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TION: Criminal Appeal No. 74 of 1976. Appeal by Special Leave from the Judgment and 'Order dated 28 7 75 of the Patna High Court in Criminal Revi sion No. 1046 of 1972. A.K. Sen and A.K. Nag for the Appellant. D. Gobrudhan, for the respondent. The Judgment of the Court was delivered by FAZAL ALI, J. This appeal by special leave exhibits the careless and cavalior manner in which the Sub Divisional Magistrate appears to have dealt with the complaint filed before him as far back as 21st February, 1966. The com plaint itself contains allegations of a very petty nature, of which hardly any cognizance could have been taken and which would be a trivial act under Sec. 95 of Indian Penal Code for which no criminal proceedings could be taken. There were proceedings under Section 107 between the parties and both 126 parties applied for copies of .these proceedings on the 20th December, 1965. It is alleged in the complaint that the appellant got the copy which was meant for the complainant, by signing his name. The complainant also got his copy a few days after eventually. Such a small matter could have been resolved by the Magistrate himself if he had persued the complaint carefully and was certainly not a , matter for which a detailed inquiry under section 202, Code of Criminal Procedure, 1908 was called for. It appears, howev er, that the Magistrate tossed the complaint from one Magis trate to another for inquiry and report, without conclusive results, starting from 21st February 1966 to 23rd November 1968, that is, for a period of more than two years. Ulti mately, on the 23rd November, 1968 the complaint was dis missed under section 203 of the Criminal Procedure Code on the ground that the complainant was absent and did not show any interest in the inquiry ordered by the Court. On the 7th of December, 1968 the respondent appeared before the Magistrate and filed an application for recalling his order. The Magistrate passed no orders on this applica tion but he sent the case ' for inquiry to Mr. K.P. Sinha, another Magistrate. Thereafter, the matter was sent to Mr. S.N. Dube on 30th of October, 1969. Mr, Dube reported that the inquiry had been completed and hence he returned the papers. of inquiry to the Magistrate. On 9th of Decem ber, 1970, the Magistrate recalled the inquiry from Mr. K.P. Sinha and transferred to Mr. A.R. Ansari and on the basis of his report, the learned Magistrate passed the order taking cognizance of the case and summoned the accused by his order dated 3 5 1972, and issued processes against the appellants. It would thus appear that a very petty matter was allowed to have a long and chequered career because the Magistrate refused to apply his mind either to the ' allegations made in the complaint or to control the proceedings before him. In support of the appeal Mr, Nag has submitted a short point. He has contended that the Magistrate had no jurisdic tion to recall the order dated 23 11 1968, by which he had dismissed the complaint under Section 203 of the Code of Criminal Procedure. In fact, there was no express order recalling the order dismissing the complaint, but by a process of deeming fiction the Magistrate thought that the order dismissing the complaint stood recalled. We might mention that the order dated 23rd November, 1968 was a judicial order by which the Magistrate had given full reasons for dismissing the complaint. Even if the Magistrate had any jurisdiction to recall this order, it could have been done by another judicial order after giving reasons that he was satisfied that a case was made out for recalling the order. We, however, need not dilate on this point because there is absolutely no provision in the Code of Criminal Procedure of 1908 (which applies to this case) empowering a Magistrate to. review or recall an order passed by him. Code of Criminal Procedure does contain a provision for inherent powers, namely, Section 561 A which, however, confers these powers on the High Court and the High Court alone. Unlike Section 151 127 of Civil Procedure Code, the subordinate criminal courts have no inherent powers. In these circumstances, there fore, the learned Magistrate had absolutely no jurisdic tion to recall the order dismissing the complaint. The remedy of the respondent was to move the Sessions Judge or the High Court in revision. In fact after having passed the order dated 23 11 1968, the Sub Divisional Magistrate became functus officio and had no power to review or recall that order on any ground whatsoever. In these circumstances, therefore, the order even if there be one, recalling order dismissing the complaint, was entirely without jurisdiction. This being the position, all subsequent proceedings follow ing upon recalling the said order,would fall to the ground including order dated 3 5 1972 summoning the accused which must also be treated to be a nullity and destitute of any legal effect. The High Court has not at all considered this important aspect of the matter which alone was sufficient to put an end to these proceedings. It was suggested by Mr. D. Goburdhan that the application given by him for recalling the order of dismissal of the complaint would amount to a fresh complaint. We are, however, unable to agree with this contention because there was no fresh complaint and it is now well settled that a second complaint can lie only on fresh facts or even on the previous facts only if a special case is made out. This has been held by this Court in Pramatha Nath Taluqdar vs Saroj Ranjan Sarkar(1). For these reasons therefore, the appeal is allowed. The Order of the High Court maintaining the order of the Magistrate dated 3 5 1972 is set aside and the order of the Magistrate dated 3 5 1972 summoning the appellant is hereby quashed. M.R. Appeal allowed. (1) [1962] 2 Supp. S.C.R. 297.

The assessee was the owner of more than 100 acres of land within municipal limits and enclosed by a compound wall. The land was adjacent to a tank, had two wells in it, was capable of being used for agriculture, was assessed to land revenue as agricultural land, but had not been actually put to any non agricultural use. The High COurt held that the land was 'agricultural land ' under section 2(e)(i) of the Wealth Tax Act, 1957 and exempt from wealth tax on the basis that, (1 ) the expres sion 'agricultural land ', not having been defined in the Act, must be given the widest possible meaning; (2) so interpreted, all land which is capable of being utilised for agricultural purposes would be 'agricultural land unless it is actually put to some non agricultural use like construc tion of buildings etc; and (3) the land has been assessed to land revenue as agricultural land under the State Revenue Law. Allowing the appeal, HELD: It is only land, which either is being actually used or ordinarily used, or has been set apart or prepared for use for agricultural purposes so as to indicate the intention of the owner or occupier of the land to put it to agricultural use, that would be 'agricultural land '. [156 A] (1 ) It is not correct to give. the expression a wide meaning merely because the statute does not define it. The correct rule is for the Court to endeavour to find out logically the exact sense in which the words have been used in a particular context, reading the statute as a whole, giving an interpretation in consonance with the purposes of the statute, and avoiding absurd results. [153 A B] (2) The object of the Wealth Tax Act is to tax surplus ' wealth. It is not all land but only 'agricultural land ' that is excluded from the definition of assets. Therefore, it is imperative to give reasonable limits to the scope of the expression 'agricultural land '. [153 C] (3) The determination of the, character of land, accord ing to the purpose for which it is meant or set apart and can be used, is a matter which ought to be determined on the facts of each particular case. What is really required to be shown is the connection with an agricultural purpose and user, and not the mere possibility of user by some possible future. owner or possessor. for an agricultural purpose. It is not the potentiality, but its actual condition and in tended user which has to be seen for purposes of exemption from wealth tax. The correct test to apply would be to. find out whether human labour had been applied to the land it self, in order to extract from its natural powers, added to or aided by other natural or artificial sources of strength, a product which can yield income. If there is nothing in its condition, or in the evidence to indicate the intention of its owner or possessor, so. as to connect it with an agricultural purpose, the land could not be agricultural land. The person claiming that any property is exempt must satisfy the conditions of the exemption. [155 G H] The extent of the land, its situation, that it was capable of being used for agricultural purposes and has not been actually put to any use which would make it unfit for immediate cultivation, .are, therefore, inconclusive being based on absence of user for non agricultural purpose. Entries in revenue records are. however, good prima facie evidence since they are based on some quasi judicial enquiry but they raise only a rebuttable presumption. If such 147 pritma facie evidence was enough for the assessee to dis charge his burden to establish an exemption, evidence to rebut it should have been led on behalf of the Department. In the present case, however, the High Court relied not only on the entries, but also on the inconclusive circumstances based on potentialities. While doing so, the High Court did not hold that categorical finding of the taxing authorities and Tribunal that the land was never used, nor was intended to be used for an agricultural purpose did not rest on any evidence at all; nor did it give any reasons for rejecting the finding. it is therefore a fit case for being remanded to the Tribunal for deciding the question of fact, after giving opportunity to both sides to adduce evidence. [155 B E] C.I.T.W. Bengal vs Raja Benoy Kumar (1957) I.T.R. 466, followed. Sarojini Devi vs Raja Sri Krishno A.I.R. 1944 Mad. 401, overruled.

Special Leave Petition No. 8862 of 1986 From the Judgment and order dated 26.3.1986 of the Karnataka High Court in C.R.P. 3084 of 1985. Padmanabha Mahale, K.K. Gupta and Mrs. Leelawati Mahale for the Petitioner. The order of the Court was delivered by SEN, J. In this special leave petition the short point involved is whether by reason of sub r. (2) of r. 92 of order XXI of the Code of Civil Procedure, 1908, the deposit required by r. 89 not having been 736 made within thirty days from the date of sale, the application made by the judgment debtor was not maintainable. Sub r. (2) of r. 92 has been amended by section 72 of the Code of Civil Procedure (Amendment) Act, 1976 by adding the words "the deposit required by that rule is made within thirty days from the date of sale", the following ' 'or in cases where the amount deposited under rule 89. within such time as may be fixed by the Court" to prevent any controversy as to the power of the Court to extend the time to make good the deficit. Unfortunately, the words added speak of the deficiency owing to 'any clerical or arithmetical mistake ' on the part of the depositor. The amended r. 92(2) now reads: "92(2). Where such application is made and allowed, and where, in the case of an application under rule 89, the deposit required by that rule is made within thirty days from the date of sale, or in cases where the amount deposited under Rule 89 is found to be dificient owing to any clerical or arithmetical mistake on the part of the depositor and such deficiency has been made good within such time as may be fixed by the Court, the Court shall make an order setting aside the sale: Provided that no order shall be made unless notice of the application has been given to all persons affected thereby. " The failure to deposit the amount entails confirmation of sale under O.XXI, r. 91(1) and thereupon the sale becomes absolute. The limitation prescribed for an application under O.XXI, r. 89 was thirty days from the date of sale under Schedule I, article 166 of the Limitation Act, 1908, now replaced by article 127 of the . The words "may apply to have the sale set aside on his depositing in Court" etc. show that not only the application, but also the deposit, should be made within thirty days from the date of sale. It is not enough to make the application within thirty days. Nor is it enough to make the deposit within thirty days. Both the application and the deposit must be made within thirty days from the date of sale. article 127 of the has now been amended by Act 104 of 1976 and the words 'sixty days ' have now been substituted for the words 'thirty days '. As a result of the amendment, the limitation for an application to set aside a sale in execution of a decree, including any such application by a judgment debtor under O.XXI, r. 89 or r. 90 is therefore sixty days now. Such being the law, there is need for an appropriate amendment of sub r. 737 (2) of r. 92 of the Code. Under O.XXI, r. 89 as it now exists, both the application and the deposit must be made within thirty days of the sale. The failure to make such deposit within the time allowed at once attracts the consequences set forth in sub r. (2) of r. 92. This is an unfortunate state of things and Parliament must enact the necessary change in law. In the present case, the auction was held on July 26, 1985. The decree holder brought to sale in execution of a money decree for Rs.21,948.45p., the property of judgment debtor No. 1 comprised of a house and open site appurtenant thereto. The highest bid of Rs.22,500 offered by the auction purchaser was accepted and the bid was knocked down in his favour. The executing Court fixed the case for confirmation of sale on September 30, 1985. In the meanwhile, judgment debtor No. 1 deposited Rs.22,000 on August 29, 1985 towards payment of the decretal amount together with an application under O.XXI, r. 90 read with section 151 of the Code for setting aside the sale. Again, on September 6, 1985 he made another application purporting to be under O.XXI, r. 89 read with section 151 of the Code and made a deposit of the balance amount. The auction purchaser objected to the entertainment of the application contending inter alia that the deposit required by r. 89 not having been made within thirty days of the date of sale as required by r. 92(2) of the Code, the sale was liable to be confirmed under sub r. (1) thereof. It is undisputed that the judgment debtor has deposited the entire decretal amount together with 5% of the purchase money by way of commission to the petitioner auction purchaser. The Principal Munsif, Dharwar by his order dated October 4, 1985 overruled the objection raised by the petitioner. A learned Single Judge (Kulkarni, J.) by his judgment dated March 26, 1986 declined to interfere with the order of the learned Munsif setting aside the sale. The learned Judge relying upon the decision of the Madras High Court in Thangammal & Ors. vs K. Dhanalakshmi & Anr., AIR 1981 Mad. 254 held that the provisions of O.XXI, rr. 89 and 92(2) of the Code and that of article 127 of the should receive a harmonious construction. In that view, the learned Judge held that the judgment debtor No. 1 having deposited the decretal amount together with 5% of the purchase money and having made the application under O.XXI, r. 89 of the Code within sixty days of the sale i.e. within the period as provided by article 127 of the , the sale was liable to be set aside. The learned Single Judge has brought about the inconsistency between sub r. (2) of r. 92 of O.XXI of the Code and article 127 of the Limitation 738 Act and suggested that steps should be taken to remove this inconsistency. We fully endorse the view expressed by the learned Single Judge. In the result, the special leave petition must fail and is dismissed. A.P.J. Petition dismissed.

P adopted A in 1914 but on account of the acute differences which arose between them later, he made a second adoption of the first appellant in 1926 on the footing that such an adoption was permitted by special custom in Nattukottai Chetti families. In the partition suit filed by A for himself and on behalf of his minor son, the first respondent, the validity of the second adoption was challenged, but the matter was compromised by a Rajinama under which P was directed to pay the plaintiffs therein Rs. 75,000 each separately in lieu of their right to partition. Under the terms of para 3 of the Rajinama and the hundi executed by P in favour of the first respondent, the amount was to be paid to the order of three persons, viz., the father and mother of the first respondent and C, and the amount itself was to be invested in the name of the first respondent in Chetti firms to the order of P and C who were to be in management. In 1929 P executed a will whereby he made arrangements for certain religious gifts and charities and gave the residue of the property to his wife for her life and thereafter to his second adopted son, the first appellant. On attaining majority in 1943 the first respondent filed two suits. The first was on the footing that the amount of Rs. 75,000 which was given to him under the Rajinama was constituted a trust for his benefit during his minority under the trusteeship of P and C, that the money was wrongfully appropriated by C, contrary to the terms of the Rajinama, and that P as a co trustee with C was equally responsible for C 's breach of trust and that the first respondent was entitled to have the amount paid out of the estate of P in the hands of the appellants. The second suit was for the recovery of the entire properties of P on the ground that the second adoption was invalid and that the will executed by P was ineffective. It was found that the adoption of the first appellant was invalid and that the customary adoption set up by P was made for temporal rather than spiritual purposes, and the question was whether, notwithstanding his description as adopted son in, the will in several places, the intention was that he was to take the property as Persona designata. As regards the terms of para 3 of the 215 Rajinama the language used was ambiguous, whether the power of investment was vested in both P and C, but looking at the subsequent conduct of the parties it was found that it was C who was authorised to collect the amount of the hundi and to arrange for the investment of the same on the responsibility of the father and mother of the first respondent. Held:(1) The question whether a disposition to a person is intended as a Persona designata or by reason of his filling particular legal status which turns out to be invalid, depends on the facts of the case and the terms of the particular document containing the disposition, and in the instant case, in view of the exclusion of the validly adopted son and his heirs from succession and the conduct of the parties for over 14 years in allowing the first appellant to retain the property, taking an overall picture of the various provisions of the will, it was clear that the first appellant was intended by the testator to take the property as persona designata and that the will was therefore effective to convey title to him. Nidhoomoni Debya vs Saroda Pershad Mookerjee, (1876) L.R. 3 I.A. 253 and Fanindra Deb Raikat vs Rajeswar Das, (1884) L.R. 12 I.A. 72, referred to. (2)Trusteeship is a position which is to be imputed to a person on clear and conclusive evidence of transfer of ownership and of the liability attached to such ownership on account of confidence reposed, and on such liability having been accepted by the alleged trustee, and in the present case there was no proof that P became a trustee for the minor 's fund and incurred liability for C 's breach of trust.

Civil Appeal No. 1950 of 1979 From the Judgment and Order dated 24 4 1979 of the Andhra Pradesh High Court in Election Petition No. 8/78. Govindan Nair and A. Subba Rao for the Appellant. P. P. Rao, T. Ramachandran, K. Ramkumar and Venkataramani for the Respondent. The Judgment of the Court was delivered by KAILASAM, J. This appeal by Shri Thammanna is directed against a judgment, dated April 24, 1979 of the High Court of Andhra Pradesh, whereby the election petition filed by Shri V. Krishna Reddy, respondent 7 herein, against the returned candidate, Shri K. Veera Reddy (Respondent 1 herein) was dismissed. The material facts are these: In the elections held for the Andhra Pradesh Legislative Assembly in February, 1978 respondents 1 to 4, 6, 7 and the appellant filed their nominations for Amarchinta Assembly Constituency. Polling took place on February 25, 1978 and Shri K. Veera Reddy, respondent 1, was declared elected on February 27, 1978. He secured 34727 votes while his nearest rival, respondent 2, got 29,419 votes. The appellant obtained 822 votes only. Shri V. Krishna Reddy, (Respondent 7 herein), being a voter for 198 Amarchinta Assembly Constituency in Mahabubnagar District filed an election petition in the High Court to get the election of the first respondent declared void on the ground that on the date of filing the nomination paper as well as on the date of the election, this respondent had subsisting contracts with the Government of Andhra Pradesh and as such, he was under Section 9A of the Representation of the People Act, 1950 (hereinafter referred to as the Act) disqualified to be chosen to fill the seat. All the candidates who had filed their nominations, were joined in the election petition as respondents. The appellant was impleaded as original respondent 5. The election petition was contested by respondent 1, (K. Veera Reddy) only. The appellant (i.e. original Respondent 5) did not file any written statement. He did not lead any evidence, nor did he cross examine the witnesses produced by respondent 1 or the Election Petitioner. He did not participate even in the arguments. A preliminary objection has been raised by the learned counsel for respondent 1. It is submitted that Shri Thammanna is not competent to maintain this appeal, because he does not fulfil the character 76 of a "person aggrieved" by the judgment of the High Court. It is emphasised that it was not necessary for the election petitioner to join Shri Thammanna as a respondent because no relief was claimed against him; that he was impleaded as respondent 5 only as a matter of form that he did not participate in the proceedings before the High Court; nor joined issue with Respondent 1. It is pointed out that according to the judgment of the High Court, the contest was only between the Election Petitioner and Respondent 1, while the original Respondents 2 to 7, including Thammanna, were proceeded against ex parte. In short, the objection is that since the appellant could not be said to be a party adversely affected by the judgment of the High Court, he has no locus standi to prefer this appeal. In reply, Shri Govindan Nair, learned counsel for the appellant submits that Shri Thammanna was not a mere proforma respondent but was a person who was entitled to apply and join as a party under Section 86(4) of the Act within fourteen days from the date of commencement of the trial and subject to any order as to security for costs. Such a person is entitled under the law by virtue of his status as a party respondent to file an appeal against the decision of the High Court, if he feels aggrieved by the same. The very fact that the original respondent 5, has filed this appeal shows that he is a person aggrieved by the decision of the High Court, dismissing the Election Petition. It is maintained that the mere fact that the appellant did not file any written statement or participate actively in proceedings before the High Court, or that the Election Petitioner has not joined him as a co appellant, is not sufficient to deny him the status of a "person aggrieved". It is argued that in an election petition, the petitioner is not the dominus litis but acts as a representative of the whole body of electors in the constituency, that is why an election petitioner cannot at his sweet will abandon the election petition or withdraw from it without complying with the procedure prescribed, and if he does so, in view of sections 109 and 110 of the Act, the Court can allow another voter or respondent to continue the petition. According to the counsel, since an appeal is only a re hearing of the original petition any party to the original proceedings who feels aggrieved, is entitled, in accordance with the principle underlying Sections 108 and 109 of the Act, to file an appeal, even if the original Election Petitioner neglects or abstains from doing so. Shri Nair further submits that the High Court has wrongly stated that the appellant (being original respondent 5) was also proceeded against ex parte; that, in fact, the appellant was present in the High Court on most of the dates of hearing, although he remained quiescent. 77 In the alternative, it is submitted that if it is assumed that the appellant was proceeded against ex parte in the High Court, the final determination in the impugned judgment will be deemed to be in the nature of an ex parte decree against him. In that view of the matter also, according to the learned counsel, the appellant has the necessary locus to maintain this appeal, against that ex parte determination. In support of his contention, Shri Nair has referred to K. K. Kamaraja Nadar vs Kunju Thevan and Ors(1), Inamati Mallappa Basappa vs Desai Basavaraj Ayyappa & Ors.(2), A. Sreenivasan vs Election Tribunal, Madras(3) and Adi Pherozshah Gandhi vs H. M. Seervai, Advocate General of Maharashtra, Bombay.(4) Before dealing with the contentions advanced on this preliminary point, let us have a look at the relevant provisions of the Act and the Code of Civil Procedure. Section 87(1) of the Act lays down that every election petition shall be tried by the High Court, as nearly as may be, in accordance with the procedure applicable under the Code of Civil Procedure, 1908 to the trial of suits. In other words the provision of the Code of Civil Procedure apply to the trial of an election petition only where there is no express provision in the Act and there is no inconsistency with the Act. Section 98 indicates the categories of orders which the High Court may make at the conclusion of the trial of an election petition. Such an order may be an order "(a) dismissing the election petition, or (b) declaring the election of all or any of the returned candidates to be void; or (c) declaring the election of all or any of the returned candidates to be void and the petitioner or any other candidate to have been duly elected. " Section 99 requires that the High Court shall at the time of making an order under Section 98 in the case where any charge of corrupt practice having been committed at the election is proved, make a further order naming the person or persons guilty of the corrupt practice and also paying costs. Section 116A runs thus: "Notwithstanding anything contained in any other law for the time being in force, an appeal shall lie to the Supreme Court 78 on any question (whether of law or fact) from every order made by a High Court under Section 96 or Section 99. " Sub section (2) prescribes a period of thirty days limitation within which such an appeal is to be preferred. In this context Section 116C may also be seen. It reads as follows: "116C(1) Subject to the provisions of this Act and of the rules, if any, made thereunder, every appeal shall be heard and determined by the Supreme Court as nearly as may be in accordance with the procedure applicable to the hearing and determination of an appeal from any final order passed by a High Court in the exercise of its original civil jurisdiction; and all the provisions of the Code of Civil Procedure, 1908 and the Rules of the Court (including provisions as to the furnishing of security and the execution of any order of the Court) shall, so far as may be, apply in relation to such appeal. " It may be seen that although Section 116A confers a right of appeal from an "order" made under Section 96 or 99, and Section 116C from "any final order" passed by the High Court in proceedings in an election petition, neither of these two sections mentions or catalogues the person or persons who have a right of appeal against such orders. Barring the exceptional provision in Section 116A, which marks a departure from the Code of Civil Procedure, Section 116C is substantially analogous to Section 96(1) of the Code of Civil Procedure, 1898 which provide "Save where otherwise expressly provided in the body of this Code or by any other law for the time being in force, an appeal shall lie from every decree passed by any court exercising original jurisdiction to the Court authorized. " Just as the term "decree" in Section 96(1) of the Code means an adjudication which "conclusively determines all or any of the matters in controversy in the suit", the expression "any final order" as used in Section 116C of the Act contemplates a conclusive determination of all or any of the matters in controversy in the election petition between the parties. Clauses (a), (b) and (c) of Section 98 illustrate such "final orders" which have been made appealable under Section 116C of the Act. In the instant case, the order sought to be impeached in this appeal is of the category mentioned in clause (a) of Section 98 of the Act. Section 98 also does not specifically mention as to who can appeal against the final orders mentioned therein. Section 116C of the Act makes the Code of Civil Procedure applicable to the hearing and determination of appeals filed under the Act. Since the substance and principle embodied in Section 96(1) of 79 the Code is not inconsistent with anything in the Act, we may legitimately look for guidance to Section 96 (1) and other provisions of the Code and also the general principles which govern the right of appeal thereunder. This being the position, the basic conditions and postulates which govern the right of appeal under Section 96(1) of the Code will apply to an appeal under Section 116C of the Act, also. As a general proposition, therefore, it may safely be stated that before a person is entitled to maintain an appeal under Section 116C, all the conditions mentioned below, must be satisfied: (1) that the subject matter of the appeal is a conclusive determination by the High Court of the rights with regard to all or any of the matters in controversy, between the parties in the election petition, (2) that the person seeking to appeal has been a party in the election petition, and (3) that he is a "person aggrieved", that is a party who has been adversely affected by the determination. In the present case, these conditions, particularly Nos. (1) and (3), have not been fulfilled. Before the High Court the appellant did not, at any stage, join the contest. He did not file any written statement or affidavit. He did not engage any counsel. He did not cross examine the witnesses produced by the Election Petitioner and the contesting respondent 1. He did not appear in the witness box. He did not address any arguments. In short, he did nothing tangible to participate in the proceedings before the High Court. It was not obligatory for the Election Petitioner to join the appellant as a respondent. There were no allegations or claims in the election petition which would attract Section 82 of the Act. From that point of view, the appellant was not a necessary party to be impleaded. Of course, if the appellant had made an application within the time prescribed, in compliance with Section 86(4) of the Act, the Court would have been bound to join him as a respondent. But the question of Section 86 (4) coming into play never arose as the Election Petitioner had already impleaded the appellant as Respondent 5 in the election petition. Even so, Respondent 5 did not join the controversy. He neither joined issue with the contesting respondent 1, nor did he do anything tangible to show that he had made a common cause with the Election Petitioner against Respondent 1. In fact, the only parties between whom the matters in controversy were at issue, were the Election Petitioner and Respondent 1. The other respondents, including the appellant, did not participate or side with either contestant in that controversy. 80 Although the meaning of the expression "person aggrieved" may vary according to the context of the statute and the facts of the case, nevertheless, normally "a 'person aggrieved ' must be a man who has suffered a legal grievance, a man against whom a decision has been pronounced which has wrongfully deprived him of something or wrongfully refused him something or wrongfully affected his title to something." (As Per James L. J. in Re Sidebothem referred to by this Court in Bar Council of Maharashtra vs M.V. Dabholkar(1) and J. N. Desai vs Roshan Kumar.(2) In the face of the stark facts of the case, detailed above, it is not possible to say that the appellant was aggrieved or prejudicially affected by the decision of the High Court, dismissing the election petition. We are further unable to accept the wide argument, that since an election petition is in the nature of a representative action on behalf of the whole body of electors in the constituency, on neglect or failure of the election petitioner to file an appeal against the order of dismissal of his election petition, any other elector, particularly who is a respondent in the election petition, can, in view of Sections 109/110 of the Act, be substituted for him for the purpose of filing and continuing the appeal. It is true that an election petition once filed cannot be abandoned or withdrawn by the petitioner at his sweet will. Section 109 provides: "(1) An election petition may be withdrawn only by leave of the High Court. (2) Where an application for withdrawal is made under sub section (1) notice thereof fixing a date for the hearing of the application shall be given to all other parties to the petition and shall be published in the Official Gazette. " Section 110 provides the procedure for withdrawal of an election petition. Its sub section (2) mandates that "no application for withdrawal shall be granted if, in the opinion of the High Court, such application has been induced by any bargain or consideration which ought not to be allowed". Sub section (3) lays down that if the application for withdrawal is granted, the petitioner shall be ordered to pay the whole or part of the costs incurred by the respondent. It further requires that notice of withdrawal shall be published in the Official Gazette. Clause (c) of Sub section (3) is material. It provides that any person who might himself have been a petitioner, may within 81 fourteen days of such publication, apply to be substituted as petitioner in place of the party withdrawing, and on compliance with the conditions as to security, shall be entitled to be substituted and continue the proceedings upon such terms as the High Court may deem fit. Section 111 provides for report of the withdrawal by the High Court to the Election Commission. Section 112(1) provides for abatement of election petition on death of the sole petitioner. Sub section (2) requires the fact of abatement to be published. Sub section (3) entitles any person who might himself have been a petitioner to apply and be substituted in place of the deceased to continue the proceeding upon such terms as the High Court may think fit. Section 116 makes a similar provision on the death of a respondent. As pointed out in Bijayananda Patnaik vs Satrughna Sahu(1), the principle behind these provisions is that "an election petition is not a matter in which the only persons interested are candidates who strove against each other at the elections. The public of the constituency also is substantially interested in it, as an election is an essential part of the democratic process. That is why provision is made in election law circumscribing the right of the parties thereto to withdraw. Another reason for such provision is that the citizen 's at large have an interest in seeing and they are justified in insisting that all elections are fair and free and not vitiated by corrupt or illegal practices. That is why provision is made for substituting any elector who might have filed the petition in order to preserve the purity of elections. " But it is equally clear from the language, setting and scheme of the provision in Sections 109 to 116, that they do not, either, in terms, or, in principle, apply to appeals or the procedure to be followed at the appellate stage before the Supreme Court. Firstly, these provisions are to be found in Chapter IV, under the main caption : `WITHDRAWAL AND ABATEMENT OF ELECTION PETITIONS '. Then, the provisions of these sections, also, repeatedly refer to the withdrawal or abatement of `election petitions ' and also to procedure in respect thereof before the `High Court '. The provision relating to Appeals in Sections 116A, 116B and 116C, have been included separately, in Chapter `IV A ', captioned "APPEALS". Secondly, Section 116C, as already noticed, enjoins upon the Supreme Court to hear and determine every appeal under this Act in accordance with the provisions of the Code of Civil Procedure and the Rules of the Court. No doubt, this is, "subject to the provisions of the Act the rules if any, made thereunder". But this clause 82 only means that the provisions of the Code and the Rules of the Court in hearing an appeal to this Court will apply except to the extent their application has been excluded expressly or by necessary implication by any provision of the Act. There is no provision in Chapter IV A of the Act, analogous to Sections 109 to 116 of the Act, which curtails, restricts or fetters an appellant 's right to withdraw an appeal. Nor is there any such provision in the Code or the Rules of this Court which does so. If the intention of the Legislature was that the provision of Sections 109 to 116 which apply to the withdrawal of election petitions should also govern the withdrawal of appeals, there was no difficulty in inserting similar provisions in Section 116C or elsewhere in Chapter IV A. In this view we are fortified by the decision of this Court in Bijayananda Patnaik 's case (ibid). In that case the provisions of Sections 116 A, 109 to 116 of the Act, as they stood before the Amendment of 1966, came up for consideration. The facts were that one S filed an election petition against the appellant B who had been declared elected to the State Legislative Assembly. On the appellant, B 's application, the Tribunal dismissed the petition under Section 90(3), for non compliance with the provisions of Section 82 of the Act. S went in appeal under Section 116 A to the High Court. Subsequently, S applied for withdrawal of the appeal but the High Court refused to permit withdrawal, holding that it had to be guided by the principles of Sections 109 and 110 of the Act in considering the application for withdrawal. In appeal by special leave, this Court held that S had an absolute right to withdraw the appeal and the High Court was bound to grant him permission to do so. In this connection, the observations made by Wanchoo, J. (as he then was), speaking for the Court, at page 547 of the Report, are apposite and may be extracted : "When sub section (2) says that the powers, jurisdiction and authority of the High Court is subject to the provisions of the Act, it means that the provision must be an express provision in the Act or such as arises by necessary implication from an express provision. . There is however, no express provision in Chap. IV A dealing with appeals, which deals with the question of withdrawal of appeals under that Chapter. Nor do we think that sections 109 and 110 necessarily imply that an appeal also cannot be withdrawn as a matter of right, unless the procedure laid down in those sections is followed. One reason for this view may at once be stated. The losing party is not bound to file an appeal and if he does not, nobody else has the right to do so. The 83 object apparently is that the election petition filed should, if any voter so desires, be heard and decided. The sections dealing with substitution on death of the petitioner lead to that view : see sections 112 115. There is no such provision for appeals. It seems to us that if Parliament intended that the provisions of sections 109 and 110 which deal with withdrawal of election petitions before a tribunal shall also apply to withdrawal of appeals before the High Court under Chap. IV A an express provision could have been easily made to that effect in section 116 A by adding a suitable provision in the section that the provisions of sections 109 and 110 would apply to withdrawal of appeals before the High Court as they apply to withdrawal of election petitions before the tribunal. In the absence of such a provision in Chap. IV A, we do not think that the High Court was right in importing the principles of sections 109 and 110 in the matter of withdrawal of appeals before the High Court. So far therefore as the question of withdrawal of appeals before the High Court under Chapter IV A is concerned, it seems to us that the High Court has the same powers, jurisdiction and authority in the matter of withdrawal as it would have in the matter of withdrawal of an appeal from an original decree passed by a civil court within the local limits of its civil appellate jurisdiction without any limitation on such powers because of sections 109 and 110. The High Court thus has the same powers, jurisdiction and authority and has to follow the same procedure in the matter of withdrawal of appeals under section 116 A as in the matter of an appeal from an original decree before it, and there is no warrant for importing any limitation in the matter on the analogy of sections 109 and 110 of the Act, which expressly deal only with election petitions and not with appeals under section 116 A." On the above reasoning, it was further held that the provisions regarding withdrawal applicable to ordinary Civil Appeals before the High Court are applicable, also, to appeals under Section 116 A. Under Order XXIII, Rule 1(1) of the code of Civil Procedure, an appellant has the right to withdraw his appeal unconditionally, and if he is to make such application, the High Court has to grant it. If an appellant, who is an aggrieved person under Section 116 C of the Act, has got a right to withdraw or abandon his appeal unconditionally, a fortiori, he has every right not to file an appeal against the dismissal of his Election Petition, much less has any other respondent who never joined the contest in the Election Petition, a right to file an appeal if the aggrieved party does not do so. In other words, the principle that an Election Petition is a representative action on behalf of the whole body of electors in the constituency, has a very 84 limited application to the extent it has been incorporated in Sections 109 to 116 of the Act, and its application cannot be extended to appeals under the Act. In the instant case, the appellant or any other elector did not make any application or complaint at the trial of the Election Petition in the High Court, that the election petitioner has abandoned the prosecution of the petition or withdrawn from it and that the applicant be substituted for the election petitioner to continue the proceeding under Section 110(3) (c) of the Act. It will bear repetition that the appellant took no interest, whatever, in the controversy in the Election Petition which was confined only to the election petitioner and respondent 1. Conditions 1 and 3, the satisfaction of which is necessary to give locus standi to a person to file an appeal under Section 116 C, have not been fulfilled in the instant case. The appellant cannot, by any reckoning, be said to be a `person aggrieved ' by the decision of the High Court, dismissing the Election petition. We, therefore, allow this preliminary objection and on that ground dismiss this appeal with costs. section R. Appeal dismissed.

A ceiling on agricultural holdings was imposed in Maharashtra by the Maharashtra Agricultural Lands (Ceiling on Holdings) Act 27 of 1961, which was brought into operation on January 26, 1962. The ceiling fixed by the Act (Principal Act) was lowered and certain other amendments were made to that Act by Acts 27 of 1975, 47 of 1975 and 2 of 1976. The validity of these Acts was challenged in the Bombay High Court. The Division Bench at Nagpur repelled that challenge by its judgment dated August 13, 1976 in Vithalrao Udhaorao Uttarwar vs State of Maharashtra, AIR 1977 Bombay 99. The appeals filed against the said decision were dismissed by the Supreme Court by its judgment in Dattatraya Govind Mahajan vs State of Maharashtra ; The only point urged in these appeals was that the Principal Act. as amended, was void being violative of the second proviso to Article 31A(1), in so far as it created an artificial "family unit" and fixed the unit on the agricultural holdings on such family units. The argument that the violation of the particular proviso deprived the impugned laws of the protection conferred by Article 31A was rejected by the Court on the view that even if the impugned provisions were violative of the second proviso they would receive the protection of Article 31B by reason of the inclusion of the Principal Act and the amending Acts in the Ninth Schedule. The Court considered whether, in fact. the provisions of the impugned Acts were violative of the second proviso and held that it was entirely for the Legislature to decide what policy to adopt for the purpose of restructuring the agrarian system and the Court could not assume the role of an economic adviser for pronouncing upon the wisdom of such policy. The second proviso to Article 31A(1) was therefore held not to have been contravened. The judgment of this Court in these appeals was delivered on January 27, 1977 while the proclamation of emergency was in operation. On the revocation of that proclamation, petitions were filed in the Court by the appellants 2 praying for the review of the judgment in Dattaraya Govind Mahajan on the ground that several contentions, which were otherwise open to them for assailing the constitutional validity of the impugned Acts, could not be made by reason of the emergency and that they should be permitted to make those contentions since the emergency was lifted. Fresh Writ Petitions were also filed in this Court in which those contentions were put forward. The Court acceded to the request for the review and hence the petitions. Dismissing the petitions, the Court ^ HELD : (Majority view) Per Chandrachud, C.J. (On his own behalf and on behalf of Krishna Iyer, Tulzapurkar and Sen, JJ.) A. (1) The Constitution (First Amendment) Act, 1951 which introduced Article 31A into the Constitution with retrospective effect and sec. 3 of the Constitution (Fourth Amendment) Act, 1955 which substituted a new clause (1), sub clauses (a) to (e) for the original clause (1) with retrospective effect, do not damage any of the basic or essential features of the Constitution or its basic structure and are valid and constitutional being within the constituent power of the Parliament. [9 F G=45 H, 46 A B] (2) The Agricultural Ceiling Acts, fall squarely within the terms of clause (a) of Article 31A(1). Those Acts provide for the extinguishment and modification of rights in an "estate", the expression "estate" being defined by clause (2) (a) (iii) to mean "any land held or let for purposes of agriculture or for purposes ancillary thereto. ". It must follow, as a necessary corollary, that the impugned Acts are entitled to the protection of Article 31A(1)(a) with the result that their provisions cannot be deemed, and there fore cannot be declared, to be void on the ground that they are inconsistent with or take away or abridge any of the rights conferred by Articles 14, 19 or 31. [17 A C] (3) If a constitutional provision, which deprives the petitioners of the benefit and protection of Articles 14, 19 and 31 is invalid, the petitioners will be entitled to challenge the impugned laws on the ground that they are inconsistent with or that they take away or abridge the rights conferred by Part III of the Constitution. Article 13(2) has a sensitive touchstone. Not only does it mandate that the State shall not make any law which takes away or abridges the rights conferred by Part III but, it provides that any law made in contravention of the clause shall, to the extent of the contravention, be void. Mere abridgement, that is to say curtailment, that is to say curtailment, and not necessarily abrogation that is to say total deprivation, is enough to produce the consequence provided for by Article 13(2). [17 C E] (4) Though the withdrawal of the application of Articles 14, 19 and 31 in respect of laws which fall under clause (a) is total and complete, that is to say, the application of those articles stands abrogated, not merely abridged, in respect of impugned enactments which indubitably fall within the ambit of clause (a), every case in which the protection of a fundamental right is withdrawn will not necessarily result in damaging or destroying the basic structure of the Constitution. The question as to whether the basic structure is damaged or destroyed in any given case would depend upon which particular Article of 3 Part III is in issue and, whether what is withdrawn is quint essential to the basic structure of the Constitution. [18 B D] (5) The true position of law on the subject of Parliament 's power to amend the Constitution is that though the Parliament has the power to amend each and every Article of the Constitution including the provisions of Part III the amending power cannot be exercised so as to damage or destroy the basic structure of the Constitution. [19 G H] H. H. Kesavananda Bharati vs State of Kerala, [1973] Supp. SCR 1; Smt. Indira Nehru Gandhi vs Raj Narain, and Minerva Mills Ltd. vs Union of India & Ors., [1981] 1 SCR p. 206, referred to. (6) If Article 31A were not enacted, some of the main purposes of the Constitution would have been delayed and eventually defeated and that by the First Amendment, the constitutional edifice was not impaired but strengthened. The First and the Fourth Amendments, especially the First were made so closely on the heels of the Constitution that they ought indeed to be considered as a part and parcel of the Constitution itself. These amendments are not born of second thoughts and they do not reflect a fresh look at the Constitution in order to deprive the people of the gains of the Constitution. They are in the truest sense of the phrase, a contemporary practical exposition of the Constitution. [26 E F, G H, 27A] (7) Article 39 of the Constitution directs by clauses (b) and (c) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good; that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment. These twin principles of State policy were a part of the Constitution as originally enacted and it is in order to effectuate the purpose of these Directive Principles that the First and the Fourth Amendments were passed. [27 A B] (8) Article 31A(I) could easily have appeared in the original Constitution itself as an illustration of its basic philosophy. What remained to be done in the hope that vested interests will not distort the base of the Constitution, had to be undertaken with a sense of urgency and expediency. It is that sense and sensitivity which gave birth to the impugned amendment. The progress in the degeneracy of any nation can be rapid, especially in societies riven by economic disparities and caste barriers. We embarked upon a constitutional era holding forth the promise that we will secure to all citizens justice, social, economic and political; equality of status and of opportunity; and, last but not the least, dignity of the individual. Between these promises and the First Amendment there is discernible a nexus, direct and immediate. Indeed, if there is one place in an agriculture dominated society like ours where citizens can hope to have equal justice, it is on the strip of land which they till and love, the land which assures to them the dignity of their persons by providing to them a near decent means of livelihood. [28 E H] (9) The First Amendment has made the constitutional ideal of equal justice a living truth. It is like a mirror that reflects the ideals of the Constitution, it is not the destroyer of its basic structure. The provisions introduced by it and the Fourth Amendment for the extinguishment or modification of rights in lands held or let for purposes of agriculture or for purposes ancillary thereto, strengthen rather than weaken the basic structure of the Constitution. [29 A B] 4 The First Amendment is aimed at removing social and economic disparities in the agricultural sector. It may happen that while existing inequalities are being removed, new inequalities may arise marginally and incidentally. Such marginal and incidental inequalities cannot damage or destroy the basic structure of the Constitution. It is impossible for any Government, howsoever expertly advised, socially oriented and prudently managed, to remove every economic disparity without causing some hardship or injustice to a class of persons who also are entitled to equal treatment under the law. Thus, the adoption of "family unit" as the unit of application for the revised ceilings may cause incidental hardship to minor children and to unmarried daughters. That cannot, however, furnish an argument for assailing the impugned laws on the ground that they violate the guarantee of equality. It seems ironical indeed that the laws providing for agricultural ceilings should be stigmatised as destroying the guarantee of equality when their true object and intendment is to remove inequalities in the matter of agricultural holdings. [29 B E] The note of the Panel set up by the Planning Commission in May 1959 on the adoption of "family unit" as the unit of application for the revised ceilings and the counter affidavit of the Deputy Secretary to the Govt. of Maharashtra show the relevance and efficacy of the family being treated as the real operative unit in the movement for agrarian reform. Considering the Indian social milieu, the Panel came to the conclusion that agricultural ceiling can be most equitably applied if the base of application is taken as the family unit consisting of husband, wife and three minor children. In view of this expert data a law passed truly for implementing the objective of Article 31A(l)(a) cannot be open to challenge on the ground that it infringes Articles 14,19 or 31. [29 E G] B. (1). The Amendment introduced by sec. 4 of the Constitution (First Amendment) Act, 1951 does not damage or destroy the basic structure of the Constitution. That Amendment must, therefore, be upheld on its own merits. [29 H] (2) The validity of Article 31A cannot be upheld by applying the doctrine of stare decisis, though the Article has continued to be recognised as valid ever since it was introduced into the Constitution. The constitutional validity of Article 31A has been recognised in the four decisions, namely. Shankari Prasad vs Union of India, ; , 95; Sajjansingh vs State of Rajasthan,[1965] 1 SCR 933; I.C. Golakanath vs Union of India & Ors,[1967] 2 SCR 762 and H. H. Kesavananda Bharati Sripadagalavaru vs State of Kerala, sometimes directly, sometimes indirectly and sometimes incidentally. It may be mentioned, though it has no relevance on the applicability of the rule of stare decisis, that in none of the three earlier decisions was the validity of Article 31A tested on the ground that it damaged or destroyed the basic structure of the Constitution. That theory was elaborated for the first time in Kesavananda Bharati and it was in the majority judgment delivered in that case that the doctrine found its first acceptance. Even in the two latest cases, namely, Ambika Prasad Mishra vs State of U.P., [1980] 3 SCR p. 1159, Thumati Venkaiah vs State of A.P., ; the question as to whether Article 31A can be upheld by applying the doctrine of stare decisis was never decided. Nor was the question of vires of Articles 31A, 31B and 31C (unamended) considered in these decisions.[30G H, 31A B, C, 32 B C] 5 It is true to say that for the application of the rule of stare decisis, it is not necessary that the earlier decision or decisions of long standing should have considered and either accepted or rejected the particular argument which is advanced in the case on hand. Were it so, the previous decisions could more easily be treated as binding by applying the law of precedent and it will be unnecessary to take resort to the principle of stare decisis. It is, therefore, sufficient for invoking the rule of stare decisis that a certain decision was arrived at on a question which arose or was argued, no matter on what reason the decision rests or what is the basis of the decision. In other words, for the purpose of applying the rule of stare decisis, it is unnecessary to enquire or determine as to what was the rationale of the earlier decision which is said to operate as stare decisis. Therefore, the reason why Article 31A was upheld in the earlier decisions. if indeed it was, are not germane for the purpose of deciding whether this is a fit and proper case in which to apply that rule.[34 C G] But there are four principal reasons for not invoking the rule of stare decisis for deciding upon the constitutionality of Article 31A. In the first place, Article 31A breathes its own vitality, drawing its sustenance from the basic tenets of our Constitution. The second reason is that neither in Shankari Prasad, nor in Sajjan Singh nor in Golak Nath and evidently not in Kesavananda Bharati, was the question as regards the validity as such of Article 31A raised or decided. Thirdly, the history of the World 's constitutional law shows that the principle of stare decisis is treated as having a limited application only. The fourth reason is that on principle rules like stare decisis should not be invoked for upholding constitutional devices like Articles 31A, 31B and 31C which are designed to protect not only past laws but future laws also. The principle of stare decisis can apply, if at all, to laws protected by these articles, if those laws have enjoyed the protection of these articles for a long time, but the principle cannot apply to the articles themselves. The principle of stare decisis permits the saving of laws the validity of which has been accepted or recognised over the years. It does not require or sanction that, in future too, laws may be passed even though they are invalid or unconstitutional. Future perpetration of illegality is no part of the doctrine of stare decisis.[34 F H, 35 A B, D, 36 B E] Burnet vs Coronado Oil & Gas Co., ; , 406; Tramways Case (No. 1) 1914 (CLR) 54@ 58; Bengal Immunity Case ; Income Tax officer, Tuticorin vs T. section D. Nadar; , ; New York vs United States, ; , 590 591 [1946]; U.S. vs International Boxing Club, ; , 249 [1955]; Mac Pherson vs Buick Motor Co., , 391 [1916]: State of Washington vs W. C. Dawson & Co., ; , 238 [1924] James. Monoroe vs Frank Pape, U.S. 492, 523, 528, quoted with approval. C. (1) All amendments to the Constitution which were made before April 24, 1973 and by which the Ninth Schedule to the Constitution was amended from time to time by the inclusion of various Acts and Regulations therein are valid and constitutional. Amendments to the Constitution made on or after April 24, 1973 by which the Ninth Schedule to the Constitution was amended from time to time by the inclusion of various Acts and Regulation therein, are open to challenge on the ground that they, or any one or more of them, are beyond the constituent power of the Parliament since they damage the basic or essential features of the Constitution or its basic structure in view of the Judg 6 ment in Kesavananda Bharati. If any Act or Regulation included in the Ninth Schedule by a constitutional amendment made on or after April 24, 1973 is saved by Article 31A, or by Article 31C as it stood prior to its amendment by the Forty Second Amendment, the challenge to the validity of the relevant constitutional Amendment by which that Act or Regulation is put in the Ninth Schedule, on the ground that the Amendment damages or destroys a basic or essential feature of the Constitution or its basic structure as reflected in Articles 14, 19 or 31, will become otiose. [10 C F=46 C F] (2) Article 31B provides that the Acts and Regulations specified in the Ninth Schedule shall not be deemed to be void or ever to have become void on the ground that they are inconsistent with or take away or abridge any of the rights conferred by Part III of the Constitution. The provisions of the Article are expressed to be without prejudice to the generality of the provisions in Article 31A and the concluding portion of the Article supersedes any judgment, decree or order of any court or tribunal to the contrary. This Article was introduced into the Constitution by section 5 of the Constitution (First Amendment) Act, 1951, Article 31A having been introduced by section 4 of the same Amendment. Article 31B has to be read along with the Ninth Schedule because it is only those Acts and Regulations which are put in that Schedule that can receive the protection of that article. The Ninth Schedule was added to the Constitution by section 14 of the First Amendment Act, 1951. The device or mechanism which sections 5 and 14 or the First Amendment have adopted is that as and when Acts and Regulations are put into the Ninth Schedule by constitutional amendments made from time to time, they will automatically by reason of the provisions of Article 31B, receive the protection of that article. [36F H, 37A B] The view of the Court that it would not be proper to invoke the doctrine of stare decisis for upholding the validity of Article 31A, must govern the question of the validity of Article 31 B. But just as there are significant similarities between Articles 31A and 31B, there is a significant dissimilarity too. Article 31A enables the passing of laws of the description mentioned in clauses (a) to (e), in violation of the guarantee afforded by Articles 14 and 19. In so far as Article 31B is concerned, it does not define the category of laws which are to receive its protection, and secondly, it affords protection to Schedule laws against all the provisions of Part III of the Constitution. No Act can be placed in the Ninth Schedule except by the Parliament and since the Ninth Schedule is a part of the Constitution, no additions or alterations can be made therein without complying with the restrictive provisions governing amendments to the Constitution. Thus, Article 31B read with the Ninth Schedule provides what is generally described as, a protective umbrella to all Acts which are included in the Schedule, no matter of what character, kind or category they may be. Putting it briefly, whereas Article 31A protects laws of a defined category, Article 31B empowers the Parliament to include in the Ninth Schedule such laws as it considers fit and proper to include therein. Thus the fourth reason for not applying the rule of stare decisis to Article 31A that any particular law passed under clauses (a) to (e) can be accepted as good if it has been treated as valid for a long number of years but the device in the form of the Article cannot be upheld by the application of that rule, applies to Article 31B read with the Ninth Schedule by the self same test.[37 G H, 38 B D, E F] (3) The decision in Kesavananda Bharati must be treated as a landmark. The theory that the Parliament cannot exercise its amending power so as to 7 damage or destroy the basic structure of the Constitution, was propounded and accepted for the first time in Kesavananda Bharati. This is one reason for holding the laws incorporated into the Ninth Schedule before April 24,1973, on which date the judgment in Kesavananda Bharati was rendered. The second reason for drawing a line at a convenient and relevant point of time is that the first 66 items in the Ninth Schedule, which were inserted prior to the decision in Kesavananda Bharati, mostly pertains to laws of agrarian reforms.[38 G H, 39A, B] D. (1) Article 31C of the Constitution, as it stood prior to its amendment by section 4 of the Constitution (Forty Second Amendment) Act, 1976, is valid to the extent to which its constitutionality was upheld in Kesavananda Bharati. Article 31C, as it stood prior to the Constitution (Forty Second Amendment) Act does not damage any of the basic or essential features of the Constitution or its basic structure. Once it is held that Article 31A is valid on its own merits, it must follow logically that the unamended Article 31C is also valid. The unamended portion of Article 31C is not like an unchartered ship. It gives protection to a defined and limited category of laws which are passed for giving effect to the policy of the State towards securing the principles specified in clause (b) or clause (c) of Article 39. It is impossible to conceive that any law passed for such a purpose can at all violate Article 14 or Article 19. In fact, far from damaging the basic structure of the Constitution, laws passed truly and bona fide for giving effect to directive principles contained in clause (b) and (c) of Article 39 will fortify that structure. [10 F G, 40 G H, 41 A C] E. (1) The normal term of the Lok Sabha expired on March 18, 1976. On April 2, 1976, the Lok Sabha passed the Fortieth Amendment Act by which the Maharashtra Land Ceiling Amendment Acts were put in the Ninth Schedule as Items 157, 159 and 160. On November 24, 1976 the House of People (Extension of Duration) Amendment Act was passed extending the term of the Parliament for a further period of one year. The Forty Second Amendment Act was passed on November 12, 1976. The Lok Sabha was dissolved on January 18, 1977 and both the emergencies dated December 3, 1971 and June 25, 1975 were revoked on March 21, 1977. [43 E G] In so far as the proclamation of December 3, 1971 is concerned, there was manifest justification for that course of action. The danger to the security of the country was clear and present. From the various dates and events mentioned and furnished to the Court, it may be possible for a layman to conclude that there was no reason to continue the state of emergency at least after the formality of exchanging the prisoners of war was completed. But Courts have severe constraints which deter them from undertaking a task which cannot judicially be performed. [44 D F, H] (2) The two Acts, the House of the People (Extension of Duration) Act, Act 30 of 1976 and the House of the People (Extension of Duration) Amendment Act 109 of 1976, by which the duration of the Lok Sabha was extended are valid and lawful. The Fortieth and the Forty Second Constitutional Amendments cannot, therefore, be struck down on the ground that they were passed by a Lok Sabha which was not lawfully in existence. [45 F G] Section 2 of the first of these Acts, Act 30 of 1976, which was passed on February 16, 1976, provided that the period of five years in relation to the then House of the People shall be extended for a period of one year "while the Pro 8 clamation of Emergency issued on the 3rd day of December, 1971 and on the 25th day of June, 1975, are both in operation. " The second Act of Extension continues to contain the same provision. Both the proclamations of emergency were in fact in operation on February 16, 1976 when the first Act was passed as also on November 24, 1976 when the second Act, 109 of 1976, was passed. Neither the first Proclamation can be deemed not to be in existence, nor can the second Proclamation be held to have been issued mala fide and, therefore non est, since the evidence produced before the Court is insufficient for recording a decision on either of these matters. [45 C F] Per Bhagwati, J. (Contra) The doctrine of stare decisis can be invoked for sustaining the constitutional validity of Article 31A. [50 E] Minerva Mills vs Union of India, [1981] 1 SCR p. 206 reiterated; Ambika Prasad Mishra vs State of U.P., [1980] 3 SCR p. 1159, followed. Per Krishna Iyer, J. (Contra) Applying the principle of stare decisis, Article 31A is valid. In constitutional issues over stress on precedents is inept. Even so, great respect and binding value are the normal claim of rulings until reversed by larger Benches. [51 C D] Ambika Prasad Mishra vs State of U.P., [1980] 3 SCR p. 1159 reiterated.

riminal Appeal No. 361 1975. (Appeal by Special Leave from the Judgment and Order dated the 19th Sept., 1975 of the Karnataka High Court in Criminal Petition No. 52 of 1975.) D. Mookerjee and B.R.G.K. Achar, for the appellant. H.B. Datar and R.B. Datar, for respondents. The Judgment of the Court was delivered by BHAGWATI, J. , This appeal by special leave raises a short but interesting question of law relating to the interpretation of certain provisions of the Code of Criminal Procedure, 1898 (hereinafter referred to as the "Old Code"). The facts giving rise to the appeal are few and may be briefly stated as follows. One Bodegowda was murdered and in regard to this inci dent a case was registered at the Police Station on 13th October, 1973 as Crime No. 62 of 1973. The police inves tigated the case and after the investigation was complete, a charge sheet was filed against the respondents in the Court of Judicial Magistrate, 1st Class Chickmagalur and the case was registered as C.C. No. 2319 of 1973. The learned Magistrate held an inquiry in accordance with the provisions of Chapter XVIII of the old Code and being of the opinion that the respondents should be committed for trial, the learned Magistrate framed a charge against the respondents for having committed an offence under section 302 read with section34 of the Indian Penal Code. The learned Magis trate then read and explained the charge to the respondents and after giving an opportunity to the respondents to. give in a list the names of witnesses whom they wished to be summoned to give evidence, the learned Magistrate made an order committing the respondents for trial by the Court of Sessions, Chickmagalur. This order of committal was made on 15th March 1974 and in pursuance of it, the records of the case were forwarded to the Court of Sessions, Chickmaga lur where they reached on 23rd March, 1974 and the case was registered as S.C. No. 5 of 1974. The Sessions Judge fixed the trial of the case on 15th July, 1974 but before that date, the Public Prosecutor filed an 352 application on 29th June, 1974 praying for permission to withdraw from the prosecution under section 494 of the old Code. The learned Sessions Judge by an order passed on the same day accorded permission to the Public Prosecutor to withdraw from the prosecution and 'discharged ' the respond ents in respect of the offence charged against them. The State thereafter ordered fresh investigation into the of fence and ha consequence of such investigation, a new charge sheet was filed against the respondents and three other accused in the Court of Judicial Magisrate, 1st Class, Chickmagalur. Since this chargesheet was filed after 1st April, 1974 when the Code of Criminal Procedure, 1973 (hereinafter referred to as "New Code") had come into force, the learned Magistrate, following the provisions of the New Code, committed the respondents and the other three accused to stand their trial before the Court of the Ses sions Judge, Chickmagalur for the same offence. When the case came up for hearing before the Sessions Judge, the respondents made an application contending that by virtue of the order dated 29th June, 1974 made by the Sessions Judge under section 494 of the Old Code, the respondents had been acquitted and they were, therefore, not liable to be prose cuted again for the same offence in view of section 300 of the New Code. The Sessions Judge rejected the applica tion, taking the view that the respondents were discharged and not acquitted under the Order dated 29th June, 1974 and, therefore, section 300 of the New Code was not applicable and there was no bar against their fresh prosecution for the same offence. The respondents challenged this Order by preferring a revision application to the High Court. This revision application was allowed and the High Court held that though the Order passed by the Sessions Judge directed that the respondents be 'discharged ', the legal effect of this order was to bring about the acquittal of the respond ents since the withdrawal from the prosecution was made after the charge had been framed and the respondents having been acquitted under that Order, the bar of section 300 of the New Code was attracted and the respondents were not liable to be prosecuted again for the same offence. This order made by the High Court is challenged in the present appeal preferred by the State with special leave obtained from this Court. It may be pointed out that before the High Court it was contended on behalf of the State that the earlier case before the Sessions Judge, viz., Sessions Case No. 5 of 1974, was governed by the provisions of the new Code and, therefore. in view of section 228 of the new Code, t was the obligation of the Sessions Judge to frame a charge before proceeding with the trial and since the withdrawal from the prosecution was effected before the framing of such charge by the Sessions Judge, the order passed by the Sessions Judge amounted to an order of discharge and not of acquit tal. This contention was, however, not pressed at the hearing of the appeal before us and it was conceded, and in our opinion rightly, that the earlier case before the Ses sions Judge was governed by the provisions of the old Code and the new Code had no application to it. Section 484 of the new Code clearly provides that where a trial is pending immediately before the commencement of the new Code, it shall be proceeded with in accordance with the provisions of the old Code as if the new Code were not in force. Here in the present case the Judicial Magistrate had already made an order of. 353 committal on 15th March, 1974 and pursuant to that order, the records of the case had reached the Court of the Ses sions Judge on 23rd March, 1974. The case was, therefore, already before the Court of Sessions prior to 1st April, 1974 and it was pending before that court for trial on 1st April, 1974 when the new Code came into force. It is immaterial as to when the case was actually registered and a number given to it. Since the case was pending for trial before the Sessions Court on 1st April, 1974, it was liable to be tried in accordance with. the provisions of the old Code and it was for this reason that the application for withdrawal from the prosecution was also made by the Public Prosecutor under section 494 of the old Code and not under the corresponding provision of the new Code. Sec tion 494 of the old Code provides that any Public Prosecutor may, with the consent of the Court, in cases tried by jury before the return Of the verdict and in other cases, before the judgment is pronounced, withdraw from. the prosecution of any person either generally or in respect of any one or more of the offences for which he is tried and the section then goes on to add that: "upon such withdrawal, (a) if it is made before a charge has been framed, the accused shall be discharged (in respect of such offence or offences); (b) if it is made after a charge has been framed or when under this Code no charge is required he shall be acquitted in respect of such offence or offences) . " The withdrawal from the prosecution in the present case having been made under this section, it is clear that if it was made before a charge was framed, the respondents would be discharged but if it was made a charge had been framed, the consequence would be that the respondents would be acquitted. It, therefore, becomes material to inquire whether at the date when the withdrawal from the prosecution was made, a charge had been framed against the respondents or not. Whether the order of the Sessions Judge granting consent to the withdrawal from the prosecution amounted to an order of discharge or acquittal would depend upon the answer to this question. It may be pointed out that it is of no consequence that the Sessions Judge directed the respondents to be 'discharged ' because if the legal effect of the order was to acquit the respondents, then the incor rect use of the expression 'discharged ' by the Sessions Judge would not alter the legal position and convert the order of acquittal into one of discharge. Now, in order to determine whether the withdrawal from the prosecution was made before the framing of the charge or after, it is necessary to notice the scheme of the relevant provisions of the old Code. Sessions Case No. 5 of 1974 in which the withdrawal was made was committed to the Sessions Court by the Judicial Magistrate under the provisions of Chapter XVIII of the old Code. The proceeding before the Judicial Magistrate was instituted on a police report and the learned Magistrate, therefore, followed the procedure specified in section 207A. This section lays down a special procedure to be adopted in proceedings instituted on police report with a view to expeditious disposal of criminal cases. Sub section (1) provides that the Magistrate, on 354 receipt of the report forwarded under section 173, shall fix a date for the purpose of holding an enquiry and sub section (2) empowers the Magistrate to issue process for compelling the attendance or any witness or the production of any document. The Magistrate is required by sub section (3) to satisfy himself at the commencement of the enquiry that the documents referred in section 173 have been furnished to the accused. Sub section (4) then requires the Magistrate to proceed to. take the evidence of such persons as may be produced by the prosecution as witnesses to the actual commission of the offence and also empowers the Magistrate to take the evidence of any other witness for the prosecu tion if he thinks it necessary to do so in the interest of justice. The accused is given liberty under sub section (5) to cross examine the witnesses examined under sub sec tion (4) and subsection (6) provides that the Magistrate shall, if necessary, examine the accused for the purpose of enabling him to explain any circumstance appearing in the evidence against him and thereafter give to the prosecution and the accused an opportunity of being heard. If the Magis trate, at the end of this procedure, feels that there is no ground for committing the accused for trial, he is bound to discharge the accused under subsection (6). But where "upon such evidence being taken. , such documents being considered, such examination (if any) being made and the prosecution and the accused being given an opportunity of being heard," the Magistrate forms an opinion that the accused should be committed for trial, sub section (7) provides that the Magistrate shall frame a charge under his hand declaring with what offence the accused is charged. Sub section (8) then requires the Magistrate to real and explain the charge to the accused and to give a copy thereof to him free of cost. Sub section (9) provides that the accused shall then be required to give in at once, orally or in writing, a list of the persons, if any, whom he wishes to be summoned to give evidence at the trial and when the accused on being required to. give the list under sub section (9) declines to do so., or gives such list, the Magistrate is empowered under sub section (10) to make an order committing the accused for trial by the Court of Session. It will thus be seen that, according to this procedure, the Magistrate is required to frame a charge and to read and explain it to the accused before making an order of committal and the accused is in fact committed to stand his trial before the Court of Session on the charge so framed. This was the procedure followed by the Judicial Magistrate in the present case and in accordance with it, the Judicial Magistrate framed a charge against the respond ents and committed them for trial to. the Court of Session on this charge. The procedure to be followed by the Sessions Court when an accused is committed to it for trial is laid down in Chapter XXII of the old Code. Section 271 provides that when the court is ready to commence trial, the accused shall appear or be brought before it and the charge shall be read out and explained to him and he shall be asked whether he is guilty of the offence charged or claims to be tried. That is the first step to be taken by the Sessions Court in relation to the case committed to it for trial. Nov, obvi ously, the charge that is required to be read out and ex plained to the accused is the charge that has been framed by the Committing Magistrate under sub section (7) 355 of section 207A. There is no provision in Chapter XXIII which requires the Sessions Court to frame a charge before proceeding with the trial of the accused. That is plainly unnecessary because a charge is already framed by the Magis trate when he commits the accused for trial to the Sessions Court and that is the charge on which the Sessions Court is to try the accused. Of course, the Sessions Court is given an overriding power under section 226 that when it finds that an accused is committed for trial without a charge or the charge is imperfect or erroneous, it may frame a charge or add to or otherwise alter the charge, as the case may be, having regard to the rules contained in the old Code as to the framing of charges. But this is only an enabling power to frame a charge where, for some reason or the other, no charge has been framed by the committing Magistrate or to correct a charge where the charge is imperfect or erroneous. It does not say that in every case the Court of Session shall frame a new charge before proceeding with the trial. On the contrary, it clearly postulates that ordinarily there would be a charge framed by the committing Magistrate and it is on that charge that the accused would be tried, unless the Court of Session finds it necessary to alter or amend the charge. It is interesting to compare the procedure under the new Code where there is no provision for framing a charge by the committing magistrate and it is only when the Court of Session to which the case is committed finds, after considering the record of the case and the documents submit ted therewith and after hearing the submissions of the accused and the prosecution, that there is ground for presuming that, the accused has committed an offence which is exclusively triable by the Court of Session, that it is required by section 220 of the new Code to frame a charge against the accused. The charge against the accused under the procedure prescribed in the new Code is to be framed for the first time by the Court of Session while according to the procedure prescribed under the old Code, the charge is framed by the committing Magistrate and the Court of Session is merely given the power to alter or amend the charge, if it thinks necessary to do so. It is, therefore, clear that when the Court of Session commences the trial of an accused, there is already before it a charge framed by the committing Magistrate and it is that charge, unless altered or amended under section 226, that is required to be read out and explained to the accused and on which the plea of the ac cused is required to be taken. It must follow inevitably as a necessary corollary from this proposition that when the prosecution against an accused who has been committed for trial is allowed to be withdrawn by the Court of Session under section 494, the withdrawal of the prosecution would be after the framing of the charge against the accused and it must result in the acquittal of the accused under clause (b) of that section. We find that this view which we are taking has prevailed with the Madras High Court since the last about eight or nine decades. The Madras High Court held as far back as 1888 in Queen Empress vs Sivarama(1) that where an accused is committed to stand his trial before a court of session on a Charge and the prosecution is withdrawn by (1) 356 the public prosecutor with the consent of the court of session under section 494, the accused is entitled to be acquitted and not merely discharged. The same view was reiterated by the Madras High Court in In re Velayudha Mudali(1). We are in agreement with the view taken in these two decisions of the Madras High Court. We accordingly affirm the decision of the High Court holding that by reason of the Order dated 29th June, 1974 passed by the Sessions Judge granting consent to the with drawal from the prosecution in the earlier case, the re spondents were acquitted and in view of section, 300 of the new Code, they were not liable to be tried again for the same offence and dismiss the appeal. P.B.R. Appeal dismissed. (1) A.I.R 1949 Mad.

Ram Sanehi received two gun shot wounds on his chest, and died within ten minutes. Two of his children claimed to have witnessed the occurrence. The dead body was subjected to post mortem only after about 24 hours had elapsed. The same evening, appellant Subhash surrendered, and appellant Shyam Narain was arrested, though for another offence altogether. The Sessions Court convicted them under section 302 I.P.C. and sentenced Subhash to death and Shyam Narain to imprisonment for life. The accused moved the High Court in appeal, while the Sessions Court referred the matter to it under section 374, for confirmation of the death sentence. The question before this Court was, whether in the case of such references, the High Court was obliged to examine the entire evidence independently. Allowing the appeal, the Court, ^ HELD: On a reference for confirmation of the sentence of death, the High Court is under an obligation to proceed in accordance with the provisions of sections 375 and 376 of the Criminal Procedure Code. The High Court must not only see whether the other order passed by the Sessions Court is correct but it is under an obligation to examine the entire evidence for itself, apart from and independently of the Sessions Court 's appraisal and assessment of that evidence. [589A B] Jumman and Ors. vs The State of Punjab AIR 1957 S.C. 460; Ram Shanker Singh and Ors. vs State of West Bengal [1962] Supp. 1 SCR 49 at 59 and Bhupendra Singh vs The State of Punjab ; , followed.

Civil Appeal No. 1601 of 1971. Appeal by Special Leave from the Judgment and Order dated the 30th March, 1971 of the Madras High Court in C.R.P. No. 19883 of 1968. T.S. Krishnamurthy Iyer, Gopal Subramanium and Mrs. Saroja Gopalakrishnan for the Appellant. P. Govindan Nair, Miss Seita Vaidyalingam and Mrs. Baby Krishnan for the Respondent. The Judgment of the Court was delivered by PATHAK, J. This appeal by special leave is directed against an order dated March 30,1971 of the Madras High Court dismissing a revision petition arising out of proceedings under the Madras City Tenants Protection Act, 1921. Almost fifty years ago, on September 19, 1934, the respondent and his mother granted a lease in favour of one Abhirama Chettiar in respect of 50 cents of open land in Coimbatore for a period of twenty years on an annual rent of Rs. 1080 for the construction of a building suitable for use as a theatre. Abhirama Chettiar constructed a theatre on the site. Subsequently, on July 14, 1937 Abhirama 332 Chettiar assigned his rights to the appellant. The appellant attorned to the respondent and was accepted as a tenant. In March, 1964, the respondent served notice upon the appellant calling upon it to vacate the property and surrender vacant possession of the site. The appellant refused to do so, and set up an oral agreement entitling it to an extension of the lease for a further period of twenty years. The respondent filed a suit against the appellant for its ejectment. Shortly thereafter, the appellant filed a suit against the respondent for specific performance of an agreement to extend the lease. On January 16, 1957 the learned Subordinate Judge, Coimbatore, decreed the respondent 's suit for possession with mesne profits and dismissed the appellant 's suit. The appellant appealed to the High Court against the two decrees. During the pendency of the appeals the Madras City Tenants ' Protection Act, 1921 was extended to the town of Coimbatore with effect from February 19, 1958. The appellant filed Civil Miscellaneous Petition No. 1835 of 1958 in the appeal arising out of the suit for ejectment and prayed for directions under section 9 of the Act for the sale of the site to it. The application was resisted by the respondent on the ground that section 9 was void. On July 28, 1958 Panchapkesa Iyer J. passed the following order: "I declare that the petitioner is entitled to purchase the site concerned in the petition under Section 9 of the Act, but on paying the full market value current today as freely undertaken by himself. The lower Court will appoint a suitable experienced commissioner to fix the value of the site based on the market value prevalent this day (28th July 1958). The Commissioner 's fees will be paid by the commissioner who will bear it himself. In this petition all the parties will bear their own costs. As soon as this order becomes final the petitioner will withdraw A.S. No. 100 of 1957 and 255 of 1957 on the file of this Court, as infructuous as undertaken by him, and they will then be dismissed without costs. " The petition was remitted by the learned Judge to the Subordinate Court, Coimbatore for appointing a Commissioner to fix the market value of the site. Against that order the respondent preferred a Letters Patent Appeal, which was dismissed. The respondent then appealed to the Supreme Court. By its judgment dated March 4, 1964, reported as N. Vajrapani Naidu and Another vs The New Theatre 333 Carnatic Talkies Ltd., Coimbatore the Supreme Court upheld the judgment of Panchapakesa Iyer J. and dismissed the appeal. Now during the pendency of the appeal in the Supreme Court, section 9 of the Madras City Tenant 's Protection published in the Fort St. George Gazette dated July 27, 1960 Act was amended by Madras Act No. XIII of 1960. Upon that, the respondent filed two petitions in the High Court, C.M.P. No. 7241 of 1960 praying for the review and modification of the order dated July 28, 1958 in the light of the amended section 9, and C.M.P. No. 7242 of 1960 praying for stay of the enquiry directed by that order. On April 1, 1964, upon the dismissal of the respondent 's appeal in this Court, the High Court dismissed the appeals against the decrees passed by Panchapakesa Iyer J. as withdrawn. The High Court also transferred the C.M.P. Nos. 7241 and 7242 of 1960 to the trial court for consideration, and directed the trial court to fix the market value and pass final orders in C.M.P. No. 1835 of 1958. The learned Subordinate Judge held that the respondent was entitled to the benefit of the amended section 9 of the Act, and directed the Commissioner to determine the minimum extent of land necessary for convenient enjoyment by the appellant to take steps for fixing the price thereof on the basis of the average market value of the three years immediately preceding the date of its order. C.M.P. No. 7242 of 1960 was dismissed as superfluous. Against the order of the trial court the appellant filed an appeal in the court of the learned First Additional Judge, Coimbatore. The appeal was dismissed. Thereafter, the appellant filed Civil Revision Petition No. 1883 of 1968 in the High Court, and on March 30, 1971 the High Court dismissed the Revision Petition. The High Court affirmed that the case was governed by the amended section 9 of the Act, and rejected the contention of the appellant that C.M.P. No. 7241 of 1960 was not competent in the High Court as the order dated July 28, 1958 by Panchapakesa Iyer J. had been confirmed by the Supreme Court, in appeal. Two contentions have been raised by the appellant in this appeal. The first is that the amended section 9 of the Madras City Tenants ' Protection Act cannot be invoked in the present case, and that section 9, as it stood before the amendment, is the provision which governs the rights of the parties. The other contention is that, in any event, the amended section 9 should have been invoked in the appeal 334 pending in this Court and the relief not having been sought there it was not open to the respondent to seek relief after the appeal has been disposed by this Court and the order of Panchapakesa Iyer J. had acquired finality. Before its amendment by Madras Act XIII of 1960, section 9 provided as follows: "9. (1) Any tenant who is entitled to compensation under section 3 and against whom a suit in ejectment has been instituted or proceeding under section 41 of the , taken by the landlord, may within one month of the date of the Madras City Tenants Protection (Amendment) Act, 1955, coming into force or of the date with effect from which this Act is extended to the municipal town or village in which the land is situated or within one month after the service on him of summons, apply to the court for an order that the landlord shall be directed to sell the land for a price to be fixed by the court. The court shall fix the price according to the lowest market value prevalent within seven years preceding the date of the order and shall order that, within a period to be determined by the court, not being less than three months and not more than three years from the date of the order, the tenant shall pay into court or otherwise as directed the price so fixed in one or more instalments with or without interest. (2) XX XX XX (3) On payment of the price the court shall pass a final order directing the conveyance of the land by the landlord to the tenant. On such order being made the suit or proceeding shall stand dismissed, and any decree or order in ejectment that may have been passed therein but which has not been executed shall be vacated. " Upon its amendment, section 9 now reads: "9 (1) (a) Any tenant who is entitled to compensation under section 3 and against whom a suit in ejectment has been instituted or proceeding under section 41 of the , taken by the landlord, may within one month of the date of Madras 335 City Tenants, Protection (Amendment) Act, 1955 coming into force or of the date with effect from which this Act is extended to the municipal town or village in which the land is situated or within one month after the service on him of summons apply to the court for an order that the landlord shall be directed to sell for a price to be fixed by the court, the whole or part of, the extent of land specified in the application. (b) on such application, the court shall first decide the minimum extent of the land which may be necessary for the convenient enjoyment by the tenant. The court, shall then fix the price of the minimum extent of the land decided as aforesaid, or of the extent of the land specified in the application under clause (a) whichever is less. The price aforesaid shall be the average market value of the three years immediately preceding the date of the order. The court shall order that within a period to be determined by the court not being less than three months and not more than three years from the date of the order, the tenant shall pay into court or otherwise as directed the price so fixed in one or more instalments with or without interest. (2) XX XX XX XX (3) (a) on payment of the price fixed under clause (b) of sub section (1) the court shall pass an order directing the conveyance by the landlord to the tenant of the extent of land for which the said price was fixed. The court shall by the same order direct the tenant to put the landlord into possession of the remaining extent of the land, if any. The stamp duty and registration fee in respect of such conveyance shall be borne by the tenant. (b) On the order referred to in clause (a) being made, the suit or proceeding shall stand dismissed, and any decree or order in ejectment that may have been passed therein but which has not been executed shall be vacated. " The question whether the case is governed by the unamended section 9 or the amended section 9 turns on the consideration whether the amendment of section 9 was intended to operate retrospectively or must 336 be construed as prospective only. Let us begin from the beginning. When the Madras City Tenants ' Protection Act was extended to the town of Coimbatore in 1958, the respondent 's suit for ejectment had already been filed and in fact was pending in appeal. It was never disputed between the parties that section 9 would operate retrospectively and affect the rights of the parties in the pending appeal. It was on that basis that the appellant applied to the court for the benefit of the provisions of section 9. The Act itself clearly laid down that section 9 could be invoked in a pending suit or proceeding, for section 10 declared that section 9, among other provisions, would "apply to suits in ejectment . . . which are pending . . in the city of Madras before the commencement of the Madras City Tenants ' Protection (Amendment) Act, 1958, and in any municipal town or village before the date with effect from which this Act is extended to such town or village. " It is to enable a tenant to secure the benefit of section 9 in a pending suit or proceeding that section 9 (1) provides that such tenants may apply under that provision "within one month of the date of the Madras City Tenants ' Protection (Amendment) Act, 1955 coming into force or of the date with effect from which this Act is extended to the municipal town or village in which the land is situated . ." This provision was necessary to enable section 9 to govern pending suits and proceedings. The other provision in section 9 (1) providing that the period of one month would commence from "the service on him of summons" applied to future suits and proceedings. When the Madras Act XIII of 1960 amended the principal Act, it amended not only section 9 thereof but section 10 also. Section 10 was amended in order that the amended provisions should apply to pending ejectment suits and proceedings. The Legislature employed the same device in respect of pending suits and proceedings as it had when respect of pending suits and proceedings as it had when the Act was originally applied to such suits and proceedings, the only difference being that while the original section 10 referred to the then existing provisions of the Act, the amended section 10 referred to the amended provisions, including the amended section 9, of the Act. It is apparent from the provisions of the amended section 9 (1) extracted earlier that the scheme respecting the tenant 's right to purchase and the landlord 's obligation to sell, the land now stood modified. Whereas the original section 9 (1) provided for the making of an application by the tenant within a specified period to the court for an order directing the landlord to sell the land for a price to be fixed 337 by the court, and the court was required to fix the price according to the lowest market value prevalent within seven years preceding the date of the order, and to order, within a period to be determined by the court, the tenant to pay into court or otherwise as directed the price so fixed, the amended section 9 (1) is divided into two clauses. Clause (a) entitles the tenant, within an identical period, to apply to the court for an order requiring the landlord to sell, for a price to be fixed by the court, the whole, or part of, the extent of the land specified in the application. The court can now direct the sale of a part only of the land mentioned in the application and is not compelled to pass an order in respect of the entire land. Clause (b) provides that the court will first decide the minimum extent of the land necessary for convenient enjoyment by the tenant, and thereafter the court will fix the price of such minimum extent of land or of the extent of the land specified in the application, whichever is less. Furthermore, the price is to be the average market value of the three years immediately preceding the date of the order. We are clear in our mind that if the suit was pending on the date when the amendments in the principal Act were brought into force, the amended provisions of the Act will govern the disposal of the suit. Now, the appellant had already filed C.M.P. No. 1835 of 1958 praying for directions under section 9 for the sale of the site. On that application Panchapakesa Iyer J. had passed an order dated July 28, 1958 holding the appellant entitled to purchase the site on paying the full market value current on that date, and had directed the trial court to appoint a Commissioner to fix the value of the site. The order did not dispose of the application and the suit, for under the original section (3) the statute contemplated an order by the court, after it was satisfied that the tenant had paid the price determined by it, directing the conveyance of the land by the landlord to the tenant. It was only after such order was made that the application and the suit would stand concluded. In Gnanaprakasam and Another vs Mahboob Bi and others, a learned Single Judge of the Madras High Court held that even where the original court had made an order fixing the price of the land and directing its payment by the tenant, the application filed by the tenant could not be regarded as at an end so long as final orders directing execution of conveyance and delivery of possession were not passed. The stage for passing such order had not been reached yet when the principal Act was amended by 338 Act XIII of 1960. The suit continued pending on the date when the amendments took effect. And consequently, it was now governed by the provisions of the amended s.9. We may reiterate that the order dated July 28,1958 did not complete the proceeding in the suit. It constituted one stage only in the suit, and inasmuch as the suit was now to be disposed of in accordance with the amended statute the incomplete proceeding had to give way to the operation of the amended statute. As the scheme under the original section stood superseded by the scheme enacted under the amended sections the order of July 28,1958 stood aborted and pursuant to the amended section fresh proceedings had to be taken by the court in order to dispose of the suit. The respondent, therefore, filed C.M.P. No. 7241 of 1960 praying for a review of the order dated July 28,1958 in the light of the amended s.9. In other words, the court was now called upon to dispose of the application of the appellant, not in the light of the provisions of the original s.9 but on the basis of the provisions of the amended s.9. We are of opinion that the trial court is right in taking the view, and the High Court in affirming it, that C.M.P. No. 1883 of 1968 and the suit had to be disposed of on the basis of the provisions of the amended s.9. The contention to the contrary raised by the appellant must fail. We are also unable to accept the other contention of the appellant that the respondent should have invoked the benefit of the amended section 9 in the appeal pending in this Court, and that not having done so it was not open to the respondent to apply for relief in the court below after the appeal had been disposed of by this Court. It is apparent that the scope of the appeal filed in this Court was restricted to the validity of s.9 and section 12 of the unamended Madras City Tenants ' Protection Act. It must be remembered that the order of Panchapakesa Iyer J, when gave rise to that appeal, was made before the Act was amended in 1960, and this Court concerned itself solely with the validity of the unamended statutory provisions. In fact, perusal of its judgment will show that this Court declined to consider the operation of the amendments brought about in 1960. In the circumstances, it is not possible to urge that the respondent might, or ought to, have insisted on relief under the amended s.9 in the appeal pending in this Court. It was, 339 therefore, open to the respondent after the disposal of the appeal by this Court to apply to the court below for an order in terms of the amended s.9. In the result, the appeal is dismissed with costs. N.V.U. Appeal dismissed.

The respondent and his mother granted a lease in respect of an open site of land for a period of 20 years in favour of a person, who constructed a theatre thereon and who later assigned his rights to the appellant and the appellant was accepted as a tenant by the respondent. The respondent subsequently served notice upon the appellant calling upon it to vacate the property and to surrender vacant possession of the site. The appellant refused, and set up can oral agreement entitling it to an extension of the lease for a further period of 20 years. The respondent filed a suit for ejectment against the appellant and the appellant filed a suit for specific performance of an agreement to extend the lease. The subordinate Court decreed the respondent 's suit for possession with mesne profits and dismissed the appellant 's suit. The appellant appealed to the High Court against the two decrees, and during their pendency the Madras City Tenants ' Protection Act, 1921 was extended to the town where the suit property was situated. The appellant thereupon filed a Civil Miscellaneous Petition in the appeal arising out of the suit for ejectment, for directions under section 9 of the Act for sale of the site. This application was resisted by the respondent on the ground that section 9 was void. The High Court upheld the validity of the section, declared the appellant entitled to purchase the site under section 9 and remitted the matter to the subordinate Court for appointment of a Commissioner to fix the market value of the site. Against that order the respondent preferred a Letters Patent Appeal which was dismissed and this order was confirmed by the Supreme Court. During the pendency of the appeal in this Court, section 9 of the Madras City Tenants ' Protection Act was amended by Madras Act No. XIII of 1960. The respondent filed two Civil Miscellaneous Petitions in the High Court praying for review and modification of the earlier order in view of the amended section 9, and for stay of the valuation proceedings. 330 After the dismissal of the respondent 's appeal in the Supreme Court, the High Court dismissed the pending appeals as withdrawn transferred the two Civil Miscellaneous Petitions to the trial court and directed it to fix the market value of the site and pass final orders. The subordinate Court held that the respondent was entitled to the benefit of the amended section 9, and directed the Commissioner to determine the minimum extent of land necessary for convenient enjoyment and fix the price on the basis of the average market value of the land during the three years immediately preceding the date of its order. The appeal to the District Court and the Civil Revision Petition in the High Court against this order were dismissed. In the appeal to this Court it was contended on behalf of the appellant that the amended section 9 of the Madras City Tenants ' Protection Act, could not be invoked, and that section 9, as it stood before the amendment, governed the rights of the parties, and that in any event the amended section 9 should have been invoked in the appeal pending in the Supreme Court, and that relief not having been sought there, it was not open to the respondent to seek relief after the appeal had been disposed of by the Supreme Court. Dismissing the appeal, the Court. HELD: 1 (i) If the suit was pending on the date when the amendments in the principal Act (Madras City Tenants ' Protection Act, 1921) were brought into force, the amended provisions of the Act will govern the disposal of the suit. [337 D] (ii) The suit continued pending on the date when the principal Act was amended by Act XIII of 1960. Consequently, it was governed by the provisions of the amended section 9. As the scheme under the original section stood superseded by the scheme enacted under the amended section, the order of July 28, 1958 stood aborted and pursuant to the amended section fresh proceedings had to be taken by the Court to dispose of the suit. [338 A B] (iii)When the Amendment Act XIII of 1960 amended the principal Act, it amended not only section 9 thereof but section 10 also. Section 10 was amended in order that the amended provisions should apply to pending ejectment suits and proceedings. The provisions of the amended section 9 (1) reveal that the scheme respecting the tenant 's right to purchase, and the landlord 's obligation to sell, the land stood modified. Whereas the original section 9 (1) provided for the making of an application by the tenant within a specified period to the court for an order directing the landlord to sell the land for a price to be fixed by the court, and court was required to fix the price according to the lowest market value prevalent within seven years preceding the date of the order, and to order, within a period to be determined by the court, the tenant to pay into court or otherwise as directed the price so fixed, the amended section 9 (1) is divided into two clauses. Clause (a) entitles the tenant within an identical period, to apply to the court for an order requiring the landlord to sell, for a price to be fixed by the court, the whole, or part of, the extent of the land specified in the application. Clause (b) provides that the court will first decide the minimum extent of the land necessary for convenient enjoyment by the tenant, and thereafter the 331 court will fix the price of such minimum extent of land or of the extent of the land specified in the application, whichever is less. [336 F H; 336 H 337 C] In the instant case, the appellant had already filed Civil Miscellaneous Petition No. 1835 of 1958 praying for directions under section 9 for the sale of the site. On that application the High Court passed an order dated July 28,1958 holding the appellant entitled to purchase the site on paying the full market value current on that date and had directed the trial court to appoint a Commissioner to fix the value of the site. That order did not dispose of the application and the suit, for under the original section 9(3) the statute contemplated an order by the Court, after it was satisfied that the tenant had paid the price determined by it, directing the conveyance of the land by the landlord to the tenant. It was only after such an order was made that the application and the suit would stand concluded. [337 E G] 2. The scope of the earlier appeal filed in the Supreme Court was restricted to the validity of section 9 and 12 of the unamended Madras City Tenants ' Protection Act, and the Court declined to consider the operation of the amendments brought about in 1960. It was, therefore, open to respondent after the disposal of the appeal to apply to the court below for an order in terms of the amended section 9. [338 F H; 339 A]

Civil Appeal No. 34 of 1980. From the Judgment and Order dated 7 11 1979 of the Madras High Court in Writ Petition No. 2886/76. Soli J. Sorabjee, D.N. Gupta and H. K. Dutt for the Appellant. R. K. Garg and V. J. Francis for the Respondent. The Judgment of the Court was delivered by SEN, J. This appeal on certificate, from the judgment of the Madras High Court raises a question of some complexity. The ques 304 tion is, whether an employer is statutorily bound to pay wages if the workmen are on strike, for any of the national or festival holidays falling within the period of strike, under s.3 read with sub s.(1) of s.5 of the Tamil Nadu Industrial Establishments (National and Festival Holidays) Act, 1958 (hereinafter to referred to as `the Act '). The facts of the case are not in dispute. Messrs Madura Coats Limited are an industrial establishment within the meaning of s.2(e) of the Act, owning textile mills at Madurai, Ambasamudram and Tuticorin in the State of Tamil Nadu. The cotton textile industry had been declared to be a public utility service for purposes of the . In respect of claim for bonus for the year 1974 75 a settlement was entered into which stood superseded by the Payment of Bonus Ordinance, 1975. The management accordingly took the view that no bonus was payable for the year in question, since its payment would be against the provisions of the Act, as amended by the Ordinance. This resulted in a strike by the workmen of the concerned mills. The workmen were on strike from January 21, 1976 to February 5, 1976. The strike was called off by the workmen on February 6, 1976 due to the intervention of the Commissioner of Labour, Madras, who brought about a settlement. The proceedings of the Commissioner of Labour dated February 5, 1976 show that the parties, i.e., the management and the workmen, had agreed to abide by his decision in the matter. The terms of the settlement were, inter alia, that the strike was to be called off forthwith and the workmen would commence work on February 6, 1976, that the management 's proposal 10 make a penal cut of eight days ' wages of the workmen for going on an illegal strike would be waived and that there would be no wages payable for the period of the strike. In accordance therewith, the workmen resumed work on February 6, 1976 and the management paid them wages for the month of January, 1976 after excluding there from the wages payable for the period of strike during January, namely, for the period from January 21 to 31, 1976. The management having withheld the wages payable for January 26, 1976, the Inspector of Factories, Ist Circle, Madurai addressed a communication dated May 22, 1976 stating that in view of s.5 of the Act, payment of wages for January 26, 1976 had to be made. The management challenged the order by a writ petition but the High Court declined to interfere. It held that the appellant was bound to pay to the workmen wages for January 26, 1976, having regard to the provisions contained in s.3 and sub s.(1) of s.5 of the Act, even though the workmen were on strike on that day. The correctness of that decision is in question. 305 It is urged firstly that in view of the term `wages ' in s.2(g) of the Act, no wages were payable to the workmen for January 26, 1976, in terms of the contract of employment since they were not available for work and thereby the management were deprived of the right given to them under sub s.(2) of s.5 of the Act, to call upon the workmen to come and do the work and secondly, the right of the workmen to receive wages for the national or festival holidays under s.3 of the Act, is subject to the right of the management under sub s.(2) of s.5 to call upon them to come and work on such holidays. It is said that when a person creates a situation by going on a strike whereby he is not available for work, the terms of employment cannot be fulfilled and, therefore, a fortiori no wages are payable. It is suggested that the right of the workmen to wages is not dependent on their status as such, but on the fulfilment of the contract of employment. It would be convenient in the first instance to set out the relevant provisions of the Act. In the Act the term `wages ' as defined in s.2(g), insofar as relevant, is in these terms: "2(g) "Wages" means all remuneration capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of the work done by him in such employment. ". Section 3 of the Act provides as follows: "3. Grant of National and Festival holidays Every employee shall be allowed in each calendar year a holiday of one whole day on the 26th January, the first May, the 15th August and the 2nd October and five other holidays each of one whole day for such festivals as the Inspector may, in consultation with the employer and the employees, specify in respect of any industrial establishment. " Sub sections (1) and (2) of s.5 of the Act provide: "5. Wages (1) Notwithstanding any contract to the contrary, every employee shall be paid wages for each of the holidays allowed to him under section 3. (2)(a) Notwithstanding anything contained in section 3, any employee. may be required by the employer to work on 306 any holiday allowed under that section if the employer has, not less than twenty four hours before such holiday, (i) served in the prescribed manner on the employee a notice in writing requiring him to work as aforesaid; and (ii) send to the Inspector having jurisdiction over the area in which the industrial establishment is situated and displayed in the premises of the industrial establishment a copy of such notice. (b) Where an employee works on any holiday allowed under section 3, he shall, at his option, be entitled to (i) twice the wages; or (ii) wages for such day and to avail himself of a substituted holiday with wages on one of the three days immediately before or after the day on which he so works. " The legislation is intended to provide for national and festival holidays in industrial establishments in the State. Section 3 of the Act provides that every employee in an industrial establishment shall be entitled to four national and five festival holidays in each calendar year. Sub section (1) of s.5 provides that `notwithstanding any contract to the contrary ' every employee shall be paid wages for each of the holidays allowed to him under s.3. The matter is thus taken out of the realm of contract. There is a statutory obligation cast on the employer and a corresponding benefit conferred on the employees. The word `allowed ' in sub section (1) of s.5 means holidays allowed under s.3. In other words, the employer has no option in the matter. There can be no contracting out of the liability to pay wages for such holidays. It will be noticed that both sub sections (1) and (2) of s.5 contain non obstante clauses. While the non obstante clause in sub s.(1) of s.5 gives to the workmen the right to claim wages for such holidays `notwithstanding any contract to the contrary ', the non obstante clause in sub section (2) of s.5 subordinates the right of the workmen to claim wages for the national or festival holidays `notwithstanding anything contained in s.3 '. Sub sections (1) and (2) of s.5 have been enacted with separate and distinct objects and they operate on different planes. Sub section (2) of s.5 confers upon the employer the right to call 307 upon the workmen to come and work on such holidays on the fulfilment of the conditions set out therein. As a matter of construction, the non obstante clause contained in sub section (2) of s.5 has an overriding effect over s.3. The right of the workmen to claim wages under sub section (1) of s.5 for any of the national and festival holidays under s.3 is, therefore, co extensive with the right of the management under sub s.(2) of s.5 to call upon the workmen to come and work on such holidays subject to the compliance with the conditions laid down therein. On the construction of sub s.(2) of s.5 of the Act and its impact on s.3 and sub s.(1) of s.5 of the Act, there is a conflict of opinion in the High Court. In Vasudevan, R.M.S. Union vs Lotus Mills Ltd. Koshal J. in dealing with a case where the workers of a textile mill went on a strike, and in between there were two paid holidays, held that wages for the holidays in question were payable despite the strike since sub s.(1) of s.5 was absolute and unconditional and gave to the employees the right to stay away from work. He was of the view that s.3 and sub s.(1) of s.5 operate independently without reference to sub s.(2) of s.5 and as such, even if the management had no opportunity to call upon the workmen to come and work on national and festival holidays as provided for in sub s.(2) of s.5, they were bound to declare such national and festival holidays under s.3 and pay wages for these holidays to the workmen as provided by sub s.(1) of s.5. In substance, Koshal J. was of the view that the legislature never intended to give to sub s.(2) of s.5 an overriding effect so as to make the fulfilment of the terms of contract of employment and of the work done a condition prerequisite for the payment of wages for the national or festival holidays. When the matter came before Natarajan J., he expressed his doubts about the correctness of the view taken in Lotus Mills case. In his view the benefit conferred on the workmen under s.3 and sub s.(1) of s.5 cannot be taken to be independent of sub s.(2) of s.5 which confers a special right on the management to call upon the workmen to come and work on national and festival holidays declared under s.3, and so long as that right of the management could not be exercised as the workmen were on strike on these days, the benefits cannot be enforced by the workmen. He, accordingly, referred the case to a Division Bench for a reconsideration of the decision in Lotus Mills case. The Division Bench (Ramanujam and Padmanabhan JJ.), however, disagreed with him and preferred to 308 follow the view taken by Koshal J. expressed in Lotus Mills case. The question is which of the two views is in accord with the provisions of the Act. Ramanujan J., speaking for the Division Bench, while accepting that 'sub s.(2) of s.5 conferred a special right on the management, which is somewhat inconsistent with s.3 and sub s.(1) of s.5, comments that 'these provisions confer two benefits on the employees, viz., (1) not to work on a holiday, and (2) to get wages from the management for such holiday ', and observes: "If the right conferred on the management under section 5(2) is intended to override the right given to the employees under section 3 and 5(1), the legislature would have specially said so by giving an overriding effect to section 5(2). But so long as section 5(2) does not specifically override section 3 and 5(1), it is not possible for us to say that sections 3 and 5(1) are subject to section 5(2). The right conferred on the management under section 5(2) and the right conferred on employees under sections 3 and 5(1) should be taken to be independent of each other." (Emphasis supplied) This observation virtually renders sub s.(2) of s.5 a mere superfluity. Furthermore, the assumption that the Act confers the right not to work on a holiday ' appears to be unwarranted. The ultimate conclusion of the High Court was that the contract of service continues even during the period of strike and, therefore, though in the instant case the employees were on strike, they still continued to enjoy the benefits of the Act and must be paid their wages for 26th January, 1976 even though they were on strike. In our judgment, the construction placed by the High Court on sub s.(2) of s.5 of the Act cannot be accepted. It is apparently wrong in observing that 'if the legislature intended such a result, the language used would have been different '. That precisely is the effect of the non obstante clause in sub s.(2) of s.5 which clearly has an overriding effect over s.3. Under the scheme of the Act, the workmen are entitled to wages for the national and festival holidays under s.3 read with sub section (1) of s.5, but this right of theirs ' is subject to the right of the management given under sub s.(2) of s.5, to call upon the workmen to come and work on such holidays. Any other construction would make the provisions contained in sub section (2) of s.5 wholly nugatory. 309 It would depend on the facts and circumstances of each case whether or not wages become payable in the context of strike. It is true that where a strike is neither illegal being not in contravention or any statutory provision, nor unjustified having been lodged as a protest against the unreasonable attitude of the management, there is no reason to deprive the workmen of their wages. It must, nevertheless, be observed that workmen cannot resort to strike with impunity for any kind of demand without first exhausting reasonable avenues for possible achievement of their object. In the present case, the affidavit of the Inspector of Factories, First Circle, Madurai shows that the dispute between the management and their workmen as to payment of bonus for the year 1974 75 had been referred to the Special Industrial Tribunal Madras which gave a decision in favour of the workmen. That has a bearing on the claim for bonus but has no relevance to the question in controversy. It appears that the workmen went on a strike without serving a notice under section 22 of the . That being so, the strike resorted to by the workmen was wholly unjustified if not illegal. When the workmen themselves brought about a situation by going on a strike, they cannot be permitted to claim wages under sub s.(1) of s.5 of the Act, since the management were deprived of their right under sub s.(2) of s.5 of the Act. In Buckingham and Carnatic Co. Ltd. vs Workers of the Buckingham and Carnatic Co. Ltd. the night shift operatives of a textile mills stopped work from about 4 p.m. upto about 8 p.m. on a certain day, the apparent cause of the strike being that the management had expressed their inability to comply with the request of the workers to declare the forenoon of that day as a holiday for solar eclipse. The stoppage of work was the result of a concerted action and fell within the definition of a 'strike ' in s.2(q) of the . The strike was an illegal strike as the textile mills was a public utility industry and no notice had been given to the management, even though the refusal to work continued only for a few hours. It was held that the continuity of service of the workers was interrupted by the illegal strike and, therefore, they were not entitled to claim holidays with pay under section 49 B(1) of the Factories Act, 1934. In Management of Chandramalai Estate, Ernakulam vs Its Workmen the workmen made certain demands and the matter was referred for conciliation. After conciliation efforts failed the workmen struck work. The question was whether the workmen were entitled to 310 paid holidays for the period of strike. It was held, on the facts of the case, that the strike was unjustified and the workmen were not entitled to any wages for the period. The question ultimately is one of fact. The liability of the management to pay wages for the national and festival holidays under s.3, read with sub s.(1) of s.5 of the Act, is subject to their right under sub s.(2) of s.5 of the Act to call upon the workmen to come and work on such holidays. That depends upon whether or not the strike was illegal or unjustified. In the result, the appeal succeeds and is allowed. The judgment of the High Court is reversed. The writ petition filed by the appellant is allowed and the impugned notice issued by the Inspector of Factories is quashed. We wish to mention that the appellant has undertaken to pay wages to the workmen for 26th January, 1976 irrespective of the result of the appeal. There shall be no order as to costs. N.V.K. Appeal allowed.

The Tamil Nadu Industrial Establishment (National and Festival Holidays) Act, 1958 was a legislation intended to provide for national and festival holidays in industrial establishments in the State of Tamil Nadu. Section 3 of the Act provides that every employee in an industrial establishment shall be entitled to four national and five festival holidays in each calender year. Sub section (1) of section 5 provides that `notwithstanding any contract to the contrary every employee shall be paid wages for each of the holidays allowed to him under section 3. Sub section (2) of section 5 confers upon the employer the right to call upon the workmen to come and work on such holidays on the fulfilment of the conditions set out therein The appellant was an industrial establishment owning textile mills in the State of Tamil Nadu. In respect of a claim for bonus for the year 1974 75 there was a dispute between the management and its workmen. This resulted in a strike by the workmen, from January 21, 1976 to February 5, 1976 which was called off by the workmen on February 6, 1976. The management paid the workmen wages for the month of January 1976 after excluding therefrom the wages payable for the period of strike during January namely January 21 to January 31, 1976. The Management having withheld the wages payable for January 26, 1976 the first respondent addressed a communication stating that in view of section 5 of the Act payment of wages for January 26, 1976 had to be made. The management challenged the order by a Writ Petition in the High Court. The High Court held that having regard to the provisions contained in sections and sub section (I) of section 5 of the Act, the appellant was bound to pay the workmen wages for January 26, 1976 even though the workmen were on strike on that date and dismissed the Writ Petition Allowing the appeal to this Court ^ HELD: (1) The liability of the Management to pay wages for the national and festival holidays under section 3 read with sub section (1) of section 5 of the Act is subject to the rights under sub section (2) of section 5 of the Act to call upon the workmen to come and work on such holidays. 303 (2) The construction placed by the High Court on sub Section (2) of section 5 of the Act cannot be accepted. Under the scheme of the Act the workmen are entitled to wages for the national and festival holidays under section 3 read with sub section (I) of section 5, but this right of theirs ' is subject to the right of management given under sub section (2) of section 5 to call upon the workmen to come and work on such holidays. Any other construction would make the provision contained in sub section (2) of section 5 wholly nugatory. [308H; 309A] (3) Both sub sections (1) and (2) of section 5 contain non obstante clauses. While the non obstante clause in sub section (I) of section 5 gives to the workmen the right to claim wages for the national or festival holidays `notwithstanding any contract to the contrary ' the non obstante clause in sub section (2) of section 5 subordinates the right of the workmen to claim wages for the national or festival holidays `notwithstanding anything contained in section 3. sub sections (1) and (2) of section 5 have been enacted with separate and distinct objects and they operate on different planes. [306H; 307A] Vasudevan, R.M.S. Union vs Lotus Mills Ltd. [1977] II LLJ 483 overruled. (4) It would depend on the facts and circumstances of each case whether or not wages become payable in the context of strike. When a Strike is neither illegal being not in contravention of any statutory provision, nor unjustified having been lodged as a protest against the unreasonable attitude of the management, there is no reason to deprive the workmen of their wages. [309B] Buckingham and Carnatic Co. Ltd. vs Workers of the Buckingham and Carnatic Co. Ltd. ; and Management of Chandramalai Estate, Ernakulam vs Its Workmen ; referred to. In the instant case the workmen went on strike without serving a notice under section 22 of the Industrial Dispute Act 1947. That being so the strike resorted to by the workmen was wholly unjustified if not illegal. When the workmen themselves brought about a situation by going on a strike they cannot be permitted to claim wages under sub section (1) of section 5 of the Act since the management were deprived of their right under sub section (2) of section 5 of the Act. [309E]

ivil Appeal No. 1201 of 1976. From the Judgment and Order dated 3.8.76 of the Allahabad High Court in Civil Miscellaneous Writ No. 12204 of 1975. Appellant in person. Dileep Tandon and R.B. Mehrotra for the Respondents. The Judgment of the Court was delivered by NATARAJAN, J. This appeal by special leave by a tenant is directed against the dismissal of Civil Miscellaneous Writ No 12204 of 1975 by the High Court of Allahabad. The second respondent became the owner of a house bearing Municipal No. 140 (old No. 94 A) in Hewett Road, Allahabad under a gift deed executed in his favour by his mother in 1945. However even in 1944, his father had leased the house to the appellant on a monthly rent of Rs.30 which after some years was raised to Rs.35 The house is a three storeyed building and the appellant was residing in the first and second floors and running a drug store belonging to his wife in the ground floor. Some years later the second respondent 's father leased out an adjacent building also to the appellant for being used for the drug store business. In 1967 it became necessary for the second respondent to seek recovery of possession of the house because his elder brother, with whom he was living, asked him to find accommodation elsewhere. Therefore the second respondent applied for permission under Section 3 of the U.P. (Temporary) Control of Rent and Eviction Act 1947 (hereinafter referred to as the 1947 Rent Act) to the Prescribed Authority to file a suit for eviction against the PG NO 725 appellant on the ground of urgent and reasonable requirement of the house for his own occupation. The Prescribed Authority rejected the application on November 10, 1967. After the 1947 Rent Act came to be replaced by the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act 1972 (hereinafter the 1972 Rent Act), the second respondent again sought the permission of the Prescribed Authority to file a suit against the appellant but this time he sought for recovery of possession of the leased premises either fully or partially. He averred in the application that since his brother had asked him to vacate his house he had taken up residence in a single room in the house of one Srivastava and was living there in great hardship and as such he wanted to recover possession of his house in its entirety failing which at least a portion of it. The Prescribed Authority refused to grant permission on the ground the application had been made within a period of six months from the commencement of the 1972 Rent Act and hence it was barred by Rule 18(1) of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Rules, 1972 (hereinafter the Rules). The Appellate Authority, however, differed from the Prescribed Authority and granted permission to the second respondent to recover possession of the ground floor portion of the house alone. Thereupon the appellant moved the High Court under Article 226 of the Constitution for issuance of a writ to quash the order of the Appellate Authority but did not meet with Success and hence this appeal by special leave. A few facts may first be noticed before the appellant 's contentions are set out and examined. Admittedly, the second respondent became the owner of the leased premises in the year 15145 under a gift settlement made by his mother and except the leased building he has no other house. It is also an admitted fact that when the first Application for permission to sue was made, the second respondent was living with his brother but subsequently he had to move out of that house and take up residence in a single room in a building belonging to one Srivastava. A Commissioner appointed by the Court had inspected the room occupied by the second respondent and found that the second respondent was faced with acute shortage of space and that the bath room and latrine were situated in the ground floor which was in the landlord 's occupation. While the prayer in the first application was for the release Of the entire house, the prayer in the second application was for release of the whole house or in the alternative for the release of at least a portion of the house. PG NO 726 Coming now to the contention of the appellant, who is a member of the bar and who appeared in person and argued the case for himself. they were as follows: 1. The application made under the 1972 Rent Act was a second application for release of the house on the same ground of requirement and hence it was barred under Rule 18(1) of the Rules since it had been made within six months from the commencement of the 1972 Rent Act. The High Court 's view that the second application was not barred under Rule 18(1) because it is the circumstances of requirement and not the nature of the requirement that would constitute the ground of eviction is erroneous and unsustainable. The Act and the Rules do not permit the creation of two dwelling units in a building covered by a single tenancy and hence the grant of permission for partial eviction is bad in law. The Appellate Authority has erred in rendering a finding against the appellant in the matter of comparative hardship merely because the appellant had another building adjacent to the leased premises for running the drug store. In any event, the Appellate Authority and the High Court have failed to notice that without the ground floor, the first and second floors cannot be used as residence because the bath and toilet rooms are situated only in the ground floor. 'The learned counsel for the second respondent. besides refuting the above contentions of the appellant argued that the appeal itself has become unsustainable because the appellant has vacated the building in the year 1976 itself and taken up residence in another house belonging to his wife and consequently by reason of Explanation (1) to Section 21 of the 1972 Rent Act, he is disentitled to dispute the second respondent 's right to recover possession of the house. We will now consider the contentions of the appellant in seriatum In so far as the first contention is concerned, it suffers from a fallacy in that it is founded upon a misconstruction of Rule 18 (1) The Rule in question is worded as under: 18. Avoidance of multiplicity of proceedings (Section 38(4) and 41) (l) Where an application of a landlord against any tenant for permission to file a suit for PG NO 727 eviction under Section 3 of the old Act, on any ground mentioned in Section 21(1) has been finally allowed or rejected on merits either before or after the commencement of the Act, whether by the District Magistrate or on revision by the Commissioner or the State Government or under clause (i) or clause (m) of Section 43(2) by the District Judge, and the landlord instead of filing a suit for eviction makes an application under Section 21 on the same ground within a period of six months from such decision or from the commencement of the Act, whichever is later, the Prescribed Authority shall accept the findings in those proceedings conclusive. " (emphasis supplied) Provided that the period during which the operation of any permission as aforesaid is stayed by order ot ' any court or authority shall be excluded in computing the said period of six months (2) . . omitted. On a reading of Rule 18(1), it may be seen that the Rule does not prohibit or bar the filing of an application for release of any building on any ground mentioned in Section 21( 1) within a period of six months from the date on which a final order was passed in the previous application made under Section 3 of the 1947 Rent Act or within a period of six months from the commencement of the Act. All that the Rule says is that it a second application is made for release of the house on which permission to sue was sought in the previous application on the same ground within a period of six months from the date of the final order in that application or within six months from the commencement of the Act whichever is later," the prescribed authority shall accept the findings in those proceedings as conclusive. " The Rule only sets out a rule of presumption to be followed by the Prescribed Authority for dealing with an application for release on the same ground without a sufficient interval of time between the filing of the two petitions The Rule does not mandate that a second application preferred on the same ground within a period of six months from the date of the order in the previous application or from the commencement of the Act must necessarily be dismissed as barred under the Rules. The first contention of the appellant is therefore obviously misconceived and cannot therefore be sustained PG NO 728 In so far as the second contention is concerned, the appellant is right when he says that the earlier application under Section 3 of the 1947 Rent Act and the later application under Section 21(1) of the 1972 Rent Act should be construed as having been made on one and the same ground viz. bona fide requirement of the premises by the second respondent for his own occupation. The High Court has however taken the view that the ground of eviction in the two applications is not the same because different sets of circumstances would constitute different grounds and such a test is satisfied in this case. We do not think it necessary to go into the question whether the High Court 's view is correct or not because even if we treat the two applications as having been made on the same ground, the second application would not attract the operation of Rule 18(1). Since the Rule contains only a formula of presumption based on facts, it goes without saying that the prescription is only of a directory nature and not of a mandatory nature. In this context we may appositely refer to the following passage in Phipson on Evidence (Thirteenth Edition) at pages 4 and 5: "Presumptions are either of law or fact. Presumptions of law are arbitrary consequence expressly annexed by law to particular facts; and may be either conclusive, as that a child under a certain age is incapable of committing any crime; or rebuttable, as that a person not heard of for seven years is dead, or that a bill of exchange has been given for value. Presumptions of fact are inferences which the mind naturally and logically draws from given facts, irrespective of their legal effect. Not only are they always rebuttable, but the trier of fact may refuse to mke the usual or natural inference notwithstanding that there is no rebutting evidence. " Besides it is a well known principle that in the interpretation of statutes that where the situation and the context warrants it, the word "shall" used in a Scction or Rule of a statute has to be construed as "may". The present context is one such where the words "the Prescribed Authority shall accept the findings in those proceedings as conclusive" have to be read as "the Prescribed Authority may accept the findings in those proceedings as conclusive" because the findings are based upon existence of facts. We may now set out the reason as to why the prescription in Rule 18(1) should be construed as only PG NO 729 directory and not mandatory In the first place, the Rule envisages two kinds of situations, one of them where the second application is made within an interval of six months from the date on which final orders were passed in the previous application and the other where the second application is made beyond an interval of six months, which may even go up to several years, as in this case where the interval was over five years, but within six months of the Act coming into force. Surely, the legislature would not have intended that the interval factor in the two sets of situations should be visited with the same consequences by adopting a rigid and inflexible application of the prescriptive guideline given in Rule 18(1) . The second factor is that even if the interval factor is the sole criterion for the application of the formula contained in Rule 18(1), the legislature could not have intended that even where drastic changes had taken place subsequent to the disposal of the earlier application, the prescribed authority should shut his eyes to the realities of the situation and blindly and mechanically apply the formula in Rule 18(1) and reject the second application. To cite a few examples it may be that after the disposal of the first application, the landlord had been rendered houseless due to the house occupied by him falling down due to decay or heavy rains or being destroyed by fire Could any one say that irrespective of the changes that have taken place, the findings rendered in the previous application would have the force of relevancy till the period of six months fixed under the Rule has expired? It is, therefore, manifest that the rule of presumption enunciated in Rule 18(1) is only to serve as a guideline to be followed by the prescribed authority if he finds the circumstances to remain unchanged and the finding rendered in the earlier application to have relevancy even with reference to the facts set out in the second application the Rule intended to avoid multiplicity of proceeding as the very heading given to the Rule would make it clear It will therefore be inequitable and unrealistic to construe Rule 18 (1) as containing an inexorable legal prescription for rejecting a second application filed within the prescribed time limit solely on the basis of the findings rendered in the earlier application. In this case we have already referred to the fact that after the first application was rejected, the living conditions ot ' the second respodent had changed materially He had been turned out of his brother 's house and forced to take up residence in a single room belonging to a third party and live there in great discomfort and hardship In the plight in which he was placed, he was even prepared to accept partial release of the house it ' he could not get release of the entire premises. The long interval of time PG NO 730 between the rejection of the first application and the date of making the second application viz. about five years and the significant changes that had taken place during the interval in the living conditions of the second respondent undoubtedly rendered irrelevant the earlier findings and such being the case the rule of presumption given in Rule 18(1) can have no application or relevance to the second application. Viewed in this manner, we do not think the Appellate Authority or the High court has committed any error in granting the relief of partial release of the house to the respondent Hence the second contention of the Appellant has also to fail. So far as the third contention is concerned viz. the impermissibility of creating two dwelling units in a single tenanted premises, the argument fails to note that Section 21(1) provides for an order of eviction being passed against a tenant "from the building under tenancy or any specified part thereof." (Emphasis supplied). We do not therefore find any error in the second respondent being granted the relief of partial eviction. As regards the fourth contention, it is admitted that the appellant had been given an additional building by the second respondent 's father for being used for the drug store business Since the appellant was using the ground floor in the suit premises only for running his wife 's drug store and was not living there in the Appellate Authority cannot be said to have committed any error in taking the view that in the matter of comparative hardship the second respondent would be the more affected person if eviction was not ordered than the appellant by an order of partial eviction being passed because he had another building and could conveniently shift his business to that building. Coming to the last contention of the appellant viz the unsuitability of the first and second floors for residential purpose without the use of the bath and toilet rooms in the ground floor, it is open to the appellant to move the Prescribed Authority for directions being given to the second respondent to make suitable provision in the ground floor for the appellant and his family members to have access to and make use of the bath and toilet rooms in the ground floor. As regards the contention of the respondent that the appellant and his wife are now living in a house belonging to the appellant 's wife and as such the appellant is precluded under Explanation (i) to Section 21(1) of the 1972 Rent Act from resisting the second respondent 's suit for eviction, we are unable to make any pronouncement on it because of lack of evidence in support of that plea and PG NO 731 besides the appellant would say that the house now occupied by him and his wife is the subject matter of a litigation between his wife and her uncle. In the light of our conclusions, the appeal fails and is accordingly dismissed. There will, however, be no order as to costs. R.S.S. Appeal dismissed.

The petitioner company had offered for public subscription secured convertible debentures after obtaining the consent of the Controller of Capital Issues. Before the public issue was due to open, certain writ petitions etc. were filed in some High Courts challenging the grant of consent or sanction for the public issue. The petitioner there upon filed an application under Article 139A of the Constitution seeking transfer of those cases to this Court and prayed inter alia for vacation of any injunction or stay granted by the High Courts. On August 19, 1988 this Court, while issuing notice on the transfer applications, directed that the public issue be proceeded with "without let or hindrance". and vacated all orders of injunction in respect of the said issue . On August 25, 1988 an article appeared in the Indian Express to the effect that the Controller of Capital Issues had not acted properly and legally in granting the sanction to the issue, and that the issue was not a prudent or a reliable venture. The petitioner moved the Court for initiating contempt proceedings against the respondents for alleged interference with the due administration of justice by publication of an article commenting on a matter which was sub judice. The petitioner also sought injunction against the threatened or expected publication of similar PG NO 212 PG NO 213 comments. The Court, while declining to take cognizance of contempt in the absence of the consent of the Attorney General, issued an order of injunction restraining publication of articles, etc. questioning the legality or validity of any of the consents, approvals or permissions for the public issue. The matter came up before the Court again to consider the question whether there was any necessity for the continuance of the order of injunction. It was contended that pre stoppage of newspaper article or publication on matters of public importance was uncalled for and contrary to freedom of press enshrined in the Constitution and the laws; that public had a right to know about this issue of debentures which was a matter of public concern, and the newspapers had an obligation to inform; and that there was no jury trial involved here and no likelihood of the trial being prejudiced because trial was by professionally trained Judges. On the other hand, it was contended that there was an inherent jurisdiction to restrain by injunction any publication that interfered with a fair trial of a pending case or with the administration of justice in general, that publication was permissible provided it did not amount to prejudgment or prejudice of a matter in Court; that liberty or freedom of Press must subserve the due administration of justice, and that there was need to continue the injunction because contribution to the debentures could be withdrawn as the final allotment had not yet been made. While disposing of the application for the continuance of the injunction, it was, HELD: Per Sabyasachi Mukharji, J. (1) The Constitution of India is not Absolute with respect to freedom of speech and expression, as enshrined by the First Amendment to the American Constitution. {223F] (2) A judiciary is not independent unless courts of justice are enabled to administer law by absence of pressure from without, whether exerted through the blandishments of reward or the menace of disfavour. A free Press is vital to a democratic society for its freedom given it power. 1227F] [3] The law of contempt must be judged in a particular situation. The process of due course of administration of justice must remain. Public interest demands that there should be no interference with judicial process and the PG NO 214 effect of the judicial decision should not be pre empted or circumvented by public agitation or publications. At the same time, right to know is a basic right which citizens of a free country aspire in the broader horizon of the right to live in this age in our land under Article 21 of our Constitution. A balance has to be struck between the requirements of free Press and fair trial. [235B C; A] (4) The Court must examine the gravity of the evil. In other words, a balance of convenience in the conventional phrase of Anglo Saxon Common Law Jurisprudence would, perhaps, be the proper test to follow. [228Bl (5) The Court must see whether there was a present and imminent danger for the issuance/continuance of injunction. It is difficult to lay down a fixed standard to judge as to how clear, remote or imminent the danger is. [234D] (6) The orders passed on 19th August, 1988 as reiterated on 25th August, 1988 stated that there must be no legal impediment in the issue of the debentures or in the progress of the debentures, taking into account the overall balance of convenience and having due regard to the sums of money involved and the progress already made.1234D] (7) The continuance of this injunction would amount to interference with the freedom of Press in the form of preventive injunction and it must therefore be based on reasonable grounds for the sole purpose of keeping the administration of justice unimpaired. [234El (8) There must be reasonable ground to believe that the danger apprehended is real and imminent. The subscription to debentures having been oversubscribed, there is no such imminent danger of the subscription being withdrawn before the allotment so as to make the issue vulnerable by any publication of article. [235DI (9) As the issue is not going to affect the general public or public life, nor any injury is involved, it would be proper and legal, on an appraisal of the balance of convenience between the risk which will be caused by the publication of the article and the damage to the fundamental right of freedom of knowledge of the people concerned and the obligation of Press to keep people informed, that the injunction should net true any further. [235H] PG NO 215 (10) Publication, if any, however, would be subject to the decision of the Court on the question of the contempt of court, namely, prejudging the issue and thereby interfering with the due administration of justice. [236A] (11) Preventive remedy in the form of an injunction is no longer necessary. Whether punitive remedy will be available or not, will depend upon the facts and the decision of the matter after ascertaining the consent or refusal of the Attorney General. [236B] Per Ranganathan, J. (1) It would not be correct to say that when the Court passed the order dated l9.9.1988, it had formed any prima facie opinion on the question whether the debenture issue had been validly approved or consented to by the various authorities. What predominantly influenced the Court was that, even assuming, prima facie, as was contended in the writ petitions, that there could be some doubt regarding the validity or otherwise of the consent orders etc. , the restraint by any court or tribunal on the issue of debentures at a late stage might prove catastrophic, and cause irreparable loss or damage to the petitioner. The balance of convenience required that there should be no order of any court or tribunal staying the debenture issue.[238 E] (2) The article published by the respondents, though not violative of the terms of the injunction granted by this Court, could have the effect of circumventing the order of this Court and rendering it ineffective. It had, prima facie, a tendency to affect the efficacy of, and defeat the object with which this Court had passed, the interim order dated 19.8.1988. That is the reason why the second order dated 25.8.1988 was passed. The said order was rightly passed and the contention that no such injunction ought to have been granted at all is not acceptable. [239A B] (3) The position has radically changed. The danger apprehended by the petitioner is not so real or substantial as to warrant the continuance of the injunction orders. [239C] Attorney General vs British Broadcasting Corporation. , ; 354; Harry Bridges vs State of California, at page 260; Express Newspapers (Pvt.] Ltd. & Anr. vs Union of India & Ors. , ; Ramesh Thapar vs State of Madras, ; at 597: Brij Bhushan & Anr. vs State of Delhi, ; ; State of Travancore PG NO 216 Cochin & Ors. vs Bombay Co. Ltd. ; ; State of Bombay vs R.M.D. Chamatbaugwala, [19S7] SCR 874 at 918; P. C. Sen 's case; , ; C. K. Daphtary & Ors. vs O. P. Gupta, ; Indian Express Newspapers (Bombay) Pvt. Ltd. & Ors. vs Union of India & Ors. , ; ; Abrams vs United States, 11963] L.Ed. 1173 at 1180; P.N. Duda vs P. Shiv Shanker & Ors., ; ; John D. Pennekamp vs State of Florida, 11945] ; Neoraska Press Association vs Hugh Stuart, 49 L.Edn. 683; Attorney General vs British Broadcasting Corpn., ; Attorney General vs B.B.C., ; Attorney General vs Times Newspapers Ltd., ; Ex Parte Bread Manufacturers Ltd., ; and Charlotte Anita Whitney vs People of the State of California, 71 L.Edn. 1095 at 1106.

on No. 217 of 1956. Petition under Article 32 of the Constitution of India for enforcement of Fundamental rights. Pandit Nanak Chand, for the petitioners. I. N. Shroff, for respondent No. 1. 1960 February, 26. The Judgment of the Court was delivered by SHAH, J. This is a petition filed by Sahibzada Saiyed Muhammed Amirabbas Abbasi, who will hereinafter be referred to as the first petitioner on behalf of himself and as the natural guardian of his two minor children, Kamal Abbas and Jehanzeb Bano, petitioners Nos. 2 and 3 against the State of Madhya Bharat (now the State of Madhya Pradesh) and three other respondents for an appropriate writ or writs of Habeas Corpus, Mandamus, Certiorari, Prohibition and any other writ, direction or order directing the State of Madhya Bharat immediately to assume charge of the properties of the minor petitioners 2 and 3 and determining the amount of loss sustained by the minors and calling upon the State of Madhya Bharat and the other respondents to compensate the minors for the full value of the property lost due to their negligence in the discharge of their respective duties in failing to protect the minors ' properties, and calling upon the 4th respondent to produce the minors before this court and directing that the minors be handed over to the custody of some relation who is competent under the Personal Law to have their custody, and calling upon the Chief Secretary of the State of Madhya Bharat to furnish full particulars of the trust property released in favour of the 2nd respondent and directing the 1st respondent to produce in this court the box of jewellery entrusted to it with full particulars regarding its custody from March 29, 1948, and ascertaining whether the contents have 'been misappropriated and further ascertaining the loss, if any, occasioned to the minor petitioners and its quantum and declaring liability of the respondents in that behalf and for further relief which the court may award in the circumstances of the case, as just and proper. 140 Prima facie, the reliefs claimed ate not within the scope of a petition for a writ under article 32 of the Constitution. This court has power under that Article to issue directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari whichever may be appropriate for the enforcement of any of the fundamental rights; but by this petition, the first petitioner claims on the plea that the respodents have misappropriated or misapplied the property of petitioners 2 and 3, a writ or writs directing that loss sustained by the minors be ascertained and made good and also asks this court to provide for the custody of the minors according to their Personal Law. The facts which give rise to the petition are these: The first petitioner married in 1940 one Naiyar Jahan Begam and by her he had two children petitioners 2 and 3. Naiyar Jahan Begam died in the year 1943 and petitioners 2 and 3 were thereafter looked after by Musharraf Jahan Begam, mother of Naiyar Jahan Begam. From her father Naiyar Jahan Begam had inherited certain valuable property and from her mother, Musharraf Jahan Begam, she had received a dowry of substantial value at the time of her marriage. Before she died on March 6, 1949, Musharraf Jehan Begam had made a trust in respect of certain property of the benefit of petitioners 2 and 3. The first petitioner had after the death of Naiyar Jehan Begam contracted a second marriage and of that marriage there were three children. During the life of Musharraf Jehan Begam the first petitioner took no interest in petitioners 2 and 3 and at sometime in the year 1948, he migrated to West Pakistan and took up residence in Rawalpindi. After the death of Musharraf Jehan Begam, the first petitioner applied to the Madhya Bharat High Court for a writ in the nature of habeas corpus for a direction to produce petitioners 2 and 3 before the court on the allegation that the latter were wrong fully detained The High Court refused to give the direction and ordered that the first petitioner might, if so advised, apply under the Guardian and Wards Act for appropriate relief. The first petitioner then applied to the 141 court of the District Judge at Ratlam for an order that he be appointed a guardian of the person and property of petitioners 2 and 3. On November 23, 1949, the second respondent, Sultan Hamid Khan, cousin of Musharraf Jehan Begam applied that he be appointed guardian of the person and property of petitioners 2 and 3 and by order dated December 5, 1949, the District Court appointed him guardian and rejected the application filed by the first petitioner. Against the order passed by the District Court, Ratlam, Appeal No. 20 of 1950 was filed in the High Court of Madhya Bharat. This appeal was dismissed on March 29, 1954. An application for special leave to appeal to this court under Act. 136 against that order of the High Court was rejected on November 12, 1956. The first petitioner had, in the meantime, applied to this court under article 32 of the Constitution for the reliefs which have already been set out. To this petition, petitioners 2 and 3 were impleaded as party petitioners, the first petitioner alleging that he was their natural guardian and next friend. Evidently, the first petitioner could not claim to be the next friend of the minor petitioners 2 and 3, a guardian of their person and property having been appointed by the District Court, Ratlam, unless this court for reasons to be recorded deemed it to be for the welfare of the minors that the first petitioner be permitted to act or be appointed as the case may be (vide 0. 32, r. 4 of the Code of Civil Procedure). The first petitioner did not obtain any order of this court permitting him to act as the next friend of petitioners 2 and 3 notwithstanding the order passed by the District Court appointing respondent No. 2 as their guardian. The petition filed by the first petitioner is a somewhat prolix document. The first petitioner claimed that the interest of the second respondent who was appointed a guardian by the District Court was adverse to the interests of the minors, and that the latter was, in any event, unfit to be appointed a guardian of the minors, that the second respondent had misappropriated the property of the minors and that he was not looking after the minors and was 142 acting contrary to their interest and that proceedings in the District Court were vitiated on account of partiality and collusion ' and by reason of deliberate violation of the order passed by the High Court. The petitioner also claimed that the State of Madhya Bharat was bound to take steps to protect the entire property of the minor petitioners 2 and 3, but the first respondent had neglected to do so and had thereby rendered itself liable to make good the loss. On these allegations, the first petitioner submitted that the minor petitioners were deprived of the equal protection of the laws in force including the Personal Law and were accordingly discriminated against and their property was, by reason of such discrimination in serious danger of being wasted or mis appropriated. He also submitted that he could not be denied his rights under the Personal Law governing the minors as their natural guardian, merely because he had acquired a foreign domicile. Exercising jurisdiction under article 32 of the Constitution, this court may grant relief for enforcement, only of the rights conferred by Part III of the Constitution. The alleged right of the first petitioner to guardianship of his minor children under the Personal Law is not one of the fundamental rights guaranteed to him by the Constitution; 'nor by appointing respondent No. 2 as the guardian of the minors under the Guardian and Wards Act is discrimination practised against the minors. The second respondent was appointed guardian of the minors by order of a competent court. and denial of equality before the law or the equal protection of the laws can be claimed against executive action or legislative process but not against the decision of a competent tribunal. The remedy of a person aggrieved by the decision of a competent judicial tribunal is to approach for redress a superior tribunal if there be one. In the present case, against the order of the District Court appointing the second respondent the guardian of the person and property of the minors, an appeal was preferred to the High Court and that appeal was dismissed. Even an application for special leave to appeal to this court was rejected, and the order of the District Court 143 became final. If, since the date on which the order appointing the guardian of the minors, events have transpired which necessitate a modification of that order, the proper remedy of the first petitioner is to apply to the District Court for relief in that behalf and not to approach this court for a writ under article 32 of the Constitution. This court has rejected the application for special leave to appeal under article 136; and that order cannot be circumvented by resorting to an application for a writ under article 32. Relief under article 32 for enforcement of a right conferred by ch. III can be granted only on proof of that right and in fringement thereof, and if, by the adjudication by a court of competent jurisdiction the right claimed has been negatived, a petition to this court under article 32 of the Constitution for enforcement of that right, notwithstanding the adjudication of the civil court, cannot be entertained. The relief claimed by the first petitioner for assessing the liability of the respondents on the plea that they have either misappropriated the estate or by negligence caused loss to the estate of the minors, may be obtained in a properly constituted suit and not in a petition under article 32 of the Constitution. The property to which the minors are or may be entitled may be ascertained in a proceeding under the Guardian and Wards Act or in a suit in the civil court and not in a petition under article 32 of the Constitution. In our judgment, the petition is wholly misconceived and must be dismissed with costs payable by the first petitioner personally. Petition dismissed.

The first petitioner, who had migrated to West Pakistan, applied to the High Court of Madhya Bharat for a writ of abeas corpus for directions to produce petitioners 2 and 3, his minor children, before the Court on the allegation that they were wrongfully confined and, upon the dismissal of the said application, applied to the District Judge of Ratlam under the Guardian and Wards Act for his appointment as guardian of the person and property of the said minors. The District judge rejected he application and appointed the second respondent as such Guardian. The first petitioner appealed to the High Court against the said order of the District judge but that appeal was Dismissed. He applied for special leave to appeal to this Court but that application was also rejected. Thereafter the first Petitioner, as natural guardian of petitioners 2 and 3, filed the present petition under article 32 of the Constitution. His casee in substance was that the interest of the second respondent was adverse to that of the minors, that he had misappropriated their property and that the first respondent, the State of Madhya Bharat, was bound to take steps to protect the property of the minors which it had failed to do and had thus rendered itself liable to make good the loss sustained by the minors in consequence. Held, that the petition was wholly misconceived, and must be dismissed. The Court can exercise jurisdiction under article 32 of the Constitution only in enforcement of the fundamental rights guaranteed by Part III of the Constitution. Where on account of the decision of a court of competent jurisdiction, the right alleged by the petitioner does not exist and therefore its infringement cannot arise, this Court cannot entertain a petition under that Article for protection of the alleged right. A claim as to denial of equality before the law or the equal protection of the laws can be made against executive action or against legislative process but not against the decision of a court of competent jurisdiction. Nor can an order of this Court rejecting an application for special leave under article 136 of the Constitution be circumvented by an application for a writ under article 32.

Appeal No. 18 of 1968. Appeal by Special leave from the judgment and order dated April 14,,1967 of the Allahabad High Court in Second Appeal No. 307 of 1965. 694 V.M. Tarkunde, Urmila Kapoor and R. K. Khanna, for the appellant. section V. Gupte and M. V. Goswami, for the respondent. The facts are not in dispute. The appellant had been occupying a shop in Mathura belonging to the respondent from a very long time, at a monthly rental of Rs. 18.37. In 1962 the respondent wanted to construct rooms on the upper Storey of the shop for his own residence. This construction could possibly be made only if the appellant vacated the shop for some period. On June 4, 1962, the appellant and the respondent entered into an agreement . After reciting the above facts it was agreed that the shop would be. vacated by the appellant on the condition that as soon as the required construction had been completed he would resume possession of the shop. At this stage the following clauses of the agreement may be set out. On this day the second party has withdrawn his possession from the shop bearing No. 1/2C, situate at Tilakdwar, and has given the same to the first party. The first party shall get the shop constructed within thirty days and would then hand over the possession of the same to the second party. At present a sum of Rs. 18 6 0 per mensem, which includes house tax and water tax, is being paid by the second Party to the first party as rent. After the construction of the shop, the first party shall be entitled to get the same, amount as rent from the second party. All the sections of the U.P. Rent Control and Eviction Act shall be fully applicable to this house. The first party shall in no case be entitled to derive benefits from it as the property built after 1 1 51." After the construction had been made and the appellant had resumed his possession of the shop the appellant offered rent to the respondent but the latter did not accept the same. Ultimately lie deposited the rent from April 1, 1962 to July 31, 1963 in court under section 7 C of the Act. The respondent served a notice April 20, 1963 apparently under the provisions of the 695 Transfer of Property Act purporting to terminate the tenancy of the appellant. This was followed by a suit which the respondent filed for ejectment of the appellant and for arrears of rent, damages etc. The Munsif dismissed the suit holding that the appellant was entitled to the protection conferred by section 3 of the Act which was applicable. The District Judge, on appeal, took the contrary view and decreed the suit. The ' High Court affirmed the judgment of the District Judge. It was held, inter alia, that the, respondent was, entitled to rely on section 1 A of the Act and the appellant could not be given the benefit of section 3. Now there can be no manner of doubt that the tenancy between the appellant and the respondent was governed by the provisions of the Act prior to the reconstruction of the premises. It appears to have been accepted that when the respondent made the re construction after the agreement mentioned above in 1962 the buildings came to be constructed within the terms of section 1 A of the Act: That section says that nothing in the Act shall apply to any building or part of a building which was under erection or was constructed on or after January 1, 1951. It will have to be decided whether it was open to the respondent to give up the benefit of this provision or waive it by means of an agreement of the nature which was entered into between the appellant and the respondent in June 1962. According to the preamble on the cessation of the applicability of sub rule 2 of rule 81 of the Defence of India Rules after September 30, 1946 it was considered expedient owing to the shortage of accommodation in the State of Uttar Pradesh to provide for the continuance during admitted period of powers to control the letting and "the rent of accommodation and to prevent the eviction of tenants therefrom. Section 3 imposed restrictions on eviction. No suit could be filed in any civil court against the tenant for his eviction from any accommodation except on one or more of the grounds mentioned in sub section (1) 'of that section without the permission of the District Magistrate or of the Commissioner to whom a revision lay against the order of the District Magistrate. Section 5 contained provisions relating to control of rent. The ether provisions of the Act need not be noticed. It has never been disputed that the Act was enacted for affording protection to the tenants against eviction except in the manner provided by the Act. It was also meant to regulate the letting of accommodation, fixing of rent etc. , the provisions relating to which were all intended to confer benefits on the tenants against unreasonable and capricious demands of the landlords. At the same time ' it appears that the legislature was conscious of the fact that the Act might retard and slacken the pace of construction of new buildings because the landlords would naturally be reluctant to invest 696 money in properties the letting of which would be governed by the stringent provisions of the Act. It was for that purpose that the saving provision in section 1 A seems to have been inserted. The essential question that has to be resolved is whether section 1 A was merely in the nature of an exemption in favour of the landlords, with regard to the buildings constructed after January 1, 1951 and conferred a benefit on them which they could give up or waive by agreement or contractual arrangement and whether the consideration or object of such an agreement would not be lawful within the meaning of section 23 of the . The general principle is that every one has a right to waive and to agree to waive the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity which may be dispensed with without infringing any public right or public policy. Thus the maxim which sanction the nonobservance of the statutory provision is cuilibet licat renuntiare juri pro se introducto. (See Maxwell on Interpretation of Statutes, Eleventh Edition, pages 375 & 376.) If there is any express prohibition against contracting out of a statute in it then no question can arise of any one entering into a contract which is so prohibited but where there is no such prohibition it win have to be seen whether an Act is intended to have a more extensive operation 'as a matter of public policy. In Halsbury 's Laws of England, Volume 8, Third Edition, it is stated in paragraph, 248 at page 143 : "As a general rule, any person can enter into a binding contract to waive the benefits conferred upon him by an Act of Parliament, or, as it is said, can contract himself out of the Act, unless it can be shown that such an agreement is in the circumstances of the particular case contrary to public policy. Statutory conditions may, however, be imposed in such terms that they cannot be waived by agreement, and, in certain circumstances, the legislature has expressly provided that any such agreement shall be void. " In the footnote it is pointed out that there are many statutory provisions expressed to apply "notwithstanding any agreement to the contrary", and also a stipulation by which a lessee is deprived of his right to apply for relief against forfeiture for breach of covenant (Law of Property Act, 1925). Section 23 of the provides "The consideration or object of an agreement is lawful, unless it is forbidden by law; or 69 7 is of such a nature that, if permitted, it would defeat the provisions of any law or is fraudulent; or involves or implies injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void. " It has never been the case of the respondent that the consideration or object of the agreement which was entered, into in June 1963 was forbidden by law. Reliance has been placed mainly on the next part of the section, namely, that it is of such a nature that it would defeat the provision of any law and in the present case it would be section 1 A of the Act. Now section 1 A does not employ language containing a prohibition against or impose any restriction on a landlord and a tenant entering into an agreement that they would not be governed by that section. We concur with the view expressed in Neminath Appayya Hanumannavar vs Jamboorao Satappa Kocheri(1) that the words "if permitted it would defeat the provisions of any law" in section 23 of the Contract Act defer to performance of an agreement which necessarily entails the transgression of the Provisions of any law. What makes an agreement, which is other wise legal, void is that its performance is impossible except by disobedience of law. Clearly no question of illegality can arise unless the performance of the unlawful act was necessarily the effect of an agreement. The following observations of Lord Wright in Vita Food Products Incorporated vs Unus Company Ltd.(1) (in Liquidation) are noteworthy in this connection "Nor must it be forgotten that the rule by which contracts not expressly forbidden by statute or declared to be void are in proper cases nullified for disobedience to a statute is a rule of public policy only, and public policy understood in a wider sense may at times be better served by refusing to nullify a bargain save on serious and sufficient grounds. " We are unable to hold that the performance of the agreement which was entered into between the parties in the present case would involve an illegal or unlawful act. In our judgment section 1 A. (1) A. I.R. (2) , 293. 698 was meant for the benefit of owners of buildings which were under erection or were constructed after January 1, 1951. If a particular owner did not wish to avail of the benefit of that section there was no bar created by it in the way of his waiving, or giving up or abandoning the advantage or the benefit contemplated by the section. No question of policy, much less public, policy, was involved and such a benefit or advantage could always be waived. That is what was done in the present case and we are unable to agree with the High Court that the consideration or object of the agreement entered into between the parties in June 1962 was unlawful in view of section 23 of the Contract Act. In the result the appeal is allowed, the judgment of the High Court is set aside and that of the trial court restored. The appellant will be entitled to his costs in this, court. V.P.S. Appeal allowed.

On the question whether reception of secondary evidence of a written agreement to grant a lease, insufficiently stamped, is barred by the provisions of sections 35 and 36 of the Stamp Act, HELD :The first limb of Section 35 clearly shuts out from evidence any instrument chargeable with duty unless it is duly stamped. The second liml of the section which relates to acting upon the instrument will obviously shut out any secondary evidence of such instrument, for, allowing such evidence to be let in when the original admittedly chargeable with duty was not stamped or insufficiently stamped, would have the effect of the document being "acted upon" by the person having by law or authority to receive evidence. Proviso (a) is applicable only when the original instrument is actually before the court of law and the deficiency in stamp with penalty is paid by the party seeking to rely upon the document. Clearly, secondary evidence either by way of oral evidence of the contents of the unstamped document or the copy of it covered by section 63 of the Indian Evidence Act would not fulfil the requirements of the proviso which enjoins upon the authority to receive nothing in evidence except the instrument itself. There is no scope for inclusion of a copy of a document as an instrument for the purpose of the Stamp Act. [596 D] If Section 35 only deals with original instruments and not copies, section 36 cannot he so interpreted so as to allow secondary evidence of an instrument to have its benefit. The words "an instrument" in Section 36 must have the same meaning as in Section 35. The legislature only relented from the strict provisions of Section 35 in cases where the original instrument was admitted in evidence without objection at the initial stage of a suit or proceeding. [596 H] State of Bihar vs Karam Chand Thapar & Bros. Ltd. ; Raja of Bohbili vs Inuganti China Sitaramaswami Garu, 23 Madras 49. , Thai] i Beehi vs Tirumalappa Pillai, 30 Madras 336 at 337 and Chidambaram vs Mayyappan, A.I.R. 1946 Madras 298, referred to. Observations in Maung Po Htoo and three vs Ma Ma Gyi and one, I.L.R. 4 Rangoon 363 and Satyavati vs Pallayya, A.I.R. 1937 Madras 431 at 432, disapproved. Ponnuswami vs Kailasam, A.T.R. 1947 Madras 422, and Alimana Sahiba vs Subbarayudu, A.T.R. 1932 Madras 693, explained.

Appeal No. 82 of 1957. Appeal from the judgment and decree dated April 4, 1955, of the Calcutta High Court in Appeal from Appellate Decree No. 1224 of 1953. G. section Pathak and D. N. Mukherjee, for the appellant. H. N. Sanyal, Additional Solicitor General of India and P. K. Chatterjee, for the respondents. February 10. The Judgment of the Court was delivered by SHAH, J. Of the premises relating to which this dispute arises No. 5, Raja Rajkissen Street, Calcutta the respondents are the owners and the appellant was a contractual tenant from June 15, 1917, till June 15, 1947, under three successive tenancies for 10 years each. Under the first tenancy, the appellant paid rent at the rate of Rs. 84,15,0,per month, under the second tenancy at the rate of Rs. 180 per month 815 and under the third tenancy at the rate of Rs. 225 per month. The tenancy was in respect of buildings used for manufacturing " tin canisters " and open land. On September 30, 1946, the Governor of Bengal issued the Calcutta Rent Ordinance, V of 1946, making certain provisions for control of rent of premises in the town of Calcutta. By section 12 of the Ordinance, it was provided in so far as it is material that notwithstanding, anything contained in the Transfer of Property Act, the Presidency Small Cause Courts Act or the Indian Contract Act, no order or decree for the recovery of possession of any premises shall be made as long as the tenant pays rent to the full extent allowable by the Ordinance and performs the conditions of the tenancy. By the proviso, the landlord was, notwithstanding the protection granted entitled, if the conditions specified therein were fulfilled, to obtain possession of the premises. This Ordinance was replaced by Act I of 1947 which contained substantially the same provisions. By the West Bengal Act V of 1948, the provisions of Ordinance V of 1946 and Act I of 1948, were continued. Thereafter on December 1, 1948 the West Bengal Premises Rent Control (Temporary Provisions) Act XXXVIII of 1948 was brought into operation and by this Act, the West Bengal Act V of 1948 was repealed, but the protection granted to the tenants was con tinued. This Act was repealed by the West Bengal Premises Rent Control Act, 1950, and by section 12 of the latter Act protection to tenants, including tenants whose tenancies had expired, against eviction was granted by prohibiting courts from passing decrees or orders for recovery of possession of any premises in favour of landlords. It was provided by that Act that the landlord shall be entitled to obtain a decree in ejectment, inter alia, where the premises are reasonably required by, him either 1 for the purpose of building or rebuilding or for his own occupation. By letter dated May 15, 1957, the respondents called upon the appellant. to vacate and deliver possession on the expiry of the period of tenancy. Possession was however not delivered by the appellant 816 and he continued to pay the stipulated amount and the same was accepted by the respondents. In an application under section 9 of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1948, the Controller fixed the standard rent of the premises at Rs. 455 per month. After the enactment of the West Bengal Premises Rent Control Act, 1950, another application was submitted by the appellant and the standard rent was reduced to Rs. 247,8,0. On October 10, 1950, the respondents served a notice upon the appellant requiring him " to quit, vacate and deliver possession of the premises occupied ", which the appellant was described as holding as " monthly tenant ", on the expiry of the 31st of Chaitra, 1357 B. section, i.e., April 14, 1951. The ground for eviction, it was claimed, was that the premises were reasonably required by the landlords for putting up now buildings thereon. The appellant having failed to vacate the premises, the respondents sued in the Court of Small Causes, Calcutta, for a decree in ejectment. The Court of Small Causes decreed the suit filed by the respondents. In appeal to the Special Bench, Court of Small Causes, the decree passed by the court of first instance was reversed. The appellate court held that by acceptance of rent after determination of the tenancy in June, 1947, the appellant continued to be " a tenant holding over " and as the purpose of the tenancy was manufacturing, it could be determined only by a notice of six months, expiring with the year of tenancy and as no such notice was served, the tenancy was not determined and the suit was liable to fail. In appeal to the High Court of Judicature at Calcutta, the decree passed by the Special Bench was reversed and the decree passed by the court of first instance was restored. With certificate of fitness under article 133(1)(c) of the Constitution this appeal is preferred by the appellant against the order of the High Court. The contractual tenancy in favour of the appellant was determined by efflux of time on June 15, 1947, and since that date there has been between the parties no fresh contractual tenancy. The respondents were, 817 it appears, anxious to obtain possession of the premises let out to the appellant, but they were unable to obtain assistance of the court in view of the protection afforded to the appellant by the successive rent control Acts. In the meanwhile, the appellant continued to pay every month amounts equal to the contractual rent, and later the rent declared to be the statutory rent. Does the acceptance of the amounts paid by the appellant confer upon him the right of a tenant holding over within the meaning of section 116 of the Transfer of Property Act? Section 116 of the Transfer of Property Act in so far as it is material provides that if a lessee of property remains in possession thereof after the determination of the lease granted to him and the lessor accepts rent from the lessee or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year or from month to month according to the purpose for which the property is leased as specified in section 106. It is, however, well settled that where a con tractual tenancy to which the rent control legislation applies has expired by efflux of time or by determination by notice to quit and the tenant continues in possession of the premises, acceptance of rent from the tenant by the landlord after the expiration or determination of the contractual tenancy will not afford ground for holding that the landlord has assented to a new contractual tenancy. It was observed by B. K. Mukherjee, J. (as he then was), in Kai Khushroo vs Bai Jerbai (1): " On the determination of a lease, it is the duty of the lessee to deliver up possession of the demised premises to the lessor. If the lessee or a sub lessee under him continues in possession even after the determination of the lease, the landlord undoubtedly has the right to eject him forthwith; but if he does not, and there is neither assent or dissent on his part to the continuance of occupation of such person, the latter becomes in the language of English law a tenant on sufferance who has no lawful title to (1) , 270,273. 818 the land but holds it merely through the laches of the landlord. If now the landlord accepts rent from such person or otherwise expresses assent to the continuance of his possession, a new tenancy comes into existence as is contemplated by section 116, Transfer of Property Act, and unless there is an agreement to the contrary, such tenancy would be regarded as one from year to year or from month to month in accordance with the provisions of section 106 of the Act. " It was further observed ". . . in cases of tenancies relating to dwelling houses to which the Rent Restriction Acts apply, the tenant may enjoy a statutory immunity from eviction even after the lease has expired. The landlord cannot eject him except on specified grounds mentioned in the Acts themselves. In such circumstances, acceptance of rent by the landlord from a statutory tenant whose lease has already expired could not be regarded as evidence of a new agreement of tenancy, and it would not be open to such a tenant to urge, by way of defence, in a suit for ejectment brought against him, under the provisions of Rent Restriction Act that by acceptance of rent a fresh tenancy was created which had to be determined by a fresh notice to quit. " Under the Calcutta Rent Ordinance, 1946, and the subsequent legislation which culminated in the West Bengal Premises Rent Control Act, 1950, in the expression "tenant" was included any person who continued in possession after termination of his tenancy. Section 12 of the West Bengal Premises Rent Control Act, 1950, expressly protects a tenant whose lease has expired. By the Rent Restriction Statutes ' at the material time, statutory immunity was granted to the appellant against eviction, and acceptance of the amounts from him which were equivalent to rent after the contractual tenancy had expired or which were fixed as standard rent did not amount to acceptance of rent from a lessee within the meaning of section 116, Transfer of Property Act. Failure to take action which was consequent upon a statutory prohibition 819 imposed upon the courts and not the result of any voluntary conduct on the part of the appellant did not also amount to " otherwise assenting to the lessee continuing in possession. " Of course, there is no prohibition against a landlord entering into a fresh contract of tenancy with a tenant whose right of occupation is determined and who remains in occupation by virtue of the statutory immunity. Apart from art express contract, conduct of the parties may undoubtedly justify an inference that after determination of the contractual tenancy, the landlord had entered into a fresh contract with the tenant, but whether the conduct justifies such an inference must always depend upon the facts of each case. Occupation of premises by a tenant whose tenancy is determined is by virtue of the protection granted by the statute and not because of any right arising from the contract which is determined. The statute protects his possession so long as the conditions which justify a lessor in obtaining an order of eviction against him do not exist. Once the prohibition against the exercise of jurisdiction by the court is removed, the right to obtain possession by the lessor under the ordinary law springs into action and the exercise of. the lessor 's right to evict the tenant will not unless the statute provides otherwise, be conditioned. The High Court was in our judgment right in holding that by merely accepting rent from the appellant and by failing to take action against him, the appellant did not acquire the rights of a tenant holding over. It is true that in the notice dated October 10, 1950, the appellant is described as a " monthly tenant ", but that is not indicative of conduct justifying an inference that a fresh contractual tenancy had come into existence. Within the meaning of the West Bengal Premises Rent Control Act, 1950, the appellant was a " tenant " and by calling the appellant a tenant the respondents did not evince an intention to treat him as a contractual tenant. The use of the adjective monthly " also was not indicative of a contractual relation. The tenancy of the appellant was determined by efflux of time an subsequent occupation by him 820 was not in pursuance of any contract express or implied, but was by virtue of the protection given by the successive statutes. This occupation did not confer any rights upon the appellant and was not required to be determined by a notice prescribed by is. 106 of the Transfer of Property Act. In that view of the case, this appeal fails and is dismissed with costs. Appeal dismissed.

The 1st appellant in the first batch of appeals had filed a writ petition in this Court challenging the notices calling upon him to pay the tax of 9 pies per ton on coal including coal despatched outside the State of Madhya Pradesh on two grounds, namely, that the levy of the tax by the Independent Mining Board was invalid at the date of its initial imposition and, 173 therefore, the respondent Sabha which was the successor of the Mining Board could not continue the levy and also that on a proper construction of section 51 of the Act, the levy could not be made. Another point namely, the increase in the rate of tax from the original 3 pies to the 9 pies per ton at which the tax was demanded was illegal was sought to be canvassed but was not allowed to be argued by the Court as it had not been raised in the petition. The writ petition was rejected. The appellant challenged the levy of the tax for the further periods byway of a writ petition before the High Court of Madhya Pradesh on grounds distinct and separate from those which had been rejected by this Court. The High Court dis missed the writ petition on the ground that it was barred by res judicata by reason of the earlier judgment by this Court. In the case of the other appellants the High Court held that the matter was also concluded on the authority of the decision of this Court. The appellants in the first batch of appeals came by special leave and also filed writ petitions challenging the validity of the levy. Held, that while the general principle of res judicata applies to writ petitions under article 32 and article 226 of the Constitution, in its application to article 32 of the Constitution, the doctrine only regulates the manner in which the fundamental rights could be successfully asserted and does not in any way impair or affect the content of the fundamental rights. Pandit M.S.M. Sharma vs Dr. Shree Krishna Sinha, [1961] 1 section 0. R. 96, Raj Lakshmi Dasi vs Banamali Sen, [1953] section C. R. 154 and Daryao vs State of U.P., ; , referred to. Constructive res judicata was a creature of statute and its application could not be extended to other proceedings particularly those questioning tax liability for different years. Held, further, that the law declared by the Supreme Court which is binding under article 141 of the Constitution of India is that which has been expressly declared and any implied declaration though binding was subject to revision by this Court when the point was subsequently directly and expressly raised before this Court. Held, further, that the procedure of assessment of tax authorised by the relevant statutory provisions and the Rules could not be said to be a capricious administrative or executive affair so as to violate article 19(1) (f) of the Constitution. 174 Kunnathat Thathunni Moopil Nair vs State of Kerala, ; , distinguished. As the Rule which prescribed the maximum rate had itself been deleted it could not be said that there had been a levy in excess of the maximum prescribed. As neither the Act nor the Rules prescribed a ceiling on the levy, the expression "first impositions occurring in section 51(2) would include every increase of the levy after its initial imposition and the increased levy would require the previous sanction of the Local Government and such sanction not being there, the levy at the rate of 9 pies per ton was illegal. Considering the nature of the tax and the periods for which it was assessed and in the absence of any provision, the assessment once made by r. 10 was final and there could be no re assessment.

Civil Appeal No. 23 of 1958. Appeal by special leave from the decision dated September 29, 1956, of the Labour Appellate Tribunal, Bombay, in Appeal (Mad.) No. 96 of 1956, arising out of the Award dated April 9, 1956, of the Industrial Tribunal., Madras, in I.D. No. 52 of 1954. A. V. Viswanatha Sastri, and Naunit Lal, for the appellants. T. section Venkataraman and M. K. Ramamurth, for the respondents. February, 22. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. The appellant, the Tinnevelli Tuticorin Electric Supply Co., Ltd., Tuticorin, is an electric supply undertaking, and it carries on its business as a licensee under the State Government of 70 Madras subject to the provisions of the (Act 9 of 1910) and the Electric Supply Act, 1948 (Act 54 of 1948). This latter Act will hereinafter be called the Act. The business of the appellant consists of buying electric supply from the State Hydro electric Projects and of supplying the same to consumers within the areas specified in its licence; this area is in and around Tinnevelli and Tuticorin Municipalities. The appellant 's workmen (hereinafter called the respondents) made several demands in respect of their terms of employment. These demands gave rise to an industrial dispute which was referred by the Madras Government to the Industrial Tribunal at Madurai for adjudication under section 10(1)(c) of the (XIV of 1947). Amongst the items thus referred for adjudication was included the respondents ' claim for additional bonus for the year 1952 53. Without prejudice to its contention that the appellant was not liable to pay bonus it had in fact voluntarily paid two months ' basic wages by way of bonus to the respondents. The respondents, however, claimed additional bonus and this claim was one of the items of dispute referred to the tribunal for its adjudication. Before the industrial tribunal the appellant contended that since it was working as a licensee under the Act no claim for bonus was admissible outside the provisions of the Act. In support of this plea the appellant relied on the scheme of the Act which restricted the profit making of the electricity concerns to a prescribed limit with a possibility of a surplus only in cases of overcharging provided for in the rules. The appellant 's case was that, having regard to the scheme, object and the background of the Act under which the appellant was carrying on its busi ness, the respondent 's claim for additional bonus was wholly misconceived. No claim for bonus can be entertained, it was urged on behalf of the appellant, without reference to the provisions of the Act which governs the business of the appellant. The tribunal, however, rejected the appellant 's contentions and held that the appellant was liable to pay two months ' basic wages as additional bonus to 71 the respondents. This award was passed on March 4, 1955. Against this award the appellant preferred an appeal, No. 56 of 1955, to the Labour Appellate Tribunal, and contended that no additional bonus should have been awarded in the absence of proof of an excess of "clear profits over reasonable return" ; it was the appellant 's case that it was only from excess of clear profits over reasonable return as defined by the Act that bonus can be legitimately awarded to the respondents. It appears that about this time a number of appeals raising the same question were pending before the Labour Appellate Tribunal, and decisions given by the Labour Appellate Tribunal showed divergence of opinion on the question about the effect of the Act in respect of the claim for bonus made by employees of electricity concerns and undertakings. That is why the Chairman of the Labour Appellate Tribunal issued an administrative order that all appeals which raised the said question should be grouped together and posted for hearing before a specially constituted fuller bench of five members. The Chairman thought that a decision by a fuller bench would finally resolve the apparent conflict disclosed in several decisions pronounced thereto, and give proper guidance to the tribunals in future. The special bench of the appellate tribunal then heard the group of appeals including the appeal preferred by the appellant. It held that bonus could be ordered to be paid notwithstanding the limitations of the Act, and that the quantum of bonus should be determined even in the case of electricity concerns or undertakings by the application of the Full Bench formula laid down in that behalf. Having decided the question of law in this manner, the appeals were remanded to the respective benches of the Labour Appellate Tribunal for disposal in accordance with law. The appeal preferred by the appellant was in due course taken up by the Industrial Tribunal at Madras the Industrial Tribunal at Madurai having been in the meanwhile abolished and the appeals on its file transferred to the Industrial Tribunal at Madras. This latter tribunal considered the merits 72 of the contentions raised by the parties, applied the Full Bench formula, and ultimately passed an award on April 9, 1956, directing the appellant to pay 'an additional bonus of two months ' basic wages to the respondents. Thereupon the appellant preferred another appeal to the Labour Appellate Tribunal, and it was numbered as Appeal (Madras) No. 96 of 1956. Certain contentions were raised before the appellate tribunal on the merits, and it was urged that the direction to pay an additional bonus of two months basic wages was improper and unjustified. The appellate tribunal negatived most of the contentions raised by the appellant, but it was satisfied that the calculation made by the tribunal in regard to the quantum of available surplus was erroneous, and so, after rectifying the said error, it held that the additional bonus which the appellant should pay to the respondents was one month 's basic wage. It is against this decision of the appellate tribunal that the present appeal by special leave has been filed by the appellant before this Court. The main question which the appeal raises for our decision is whether the fuller bench of the Labour Appellate Tribunal was justified in holding that the Full Bench formula can and should be applied in adjudicating upon the respondents ' claim for bonus against the appellant. Incidentally, we may point out that the fuller bench of the Labour Appellate Tribunal in the case of U. P. Electricity Supply Co. Ltd. & Ors. vs Their Workmen (1) has decided two questions of law. The first was in regard to the applicability of the Full Bench formula to the employees ' claim for bonus against their employers carrying on the business of the supply of electricity, and the second was in regard to the extent of the statutory depreciation allowed by the Full Bench formula. The question was whether it should not include initial depreciation and additional depreciation which are given for the purpose of allowing relief in the matter of taxation under section 10(2) (vi b) of the Income tax Act. The fuller bench had decided that in allowing a prior charge in the (1) 73 working of the formula it is only the normal incometax depreciation (including multiple shift depreciation) that should be allowed. The correctness of this latter decision was challenged before this Court in Sree Meenakshi Mills Ltd. vs Their Workmen (1) but the challenge failed and the decision of the fuller bench was confirmed. In the present appeal it is the correctness of the fuller bench decision on the first question which is challenged before us. Let us being by stating briefly the appellant 's contention. It is urged on behalf of the appellant that it is only where the " clear profits " are in 'excess of the " reasonable return " under the Act that a case for the payment of bonus can really arise in regard to the electricity concerns and undertakings. The Act is a self contained code intended to regulate the business and affairs of electricity concerns including the claim of their employees for bonus, and as such an industrial dispute between such concerns and their employees in regard to bonus must be determined solely by reference to the provisions of the Act and and not by the application of the Full Bench formula. As to the quantum of bonus which should be awarded it would depend upon the circumstances in each case; but it is urged that it may as an ad hoe measure be decided that 1/4th of the excess between clear profits and the reasonable return may be taken as a fair quantum of bonus which electricity concerns should be ordered to pay to their employees. Before dealing with the validity of this argument it is necessary to examine the scheme of the Act. Let us first consider some of the provisions in the 9 of 1910 which may be relevant. Section 3(2)(d)(i) provides that the State Government may, on an application made in the prescribed form, and on payment of the prescribed fee (if any), grant, after consulting the State Electricity Board, a licence to any person, and that the said licence may prescribe such terms as to the limits within which and conditions under which, the supply ,of energy is to be compulsory or permissive, and generally as to such matters as the State Govern (1) 74 ment may think fit. Section 3(f) provides that the provisions contained in the Schedule shall be deemed to be Incorporated with, and to form part of, every licence granted under this Part, except as in the manner therein described. Section 4(1)(b) empowers the State Government inter alia to revoke the licence where the licensee breaks any of the terms or the conditions of his licence the breach of which is expressly declared by such licence to render it liable to revocation. Section 7(1) provides to the authorities specified in it option to purchase the undertaking. Section 11 requires the licensee to prepare and render to the State Government or to such authority as the State Government may appoint in that behalf, on or before the prescribed date in each year an annual statement of account of his undertaking made up to such date, in such form and containing such particulars, as may be prescribed in that behalf. Section 22 imposes on the licensee obligation to supply energy subject to the conditions prescribed ; and section 23 provides that a licensee shall not, in making any agreement for the supply of energy, show undue preference to any person. The licensee cannot also charge for such supply any rates higher than those permitted. The appropriate Government is authorised to fix the maximum charges, and by appropriate rules both the maximum and minimum charges have been prescribed. These are the relevant provisions of Act 9 of 1910. Let us now refer to some of the relevant provisions of the Act. Section 57 provides the licensee 's charges to consumers. According to it the provisions of the Sixth Schedule and the Seventh Schedule shall be deemed to be incorporated in the licence of every licensee, not being a local authority, in the manner specified by it. This section further provides inter alia that as from the specified date the licensee shall comply with the provisions of the said Schedules and not provisions of Act 9 of 1910, and the licence granted to him thereunder and of any other law, agreement or instrument applicable to the licensee shall, in relation to the licence, be void and of no effect in so far as they are inconsistent with the 75 provisions of section 57A and the said Schedules. Section 57 deals with the licensee 's charges to the consumers and lays down provisions which shall have effect in relation to the licence where the provisions of the Sixth Schedule and the table appended to the Seventh Schedule are under sub section (1) deemed to be incorporated in the said licence. These provisions relate to the appointment of the Board and the rating committee. Section 57A prescribes the principles and the procedure which has to be followed by the rating committee in making its report to the State Government regarding the charges for electricity which the licensee may make to any class or classes of consumers. This provision gives us an idea as to the object which the Legislature had in mind in ultimately fixing the minimum and maximum rates chargeable to the consumers. Sections 78 and 79 provide for power to make rules and regulations. Nine Schedules are attached to the Act. Schedule Six deals with the financial principles and their application; Schedule Seven deals with the depreciation of assets; Schedule Eight provides for the determination of cost of production of electricity at generating stations; and schedule Nine prescribes the method for allocation of costs of production at generating stations. It is necessary at this stage to refer briefly to some of the provisions contained in the Sixth Schedule, because Mr. Viswanatha Sastri, for the appellant, has relied on the scheme of the said Schedule in support of his principal argument. These provisions prescribe the financial principles which have to be followed by the electricity concerns and undertakings covered by the Act. It is urged by the appellant that these principles along with the rest of the Schedules and the provisions of the Act constitute a self contained code which govern the business and the financial affairs of electricity concerns, and as such even the claim of the appellant 's employees for bonus must be dealt with in the light of these provisions. Paragraph 1 of Sixth Schedule provides: " 1. Notwithstanding anything contained in the (9 of 1910) (except sub section (2) of section 22A), and the provisions In the 76 licence of a licensee, the licensee shall so adjust his rates for the sale of electricity whether by enhancing or reducing them that his clear profits in any year of account shall not, as far as possible, exceed the amount of reasonable return;". This provision is made subject to four provisos which it is unnecessary to mention. Paragraph 2 reads thus: " II. (1) If the clear profit of a licensee in any year of account is in excess of the amount of reasonable return, one third of such excess, not exceeding five per cent. of the amount of reasonable return, shall be at the disposal of the undertaking. Of the balance of the excess, one half shall be appropriated to a reserve which shall be called the Tariffs and Dividends Control Reserve and the remaining half shall either be distributed in the form of a proportional rebate on the amounts collected from the sale of electricity and meter rentals or carried forward in the accounts of the licensee for distribution to the consumers in future, in such manner as the State Government may direct. (2) The Tariffs and Dividend Control Reserve shall be available for disposal by the licensee only to the extent by which the clear profit is less than the reasonable return in any year of account. (3) On the purchase of the undertaking under the terms of its licence any balance remaining in the Tariffs and Dividends Control Reserve shall be handed over to the purchaser and maintained as such Tariffs and Dividends Control Reserve. " Paragraph 3 provides for the creation from existing reserve or from the revenue of the undertaking a reserve to be called Contingencies Reserve. Paragraph 4 prescribes the manner in which the licensee shall appropriate to Contingencies Reserve from the revenues of each year of account. Paragraph 6 directs that there shall be allowed in each year in respect of depreciation of fixed assets employed in the business of electricity supply such an amount as would if set aside annually throughout the prescribed period and accumulated at compound interest at 4 per 77 cent. per anum, produce by the end of the prescribed period amount equal to 90 per cent. of the original cost of the asset after taking into account the sums already written off or set aside in the books of the undertaking; annual interest on the accumulated balance will be allowed as expense from revenue as well as the annual incremental deposit. Paragraph 7 deals with assets which have ceased to be avilable for use through obsolescence, inadequacy, superfluity or for any other reason, and it allows the licensee to describe the said assets as no longer in use, and no further depreciation in respect thereof shall be allowed as a charge against the revenue. Paragraph 8 prohi bits any further depreciation where an asset has been written down in the books of the undertaking to 10 per cent. or less of its original cost. Under paragraph 9, where a fixed asset is sold for a price exceeding its written down cost, the excess has to be credited to the Contingencies Reserve. Paragraph 10 requires the consent of the State Government to carry sums to a reserve or to declare a dividend in excess of 3 per cent. on share capital or other matters specified therein. Paragraph 13 imposes limitations in respect of ordinary remunerations of managing agents; whereas paragraph 14 provides that the Board of Directors shall not contain more than 10 directors; and paragraph 15 prescribes the way in which the licensee can make any capital expenditure which exceeds Rs. 25,000 or 2 per cent. of the capital base within three years before the next option of purchase under the licence arises. Paragraph 16 contains an arbitration clause. Paragraph 17 gives definitions for the purpose of this Schedule. Capital base is defined by paragraph 17(1); clear profit is defined by paragraph 17(2) as meaning the difference between the amount of income and the sum of expenditure plus specific appropriations made up in each case as prescribed in several sub clauses of clauses (a), (b) and (c). It is necessary to refer to two sub clauses under clause (b) : " (xi) other expenses admissible under the law for the time being in force in the assessment of, Indian Income tax and arising from and ancillary or incidental to the business of electricity supply; 78 (xii) contributions to Provident Fund, staff pension, gratuity and apprentice and other training schemes. " Paragraph 17(9) defines a reasonable return as meaning : " in respect of any year of account, the sum of the following: (a) the amount found by applying the standard rate to the capital base at the end of that year; (b) the income derived from invesments than those made under paragraph IV of this Schedule; (c) an amount equal to one half of one per centum on any loans advanced by the Board under subparagraph (2) of paragraph I of the First Schedule. " One of the points which we have to decide in the present appeal is whether an amount of bonus paid by the employer to his employees is included under paragraph 17 (2) (b)(xi) of the Sixth Schdule. It would thus be clear that the provisions of the Act in general and those of the Sixth Schedule in particular, are no doubt intended to control and regulate the rates chargeable to consumers and to provide the method and the machinery by which the electrical system of the country could be properly coordinated and integrated. The rates chargeable are fixed, so is a reasonable return provided for. But it is not as if the Act intends to guarantee a minimum return to the undertaking. What it purports to do is to prohibit a return higher than the one specified. Appropriations permissible under revenue receipts are also defined and enumerated and a clear profit as contemplated by the Act is also prescribed and defined. Large powers have been given to the Electricity Authority, Boards and Councils for the purpose of canalising the activities of the concerns as well as for adjusting their activities for changing conditions and circumstances. Just as the Act has made provision for the control of rates chargeable to consumers its policy also is to give a fair deal to the undertaking and persons engaged in the business of supplying electricity. 'It is with this twin object that a working sheet is required to be prepared under the provisions of the Act. It is, however, clear that the working sheet thus prescribed is essentially 79 different from the balance sheet and profit and loss account which companies keep under the provisions of the Companies Act. The determination of clear profits on the basis of the working sheet ::proceeds on the consideration of previous losses, contributions towards the arrears of depreciation and several appropriations authorised by the State Government, matters which have no relevance to commercial accounting. The principles of commercial accounting on which the balance, sheets are prepared and profit and loss account made are very different from the principles on which the working sheet as specified in the Act is required to be prepared. The question which arises for our decision is whether the appellant is right in contending that the present dispute arising from the respondents ' claim for bonus must be decided by the provisions of the Act alone and that the Full Bench formula is wholly inapplicable for the purpose. In dealing with this contention it is necessary to bear in mind that the fields covered by the Full Bench formula and by the provisions of the Act are entirely different. The Full Bench formula has been evolved by industrial adjudication for the purpose of doing social justice to workmen and it is. now well established that the workmen 's claim for bonus is justified on the ground that they contribute to the employer 's profit and are entitled to claim a share in the said profit with a view to fill the gap between their actual wages and the living wage which they aspire to earn. On the other hand, the Act does not purport to deal with this problem at all. It is significant that though the Act makes detailed provisions in respect of matters intended to be covered by it, it does not refer to the wages which the employer may have to pay to his employees. Can it be said that in fixing the wage. structure as between an electricity undertaking and its employees considerations of social justice would be irrelevant? In fixing such wage structure none of the provisions of the Act can afford the slightest assistance to industrial tribunals. That task must be attempted by the tribunals in the light of principles of social justice and other relevant considerations such as the capacity of the employer to pay and the wages 80 received by employees in comparable trades in the same region. Just as the problem of wage structure has to be solved in the case of electricity concerns apart from the provisions of the Act and in the light of the relevant industrial principles, so must the problem of bonus be resolved in the like manner. There is really no conflict between the Act and the principles of industrial adjudication. In fact they cover different fields and their relevance and validity is beyond question in their respective fields. As we have just indicated the method of accounting required by the Act in preparing the working sheet is substantially different from the commercial method of accounting which yields the gross profits in the form of profit and loss account. Determination of gross profit is the first step which industrial tribunals take in applying the Full Bench formula. Such gross profit cannot be ascertained from the working sheet prepared under the Act. It is not denied that the appellant has to keep accounts under the Companies Act on a commercial basis. That being so, in dealing with the respondents claim for bonus, it is the balance sheet and the profit and loss account , prepared by the appellant that must be taken as the basis in the present proceedings, and that is precisely what the tribunals below have done. Therefore, we are satisfied that the Labour Appellate Tribunal was right in coming to the conclusion that the respondents ' claim for bonus must be governed by the application of the Full Bench formula. In this connection it may be useful to refer to the decision of this Court in the case of Baroda Borough Municipality vs Its Workmen (1). One of the points raised on behalf of the Baroda Borough Municipality in resisting the claim for bonus by its workmen was that the scheme of the Bombay Municipal Boroughs Act 18 of 1925 by which the Municipality was governed did not permit the making of any claim for bonus : and so it was not open to the, labour court or tribunal to direct payment of bonus to municipal employees. This argument was rejected. "The demand for bonus as an industrial claim ", it was (1) ; 81 observed, "is not dealt with by the Municipal Act; it is dealt with by the . Therefore, it is not a relevant consideration whether there are provisions in the Municipal Act with regard to bonus. The provisions of the Municipal Act are relevant only for the purpose of determining the quality or the nature of the municipal property or fund; those provisions cannot be stretched beyond their limited purpose for defeating a claim of bonus ". That is why this Court came to the conclusion that the absence of provisions in the Municipal Acts for payment of bonus to municipal employees was not a consideration which was either determinative or conclusive of the question at issue before it. The next question which arises is whether a claim for bonus can be said to be included under paragraph 17 (2) (b) (xi). This provision includes under expenditure other expenses admissible under the law for the time being in force in the assessment of Indian Income tax and arising from. and ancillary or incidental to, the business of electricity supply. It is admitted that bonus paid by an employer to his employees constitutes expenses admissible under section 10(2)(vi) of the Income tax Act, but it is urged that it is not an expense which can be said to arise from, and ancillary or incidental to, the business of electricity supply. The argument is that cl. (xi) lays down two tests, one of which is satisfied viz., that it is expense admissible under the lndian Income tax Act, but the other is not satisfied, and so the clause is inapplicable to the amount paid by way of bonus. The appellate tribunal has held that even the other test is satisfied and that the expenditure in question can be said to arise from, or to be ancillary, or incidental to, the business of electricity supply. In our opinion, it is difficult to accept the appellant 's argument that the construction placed by the appellate tribunal on the latter part of this clause is not reasonably possible. Besides, it may be relevant to point out that by a subsequent amendment made in 1957 cl. (xiii) has been added under paragraph 17(2)(b) of the Sixth Schedule. This clause which is numbered (xiii) reads thus: " Bonus paid to the employees it 82 of the undertaking (a) where any dispute regarding such bonus has been referred to any tribunal or other authority under any law for the time being in force, relating to industrial or labour disputes in accordance with the decision of such tribunal or authority ; (b) in any other case, with the approval of the State Government ". After the insertion of this clause there can be no doubt that the amount paid by the employer to his employees by way of bonus would definitely be admissible expenditure under paragraph 17(2)(b). In our opinion, the insertion of this clause can be more reasonably explained on the assumption that the Legislature has thereby clarified its original intention. Even when cl. (xi) was enacted the intention was to include claims of bonus under expenses covered by the said clause, but in order to remove any possible doubt the Legislature thought it better to provide specifically for bonus under a separate category. Otherwise, it is difficult to appreciate how contributions to Provident Fund were treated as admissible expenditure all the time since they were covered by cl. (xii) and bonus could not have been treated as admissible expenditure under cl. That is why we are on the whole prepared to agree with the construction put upon cl. (xi) by the appellate tribunal. If that be the true position then bonus has always been an admissible expenditure under the scheme of the Act, and as such there is no conflict between the scheme of the Act and the claim made by the respondents in the present case. Incidentally, we may add that this point appears to have been conceded by the appellant before the appellate tribunal. We must accordingly hold that the appellate tribunal was right in coming to the conclusion that the Full Bench formula applied in adjudicating upon the respondents ' claim for bonus against the appellant in the present proceedings. As we have already indicated, before the fuller bench reached this decision there was a conflict of opinion in the decisions of the Labour Appellate Tribunals, but in view of our conclusion it is unnecessary to refer to the said earlier decisions. 83 That takes us to the merits of the award. The first point is in regard to the appellant 's claim for rehabilitation. Before the Labour Appellate Tribunal it was fairly conceded by the respondents that at least income tax at seven annas in a rupee on the gross profits less depreciation, and also a contingency reserve of Rs. 6,047 have to be allowed in arriving at the figure of net available surplus for the purpose of bonus payable to the respondents ; and that in regard to normal statutory depreciation the correct figure must be taken to be Rs. 99,038 instead of Rs. 90,393 as given by the industrial tribunal. Then, as to the rehabilitation the appellant has led no evidence at all and so the appellate tribunal refused to grant any sum by way of rehabilitation in addition to the total amount of Rs. 1,13,950. In our opinion, the appellate tribunal was right in holding that the adoption of a factor of 2 7 for all assets purchased before 1945 was not justified, and that the adoption of the figures of the estimated life of the assets from the Schedule to the Electric Supply Act without even deducting the respective portions of the life of the assets which had already expired was equally unjustified. In that view of the matter we do not see how ' the appellant can make any grievance against the finding of the appellate tribunal on the question of rehabilitation. The appellate tribunal has fairly observed that, in future if a dispute arises between the appellant and its employees, the appellant may substantiate its claim for rehabilitation by leading proper evidence. The claim of the appellant for the triple shift allowance in respect of the mains has been allowed by the appellate tribunal and there is no dispute in respect of it; but it is urged that rule 8 of the Incometax Rules justifies the appellant 's claim in respect of all its electric plant and machinery under Entry IIIE (1). Rule 8 provides that the allowance under section 10 (2) (vi) of the Act in respect of depreciation of buildings, machinery, plant or furniture shall be a percentage of the written down value or original cost, as the case may be, equal to one twelfth the number shown in the corresponding entry in the second column of the following statement. There are two 84 provisos to this rule which it is not necessary to set out. The appellant makes a claim under IIIE (1) which deals with electric plant, machinery and boilers, whereas, according to the respondents, the appellant 's case in this behalf falls under IIIC (4) and (5) which respectively deal with underground cables and wires and overhead cables, and wires. The argument for the respondents is that in respect of these items the appellant 's claim is inadmissible. In support of this argument the respondents rely upon the remark against item 3 on page 8 of the Rules. This remark would show that the benefit claimed by the appellant does not apply to an item of machinery or plant specifically excepted by the letters N, E, S, A being shown against it. These letters are the contraction of the expression " No Extra Shift Allowance ". There is no doubt that these letters are to be found against items in IIIC (4) and (5). Therefore, the point which arose for decision before the appellate tribunal was whether the appellant 's claim falls under IIIE (1) or IIIC (4) and (5). The appellate tribunal has observed that the appellant made no attempt to show that any such claim for shift depreciation in respect of its cables and wires had been put forward by it before the income tax authorities, or that it was held to be admissible by them. It has also observed that if the appellant 's case was true that the cables and wires fell under IIIE (1) it was difficult to understand why separate provision should have been made in respect of depreciation of cables and wires under IIIC (4) and (5). Besides, the appellate tribunal was not satisfied that such cables and wires would depreciate in value to a materially greater extent when electrical energy is allowed to pass through them for more than one shift. That is why, on the materials as they were available on the record, the appellate tribunal saw no reason why the appellant should be allowed any extra shift depreciation in respect of underground and overhead cables by way of a prior charge. The appellant 's claim for the provision of Rs. 23,516 in that behalf was ' therefore, rejected. It would thus be seen that the appellant seeks to claim this amount by way of prior charge; 85 and in substance this claim has been rejected by the appellate tribunal on the ground that sufficient material has not been placed before it by the appellant on which the claim could be examined and granted. In such a case we do not see how we can interfere in favour of the appellant. The present decision will not preclude the appellant from making a similar claim in future and justifying it by leading proper evidence. In the result the appeal fails and is dismissed with costs. Appeal dismissed.

In respect of a dispute between the appellant company and the respondent company which was referred to the arbitration of the Bengal Chamber of Commerce in terms of the arbitration clause contained in the contract entered into on April 6, 1951, an award was made on February 29, 1952, allowing the claim of the appellant. The respondent made an application in the High Court for having the award set aside on the ground, inter alia, that the contract was void under the provisions of the Raw jute (Central jute Board and Miscellaneous Provisions) Act, 1951, inasmuch as it had not been entered into in the manner specified in sections 5, 6 and 7 of the Act as required therein. On December 14, 1950, the Government of West Bengal had promulgated an Ordinance called the Raw jute (Central jute Board and Miscellaneous Provisions) Ordinance, 1950, for the better regulation of the trade, and on December 29,1950, a notification was issued specifying December 30, 1950, as " the appointed day for the purposes of sections 5, 6 and 7 Of the said Ordinance." Subsequently the Ordinance was replaced by the Act which by section 16, provided:. . . any notification issued. . under the Raw Jute (Central jute Board and Miscellaneons Provisions) Ordinance, 1950, shall, on the said Ordinance ceasing to operate, be deemed to have been issued under this Act as if this Act had commenced on the 14th day of December 1950. " It was contended for the appellant that the notification dated December 29, 1950, could not be read as having brought sections 5, 6 and 7 Of the Act into force, because, on a plain reading of it, the notification did not purport to bring any of the sections of the Act into force, but expressly brought sections 5, 6 and 7 of the Ordinance into force and that the said sections of the Act not having been brought into force, the contract in question was valid and, consequently, the award was binding and enforceable. Held, that in order to give full effect to the two legal fictions created in section 16 of the Act that the Act shall be deemed to have commenced on December 14, 195o, and that the notification issued under the Ordinance shall be deemed to have 80 been issued under the Act, the principle of mutatis mutandis has to be adopted and the word " Act " substituted for the word " Ordinance " used in the notification dated December 29, 1950. Consequently, the provisions of sections 5, 6 and 7 Of the Act were applicable to the contract in question.

ivil Appeal No. 1 278 of 1978. Appeal by special leave from the Judgment and Order 15 11 1976 of the Delhi High Court in Civil Writ No. 96 of 1971. B. Dutta for the Appellant. Soli J. Sorabjee, Addl. General and R. N. Sachthey for Respondents 1 and 2. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. We granted special leave and heard arguments on the limited question whether "brick earth" is a 'minor mineral ' within the meaning of that expression as defined in Section 3 (e) of the . The definition is as follows: "Minor mineral ' means building stones, gravel? ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by Notification in the official Gazette declare to be minor mineral ;" In exercise of the power conferred by Section 3(e) of the Act, the Central Government declared the following minerals to be minor minerals "Boulder, Shingle, Chalcedony pebbles used for ball mill purposes only, limeshell kanker and limestone used for lime burning, murrum, brick earth, fuller 's earth, bentonite road metal, reh matti, slate and shale when used for building material;" The submission of the learned Counsel for the appellant was that a substance had to be a mineral before it could be notified as a minor mineral pursuant to the power under Section 3(e) of the . He urged that brick earth was not a mineral and, therefore, it could not be notified a minor mineral. We agree with the learned Counsel that a substance must first be a mineral before it can be notified as a minor mineral pursuant to the power vested in the Central Government under Section 3(e) of the Act. The question, therefore, is whether brick earth is a mineral. The expression "Minor Mineral" as defined in Section 3(e) includes 'ordinary clay ' and 'ordinary sand '. If the expression "minor mineral" as defined in Section 3(e) of the Act includes 'ordinary clay ' and 273 `ordinary sand ', there is no reason why earth used for the purpose A of making bricks should not be comprehended within the meaning of the word "any other mineral" which may be declared as a "minor mineral" by the Government. The word "mineral" is not a term of article It is a word of common parlance, capable of a multiplicity of meaning depending upon the context. For example the word is occasionally used in a very wide sense to denote any substance that is neither animal nor vegetable. Sometimes it is used in a narrow sense to mean no more than precious metalls like gold and silver. Again, the word "minerals" is often used to indicate substances obtain . ed from underneath the surface of the earth by digging or quarrying. But this is not always so as pointed out by Chandrachud, J (as he then was) in Bhagwan Dass vs State of Uttar Pradesh,(1) where the learned judge said (at p. 874): 'It was urged that the sand and gravel are deposited on the surface of the land and not under the surface of the soil and therefore they cannot be called minerals and equally so, any operation by which they are collected or gathered cannot properly be called a minerals operation. It is in the first place wrong to assume that mines and minerals must always be sub soil and that there can be no minerals on the surface of the earth. Such an assumption is contrary to informed experience. In any case, the definition of mining operations and minor minerals in section 3(d) and (e) of the Act of 1957 and Rule 2(S) and (7) of the Rules of 1963 shows that minerals need not be subterranean and that mining operations cover every operation undertaken for the purpose of "Winning" any minor mineral. "Winning" does not imply a hazardous or perilous activity. The word simply means extracting a mineral" and is used generally to indicate, any activity by which a mineral is secured. "Extracting" in turn means drawing out or obtaining. A tooth is 'extracted ' as much as the fruit juice and as much as a mineral. Only that the effort varies from tooth to tooth, from fruit to fruit and from mineral to mineral". We may also refer to Northern Pacific Railway Company vs John A. Sodrberg(2) where the Supreme Court of United States observed as follows (at page 581): "The word 'mineral ' is used in so many senses, dependant upon the context, that the ordinary definitions of the dictionary throw but little light upon its significance in a (1) ; (2) 47 L. Fd.575 274 given case. Thus, the scientific division of all matter into the animal, vegetable, or mineral kingdom would be absurd as applied to a grant of lands, since all lands belong to the mineral kingdom, and therefore, could not be excepted from the grant without being destructive of it. Upon the other hand, a definition which would confine it to the precious metals gold and silver would so limit its application as to destroy at once half the value of the exception. Equally subversive of the grant would be the definition of minerals found in the Century Dictionary: as "any constituent of the earth 's crust" ; and that of Beinbridge on Mines: "All the Sub stances stances that now form, or which once formed, a part of the solid body of the earth". Nor do we approximate much more closely to the meaning of the word by treating minerals as substances which are ""mined"" as distinguished from those are "quarried", since many valuable deposits of gold, copper, iron, and coal lie upon or near the surface of the earth, and some of the most valuable building stone, such for instance, as the Caen stone in France, is excavated from mines running far beneath the surface. This distinction between under ground mines and open workings was expressly repudiated in Midland C. vs Haunchwood Brick & Tile Co. (L.R 20 Ch. 552) and in Hext vs Gill (L.R. 7 Ch. 699)" The Supreme Court of United States also referred to several English cases where stone for road making or paving was held to be 'minerals ' as also granite, sandstone, flint stone, gravel, marble, fire clay, brick clay, and the like. It is clear that the word 'mineral ' has no fixed but a contextual connotation. The learned Counsel for the appellant invited our attention to the decision of the Court of Appeal in Todd Birleston and Co. vs The North Eastern Railway Co.(l) and to Stoud 's Judicial Dictionary to urge that clay, brick earth and the like have sometimes been held not to be minerals by English Courts. As we said earlier the word mineral is an elastic word whose meaning depends upon the setting in which it is used. For instance, in the case cited, the question was whether clay forming the surface or subsoil, and constituting the "land" compulsorily taken for the purposes of a railway, was not a mineral WITH the meaning of Sections 77, 78 or 79 of the Railway Clauses Consolidation Act. The answer was that 'clay ' was not a mineral for the purposes of the Railway Clauses Consolidation Act. Any other conclusion, in the context of the Act, would have led to the absurd (1) [1903] I K.B. 603 . 275 result that the original owner whose land had been taken would be entitled to dig and take away the clay from the land on which the Railway was constructed, thus defeating the very object of the compulsory taking. On the other hand, as noticed by the Supreme Court of the United States, in several English cases clay, gravel, sand, stone etc. has been held to be minerals. That is why we say the word mineral has no definite meaning but has a variety of meanings, depending on the context of its use. In the context of the Mines and Minerals (Regulation & Development) Act, we have no` doubt that the word 'mineral ' is of sufficient amplitude to include 'brick earth '. As already observed y us, if the expression 'minor mineral ' as defined in the Act includes 'ordinary clay ' and 'ordinary sand '. there is no earthly reason why 'brick earth ' should not be held to be 'any other mineral ' which may be declared as 'minor mineral. We do not think it necessary to pursue the matter further except to say that this was The view taken in Laddu Mal vs State of Bihar(l) Amar Singh Modilal vs State of Haryana(2) and Sharma & Co. vs State of U.P.(3). We do not agree with the view of the Calcutta High Court in State of West Bengal vs Jagadamba Prasad (4) that because speaks of 'ordinary earth ' as a mineral it is not a minor mineral as defined in the Mines and Minerals (Regulation & Development) Act. The appeal is accordingly dismissed with costs. S.R. Appeal dismissed (1) A.I.R 1965 Patna 491 (2) A.I.R 1972 Punj. & Har. 356 (3) A.I.R. 1975 All. 86. (4) A.I.R. 1969 Cal.

Respondents were two workmen originally employed by M/s Seth lam Gopal and Partners, who were licensees for the distribution of electricity under the Electricity Act, 1910. There were certified Standing orders for the industrial establishment of the said licensees; but they did not prescribe any age of superannuation for the employees with the result the workmen could continue to hours long as they were fit and able to discharge their duties Pursuant to The purchase by the appellant with effect from 1 12 1964 of the electricity undertaking of M/s Seth Ram Gopal, the employees in their industrial establishment including the respondents became the employee of the appellant. I he appellant board which ii admittedly an industrial establishment to which the Industrial Employment (Standing orders Act. 1946 applies neither made nor got certified any standing orders as it was bound so to do under hat Act. The Board however considered the certified Standing orders of the establishment Seth Ram Gopal as applicable to their employees even after the purchase of the undertaking by the Board. However. On lay 2. 1970 the Governor of Uttar Pradesh notified under Section 13 B o the Industrial Employment (Standing orders) Act, 1946. a regulation made by the U.P. State Electricity Board under Section 79(c) of the electricity Suppl. Act, 1948 fixing the age of superannuation as S and 60 on a par with the other State Govt. employees. Action in pursuance of the regulation as notified by the Governor the appellant sought to retire the respondents on July 2, 1972 and July 7. 1972 respectively. On their attaining the age of 58 years. The respondents filed a Writ Petition in the Allahabad High Court challenging the regulation male by the Board and its notification by the Governor which was dismissed. But the Division Bench which heard the special appeal preferred by then. Referred three questions to a Full Bench The Full Bench answered the questions as follows: ``(l) The Industrial Employment (Standing Orders 1946 applies to the industrial establishment of the State Electricity Board. (2) The Standing Orders framed, in an industrial establishment by an electrical undertaking, do not cease to be operative on the purchase of the undertaking by the Board or on framing of the Regulations under Section 79(c) of the electricity (Supply) Act 1918 and (3) Section 13 B of the Industrial Employment (Standing orders Act. applies only to the industrial establishments of the Government and to no other establishments. 356 Following the opinion of the Full Bench, the Division Bench allowed the special Appeal and issued a writ quashing the notification dated May 28, 197) and directing the appellant not to enforce the regulation against the respondents. he appellant obtained a certificate under article 133(1) of the Constitution and has preferred the appeal. Allowing the appeal, the Court ^ HELD : 1. The Industrial Employment (Standing orders) Act. 1946 (Act 20) is a special law in regard to the matters enumerate(l in the schedule and the regulations made by the Electricity Board with respect to my of those matters are of no effect, unless such regulations are either notified by the Government under Section 13 B or certified by the certifying officer under Section 5 of the Industrial Employment (Standing orders) Act, 1946. In regard to matters in respect of which regulations made by the Board have not been notified by the Governor or in respect of which no regulations have been made by the Board the Industrial Employment (Standing Orders Act shall continue to apply. In the present case, the regulation made 1. the Board with retired to the age of superannuation having been duly notified by the government , the regulation shall have effect. notwithstanding the fact that it is a matter which could be the subject matters of Standing orders under the Industrial Employment (Standing Orders) Act. The respondents were, therefore, properly retired when they attained the are of 58 years. [371A F] 2. The Industrial Employment (Standing Orders) Act is an Act specially designed to define the terms of employment of workmen in industrial establishment, to give the workmen a collective voice in defining the terms of employment and to subject the terms of employment to the scrutiny of quasi judicial authorities by the application of the test of fairness and reasonableness. It is an Act giving recognition and hard won and precious right of workmen. It is a Special Act expressly and exclusively dealing with the schedule enumerated conditions of service or workmen in industrial establishment. [364E G] Associated Cement Co. Ltd. vs P. D. Vyas, [196(] 2 S.C.R. 974; Rohtak Hissar district Electricity Supply Co. Ltd. vs , State of U.P. an(l ors. ; , ; Western India Match Co. Ltd. vs Workmen, [1974] 1 S.C.R. 434; referred to. The Electricity Supply Act does not presume to be an Act to regulate the conditions of service of the employees of State Electricity Board. It is an act to regulate the coordinated development of electricity. It is a special Act in regard to the subject of development of electricity, even as the Industrial Employment (Standing orders) Act is a special act in regard to the subject of conditions of service of workmen in industrial establishments. If section 79 of he Electricity Supply Act generally provides for the making o regulations providing for the conditions of service of the employees of the Board, it can only be regarded as a general provision which must yield o the special provisions of the Industrial Employment (Standing orders) Act in respect of matters covered by the latter. [365D F] 4. The reason for the rule "Generalis specialibus non derogant", that a general provision should yield to specific provision is this: In passing a special Act, Parliament devotes its entire consideration to a. particulars subject. When a 357 General Act is subsequently passed, it is logical to presume that Parliament has A not repealed or modified the former special Act unless it appears that the Special Act again levied consideration from Parliament [366 D] The provisions of the Standing orders Acts therefore, must prevail over Section 79(c) of the Electricity Supply Act in regard to matters to which the Standing (Orders Act applies. It is impossible to conceive that Parliament sought to abrogate the provisions of the Industrial Employment (Standing orders) Act, embodying as they do hard won and precious rights of workmen and prescribing as they do an elaborate procedure, including a quasi judicial determination, by a general, incidental provision like Section 79(c) of the Electricity Supply Act. lt is obvious that Parliament did not have before it the Standing orders Act, when it passed the Electricity Supply Act and Parliament never meant that the Standing orders Act should stand pr alto repealed by Section 79(c of the Electricity Supply Act. [366F H] Sukhdev Singh vs Bhagat Ram, ; ; Rajasthan Electricity Board n. Mohan Lal, [1967] 3 S.C.R. 277; held inapplicable. The true scope of the rule of "ejusdem generis" is that words of a general nature following specific and particular words should be so construed as limited t things which are of the same nature as those specified. But the rule is one which has to be "applied with caution aud not pushed too far". It is a rule which must be confined to narrow bounds so as not to unduly or necessarily limit general and comprehensive words. If a broad based genus could consistently be discovered there is no warrant to cut down general words to dwarf size. If giant it cannot be, dwarf it need not be. [369 A B] It is true that in Section 1 3 B the specie specifically mentioned happen to be Government servants. But they also possess this common characteristic that they are all public servants enjoying a statutory status and governed by statutory rules and regulations. If the legislature intended to confine the applicability of Section I 3 B to industrial undertakings employing government servants only nothing was easier than to say so instead of referring to various rules specially and following it up with a general expression like the one in the instant case. [369B D] 6. The words 'rules and regulations ' have come to acquire a. special meaning when used in statutes. They are used to describe subordinate legislation made by authorities to whom the statute delegates that function. The words can have MV other meaning in Sec. 1 3 B. Therefore, the expression "workmen . whom . any other rules or regulations that may be notified in this behalf means, in the context of Sec. 13 B, workmen enjoying a statutory status, in respect of whose conditions of service the relevant statute authorises the making of rules or regulations. The expression cannot be construed so narrowly as to mean Government servants only; nor can not be construed so broadly as to mean workmen employed by whomsoever including private employers, so long as their conditions of service are notified by the Govt. under Sec. 13 B [369D F] The words 'nothing in this Act shall apply ' are not to be interpreted to literally as to lead to absurd results. The only reasonable construction that an be put upon the language of Section 13 B is that a rule of regulation, it 358 notified by the Government, will exclude the applicability of the Act to the extent that the rule or regulation covers the field. To that extent and to that extent only "nothing in the Act shall apply". [307 F G] Raman Nambissan vs State Electricity Board and Thiruvenkataswami vs Coimbatore Municipality, explained.

Appeal No. 55 of 1950. Appeal by special leave from the Judgment and Order dated March 18. 1949, of the High Court of Judicature at Bombay (Chagla C. J. 178 and Ten dolkar J.) in Income tax Reference No. 5 of. 1948, arising out of order dated September 27, 1947, of the Income tax Appellate Tribunal, Bombay Bench 'A ', in I.T.A. No. 2205 of 1946 47. C. K. Daphtary, Solicitor General for India, (K. T. Desai and A.M. Mehta, with him) for the appellant. M. C. Setalvad, Attorney General for India, (G. N. Joshi, with him) for the respondent. November 3. The Judgment of the Court ,Was delivered by Bose, J. This is an appeal from the High Court at Bombay in an Income tax Reference under section 66 (1) of the Indian Income tax Act of 1922. The reference was made to the Bombay High Court by the Bombay Bench of the Income tax Appellate Tribunal in the following circumstances. The appellant assessee is a company known its the Raghuvanshi Mills Ltd., of Bombay. The assessment year with which we are concerned is 1945 46. 'The assessee had insured its buildings, plant and machinery with various insurance companies and also took out, besides those policies, four policies of a type known as a "Consequential Loss Policy. " This kind of policy insures against loss of profit, standing charges and agency commission. The total insured against under, the latter heads was Rs. 37,75,000 account of loss.of profits and standing charges, and Rs. 2,26,000 account of agency commission, making a total of Rs. 40,00,000. On the 18th of January, 1944, a fire. broke out and the mill were completely destroyed. The various insurance companies therefore paid the assessee company an aggregate of Rs. 14,00,000 account in the year with which we are concerned under these policies. This was paid in two sums as follows: Rs. 8,25,0.00 8th September, 1944, and Rs. 5,75,000 22nd December, 1944. These payments have been treated as part of the assessee 's 'income and the 179 company has been taxed accordingly. The question is whether these sums are or are not liable to tax. Before we set out the question referred, it will be necessary to state that the whole of this Rs. 14,00, 000 has been treated as paid account of loss of profits. The learned Solicitor General, who appeared for the ) appellant assessee, contended that that was wrong because the portion of it assignable to standing charges and agency commission could not any construction be liable to tax. This contention is new and involves questions of fact and travels beyond the scope ' of the question referred. We are consequently not, able to entertain it. It has been assumed throughout the proceedings, tight up to this Court, that the whole of the Rs. 14,00,000 was assignable to loss of profits. There is nothing the record to show that it was ever split up among the other heads or that it was ever treated &a having been split up,either by the insurance com panies or by the assessee, nor is there any material which we would be able to apportion it. Our decision therefore proceeds the assumption that the whole sum is assignable to loss of profits and we make it clear that we 'decide nothing about other moneys which may be distributable among other heads. The question has been referred in these terms: "Whether in the circumstances of the case, the sum of Rs. 14,00,000 was the assessee company 's income within the meaning of Section 2(6C) of the Indian Income tax Act and liable to pay income tax under the Indian Income tax Act. " We are concerned in this case with four policies of insurance with four different insurance companies. The clauses relevant to the present matter are the same in all four cases though the sum insured against by. each insurance company differs. They are as follows "POLICY NO. C.L. 110018. . . 180 Rupees X Lacs only Loss of Profits, Standing Charges and Agency Commission of the above Co. 's Mills, situate at Haines o Road, Mahaluxmi; Bombay, following . . The total amount declared for insurance is Rs. 40,00,000 and for 18 months ' benefits only as under: Rs. 37,75,000 Loss of Profits and Standing Charges. Rs. 2,25,000 Agency Commission. Rs. 40,00,000 Out, of which this policy covers Rs. X lacs only. Schedule attached to and forming part of Po licy No. C. L. 10018. The company will pay to the assured: The loss of Gross Profit due to (a) Reduction in Output and (b@) increase in Cost of Working and the, amount payable as indemnity hereunder shall. . Definitions of those two terms follow. We need not reproduce talent. Then come the following definitions: "Gross profit. The sum produced by adding to the Net Profit the amount of the Insured Standing Charges, or if there be no Net Profit the amount of the Insured Standing Charges, less such a proportion of any net trading loss as the amount of the Insured Standing Charges bears to all the Standing Charges of the business. Net profit. The net trading profit (exclusive of all capital receipts and accretions and all outlay properly chargeable to capital) resulting from the business of the Insured at the premises after due provision has been made for all Standing 'and other charges including depreciation. Insured standing charges. Interest Loans and Bank Overdrafts, Rent Rates and Taxes, Salaries to Permanent Staff and Wages to Skilled Employees, 181 Directors ' Fees, Auditor 's Fees, Travelling Expenses, Insurance Premiums, Advertising and Agency Commission. Period of indemnity. The period beginning with the occurrence of the fire and ending not later than eighteen consecutive calendar months thereafter during which the results of the business shall be affected in consequence of the fire. Rate of Gross Profit. The rate of gross profit per unit earned the output during the financial year immediately before the date of the fire. . to which such adjustments shall be made as may be necessary to provide for the trend of the business and for variations in or special circumstances affecting the business either before or after the fire or which would have affected the business had the fire not occurred so that the figures thus adjusted shall represent as nearly as may be reasonably practicable the result which, but for the fire, would have been obtained during the relative period after the fire. " The underlined words show that the insurance in respect of profits was to represent as 'nearly as possible the profits which would have been made, had the mills been working in its normal way. We turn next to the Income tax Act. Under section 3 the "total income of the previous year" is liable to tax subject to the provisions of the Act. Section 4 defines the total income to include "all income, profits and gains from whatever source derived. " There are certain qualifications but they do not concern us here. It will be seen that the taxable commodity, "total income", embraces three elements, "income", "profits" and "gains". Now though these may overlap in many cases, they are nevertheless separate and severable, and the simple question is whether the Rs. 14 lacs Here italicised. 24 182 fall under any one or more of those heads. In our opinion, it is "income" and so is taxable. It was argued behalf of the assessee that it can not be called profits because the money is only pay able if and when there is a loss or partial loss and that something received from an outside source in circumstances like these is not money which is earned in the business and if there are no earnings and no profits there cannot be any income. But that only concentrates the word " ' profits". This may not be a "profit" but it is something which represents the profits and was intended to take the place of them and is therefore just as much income as profits or gains received in the ordinary way. Section 4 is so widely worded that everything which is received by a man and goes to swell the credit side of his total account is either an income or a profit or a gain. No attempt has been made in the Act to define "income" except to say in section 2 (6C) that it includes certain things which would possibly not have been regarded as income but for the special definition. That however does not limit the generality of its natural meaning except as qualifided in the section itself. The words which follow, namely, "from a whatever source derived", show how wide the net is spread. So also in section 6. After setting out the various heads of taxable income it brings in the all embracing phrase "income from other sources. " There is however a distinction between "income" and "taxable income". The Act does not purport to subject all sources of income to tax, for the liability is expressly made subject to the provisions of the Act and among the provisions are a series of exceptions and limitations. Most of them are set out in section 4 itself but none of them apply here. The nearest approach for present purposes is section 4 (3) (vii): "Any receipts. . not being receipts arising from business. . which are of a casual and non recurring nature. " 183 But the sting, so far as the assessee is concerned, lies in the words "not being receipts arising from business. " The assessee is a business company. Its aim is to make profits and to insure against loss. In the ordinary way it does this by buying raw material, manufacturing goods out of them and selling them so that balance there is a profit or gain to itself. But it also has other ways of acquiring gain, as do all prudent businesses, namely by insuring against loss of profits. It is indubitable that the money paid in such circumstances is a receipt and in so far as it represents loss of profits, as opposed to loss of capital and so forth, it is an item of income in any normal sense of the term. It is equally clear that the receipt is in separably connected with the ownership and conduct of the business and arises. from it. Accordingly, it is not exempt. This question was considered by the Supreme Court of Canada which decided that a receipt of this nature is not a "profit" and so is not taxable [B. C. Fir and Cedar Lumber Co. vs The King(1)]. But the Court did not examine the wider position whether it is "income" and in any event the decision was reversed appeal to the Privy Council(1). Their Lordships held it is "income". This was followed later by the Court of Appeal in England and endorsed by the House of Lords in Commissioners of inland Revenue vs William 's Executors(1) In so far as these decisions do not turn the special wording of the Acts with which they are respectively concerned and deal with the more general meaning of the word "income", we prefer the view taken in England. It is true the Judicial Committee attempted a narrower definition in Commissioner of income tax vs Shaw Wallace & Co.(1), by limiting income to "a periodical monetary return 'coming in ' with some sort of regularity, or expected regularity, from definite sources" but, in our opinion, those remarks must be (I) [1931] Canada L.R. 435. (2) [I932] A. C. 441 at 448. (3) (I944) (4) (1932) 59 I.A. 206. 184 read with reference to the particular facts of that case. The non recurring aspect of this kind of receipt was considered by the Privy Council in The King vs B. C. Fir and Cedar Lumber Co.(1), and we do not think $their Lordships had in mind a case of this nature when they decided Shaw Wallace & Company 's case (2). The learned Solicitor General relies strongly a clause which appears in three of the four policies with which we are concerned. That is a clause which states that the insured must do all he can to minimise the loss in profits and until he makes an endeavour to re start the business the moneys will not be paid. This, he argued, shows that the money was paid as an indemnity against the loss of profits and was niether income nor profits, nor was it a gain within the meaning of the section. We are unable to see how these receipts cease to be income simply because certain things must be done before the moneys can be claimed. In our opinion, the High Court was right in holding that the Rs. 14,00,000 is assessable to tax. The appeal fails and is dismissed with costs. Appeal dismissed. (1) [1032] A.C. 441, at 448. (2) [1932] 59 I.A. 206.

The appellants, who were dealers in Cotton yarn, obtained a license under the Madras General Sales Tax Act, 1939 (IX of 1939). Section 5 of that Act exempted such dealers from pay ment of sales tax under section 3 of the Act subject to such restrictions and conditions as might be prescribed, including the conditions as to licenses and license fees. Section 13 required a licensee to keep and maintain true and correct accounts of the value of the goods sold and paid by him. Rule 5 of the General Sales Tax Rules provided that any person seeking exemption under section 5 of the Act must apply for license in Form 1 which made the license subject to the provisions of the Act and the rules made thereunder. The appellants on surprise inspection were found to maintain two separate sets of accounts, on the basis of one of which they submitted their returns and the other 737 showed black market activities. The question for determination in the appeal was whether the appellants who had been refused exemption and were assessed to tax, could claim exemption under the Act. Held, that the question must be answered in the negative. Section 5 of the Madras General Sales Tax Act, 1939, pro perly construed, leaves no manner of doubt that an exemption from assessment thereunder is clearly conditional upon the observance by the assessee of the conditions and restrictions imposed by the Act, either in the rules or in the license itself, and the words 'subject to ' used by the section means "conditional upon". It was not correct to say that licensee was exempt from assessment so long as he held the license notwithstanding any breach of the provision of the law and that the only penalty he could be subjected to was the cancellation of his license or criminal prosecution.

N: Criminal Appeal Nos. 345 346 of 1991. From the Judgement and Order dated 14.6.1990 of the Madras High Court in Referred Trial Nos. 4/89 and 5/89 and Crl. Appeal Nos. 593/89 and 594 of 1989. 715 Raju Ramachandran, Jaga Rao, Alok Agarwal, Ms. Malini Bhat and section Ravindra Bhatt for the appellants. V.R. Karthikeyan and V. Krishnamurthy for the respondent. The Judgment of the Court was delivered by K. RAMASAWAMY, J. Special leave to appeals granted. Heard the learned counsel, Sri Raju Ramachandran amicus curiae for the appellants and Sri V. Krishnamurthy, the learned Standing Counsel for the State. The appellants Sevaka Perumal and Isakkimuthu for short 'A 1 ' and 'A 2 ' in Appeal arising out of S.L.P. (Crl.) No. 1842/90 are accused in Sessions Case No. 283 of 1986 on the file of the Addl. Sessions Judge, Tirunelveli Sessions Division and appellants in Criminal Appeal No. 594 of 1989 and R.T. No. 4 of 1989 by judgment, dated June 14, 1990 of the High Court of Madras. Criminal Appeal arise out of S.L.P. (Crl.) No. 1841/90; Sessions Case No. 284 of 1986 of the same Sessions Division and Criminal Appeal No. 593 and R.T. No. 5 of 1989 dated June 14, 1990 of the Madras High Court respectively, A 1 is the appellant. In each case the Sessions Court convicted them under sections 120B, 364, 392 read with section 397; section 302 read with section 34 I.P.C. and sentenced to death. In Crl. Appeal No. 594 of 1989 and R.T. No. 4 of 1989, the High Court confirmed the conviction and sentence of death of both the appellants. In Crl. Appeal No. 593 of 1989 and R.T. No. 5 of 1989, the High Court confirmed the conviction and sentenced of death of the A 1 and acquitted A 2 of all the charges. The case of the prosecution in brief is that the appellants and PW 1, the approver belonged to kidarakulam village and became friends. A 1 used to bring money form the timber shop of his brother in law (PW 4) in Sessions Case No. 284/86 in whose shop A 1 had worked. They used to go to various places. A 1 used to purchase ganja from chenglapatai and other places and A 1 and A 2 used to sell them. Yet they did not have enough money to spend lavishly. They attempted to commit theft in the localities but became impracticable. Therefore, they conspired to entice boys from affluent families to bring cash and jewellery from their houses; take them to far away places; take their money or jewellery and to murder them for gain. Pursuant thereto in 1978 they murdered one Athippan; in 1981 one Chelladurai; in March, 1982 one Hariramachandran and in 1983 one Christodas. In Sessions Case No. 283/86, the deceased boy is Athiappan. In 716 Sessions Case No. 284/86, the deceased boy is Hariramachandran. Sessions Case No. 282/86 on the file of the Sessions Court. Madurai Division relates to deceased Chelladurai. Therein also we are informed that the appellants were convicted but on appeal they were acquitted. In sessions Case relating to the death of Christodas, it also ended in conviction and sentence of death was imposed on the appellants and is pending confirmation in the High Court. It is sufficient to set out the material fact leaving out the minor details in Sessions Case No. 284/86 to meet the points raised by the counsel for the appellants. A 1 enticed the deceased, Hariramachandran, his nephew (elder sister PW 2 ' son) to bring jewellery from the house of PW 2 and PW 4. The appellants and PW 1 took him to Madurai. On the way the deceased went to the house of PW 3 and handed over one chain to be delivered to his mother and took M.O. 1 chain with him. A 1 had taken a room in the lodge at Madurai run by PW 16. On coming to know that they were staying in Madurai, PW 2, PW 4, her husband and PW 3 went to the lodge and the deceased was found threat. He informed them that the chain was with A 1 and he would come in the evening at 8.00 p.m. After waiting for some time and when it was getting dark, the ladies went away asking PW 4 to get the chain and the deceased after A 1 's arrival. While PW 4 was waiting the deceased went down stairs and after A 1 's arrival told him of his mother 's coming etc. and from there they went away to Madras, and having come to know that they left the place PW 4 left to his village. On the next day they returned to Madurai. From there they went to Usilampatti and A 1 then purchased a knife at the Bus Stand without the knowledge of the deceased and proceeded to Peraiyar road. They sat near a jungle stream. While A 1 and the deceased Harirmachandran were sitting near a stone on the southern side of the road, A 2 and PW 1 were standing at a distance, A 1 stabbed Harirmachandran in his stomach with a knife and the deceased collapsed on the stone. A 1 threw away the knife in the river. He threw the deceased in the nearby well and washed his hands and legs in the stream. They returned to Usilampatti Bus Stand. From there they came to Madurai. A 1 sold M.O. 1 chain to PW 24 and gave one hundred rupees each to PW 1 and A 2. This evidence of PW 1 received sufficient corroboration from the evidence of prosecution witnesses. Sri Raju Ramachandran contended that the dead body was admittedly found in a highly decomposed condition. There is no proper identification of the dead body to be of the deceased. The 717 mother PW 2 identified only with reference to the photograph taken of the dead body. There is evidence that the deceased wrote a letter of leaving to unknown destination. Unless there is proof that the dead body belongs to Hariramachandran, it is not safe to convict to A 1 to a capital punishment of death sentence. We find no force in the contention. In a trial for murder it is not an absolute necessity or an essential ingredient to establish corpus delicti. The fact of death of the deceased must be established like any other fact. Corpus delicti in some cases may not be possible to be traced or recovered. Take for instance that a murder was committed and the dead body was thrown into flowing tidal river or steam or burnt out. It is unlikely that the dead body may be recovered. If recovery of the dead body, therefore, is an absolute necessity to convict an accused, in many a case the accused would manage to see that the dead body is destroyed etc. and would afford a complete immunity to the guilty from being punished and would escape even when the offence of murder is proved. What, therefore, is required to base a conviction for an offence of murder is that there should be reliable and acceptable evidence that the offence of murder, like any other factum, of death was committed and it must be proved by direct or circumstantial evidence, although the dead body may not be traced. In this case the evidence of PWs. 7 to 10 would establish that they have seen the dead body of the deceased Hariramachandran in the well and brought it out and the photograph was taken at the time of inquest. It was identified to be that of the deceased by no other than his mother, PW 2. Thus we have no hesitation to hold that there is no doubt as regards the identity of the dead body and that the medical evidence establishers that the deceased died due to stabbing with sharp edged weapon like knife. It is next contended that PW 1 being an approver, his evidence must be reliable and must receive corroboration on all material particulars from independent evidence. PW 1 is neither a reliable witness nor did his evidence receive such corroboration. Therefore, his evidence cannot form the basis to convict the appellants. It is his contention that in Hariramachandran 's death case the evidence of PW 1 was not accepted as regards the complicity of A 2 and he was acquitted. Therefore, PW 1 is not a reliable witness. This contention too is devoid of any force. PW 1 had given wealth of details of commission of the crimes. Under section 133 of the Evidence Act 1 of 1872, an accomplice shall be a competent witness against an accused person; and a conviction is not illegal merely because it proceeds upon the uncorroborated testimony of an accomplice. Section 114 illustration (b) postulates that an accomplice is unworthy of credit, unless he is corroborated in mate 718 rial particulars. In King vs Baskervilli, Lord Reading, CJ, laid the test that the corroboration need not be direct evidence that the accused committed the crime. It is merely circumstantial evidence of his connection with the crime. The nature of the corroboration will depend and vary according to the particular circumstances of each case. What is required is some additional evidence rendering it probable that the story of the accomplice is true and that it is reasonably safe to act upon. In Mahadeo vs The King AIR 1936 P. C. 242 the judicial committee held that the evidence of an accesory must be corroborated in some material particulars not only bearing upon the facts of the crime but upon the accused 's implication in it. This Court in Rameshwar vs The State of Rajasthan, ; held that it is not necessary that there should be independent confirmation of every material circumstance in the sense that the independent evidence of the case, apart from the testimony of the complainant or its accomplice should in itself be sufficient to sustain conviction. All that is necessary is that there should be independent evidence which will make it reasonably safe to believe that the witness 's story that the accused was the one that committed the offence could be acceptable. The corroboration need not be direct evidence that the accused committed the crime. It is sufficient if it is merely circumstantial evidence of his connection with the crime. In section Swaminathan vs State of Madras, AIR 1957 SC 340 this Court held that corroboration of approver 's evidence need not be of a kind which prove the offence against the accused. It is sufficient if it connects the accused with the crime when the accused had been charged for the offences of conspiracy and of cheating, a specific instance of cheating proved beyond doubt against one of the accused would furnish the best corroboration of the offence of the conspiracy. In Sarwan Singh vs The State of Punjab, ; relied by Shri Raju Ramachandran, this Court held that the approver must be a reliable witness and the evidence must receive sufficient corroboration. In that case the corroboration of minor particulars was accepted to be sufficient to hold the approver to be reliable witness. In B.D. Patil vs State of Maharashtra, this Court held that the conviction of an accused on the testimony of an accomplice cannot be said to be illegal, yet the courts will, as a matter of practice do not accept the evidence of such a witness without corroboration in material particulars. There should be corroboration of the approver in material particulars and must be qua each accused. In Md. Hussain Umar Kochra etc. vs K.S. Dalipsinghji & Anr., [1970] 1 S.C.R. 130 it was held that the combined effect of sections 133 and 114(b) is that though a conviction based upon accomplice evidence is legal the court will not accept such evidence unless it is 719 Corroborated in material particulars. The corroboration must be from an independent source. If several accomplices simultaneously and without previous concert giving consistent account of the crime implicating accused, the court may accept the several statements as corroborating each other. In Ram Narain vs State of Rajasthan, ; this Court held that section 114(b) strikes a note of warning, cautioning the court that an accomplice does not generally deserve to be believed unless corroborated in material particulars. In other words, the rule is that the necessity of corroboration is as matter of prudence except when it is safe to dispense with such corroboration must be clearly present to the mind of the Judge. In Abdul Sattar vs Union Territory, Chandigarh, [1985] (Suppl.) S.C.C. 599 this Court further held that it is not safe to convict an accused on the charges like murder upon the evidence of uncorroborated testimony of the approver. Thus the settled law is that an approver is a competent witness against the accused person. But the court, to satisfy its conscience, insists as caution and prudence to seek, as a rule, corroboration to the evidence of the approver, a particips criminis from independent evidence occular or circumstantial, of general particulars regarding the story spoken off by the approver of the commission of the crime and the part played by the accused therein to find whether it is true and worthy of acceptance. The reliability of the evidence of an approver should be considered from totality of the facts and circumstances. In the trial of Athiappan murder there is no dispute that such a corroborative evidence connecting both the appellants is available which was minutely considered by the trial court and the High Court and was accepted. We find no infirmity in that regard. In the trial of the death of Hariramachandran, A. 2 was acquitted on the ground that his extra judicial confession made to P.W. 23, the only corroborative evidence,was disbelieved by the High Court. Both the courts below gave categorical finding that P.W. 1 is a reliable witness. the evidence of the approver received corroboration from independent evidence on general prosecution case, namely, P.W. 16 spoke that the deceased was brought by the accused and stayed in the lodge. P.Ws 2 to 4 spoke of A 1 working in their shop, previous theft by A 1 and M.O. 1 being missing, their attempt to take back the deceased and M.O, 1, the deed body was found in the well and was taken out as spoke to by P. Ws. 7to 10. The medical evidence establishes the stabbing with the knife and death was due to it. P.W. 24 corroborates A. 1 of selling M.O. 1 chain and taking the money. The canopy of the material evidence from independent sources sufficiently corroborates the approver ' evidence. 720 PW 1 is a reliable witness. No infirmity has been pointed out to disbelieve his evidence. It is next contended that the courts below were not justified in imposing the extreme penalty of death sentence under section 302, I.P.C. and strongly relied upon the judgment of Bachan Singh 's case. It is contended that the acquittal of A. 2 giving the benefit of doubt in Hariramachandran 's death trial introduces an element of doubt which should be extended to convert the death sentence of A. 1 to life imprisonment. We find no susbstance in the contention. The doctrine of benefit of doubt only would operate in proof of the commission of the offence. If there is any reasonable doubt, not the doubt of vacillating mind of a Judge, the accused is entitled to the benefit and acquitted. The benefit of doubt again does not enter in the area of consideration of imposing sentence. The law regulates social interest, arbitrates conflicting claims and demands. Security of persons and property of the people is an essential function of the State. It could be achieved through instrumentality of criminal law. Undoubtedly, there is a cross cultural conflict where living law must find answer to the new challenges and the courts are required to mould the sentencing system to meet the challenges. The contagion of lawlessenss would undermine social order and lay it in ruins. Protection of society and stamping out criminal proclivity must be the object of law which must be achieved by imposing appropriate sentence. Therefore, law as a corner stone of the edifice of order should meet the challenges confronting the society. Friedman in his "Law in Changing Society" stated that, "State of criminal law continues to be as it should be a decisive reflection of social consciousness of society". Therefore, in operating the sentencing system, law should adopt the corrective machinery or the deterrence based on factual matrix. By deft modulation of sentencing process be stern where it should be, and tempered with mercy where it warrants to be. The facts and given circumstances in each case, the nature of the crime, the manner in which it was planned and committed, the motive for commission of the crime, the conduct of the accused and all other attending circumstances are relevant facts which would enter into the area of consideration. For instance a murder committed due to deep seated personal rivalry may not call for penalty of death. But an organised crime or mass murders of innocent people would call for imposition of death sentence as deterrence. In Mahesh vs State of M.P., this Court while refusing to reduce that death sentence observed thus: 721 `It will be a mockery of justice to permit the accused to escape the extreme penalty of law when faced with such evidence and such cruel acts. To give the lesser punishment for the accused would be to render the justicing system of the country suspect. The common man will lose faith in courts. In such cases, he understands and appreciates the language of deterrence more than the reformative jargon '. Therefore, undue sympathy to impose inadequate sentence would do more harm to the justice system to undermine to public confidence in the efficacy of law and society could not long endure under serious threats. If the courts did not protect the injured, the injured would then resort to private vengeance. It is, therefore, the duty of every court to award proper sentence having regard to the nature of the offence and the manner in which it was executed or committed etc. It is clear from the evidence that the accused indulged in illegal business of purchase and sale of ganja. They conspired to entice innocent boys from affluent families took them to far flung places where the dead body could not be identified. The letters were written to the parents purporting to be by the deceased to delude the parents that the missing boy would one day come home alive and that they would not give any report to the police and the crime would go undetected. Four murders in a span of five years were committed for gain in cold blooded , pre meditated and planned way. It is undoubted that if the trial relating to Athiappan murder had taken place and concluded earlier to the trial and conviction of other three murders, the subsequent murders are not relevant facts to be considered. But in this case the trial of the murder relating to Athiappan and Hariramachandran practically took place simultaneously by which date the appellants were convicted for the murder of Chelladurai and Christodas. Therefore ,the reference of conviction and sentence by the Sessions Court to those two cases also are relevant facts. The deceased Hariramachandran is no other than the nephew (elder sister 's son) of A 1. This would establish his depravity and hardened criminality. No regard for precious lives of innocent young boys was shown. They adopted the crime of murder for gain as a means to living. Undoubtedly under section 235(2) of Code of Criminal Procedure, the accused is entitled to an opportunity to adduce evidence and if need be the case is to be adjourned to another date. It is illegal to convict, an accused and to impose sentence on the same day. It is true 722 as contended for the State that under section 309, third proviso brought by Amendment Act, 1978 that no adjournment should be granted for the purpose only of enabling the accused person to show cause against sentence to be imposed upon him. Under section 235(2) when the accused has been given right to be heard on the question of sentence it is a valuable right. To make that right meaningful the procedure adopted should be suitably moulded and the accused given an opportunity to adduce evidence on the nature of the sentence. The hearing may be on the same day if the parties are ready or be adjourned to a next date but once the court after giving opportunity propose to impose appropriate sentence again there is no need to adjourn the case any further thereon. No doubt the Sessions Judge needed to adjourn the case under section 235(2) to next date but in the High Court the counsel was directed to show any additional grounds on the question of sentence . The High Court observed that the counsel was unable to give any additional ground. It is Further contended that the appellants are young men. They are the bread winners of their family each consisting of a young wife. minor child and aged parents and that, therefore, the death sentence may be converted into life. We find no force. These compassionate grounds would always be present in most cases and are not relevant for interference. Thus we find no infirmity in the sentence awarded by the Sessions Court and confirmed by the High Court warranting interference. The appeals are accordingly dismissed. G.N. Appeal dismissed.

The General Office Order No. 26 dated 1.12.1943 of the Appellant Company provided that employees with 30 years ' service or more would be eligible to receive "Retiring Allowance" (pension). The said office order also provided that all permanent employees who were in the Company 's service prior to 1.1.1947 and who do not qualify for retiring allowance on retirement, will be eligible for gratuity on finally leaving the Company 's service subject to the prescribed conditions being fulfiled. In 1956 a memorandum of settlement was signed by the appellant company and the Employees ' Union under which the employees in service prior to 1.1.47 were required to opt at the time of leaving service either for gratuity or in lieu of the gratuity the retiring allowance. Later the came into force and the payment of gratuity became statuory. The employer and the Employees ' Union jointly applied to the Government for exemption from the provisions the statue which was refused. Some of the retiring employees of company filed applications under Section 33 C(2) of the before the Labour Court claiming pension by alleging that payability of pension was a condtion of service and the employer had stopped it without any Justification. The Labour Court allowed the applications. Against the 638 order of the Labour Court the employer preferred six writ petitions. In the meantime the same dispute was referred to the Industrial Tribunal and by an award the Tribunal answered the reference against the employees. The Employees ' Union challenged the award by filling a writ petition in the High Court. All the writ petitions were heard by a learned single judge of the High Court who allowed the writ petitions of the management against the order of the Labour Court and dismissed the writ petition preferred by the Labour Union challenging the award of the Tribunal. Writ appeals were carried against the single Judges ' decision. The Appellate Bench of the High Court held that gratuity provided under the settlement was not a substitute of pension and the claim of pension was available to employees notwithstanding the settlement. Hence this appeal by the employer company. Dismissing the appeals, this Court, HELD: The 1956 settlement between the parties does not provide for payment of pension except to pre 1947 employees and making the benefit liable to exercise of option under clause 6(d) of the settlement. The retiral benefit (pension) was payable to all qualfied employees as a matter of practice. If under the settlement that was not done away with, the benefit arising out of General Office order No. 26 would still be available and gratuity contemplated under the settlement would not be a substitute of the retiral benefit of pension. The Appellate Bench of the High Court was right in holding that the entitlement to pension had not been substituted by the settlement of 1956 and, therefore, the claim to pension subject to qualification being satisfied was available to be maintained notwithstanding the settlement of 1956. The High Court rigtly came to the conclusion that the Labour Court had justifiably worked out the dues and the claim petition under section 33 C(2) of the 1947 Act. [641C D, 642C D]

N: Criminal Appeal No. 233 of 1978. Appeal by Special Leave from the Judgment and Order dated the 20th April, 1978 of the Madras High Court in Writ Petition No. 988 of 1978. AND WRIT PETITION NO. 4327 OF 1978 (Under Article 32 of the Constitution of India) Ram Jethmalani M. G. Kurnali and Vineet Kumar for the Appellant/Petitioner. A. V. Rangam for the Respondent. 635 The Judgment of the Court was delivered by CHINNAPPA REDDY, J. Bhawarlal Ganeshmalji whose application for the issue of a Writ of Habeas Corpus was rejected by the High Court of Madras, is the appellant in Criminal Appeal No. 233 of 1978. He has also filed Writ Petition No. 4327 of 1978 for the issue of a Writ of Habeas Corpus under Article 32 of the Constitution in which he has raised certain grounds which had not been raised before the Madras High Court. The appeal and the Writ petition were heard together by us and are disposed of by this common order. The impugned detention order was made on 19th December, 1974 by the Government of Tamil Nadu and the grounds for the order were contained in a memorandum dated 20th December, 1974 of the Government of Tamil Nadu. The order of detention could not be executed immediately as the appellant petitioner was absconding and could not be apprehended despite a proclamation made pursuant to Section 7 of the . The appellant petitioner, however, surrendered himself before the Commissioner of Police, Madras on 1st February, 1978. First the order of detention and later the grounds of detention were served on the appellant petitioner. There were two grounds of detention which were as follows: "(i) On 23 2 1972 an inland registered parcel bearing No. 325 emanating from one T. Chowdiah No. 2, Sanjeev appa Lane, Bangalore, and addressed to M/s. Raj Metal House, 77, Mint St. Madras was intercepted by Preventive Officers of the Madras Customs at the Madras General Post Office and it was found to contain Indian currency amounting to Rs.1,20,000/ and the currency was seized under the Customs Act. Sukanraj, owner of M/s. Raj Metal House on being questioned admitted in a written statement dated 23 2 1972 that the currency was sent by one R. G. Bhandari 's man from Bangalore, to be received by him and handed over to one Bhoormal, a partner of R. G. Bhandari, residing with the latter. He also stated that he knew well that R. G. Bhandari was dealing in smuggled gold at Ban galore; Sukanraj further stated that within the previous two months, 5 or 6 parcels were received by him and by his brother Motilal. Motilal also gave an independent statement on the same day corroborating the facts mentioned by his brother that R. G. Bhandari was dealing in smuggled gold and that the currencies in post parcels were the sale proceeds of smuggled gold. On enquiry at the Park Town 636 Post Office it was found that seven registered parcels had been delivered to M/s. Raj Metal Works between 18 1 1972 and 17 2 1972 and received either by Sukhanraj or Motilal. At Bangalore, the premises at No. 2, Sanjeev appa Lane the address mentioned on post parcel, was searched on 23 2 1972. T. Chowdiah, the sender of the said parcel was not there. But one Ghaverchand Samarthajee was present. He admitted in his statement dated 24 2 1972 that he was an employee of R. G. Bhandari and on the latter 's instructions he was disposing of smuggled gold in Bangalore on behalf of his master and despatching the sale proceeds to Madras. The postal receipt bearing the No. 325 Avenue Road Post Office, Bangalore, in respect of the parcel which was seized at Madras was also seized. This and his confessional statement revealed that he had previously despatched seven registered parcels to M/s. Raj Metal Works containing amounts to the tune of Rs.8,84,000/ using the name of T.Chowdiah and that he had disposed of 3900 bars of smuggled gold valued at Rs.80 lakhs within a short time of less than a month. Bhawarlal, the servant of Bhoormal in Madras identified Ghaverchand Samarthajee as an employee of R. B. Bhandari used for gold smuggling business at Bangalore. The case was adjudicated and the currency was confiscated. personal penalty of Rs.5000/ was imposed on Thiru R. section Bhandari. (ii) On 20 4 1974, 40 bars of gold weighing 23,274.100 grams valued at Rs.12,75,420/ was seized by Thiru Ramanathan Supdt. Central Excise, Madras from a secret vacity of an Ambassador can MDE 9399 at the commercial Check Post, Hosur. T. Ramamurthy of Porayar (driver) and Thiru Ganesan occupied the car. Their statements revealed that the gold was sent by Sikku Govidaswami of Porayar, a noted transport agent for contraband goods. Ganesan also admitted that the car with the contraband was to be handed over to one Marwari, at Bangalore at an appointed place. The intelligence report dt. 17 4 74 and 19 4 74 by the Intelligence officer tc the . Directorate of Revenue Intelligence which had been received earlier on the basis of which the aforesaid car was intercepted and the seizure was effected, had disclosed that the Marwari referred to was R. G. Bhandari 637 Shri Jethmalani learned Counsel for the detenu submitted that the order of detention which was made more than three years before its execution must be considered to have lapsed or ceased to be effective without a fresh application of the mind of the detaining authority to the facts and circumstances of the case and the necessity for preventive detention. Otherwise, the learned Counsel submitted the order of preventive detention would change its character and be come an order of punishment for an unproven crime. In regard to the first ground mentioned in the Memorandum of the Government, the learned Counsel submitted that all the four persons who had made statements on 23rd February, 1972 and 24th February, 1972, and which were the basis of the first ground, had resiled from their statements long before the order of detention was made. The circumstance that all of them had resiled from their earlier statements was not brought to the notice of the detaining authority and the failure of the detaining authority to consider such vital material before arriving at its subjective satisfaction vitiated the ground and, therefore, the order of detention itself. Shri Jethmalani urged that the order of detention had necessarily to be struck down even if a single ground out of many was bad since the order had been made at a time when Section 5A of the COFEPOSA had not yet been brought into the Statute Book. In regard to the second ground of detention the submission of Shri Jethmalani was that it was not based upon any "rationally probative" material The ground was invalid inasmuch as it was based upon an intelligence report. It was further contended that the ground would be innocuous without the aid of the intelligence report mentioned therein and since no privilege was claimed in respect of the intelligence report, the identity of the author of the report should have been disclosed as also the material on which the report was based. Failure to do so had resulted in a denial of the petitioner 's fundamental right, under Article 22(5) of the Constitution. Shri A. V. Rangam, learned Counsel for the State of Tamil Nadu urged that the appellant petitioner was himself responsible for the long delay in the execution of the order of detention and he could not be allowed to take advantage of his own wrong. With regard to the first ground of detention he submitted that the circumstance that the persons who had incriminated the detenu had resiled from their former statements had been mentioned in the judication order passed by the Customs authorities and that order had been placed before the detaining authority before the order of detention was made. In regard to the second ground of detention the learned Counsel argued that it was not based merely on the intelligence 638 report and in any case, since no privilege was claimed, it was always open to the detenu to have asked for more particulars if he so desired, but which he failed to do. It is true that the purpose of detention under the COFEPOSA is not punitive but preventive. The purpose is to prevent organised smuggling activities and to conserve and augment Foreign Exchange. It is true that the maximum period for which a person may be detained under the COFEPOSA is one year. It is further true that there must be a 'live and proximate link ' between the grounds of detention alleged by the detaining authority and the avowed purpose of detention namely the prevention of smuggling activities. We may in appropriate cases assume that the link is 'snapped ' if there is a long and unexplained delay between the date of the order of detention and the arrest of the detenu. In such a case we may strike down an order of detention unless the grounds indicate a fresh application of the mind of the detaining authority to the new situation and the changed circumstances. But where the delay is not only adequately explained but is found to be the result of the recalcitrant or refractory conduct of the detenu in evading arrest, there is warrant to consider the 'link ' not snapped but strengthened. That, precisely, is the state of affairs before us. The order of detention was made on 19th December, 1974. The detenu was found to be absconding. Action was taken pursuant to Section 7 of the COFEPOSA and he was proclaimed as a person absconding under Section 82 of the Criminal Procedure Code. The proclamation was published in several leading English and local language daily newspapers. His photograph was exhibited in Cinema halls A reward of Rs. 5.000/ was also announced for his apprehension. Despite all this effort he could not be arrested until he surrendered on 1st February, 1978. We do not have any hesitation in over ruling the submission of Shri Jethmalani based on the delay in the execution of the order of detention The second submission made on behalf of the detenu that the detaining authority had not before it the circumstance that the four persons who had made statements implicating the detenu had later, but long before the order of detention, resiled from their statements is also devoid of force. The proposition that the failure to place before the detaining authority relevant and material facts which may influence the mind of such authority one way or the other will vitiate the order of detention is unexceptionable. But a perusal of the first ground of detention shows that the detaining authority took into 639 consideration the circumstance that there were 'adjudication ' proceedings, that the currency was confiscated and that a penalty of Rs.5,000/ was imposed on the detenu. It was not disputed and it was not alleged in the petition that the order of adjudication by which the currency was confiscated and penalty was imposed did refer to the circumstance that persons who had made incriminating statements against the detenu had resiled from those statements. The circumstance that persons who had earlier incriminated the detenu had later resiled from those statements was therefore before the detaining authority. There is thus no factual foundation for this submission of the learned Counsel, which we accordingly reject. We now proceed to consider the last submission of the learned Counsel based on the reference to the contents of the intelligence report in the second ground of detention. It was pointed out by the petitioner 's learned Counsel that the statement of Ramamurthy and Ganesan merely showed that the contraband was to be delivered to a Marwari at Bangalore at an appointed place. It was the intelligence report alone that fixed the identity of the Marwari as the detenu. Without the intelligence report it would be impossible to connect the detenu with the person mentioned as the Marwari in the statements of Ganesan and Ramamurthy. Now the submission of the learned Counsel was that the identity of the author of the intelligence report as well as the report and the material on which the report was based ought to have been disclosed to the detenu if the detenu was to effectively exercise his fundamental right under Article 22(5) of the Constitution and to make a representation against the order of detention We agree with the learned Counsel for the petitioner that in order to make a representation against the order of detention and thus to exercise the fundamental right guaranteed by Article 22(5) of the Constitution, a detenu is entitled to be furnished with all essential particulars forming the basis of the grounds of detention. so it is that where insufficient particulars are mentioned in the grounds, the detenu is entitled to call for better particulars. That is a right which flows from the Constitutional right to be afforded a reasonable opportunity to make representation. Of course, where the grounds are vague. no question would arise of the detenu asking for better particulars. But the present case is not a case of a vague ground. The ground is specific enough. If the detenu wanted any more particulars such as the name of the intelligence officer or other information, he could have well asked for the particulars before making his representation. That he never did. It was not as if any privilege had been claimed by the Government in respect of the 640 intelligence reports. In fact, we find that the intelligence reports were produced before the learned Judges of the High Court at the hearing of the Writ Petition there. There was no complaint before us that the detenu or his Counsel wanted to peruse the reports and were denied the opportunity of doing so. We do not think that the detenu could be said to have been denied a reasonable opportunity of making a representation merely because particulars which he neyer desired in respect of a ground which was not vague were not furnished to him. We are unable to see any force in any of the submissions advanced on behalf of the detenu. In the result, we reject the appeal and the writ petition.

The draft Special Courts Bill 1978 introduced in the Parliament by a private member seeks to create adequate number of courts to be called specialcourts. The Bill provides that a special court shall take cognizance of or try such cases as are instituted before it or transferred to it in the manner provided therein. If the Central Government is of opinion that there is prima facie evidence of the commission of an offense alleged to have been committed during the period of Emergency by a person who held high public or political office in India and that the said offense ought to be debit with under the Act, it shall make a declaration to that effect in every case in which it is of that opinion. A declaration made by the Central Government cannot be called in question in ;my court. Clause (7) of the Bill provides that a special count shall be presided over by a sitting Judge of a High Court in India or a person who has held the office as a Judge of a High Court in India and nominated by the Central Government in consultation with the Chief Justice of India. Clause 10(1) provides that notwithstanding anything contained in the Code of Criminal Procedure, an appeal shall lie as of right from any judgment or order of a special court to the Supreme Court of India both on fact and on law The President made a reference to the Supreme Court under article 143(1) of the Constitution for consideration of the question whether the Special Courts Bill 1978 or any of its provisions, if enacted would be constitutionally invalid. Preliminary objections as to the maintainability of the reference were raised on the ground that (i) the reference was of a hypothetical and speculative character and was vague, general and omnibus; (ii) since the Parliament was seized of the Bill it is it6 exclusive function to decide upon the constitutionality of the Bill and if the court withdrew that question for its consideration and report, it would be encroaching upon the functions and privileges of the Parliament. (iii ) if the reference were entertained it would supplant the salutary provision of article 32 of the Constitution, (iv) irrespective of the view expressed by this Court it would be open to the Parliament to discuss the Bill and pass or not to pass it with or without amendment, and (v) the reference raised purely political questions which the court should refrain from answering. ^ HELD: [per majority Y. V. Chandrachud, C.J., P. N. Bhagwati, R. section Sarkaria and section Murtaza Fazal Ali, JJ.] 1. (a) It is not necessary that the question on which the opinion of this Court is sought under article 143(1) must have arisen actually: it is competent for the President to make the reference if he is satisfied that the question has 477 arisen or is likely to arise. The plain duty and function of the Court under article 143(1) is to consider the question on which the reference i6 made and report to the President its opinion, provided the question is capable of being pronounced upon and falls within the powers of the Court to decide. If, for any reason the Court considers it not proper or possible to answer the questions it would be entitled to return the reference by pointing out the impediments in answering it. The right of this Court to decline to answer a reference does not flow merely out of the different phraseology used viz., "may" in clause (1) and "shall" in clause (2). Even in matters arising under clause (2), the Court may be justified in returning the reference unanswered, if it finds for a valid reason that the question is incapable of being answered. [502C F] (b) It cannot be said that the reference is of a hypothetical or speculative character on the ground that the Bill has yet to become an Act. The assumption of every reference under article 143 has to be the continued existence of a context or conditions on the basis of which the question of law or fact arises or is likely to arise. But the possibility of a change, even of a fundamental change, cannot make the exercise of the Presidential jurisdiction under article 143 speculative or hypothetical. In the press It case there is no speculation about the existence of the Bill and there is nothing hypothetical about its contests as they stand today. The Bill may undergo changes in future but so may the Constitution itself, including article 143, under which the President has made the reference to this Court. The former possibility cannot make the reference speculative or hypothetical any more than the latter possibility can make it so. The Special Courts Bill is there in flesh and blood for anyone to see and examine. That sustains the reference, which is founded upon the satisfaction of the President that a question as regards the constitutional validity of the Bill is likely to arise and that the question i5 of such a nature and of such public importance that it is expedient to obtain the opinion of this Court upon it. (503B E l (c) A reference which does not specify with particularity the ground or grounds on which the Bill or any of its provisions may be open to attack under the Constitution is difficult to answer because it gives no indication of the specific point or points on which the opinion of the Court is sought. It is not proper or desirable that this Court should be called upon to embark upon a roving enquiry into the constitutionality of a Bill or an Act. Such a course virtually necessitates the adoption of a process of elimination with regard you all reasonably conceivable challenges under the Constitution. It is not expected of this Court, while answering a reference under article 143, to sit up and discover, article by article, which provision of the Constitution is most lawlessly to be invoked for assailing the validity of the Bill if it becomes a law. Speculative opinions or hypothetical questions are worthless and it is contrary to principle, inconvenient and inexpedient that opinions should be given Up.l such questions at all. Whenever a reference is made to this Court under Art 143 of the Constitution, care should be taken to frame specific questions for the opinion of the Court. In the instant reference it is possible to consider specific questions as being comprehended within the terms of the reference but the risk that a vague and general reference ma. ,y be returned unanswered is real and ought to engage the attention of those whose duty it is to frame the reference. 505 F G, 507B] (d) The contention that since the Parliament is seized of the Bill, it is its exclusive function to decide upon the constitutionality of the provisions of the 478 Bill betrays a tctal lack of awareness of the scheme of.division of powers under the Constitution. The Court is concerned, not with fanciful theories based on personal predilections, but with the scheme of the Constitution and the philosophy underlying it. The principle is firmly and wisely embedded in the Constitution that the policy of law and the expediency of passing it are matters for the legislature to decide while, interpretation of laws and questions regarding their validity fall within the exclusive advisory or adjudicatory functions of Courts [507D E] (e) There is equally no force in the contention that if the Court withdrew the question of validity of the Bill for its consideration while the Bill was pending consideration before the Parliament, the Court would be encroaching upon the functions and privileges of Parliament. The President has made a reference under article 143(1) and the Court is under a constitutional obligation to consider the reference and report to the President. It cannot be said that any particular function or privilege of the Parliament is encroached upon by this Court. The question whether the provisions of the Bill suffer from any constitutional invalidity falls within the legitimate domain of this Court. Parliament can discuss and debate the Bill but the ultimate decision on the validity of a law has to be that of the Court, and not of the Parliament. In the absence of any text or authority showing what the privileges of the British Parliament are in regard to the kind of matter before the Court it is impossible to say that there is a violation of the Parliament 's privileges. The a,argument that it would be futile to consider the constitutional validity of the Bill because whatever view the Court might take it would still be open to the Parliament to discuss the Bill and to pass or not to pass it, proceeds on an unrealistic basis. Although the opinion of this Court can neither deter the Parliament from proceeding with the Bill nor from dropping it, it cannot be said that even if the Court holds the Bill as unconstitutional the Parliament would proceed to pass it without removing the defects from which it is shown to suffer. [508 F H; 510 B] (f) The argument that. the reference raises a purely political question is without force. The policy of the Bill and the motive of the mover may be to ensure a speedy trial of persons holding high public or political office who are alleged to have committed certain crimes relating to the period of emergency. The President, however, has not asked the Court to advise him as to the desirability of passing the Bill or the soundness of the policy underlying it. The question whether the Bill or any of its provisions are constitutionally invalid is not a question of political nature which the Court should restrain itself from answering The question referred by the President for the opinion of this Court raises purely legal and constitutional issues which is the right and function of this Court to decide. [510 D F] Clauses 2, 6 and 10(1) of the Bill are within the legislative competence of the Parliament. (522H ] 2. (a) The challenge to the legislative competence of Provide to provde for the creation of Special Courts is devoid of substance. By virtue of article 246(2) read with Entry 1 1A of the Concurrent List, Parliament has clearly the power to make laws with respect to the Constitution and organisation, that is to say, the creation and setting up of Special Courts. Clause ' of the Bill, ;S therefore, within the competence of the Parliament to enact. By cl. 10(1) of the Bill Parliament clearly has the competence to provide that notwith standing anything contained in the Code of Criminal Procedure, 1973 an appeal 479 shall lie as of right from any judgment or order of a Special Court to the A Supreme Court both on fact and on law. A law which confers additional powers on the Supreme Court by enlarging its jurisdiction is evidently a law with respect to the "Jurisdiction and powers" of that Court. [517 C D; 521 A B] (b) The argument that the constitution having provided copiously for an hierarchy of courts. it is impermissible to the Parliament to create a court or a class of courts which do not fall within or fit in that scheme has no force. There is nothing in the Constitution which will justify the imposition of such a limitation on the Parliament 's power to create special courts. The words to Entry 11A are sufficiently wide to enable the Parliament not merely to set up courts of the same kind and designation as are referred to in the relevant provisions but to constitute and organize, that is to say, create new or special courts subject to the limitation mentioned in the entry as regards the Supreme Court and the High Courts. [524 A&D] (c) It is not correct to say that by reason of the fact that the Special Courts will not have the constitutional status of High Courts nor are they District Courts within the meaning of article 235, the creation of Special Courts is calculated to damage or destroy the constitutional safeguards of judicial independence. [524F] 3. (a) The classification provided for by the Special Courts Bill is valid and no objection can be taken against it. [537E] (b) The promulgation of emergency is not and cannot be a matter of normal occurrence in a, nation 's life. Offenses alleged to have been committed during the period of emergency constitute a class by themselves and so do the persons who are alleged to have utilized the high public or political offices held by them as a cover for committing those offenses. This Court is not concerned with the truth or otherwise of the allegations, the narrow question before it being whether, in the first instance, the classification is based on some qualities or characteristics which are to be found in all the persons grouped together and not in others who are left out. The answer to that question can be one and one only, namely, that offenses alleged to have been committed during the emergency by persons holding high public or political offices in India stand in a class apart. The cover of emergency provided a unique opportunity to the holders of such offices to subvert the rule of law and perpetrate political crimes on the society. Others left out of that group had neither the means nor the opportunity to do so, since they lacked the authority which comes from official position. Thus persons who are singled out by the Bill for trial before Special Courts possess common characteristics and those who fall outside that Group do not possess them. [538 B; 540 A D] (c) Crimes falling outside the group are of a basically different kind and have generally a different motivation. No advantage can be taken of the suppression of human freedom when the emergency is not in operation. The suppression of people 's liberties facilitates easy commission of crimes when public criticism is suppressed, there is no fear of detection. Crimes which are alleged to have been committed during emergency are oblique in their design and selective in their object. They are generally designed to capture and perpetuate political power; and they are broadly directed against political opponents. The holder of a high public office who takes a bribe does it to enrich himself. Though, that deserves the highest condemnation, such crimes are not woven out of the warp and woof of political motivation. Equal laws have to be 480 applied to all in the same situation and the legislature is free to recognize the degree of harm or evil. Purity in public life is a desired goal at all times and in all situations. But, this Court cannot sit as a super legislature and 6trike down the classification on the ground of under inclusion on the score that those others are left untouched, so long as there is no violation of constitutional restraints. [540 E H) (d) If the classification is valid and its basis bears a reasonable relationship with the object of the Bill, no grievance can be entertained under article 14. Classification necessarily entails the subjection of those who fall within it to a different set of rules and procedure, which may conceivably be more onerous than the procedure which generally applies to ordinary trials. In almost all of the decisions bearing, on the questions which arise for consideration the especial procedure prescribed by the particular laws was distinctly more onerous than the procedure which governs ordinary trials. But once a classify cation is upheld by the application of the dual test, subjection to harsher treatment or disadvantageous procedure loses its relevance, the reason being that for the purposes of article 14, unequals cannot complain of unequal treatment. Classification necessarily implies discrimination between persons classified and those who are not members of that class. It is the essence of a classification that upon the class are cast duties and burdens different from those resting upon the general public. The very idea of classification is that of inequality, so that it goes without saying that the mere fact of inequality in no manner determines the matter of constitutionality. Some of the provisions of the Bill, cast upon the accused before the Special Court, certain disadvantages as compared with the accused who a.re put up for trial before the ordinary courts, even as some other provisions give to them certain advantages which are denied to others. [542 E H] The State of West Bengal vs Anywhere Ali Sarkar, ; ; Kathy Raning Rawat vs The State of Saurashtra, ; ; Lachmandas Kewalram Ahuja & Anr. vs the Slate of Bombay, (1952] SCR 710; Syed Qasim Razvi vs The State of Hyderabad & Ors., ; Habeeb Mohamed vs The State of Hyderabad, [1953) SCR 661; Rao Shiv Bahadur Singh & Anr. vs The State of Vindhya Pradesh, ; ; Kedar Nath Bajoria vs The State of West Bengal; , ; Asgarali Nazarali Singaporawalia vs The State of Bombay, ; ; referred to. (e) The grouping1g together of persons who are alleged to have committed offences during the period of emergency with others who are alleged to have engaged themselves in screening certain offenders prior to the declaration of emergency is tantamount to clubbing together, in the same class, persons who do not possess common qualities or characteristics. It is unquestionably reasonable for the legislature to thinly that the suppression of human liberties during the period of emergency furnished an opportunity to persons holding high public or political offices to commit crimes of grave magnitude which were calculated to destroy democratic values. Offences alleged to have been committed during the period of emergency can be treated as sui generis. The same cannot, however, be said of activities, which preceded the declaration of emergency. Those doings were open to public criticism and were unprotected by the veil of emergency. The validity of a classification should be tested by broad considerations, particularly when the charge is one of under inclusiveness. But 481 persons possessing widely differing characteristics, in the context of their situation 1 in relation to the period of their activities, cannot by any reasonable criterion be herded in the same class. The ante dating of the emergency, as it were, from June 25 to February 27, 1975 is wholly unscientific and proceeds from irrational considerations arising out of a supposed discovery in the matter of screening of offenders. The inclusion of offences and offenders in relation to the period from February 27 to June 25, 1975 in the same class as those whose alleged unlawful activities covered the period of emergency is too artificial to be sustained. [545 C H] (f) The answer to the question whether, those who are alleged lo have committed offences prior to the emergency can be put in the same class as persons who are alleged to have committed offences during the period of emergency, has to be in the negative. [546 c] (g) The classification provided for by cl. 4(1) of the Bill is valid to the limited extent to which the Central Government is empowered to make the declaration in respect of offences alleged to have been committed during the period of emergency, by persons holding high public or political offices. The classification is invalid in so far as it covers offences committed by such persons between February 27 and June 25, 1975. No declaration can therefore be made by the Central Government in regard to those offences and offenders under the present classification. [546 D] (h ) As regards those who are rightly grouped together, since the classification is valid, it is unnecessary for the purposes of article 14 to consider whether the procedure prescribed by the Bill is more onerous then the ordinary procedure. The onerousness of the special procedure would be irrelevant in considerations arising under article 14, for the reason that the classification is valid (to the extent indicated). But the Bill has got to meet the challenge of other provisions of the Constitution also, in so far as any particular provision is attracted. (a) There is no provision in the Bill for the transfer of cases from one Special Court to another. Absence of such a provision may undermine the confidence of the people in the Special Courts. The manner in which a Judge conducts himself may disclose a bias; or a Judge may not in fact be biased and yet the accused may entertain a reasonable apprehension on account of attendant circumstances that he will not get a fair trial. To compel an accused to submit to the jurisdiction of a court which, in fact, is biased or is reasonably apprehended to be biased is a violation of the fundamental principles of natural justice and a denial of fair play. In yet another case expediency or convenience may require the transfer of a case, even if no bias is involved. [549D E] (b) The provision for the appointment of a, sitting High Court Judge as Judge of the Special Court is open to no exception. Though unquestionably retired Judges of High Courts occupy a position of honour and respect in society, one cannot shut one 's eyes to the constitutional position that whereas by article 217 a sitting Judge of a High Court enjoys security of tenure until he attains a particular age, the retired Judge will hold his office as a Judge of the Special Court during the pleasure of the Government. The pleasure doctrine is subversive of judicial independence. A retired Judge presiding over a Special Court, who display strength and independence may be frowned upon by the 482 Government and there is nothing to prevent it from terminating his appointment as and when it likes. There is no force in the submission that if the appointment has to be made in consultation with the Chief Justice of India, the termination of the appointment will also require similar consultation. The obligation to consult may not necessarily act as a check on an executive which is determined to remote an inconvenient incumbent. ,549 H; 550 B E] (c) Clause 7 of the Bill violates article 21 of the Constitution to the extent that a person who has held office as a Judge of the High Court can be appointed to preside over a. Special Court, merely in consultation with the Chief Justice of India. [550 E] (d) Yet another infirmity from which the procedure prescribed by the Bill suffers is that the only obligation which cl. 7 imposes on the Central Government while nominating a person to preside over the Special Court is to consul the Chief Justice of India. One must look at the matter not so much from the point of view of the Chief Justice of India, nor indeed from the point of view of the Government as from the point of view of the accused and the expectation and sensitivities of the society. It is of the greatest importance that in the name of fair and unpolluted justice, the procedure for appointing a Judge to the Special Court, should inspire the confidence not only of the accused but of the entire community. Administration of justice has a social dimension and the society at large has a stake in impartial and even handed justice. [550 H: 551 A B] 5. The fact that the trial is to be held by no less a person than a Judge of a High Court and there is a right of appeal to this Court are salient safeguards of the Bill. [552 H] 6. The question as to whether the opinion rendered by this Court in the exercise of its advisory jurisdiction under article 143(1) of the Constitution is binding as law declared by this Court within the meaning of article 141 of the Constitution, may have to be considered more fully on a future occasion but it is to be hoped that the time which has been spent in determining the questions arising in this reference shall not have been spent in vain. Though it is always open to this Court to re examine the question as already decided by it and to over rule, if necessary the view earlier taken by it, insofar as all other courts in the territory of India are concerned, they ought to be bound by the view expressed by this Court even in the exercise of its advisory jurisdiction under article 143(1) of the Constitution. In St. Xaviers College it was pointed (jut that even if the opinion given in the exercise of advisory jurisdiction may not he binding, it is entitled to great weight. It would be strange that a decision given by this Court on a question of law in a dispute between two private parties should be binding on all courts in this country but the advisory opinion Should bind no one at all, even if, as in the instant case, it is given after issuing notice to all interested parties, after hearing everyone concerned who desired to be heard, and after a full consideration of the questions raised in the reference. Almost everything that could possibly be urged in favour of and against the Bill was urged before this Court and to think that its opinion is an exercise in futility is deeply frustrating. [553 D G] Estate Duty Bill, , 320, 332, 341; U.P. Legislative Assembly; , , 446 47; St. Xaviers College, [19751 1 SCR 173, 201 202; Attorney General for Ontario vs Attorney General 483 for Canada, , 589; Ram Kishore Sen vs Union of India, AIR 1965 Cal. 282; Chhabildas Mehta vs The Legislative Assembly Gujarat State, 1970 II Gujarat Law Reporter 729; The Province of Madras vs Messrs Boddu Paidanna, ; Central Provinces case, ; Constitutional Law of India by H. M. Seervai, 2nd Edn. II, page 1415, para 25.68, referred to. Investing the High Courts with jurisdiction to try cases under the Bill may, B: in the circumstances afford the best solution from every point of view. The Chief Justices of High Courts will, in their discretion, assign and allocate particular cases to Judges of their courts. To avoid delays and to ensure speedier trial, no other work may be assigned to the High Court Judge nominated by the Chief Justice to try a case or cases under the Bill. This will obviate the nomination, by the Central Government, of a particular Judge to try a particular case. [554 C D] Answers to the reference are as follows: (1) Parliament has the legislative competence to create Special Courts and to provide that an appeal shall lie as of right from any judgment or order of a Special Court to the Supreme Court. Clauses 2 and 10(1) of the Bill are, therefore, within the Parliament 's legislative competence; [554G H] (2) The classification provided for in cl. 4(1) of the Bill is valid to the extent to which the Central Government is empowered to make a declaration in respect of offences alleged to have been committed during the period of Emergency by persons who held high public or political offices in India. Persons who are alleged to have committed offences prior to the declaration of Emergency cannot validly be grouped along with those who are alleged to have committed offences during the period of Emergency. It is, therefore not competent to the Central Government to make a declaration under cl. 4(l) of the Bill in respect of persons who are alleged to have committed offences between February 27, 1975 and June 25, 1975. [555 A C] (3) The procedure prescribed by the Bill for the trial of offences in respect of which a declaration can be validly made by the Central Government under cl. 4(1) of the Bill is just and fair except in regard to the following matters: (a) the provision in cl. 7 of the Bill, under which a retired Judge of the High Court can be appointed as a Judge of the Special Court; (b) the provision in cl. 7, under which the appointment of a Judge lo the Special Court can be made by the Central Government in consultation with but without the concurrence of the Chief Justice of India; and (c) the absence of a provision for transfer of a case from one Special Court to another. (d) The Bill is valid and constitutional in all other respects. [555 D E] KRISHNA IYER. J. (Concurring) 1. Corruption and repression hijack development processes, and, in the long run, lagging national progress means ebbing people 's constitutional in constitutional means to social justice. And so, to track down and 484 give short shrift to these heavy weight criminaloids who often mislead the people by public moral weight lifting and multipoint manifestoes is an urgent legislative mission partially undertaken by the Bill under discussion. To punish such super offenders in top positions, sealing off legalistic escape routes and dilatory strategies and bringing them to justice with high speed and early finality, is a. desideratum voiced in vain by Commissions and Committees in the past and is a dimension of the dynamics of the Rule of Law. This Bill, breaks new ground contrary to people 's resigned cynicism that all high powered investigations, reports and recommendations end in legislative and judicative futility, that all these valient exercises are but sound and fury signifying nothing. [557 A B] 2. (a) An Act of this nature, with the major changes mentioned by the Chief Justice to avert collision with Al t. 21 and with wider coverage to come to terms with article 14, is long overdue. [577 G H] (b) These offenders perfectly fill the constitutional bill as a separate class which deserves speedy prosecution and final punishment by high judicial agencies if restoration of the slumping credence in the constitutional order and democratic development were to be sustained among the masses in Third World countries. The Preamble to the Bill is revelatory of this orientation. [558 C`l (c) There is a reasonable classification implicit in this legislation, but it is perilously near being under inclusive and. therefore, unequal. For it is a truncated projection of a manifestly wider principle that exalted offenders shall be dealt with by the criminal law with emergent speed so that the common man may knew that when public power is abused for private profit or personal revenge the rule of law shall rapidly run them down and restore the faith of the people in democratic institutions through speedy justice according to law. It is in this sense that very important persons wielding large administrative powers shall, with quick despatch be tried an(l punished, if guilty. Prompt trial and early punishment may be necessary in all criminal cases. But, raw realism suggests that in a decelerating situation of slow motion justice there is a special case for speedier trial and. prompter punishment where the offender sits at the top Or the administrative pyramid. [558 H; 559 A C] (d) The Bill must fail morally if it exempts non Emergency criminals about whom prior Commission Reports, bear witness. In this larger perspective, `emergency ' is not a substantial differential and the Bill nearly recognises this by ante dating the operation to February, 27, 1975 when there was no 'emergency '. [559 G] 3. The procedure of criminal courts is dilatory, there are appeals upon appeals and revisions and supervisory jurisdiction, baffling and baulking speedy termination of prosecutions, not to speak of the contribution to delay by the Administration itself by neglect of the basic necessaries of the judicial process. Leaving V.V.I.P. accused to be dealt with by the routinely procrastinating legal process is to surrender to interminable delays as an inevitable evil. Therefore, the Court should not be finical about absolute processual equality and must be creative in innovating procedures compelled by special situations. [559H] 4. (a) The idiom of article 14 is unmistakeable. The power status of the alleged criminal the nature of the alleged crime vis a vis public confidence and the imperative need for speedy litigative finality, are the telling factors. Every difference is not a difference. 'Speedy trial ' of offences of a public nature committed by persons who have held high public or political offices in the 485 country and others connected with the commission of such offences ' is the heart of the matter. [560 D] (b) During that hushed spell, many suffered shocking treatment. In the words of the Preamble of the Bill, civil liberties were withdrawn to a great extent, important fundamental rights of the people were suspended, strict censorship on the press was placed and judicial powers were curtailed to a large extent. [560 F] Murthy Match Works etc etc. vs The Asstt. Collector of Central Excise, etc. ; , at 130, referred to. (c) The objects and reasons are informative material guiding the court about the purpose of a legislation and the nexus of the differentia, if any, to the end in view. Nothing about Emergency period is adverted to there as a distinguishing mark. The clear clue is that all abuse of public authority by exalted public men, shall be punished without the tedious delay in the case of top echeolns. [561 F] Mohammad Shujat Ali & Ors. vs Union of India & Ors. , ; at 477; State of Gujarat & Anr. vs Shri Ambica Mills Ltd., Ahmedabad, [19741 3 SCR 760 at 782: referred to (d) Civil liberties were suppressed. press censorship was clamped down and judicial powers were curtailed. Even if liberty had not been curtailed, press not gagged or writ jurisdiction not cut down. criminal trials and appeals and revisions would have taken their own interminable delays. It is the forensic delay that has to be axed and that has little to do with the vices of the Emergency. There is no law of limitation for criminal prosecutions. B] (e) High powered public and political offenders are not a peculiar feature of the Emergency but has been a running stream for long and bids fair to flow on, therefore, a corrupt continuity cannot be cut up without better justification. [565 E F] (f) The question, then is whether there is constitutional rationale for keeping out of the reach of speedy justice non emergency criminals in high public or political offices. Such a Bill, were it a permanent addition to the corpus juris and available as a jurisdiction for the public to compel government, if a prima facie case were made out even against a minister in office, to launch a prosecution before a sitting High Court Judge, would be a wholesome corrective to the spreading evil of corruption in power pyramids. [565 G H] (g) On constitutional principles, it is possible to sustain this temporary measure which isolates crimes and criminals during a pernicious period from the rest who share the same sinister properties. When a salvationary alternative is available, the Court should opt for it when the attack is under article 14, provided the assumptions of fact desiderated by the alternatives are plausible, not preposterous. The anatomy of the Emergency as X rayed in the Preamble, hi all dark shadows. No court to call illegality to order or halt horrendous torture or challenge high handed unreason. If this be a potential peril naturally a dangerous situation develops, and unaccountable power once unsheathed, the inauguration and escalation of such abuse becomes a compulsive continuum. Constitutional tyranny is anathema to decent democracy. In that state of nervous breakdown of the people, the right to go to court and prosecute an absolutist in authority for corruption dr misuse of power is illusory. If 486 you speak up against crimes in high positions, if you complain to court about abuse of power, you may be greeted with prompt detention and secret torture, with judicial relief jettisoned and Press publicity loc jawed If these macabre maybes were assumed, there could be a noxious nexus between the Emergency season and the sinister crimes covered by this Bill. It follows that a rexus between the differentia and the object is not too recondite to be inferred. [567 A B] (h) The scary scenario of emergency excesses ' had a nexus with non action against persons in high against authority and escalation of corruption and repression then judicial checks on abuse had gone to sleep. [563 A B] (i) The fabric of the offences before and during the Emergency is the same. What validates the special legislation is the abnormality of the then conditions, the intensive phase of corrupt operations and the inexpediency of digging up old crimes. Ambica Mills (supra) is the judicial justification for the classification. [570C] 5. (a) The Bill hovers periliously near unconstitutionality (article 14) in a certain respects, but is surely saved by application of pragmatic principles rooted in precedents. Nevertheless, justice to social justice is best done by a permanent statute to deal firmly and promptly with super political offenders, since these 'untouchable ' and 'unapproachable ' power wielders have become sinister yet constant companions of Development in developing countries. [570 E] Chaganlal Maganlal (P) Ltd. vs Municipal Corporation of Greater Bombay & Ors., [1975] I SCR 1, referred to. (b) Basic fairness of procedure is necessary. A valid classification with an intelligible differentia and intelligent nexus to the object is needed. Within the class there should be no possibility of using a more burdensome procedure for one and a substantially different one for another. Arbitrariness in this area also violates article 14. [571 D] (c) Assuming that the facilities under the Bill and under the ordinary Code are equally fair, could the Government have indicated one or the other in the ordinary court or the special court on the basis of drawing lots or the first letter of their names, the colour of their skins or like non sense ? No. The wisdom of article 14 will not tolerate such whim. Classify or perish, is the classic test of valid exemption from inflexible equality under the Constitution. [571 E F] (d) The sure solution to the problems raised by the Reference, consistently with the present object of the Bill, is to make the High Court the custodian of the new jurisdiction. [571G] UNTWALIA, J. (concurring with the majority) 1. In none of the earlier references answered either by the Federal Court or by this Court a, precedent is to be found resembling or identical to what happened in this Special Reference. There is no harm in adopting the method of giving some suggestions from the Court which may obliterate a possible constitutional attack upon the vires of a Bill. It may not be necessary or even advisable to adopt such a course in all References under article 143 of the Constitution. But if in some it becomes expedient to do so, as in the instant one it was so, it saves a lot of public time and money to remove any technical lacuna from the Bill if the Government thinks that it can agree to do so. The Bill by itself is not a law. It would be a law would passed by the Parliament. 487 But even at the stag of the Bill when opinion of this Court is asked for, it A seems quite appropriate in a given case to make some suggestions and then to answer the Reference on the footing of acceptance by the Government of such of the suggestions as have been accepted. Otherwise is incongruous for this Court to answer the Reference as it is without taking into account the concessions made on behalf of the Government vis a vis the suggestions of the Court. It is manifest that all the three infirmities pointed out in the majority opinion m answer No. 3 vanish after the acceptance in writing by the Government that the three suggestions made by the Court vis a vis the alleged three infirmities, namely, 3(b), and 3(c) would be removed from the Bill. [572 D A] 2. The absence of a provision for transfer of a case from one Special Court to another, makes the procedure unjust or arbitrary. But the alleged infirmities, 3(a) and (b), do not make the procedure unjust or arbitrary. There is no question of the procedure being unjust or arbitrary in respect of any of the three infirmities (a), (b) and (c) enumerated in answer 3 in view of the acceptance by the Government of India of the suggestions emanating from the Court during the course of the hearing of the Reference. The Reference, therefore, stands amended in view of those concessions and the court is now required to answer the amended Reference which means the Reference as if the Bill as proposed incorporates the three concessions made by the Government. Thus the procedure prescribed in the Bill, undoubtedly, becomes just and fair and no longer remains arbitrary in any sense. [573 C D] SHlNGHAL, J. (Dissenting) Clauses 5 and 7 of the Bill ale unconstitutional and invalid. [573H] 1. (a) The reason given in the Statement of Objects and Reasons of the Bill for excluding the ordinary criminal courts from trying the class of offences referred to therein is congestion of work and not their inferior status or in capacity to deal with those cases. That object of the Bill would have been served by the creation of additional courts of the same category as the ordinary criminal courts and the making of any procedural changes which may have been considered necessary in that context to exclude avoidable delay in the trial. 1574 F] (b) There would have been nothing unusual if such additional courts had been created to save the ordinary criminal courts, from the burden of more work and to bring the contemplated prosecutions to speedy termination. That was permissible under the existing law. Even if some procedural changes were considered necessary, they could have been worked out within the framework of the law. The special courts envisaged in the Bill are, however, courts, the like of which has It been provided in the Code of Criminal Procedure or any other law and are in fact unknown to the Criminal law of the country. [574 G] (c) The Constitution contemplates that all civil and criminal courts in State, other than the High Court, shall be no other than the Subordinate Courts over which the High Court shall exercise the fullest superintendence and control and that the presiding officers of those courts shall be under the control of the High Court and of no other authority. That is necessary to ensure the independence of every court dealing with civil and criminal matters. [576 D] (d) It may be permissible to create or establish civil and criminal courts in a state with designations other than those expressed in article 236, or any existing designation in the Codes of Civil and Criminal Procedure. but that is far 488 from saying that it is permissible to establish a hierarchy of courts other than that envisaged in the Constitution. [576 E] 2. (a) The Constitution has made ample and effective provision for the establishment of a strong, independent and impartial judicial administration in the country with the necessary complement of civil and criminal courts. it is not permissible for Parliament or a state Legislature to ignore or bypass that scheme of the Constitution by providing for the establishment of a civil or criminal court parallel to a High Court in a state or by way of an additional or extra or a second High Court or a court other than a court subordinate to the High Court. Any such attempt would be unconstitutional and would strike at the independence of the judiciary which he so nobly been enshrined in the Constitution and so carefully nursed over the years. [576 G] (b) The Constitution provides for the appointment of district judges and other judicial officers in the States. In a large number of cases this Court had declared that it is the High Court which is the sole custodian of the control over the State Judiciary which in fact is the life blood of in independent judicial administration and the very foundation of any real judicial edifice The Constitution has not considered even the existence or continuation of Magistrates who are outside the control of the High Court to be desirable. It is beyond doubt that the Constitution does not permit the establishment of a criminal court of the status of a court presided over by a District Judge which is not subordinate to the High Court and does not permit the establishment of a court similar to the High Court or a court parallel to the High Court. [577 C; 578 A B] The State of West Bengal vs Nripendra Math Bagchi, ; , Chandra Mohan and others, vs State of U.P. & Ors., ; State of Assam etc. vs Ranga Mohammad & Ors., [1967] J SCR 454; The State of Orissa vs Sudhansu Sekhar Misra & Ors., [968] 2 SCR 154; State of Assam & Anr. N. Sen & Anr., ; ; Shamsher Singh & Anr. vs State of Punjab ; ; High Court of Punjab & Haryana vs State of Haryana & Ors. etc., [1975]) SCR 365; State, of Haryana vs Inder Prakash Anand, ; ; Chief Justice of Andhra Pradesh & Ors. vs L. V. A. Dixitulu & Ors. referred to. (c) Neither section 6 of the Code of Criminal Procedure 1973 nor section 6 of the Criminal Law Amendment Act, 1952 justifies the argument that special courts of the nature contemplated in the Bill would be created under the scheme of the Constitution. Although section 6 of the Code of Criminal Procedure states that the five classes of criminal courts stated in it shall be in addition to the High Court and courts that may be constituted under any law, it cannot be said that it pro ides tor the constitution of courts parallel to or on the same footing as the High Court or of criminal courts which are not subordinate to the High Courts Similarly, special judges appointed under section 6 of the Criminal Law Amendment Act are subordinate to the High Court and fit in the scheme of the independence of the judiciary envisaged by the Constitution. [578 E Fl (d) The attempt to justify the creation of special courts by reference to Part XIVA of the Constitution which provides for establishment of administrative Tribunals cannot be sustained because such Tribunal are not meant for the trial of offences referred to in the Indian Penal Code. They may well be said to be quasi judicial Tribunals, [579 D] 489 (e) The Special Courts contemplated by clause 2 of the Bill will not be on the same. footing as the High Courts and will, to say the least, be lesser or inferior courts. 1579 E] (f) Clause 7 of the Bill provides that a special court shall be presided over by a "sitting judge" of a High Court, but it will not be permissible or proper to do so as that court is lesser and inferior to a High Court. In all probability, sitting judges of High Courts will refuse to serve as presiding judges of special Courts, and there is no provision in the Constitution under which they can be compelled, or ordered against their will, to serve there. That eventuality will make the provisions of the Bill unworkable. At any rate, the possibility that the sitting High Court Judges may not agree to serve as presiding judges of Special Courts is real, and their very refusal will embarrass the judicial administration and lower the prestige of the judiciary for clause 7 of the Bill provides for their nomination in consultation with the Chief Justice of India. [579 F H] 3. (a) Equality before the law, or speaking in terms of the present controversy, equality in criminal justice, is the universal goal of all democratic forms of government, for no one can ever deny that all persons charged with crime must, in law, stand on the same footing at the Bar of justice. That equality should be assured not only between one accused and another, but between the prosecution and the accused. That is what the Constitution has carefully, assuredly and fully provided for every citizen. Article 21 is, by itself, enough to bring that out. [580 C D] (b) In order to fulfil the guarantee of article 21 the procedure prescribed by law for the trial of criminal cases has to be fair, just and reasonable, and not fanciful, oppressive or arbitrary. Taken together, clauses S, 7 and 8 of the of Bill provide for the trial of the accused only by special courts to be presided over by a judge nominated by the Central Government and clauses 4, 5 and 7 vest the power of designating the special court in which an accused is to be tried exclusively in that Government. The Bill enables the Central Government to decide which of the accused will be tried by which of its nominated judges. Thus if several special courts are created by the Central Government in Delhi and they are all presided over by judges nominated by the Central Government, the power of nominating the judge for any particular case treble in Delhi shall vest in the Central Government. Such a procedure cannot be said to be fair, just and reasonable within the meaning of article 21 and amounts to serious transgression on the independence of the judiciary. [581 G; 587 D F] (c) The question of the Central Government or the State Government nominating a judge of the Supreme Court or of the High Court for dealing with a particular case does not and cannot arise. So too in regard to the judges and magistrates of the subordinate courts, sufficient safeguards have been provided, in the relevant laws for their appointment by the High Court. It is not permissible for the executive to appoint a particular judge or magistrate to preside over the trial of a particular accused under the Code of Criminal Procedure. That is fair, just and reasonable and relieves the accused of any possible oppress on. 1583 A Bl (d) Moreover in the case of trials before special courts, the trial by the fiat of a successor government, however, justified, is noticed with scepticism The suspicion that the trial is motivated by political considerations, that it would not be just and fair or that it would lead to injustice, would be lurking 13 978SCI/78 490 in the mind of the accused. It is therefore necessary that everyone concerned, including the accused, should be convinced that the executive had the best of intentions in ordering the trial and had provided for a fair and straight forward procedure, and the cleanest of judges, for the trial in an open and fearless manner. [583 C&E] (e) If the result of the trial has to carry conviction with the people as a whole, and is meant to acquaint them with the true character of the persons who have committed the offences for the survival of the democratic institutions and cleanliness of the political life as professed in the statement Of Objects and Reasons of the Bill, it is in the interest of those making the declaration under clause 4 to convince everyone, including the accused, that the trial is not spectacular in purpose and does not expose those facing it to a risk greater the that taken by any other accused at an ordinary trial, under the ordinary law. Human dignity is a concept enshrined in the Constitution and this treasure should be the priceless possession and solid hope of all our fellow citizens. including those who have to face trials for offences charged against them. [583 F H] (f) An attempt, like the one made in the present Bill to usurp an important judicial power and vest it in the executive is a serious inroad of the Independence of the judiciary and is fraught with serious consequences. It has, there fore, to be put down at the very inception for it may otherwise give rise to a prospect too gruesome to envisage and too dangerous to be allowed to have the sanction of law. [584 H] Liyanage & Ors. vs Regina ; referred to.

minal Appeal No. 218 of 1966. Appeal by special leave from the order dated August 5, 1966 of the Patna High Court in Criminal Revision No. 1020 of 966, AND Criminal Appeal No. 238 of 1966. Appeal by special leave from the judgment and order dated September 13, 1966 of the Patna High Court in Criminal Revi sion No. 40 of 1965. B. P. Jha and Subhag Mal Jain, for the appellants (in Cr. A. No. 218 of 1966). Nuruddin Ahmed and R. C. Prasad, for the appellants (in Cr. A. No. 238 of 1966). U. P. Singh, for the respondents (in both the appeals). The Judgment of the Court was delivered by Vaidialingam, J. The common question, that arises for con sideration, in these two criminal appeals, by special leave, is as to whether a Magistrate can direct the police to submit a charge sheet, when the police, after the investigation into a congnizable offence, had submitted a final report, under section 173 of the Code of. Criminal Procedure (hereinafter called the Code). There is a conflict of opinion, on this point between the various High Courts in India. The High Courts of Madras, Calcutta, Madhya Pradesh, Assam and Gujarat have taken the view that the Magistrate has no such power, whereas, the Patna and Bombay High Courts have held a contrary view. In Criminal Appeal No. 218 of 1966, the respondent, Dinesh Mishra, lodged a first information report, on June 3, 670 1965, at the Rajoun Police Station, that he saw a thatched house, of one Uma Kant Misra, situated on the northern side of his house, burning, and the petitioners herein., running away from the scene,. The police made an investigation and submitted what is called a 'final report ', under section 173 (1) of the Code, to the effect that the offence complained of, was false. The Sub Divisional Magistrate received this report on July 13, 1965, but, in the meanwhile, the respondent had filed what is termed 'a protest petition ', challenging the correctness of the report submitted by the police. The Magistrate appears to have perused the police diary and, after hearing the counsel for the respondent and the public prosecutor, passed an order on October 27, 1965, directing the police to submit a charge sheet, against the petitioners, herein. The petitioners challenged this order, without success, both before the learned Sessions Judge, Bhagalpur, and the Patna High Court. It was held by the High Court, following its previous decision, that the Magistrate has jurisdiction to call for a charge sheet, when he disagrees with the report submitted by the police, under section 173(1) of the Code. The petitioners, in this appeal, challenge these orders. Similarly, in Criminal Appeal No. 238 of 1966, the second respondent therein, had lodged a written report, on February 24. 1.964, before the police, at Malsalami police station, that his daughter, Hiramani, was missing from February 21, 1964, and that the appellants in that appeal, had kidnapped her. A case under section 366 I.P.C. was registered against them. The police, after investigation, submitted a final report to the Magistrate. to the effect that the girl concerned, had been recovered and that she bad stated that she had, of her own accord, eloped; and therefore the police stated that the case might be treated as closed. The second respondent filed a 'protest petition ' in Court, challenging the statements of the police and he also filed a complaint, under section 498 I.P.C. The Magistrate, after a perusal of the case diary of the police, and hearing the lawyer for the appellants and the second respondent, as also the public prosecutor, passed an order directing the investigating officer to submit a charge sheet, against the accused persons, under section 366 I.P.C This order has been confirmed by the, learned Sessions Judge, as well as the Patna High Court. Here also, the Patna High Court, in accordance with its previous decision, held that the Magistrate had jurisdiction to pass the order, in question. All these orders are challenged by the appellants, in this appeal. On behalf of the appellants, in Criminal Appeal No. 218 of 1966, Mr. Jha, learned counsel pointed out that when a final report is submitted by the police, under section 173(1) of the Code,, 6 71 stating that no case is made out, the Magistrate has no jurisdiction to direct the police to file a charge sheet. It may be open, counsel points out, to the Magistrate, to direct further investigation to be made by the police, or to treat the protest petition filed by the second respondent, as a complaint, and take cognizance of the offence and proceed, according to law. , The scheme of Chapter XIV of the Code, counsel points out, clearly indicates that the formation of an opinion, as to whether or not there is a case to place the accused on trial, is that of the investigating officers, and the Magistrate cannot compel the police to form a particular opinion on the 'investigation and to submit a report, according to such opinion. In this case, there is nothing to show that the protest petition, filed by the second respondent, has befell treated as a complaint, in which case, it may be open to the Magistrate to take cognizance of the offence, but, in the absence of any such procedure being adopted according to counsel, the order of the Magistrate directing a charge sheet to be filed, is illegal and not warranted by the provisions of the Code. These contentions have been adopted, and reiterated, by Mr. Nuruddin Ahmed, on behalf of the appellants, in Criminal Appeal No. 238 of 1966. Both the learned counsel pressed before us, for acceptance, the views, as expressed by the Gujarat High Court, in its Full Bench judgment, reported as State of Gujarat vs Shah Lakhamshi(1). On the, other hand, Mr. U. P. Singh, learned counsel for the respondent, in Criminal Appeal No. 218 of 1966, has pointed out that the Magistrate has jurisdiction, in proper cases, when he does not agree with the final report submitted by the police, to direct them to submit a charge sheet. Otherwise, counsel points out, the position will be that the entire matter is left to the discretion of the police authorities, and the Courts will be powerless, even when 'they feel that the action of the police is not justified. Quite naturally, counsel prays for acceptance of the views expressed by the dissenting Judges, in A. K. Roy vs State of W. B. (2) and by the Bombay and Patna High Courts, in the decisions reported as State vs Murlidhar Govardhan(3), and Ram Nandan vs State ( 4 ) , respectively. In order, properly, to appreciate the duties of the police, in the matter of 'investigation of offences, as well as their powers, it is necessary to refer to the provisions contained in Chapter XIV of the Code. That chapter deals with 'Information to the Police and their Powers to investigate ', and it contains the group of section beginning from section 154 and ending with section 176. Section 154 deals with information relating to the commission of a cognizable R. 1966 Guj, 283. (2) A. 1. R. B.). (3) A. 1. R. (4) A. 1. R. 1966 Pat. 67 2 offence, and the procedure to be adopted in respect of the same. Section 155, similarly, deals with information in respect of noncognizable offences. Sub section (2), of this section, prohibits a police officer from investigating a non cognizable case, without the order of a Magistrate. Section 156 authorizes a police officer, in charge of a police station, to investigate any cognizable case, without the order of a Magistrate. Therefore, it wilt be seen that large powers are conferred on the police, in the matter of investigation into a cognizable offence. Sub section (3), of section 156, provides for any Magistrate empowered under section 190, to order an investigation. In cases where a cognizable offence is suspected to have been committed, the officer, in charge of a police station, after sending a report to the Magistrate, is entitled, under section 157, to investigate the facts and circumstances of the case and also to take steps for the discovery and arrest of the offender. Clause (b), of the proviso to section 157(1), gives a discretion to the police officer not to investigate the case, if it appears to him that there is no sufficient ground for entering on an investigation. Section 158 deals with the procedure to be adopted in the matter of"a report to be sent, under section 157. Section 159 gives power to a Magistrate, on receiving a report under section 157, either to direct an investigation or, himself or through another Magistrate subordinate to him, to hold a preliminary enquiry into the matter, or otherwise dispose of the case, in accordance with the Code. Sections 160 to 163 deal with the power of the police to require attendance of witnesses, examine witnesses and record statements. Sections 165 and 166 deal with the power of police officers, in the matter of conducting searches, during an investigation, in the circumstances, mentioned therein. Section 167 provides for the procedure to be adopted by the police, when investigation cannot be completed in 24 hours. Section 168 provides for a report being sent to the officer, incharge of a police station, about the result of an investigation, when such investigation has been made by a subordinate police officer, under Chapter XIV. Section 169 authorises a police officer to release a person from custody, on his executing a bond, to appear, if and when so required, before a Magistrate, in cases when, on investigation under Chapter XIV, it appears to the officer, in charge of the police station, or to the police officer making the investigation, that there is no sufficient evidence or reasonable ground of suspicion, to justify the forwarding of the accused to a Magistrate. Section 170 empowers the officer, incharge of a police station, after investigation under Chapter XIV, and if it appears to him that there is sufficient evidence, to forward the accused, under custody, to a competent Magistrate or to take securtiy from the accused for his appearance before the Magistrate, in cases where the offence is bailable. Section 172 makes it obligatory on the police officer making an investigation, to maintain a diary recording the various particulars therein and in the 673 manner indicated in that section. Section 173 provides for an investigation, under Chapter XIV, to be completed, without unnecessary delay and also makes it obligatory, on the officer, incharge of the police station, to send a report to the Magistrate concerned, in the manner provided for therein, containing the necessary particulars. It is now only necessary to refer to section 190, occurring in Chapter XV, relating to jurisdiction of criminal Courts in inquiries and trials. That section is to be found under the heading 'Conditions requisite for initiation of proceedings ' and its sub section (1) is as follows : "(1) Except as hereinafter provided, any Presidency Magistrate, District Magistrate or Sub divisional Magistrate and any other Magistrate specially empowered in this behalf, may take cognizance of any offence (a) upon receiving a complaint of facts which constitute such offence; (b) upon a report in writing of such facts made, by any police officer; (c) upon information received from any person other than a police officer, or upon his own knowledge or suspicion, that such offence has been committed. " From the foregoing sections, occurring in Chapter XIV, it will be seen that very elaborate provisions have been made for securing that an investigation does take place into a reported offence and the investigation is carried out within the limits of the law, without causing any harassment to the accused and is also completed without unnecessary or undue delay. But the point to be noted is that the manner and method of conducting the investigation, are left entirely to the police, and the Magistrate, so far as we can see, has no power under any of these provisions, to interfere with the same. If, on investigation, it appears to the officer, in charge of a police station, or to the officer making an investigation, that ,,here is no sufficient evidence or reasonable grounds of suspicion justifying the forwarding of an accused to a Magistrate,, section 169 says that the officer shall release the accused, if in custody, on hi , executing a bond to appear before the Magistrate. Similarly, if on the other hand, it appears to the officer, in charge of a police station, or to the officer making the investigation, under Chapter XIV, that there is sufficient evidence or reasonable ground to justify the forwarding of an accused to a Magistrate, such an officer is required, under section 170, to forward the accused to a Magistrate or, if the offence is bailable, to take security from him for his appearance before such Magistrate. But, whether a case comes under section 169, or under section 170, of the Code, on the completion of the investigation, the police officer has to L7SupCI/67 13 674 submit a report to the Magistrate, under section 173, in the manner indicated therein, containing the various details. The question as to whether the Magistrate has got power to direct the police to file a charge sheet, on receipt of a report under section 173 really depends upon the nature of the jurisdiction exercised by a Magistrate, on receiving a report. In this connection, we may refer to certain observations, made by the Judicial Committee in King Emperor vs Khwaja Nazir Ahmed(1) and by this Court, in H. N. Rishbud and Inder Singh vs The State of Delhi(2). In Nazir Ahmed 's Case(1), Lord Porter observes, at 212, as follows "Just as it is essential that every one accused of a crime should have free access to a court of justice so that he may be duly acquitted if found not guilty of the offence with which he is charged, so it is, of the utmost importance that the judiciary should not interfere with the police in matters which are within their province and into which the law imposes on them the duty of inquiry. In India, as has been shown, there is a statutory right on the part of the police to investigate the circumstances of an alleged cognizable crime without requiring any authority from the judicial authorities, and it would, as their Lordships think, be an unfortunate result if it should be held possible to interfere with those statutory rights by an exercise of the inherent jurisdiction of the court. The functions of the judiciary and the police are complementary, not overlapping, and the combination of individual liberty with a due observance of law and order is only to be obtained by leaving each to exercise its own function, always, of course, subject to the right of the court to intervene in an appropriate case when moved under section 491 of the Criminal Procedure Code to give directions in the nature of habeas corpus. In such a case as the present, however, the court 's functions begin when a charge is preferred before it, and not until then. " These observations have been quoted, with approval, by this Court, in State of West Bengal vs section N. Basak(3). This Court in Rishbud and Inder Singh 's Case(1), observes, at p. 1156, as follows : "Investigation usually starts on information relating to the commission of an offence given to an officer incharge of a police station and recorded under sec (1) L. R. 71 1. A. 203. (2) (3) A. 1. R. 675 tion 154 of the Code. If from information so received or otherwise, the officer in charge of the police station has reason to suspect the commission of an offence, he or some other subordinate officer deputed by him, has to proceed to the spot to investigate the facts and circumstances of the case and if necessary to take measures for the discovery and arrest of the offender. Thus investigation primarily consists in the ascertainment or the facts and circumstances of the case. By definition, it includes 'all the proceedings under the Code for the collection of evidence conducted by a police officer '. " Again after a reference to some of the provisions in Chapter XIV of the Code, it is observed at p. 1157 "Thus, under the Code investigation consists generally of the following steps : (1) Proceeding to the spot, (2) Ascertainment of the facts and circumstances of the case, (3) Discovery and arrest of the suspected offender, (4) Collection of evidence relating to the commission of the offence which may consist of (a) the examination of various persons (including the accused) and the reduction of their statements into writing, if ' the officer thinks fit, (b) the search of places of seizure of things considered necessary for the investigation and to be produced at the trial, and (5) Formation of the opinion as to whether on the material collected there is a case to place the accused before a Magistrate for trial and if so taking the necessary steps for the same by filing of a charge sheet under section 1 7 3. . It is also clear that the final step in the investigation viz., the formation of the opinion as to whether or no ' there is a case to place the accused on trial is to be that of the officer in charge of the police station. " We are referring to these observations for the purpose of emphasizing that the scheme of Chapter XIV, clearly shows that the formation of an opinion as to whether or not there is a case to place the accused on trial, has been left to the officer incharge of a police station. Bearing in mind these principles referred to above, we have to consider the question that arises for consideration, in this case. The High Courts which have held that the Magistrate has no jurisdiction to call upon the police to file a charge sheet, under such circumstances, have Tested their decision on two principles viz., (a) that there is no express provision in the Code empowering a Magistrate to pass such an order; and (b) such a power, in view of the scheme of L7SUPCI/67 14 676 Chapter XIV, cannot be inferred vide Venkata Subha v Anjanayulu(1); Abdul Rahim vs Abdul Muktadin(2); Aman Premanand vs State(3); the majority view in A. K. Roy vs State of W. B.(1); and Stale of Gujarat vs Shah Lakhamshi(5). Or the other hand, the High Courts which have recognised such a power, rest their decision again on two grounds viz., (a) where a report is submitted by the police, after investigation, the Magistrate has to deal with it judicially, which will mean that where the report is not accepted, the Magistrate can give suitable directions to the police , and (b) the Magistrate is given supervision over the conduct of investigation by the police, and there ore, such a power can be recognised in the Magistrate vide State vs Murlidhar Goverdhan(6); and Ram Nandan vs State(7). Though it may be that a report submitted by the police may have to be dealt with, judicially, by a Magistrate, and although the Magistrate may have certain supervisory powers, nevertheless, we are not inclined to agree with the further view that from these considerations alone it can be said that when the police submit a report that no case has been made out for sending up an accused for trial, it is open to the Magistrate to direct the police to file a charge sheet. But, we may make it clear, that this is not to say that the Magistrate is absolutely powerless, because, as will be indicated later, it is open to him lo take cognizance of an offence and proceed, according to law. We do not also find any such power, under section 173(3), as is sought to be inferred, in some of the decisions cited above. As we have indicated broadly the, approach made by the various High Courts in coming to different conclusions, we do not think it necessary to refer to those decisions in detail. It will be seen that the Code, as such, does not use the ex pression 'charge sheet ' or 'final report '. But it is understood, in the Police Manual containing Rules and Regulations, that a report by the Police, filed under section 170 of the Code, is referred to as a 'charge sheet '. But in respect of the reports sent under section 169, i.e., when there is no sufficient evidence to justify the forwarding of the accused to a Magistrate, it is termed variously, in different States, as either 'referred charge ', 'final report ', or 'Summary '. In these two appeals, which are from the State of Bihar, the reports, under section 169, are referred to as 'final report '. Now, the question as to what exactly is to be done by a Magistrate, on receiving a report. under section 173, will have to be considered. That report may be inrespect of a case, coming under section 170, (1) A.I.R. 1932 Mad. 673. (2) A.I.R. 1953 Assam 112. (3) A.I.R. 1960 M P. 12. (4) A.I.R. 1962 Cal. (5) A.I.R. 1966 Guj. (6) A.I.R. 1960 Born. (7) A.I.R. 1966 Pat. 677 or one coming under section 169. We have already referred to section 190, which is the first section in the group of sections headed 'Conditions requisite for Initiation of Proceedings. ' Sub section (1), of this section, will cover a report sent, under section 173. The use of the words 'may take cognizance of any offence ', in sub section (1) of section 190 in our opinion imports the exercise of a 'judicial discretion ', and the Magistrate, who receives the report, under section 173, will have to consider the said report and judicially take a decision, whether or not to take cognizance of the offence. From this it follows that it is not as if that the Magistrate is bound to accept ,,the opinion of the police that there is a case for placing the accused, on trial. It is open to the Magistrate to take the view that the facts disclosed in the report do not make out an offence for taking cognizance or he may take the view that there is no sufficient evidence to justify an accused being put on trial. On either of these grounds, the Magistrate will be perfectly justified in declining to take cognizance of an offence, irrespective of the opinion of the police. On the other hand, if the Magistrate agrees with the report, which is a charge sheet submitted by the police, no difficulty whatsoever is caused, because he will have full jurisdiction to take cognizance of the offence, under section 190(1)(b) of the Code. This will be the position, when the report under section 173, is a charge sheet. Then the question is, what is the position, when the Magis trate is dealing with a report submitted by the police, under section 173, that no case is made out for sending up an accused for trial, which report, as we have already indicated, is called, in the area in question, as a 'final report '? Even in those cases, if the Magistrate agrees with the said report, he may accept the final report and close the proceedings. But there may be instances when the Magistrate may take the view, on a consideration of the final report, that the opinion formed by the police is not based on a full and complete investigation, in which case in our opinion the Magistrate will have ample jurisdiction to give directions to the police, under section 1 5 6 ( 3 ), to make a further investigation. That is, if the Magistrate feels, after considering the final report, that the investigation is unsatisfactory, or incomplete, or that there is scope for further investigation, it will be open to the Magistrate to decline to accept the final report and direct the police to make further investigation, under section 156(3). The police, after such further investigation, may submit a charge sheet, or,, again submit a final report, depending upon the further investigation made by them. If, ultimately, the Magistrate forms the opinion that the facts, set out in the final report, constitute an offence, he, can take cognizance of the offence under section 190(1) (c), notwithstanding the contrary opinion of the police, expressed in the final report. 678 In this connection, the provisions of section 169 of the Code, are relevant. They specifically provide that even though, on investigation, a police officer, or other investigating officer, is of the opinion that there is no case for proceeding against the accused, he is bound, While releasing the accused,, to take a bond from him to appear, 'If and. when required, before a Magistrate. This provision is obviously to meet a contingency of the Magistrate, when he considers the report of the investigating officer, and judicially takes a view different from the police. We have to approach the, question, arising for consideration in this case, in the light of the circumstances pointed out above. We have, already referred to the scheme of Chapter XXIV, as well as the observations of this Court in Rishbud and Inder Singh 's Case(1) that the formation of the opinion as to whether or not there is a case to place the accused on trial before a Magistrate, is 'left to the officer in charge of the police station. There is no express power, so far as we can see, which gives jurisdiction to pass an order of the nature under attack; nor can any such powers be implied. There is certainly no obligation, on the Magistrate, to accept the report, if he does not agree with the opinion formed by the police. Under those circumstances, if he still suspects that an offence has been committed, he is entitled, notwithstanding the opinion of tile police, to take cognizance, under section 190(1)(c) of the Code. That provision, in our opinion, is obviously intended to secure that offences may not go unpunished and justice may be in voked even where persons individually aggrieved are unwilling or unable to prosecute. or the police, either wantonly or through bona fide error, fail to submit a report, setting out the facts constituting the offence. Therefore, a very wide power is conferred on the Magistrate to take cognizance of an offence. not only when he receives information about the commission of an offence from a third person, but also where he has knowledge or even suspicion that the offence has been committed. It is open to the Magistrate to take cognizance of the offence, under section 190(1) (c), on the ground that, after having due regard to the final report and the police records placed before him, be has reason to suspect that an offence has been committed. Therefore, these circumstances will also clearly negative the power of a Magistrate to call for a charge sheet from the police, when they have submitted a final report. The entire scheme of Chapter XIV clearly indicates that the formation of the opinion, as to whether or not there is a case to, place the accused for trial, is that of the officer in charge of the police station and that opinion determines whether the report is to be under section 170, being a 'charge sheet ', or under section 169, 'a final report '. It is no (1) [1955]1 S.C.R. 1150. 67 9 doubt open to the Magistrate, as we have already pointed out, to accept or disagree with the opinion of the police and, if he disagrees, he is entitled to adopt any one of the courses indicated by us. But he cannot direct the police to submit a charge sheet, because, the submission of the report depends upon the opinion formed by the police, and not on the opinion of the Magistrate. The Magistrate cannot compel the police to form a particular opinion, on the investigation, and to submit a report, according to such opinion. Thai will be really encroaching on the sphere of the police and compelling the police to form an opinion so as to accord with the decision of the Magistrate and send a report, either under section 169, or under section 170, depending upon the nature of the decision. Such a function has been left to the police, under the Code. We have already pointed out that the investigation, under the Code, takes in several aspects, and stages, ending ultimately with the formation of an opinion by the police as to whether, on the material covered and collected, a case is made out to place the accused before the Magistrate for trial, and the submission of either a charge sheet, or a final report is dependent on the nature of the opinion, so formed. The formation of ,the said opinion, by the police, as pointed out earlier, is the final step in the investigation, and that final step is to be taken only by the police and by no other authority. The question can also be consider from another point of view. Supposing the police send a report, viz., a charge sheet, under section 170 of the Code. As we have already pointed out, the Magistrate is not bound to accept that report, when he considers the matter judicially. But, can he differ from the police. and call upon them to submit a final report, under s.169 ? In our opinion, the Magistrate has no such power. If he has no such power, in law, it also follows that the Magistrate has no power to direct the police to submit a charge sheet when the police have submitted a final report that no case is made out for sending the accused for trial. The functions of the Magistracy and the police, are entirely different, and though, in the circumstances mentioned earlier the Magistrate may or may not accept the report, and take suitable action, according to law, he cannot certainly infringe upon the jurisdiction of the police, by compelling them to change their opinion, so as to accord with his view. Therefore, to conclude, there is no power, expressly or im pliedly conferred, under the Code, on a Magistrate to call upon the police to submit a charge sheet, when they have sent a report under section 169 of the Code, that there is no case made out for sending tip an accused for trial. L7 Sup. CI/67 15 680 In these two appeals, one other fact will have to be taken note of. It is not very clear as to whether the Magistrate, in each of these cases, has chosen to treat the protest petitions, filed by the respective respondents, as complaints, because, we do not find that the Magistrate has adopted the suitable procedure indicated in the Code, when he takes cognizance of an offence, on a complaint made to him. Therefore, while holding that the orders of the Magistrate, in each of these cases, directing the police to file charge sheets, is Without jurisdiction, we make it clear that it is open to the Magistrate to treat the respective protest petitions, as complaints, and take further proceedings, according to law, and in the light of the views expressed by us, in this judgment. Mr. Nuruddin Ahmed, learned counsel for the appellants in Criminal Appeal No. 238 of 1966, particularly urged that it is unnecessary to direct further proceedings to be continued, so far as his clients are concerned. Learned counsel pointed out that the police report before the Magistrate clearly shows that the girl, in question, who is stated to be above 19 years of age, has herself stated that she bad eloped, of her own accord and that if that is so, further proceedings against his clients, are absolutely unnecessary, to be continued. We are not inclined to accept these contentions of the learned counsel. As to whether an offence is made out or whether any of the appellants or both of them are guilty of the offences with which they may be charged, are all matters which do not require to be considered, by this Court, at this stage. In the result, subject to the directions contained above, the orders of the Magistrate, directing the police to file a charge, will be set aside, and the appeals allowed, to that extent. V.P.S. Appeals allowed.

The respondent joined Class III service of the Mysore Government in 1958 as a local candidate. According to the Mysore Civil Service Rules, 1958 a local candidate meant a temporary Government servant not appointed regularly in accordance with the rules of recruitment to that service. On September 22, 1961 the Mysore Government passed art order whereby under sub cl. (i) of cl. 2 local candidates appointed before Dec. 31, 1959, were entitled to have their appointments regularised subject to certain conditions. According to sub cl. (ii) of cl. 2 of the Order the services of local candidates were to be regularised with effect from the date of their appointment ', from which their service was continuous provided they were in service on 1st January 1960 and continued to be in service at the time their services were regularised. Sub clause (iii) said that local service would count for purposes of leave, pension and increments but not for purposes of seniority, and that only the service from the date of regularisation of the appointment in the particular department would count for seniority. Sub clause (iv) laid down that breaks in service would not be condoned even if such breaks were only for short periods. There was a break of one day in the respondent 's service on March 1, 1961. The Mysore Government terminated his service on July 4, 1963. The respondent filed a writ petition before the High Court claiming that he was entitled to have his appointment regularised under the aforesaid Government Order. The High Court held that the requirements of the Order were that a local candidate was entitled to its benefit if he joined service before Dec. 31, 1959, and was in service on two dates, namely 1st January 1960 and 22nd September 1961. On this view the High Court allowed the respondent 's petition whereupon the State appealed to this Court. HELD : The High Court was wrong in its construction of sub cl. (ii) of cl. 2 of the Order. On a harmonious construction of sub cl. (ii) with the other subclauses of cl. 2 its proper interpretation would be that in order that the regularisation order may apply to a particular case the local candidate must be initially appointed prior to December 31, 1959, he must be in service on January 1, 1960 and continue to be in service without any break till the date of the order. Since the service of the respondent was not continuous during this period he was not entitled to regularisation of his appointment under the Order. (133 G]

Civil Appeal No. 11417 of 1983 From the Judgment and Order dated 14. 9. 1983 of the High Court of Madras in W. P. N. 4615 of 1983. K. Ram Kumar for the Appellant. A. V. Rangam for the Respondents The Judgment of the Court was delivered by SEN, J. This appeal by special leave directed against the judgment and order of the Madras High Court dated September 14, 1983 raises a question of some complexity. The question is as to whether cl. 3 (IA) of the Tamil Nadu Paddy (Restriction on Movement) Order, 1982 issued by the State Government under s 3 of the read with the Government of India, Ministry of Agriculture (Department of Food) Order, a. section R, 800 dated June 9, 1978, with the prior concurrence of the Government of India, was ultra vires the State Government being in excess of its delegated powers. That depends on whether the delegation of a specific power under cl. (d) of sub section (2) of section 3 of the Act by the aforesaid notification issued by the Central Government under section 5 to regulate the storage, transport, distribution, disposal, acquisition, use or consumption of an essential commodity, in relation to foodstuffs, carries with it the general powers of the Central Government under sub section (1) of section 3 of the Act to regulate or prohibit the production, supply and distribution of essential commodities and trade and commerce therein. There is a conflict OF opinion on this question between different High Courts. Hence we thought it fit to grant special leave and heard the appeal on merits. After hearing the parties, we dismissed the appeal by an order dated December 5, 1983 for reasons to follow. The reasons therefore are set out below . Briefly stated, the facts are these. In the State of Tamil Nadu, there has been a system of imposing levy on purchase of paddy by traders in vogue since the year 1970. This was imposed by cl. 3 (5) (i) of the Tamil Nadu Paddy and Rice (Licensing, Regulation & Disposal of Stock) Order, 1968 issued by the State Government under section 3 of the Act with the prior concurrence of the Government 1033 Of India. Cl. 3 (5) (i) empowered the State Government to impose A and collect upto 50% of the stocks by way of levy on purchases of paddy by traders on payment of price specified from time to time. The said Order was replaced by the Tamil Nadu Paddy and Rice (Regulation of Trade) Order, 1974 issued under section 3 of the Act with the prior concurrence of the Government of India. Cl. 5 (1) of this Order empowers the State Government to impose and collect levy upto 50% of the purchase of paddy and rice by the dealers other than retail dealers and they are paid prices notified by the Government. This clause was subsequently amended in 1976. The power to impose and collect levy on the purchase of paddy and rice was exercised by the State Government under section 3 of the Act with a view to procure the stock for distribution of rice to about 118 lakhs family card holders throughout the State through nearly 17, 800 fair price shops. A review of the food situation in the latter half of 1980 and the beginning of 1981 revealed that the stock of paddy and rice with the Government was not adequate to meet the requirements under the public distribution system. The State Government in the Food & Cooperation Department accordingly, decided to enforce the levy on traders by G. O. Ms. No. 33 dated January 1, 1981 and to collect 40% levy on the purchases of paddy and rice by dealers even though it had the power to impose levy upto 50% at prices fixed by it from time to time. Thereafter, the Government in the Food & Cooperation Department by G. O. MS. No. 765 dated October 1, 1981 increased the levy from 40% to 50% from kuruvai season 1981. There was a failure of monsoon in the State in the years 1981 82 and the off take of rice in the fair price shops had increased from 34,000 tonnes in April to 85,000 tonnes in December 1982. Due to failure of south west monsoon in the year 1982 and consequent poor rainfall, the storage level in the Mettur reservoir fell. As a result of this there was a steep fall in kuruvai cultivation of paddy. In Thanjavur district alone, the acreage of paddy cultivation was reduced from 4. 5 lakhs acres to 2.97 lakhs acres. Added to this, the north east monsoon in the State also failed causing a serious fall in the production of paddy. In the circumstances, the State Government in the Food & Cooperation Department had no other alternative but to introduce a monopoly procurement scheme of paddy with a view to procure the maximum stock of paddy by banning the purchases by traders. 1034 In exercise of the powers conferred under section 3 of the read with the Government of India, Ministry of Agriculture (Department of Food) Order, G. section R. 800 dated June 9, 1978, with the prior concurrence of the Government of India, the State Government promulgated the Tamil Nadu Paddy (Restriction on Movement) Order, 1982 on October 22, 1982. 3 (1) of the Order provides: "No person shall transport, move or otherwise carry or prepare or attempt to transport, move or otherwise carry, or aid or abet in the transport, movement or otherwise carrying of paddy outside the State by road/rail or otherwise except under and in accordance with the conditions of a permit issued by an authorized officer. " On January 22, 1983, the State Government Department issued G. O. MS. No. 42 for purchase of the entire marketable surplus of paddy in Thanjavur District by the Government through the Tamil Nadu Civil Supplies Corporation as an agent of the Government. On February , 1982, the State Government in the Food & Co operation Department issued another G. O. Ms. No. 84 extending the provision made with regard to Thanjavur district of Chidambaram and Kattumannarkoil taluks in South Arcot district and Musiri, Kulithalai, Lalgudi and 7 Tiruchirapalli taluks in Tiruchirapalli district. On May 11, 1983, the State Government in the Food & Co operation Department issued G. O. Ms. No. 293 introducing sub cl. (1A) to cl. 3 of the Order. The newly inserted cl. (IA) is as follows: "No person shall transport, move or otherwise carry or prepare or attempt to transport, move or otherwise carry, or aid or abet in the transport, movement or otherwise carrying of paddy outside the places notified under Clause 3 of the Tamil Nadu Paddy & Rice (Restriction of Rates) Order, 1974 by road/rail or otherwise. " Thereafter, on June 20, 1983, the State Government in the Food & Cooperation Department by G. O. Ms. No 413 made a further amendment to the newly introduced sub cl. (1A) of cl. 3. The amended cl. (IA) of cl. 3 is follows: 1035 "No person shall transport, move or otherwise carry or prepare or attempt to transport, move or otherwise carry, or aid or abet in the transport, movement or other wise carrying of paddy outside the Thanjavur District, Chidambaram and Kattumannarkoil Taluks in South Arcot District and Musiri, Kulithalai, Lalgudi and Tiruchirapalli Taluks in Tiruchirapalli District. " These various orders were issued by the state Government in exercise of the powers conferred by section 3 of the Act read with the Government of India, Ministry of Agriculture (Department of Food) Order, G. section R. 800 dated June 9, 1978 which is set out below: C "MINISTRY OF AGRICULTURAL AND IRRIGATION (DEPARTMENT OF FOOD) ORDER New Delhi, the 9th June, 1978. G. section R. 800 In exercise of the powers conferred by section 5 of the (10 of 1955), and in supersession of the Order of the Government of India in the late Ministry of Agriculture (Department of Food) No. G. section R. 316 (E) dated the 20th June, 1972, the Central Government hereby directs that the powers conferred on it by sub section (1) of section 3 of the said Act to make orders to provide for the matters specified in cls. (a), (b), (c), (d), (e), (f), (h), (i), (ii) and (j) of sub section (2) thereof shall, in relation to foodstuffs be exercisable also by a State Government subject to the conditions (1) that such powers shall be exercised by a State Government subject to such directions, if any, as may be issued by the Central Government in this behalf; (2) that before making an order relating to any matter specified in the said cls. (a), (c) or (f) or in regard to distribution or disposal of foodstuffs to places outside the State or in regard to regulations or transport of any foodstuffs, under the said cl (d), the State Government shall also obtain the prior concurrence of the Central Government and 1036 (3) that in making an order relating to any of the matter specified in the said cl. (i) the State Government shall authorize only an officer of Government. Sd/ K. Balakrishnan, Dy. Secretary to the Government of India (No. 3 (Genl) (1)/78 D&R (1) 59). " The appellant and various other agriculturists of Thanjavur district and the aforesaid traditionally rice growing areas of South Arcot and Thiruchirapalli districts challenge the constitutional validity of cl. 3 (1A) of the Order placing a complete ban on the transport, movement or otherwise carrying of paddy outside Thanjavur district and the aforementioned taluks of South Arcot and Thiruchirapalli districts by petitions under article 226 of the Constitution in the High Court. There were as many as 300 writ petitions in the High Cort which were disposed of by the judgment under appeal. The validity of cl 3 (IA) of the Order was assailed on three main grounds: (1) Cl. 3 (1A) was wholly arbitrary and irrational and thus violative of article 14 of the Constitution. (2) Cl. 3 (IA) was in excess of the delegated powers conferred on the State Government under section 3 of the Act by the aforesaid G. section R 800 dated June 9, 1978 issued by the Central Government under section 5 of the Act. And (3) The total ban on movement of paddy from out of Thanjavur district and the aforesaid taluks of South Arcot and Thiruchirapalli districts by cl. 3 (1A) of the Order was an unreasonable restriction on the freedom of trade and commerce guaranteed under article 19 (l) (g) and also infringes the freedom of inter State trade, commerce and intercourse under article 301 of the Constitution. The High Court repelled all these contentions. Shri P. Govindan Nair, learned counsel appearing for the appellant argued the case with much learning and resource. Learned counsel with his usual fairness did not advance some of the contentions raised before the High Court as they were apparently misconceived. He has confined his submissions to only two grounds, namely: (l)Cl. 3 (IA) of the impugned Order issued by the State Government under section 3 of the Act read with G. section R. 800 dated June 9, 1978 issued by the Central Government under section 5 of the Act with the prior concurrence of the Government of India placing a ban on the transport, movement or otherwise carrying of 1037 paddy from out of Thanjavur district, the two taluks of South Arcot district and the four taluks of Thiruchirapalli district, was ultra vires the State Government being in excess of the delegated powers. It is urged that the delegation of a specific power under cl. (d) of subs. (2) of section 3 of the Act by the aforesaid notification issued by the Central Government under section 5 of the Act to regulate the storage, transport, distribution, disposal etc. Of an essential commodity, in relaston to foodstuffs, does not carry with it the general power of the Central Government under sub section (l) of section 3 to regulate or prohibit the production, supply and distribution thereof and trade and commerce therein. And (2) The word 'regulating ' in cl. (d) of sub section (2) of section 3 of the Act does not take in 'prohibiting ' for the words 'regulating ' and 'prohibiting ' denote two distinct and separate attributes of power and they are mutually exclusive Otherwise according to learned counsel, there was no point in the Legislature using both the words 'regulating ' and 'prohibiting ' in sub section (1) of section 3 of the Act and the words 'regulating ' and 'prohibiting ' differently in various clauses of sub section (2) thereof. It is urged that there cannot be a total prohibition on transport, movement or otherwise carrying of paddy out of the areas in question under cl. (d) of subs. (2) of s 3 but only regulation of such activities in the course of trade and commerce by grant of licences or permits The learned counsel is fortified in his submissions by the decisions of the Punjab, Allahabad and Orissa High Courts in Sujan Singh v State of Haryana,(1) State of Uttar Pradesh vs Suraj Bhan(2) and Bejoy Kumar Routrai vs State of Orissa(3) and he questions the correctness of the decision of the Gujarat High Court in Nanalal Navalnathji Yogi Collestor of Bulsar& Ors.(4) taking a view to the contrary. We are afraid, we are unable to accept any of the contentions advanced by him. In order to appreciate the contentions advanced, it would be convenient to set out the relevant statutory provisions. Sub section (1) of section 3 of the Act is in these terms: "3 (1). Power to control production, supply, distribution etc. Of essential commodities (1). AIR [1968] Pun. 363 (2). AIR [.972] Al]. 401 (3). AIR [1976] Orr. 138 (4). [1981] . 87 1038 If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, (or for securing any essential commodity for the defence of India or the efficient conduct of military operations) it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. " Sub section (2) of section 3 of the Act, insofar as material, lays down: " 3. (2) Without prejudice to the generality of the powers conferred by sub section (1), an order made thereunder may provide (a) * * * * (b) * * * * (c) * * * * (d) for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of any essential commodity. " section S of the Act provides: "5. Delegation of powers The Central Government may, by notified order, direct that (the power to make orders or issue notifications under section 3) shall in relation to such matters, and subject to such conditions, if any, as may be specified in the direction, be exercisable 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. " 1039 The infirmity in the argument lies in the erroneous assumption A that the source of power on authority to promulgate the impugned Order was derived by the State Government under cl.(d) of sub s (2) of section 3 of the Act by virtue of the delegation of powers by the Central Governmnent by the notification No G. section R. 800 dated June 9, 1978 under s 5 of the Act. The source of power to promulgate an order of this description is derived from sub section (1 of section 3 of the Act, According to its plain language, the aforesaid notification No. G. section R. 800 provides that in exercise of the powers conferred by section 5 of the Act, and in supersession of the earlier order of the Government of India in the Ministry of Agriculture, Department of Food, No. G. S R 316 dated June 20, 1972, the Central Government directs that 'the powers conferred on it by sub section (1) of section 3 of the Act ' to make orders to provide for matters specified in clauses (a), (b), (c), (d), (e), (f), (h), (i), (ii) and (j) of sub section (2) thereof shall, in relation to foodstuffs, 'be exercisable also by a State Government subject to the conditions set out therein '. There must be some meaningful effect given to the words 'the Central Government hereby directs that the powers conferred on it by sub section (1) of section 3 of the Act to make orders etc. shall be exercisable also by a State Government subject to the conditions set out therein '. On a plain construction, the first part of the aforesaid notification in specific terms provides for the delegation by the Central Government under section 5 of the Act of the powers conferred on it by sub section (1) of section 3 of the Act. That power is general in its terms and authorises inter alia the promulgation of any order providing for regulating or prohibiting the production, supply and distribution of, and trade and commerce in, any essential commodity, insofar as it is necessary or expedient so to do for maintaining or increasing supplies or for securing their equitable distribution and availability at fair prices. The second part of the notification directs that the power to make 'orders thereunder ' i.e. the power under sub section (1) of section 3 of the Act shall be exercisable also by a State Government, in relation to foodstuffs, with respect to 'such matters ' viz. for the matters specified in clauses (a), (b), (c), (d), (e), (f), (h), (i), (ii) and (j) of sub section (2) thereof and subject to 'such conditions ' set out therein. The aforesaid notification G. section R. 800 dated June 9, 1978 issued by the Central Government was strictly in conformity with section 5 of the Act. Of the three conditions, the one that is material for our purpose is condition 2 It provides that before making an order under cl. (d) of sub section (2) of section 3 of the Act in regard to 1040 distribution or disposal of foodstuffs to places outside the State or in regard to regulations or transport of any foodstuffs, the State Government shall also obtain the prior concurrence of the Central Government. It is manifest on a plain reading that the aforesaid notification No. G. section R. 800 dated June 9, 1978 was strictly in conformity with the requirements of section 5 of the Act. Learned counsel for the appellant however strenuously con tends that the delegation of powers by the Central Government under section 5 of the Act must necessarily be in relation to 'such matters ' and subject to 'such conditions ' as may be specified in the notification. The whole attempt on the part of the learned counsel is to confine the scope and ambit of the impugned order to cl. (d) of sub s ( .) of g. 3 of the Act which uses the word 'regulating ' and take it out of the purview of sub section (1) of section 3 which uses the words 'regulating or prohibiting '. That is not a proper way of construction of sub ss (l) and (2) of section 3 of the Act in their normal setting. The restricted construction of section 3 contended for by learned counsel for the appellant would render the scheme of the Act wholly unworkable. As already indicated, the source of power to make an order of this description is sub section (l) of s 3 of the Act and sub section (2) merely provides illustration for the general powers conferred by sub section Sub section (2) of section 3 of the Act commences with the words 'Without prejudice to the generality of the powers conferred by sub section (1) '. It is manifest that sub section (2) of s 3 of the Act confers no fresh powers but is merely illustrative of the general powers conferred by sub section (1) of section 3 without exhausting the subjects in relation to which such powers can be exercised. The matter is no longer res integra. The question directly arose for consideration by this Court in Santosh Kumar Jain vs The State (1). There, the Court was considering the validity of the Sugar and sugar Products Control Order, 1947 issued by the then Provincial Government of Bihar in exercise of the powers conferred on it by section 3 of the Essential Supplies (Temporary Powers) Act, 1946 by virtue of the delegation of powers by the Central Government to make orders in relation to foodstuffs under cl. (j) of sub section (2) of section 3 of that Act. Patanjali Shastri, J., speaking for the Court explaining the relevant functions of sub sections (1) and (2) of section 3 of the Act, said: (1) ; 1041 "It is manifest that sub section (2) of section 3 confers no fur. A the or other powers on the Central Government than what are conferred under sub section (1), for it is "an order made thereunder" that may provide for one or two other of the matter specifically enumerated in sub section (2) which are only illustrative, as such enumeration is "without prejudice to the generality of the powers conferred by sub section Seizure of an article being thus shown to fall within the purview of sub section (l), it must be competent for the Central Government or its delegate, the Provincial Government, to make an order for seizure under that sub section apart from and irrespective of the anticipated contravention of any other order as contemplated in cl. (j) of sub section " The Court drew support for this view from the decision of the Privy Council in Emperor vs Sibnath Banerjee. ( ') The Federal Court in that case held r. 26 of the Defence of India Rules made under cl (j) of sub s (2) of section 3 of the Defence of India Act, 1939 to be ultra vires, which decision was reversed by the Privy Council, The Court quoted with approval the following observations of Lord Thankerton, J. delivering the judgment of Privy Council: "In the opinion of their Lordships, the function of sub section (2) is merely an illustrative one; the rule making power is conferred by sub section (1), and "the rules" which are referred to in the opening sentence of sub section (2) are the rules which are authorized by, and made under, sub section (1); the provisions of sub s (2) are not restrictive of sub section (1), as, indeed is expressly stated by the words "without prejudice to the generality of the powers conferred by sub s (1). " This accords with our view of the purport and effect of sub sections (1) and (2) of section 3 of the Act. In Atulya Kumar vs Director of Procurement & Supply(a), the challenge was to the validity of West Bengal Foodgrains (Intensive Procurement Order, 1952 issued under section 3 (1) of the Essential Supplies (Temporary Powers) Act, 1946 by virtue of delegation of powers by the Central Government under section 5 of the Act which was (1) LR [1945] 72 IA 241. AIR [1953] Cal. 1042 almost in identical terms with section 5 of the Act. Sinha, J. (as he then was) held that the powers to promulgate the levy order was derived from sub section (1) of s 3 of the Act; and that the power was general in terms and authorized inter alia the promulgation of any order providing for regulating or prohibiting the production, supply and distribution of, and trade and commerce in, any essential commodity, insofar as it appears necessary or expedient to the State Government for maintaining or increasing supplies or for securing their equitable distribution and availability at fair prices. The learned Judge after referring to the Privy Council decision in Sibnath Banerjee 's case and that of this Court in Santosh Kumar Jain 's case, observed : "Sub section (2) of section 3, commences with the words "without prejudice to the generality of the powers conferred by sub section (1). etc. " This shows that sub section (2) confers no fresh powers but provides illustrations of the general powers conferred by sub section (1). " The learned Judge went on to observe: "This is undoubtedly very incompetent drafting. But I think that the meaning is reasonably clear. The 'Matters Specified ' in sub section (2), being "without prejudice" to the generality of the powers conferred by sub s (1) must be held to include such powers. Thus it cannot be said that the general powers have not been conferred upon the State, but only those specified in cls. (a) to (j) of sub section The only limitation is with regard to the kind of essential commodity concerned. The State has been given powers limited to 'foodstuffs ' only." Quite recently, the Calcutta High Court in Tarakdas Mukherjee vs State of West Bengal(1) and Lila Biswas vs State of West Bengal 12) following the dictum of Sinha, J. in Atulya Kumar 's case, supra, have held that the delegation of specific powers to issue an impugned order of this nature is derived from sub section (1) of section 3 and that the provisions of sub section (2) thereof are merely illustrative. It has further held that the various clauses of sub section (2) of section 3 of the Act cannot be made operative independently by any notification (1) (2) 1043 under section 5 of the Act without deriving the general powers under sub section (1) of section 3 of the Act. We are of the considered opinion that the view of the Calcutta High Court accords both with reason and principle. The view to the contrary taken by the Punjab, Allahabad and Orissa High Courts in Sujan Singh 'section Suraj Ban 's and Bejoy Kumar Routrai 's cases, supra, dose not lay down good law. It must accordingly be held that although cl. (d) of sub section (2) of section 3 of the Act deals only with a specific power, the general power to issue the impugned order flows from the provisions of sub h. (1) of section 3 which stands delegated to the State Government by virtue of the notification issued under section S of the Act. Upon that view, the question as to the construction of the word 'regulating ' occurring in cl. (d) of sub section (2) of 8.3 of the Act does not really arise. However, since the question has been raised at the Bar we think it proper to deal with it. As a matter of construction, Shri P Govindan Nair, learned counsel for the appellant contends that the words 'regulating ' and prohibiting ' connote two distinct and separate attributes of power which are mutually exclusive and therefore the word 'regulating ' used in cl. (d) cannot be given the same meaning as 'prohibiting '. He urges that is A sound rule of construction to give the same meaning to the same word occurring in different parts of an Act of Parliament. For the purpose of ascertaining the true meaning of the word 'regulating ' in the context of cl. (d) of sub section (2) of section 3, he has referred to us the different clauses of that sub section. A perusal of the various clauses (a) to (j) indicates that while cls. (a), (d) and (g) speak of the power to prohibit, and the remaining cls. (b), (c), (f), (h), (i), (ii) and (j) though they do not mention that they are illustrative of the power to regulate impliedly partake of the character of that power. If the contention of the learned counsel were to be accepted, it would imply that the Central Government derives its power under sub section (1) of section 3 of the Act as the power to promulgate any order providing for regulating or prohibiting the production, supply and distribution of, and trade and commerce in, any essential commodity insofar as it appears necessary or expedient so to do, for maintaining or increasing supplies or for securing their equitable distribution and availability at fair prices. If the Central Government were to make an order under sub section (1) in respect of the matters specified in cl. (d), it may not only regulate or control the storage, transport, distribution etc. Of an essential commodity including the 1044 movement of such foodstuffs by grant of licenses, permits or otherwise, but also place a ban on the movement of wheat from one place to another; but the State Government under cl. (d) has only a regulatory power in relation thereto i.e. to make an order only for regulating the movement of wheat from one place to another by issue of the permits, licenses or otherwise as provided for by cl. 3 of the impugned Order but could not have issued cl. 3 (IA) placing a ban on movement of wheat from one place to another. Although by force of logic one may be driven to that conclusion that the State Government has power to promulgate cl 3 of the impugned Order but not cl. 3 (IA), there is no reason for us to give such a restrictive meaning to the word 'regulating ' appearing in cl. (d) of sub section (2) of section 3 of the Act. it would seem that the rule of construction is clearly y well recognized that a word may be used in two different senses in the same section of an Act. The world 'regulation ' has not that rigidity of moaning as never to take in 'prohibition '. I must depend on the context in which it is used in the statute and the object sought to be achieved by the legislation. For a time different views were expressed on the question whether the word 'regulation ' in article 19(2) to 19(6) includes 'prohibition ' till the Court in Narendra Kumar vs Union of India(1) answered it in the affirmative. Shri P. Govindan Nair, learned counsel for the appellant however contends that the word 'regulation ' should not be confused with the expression 'reasonable restrictions ' occurring in article 19(2) to (6) of the Constitution and therefore the view t taken in Narendra Kumar 's case is not applicable. According to him, the word 'regulation ' in cl. (d) of sub . (2) of section 3 of the Act does not take in 'prohibition '. He seeks to draw a distinction between prohibition or prevention o certain activities and their regulation or governance. It is said that a power to regulate or govern would imply continued existence of that which is to be regulated or governed; and to be inconsistent with absolute prohibition. He therefore submits that cl. 3 (IA) of the Order was ultra vires because the State Government had only power under cl. (d) of sub s, (2) of section 3 of the Act to regulate production, supply and distribution of, and trade and commerce in, essential commodities like foodstuffs by (1) 1045 grant of permits, licenses or otherwise, in contradistinction to the A power of the Central Government under sub section (1) of section 3 to regulate or prohibit such production, supply and distribution of, and trade and commerce in, essential commodities. Learned counsel for the appellant placed reliance on the decision of the Allahabad High Court in Suraj Bhan 's case which proceeds Upon a decision of this Court in State of Mysore vs Sanjeeviah(1) holding that power to regulate does not include power to prohibit or restrict. In Sanjeeviah 's case, the question arose whether two provisos framed by the State Government under section 37 of the Mysore Forest Act, 1900 which empowered the making of rules to regulate the transit of forest produce which placed absolute prohibition against transportation of forest produce between sunset and sunrise and a qualified prohibition in certain circumstances, was beyond the rule making power of the State Government. The contention on behalf of the State was. that the two provisos were regulatory and prohibitory In repelling the contention, the Court observed: "The power which the State Government may exercise is the power to regulate transport of forest produce, and not the power to prohibit or restrict transport. Prima facie, a rule which totally prohibits movement of forest produce during the period between sunset and sunrise is prohibitory or restrictive of the right to transport forest produce. " These observations do not lay down any rule of universal application. The word 'regulation ' cannot have any rigid or inflexible meaning as to exclude 'prohibition '. The word 'regulate ' is difficult to define as having any precise meaning. It is a word of broad import, having a broad meaning, and is very comprehensive in scope. There is a diversity of opinion as to its meaning and its application to a particular state of facts, some Courts giving to the term a somewhat restricted, and others giving to it a liberal, construction. The different shades of meaning are brought out in Corpus Juris Secundum, vol. 76 at p. 611: (1) ; , 1046 "Regulate" is variously defined as meaning to adjust; to adjust; order, or govern by rule, method, or established mode; to adjust or control by rule, method, or established mode, or governing principles or laws: to govern to govern by rule; to govern by, or subject to, certain rules or restrictions; to govern or direct according to rule; to control, govern, or direct by rule or regulations. "Regulate" is also defined as meaning to direct; to direct by rule or restriction; to direct or manage according to certain standards, laws, or rules; to rule; to conduct; to fix or establish; to restrain; to restrict. " See also: Webster 's Third New International Dictionary, vol. II, p. 1913 and Shorter Oxford Dictionary, Vol. II, 3rd edn., p. 1784. It has often been said that the power to regulate does not necessarily include the power to prohibit, and ordinarily the word 'regulate ' is not synonymous with the word 'prohibit '. This is true in a general sense and in the sense that mere regulation is not the same as absolute prohibition. At the same time, the power to regulate carries with it full power over the thing subject to regulation and in absence of restrictive words, the power must be regarded as plenary over the entire subject It implies the power to rule, direct and control, and involves the adoption of a rule or guiding principle to be followed, or the making of a rule with respect to the subject to be regulated. 'the power to regulate implies the power to check and may imply the power to prohibit under certain circumstances, as where the best or only efficacious regulation consists of suppression It would therefore appear that the word 'regulation ' cannot have any inflexible meaning as to exclude 'prohibition '. let has different shades of meaning and must take its colour from the context in which it is used having regard to the purpose and object of the legislation, and the Court must necessarily keep in view the mischief which the legislature seeks to remedy. The question essentially is one of degree and it is impossible to fix any definite point at which 'regulation ' ends and 'prohibition ' begins. We may illustrate how different minds have differently reacted as to the meaning of the word 'regulate ' depending on the context in which it is used and the purpose and object of the legislation 1047 In Slattery vs Naylor,(l) the question arose before the Judicial Committee of the Privy Council whether a bye law by reason of its prohibition internment altogether in a particular cemetry, was ultra vires because the Municipal Council had only power of regulating internments whereas the bye law totally prohibited them in the cemetry in question, and it was said by Lord Hobhouse, delivering the judgment of the Privy Council: "A rule or bye law cannot be held as ultra vires merely because it prohibits where empowered to regulate, as regulation often involved prohibition. " In contrast in Municipal Corporation of the City of Toronto vs Virgo,(2) where the question for decision was whether a section or a bye law prohibiting hawkers from plying their trade, was competently and validity made, Lord Davey delivering the judgment of the Privy Council while laying down that a power to make a bye law to 'regulate ' and 'govern ' a trade does not authorize the prohibition of such trade, and added: "There is a marked distinction between the prohibition or prevention of a trade and the regulation or governance of it, and, indeed, a power to regulate ' and 'govern ' seems to imply the continued existence of that which is to be regulated or governed. " The predominant object of the Act, as reflected in the preamble is to provide, in the interests of the general public, for the control of the production, supply and distribution of, and trade and commerce in, certain essential commodities. It is a piece of socioeconomic legislation enacted in the national interest to secure control over the production, supply and distribution of, and trade and commerce in, essential commodities. The various Control Orders issued by the Central Government under sub s (1) of section 3 of the Act or by the State Government under s 3 read with section 5 have introduced a system of checks and balances to achieve the object of the legislation i.e. to ensure equitable distribution and availability of essential commodities at fair prices. Special public interest in an industry e.g. that it is engaged in the production of a commodity, (1) LR [1888] AC 446 (2) 1048 vitally essential to the community, may justify the regulation of its production, supply and distribution and its trade and commerce, provided such regulation is not arbitrary and has a rational nexus with the object sought to be achieved. the power to regulate or prohibit the production, supply and distribution of, and trade and commerce in, essential commodities may be exercised in innumerable ways. One of the ways in which such regulation or control over the production, supply and distribution of, and trade and commerce in, an essential commodity like foodstuffs may be exercised by placing a ban on inter Slate or inter State movement of foodstuffs to ensure that the excess stock of foodstuffs held by a wholesale dealer, commission agent or retailer is not transported to places outside the State or from one district to another with a view to maximize the procurement of such foodstuffs from the growers in the surplus areas for their equitable distribution at fair prices in the deficit areas. The placing of such ban on export of foodstuffs across the State or from one part of the State to another with a view to prevent outflow of foodstuffs from a State which is a surplus State prevents the spiral in prices of such foodstuffs by artificial creation of shortage by unscrupulous traders. But such control can be exercised in a variety of ways otherwise than by placing compulsory levy on the producers, for example, by fixing a controlled price for foodstuffs, by placing a limit on the stock of foodstuffs to be held by a wholesale dealer, commission agent, or retailer, by prohibiting sales except in certain specified manner, etc. These are nothing but regulatory measures. We find no lawful justification for giving a restricted meaning to the word 'regulating ' in cl. (d) of sub section (2) of section 3 of the Act as not to take in prohibiting '. In State of Tamil Nadu vs M/S Hind Stone and Ors. ( ') Chinnappa Reddy, J. referred with approval the observations of Mathew, J. in G.K. Krishnan vs State of Tamil Nadu(2) laying down that the word 'regulation ' has no fixed connotation and that its meaning differs according to the nature of that, thing to which it is applied. The learned Judge also observed: "In modern statutes concerned as they are with economic and social activities, 'regulation ' must, of necessity, (1) [l981] 2 SCC 205 (2) [1975] 2 SCR 715 1049 receive so wide an inter pretation that in certain situations, A it must exclude competition to the public sector from the private sector. More so in a welfare State. It was pointed out by the Privy Council in Commonwealth of Australia vs Bank of New South wales we agree with what was stated therein that the problem whether an enactment was regulatory or something more or whether a restriction was direct or only remote or only incidental involved, not so much legal as political, social or economic consideration and that it could not be laid down that in no circumstances could the exclusion of competition so as to create a monopoly, either in a State or Commonwealth agency, be justified. ' ' In Krishan Lal Praveen Kumar & Ors vs State of Rajasthan & Ors. ,(l) Suraj Mal kailash Chand & ors. vs Union of India & Ors. ,(a) and Bishamber Dayal Chandra Mohan & Ors. vs State of U.P. & Ors.(3) the Court has held that a restriction placed on movement of wheat from one State to another and/on movement of wheat from one district to another under cl. (d) of sub section (2) of section 3 of the Act, to be regulatory in character. Surely when a part of the country is verging on conditions of acute shortage or even famine, it is expected of the government to procure foodstuffs from surplus areas and transport the same for distribution in deficit areas. [D the State of Tamil Nadu like some other States, the two things most essential for the sustenance of human life are rice and paddy. It is amply borne out from the material on record that due to the failure of the southwest and north east monsoons in successive years, and the consequent poor rainfall, there was a steep fall in production of paddy. In the circumstances, the State Government had no other alternative not only to reimpose compulsory levy on the producers of paddy to the extent of 50%%, but also to introduce a scheme for a monopoly purchase of paddy by the Government with a view to build up its buffer stock for distribution through the public distribution (1) 11981] 4 SCC 550 (2) (3) [1982] I SCR 137 1050 system throughout the State. If one part of the State is faced with a famine or even acute shortage of foodstuffs, it is not unreasonable for the Government to acquire foodstuffs from the surplus areas and distribute the same in areas where they are most needed. The source of power to issue an order under cl. (d) of sub section (2) of section 3 of the Act being relatable tot he general powers of the Central Government under sub section (1) of section 3, there is no reason for us to give a restricted meaning to the word 'regulating ' in cl. (d) of sub section (2) of section 3 of the Act so as not to take in prohibiting '. For the reasons aforesaid, the appeal must fail. A.P.J. Appeal dismissed.

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

Appeals Nos. 2138 and 2196 of 1966. Appeals by special leave from the Award dated June 27, 1966 of the Sixth Industrial Tribunal, West Bengal in Case No. VIII 251 of 1965. N. A. Palkhivala, Jatinder Mahajan, O.C. Mathur and Ravinder Narain, for the appellant (in C.A. No. 2138 of 1966) and the respondent (in C.A. No. 2196 of 1966). A. S.R. Chari, R.K. Maheshwari and B.P. Maheshwari, for the respondents (in C.A. No. 2138 of 1966) and the appellants (in C.A. No. 2196 of 1966). H.K. Sowani, K. RaJendra Chaudhuri and K.R. Chaudhuri, for intervener No. 1. N. A. Palkhivala and D.N. Mukherjee, for intervener No. 2. M.K. Ramamurthi, Shyamala Pappu and Vineet Kumar, for intervener No. 3. R. J. Kolah and O.C. Mathur, for intervener No. 4. N. A. Palkhivala and O.C. Mathur, for Intervener No. 5. A. N. Parekh and Subhag Mal Jain, for intervener No. 6. The Judgment of the Court was delivered by Shelat, J. By a reference dated September 17, 1965, the Government of West Bengal referred to the Sixth Industrial Tribunal the following question for adjudication: "Whether computation of bonus in respect of the accounting year ending 31st March 1965 payable to the employees is in accordance with the payment of Bonus Ordinance ? If not, what should be the quantum of bonus for the employees ?" 754 The dispute between the appellant company and its employees arose in the following manner. The company 's accounting yearis from 1st April to 31st March of the following year and its books of account are maintained on the mercantile system of accounting. The company computed the amount of bonus payable to its employees under the Payment of Bonus Ordinance which was promulgated on May 29, 1965 and furnished on July 5, 1965 copies of its this computation to the three respondent Unions representing its employees. The available surplus and allocable surplus, according to this computation, were Rs. 49.96 lacs and Rs. 29.98 lacs respectively. On this basis the company declared the bonus at 13.28 per cent of the total wages paid to the employees. According to this computation, the gross profits came to Rs. 2,70,61,234/ . Out of this the company deducted the following amounts allowed under the Ordinance, namely: Rs. 28,64,000/ as depreciation admissible under the Income Tax Act, 1961; Rs. 9,00,000/ as development rebate. Rs. 1,36,33,000/ as direct taxes. Rs. 1,50,000/ as dividend on preference shares; Rs. 23,37,000/ as interest at 8.5 p.c. on paid up capital; Rs. 17,80,358/ as interest at 6 p.c. on reserves. Thus the available surplus came to Rs. 49,96,876/ , sixty per cent of which, namely, Rs. 29,98,125/ was the allocable surplus. The employees disputed the computation contending that the company had wrongly reduced the gross profits and the available surplus and that the following amounts should be added back, viz. ,provision for gratuity Rs. 18,38,605/ and provision for doubtful debts Rs. 50,000/ . They also challenged deduction of interest on the reserves on the ground that the capital reserve of Rs. 57,00,151/ was artificially arrived at by a mere revaluation of the company 's fixed assets as on April 1, 1956. They also disputed the figures of depreciation, development rebate and direct taxes deducted by the company while working out the available surplus. Parliament in the meantime passed the which by sec. 40 repealed the Ordinance but which saved all things done and action taken under the 'Ordinance as having been done or taken under the Act. On September 27, 1965 company paid, subject to the result of the reference, bonus at the rate of 13.28 percent of the wages including dearness allowance to its employees. In its award the Tribunal allowed Rs. 23,48,226/ instead of Rs. 28,82,261/ claimed by the company as depreciation. Simiearly it allowed only Rs. 7 lacs instead of Rs. 8,87,371/ claimed 755 by the company as development rebate. As regards Rs. 18.38 lacs claimed under the head of gratuity, the Tribunal held that amount was not a reserve but a provision and, therefore, was not liable to be added 'back. But it held that the company could deduct only Rs. 10 lacs and odd as also Rs. 1.31 lacs and Rs. 87,000/ and odd actually paid during the year to employees who retired during that year and added back the balance of Rs. 6 lacs to the gross profits. Except for these amounts, the TribUnal accepted the rest of the company 's computation. In the result the Tribunal found the available surplus and the allocable surplus to be 54 lakhs and odd and Rs. 32.42 lacs respectively and directed payment of bonus at 14.55 per cent of the total wages. Both the Unions and the company obtained special leave and filed appeals challenging the correctness of the Award. In the profit and loss account for the year 1964 65, the Company had shown Rs. 17 chores and odd as gross receipts and out of that amount had deducted diverse amounts as expenditure including the sum of Rs. 23,48,226/ by way of depreciation. In its computation filed before the Tribunal, the Company, however, claimed depreciation at Rs. 28.82 lacs worked out by its auditors in accordance with the provisions of the Income Tax Act, 1961. The Unions disputed this amount on the ground (1 ) that there was no evidence that the amount of depreciation came to Rs. 28.82 lacs and (2) that since the profit and loss account mentioned Rs. 23.48 lacs as depreciation, the company could claim that amount only. The Tribunal accepted the Unions ' contention stating that there was nothing to show that the company through mistake had shown Rs. 23.48 lacs as depreciation in the profit and loss account and that subsequently on finding out the mistake it had revised in its computation depreciation at Rs. 28.82 lacs. The Tribunal, as we shall presently show, was in error in confusing depreciation claimed by it as a deduction under sec. 6 of the Act and in thinking that the company had made or claimed to have made a mistake and was trying to correct such mistake. Under sec. 205( 1 ) of the , no dividend can be declared or paid by a company for any financial year except out of profits arrived at after providing for depreciation in accordance with sub sec. Sub sec. (2) provides different methods of calculating depreciation, one of which is to calculate it by dividing 95 per cent of the original cost of each of the depreciable asset by a specified period in respect of each such asset. The depreciation deducted in the expenditure column in the P&L account therefore was the depreciation worked out under sec. 205 ( 2 ) of the Companies 'Act. Under sec. 2 ( 18 ) of the Bonus Act, gross profits mean gross profits calculated under sec. In the case of companies other than a banking company, gross profits under Sec. 4 are to be computed in the manner laid 756 down in the 2nd Schedule. That Schedule requires adding back to the net profit shown in the P & L account of depreciation deducted in that account while computing gross profits. Obviously, the depreciation so to be added back is the one worked out by the company under sec. 205 (2 ) of the . Section 6 of the Bonus Act provides that having arrived at the gross profits under sec. 4 read with the 2nd Schedule, the Company is entitled to deduct therefrom depreciation admissible under sec. 32( 1 ) of the Income Tax Act, that is, such percentage on the written down value as may, in the case of each of the classes of assets, be prescribed. The fact that the company while preparing its P & L Account and its computation (exhibit 6) produced before the Tribunal, had kept the distinction between depreciation worked out under the and the one to be worked out under the Income tax Act for the purposes of the Bonus Act is clear from the evidence of its witness, Verma. It was for this reason that Rs. 23 lacs and odd were shown as depreciation in the P & L Account while in the computation (exhibit 6) the company claimed Rs. 28.64 lacs as depreciation. There was, therefore, no question of the company having made any mistake in calculating depreciation in the P & L Account or its trying to amend that mistake as erroneously thought by the Tribunal. The only mistake, the company claimed it had made, was that the true figure of depreciation deductible under sec. 6(a) of the Bonus Act was Rs. 28.82 lacs and not Rs. 28.64 lacs. The Company produced a certificate of its auditors (exhibit U 2) dated December 20, 1965 wherein the auditors certified that on the records produced before them the true figure of depreciation would be the revised figure of Rs. 28.82 lacs and not Rs. 28.64 lacs. But the controversy between the parties was not confined to the difference between these two figures. There were three figures for depreciation before the Tribunal, Rs. 23 lacs and odd shown in the P & L Account, Rs. 28.64 lacs shown in the computation and Rs. 28.82 lacs subsequently claimed by the company as the revised figure of depreciation. The last two figures were taken by the company from its auditors ' certificate certifying first Rs. 28.64 lacs and, latex on, revising that figure to Rs. 28.82 lacs on certain further records and information produced before them. The evidence of Verma shows clearly that the Unions disputed the Company 's calculations of depreciation. When questioned by them, Verma could only say that the calculations were done not by him but by the Secretarial Department and, therefore, was not in a position to answer questions in that regard. No witness from the Secretarial Department was produced. As regards their books and records produced before the auditors, his only answer was: 757 "So far as books and records mentioned in the first part of Ext. U 2 are concerned, the books and record relating to the branches were produced before the representatives of the, auditors ' firm there, and the other books and records were produced there before the auditors ' firm. So far as the record mentioned in the second part of the certificate are concerned, they are different records. The informations and explanations given to the auditors were given verbally after consulting our books of accounts". These books and records not having been produced or disclosed, there was obviously no opportunity to the Unions to verify either of the two figures, viz., Rs. 28.64 lacs or Rs. 28.82 lacs. It is true that Verma said that the calculations shown to the auditors could be produced but he qualified the offer by saying that would be done if the Tribunal required. Since the company claimed the deduction of depreciation, it stands to reason that the burden of proof that the depreciation claimed by it was the correct amount in accordance with the Income Tax Act was on the Company and that burden the company must discharge once its figures were challenged. But it was; contended that once the company produced its auditors ' certificate. that should be sufficient and must be accepted and that the Tribunal should not insist either on the auditors proving their certificate or on the company proving depreciation on each and every item of depreciable asset. Such an enquiry before the Tribunal, it was argued, would be a harassing and prolonged enquiry, not contemplated in industrial adjudication and, therefore, the Tribunal ought to have accepted as correct Rs. 28.82 lacs certified by the auditors. Under sec. 23 of the Act the presumption of accuracy is allowed only to the balance sheet and the P & L Account of companies. No such presumption is provided for by the Act to auditors ' certificates. Speaking of rehabilitation amount deductible as a prior charge under the Full Bench formula while working out the available surplus this Court in Khandesh Spg. ana Wvg. Mills Co. Ltd. vs Rashtriya Girni Kamgar Sangh(1) observed at page 847 as follows: "The importance of this question (the procedure to be followed for ascertaining facts) in the context of fixing the amount required for rehabilitation cannot be over estimated. The item of rehabilitation is generally a major item that enters. into the calculations for the purpose of ascertaining the surplus and, therefore, the amount of bonus. So, there would be a tendency on the part of the employer to inflate this figure and the (1) ; ,847. C. 1./69 2 758 employees to deflate it. The accounts of a company are prepared by the management. The balance sheet and the profit and loss account are also prepared by the company 's officers. The labour have no concern in it. When so much depends on this item, the principles of equity and justice demand that an Industrial Court should insist upon a clear proof of the same and also give a real and adequate opportunity to the labour to canvass the correctness of the particulars furnished by the employer. " The necessity of proper proof of the correctness of statements in the balance sheet was repeated in Petlad Turkey Red Dye Works Ltd. vs Dyes & Chemical Workers ' Union(1). These observations made with regard to balance sheets and P & L accounts would equally apply to statements made in ,the auditors ' certificates 'prepared on the instructions and information supplied to them by employers. Mere production of auditors ' certificate, especially when it is not admitted by labour, not by the auditors but by the employees of the company who admitted not to have been concerned with its preparation or the calculations on which it was based. would not be conclusive. We do not say that in such a case the Tribunal should insist upon proof of depreciation on each and every item of the assets. It should, however, insist on some reasonable proof of the correctness of the figure of depreciation claimed by the employer either by examining the auditors who calculated and certified it or by some other proper proof. Depreciation in some cases would be of a large amount affecting materially the available surplus. Fairness, therefore, requires that an opportunity must be given 'to the employees to verify such figures by cross examination of the employer or his witnesses who have calculated depreciation amount. Notwithstanding the Unions ' challenge to the figure of depreciation claimed by the company, the only thing that the company did was to examine Verma, who admittedly had nothing to do with its calculation, and to produce through him the said certificate. In our view, that was neither proper nor sufficient. The proper course for the Tribunal in such a case was to insist upon the company adducing legal evidence in support of its claim instead of taking the figure of depreciation from the P & L account which was not worked out in accordance with the Income Tax Act but under sec. 205 of the , and saying that the Company had failed to prove that it was a mistaken figure. In our view, the question as to the correct amount of depreciation must go back to the Tribunal for a fresh decision. The Tribunal should give opportunity to the Company to prove its claim for depreciation by reasonable proof and to the Unions to test such evidence by cross examination or otherwise. (1) ; , 909. 759 An error of the same type seems to have been committed by the Tribunal in the matter of development rebate. It allowed Rs. 7 lacs as development rebate. instead of Rs. 8.87 lacs. claimed by the Company. Under sec. 33 of the Income Tax Act, an assessee is allowed by way of development rebate a certain percentage of the cost of machinery or plant depending on the date of its installation. Section 34(3) of that Act provides, however, that the said allowance shall not be given unless an amount equal to 75 per cent of the development rebate to be allowed is debited to the P & L account of the relevant previous year and credited to a reserve account to be utilised by the assessee in the 8 years next following for the purposes of the undertaking. Accordingly, the Company appropriated Rs. 7 lacs to the development rebate reserve as it was bound to do if it wanted to claim development rebate. The Company took the round figure Rs. 9 lacs instead of Rs. 8.87 lacs for development rebate and credited Rs. 7 lacs, being 75 per cent thereof to the development rebate reserve. Under the Second Schedule to the Bonus Act, read with sec. 4 thereof the Company is required while computing its gross profit to add the development rebate and as footnote 1 in that Schedule shows "to the extent charged to profit and loss account", that is, Rs. 7 lacs. Under sec. 6(b) of the Bonus Act, the Company is entitled, however, to deduct out of the gross profits arrived at under sec. 4, the whole of the development rebate admissible under the Income Tax Act, i.e., the amount, 75 per cent of which comes to Rs. 7 lacs. The error which the Tribunal fell into was in mixing up the development rebate reserve to which the Company had to appropriate Rs. 7 lacs in P & L account and the development rebate of Rs. 8.87 lacs allowable to it under sec. 6 of the Act. Mr. Chari for the Unions fairly conceded that he could not challenge this position. There was, therfore, no justification for the Tribunal to allow Rs. 7 lacs only instead of Rs. 8.87 lacs as development rebate. The next question relates to a sum of Rs. 18.38 lacs, being the estimated liability under two gratuity schemes framed by the Company, which was deducted from the gross receipts in the P & L account. In 1960 the Company introduced a gratuity scheme for its employees other than its officers. Under that scheme gratuity was payable on the termination of an employees 's service either due to retirement, death or termination of service, the amount of gratuity payable being dependent on his wages at that time and the number of years of service put in by him. The Company had worked out on an actuarial valuation its estimated liability and made provision for such liability not all at once but spread over a number of years. Thus in 1959 60, 1960 61 and 1961 62 the Company allocated towards this liability Rs. 5 lacs. Rs. 10 lacs and Rs. 5 lacs respectively from out of the profits, 760 debiting these amounts in the profits and loss account. In all Rs. 40 lacs have so far been provided in the aforesaid manner against the said liability. The practice followed by the Company is that every year the Company works out the additional liability incurred by it on the employees putting in every additional year of service. Whenever an employee retires, the amount of gratuity payable to him is debited against the amount provided for as aforesaid. The amount so paid is not debited in the P & L account as an outgoing or expenditure but against the estimated liability provided as aforesaid. In 1964 65 the, Company introduced a similar gratuity scheme for its officers. According to the Company, the estimated liability under this scheme was worked out at Rs. 20 lacs. But instead of providing the whole for it provided only Rs. 11.31 lacs. It also provided Rs. 7 lacs under the scheme for its non officers against the liability for service put in by them in that year. Out of Rs. 18.38 lacs so provided, the Company paid as gratuity Rs. 1,31,585/ and Rs. 87,295/to officers and other employees who retired during 1964 65, debiting as aforesaid, these amounts not as an outgoing or expenditure but against the said amounts of Rs. 11 lacs and Rs. 7 lacs. The Company claimed that it was entitled to. deduct the balance of Rs. 16 lacs from the gross receipts in the P & L account while working out its net profit. The Unions contended that the Company could deduct from the gross receipts only Rs. 1.31 lacs and Rs. 87,000/ and odd actually paid during the year. The Company, on the other hand, maintained that what it had 'done was legitimate and was warranted by the principles of accountancy and, therefore, the whole amount of Rs. 18.38 lacs was deductible in arriving at its net profits. What the Tribunal did, however, was that instead of squarely facing this controversy, it held that as the Company had in the former years debited Rs. 5 lacs e.g., in 1959 60 and 1961 62, it would allow only Rs. 5 lacs for each of the two schemes. Thus it allowed Rs. 10 lacs as dubitable in the P & L account in addition to the said Rs. 1.31 lacs and Rs. 87,000/ and disallowing the balance of Rs. 6 lacs added back that amount in the net profits shown in the P & L account. The contention of Mr. Chari was two fold: (1 ) that the amount which could be debited was that which was actually paid and the Company was not entitled to debit in the P & L account any amount worked out by it as estimated liability. The Tribunal. therefore, was not justified in allowing the Company to debit any such amount and that the Tribunal arbitrarily fixed Rs. 10 lacs and allowed wrongly that amount to be deducted; and (2) even if such estimated liability was debitable, the appropriation amounted to a reserve and under the Bonus Act such a reserve had to be 761 added back while working out the gross profits under the 2nd Schedule to the Act. Two questions, therefore, arise: (1) whether it is legitimate in such a scheme of gratuity to estimate the liability on an actuarial valuation and deduct such estimated liability in the P & L account while working out its net profits; and (2).i.f it is, whether such appropriation amounts to a reserve or a provision. If it is a reserve, obviously the amount has to be added back while computing the gross profits. But in that event the Company would be entitled to interest thereon at 6 per cent per annum under Item 1 (iii) of the Third Schedule to the Act. In the case of an assessee maintaining his accounts on mercantile system, a liability already accrued, though to 'be discharged at a future date, would be a proper deduction while working out the profits and gains of his business, regard being had to the accepted principles of commercial practice and accountancy. It is not as if such deduction is permissible only in case of amounts actually expended or paid. Just as receipts, though not actual receipts but accrued due or brought in for income tax assessment, so also liabilities accrued due would be taken into account while working out the profits and gains of the business. A Company carrying on business of buying land and selling it after development sold certain plots, received a part of the price but entered the whole of the price receivable as it maintained its books of accounts on mercantile method. It also debited a certain sum, being the estimated expenditure for the developments it undertook to carry out within six months from the execution of the sale deeds although no part of such expenditure was actually incurred during that year. It was held that having regard to the accepted commercial practice and trading principles and there 'being no prohibition against it in the Income Tax Act, deduction of such estimated liability even though it did not come under any specific provisions of sec. 10(2) of the Income Tax Act, 1922 was permissible; (see Calcutta Company Ltd. vs CJ.T.(1) Such a deduction of an accrued liability though not actually paid is not confined to the Income Tax Act only but is also perrnissible under the Wealth Tax Act, 1957. In Commissioner of Wealth Tax vs Standard Vacuum Oil Co. Ltd.( 2) demands in respect of payment of tax under sec. 18A of the Income Tax Act, 1922 were made against the 'assessee company for 1956 57. The final installment of Rs. 47 lacs and odd for each of the two years was outstanding on the respective valuation dates. The question was whether the demand ,for such tax could be deducted while determining the net wealth of the Company. This Court held that a debt is "owed ' when an order is passed under sec. 18A and a notice of demand is sent. The amount mentioned in the notice begins to be 'owed ' till a new figure is (1) [1960]1 S.C.R. 185. (2) ; 762 substituted by the assessee under sec. 18A(2) of the Income Tax Act. But till that is done, the amount is ascertained and there is a statutory liability to pay the amounts mentioned in the order under sec. 18A(1) and were debts on the valuation dates and, therefore, deductible for the purpose of arriving 'at the Company 's net wealth. The Court also held that a condition subsequent, the fulfilment of which may result in the reduction or even extinction of the liability, would not have the effect of converting that liability into a contingent liability. The decision, no doubt, turned on the meaning of 'debt ' as defined by sec. 2(m) of the Wealth Tax Act, the. Court there holding that the statutory liability to pay the amount mentioned in the order commenced when the demand notice was served and, therefore, the liability did exist in present. In Kesoram Industries and Cotton Mills Ltd. vs C.W.T.(1) also a case under the Wealth Tax Act, the appellant company showed in its P & L account two amounts: (1 ) the amount of dividend proposed to be distributed for that year and (2) another sum as a provision for tax liability under the income Tax Act, 1922. The question was whether these two sums were debts and could be deducted while computing the Company 's net wealth. It was held that the dividend amount was not a debt as on the valuation date nothing more than a recommendation by the Directors had taken place. But as regards the estimated tax liability, it was held that it was a debt inasmuch as the liability to pay the tax was in present though payable in future and was in respect of an ascertainable sum of money. In Standard Mills Co. Ltd. vs Commissioner of Income Tax(2) the decision turned on the question whether an estimated liability under gratuity schemes framed under Industrial awards amounted t0 debts and could be deducted while computing the net wealth. On reliance having been placed on Southern Railway of Peru Ltd. vs Owen(a) a decision to which we shall presently come the Court observed ' at page 773 that decision had no relevance to the question before it as the House of Lords in that decision was concerned in determining the deductibility of the present value of a liability which may arise in future in the computation of taxable income for the relevant year under the Income Tax laws The Court held, in view of the terms of sec. 2(m) of the Wealth Tax Act, that as the liability to pay gratuity was not in presents but would arise in future on the termination of service i.e. on retirement, death or termination; the estimated liability under the schemes would not be a debt and, therefore, could not be deducted while computing the net wealth. These observations show that the Court was of the view that though such a liability is a contingent liability and therefore not a 'debt ' under sec. 2(m) of the Wealth Tax Act, it would be deductible under the Income Tax Act while (1) ; (2) ; (3) ; 763 computing the taxable profits. In the instant case, the question is not whether such estimated liability arising under the gratuity schemes amounts to a debt or not. The question that concerns us is whether while working out the net profits a trader can provide from his gross receipts his liability to pay a certain sum for every additional year of service which he receives from his employees. This, in our view, he can do, if such liability is properly ascertainable and it is possible to arrive at a proper discounted present value. Even if the liability is a contingent liability, provided its discounted present value is ascertainable, it can be taken into account. Contingent liabilities discounted and valued as necessary can be taken into account as trading expenses if they are sufficiently certain to be capable of valuation and if profits cannot be properly estimated without taking them into account. Contingent rights, if capable of valuation, can similarly be taken into account as trading receipts where it is necessary to do so in order to ascertain the true profits: (see C.N. Beatti 's Elements the Law of Income and Capital Gains Taxation 8th ed. 54). In Southern Railway of Peru Ltd. vs Owen(1), the House of Lords was concerned with the problem similar to. the one before us and, therefore, the observations made there would be of assistance. An English Company operating a railway in Peru was under the laws of that country liable to pay its. employees compensation on the termination ' of their services either by dismissal or on termination of service by notice or on such termination by death or affluence of contractual time. The compensation so paid was an amount equivalent to one month 's salary at the rate in force at the date of determination of every year of service. The Company claimed to be entitled to charge against each years receipts the cost of making provision for the retirement payments which would ultimately be thrown on it, calculating the sum required to be paid to each employee if he retired without feature at the close of the year and setting ' aside the aggregate of what was required insofar as the year had contributed to the aggregate. The House of Lords rejected the deductions on the ground that in calculating the deduction the company had ignored the factor of discount. But their Lordships recognised the principle that the company was entitled to charge against each year 's receipts the cost of making provision for the retirement payments which would ultimately be payable as the company had the benefit of the employees ' services during the year provided the present value of the future payments could be fairly estimated. The contention on behalf of the Crown was very nearly the same as the one before us. Counsel conceded, that a trader computing his taxable profits for a particular year may properly deduct not only the payments actually made to his employees but (1) ; 764 also the present value of any payments in respect of their services in that year to be made in a subsequent year if it can be satisfactorily estimated. But it was argued that proposition would not apply to that case as the company was not in any year under a definite obligation to pay its employees lump sums on the termination of their employment as in each case the right to a lump sum was contingent on certain conditions being fulfilled and ' so the prospective liability remained contingent until the service was actually ended. The lump sum could not be regarded as earned or payable in respect of a particular year of service and, therefore, the whole sum should be debited in the account of the last year of service. This contention was not upheld. In the course of his opinion, Lord Radcliffe cited with approval the dictum of Lord Haldane in Sun Insurance Office vs Clark(1) at p. 455, namely: "It is plain that the question of what ,is or is not profit or gain must primarily be one of fact, and of fact to be ascertained by the tests applied in ordinary business. Questions of law can only arise when (as was not the case here) some express statutory direction applies and excludes ordinary commercial practice, or where, by reason of its being impracticable to ascertain the facts sufficiently, some presumption has to be invoked to fill the gap. " Holding that there was no such statutory rule prohibiting the commercial practice of providing for such an estimated liability for each year, he compared the: two systems and observed at pp. 351 352 as follows: "Now the question is how ought the effects of this statutory scheme to be reflected in the appellant 's accounts of the annual profits arising from its trade ? One way, which is certainly the simplest one, is to let the payments made fall entirely as expenses of the year of payment and ignore any question of making provision for the maturing obligation during the years of service that precede it . . It has one considerable advantage; no element of estimate or valuation appears in the profit assessment and nothing is charged to profits except the actual cash outgoing. But, when this has been conceded, I think that there is the very serious disadvantage to be set against the inefficient method of arriving at the true profits of any one year. The retirement benefit is not obviously paid to obtain the services given in the year of retirement. The incident of retirement payments must be variable from year to year, and (1) ; 765 they may inordinately depress the profits of one year just as they may inordinately inflate the profits of another. It is true that the company carries on business from one year to another, but it is not charged on the average of its annual profits. Tax rates and allowances themselves vary and, apart from that, to charge tax on a profit unduly accelerated or unduly deferred is, in my opinion, no more respectable an achievement than to admit that the annual accounts of business do in some cases require the introduction of estimates or valuations if a true statement of profit i,s to be secured. Another method is that which the appellant is seeking to establish with regard to its assessments for the four years 1947 1950 . . What the appellant claims the right to do is to charge against each year 's receipts the cost of making provision for the retirement payments that will ultimately be thrown upon it by virtue of the fact that it has had the benefit of its employees ' services during that year. As a corollary it will not make any charge to cover the actual payments made in the year in respect of retirement benefits. Only by such a method, it is said, can it bring against the receipts of the year the true cost of the services that it has used to earn those receipts. Generally speaking, this must, I think, be true. For, whereas it is possible that any one of its many employees may forfeit his benefits and so never require a payment, the substantial facts of the situation are that when the company has paid every salary and wage 'that is due for current remuneration of the year it has not by any means wholly discharged itself of the pecuniary burden which fails upon it in respect of the year 's employment. " Agreeing with the company 's claim he observed that provision for retirement payments would give an accurate reflection of the true costs of earning the year 's receipts than merely charging against them the year 's payment to employees who retired in the year. That there is no rule against providing for any such contingent liability but on the contrary such a provision is permissible can be seen from the form of balance sheet in Schedule VI to the where provisions for taxation, dividends. provident fund schemes, staff benefit schemes and other items for which a company is contingently liable are to be treated as current liabilities and, therefore, dubitable against the gross receipts. Schedule VI, , lays down the requirements of profit and loss account and el. 3 (ix) of it provides that a profit and loss account shall set out amongst other things the aggregate of amounts set aside or provisions made for meeting. specific liabili 766 ties, contingencies or commitments. But the contention was that though Schedule VI to the may permit a provision for contingent liabilities, the Income tax Act, 1961 does not, for under sec. 36(v) the only deduction from profits and gains permissible is of a sum paid by an assessee as an employer by way of his contribution towards an ' approved gratuity fund created by him for the exclusive benefits of his employees under an irrevocable trust This argument is plainly incorrect because sec. 36 deals with expenditure deductible from out of the taxable income already assessed and not with deductions which are to be made while making the P & L account. In our view, an estimated liability under gratuity schemes such as the ones before us, even if it amounts to a contingent liability and is not a debt under the Wealth Tax Act if properly ascertainable and its present value is fairly discounted is deductible from the gross receipts while preparing the P & L account. It is recognised in trading circles and we find no rule or direction in the Bonus Act which prohibits such a practice. The next question is whether the amount so provided is a provision or a reserve. The distinction between a provision and a reserve is in commercial accountancy fairly well known. Provisions made against anticipated losses and contingencies are charges against profits and, therefore, to be taken into account against gross receipts in the P & L account and the balance sheet. On the other hand, reserves are appropriations of profits, the assets by which they are represented being retained to form part of the capital employed in the business. Provisions are usually shown in the balance sheet by way of deductions from the assets in respect of which they are made whereas general reserves and reserve funds are shown as part of the proprietor 's interest: (See Spicer and Peglar 's Book keeping and Accounts, 15th ed. p. 42). An amount set aside out of profit and other surpluses, not designed to meet a liability contingency commitment or diminution in value of assets known to exist at the date of the balance sheet is a reserve but an amount set aside out of profits and other surpluses to provide for any known liability of which the amount cannot be determined with substantial accuracy is a provision, (see William Pickles Accountancy, Second Edn., 192, Part III, cl. 7, Sch. VI to the which defines provision and reserve). Under sec. 23 of the Bonus Act, there is 'a presumption of the genuineness of the P & L account produced by the company unless it is challenged in the manner provided therein. The Company 's case was that the estimated liability under the gratuity schemes in respect of the accounting year was ascertainable with fair accuracy under the actuarial valuation and Rs. 16 lacs which it took into account while making it P & L account was the 767 present discounted liability. This position does not seem to have been disputed before the Tribunal. The principal contention urged against that figure was not that the estimated liability was not ascertainable or as in the case of Southern Railway of Peru(1) that it did not represent the present discounted value, but that the Bonus Act permits only the deduction of the amount actually paid during the accounting year. This was also the principal contention of Mr. Chari before us. Mr. Ramamurthi, appearing for one of the interveners, argued that though it may be possible to take into account such a contingent liability in arriving at the true profits and gains under the Income tax Act, it would not be so under the Bonus Act as the scheme of the Act treats the accounting year as a unit and, therefore, reserves or provisions on the footing of estimated liabilities to be paid in future cannot be taken into account. But under the Income tax Act also the previous year is a unit and it is only the profits and gains during that year which are taxable. If under the Income tax Act an estimated liability ascertainable with substantial accuracy can be taken into account for arriving at the true profits and gains, there is no reason why the same cannot be done under the Bonus Act unless 'there is any provision therein forbidding such a practice recognised by commercial accountancy. No such provision was shown to exist in the Bonus Act. The Tribunal in allowing Rs. 10 lacs out of the estimated 'Rs. 16 lacs impliedly accepted the principle canvassed by the company. It, however, allowed only Rs. 10 lacs because it thought it to be excessive as in some prior years the Company had deducted Rs. 5 lacs. But this was not done on the ground that the estimate of Rs. 16 Iacs was not warranted on any valuation. In our view, in the absence of any challenge as to the correctness of the valuation and in the absence of any challenge that such liability cannot be estimated on any fair standard, the Tribunal ought to have allowed the whole of Rs. 16 lacs to be deducted while arriving at the net profits in the P & L account. Turning now to the appeal filed by the employees two question besides those already disposed of were raised: one dealing with interest on capital reserve and the other relating to the amount of direct taxes to be deducted from the gross profits. As regards the first question, Verma 's evidence was that the Company had revalued its fixed assets in 1956.and credited the difference of Rs. 57 lacs between its cost and the value fixed on such revaluation, to the capital reserve. The Tribunal accepted the valuation as bona fide and allowed interest on the said reserve at 6 per cent in accordance with sec. 6(d) and el. 1 (iii) of the 3rd Schedule. Mr. Chari 's contention was that the revaluation (1) ; 768 by the director in 1956 was fictitious; that the difference of Rs. 57 lacs was a mere book adjustment and did not add to the wealth of the Company and though that amount was transferred to the capital reserve it was not as if any additional amount became available for the Company 's business and therefore, no interest was permissible on such an artificial amount. At first blush it would seem as if there is some force in this contention, for it would be possible for a company to deflate its gross profits by fictitiously revaluing its fixed assets at regular intervals red claiming interest on the excess by carrying such excess to capital reserve and to reduce thus labor 's claim to bonus. In the present case the revaluation was made as early as in 1956 and it does not appear that it was ever objected to either by 'the Company 's auditors or by any one else concerned with the Company 's management. It cannot, therefore, be legitimately said that it was done for any oblique purpose, much less with a view to defeat the labor 's claim to bonus. It is true that such revaluation does not bring in any tangible additional amount into the company 's coffers which it can use for its business. But under sec. 211 of the every balance sheet of a company must give a true and fair view of the state of affairs of the company as at the end of the financial year. VI to the also provides that where sums have been written off on a reduction of capital or a revaluation of assets the balance sheet subsequent to such reduction or revaluation must show the reduced or the increased figures as the case may be. Apart from the provisions of the , it is a recognised principle of accountancy to transfer the increased value of assets on revaluation to a capital reserve account. Such an increased figure is an unrrealised accretion in the value of a fixed asset. (see Pickles Accountancy 2nd Edn. 103 and 935). So that the fact such an increased figure does not actually bring in any additional amount to the Company does not make the capital reserve any the less a reserve. Nor is it possible to postulate that if such a claim is allowed to be deducted, the management would go on artificially inflating the value of the fixed assets with a view 'to claim interest. In the first place, if such an inflation is made mala fide, the Tribunal can always reject it. In the second place, it is hardly profitable for a company to resort to such a practice for under the Wealth Tax Act the company would be liable to an increased assessment. Section 7(2) of that Act provides that where an assessee is carrying on a business for which accounts are maintained regularly, the Wealth Tax Officer may instead of determining separate the value of each asset held by the assessee determine the net value of the asset of the business as a whole having regard to the balance sheet of such business as on the valuation date. In Kesoram Industries vs Commissioner of Wealth Tax(1) the assessee sought (1) ; 769 to argue exactly what Mr. Chari contended, namely, that the revaluation of the assets made by him did not represent the true value of the assets. That contention was rejected and this Court held that the Wealth Tax Officer was entitled to rely on such revaluation and proceed to assess on the basis of the net wealth shown as a result of such revaluation. We do not, therefore, see any justification for the apprehension felt by Mr. Chaff, for, by trying to reduce the gross profits, the Company would land itself into being assessed on a higher net wealth. The Tribunal was, in our view, right in accepting the figure of Rs. 57 lacs and deducting interest thereon from the gross profits. There remains now the question regarding computation of direct taxes. Section 6(c) of the Act provides: "subject to the provisions of section 7, any direct tax which the employer is liable to pay for the accounting year in respect of his income, profits and gains during that year;" Section 7 inter alia provides: "For the purpose of clause (c) of section 6, any direct tax payable by the employer for any accounting year shall, subject to the following provisions. be calculated at the rates applicable to the income of the employer for that year, . . The Company claim a deduction from the gross profits of Rs, 145 lacs as direct taxes. It had made provision, however; for Rs. 130 lacs for direct taxes in the P & L account. In its computation it had made a provision for Rs. 136 Iacs. At the stage of the evidence and arguments it contended however that the proper amount would be Rs. 145 lacs. It claimed that direct taxes are to be worked out under sec. 6(c) on the gross profits worked out under sec. 4 less the prior charges allowable under sec, 6, namely, depreciation and development rebate, but without deducting from such balance the bonus payable by the Company in the particular accounting year. The Tribunal accepted the contention and allowed Rs. 145 lacs. as direct taxes to be deducted under section 6 (c). This conclusion has been seriously disputed by the Unions. Mr. Chari 's argument was that the Act lays down its own statutory formula for working out available surplus and allocable surplus, that the deduction from gross profits allowable are those permissible under the Act, namely, depreciation admissible in accordance with the provisions ' of sec. 32(1) of the Income tax Act, the development rebate and subject to the provisions of sec. 7 of the Act, the amount of direct taxes which the employer "is liable to pay" for the accounting year in respect of "his income, profits and gains during that year". Mr. Chari laid stress on the 770 words "is liable to pay" ' and "in respect of his income, gains and profits during that year" and argued that inasmuch as cl. (c) incorporates 'the language of the Income tax Act, it contemplates that the employer is entitled to deduct his actual tax liability. Such liability, therefore, is to be worked out in accordance with the provisions of the Income tax Act and other relevant Acts by first arriving at the actual taxable income, gains and profits under those Acts and then computing the taxes at rates provided by them for that particular accounting year. He argued that since cl. (c) is subject to the provisions of section 7, the only departure permissible under the Act is that which is provided in section 7. His contention thus was that the Tribunal must start its calculations from the net profit shown in the P & L account which would have made provision for direct taxes and then deduct from the gross profits calculated under section 4 the prior charges permissible under section 6. The provision for direct taxes made in the P & L account would be computed after deducting from the gross receipts such deductions, allowances, reliefs, rebates, credits etc. as are permissible under the Income tax Act which would include the bonus amount payable during the year, for, without such deduction the P & L account cannot reflect the true net profit of the employer. The Company 's contention, on the other hand, was that the employer is entitled to compute his tax liability without deducting first the amount of bonus he would be liable to pay from out of the amount computed under section 4 and section 6. Mr. Palkhiwala submitted from the different provisions of the Act that the concept of actual tax liability under the Income tax Act is foreign to the Bonus Act inasmuch as the Bonus Act is concerned with gross profits calculated in accordance with section 4 and Sch. II, and that section 7 to which section 6(c) is made subject, militates against the concept of actual tax liability as worked out under the Income tax Act. The contention was that prior to the enactment of the Act when available surplus was worked out under the Full Bench Formula bonus was not deducted while arriving at. the amount of income tax deductible from gross profits, that Parliament could not possibly have contemplated a departure from the course followed in a number of decisions both of courts and tribunals and suddenly decided to incorporate into this Act the complicated and elaborate provisions of the Income tax Act and throw the burden on Industrial Tribunals to work out deductions, allowances, reliefs, rebates etc. under the Income tax Act and then finally to assess the actual tax liability. It was submitted that what has to be done by the Tribunal is first to work out gross profits under section 4 and Sch. II and then to deduct therefrom the prior charges under section 6 (a ) and (b) and estimate direct taxes on the balance and thus arrive at the available surplus. The controversy thus is one of principle rather than on the amount deducted by the Tribunal by way of direct taxes. 771 Before we attempt to resolve this controversy, it will be worth our while to recount the principle consistently follow before the passing of this Act, not with a view to interpret section 6(c), but to ascertain whether Parliament has made a departure from that principle and laid down a new procedure on which direct taxes are to be computed. Mr. Chari 's contention was that the Bonus Act is drafted on a clean slate giving a go bye to the earlier principle of working out bonus, and, therefore, we must proceed on the footing of the language used in section 6(c). At first sight it would appear that the language of el. (c) lends support to his contention. But acceptance of that contention would mean incorporating into the Bonus Act the elaborate and complicated provisions of not only the Income tax Act but other Acts levying direct taxes and throwing a considerable burden on Tribunals, least equipped with working out the provisions of those Acts entailing inevitably prolonged enquiries. Therefore, we must proceed cautiously in examining the scheme of. the Act before we conclude on the interpretation to be given to section 6(c) and section 7. Calculating the avail. able surplus under the Full Bench Formula used to work out nationally the amount of bonus which they thought would be awarded and deducted that amount from the gross profits, on the remaining balance of which, income tax payable by the employer would be determined. The result of this procedure was that the amount of tax so worked out was proportionately less. Deprecating this procedure, Gajendragadkar, J., (as he then was) observed in Associated Cement Companies Ltd. vs The Workmen(1) as follows: "Logically it is only after all the prior charges have been determined and deducted from the gross profits that available surplus can be ascertained; and it is only after the available surplus is ascertained that the question of awarding bonus can be considered. Some tribunals seem 'to work out nationally the amount of bonus which they think can be awarded and placed that amount higher up in the process of making, calculations before the income tax payable is determined . We wish the make it clear that this procedure should not be followed." In Crompton Parkinson (Works) Private Ltd. vs Its Workmen(2) disapproval of the said procedure was once again voiced, Das, C.J. observing that such a procedure is certainly not giving effect to the bonus formula "but amounts to ad hoc determination which may vary according to the length of the proverbial foot of the Lord Chancellor and is bound to lead to chaos and industrial unrest. " In Workmen of India Explosives Ltd. vs Indian Explosives (1) (2) [1959] Supp. 2S.C.R. 936. 772 Ltd.(1) the labour relied on the report of the Directors which was to the effect that no income tax was payable on the year 's result and a total of Rs. 62.39 lacs made up of income tax and development rebate was being carried forward. On this report it was argued that No. deduction should be made for income tax. Negativing 'the contention it was held that in the application of the Full Bench Formula the deduction of income tax is notional, the gross profits are arrived at by adding back certain items to the net profits and then the gross profits are reduced by making certain notional deductions, one such deduction is under the head of income tax. It was held that this deduction is not made on the actual amount payable, but what would be nationally payable on the profits determined under the Full Bench Formula and that if the argument on behalf of the labour were to be accepted the Tribunal would in effect not be applying the formula. Similar observations are to be found in several other decisions but we need not add them here. The question is whether the concept of notional tax liability which was adopted so long was laid aside by Parliament when it enacted section 6(c) and section 7 and replaced the concept of actual tax liability. To answer this question we must examine the scheme of the Act and Sch. Broadly speaking, it can be safely said that Parliament has retained the main outlines of the Full Bench Formula in the Act. It maintained, for instance, the accounting year as the unit, the principle that the employer, and where it happens to be a company, the company and its shareholders and labour as are each entitled as contributories to the profits to a share therein, the deductions of certain prior charges, the concept of gross profits etc. which were the features of the Formula. The principal change it introduced was the statutory formula of minimum and maximum bonus and the corollary flowing therefrom of "set on" and "set off" and the doing away of rehabilitation as a prior charge against which labour had clamored long. But do these changes envisage the doing away of the concept of notional tax liability which the Tribunals used to work out and substituting actual tax liability by first working out the taxable income of, the employer under the Income Tax Act and other Acts ? The answer of course, must be found from the provisions of the Act and not from what used to be done before its enactment. Sections 4, 5, 6 and 7 together with the Schedules deal with computation of gross profits and available surplus out of which 67% in cases falling under el. (a) of sec. 2(4) and 60% in cases falling under cl. (b) of that sub section would be the allocable surplus. Under Sch. II, which applies to establishments which are not banking companies, the starting point is the net profit (1) 773 shown by the employer in his P & L account. The reason for doing so seems to be that the Tribunal is not expected ordinarily to reopen the P & L account, verify the accounts from which it is worked out or find. out for itself 'the true net. profit. Parliament was award that Tribunals which would adjudicate disputes under the Act would be the least efficacious for such a purpose, apart from the fact that such enquiries would be prolonged and bitter enquiries. That is why section 23 was enacted to raise a presumption about the correctness of 'the P & L account and balance sheets of companies duly certified by auditors qualified under section 226 of the . Since the P & L account would have taken into account, besides expenditure allowable under the Income Tax Act, bonus payable to labour, provisions for tax, development rebate or development allowance and reserves, Item 2 of Sch. II requires these amounts to be added back. Similarly, the amounts set out in Items 3 & 4 in Sch. II are also to be added back. Item 5 provides for certain deductions ' such as capital receipts, capital profits, profit and receipts relating to business outside India, income of foreign concerns from investments outside India etc. It is clear from the nature of these deductible items that they are items in which generally labour would not have made any contribution. Having thus arrived at the gross profits, section 6 provides for deduction of prior charges Set out in cls. (a), (b), (c) and (d). Clause (a) allows the deduction of depreciation admissible under section 32 ( 1 ) of the Income Tax Act or a similar provision under other Acts charging direct taxes, but not depreciation unabsorbed in any earlier previous year by reason of there being no profits or gains chargeable for that year or of such profits or gains being less than the allowance allowable under section 32(2) of the Income Tax Act. The result is that while making his P & L account the employer would deduct both 'the depreciation allowable under section 32(1) as. also the depreciation unabsorbed during the earlier years. The whole of Such depreciation, however, has to be added back under item 2(b)of Sch. II while computing the gross profits. Notwithstanding such adding back of depreciation allowable under both sub secs. 1 & 2 of section 32 of the Income Tax Act, the depreciation deductible under s.6(a) of the Act is the one allowed under section 32(1), that is, the depreciation relating to the accounting year only and not the depreciation unabsorbed in any earlier accounting year. Similar is the position regarding bonus paid during the accounting year but which relates to the earlier accounting years. Even in the case of an employer keeping his accounts on mercantile basis, he would not get a deduction of bonus though payable but not actually paid during the accounting year. He would, however, be entitled to deduct such bonus from his taxable profits and gains as expenditure incurred wholly for the business. Under Sch. II Item 3(a) bonus, even though paid during the accounting year, has to be 774 added back if it is deducted in the P & L account. The net profit in the P & L account: would thus not be the same as the available surplus worked out under 'the Act, The same is the position of losses and expenditure relating to a foreign business which though allowable under ' the Income Tax Act have to be added back to the net profit shown in the P & L account. As already stated deductions permissible under Sch. 11 are those items in which it can be said that labour could have made no contribution in earning them So far as development rebate is concerned, section 6(b) allows the whole of such rebate allowable under the Income 'Fax Act and, therefore, there would be no difficulty in working out the development rebate under this head and the Income Tax Act. Coming now to cl. (c) of section 6, is it the actual taxable income, the direct tax on which is a prior charge, which is to be worked out, or the tax ' on the estimated balance of gross profits after deducting depreciation and development charges but without deducting the bonus payable during the year ? In other words, when the Tribunal. reaches the stage ' of cl. (c), does it have to assess the taxable income in accordance with the various provisions of the Income Tax Act just as an Income Tax Officer would do and assess the liability of income tax on such taxable income according to the rates applicable during the particular accounting year, or should it compute the balance of gross profits and as stated above and apply the said rates and estimate the amount of direct tax and deduct them from the remain gross profits? Bonus being payable within eight months after the close of the accounting year in cases.where there is no dispute pending before an authority under section ,22 of the Act as provided by section 19, it is hardly possible, except in rare cases, that assessment under the Income Tax Act and other such Acts would be completed by the time bonus has to be paid; Therefore, the Tribunal would not have before it the taxable income assessed by the Income Tax and other such officers. If the Unions ' contention were to be right, there would be two or more parallel authorities working under this Act and the Income Tax Act and other such Acts who would have to assess taxable income and the tax payable thereon, before all of whom the employer would have to prove his taxable income. Prima facie, it would seem that the Bonus Act could not intend an enquiry into the actual taxable income worked out under all the elaborate provisions relating to deductions, allowances, reliefs, rebates etc. provided by the Income Tax Act and other such Acts. This is particularly so as in each bonus dispute the Tribunal not equipped with the detailed knowledge of all such Acts would have to undertake an. enquiry into the various deductions, rebates. reliefs etc. claimable by the employer under those Acts. The fact that payment of bonus cannot brooke delay without causing 775 hardship to labour would seem to militate against the possibility of such prolonged enquiries. The key to the words in section 6(c), namely, "is liable to pay" emphasised on behalf of the unions and some of the interveners lies in the opening words "subject to the provisions of section 7" in cl. These words are used, whether the tax liability is to be calculated on actual taxable income or on the notional amount worked out under sections 4 and 6 and Sch. II, because the direct taxes payable by the employer are to be calculated at the rates applicable during that year as provided by section 7. That both such amounts cannot be the same is clear because section 7 in express terms prohibits taking into account unabsorbed losses and arrears of depreciation allowable under section 32(2), the exemption allowed under section 84 and the deduction allowed under section 101(1) of the Income Tax Act. Similarly, where an assessee is a religious or charitable institution and its income either wholly or partially, as the case may be, is exempt under the Income Tax Act, such an employer to whom section 32 of the Act does not apply is treated as a company in which the public are substantially interested and its income is to be assessed accordingly by the Tribunal and compute its liability for direct taxes. Clause (c) of section 7 does away for the purposes of sections 6 and 7, the distinction between the liability of an individual and a Hindu Undivided Family under the Income Tax Act and provides that the income derived by such a Hindu Undivided Family is to be treated as the income of that employer as an individual. Likewise, where profits and gains of an employer include profits from export, a rebate allowed under the Income Tax Act on such profits is not to be taken into account while working out the tax. liability under section 6(c). Also, the rebate allowed under any of the Acts levying direct taxes on sums spent on development of an industry is also not to be taken into account while computing the tax liability. It was, however, argued that the provisions of section 7 lay down the only departure from the Income Tax Act and that except for that departure the Tribunal must assess the actual taxable income and arrive at the tax liability thereon at rates prevailing during the accounting year in question. In our view this submission is not correct. What section 7 really means is that the Tribunal has to compute the direct taxes at the rates at which the income, gains and profits of the employer are taxed under the Income Tax Act and other such Acts during the accounting year in question. That is the reason why section 6(c) has the words "is liable for" and the words "income, gains and profits". These words do. not, however, mean that the Tribunal while computing direct taxes as a prior charge has to assess the actual taxable income and the taxes thereon. How can the Tribunal arrive at the amount of bonus to be paid to labour without first estimating the amount of taxes and deducting it from the gross profits and thus ascertaining the 776 available surplus ? If it were to reverse the process and first deduct bonus and ascertain the tax amount, it would have to do so on a somewhat ad hoc figure thus bringing about the same result deprecated by this Court in decisions referred to above. This and the other difficulties already pointed out must deal to the result that the Tribunal must estimate the amount of direct taxes on the balance of gross profits as worked out under sections 4 & 6, but without deducting the bonus, then work out the quantum of taxes thereon at rates applicable during that year to the income, gains and profits of the employer and after deducting the amount of taxes so worked out arrive at the available surplus. Section 6(c) being subject to section 7 the computation has to be done without taking into account the items specified in section 7(a) and in the manner prescribed by the remaining clauses of that section. This interpretation is commendable because: (1 ) it is consistent with the words "is liable to pay" in section 6(c), (2) it is in harmony with the provisions of sections 4 and 6 and Sch. 11, and (3) it is consistent with the intention of Parliament apparent from the scheme of computation of available surplus in the Act. The Act recognises the principle laid down in the Full Bench Formula that both labour and capital are entitled to a share in the profits. That is why 40 p.o. of the available surplus is left to the capital and interest is allowed to the employer on paid up and working capitals while working out the gross profits. Parliament besides was or at any rate is presumed to have been aware that depreciation allowed under the Income Tax Act would not be sufficient for rehabilitation purposes. It did away with rehabilitation as a prior charge partly became there were complaints that it was being ill used, but partly also because it knew that the rebate in Income Tax Act on bonus paid would go to the employer with which he could recoup the depreciation which would be larger than the one allowed under section 32 of the Income Tax Act. In our view it was for that reason that it did not lay down that bonus is to be deducted before computing the amount on which direct taxes are to be calculated under section 6(c). If Parliament intended to make a departure from the rule laid down by courts and tribunals that the bonus amount should be calculated after provision for tax was made and not before, we would have. expected an express provision to that effect either in the Act or in the Schedules. 'In our view the contention urged by the Company that the tax liability is to be worked out by first working out the gross profits and deducting therefrom the prior charges under section 6 but not the bonus payable to the employees is right. In the result, the appellant Company succeeds on the questions of development rebate and the provision for gratuity amount. Its appeal on those questions is therefore allowed and to that extent the award is set aside. As regards the question of depreciation 777 amount the Tribunal will ascertain the amount afresh after giving the parties opportunity to lead such evidence as they desire and taking that amount and the amounts of development rebate and ' of the provision for gratuity in the light of this judgment, the Tribunal will adjust it award and arrive at the quantum of bonus payable to the workmen. Appeal by workmen is dismissed. There will be no order as to costs. R.K.P.S. Appeal by Company allowed in part. Appeal by Workmen dismissed.

The assessee was running a business of plying buses and during its previous year ending on August 16, 1959, the buses had been plied for part of the year but were sold thereafter. The Income tax Officer assessed the difference between the sale price of the buses and their written down value to tax as profit under the second proviso to section 10(2) (vii). In appeal, the Appellate Assistant Commissioner rejected the assessee 's contention that the business had been transferred as a whole and therefore the profit in question could not be taxed. The Tribunal also dismissed an appeal taking the view that the buses had been plied by the assessee for part of the previous yea.r and the profit on the sale of these buses was taxable under the said provision. However, the High Court, upon a reference, held that the amount in question was not assessable as profit under section 10(2)(vii) on the assumption that the whole of the bus service business had been wound up during the relevant period. On appeal to this Court. HELD: allowing the appeal: Even on the assumption that the sale of the buses was a closing down or a realization sale it would nonetheless be taxable since the sale was made after the amendment of the second proviso. section 10(2)(vii) by Act 67 of 1949. [533 F G] According to the law laid down by this Court the view of the High Court would have been sustainable if the sale in the present case had been effected during the assessment year prior to the amendment of the proviso by Act 67 of 1949. The critical words which were inserted by that proviso namely, "whether during the continuance of the business or after the cessation thereof", must be given their proper meaning. It is quite plain that if the building, machinery or plant is sold during the continuance of the business or after the business ceases, the sale proceeds would be liable to tax in accordance with the proviso. When the legislature clearly provided that the proviso would apply even if the sale was made, after the cessation of the business, it is difficult to conceive that it was intended to exclude from the ambit of the proviso a sale made for the purpose of closing down the business or effecting its cessation. [535 F H] Commissioner of Income tax, Madras Iv. Express Newspapers Ltd., Madras, , 195; Commissioner of Income tax, Kerala vs West Coast Chemicals and Industries Ltd. ; Commissioner of Income tax, Kerala vs R.R. Ramakrishna Pillai, and The Liquidators of Pursa Limited vs Commissioner of Income tax, Bihar; , ; distinguished. Commissioner of Income tax vs Ajax Products Ltd., ; ; referred LI 3Sup. CI/68 3 532

iminal Appeal No. 80 of 1970. Appeal by Special Leave from the Judgment and Order dated the 23rd October, 1969 of the Delhi High Court in Criminal Appeal No. 61 of 1069 (Murder Reference No. 3 of 1969) Harjinder Singh and section Sodhi, for the appellant G. Das and R. N. Sachthey, for the respondent 695 The Judgment of the Court was delivered by CHANDRACHUD, J. This appeal by special leave is directed against a judgment of the High Court of Delhi: confirming the conviction of the appellant under section 302 of the Penal Code but reducing the sentence of death imposed on him by the learned Additional Sessions Judge, Delhi to life imprisonment. The charge against the appellant is that on the night between the 17th and 18 August, 1968 lie committed the murder of one Ram Kumar. On April 11, 1968 Ram Kumar, his brother Shiv Kumar, their mother and the appellant left Kanpur for Moradnagar. On,April 15 Ram Kumar, Shiv Kumar and the appellant left Moradnagar for Delhi for purchasing a secondhand motor cycle. Shiv Kumar went back to Moradnagar for catching a bus to Kanpur. At about 7 15 p.m. on April 15, 1968 Ram Kumar and the appellant booked a room at Hindustan Hotel, Ballimaran, Delhi. They signed their names in the hotel register and entered therein their Kanpur address. On the 16th they were admittedly together and while in search of a motor cycle they met Abdul Hafeez, Babu Khan and Om Prakash. On the 17th morning Ram Kumar and the appellant struck a deal with Babu Khan and Om Prakash agreeing to purchase from them a motor cycle for Rs. 1,000/ . Ram Kumar paid a sum of Rs. 251 by way of advance and the sellers agreed to ,deliver the motor cycle in the evening. At about 6 p.m. on the 17th evening Babu Khan and Om Prakash went to Hindustan Hotel with the motor cycle and met Ram Kumar, who told them that he was short of money by three or four hundred rupees and that he had sent the appellant to get the amount from his (the appellant 's) Ustad. Babu Khan and Om Prakash waited till about 9 30 p.m. but the appellant did not turn up and so they went away with the motor cycle. The case of the prosecution is that at about 12 30 a.m. on the night between the 17th and 18th the deceased Ram Kumar and the appellant were seen going to their hotel room by Lal Chand, a partner of the hotel. It is further alleged that at about 10 a.m. on the 8th morning, Lal Chand and his brother Tek Chand saw the appellant locking the room and leaving the hotel. On April 20th, the hotel premises were full of a foul smell and thereupon the lock of the room which was occupied by Ram Kumar and the appellant was broken open. Inside the room was found the dead body of Ram Kumar with two stab injuries, one near the right eye brow and the other near the right ear and nine contused lacerated wounds on the scalp, each injury being brain deep. According to medical evidence the stab injuries were caused with a pointed, sharp edged weapon ,while the other injuries were caused by a hard, blunt substance. Soon after the discovery of Ram Kumar 's dead body Lal Chand lodged the First Information Report at the Lahori Gate police station stating that two, persons who had entered their names as Nasim Mahazroo and Ram Kumar occupied a room in his hotel on April 15, 696 that he had seen them entering the room at about 10 30 p.m. of the night between 17th and 18th April and that the younger of the two (namely Nasim, the appellant) had locked the room at about 10 a.m. on the 18th and had not returned since then. The First Information Report then refers to the circumstances in which the dead body of Ram Kumar was found in the room. The appellant could not be found at Kanpur where he normally resides and it was on May 4, 1968 that he was arrested at Gaya (Bihar) in the house of his sister. On a search of that house an attache case containing clothes, a spanner set, an allenkey set and a connecting, rod are said to have been recovered. According to the prosecution. , the appellant committed the murder of Ram Kumar with the motive of committing theft of about six or seven hundred rupees which he had kept with him for purchasing the motorcycle. The appellant admitted that he was on friendly terms with Ram Kumar and that they had gone to Delhi for purchasing a motor cycle. He also admitted that Ram Kumar agreed to purchase the motor cycle from Babu Khan and Om Prakash, that a sum of Rs. 25/ was given to Om Prakash by way of advance, that he, the appellant, was asked by Ram Kumar to raise some money from his Ustad to make up the price of the motor cycle and that during his absence, Om Prakash and Babu khan had come to the hotel but had, left before he reached the hotel. The version of the appellant is that he was unable to get the required amount from his Ustad and therefore on reaching the hotel at about 9 p.m. on the 17th he told Ram Kumar that be would go to Kanpur and bring the amount. He claims to have left for Kanpur by the 9 45 p.m. train reaching there at 6 a.m. on the 18th. He obtained a sum of Rs. 450/ on April 19 from one Rafi and arrived in Delhi on the evening of April 20. He says that be went to Ballimaran where the Hindustan Hotel is situated and on hearing rumors that a person was murdered in the hotel and that his name was involved in it he Bed to Gaya out of fear. He denied that any of the incriminating articles were recovered from his sister 's house. This is a case of circumstantial evidence and it is therefore necessary to find whether the circumstances on which the prosecution relies are capable of supporting the sole inference that the appellant is guilty of the crime of which he is charged. The circumstances, in the first place, have to be established by the prosecution by clear and cogent evidence and those circumstances must not be consistent with the innocence of the accused. For determining whether the circumstances established on the evidence raise but one inference consistent with the guilt of the accused, regard must be had to the totality of the circumstances. Individual circumstances considered in isolation and divorced from the context of the overall picture emerging from a consideration of the diverse circumstances and their conjoint effect may by themselves appear innocuous. It, is only when the various circums tances are considered conjointly that it becomes possible to understand and appreciate their true effect. If a person is seen running 697 away on the heels of a murder, the explanation that he was fleeing in panic is apparently not irrational. Blood stains on the clothes can be attributed plausibly to a bleeding nose. Even the possession of a weapon like a knife can be explained by citing a variety of acceptable answers ' But such circumstances cannot be considered in watertight compartments. If a person is found running away from the scene of murder with blood stained clothes and a knife in his hand, it would, in a proper context, be consistent with the rule of circumstantial evidence to hold that he had committed the murder. The circumstances on which the High Court relies are these (1) that on April 15, 1968 the appellant and the deceased .Ram Kumar arrived at Delhi for purchasing a motorcycle; (2) that on the evening of the 15th they occupied Room No. 2 in the Hindustan Hotel, Delhi; (3) that on the 16th, the two were together and were looking out for a secondhand motor cycle; (4) that on the 17th the deceased agreed to purchase a, motor cycle from Babu Khan and Om Prakash and paid a sum of Rs. 25/ to Om Prakash by way of advance. The motor cycle needed repairs and the sellers agreed to deliver it in. the evening; (5) that the price of the motor cycle was fixed at Rs. 1000/but the deceased was short of money by about Rs. 400/ ; (6) that on the evening of the 17th Babu Khan and Om Prakash went to the hotel to deliver the motor_cycle when the deceased told them that the appellant had gone to bring the money from his Ustad. Babu Khan and Om, Prakash waited till about 9 p.m. and since the appellant had hot returned till then they left with the motor cycle; (7) that Lal Chand (P.W. 1), a partner of the hotel saw the appellant and the deceased coming to the hotel at about 12 30 a.m.; (8) that at about 10 a.m. on the 18th Lal Chand and his brother Tek Chand (P.W. 2) who run the hotel in partnership saw the appellant locking Room No. 2 and leaving the hotel; (9) that the appellant went to Kanpur on the 18th and got new clothes stitched for himself from a tailor there on, payment of Rs. 60/ as tailoring, charges. Appellant was generally in poor financial circumstances; (10) that during his stay at Kanpur the appellant stayed at 'Himachal Hotel ' in an assumed name. 'section N. Gander. He booked a room in the hotel at 5 30 p.m. on the 18th and left the hotel at 4 p.m. on the 19th; 698 (11) that the appellant was traced at Gaya, Bihar, on May 4.1968 in the house of his sister. On a search of that house a 'connecting rod ' having stains of human blood was recovered along with other articles. There is clear and un controverted evidence to show that the deceased bad, a sum at least of about Rs. 700/ with him, that he wanted .to purchase a motorcycle, that he and the appellant were occupying Room No. 2 in the Hindustan Hotel, that it was agreed to purchase a motor cycle for Rs. 1000/ from Babu Khan and Om Prakash and that the deceased had deputed the appellant on the 17th evening to get the deficit amount of about Rs. 300./ from the latter 's Ustad. These facts were never disputed and are not in dispute before us eithe r. The crucial point of time at which the prosecution and the defence part company is the mid night between the 17th and the 18th. Lal Chand has stated in his evidence that at about 12 30 a.m. he saw the deceased and the appellant entering Room No. 2. It was urged by the learned counsel appearing on behalf of the appellant that Lal Chand may have made a mistake in identifying the. companion of the deceased but we see no foundation for this submission. Lal Chand is a proprietor of the Hindustan Hotel and he was neither interested in the deceased nor did he have any grudge against a customer like the appellant. It is significant that in the First Information Report which Lal Chand lodged at the Lahori Gate police station on the evening of the 20th, he has specifically mentioned that he saw the deceased and the appellant entering the room at about 12 30 a.m. on the night between the 17th and the 18th. At the time when that Report was lodged no one had any clue to the murder and Lal Chand could not have started building up a theory of his own so as to implicate the appellant falsely. The evidence of Lal Chand shows that the appellant and the deceased spent the night in Room No. 2. Counsel for the appellant also challenged the evidence of Lal Chand and Tek Chand that they saw the appellant locking the room at about 10 a.m. on the 18th and leaving the hotel. This fact is also specifically mentioned in the First Information Report which, in our opinion. is a highly significant circumstance. The case of the appellant is that he left Delhi at about 9.45 p.m. on the 17th and therefore be could not have been seen locking the room at 10 a.m. on the 18th. The evidence of Chhedi Lal, the Manager of Yasin Tailors, Kanpur, is relied upon as showing that the appellant was in Kanpur at least at about 2 pm. on the 18th and therefore he could not have left Delhi as late as at 10 a.m. The train takes more than 8 hours to cover the 'distance between Delhi and Kanpur. Chhedi Lal was obviously trying to offer a helping hand to the, appellant but even then his evidence does not show that the appellant had delivered the cloth to him at 2 p.m, on the 18th. In answer to, a question put by the learned Sessions Judge, Chhedi Lal stated that he did not remember the exact time when the cloth was delivered to him by the appellant and that the 'Cloth may have been delivered at any time between 12 noon and 8 p.m. 699 on the 18th. The Sessions Court and the High Court were therefore. , right in accepting the evidence of Lal Chand and Tek Chand that the appellant locked the room at about 10 a.m. and left the hotel. These two circumstances are by themselves sufficient to determine the guilt of the appellant. The appellant and the deceased occupied a room in the Hindustan Hotel, they were seen entering the room together at mid night between the 17th and 18th and the appellant locked the room on the 18th morning and left the hotel. From that room was discovered the dead body of. Ram Kumar on the 20th. The sum of Rs. 700/ which the deceased had on him was found missing and at the Kanpur end, the appellant was indulging in what for a man of his means was a spree of extravagance. He obtained terylene cloth and paid a bill of Rs. 60/ to the tailor while his friend was lying dead at Delhi. The appellant is supposed to have gone to. Kanpur to obtain the deficit sum of Rs. 300/ and if he was truly on such a bona fide mission, it passes comprehension that he should have stayed in the Himachal Hotel, Kanpur in the false name of section N. Gander. The conduct of the appellant after his arrival at Kanpur on the 18th is a valuable link in the chain of causation. He knew that the.amount was required by his friend urgently and that his friend was waiting for him in Delhi. On his own showing, he had a merry time.in Kanpur and according to him it was on the 20th that he went back to Delhi. And what should he have done ?. He says that he went to, Ballimaran locality where the Hindustan Hotel is situated and then to the hotel itself. Having come to know there that he was being involved in a murder which had taken place in the hotel, he claims to, have fled to Gaya, out of sheer fear. This explanation is wholly irrational and is false. He and the deceased were on intimate terms and there is evidence showing that the deceased and his family used to treat him as of their own kin. If he were innocent, he would have in quired about his benefactor in a moment of sorrow and would not have.run away under the magic spell of a strange sense of fear. Added to the weight of these circumstances is the discovery of the blood stained connecting rod from the house of the appellant 's sister. That discovery was challenged before us because the two witnesses who acted as Panchas to the seizure memo turned hostile and the prosecution was left to depend on the testimony of two police officers to prove the discovery. That the two witnesses turned hostile was not surprising because both of them are closely related to the appellant. It would have been better if the prosecution had examined the other Panch, Sayyed Habib ul Rab, who is described as a retired Judge in the Memo of Seizure. The Investigating Officer, however was not asked as to why he was not examined and we see no warrant for assuming that the witness though available was. deliberately kept back. The postmortem report shows that on the person of the deceased were found two stab injuries and nine contused lacerated wounds. 700 The nature of the injuries shows that two different weapons were used in the commission of Ram Kumar 's murder. But in the light of the various circumstances discussed above, it is impossible to accept the inference pressed upon us on behalf of the appellant that not only were two different weapons used but at least two persons had participated in the commission of the murder. Even granting that there was more than. one person, there is no doubt that the appellant had ;participated and was a key figure in the commission of the crime. We therefore dismiss the appeal and confirm the order of conviction and sentence. P.B.R. Appeal dismissed.

The respondent was employed in a company. The contract of service Provided for, the termination of service by giving three months notice or three months pay ,in lieu thereof without assigning any cause. The company gave him a notice that it was found that his performance and conduct have not been good and that he had not proved useful to the company. He was therefore advised to try for alternative employment. He was informed that he would be released from the company at his request on payment by him of the amount under a bond executed by him with some concession. The respondent thereupon filed a suit claiming various reliefs. He, did not ask for an interim injunction restraining the appellant and the company from terminating his service during the pendency of the suit, nor did the appellant and the company give any such undertaking. The company gave the respondent notice terminating his service with effect from the date of the service of the notice and granted him three months ' pay. The High Court hold that the act of giving the second notice amounted to con. tempt of court because, as a result of the termination some of the reliefs Prayed for would become infructuous and that would amount to obstruction or interference with due course of justice. Allowing the appeal to this Court, HELD Where a party to a suit terminates the service of the adversary party in the honest exercise of his rights under the contract of service and in the absence of any interim injunction or undertaking,, the act would not constitute contempt of court. [653 B C] (a) A combined reading of the two notices shows that the appellant had terminated the service in the honest exercise of the right vested in the company by the contract of service. The order did not threaten the respondent to withdraw the whole or part of the suit. [653 C] (b)The circumstance that one or more of the reliefs claimed in the plaint had become infructuous on account of the termination would not establish contumacy, because the respondent was free amend his plaint and ask for an appropriate relief. [653 D] (c) The fact that the appellant had tendered an unconditional apology in the High Court is not a ground for this Court refusing to interfere, because, (i) the High Court had in fact held that appellant has committed contempt though it did not award punishment because of the apology and(ii)the High Court had directed the appellant to pay cost to the respondent. [654 B] Taka Qim Goakar vs R. V. Shakla, ; , fang Bahadur Singh vs Baij Nath rewari, Cand Malojirao Shitole vs C. G. Matkar, A.I.R 1953 M. B. 245, referred to. Pratap ginirh vs Gurbaksh Sinqh, [1962] Supp. 2 S.C.R. 838, and Govind Sahl vs State of U. P. [1969] 1 S.C.R. 176, distinguished.

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 respondent industry entered into an agreement with the appellant Board for supply of electricity on 5th March, 1965. Under the agreement, which was valid for five years i.e. upto 5th March 1970, consumer was obliged to pay certain minimum charges in any event. However, on 30th April, 1968 supply of electricity to respondent was disconnected for non payment of electricity charges. Since the respondent also failed to pay the minimum charges for the period subsequent to the date of disconnection, the Electricity Board riled a suit for the amount due on account of the electricity consumed upto April 30, 1968 and for the minimum charges from May 1, 1968 to March 5, 1970. The Trial Court decreed the suit. The respondent preferred an appeal before the High Court which sustained the Trial Court 's decree only for the period upto the date of disconnection but disallowed the claim for the period subsequent to the date of disconnection on the ground that since the respondent did not avail of any energy whatsoever during the period subsequent to the disconnection it was not liable to pay the minimum charges for that person. In appeal to this Court it was contended on behalf of the Electricity Board that in view of the judgment of this Court in the case of Bihar State Electricity Board, Patna and Ors. vs M/s Creen Rubber Industries and Ors., [1990] 1 S.C.C. 731 the respondent was liable to pay the minimum charges for the period subsequent to disconnection. 861 Allowing the appeal and setting aside the order of the High Court, this Court, HELD: Clause (13) of the agreement between the parties does oblige the consumer to pay a certain minimum charges in any event. The judgment and decree of the Trial Court is restored. [862 E, 863 D] Bihar State Electricity Board, Patna & Ors. vs M/s Green Rubber Industries and Ors., [1990] 1 S.C.C. 731, relied on.

l Appeal No. 138 of 1992 From the Judgment and Order dated 30.8.1991 of the Central Administrative Tribunal,Principal Bench, New Delhi in O.A.No. 1177 of 1987. G.D. Gupta and Ashok K. Mahajan for the Appellant. K.T.S. Tulsi, Hemant Sharma and Vijay K.Mehta for the Respondents. The Judgment of the Court was delivered by AHMADI, J. Special leave granted. Heard counsel on both sides. The facts giving rise to this appeal, briefly stated, are as under : One MR.Jaisani, a direct recruit, was holding the post of Assistant Director General (prevention of Food Adulteration) in the Ministry of Health and Family Welfare of the Government of India. On his passing away sometime in july 1989, a vacancy arose which was required to be filled under the extant recruitment rules. The recruitment rules which were then in operation provided for the said post being filled in by direct recruitment only. A requisition was sent to the Union Public Service Commission (Commission ' hereafter) sometime in November, 1989, for selection of a candidate for filling in the vacancy in question. However, before the Commission could advertise the post, the Union Government informed the Commission by letter dated December 29, 1989 received by the Commission on January 1, 1990 not to proceed with the process of selection it was examining the question of opening up an avenue for promotion from Assistant Secretary to the post in question Notwithstanding the said communication, the commission advertised the post in January 1990, The appellant applied for the same and was called for an interview on December 13,1990. Thereupon the first respondent, Mrs. Debi Mukherjee,who was then serving as Assistant Secretary, and was hoping to be promoted as Assistant Director General on the amendment of 4 the recruitment rules approached the Central Administrative Tribunal. New Delhi and obtained an interim order staying the process of selection initiated by the Commission. It may here be mentioned that in the meantime two further layers above that of Assistant Secretary came to be created providing for higher pay scales by an amendment of the rules pursuant to the directions given by this Court in Writ petition No. 1118/89 read with the directions in the Contempt Petition No. 5/90 dated May 4, 1990. The two layers thus created provided for higher pay scales but no separate designations. The question regarding the appointment to the vacancy created on the demise of Jaisani, however, had still to be dealt with. The appellant who was affected by the Tribuanl 's Order approached for impleadment/intervention but the Tribunal did not allow the same although we are told that the Tribunal gave a hearing to the counsel for the appellant. The Tribunal ultimately disposed of the petition with a direction to the concerned Ministry to provide promotional avenues to the applicant who had functioned in the post of Assistant Secretary for several years and had held the charge of Assistant Director General as and when the occasion arose. Three months ' time was granted to the concerned Ministry to carry out the directions. The failure to carry out the directions had led to the filing of a Contempt Application also. The grievance of the appellant is two fold. Firstly, he contends that once the process for selection had started it was not open to the Government as well as the Tribunal to freeze the process and the Commission was entitled to complete the selection. The second point urged was that the fact of the creation of tow layers by the amendment of the relevant rules had been totally over looked by the Tribunal even though its attention was drawn to the same by counsel for the appellant. In support of the first contention, strong reliance was placed on the decision of this Court in N.T. Devin Katti & Ors. vs Karnataka Public Service Commission & Ors. ; In that case this Court observed that a candidate who is eligible and otherwise qualified in accordance with the relevant rules and the terms of the advertisement acquires a vested right of being considered for selection in accordance with the rules as they existed at the date of advertisement. He cannot be deprived of that limited right on the amendment of rules during the pendency of selection unless the amended rules are retrospective in nature. While making these observations, it was made clear that a candidate on making an application for a post pursuant to an advertisement does not acquire any vested right of selection or of appointment to the post in question. This is obvious from the ratio of this Court 's decision in Jatinder Kumar & Ors., In that case, it was clarified that an independent body like the 5 Commission is established to ensure selection of best available talent for appointment to the post in question to avoid arbitrariness and nepotism in the matter of appointment. The selection has to be made by the Commission and on the basis thereof the Government has to fill up the post adhering to the order of merit drawn up by the Commission. This Court emphasised that the selection by the Commission is only recommendary in nature and the final authority for appointment is the Government, and if the Government declined to accept the recommendation the Constitution enjoins the Government to place on the table of the legislature its reasons and report for so doing. Thereby the Government is made answerable to the elected representatives under the Constitution. This however, does not clothe the selectee with any right to appointment that is to say that he cannot force the Government to accept the recommendation of the Commission but the Government has to make the appointment strictly in accordance with the recruitment rules and merits as determined by the Commission and it cannot disturb the list at its sweet will. Nor can the Government appoint a person whose name does not appear in the list. It is obvious from the ratio of these two decisions to which our attention was pointedly drawn that if the Commission issued an advertisement at the behest of the Government and pursuant thereto calls a candidate for interviews, the candidate has a right to be considered for selection but not a right to be selected or to appointment to the post in question. The right to selection crystalises only after the candidate is called for interview pursuant to the advertisement. But in the instant case the question is whether the Government can withdraw the requisition sent to the Commission for initiating the process of selection because at the point of time no right had crystalised in anyone for being considered for selection. If the Government is at a given point of time considering the question of amending the recruitment rules with a view to providing for promotion to the post in question, the Government can before an advertisement is issued by the Commission and the process of selection is under way request the Commission to withdraw the same till it decides on the question of amending the rules. The decision of the Government to withdraw the requisition sent to the Commission in NOVEMBER 1989 before the issuance of the advertisement does not interfere with any vested right of selection because that stage had yet not reached. In the instant case, that is exactly what happened. Therefore, before the appellant acquired a right to be considered for selection the Government had already intimated that it was examining the question of amending the recruitment rules with a view to providing for appointment by promotion to the post in question. Once this decision was communicated to the Commission before it had set the process of selection in motion by issuing an advertisement, it was not open to the Commission to insist that it will go ahead with the selection process as the extant rule provided for 6 promotion by direct recruitment and the Government could amend the recruitment rules retrospectively, if it so desired, with a view to providing for appointment by promotion. Such an exercise by the Commission would be an exercise in futility, waste of public time and money and hardship to candidates who seek appointment. Whether to provide for promotion as a mode of appointment to the post in question is a matter of policy left to the Government to decide and if it desired that the selection process should be held in abeyance till the question was examined and a final decision was taken thereon, it was not open to the Commission to ignore the communication of the Government in that behalf and proceed to set the selection process in motion. We think the action of the Commission was somewhat hasty and unjustified. The appellant, therefore, cannot claim any vested right as urged by his learned counsel. Nor can the Tribunal 's omission to notice that two new layers were created have a bearing on the Government 's decision to place the process of selection in hibernation till a final decision is taken on the proposal to provide for promotion to the post. For the above reasons, we are of the opinion that the decision reached by the Tribunal does not require any interference at our hands in exercise of the power under Article 136 of the Constitution. Hence, the appeal fails and is accordingly dismissed with no order as to costs. R.P. Appeal dismissed.

The Union government sent a requisition to the Union Public Service Commission for selection of a candidate to post of Assistant Director General (Prevention of Food Adulteration)in the Ministry of Health and Family Welfare which, under the extant rules, was to be filled in only by direct recruitment. However, before the Commission could advertise the post,the Government informed it not to proceed with the process of selection as it was examining to fill up the post by promotion of Assistant Secretary. But inspite of this,the commission Advertised the post and the appellant was called for an interview where upon Respondent No.1, an Assistant Secretary who was expecting her promotion to the post on amendment of the rules,obtained an interim order from Central Administrative Tribunal, staying the process of selection initiated by the Commission. The appellant, feeling affected by the said order, unsuccessfully moved the Tribunal for impleadment. Meanwhile two further layers above that of Assistant Secretary, though in higher pay scales but with no separate designations, were created by an amendment of rules in pursuance of this Court 's direction, The Tribunal disposed of the application directing to provide promotional avenues to Respondent No.1 who, while functioning as Assistant Secretary, had also occasionally held the charge of Assistant Director General. Aggrieved, the appellant preferred the appeal by special leave to this Court. It was contended by the appellant that once the process for selection had started, it was not open to the Government as well as to the Tribunal to freeze the process and the Commission was entitled to complete the selection; and that the fact of creation of two layers by the amendment of the rules was wrongly overlooked by the Tribunal. Dismissing the appeal, this Court, 2 HELD : 1.1 If the Government is at a given point of time considering the question of amending the recruitment rules with a view to providing for promotion to a particular post, it can, before an advertisement is issued by the Commission and the process of the selection is under way, request the Commission to withhold the same till it decides on the question of amending the the rules. (p.5E F) 1.2 Whether to provide for promotion as a mode of appointment to the post in question is a matter of policy left to the government to decide.(p.6AB) 1.3 Once the decision of the Government to withdraw the repuisition was communicated to the Commission before it had set the process of selection in motion by issuing an advertisement, it was not open to the Commission to go ahead with the selection process as the Government could amend the recruitment rules retrospectively, if it so desired, with a view to providing for appointment by promotion .Such an exercise by the Commission would be one in futility, waste of public time and money and hardship to candidates who seek appointment.(pp.5GH;6A) The action of the Commission was somewhat hasty and unjustified.(p.6B) 2.1 If the Commission issues an advertisement at the behest of the Government and pursuant thereto calls a candidate for interview, the candidate has a right to be considered for selection but not a right to be selected or to appointment to the post in question. The right to selection crystalises only after the candidate is called for interview pursuant to the advertisement.(p.5 C D) N.T. Devin Katti & Ors. vs Karnataka Public Service Commission & Ors.(1990) 3 SCC 157 and Jatinder Kumar & Ors.v. State of Punjab & Ors. (1985)1 SCR 899, referred to. 2.2 In the instant case, the decision of the Government to withdraw the requisition sent to the Commission before the issuance of the advertisement dose not interfere with any vested right of selection because that stage had yet not reached.(p.5F) 2.3 Before the appellant acquired a right to be considered for selection the Government had already intimated that it was examining the question of amending the recruitment rules with a view to providing for appointment by promotion to the post in question. (p.5G) 3 2.4 The appellant, therefore, cannot claim any vested right. Nor can the tribunal 's omission to notice that two new layers were created have a bearing on the Government 's decision to place the process of selection in hibernation till a final decision is taken on the proposal to provide for promotion to the post. (p.6BC)

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

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

ON: criminal Appeal No. 184 of 1956. Appeal. from the judgment and order dated October 15, 1956, of the former Nagpur High Court in Criminal Appeal No. 205 of 1956 and Criminal Reference No. 15 of 1956, arising out of the judgment and order dated July 10, 1956, of the First Additional District Judge, Nagpur in Sessions Trial No. 34 of 1956. 554 J. N. Banerjee and P. C. Agarwala, for the appellant. Jindra Lal and R.H.Dhebdr, for the respondent. September 25. The following Judgment of the Court was delivered by SINHA J. This appeal on a certificate of fitness under article 134(1)(c), granted by the High Court at Nagpur (as it then was), is directed against the concurrent judgment and orders of the courts below, so far as the appellant Khushal is concerned, convicting and sentencing him to death under section 302, Indian Penal Code, for the pre meditated murder of Baboolal on the night of February 12, 1956, in one of the quarters of the city of Nagpur. It appears that there are two rival factions in what has been called the Mill area in Nagpur. The appellant and Tukaram who has been acquitted by the High Court, are the leaders of one of the factions, and Ramgopal, P.W. 4, Inaya tullah, P.W. 1, and Tantu, P.W. 5, are said to be the lead ers of the opposite faction. Before the time and date of the occurrence, there had been a number of incidents between the two rival factions in respect of some of which Inayatul lah and Tantu aforesaid had been prosecuted. Even on the date of the occurrence, apart from the one leading to the murder of Baboolal, which is the subject matter of the present appeal, Tantu and Inayatullah had made two separate reports about the attacks on them by Khushal 's party. There was another report lodged by Sampat one of the four persons placed on trial along with the appellant, for the murder of Baboolal. That report was lodged at Ganeshpeth police station at about 9.30 p.m. on the same date February 12, 1956 against Inayatullah alias Kalia and Tantu, that they had attacked the former with sharp edged weapons (exhibit P 26). The prosecution case is that the appellant Khushal was on bad terms with Baboolal who was on very friendly terms with the leaders of the opposite faction aforesaid. Being infuriated by the conduct of Baboolal in associating with the enemies of the party of the accused, Sampat, Mahadeo, Khushal and Tukaram 555 suddenly attacked Baboolal with swords and spears and in flicted injuries on different parts of his body. The occur rence took place in a narrow lane of Nagpur at about 9 p.m. Baboolal was taken by his father and other persons to the Mayo hospital where he reached at about 925 p.m. The doctor in attendance Dr. Kanikdale (P.W. 14) at once questioned him about the incident and Baboolat is said to have made a statement to the doctor which the latter noted in the bed head ticket (exhibit P 17) that he had been assaulted by Khu shal and Tukaram with swords and spears. After noting the statement aforesaid, of Baboolal, the doctor telephoned to the Ganeshpeth police station where the information was noted at 9.45 p.m. On receiving the information, Sub Inspec tor A. K. Khan recorded 'exhibit P 1) and registered an offence under section 307, Indian Penal Code, and immediately went to the Mayo hospital along with a head constable and several con stables. He found Baboolal in a serious condition and suspecting that he might not survive and apprebending that it might take time for the magistrate to be informed and to be at the spot, to record the dying declaration, he consult ed Dr. Ingle, the attending doctor, whether Baboolal was in a fit condition to make a statement. The doctor advised him to have the dying declaration recorded by a magistrate. The Sub Inspector decided that it would be more advisable for him to record the dying declaration without any delay. Hence, he actually recorded Baboolal 's statement in answer to the questions put by him (exhibit P 2) at 10 15 p.m. In the meantime, Shri M. section Khetkar, a magistrate, first class, was called in, and he recorded the dying declaration (exhibit P 16) between 11 15 and 11 35 p.m. in the presence of Dr. Ingle who certified that he had examined Baboolal and had found him mentally in a fit condition to make his dying declara tion. Besides these three dying declarations recorded in quick succession, as aforesaid, by responsible public serv ants, Baboolal is said to have made oral statements to a number of persons, which it is not necessary to set out because the High Court has not acted upon those oral dying declarations. We 71 556 shall have to advert, later, to the recorded dying declara tions in some detail, in the course of this judgment. It is enough to say at this stage that the courts below have founded their orders of conviction of the appellant mainly on those dying declarations. Baboolal died the next morning at about 10 a.m. in hospital. Having come to know the names of two of the alleged assail ants of Baboolal from his recorded dying declarations, the police became busy apprehending those persons. They could not be found at their respective houses. The appellant was arrested four days later in an out house locked from out side, of a bungalow on Seminary Hill in Nagpur. The other person named as one of the assailants, Tukaram, was arrested much later. The prosecution case is that these persons were absconding and keeping out of the way of the police. After investigation and the necessary inquiry, four persons were placed on trial and the appellant was one of them. The Additional Sessions Judge acquitted two of them and convict ed the remaining two the appellant and Tukaram under section 302. Indian Penal Code, or in the alternative, tinder section 302, read with section 34, Indian Penal Code. He sentenced the appel lant to death because in his opinion, he had caused Baboolal 's death intentionally, and there were no extenuat ing circumstances. He sentenced Tukaram to imprisonment for life, because in the learned Judge 's view of the case, Tukaram had acted under the instigation of the appellant. Accordingly, the learned Additional Sessions Judge made a reference to the High Court for confirmation of the sentence of death. That reference was heard along with the appeal filed by the condemned prisoner. The reference, the appeal by the convicted accused persons, as also the appeal by the Government of Madhya Pradesh, against the two accused per sons who had been acquitted by the learned trial Judge, and the revisional application for enhancement of sentence passed upon Tukaram, also filed by the State Government, were all heard together and disposed of by one judgment, 557 by a Bench consisting of Hidayatullah C. J. and Mangalmurti J. The High Court, apparently with a view to understanding the evidence adduced in the case on behalf of the parties, made a local inspection on September 17, 1956, and recorded their impressions in a note which forms part of the record of the High Court. In a very well considered judgment, the High Court, by its judgment and orders dated October 13, 1956, acquitted Tukaram, giving him the benefit of the doubt caused chiefly by the fact that in the dying declaration (exhibit P 16) recorded by the magistrate as aforesaid, he has been described as a Teli, whereas Tukaram before the Court is a Kolhi, as stated in the charge sheet. The doubt was further accentuated by the fact that there were three or four persons of the name of Tukaram, residing in the neigh bourhood and some of them are Telis. The High Court exam ined, in meticulous details, the evidence of the eye wit nesses Inayatullah, P.W. 1, and Sadashiv, P.W. 3, and agreed with the trial Judge in his estimate of their testimony that those witnesses being partisan, their evidence could not be relied upon, to base a conviction. The High Court went further and came to the. conclusion that their evidence being suspect, could not be used even as corroboration, if corroboration was needed of the three dying declarations made by Baboolal, as aforesaid. They upheld the conviction and sentence of the appellant on the ground that the dying declarations were corroborated by the fact that the appel lant had been absconding and keeping out of the way of the police, and had been arrested under very suspicious circum stances. These circumstances and the alleged absconding by Tukaram were not so suspicious. as to afford corroboration against him. In that view, the High Court " very reluctant ly " gave the benefit of the doubt to Tukaram and allowed his appeal. The High Court also agreed with the trial Judge in acquitting the other two accused persons Sampat and Maha deo because these two persons had not been named in the dying declarations, and the oral testimony was not of such a character as to justify conviction. Accordingly, the Gov ernment appeal and 558 application in revision were dismissed. As against the appellant, the reference made by the learned trial judge was accepted and his appeal dismissed. Thus, under the orders of the High Court, only the appellant stood convicted on the charge of murder with a sentence of death against him. He moved the High Court for a certificate under article 134(1)(c) of the Constitution, and the High Court granted a " certifi cate of fitness ". Hence, this appeal. At the outset, we must repeat what this Court has observed in a number of appeals coming up to this Court on certifi cates of fitness granted by High Courts, mainly on questions of fact. The main ground for the grant of the certificate may be reproduced in the words of the High Court itself: "The main ground is that there is not enough evidence against the accused and that there is an error in our judg ment in holding that there was no evidence to show that Khushal whose absconding has been held to corroborate the dying declaration, was involved in a liquor case. During the course of the argument neither side drew our attention to the documents which were in the record; nor was any point made of it, though we questioned why the absconding should not be taken into consideration. Now it seems that there are one or two defence exhibits in which it has been shown that Khushal was not found in his house when he was wanted in a liquor case after a search on 5th February, 1956. In view of the fact that there is this error and the sufficien cy of the evidence might be a matter for consideration in the light of this additional evidence, we think this is a fit case for a special certificate under article 134(1)(c) of the Constitution. " It is clear that the High Court granted the certificate of fitness under article 134(1)(c) of the Constitution not on any difficult question of law or procedure which it thought required to be settled by this Court, but on a question which is essentially one of fact, namely, whether there was sufficient evidence of the guilt of the accused. The latest reported case of this Court, bearing on this aspect of this appeal, is Haripada 559 Dey vs The State of West Bengal(1), to the effect that a High Court exceeds its power of granting a certificate of fitness under that article if the certificate discloses that the main ground on which it was based related to a question of fact, and that the High Court is not justified in sending up such a case for further consideration by this Court which does not, ordinarily, concern itself with deciding mere questions of fact unless such questions arise on a certifi cate granted under cls. (a) or (b) of article 134 (1) of the Constitution. In other words, this Court does not function ' ordinarily, as a Court of Criminal Appeal. Under the Con stitution, it has the power, and it is its duty, to hear appeals, as a Regular Court of Appeal, on facts involved in cases coming up to this Court on a certificate under article 134(1)(a) or (b). To the same effect are the other deci sions of this Court, referred to in the reported decision aforesaid, for example, Narsingh vs The State of Uttar Pradesh (2) Baladin vs The State of Uttar Pradesh(3) sunder Singh vs State of Uttar Pradesh(4) It is, therefore, incumbent upon the High Courts to be vigilant in cases coming up before them, by way of an appli cation for a certificate of fitness under article 134(1) (c) of the Constitution. In view of these considerations, it has got to be held that the certificate of fitness granted by the High Court does not satisfy the requirements of article 134(1)(c) of the Con stitution. The appeal on such a certificate has, therefore, to be dismissed in limine; but we have to satisfy ourselves whether there are such grounds as would justify this Court in granting special leave to appeal to this Court, if the appellant had approached this Court in that behalf. We have, therefore, examined the record of this case from that point of view. It appears from the judgments of the courts below that the prosecution case rests mainly upon the three dying declarations of Baboolal who died shortly after making those statements as to his assailants, in quick succession within about two and a half hours of the (1) [I956] S.C.R. 639. (2) [1955] i S.C.R. 238. (3) A.I.R. 1956 S.C. 181. (4) A.I.R. 1956 S.C.411. 560 occurrence indeed, the first one to the doctor, was made within half an hour; as also upon the evidence of two per sons Inayatullah, P.W. I and Sadashiv, P.W. 3, who figure as eye witnesses, and Trimbak, P.W. 2 and Ramgopal, P.W. 4, who claimed to have turned up in the nick of time, to witness the last stages of the occurrence. Though the trial Judge did not disbelieve the oral testimony of the witnesses aforesaid, and only insisted upon corroboration, the High Court was more pronounced in its view that the testimony of those four witnesses was not trustworthy. The High Court has discussed their evidence in great detail, and was not prepared to accept any part of their testimony on the ground that they were strongly partisan witnesses and that they did not come to the rescue of the victim of the murderous as sault if they were really in the neighbourhood of the place of the occurrence, as claimed by them. If we had to assess the value of that body of oral evidence, we may not have come to the same conclusion, but we proceed on the assump tion that the High Court is right in its estimate of the oral testimony adduced on behalf of the prosecution. After discussing all that evidence, the High Court took the view that it could not place any reliance on the oral testimony of what Baboolal had spoken to P.Ws. 2 and 19 when they deposed that Baboolal had named two of his assailants, namely, the appellant and Tukaram. The High Court reiied upon the three dying declarations recorded at the hospital first, by the attending doctor, second, by the Sub Inspector of police and the third, by the magistrate, first class, between 9 25 and 11 35 p. m. As regards authenticity of the record of those three statements of the deceased, the High Court had no doubt, nor has any doubt been cast upon them by counsel for the appellant. The High Court then considered the question whether the conviction of the accused could be based on those dying declarations alone. It pointed out that in that High Court as also in other High Courts, con victions on dying declarations alone had been rested if the Court was satisfied that the dying declaration was true and, therefore, could be acted upon. But the decision of 561 this Court in Ram Nath Madhoprasad vs State of Madhya Pra desh (1) was brought to their notice, and in view of that decision, the High Court looked for corroboration of the dying declarations aforesaid. It found that corroboration in the subsequent conduct of the appellant in that, as deposed to by prosecution witness 31 the Sub Inspector in charge of Ganeshpetli police station the appellant could not be traced till February 16, 1956, on which day, the police obtained information to the effect that the accused had been concealing himself in the premises of Ganesh dhobi at Hazari Pahar. He went there and found the appellant sitting in a room which had been locked from the front side. He arrested the accused. The High Court did not believe the defence suggestion that the appellant bad been concealing himself for fear of the police in connection with an excise case in which be had been suspected. The records in connection with that case have been placed before us, and, after examining those records, we do not find any good reasons for differing from the High Court in its appreciation of the circumstances connected with the absconding of the accused. The High Court took the view that the circumstance of the appellant 's conduct in concealing himself and evading the police for a number of days was consistent with the prosecution case that he was concerned in the crime which was the subject matter of the charge against him. Thus, in effect, the High Court found corroboration which, according to the ruling of this Court referred to above, was necessary in order to base the conviction upon the dying declarations of Baboolal. The question whether the circumstances of the appellant 's alleged keeping out of the way of the police, for a number of days after the occurrence, can be used as corroboration of the dying declarations, is not free from doubt and diffi culty. The argument on behalf of the accused that he had been keeping out of the way of the police because he was suspected in the excise case is not entirely unfounded. He had not left the city of Nagpur and gone out of the juris diction of the local police. In those circumstances we are not (1) A.I.R. 1953 S.C. 420. 562 prepared to say that the alleged absconding of the accused could afford sufficient corroboration, if corroboration of the dying declarations was needed. In this Court, a good deal of argument was addressed to us, to the effect that the ruling of this Court lays down a sound proposition of law which should have been followed by the High Court, and that the alleged fact of the accused absconding and keeping out of the way of the police could not be used as corroboration of the dying declaration. The decision of this Court in Ram Nath Madhoprasad vs State of Madhya Pradesh (1), contains the following observations, at p. 423, which have been very strongly relied upon, on behalf of the appellant, as having a great bearing upon the value to be placed upon the dying declarations: "It is settled law that it is not safe to convict an accused person merely on the evidence furnished by a dying declara tion without further corroboration because such a statement is not made on oath and is not subject to cross examination and because the maker of it might be mentally and physically in a state of confusion and might well be drawing upon his imagination while he was making the declaration. It is in this light that the different dying declarations made by the deceased and sought to be proved in the case have to be considered. . We have, therefore, to examine the legal position whether it is settled law that a dying declaration by itself can, in no circumstances, be the basis of a conviction. In the first place, we have to examine the decision aforesaid of this Court from this point of view. This Court examined the evidence in detail with a view to satisfying itself that the dying declarations relied upon in that case were true. In that case, apart from the dying declarations, there was the evidence of the approver. This Court found that the evi dence of the approver and other oral testimony had been rightly rejected by the High Court. In that case also, the Court had mainly relied upon the dying declarations for basing the conviction under section 302, (i) A.I.R. 1953 S.C. 420. 563 read with section 34, Indian Penal Code. This Court examined for itself, the dying declarations and the other evidence bear ing upon the truth and reliability of the dying declara tions, and after an elaborate discussion of all that evi dence, came to the conclusion that the dying declarations did not contain "a truthful version of what actually hap pened". Thus after a very careful and cautious examination of the facts of the case, connected with the recording of the dying declaration, and of the other evidence in the case and of the fact that it was a dark night without any lights available at the place of occurrence, this Court distinctly came to the conclusion that the dying declaration was not true and could not be relied upon to base, upon that alone, the conviction of the appellants. It is, thus ' clear that the observations quoted above, of this Court, are in the nature of obiter dicta. But as it was insisted that those observations were binding upon the courts in India and upon us, we have to examine them with the care and caution they rightly deserve. The Legislature in its wisdom has enacted in section 32(1) of the Evidence Act that "When the statement is made by a person as to the cause of his death, or as to any of the circumstances of the transaction which resulted in his death, in cases in which the cause of that person 's death comes into question", such a statement written or verbal made by a person who is dead (omitting the unnecessary words) is itself a relevant fact. This provision has been made by the Legislature, advisedly, as a matter of sheer necessity by way of an exception to the general rule that hearsay is no evidence and that evidence, which has not been tested by cross exami nation, is not admissible. The purpose of cross examination is to test the veracity of the statements made by a witness. In the view of the Legislature, that test is supplied by the solemn occasion when it was made, namely, at a time when the person making the statement was in danger of losing his life. At such a serious and solemn moment, that person is not expected to tell lies; and secondly, the test of cross examination would not be available. In such a case, the necessity of oath also has been 72 564 dispensed with for the same reasons. Thus, a statement made by a dying person as to the cause of death has been accorded by the Legislature a special sanctity which should, on first principles, be respected unless there are clear circum stances brought out in the evidence to show that the person making the statement was not in expectation of death, not that that circumstance would affect the admissibility of the statement, but only its weight. It may also be shown by evidence that a dying declaration is not reliable because it was not made at the earliest opportunity, and, thus, there was a reasonable ground to believe its having been put into the mouth of the dying man, when his power of resistance against telling a falsehood was ebbing away; or because the statement has not been properly recorded, for example, the statement bad been recorded as a result of prompting by some interested parties or was in answer to leading questions put by the recording officer, or, by the person purporting to reproduce that statement. These may be some of the circum stances which can be said to detract from the value of a dying declaration. But in our opinion, there is no absolute rule of law, or even a rule of prudence which has ripened into a rule of law, that a dying declaration unless corrobo rated by other independent evidence, is Dot fit to be acted upon, and made the basis of a conviction. No decision of this Court, apart from the decision already noticed, has been pointed out to us as an authority for the proposition that a dying declaration, in order to be acted upon by a court, must be corroborated by independent evidence. On the other hand, the different High Courts in India (including Burma) have taken conflicting views as to the value of a dying declaration in part or in its entirety, without any independent corroboration. For example, a Division Bench of the Bombay High Court, presided over by Sir John Beaumont C.J., has laid down in the case of Emperor vs Akbarali Karimbhai (I), that a statement which is covered by section 32(1) of the Evidence Act is relevant evidence and has to be judged on the same principles as other evidence, bearing in mind that such a (i) I.L.R. 565 declaration was not made on oath and was not subject to cross examination, and is, therefore, a weaker type ,of evidence than that given by a witness on oath. Therefore, if a part of a dying declaration is deliberately false, it will not be safe to act upon the other part of the declara tion without very definite corroboration, That Bench also ruled that it is not correct to postulate that because some part of the dying declaration is false, the whole declara tion must necessarily be disregarded. The Bombay High Court, thus, did not agree with the observations of the Calcutta High Court in the case of Emperor vs Premananda Dutt (1) to the effect that it is not permissible to accept a dying declaration in part and to reject the other part and that a dying declaration stood on a widely different footing from the testimony of a witness given in court. On the other hand, we have the decision of the Rangoon High Court, reported in the case of the King vs Maung Po Thi (2). In that case, the positive evidence led on behalf of the prose cution was found to have been tampered with and unreliable. The Court set aside the order of acquittal passed by the trial judge, and recorded an order of conviction for murder, practically on the dying declaration of the victim of the crime. The Court observed that there was. no such rule of prudence as had been invoked in aid of the accused by the trial judge who had observed that an accusation by a dying man, without corroboration from an independent source, could not be the sole basis for conviction. The learned Judges of the High Court further observed that in order to found on a dying declaration alone, a judgment of conviction of an accused person, the Court must be fully satisfied that the dying declaration has the impress of truth on it, after examining all the circumstances in which the dying person made his statement ex parte and without the accused having the opportunity of cross examining him. If, on such an examination, the Court was satisfied that the dying declara tion was the true version of the occurrence, conviction could be based solely upon it. (1) Cal. (2) A.I.R. 1938 Rang. 282 566 In the High Court of Madras, there was a difference of judicial opinion, as expressed in certain unreported cases, which resulted in a reference to a Full Bench. Sir Lionel Leach C. J. presiding over the Full Bench (In re, Guruswami Tevar (1) ), delivered the unanimous opinion of the Court after examining the decisions of that High Court and of other High Courts in India. His conclusions are expressed in the penultimate paragraph of his judgment, thus: " In my judgment it is not possible to lay down any hard and fast rule when a dying declaration should be accepted, beyond saying that each case must be decided in the light of the other facts and the surrounding circumstances, but if the Court, after taking everything into consideration, is convinced that the statement is true, it is its duty to convict, notwithstanding that there is no corroboration in the true sense. The Court must, of course, be fully con vinced of the truth of the statement and, naturally, it could not be fully convinced if there were anything in the other evidence or in the surrounding circumstances to raise suspicion as to its credibility. " To the same effect are the decisions of the Patna High Court in the case of Mohamad Arif vs Emperor(2), and of the Nag pur. High Court in Gulabrao Krishnajee Maratha vs King Emperor(3). The Judicial Committee of the Privy Council had to consider, in the case of Chandrasekera alias Alisandiri vs The King(4), the question whether mere signs made by the victim of a murderous attack which had resulted in the cutting of the throat, thus, disabling her from speaking out, could come within the meaning of section 32 of the Ceylon Evidence Ordinance, which was analogous to section 32(1) of the Indian Evidence Act. The Pi ivy Council affirmed the decision of the Supreme Court of Ceylon, and made the following observa tions in the course of their judgment, which would suggest that a dying declaration, if found reliable by a jury, may, by itself, sustain a conviction: (1) I.L.R. ,170. (2) A.I.R. 1941 Patna 409. (3) I.L.R. [1945] Nag. 613; A.I.R. 1945 Nag. (4) [I937] A.C. 220, 229. 567 ". Apart from the evidence proceeding from the deceased woman, the other evidence was not sufficient to warrant a conviction, but at the same time that other evidence was not merely consistent with the deceased 's statement but pointed in the same direction. ' It was.% case in which, if the deceased 's statement was received, and was believed, as it evidently was by the jury, to be clear and unmistakable in its effect, then a conviction was abundantly justified and, indeed, inevitable. " In 'Phipson on Evidence ', 9th ed., p. 335, the author has discussed the question Whether, a dying declaration without other evidence in corroboration, could be sufficient for a conviction, and has made the following observations which are pertinent to this case : ". The deceased then signed a statement implicating the prisoner, but which was not elicited by question and answer, and died on March 20. It was objected that being begun in that form, it was inadmissible: Held (1) the questions and answers as to his state of mind were no part of the dying declaration; (2) that even if they were, they only affected its weight, not its admissibility ; and (3) that the decla ration was sufficient, without other evidence, for convic tion (R. vs Fitzpatrick (1910) 46 Ir. L.T.R. 173, C.C.R). " Sometimes, attempts have been made to equate a dying decla ration with the evidence of an accomplice or the evidence furnished by a confession as against the maker, if it is retracted, and as against others, even though not retracted. But,,in our opinion, it is not right in principle to do so. Though under section 133 of the Evidence Act, it is not illegal to convict a person on the uncorroborated testimony of an accomplice, illustration (b) to section 114 of the Act lays down as a rule of prudence based on experience, that an accom plice is unworthy of credit unless his evidence is corrobo rated in material particulars and this has now been accepted as a rule of law. The same cannot be said of a dying decla ration because a dying declaration may not, unlike a confes sion, or the testimony of an approver, come from a tainted source. If a dying 568 declaration has been made by a person whose antecedents are as doubtful as in the other cases, that may be a ground for looking upon it with suspicion, but generally speaking, the maker of a dying declaration cannot be tarnished with the same brush as the maker of a confession or an approver. On a review of the relevant provisions of the Evidence Act and of the decided cases in the different High Courts in India and in this Court, we have come to the conclusion, in agreement with the opinion of the Full Bench of the Madras High Court, aforesaid, (1) that it cannot be laid down as an absolute rule of law that a dying declaration cannot form the sole basis of conviction unless it is corroborated; (2) that each case must be determined on its own facts keeping in view the circumstances in which the dying decla ration was made ; (3) that it cannot be laid down as a general proposition that a dying declaration is a weaker kind of evidence than other pieces of evidence; (4) that a dying declaration stands on the same footing as another piece of evidence and has to be judged in the light of surrounding circumstances and with reference to the princi ples governing the weighing of evidence; (5) that a dying declaration which has been recorded by a competent magis trate in the proper manner, that is to say, in the form of questions and answers, and, as far as practicable, in the words of the maker of the declaration, stands on a much higher footing than a dying declaration which depends upon oral testimony which may suffer from all the infirmities of human, memory and human character, and (6) that in order to test the reliability of a dying declaration, the Court has to keep in view the. circumstances like the opportunity of the dying man for observation, for example, whether there was sufficient light if the crime was committed at night; whether the capacity of the man to remember the facts stated had not been impaired at the time he was making the state ment, by circumstances beyond his control; that the state ment has been consistent throughout if he had several oppor tunities of making a dying declaration apart from the offi cial record of it ; and that the statement had been made at the 569 earliest opportunity and was not the result of tutoring by interested parties. Hence, in order to pass the test of reliability, a dying declaration has to be subjected to a very close scrutiny, keeping in view the fact that the statement has been made in the absence of the accused who had no opportunity of testing the veracity of the statement by cross examination. But once the court has come to the conclusion that the dying declaration was the truthful version as to the circumstances of the, death and the assailants of the victim, there is no question of further corroboration. If, on the other hand, the court, after examining the dying declaration in all its aspects, and testing its veracity has come to the conclusion that it is not reliable by itself, and that it suffers from an infirmity, then, without corroboration it cannot form the basis of a conviction. Thus, the necessity for corrobora tion arises not from any inherent weakness of a dying decla ration as a piece of evidence, as held in some of the re ported cases, but from the fact that the court, in a given case, has come to the conclusion that that particular dying declaration was not free from the infirmities referred to above or from such other infirmities as may be disclosed in evidence in that case. Having made the general observations bearing on the question of the legality of basing a conviction on a dying declara tion alone, and keeping in view the tests set out above, let us examine the dying declarations now in question before us. The most remarkable fact which emerges from an examination of the three successive dying declarations made in the course of about two hours, by the deceased, is that he con sistently named the appellant and Tukaram as the persons who had assaulted him with sword and spear. The injuries found on his person, namely, the punctured wounds and the incised wounds on different parts, of his body, are entirely con sistent with his statement that he was attacked by a number of persons with cutting and piercing weapons. No part of his dying declarations has been shown to be false. Of the two assailants named by him, Tukaram was convicted by the learned trial judge, but acquitted 570 by the High Court which very reluctantly gave him the bene fit of the doubt created by the similarity of names in that locality, as already stated. There was no such confusion in the case of the appellant. The deceased indicated that there were two more persons concerned in the crime, but he could not name them. The other two accused persons who were acquitted by the courts below had not been named in the dying declarations and, therefore, their acquittal did not, in any way militate against the truth of the dying declara tions. The courts below also agreed in holding that Babool al was in a position to see his assailants and to identify them in the light of the electric lamp nearby. They have also pointed out that there was no "coaching". There is no doubt, therefore, that Baboolal had been consistent through out in naming the appellant as one of his assailants, and he named him within less than half an hour of the occurrence and as soon as he reached the Mayo Hospital. There was, thus, no opportunity or time to tutor the dying man to tell a lie. At all material times, he was in a proper state of mind in spite of multiple injuries on his person, to remem ber the names of his assailants. Hence, we have no reasons to doubt the truth of the dying declarations and their reliability. We have also no doubt that from the legal and from the practical points of view, the dying declarations of the deceased Baboolal are sufficient to sustain the appellant 's conviction for murder. The only other question that remains to be considered is whether there are any extenuating circumstances in favour of the accused justify ing the lesser of the two sentences prescribed by law. In our opinion, there are none. It was a case of a deliberate cold blooded murder. For the reasons given above, we uphold the judgment and order of the High Court convicting the appellant of murder and sentencing him to death. The appeal is, accordingly, dismissed. Appeal dismissed.

The Supreme Court does not ordinarily function as a Court of criminal appeal, and it is not competent for a High Court under article 134(1)(c) of the Constitution to grant a certifi cate of fitness for appeal to this Court on a ground which is essentially one of fact. Haripada Dey vs The State of West Bengal" (1956) S.C.R. 639, followed. There is no absolute rule of law, not even a rule of pru dence that has ripened into a: rule of law that a dying declaration in order that it may sustain an order of convic tion must be corroborated by, other independent evidence. The observations made 553 by this Court in Madhoprasad vs The State of Madhya Pradesh are in the nature of obiter dicta and do not lay down the law. Madhoprasad vs The State of Madhya Pradesh, A.I.R. (1953) S.C. 420, considered. In re Guruswami Tevar, I.L.R. , approved. Case law reviewed. The provision of section 32(I) of the Indian Evidence Act " which makes the statement in a dying declaration as to the cause of death and the circumstances that brought it about rele vant, is an exception to the general rule of exclusion of hearsay evidence and evidence untested by cross examination. The special sanctity which the Legislature attaches to such a declaration must be respected unless such declaration can be shown not to have been made in expectation of death or to be otherwise unreliable and any evidence adduced for this purpose can only detract from its value but not affect its admissibility. Although a dying declaration has to be very closely scruti nised, and tested as any other piece of evidence, once the Court comes to the conclusion, in any particular case, that it is true, no question of corroboration arises. A dying declaration cannot be placed in the same category as the evidence of an accomplice or a confession. Consequently, in a case where the trial judge as also the High Court founded their orders of conviction of an accused person under section 302 Of the Indian Penal Code mainly on three dying declarations made by the murdered person in quick succession one after the other, and the High Court, relying on a decision of this Court, sought for corroboration of such dying declarations in the fact that the accused person had absconded and was arrested in suspicious circumstances, but was in doubt as to the sufficiency of such evidence of corroboration and granted the certificate of fitness under article I34(I)(c): Held, that the certificate granted by the High Court was incompetent and as the case disclosed no grounds on which this Court could possibly grant special leave to appeal under article 136 of the Constitution, the appeal must be dismissed.

vil Appeal Nos. 2025 26, 2873 75, 1537 of 1986. From the Judgment and Order dated 24.3.86 and 20.3.86 of the Kerala High Court in O.P. No. 7621/85 1, 4411/85 Y, 2785/83 G, 9366/84 1 and 4740/82 J respectively. Soli J. Sorabjee, Dr. Y.S. Chitale, T.S. Krishnamoorthy Iyer, Harish N. Salve, K.J. John, M.N. Jha, Mrs. A.K. Verma and D.N. Misra for the Appellants. 212 V.J. Francis, N.M. PopIi and W.K. Jose for the Respondents. The Judgment of the Court was delivered by PATHAK, CJ. These appeals by certificate granted by the High Court of Kerala raise the question whether galvanised iron pipes and tubes are a commercially different commodity from steel tubes mentioned in section 14(iv)(xi) of the . The appellant is a company registered under the Compa nies Act, 1956. It has its registered office at Ahmedabad in Gujarat. It is engaged in the manufacture and sale of steel tubes and pipes, both black and galvanised. In the assessment proceedings for the assessment years 1982 83 and 1983 84 under the Kerala General Sales Tax Act, 1963, the appellant contended that the galvanised iron pipes manufactured by it are "declared goods" and are not liable to additional sales tax as well as surcharge. The appel lant 's contention was not accepted by the assessing authori ty, who taxed the turnover of galvanised iron pipes at four per cent and also assessed and additional tax and surcharge treating the galvanised iron pipes as goods falling under Entry 46 of the First Schedule to the Kerala Sales Tax Act. Demands were raised accordingly. It appears that the matter was brought to the High Court by writ petition, and the High Court held on the basis of its decision in Apollo Tubes Limited vs State of Kerala, [1986] 61 STC 275 that the category of goods called galva nised iron pipes had acquired a different commercial identi ty as a result of the process of galvanisation and could not be identified with steel tubes mentioned in section 14(iv)(xi) of the . Cases on the other side of the line are Associated Mechanical Industries vs Commissioner of Commercial Taxes, Bangalore, [1986] 61 STC 225 and Commis sioner of Sales Tax vs Om Engineering Works, [1986] U.P.T.C. 55. The High Court preferred to follow its own decision and on 24 March, 1986 held against the appellant. A certificate having been granted by the High Court these appeals are now before us. The purpose of galvanising a pipe is merely to make it weatherproof. It remains a steel tube. By being put through the process of galvanising it is made rust proof. Neither its structure nor function is altered. As a commercial item it is not different from a steel tube. That 213 galvanisation is done on steel tubes or pipes as a protec tive measure only was the basis of the decision of the Karnataka High Court in Associated Mechanical Industries, (supra). Merely because the steel tube has been galvanised does not mean that it ceases to be a steel tube. The Gujarat High Court in State of Gujarat vs Shah Veljibhai Motichand, Lunawada, [1969] 23 S.T.C. 288 held that merely because iron is given the shape of a sheet and is subjected to corruga tion does not take it out of the description of "iron and steel". So also in Sales Tax Commissioner and Others vs Jammu Iron and Steel Syndicate, [1980] 45 S.T.C. 99 the High Court of Jammu and Kashmir held that galvanisation and corrugation do not change the essential character of iron sheets, and they remain iron sheets. We are unable to agree with the view taken by the Madras High Court in Deputy Commissioner of Commercial Taxes, Tiruchirapalli vs P.C. Mohammed Ibrahim Marakayar Sons, [1980] 46 S.T.C. 22. The limited purpose of galvanisation does not, it seems to us, bring a new commodity into exist ence. The respondents rely on Deputy Commissioner of Sales Tax (Law) Board of Revenue vs G.S. Pai & Co., [1980] 1 S.C.R. 938 but in that case this Court held that Bullion as under stood popularly does not include ornaments or other articles of gold. It was pointed out that Bullion was commonly. treated as a commodity distinct and separate from ornaments and articles of gold. Gold ornaments and articles were manufactured or finished products of gold. A number of other cases were cited on behalf of the respondents, but we do not find any of them to be of assistance to the respondents. We are of the view that galvanised pipes are steel tubes within the meaning of section 14(iv)(xi) of the . The view taken by the High Court is erroneous. We may not that shortly after judgment was reserved in the present appeals, an identical point arose before a Bench of this Court on 28 April, 1988 in S.L.P. (Civil) No. 3549 of 1988 Commissioner of Sales Tax vs Mitra Industries, [1988] 69 S.T.C. Note No. 55 at p. 16 and the learned Judges took the same view which finds favour with us here. In the result, the appeals are allowed, the impugned judgment and order of the High Court and the orders of the tax authorities in each case are set aside. The Sales Tax Officer will now proceed to re assess the appellant in accordance with law and the observations contained in this judgment. T.N.A. Appeals Allowed.

According to the Regulation 16.14 of the Jammu & Kashmir Industries Employees Service Rules & Regulations the serv ices of the permanent employee could be terminated if the post is abolished or he is declared medically unfit after giving three month 's notice or pay in lieu thereof and in case of temporary employee one month 's notice or pay in 429 lieu thereof. This regulation was amended on April 20, 1983 by adding two more grounds namely, if the employee remains on an unauthorised absence or if he takes part in active politics, in such cases the services shall be terminated if he fails to explain his conduct satisfactorily within 15 days from the date of issue of notice and the management shall be empowered to take a decision without resorting to further enquiries. Pyare Lal Sharma was employed as a Chemical Engineer by the Jammu & Kashmir Industries Ltd. hereinafter called 'Company '. The Company issued a show cause notice on 21.4.83 in terms of the added clauses for his unauthorised absence from duty. As no reply was submitted, the M.D. terminated his services by an order dated 14.6.1983. Sharma challenged the order of termination by way of a writ petition before the J & K High Court. Learned Single Judge allowed the Writ Petition on three grounds namely, violation of Rules of Natural Justice, that the Board of Directors having appoint ed Sharma, the M.D. who is subordinate authority could not terminate his services and that the regulation 16.14 was arbitrary and violative of article 14 of the Constitution of India. The Letters Patent Bench of the High Court dismissed the appeal of the Company but denied backwages to Sharma. Aggrieved by that order both the Company as well as Sharma came up in appeals before this court. While allowing the appeal of Sharma partially and dismissing the appeal of the Company, this Court, HELD: That Regulation 16.14 was not arbitrary. The provision of show cause notice is a sufficient safeguard against arbitrary action. Under grounds (a) & (b) of the Regulations three months notice or pay in lieu thereof is required. Regarding grounds (c) & (d) the regulations pro vide for 15 days notice to explain the conduct satisfactori ly and there is no requirement of any other notice or pay in lieu thereof. [437C D] There is no provision in the Articles of Association or the regulations of the company giving same protection to the employees of the company as is given to the civil servants under article 311(1) of the Constitution of India. An employee of the Company cannot, therefore, claim that he cannot be dismissed or removed by an authority subordinate to that by which he was appointed. Since on the date of termination of Sharma 's services the M.D. had the powers of the appointing authority he was legally competent to terminate Sharma 's services. [437F G] 430 Grounds (c) & (d) in regulation 16.14 exclusively and individually are sufficient to terminate the services of an employee. Once it is established that an employee remains on an unauthorised absence from duty the only action which can be taken is termination of his services. Similar is the case when an employee takes part in active politics. The finding in the termination order cannot be sustained because no notice in this respect was given to Sharma but the order of termination can be supported on the ground of his remaining on unauthorised absence from duty. [437H; 438A B] State of Orissa vs Vidyabhushan Mohapatra, [1963] 1 Supp. SCR 648 and Railway Board vs Niranjan Singh, , relied upon. It is a basic principle of natural justice that no one can be penalised on the ground of a conduct which was not penal on the day it was committed. The date of show cause notice being April 21, 1983 the unauthorised absence from duty which has been taken into consideration is from Decem ber 20, 1982 to April 20, 1983. Whole of this period being prior to the date of amendment of regulation 16.14, the same could not be made as a ground for proceeding under ground (c) of Regulation 16.14. The Notice served on the appellant was thus illegal and as a consequence the order of termina tion can not be sustained and has to be set aside. [438F G] When the termination order is set aside by the courts normally the employee becomes entitled to backwages and all other consequential benefits. In view of the facts and circumstances of this case the court ordered that only sixty percent of the backwages be paid to Sharma. Moneys already received by Sharma under orders of either this Court or High Court shall be adjusted and the balance paid to him. If the money already paid to Sharma is more than what has been ordered to be paid now then there shall be no recovery from him. [439A C]

ivil Appeal No. 6229 of 1983. Appeal by Special leave from the Judgment and order dated the 29th May, 1980 of the Punjab and Haryana High Court in C.W.P. No. 1225 of 1980. K.G. Bhagat, Addl. Soliciter General and K. K. Mohan for the appellant. R. N. Poddar For the Respondent. The Judgment of the Court was delivered by: CHINNAPPA REDDY, J. Special leave granted. 655 Smt. P. Grover was an outstanding teacher. In 1968 69, the Government of Haryana honoured her by presenting the State Award for teachers. She attained the age of superannuation on August 2s0, 1978. About two years before she attained the age of superannuation, she was promoted as acting District Education Officer with effect from July 19, 1976. The Government of Haryana had taken a policy decision as early as in 1965 that the Services of teachers, who had received the National or State Awards, should be extended until they attained the age of 60 years, on an year by year basis, if their service record continued to be good otherwise. Pursuant to the policy decision, Smt. Grover 's services were extended first by one year and later by another year. During the period of extension of service, she worked as Principal, Government Higher Secondary School, Mahendergarh. She finally retired from service on August 31, 1980. We mentioned that she was promoted as an acting District Education officer with effect from July 19, 1976. The order of promotion contained a super added condition that she would draw her own pay scale which apparently meant that she would continue to draw her salary on her pay scale prior to promotion. The initial order extending her services recited that she was an acting District Education Officer, but contained a super added condition that her pay would not be more than the maximum of the Principal 's grade. Grover claims that having been promoted as District Education officer, she was entitled to the pay of a District Education officer and there was no justification for denying the same to her. A writ petition filed by her was dismissed by the High Court of Punjab and Haryana and she is before us by way of special leave under article 136 of the Constitution. The counter affidavit filed on behalf of the Government of Haryana offers no rational explanation for denying the pay of District Education Officer to Smt. P. Grover after she was promoted to act as District Education officer. All that was said in the counter affidavit was that there were no Class I post available and therefore, she was not entitled to be paid the salary of District Education officer. We are unable to understand the reason given in the counter affidavit. She was promoted to the post of District Education officer, a Class I post, on an acting basis. Our attention was not invited to any rule which provides that promotion on an acting basis would not entitle the officer promoted to the pay of the post. In the absence of any rule justifying such refusal to pay to an officer promoted to a higher post the salary of such higher post (the 656 validity of such a rule would be doubtful if it existed), we must hold that Smt. Grover is entitled to be paid the salary of a District Education officer from the date she was promoted to the post, that is, July 19, 1976, until she retired from service on August 31, 1980. The appeal is accordingly allowed with costs. H.L.C. Appeal allowed.

section obtained a decree of, ejectment against the third respon dent and while attempting to take possession of the properties ir execution of the decree he was obstructed by the appellant and the application for removal of the obstruction was dismissed by the Court on April 12, 1947. He thereupon filed the present suil on March 12, 1948, under 0. XXI, r. 103, of the Code of Civil Procedure, for a declaration that he was entitled to recovery possession of the suit properties, impleading the appellant and the third respondent. In the plaint, apart from the decree obtained in the earlier suit no particular averments were made as to the facts or grounds on which the plaintiff based his title to the suit properties as against the appellant. Both in his application dated November 2o, 1948, and in his written statement, the appellant,objected to the maintainability of the suit on the grounds that he was not a party to the previous suit and that the plaint disclosed no cause of action against him. On March 20, 1950, when the suit was taken up for trial on the preliminary issue as to whether the suit as framed was tenable, an application was made by the plaintiff for the amendment of the plaint by giving further and better particulars of the claim made in the plaint. The trial judge rejected the application and dismissed the suit, but the High Court, on appeal, allowed the application. The appellant appealed by special leave and contended that the application for amendment should not have been allowed because (1) on the date of the application for amendment, the period of limitation for a suit under 0. XXI, r. 103, Code of Civil Procedure, had already expired, and (2) though the attention of the plaintiff to the defect in the original plaint 'had been drawn as early as November 2o, 1948, no application for amendment was made till. March 29, 1950. Held, that the application for amendment was rightly allowed by the High Court, because the amendments did not really introduce any new case nor alter the nature of the reliefs sought, and, though the application was made after the expiry of the period of limitation for a suit under 0. XXI, r. 103, Code of Civil Procedure, the appellant did not have to 77 596 meet anew case and he was not taken by surprise; nor did he have to meet a new claim set up for the first time after the expiry of the period of limitation. Charan Das vs Amir Khan (L. R. 47 I.A. 255), relied on. L. J. Leach & Co. vs Jardine Skinner & CO. ([1957] S.C.R. 438), followed. Observations of Batchelor J. in Kisandas Rupchand vs Rachappa Vithoba (I.L.R. , 649), approved.

Civil Appeal No. 5742 of 1983 Appeal by Special leave from the judgment and order dated the 7th May, 1983 of the Assam High Court in Civil Rule No. 1292 of 1982. K.K. Venugopal, Ms. Laxmi Venugopal, A.K Bordelay, C.S. Vaidyanathan and Praveen Choudhary for the Appellants. S.S. Ray, A.S. Pundir, Vijay Hansaria, Sunil Kumar Jain, Mukesh Advani and Ms. Mridula Ray for Respondent Nos. 1 & 2. S.K.Nandy for the Respondents 3 & 5. N.R. Choudhary for the Intervener. The Judgment of the Court was delivered by 828 SEN, J. This appeal by special leave is directed against the judgment and order of the Assam High Court dated November 4, 1982 concerns the propriety of the grant of a liquor licence. By the judgment the High Court quashed an order of the Board of Revenue dated February 11,.1982 affirming the grant of licence in respect of Jorhat Country Spirit Shop No. 1 made by the Deputy Commissioner Sibsagar, Jorhat, by his order dated August 28, 1981, and instead of remitting the matter to the Board of Revenue for a decision afresh, the High Court had directed the Deputy Commissioner to settle the liquor shop with respondents Nos. 1 and 2 for the remaining period of the grant upto March 31, 1984. The short question that arises in the appeal is whether it was proper exercise of jurisdiction by the High Court under article 226 of the Constitution to have issued a writ of mandamus ordaining the Deputy Commissioner to grant the licence. Further, a question arises whether it was impermissible for the High Court to have embarked upon an inquiry into the facts and on a reappraisal of the evidence come to a finding contrary to that reached by the Board of Revenue based on appreciation of evidence that one set of rival claimants i.e. Parag Saikia and Prafulla Barua, respondents Nos. 1 and 2 were entitled to grant of such privilege in preference to the appellant under the note beneath r. 223(2) of the Assam Excise Rules, 1945 (for short 'Rules '). The facts of this case present a rather disturbing feature. Jorhat Country Spirit Shop No. 1 is a big excise shop within the meaning of r. 232 of the Rules. Under cl.(a) thereof, the settlement of such a country liquor shop has to be made with a pair of tenderers constituting two or more, partners. Five joint tenders were received in response to the notification issued by the Deputy Commissioner, Sibsagar, Jorhat calling for tenders of the country liquor shop for the financial year 1983 84. The Deputy Commissioner, Sibsagar, Jorhat in consultation with the Advisory Committee constituted for that purpose as required under r. 208 by his order dated August 28, 1981 settled the shop with the two appellants Bishnu Ram Borah and Bipin Chandra Borah. One set of the unsuccessful tenderers were respondents Nos. 1 and 2 Parag Saikia and Prafulla Barua. Of them, Parag Saikia respondent No. 1 herein was held by the Deputy Commissioner to be a mere benamidar of a prominent businessman of Dibrugarh while respondent No. 2 Prafulla Barua was a student studying for his B.Sc. degree and stying in a hostel at Golaghat, which is a place some 30 miles away from Jorhat. The Board of 829 Revenue, Assam by its order dated February 11, 1982 upheld the settlement of the country liquor shop with the appellants. Being aggrieved by the decision of the Board, two sets of unsuccessful tenderers viz, respondents Nos. 1 and 2 and the interveners Daya Ram Borah and Prabin Kumar Borah filed petitions under article 226 of the Constitution before the Assam High Court being Civil Rule Nos. 215 of 1982 and 1163 of 1982. The High Court instead of taking up both the writ petitions together, heard and decided the writ petition filed by respondents Nos. 1 and 2 and by its judgment dated November 4, 1982 quashed the order of the Board of Revenue and remitted the appeal to the Board for a decision afresh in the light of the observations made by it. The Board however by its order dated December 3, 1982 maintained the settlement of the country liquor shop with the appellants. Thereupon, respondents Nos. 1 and 2 again moved the High Court under article 226 for appropriate writ, direction or order in the matter of grant of the liquor licence. The High Court by its judgment dated May 7, 1983 quashed the order of the Board of Revenue and instead of remitting the matter to the Board for a decision afresh, issued a writ of mandamus by which it directed the Deputy Commissioner to settle the liquor shop with respondents Nos. 1 and 2 for the remaining period of the grant upto March 31, 1984. While making the direction the High Court observed that 'in case it was found that respondents Nos. 1 and 2 were benamidars of anybody, it would be open to the settling authority i.e. the Deputy Commissioner to cancel the liquor licence '. Further, it observed that 'the grant ' would be subject to the result of the decision in the writ petition filled by the interveners i.e. Civil Rule No. 1163 of 1982 '. Before proceeding further, it is necessary to refer to certain provisions of the Assam Excise Act, 1910 (for short 'Act ') and the Assam Excise Rules, 1945 (for short 'Rules ') as amended from time to time. Section 18(1) of the Act provides: "18 (1). Prohibition of sale without licence, and the exceptions to such prohibitions No intoxicant shall be sold except under the authority and in accordance with the terms and conditions of a licence granted by the Authority prescribed in the rules framed under this Act. " Rule 208 provides as follows: "Advisory Committee The Collectors should make settlements in consultation with an advisory committee. " 830 Rule 223(2) provides: "In making settlement to any person preference shall always be given to the educated unemployed youths or to co operatives and co opt firms formed by such educated unemployed youth. Preference shall also be given to the persons belonging to the more backward classes. " Note: The term 'educated unemployed youth ' as mentioned in sub rule (2) of Rule 223 means a person not exceeding 35 years of age who has passed the H.S.L.C. or its equivalent examination and is without any employment." A few facts have to be stated. Before the Board of Revenue passed its earlier order dated February 11, 1982 upholding the grant of licence by the Deputy Commissioner by his order dated August 28, 1981, the Board had called a report from the Deputy Commissioner, Sibsagar, Jorhat and had also before it a parawise comment of the Deputy Commissioner. On an evaluation of the comparative merits and demerits and after eliminating the other sets of competitors ' the Board upheld the grant of licence made by the Deputy Commissioner in favour of the appellants. On a careful consideration of the material on record and in the light of the confidential report made by the Deputy Commissioner, the Board held that respondent Nos. 1 and 2 were not suitable for the grant of licence for the country liquor shop. As regards respondent No.1 Parag Saikia, the Board relying upon the report of the Deputy Commissioner held that he was a mere benamidar of a prominent businessman of Dibrugarh who was trying to corner big liquor shops at Jorhat and that it was evident from the report that he mostly resides at Gauhati enjoying the pay and perquisites provided by this businessman and that he was apparently not an unemployed person as he was resorting to highly expensive litigation for getting a liquor shop licence. Further, the Board observed that he had the means not only to prefer appeals before the State Government and the Board of Revenue but that he had also repeatedly moved the High Court for the grant of appropriate writ, direction or order in the matter of settlement of a country liquor shop which showed that he had some strong financier behind him. As regards respondent No.2 Prafulla Barua who was still a student studying for his B.Sc. degree and staying in a hostel at Golaghat, the Board held that he could not be treated as an 'educated unemployed youth ' within the meaning of the note beneath r.223 of the Rules. 831 In reaching the conclusion that it did, the Board of Revenue observed: "In an excise settlement apart from the finance, there is also the question of general suitability of the tenders for a particular shop. It came out during the hearing that this is one of the Sibsagar District. As such substantial revenue of the State is involved in this shop and the suitability of the lessee has therefore to be examined very closely. Under Rule 232 of the Excise Rules, no distinction can be drawn between the legal liabilities of the two partners who will be jointly and severally responsible for the management of the shop. It is implicit in this Rule that the partners have to be more or less equal partners. It is also implicit that the settling authority should be satisfied about their respective role, responsibilities, investments and involvements. On a total consideration of the tender, the memo of appeal and the various affidavits and other documents filed on behalf of the appellant Parag Saikia, it appears doubtless that he is the dominant partner and his associate appears more as a show boy than even as a sleeping partner. " The Board then went on to say: "Reverting to the partnership of the appellants it is observed that their respective financial investment and physical involvement as well as the sharing of the profit or loss is not known. Indeed for the two persons living in two different Sub divisional Head quarter towns and having a substantial difference in age and present status, it is difficult to be definite that they have the needed concord and compatibility or unity and understanding for operating a major shop like this. Again, in a double lessee shop what is needed is not just a second helping hand to a lessee but it requires persons of a minimum calibre from the point of intelligence, experience and businessman. Parag Saikia by his own admission found that the firm set up by him or joined by him had failed or were non starters. These considerations might have weighed with the Advisory Committee and the District Collector in not setting with Parag Saikia even any of the smaller shops for which he is known to have tendered 832 and Prafulla Barua being still an undergraduate student might have been considered unsuitable on that ground as well among others. " The Board of Revenue accordingly held that respondent No. 1 Parag Saikia was a mere benamidar and therefore ineligible for the grant of licence while respondent No. 2 Prafulla Barua being still a student studying for his B.Sc. degree was not suitable for grant of such privilege, and at any rate, he could not be encouraged when educated unemployed youths and other suitable tenderers were available. It found considerable force in the submission that the Board should adopt it as a policy to discourage students from entering into liquor business. Regrettably, the High Court while allowing the writ petition preferred by respondent Nos. 1 and 2 passed certain strictures which, in our opinion, should have been avoided. It found fault with the Board of having acted on the report of the Deputy Commissioner observing that 'the Board could not act on the ipse dixit of the Deputy Commissioner '. Further, the High Court held that there was no basis for the Board to adopt a policy to discourage students from entering into liquor business when there was no such legal bar. Still further, it observed that merely because respondent No. 2 Prafulla Barua was a student of B.Sc. class and was staying at a hostel at Golaghat which was about 30 miles away, it would not be difficult for him to carry on a partnership business at Jorhat where his cousin lives and further that he answers the description of 'educated unemployed youth ' envisaged in the note beneath r.223 of the Rules. It recorded that respondent No. 2 Prafulla Barua had given an undertaking that he would give up his studies if the settlement of the liquor shop was made in his favour. There was no warrant for any of these observations made by the High Court and the High Court was not entitled to enter into a question of fact as to whether or not respondent No. 1 Parag Saikia was a mere benamidar. It is somewhat strange that the High Court should have taken an undertaking from respondent No. 2 Prafulla Barua that he would give up his studies if the settlement was made in his favour and observed that there was nothing in law to discourage students still undergoing their studies from entering into the liquor business and that he falls within he category of 'educated unemployed youth ' within the note beneath r.223 of the Rules 833 On remand, the Board of Revenue by its order dated December 2, 1982 reacted sharply to the observations and went on to say that the observations were uncalled for. That apart, the Board observed that since the observations were on questions of fact, they could not be taken as binding on the Board. It reaffirmed its earlier order upholding the grant of the licence to the appellants by the Deputy Commissioner. As regards respondents Nos. 1 and 2, the Board relying on the report of the Deputy Commissioner held them to be unsuitable for the grant of licence. It held that respondent No. 1 Parag Saikia was a mere benamidar of a mahaldar of Dibrugarh district who had cast his net far and wide in the Jorhat sub division and that respondent No. 2 Prafulla Barua who was still undergoing his studies for the B.Sc. degree could not be regarded as falling within the category of educated unemployed youth appearing in the note beneath r.223 of the Rules. Thereupon, respondents Nos. 1 and 2 again moved the High Court under Art.226 of the Constitution for appropriate writ, direction or order in the matter of grant of the liquor licence. As was expected, the High Court strongly deprecated the action of the Board of Revenue defying the directions made by the High Court in exercise of its jurisdiction under article 226 of the Constitution and held that the Board had no other alternative but to decide the matter afresh in the light of the directions given by the High Court and expressed its regret that it had not done so at all observing: "Such an effort of subordinate tribunal is fraught with grave danger to the administration of justice known to the people of this country and had to be duly taken note of with great concern by all." The High Court then went on to observe that the Board had thrown all judicial decorum and discipline to the winds by disregarding its judgment. It further observed: "A perusal of the impugned judgment shows that though the petitioners are entitled to preference under r.223(2) of the Assam Excise Rules, 1945, hereinafter the Rules, whereas the respondents land 2 are not, they have not been found suitable for settlement for these reasons; (i) Parag, one of the petitioners, is a benamidar; 834 (ii) the partnership in question is sham; and (iii) the petitioners are not financially sound to run the shop. " After adverting to the well settled principles relating to the power of the High Courts under Art.226 of the Constitution to issue a writ of certiorari and observing that it was conscious of its own limitations in the matter, the High Court nonetheless observed that 'it could definitely set aside the order of an inferior tribunal like the Board of Revenue founded even on some factual conclusions if they were based on irrelevant or extraneous materials or be such which no reasonable person could have reached or if they were grounded on a total misconception of law '. It held that a finding reached by the Board by disregarding the directions given to it by the High Court was in excess of jurisdiction. It is regrettable that the Board of Revenue failed to realize that like any other subordinate tribunal, it was subject to the writ jurisdiction of the High Court under Art.226 of the Constitution. Just as the judgments and orders of the Supreme Court have to be faithfully obeyed and carried out throughout the territory of India under Art.142 of the Constitution, so should be the judgments and orders of the High Court by all inferior courts and tribunals subject to their supervisory jurisdiction within the State under Art.226 and 227 of the Constitution. We cannot but deprecate the action of the Board of Revenue in refusing to carry out the directions of the High Court. In Bhopal Sugar Industries Limited vs Income tax Officer Bhopal, the Income tax Officer had virtually refused to carry out the clear and unambiguous directions which a superior tribunal like the Income tax Appellate Tribunal had given to him by its final order in exercise of its appellate powers in respect of an order of assessment made by him. The Court held that such refusal was in effect a denial of justice and is furthermore destructive of one of the basic principles in the administration of justice based as it is in this country on the hierarchy of courts. The facts of the present case are more or less similar and we would have allowed the matter to rest at that but unfortunately the judgment of the High Court directing the issue of a writ of mandamus for the grant of a liquor licence to respondents Nos. 1 and 2 cannot be sustained. The High Court dealt with the finding of the Board as to whether or not the alleged partnership between respondents Nos.1 835 and 2 was genuine. As regards the suitability in their ages which, according to the Board, would stand in the way of needed. concord and compatibility, it felt that it was for respondent No.2 Prafulla Barua to decide whether respondent No.1 Parag Saikia was a suitable person with whom he should enter into a partnership. Secondly, the High Court observed that it would not be difficult for respondent No.2 Prafulla Barua although he was a student studying for his B.Sc. degree and staying in a hostel at Golaghat which was some 30 miles away from Jorhat to carry on the liquor business in partnership. Thirdly, the High Court went into the question whether they had the requisite financial capacity to fulfil the requirements of r.346. From all this, it is quite evident that the High Court was oblivious of the limitations of its own powers under Art.226 of the Constitution in the matter of grant of a writ of certiorari. It was impermissible for the High Court to have embarked upon an inquiry into the facts to adjudge the suitability or otherwise of the rival pairs of claimants and upon a reappraisal of the evidence come to a finding contrary to that reached by the Board of Revenue. There was nothing on record to show that the Board had acted in excess of jurisdiction or there was an error apparent on the face of the record which resuited in manifest injustice. That apart, it was not a proper exercise of jurisdiction under Art.226 of the Constitution for the High Court to have issued a writ of mandamus ordaining the Deputy Commissioner to grant the liquor licence to respondents Nos.1 and 2 in preference to the appellants. Although a writ of mandamus may be a necessary adjunct to a writ of certiorari, in the High Court was satisfied that a writ of certiorari had to be issued to quash the impugned order of the Board of Revenue on the ground that its order was vitiated by an error apparent on the face of the record, the proper course for the High Court to adopt was to have issued a writ of mandamus to hear and redetermine the appeal according to law: H.W.R. Wade 's Administrative Law, 5th edn., p.638. The High Court was also in error in holding that the earlier order passed by the High Court remanding the case to the Board of Revenue contained a direction requiring the Board not to act upon the report of the Deputy Commissioner. The fact that the Board had in the past in some other case viz. for the grant of liquor licence for Melan Country Spirit Shop not acted upon the report of the Deputy Commissioner against respondent No.1 Parag Saikia was not 836 a ground sufficient for ignoring the adverse report of the Deputy Commissioner against him in the present case. It would be apposite to quote the report which reads as follows: "Jorhat town country spirit shop No.1 (with which shop we are concerned) is meant for joint lessee. Just after the submission of the tender on 21.8.81 secret information was received to the effect that Shri Parag Saikia (one of the petitioners in the case) is in the private employment of a prominent businessman of Dibrugarh district who is also said to be benamidar of important C.S. shops and Shri Saikia resides in Gauhati for the greater part of the year enjoying all the perquisites of the employer, The secret information further indicates that the said benamidar of Dibrugarh district was trying to grab important shops of Jorhat Sub Division through Parag Saikia. The matter was discussed in the Advisory Board which rejected the tender of the joint appellant. " Further, the High Court had observed that the Board could not have relied upon the report of the Deputy Commissioner unless respondents Nos.1 and 2 were confronted with the same and respondent No.1 was allowed to have his say in the matter. The responding of the High Court can hardly be supported. In the first place, the Deputy Commissioner is the head of the administration of the district and is conversant with the local situation and has secret sources of information. Normally the Board is entitled to rely upon the word of the Deputy Commissioner. It is expected that the Deputy Commissioner would always act with a sense of responsibility. Secondly, the report of the Deputy Commissioner was confidential in nature. There was no question of the Board disclosing the contents of the report to respondents Nos. 1 and 2. Further, respondents Nos.1 and 2 never made a demand for a copy of the report, and even if such a request was made the Board would have been fully justified in not furnishing the same. Such a refusal would not amount to denial of natural justice for the obvious reason that the rules of natural justice must necessarily vary with the nature of the right and the attendant circumstances. The grant of a liquor licence was not a matter of right but merely in the nature of privilege, Furthermore, the Board was entitled to call for a report of the Deputy Commissioner in an appeal of this nature. 837 We cannot also subscribe to the view expressed by the High Court that respondent No.2 Prafulla Barua who is a student of B.Sc. class still undergoing his studies falls within the description of 'educated unemployed youth ' appearing in the note beneath r.223 of the Rules. In our judgment, the expression 'educated employed youth has definite legal connotation. It denotes a class of citizens who after completing their education are faced with unemployment R.223(2) read with the note embodies a rule of preference. The question of grant of preference under the note beneath r.223(2) can only arise when other conditions as regards suitability of the rival tenderers is equal Besides, the construction placed by the High Court on the expression 'educated unemployed youth ' is manifestly erroneous. By no stretch of imagination can a student still under going his studies in the university be regarded as having completed his education or being 'unemployed ' youth. When a person is still pursuing his course of studies in a university, we fail to see any basis for treating him as an 'educated unemployed youth '. The judgment of the High Court directing the issue of a licence to respondents Nos.1 and 2 being based on the rule of preference contained in the note beneath r.223 of the Rules cannot therefore be supported. The judgment of the High Court also suffers from a serious infirmity. As already stated, instead of remitting the matter to the Board of Revenue, the High Court issued a mandamus directing the Deputy Commissioner to make a grant of the licence to respondents Nos.1 and 2. While doing so, the High Court made a direction that the grant of licence would be subject to the result of the inquiry as to whether respondent No.1 Parag Saikia was a benamidar and therefore not entitled to such grant. Moreover, the High Court made the grant subject to the result of the writ petition filed by the interveners Daya Ram Borah and Prabin Kumer Borah which was still pending before it against the earlier order, of the Board dated February 11, 1982. We fail to appreciate the making of a grant in favour of respondents No. 1 and 2 subject to the result of the inquiry as to whether respondent No.1 Parag Saikia was a mere benamidar. If that were to be so, it would affect the validity of the grant itself. Further, the procedure adopted by the High Court in separately dealing with the writ petition filed by respondents Nos.1 and 2 making a grant of the licence to them for the country spirit shop in question while the earlier writ petition filed by the interveners was still pending was not in consonance with law and rules of fairplay and justice. 838 Before parting with the case we must express our deep sense of anguish that there should have been this unseemly tussle between the High Court and the Board of Revenue, particularly the lack of restraint in the language used by the Board in its order dated December 3, 1982. We also feel that the High Court was not right in criticizing the Board of Revenue in such strong language. The use of harsh language does not redound to the credit of anyone. There must be restraint at all levels as otherwise there can be no rule of law and our entire system of administration of justice will fail. For these reasons, we set aside the judgment and order of the High Court, as a consequence whereof the order of the Board of Revenue dated December 3, 1982 will stand restored. We hope and trust that the High Court will be able to dispose of the writ petition as expeditiously as possible. The writ petition filed by the interveners shall also be heard and disposed of by the High Court along with this writ petition according to law. There shall be no order as to costs. H.S.K. Appeal remanded.

The Board of Revenue on a consideration of the material on record as to the suitability or otherwise of the rival pairs of claimants upheld the grant of a liquor licence made by the Deputy Commissioner in favour of the appellants. It held that respondent No. 1 was a mere benamidar of a prominent businessman and respondent No. 2 being still a student studying for his B.Sc. degree could not be treated as an 'educated unemployed youth ' within the meaning of the note beneath r. 223 of the Assam Excise 'Rules, 1945. The respondent Nos. 1 and 2 and the interveners separately moved the High Court under article 226 of the Constitution. The High Court instead of taking up both the petitions together: took: the writ petition filed by respondents Nos. 1 and 2 and on a reappraisal of the evidence came to the conclusion contrary to that reached by the Board. It accordingly quashed the order of the Board of Revenue and remanded the matter to the Board for a decision afresh, in the light of the directions made by it. The Board took serious exception to certain observations made by the High Court and held that the directions issued were nothing but mere observations and therefore it was not bound by it. After hearing the parties, the Board maintained its earlier order confirming the settlement of the liquor shop by the Deputy Commissioner with the appellants. Respondents Nos. 1 and 2 again moved the High Court under article 226. The High Court passed strictures on the Board of Revenue for not having complied with its directions and on a consideration of the facts appearing came to the same 826 conclusion as before and quashed the order of the Board but instead of remanding the matter to the Board for complying with its earlier orders issued a writ of mandamus directing him to settle the country liquor shop with respondents Nos. 1 and 2 on condition that the grant would be subject to an inquiry as to whether respondent No. 1 was a mere be subject and also subject to the result of earlier writ petition filed by the interveners which was still pending. In appeal, the two questions which arose were :(1) whether it was impermissible for the High Court to have embarked upon an inquiry into facts and on a reappraisal of the evidence come to a finding contrary to that reached by the Board of Revenue and upon that basis issue a writ of certiorari under article 226 quashing the order of Board. And (2) Whether it was a proper exercise of jurisdiction by the High Court under article 226 to have issued a writ of mandamus ordaining the Deputy Commissioner to settle the country liquor shop with respondents Nos. 1 and 2. Answering the first question in the affirmative and the second in the negative. ^ HELD : 1. The High Court clearly exceeded its jurisdiction while issuing a writ of certiorari under article 226 of the Constitution in quashing the impugned order of the Board of Revenue to have embarked upon an inquiry into the facts and upon a reappraisal of the evidence come to the conclusion contrary to that reached by the Board of Revenue viz. whether or not respondent No. 1 was a mere benamidar. [837 F G] 2. It was also not a proper exercise of jurisdiction under article 226 for the High Court to have issued a writ of mandamus directing the Deputy Commissioner to grant the liquor licence to respondents Nos. 1 and 2 in preference to the appellants. Although a writ of mandamus may be a necessary adjunct to a writ of certiorari, if the High Court was satisfied that a writ of certiorari had to be issued to quash the impugned order of the Board of Revenue on the ground that its order was vitiated by an error apparent on the face of the record, the proper course for the High Court to adopt was to issue a writ of mandamus to the Board to hear and redetermine the appeal according to law. [835 E F] HWR Wade 's Administrative Law, 5th edn., p. 638, referred to. The construction placed by the High Court on the meaning of the expression 'educated unemployed youth ' appearing in the note beneath r. 223 of the Rules is apparently erroneous. When a person is still pursuing his course of studies in a university, one fails to see any basis for creating him as an 'educated unemployed youth. The expression 'educated unemployed youth, in the note beneath r. 223 has a definite legal connotation. It denotes a class of citizens, who after completing their education, are faced with the growing problem of unemployment. [837 B D] 827 4. The direction made by the High Court while issuing a writ of mandamus to the Deputy Commissioner ordaining him to grant the liquor licence to respondents Nos. 1 and 2 that the grant would be subject to the result of an inquiry as to whether respondent No. 1 was a mere benamidar and also subject to the result of the writ petition which was filed by the interveners and still pending, appears to be unwarranted. If that were to be so, it would affect the validity of the grant itself. It was also irregular for the High Court to have taken an undertaking from respondent No. 2 who was a student still undergoing his studies for B.Sc. degree in a university that he would give up his studies in case he was given the liquor licence. The procedure adopted by the High Court in separately hearing the writ petition filed by respondents Nos. 1 and 2, while the writ petition filed by the interveners was still pending, and in not taking up both the writ petitions together, and directing the Deputy Commissioner to issue a liquor licence to respondents Nos. 1 and 2, was not in consonance with the procedure established by law and clearly in denial of rules of fairplay and justice. The Board of Revenue was bound to comply with the directions made by the High Court and it was not open to it to say that they were mere observations and not directions issued. The refusal of the Board to comply with the directions of the High Court issued under article 226 was in effect a denial of justice and also destructive of one of the basic principles in the administration of justice based as it is in this country on a hierarchy of Courts. Bhopal Sugar Industries Limited vs Income tax Officer, Bhopal. [1961] 1 S C.R. 474 relied on.

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

Respondent Nos. 4 to 6 sold their 3/5th share of the ancestral land to the appellant for Rs.14,000, as the ven dors left their village and wanted to settle elsewhere where they purchased 80 kanals of Nehri land. Respondents Nos. 1 to 3 filed a declaratory suit in the court of Sub Judge, Ludhiana seeking a declaration that the sale of the suit land would not affect their reversionary rights after the death of respondents 4 to 6. They pleaded that the land was ancestral and according to the custom governing the parties, it could not be alienated; they also asserted that the land was sold without any consideration and legal necessity. The appellant defendant No. 1, contended that the sale was an act of good management on the part of the alienors, and that the same was not without consideration/the vendors having decided to settle elsewhere. The trial court held that the sale was an act of prudent management and was not without consideration. As regards the custom it held that the parties were governed by custom, whereunder ancestral land could not be alienated except for legal necessity or as an act of good management. The suit was accordingly dismissed and the first appeal preferred against that decision failed. Respondents 1 to 3 thereafter preferred Regular Second Appeal before the High Court. The High Court allowed the appeal, set aside the sale holding that it was neither for any legal necessity nor could it be justified as an act of good management. The suit was accordingly decreed. Hence this appeal by the appellant defendant No. 1 by special leave. 418 Before this Court the appellant contended that the sale was or was not an act of good management having been a question of fact, the trial court as also the first appel late court having arrived at a concurrent finding that it was an act of good management, the High Court should not have interfered with that finding. On the other hand the respondents contended that the sale was not an act of good management. Allowing the appeal, this Court, HELD: The custom is that the ancestral immovable proper ty is ordinarily inalienable specially amongst Jats residing in the Central Districts of Punjab, except for necessity and the other permissible reasons. All alienation as a bona fide act of good management has been treated as one of necessity and hence valid. [233B] In the instant case, the vendee proved the ingredients of good management and the concurrent finding of the Trial Court and the first appellate court was that the impugned sale was an act of good management, and it was essentially a finding of fact. [234F] The High Court was, therefore, in error in setting aside the concurrent finding of fact in the facts and circum stances of the case in Second Appeal. Gujar vs Sham Das, 107 P.R. 1887; Mohammad Chiragh and Ors. vs Fatta & Ors., AIR 1934 Lahore 452; Abdul Rafi Khan vs P. Lakshmi Chand and Ors., AIR 1934 Lahore 998; Dial Singh vs Surain Singh, AIR 1937 Lahore 493; Gujjan Singh and Ors. vs Atma Singh, 1968 PLR Vol. 70 195.

N: Criminal Appeal No. 420 of 1974. Appeal by Special Leave from the Judgment and Order dated 27 11 74 of the Allahabad High Court in Criminal Appeal No. 2646/73 and Referred No. 95/73. Frank Anthony, E.C. Agarwala and A. T. M. Sampath; for the Appellants. O.P. Rana; for the Respondent. The Judgment of the Court was delivered by CHANDRACHUD, J. The appellants, Subhash and Shyam Narain, were convicted by the learned Civil and Sessions Judge, Farrukhabad under section 302 of the Penal Code on the charge that at about 9 a.m. on June 9, 1972 they committed the murder of one Ram Sanehi. Subhash was sentenced to death and Shyam Narain to imprisonment for life. The judgment of the trial court having been confirmed in appeal by the High Court of Allahabad, the two accused have filed this appeal by special leave of this Court. 588 The case of the prosecution is briefly as follows: on the morning of June 9, 1972 the deceased Ram Sanehi had gone to his field along with his son Bal Kishore and his daughter Kusuma Devi for eating Kharbuzas. While they were returning from the field at about 9 a.m. the appellants, who were lying in wait near a culvert, suddenly accosted Ram Sanehi. The Appeallent Subhash pointed the barred of his gun towards the chest of Ram Sanehi and said that since he, Ram Sanehi, was a witness against him in a complaint filed by Pooran Lal and since he was also doing Pairvi on behalf of Pooran Lal he would not be allowed to remain alive. The appellant Shyam Narain was armed with a lathi. Bal Kishore and Kusuma Devi pleaded with the appellants to spare their father but Shyam Narain asked Subhash not to delay the matter and finish Ram Sanehi quickly. Subhash thereupon fired three shots from his double barrelled gun, the last of which misfired. Ram Sanehi fell down, whereupon the appellants dragged him by his legs over a distance of 6 or 7 paces. Bal Kishore and Kusuma Devi then raised an alarm whereupon Brij Bhusan, Shyam Lal Mangali Prasad and Jhabbo Singh Thakur reached the place of occurecnce and challenged the appellants. Before running away, the appellant Subhash told his companion Shyam Narain that he on his own part was going to surrender before a court and that Shyam Narain should make his own arrangements. Ram Sanehi died within about 10 minutes after receiving the injuries. Bal Kishore first went to his house which is at about a distance of 120 yards from the scene of offence. At about 12 o 'clock at noon he went to the Kamalgani police station and lodged his First Information Report (exhibit Ka 3). S.I. Vishwanath Sharma who was posted as a 2nd officer at the police station recorded Bal Kishore 's complaint. went to the scene of occurrence, prepared the inquest report and handed over the dead body for being sent for post mortem examination to the District Hospital at Farrukhabad which is about 10 miles away form the village of Kandharpur where the incident took place. S.I Sharma took samples of earth from the place of occurrence an seized a mis fired cartridge which was lying concealed in the folds of the deceased 's Dhoti. The Fard in that behalf is exhibit Ka 10 and the site plan is exhibit Ka 11. The appellant Subhash surrendered before the Additional District Magistrate (Judicial) at Farrukhabad at about 4 p.m. on the very day. The appellant Shyam Narain was arrested at about 2 40 p.m. on the same day under section 122 of the Railway Act for crossing The railines at Fatehgarh. The appellants denied the charge that they had committed the murder of Ram Sanehi and stated that they were involved in the case due to enmity. This defence has been rejected both by the Sessions Court and the High Court. Before referring to the evidence in the case it has to be mentioned that the High Court had before it not only the appeal filed by the accused but also a reference made by the Sessions Court for confirma tion of the capital sentence under section 374 of the Code of Criminal 589 Procedure. Time and again this Court has pointed out that on a reference for confirmation of the sentence of death, the High Court is under an obligation to proceed in accordance with the provisions of sections 375 and 376 of the Criminal Procedure Code. Under these sections the High Court must not only see whether the order passed by the Sessions Court is correct but it is under an obligation to examine the entire evidence for itself, apart from and independently of the Sessions Court 's appraisal and assessment of that evidence. From the long line of decisions which have taken this view it would be enough to refer to the decisions in Jumman and ors. vs The State of Punjab, Ram Shanker Singh & ors. vs State of West Bengal and Bhupendra Singh vs The State of Punjab. The High Court has failed to show due regard to this well established position in law. It did not undertake a full and independent examination of the evidence led in the case and it mainly contented itself with finding out whether the Sessions Court had in any manner erred in reaching the conclusion that the charge of murder levelled against the appellants was established beyond a reasonable doubt. The High Court is right in saying that the main question in the case was whether Bal Kishore and Kusuma Devi who were examined as eye witnesses were truthful witnesses. But then it did not subject their evidence to any minute scrutiny. Impressed overbearingly by the circumstance that the Sessions Court "had the opportunity of observing the demeanour" of the witnesses, the High Court apparenty thought that such an opportunity gave to the Sessions Court 's judgment a mystical weight and authority, even though the learned Sessions Judge had not, in his judgment or while recording the evidence, made any special reference to the demeanour of the witnesses. The High Court accepted the evidence of Ram Sanehi 's children by observing that there was no material contradiction ill their evidence and that certain statements in the F.I.R. afforded a guarantee that the two witnesses were present when their father was done to death. We will now proceed to show how several significant circumstances either escaped the attention of the High Court or were not given their due and rightful importance. First as to the manner in which S.I. Sharma conducted investigation into the case. The offence took place at about 9 a.m. on June 9 and though the District Hospital at Farrukaabad was just 10 miles away, the dead body was not received at the hospital for nearly 24 hours after the incident had taken place. The excuse offered by the prosecution that cartman was not willing to take the body at night is utterly flimsy because the Investigating officer could have easily made some alternate arrangement for despatchin the dead body for postmortem examination expeditiously. With the dead body lying at the scene of offence for nearly 12 hours and thereafter at the police station for another 8 or 9 hours, it was easy enough for the witnesses to mould 590 their statements so as to accord with the nature of injuries. The lnvestigating Officer did not make any note at all in the General Diary as to which witnesses were examined by him on the date of the occurrence which was obligatory upon him to do under paragraph 44 of the U.P. Police Act. The time when the investigation was commenced and the time when it was concluded are not mentioned in the case diary. The time when the Investigating officer reached the village and the time when he returned to the police station are also not noted in the case diary. S.I. Sharma stated in his evidence that several important facts concerning the investigation were being stated by him in his evidence from memory. He reached the scene of offence at about 2 30 p.m. but it was not until about 6 p.m. that he inspected the site. The dead body was not removed from the scene of offence till about 9 p.m. and even that is open to grave doubt because the Investigating officer has admitted in his evidence that he was unable to say as to when the dead body was taken way from the spot and whether it was taken directly to the hospital or was detained somewhere on the way. He was unable to say whether it was right or wrong that the dead body remained in the village till about 4 'O 'clock on the morning of the 10th. Forty or fifty persons had gathered at the scene of offence when the Investigating officer arrived but the record of the case does not show that the statement of any of those persons was ever recorded. In fact even the statement of Kusuma Devi was recorded late at night for which the reason is stated to be that her elder sister Pushpa Devi died of shock on the evening of the 9th after hearing of her father 's murder. It may be that Pushpa Devi died on the 9th, but apart from the cause of her death, the statement of Kusuma Devi need not have been held up so long. We are doubtful if the Investigating officer at all knew on the 9th that Pushpa Devi had died. He has admitted that his knowledge in that behalf was derived from hearsay reports. The appellant Subhash had surrendered before the Additional District Magistrate, Farrukhabad on the afternoon of the 9th itself while the other appellant Shyam Narain was arrested at Fatehgarh at about 2 40 p.m. The Investigating officer did not even know of these significant developments, though they had taken place just a few miles away from the scene of investigation. He says that he learnt of the surrender and the arrest of the appellants on the evening of the 12th. Mangali Prasad has been examined by the prosecution as an eye witness and his name is mentioned in the F.I.R. as one of the four persons who arrived at the scene of offence even before the appellants had run away. His statement was recorded 11 days later on June 20. The F.I.R. mentions expressly that the appellants caught hold of the legs of the deceased and started dragging him. The Investigating officer has not stated in the Panchnama of the scene of offence whether the ground was soft or hard or sandy which had great relevance on the allegation that the deceased was dragged over a certain distance. Finally, it is surprising that the Investigating officer did not think it worthwhile to pay a visit to the field where the deceased is alleged to have gone with his children for eating Kharbuzas. Indeed he stated that he was not in a position to say if there were Kharbuzas at all in the field, when the occurrence took place. 591 The High Court has condoned these lapses on the part of the Investigating officer with the observation that he "appears to have been inexperienced and somewhat negligent". The Investigating officer has stated in his evidence that he had put in 7 years of service. It is difficult to understand on what basis the High Court attributed the lapses on his part to mere inexperience. We will presently indicate the significance of the various lapses and loopholes in investigation but to say, as the High Court has done, that the Investigating Officer was "somewhat negligent" seems to us in the circumstances a grave euphemism. We will now proceed to deal with the various circumstances which, in our opinion, render it unsafe to accept the prosecution case. Dr. S.C. Pandiya who performed the post mortem examination has described in his evidence the injuries received by Ram Sanehi. In all he found 7 injuries on the dead body, out of which injuries 1, 3 and 7, injuries 2 and 4, and injuries 5 and 6 are interconnected. Injury No. 1 is described as a "shot wound" with its entry above the left nipple. Injury No. 3 is described as multiple rounded abrasions on the left side of the chest. Injury No. 7 is the wound of exit on the right scapular region, corresponding to injury No. 1. rnjury No. 2 consists of 8 gunshot wounds of entry below the right nipple while injury No. 4 consists of multiple rounded abrasions above the right nipple. Injury No. 5 is a gun shot wound of entry on the back of the left forearm while injury No. 6 is the corresponding wound of exit near the ulnar aspect of the left forearm. The evidence of Dr. Pandiya and the description of the injuries given by him in the post mortem report tend to show that two different kinds of firearms were used by the assailants of Ram Sanehi. Injury No. 1 was caused by a bullet and that is clear not only from the description of the injury but from what Dr. Pandiya has stated in his evidence. He says: "The bullet, which had entered through injury No. 1 went out straight after emerging from injury No. 7". Injuries Nos. 2 and 5 were caused by pellets. This shows that whereas injury No. 1 was caused by a firearm in the nature of a rifle, injuries 2 and 5 were caused by an ordinary gun. The medical evidence thus falsifies the eye witnesses ' account according to which, the appellant Subhash alone was armed with a double barrelled gun, the other appellant Shyam Narain being armed with a lathi. The objective inference arising from the nature of injuries received by the deceased has a significant impact on the case of the prosecution, which has been overlooked by both the Sessions Court and the High Court. While we are on the medical evidence it would be appropriate to mention that there was no tatooing or charring on any of the firearm injuries which, according to the doctor, shows that the firing was done from a distance of more than 4 feet. In the First Information Report Bal Kishore has stated that as soon as he, his father and sister, reached the culvert, Subhash "touching the chest" of Ram Sanehi "with the 592 barrel of his gun" said that he shall not leave him alive; Shyam Narain thereupon exhorted Subhash not to delay and fire immediately; Subhash then fired three shots in quick succession, one of which mishred. The trend of the F.I.R. is that Subhash fired the first two shots at Ram Sanehi from a point blank range, in which event indisputably, there would have been tatooing and charring around the injuries. Bal Kishore has attempted to offer an explanation that what he meant to say in his compaint was that Subhash trained his gun "towards" Ram Sanehi 's chest and not "on" his chest. This explanation is an after thought and in the circumstances difficult to accept. Thus in another important respect, the medical evidence falsifies the case of the prose cution. There is another aspect of the medical evidence which, though, not as important as the two aspects mentioned above, may also be referred to. The case of the prosecution is that Ram Sanehi had gone to his Kharbuza field with his son and daughter for eating Kharobuzsas. There is evidence that they did eat Kharbuzas and almost immediately there after they started back for home. Within less than 5 minutes, Ram Sanehi met with his deat near the culvert. The post mortem report shows that Ram Sanehi 's stomach was empty which means that the evidence that he had eaten Kharbuzas just a little time before his death is untrue. Bal Kishore tried to wriggle out of this situation by saying that Ram Sanehi had eaten just a small slice of Kharbuza. But even there, Dr. Pandiya has stated that if the entire slice of Kharbuza was eaten by Ram Sanehi, its remains would be found in the stomach provided there was no vomiting after the gun shot injuries. Since Ram Sanehi had not vomited, his large intestines could not have been found to be empty if the story of his children was true. This last circumstance may at first sight seem trivial but its importance consists in the fact that the visit of Ram Sanehi, along with his children, to the Kharbuza field for the purpose of eating Kharbuzas is the very genesis of the incident which happened on June 9, 1972. Coupled with the circumstance that the Investigating officer did not even pay a visit to the Kharbuza field, leave alone making a Panchnama thereof, the conclusion is irresistible that the story that the children had accompanied their father to the Kharbuza field lacks a factual basis. The other circumstances which render the prosecution case suspect are these (1) Ram Sanehi is alleged to have been drageed over 6 or 7 paces by the appellants but not even an abrasion was found on his back or stomach which could be attributed to dragging. (2) Thirty or forty persons are alleged to have collected at the sence of occurrence but Bal Kishore was not able to mention the name of even one of them and it is common ground that the Investigating officer did not record the statement of any of them. (3) Jhabboo Singh, Shyam Lal Brij Bhushan and Mangali Prasad reached the scene of offence even before the appellants had fled away but none from amongst the first three was examined by the prosecution. Mangali Prasad was examin 593 ed as an eye witness but he has been concurrently disbelieved by the Sessions Court and the High Court. (4) Though the motive of the offence is alleged to be that in a complaint filed by Pooran Lal against the appellant Subhash, the deceased Ram Sanehi was cited as a witness, Mangali Prasad 's evidence shows that immediately after the firing, Bal Kishore told him that Ram Sanehi was murdered because of the disputes concerning the election to the Pradhanki. What Bal Kishore told Mangali Prasad immediately after the incident seems more probable because, one Virendrapal had contested that election and the appellant Subhash had defeated him. When Bal Kishore went to lodge his F.I.R. at the police station he was accompanied by Virendrapal, though an attempt was made to show that Virendrapal was only standing outside the police station and had met Bal Kishore accidently. (5) The story of Bal Kishore that after the appellant Subhash fired 2 shots he re loaded his gun but the re loaded cartridge misured makes hardly any sense. Subhash was armed with a double barrelled gun and having fired 2 fatal shots from a close range at his target, it is unlikely that he would re load the gun and that too with only one cartridge. And if that cartridge misfired, it is impossible to understand how it could be found concealed in the folds of Ram Sanehi 's dhoti. There is only one other aspect of the matter which remains to be considered and since the High Court has placed great reliance thereon, it is necessary to deal with it. The F.I.R. which lodged at about 12 O 'clock at noon on the 9th itself mentions that after Ram Sanehi was murdered, the appellant Subhash told his companion Shyam Narain that he himself was going to surrender before a court and that Shyam Narain should make his own arrangement. In fact, Subhash did surrender in the court of the Additional District Magistrate, Farrukhabad, at about 4 p.m. on the 9th. What the High Court has over looked is that Subhash did not surrender in connection with the murder of Ram Sanehi but he surrendered along with the 13 or 14 other accused against whom Pooran Lal had filed a complaint. In so far as Shyam Narain is concerned, the High Court is wrong in saying that he managed somehow to get himself arrested. The evidence of Constable Virendra Singh shows that Shyam Narain was arrested because he was crossing the railway lines and if he was not caught, he would have been run over by the two trains coming from Kanpur and Farrukhabad. This was hardly any sensible way of making an "arrangement" for himself, as directed by Subhash. It is therefore not as if the statement attributed to Subhash in the F.I.R. is corroborated by subsequent events so as to afford a guarantee to Bal Kishore 's presence at the culvert. We are conscious that the Sessions Court and the High Court have both held that the appellants committed the murder of Ram Sanehi but the weight of the circumstances which we have discussed above is so preponderating that even the concurrent finding cannot be allowed 594 to stand. In any event, it seems to us impossible to hold that the prosecution has established its case beyond a reasonable doubt. We therefore allow this appeal, set aside the order of conviction and sentence recorded by the High Court and the Sessions Court and direct that the appellants shall be set at liberty. M.R. Appeal allowed.

The appellants filed three suits (the earliest of the three suits was filed on December 18, 1945) for possession of lands claiming that K, the last owner of the lands died on August 15, 1945. Those suits were dismissed on August 3, 1951, as premature on the ground that the fact of the death of K had not been established. The appellants again instituted three suits in October 1952, December 1952 and May 1953 for the same relief as in the previous suits alleging that the right to sue had ac crued after August 16, 1952, that is, after a period of seven years, under section 108 of Evidence Act; that K died three years before the date. of the filing of the suits; and that they were within time under article 2(b) of the. Schedule annexed to the Punjab Limitation (Customs) Act, 1920 which provides that the period of limitation for a suit for pos session of ancestral immovable property which has been alienated, is three years, if a declatory decree has been obtained, and that period commences from the date on which the right to sue accrues. On appeal, a single Judge of the High Court decreed the suits holding that K having been treated as alive by the High Court when it passed the previous decree in 1951, the conclusion of the lower courts that he had been dead for seven. years before the institution of the suits could not be sustained and also excluded the time spent on the previ ous litigation from 1945 to 1951 under section 14(1) of the Limitation Act. On Letters Patent appeal, the Division Bench held: (1) that the single Judge was in error in ex cluding the time spent on the previous litigation by apply ing section 14(1) of the Limitation Act; (ii) that the words "or other cause of a like nature" occurring in section 14(1) had to be read ejusdem generis with the preceding words "relating to the defects of jurisdiction" and that it was not possible to give the benefit of that provision to the plaintiffs. Dismissing the appeal to this Court (per A.N. Ray, C.J. and Jaswant Singh, J) HELD: (1) Under article 2(b) of the Schedule to the Punjab Limitation (Customs) Act, 1920 in order to be able to succeed the plaintiffs must bring their suits within three years of the accrual of the right to sue (which ac cording to well settled judicial opinion means the accrual of the right to seek relief), namely within three years of the death of K. They had to prove affirmatively that the death of K took place within three years of the institution of the suits. Granting that K has to be presumed to be dead, it cannot be overlooked that under section 108 of the Evidence Act, the precise time of the death is not a matter of presumption but of evidence and the onus of proving that the death took place at any particular time within seven years lies upon the person who claims the right for the establishment of which the proof of that fact is essential. The plaintiffs had not only, therefore, to prove that K had not been heard of for a period of seven years and was to be taken to be dead, but it also lay heavily on them to prove the particular point of time within seven years when K 's death occurred. This they have failed to prove. In the absence of such proof, it cannot be held that the present suits had not been brought within three years of the accrual of the right to sue. [263 D G] 251 Nepean vs Doe D. Knight ; ; , Jayawant Jivarao Deshpande vs Ramachandra Narayan Joshi (A.1.R. 1916 Born. 300), Lalchand Marwari vs Ramrup. Gir (LIII I.A.24; A.I.R. 1926 P.C. 9), Jiwan Singh vs Kuar Reoti Singh & Anr. (A.I.R. 1930 All. 427), Kottappalli Venkates warla vs Kottapalli Bapayya & Ors. (A.I.R. 1957 A.P. 380), Punjab and Ors. vs Natha & Ors. (A.I.R. and Ram Kali & Ors. vs Narain Singh (A.I.R. 1934 Oudh 298 F.B.) referred to. (2) If K had died beyond three years, from the date of the suits, the suits would be barred by limitation because the appellants cannot claim the benefit of section 14 of the Limitation Act 1908. The three important requirements of the section are: (1) that the plaintiff must have prosecuted the earlier civil proceeding with due diligence; (2) the former proceeding must have been prosecuted in good faith in a court which from defect of jurisdiction or other cause of a like nature was unable to entertain it and (3) the earlier proceeding and the later proceeding must be based on the same cause of action. [265 D] (3) The contention that the appeals had been rendered untenable as a result of the amendment made to section 7 of the Punjab Customs Power to Contest) Act 1920 by the Amending Act 12 of 1973 has no force and must be rejected. Section 4 of the Act provides that the Act shall not affect any right to contest any alienation or appointment of an heir made before the Act came into force. This section has been left untouched by the Amending Act of 1973. In the instant case, the alienation was made before the 1920 Act came into force and was not affected by that Act. [261 F H] (4) The words "or other cause of a like nature" in section 14(1) take their colour from the preceding words "defect of jurisdiction" according to the rule of ejusdem generis. Therefore, the defect must be of a character analogous to jurisdiction barring the Court from entertaining the previ ous suit. In the instant case, the Court which tried and dismissed the previous suits as premature did not suffer from inability or incapacity to entertain the suits on the ground of lack of jurisdiction or any other ground analogous to the defect of jurisdiction. The exclusion of the period during which the previous suits were pending, could not, therefore, be allowed to the plaintiffs while computing the period of limitation. [265 E; I 1; 266 A] Bhai lai Kishan Singh vs People Bank of Northern India, I.L.R. , Dwarkanath Chakravarti vs Atul Chan dra Chakravarti (I.L.R. and Palla Pattabhira mayya & Ors. vs Velga Narayana Rao (A.I.R. referred to. [Obiter: The causes of action in the previous suits and in the present suits are also different. And hence the appellants cannot press section 14 into service.] Beg, .J. (Dissenting) The Division Bench of the High Court was wrong in ignor ing the effect of the finding of the single Judge that a new cause of action had arisen within three years before the filing of the plaintiffs ' suits. [281 C] The question of time bar or its removal by resorting to section 14(1) of Limitation Act postulates that a point of time from which limitation could run had been ascertained. As that point could not be the date of the death of K, which was unknown the suits could not be dismisses on that ground. [281 D] (1) The single Judge had sufficiently indicated that the cause of action in the previous litigation was different from the one in the later inasmuch as the facts proved in the later case showing that K must be presumed to be dead could not be and were not set up in the earlier suits. The cause of action had not accrued in 1945. The effect of the judgment in the former suits was that these suits were premature, which is not the case in the suits in appeal. The plaints in the later cases set out the case founded on new facts not in existence at the time of the earlier liti gation and expressly stated why the plaintiffs rely on the presumption of death of K. If the previous suits were dismissed on the ground that they were premature, the cause of action could only, be said to have accrued after their institution. [268 G; 269 C] 252 The findings of the single Judge showed that the. plain tiffs were entitled to the benefit of the presumption laid down by section 108 of the Evidence Act. He found that till August 3, 1951 when the judgment of the High Court in the previous suits was delivered, the position was that the death of K had not been established. This meant that on new facts asserted and proved, K could be presumed dead when the subsequent suits were instituted in 1952 and 1953. This presumption of death having become available to the plain tiffs within. three years of the suits and not before, no occasion for applying section 14 of the Limitation Act could arise. The evidence sought to be given in the previous suits was that K had died on a particular date but the evidence in the subsequent suit was not that he had died on a particular date but that he had not been heard of from August 5, 1945 upto the time of filing of the subsequent suits. [269 H; 270 H] Modi Khalil Khan vs Mahboob Ali Mian, A.I.R. 1949 PC 78 at 86 referred to. (2) (a) If causes of action differ from suit to suit, the accrual of the cause of action can also not be tied down to a particular kind of fact such as the date of actual death of the holder of the property. Once it is held that the causes of action differ for purposes of their accrual, their accrual could not be made to depend on facts of one type only. Facts denoting their accrual must differ from case to case. Proof of date of actual death is conclusive. But, where the basis of the right to sue is presumption of death, the. date; of accrual of the right is the date on which that presumption matures. [271 C] Indian Electric Works Ltd. vs James Montosh & ,Anr. ; followed. Rante Surno Moyee vs Shooshee Mokhee Burmonia & Ors. 12 Moore 's I.A. 244, State of Madras V.P. Agencies & Anr. AIR 1960 SC 1309 at 1310 and Mst. Chand Kour vs Partap Singh, , referred to. (b) The expression "cause of action" has sometimes been employed to convey the restricted idea of facts or circum stances which constitute either the infringement or the basis of a right and no more. In a wider and more compre hensive sense it has been used to denote the whole bundle of material facts which a plaintiff must prove in order to succeed. These are all those essential facts without the proof of which the plaintiff must fail in his suit. [272 G] (c) Applying these tests, in the instant case, the causes of action in the earlier and later litigations would be materially different. No cause of action had arisen at all if it is assumed that K had not died at all. K 's death was an essential part of the cause of action. It had to be proved to enable the plaintiffs to put forward their claims to succeed. But proof of the date of death was not essen tial or indispensable for that purpose. It could only become material in deciding whether the right accrued had been extinguished by the law of limitation. Both the narrow and wider sense of the term "cause of action ' would include all those facts and circumstances on the strength of which the plaintiffs urged that they were entitled to the benefit of the obligatory presumption of law contained in section 108 of the Evidence Act. As these were not available to the plain tiffs before the expiry of seven years from August 5, 1945, it was not possible to urge that this cause of action had arisen more than three years before the filing of the suits. Therefore, the date of its accrual could not lie a day earlier than seven years after August 5, 1945 when K was last heard of. [272 G H; 273 A B] (d) It was for the defendants to establish that K was either alive or had died more than three years before the suits were filed. The presumption under section 107 of the Evidence Act could not come to the aid of the defendants when the plaintiffs had established facts necessary to raise the presumption under section 108 of the Evidence Act. [273 E] (e) The suits are not barred by limitation. The plaintiffs discharged their burden as to when the accrual of their cause of action was within the prescribed period of limita tion. If the "media" upon which the plaintiffs rest their cases 253 are different in the previous and subsequent litigations, the causes of action are different. If the alleged date of death of K was the date of accrual of the previous cause of action, the date of accrual of the second could only be something other than the date of death of K, it could not possibly be the same. The other date of accrual could only be subsequent to August 5, 1945 because it was held in the previous suit that the suit was premature on the ground that seven years since K was last heard of had not elapsed then. Since the evidence was that he was last heard of on August 5, 1945, the only possible date of accrual of the subsequent cause of action could be seven years after the date. The suits were filed within three years of that date. [273 H; 274 A C] (3)(a) The term 'right to sue ' occurring in article 2 of Schedule to the Punjab Limitation (Customs) Act 1 of 1920 must be equated with cause of action. " The "date of death" cannot be substituted for the date of accrual of the "right to use". In the Limitation Act the accrual when intended to be tied to the date of some event is specified as the date of that event. In this case, it is not so. It cannot be held that the date of accrual in both sets of suits is one and the same, that is to say, the actual date. of death. [274 D] (b) Wherever the accrual of a right or commencement of a period of limitation, within which a suit must be shown by the plaintiffs to have been brought, could only be estab lished by proving the date of a person 's death, that duty must be discharged by the plaintiffs or the suit will fail. But to carry the doctrine beyond that and to lay down that the date of death must invariably be proved, whenever the question of limitation is raised in such cases must result in stultifying or defeating legal right and wiping out the effects of a statutory presumption. The accrual of a cause of action based on untraceability of the owner could not be said to depend at all on proof of either actual death or the date of actual death of the owner. It accrues as soon as death can be presumed and not a day earlier. [278 D F] (c) It is not in every suit for possession that the com mencement of the date of dispossession must be established by the plaintiffs. It is only in a suit for possession based on the allegation by the plaintiff of his own dispos session that the burden is governed by Art, 142 of the Limi tation Act. [274 G] (d) In the instant ease, the plaintiffs were never in pos session and, therefore,there was no question of their dis possession. It was a pure and simple suit for possession on the basis of title against which the defendants had not even alleged adverse possession. Therefore, there is no need to bring in the actual date of death constructively, as the date of the presumed dispossession or adverse possession has not been asserted anywhere. [275 B] (e) The plaintiffs have asserted and proved that the period of seven years when K was last heard of by those who would in the natural course of events have heard of or about him if he was alive, had elapsed and that their cause of action matured within three years of their suits. Assuming that the concept of adverse possession of the defendants was to be introduced, the legal position is that possession of defendants could not be adverse to K 's reversioners even before K could be presumed to be dead. The defendants them selves had set up. the plea that he must be still deemed to be alive. The plaintiffs could only be required to prove K 's death but not the date of his death or the date of the plaintiffs ' dispossession. Neither cases dealing with recov ery of possession on the plaintiffs ' allegation of their own dispossession nor those where proof of date of death was a necessary statutory duty for showing that the suit was within time; are applicable in these cases. [275 E F] Nepean vs Doe D. Knight (English Reports 150 Exchequer p. 1021), Jayawant Jivanrao Deshpande vs Ramachandra Narayan Joshi, AIR 1916 Bom. 300 & 301. , Lal Chand Marwari vs Mahant Ramrup Git & Anr. AIR 1926 PC 9, Jiwan Singh vs Kuar Reoti Singh & Anr. AIR 1930 All. 427, Kottapalli Venkateswarlu vs Kottapalli Bapayya & Ors. AIR 1957 AP 380 Punjab v Natha AIR 1931 Lab. 582 (FB) & Ram Kali & Ors vs Naraian Singh AIR 1934 Oudh 298 & 299 300, refrered to. 254 (f) It is neither a part of the case of any plaintiff in these cases nor necessary for the success of his case to prove that K died on a particular date or that K died before or after somebody else. The plaintiffs cannot be saddled with the responsibility to prove this date. [279 ,B] (4) The suits were not barred by limitation because the causes of action in the previous litigation and the litiga tion now are different and the subsequent cause of action has arisen within three years before the filing of the suits. Assuming that the suits were filed beyond the period of limitation on the actual basis of their claims the plaintiffs are entitled to succeed because this is a fit case in which section 14(1) Limitation Act could come to the aid of the appellants. They had been asserting repeatedly that the basis of their claim was that although the actual date of death of K could not be proved, yet, he has not been heard of for seven years. That basis having emerged within three years before the filing of the suits, their suits could not be barred by time. If the causes of action did not arise no question of its exceeding by the law of limitation, could emerge. [280 G] The previous suits did not fail for want of jurisdic tion. The delay in bringing the present suits was due to the fact that no court could decree the claim before the cause of action matured. Therefore, the cause of action of a "like nature" to a defect of jurisdiction is present in these cases, since the provision has to be liberally con strued. The defect revealed by the evidence in the latter litigation was that the suits did not lie at all as they were premature. This was a defect reasonably comparable to a want of jurisdiction. [280 A C] India Electric Works Ltd. vs James Mantosh & Anr. ; , followed. (5)(a) If no cause of action could accrue at all unless and until the date of actual death of K was established, there could be no commencement of a period of limitation. The only possible point from which limitation could start framing in these, cases is the date on which seven years expired from the date on which K was last heard of. This was within three years before filing of the suits. [280 D] (b) The issue in the earlier litigation was whether K was actually shown to have died on a particular date. This was quite different from the issue decided now, which was whether K 's whereabouts had remained unknown for seven years so that he could be presumed to be dead. [280 F] ARGUMENTS For the appeliants: The legal presumption under Section 108 was not sought to be raised in the prior suits. It was for the first time raised in the subsequent group of suits instituted in Octo ber, 1952 based on the allegation that Kishan Singh was not heard of since 15th August, 1945. This submission opens the questions (i) when is the presumption of death to be raised and (ii) whether for the purpose of proceedings in which it is raised or any prior proceedings. The presumption is to be raised in the pro ceedings where the question has been raised i.e. the second group of suit. However, there is no presumption as to the time of death of the person whose death is accepted as a result of presumption. The two are distinct matters (i) the legal presumption of death and (ii) the time of death preceding the period when presumption is drawn. The death may be at any time during the preceding period of 7 years the period that has enabled the court to draw presumption of death. The law requires that if one has to establish the pre cise period during these 7 years at which such person died he must do so by evidence. 255 The conclusion of the court of presumption of death based upon disappear ance from 15th August, 1945 cannot be ignored. Death at any time on or after 15th August, 1945 does not in any manner adversely affect the case of the appellants, inasmuch as the parties had instituted suits (of course premature) on 18th December 1945 (other suits some time later decided by a common judgment). If the parties are held entitled to the benefit of deduction of time from 18th December 1945 to 3rd August, 1951, the death of Kishan Singh even if it took place between 15th August, 1945 to any date before 3rd August, 1951 the suit are not barred by limita tion. On the pleading of the parties it cannot be assumed that the presumption of death would justify acceptance of date of death, any time prior to 15th August, 1945. The period of limitation for the suit for possession was 3 years The defendants had not pleaded in the prior suit that the suit was. barred by limitation as instituted. In other words it was not alleged that he had died at any time 3 years prior to the institution of the suit (18th December, 1945). Actually death has not been admitted even on 15th August, 1945. The trial Court and the District Judge held the suit to be time barred not on the ground that his death had taken place at a period exceeding 3 years from the date of the institution of the first suit. They have apparently not ignored the possibility of death having taken place during the period between 18th December, 1945 to 3rd August., 1951. They have held the. suit to be time barred because it was considered that the appellants are not entitled to deduct the stated period spent in the prior suits. Even if it is considered that death had taken place during this period or any time after 15th August, 1945 or during the 3rd August to 31st October, 1952 the suits are not time barred. Preliminary objection was raised by the respondents as to the effect of the Punjab Customs (Power to Contest) Amendment Act, 1973 (Punjab Act 12 of 1973). It was urged that the Act had come into force on 23rd January, 1973, it has retrospective operation and bars all suits to contest alienation also including the suits for possession of the property following a declaratory decree. It was urged that the appeals are barred as a consequence of repeal of the provisions of Punjab Act II of 1920. The contention as to the effect of Act 12 of 1973 is not correct. The previous law on the subject of right to contest alienation of immovable property and the limitation of suits relating to alienation of ancestral immovable property is regulated by two Acts. (1) Punjab Act II of 1920 Described an Act to restrict the powers of the descendents or collaterals to contest an alienation of immovable property; and (2) Punjab Act I of 1920 Described as an Act to amend and consolidicate the law govern ing the limitation of suits relating to alien ations of ancestral immovable property etc. The present Act 12 of 1973 repeals section 6 of Act II of 1920. It also amends section 7 of the aforesaid Act. Effect of the repeal of section 6 and amendment of section 7 merely is that the right to. contest vesting in the collaterals upto 5th degree has been done away with and the suit to contest alienation of ancestral property has been taken away. Under the previous existing law an alienation of non ances tral property could not be contested. Act I of 1920 has also not been repealed. The limitation provided for a suit for possession i.e. 3 years is still an existing provision of the Act. It is obvious that the legislature has retained 256 Act I of 1920 unrepealed so that the benefit of the decrees may be available to all persons under section 8 of the Act and the period of limitation may be retained as before. The effect of the declaratory decree in that the alienation is not binding against the inheritance. The succession never remains in abeyance. A person entitled to succeed to the last male holder is entitled to sue for possession on the basis of right to succession to the property. For the respondent: The principle of res judicata would be immediately attracted if the plaintiffs allege the "same cause of ac tion" and seek the exclusion of the time because the earlier suit was tried on merits by a competent court having jurisdiction and was dismissed holding that 'plaintiff failed to prove that Kishan Singh died on 15th August, 1945. This finding would be binding between the parties in the subsequent suits as they have been given after recording the evidence and a full trial by, the competent court having jurisdiction. Therefore, the plaintiff is barred by principles of res judicata from alleging the accrual of right to sue before the filing of the earlier suits as the same would be res judicata. The plaintiff is estopped from alleging the accrual of same cause of action, therefore, no question of exclusion of time inasmuch as the principle of section 14 of exclusion of time arises only if the cause of action is the same. Section 14 uses the words "the proceeding is founded upon the same cause of action". The language of section 14 of the Limitation Act by using the words "same cause of action" makes it very clear that time can be excluded for the same cause of action only if the earlier suit is dismissed be cause of defect of jurisdiction or other cause of a like nature. On the interpretation of section 14 also the time cannot be excluded for the reason that the earlier suit was dis missed as premature and the new suit was filed on a new cause of action, namely, Alla Singh and his line became extinct on the death of Kishan Singh on 15th of August, 1952 i.e. after the expiry of ' seven years from 15th August, 1945. Since a new cause of action was alleged after the dismissal of previous suit, section 14 cannot be attracted. The words "is unable to entertain it" mean that it is not able to admit the matter for consideration on merits i.e. the. inability is of a formal nature but it does not mean inability to grant relief. From the decisions one principle is deducible that section 14 of the Limitation Act has to be construed harmoniously with section 11 C.P.C. Section 11 C.P.C. bars the filing of a fresh suit on the same cause of action whereas section 14 of Limitation Act allows time to be. excluded in the previous litiga tions was "founded on the same cause of action ' '. Section 12 says that if plaintiff is barred under section 11 C.P.C. to file suit for any cause of action then plaintiff cannot file suit for a such cause of action in any court to which C.P.C. applies. If both. section 14 of Limitation Act and principles of res judicata are to operate then, it should be held that to apply section 14 the earlier suit had been dismissed on a technical ground of jurisdiction, or other cause of a similar nature, court is unable to entertain it without going into the merits of the case. In the present case earlier suits were dismissed because the plaintiff failed to prove the death of Kishan Singh and the extinction of line of Alia. The words used by the High Court at page 302 line 37 are: "The suit had been rightly dismissed as premature" do not mean that Kishan Singh was alive but it means that plaintiffs have not proved the accrual oj cause of action namely the extinction of line of Alia. In these circumstances it is submitted that the suits were not dis missed on the ground of defect of jurisdiction or other cause of similar nature. for which the court was unable to entertain it. Section 14 of the Limitation Act does not apply. Plaintiffs have failed to prove the date of death of Kishan Singh and the extinction of line of Alla within 3 years of the filing of the suit. Suits are therefore time barred. 257 Sections 107 and 108 of the Evidence Act do not help the appellants. Rule of evidence in section 107 is that it is for the plaintiff to prove the death of a person if he was alive within 30 years and section 108 says that burden of proving that a man was ,dive is on the person who alleges he is alive if it is proved that he has not been heard of for seven years by those who would naturally have heard of him if he had even alive. In this case the plaintiffs appellants have alleged that Kishan Singh was last heard of on 15th August, 1915 and singe then he is not heard of. The onus is, there fore, on the plaintiff appellant under section 107 of Evidence Act 10 prove as to when Kishan Singh died. It is; Submit ted that Kishan Singh may have died on any date either before 15th August, 1945 or immediately theereafter. There is no presumption that he died on the expiry of 7 years from the date he was last heard. The date of death is thus required to prove by the plaintiff like any other fact. The suits are, therefore, barred by time and should be dismissed plaintiffs ' failure to prove death of Kishan Singh within three years of the filing of suits.

ce Act 1948 covers all factories or establishment with 20 or more employees and the benefit is intended to be given to institutions with more than that number. Because the legislation is beneficial it should also apply to factories or establishments with less than 20 employees is not the contention on behalf of the appellant. If that be not so, in finding out whether a partner would be an employee a liberal construction is not warranted. [127H, 128A] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3500 of 1984. Appeal by Special leave from the Judgment and order dated the 3rd August, 1981 of the Kerala High Court in M.F.A. No. 442 of 1979. M.K. Banerjee, Addl. General, Girish Chandra and R.N. Poddar for the Appellant. The Judgment of the Court was delivered by RANGANATH MISRA, J. The short point which arises for determination in this appeal by special leave is as to whether a partner of a firm is an "employee ' within the meaning of Section 2(9) of the (hereinafter called 'the Act '). Respondent Ramanuja Match Industries which is a firm is engaged in manufacturing of matches within the Trichur area of Kerala State and the question as to whether it is covered under the provisions of the Act fell for consideration. The Inspector found that there were 18 regular employees and three of the partners who worked regularly for wages were to be put together. Thus the number of 20 employees as required by the Act was satisfied and the respondent did incur liability for contribution The respondent challenged its liability before the Employees Insurance Court at Calicut by contending that partners were not employees and when the three partners were excluded, the total number of employees did not exceed the statutory minimum. The 122 Insurance Court found in favour of the respondent and an appeal under the Act was carried to the High Court by the appellant and a Division Bench of that Court following its earlier decision in Regional Director of E.S.I. Corporation vs M/s. Oosmanja Tile Works, Alwaye,(l) held that partners were not employees. It is against this decision that the present appeal has been carried. There is no dispute that under the Act, liability to pay contribution arises only when 20 or more persons are employed for wages. It is also not disputed that in the case of the respondent unless the three partners are included, the basic number of 20 is not reached and no liability under the Act accrues. The term 'employee ' has been defined in section 2(9) of the Act to mean "any person employed for wages in or in connection with the work of a factory or establishment to which the Act applies and "one of the alternative in clauses (i), (ii) or (iii). 'Wages ' has been defined in sub section (22) of that section to mean "all remuneration paid or payable, in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled. " It is thus clear that in order that some one may be an employee within the meaning of the Act, he has to be employed for wages. The concept of wages would bring in the contract of employment. The Shorter oxford English Dictionary gives the meaning of 'employ ' to be "to use the services of for some special business; to have or maintain in one 's service". In common parlance the concept of employee would take with it the correlation of the employer. The term 'employer ' had not been defined in the Act but in the absence of an employer who would provide the employment, there would indeed be no employee. In fact, that concept is clear in the scheme of the Industrial Disputes Act of 1947 and the definition of the term 'employer ' in section 2(g) of that Act makes the position clear. It is appropriate that at this stage we refer to the position of a partner qua the firm. Section 4 of the Partnership Act, 1932 defines 'partnership ' and one of the essential requisites of a partner ship is that there must be mutual agency between the partners. (1) I.L.R. 1975 (2) Kerala 207. 123 Full Bench of the Patna High Court in Seth Hira Lal & Anr. vs A Sheikh Jamaluddin and Anr.,(1) rightly emphasised upon the position that an important element in the definition of partnership is that it must be carried on by all or any one of the partners acting for all. Section 18 of the Partnership Act statutorily declares every partner to be an agent of the firm for the purposes of the business of the firm and Section 19 states that an act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm, binds the firm. A partnership firm is not a legal entity. This Court in Champaran Cane Concern vs State of Bihar and Anr. ,(2) pointed out that in a partnership each partner acts an agent of the other. The position of a partner qua the firm is thus not that of a master and a servant or employee which concept involves an element of subordination but that of equality. The partnership business belongs to the partners and each one of them is an owner thereof. In common parlance the status of a partner qua the firm is thus different from employees working under the firm, it may be that a partner is being paid some remuneration for any special attention which he devotes but that would not involve any change of status and bring him within the definition of employee. Learned counsel for the appellant strongly relied on a case of the Rajasthan High Court in Regional Director of E.S.I. Corporation, Jaipur vs P.C. Kasliwal and Anr. ,(3) The learned Single Judge has taken the view that a partner can be employed by the firm and if he draws emoluments within the prescribed limits for the work of the factory, he would be an employee under section 2(9) of the Act. In the same decision it has also been held that a sleeping partner drawing a monthly allowance merely because he is a partner would not come within the ambit of the Act as an employee and contribution in respect of such partner would not be payable. As against this view there is a Division Bench decision of the Kerala High Court in Regional Director of E.S.I. Corporation vs M/s. Oosmanja Tile Works, alwaye (supra), where it has been held that a managing partner of a firm is not an employee if merely he receives salary or other remuneration. Strong reliance has been placed by (1) [1946] 224 Indian Cases 106. (1) ; (2) [1981] Labour & Industrial Cases 671. 124 the Kerala High Court on the position that such managing partner is not an employee who is working under a contract of service. In fact, in the present case support has been drawn from this decision of the High Court as a precedent and following the ratio of that decision, the High Court has decided against the appellant. The Rajasthan High Court has obviously not been alive to the definition of the term 'employee ' in section 2(9) of the Act though the definition has been extracted in extenso. The status of a partner qua the firm with reference to the provisions of the Partnership Act the concept of "employer" and "employee" and the importance of the definition of "wages" have also been lost sight of in adjudicating whether a partner is an employee. We are, therefore, not inclined to accept the view of the Rajasthan High Court. On the other hand, the view taken by the Kerala High Court seems to be the correct one and fits in with the position of a partner qua his firm and the jurisprudential approach to the matter. The respondent did not choose to appear in this Court to support the order of the High Court. We have, however, come across several judicial opinions of American and English Courts taking the view that a person cannot be the employee of the firm of which he is a partner. In Words and Phrases Permanent Edition Vols. 14 and 14A (1974 reprint), several such decisions of the American State Courts have been referred to in support of the view that a partner cannot be an employee of his firm and we propose to refer to some of the more apt ones. In Dube vs Robinson(1) it has been held that in a partnership each partner is an agent of the others as well as a principal; but he is not in hire as an employee and that he may perform labour even with the employees of the partnership and of the same kind as they perform does not make him an employee of the other partners or of the partnership, and hence such partner cannot be counted to constitute one of the workmen ' necessary for application of the Employers ' Liability and Workman 's Compensation Act to the partnership business. In United States Fidelity & Guarantee Company vs Neal(2) it has been held that a partner not an employee of the partnership within the Compensation Act though at the time of the injury he was performing special services under contract with his partner, (1) (2) 125 separate and independent from the articles of partnership, and is A being paid compensation therefore in addition to his shale in profits. Again, in Le Clear vs Smith,(1) it was held that a partner, though he received a salary in addition to his share of the profits, was an employer and an not employee entitled to compensation under the Workman 's Compensation Law, where the insurer did not insure the employers. In Berger Fidelity Union Casualty Co., vs Texas,(2) it has been held that a member of an employer firm cannot be an employee thereof. In Wearer vs Weinberger,(3) it was held that "employee" is a person who renders service to another, usually for wages, salary or other financial consideration, and who, in performance of such service, is entirely subject to the direction and control of the other, such other being the employer. Crooks vs Glena Falls Indemnity Co. ,(4) is an authority for the view that an employee is one who is subject to the absolute control and direction of the employer in regard to any act, labour or work to be done in course and scope of his employment. In Morici Corporation vs U.S.D.C. California. ,(5) the Court held that the test to determine whether one person is another 's employee, is whether or not he is subject to control of the other person. In Burker vs Friedman,(6) it was held that partners cannot be regarded as employees rather than as employers who own and manage operation of business, and, hence, cannot be included as employees. Wright vs Deareter(7) took the view that partners were not employees for purposes of requirement that compensation law be complied with when there are three or more employees. Though we have not come across any decision of the U.S. Supreme Court on the point, these authorities under various legislations are clearly indicative of the principle that a partner who belongs to the class of employer cannot rank as employee because he also works for wages for the partnership. Undoubtedly the term employee is the co relative of employer. (1) (2) 293 S.W. 235. (3) 392 F. Suppl. (4) 203. (5) 500 F. Suppl. (6) (7) 126 We may usefully refer here to an English decision. The Court of Appeal in Ellis vs Joseph Ellis & Co.,(1) was called upon to decide whether a partner of a firm could be its employee. The short facts relevant for our purpose available in the judgment of Collins M.R. are: "The deceased appears to have been a skilled workman and, by agreement with his partners, he worked at the mine, sometimes on the surface and sometimes under ground, for wages; and, while working underground, he met with an accident which occasioned his death. His representative thereupon claimed compensation under the Workman 's Compensation Act, 1897, on behalf of her self and his children. The question is whether, having regard to his position as one of the partners, he can be regarded as a workman in the employ of the partnership, and the partners as his employers within the meaning of the Act. When one looks at the provisions of the Act, they do not appear to be applicable to a case like the present. The supposition that the deceased man was employed, within the meaning of that term as used in the Act (not very different from the definition here), would appear to involve that he, as one of the partners, must be looked upon as occupying the position of being one of his own employers. It seems to me that, when one comes to analyse an arrangement of this kind, namely, one by which a partner himself works, and receives sums which are called wages, it really does not create the relation of employers adjusting the amount that must be taken to have been contributed to the partnership assets by a partner who has made what is really a contribution in kind, and does not affect his relation to the other partners which is that of co adventurer and not employee". Lord Justice Mathew pithily but with emphasis added: "The argument on behalf of the applicant in this appeal appears to involve a legal impossibility, namely, that the same person can occupy the position of being both master and servant, employer and employed." (1) 127 Lord Justice Cozens Hardy also spoke in the same strain: "All that our decision in this case amounts to, I think, is that the Act only applies where there is on one side an employer, and on the other side a workman, who are different persons. " This is in complete accord with our view. F.C. Bock and F.F. Manix in their book, the Australian Income Tax Law and Practice (1960 Edn., Vol. 3, page 3092) have said: "The decision of the High Court in Rose vs Federal Commissioner of Taxation(l) established that there is nothing in the relevant income tax legislation to warrant treating a partnership as a distinct legal entity. A partner cannot therefore, also be an employee of the partnership, for a man cannot be his own employer . . " It is thus clear that in the United States, Great Britain and Australia, a partner is not treated as an employee of his firm merely because he receives a wage or remuneration for work done for the firm. This view is in complete accord with the jurisprudential approach. In the absence of any statutory mandate, we do not think there is any scope for accepting the view of the Rajasthan High Court. Counsel for the appellant emphasised on the feature that the statute is a beneficial one and the Court should not interpret a provision occurring therein in such a way that the benefit would be withheld from employees. We do not doubt that beneficial legislations should have liberal construction with a view to implementing the legislative intent but where such beneficial legislation has a scheme of its own there is no warrant for the Court to travel beyond the scheme and extend the scope of the statute on the pretext of extending the statutory benefit to those who are not covered by the scheme. The Act covers all factories or establishment with 20 or more employees and the benefit is intended to be given to institutions with more than that number. It is not the (1) ; 128 contention of counsel that because the legislation is beneficial it should also apply to factories or establishments with less than 20 employees. If that be not so, in finding out whether a partner would be an employee a liberal construction is not warranted. A person who would not answer the definition cannot be taken into account for the purpose of fixing the statutory minimum. We are therefore, not inclined to accept the contention of counsel that on the basis of the statute being beneficial, a partner should also count as an employee. Once we hold that the three partners were not employees, on the admitted fact the total number of employees would be less than 20, the Act would not be applicable to the establishment in question. There is no merit in the appeal and the same is, therefore, to be dismissed. At the hearing the respondent was not represented; we, therefore, make no direction for costs. N. V. K. Appeal dismissed.

On an allegation that the appellant, a temporary Sub inspector of Police, while posted at Pithoragarh had contracted in November 1964 a second marriage, while his first wife was alive, without obtaining the prior permission of the Government and in violation of Rule 29 of the U. P. Government Servants ' Conduct Rules, 1956 the Superintendent of Police, Shahjahanpur initiated in 1968 disciplinary proceedings under section 7 of the Police Act against him. 1 However, after the evidence was closed in January 1970, the Superintendent noticed that his action was without jurisdiction and pointed out the same lo the Deputy Inspector General of Police, Bareilly Range, who ordered the quashing of the disciplinary proceedings on March 12, 1970. About this time the Inspector General of Police, Uttar Pradesh issued a circular letter to the Superintendent of Police throughout the State requiring them to submit a list of Sub Inspectors who fell in any of the following three categories: 1. Whose reputation and integrity is very low and/or 2. Who are generally involved in scandals, like drinking, immorality, etc. which blackens the face of the U. P. Police and/or 3. Everywhere they are a big problem because they encourage gambling, excise offences, brothels, criminals, etc. The Superintendent of Police, Shahjahanpur drew up a list of such Sub Inspectors on February S, 1970 and directed them to appear before the Deputy Inspector General of Police, Bareilly Range on February 10, 1970 during his 2 inspection of the district. The list included the name of the appellant with the note: "A corrupt officer, who is not straight forward. Married two wives against Government Servants Conduct Rules. Does not do his duty sincerely. Wherever he goes creates problem". Thereupon, on April 27, 1970, the Deputy Inspector General of Police, Bareilly Range, made an order purporting to be under the rules published by Notification No. 230/ 1953 dated January 30, 1953 that the appellant 's services were not required any more and were terminated with one month 's pay in lieu of notice. The appellant thereupon filed a Writ Petition in the High Court against the order terminating his services and on November 17, 1972 a learned Single Judge of the Allahabad High Court dismissed the Writ Petition holding that the order of termination was passed bonafide, that it was an order of termination simpliciter and that it did not constitute the removal of the appellant from service. On appeal filed by the appellant that vice was endorsed by a Division Bench of the High Court by its judgment and order dated March 13, 1973 and the appeal was dismissed holding that the impugned order was ex facie innocuous and could not be said to cast any stigma or be regarded as imposing the punishment of dismissal or removal. Hence the appeal by Special Leave of the Court. Allowing the appeal, the Court ^ HELD; 1. It is well settled that in dealing with a government servant the State must conform to the constitutional requirements of Articles 14 and 16 of the Constitution. An arbitrary exercise of power by the State violates these constitutional guarantees, for a fundamental implication in the guarantee of equality and of protection against discrimination is that fair and just treatment will be accorded to all, whether individually or jointly as a class. When a government servant satisfies the Court prima facie that an order terminating his services violates Articles 14 and 16 the competent authority must discharge the burden of showing that the power to terminate the services was exercised honestly and in good faith, on valid considerations fairly and without discrimination. [S E G] 2. Where the services of a government servant on temporary appointment arc terminated on the ground that his reputation for corruption makes him unsuitable for retention in the service, the reputation for corrupt behavior must be based on something more than a mere allegation. The State, and for that matter any statutory employer must take great care when proceeding to terminate a career on the ground of unsuitability, to ensure that its order is found in definable material, objectively assessed and relevant to the ground on which the termination is effected. [6 C E] In the instant case, the Superintendent of Police did not apply his mind to the requirements of the case. The Superintendent of Police has noted that the 3 appellant created problems wherever he went, but it is not disclosed in the affidavits what those problems were and that the problems were of the nature specifically indicated by the circular issued by the Inspector General of Police. The other grounds mentioned in the report of the Superintendent of Police are equally vague and unspecific. [ 6A B] 3. Where allegations of misconduct are leveled against a Government Servant, and it is : case where the provisions of Article 311 (2) of the Constitution should be applied(l, it is not open to the competent authority to take the view that holding the enquiry contemplated by the clause would be a bother or a nuisance and that therefore it is entitled to avoid the mandate of that provision and resort to the guise of an ex facie innocuous termination order. The Court will view with great disfavour any attempt to circumvent the constitutional provision of Article 311 (2) in a case where that provision comes into play. [6 G H, 7A B]

Civil Appeal No. 47 (N T) of 1975. From the Judgment and Order dated 3.10.1974 of t he Gujarat High Court in I.T. Reference No. 30 of 1973. Bishambar Lal for the Appellant. V.S. Desai, B. Rao and Ms. A. Subhashini for the Responden t. M.B. Lal for the Intervener. (N.P.) 88 The Judgment of the Court was delivered by PATHAK, C.J. This appeal by certificate granted by t he High Court of Gujarat is directed against the judgment of the High Court on the following questions referred to it by the Appellate Tribunal: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was fight in holding that the asse s see cannot be denied the benefit of carry forward of deve l opment rebate? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in directing that t he Income tax Officer should determine the development reba te and such development rebate should be allowed to be carri ed forward and set off when profits are available and if, in that year, the assessee fulfils the necessary requiremen ts for such allowance like creation of adequate reserve?" The assessee is a limited Company. It has a textile mi ll at Cambay in the State of Gujarat. For the assessment ye ar 1962 63, the previous year being the calendar year 1961, t he assessee claimed that a sum of Rs. 1,26,233 should be a l lowed as development rebate under section 33 of the Income t ax Act, 1961. The Income tax Officer rejected the claim on t he ground that the assessee had not created a reserve as co n templated by sub section (3) of section 34 of the Income tax Ac t, 1961. The Appellate Assistant Commissioner of Income T ax dismissed the appeal filed by the assessee. In second appe al the claim by the assessee found favour with the Income T ax Appellate Tribunal. At the instance of the Revenue t he questions set forth earlier were referred to the High Cou rt for its opinion. The High Court has answered the questio ns in favour of the Revenue and against the assessee. It h as held that the assessee had failed to comply with the cond i tions of sub section (3) of section 34 of the Act. In this appeal by the assessee it is urged that the vi ew taken by the High Court is erroneous and that it is n ot necessary that a reserve should be created in the previo us year during which the machinery or plant was installed. Sub section (1) of section 33 provides that development rebate m ay be claimed as a deduction in respect of a new machinery or plant installed 89 after 31 March, 1954 which is owned by the assessee and is wholly used for the purposes of the business carried on by him, and that the allowance of the deduction is subject to the provisions of section 34. (a) of sub section (3) of section 34 provides that the deduction referred to in section 33 shall n ot be allowed unless an amount equal to 75 per cent of t he development rebate to be actually allowed is debited to t he profit and loss account of the relevant previous year a nd credited to a reserve account to be utilised by the assess ee during a period of eight years next following for the pu r poses of the business of the undertaking, other than f or distribution by way of dividends or profits or for remi t tance outside India as profits or for the creation of a ny asset outside India. The Finance Act, 1966 added an Explan a tion to this clause. The Explanation declared that t he deduction referred to in section 33 could not be denied by reas on only that the amount debited to the profit and loss accou nt of the relevant previous year and credited to the aforesa id reserve account exceeded the amount of the profit of su ch previous year (as arrived at without making the depos it aforesaid) in accordance with the profit and loss accoun t. The Explanation was inserted with retrospective effect fr om the commencement of the Act. Before the Explanation w as enacted a difference of opinion had existed between the Hi gh Courts on the question whether the statute required t he creation of a reserve in the previous year in which the n ew machinery or plant was installed, when the amount of t he profit of that previous year was either nil or insufficie nt for the purposes of enabling the creation of such reserv e. It is not necessary to refer to these cases, for it see ms clear to us that the Explanation, which applied to t he assessment year under consideration before us, removes t he doubt altogether. What is contemplated is the creation of a Reserve Fund in the relevant previous year irrespective of the result of the profit and loss account disclosed by t he books of the assessee. Mere book entries will suffice f or creating such a Reserve Fund. The debit entries and t he entries relating to the Reserve Fund have to be made befo re the profit and loss account is finally drawn up. That is a condition for securing the benefit of development rebate a nd if that condition is not satisfied we fail to see how t he deduction on account of development rebate can be claimed at all. Learned counsel for the assessee relies on West Laikdi hi Coal Co. Ltd., Calcutta vs Commissioner of Income tax, We st Bengal 11, and Commissioner of Income ta x, Delhi Central vs Modi Spinning & Weaving Mills Co. Ltd . , Those were cases decided under the prov i sions of the Indian Income tax Act, 1922 and there was no Explanation such as we have before us. Re 90 ference was made to the decision of this Court in Indi an Overseas Bank Ltd. vs Commissioner of Income tax Madra s, In that case, however, the question w as whether the creation of a reserve in compliance with section 17 of the Banking Companies Act constituted sufficient compl i ance with the requirements of proviso (b) to section 10(2) (vi b) of the Indian Income tax Act, 1922. Reference has also be en made to Additional Commissioner of Income tax vs Vishnu I n dustrial Enterprise, We do not find it possible to agree with the view taken by the Allahabad Hi gh Court in that case that the development reserve need not be created in the relevant previous year during which the n ew machinery or plant is installed, and that a profit must ha ve been earned during the previous year to permit the creati on of a reserve fund. We think that the Explanation is clea r, and that there can be no doubt that it envisages the cre a tion of a Reserve Fund notwithstanding that there is no profit or insufficient profit from which such reserve may be provided. To contemplate otherwise would be to negate t he entire scheme incorporated in section 33 read with section 34 of t he Act. For the same reason we are unable to affirm the vi ew taken by the Allahabad High Court in Commissioner of Income tax vs U.P. Hotel and Restaurants Ltd., [1984] 1 Our attention has been drawn by the learned couns el for the assessee to Dodballapur Spinning Mills Ltd. vs Commissioner of Income tax, Karnataka 2 and Anr., [1980] 1 where reference has been made to a circular issued by the Central Board of Direct Taxes dated 14th October, 19 65 and to a subsequent circular dated 30 January, 1976. We ha ve carefully considered the matter and we do not think that t he circulars affect the true position in law. On behalf of the assessee reliance was placed on Indi an Oil Corporation Ltd. vs section Rajagopalan, Income tax Office r, Companies Circle II (1) Bombay and others, 41 where the Bombay High Court has held that there was no obligation on the assessee to create a reserve in the ye ar of installation if there was no taxable income in the rel e vant year. Some of the submissions addressed in that ca se may be set forth in detail. A powerful argument was a d dressed by learned counsel for the assessee and it w as pointed out that the expression "shall be allowed" in clau se (a) of sub section (1) of section 33 indicated that the developme nt rebate is to be assessed and thereupon it becomes allowabl e, and that sub section (2) of section 33 which provides for the allo w ance of development rebate mentions that the sum "to be allowed" by way of development rebate for the assessme nt year shall be only such amount as shall be sufficient to reduce the total assessable income to nil and the amount of development rebate to the extent to which 91 it has not been allowed shall be carried forward to t he following assessment years for eight subsequent year section Reference was also made to the distinction between t he expressions "to be allowed" and "actually allowed" used in the relevant provisions. It was also argued that the util i sation by the assessee of the development rebate reserve f or the purposes of the business of the undertaking contemplat ed the existence of an actual fund which could be utilised f or the purposes of the business, and that an illusory deb it entry in the profit and loss account and an illusory cred it entry in the development rebate reserve account were n ot contemplated. The High Court accepted the submission a nd concluded that it was not mandatory that the necessary deb it and credit entries must be made in the assessment ye ar following the year of installation in which the developme nt rebate is determined under section 33. Having considered t he matter at some length in the present case, it seems to us clear that in order to claim the deduction on account of development rebate under sub section (1) of section 33 it is obligat o ry that the debit entries in the profit and loss account a nd the credit entry in a reserve account should be made in t he relevant previous year in which the machinery or plant is installed or first put to use. The development rebate co n templated by sub section (1) of section 33 cannot be allowed as a deduction unless a reserve account has been created in t he previous year in which the installation or first use occur section Any doubt in so reading the provisions because of a want or insufficiency of profit in such previous year has be en removed by the Explanation to clause (a) of sub section (3) of section 34. The significance of the words "actually allowed" in clause (a) of sub section (3) of section 34 has been considered by t he High Court in the judgment under appeal, and we are in entire agreement with the view taken by the High Court in that ' regard. A number of other cases have also been placed before us by learned counsel for the assessee, but as they deal wi th the point on the basis of considerations substantially t he same as have been referred to in the cases mentioned earl i er, we think it unnecessary to deal with them specifically . Upon the aforesaid considerations we hold that the Hi gh Court is right in answering the questions in favour of t he Revenue and against the assessee. In the result, the appeal is dismissed but there is no ord er as to costs. H.L.C. Appeal di s missed.

This is defendants ' appeal arising out of a suit for part i tion. One Mallappa Kulkarni had two sons: Veerappa and Gura p pa. Verrappa is survived by his son Lingappa. Gurappa, w ho was in the service of Railways married Channavva (fir st wife) on 16.2.28 but since she remained issueless, he rema r ried in 1955 Chinnavva (second wife). From this marriage t wo daughters were born viz. Shakuntlabai arid Annapoornav a. Consequent upon the death of his second wife Gurappa is sa id to have married Nilavva accroding to customary Udiki ma r riage. After retirement Gurappa settled permanently at Hub li where he had house, property etc. After the death of Gura p pa, his first wife Channavva claimed l/3rd share in t he property. Having failed to get the same, she sold her 1/3 rd share to Lingappa. Lingappa also could not procure the 1/3 rd share from defendants by mutual negotiation. Thereupon he filed a suit for partition claiming his 1/3rd share in t he immovable properties left by Gurappa. In the suit he i m pleaded Channavva (first wife) as Defendant No. 1 and t he children from 2nd wife as Defendant Nos. 2 & 3 and Nilla va was impleaded as Defendant No. 4, who was described as having illegal connections with the deceased Gurappa. The Additional Munsiff, Hubli who tried the suit pass ed a preliminary decree for partition of l/3rd share of Gura p pa 's properties in the hands of the defendants 2 to 4 by metes and bounds. Defendants 2 to 4 contested that Defenda nt No. 4 was lawfully married wife of Gurappa. Defendants 2 to 4 appealed to the Civil Judge at Hub li impleading the plaintiff and Defendant No. 1 as respodent section The Civil Judge 71 modified the decree and granted I/6th share holding the 4 th defendant to be legally married wife of Gurappa. Bei ng dissatisfied by the said order, the plaintiff as also D e fendants 2 & 3 filed appeals in the High Court. The Hi gh Court by the impugned judgment allowed the plaintiff 's appeal and restored the decree of the trial Court for l/3 rd share and dismissed the defendant 's appeal. The High Cou rt held that the 4th defendant was not legally married wife of deceased Gurappa. Hence this appeal by Defendants 2 & 3 by special leave. The question that was agitated before this Court wa s: Whether proof of custom of Udiki marriage was adduced by t he fourth defendant; and whether Udiki marriage itself impli ed the dissolution of earlier marriage and if not, wheth er separate custom of dissolution of the earlier marriage w as pleaded and proved. Allowing the appeal, this Court, HELD: Custom must be proved and the burden of proof is on the person who asserts it. A custom cannot be extended by logical process. Customs cannot be extended by analogy a nd it cannot be established by a priori method. [8lB. E] Nothing need be proved of which the Courts can ta ke judicial notice. When a custom has been judicially reco g nised by the Court then it passes into the law of the la nd as proof of it becomes unnecessary under section 57(1) of the Evidence Act. [81 F] From the evidence on record, appreciated in the light of the case law on the subject and the authoritative tex ts relating to the custom of dissolution and Udiki form of marriage prevalent among the Lingayats who are a religio us sect following teachings of Basava, the Court entertains no doubt that there has been ancient and unbroken customs of dissolution of marriage and of Serai Udiki marriage amo ng the Panchamasal Lingayats which was judicially noticed by the Courts, and that the marriage in the instant case, of the fourth defendant with Gurulingappa was proved to ha ve been customarily dissolved and that she was subsequent ly legally married with Gurappa in the valid customary form of Udiki marriage, whereafter, she lived with Gurappa as hu s band and wife until Gurappa died, and that, thereafter, s he enjoyed the family pension by dint of her being nominated as wife of Gurappa to the knowledge of all concerned. She w as accepted by the community as wife of Gurappa even after h is death. There is, therefore, no scope for declaring t he marriage illegal posthumously. [84F H; 85A] 72 Virasangappa vs Rudrappa & Anr., Madr as 440; Pakhali Jina Magan vs Bai Jethi, I.L.R. 5; Sankarlingam vs Subban, [1894] 17 Madras 479; Shivalingi ah vs Chowdamma, A.I.R. 1956 Mys. 17; Rahi vs Govinda Val ad Teja, Bom. 97; Edward vs Jenkins, [189 6] ; Mohammed Ibrahim vs Shaik Ibrahim, AIR 19 ; Ramalakshmi Ammal vs Sivanantha Perumal Sethuraya r, 14 M.I.A. 570; Raja Rajendra Narain vs Kumar Gangananda Ors., AIR 1925 PC 213; D.C. Bara Banki vs Receiver of t he Estate of Choudhry & Ors., AIR 1928 PC 202; Effuah Amiss ah vs Effuah Krabah, AIR 1936 P.C. 147; Saraswati vs Jagada m bal; , and Uzagar Singh vs Mst. Jeo, AIR 19 59 SC 1041, referred to.

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

Appeal Nos.4538 39 of 1991. From the Judgment and Order dated 23.3.1990 of the Hyderabad High Court in C.C.A. Nos. 54 & 55 of 1987. Ashok K.Gupta for the Appellant. Ms. Suruchi Agrawal and T.V.S.N.Chari for the Respondents The Judgment of the Court was delivered by RANGANATH MISRA, CJ. Special leave granted. By notifica tion dated 12th January, 1973, under Section 4(1) of the Land Acquisition Act, 1894 as modifiednby Notification of 27th July, 1978, 26 acres and 26 gunthas of land located within the Hyderabad District was notified for acquisition for the Bhagyanagar Urban Development Authority. A similar notification was published on 14th June, 1979 for acquisi tion of two acres and 29 gunthas. The Land Acquisition Officer made his award for both the properties on 10 th June, 1982 fixing the market value at Rs. 42,000 per acre with five per cent deduction towards development cost. Being dissatisfied with the awards passed by Land Acquisition Officer, a reference was sought and made under section 18 of the Act. The Claimants demanded compensation at the rate of Rs. 200 per square yard. The Civil Court fixed the market value at Rs.200 per sq.yd. as demanded but directed deduc tion of 20 per cent towards development charges. The Land Acquisition Officer carried appeals against the escalation of compensation and the present appellants preferred cross objections. The High Court reassessed the entire evidence and came to hold. "Today the position of the acquired lands is altogether different. It is common knowledge that the prices started soaring high from 1980 onwards and this part of Hyderabad, namely, 377 Gaddiannaram started developing from 1980 and today it is undoubtedly one of the important areas in Hyderabad. But we must consider the position as it stood in 1978 and 1979. Taking all the circumstances into account, we think it reasonable to fix the market value at Rs. 3 lakhs per acre. The Civil Court had given a deduction of 20 per cent towards development charges. The learned Advocate General contended that deduction should be enhanced to 33 1/3 per cent. We do not think that any interference is called for in this regard. The lands are abutting the highway. Evidence shows that there are roads on three sides. Hence. we maintain the deduction of 20 per cent and if so done, the market value comes to Rs.2,40,000 which works out at Rs. 50 per sq.yd. The Trial Court has awarded Rs.200 per sq.yd with a deduction of 20 per cent which comes to Rs. 160 per sq.yd. We are unable to sustain the order of the Court below on any justifiable grounds. We accordingly set aside the judgment and decree and determine the market value at the rate of Rs.50 per sq.yd . " It is against this deduction in compensation that the claimants have come to this court in appeal. The Collector had adopted a deduction of five per cent. The referee court adopted the deduction at 20 per cent and the High Court rejecting the claim of the Advocate General that deduction should be one third put it at one fifth. We find that the High Court did not go by the percentage of deduction. In fact, according to the High Court and particu larly as the portion we have extracted above would show the appropriate market value per square yard was Rs. 50 and if a 20 per cent deduction from out of Rs. 3 lakhs per acre was accepted, it worked out that way. The Judgment of the High Court gives us the impression that in fixing the compensa tion. the High Court did not go by the percentage of deduc tion but kept in view the market value of the land at the time of the notification under section 4(1) of the Act. There is clear material and the High Court has accepted it that price went up in the area after 1980. The notifications are within a range of a year or two from that time. There fore, the valuation after 1980 is not the guideline. Having looked into the material accepted by the High Court, we are not in a position to disturb the finding recorded by the High Court. The appeals are accordingly dismissed. No costs. R.P. Appeals dismissed.

The appellant a public limited company was manufacturing Rosin, Turpentine and Rosin Derivatives and was carrying on business at Bari Brahmana and Jammu Tawi. On 20.1.1981, the Assessing Authority assessed the appellant company under the , for the year ending 30.6.80. On 22.2.1981 an assessment order under section 10 of the Act was made. A penalty order was also made. The appellants challenged the order of the Assessing Authority before the High Court filing Writ Petition No. 87 of 1987, contending that they were exempt from payment of sales tax under the and the Jammu & Kashmir General Sales Tax Act, 1962, on the finished goods produced by them for a period of five years commencing from 8th November, 1979, in terms of the Government Orders No. 159 Ind. dated 26.3.1971 as amended by Government Order No. 414 Ind. dated 25th August, 1971 read with Section 8(2A) of the ; that the Government represented and announced a package of incentives for large and medium scale industries grant of exemption from sales tax both on the raw materials purchased by the industries and the sale of their finished products; and that the Government was estopped from charging sales tax. The High Court dismissed the Writ Petition holding that the two Government Orders were only declarations of an intention to exempt 181 from payment of sales tax and that they were not exemption notifications under section 5 of the General Sales Tax Act and that the appellants failed to prove the factual foundation for invoking the principle of promissory estoppel. Against the High Court 's decision by special leave C.A. No. 2309 of 1989 was filed by the appellant company. C.A. No. 2310 of 1989 The appellant company had filed a miscellaneous petition, after the judgement in the W.P.No. 87 of 1987 (the writ petition of the High Court against which C.A.No. 2309 of 1989 was filed) for permission to file reply affidavit on the ground of that the documents produced at the time of hearing needed explanation. The High Court dismissed the Misc. Petition as it was belated and the judgement in the writ petition was delivered relying on the materials placed on record. C.C.No. 3148 50 of 1989 The appellant partnership firm was manufacturing Vanaspati Ghee. It was assessed for the period from 2.9.1981 till 30.9.1981 under the Jammu & Kashmir General Sales Tax Act. The appellants moved the High Court in a writ petition (W.P.No. 52 of 1982) to quash the assessment order, contending that the Government order 159 Ind. dated 26.3.1971 as amended by Government Order 414 Ind. dated 25.8.1971 exempted the sales of the finished product of Vanaspati Ghee from sales tax and that the Government was estopped from collecting tax. When the Writ Petition (W.P.No. 52 of 1982) was pending an assessment order was made on 14.11.1984 for the assessment year ending 30th September, 1982, including the period 2nd September to 30th September, 1981 (which was questioned in W.P.No. 52 of 1982). The assessment order dated 14.11.1984 was challenged by the assessees appellants in the writ Petition No. 822 of 1984. During the pendency of the writ petitions certain other Government Orders were passed and certain assessment orders for the subse 182 quent periods were passed and those were questioned in the Writ Petition No. 711 of 1987. The assessees contended that Government Order No. 159 Ind. dated 26.3.1971 and Government Order 414 Ind. dated 25.8.1971 were exemption orders referable to section 5 of the Jammu & Kashmir General Sales Tax Act. The respondents contended that the said Government orders were not exemption orders section 5 of the General Sales Tax Act and that there was not factual foundation for the plea of promissory estoppel. The High Court dismissed all the three writ petitions by a common order, against which Civil Appeals 3148 50 of 1989 were filed. C.A.No. 3151 of 1989 : The appellant assessee filed a writ petition praying to quash certain notices issued under section 14 of the and for a declaration that the Vanaspati Ghee manufactured by them was exempt from payment of tax upto January, 1992, i.e., for a period of 10 years from the date from which they started their commercial production as per the Government Order 159 Ind. dated 26.3.1971 and Government Order No. 414 Ind. dated 25th August 1971 as orders exempting their goods from sales tax under Section 5 of the Jammu & Kashmir General Sales Tax Act. The Writ Petition was also dismissed against which C.A.No. 3151 of 1989 was filed by special leave. The assessee contended that the exemption from payment of tax was extended from 5 years to 10 years and the Government was bound to give the exemption for 10 years on the ground of promissory estoppel; that SRO 448 which superseded the exemption granted under the Govt. Orders was ultra vires and that the SRO 448 had no effect of superseding exemption granted under the G.O. 159 and 414; and that the exemption for 5 years granted under the Government Orders could not be withdrawn on the ground that SRO 80/82 was prospective in operation and also on the ground of promissory estoppel. The State contended that even if the sale of a particular commod 183 ity was exempted from payment of tax under the local Act, the dealer selling the same in inter state trade or commerce would be liable to pay Central Sales Tax under the provisions of Section 6(1A) of the ; that if Section 6(1A) of the was applicable to a particular transaction of sale, Section 8(2 A) of the General Sales Tax Act would not be applicable to that transaction; that the conditions that the industry should have been set up and commissioned subsequent to the Government Orders 159 and 414 and the commodity sold in order to claim the exemption under the Government Orders, should be those manufactured by that industry were the conditions or specified circumstances within the meaning of the Explanation and, therefore, the appellants in C.A.Nos. 2309, 2310/89 were not entitled to any exemption under Section 8(2 A) of the ; that the Government Orders were superseded by SRO 80/82 and Vanaspati Ghee was made liable to tax at the rate of 8 per cent; that the goods manufactured by the appellants in C.A.Nos. 2309, 2310/89 were also made taxable as falling under the residuary item at the rate of 8 per cent; that in the assessment order relating to Assessment Year 1981 82 for the period from 1.9.1981 to 30.8.1982 in the case of appellants in C.A. Nos. 3148 3150 of 1989 there was a finding that the assesses collected sales tax in respect of their sales turnover for which the exemption was now claimed and that under Section 8 B of the J&K General Sales Tax Act the said amount was refundable to the Government. As the questions, arose in these appeals were common, appeals were heard together and allowing the appeals of the assessees by a common judgment, this court, HELD :1. If power to do an act or act or pass an order can be traced to an enabling statutory provision, then often if that provisions is not specifically referred to, the act or order shall be deemed to have been done or made under the enabling provision. [194D] 2.1 Normally in the case of grant of tax exemption as an incentive to industry the exemption orders have generally taken the form of Government Order rather than a notification. But in the case of other exemptions though they are also under section 5 of the local Act (J&K General Sales Tax Act, 1962) they have taken the form of notification. [194G H] 2.2 The pattern followed in Jammu & Kashmir is that in respect 184 of exemptions from payment of taxes following Cabinet decision on Policy matters and incentive they have taken the form of a Government order. [194H 195A] 2.3 The Jammu & Kashmir General Sales Tax Act, 1962 itself makes a distinction requiring a notification to be made for certain purposes and the making of a Government order in respect of certain other purposes. Since there is no form prescribed in this behalf, if the particular order in effect is an exemption order, whether it takes the form of an order or notification makes no difference. [194F G] 2.4 From the publicity given to the Government Orders 159 and 414 by the Government, while inviting entrepreneurs to establish industries in Jammu & Kashmir and certain other communications to the parties, it is be understood that the Government orders 159 and 414 were treated as exemption orders satisfy all the requirements of the provisions of section 5 of the local Act. [195B C, 194E] 2.5 Even as an order of exemption the appellant will have to show that he had set up the industry in conformity with the intent of 1971 order and entitled in terms thereof to the exemption in respect of the goods manufactured by him. But that is not to say that after he establishes those facts the Government will have to make a separate order of exemption in relation to him. [201C D] 2.6 There is no prescribed form for granting exemption under section 5 of the Jammu & Kashmir General Sales Tax Act. There is also no prohibition against reference to any other matter or matters in exemption orders under section 5 of the General Sales Tax Act. If the incentives related also to other benefits or rights merely because they are included in the same Government Order does not make it any the less an exemption order so far as the exemption related to payment of sales tax. [202C D] 2.7 The High Court was in error in thinking that the exemption order should be specific in favour of the appellant. The exemption as can be seen from the provisions of section 5 of the Jammu & Kashmir General Sales Tax Act could be in respect of any class of dealers or any goods or class or description of goods. There could be an exemption to an individual also but the power of exemption is not restricted to such cases alone. It may refer to transactions of sale of a particular type of goods or class or description of goods or in respect of any class of 185 dealers or a combination of both. [201B] 3.1 `Will be granted exemption ' has the same meaning as `will be exempted ' and does not in any way show that it requires a further follow up action. [201G H] 3.2 The exemption is with reference to an industry which is to be established subsequent to the Government order. Therefore in that sense both expressions mean the same. [202A] 4. The notification issued on the 3rd of June 1971 in SRO 214 under section 23 of the Jammu & Kashmir Urban Immovable Property Tax Act, 1962, amending the Immovable Property Tax Rules, 1962 by inserting Rules 20 A was subsequent to GO 159 Ind. dated 26.3.1971. It was published on 25.3.1971 in the Government Gazette under section 23(1) for information of all persons likely to be affected thereby and any objection or suggestion which may be received in the Finance Department from any person with respect to the said draft before the said date will be considered by the Government. It is by reason of the fact that this draft rule has been published calling for objection the GO 159 Ind. itself stated that the grant of immovable property tax exemption would be available "as admissible under the Urban Immovable Property Taxation Rules". Thus on the day when the Government Order was made there was already the draft amendment rules, and, therefore, it could not be stated that the amendment was a follow up action in pursuance of the Government order. The Government order refers to the draft and says as per the amendment they will be entitled to the exemption. [202E 203B] 5.1 The only reference to 10 years was in the Finance Minister 's speech and in the Brochure dated September 1978. The Brochure only lists the concession and incentives available generally. It does not refer to any Government decision or Cabinet decision or any order of the Government. [203G H] 5.2 The Finance Minister 's statement made in March 1978 only refers to a proposal to continue the grant of exemption from payment of sales tax for a period of 10 years. This statement also is not unambiguous. It may mean that the benefits under the Government Orders 159 and 414 may be continued for another 10 years without withdrawing the same. This is merely a budget proposal which could 186 give rise to no right to the appellants. As no decision order or notifications is produced extending the period of exemption in relation to sales tax it is not possible to consider the claim of the appellants for exemption for 10 years on the ground of promissory estoppel. [204 B C] 6.1 The SRO No. 195 dated 31.3.1978 did not and could not supersede the exemption granted under the Government orders 159, 414. [205D] 6.2 When it stated in the amending notification SRO 448 dated 22nd October, 1982 that vanaspati and edible oils are taxable at the point specified therein it only means that those vanaspati and edible oils which are not exempted are taxable at the points specified in the Schedule. The Government order gave exemption only for five years from the date of commencement of the industry and those industries who had been manufacturing for more than that period and also those industries who were not entitled to the benefit of the said Government order would be liable to pay sales tax on the vanaspati manufactured by them and the said goods were liable to tax at the point specified in the Schedule. [205F G] 7.1 In the scheme of levy of single point taxation, the Government could fix any point in the series of sales for the Government have fixed the sale by the dealer, that if the second sale, as the taxable point no exception can be taken. In that sense no question of vires on the ground of lack of power would arise. [205H 206A] 7.2 Under section 4(1) of Jammu & Kashmir General Sales Tax Act the goods are taxable only once, that is it could be taxed only at one point of sale. The government orders 159 and 414 are exemption orders and exempt the sale by appellants of their manufactured products. The exemption would not arise unless the goods are taxable at the point of their sale. Thus the effect of exempting their sale is that the said goods manufactured by them could not be taxed at the second or subsequent sales also as that would offend section 4(1) which provides for single point levy. In cases where there are no exemption orders and the State fixed the second or subsequnt sale as point of taxation the first or prior or subsequent sales are not exempted sales but are not taxable sales. Therefore SRO 448 fixing he sale of vanaspati ghee by a dealer would not be applicable to vanaspati ghee manufactured by the appellants which are exempt under the Government orders. [206B D] 187 7.3 The goods manufactured by the Appellants are exempt under Government Orders 159 and 414 and that exemption covers entire series of sales of that very goods. [206D] 8.1 Under section 6(1) of the every dealer who sells goods in the course or inter state trade or commerce shall be liable to pay tax under that Act. A sale of goods shall be deemed to take place in the course of inter state trade or commerce if the sale occasions the movement of goods from one state to another or if effected by a transfer of documents of title to the goods during their movement from one State to another. [207D E] 8.2 In view of the provisions of Section 15 the State Law can impose tax on sale of declared goods only at a rate not exceeding four per cent of the sale price and such tax also shall not be levied at more than one stage. If the tax has been levied under the State Law on declared goods and such goods are sold in the course of inter state trade and tax has been paid under the Central Sales Tax the Law levied under the State law shall be reimbursed to the person making such sale in the course of inter state trade. [208C E] 8.3 Section 8(2 A) of the does not have any over riding effect on the scheme of taxation relating to inter State sale of declared goods. There is also scope for the applicability of section 6(1 A) of the when the inter state sale takes place when the goods are in transit and is effected by transfer of documents of title to the goods during their movement from one State to another. [209B C] 8.4 Only certain cases which would have been covered by section 6(1 A) of the have been carved out for the purpose of exemption subject to the applicability of section 8(2 A) of the . Section 6(1 A) of the has not become otiose by reason of inclusion of that section in the non obstante clause in section 8(2 A). Both provisions, therefore, operate and they should not be read so as to nullify the effect of one another. [209C E] 9. The facts which the dealer had to prove to get the benefit of the Government orders are intended only to identify the dealer and the goods in respect of which the exemption is sought and they are not conditions or specifications of circumstances relating to the turnover sought 188 to be exempted from payment of tax within the meaning of those provisions. The specified circumstances and the specified conditions referred to in the explanation should relate to the transaction of sale of the commodity and not identification of the dealer or the commodity in respect of which the exemption is claimed. The conditions relating to identity of the goods and the dealer are always there in every exemption and that cannot be put as a condition of sale. [210D F] 10.1. SRO 80/82 was prospective in operation. The Government seems to have been following as a pattern that is in the case of incentives to industries the exemption orders had taken the form of a Government order. Government orders 159 and 414 were also in pursuance of a Cabinet decision. SRO 80/82 though a Government notification under the Business Rules it is issued by the Ministry concerned. In the circumstances there is also a serious doubt whether the said incentives could have been superseded by the SRO 80/82. [213H 214B] 10.2. In the case of a grant of exemption without specifying any period for which the exemption is available the Government could withdraw the same at any time. The appellants acting on the representations of the Government had set up their industries. Therefore they are entitled to claim the benefit of the exemption for the entire period of five years calculated as per the terms of the Government orders, even if it were to be held that SRO 80/82 superseded the earlier exemption orders. [216D E, 216G 217A] 11. Since the assessment orders were regular assessment orders on the ground that their sales are taxable sales the question of applicability of Section 8B of the local Act does not arise. That question arises in view of the finding that their sales turnover are exempt but still under section 8B of the Local Act, they are liable to refund any money collected "by way of tax". [217G H] Pournami Oil Mills & Ors. vs State of Kerala & Anr. , [1986] Supp. SCC 728; Bakul Oil Industries & Anr. vs State of Gujrat & Anr. , ; ; Assistant Commissioner of Commercial Taxes (Asstt), Dharwar & Ors. vs Dharmendra Trading Company and Ors., ; ; Indian Aluminium Cables Ltd. & Anr. vs State of Haryana, 38 STC 108; Industrial Cables India Ltd. vs Assessing Authority, [1986] Supp. SCC 695; International Cotton Corporation (P) Ltd. vs Commercial Tax Officer & Ors., 35 STC 1; referred to. 189

ition No. 6607 of 1981. Kapil Sibal (A.C.) for the Petitioner. N.C. Talukdar and R.N. Poddar with him for the Respondent. Miss A. Subhashini for CBI. Daniel Latiffi and N.K Agarwal with him for the Intervener. The Judgment of the Court was delivered by PATHAK, J. The petitioner, Shri Bhagwant Singh, has applied to this Court for relief in the matter of the death of his married daughter, Gurinder Kaur. 113 Shri Bhagwant Singh is a member of the Indian Revenue Service. His daughter, Gurinder Kaur, was one of three children. She was an intelligent and talented girl who secured a first division in the Senior Cambridge Examination and had obtained a B. Sc. (Home Science) Degree from Lady Irwin College. She was endowed with good looks and a pleasing personality, and her education and deportment attracted notice. It is apparent that the father was proud of his daughter. Shri Bhagwant Singh and Shri Kartar Singh Sawhney were colleagues in the office. They had been friends for over thirty years. Shri Kartar Singh has a son, Amarjit Singh. The family lived at J 7/93, Rajouri Garden, New Delhi. The son ran a motor parts shop at Kashmere Gate, Delhi. It appears that the two colleagues decided on a marriage between Gurinder Kaur and Amarjit Singh in view of the close association of the two families. From the very beginning, it seems, Shri Bhagwant Singh was opposed to the evils of the dowry system, and the sentiment was also deeply entrenched in Gurinder Kaur for, it appears, she along with other girls of her college signed a pledge in favour of the "anti dowry movement". According. to Shri Bhagwant Singh, there was an express stipulation between the respective parents that no dowry would be demanded in the marriage. The marriage started off well and the young couple enjoyed a harmonious relationship for the first few months. But very soon, it is alleged, Gurinder Kaur became conscious of broad hints from her mother in law that gifts in the shape of money and jewellery were expected from her parents. Shri Bhagwant Singh, on being formed of this, decided to ignore it, firm inn his conviction that any insidious attempt to extract a dowry should not be countenanced. It is alleged that from this point Gurinder Kaur became the victim of constant ill treatment by her mother in law. She was carrying a baby, but amidst the oppressive tensions at home she suffered a miscarriage and was admitted to a Nursing Home. According to Shri Bhagwant Singh, his daughter continued to be ill treated and was often taunted that unless the observed the family tradition of presenting a necklace to her mother in law she would remain without child. It is said that the pressure on Gurinder Kaur continued unabated, and it was not long before her husband got it conveyed to Shri Bhagwant Singh that he required about 114 Rs. 50,000 for financing his business. As Shri Bhagwant Singh remained firm in his resolve not to yield to these pressures, it is alleged that the girl continued to be harassed and her parents in law made it plain to her that they regretted the marriage. The attitude and relations of her husband and his family towards her went from bad to worse, and the regard which ordinarily a bride in the house can expect to receive was replaced by a continuing scorn and contempt and ill will. It must be recalled that Gurinder Kaur was a girl of good family, of refined character and well educated. Brought up in a home where the dowry system was regarded as an evil to be opposed, it can be presumed that she rebelled strongly against the attempts at extortion directed against her father. It is reasonable to assume that the relations between the young husband and wife were vitiated by bitter discord, and that she lived in the home in an atmosphere of open and continuous hostility. On August 9, 1980, ten months after the marriage, Gurinder Kaur, aged 22 years was found dead of third degree burns from a kerosene fire in the bath room. According to the family of Kartar Singh, all the members of the family had proceeded to the Gurudwara Bangla Sahib in the early morning, and on their return the girl had prepared breakfast for the eight members of the family. She and her husband ate breakfast later and, it is said, the husband left for work about 10. 30 A.M. Within an hour thereafter, the girl was found dead in the bathroom. The tragedy occasioned universal distress, and on the versions put out by the newspapers agitated letters condemning the dowry system and calling for urgent legislative and social measures for reform poured into the press. The police authorities, it seems, tend to believe that the case was one of suicide, but Shri Bhagwant Singh is convinced that murder cannot be ruled out. It is not possible in this case, nor indeed would it be right for us to do so, to enter into the question whether Gurinder Kaur committed suicide or was murdered. That is a matter which is properly involved in the trial of a criminal charge by a court possessing jurisdiction. We are concerned here only with an examination of the question whether, after being informed of Gurinder Kaur 's death, the police authorities conducted themselves as law and justice required of them. A counter affidavit of October, 1981 of Shri P.S. Bhinder, Commissioner of Police, Delhi states that Gurinder Kaur was admitted in the Ram Manohar Lohia Hospital on August 9, 1980 at 12.15 P.M. with "100% burn injury" by her father in law, 115 Shri Kartar Singh Sawhney, and that on receiving information a Sub Inspector of Police visited the hospital and was told by the doctor on duty at 3. 10 P.M. that Gurinder Kaur was unfit to make a statement. His enquiries led him to believe that Gurinder Kaur had attempted to commit suicide. He registered the case as F.I.R. No. 507 dated August 9, 1980 under section 309 of the Indian Penal Code and commenced investigation. IS P.M. On the same day Gurinder Kaur died. The police investigation brought to light that Gurinder Kaur was found burning at about 11 A.M. On August 9, 1980 in the bathroom of the first floor of the house. The police say that the bath room was found bolted from inside, and it was broken open by a servant, Ramu, with the assistance of Smt. Satinder Kaur, the elder daughter in law. After the fire was extinguished, Gurinder Kaur was removed to the hospital. It is said that a tin can of S litters of Kerosene oil, two match boxes and one looking glass with the words "Do not hold any one responsible Pinky" written on its surface with a soap cake were found. The Central Forensic Science Laboratory experts summoned for the purpose were of opinion that the writing on the mirror was that of Gurinder Kaur. It was also said that the door of the bathroom could have been broken open from outside. When Shri Bhagwant Singh complained about the manner in which the police investigation was proceeding and expressed his suspicions in regard to the circumstances in which his daughter died, the police added section 4 of the Dowry Prohibition Act to the charge on November 29, 1980. Subsequently, on May 15, 1981 reference to section 306 of the Indian Penal Code was also included. The police continued their investigation until August 29, 1981, and from the investigation they inferred that it was a case of suicide. It seems that thereafter the investigation was entrusted by the Minister of State for Home Affairs in the Government of India to the Central Bureau of Investigation, and the file was sent to its Director on September 10, 1981. For that reason, it is said, no question arose of filing any report under section 173 (2) of the Code of Criminal Procedure. Shri Bhagwant Singh has vigorously contended that the investigating agency in this case did not carry out its statutory duties in a bonafide manner and deliberately withheld the filing of a police report and resorted to delaying the progress of the investigation in order to ensure that no proceedings were taken against the accused in the case. He disputes the version of the police that the doctor 116 on duty at the hospital had said that Gurinder Kaur was unfit to make a statement and that it was not possible for the police to obtain her statement before her death. He has referred to the statement of Shri Kartar Singh Sawhney, the father in law of the girl, made to the police on November 13, 1980, in which he had disclosed that Shri Bhagwant Singh had come to the hospital and he found that his daughter was talking occasionally, and that during the period from 2.30 P.M. to 8.30 P.M. Shri Bhagwant Singh, his wife, his niece, who was a doctor, and his elder brother Balwant Singh, as well as the latter 's wife and two sons, had been talking to the girl. In his affidavit Shri Bhagwant Singh also alludes to the statement of Smt. Satinder Kaur recorded by the police on August 9, 1980 where she stated that at the time of the tragedy she rushed upstairs and fainted and that when. she regained consciousness many people including her father in law, mother in law and brother in law, Raman Deep Singh who lived on the second floor were present. It is pointed out that if this statement is true, then it is not possible to accept the version put forward by the family of Shri Kartar Singh that the servant, Ramu, with the assistance of Smt. Satinder Kaur had to break open the door of the bathroom because it was bolted from inside. It is also pointed out that the servant Ramu and Smt. Satinder Kaur were alleged to be on the ground floor when the burning took place in the both room on the first floor of the house where the mother in law, Gurbachan Kaur was present. Gurbachan Kaur, according to her statement, was ironing clothes at that movement on the first floor, a few yards away from the bathroom and would have been the first person to have witnessed the tragedy and yet, it is questioned, there is no reason why she should not have been the first to assist the servant Ramu in breaking open the door if indeed the door had to be broken open. It is also alleged that the police never attempted to take into possession the cake of soap in the bathroom with which the deceased is supposed to have written on the looking glass, nor did they take possession of the blanket, which according to the statement of Shri Kartar Singh Sawhney, was employed to extinguish the fire. Several suspicious circumstances have been set forth by Shri Bhagwant Singh in his affidavit, and the opinion of the C.F.S.L. experts has been assailed on the ground that it was delivered on an examination of the mirror after more than a month. He has also attempted to rebut the assertion of the police that he did not join in the investigation from the outset and that he had originally said that he did not suspect any foul play. On the contrary, he has dwelt at some length on the 117 continuous attempts made by him to ensure an effective investigation into the cause of his daughter 's death, approaching in this behalf the highest authorities in the land. When this case came before this Court, an order was made directing the filing of a detailed affidavit by the Commissioner of Police setting forth full particulars of the various steps taken by the police in connection with the investigation. A further counter affidavit was filed by Shri P. section Bhinder, Commissioner of Police. It is stated in the counter affidavit that the investigating officer remained busy with the investigation of other cases and with matters concerning the maintenance of law and order. and that this particular case was with Sub Inspector Amrit Lal, who had 12 cases in hand, from August 9, 1980 to August 11, 1980. and thereafter was entrusted to Sub Inspector Sri Ram, who had 29 cases in hand, from August 12, 1980, to November 13,1980, and subsequently to Inspector Charan Das, who had only one case in hand, from November 13, 1980 to May 28, 1981. It is stated that these police officers "could not investigate this case all the time" because besides the other cases in hand, they had also to look after the day to day work of the Police Station. It is said also that during the period when the case was under investigation with Inspector Charan Das, the file remained under submission to the Crime Bench of Delhi for scrutiny with a view to guide the local police on further investigation. Finally, the case passed into the hands of Inspector R. P. Kochhar of the Crime Branch, who had four cases in hand, and he dealt with this case from May 28, 1981 to September 9, 1981. It is pointed out that Inspector Kochhar was at that time entrusted also with the investigation of a number of cases involving a notorious dacoit as well as two sensational murders. It is reiterated in the counter affidavit that the statement of Gurinder Kaur could not be recorded by the police as the doctor on duty had declared her unfit to make a statement. It is admitted that the blanket with which the fire was extinguished was not taken into possession by the police, but it is asserted that the soap cake was taken on August 9, 1980. It is also asserted that on August, 10, 1980 Sub Inspector Amrit Lal brought a team of C.F.S.L. experts to the place of occurrence and a photograph of the mirror was taken. It is alleged that although every effort was made to record the statement of Shri Bhagwant Singh, he declined to make any statement. It was only on April 21, 1981 that he did so. It is conceded that reference to section 306 of the Indian Penal Code was added only on May 15, 1981, the omission 118 to do so earlier being explained as a mistake. The delay occasioned A in the investigation is ascribed by the Commissioner of Police to the fact that Shri Bhagwant Singh permitted his statement to be recorded only as late as April 21, 1981. We think it can be fairly stated that the police did not display the promptitude and efficiency which the investigation of the case required. There is much that calls for comment. It appears from the entries in the police Case Diary that a Sub Inspector visited the place of occurrence on August 9, 1980 and seized a number of articles. But it is conceded that he did not take into custody the blanket with which the fire is said to have been put out. On the next day, experts from the Central Forensic Science Laboratory visited the place and appear to. have made an examination for chance prints. They also photographed the mirror. And yet, it was not until over five weeks later that the police were able to obtain a report from them. Curiously, although the minor was removed from the scene of occurrence and was examined for chance prints, no "identifiable prints" could be developed. In cases such as this, it would have been of the essence that on visiting the place of occurrence immediately on information of the incident, the mirror should have been taken into possession by the police and handed over forthwith to the Central Forensic Science Laboratory experts for an urgent report in regard to the existence and identification of the prints. Delay in such a matter is vital and can often result in the loss of valuable clues. It is of little consolation that, according to the entry G. D. No. 7 dated September 23, 1980 the Deputy Commissioner of Police wrote a reminder to the Director, Central Forensic Science Laboratory for an urgent examination of the writing. An important question was whether the bathroom door was latched from inside and had to be forced open, or was in fact latched from outside. According to the family of Shri Kartar Singh, the door was forced open with the help of the servant Ramu. The entry C. D. No. 1 dated August 9, 1980 in the Case Diary does not indicate that Ramu 's statement was recorded by the police on that day, although it shows that the statements of other persons were recorded. There is a suggestion by the learned counsel for the State that Ramu 's statement was also recorded on that very day, but that is not shown by the Case Diary extracts filed before us. It is only as late as January 25, 1981, according to the entry C. D. No. 13 of that date, that the servant was examined by the Station House officer. Ramu 119 was a material witness, and yet strangely, as it appears from the entries in the police Case Diary, he was allowed to leave the town and go to his village before he could be fully examined by the police. There is no evidence that the police expressed any anxiety to put him through a thorough examination immediately or shortly after the date of the occurrence or at least before Shri Kartar Singh 's family allowed Ramu to leave the town for his village. Much has been made by the police of the reluctance of Shri Bhagwant Singh to make a statement to them. As a responsible officer of sufficiently senior status in the Government of India it would have been natural to expect that he would have come forward from the very first to have his statement recorded and to cooperate with the police, especially in view of the fact that he would have been particularly anxious to have the truth determined into the death of his own daughter. It is indeed difficult to believe that he did not cooperate with the police in the investigation or declined to give his statement until April 21, 1981. But if he did so, it could only be because of want of confidence in the manner in which the police investigation was being conducted. The most vital evidence would have been the statement of Gurinder Kaur herself, and yet even on that point there is a conflict of testimony on the question whether she was fit to make a statement at 3.10 p.m. when the Sub Inspector approached the doctor for the purpose. On the other hand, according to the statement made by her father in law, Shri Kartar Singh, himself to the police on November 13, 1980, when her father Shri Bhagwant Singh came to the hospital and entered the room, the girl was talking occasionally, and during the period 2.30.p.m. to 8.30 p.m. Shri Bhagwant Singh, his wife, his niece who was a. doctor and other members of his family had been talking to the girl. According to the statement of Dr. Rajinder Pal Kaur, niece of Shri Bhagwant Singh, Gurinder Kaur was in possession of her senses at the time and when Dr. Kaur suggested to one of the police officers, who was present, to record to statement of the girl, he declined to do so. It is regrettable that there is a conflict on the question whether the girl was fit to make a statement to the police, and we are constrained to point out that the conflict centres on a vital part of the case. There are other features of the case, including the question of the transfer of a Television set to the family of Shri Kartar Singh as a palliative by the uncle of the unfortunate girl, but. we find it 120 unnecessary to enter into them. It is enough to point out that A the investigation by the police does not inspire confidence. It was, in fact, considered materially inadequate by the Crime Branch itself. For on May 12, 1981, a memorandum was addressed by the Crime Branch to the Deputy Commissioner of Police, Delhi pointing out that the file showed that statements of material persons had not been recorded. We may also advert to the fact that although the girl was taken to the hospital in a taxi, the police do not appear to have attached any importance to recording the statement of the taxi driver. There is also an affidavit of one Shri Jagjit Singh before us from which it appears that he was among the first to reach the house when the incident occurred and that it was he who suggested that the girl, who was lying burnt half inside the bathroom and half outside in the verandah, should be taken forthwith to the hospital, and he states that it was he who wag instrumental in sending for the taxi. Shri Jagjit Singh was an important witness, and although he was in the neighbourhood, no attempt was made to record his statement expeditiously. Two inferences follow irresistibly from the material before us. One is that the investigation by the police following the occurrence was desultory and lackadaisical, and showed want of appreciation of the emergent need to get at the truth of the case. There is a powerful suggestion made by learned counsel for Shri Bhagwant Singh that the police were anxious not to embarrass Shri Kartar Singh and his family and may indeed, as it were, have looked the other way instead of vigorously pursuing the investigation. Whatever may be the reason, there is no doubt that the investigation of the case suffered from casualness lack of incisiveness and unreasonable dilatoriness, and this is demonstrated most effectively by the manner in which the case was passed from one police official to another, being entrusted successively to Sub Inspectors and Inspectors each of whom already had his hands full with the investigation of several other cases. There is the admission that these police officers were preoccupied with numerous other cases in their hands and they were officers who were also required to look after the day to day work of the police station. It was only when on the repeated and insistent petitions of Shri Bhagwant Singh the case passed into the control of the Crime Branch that the investigation showed some signs of being speeded up. The other inference which disturbs us is that the entries in the police Case Diary (set forth in the annexure to the counter affidavit 121 on the record) do not appear to have been entered with the scrupulous completeness and efficiency which the law requires of such a A document. The haphazard maintenance of a document of that status not only does no credit to those responsible for maintaining it but defeats the very purpose for which it is required to be maintained. We think it to be of the utmost importance that the entries in a police Case Diary should be made with promptness, in sufficient detail, mentioning all significant facts in careful chronological order and with complete objectivity. We believe it would be appropriate to make a few further observations at this stage. It is impossible to escape the conclusion that, in a case such as this, the death of a young wife must be attributed either to the commission of a crime or to the fact that, mentally tortured by the suffocating circumstances surrounding her, she committed suicide. Young women of education, intelligence and character do not set fire to themselves to welcome the embrace of death unless provoked and compelled to that desperate step by the intolerance of their misery. It is pertinent to note that such cases evidence a deep seated malady in our social order. The greed for dowry, and indeed the dowry system as an institution, calls for the severest condemnation. It is evident that legislative measures such as the Dowry Prohibition Act have not met with the success for which they were designed. Perhaps, legislation in itself cannot succeed in stamping out such an evil, and the solution must ultimately be found in the conscience and will of the social community and in its active expression through legal and constitutional methods. Besides this, what is important to point out is that where the death in such cases is due to a crime, the perpetrators of the crime not infrequently escape from the nemesis of the law because of inadequate police investigation. It would be of considerable assistance if an appropriately high priority was given to the expeditious investigation of such cases, if a special magisterial machinery was created for the purpose of the prompt investigation of such incidents, and efficient investigative techniques and procedures were adopted into taking account the peculiar features of such cases. Among other suggestions, we would recommend that a female police officer of sufficient rank and status in the police force should be associated with the investigation from its very inception. There are evident advantages in that. In a case where a wife dies in suspicious circumstances in her husband 's home it is invariably a matter of 122 considerable difficulty to ascertain the precise circumstances in which the incident occurred. As the incident takes place in the home of the husband, the material witnesses are usually the husband and his parents or other relations of the husband staying with him. Whether it was cooking at the kitchen stove which was responsible for the accident or, according to the inmates of the house, there was an inexplicable urge to suicide or whether indeed the young wife was the victim of a planned murder are matters closely involving the intimate knowledge of a woman 's daily existence. If the incident is the result of a crime by the husband or his family, the problem of ascertaining the truth is burdened by the privacy in which the incident occurred. In circumstances where it is possible to record the dying declaration of the victim, it would, in our opinion, be more conducive to securing the truth if the victim made the declaration in the presence of a female police officer who can be expected to inspire confidence in the victim. Psychological factors play their part, and their role cannot be ignored. A young wife can be the subject of varying psychological pressures, and because that is so the nuances of feminine psychology support the need for including a female police officer as part of the investigating force. While making these observations we may emphasise that we intend no aspersion on the rectitude or efficiency of the male members of the police involved in the investigation of such cases. Another suggestion which has found favour with us is the need to extend the application of the to other cities besides those where it operates already. The application of the will make possible an immediate inquiry into the death of the victim, whether it has been caused by accident, homicide, suicide or suddenly by means unknown. It contains provisions which are entirely salutary for the purpose of such inquiry, and we have little doubt that an inquiry under that enactment would be more meaningful and effective and complete in the kind of case before us. We are aware that the Code of Criminal Procedure, 1973 contains, in sections 174 and 175, provision for a police inquiry pursuant to an information that a person has committed suicide or has been killed by another or by an animal or by machinery or by an accident or has died under circumstances raising reasonable suspicion that some other person has committed an offence. In such a case the police officer makes an investigation and submits a report to the District Magistrate or the Sub Divisional Magistrate, and thereafter the 123 District Magistrate of Sub Divisional Magistrate or other Executive Magistrate empowered in that behalf is required to hold an inquest. The police officer making an investigation is entitled to summon two or more persons for the purpose of the investigation and any other person who appears to be acquainted with the facts of the case to attend and answer truly all questions other than questions the answer to which would have a tendency to incriminate him. We think that in the category of cases we have in mind the more appropriate and effective procedure would be that contemplated by the , which ensures that the inquiry into the death is held by a person of independent standing and enjoying judicial powers, with a status and jurisdiction commensurate with the necessities of such cases and the assistance of an appropriate machinery. We have referred to some of the important features of the case. We have done so not for the purpose of determining whether the girl was murdered or had committed suicide, but solely with the object of drawing attention to the manner in which the investigation of the case was conducted. Disappointing as it may seem to those who have desired the institution of criminal action on the basis that a crime has been committed, we do not think that on the material before us we can go that far. The investigation of the case was transferred from the police administration of Delhi to the Central Bureau of Investigation at the instance, we understand, of the petitioner. We hope and trust that this investigation has been completed. It not, we would request the Central Bureau of Investigation to complete the investigation within three months from the today and take such action as may be warranted by the result of the investigation. The petition is disposed of accordingly.

The respondent, a scheduled bank, sued the appellant for recovery of money under a mortgage. The appellant claimed reduction of the debt under the Uttar Pradesh Zamindari Debt Reduction Act, 1953. An advance or debt due to a scheduled bank was excluded from the definition of "debt" given in the Act. The appellant contended that the definition in so far as it excluded certain debts offended article 14 Of the Constitution as it made an arbitrary distinction between several classes of debtors. The appellant applied to the court under the proviso to section 113 of the Code of Civil Procedure praying that a case be stated for the opinion of the High Court as to the validity of the impugned portion of the definition. The Court rejected the application. The appellant made an application in revision to the High Court and also an application under article 228 of the Constitution for withdrawing the case for a decision of the question of the validity of the definition. The High Court dismissed the applications. The Courts below held that in either view of the question as to the validity of the impugned portion of the definition, the appellant would be left without the remedy which he sought, because that portion of the definition was not severable from the rest and the whole definition would have to be excluded and therefore it was not necessary to decide that question to dispose of the case 1151 Held, that the question raised by the appellant came both within the proviso to section 113 of the Code and article 228 Of the Constitution. The question whether the impugned part of the definition contravened article 14 was a question as to the interpretation of the Constitution and that question must be decided first. The question of severability could arise only after that question had been decided and the impugned part held invalid.

iminal Appeal No. 72 of 1961. Appeal by special leave from the judgment and order dated December 20, 1960, of the Bombay High Court in Criminal Apeal No. 1207 of 1960. Jai Gopal Sethi, C.L. Sareen and R.L. Kohli, for the appellant, G. C. Mathur and P. D. Menon, for the respondent. July 24. The Judgment of the Court was delivered by SHAH, J. On May 1, 1962, we ordered after arguments were concluded that the appeal be allowed and the conviction of the appellant be set aside. We now proceed to record our reasons in support of the order. 398 The appellant, Ramesh Amin, and seven others were tried in the Court of Session, Aurangabad, for offences punishable under sections 366, 366A. Indian Penal Code, and abetment thereof. The appellant was the third accused at the trial. The Sessions Judge convicted accused Nos. 1 to 4 and 7 of the offences charged against them and sentenced them to suffer rigorous imprisonment for two years for each offence, and acquitted the rest. The High Court of Bombay entertained appeal of accused Nos. 1 to 4 (but not of accused No. 7) and set aside the order of conviction and sentence against them for the offences punishable under section 366 read with section 34 and section 366A of the Indian Penal Code. The High Court, however, convicted the appellant of abetting the seventh accused in inducing a minor girl, Anusaya, to go with other persons from her residence at Kabadipura to Gulzar Theatre, and then to a house known as Bohori Kathada with intent that she may or knowing that she was likely to be seduced to illicit intercourse. With special leave the appellant has appealed to this Court. The seventh accused, Patilba, is a resident of Aurangabad, and the eighth accused is his wife. Anusaya is the daughter of Shakuntala by her husband Kashinath. After the death of Kashinath, Shakuntala brought her infant daughter Anusaya to the house of Patilba and started living with him as his mistress. Sometime later Shakuntala left the house of Patilba and took up residence at Nasik but Anusaya 'continued to live with Patilba and was brought up by him. Marriage was arranged by Patilba between Anusaya and one Ramlal, but Anusaya declined to live with her husband. Pat ilba introduced Anumaya to some "customers" and she started indulging in promiscuous intercourse, for money. It was the prosecution case that on January 13, 1960, the appellant went to the residence of Patilba and asked him to bring Anusaya and 399 one Chandrakala (a woman following the profession of a prostitute) to the Gulzar Theatre, and accordingly, Patilba, the eighth accused, Chandrakala and Anusaya went to the Theatre. At the instance of the appellant, Anusaya and Chandrakala were taken by one Devidas (who has given evidence as an approver) to Bohori Kathada. Sub Inspector Pagare of the Police Station City Police Chowk, Aurangabad, had received information that some persons were consuming illicit liquor in a room at Bohori Kathada and he arranged to raid that house. Pagare found accused Nos. 1 to 5 and Devidas in a room consuming liquor. He also found Chandra kala and Anusaya in an inner apartment, Persons found in the room were arrested and sent for medical examination to the local Civil Hospital, and it was found that Anusaya had not attained the age of 18 years. Pagare then laid an information before the Judicial Magistrate, Aurangabad, for offence punishable under the Bombay Prohibition Act, 1949 (we are informed at the Bar that in respect of those offences the accused were acquitted and we are not concerned in this case with those offence) and also for offences punishable under sections 366 and 366A of the Indian Penal Code against nine persons including the appellant, Patilba and Devidas. In the course of proceedings for commitment to the Court of Session, Devidas was tendered pardon on condition of his making a full disclosure of the circumstances within his knowledge. The case was then committed to the Court of Session, Aurangabad for trial. The Court of Session held that accused Nos. 1 to 4 had in furtherance of their com mon intention kidnapped Anusaya a girl below the age of 18 years in order that she may be forced or seduced to illicit intercourse or knowing it to be likely that she would he forced or seduced to illicit intercourse, and the seventh accused Patilba had abetted the commission of that offence, and that accused Nos. 1 to 4 and 7 had induced Anusaya to 400 go from her residence to the Gulzar Theatre and from the theatre to Bohori Kathada with intent that she may be or knowing that it was likely that she would be forced or seduced to illicit intercourse. He accordingly convicted accused Nos. 1 to 4 of the offence under section 366 read with section 34 of the Indian Penal Code and also of the offence under a. 366A of the Indian Penal Code. The High Court of Bombay in appeal acquitted accused Nos. 1 to 4 of the offence of kidnapping because, in their view, accused Nos. 1 to 4 had "nothing whatever to do with the original kidnapping by Patilba (the 7th accused) and since he was not the lawful guardian of this girl, her being bro ught to this room cannot be regarded as kidnapping". The learned Judges also acquitted accused Nos, 1 to 4 of the offence under section 366A observing that ,,there is no evidence of any direct talk between any of the accused and the girl, nor even of any inducement offered through Patilba (accused No. 7). Even so far as accused No, 3 is concerned, there is no direct talk between Anusaya and accused No, 3 which can be regarded as an inducement to her to move either from the house of Patilba or from the theatre to the room in question. " But in their view the case against tile appellant "did not end with this" : They observed. "The evidence. . . . clearly indicates that accused No. 3 instigated Pat ilba and Devidas to bring the girl to the theatre and thereafter to the room in question. Patilba, as we have stated, being in custody of this girl and the girl being minor and helpless, induced or forced her to go to the cinema and thereafter to this room and actually left her there. So far Patilba was concerned, he intended that she should be forced or seduced to illicit intercourse by one or the other of 401 the accused. Accused No. 3 by asking Patilba to bring the girl to the theatre and asking Devidas and Patilba to bring the girl to the room clearly instigated Patilba in the comm ission of this offence. He must, therefore, be held clearly guilty of the offence of abet ment of this offence by Patilba. " The High Court accordingly convicted the appellant of the offence under section 366A read with section 109 of the Indian Penal Code, because, in their view, he had abetted the commission of an offence punishable under section 366A by Patilba by instigating the latter to bring Anusaya to the theatre and by by further instigating Patilba and Devidas to bring Anusaya from the theatre to Bohori Kathada. In our view, the appellant cannot in law be held guilty of abetting the commission of an offence punishable under section 366A, Indian Penal Code, by Patilba. The facts proved by the evidence are these: Anusaya at the material time had not attained the age of 18 years. She was brought up by Patilba and even though she had married Ram Lal she was at the material time and for many months before living under the guardianship of Patilba. For a long time before the date of the offence Anusaya was accustomed to indulge in promiscuous intercourse with customers" for money. She used to entertain, as she herself admitted, "one or two customers every day" and bad before the date of the offence been habituated to the life of a prostitute. On the day in question she and her companion Chandrakala went to the Gulzar Theatre accompanied by Patilba. In the theatre Anusaya and Chandrakala were seeking customers: they repaired during the break in the show to the entrance of the theatre for that purpose, but she had to return disappointed because they found a police van parked near the 402 entrance. Anusaya and the 6th accused went to Bohori Kathada for carrying on their profession as prostitutes. There is no evidence that she was not willing to go to Gulzar Theatre on the night in question nor is there any evidence that she was unwilling to go to Bohori Kathada to which she and her companion were invited for the purpose of prostitution. Do these facts make out a case against the appellant of abetment of the offence of procuration of a minor girl punishable under section 366A of the Indian Penal Code? Section 366A was enacted by Act XX of 1923 to give effect to certain Articles of the International Convention for the Suppression of Traffic in Women and Children signed by various nations at Paris on May 4, 1910. There are three principal ingredients of the offence: (a) that a minor girl below the age of 18 years is induceed by the accused, (b) that she is induced to go from any place or to do any act, and (c) that she is so induced with intent that she may be or knowing that it is likely that she will be forced or seduced to illicit intercourse with another person, The evidence clearly establishes that Anusaya had not at the material time attained the age of 18 years. But there is no evidence on the record that Patilba induced Anusaya to go to the theratre or from the theatre to Bohori Kathada. It must be assumed that when Patilba accompanied Anusaya to the theatre and from the theatre to the Bohori Kathada at the suggestion of the appellant he knew that she was going for plying her profession as a prostitute. But in our judgment a person who merely accompanies a woman going out to ply her profession of a prostitute, even if she has not attained the age of eighteen years, does not thereby commit an offence under section 366A of the Indian Penal Code. It cannot be said that thereby he induces her to go from any place or to do any act with the intent or knowledge contemplated by the section. We agree that seduction to illicit intercourse contemplated by the section does not mean merely straying from the path of virtue by a female for the first time. The verb "seduce ' is used in two senses. It is used in its ordinary and narrow, sense as inducing, a woman to stray from the path of virtue for the first time: it is also used in the wider sense of educing a woman to submit to illicit intercourse at any time or on any occasion. It is in the latter sense that the expression has been used in as. 366 and 366A of the Indian Penal Code which sections partially overlap. This view has been taken in a large number of cases by the Superior Courts in India, e. g. Prafula kumar Basu vs The Emperor (1), Emperor vs Laxman Bala (1), Krishna Maharana vs The King Emperor (3), In re Khalandar Saheb (4) Suppiah vs Emperor (5), Pessumal vs Emperor (6), King Emperor vs Nga Ni Ta (7) and Kartara vs The State (8). The view expressed to the contrary in Emperor vs Baijnath (9), Saheb Ali vs Emperor (11) Aswini Kumar Roy vs The State (10) and Nara vs Emperor (12) that the phrase used in section 366 of the Indian Penal Code is "Properly applicable to the first act of illicit intercourse, unless there be proof of a return to chastity on the part of the girl since the first act" is having regard to the object of the Legislature unduly restrictive of the content of the expression "seduce" used in the Code. But this is not a case in which a girl who had strayed from the path of virtue when she (1) Cal. 1074 (2) Bom. (3) Pat. (4) A. I. R. (5) A. I. R. 1930 Mad. (6) (7) (8) I. L. R. [1957] Punjab 2003. (9) All. (10) Col. 1457 (11) A. I. R. A. I. R. 404 was in the custody of her guardian and had with a view to carry on her affair accompanied her seducer or another person. Such a case may certainly fall within the terms of s.366 or s.366A whichever applies. But where a woman follows the profession of a prostitute, that is, she is accustomed to offer herself promiscuously for money to "customers", and in following that profession she is encouraged or assisted by someone, no offence under section 366A is committed by such person, for it cannot be said that the person who assists a girl accustomed to indulge in promiscuous intercourse for money in carrying on her profession acts with intent or knowledge that she will be forced or seduced to illicit intercourse. Intention on the part of Patilba or knowledge that Anusaya will be forced to subject herself to illicit intercourse is ruled out by the evidence: such a case was not even suggested. Seduction implies surrender of her body by a woman who is otherwise reluctant or unwilling to submit herself to illicit intercourse in consequence of persuasion, flattery, blandishment or importunity, whether such surrender is for the first time or is preceded by similar surrender on earlier occasions. But where a woman offers herself for intercourse for money not casually but in the course of her profession as a prostitute there are no scruples nor reluctance to be overcome, and surrender by her is not seduction within the Code. It would then be impossible to hold that a person who instigates another to assist a woman following the profession of a prostitute abets him to do an act with intent that she may or with knowledge that she will be seduced to illicit intercourse. Appeal allowed.

The appellant was convicted of the offence under section 366A read with section 109 of the Indian Penal Code. The case against him was that A who was a minor below the age of 18 years was brought up by P and had before the date of the offence been habituated to the life of a prostitute. On the day in question the appellant went to the residence of P and asked him to bring A to a theatre, P accompanied A to the 397 theatre where the latter sought some customers. They were taken by another person to a place called Bohori Kathada at which place A was invited for the purpose of prostitution. When P accompanied A to the theatre and from there to Bohori Kathada he knew that she was going for plying her profession as a prostitute. Held, that the appellant could not in law be held guilty of abetting the commission of an offence under section 366A of the Indian Penal Code by P. A person who merely accompanies a woman going out to ply her profession of a prostitute, even if she has not attained the age of 18 years, could not be said thereby to induce her to go from any place or to do any act with the intent or knowledge that she will be forced or seduced to illicit intercourse within the meaning of section 366 A. Seduction implies surrender of her body by a woman who is otherwise reluctant or unwilling to submit herself to illicit intercourse whether such surrender is for the first time or is preceded by similar surrender on earlier occasions ; but where a person in the course of her profession as a prostitute offers herself for profession as a prostitute offers herself for intercourse, there are no sucruples nor reluctance to be overcome, and surrender by her is not seduction within the Code.

ivil Appeal Nos. 992997 of 1990. From the Judgment and Order dated 30.8. 1988 of the Allahabad High Court in W.P. Nos. 12572 of 1984. 6512/85, 12574/84, 17966/180. 12152,84 and 12159 of 1984. K.K. Venugopal, S.N. Misra, Rajinder Sachhar, Soli J. Sorabjee, V.M. Tarkunde, S.S. Ray, O.P. Rana, Govind Muk hoti, P.C. Kapur, B.P. Sahu, P.N. Misra, Krishna Pd., B.P. Singh, A.K. Goel. J.M. Khanna, Ms. Shafali Khanna, section Mar kandeya, Ashok Sharma, G.S. Gift Rao, Mrs. C. Markandeya, W.A. Nomani, G. Seshagiri, S.K. Mehta, Aman Vachher, Atul Nanda, N.D. Tyagi, Raju Ramachandran, D. Pillai, Raja Ram Agarwal, Sanjay Parekh, S.N. Mira and A.K. Goel for the appearing parties. The Judgment of the Court was delivered by RANGANATH MISRA, J. We have heard counsel for the par ties at considerable length but piece meal spread over a number of days. Special Leave granted 205 Five cooperative societies with membership of Government servants mostly of ' the lower strata filed six separate writ petitions before the Allahabad High Court challenging the Notification under section 4(1) and section 17(1) of the Land Acquisition Act (1 of 1894) on several grounds. The principal contentions before the High Court were two fold: (1) the cooperative societies consisting Of the low paid Government servants having acquired the land for the purpose of providing residential accommodation to their members, the Ghaziabad Development Authority constituted by the State of Uttar Pradesh for the same purpose should not have been permitted to acquire the said land to their prejudice; and (2) there was no justification for depriving the petitioners of their right to representation under section 5A of the Acquisition Act in the facts and circumstances of the case. The High Court by a common judgment dated 30th August, 1988, dismissed the writ petitions by negativing the several contentions raised on behalf of the petitioners. It may be pointed out that on behalf of the Neelam Sahakari Awas Samiti Ltd. two writ petitions were filed while each of the other four societies had filed one writ petition. That is how six Special Leave Petitions were filed before this Court and have now been converted into appeals on grant of leave. Ghaziabad, within the State of Uttar Pradesh, virtually bordering Delhi is located at a distance of 28 kilometers from the New Delhi Railway Station in the trans Jamuna area. It has of late become, apart from being a Railway junction,. an industrial area as also an agglomeration sufficiently developed to call it a township. A Master Plan has been drawn up for the area and some portions have been developed while the lands of the five cooperative societies have not yet been improved on account of the pendency of this group of cases. In course of the hearing of these appeals we were satis fied about the genuineness of the grievance advanced on behalf of the members through their respective cooperative societies and took the view that the members of the coopera tive societies should not be denied residential accommoda tion for which they had taken effective steps before the acquisition for the Development authority was notified. We took into consideration the total number of members as also the number of eligible members; the total area which the members had acquired and entrusted to the cooperative socie ties for construction; the capacity of the members to pay for the construction now charged by the Development authori ty; the need of planned development of the area. ; and all other relevant facts and circumstances placed by all the parties before 206 us and formed the opinion that it would be sufficient to meet the requirement of members of these societies if each one of them was provided with a plot limited to an area of 80 square yards. Total members entitled to allotment are 1739. Whether it should be individual plots or double storeyed construction should be permitted was seriously debated before us but we have come to the ultimate conclusion that instead of single storey construction double storey constructions would be convenient and economical. The interest of the members represented by their respective cooperative societies and the nature of the housing complex contemplated by the Devel opment authority have to be kept in view and the ultimate decision, keeping the interest of both, has to be taken. Counsel for the Development authority had canvassed before us that instead of confining construction of flats to two storeys, the normal pattern of five or six storeys could be adopted. High rise construction for the poor section of the society would not be convenient in old age many would have movement problem; many of the necessities for living would be difficult to secure. We have, therefore, decided that the construction must be confined to two storeys only and the members of their respective societies shall make their own adjustment of the ground floor and 1st floor allotments. About 20 acres of land would be necessary if the double storey construction with an area of 80 square yards is adopted. Society wise particulars are provided below: section No. Name of cooperative Total members Area society entitled to in acres allotment 1. Sarkari Karamchari Evam 230 2.54 Mitregan Sahakari Awas Samiti Ltd. 2. Kendriya Karamchari Evam 523 5.77 Mitregan Sahakari Awas Samiti Ltd. 3. Ghaziabad Shiromani 298 3.29 Sahakari Awas Samiti Ltd. 4. Neelain Sahakari Awas 245 2.70 Samiti Ltd. 207 5. Asha Pushpa Vihar Sahakari 443 4.87 Awas Samiti Ltd. 1739 19.17 Members entitled 1739 Total area 19.17 acres (rounded to 20 acres) This area of 20 acres is inclusive of land for laying of the roads and other requirements contemplated under the development scheme. For convenience and adjustment we are of the view that two more acres of land be made available to the five cooperative societies to be shared by amicable adjustment by them. Thus from the acquisition Notification 22 acres of land shall stand deleted and shall be released in accordance with the extent indicated for each of the five cooperative societies. The identification of the land to be so released shall be made within four weeks from the date of pronouncement of the order by mutual arrangement. We direct that when the land shall be so identified, the order of release from acquisition by appropriate description of the land shall be made; sketch maps showing the identified land shall also be signed by parties to avoid future litigation and made over to each of the societies. We commend that all the five cooperative societies may form themselves into a federation for the purpose of ensur ing appropriate development of the area and sharing either in common or by division the 2.83 acres of extra land which is directed to be released from acquisition. It has been agreed that development charges for sewer age, electricity, road connections and the like shall be provided by the Development authority @ Rs. 100 per square yards and internal development shall be done by the socie ties themselves. In raising the construction, the bye laws and regulations of the Development authority shall be strictly followed. We hope and trust that the Development authority shall extend its cooperation in every manner to the societies to effectuate the directions made by us. We look forward to the fulfillment of the dreams of each of the members of the society in the matter of having a residential accommodation. 208 As soon as the lands are identified and sketch maps are delivered as directed above the interim orders made by this Court shall stand dissolved. The appeals are disposed of without any order for costs. P.S.S. Appeals allowed.

The appellant cooperative societies consisting of 1739 low paid Government servants had acquired certain land in Ghaziabad for the purpose of providing residential accommo dation to their members. Subsequently, the said land was notified for acquisition under sections 4(1) and 7(1) of the Land Acquisition Act for the Ghaziabad Development Authori ty. Representations made by the appellants under section 5A of the Act were rejected. In the writ petitions, filed under Article 226 of the Constitution, it was contended for the appellant societies that the Development Authority constituted by the State for the same purpose should not have been permitted to acquire the said land to their prejudice, and that there was no justification for depriving them of their right to represen tation under section 5A of the Act. The High Court dismissed the writ petitions. Allowing the appeals by special leave, the Court, HELD: 1. The members of the appellant societies should not be denied residential accommodation for which they had taken effective steps before the acquisition for the Ghazia bad Development Authority was notified. [205G] 2.1 Keeping in view the number of eligible members, the total area which they had acquired and entrusted to the societies for construction, the capacity of the members to pay for the construction now charged by the Development Authority, the need for planned development of the area and all other relevant facts, it would be sufficient if each one of them was provided with an area of 80 sq. yards. [205G H; 206A] 204 2.2 High rise construction for the poor sections of the society would not be convenient. If the double storey con struction with an area of 80 sq. yards is adopted about 20 acres of land, inclusive of land for laying of the roads and other requirements contemplated under the development scheme, would be necessary. For convenience and adjustment two more acres of land shall be made available to the socie ties to be shared by amicable adjustment by them. Thus, from the acquisition notification 22 acres of land shall stand deleted and shall be released inaccordance with the extent indicated for each of the societies. The identification of the land to be so released shall be made within four weeks from the date of pronouncement of the order by mutual ar rangements. The order of release bearing appropriate de scription to follow and sketch maps to be signed by the parties. [206D; 207C E] 3. The development charges for sewerage, electricity, road connections and the like shall be provided to the Development Authority at the rate of Rs.100 per sq. yard and internal development shall be done by the societies them selves. In raising the construction, the bye laws and regu lations of the Development Authority shall be strictly followed, (207G)

N: Criminal Appeal No. 687 of 1980. Appeal by Special Leave from the Judgment and Order dated 18 4 1980 of the Punjab and Haryana High Court in Crl. No. 26 M/1980. Mrs. Urmila Sirur for the Appellant. Mrs. Shobha Dixit and M. N. Shroff for the Respondent. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. On August 13, 1979, Gurnam Singh a resident of Chandigarh submitted a complaint to the Judicial Magistrate 1st Class Chandigarh, alleging that the appellant H. section Bains accompanied by two persons had come to his house in a car on the morning of August 11, 1979, at about 8 a.m., tress passed into the house and threatened to kill him and his natural son if he did not take away his natural son Aman Deep Singh from the house of his sister Bakshish Kaur, who had taken the boy in adoption as she was issueless. Bakshish Kaur was the widow of the brother of the appellant and the adoption made by Bakshish Kaur was not to the liking of the appellant. It was alleged in the complaint that the appellant was armed with a revolver which he pointed at the complainant. The complainant raised a hue and cry. The accused and his companions fled away in their car. As August 11, 1979 and August 12, 1979 were holidays, he was able to file the complaint only on 13th August, 1979. The learned Magistrate to whom the complaint was submitted ordered an investigation by the police under Sec. 156(3) of the Code of Criminal Procedure. The police after completing the investigation, 937 submitted a report to the Magistrate under Sec. 173 of the Code of Criminal Procedure stating that the case against the appellant was not true and that it might be dropped. The police arrived at the conclusion that the case against the appellant was not true as their investigation revealed, according to them, that the appellant was at Amritsar with Shri Jai Singh, District Magistrate of Amritsar at 9 a.m. on August 11, 1979 and it was, therefore, impossible for him to have been at Chandigarh at 8 a.m. on August 11, 1979. The learned Magistrate after perusing the report submitted by the police disagreed with the conclusion of police, took cognizance of the case under Sections 448, 451 and 506 of the Indian Penal Code and directed the issue of process to the appellant. Aggrieved by the issue of process, the appellant filed Criminal Miscellaneous Case No. 26 M of 1980, in the High Court of Punjab and Haryana to quash the proceedings before the Magistrate. The application was dismissed by the High Court and the appellant filed a petition for the grant of special leave to appeal against the order of the High Court. We granted Special Leave and straightaway heard the appeal with the consent of the parties. Shri Kapil Sibal urged that the Magistrate had issued process to the accused without recording the statement, on oath, of the complainant and the witnesses under Sec. 200 Criminal Procedure Code and therefore, he must be taken to have taken cognizance of the case under Sec. 190(1)(b), as if upon a police report. Shri Sibal submitted that the Magistrate was not competent to take cognizance of the case as if it was upon a police report as the report under Sec. 173 Criminal Procedure Code submitted to him disclosed that no offence had been committed by the accused. According to Shri Sibal, in the circumstances of the case, the Magistrate, on receipt of the report under Sec. 173 Criminal Procedure Code to the effect that the case against the accused was not proved, had only two options before him. He could either order a further investigation or he could take cognizance of the case as if upon a complaint, record the statements of the complainant and witnesses under Sec. 200 Criminal Procedure Code and then proceed to issue process if he was satisfied that process ought to be issued. In any case Shri Sibal submitted that the order of the Ist Class Magistrate taking cognizance of the case was so unjudicial that it ought to be struck down. Shri Sibal invited our attention to two decisions of this Court: Abhinandan Jha & Ors. vs Dinesh Mishra; and Tula Ram & Ors. vs Kishore Singh. 938 Chapter XII of the Code of Criminal Procedure 1973 deals with information to the Police, and their powers to investigate. 156 (1) vests in an officer incharge of a Police Station the power to investigate any cognizable case, without the order of a Magistrate. 156(3) authorises a Magistrate, empowered under Sec. 190, to order an investigation as mentioned in Sec. 156(1). The provisions from Sec. 157 onwards are concerned with the power and procedure for investigation. 169 prescribes that if upon an investigation it appears to the officer incharge of the Police Station that there is no sufficient evidence or reasonable ground of suspicion to justify the forwarding of the accused to a Magistrate, such officer shall, if such person is in custody, release him on his executing a bond (with or without sureties) to appear if and when required, before a Magistrate empowered to take cognizance of an offence on a police report and to try the accused or commit him for trial. 170 prescribes that if upon investigation it appears to the officer incharge of the Police Station that there is sufficient evidence or reasonable ground of suspicion to justify the forwarding of the accused to a Magistrate, such officer shall forward the accused under custody to a Magistrate empowered to take cognizance of an offence on a police report and to try the accused or commit him for trial. If the offence is bailable the officer shall take security from him for his appearance before such Magistrate on a day fixed and for his attendance from day to day before such Magistrate until otherwise directed. 173(1) casts a duty upon the police officer to complete the investigation without unnecessary delay. 173(2) prescribes that as soon as the investigation is completed the officer incharge of the police station shall forward to a Magistrate empowered to take cognizance of an offence on a police report, a report in the prescribed form stating the various particulars mentioned in that sub section. 190(1) which occurs in Chap. XIV (Conditions requisite for initiation of proceedings) may be extracted at this stage. It is as follows: "190(1) Subject to the provisions of this Chapter, any Magistrate of the first class, and any Magistrate of the second class specially empowered in this behalf under sub section (2), may take cognizance of any offence (a) upon receiving a complaint of facts which constitute such offence; (b) upon a police report of such facts; 939 (c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed". What has been extracted is Sec. 190 as it stands at present. 190 of the previous Code was slightly different. Clause (1)(b) read as "upon a report in writing of such facts made by any police officer". In clause (1)(c) after the word 'knowledge ', the words 'or suspicion ' occurred, and these words have now been omitted. Chapter XV (Sections 200 to 203) of the Code deals with "complaints to Magistrates". A Magistrate taking cognizance of an offence on complaint is required by Sec. 200 to examine the complainant and the witnesses present, if any. Sec. 202 provides that a Magistrate taking cognizance of a case upon complaint, may, if he thinks fit, postpone the issue of process against the accused, and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding. 203 empowers the Magistrate to dismiss the complaint, if, after considering the statements on oath (if any) of the complainant and of the witnesses and the result of the enquiry or investigation (if any) under Sec. 202, the Magistrate is of the opinion that there is no sufficient ground for proceeding. Chapter XVI deals with "commencement of proceedings before Magistrate" and Sec. 204 enables a Magistrate to issue summons or a warrant as the case may be to secure the attendance of the accused if in the opinion of the Magistrate taking cognizance of the offence there is sufficient ground for proceeding. It is seen from the provisions to which we have referred in the preceding paragraphs that on receipt of a complaint a Magistrate has several courses open to him. He may take cognizance of the offence and proceed to record the statements of the complainant and the witnesses present under Sec. 200. Thereafter, if in his opinion there is no sufficient ground for proceeding he may dismiss the complaint under Sec. If in his opinion there is sufficient ground for proceeding he may issue process under Sec. 204. However, if he thinks fit, he may postpone the issue of process and either enquire into the case himself or direct an investigation to be made by a Police Officer or such other person as he thinks fit for the purpose of deciding whether or not there is sufficient ground for proceeding. He may then issue process if in his opinion there is sufficient ground for proceeding or dismiss the complaint if there is no sufficient ground for proceeding. On the other hand, in the first instance, on receipt 940 of a complaint, the Magistrate may, instead of taking cognizance of the offence, order an investigation under Sec. 156(3). The police will then investigate and submit a report under Sec. 173(1). On receiving the police report the Magistrate may take cognizance of the offence under Sec. 190(1)(b) and straightaway issue process. This he may do irrespective of the view expressed by the police in their report whether an offence has been made out or not. The Police report under Sec. 173 will contain the facts discovered or unearthed by the police and the conclusion drawn by the police therefrom. The Magistrate is not bound by the conclusions drawn by the Police and he may decide to issue process even if the Police recommend that there is no sufficient ground for proceeding further. The Magistrate after receiving the Police report, may, without issuing process or dropping the proceeding decide to take cognizance of the offence on the basis of the complaint originally submitted to him and proceed to record the statements upon oath of the complainant and the witnesses present under Sec. 200 Criminal Procedure Code and thereafter decide whether to dismiss the complaint or issue process. The mere fact that he had earlier ordered an investigation under Sec. 156(3) and received a report under Sec. 173 will not have the effect of total effacement of the complaint and therefore the Magistrate will not be barred from proceeding under Sections 200, 203 and 204. Thus, a Magistrate who on receipt of a complaint, orders an investigation under Sec. 156(3) and receives a police report under Sec. 173(1), may, thereafter, do one of three things: (1) he may decide that there is no sufficient ground for proceeding further and drop action; (2) he may take cognizance of the offence under Sec. 190(1)(b) on the basis of the police report and issue process; this he may do without being bound in any manner by the conclusion arrived at by the police in their report: (3) he may take cognizance of the offence under Sec. 190(1)(a) on the basis of the original complaint and proceed to examine upon oath the complainant and his witnesses under Sec. 200 If he adopts the third alternative, he may hold or direct an inquiry under Sec. 202 if he thinks fit. Thereafter he may dismiss the complaint or issue process, as the case may be. In Abhinandan Jha & Ors. vs Dinesh Mishra, (supra) the question arose whether a Magistrate to whom a report under Sec. 173(1) had been submitted to the effect that no case had been made out against the accused, could direct the police to file a charge sheet, on his disagreeing with the report submitted by the Police. This Court held that the Magistrate had no jurisdiction to direct the police to submit a charge sheet. It was open to the Magistrate to agree or 941 disagree with the police report. If he agreed with the report that there was no case made out for issuing process to the accused, he might accept the report and close the proceedings. If he came to the conclusion that further investigation was necessary he might make an order to that effect under Sec. 156(3). If ultimately the Magistrate was of the opinion that the facts set out in the police report constituted an offence he could take cognizance of the offence, notwithstanding the contrary opinion of the police expressed in the report. While expressing the opinion that the Magistrate could take cognizance of the offence notwithstanding the contrary opinion of the police the Court observed that the Magistrate could take cognizance under Sec. 190(1)(c) '. We do not have any doubt that the reference to 'Sec. 190(1)(c) ' was a mistake for 'Sec. 190(1)(b) '. That appears to be obvious to us. But Shri Kapil Sibal urged that the reference was indeed to Sec. 190(1)(c) since at that time Sec. 190(1)(c) included the words 'or suspicion ' and the Court had apparently taken the view that the Magistrate could take cognizance of the offence not under Sec. 190(1) (b) as if on a police report but under Sec. 190(1)(c) as if on suspicion '. We do not agree with this submission. 190(1)(c) was never intended to apply to cases where there was a police report under Sec. 173(1). We find it impossible to say that a Magistrate who takes cognizance of an offence on the basis of the facts disclosed in a police report must be said to have taken cognizance of the offence on suspicion and not upon a police report merely because the Magistrate and the Police arrived at different conclusions from the facts. The Magistrate is not bound by the conclusions arrived at by the police even as he is not bound by the conclusions arrived at by the complainant in a complaint. If a complainant states the relevant facts in his complaint and alleges that the accused is guilty of an offence under Sec. 307 Indian Penal Code the Magistrate is not bound by the conclusion of the complainant. He may think that the facts disclose an offence under Sec. 324 Indian Penal Code only and he may take cognizance of an offence under Sec. 324 instead of Sec. 307. Similarly if a police report mentions that half a dozen persons examined by them claim to be eye witnesses to a murder but that for various reasons the witnesses could not be believed, the Magistrate is not bound to accept the opinion of the police regarding the credibility of the witnesses. He may prefer ignore the conclusions of the police regarding the credibility of the witnesses and take cognizance of the offence. If he does so, it would be on the basis of the statements of the witnesses as revealed by the police report. He would be taking cognizance upon the facts disclosed by the police 942 report though not on the conclusions arrived at by the police. It could not be said in such a case that he was taking cognizance on suspicion. In Tula Ram & Ors. vs Kishore Singh (supra) the Magistrate, on receiving a complaint, ordered an investigation under Sec. 156(3). The Police submitted a report indicating that no case had been made out against the accused. The Court, however, recorded the statements of the complainant and the witnesses and issued process against the accused. It was contended that the Magistrate acted without jurisdiction in taking cognizance of the case as if upon a complaint when the police had submitted a report that no case had been made out against the accused. This Court held that the Magistrate acted within his powers and observed that the complaint did not get exhausted as soon as the Magistrate ordered an investigation under Sec. 156(3). We are, therefore unable to agree with the submission of Shri Sibal that the Magistrate acted without jurisdiction in taking cognizance of the offence and issuing process to the accused notwithstanding the fact that the police report was to the effect that no case had been made out. We do not propose to say a word about the merits of the case since it was entirely a matter for the learned Magistrate to take cognizance or not to take cognizance of the several offences. We however wish to observe that it was wholly unnecessary for the Magistrate to write such an elaborate order as if he was weighing the evidence and finally disposing of the case. We also desire to say that some of the observations of the learned Magistrate about the District Magistrate were wholly uncalled for as the latter was yet to appear before him as a witness. We are told that the case has already been transferred to some other Magistrate. It is, therefore, unnecessary to say anything further in the matter. The appeal is, therefore, dismissed.

One M carried on the business of printer and publisher. In 1953 his brother in law alongwith some other persons floated two companies a publishing firm and a printing press. Under an agreement dated May 29, 1953 M agreed to transfer his business to the newly floated companies, and on January 24, 1954 he wrote letters intimating that the shares in the companies be allotted to his wife, his 3 sons, his brother in law and an ex employee. The companies allotted the shares accordingly. 502 shares were allotted to M in his own name in the publishing firm and 225 shares in the printing press. Of the remaining, 2002 shares in the publishing firm and 1602 shares in the printing press were allotted to M and his nominees. M died on February 11, 1957. On his death the respondent, the accountable person filed a return of estate duty in which he included the value of the 502 shares in the publishing firm and 225 shares in the printing press. The Assistant Controller of Estate Duty did not accept this part of the return and included the 2002 shares in the publishing firm and 1602 shares in the printing press standing in the name of the wife of the deceased, his 3 sons, brother in law and the ex employee, since they were holding these shares benami, and included the value of these shares in the principal value of the estate of the deceased. In appeal, the Central Board of Direct Taxes, the Appellate Tribunal affirmed this order. It observed that the mere fact that the subject matter was the shares in the two companies would not throw any more onus of proof on the Assistant Controller than would be thrown if the subject matter was some other property. When money was paid by the deceased, it was for the accountable person to prove the gift. The deceased had clearly mentioned in his letters dated January 24, 1954 to the two companies that the shares should be issued and allotted in the names of the persons nominated by him. If the deceased intended to make an outright gift of the shares, he would have very 944 well said so in the letters. There being no presumption of advancement, the mere fact that the shares were got issued in their names without making any indication of gift, would not make the nominees recipients of any gift. The High Court answered the reference against the appellant and in favour of the accountable person. Following the decisions of the Andhra Pradesh High Court in Shantabai Jadhav vs Controller of Estate Duty and Smt. Denabai Bomab Shah vs Controller of Estate Duty (1964) 51 ITR (ED) 1 it observed that since the shares stood in the name of the wife and sons etc., benami for the deceased, the deceased had no power to transfer since he had not obtained a release from the benamidars or a declaration from an appropriate court. As the deceased, remained incompetent to transfer the shares till his death, the property in them would not be deemed to pass upon his death by reason of section 6 and therefore, they would not be included in the estate of the deceased under section 5(1) of the Act. Allowing the appeal, to this Court ^ HELD: 1. The liability to pay estate duty under section 5(1) of the Act arises upon the death of the real owner and not of the benamidar, who is merely an ostensible owner. The test lies in whether upon the death of the benamidar, there would be incidence of liability to estate duty. [961B] 2. The finding being that the shares were purchased by the deceased benami in the name of his wife and sons, the real ownership of the property was vested in the deceased who was entitled to deal with the same as if it were his own and the benamidars held it in trust under section 82 of the Trust Act, 1882 for the benefit of the deceased. The estate, therefore, belonged to the deceased who died possessed of the same and under section 5(1) of the Act the entire value of the shares was includible in the principal value of the estate of the deceased on his death. [961C E] 3. (i) The imposes a tax upon the principal value of all properties, settled or not settled passing on death or deemed to pass on death. Estate duty is chargeable at percentage rates rising with the value of the estate on all property passing on death, including property of which the deceased was competent to dispose and gifts made within limited period before death. Primary liability falls on the deceased 's estate. [950H; 951A] (ii) The scheme of the Act is two fold. Firstly there are properties which pass on the death of a person. Section 5(1) imposes duty on their value. Secondly, there are properties in which the deceased had an interest or power of appointment and which really do not pass on his death. The scheme of the Act is to impose duty on the value of such properties also. In the second class will fall provisions like sections 6, 7, 8, 9 and 10. The Act creates a fiction of law to declare that the properties mentioned in those sections will be deemed to pass on the death of a person, though they do not 'pass ' in fact. [957D E] (iii) The object of section 6 is to catch properties in the net of section 5(1) which do not really pass on the death of a person. For instance, property comprised in a revocable gifts is property which the donor is competent to dispose of whether the gifts is revoked or not and will be covered by section 6. Similarly property in respect of which the deceased had the power of appointment will also fall within section 6. [957H; 958A] O.S. Chawla vs Controller of Estate Duty (1973) 90 ITR approved. 945 4. In applying the Act to any particular transaction, regard must be had to its substance, that is, its true legal effect, rather to the form in which it is carried out. [958B] 5. By no rule of construction can the operation of sub section (1) of section 5 of the Act be curtailed by the operation of section 6. It is in addition to or supplemental of the provisions of sub section (1) of section 5, which is the charging section. [951E] In the instant case, it has been established that the deceased was the real owner of the shares. The ownership which the deceased had in the shares passed on his death and must be brought to charge under sub section (1) of section 5. [958C] Smt. Denabai Bomab Shah vs Controller of Estate Duty and Smt. Shantabai Jadhav vs Controller of Estate Duty (1964) 51 ITR (ED) 1 disapproved. (i) The provisions of sections 5 and 6 of the Act are somewhat similar to those of sections 1 and 2 of the Finance Act, 1894 in England. [955F] (ii) The precise relationship between sections 1 and 2, before the law was amended in 1969, was a question on which judicial opinion fluctuated widely. For over sixty years they were regarded as mutually exclusive and having in dependent fields of operation, the view was that property could not be liable to duty concurrently. In a situation where both sections 1 and 2 might apply, section 1 took priority and excluded liability. [952D E] Earl Cowley vs Inland Revenue Commissioners, L.R. , Attorney General vs Milne, L.R. [1914] A.C. 765, Nevill vs Inland Revenue Commissioners, LR [1924] A.C. 385 referred to. (iii) In Public Trustee vs Inland Revenue Commissioners (Re Ambody) LR the House of Lords struck the discordant note, holding that section 1 imposed the charge in general terms and section 2 by exclusion and inclusion, defined area of that charge. In Weir 's Settlement Trusts, Re Mc Pherson vs Inland Revenue Commissioners LR [1971] Ch.D. 145 the Court of Appeal resolved the doubts as to the relationship of these two sections. [954C; G, 955A] 7. When a property is purchased by a husband in the name of his wife or by a father in the name of his son, it must be presumed that they are benamidars, and if they claim it as their own by alleging that the husband or the father intended to make a gift of the property to them, the onus rests upon them to establish such a gift. When the benamidar is in possession of the property, standing in his name, he is in a sense the trustee for the real owner; he is only a name lender or an alias for the real owner. [1958F; 959A] Gopeekrist Gosain vs Gungapersaud Gosain (1854) 6 MIA 53, Sura Lakshmiah Chetty vs Kothandarama Pillai L.R. [1924 25] 52 IA 286, Shree Meenakshi Mills Ltd. C.I.T. referred to. 946 8. A benamidar has no interest at all in the property standing in his name A benamidar is an ostensible owner and if a person purchases from a benamidar, the real owner cannot recover unless he shows that the purchaser had actual or constructive notice of the real title. But from this it does not follow that the benamidar has real title to the property, he is merely an ostensible owner thereof. [960E] Mayne Hindu Law 11th Edn. p. 953 referred to.

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

The appellant Institution was started as a Teachers Training College under a Society which was established as far back as 1972, though the college itself was established and started in July 1977. On 22.9.1977 the institution made an application to the Government for grant of affiliation or recognition of the same in response to which a most extraordinary order was passed by the Government directing the University for refusing affiliation on the strange ground that all proposals for affiliation by the non Government Teachers Training Colleges be rejected and that no student be allowed to appear as a private candidate. How ever, since the above decision was not applicable to minority institutions which was reiterated by a latter ordinance called Bihar non Government Teachers Training College ordinance on June 5, 1978, it was incumbent on the institution to prove that it was a minority institution before it could be granted affiliation, on 24.2.1978 the appellants filed an application before the Ranchi University for grant of affiliation on June 15, 1978, the Government wrote to the Ranchi University for inspection of the appellants college. On 6.2.1980. Joint Secretary to the Government of Bihar sent letter to the Ranchi University and the Deputy Commissioner, Ranchi for inspection of the appellants ' college. Although the institution applied for affiliation in 1978 and claimed to be a minority institution which was never disputed at any point of time the Government took three years to take a decision about affiliation of the appellants ' college. On 5.3.1980, the University Authorities inspected the appellants ' college and recommended its affiliation which was followed by a report by the District Development officer, Ranchi on 30.6.1980 recommending affiliation. But, despite these facts no final decision was taken by the Government as a result of which the appellants had to move the High Court for directing the Government to grant affiliation. On the High Court 's direction to the Government to decide recognition and affiliation 411 the appellants ' college within a specified time, on 3.11.1980, the Government granted recognition and approval for affiliation for three sessions only, i.e. 1977 78, 1978 79 and 1979 80. On 10.11.1980, the University wrote to the Government recommending further grant of affiliation to the appellants ' college. On 22.11.1980 the appellants applied for grant of permanent affiliation. But, somehow or the other, on 27.11.1980 for undisclosed reasons, the Government passed a strange order cancelling the recognition and approval for affiliation granted to the appellants ' college vide its letter dated 3.11.1980. This order was challenged before the High Court which quashed the same on 18.5.1981. Thereafter, on 17.8.1981 the State of Bihar filled a Special Leave Petition before the Supreme Court which was dismissed on 30.11.1981. However. on 7.9.1981. three minority colleges, alongwith the appellants ' college, were granted recognition and affiliation by the Government by virtue of the High Court 's orders. The appellants again wrote to the High Court to direct the State Government to dispose of the application of the appellants for permanent recognition filed by them on 22.11.1980. On 16.9.1982. the Education Commissioner, Bihar again made a recommendation This recommendation was made after inspection by the Educational Commissioner In the presence of the local authorities as also the University authorities and after coming to a conclusion that the institution was a minority institution. Despite this, since no action was taken by the Government the appellants were compelled to file another Writ Petition in the High Court on 3.5.1983 with a prayer to allow the students of the appellants ' college to appear at the University Examination, but the Writ Petition was dismissed by the High Court in limine. Hence, the appeal by Special Leave of this Court Allowing the appeal, the Court ^ HELD: (Per majority) Per Fazal Ali. J 1.1. Although Article 30 of the Constitution is not included in Part III of the Indian Constitution which guarantees certain fundamental rights, yet the Supreme Court starting from the Kerala Education Bill s case, which is the locus classicus on the point in issue, right up to the case of The Ahmedabad St. Xaviers College Society & Anr. vs State of Gujarat and Anr. and ending with All Saints High School, Hydrabad & Ors. vs Government of Andhra Pradesh & Ors. has clearly recognised that running of minority institutions is also as fundamental and important as the rights conferred on the other citizens of the country, with the only difference that the rights contained in Article 30 have as independent sphere of their own The freedoms guaranteed by Article 30 are also elevated to the status of a full fledged fundamental right within the field in which they operate. In other words, any State action which in any way destroys, curbs or interferes with such rights would be violative of Article 30. [414 G H; 415 A B] 1.2. Technically speaking, the right of affiliation or aid from the Government is not a fundamental right so as to violate Article 30, but the refusal to give aid or affiliation by the statutory authorities without just and sufficient grounds amounts to violation of the fundamental freedoms enshrined in Articles 30 of the Constitution. If the Government withholds giving aid or a University 412 refuses to grant affiliation, the direct consequence would be to destroy the very existence of the institution itself because there may be a number of minority institutions which may not exist without the Government aid and a large number of students admitted to these institutions, in the absence of affiliation, will be deprived of acquiring higher academic status which will not only be a loss to the institution but a loss to the nation itself. It is for this purpose that Article 30 was inserted in the Constitution. [415 G H; 416 A] Kerala Education Bill 's Case [1959] SCR 995; The Ahmedabad St Xaviers College Society & Anr. vs State of Gujarat & Anr. ; ; and All Saints High School. Hyderabad & Ors. vs Government of Andhra Pradesh & Ors. referred to. On a careful and detailed review of these cases the following position emerges: (1) that while article 30 undoubtedly seeks to preserve the religious freedom, autonomy and its individuality; there is no fundamental right under which an institution can claim either aid or affiliation as a matter of right. It is permissible for the State of the University, as the case may be, to lay down reasonable conditions to maintain the excellence of standard of education but in the garb of doing so, refusal to grant affiliation cannot be made a ruse or pretext for destroying the individuality and personality of the said institution. If this is done, then apart from being wholly arbitrary and unreasonable it would amount to a clear infraction of the provisions of article 30 because what cannot be done directly is done indirectly. [420 C E] (2) While the State or a University has got an absolute right to insist on certain courses of study to be followed by institutions before they could be considered for affiliation but these conditions should not in any way take away the freedom of management or administration of the institution so as to reduce it to a satellite of the University or the State. This is impermissible because such a course of action directly violate article 30 of the Constitution. [420 F G] (3) While imposing conditions before granting affiliation, as indicated above, the State or the University cannot kill or annihilate the individuality or personality of the institution in question by insisting on following a particular kind of syllabus or a course of study which may be directly opposed to the aims, objects and ideals sought to be achieved by the institutions. [420 H] (4) There is a very thin line of distinction between withholding of affiliation for a particular purpose on extraneous grounds so as to subject the institution to rigorous orders, edicts or resolutions which may run counter to the dominant purpose for which the institution has been founded, and insisting on genuine and reasonable conditions to be imposed in the larger interest of education. [421 A B] While affiliation itself may not be a fundamental right but refusal of affiliation on terms and conditions or situations which practically denies the progress and autonomy of the institution is impermissible as being violative of article 30 of the Constitution. [421 C] 413 2:1. In the instant case, the State has refused to grant affiliation on purely illusory grounds which do not exist and failed to consider the recommendation of the Education Commissioner which was made after full inspection for grant of affiliation. In other words, the affiliation was refused without giving any sufficient reasons and such a refusal contravenes the provisions of article 30 of the Constitution. [426 G] 2:2. The belated attempt through a subsequent affidavit filed by the State Government to show that there were certain defects in the Institution, in view of the non production of the most important and decisive material, is nothing but an after thought. The State Government 's assurance to grant affiliation to the appellants college on fulfilling certain conditions is nothing but a pretext or a smoke screen to cloud the real issue. The Government did not mean business by producing a report on which exhibit J was based, which has been deliberately suppressed despite the Court 's order to produce the same. Therefore, an adverse inference has to be drawn against the State Government to the effect that if the materials on which the report was based had been produced it would have exploded the case of the Government and disclosed the real state of affairs namely that the appellants institute does fulfil all the conditions imposed by the State. [425 G H; 426 A] 3. Normally the Supreme Court does not grant cost in case of refusal of affiliation to institutions but having regard to the manner in which the State Government has behaved and exhibited its reluctance to perform a constitutional duty and has also tried to disobey the Court 's order for production of certain documents the instant case is a fit case for imposing a heavy cost on the State, apart from the directions to the State for granting affiliation to the appellant 's college and to allow its students of the 1980 81, 1981 82 and 1982 83 sessions to sit in the examination. [426 F G] Per Sabyasachi Mukharji, J. (Concurring) In the background of the facts and circumstances of this case, the Government action is not granting affiliation to the appellants college is action based without reason and is an act of arbitrariness. [428 F] (Per contra) 1. Article 30 of the Constitution was engrafted for the high and noble purpose of safeguarding and protecting the rights of minorities to establish and administer educational institutions. In this case, in not granting affiliation to the appellants ' college there was no discrimination against any educational institution on the ground that it was under the management of any minority whether based on religion or language. It was inaction or an act of arbitrariness on the part of the authorities. From such unreasonable and arbitrary actions or inactions institutions, educational or otherwise, belonging both to the majority or minority communities often suffer and in appropriate cases, Court should grant relief without aid or recourse to the articles of the Constitution protecting the freedom and rights of the minorities. In this case there is no evidence or even any serious allegation that affiliation was being denied to the appellants institution on the ground that it was a minority institution. [428 G H; 429 A B] 414

Appeal No. 766 of 1976. Appeal by Special Leave from the Order dated 29 11 75 of the Industrial Tribunal, Orissa in Industrial Dispute Case No. 5/75 and Special Leave Petitions (Civil) Nos. 1844A and 1845/76 L.N. Sinha, Sol. Gen, Govind Das, (Mrs.) section Bhandare, M. section Narasimhan, A. K. Mathur and A.K. Sharma, for the Appel lant. J. P. Goyal and Shree Pal Singh; for the Respondent. Gobind Das, P.H. Parekh and (Miss) Manju Jatly; for the petitioner [In S.L.P. (Civil) Nos. 1844A and 1845/76]. The Judgment of the Court was delivered by GOSWAMI, J. The Appellant, the Paradip Port Trust, is a major port governed by the provisions of the and is managed by Board of Trustees consti tuted under the provisions of the said Act. Under section 5 of the said Act the Board of Trustees is 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 may sue or be sued in the name of the Board. An industrial dispute was raised by the Paradip Shramik Congress representing the workmen with regard to the termination of the service of one Nityananda Behera, a temporary teacher in the Paradip Port Trust High School. The dispute was referred to the Industrial Tribunal (Cen tral) Bhubaneswar, Orissa, under section 10( 1 ) (d) of the (briefly the Act). The respondents (hereinafter to be referred to as the Union) appeared before the Tribunal through the Adviser and General Secretary of Paradip Shramik Congress. The appel lant sought to be represented before the Tribunal through Shri T. Misra, Advocate, who was a "Legal 539 Consultant" of the Trust. The appellant filed their au thority in Form 'F ' under rule 36 of the Orissa Industrial Dispute Rules in his favour. The appellant subsequently filed also a Power of Attorney executed by the Chairman of the Board of Trustees in favour of Shri T. Misra who was admittedly a practising Advocate of the Orissa High Court. An objection was taken by the Union to the representa tion of the Paradip Port Trust (hereinafter to be described as the employer) by Shri T. Misra, Advocate, and the Union refused to give their consent to his representation as required under section 36(4) of the Act. The Tribunal after hearing the parties upheld the objec tion of the Union. The Tribunal examined the terms and conditions of the appointment of Shri T. Misra as Legal Consultant of the employer and held as follows : "His duties and the restrictions on his practice which have been extracted above and the terms as to his professional fees, etc. indicate that the relationship of the first party and Shri Misra is clearly that of a client and his lawyer and not that of employer and employee. Hence, Shri Misra cannot be said to be Officer of the first party. " The Tribunal further held: "Merely by execution of a power of attorney, the restrictions attached to a legal practitioner contained in sub section (4) of the Act cannot be circumvented. I would accordingly bold that Shri Misra who is a legal practitioner cannot represent the first party before this Tribunal even if he holds a power of attorney executed in his favour by the first party? The appellant has obtained special leave of this Court against the above order of the Tribunal. We have heard the Solicitor General on behalf of the appellant and Shri Goyal for the respondents. Along with the above, appeal two Special Leave petitions Nos. 1844 A and 1845 of 1976 are also posted for hearing for admission and we have heard Mr. Gobind Das at great length. The two Special Leave Petitions are by the management of Keonjhar Central Cooperative Bank Ltd. One application is relating to rejection by the Tribunal of the Bank 's prayer for representation before the Tribunal through its Advocate, Shri B.B. Rath, on the ground of objection by the Union under section 36(4) of the Act. The second application relates to the, order of the Tribunal allowing Shri A.C. Mohanty, Advocate and Vice President of the Keonjhar Central Cooperative Bank Employees Union under section 36(1) of the Act notwithstanding the objection of the management. Industrial law in India did not commence with a show of cold shoulder to lawyers as such. There was an unimpeded entrance of legal practitioners to adjudication halls before tribunals when the Act first came into force on April 1, 1947. Three years later when the Labour Appellate Tribu nals were constituted under the Industrial Disputes (Appel late Tribunal) Act 1950, a restriction was imposed on the parties 3 1234SCI/76 540 in engagement of legal practitioners before the Appellate Tribunal without consent of the parties and leave of the Tribunal. When this was introduced in the appellate forum, the same restriction was imposed for the first time upon representation of parties by legal practitioners before the Industrial Tribunals as well [see Section 34 of the Indus trial Disputes (Appellate Tribunal) Act, 1950]. In view of the recent thinking in the matter of preferring legal aid to the poor and weaker sections of the people it may even be possible that the conditional embargo under section 36(4) may be lifted or its rigour considerably reduced by leaving the matter to the Tribunals permission as has been the case under the English law. Restriction on parties in respect of legal representa tion before Industrial Courts is not a new phenomenon. It was there in England in the Industrial Courts Act, 1919 (9 & 10 Geo 5 c 69) and. does not appear to be altered even by the Industrial Relations Act, 1971. Section 9 of the English Act provides that except as provided by rules, "no person shall be entitled to appear on any such proceedings by counsel or solicitor. " However, rule 8 of the Industrial Court (Procedure) Rules 1920 allows persons to appear by counsel or solicitor with permission of the court. The Act envisages Investigation and settlement of indus trial disputes and with that end in view has created various authorities at different levels all independent of one another. The word adjudication occurs only with reference to labour courts, industrial tribunals and national tribu nals. These bodies are manned by Judges of High Courts or by officers with appropriate Judicial and labour law experi ence. The conciliation proceedings held by a Board or a Conciliation Officer are mainly concerned with mediation for promoting settlement of industrial disputes. It is reason able to suppose that the presence of legal practitioners in conciliation may divert attention to technical pleas and will detract from the informality of the, proceedings imped ing smooth and expeditious settlement. Legal practitioners entrusted with their briefs cannot be blamed if they bring forth their legal training and experience to the aid and benefit of their clients. But labour law operates in a field where there are two unequal contestants. The Act, there fore, takes care of the challenge of the situation in which the weaker party is pitted against the stronger before adjudicating authorities. That appears to be one of the reasons for introducing consent of the parties for represen tation by legal practitioners. Employers, with their purse, naturally, can always secure the services of eminent coun sel. The question that arises for consideration will turn on the interpretation of section 36 of the Act which may be quoted: 36(1) A workman who is a party to a dispute shall be entitled to be represented in an proceed ing under this Act by (a) any member of the executive or other office bearer of a registered trade union of which he is a member; 541 (b) any member of the executive or other office bearer of a federation of trade unions to which the trade union referred to in clause (a) is affiliated; (c) where the worker is not a member of any trade union, by any member of the executive or other office hearer of any trade union connected with, or by any other workman employed in the industry in which the worker is employed and autho rised in such manner as may be prescribed. (2) An employer who is a party to a dispute shall be entitled to be represented in any pro ceeding under this Act by (a) an officer of an association of employers of which he is a member; (b) an officer of a federation of associa tions of employers to which the association re ferred to clause (a) is affiliated; (c) where the employer is not a member of any association of employers by an officer of any association of employers connected with, or by any other employer engaged in, the industry in which the employer is engaged and authorised in such manner as may be prescribed. (3)No party to a dispute shall be entitled to be represented by a legal practitioner in any concili ation proceedings under this Act or in any proceed ings before a Court. (4) In any proceeding before a Labour Court, Tribunal or National Tribunal, a party to a dispute may be represented by a legal practitioner with the consent of the other parties to the proceeding and with the leave of the Labour Court, Tribunal or National Tribunal, as the case may be. " Section 36 provides for representation of parties before the Tribunals and the Labour Court. Under section 36(1) a workman who is a party to a dispute shall be entitled to be represented in any proceeding under the Act by three classes of officers mentioned m (a), (b) and (c) of that sub sec tion. Similarly under section 36(2) an employer who is a party to a dispute shall be entitled to be represented in any proceeding under the Act by three classes of officers mentioned in (a), (b) and (c) of that sub section. By sub section (3) a total ban is imposed on representation of a party to a dispute by a legal practitioner in any concili ation proceedings under this Act or in any proceedings before a Court of enquiry. Then comes section 36(4) which introduces the requirement of prior consent of the opposite party and 542 leave of the Tribunals and of the Labour Court, as the case may be, for enabling a party to be represented by a legal practitioner. Under the scheme of the Act the parties to an industrial dispute are employers and employers; employers and workmen; and workmen and workmen [section 2(K)]. The definition of "appropriate Government" under section 2(a) of the Act lays bare the coverage of industrial disputes which may be raised concerning, amongst others, several types of corporations, mentioned therein, companies, mine, oil field, cantonment board and major port. The definition of employer under section 2(g), which is a purposive but not an exhaustive definition, shows that an industrial dispute can be raised in relation to an industry carried on even by the Government and by local authorities. It need not be added that indus try is also carried on by private owners, private companies and partnerships. Employers and workmen will, therefore, be drawn from numerous sources. Leaving aside for the present industrial disputes between employers and employers and workmen and workmen, such disputes, almost, always are between employers and workmen. Prior to the insertion of section 2A in the Act by the Amendment Act 35 of 1965 a dispute raised only by a single individual workman did not come under the category of an industrial dispute within the meaning of section 2(k). Left to himself, no remedy was available to such an aggrieved individual workman by means of the machinery provided under the Act for adjudication of his dispute. Such an individual dispute, for example, relating to the discharge or dismissal of a single workman, however, became an industrial dispute only if a substantial body of workmen or a union of workmen espoused his cause. The trade union of workmen, therefore, comes to be recog nised as a live instrument under the Act and has an active role to play in collective bargaining. Thus, so far as workmen are concerned, union is, alsmost, always involved in the dispute from the inception. Since the dispute, itself, in a large number of cases takes the character of industri al dispute from participatory involvement of the trade union, the Act confers an unbartered right upon the workmen to be represented by a member of the executive or by an office bearer of a registered trade union. It is, there fore, in the very scheme of things that a workman 's absolute right to be represented by an office bearer of the union is recognised under the Act. Indeed it would have been odd in the entire perspective of an industrial dispute and the objects and purposes of the Act not to give due recognition to the union. But for a provision like section 36(1 ) of the Act, there may have been difficulty under the general law in the way of the office bearers of the union represent ing workmen before the adjudicating authorities under the Act unless, perhaps, regulated by the procedure under sec tion 11 of the Act. To put the matter beyond controversy an absolute right is created in favour of the workmen under section 36(1) in the matter of representation. Having made such a provision for the workmen 's representation the employer is also placed at par with the workmen in similar terms under the Act and the employer may also be represented by an officer of the association of employers of which the employer is a member. The 543 right is extended to representation by the office bearers of the federation of the unions and by the officers of the federation of employers. The provisions of section 36(1) and 36(2) confer on the respective parties absolute rights of representation by persons respectively specified therein. The rights of representation under section 36(1) and section 36(2) are unconditional and are not subject to the condi tions laid down under section 36(4) of the Act. The said two sub sections arc independent and stand by themselves. As stated earlier, section 36 deals with representation of the parties. Neither the Act nor section 36 provides for appearance of the parties themselves when they are individu als or companies or corporations. The Tribunals and the Labour Courts being quasi judicial authorities dealing with rights affecting the parties cannot adjudicate their dis putes in absence of the parties. It is, therefore, incum bent upon the Tribunals and Labour Courts to afford reasona ble opportunity to the parties to appear before them and hear them while adjudicating industrial disputes. This position is indisputable. Section 36, therefore, is not exhaustive in the sense that besides the persons specified therein there cannot be any other lawful mode of appearance of the parties as such. As indicated earlier section 36 does not appear to take count of companies and corporations as employers. It is, however, common knowledge that industri al disputes are raised in a predominantly large number of cases where companies or corporations are involved. Since companies and corporations have necessarily to appear through some human agency there is nothing in law to pre vent them from being represented in any lawful manner. As Salmond says :, "Every legal person, therefore, has corresponding to it in the world of natural persons certain agents or representa tives by whom it acts . . . . "(Salmond on Jurispudence, 12th Edition, page 312.) It is not intended under the Act that companies and corporations are confined to representation of their cases only through the officers specified in section 36(2) of the Act. They can be represented by their directors or their own officers authorised to act in that behalf in a lawful manner provided it is not contrary to any provision of the Act. This would not, however, mean that the companies and corporations, and for the matter of that any party, are free to engage legal practitioners by means of a special power of attorney to represent their interests before the Tribunals without consent of the opposite party and leave of the Tribunal. Again, although under section 36(2)(c) there is provi sion for the contingency of an employer not being a member of an association of employers, the device of representation provided therein would not fit in the case of a Government Department or a public corporation as an employer. These categories of employers, known to the Act, will be put to the most unnatural exercise of enlisting the aid of an outside 544 association, albeit connected with the same type of indus try, to defend their cases before Tribunals. Such an absurd intent cannot be attributed to the legislature in enacting section 36, which will be, if that section is the be all and end all of the types of representations envisaged under the Act. The impossibility of the position indicated above a crucial pointer to section 36 being not exhaustive but only supplemental to any other lawful mode of represen tation of parties. The parties, however, will have to conform to the conditions laid down in section 36(4) in the matter of representation by legal practitioners. Both the consent of the opposite party and the leave of the Tribunal will have to be secured to enable a party to seek representation before the Tribunal through a legal practitioner qua legal practitioner. This is a clear significance of section 36(4) of the Act. If, however, a legal practitioner is appointed as an officer of a company or corporation and is in their pay and under their control and is not a practising advocate the fact that he was earlier a legal practitioner or has a legal degree will not stand in the way of the company or the corporation being represented by him. Similarly if a legal practitioner is an officer of an association of employers or of a federation of such associations, there is nothing in section 36(4) to prevent him from appearing before the Tribunal under the provisions of section 36(2) of the Act. Again, an office bearer of a trade union or a member of its executive, even though he is a legal practitioner, will be entitled to represent the workmen before the Tribunal under section 36(1) in the former capacity. The legal practi tioner in the above two cases will appear in the capacity of an officer of the association in the case of an employer and in the capacity of an office bearer of the union in the case of workmen and not in the capacity of a legal practitioner. The fact that a person is a legal practitioner will not affect the position if the qualifications specified in section 36(1) and section 36(2) are fulfilled by him. It must be made clear that there is no scope for enquiry by the Tribunal into the motive for appointment of such legal practitioners as office bearers of the trade unions or as officers of the employers associations. When law provides for a requisite qualification for exercising a right fulfilment of the qualification in a given case will entitle the party to be represented before the Tribunal by such a person with that qualification. How and under what circumstances these qualifications have been obtained will not be relevant matters for consideration by the Tribunal in considering an application for representation under section 36(1) and section 36(2) of the Act. Once the qualifications under section 36(1) and section 36(2) are fulfilled prior to appearance before Tribunals, there is no need under the law to pursue the matter in order to find out whether the ap pointments are in circumvention of section 36(4) of the Act. Motive of the appointment cannot be made an issue before the Tribunal. 545 We may note here the difference in language adopted in section 36(1) and section 36(2). While section 36(1) refers to "any member of the executive" or "other office bearer," section 36(2), instead, mentiones only "an officer." Now "executive" in relation to trade union means the body by whatever name called to which the management of the affairs of the trade union is entrusted section 2(gg). "Office bearer" in relation to a trade union includes any member the executive thereof but does not include an auditor section 2(III). So far as trade unions are concerned there is no difficulty in ascertaining a member of the executive or other office bearer and section 36(1) will create no difficulty in practical application. But the word "officer" in section 36(2) is not defined in the Act and may well have been, as done under section 2(30) of the Companies Act. This is bound to give rise to controversy when a particular person claims to be an officer of the association of employers. No single test nor an exhaustive test can be laid down for determining as to who is an offi cer in absence of a definition in the Act. When such a question arises the Tribunal, each individual case, will have to determine on the materials produced before it wheth er the claim is justified. We should also observe that the officer under section 36(2) is of the association or of the federation of associations of employers and not of the company or corporation. The matter of representation by a legal practitioner holding a power of attorney came up for consideration before the Full Bench of the Appellate Tribunal of India in the year 1951 (see Kanpur Hoisery workers ' Union vs J.K. Hosiery Factor) ', Kanpur)(1). The provision for representation which applied to the Appellate Tribunal was section 33 of the repealed Industrial Disputes Appeallate Tribunal) Act, 1950. This section corresponds to section 36 of the with which are concerned. Although the Appel late Tribunal rejected the claim of the party to be repre sented by the legal practitioner on the basis of a power of attorney, with which we agree, the reasons for its conclu sion based solely on the ground of section 36 being exhaus tive do not meet with our approval. The Appellate Tribunal took the view that the Act intended to restrict the repre sentation of parties to the three clases of persons enumer ated in sub sections (1) and (2) of section 33. The Appel late Tribunal was of the view that sub sections(1) and (2) of section 33 were intended to be exhaustive of the persons (other than the party himself) who might represent either of the party. Since holding of a power of attorney is not one such mode the claim of the legal practitioner failed, ac cording to the Appellate Tribunal. The Rajasthan High Court in Duduwala & Co. and others vs Industrial Tribunal and another(2) took the same view. Our attention has been drawn to the decisions of the Calcutta and Bombay High Courts where in a contrary view has been taken with regard to the interpretation of section 36 as being exhaustive [see Hall & Anderson, Ltd. vs S.K. Neogi and another(3) and Khadilkar (K. K.) General Secretary, Engineering Staff Union Bombay vs Indian Hume Pipe Company, Ltd.,Bombay, and another] (4). For the reasons already given by us we are (1) [1952] I L.L.J. 384. (2) A.I,R. (3) [1954] I.L.L.J. 629. (4) [1967] I.L.L.J. 139 546 of opinon that the views of the Labour Appellate Tribunal and that of the Rajasthan High Court in this aspect of the matter are not correct and the Calcutta and Bombay High Courts are right in holding that section 36 is not exhaus tive. The Solicitor General contends that "and" in section 36(4) should be read as "or" in which case refusal to con sent by a party would not be decisive in the matter. The Tribunal will then be able to decide in each case by exer cising its judicial discretion whether leave, in a given case, should be given to a party to be represented by a lawyer notwithstanding the objection of the other party. It is pointed out by the Solicitor General that great hardship will be caused to public corporations if the union is given a carte blanche to finally decide about that matter of representation by refusing to accord its consent to repre sentation of the employer through a legal practitioner. It is pointed out that public corporations, and even Government running a transport organisation like the State transport, cannot be expected to be members of any employers ' associa tion. In their case section 36(2) will be of no avail. To deny them legal representation would be tantamount to denial of reasonable opportunity to represent their cases before the Tribunal. It is submitted that since such injustice or hardship cannot be intended by law the final word with regard to representation by legal practitioners before the Tribunal should rest with the Tribunal and this will be effectively implemented if the word "and" in section 36(4) is read as "or". This, it is said, will also achieve the object of the Act in having a fair adjudication of disputes. We have given anxious consideration to the above submis sion. It is true that "and" in a particular context and in view of the object and purpose of a particular legislation may be read as "or" to give effect to the intent of the Iegislature. However, having regard to the history of the present legislation, recognition by law of the unequal strength of the parties in adjudication proceedings before a Tribunal, intention of the law being to discourage repre sentation by legal practitioners as such, and the need for expeditious disposal of cases, we are unable to hold that "and" in section 36(4) can be read as "or". Consent of the opposite part is not an idle alternative but a ruling factor in section 36(4). The question of hardship, pointed out by the Solicitor General, is a matter for the legislature to deal with and it is not for the courts to invoke the theory of injustice and other conse quences to choose a rather strained interpretation when the language of section 36 is clear and unambiguous. Besides, it is also urged by the appellant that under section 30 of the , every advocate shall be entitled "as of right" to practise in all courts, and before only tribunal section 30(i) and (ii). This right conferred upon the advocates by a later law will be properly safeguarded by reading the word "and" as "or" in section 36(4), says counsel. We do not fail to see some difference in language in section 30(ii) from the provision in section 14(1) (b) of the , relating to the right of advocates to appear before courts and tribu nals. For example, under section 14(1) (b) of the 547 Bar Councils Act, an advocate shall ;be entitled as of right to practise save as otherwise provided by or under any other law in any courts (other than High Court) and tribunal. There is, however, no reference to "any other law" in sec tion 30(ii) of the . This need not detain us. We are informed that section 30 has not yet come into force. Even otherwise, we are not to be trammelled by section 30 of the for more than one reason. First, the is a special piece of legislation with the avowed aim of labour welfare and representation before adjudicatory authorities therein has been specifical ly provided for with a clear object in view. This special Act will prevail over the which is a general piece of legislation with regard to the subject matter of appear ance of lawyers before all courts, tribunals and other au thorities. The is concerned with.representation by legal practitioners under certain conditions only before the authorities mentioned under the Act. Generalia Specialibus Non Derogant. As Maxwell puts it: "Having already given its attention to the particular subject and provided for it, the legis lature is reasonably presumed not to intend to alter that special provision by a subsequent general enactment unless that intention be main fested in explicit language . or there be something in the nature of the general one making it unlikely that an exception was intended as regards the special Act. In the absence of these conditions, the general statute is read as silently excluding from its operation the cases which have been provided for by the special one. "(1) Second, the matter is not to be viewed from the point of view of legal practitioner but from that of the employer and workmen who are the principal contestants in an industrial dispute. It is only when a party engages a legal practi tioner as such that the latter is enabled to enter appear ance before courts or tribunals. Here, under the Act, the restriction is upon a party as such and the occasion to consider the right of the legal practitioner may not arise. In the appeal before us we find that the Tribunal, after considering the materials produced before it, held that Shri T. Misra could not claim to be an officer of the corpora tion simply because he was a legal consultant of the Trust. The Tribunal came to this conclusion after examining the terms and conditions governing the relationship of Shri Misra with the Trust. He was neither in pay of the company nor under its control and enjoyed freedom as any other legal practitioner to accept cases from other parties. It is significant to note that one of the conditions of Shri Misra 's retainer is that "he will not appear in any suit or appeal against the Port until he has ascertained from the Chairman that his services on behalf of the Port will not be required. " That is to say, although on a retainer and with fixed fees for appearance in eases there is no absolute ban to appear even (1) Maxwell on lnterpretation of Statutes 11th Ed. P. 169. 548 against the Port. This condition is not at all consistent with the position of an officer of the Trust. We agree with the opinion of the Tribunal that Shri Misra cannot be held to be an officer of the Trust. A lawyer, simpliciter, cannot appear before an Industri al Tribunal without the consent of the opposite party and leave of the Tribunal merely by virtue of a power of attor ney executed by a party. A lawyer can appear before the Tribunal in the capacity of an office bearer of a registered trade union or an officer of associations of employers and no consent of the other side and leave of the Tribunal will, then, be necessary. In the result the appeal is dismissed with costs. Necessarily the Special Leave Petitions also fail and stand dismissed.

Under the , it is the business of the Oil and Natural Gas Commission to plan, promote, organise and implement programmes for the development of petroleum resources and the production and sale of petroleum products produced by it and to perform such functions as the Central Government may, from time to time, assign to it. Under section 29 of the Act, the Commission shall be deemed to be a Company, liable for any tax or fee levied by the Central or State Government. Section 31 empowers the Central Government to make rules prescribing the conditions subject to which, and the mode in which, contracts may be entered into by or on behalf of the Commis sion. The Commission is engaged in the business of produc ing crude oil in Assam and supplying it to the refineries of the Indian Oil Corporation at Gauhati in Assam and Barauni in Bihar. It was decided by the Government of India and agreed to by the Commission; that the crude is deemed no tionally to be delivered only to Barauni Refinery and not to Gauhati Refinery, and that payment of Sales tax by the Commission is to be on the same principle. The Commission however challenged, in a petition to this Court, its liability to pay any sates tax either under the Central Sales Tax Act to the State of Assam or the State Sales Tax to the .State of Bihar, on the ground, that, in supplying crude oil to the Corporation there was no contract of sale between the Commission and the Corporation, because, the supply was pursuant to. directions and orders of the Central Government and the Commission had no volition or freedom in the matter. The Commission also contended that assuming that they are sates they are inter state sales, under the , and the State of Bihar was not competent to levy any State sales tax. HELD: (1) The supplies of crude oil by the Commission to the Brauni Refinery of the Corporation satisfy all the ingredients of a sale and amount to sales by the Commission to the Corporation. [356 A] (a) Statutory orders regulating the supply and distribu tion of goods by and between the parties under Control Orders do not absolutely impinge on the freedom to enter into contract. [357 C] (b) Directions, decisions and orders of agencies of the Government to control production and supply of commod ities, may fix the person who has to carry them out, the parties to whom the goods are to be supplied, and he price at which, and the time during which they are to be supplied. In much cases it cannot be said that compulsive. directions rob the transactions of the character of agreement. There is privity of contract between the parties, he statute supplying the consensus and the modality of consensus. [357 D E] (c) Such a transaction is a valid transfer of, property for consideration and he law presumes assent when there is transfer of goods from one to the other. [357 F] (d) Also, a sale may not require the consensual element and there may compulsory sale of property under a statute for a price fixed against the owner 's will. (e) Delimiting areas for transactions or denoting par ties or price for transactions are all within the area of individual freedom of contract with limited choice by reason of ensuring the greatest good for the greatest number by achieving proper supply as standard or fair price. [357 G] . (f) The transactions in substance represent the outgoing of the business and the price would come into computation of profits. [357 G] Salar Jung Sugar Mills Ltd. Etc. v, State of Mysore & Ors. [1972] 2 S.C.R. 228 followed. (2) The movement of crude oil from Assam to Barauni in Bihar is pursuant to and as an incident to the contract for, sale between the Commission and the Corporation. The Sales are therefore inter state sales. and under the Central Sales tax Act only the. State of Assam is entitled to levy central sales tax on the Commission. [358 G]

Civil Appeal No. 1490 of 1984. From the Judgment and Order dated 16.2.1984 of the Madras High Court in O.S.A. No. 217 of 1982. section Chellaswamy, N.H. Hingorani, Mrs. Kapila Hingorani, Mrs. Rekha Pandey and D. Sadasivan for the Appellants. F.S. Nariman, M.K. Rao, P.N. Ramalingam and A.T.M. Sampath for the Respondent. 122 The Judgment of the Court was delivered by CHINNAPPA REDDY, J. The long and grasping hand of a Multi National Company, the Monsanto Company of St. Lous, Missouri, United States of America, has reached out to prevent alleged infringement of two of their patents (Numbers 104120 and 125381) by the defendant, an Indian Private Limited Company. Though the suit, as initially laid, was with reference to two patents, the suit was ultimately confined to one patent only (Number 125381), the period for which the other patent (104120) was valid having expired during the pendency of the suit. The suit was decreed by the trial court, but was dismissed by the appellate court. The appeal which is now before us has been filed pursuant to a certificate granted by the appellate bench of the High Court on the ground that substantial questions of law of great public importance were involved. The questions, however, were not specified in the certificate. As we see it, we are unable to find any substantial questions of law of great importance. We are afraid both the lower courts misdirected themselves and missed the real substance of the dispute and found themselves chasing the mirage of legal questions which did not strictly arise. We may first refer to a few preliminary facts. Weeds, as is well known, are a menace to food crops, particularly crops like rice which belong to the grass variety. Research has been going on for years to discover a weed killer which has no toxic effect on rice, that is to say, a Herbicide which will destroy the weeds but allow rice to survive without any deleterious effect. For long the research was futile. But in 1966 67 came a break through. A Scientist Dr. John Olin discovered CP53619 with the formula '2 Chlore 2 ',6 ' Diethyl N (Butoxy Methyl) Acetanilide ' which satisfied the requirement of a weed killer which had no toxic effect on rice. The annual report of the International Rice Research Institute for 1968 state, "Weed control in rice was an important part of the Agronomy program. The first agronomic evidence of the efficacy of granular trichloroethyl styrene for the selective control of annual grasses in transplanted rice was obtained at the Institute. Another new accession, CP53619, gave excellent weed control in transplanted flooded and non flooded, upland rice. " It was further stated "CP53619 at 2 and 4 k.g./ha a.i. appeard at least twice among the 20 best treatments" and "the most outstanding new pre emergence herbicide was 2 chloro 2 ', 6 ' diethyl N (butoxymethyl) acetanilide (CP 53619). " The 123 annual report of the International Rice Research Institute for 1969 shows that the herbicide CP 53619 came to acquire the name of Butachlor. It is now necessary to refer in some detail to the averments in the plaint, as the decision of the case, in the view that we are taking, turns very much on what the plaintiffs themselves had to say about their case. The first plaintiff is the Monsanto Company and the second plaintiff is a subsidiary of the first plaintiff registered as a Company in India. It was stated in the plaint that the first plaintiff was the patentee of inventions entitled "PHYTOTOXIC COMPOSITIONS" and "GRASS SELECTIVE HERBICIDE COMPOSITIONS", duly patented under patent number 104120 dated March 1, 1966 and 125381 dated February 20, 1970. The claims and the particulars relating to the inventions were stated to be contained in the specifications of the two patents annexed to the plaint as annexure I and II. After stating so much the plaintiffs said, and this is very important, "THE ACTIVE INGREDIENT MENTIONED IN THE CLAIM IS CALLED "BUTACHLOR". It suggested, without expressly saying it that the Plaintiffs ' patents covered Butachlor also which in fact it did not, as we shall presently see. It was next stated that the first plaintiff had permitted the second plaintiff to work the patents from 1971 onwards under an agreement dated September 3, 1980. The second plaintiff had been manufacturing and marketing formulations according to the Patents Numbers 104120 and 125381 and 'a specimen tin containing formulations produced by the second plaintiff according to the said two patents and sold in the market by the second plaintiff ' was produced along with the plaint as M.O.I. It came to the notice of the plaintiffs, it was averred, that the defendant was attempting to market a formulation of Butachlor covered by the said patents. They, therefore, wrote to the defendant drawing their attention to the existence of the patents in their favour. Some correspondence ensued. In the second week of May, 1981, the second plaintiff found that the defendant was marketing formulation of Butachlor covered by the patents of the first plaintiff. Sample tins of "Butachlor 50" manufactured by the defendant were purchased by the plaintiffs and were produced along with the plaint as M.O.s 3 and 4. The legend on the tins was as follows : "Delchor 50 Composition (Butachlor 50%E.C.) Butachlor 50% W/W Herbicide Solvents and Emulsifiers 50% W/W" 124 According to the plaintiffs, the legend on the tins containing the substance manufactured by the defendants showed that what was sold by the defendants was nothing but a reproduction of the first plaintiff 's patented formulations. The formulations of the defendant were sent to Shri Ram Institute for analysis and they were said to contain the chemical "Butachlor Chemical formula for which is 2 Chloro 2 ' 6 ' Diethyl N (Butoxymethyl) Acatanilide. " On these averments, the plaintiffs alleged that the defendant had infringed their Patents Numbers 104120 and 125381 by selling formulations covered by them. The plaintiffs used for an injunction to restrain the defendant from infringing their Patents Numbers 104120 and 125371 by the manufacture or sale of the infringing formulations as contained in this marked as M.O.Nos. 2 and 3. The Plaintiffs also asked for an account etc. Annexed to the plaint were the two specifications relating to Patent Numbers 104120 and 125381. In the specification relating to "Phytotoxic Composition" (Specification No. 104120), it was claimed : "We Claim : 1. A phytotoxic composition comprising as an active ingredient a compound of the formula shown in Figure 1 of the accompanying drawings, wherein R1 and R2 are alkyl of alkoxy having from 1 to 10 carbon atoms, R3 is halogen, alkyl or alkoxy having from 1 to 10 carbon atoms, n is an integer from 0 to 3, A is oxygen or sulfur, X is chlorine, bromine or iodine, and Z,Z1 and Z2 are hydrogen, alkyl, alkoxy,alkenyl or alkynyl having from 1 to 18 carbon atoms, aryl having from 6 to 24 carbon atoms, heterocyclyl having a miximum of 24 carbon atoms and from 1 to 3 hetero atoms, or two of Z groups are combined to form a bivalent alkylene radical having from 1 to 6 carbon atoms in admixture with an adjuvant such as herein described, the active ingredient in the said composition being present in an amount of at least 0.1 per cent by weight. A phytotoxic composition as claimed in Claim 1, wherein the active ingredient is 2 ' tertbuty 1 2 chloro N (2 prophynyloxy methyl) 6 'methyl acetanilide. 125 3. A phytotexic composition as claimed in Claim 1, wherein the active ingredient is 2 ' tertbutyl 2 chlore N (2 prophynyloxy methyl) 6 ' methyl acetani lide. A phytotexic composition as claimed in Claim 1, wherein the active ingredient is 2 ' tertbutyl 2 chlore N(allyloxymethyl) 6 ' methylacet anilide. A phytotoxic composition as claimed in Claim 1, wherein the active ingredient is 2 tertbutyl 2 brome N methexy methyl 6 ' methylacetanilide. 6. A phytotoxic composition as claimed in Claim 1, wherein the active ingredient is 2 ' tertbutyl 2 broome N (2 prophynylexymethyl) 6 methylacetani lide. A phytotoxic composition as claimed in Claim 1, wherein the active ingredient is 2 chloro 2 ', 6 disthyl N (methoxymethyl) acetanilide. A phytotoxic composition as claimed in Claim 1 wherein the active ingredient is 2 ' tertbutyl 2 bromo N (allyloxymethyl) 6 ' methylacetanilide. 9. A phytotoxic composition as claimed in Claim 1, wherein the active ingredient is 2 ' tertbutyl 2 choloro N (2 methoxyethoxymethyl) 6 ' methylacetan ilide. A phytotoxic composition as claimed in Claim 1, wherein the active ingredient is 2 ' tertbutyl 2 bromo N (2 methoxyethoxymethyl) 6 methylace tanilide. A phytotoxic composition as claimed in Claim 1, wherein the active ingredient is 2 bromoe 2 ' terbutyl N (2,3 dihydroxypropoxyomethyl) 6 methylacetanilide. A phytotoxic composition as claimed in Claim 1, wherein the active ingredient is 2 chloro 2 ', 6 dimethyl N (isoproposymethyl) acetanilide. 13. A phytotoxic composition substantially as herein before described. " 126 In the specification relating to Grass selective Herbicide Compositions (Specification No. 125381), it was claimed: "We claim: 1. A herbicidal composition in the form of an emulsion, suspension or dispersion, comprising as active ingredient a compound selected from the group. a) 2 ',6 ' diethyl N butoxymethyl alpha chloroaceta nilide, and b) 2 ', 6 ' diethyl N (2 butoxyethyl) alpha chloro acetanilide, or a mixture of (a) and (b) in admixture with one or more diluents or carriers and surface active agents in which an emulsion is obtained by dissolving the active ingredient in an organic solvent and thereafter dispereing the solution in another liquid medium in the presence of an emulsifying agent such as herein described. A composition as claimed in claim 1, which further comprises one or more compounds selected from the following conventional pesticides, fertilizers, and extenders such as herein described. A composition as claimed in claim 2, wherein mineral extenders such as natural clays, phyro phyllites and vermiculite having a perticle size of 2000 to 149 microns, preferably of 1410 to 250 microns, are used. A herbicidal composition in the form of an emulsion, suspension or dispersion substantially as hereinbefore described. " We do not propose to set out in detail the contents of the written statement. It is sufficient to state that the Defendant claimed as he was entitled to do under section 107 of the , that the patents were liable to be revoked under section 64(1) (a),(b),(d),(e),(f),(g),(h),(i),(j),(k),(l) and (m) of the . The defendant also made counter claim seeking revocation of the patents. 127 A close scrutiny of the plaint and a reference to the evidence of the witnesses for the plaintiff atonce exposes the hollowness of the suit. We must begin with the statement in the plaint that "THE ACTIVE INGREDIENT MENTIONED IN THE CLAIM IS CALLED 'BUTACHLOR '" which suggests that Butachlor was covered by the Plaintiffs ' patents and the circumstance now admitted that no one, neither the plaintiff nor any one else, has a patent for Butachlor. The admission was expressly made by PW 2, the power of attorney holder of the first plaintiff and Director of the second plaintiff company. The learned counsel for the plaintiffs also admitted the same before us. PW 1, Dr. Dixon, Chemist of the first plaintiff company, after explaining the use of an emulsifying agent, in answer to a direct question, whether his company claimed any patent or special knowledge for the use of any particular solvent or particular emulsifying agent, in the formulation in their patent, had to admit that they had no such patent or special knowledge. He further admitted that the use of solvent and emulsifying agent on the active ingredient was one of the well known methods used in the pesticide industry to prepare a marketable product. He also expressed his inability to say what diluents or emulsifying agents the defendant used in their process. PW 2 admitted that Butachlor was a common name and that the Weed Science Society of America had allotted the common name. He stated that "Machete" was the brand name under which their company manufactured Butachlor. He also stated that there could be a number of concerns all over the world manufacturing Butachlor, but he was not aware of them. He admitted that they did not claim a patent for Butachlor. He stated that though his company did not claim a patent for Butachlor, they claimed a patent for the process of making a Butachlor emulsifiable concentrate to be used as a Herbicide composition for rice. Pursued further in cross examination, he was forced to admit that they used kerosene as a solvent for Butachlor and an emulsifier manufactured by a local Indian company as an emulsifying agent. He then proceeded to state that he claimed secrecy with regard to the manufacture of their formulation. When he asked further whether the secrecy claimed was with regard to the solvent or with regard to the stabilizer, he answered in the negative. He finally admitted that his secret was confined to the active ingredient Butachlor about which as we know there is no secret. PW 3, Robert Galson Depenning the patent agent of the first plaintiff under a power of attorney from the first plaintiff, stated that it was he that had verified the plaint and that it 128 was on his instructions that the plaint was drafted. He stated that according to him, by selling his formulations the defendant had infringed Patents Numbers 104120 and 125381, though he was unable to explain which part of his claim in Patent Number 104120 was infringed as he was not a Chemist. He stated that he said so and was able to say so in consultation with the Managing Director of the second plaintiff company. He stated that it was explained to him by PW 2 that both the Patents Numbers 104120 and 125381 were infringed. He also admitted that it was he that had signed the specification of 104120 and while he was not sure whether he had signed the specification Number 125381, he saw that it had been signed by Depenning and Depenning. We, therefore, see that Butachlor which was the common name for CP 53619 was discovered, even prior to 1968 as a Herbicide possessing the property of nontoxic effect on rice. The formula for the Herbicide was published in the report of the International Rice Research Institute for the year 1968 and its common name Butachlor was also mentioned in the report of the International Rice Research Institute for the year 1969. No one patented the invention Butachlor and it was the property of the population of the world. Before Butachlor or for that matter any Herbicide could be used for killing weeds, it had to be converted into an emulsion by dissolving it in a suitable solvent and by mixing the solution with an emulsifying agent. Emulsification is a well known process and is no one 's discovery. In the face of the now undisputable fact that there is no patent for or any secrecy attached to Butachlor, the solvent or the emulsifying agent and the further fact that the process of emulsification is no new discovery, the present suit based on the secrecy claimed in respect of the active agent Butachlor and the claim for the process of emulsification must necessarily fail. Under sec. 61(1)(d), a patent may be revoked on the ground that the subject of any claim of the complete specification is not an invention within the meaning of the Act. Under sec. 64(e), a patent may be revoked if the invention so far as claimed in any claim of the complete specification is not new, having regard to what was publicly known or publicly used in India before the date of the claim, etc. Under sec. 64(1)(f), a patent may be revoked if the invention so far as claimed in any claim of the complete specification is obvious or does not involve any inventive step having regard to what was publicly known or publicly used in India or what was published in India before the priority 129 date of the claim (the words "or elsewhere" are omitted by us as the patents in the present case were granted under the Indian Patents and , i.e., before the ). "Invention has been defined by secc. 2(j) as follows: " Invention" means any new and useful (i) art, process, method or manner of manufacture; (ii) machine, apparatus or other article; (iii) substance produced by manufacture, and includes any new and useful improvement of any of them, and an alleged invention. " It is clear from the facts narrated by us that the Herbicide CP 53619 (Butachlor) was publicly known before Patent Number 125381 was granted. Its formula and use had already been made known to the public by the report of the International Rice Research Institute for the year 1968. No one claimed any patent or any other exclusive right in Butachlor. To satisfy the requirement of being publicly known as used in clauses (e) and (f) of sec. 64(1), it is not necessary that it should be widely used to the knowledge of the consumer public. It is sufficient if it is known to the persons who are engaged in the pursuit of knowledge of the patented product or process either as men of sciene or men of commerce or consumers. The section of the public who, as men of science or men of commerce, were interested in knowing about Herbicides which would destroy weeds but not rice, must have been aware of the discovery of Butachlor. There was no secret about the active agent Butachlor as claimed by the plaintiffs since there was no patent for Butachlor, as admitted by the plaintiffs. Emulsification was the well known and common process by which any Herbicide could be used. Neither Butachlor nor the process of Emulsification was capable of being claimed by the plaintiff as their exclusive property. The solvent and the emulsifier were not secrets and they were admittedly not secrets and they were ordinary market products. From the beginning to the end, there was no secret and there was no invention by the palintiffs. The ingredients, the active ingredient, the solvent and the emulsifier, were known; the process was known, the product was known and the use was known. The plaintiffs were merely camouflaging a substance whose 130 discovery was known through out the world and trying to enfold it in their specification relating to Patent Number 125381. The patent is, therefore, liable to be revoked. We do not think that it is necessary for us to go into the various questions of law so carefully and meticulously argued by Mr. Chellaswamy. The questions were no doubt interesting and arose for the first time. But we desire to keep our interest purely academic and within bounds. So we do not pronounce upon those questions. The appeal is dismissed with costs. M.L.A. Appeal dismissed.

The respondent 's husband was a partner in a firm carrying on business as bankers. He issued a cheque for Rs.3,00,000 in favour of the firm on 4th October, 1952 with a view to give Rs. 1,00,000 to each of his three minor grand nephews. This amount was debited to his account in the firm and credited in the accounts of the three minors in equal proportion. He died on 21st February 1956. The said sum continued to stand in the respective accounts of the three minors in the books of the firm till its dissolution on 4th July, 1960 whereafter some assets were allotted to each one of them in lieu of the amounts standing to their credit. The respondent, as the accountable person, filed an account declaring the value of the assessee 's estate without including the aforesaid sum of Rs. 3,00,000 transferred by the deceased to his three grand nephews. The respondent assessee contended before the Deputy Controller (i) that these transfers were not gifts but amounted to transfer of actionable claims made in conformity with section 130 of the transfer of Property Act by effecting entries in the books of account; and (2) that the transfer amounted to a novation which did not require an instrument signed by the transferor. The Deputy Controller negatived both the contentions and held that the sum of Rs. 3 lakhs was includible in the estate of the deceased that passed on his death. The Appellate Controller confirmed the aforesaid order in appeal. In the further appeal preferred by the respondent, the Appellate Tribunal, held (i) that the plain reading of section 130 showed that the transfer 349 of an actionable claim became complete and effective only upon the execution of an instrument in writing signed by the transferor or by his duly authorised agent; (ii) that the cheque issued by the deceased in favour of the firm only authorised the firm to pay to itself the sum of Rs. 3 lakhs from out of the amount lying at the credit of the deceased but it did not by itself authorise the firm to transfer this amount to anyone else and that such a transfer could be authorised by a separate letter of instructions from the deceased but no such instrument obtained and the oral instructions given could not take the place of such an instrument in writing and, therefore the transfer of Rs. 3 lakhs done in favour of the donees was not in accordance with the requirements of section 130; (iii) that the amount of Rs.3 lakhs was also includible in the estate of the deceased under section 10 of the even if it were assumed that the transfer became complete and effective on the date of the transfer inasmuch as on the facts, it could not be said that the donees retained possession and enjoyment of the gifted amounts to the entire exclusion of the donor or of any benefit to him and that this position continued to exist till the death of the deceased. The High Court in a reference at the instance of the assessee, set aside the order of the Tribunal on the grounds (i) that it was a gratuitous transfer of an actionable claim and the inter position of a cheque issued by the deceased in favour of the firm made all the difference inasmuch as the transfer of an actionable claim represented by a negotiable instrument like a cheque was governed by section 137 in preference to section 130 of the Transfer of Property Act and that the cheque together with the oral instructions (which even the Tribunal presumed were given by the deceased) would constitute the firm a trustee or an agent holding the moneys for the benefit of the minors and, as such, the transfer to minors was valid, complete and effectual; (ii) that the donor had been completely excluded from the subject matter of the gift and, as such, section 10 was not applicable. Dismissing the appeal, ^ HELD: 1. The transaction in question clearly fell within the ratio of the decision in Munro 's case and the High Court 350 was right in coming to the conclusion that to such a transaction, section 10 was inapplicable. [362 F G] 2.(i) Section 10 of the prescribes two conditions, namely,: (1) that the donee must bona fide have assumed possession and enjoyment of the property which is the subject matter of the gift to the exclusion of the donor immediately upon the gift; and (2) that the donee must have retained such possession and enjoyment of the property to the entire exclusion of the donor or of any benefit to him by contract or otherwise. Both these conditions are cumulative. Unless each of the conditions is satisfied, the property would be liable to estate duty under section 10 of the Act. [357G H; 358 A] 2.(ii) The second part of section 10 has two limbs: the deceased must be entirely excluded (i) from the property; and (ii) from any benefit by contract or otherwise and that the word "otherwise" should be construed ejusdem generis and should be interpreted to mean some kind of legal obligation or some transaction enforceable in law or in equity which, though not in the form of a contract, may confer a benefit on the donor. [358 B C] 3.(i) The question whether gifted property should be regarded as a part of the estate of the deceased donor passing on his death for the purpose of section 10 of the Act would depend upon as to what precisely is the subject matter of the gift and whether the gift is of absolute nature or whether it is subject to certain rights. If the gift is made without any reservation or qualification, that is to say, where the gift carries fullest right known to law of exclusive possession and enjoyment, any subsequent enjoyment of the benefit of that property by way of possession or otherwise by the donor would bring the gift within the purview of section 10; but where the gift is subject to some reservation or qualification, that is to say, if the subject matter of the gift is property shorn of certain rights and the possession or enjoyment of some benefit in that property by the donor is referable to those rights i.e. rights shorn of which the property is gifted, then in that case the subject matter of the gift will not be deemed to pass on the death of the deceased donor. In other words, if the deceased donor limits the interest he is parting with and 351 possesses or enjoys some benefit in the property not on account of the interest parted with but because of the interest still retained by him, the interest parted with will not be deemed to be a part of the estate of the deceased donor passing on his death for the purpose of section 10 of the Act. It is these aspects which mark the distinction between the two leading cases, namely Chick 's case and Munro 's case. The decision in chicks 's case falls within the first category while Munro 's case falls within the other category. [358 E H; 359 A B] In the instant case, the donees were never admitted to the benefits of the partnership firm. The Tribunal as well as the High Court found as a fact that when the cheque was issued oral instructions must be presumed to have been given by the deceased to the firm for crediting the three accounts of the three minors without which the firm could not make such credit entries. Therefore, the transaction in question amounted to a gratuitous transfer of an actionable claim to which section 137 in preference to section 130 of the Transfer of Property Act applied and there was a valid gift thereof to the minor donees. Moreover, the amount of Rs. 3 lakhs did not go out of the firm but on being transferred from the account of the deceased to the accounts of the minor donees continued to remain with the firm for being used for the firm 's business; in fact the partnership continued to have the benefit thereof even after the death of the donor till the firm was dissolved. Obviously, the substance of the transaction was that the gift was of an actionable claim of the value of Rs. 3 lakhs out of the donor 's right, title and interest as a whole in the firm and as such was shorn of certain rights in favour of the partnership and therefore, the possession or enjoyment of the benefit retained by the donor as a partner of the firm must be regarded as referable to partnership rights and had nothing to do with the gifted property. [361 G H; 362 A F] Munro vs Commissioner of Stamp Duties, ; ; C.R. Ramachandra Gounder 's case, ; N.R. Ramarathanm case, 91 I.T.R.Controller of Estate Duty vs R.V. Vishwanathan & Ors., & Controller of Estate Duty vs Kamlava, applied. Chicks vs Commissioner of Stamp Duties of New South Wales, 37 I.T.R. (E.D.) 89; George Da Costa vs Controller of 352 Estate Duty, Mysore, ; Controller of Estate Duty, Madras vs Smt. Parvati Ammal ; Shantaben section Kapadia vs Controller of Estate Duty, Gujarat, 73 I.T.R. 171 & Controller of Estate Duty, Gujarat vs Chandravadan Amratlal Bhatt, distinguished.

Civil Appeal No. 341 of 1988. From the Judgment and order dated 2.4.1986 of the Bombay High Court in W.P. No. 1946 of 1984. D.N. Devedi. C. Ramesh and P. Parmeshwaran for the Appellants. R.K. Garg and D.K. Garg for the Respondents. The Judgment of the Court was delivered by OZA, J. Leave granted. This appeal has been filed by the Union of India against a judgment passed by High Court of Bombay in Misc. Petition No. 1946/84 decided on 2.4.1986. A Writ petition before the High Court was filed by M.T.S.S.D. Workers ' Union, Pune and two of the employees in the establishment in which this union is functioning. In this Writ Petition an order was sought quashing the decision of the 827 authorities concerned of the petitioner who by their order dated 31.1.1984 informed the union about the scheme of the election to the Works Committee on the basis of the division in different constitutencies. This order of the Commandant was conveyed to the respondent union. These Works Committees were to be constituted for the period 1984 86. The question that was considered by the High Court was as to whether such a distribution was permissible under the Rules framed under . The Bombay High Court by the impugned judgment came to the conclusion that such a distribution of constituencies is not permissible in view of the scheme of the Rules especially Rules 39,41,42 and 43 of the Central Rules framed under the . Learned counsel appearing for the appellants contended that Rule 39 when it talks of representation to the various categories and groups and class of workmen it contemplates that such constituencies be divided so that various sections, groups and categories of workers skilled, unskilled, clerical and otherwise may get appropriate representation. Learned counsel also relied on the proviso to Rule 43 to justify the division of the constitutencies which was done by the impugned order which was set aside by the High Court of Bombay. Learned counsel for the respondent on the other hand contended that the Works Committees are expected to go into day to day problems and they are expected to be so constituted that they bring harmony and better functioning of the industry and it is for this purpose. According to the learned counsel Rule 42 contemplates only division in two constitutencies that is those who are members of a registered trade union and those who are not members of the registered trade union and even while providing for such a distribution in Rule 42 it has been further provided that where more than half the workers belong to one registered trade union then there is no need for any division of constituencies and election will only be by general vote of the workers in the industry. It was contended by learned counsel that this scheme of these Rules contemplates that where there is a union representing the majority of workers there is no occasion for any distribution of constituencies so that the union and the management with the help of the Works Committee may resolve day to day problems and the industry may run smoothly in the interest of production and industrial peace. He, therefore, contended that the order passed by the Bombay High Court in the scheme of the Rules is justified. 828 The constitution of the Works Committees has been provided for in Section 3 of the which reads as under: "3. Works Committee:(1) In the case of any industrial establishment in which one hundred or more workmen are employed or have been employed on any day in the preceding twelve months the appropriate Government may by general or special order require the employer to constitute in the prescribed manner a Works Committee consisting of representatives of employers and workmen engaged in the establishment so however that the number of representatives of workmen on the Committee shall not be less than the number of representatives of the employer. The representatives of the workmen shall be chosen in the prescribed manner from among the workmen engaged in the establishment and in consultation with their trade union, if any, registered under the India (XVI of 1926). (2) It shall be the duty of the Works Committee to pro mote measures for securing and preserving amity and good relations between the employer and workmen and, to that end, to comment upon matters of their common interest or concern and endeavour to compose any material difference of opinion in respect of such matters. " It is clear from the language used in this Section that the representatives of workmen shall be chosen in the prescribed manner and it shall be so done in consultation with their trade union if there is any registered under the Indian . It is because of this that the Rules have prescribed the manner in which the Works Committees will be constituted. In Chapter 7 of the Rules framed under Industrial Disputes (Central) Rules 1957 it has been provided for a constitution of the Works Committee. Rule 39 on which much emphasis was laid by learned counsel for the appellants reads: "Number of members The number of members constituting the Committee shall be fixed so as to afford representation to the various categories, groups and class of workmen engaged in, and to the sections, shops or departments of the establishment: 829 Provided that the total number of members shall not exceed twenty: Provided further that the number of representatives of the workmen shall not be less than the number of representatives of the employer." This Rule talks of the number of members to constitute a Works Committee and it has been provided that the number shall be so fixed keeping in view that representation could be made in the Committee of workers engaged in different sections, shops, departments of the establishment. It was contended by learned counsel for the appellant that it was because of this that the management in this industry chose to distribute the constituencies in such a manner that there may be representatives in the Works Committee of different sections and departments of the industry. But it is clear that Rule 39 does not talk of any distribution of constituencies. The relevant Rule which provides for group of workmen 's representatives is Rule 42 but Rule 41 contemplates consultation with the trade unions and where there is a registered trade union the management is expected to ask the registered trade union to give information as to how many of the workmen are members of the union and how their membership is distributed among the sections, shops and departments of the establishment. Rule 41 reads as under: "Consultation with trade unions: (1) Where any workmen of an establishment are members of a registered trade union the employer shall ask the union to inform him in writing (a) how many of the workmen are members of the union; and (b) how their membership is distributed among the sections, shops or departments of the establishment. (2) Where an employer has reason to believe that the information furnished to him under sub rule (1) by any trade union is false, he may, after informing the union, refer the matter to the Assistant Labour Commissioner (Central) concerned for his decision; and the Assistant Labour Commissioner (Central), after hearing the parties, shall decide 830 the matter and his decision shall be final. " Rule 42 reads thus: "Group of workmen 's representatives: on receipt of the information called for under Rule 41, the employer shall provide for the election of workmen 's representative on the Committee in two groups: (1) those to be elected by the workmen of the establishment who are members of the registered trade union or unions, and (2) those to be elected by the workmen of the establishment who are not members of the registered trade union or unions. bearing the same proportion to each other as the union members in the establishment bear to the non members: Provided that where more than half the workmen are members of the union or any one of the unions, no such division shall be made: Provided further that where a registered trade union neglects or fails to furnish the information called for under sub rule (1) of Rule 41 within one month of the date of the notice requiring it to furnish such information such union shall for the purpose of this rule be treated as if it did not exist: Provided further that where any reference has been made by the employer under sub rule (2) of Rule 41, the election shall be held on receipt of the decision of Assistant Labour Commissioner (Central. )" This Rule clearly provides that the workers ' representatives in the Committee will be in two groups:(1) those who are elected by the workmen who are members of the registered trade union or unions and (2) other those who will be elected by the workmen of the establishment who are not members of the registered trade union or unions and it is further provided that this number would bear the same proportion to each other as the union members in the establishment bear 831 to the non members. That clearly shows that if in an industry there is or are registered trade unions and they have their membership as the management will know under the scheme of Section 41, the management will fix the number of seats in the Works Committee to be elected by the members of the union and by those who are not the members of the union and the ratio between the members representing the union members and the members representing those who are not union members will be the same as membership of the union vis a vis non members in the establishment. There is yet another proviso which provides that where more than half the workmen are members of the union or any one of the unions no such division will be made. This clearly goes to show that where in an industry or an establishment the majority of the workers are in one union the distribution as provided in Rule 42 will not be necessary, it will only be one constituency. This scheme of Rule 42 read with this proviso clearly goes to show that where there is any registered trade union representing the majority of workers (more than 50%) the question of distribution of constituencies does not arise. Learned counsel for the appellant also contended that proviso to Rule 43 contemplates division of the constituencies into various sheds, departments and sections as was done by the management which was quashed by the High Court. Rule 43 reads as under: "43. Electoral constituencies: Where under Rule 42 of the workmen 's representatives are to be elected in two groups, the workmen entitled to vote shall be divided into two electoral constituencies, the one consisting of those who are members of a registered trade union and the other of those who are not: Provided that the employer may, if he thinks fit, subdivide the Electoral constituency or constituencies, as the case may be and direct that workmen shall vote in either by groups, sections shops or departments. " This Rule starts with a situation where under Rule 42 the workmen 's representatives are to be elected in two groups and where such a situation exists. The proviso further provides that if the employer thinks fit may sub divide the electoral constituencies in a manner so that the workers may vote either by groups or by sections or by departments. But it is clear from the language of this Rule that this sub division of constituencies only could be done if Rule 43 comes into 832 operation. Admittedly in the present case in this industry the respondent trade union represents the majority of the workers that it has more than SO per cent as its members and the occasion for distribution of the works committee into two constituencies as contemplated in Rule 42 does not arise and if it is not so then Rule 43 does not come into operation at all as Rule 43 itself clearly states that this Rule only comes into operation "where under Rule 42 the workers representatives are to be elected in two groups". It is therefore clear that this proviso to Rule 43 is not an independent substantive provision and therefore on this basis the contention advanced by learned counsel for the appellants is of no substance. It is therefore clear that the scheme of these Rules for constitution of Works Committees clearly provide:(a) where there is a registered trade union having more than SO per cent membership of the workers in that establishment the total number of members of the Works Committee will be elected without distribution of any constituencies:(b) if in an industry no trade union registered under the represents more than 50 per cent of the members then only the election will be held in two constituencies, one from the members of the registered trade union or unions and the other from non members of the trade unions and it is only in this contingency it is further provided that if the employer thinks proper may further sub divide the constituency into department, section or shed. This clearly indicates that there may be a situation in an particular establishment where some section may have no membership of any trade union at all whereas in other sections there may be membership of trade unions then if under Rule 42 it has to divide in two constituencies that is members of the registered trade union and non members. It may further sub divide in order to provide for representation to any section of workmen who have no representation in any trade union at all. It is therefore clear that when there is a registered trade union in an establishment having more than SO per cent membership this exercise under Rule 43 is futile and is not called for as in this case as admittedly the respondent unions membership is more than 50 per cent. The distribution of constituencies under Rule 42 is not contemplated and therefore there is no occasion for Rule 43 or proviso therein to come into operation. In this view of the matter, in our opinion, the judgment of the High Court is correct and we see no reason to interfere with it. The appeal is therefore dismissed. In the Circumstances of the case, parties are directed to bear their own costs. N. P V. Appeal dismissed.

% The respondents filed a writ petition in the High Court for quashing the order dated 31.1.1984 of the authorities, informing the respondent Union about the scheme of election to the Works Committee to be constituted for the period 1984 86, on the basis of division in different constituencies under the Industrial Disputes (Central) Rules, 1957, framed under the . The High Court held that such a distribution of constituencies was not permissible in view of the scheme of the Rules, especially Rules 39, 41. 42 and 43. In the appeal by special leave, on behalf of the appellants it was contended that such a division of constituencies to give appropriate representation to various sections, groups and categories of workers, skilled, unskilled, clerical and otherwise, was justified under Rule 39 and proviso to Rule 43. On behalf of the respondents, it was contended that while Rule 42 contemplated only division in two constituencies, that is, those who were members and those were not, of a registered trade union, it further provided that where more than half the workers belonged to one registered trade union, there was no need for any division of constituencies, and election will be only by general vote of workers of the industry and, therefore, the High Court was right in holding that the division of constituencies as contemplated in the aforesaid order was not permissible. Dismissing the appeal, 826 ^ HELD: The scheme of the Industrial Disputes (Control) Rules, 1957 for the constitution of Works Committee clearly provides that (a) where there is a registered trade union having more than SO per cent membership of the workers in that establishment, the total number of members of the Works Committee will be elected without distribution of any constituencies; and (b) if in an industry, no trade union registered under the Trade Unions Act represents more than 50 per cent of the members, then only the election will be held in two constituencies, one from the members of the registered trade union or unions and the other from non members of the trade unions and it is only in this contingency, it is further provided that, if the employer thinks proper, may further sub divide the constituency into department, section or shed. [832C E] When there is a registered trade union in an establishment, having more than 50 per cent membership, the exercise under Rule 43 of the Industrial Disputes (Control) Rules, 1957 is futile and is not called for. [832F G] In the instant case since the respondent union 's membership is more than 50 per cent, the distribution of constituencies under Rule 42 is not contemplated and, therefore, there is no occassion for Rule 43 or proviso therein to come into operation. [832G ]

Civil Appeal No. 1365 of 1978 From the Judgment and Order dated 11.8.77 of the Patna High Court in Civil Revision No. 585 of 1976. B.P. Singh R. Kumar and R. Prakash for the Appellants. Mrs. Gian Sudha Misra for the Respondent. The Judgment of the Court was delivered by DESAI, J. Where a plaintiff in a suit bitterly complains that the defendant would be getting unfair advantage of his own lapse, if we were to interfere with the judgment rendered by the High Court, we put ourselves on caution whether such be the outcome of our setting aside the order under appeal. Unwittingly, this Court should not be a party to the conferment of an undeserved advantage on a party to a proceeding guilty of a lapse though remediable and even unintentional. Deeper probing into the facts reveals that the boot is on the other foot in that the respondent plaintiff is wholly to be blamed for the delay. The facts first. The respondent plaintiff field a suit for eviction against the appellant defendent on the only ground that the tenant committed default in payment of rent for the period May, 1969 to December, 1971. The defendant contested the suit inter 829 alia contending that he was not in default. There followed an application by the respondent landlord for a direction under Sec. 11A of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 ( 'Act ' for short). Section 11A reads as under: "11A. Deposit of rent by tenants in suits for ejectment If in a suit for recovery of possession of any building the tenant contests the suit, as regards claim for ejectment the landlord may make an application at any stage of the suit for order on the tenant 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 par ties to be heard, may make an order for deposit of rent at such rate as may be determined 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 tenent 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. The Court may further order recovery of cost of suit and such other compensation as may be determined by it from the tenant. " The prayer in the application was that the defendant tenant be directed to deposit the rent in arrears upto and inclusive of June 1973 within a period of fifteen days from the date of the order and a further direction be given that he should continue to deposit the rent from month to month. The learned Judge made an order directing the appellant to deposit rent for the period upon and inclusive of June 1973 at the rate of Rs. 32 per month and there after to continue to deposit the rent from month to month at the rate of Rs. 12.20 per month. The tenant preferred a revision petition which was dismissed on March 26, 1974. The such was fixed fore haring on January 28, 1975. The tenant moved an application for adjournment which was rejected. Plaintiff 's witnesses were examined and the suit was decreed ex parte on January 30, 1975. On an application moved by the defendant praying for relief under 830 Order IX Rule 13, Code of Civil Procedure the learned Judge set aside the ex parte decree and set down the suit for proceeding further from the stage where it was decreed ex parte. On January 5, 1976, the respondent landlord moved an application praying that as there was irregularity in depositing the rent for the month of August to October, 1975, defence of the appellant be struck off, the his failure to strictly comply with the order made under Section 1 IA. After the appellant filed his rejoinder, the learned Judge heard the application and rejected the same on the ground that as the earlier order was made prior to the date on which the suit was decreed exparate, on the setting aside of the exparte decree and revival of the suit, the order giving directions for deposit of future rent does not per se revive and therefore even if there was some default on the part of the tenant in depositing the rent for the months from February to April, 1979, his defence cannot be struck off. Promptly, the respondent landlord moved a revision petition before the High Court being Civil Revision No. 585 of 1976.A Division Bench of the High Court heard and disposed of the revision petition on August 11, 1977. The learned Judges of the High Court made the rule absolute and set aside the order of the learned trial Judge refusing to strike off the defence of the appellant and directed the learned Judge to note that the defence of the appellant will be deemed to have been struck off due to non compliance of the order dated April 26, 1973. Hence this appeal by special leave which is being heard after seven years. Section 11A, to some extent, can be styled as a check on the tendency of the defendent to protract the litigation by frivolous defences more especially where the duty to pay the rent is unmistakably admitted. In a suit for eviction, Sec. 11A enables the court to give a direction to pay rent which is claimed to be in arrears as also to compell the defendent who continues to remain in possession during the pendency of the proceedings to perform his obligation to deposit the rent regularly. It also enables the court to deter mine the rate of rent at which the deposit shall be made, wherein a case there is a dispute as to the rate of rent. It is an undeniable feature of the tenancies in this country that more or less excluding the metropolitan areas, the tenancy is generally oral and no written record is usually available to furnish evidence as to the terms of lease. Giving a receipt for the rent paid has not still become a part of the culture of a landlord. Therefore where 831 eviction is sought on the ground of non payment of rent, it places a tenant at a comparative disadvantage if the landlord chooses to claim rent at the rate which is beyond the capacity of the tenant to pay. In such a situation, the tenant will be exposed to double jeopardy in that on a prima facie pleading he will be directed to deposit the rent at the rate claimed by the landlord, if the court has no power to determine rate of rent at an interim stage. Such power is conferred by Sec. 11A on the court. The court can also determine as to from what date the tenant appears to be in arrears so that an appropriate direction can be given that the rent in arrears may be deposited within the time stipulated by the court as also future rent may be deposited regularly in the court. It is a whole some provision which would advance justice. Now where power is conferred on the court to give such directions, a sanction had to be created to guard against the failure to comply with the court 's directions. This sanction is to be found in the conferment of power on the court to strike off the defence of the tenant if the tenant fails to comply with the order of the court giving directions for deposit. Such a sanction would again advance justice. So far there is no dispute. The contention of the landlord which has found favour with the High Court is that the moment the failure of the tenant to comply with the earlier order is brought to the notice of the court, without anything more the defence has to be struck off. This view of the court is founded on the use of the expression 'shall ' in that part of section by which power in conferred on the court to strike off the defence. The relevant part of the expression reads thus: F ". 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 next following month, the court shall order the defence against ejectment to be struck off and the tenant be placed in the same position as if he had not defended the claim to ejectment. " Interpreting this expression 'shall ' as mandatory in the afore mentioned clause, the High Court was of the opinion that as there was default in making the deposit for the month herein before mentioned 832 which would show non compliance with the order dated July 26, 1973 passed under Sec. 11A and therefore 'the tenant will have to bear consequences thereto ' The High Court further observed that 'once a default is found, the courts are powerless; the statutory consequences are bound to follow. ' In the back drop of the rival contentions, the neat question that arises is: whether the use of the word 'shall ' in the expression herein before extracted makes the provision imperative or mandatory or the court still retains the discretion to relieve against the default ? Ordinarily the use of the word 'shall ' prima facie indicates that the provision is imperative in character. However, by a catena of decisions, it is well established that the court while considering whether the mere use of the word 'shall ' would make the provision imperative, it would ascertain the intenedment of the legislature and the consequences flowing from its own construction of the word 'shall '. If the use of the word 'shall ' makes the provision imperative, the inevitable consequence that flows from it is that the court would be powerless to grant any relief even where the justice of the case so demands. If the word 'shall ' is treated as mandatory the net effect would be that even where the default in complying with the direction given by the court is technical, fortuitous, unintended or on account of circumstances beyond the control of the defaulter, yet the court would not be able to grant any relief or assistance to such a person. Once a default is found to be of a very technical nature in complying with the earlier order, the court must have power to relieve against a drastic consequence all the more so if it is satisfied that there was a formal or technical default in complying with its order. To illustrate, if the tenant while he has on the way to the court on the 15th day to deposit the rent for the just preceeding month as directed by an order under Sec. 11A, met with an accident on the road and could not reach the court before the court hours were over, should he be penalised by his defence being struck off. Even if the court is satisfied that he was on the way to the court to make the necessary deposit, that he had the requisite amount with him, and that he started in time to reach the court within the prescribed court hours and yet by circumstances beyond his control, he met with an accident would the court be powerless to grant him relief? This illustration would suffice to 833 the intendment of the legislature that it never used the word 'shall ' to make it so imperative as to render the court powerless. The statute in which the expression is used is The Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947. It is a statute enacted with a view to providing a fetter on the right of a landlord to evict tenant at his whim or fancy. The long title of the Act shows that it was enacted to regulate the letting of buildings 13 and the rent for such buildings and to prevent unreason able eviction of tenants therefrom in the Province of Bihar. A provision in such a statute primarily enacted for the protection of tenants against unreasonable eviction that the court is required to find out whether the word 'shall ' was used as to make the provision mandatory or imperative. Obviously if one ascertains the intendment of the legislature, the purpose for which the provision was enacted, the beneficient nature of the statute and to protect the harassed tenant obviously it does not require long argument to hold that the expression 'shall ' was used not with a view to making the provision mandatory or imperative but it was to be directory. Such a construction would advance the purpose for which the Act was enacted namely the protection of tenants. It will also not render the court powerless in the face of harsh facts where striking off the defence would be nothing short of miscarriage of justice. Mrs. Gyan Sudha Misra, learned counsel however contended that where the expression 'may ' and 'shall ' both are used in the same provision the legislative intendment is unmistakable that the provision where the word 'shall ' is used must be held to be mandatory because the previous use of the expression 'may ' shows that the legislature was conscious, which part of the provision is to be directly and which other part to be mandatory. She relied upon a statement in Maxwell on the Interpretation of Satutes 12th Edn. Page 282 where in it is stated relying upon the decision is R. vs Inhabitants of Great Bolton(1) that "where the Legislature in the same sentence uses different words, we must presume that they were used in order to express different ideas. " Obviously where the legislature uses two words 'may ' and 'shall ' in two different parts of the same provision prima facie it would appear that the legislature manifested its intention to make one part directory and another (1) at 74 834 mandatory. But that by itself is not decisive. The power of the court still to ascertain the real intention of the Legislature by care fully examining the scope of the statute to find out whether the provision is directory or mandatory remains unimpaired even where both the words are used in the same provision. In Govindlal Chagganlal Patel vs The Agricultural Produce Market Committee Godhra and others(1) Chandrachud, J. speaking for the Court approved the following passage in Crawford on 'Statutory Construction ' (Ed. 1940 article 261, p. 516): "The question as to whether a statute is mandatory or directory depends upon the intent of the legislature and not upon the language in which the intent is clothed. The meaning and intention of the legislature must govern and these are to be ascertained, not only from the phrasacology of the provision, but also while considering its nature, its design and the consequences which would follow from construing it the one way or the other. " Applying this well recognised canon of construction the conclusion is in escapable that the word 'shall ' used in the provision is directory and not mandatory and must be read as 'may '. This construction also commends to us for the additional reason that where the court fixes a time to do a thing, the court always retains the power to extend the time for doing so. 148 of the Code of Civil Procedure provides that where any period is filed or granted by the court for the doing of any act prescribed or allowed by the Code, the Court may, in its discretion, from time to time, enlarge such period, even though the period originally fixed or granted may have expired. The principle of this section must govern in not whittling down the discretion conferred on the court. The view which we are taking is in accord with the construction put by this court on a provision imparimateria in a similar statute. In Shyamcharan Sharma vs Dharamdas(2) a question that arose (1) ; (2) ; 835 before this Court was whether the construction put by the High Court on Sec. 13 (1) read with Sec. 13 (6) of the Madhya Pradesh Accommodation Control Act, 1961 accords with the intendment of the Legislature. The relevant provision provides that on an application, a tenant can be directed by the Court to pay to the landlord an amount calculated at the rate of the rent at which it was paid for the period for which a tenant may have made a default including the period subsequent thereto upto the end of the month previous to that in which the deposit or payment is made and shall thereafter continue to deposit or pay month by month by the of tenth of each succeeding month, the sum equivalent to the rent. It was contended that the provision i i mandatory so that the court has to power to extend the time initially liked by it for making the deposit. A submission before the court was that the expression used in sub sec. (1) discloses the legislative intent and the use of the word 'may ' in sub sec. (6) would not make the provision directory. The Court, speaking through O. Chinnappa Reddy, J. after ascertaining the intendment of the Legislature held that the court has the jurisdiction to extend time once fixed for deposit or payment of monthly rent falling due after the filing of the suit. Failure to comply with an earlier direction should not necessarily visit the tenant with the consequence of his defence being struck off because there might be myriad situations in which default may be committed. The Court should adopt such a construction as would not render the court powerless in a situation in which ends of justice demand relief being granted. The High Court has adopted such a construction which would defeat the beneficent nature of provision. The decision of the High Court will have to be set l, aside because it proceeds on the basis that once there is default, the tenant must suffer the consequences of it. The learned trial Judge had held that once a suit ended in exparte decree the earlier direction for making necessary deposit given under Sec. it would remain ineffective even if the exparte is, decree is set aside and would not revive was rightly disapproved by the High Court. To that extent the view of the learned trial Judge was unsustainable. The learned trial Judge did grant relief to the tenant by refusing to strike off the defence, of course, on an erroneous view 836 of law that the direction did not revive after the setting aside of the ex parte decree. And the High Court reversed it on another crroneous view of law that the court was powerless to grant any relief once a default is established ? The question then is what relief we should grant ? The tenant has deposited all the arrears. There was some irregularity in making the deposit but it was not of such a nature as to visit the tenant with the consequence of striking off his defence. Therefore the Judgment of the High Court directing that the defence be deemed to be struck off is set aside and the order of the learned trial Judge is restored for the reasons herein stated. This appeal is allowed accordingly and the matter is remitted to the trial court to proceed further with the suit from the stage where the defence of the present appellant was struck off. The defence will be treated as part of the proceedings and suit shall be proceeded with accordingly. As the matter is delayed for long, we direct that the suit shall be accorded priority by the trial court and shall be disposed of within a period of six months from the date of this judgment. Mrs. Misra on behalf of the respondent submitted that the respondent has filed a second suit for eviction on the ground of personal requirement. If that is pending the same must be heard alongwith the suit from which the present appeal arises. We leave the parties to bear their respective costs both in the High Court as well as in this Court. Costs in the trial court will abide the outcome of the suit.

The respondent plaintiff filed a suit for eviction against the appellant defendant on the ground that the tenant committed default in payment of rent. The defendant contested the suit contending that he was not in default. An application was filed by the respondent landlord for a direction under Sec. 11A of the (Bihar Buildings Lease, Rent and Eviction) Control Act, 1947 to the defendant tenant to deposit the rent in arrears; and a further direction to deposit the future rent from month to month. The trial judge ordered the appellant to deposit the rent in arrears at the rate of Rs. 32 per month and thereafter to continue to deposit the rent at the rate of Rs. 12 20 per month. The defendant preferred a revision petition which was dismissed. The suit was fixed for hearing. The tenant moved an application for adjournment which was rejected. the plaintiff witnesses were examined and the suit was decreed ex parte. On an application moved by the defendant praying for relief under 826 Order IX Rule 13 CPC, the trial judge set aside the ex parte decree and set down the suit for proceeding further from the stage it was decreed ex parte. The respondent landlord moved an application contending that as there was irregularity and delay in depositing the rent, the defence of the appellant be struck off for his failure to strictly comply with the order made under Section 11A, but the trial judge rejected it on the ground that the earlier order was made prior to the date on which the suit was decreed ex parte; on the setting aside of the ex parte decree and revival of the suit, the order giving directions for deposit of future rent does not per se revive and therefore even if there was some default on the part of the tenant in depositing the rent, his defence cannot be struck off. The respondent landlord moved a revision petition before the High Court. A Division Bench interpreted the expression 'shall ' in Sec. 11A of the Act, as mandatory, and finding that there was default in making the deposit for the months mentioned in the landlords ' application, it could be shown that there was non compliance with the order passed under Sec. 11A, and therefore 'the tenant will have to bear the consequence thereto. ' It further held that 'once a default is found, the courts are powerless; the statutory consequences are bound to follow, ' It made the rule absolute and set aside the order of the trial judge refusing to strike off the defence of the appellant and directed the trial judge to note that the defence of the appellant would be deemed to have been struck off due to non compliance of the order Passed under Section 11A. Allowing the Appeal to this Court, ^ HELD: 1. (i) Failure to comply with an earlier direction should not necessarily visit the tenant with the consequence of his defence being struck off because there might be myriad situations in which default may be committed. The Court should adopt such a construction as would not render the court powerless in a situation in which ends of justice demand relief being granted. [835 F F] In the instant case, the High Court had adopted a construction of Section 11A of the Act which would defeat the beneficient nature of the pro vision. The decision of the High Court is set aside because it proceeds on the basis that once there is default, the tenant must suffer the consequences of it. The trial judge held that once a suit ended in an ex parte decree the earlier direction for making necessary deposit given under Sec. 11A would remain ineffective even if the ex parte degree is set aside and would not revive, was rightly disapproved by the High Court. The trial judge did grant relief to the tenant by refusing to strike off the defence, but on an erroneous view of the law. The High Court reversed it on yet another erroneous view of law holding that the court was powerless to grant any relief once a default is established. [835 F H; 836 A B]. 827 (ii) The tenant has deposited all the arrears. There was some irregularity in making the deposit but it was not of such a nature as to visit the tenant with the consequence of striking off his defence. The judgment of the High Court directing that the defence be deemed to be struck off is set aside and the order of the trial judge is restored. [836 C] 2 (i) Section I IA, can he styled as a check on the tendency of the defendant to protract the litigation by frivolous defences more especially where the duty to pay the rent is unmistakably admitted. [830 F] (ii) In a suit for eviction, Sec. 11A enables the court to give a direction to pay rent which is claimed to be in arrears as also to compel, the defendant who continues to remain in possession during the pendency of the proceedings to perform his obligation to deposit the rent regularly. It also enables the court to determine the rate of rent at which the deposit shall be made, where in a case there is a dispute as to the rate of rent. [830 G] (iii) An undeniable feature of the tenancies in this country is that, the tenancy is generally oral and no written record is usually available to furnish evidence as to the terms of lease. Giving a receipt for the rent paid has not still become a part of the culture of a landlord. Therefore, where eviction is sought on the ground of non payment of rent, it places a tenant at a comparative disadvantage if the landlord chooses to claim rent at the rate which is beyond the capacity of the tenant to pay. In such a situation, the tenant will be exposed to double jeopardy in that on a prima face pleading he will be directed to deposit the rent at the rate claimed by the landlord, if the court has no power to determine rate at an interim stage. Such power is conferred by Section 11A on the Court. It is whole some provision which would advance justice. [830 H; 83 1 A C] 3. Where the legislature uses the two words may and shall in two different parts of the same provision prima facie it would appear that the Legislature manifested its intention to make one part directory and another mandatory. But that by itself is not decisive. The power of the court still to ascertain the real intention of the Legislature by carefully examining the scope of the statute to find out whether the provision is directory or mandatory remains un impaired even where both the words are used in the same provision, [833 H; 834 A] In the instant case, if one ascertains the intendment of the legislature, the purpose for which the provision was enacted, the beneficent nature of the statute to protect the harassed tenant, it does not require long argument to hold that the expression 'shill ' was used not with a view to making the provision mandatory or imperative but it to was be directory. Such a construction would advance the purpose for which the Act was enacted namely the protection of tenants. It will also not render the court powerless in the face of harsh facts where striking off the defence would be nothing short of miscarriage of justice. [833 D E] 828 R.V Inhabitants of Great Bolton, (1828) 8B & 71 at 74 Govindlal Chaganlal Patel vs The Agricultural Produce Market Committee, Godhra and others, [1976]1 SCR 451, referred to. Where the court fixes a time to do thing, the court always retains the power to extend the time for doing so. 148 of the Code of Civil procedure provides that where any period is fixed or granted by the court for the doing of any act prescribed or allowed by the Code, the Court may, in its discretion, from time to time, enlarge such period, even though the period originally fixed or granted may have expired. The principle this section must govern in not whittling down the discretion conferred on the court, by Section 11A of the Act. [834 F G] Shyamcharan Sharma v Dharamdas, ; , referred to.

ition (Civil) No. 873 of 1990. (Under Article 32 of the Constitiution of India) WITH Contempt Petition No. 6 of 1991. AND Civil Appeal Nos. 309 to 373 of 1992. R.K. Garg, Kapil Sibal, V. Lakshmi Narayanan, D.K. Garg and P. Mahale for the Petitioners. R.N. Narasimhamurthy, Kh. Nobin Singh and M. Veerappa for the Respondents. The Judgment of the Court was delivered by R.M. SAHAI, J. Teachers appointed temporarily for three months or less, by privately managed degree colleges receiving cent per cent grant in aid, controlled administratively and financially by the Educational Department of the State of Karnataka, seek regularisation of their services by invoking principle of equitable estoppel arising from implied assurance due to their continuance, as such, for years with a break of a day or two every three months. Another basis for direction to regularise is founded on denial of similar treatment by the State as has been extended to contract teachers and local teachers appointed in government or vocational colleges. Payment of fixed salary instead of regular emoluments for eight months in a year and that too for number of years is yet another grievance. Ad hoc appointments, a convenient way of entry usually from back door, at times even in disregard of rules and regulations, are comparatively recent innovation to the service jurisprudence. They are individual problem to begin with, become a family problem with passage of time and end with human problem in court of law. It is unjust and unfair to those who are lesser fortunate in society with little or no approach even though better qualified, more meritorious and well deserving. The infection is 401 widespread in government or semi government departments of State financed institutions. It arises either because the appointing authority resorts to it deliberately as a favour or to accommodate someone or for any extraneous reason ignoring the regular procedure provided for recruitment as a pretext under emergency measure or to avoid loss of work etc. Or the rules or circulars issued by the department itself empower the authority to do so as a stop gap arrangement. The former is an abuse of power. It is unpardonable. Even if it is found to have been resorted to as a genuine emergency measure the courts should be reluctant to grant indulgence. Latter gives rise to equities which have bothered courts every now and then. Malady appears to be widespread in educational institutions as provisions for temporary or ad hoc appointments have been exploited by the managements of private aided colleges to their advantage by filling it, on one hand, with persons of own choice, at times without following the procedure, and keeping the teachers exposed to threat of termination, on the other, with all evil consequences flowing out of it. Any institution run by State fund but managed privately is bound to suffer from such inherent drawbacks. In State of Karnataka it is basically State created problem due to defective rule and absence of any provsions to effectively deal with such a situation. What is surprising is that till today the State has not been able to bring out a comprehensive legislation on such an important aspect as education and the appointment, selection, promotion, transfer, payment of salary etc. of teachers is regulated by government orders issued from time to time. Since 1980 it is governed by an order issued by Educational and Youth Services Department of the State of Karnataka on 3rd October, 1981. Clause 5 of the Order reads as under: "Any appoinment for a period of three months or less in a College shall be made, subject to approval of the Director within one month from the date of appointment by the Management or such authority as the Management by Order, may specify in that behalf. Such temporary appointments may, however, be continued for a further period of not more than three months, with one day 's break when selection through the Selection Committee is likely to take time. The Director may, for reasons to be recorded in writing refuse approval for the said appointment and the services of the person so appointed shall be terminated forthwith. " Appointments for more than three months is to be by a regularly constituted selection committee under clause 4 of the order. But if is for three months or less than the appointment could be made by the 402 Management under clause 5 subject to approval by the Director. It could be continued for further period of three months if there was delay in regular appointment. But the direction to re appoint with one day 's break is not understandable. If the intention was to differentiate between appointments for more than three months and others it was a futile exercise. That had already been achieved by providing two different methods of selection one by Selection Committee and ohter by Management. Distinction between appointment against temporary and permanent vacancies are well known in service law. It was unnecessary to make it appear crude. If the purpose was to avoid any possible claim for regularisation by the temporary teachers then it was acting more like a private business house of narrow outlook than government of a welfare State. Such provisions cannot withstand the test of arbitrariness. That is why the High Court, while disposing of CMW 6232 of 1990 B.R. Parineeth & Ors. vs The State of Karnataka & Others, along with many other petitions by its order dated 3rd July, 1990, criticised such practice as pernicious. The rule making authority lost sight of fact that such policy was likely to give dominance to vested interests who leave no opportunity to exploit the educated youth who have to survive even at cost of one meal a day. That is apparent from continuance of these teachers for 8 to 10 years with sword of termination hanging on their head ready to strike every three months at the instance of either the management or the Director. Provision of stop gap appointments might have been well intended and may be necessary as well but their improper use results in abuse. And that is what has happened on a large scale. The helplessness expressed by the State in the counter affidavit that the managements went on continuing such teachers without holding regular selections despite orders of educational authorities may be true but not convincing. It sounds like surrender in favour of private managements. Another obnoxious part is the emoluments that have been paid to the temporary teachers. The order provides that the teacher shall be paid a fixed salary which is ten rupees less than the minimum payable to regular employee. This method of payment is again beyond comprehension. An appointment may be temporary or permanent but the nature of work being same and the temporary appointment may be due to exigency of service, non availability of permanent vacancy or as stop gap arrangement till the regular selection is completed, yet there can be no justification for paying a teacher, so appointed a fixed salary by adopting a different method of payment than a regular teacher. Fixation of such emoluments is arbitrary and violative of Article 14 of the Constitution. The evil inherent in it is that apart from the teachers being at the beck and call of the management are in danger of being exploited as has been done by the management 403 committees of State of Karnataka who have utilized the services of these teachers for 8 to 10 years by paying a meagre salary when probably during this period if they would have been paid according to the salary payable to a regular teacher they would have been getting much more. Payment of nearly eight months ' salary, by resorting to clause 5, and, that too fixed amount, for the same job which is performed by regular teachers is unfair and unjust. A temporary or ad hoc employee may not have a claim to become permanent without facing selection or being absorded in accordance with rules but no discrimination can be made for same job on basis of method of recruitment. Such injustice is abhorring to the constitutional scheme. While deprecating direction by the government to break service for a day or two and paying fixed salary to temporary employees we must condemn the practice of management of not making regular selection utmost within six months of occurrence of vacancy. Nor the helplessness of government can be appreciated as expressed in the counter affidavit that despite orders the management continued with it. If the government could not take effective measure either by superseding the management or stopping grant in aid then either it was working under pressure from Management of the private aided institutions or it was itself interested in continuing such unfortunate state of affairs. In either case the equities have been created because of doing of state itself, therefore, it should resolve it. One such method was adopted by the High Court in invididual petitions filed by the teachers by directing the Director of Education to hold selection. In pursuance of it some of the teachers have been regularised. But substantial number still remain due to State 's going back on its agreement before the court by creating obstacles in implementation of the order. Many of them who have have faced selection and have secured higher marks and are in zone of selection are being denied the benefit because it is claimed that such regularisation would be contrary to reservation policy of the State. The policy is under challenge in another proceedings in the Court. Without entering into validity of the policy which according to petitioner results in cent per cent reservation we are of opinion that such practice should be put an end to, therefore, following directions are necessary to be issued: (1) Provision in clause 5 of one day 's break in service is struck down as ultra vires. (2) Orders for payment of fixed salary to temporary teachers is declared invalid. But it shall operate prospectively. A teacher appointed temporarily shall be paid the salary that is admissible to any teacher appointed regularly. 404 (3) Any teacher appointed temporarily shall be continued till the purpose for which he has been appointed exhausts or if it is in waiting of regular selection then till such selection is made. (4) Management shall take steps, whenever necessary, to fill up permanent vacancies in accordance with rules. Delay in filling up the vacancies shall not entitle the management or Director to terminate the services of temporary teachers except for adequate reasons. But it shall entitle the government to take such steps including supersession of management or stopping grants in aid if permitted under law to compel the institutions to comply with the rules. So far these petitioners and teachers similarly situated are concerned, it could not be disputed that many of those teachers who appeared for selection in pursuance of the High Court order secured sufficiently high marks but they could not be regularised because the vacancies are said to be reserved. But what has been lost sight of is that petitioners are seeking regularisation on posts on which they have been working and not fresh appointments, therefore, they could not be denied benefit of the High Court 's order specially when no such difficulty was pointed out and it was on agreement by the respondents that the order was passed. No material has been brought on record to show that any action was taken prior to decision by the High Court against any institution for not following the reservation policy. To deny therefore the benefit of selection held on agreement by the respondents is being unjust to such selectees. Further the State of Karnataka appears to have been regularising services of adhoc teachers. Till now it has regularised services of contract lecturers, local candidates, University lecturers,Engineering colleges, lecturers etc. It may not furnish, any basis for petitioners to claim that the State may be directed to issue similar order regularsing services of teachers of privately managed colleges. All the same such policy decisions of government in favour of one or the other set of employees of sister department are bound to raise hopes and expectations in employees of other departments. That is why it is incumbent on governments to be more circumspect in taking such decisions. The petitioners may not be able to build up any challenge on discrimination as employees of government colleges and private colleges may not belong to the same class yet their claim cannot be negatived on the respondents ' stand in the counter affidavit that the regularisation of temporary teachers who have not faced selection shall impair educational standard without explaining the effect of regularisation of temporary teachers of University and even technical colleges. Such being the unfortunate state of affairs this Court is left with no option but to issue following directions to respondents for not honoring its com 405 mitments before the High court and acting contrary to the spirit of the order, and also due to failure of governemt in remaining vigilant against private management of the college by issuing timely directions and taking effective steps for enforcing the rules: (1) Services of such temporary teachers who have worked as such for three years, including the break till today shall not be terminated. They shall be absorbed as and when regular vacancies arise. (2) If regular selections have been made the governemt shall create additional posts to accommodate such selected candidates. (3) The teachers who have undergone the process of selection under the directions of the High Court and have been appointed because of the reservation policy of the Government be regularly appointed by creating additional posts. (4) From the date of judgment every temporary teacher shall be paid salary as is admissible to teachers appointed against permanent post. (5) Such teachers shall be continued in service even during vacations. For these reasons this petition succeeds and is allowed. The direction is issued to respondents in the terms indicated above. Civil Appeal Nos. 309 373 of 1992 arising out of SLP (Civil) Nos. 13131 95 of 1990 challenging the order of High Court in CMW 6232 of 1990 decided on 3rd July, 1990 is disposed of accordingly. Contempt Petition No. 6 of 1991 alleging violation of status quo order granted in W.P. (Civil) No. 873 of 1990 need not be decided. It is directed to be filed. The petitioners shall be entitled to their cost from the State of Karnataka. T.N.A. Petition allowed.

The Respondents landlords filed a suit for possession of the suit premises against the appellants on the ground of default in payment of rent, amongst other, The 7th Additional Small Causes Judge, dismissed the suit holding that the service of notice dated 7 8 1980 on the defendants terminating the tenancy was not proved, even though one out of the three acknowledgments due, had been received duly signed. As regards the question of default in payment of rent, the learned Judge took the view that the case did not fall under Section 12(3)(b) of the Act, as the defendants had paid Rs. 55,800 on 16.1.1984 and thereafter made regular payment of Rs. 600 every month. On appeal by the respondent landlords, the learned additional District Judge reversed the findings of the trial Court and decreed the suit. The learned Additional District Judge held that when the notices are sent by registered post, it is presumed to have been served and mere denial by the tenants had no value, unless they proved some extraordinary happenings or events which prevented following of usual course of business. On the question of default in payment of rent the learned Judge held that as the defendants did not deposit the entire arrears on the first date of hearing and did not deposit the further rent during the pendency of the appeal, they persistently committed defaults during the pendency of the suit and also the appeal. The appellants thereupon filed a writ petition in the High Court challenging the validity of the aforesaid order of the learned Additional District Judge. The High Court dismissed the writ petition and affirmed the order passed by the learned Additional District Judge. Hence this appeal by the appellants, after obtaining special leave. Dismissing the appeal, this Court, 228 HELD: The notice under Section 106 T.P. Act can be sent by post to the party who is intended to be bound by it. Thus the notice sent by registered post in the name of the defendant company who is the tenant is fully in accordance with the requirement of section 106 of the Transfer of Property Act.[232H 233A] The plaintiffs had sent a copy of the notice to all the three defendants by registered post. Three postal receipts Exhs. 52,53 and 54 have been filed in the present case Exh. 51, one acknowledgment receipt. As regards Exh. 51, the defendants No.2 has appeared in the witness box and has denied his signatures. However, it has not been shown that this acknowledgment receipt was related to which of the three notices sent vide postal receipts Exhs. 52,53 and 54. [231E F] The rebuttal, if any, made by defendant No.2 can be related only with regard to Exh. 51 for one notice but not with regard to all the three notices sent by registered post vide Exhs. 52 to 54.[232D] The service of notice shall have to be presumed so far as defendant company is concerned and there is no rebuttal to presumption by the defendant appellants. [232E] The finding recorded by the learned Additional District Judge that the defendants were defaulter in the payment of rent as full amount of rent was not paid or deposited on the first date of hearing and no rent was paid month by month during the pendency of the appeal could not be assailed. [233B] Green View Radio Service vs Laxmibai Ramji and Anr., , referred to.

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

The three collieries owned by the appellant company employ over 4,200 workmen. At the relevant time, there were three Trade Unions functioning at the collieries namely, Madhya Pradesh Koyla Mazdoor Panchayat, Azad Koyla Shramik Sabha and Madhya Pradesh Colliery Workers ' Federation. At the material time, the Panchayat, according to the allegations of the Company, had about 75 per cent of the workers on its rolls. This Union conducted a complete strike for 57 days in the months of March and April 1968 at the collieries. The Central Wage Board for Mining Industry by its award recommended payment of Variable Dearness Allowance (V.D.A.), correlated to the cost of living index prevailing from time to time. The Company accepted those recommendations. The workers represented by the various Unions, on the basis of the Wage Board 's award, demanded V.D.A. at the rate of Rs. 1.47 per day with effect from April 1, 1968 while the Company was paying it at the rate of Re. 1. 1 1 per day. The Company refused to pay more than Re. 1. 11 per day. Thereupon, in December 1968. the Federation. which had a membership of 169 workers (Respondents 4 to 173) made an application before the Central Labour Court cum Industrial Tribunal Jabalpur (the Labour Court) under section 33 C(2) of the Industrial Disputes Act for determination of the amount of V.D.A. due to the workers. The Company submitted its Written Statement on May 13, 1969, challenging the jurisdiction of the court and raised other legal objections. In consequence of the notice of strike under Sec. 22(1) of the Act by the Panchayat, the conciliation proceedings to be under section 22 read with sec. 12(1) of the Act were held by Mr. B. D. Sharma. Assistant Labour Commissioner. In the course of these conciliation proceedings besides other matters, the dispute relating to V.D.A. was settled. Subsequent to the signing of the conciliation agreement, the company filed a supplementary statement before the Labour Court that, in view of the settlement, the application filed by the Federation had become infructuous. The stand taken by the workers Was that the settlement was not in accordance. with the provisions of the Act. The Labour Court tried this issue as a preliminary issue. It held that Shri Sharma was not a duly appointed ,conciliation officer on the 'date on which the settlement was arrived at and consequently, it did not put an end to the dispute pending before the Labour Court. The Writ Petition filed by the Company in the High Court impugning the order of the Labour Court was dismissed. Hence this appeal by special leave. It was contended for the appellant (i) Assuming that the settlement in question was not a settlement in the course of conciliation proceedings and binding under section 18(3) of the Act, it was still a settlement binding on the workmen, including respondents 4 to 173 herein, when 99 per cent of the total workmen had accepted the terms of the settlement, including V.D.A; (ii) The Labour Court 's order refusing permission to the appellant Company to lead evidence to prove the implementation and acceptance of the aforesaid settlement by 99 per cent of the workers, was violative of the principles of natural justice, and (iii) There is nothing in the Act which prohibits the employers and the workmen 874 from entering into a settlement during the pendency of proceedings under section 33 C(2) the Act. On the other hand, settlements inter se between the parties have always been preferred by this Court to the adjudicatory process. HELD (i) A perusal of sec. 18 of the Act makes it clear that a settlement at rived at in the course of conciliation proceedings is binding not only On the actual parties to the industrial dispute but also on the heirs, successors or assigns ,of the employer on the one hand, and all the workmen in the establishment, present or future. on the other. Thus had Mr. B. D. Sharma been a duly appointed Conciliation Officer, the settlement arrived at in the conciliation proceedings, duly conducted by him under sec. 12, would have been binding on the entire body of the workers. Since the finding of the High Court to the effect, that the settlement between the Panchayat and the management cannot be deemed a, settlement arrived at in the course of conciliation proceedings under the Act, now stands unassailed, sub sec. (3) of sec. 18 cannot be invoked to make it binding on Respondents 4 to 173 represented by the Federation. An implied agreement by acquiescence or conduct such as acceptance of a benefit under an agreement to which the worker acquiescing or accepting the benefit was not a party being out side the purview of the Act is not binding on such a worker either under sub sec. (1) or under sub sec. (3) of sec. 18 of the Act. It follows, therefore, that, even if 99% of the workers have impliedly accepted the agreement by drawing V.D.A. under it, it will not whatever its effect under the general law put an end to the dispute before the Labour Court and make it functus officio under the Act, [878C E; 879A B] (ii) The refusal of the Labour Court to allow the appellant to lead evidence at this stage, has not caused any prejudice to the appellant. The issue decided as a preliminary issue involved a question of law which could be decided on the basis of material on record. Furthermore, the decision of the Labour Court neither debars the appellant from bringing on record evidence relevant to the issues which still remain to be decided, nor does it rule out the agreement for all purposes. [879C E] ' (iii) In East India Coal Company Ltd., Benares Colliery, Dhanbad vs Rameshwar and ors. , this Court held that although the scope of section 33C(2) is wider than that of sec. 33 C(1), cases which would appropriately be adjudicated under sec. 10(1) are outside the purview of sec. 33C(2). The provisions of section 33 C are broadly speaking in the nature of executing provisions. The jurisdiction of the Labour Court, in the present case, is not only circumscribed by sec.33 C(2) but the matter also is yet at the initial stage. The controversy between the parties still remains to be determined on merits. [880F & G] Amalgamated Coffee Estates Ltd. and Ors. vs Their workmen and Ors. discussed and The Sirsilk Ltd. and Ors. vs Govt. of Andhra Pradesh and Anr, [1964] S.C.R. 448, referred to.

APPEALS Nos: 276 395 AND 397 404 OF 1975 Appeals by Special Leave from the Judgments and orders dated 21.2.72., 8.3.72., 2].2.72., 10.3.72., 21.3.72., 16.]2.71. , 24.3.72., 21.3.72. 21.3.72., 22.3.72., 25.2.72., 8.3.72., 21.2.72., 10.3.72. , 8.3.72. 10.3.72 10.3.72. , 18.2.72., 16.l2.71. 9.3.73. , 8.3.72.,25.2.72., 16.12.71. , 25.3.72., 15.3.72., 25.3.72., 25.2.72., 25.3.72., 25.2.72., 14.3.72., .14.3.72., 21.3. 2.,14.3.72. , 14.3.72. 21.3.72.,21.3.72. , 14.3.72., 25.3.72., 25.372., 21.3.72., 21.3.72., 21.3.72, 21.3.72., 24.3.72, 24.3.72., 24.3.72., 24.3.72., 25.3.72., 21.3.72., 3.4.72., 21.3.72., 3.4.70. 24.3.72., 24.3.72 24.3.72., 24.3.72., 24.3.72., 24.3.72, 25.372. , 25.3.72., 25.3.72 25.372., 25.372., 3.4.72., 3.4.72., 3.4.72., 3.4.72., 3.4.72. , 14 3.72. 3.9.71., 3.9.71., 16.7.71., 14.3.71. , 29.3.72., 14.3.72., 14.3.72. , 14.3.72, 5.4.72. , 5.4.72. , 5.1.72., 5.4.72., 18 2 72., 23.2.72., 10.3.72. , 20.1.72., 9.1.72. , 31.1.72. 31.1.72., 31.1.72., 31.1.72., 8.3.72., 2.2.72 3.2.72., 25.2.72., 2.2.72., 10.3.72. , 4.2.72. , 25.9.72. , 25.9.72, 6.10.72., 1.2.73. , 13.2.73., 30.1.73., 9.4.73., 13.2.73., 14.2.72., 13.3.72., 13.3.72., 24.3.72., 18.7.72., 4.9.73. 25.2.72, 17.5.71., 21.3.72., 3.4.72., 21.3.72., 16.7.71., 5.4.72. , In Special Appeal Nos. 616, 643, 617, 644/74 and Civil Misc Writ Nos 2268,448,2280,2254,2255/69 and Special Appeal Nos 730 752, 647,615,611,648,645605,610/71 and Civil Misc. Writ No. 149/68 and Special Appeal No.86, 796.775/71 and W.P No. 450 69 and Writ No 451, 218, 5706 2915/69,S. A. No. 690/71 C. Misc Writ No.3037/69 and S.A. No.613/71 and C. Misc Writ No.2090/69 and Civil Misc. Writ Nos 2094, 2119, 2122, 2172, 2188 2189 92, 2180 2182, 2187,2256, 2273, 2274,2276 2279, 2282 2284.2334 2347, 2576,2608 2611,2649 2690,2742 2743, 2759,2760,2811,2850, 2916,2918,2919,3075,3400/69 and 543 546, 786,1039,1246, 1248, 2169,3881, 4035,4428,4563,4821,211,250, 256, 7253, 607, 614, 618.628,7655.691 694, 729. 732. 751, 776, 787, 799. 805171 and Civil Misc. Writ No.1525,1529,3387.7051,7253, 7588, 7575, 7980 and Special Appeal Nos.6,102, 115, 166,309/72 and 1902/73 and Special Appeal No.774171 and Civil Misc. Writ No. 2121/69,2194/69 70,3375/69 and writ Petition No.3627/70,260/71 respectively. 534 B. Sen and o. P. Rana for the Appellant. Yogeswar Prasad, section K. Bagga and (Mrs.) section Bagga, for the Respondent in CA 399/75 and 400 405/75. (Miss) Kamlesh Bansal, for Respondent in CAs. 310, 312, 238,403,357,and 313/75 L. C. Goyal, for Respondent in CA No. 396/75. The Judgment of the Court was delivered by JASWANT SINGH, J. This batch of 127 appeals by special leave which are directed against various judgments rendered by the High Court of Judicature at Allahabad in writ petitions and special appeals and relate to enforcement of certain obligations of licensees for retail vend of country liquor shall be disposed of by this judgment. The facts leading to these appeals are The State of Uttar Pradesh has,, under the U.P. Excise Act 1910 (Act No. IV of 1910) (herein after referred to as 'the Act ') which contains provisions relating to all aspects and manifestations of intoxicating liquors and intoxicating drugs, that is to say, their import, export, transport, manufacture, sale and possession, the exclusive right or privilege of manufacturing and selling liquor in that State. Section 24 of the Act lays down that subject to the provisions of section 31, the Excise Commissioner may grant to any person a licence for the exclusive privilege (1) of manufacturing or of supplying by wholesale, or of both, or (2) of selling by wholesale or by retail, or (3) of manufacturing or of supplying by wholesale, or of both and or selling by retail any country liquor or intoxicating drug within any local area. Section 31 provides that every licence, permit or pass granted under the Act shall be granted (a) on payment of Such fee (if any); (b) subject to such restrictions and on such conditions; (c) shall be in such form and contain such particulars, as the Excise Commissioner may direct either generally or in any particular instance in this behalf; and (d) shall be granted for such period as the State Government may, in like manner, direct. Section 33 of The Act invests the authority granting a licence under the Act to require the grantee to execute a counterpart a agreement in conformity with the tenor of his licence and to give such security for the performance of such agreement or to make such deposit in lieu of security as such authority may think fit. Section 28 of the Act which deals with imposition of excise duty or countervailing duty reads: "28. (1) Duty on excisable article. An excise duty or a countervailing duty as the case may be at such rate or rates as 535 the Local Government shall direct, may be imposed, either A generally or for specified local area, on any excisable article (a) imported in accordance with the provisions of section 12 (1); or (b) exported in accordance with the provisions of section 13; or (c) transported; or (d) manufactured, cultivated or collected under any licence granted under section 17; or (e) manufactured in any distillery established, or any distillery or brewery licensed, under section 18 . " Section 29 of the Act lays down the manner in which the duty may be levied. One of the ways provided in the section for levy of the duty is by payment upon issue for sale from a warehouse established or licensed under section 18(d) of the Act. Sections 40 and 41 of the Act empower the State Government and the Excise Commissioner (subject to the previous sanction of the Government) to make rules for the purposes set out therein. These rules are contain in the Excise Manual, Uttar Pradesh (Volume I). Paragraph 38 of the Excise Manual shows that there are four licence fee systems in vogue in the State of Uttar Pradesh. One of such systems is 'The auction fee system ' under which the amount of licence fees inter alia for the retail sale of ' country spirit under the distillery system and for the manufacture and retail sale of country spirit under the outstill system is determined by competition among bidders. According to paragraph 332 licences for the wholesale and retail vend of intoxicants are usually granted for the excise year which commences from April 1 and lasts upto March 31. In accordance with the requirements of the auction system, auctions were held throughout Uttar Pradesh during the months of February and March, 1969 on various dates and at various places for the grant of licences to sell country spirit by retail at the specified shops during the excise year 1969 70. Before holding The auctions, rates of` excise duty and prices of different varieties of country liquor as also the conditions of ' licences for sale of county spirit for 1969 7() were announced. No announcement was, however, made as to whether the exemption from sales tax in respect of sale of country liquor granted vide Notification No. ST 1149/X 802(33) 51 dated April 6,, 1959. issued under section 4 of the U.P. Sales Tax Act, 1948 was or was not likely to be withdrawn. The respondents herein participated in the aforesaid auctions and being the highest bidders were granted licences for retail sale of country spirit for the period beginning from April t, 1969 to the end of March., 1970. 536 Each one of these licences contained infer alia the following condition: "3. (a) The licensee shall lift each month the proportionate quota for the month, if any, fixed for his vend and deposit still head duty realisable thereon. On his failure to lift the monthly proportionate quota in any month, he shall be liable to pay compensation to the State Government at the rate equal to the rate of still head duty per litre of spiced spirit and still head duty per litre of plain spirit as may be in the area in which the shop is situated on the quantity falling short of such monthly proportionate quota and such com pensation shall be paid by the 7th of the month following the month to which such shortfall relaters. (b) He shall be bound to sell the whole quantity of country spirit obtained for the shop from the warehouse on his failure to do so, he shall be liable to pay to the State Government compensation at the rate equal to the rate of stillhead duty per litre of spiced spirit and stillhead duty per litre of plain spirit as may be in force in the area in which the shop is situated on the unsold quantity of country spirit during the period of the contract to which the licence relates. (c) In the event of the licensee being required to pay compensation to State Government under the aforesaid condition due to the short lifting of the quota or non deposit of such compensation, the amount of said compensation may be realised from the amount of security deposited by him. The resultant deficiency in the amount of security shall be made good by the licensee within seven days of such adjustment. Tn case the short lifting of proportionate monthly quota or short deposit of compensation continues for two consecutive months or the license fails to make up the deficiency in the amount of security within the prescribed period of seven days his licence may be cancelled in addition to the recovery of the deficiency in payment of compensation as arrears of land revenue. " On the day following the commencement of the aforesaid licences i.e. on April 2, 1969, the Government of Uttar Pradesh issued Notification No. ST 1603/X 900 (12)/67 under section 3 A and 4 of the U.P. sales Tas Act, 1948, superseding the earlier Notification No. ST 1149/X 802 (33) 51 dated April 6, 1959, issued under section 4 of the U. P. Sales Tax Act, 1948, and imposing sales tax on the turnover in respect of the country spirit at the rate of ten paise per rupee at the point of retail sale with immediate effect. The respondents herein having failed to lift and sell the minimum quotas of liquor prescribed in their licences were required by the excise authorities of the State to pay, by way of compensation, the amounts of excise duty leviable on the short falls. Aggrieved by this demand, the respondents moved the High Court under Articles 226 537 Of the Constitution for issue of appropriate writ or directions retraining the appellants herein from recovering the aforesaid amounts contending inter alia that the condition of their licences on the basis of which the demand was made was invalid, unconstitutional and unenforceable. The respondents in six appeals Nos. 399 to 404 of 1975 also challenged Notification No. ST 1608/X 900(12)/67 (dated April 2, 1969) (supra) which superseded the earlier Notification No. ST 1149/X 802(33)51 dated April 6, 1959 and imposed sales tax on the turnover in respect of the country. liquor at the rate of ten paise per rupee at the point of retail sale by the vendor with effect from April 2, 1969 on the ground that since the state Government did not announce at the time of the aforesaid auction that Notification No. ST 1149/X 802(33)51 dated April 6, 1959, was likely to be withdrawn and the sales of country. liquor were likely to be subjected to the levy of sales tax during the excise year and in reply to the query made by them at the time of the auction they were told by the authorities that there was no sales tax of the sale of country liquor. the appellants herein were estopped from making the demand in respect of sales tax and recovering the same from them. The High Court allowed all these petitions in toto. Having failed to secure certificates of fitness from the High Court, the appellants applied for and obtained special leave to appeal from this Court. The common question of law that arises for determination in all these appeals is whether the condition incorporated in the licences of the respondents that they would lift the fixed minimum quantity of liquor and sell the same at their allotted shops and in case of their default or failure to d(h so, they would be liable to pay compensation equal to the amount of excise duty leviable on the unlifted quantity is valid and enforceable. This point is no longer res integra. In Bimal Chandra Banerjee vs State of Madhya Pradesh(1) this Court held that: "No tax can be imposed by any bye law or rule or regulation unlegs the statute under which the subordinate legislation is made specially authorises the imposition. In the present case, the legislature has levied excise duty or countervailing duty on the excisablc articles which have been either imported. exported. transported, manufactured. cultivated or collected under any licence granted under section 13? or manufactured in any distillery or brewery established or licensed number the. Act; and the State Government has not been empowered to levy any duty on liquor which the contractors failed to lift. Therefore, the State Government was exercising a power which it did not possess and hence the rule imposing the condition in the licences and the demand notices are invalid." Thus the aforesaid question arising for determination by us stands already settled by the ratio of the decision of this Court in Bimal Chandra Banerjees case (supra.) (1) ; 538 It will also be noticed that neither section 28 nor section 29 nor any other provision of the Act authorises the levy of the amounts sought to be recovered from the respondents. The decision of this Court is Panna Lal and Ors. vs State of Rajasthan and ors.(1) which is sought to be relied upon on behalf of the appellants is clearly distinguishable. In that case, the contractual obligation of the appellants to pay the guaranteed sum or the stipulate(d sum mentioned in the licences was not dependent on the quantum on liquor sold by them and no excise duty was charged or chargeable on undrawn liquor under the licences. The excise duty there was collected only in relation to the quantity and quality of the country liquor which was drawn. We have, therefore, not the lightest hesitation in holding that the demand made by the appellants though disguised as compensation, is in reality a demand for excise duty on the unlifted quantity of liquor which is not authorised by the provisions of the Act. This being the sole point involved in appeals other than Appeals Nos. 399 to 404 of 1975 the former Appeals cannot succeed. In the result they are dismissed with costs. Appeals Nos. 399 to 404 of 1975 which raise another point as well viz. the validity of the appellants ' demand from the respondents in respect of sales tax at the rate of ten paise per rupee on the retail sales of country spirit made by the latter with effect from April 2, 1969 stand on a slightly different footing. Section 3 A and 4 of the U.P. Sales Tax Act, 1948 clearly authorise the State Government to impose sales tax. The fact that sales of country liquor had been exempted from sales tax vide Notification No. ST 1149/X 802(33) 51 dated April 6 1959 could not operate as an estoppel against the State Government and preclude it from subjecting the sales to tax if it felt impelled to do so in the interest of the Revenues of the State which are required for execution of the plans designed to meet the ever increasing pressing needs of the developing society. It is now well settled by a catena of decision that there can be on question of estoppel against the Government in the exercise of its legislative, sovereign or executive powers. While speaking for the Court in M. Ramanathan Pillai vs State of Kerala(2) the learned Chief justice quoted with approval the following statement contained in American Jurisprudence 2d. at page 783 paragraph 123: "In American Jurisprudence 2d at page 783 paragraph 123 it is stated ' 'Generally. a state is not subject to an estoppel to the same extent as an individual or a private corporation. " otherwise, it might be rendered helpless to assert its powers in government. Therefore as a general rule the doctrine of estoppel will not be applied against the State in its governmental public or sovereign capacity." (1) [1976] t S.C.R. 219 (2) ; 539 In State of Kerala and Anr. vs The Cawalior Rayon Silk Manufacturing (Wvg.) Co. Ltd. Ltd.(l) where the respondent company established itself in the State of Kerala for production of rayon cloth pulp on an understanding that the Government would bind itself to supply raw material and later the Government on finding that it was not able to supply the material undertook not to legislate for the acquisition of the private forests for a period of 60 years if the company purchased forest lands for the purpose of its supply of raw material and accordingly, the company did purchase 30,00 acres of private forests from an estate for Rs. 75 lakhs for the aforesaid purpose but the Government enacted Act 26 of 1971 expropriating vast forest areas without paying compensation as a measure of agrarian reform whereupon the respondent company sought to invoke the doctrine of equitable estoppel against the Government, Palekar, J. delivering the majority judgment observed: "We do not see how an agreement of the Government can preclude legislation on the subject. The High Court 'has rightly pointed out that the surrender by the Government of its legislative powers to be used for public good cannot avail the company or operate against the Government as equitable estoppel." Approving the decision of the House of Lords in Howell vs Falmouth Boat Construction Co. Ltd. ( ') where the observations of Lord Denning in Robertson vs Minister of Pensions (8) that the action of the War office which was an agent of the Crown in assuming authority over the matter and assuring the appellant who had been serving on the army that his disability had been accepted as attributable to military service bound the Crown and through the Crown the Minister of Pensions, who while administering the Royal warrant issued by the Crown has to honour all assurances given by or on behalf of the Crown were unequivocally disapproved by observing that the character or an act done by an officer of a Government, however high or low in the hierarchy in face of a statutory prohibition, is not affected by the fact that it had been induced by a misleading assumption of authority and neither a Minister. nor any subordinate officer of the Crown can, by conduct or representation, bar the Crown from enforcing a statutory prohibition. It was held by Bench of this Court ill Assistant Custodian Exacuee Property and ors. vs Brij Kishore Agarwala and Ors(4) that the Evacuee Department was not bound by the reply given by the Assistant Custodian to the first respondent 's enquiry that the property in question was not an evacuee property. Following the above decision. the High Court of Jammu & Kashmir has in Malhotra and Sons and Ors. vs Union of India and ors (5). rightly held that . "The courts will only bind the Government by its promises to prevent manifest injustice or fraud and will not make the Government a slave of its policy for all times to come when (1) [1973] 2 s.c.c. 713. (2) (3) (4) ; (5) A.I.R. 1976 J. & K. 41. 540 the Government acts in its Governmental, public or sovereign capacity. " We may as well refer here to the celebrated decision Of the Supreme Court of the United States in Federal Crop Insurance Corporation vs Morrill(1). In that case where the agents of the petitioner a wholly Government owned Corporation, created by the Federal Crop Insurance Act to insure producers of wheat against loss in yields due to unavoidable causes including drought, advised the respondents in ignorance of and contrary to the duly promulgated controlling regulation which expressly precluded insurance coverage of spring, wheat re seeded on winter wheat acreage that their entire 460 acres spring wheat crop including the spring wheat which had been reseated on winter wheat acreage in the 1945 crop year was insurable by the Corporation and recommended to the Corporation ranch office acceptance of the respondents formal application which, however, did not disclose that any part of the insured Crop was reseeded and the Corporation accepted the application and a few months later, most of the respondents ' crop was destroyed by drought, and the Corporation on the loss being notified to them refused to pay the loss on the ground that the wheat crop insurance regulations expressly prohibited the insurance of spring wheat which was re seeded on winter wheat acreage, the Court by majority held that though a private insurance Corporation would be bound on similar facts. the same was not true of a Government Corporation engaged in the insurance field and the latter was not estopped from repudiating the liability. The following observations made by the court in Federal Crop Insurance Corporation vs Merrill (supra) are worth quoting: "It is too late in the day to urge that the Government is just another private litigant, for purposes of charging it with liability, whenever it takes over a business therefore conducted by private enterprise or engages in competition with private ventures. Whatever the form in which the Government functions, anyone entering into an arrangement with the Government takes the risk of having accurately ascertained that he who purports to act for the Government stays within the bounds of his authority. And this is so even though, as here, the agent himself may have been unaware of the limitations upon his authority. "Men must turn square corners when they deal with the Government", does not reflect a callous outlook. It merely expresses the duty of all courts to observe, the conditions defined by Congress for charging the public treasury. " In his Treatise on the Law of Estoppel, Melville M. Bigelow has stated that in State vs Williams,(2) State vs Bevars,(2) and Wallace vs Maxwell(4) it has been held that estoppel does not operate against the Government or its assignee. (1) L cd. (2) (3) (4) 10 Ird. 541 The High Court was, therefore, clearly in error in ignoring that the Government cannot divest itself of the right incidental to its office by conduct which, in the case or a private person, would amount to estoppel and in characterizing the demand for sales tax made by the appellants as illegal. Accordingly Appeals Nos. 399 to 404 of 1975 are partly allowed, and it is held that the demand made by the appellants from the respondents in these appeals in respect of sales tax on the turnover of sales of ' country spirit made by them between April B, 2, 1969 and March 31, 1970 was valid and could not be struck down. The parties in these six appeals shall pay and bear their own costs. P.H.P. Appeals partly allowed.

After holding a departmental enquiry on certain charges of contravention of Government Servants ' Conduct Rules, the appellant was reduced in rank. His suit for a declaration that the impugned action was void and inoperative was dismissed. The High Court dismissed his appeal. On appeal, it was contended that the departmental enquiry was vitiated on account of material irregularities, and that, as a result of excessive delay, between the date of hearing and delivery of judgment by the High Court, it did not deal with a number of submissions made by him and thereby caused prejudice. Dismissing the appeal to this Court, ^ HELD: (1)(a) The question whether the appellant was given a reasonable opportunity to lead evidence and was sufficiently heard or hot is largely a question of fact. It is only when an opportunity denied is of such a nature that the denial contravenes mandatory provision of law or a rule of natural justice that it could vitiate the whole departmental trial. Prejudice to the Government servant from an alleged violation of a rule must be proved.[583C] (b) The plea that the appellant had been subjected to trial on allegations which had been the subject matter of previous enquiries overlooks that no charge was framed as a result of any previous enquiry. If an enquiry was held at a particular stage, possibly to determine whether regular proceedings should be drawn up or started, it did not debar a departmental trial. [583D] State of Assam & Anr. vs J. N. Roy Biswas ; and R. T. Rangachari vs Secretary of State, AIR 1937 PC 27, held inapplicable. (c) It was not shown whether any evidence which the appellant tried to produce was really wrongly excluded and at what stage and for what reasons. All these are questions of fact which should be raised in the departmental trial. After that if there was any patent error a writ petition lay. [584A] (d) A suit challenging a departmental proceeding cannot be treated as an appeal from the findings in those proceedings or against a punishment inflicted upon the Government servant even if these were erroneous. A question which could affect the result in a civil suit has to be of such a nature that it goes to the root of the jurisdiction that the conduct of the departmental trial illegally and vitiates the result. It is only if the departmental proceeding is null and void that a plaintiff could obtain the reliefs he had asked for. [584E F] Smt. Ujjam Bai vs State of U.P. & Anr. [1963] 1 S.C.R. 778 @ 835, 836, referred to. (e) Unless a point could be raised on behalf of an appellant which is capable of vitiating the departmental proceedings there could be no declaration that the departmental proceedings were null and void. [585H] 581 (2) The Civil Procedure Code does not provide a time limit for the period between the hearing of arguments and the delivery of a judgment. Nevertheless, an unreasonable delay between the hearing of arguments and delivery of judgment, unless explained by exceptional or extraordinary circumstances, is highly undesirable even when written arguments were submitted. It is not unlikely that some points which the litigant considered important might have escaped notice. But, what is more important is that litigants must have complete confidence in the results of litigation. This confidence tends to be shaken if there excessive delay between hearing of arguments and delivery of judgments.

Civil Appeal No. 4720 of 1984. Appeal by Special leave from the Judgment and order dated the 24th November, 1983 of the Punjab and Haryana HIGH Court in C.W.P. No. 4839 of 1983. V.M. Tarkande and A.K. Goel, for the Appellant. Ashwani Kumar and A.K. Panda for the Respondents. The Judgment of the Court was delivered by CHANDRACHUD, C.J. The appellants 22 in number, who hold a three year Diploma in Electrical Engineering Course from the State Board of Technical Education, Punjab, were appointed as apprentices in August 1981. The Principal, Technical Training Institute, Punjab State Electricity Board, Patiala, who is respondent 3 herein, issued the requisite certificates to the appellants on successful completion by them of one year 's apprenticeship. After obtaining those certificates the appellants registered their names with the Employment Exchanges in Punjab. The Ministry of Labour and Rehabilitation, Department of Labour (D.G.E.T.), Government of India, New Delhi, issued instructions to various offices including the Punjab State Electricity Board. Patiala, respondent 2 herein, asking that necessary action should be taken to ensure that the trained apprentices are absorbed in industries upto a minimum of 50 per cent of direct recruitment vacancies. These instructions were notified on March 23, 1983. On July 27, 1983, respondent 2 advertised 50 posts of Junior Engineers II (Electrical) in its establishment, for which the appellant had successfully completed a one year apprenticeship. The appellants filed a writ petition (No. 4839 of 1983) in the High Court of Punjab and Haryana, challenging the issuance of the advertisement on the ground that, under their respective letters of appointment, they were entitled to be appointed to 50 percent of the posts which were advertised by respondent 2. That writ petition was dismissed by the High Court on the ground that the letters of appointment issued to the appellants did not contain any assu 155 rance or undertaking that they will be absorbed in the service of the Punjab State Electricity Board; that 47 per cent of the vacancies were already reserved for Scheduled Castes, Scheduled Tribes, backward classes, ex service men, etc.; and that, if another 50 per cent of the posts were to be reserved for apprenticeship trainees, almost 100 per cent posts shall have been put in the reserved category which would be contrary to law. This appeal by special leave is directed against the judgment of the high court. Section 22(1) of the , 52 of 1961, provides that it shall not be obligatory on the part of the employer to offer any employment to any apprentice who has completed the period of his apprenticeship training in his establishment nor shall it be obligatory on the part of the apprentice to accept an employment under the employer. This provision is, however, subject to the non obstante clause in sub section (2) of section 22 which reads as follows: "Notwithstanding anything in sub section (1), where there is a condition in a contract of apprenticeship that the apprentice shall, after the successful completion of the apprenticeship training, serve the employer, the employer shall, on such completion, be bound to offer suitable employment to the apprentice, and the apprentice shall be bound to serve the employer in that capacity for such period and on such remuneration as may be specified in the contract". (The proviso to this sub section is not relevant for our purpose) . This sub section leaves no doubt that, despite the provision contained in sub section (1), the employer is under an obligation to offer suitable employment to the apprentice if the contract of apprenticeship contains a condition that the apprentice shall serve the employer after the successful completion of the training. Indeed, when such an offer is made, the apprentice on his part is bound to serve the employer in the capacity in which he was working as an apprentice. The question which, therefore, arises for consideration is whether there is a condition in the contract of apprenticeship of the appellants that they shall serve the employer after the successful 156 completion of their apprenticeship training. In this behalf, Para graph 2 of the letters of appointment under which the appellants were appointed as apprentices is important. It reads thus: "It should be clearly understood that you shall be on stipendary training for a period of one year and on successful completion of this training, you shall be absorbed in the department if there are vacancies, without any commitment subject to the stipulation that during the waiting period after one year s apprenticeship, you will not be paid any remuneration". It is urged on behalf of the respondents that, this particular term in the contract of apprenticeship cannot be construed as a condition that the apprentices shall, after the successful completion of their apprenticeship training, serve the employer. We find it difficult to accept this submission. Paragraph 2 of the letters of appointment is intended to convey the meaning that there is an obligation on the apprentices to serve the employer after the successful completion of the training. This condition is not happily expressed but, in matters such as the one before us, one must take a broad and commonsense view of the terms of employment. It is not pro per in such cases to indulge in a hair splitting approach and find an escape for defeating the rights of employees. When paragraph 2 says that the apprentice "shall be absorbed in the department", the only reasonable interpretation to put upon that expression is that it creates reciprocal rights and obligation of the parties to the contract of apprenticeship, namely, the employee and the employer "You shall be absorbed" is a double edged term of the contract. It binds the employer to offer employment to the apprentice (if there is a vacancy) and, equally, it binds the apprentice to accept the offer. Indeed, that is why, instead of advancing the argument which was made before us, the stand taken by the State of Punjab in the High Court was that the Executive Engineer, who sent the letters of appointment, had no authority to incorporate the particular condition in those letters. That contention is wholly without substance and in any event, remains unsubstantiated. It is quite difficult to accept that a senior officer in the position of an Executive would incorporate a specific term in the contract of apprenticeship without being authorised to do so. That is also why yet another defence was taken by the State of 157 Punjab to the contention of the appellants. That defence was that the words "without any commitment" which occurs in paragraph 2 of the letters of appointment, show that there is no obligation on the part of the employer to employ the apprentices after their period of training is over. There is no substance in that contention also because, in the context in which the expression "without any commitment" occurs, it only means that the obligation of the employer to offer employment to the apprentice and the corresponding obligation of the apprentice to serve the employer arises only if and when there is a vacancy in which the apprentice can be appointed. This is made clear by the clause, "you shall be absorbed in the department if there are vacancies ', which precedes the expression "without any commitment". This is plain commonsense because, if there is no vacancy in which an apprentice can be appointed, there can be no obligation to appoint him and there can, evidently, be no obligation upon the apprentice to serve the employer. These reciprocal rights and obligations, namely, to serve and offer employment, arise on the occurrence of a vacancy in which an apprentice can be appointed. We are also of the opinion that, apart from the implications arising out of Section 22(2) of the , paragraph 2 of the letters of appointment creates a binding obligation upon the employer to absorb the apprentices in the department on the successful completion of the training period, provided there is a vacancy in which the apprentices can be appointed. It would be contrary both to the letter and spirit of paragraph 2 of the letters of appointment to hold, that, even if there is a vacancy in which an apprentice can be appointed after the successful completion of his training, the employer is free not to appoint the apprentice and fill that vacancy by appointing an outsider. Such a reading of the assurance contained in paragraph 2 will also frustrate the very object of the provision made by the legislature in Section 22 (2) of the Act The object of that provision is to guarantee, to the extent of the existence of vacancies, that the apprentices will not be rendered jobless after they complete their training. No other point was argued before us on behalf of the respondents. We would, however, like to indicate that there is no substance in the contention taken by the respondents before the High Court that offering employment to the appellants to the extent of 50 percent of the posts will violate the law, as laid down by this Court, in regard to reservation of posts. The appellants are entitled 158 to be appointed in the available vacancies not because of any reservation of posts in their favour but because of the provisions of Section 22(2) of the and the contractual obligations arising under paragraph 2 of the letters of appointment. For these reasons, we allow the appeal and set aside the judgment of the High Court. A writ shall issue directing the respondents to absorb the appellants as "Junior Engineers II(Electrical) in the 22 vacancies which will form a part of the fifty vacancies which are advertised by respondent 2, The Punjab State Electricity Board, Patiala. The appellants will get their costs here and in the High Court, which we quantify at rupees five thousand in all.

The prosecution alleged that PW 2 had given a First Information Report of two offences but appropriate investigation was not being done and charge sheet was not being furnished to the Court. When PW. 2 contacted the Appellant the Head Constable of the Police Station he demanded money. 2 thereupon informed the Anti Corruption Department about the demand and the Deputy Superintendent of Police agreed to lay a trap. Details were fixed and the trap was laid. An amount of Rs. 50 was passed on as the bribe. Five currency notes each of Rs. 10 denomination with marked initials were made over to PW. 2 to be given as bribe to the accused. The prosecution further alleged that the accused came pursuant to the request and the money was passed on and the payment of bribe was duly detected. The Special Judge accepted the prosecution case, convicted the Appellant under section 161 of the Indian Penal Code as also section 5(1)(d) and section 5(2) of the Prevention of Corruption Act, 1947 and imposed a consolidated sentence of two years ' rigorous imprisonment. The conviction and sentence were upheld in appeal by the High Court. Allowing the Appeal, to this Court, ^ HELD: 1. The restriction on appreciation of evidence in an appeal by special leave is a self imposed one and is not a jurisdictional bar. Whileordnai 1137 rily this Court would refrain from re examining the evidence in a case where serious injustice would be done if the evidence is not looked into it would not be proper for the Court to shun attention by following the self imposed restriction. [1140C] Ram Prakash Arora vs State of Punjab, [1972] Crl. L. J. 1293 and State of Bihar vs Basawan Singh ; ; referred to. In the instant case, certain important features have been overlooked both by the trial Court as also by the High Court. The two panch witnesses have not only turned hostile, but have disclosed facts which support the defence version of the incident. PW. 2, the decoy witness has stated facts which probabilise the defence stand. Even the literate Constable PW. 7 who has not been declared hostile has supported the defence version. The Place and the manner in which the bribe is said to have been offered and received make the prosecution story totally opposed to ordinary human conduct. [1139 H; 1140 A B] 2. Sufficient material has been brought out to merit interference. The evidence of the panchas is not available to support the prosecution case. There is discrepancy in many material aspects. The prosecution story is opposed to ordinary human conduct. The discrepancies go to the root of the matter and if properly noticed would lead any court to discard the prosecution version. Without powder treatment, for the absence of which no explanation has been advanced the prosecution story becomes liable to be rejected. An overall assessment of the matter indicates that the story advanced by the prosecution is not true and the defence version seems to be more probable. The conviction of the appellant is therefore set aside and he is acquitted. He is discharged from his bail bond. [1145 C E] Prakash Chand vs State (Delhi Administration), ; and Kishan Chand Mangal vs State of Rajasthan ; ; referred to. The accused was, according to the prosecution evidence, in full uniform. He had been called up to the bus stand which is a public place. There is evidence to show that there were many people moving around and the area was crowded. There is also evidence that the place where PW. 2 met the accused with the money was close to a hotel where people were standing. In such a surrounding a police man in uniform would ordinarily not accept a bribe. The police station was not far away and if the accused wanted actually to receive the bribe he would try to choose a better environment for it than the one where the bribe is said to have been given. Human compunction would not permit a man in the position of the accused to behave in the manner prosecution has pictured him to have. There is also evidence that the money had not really been received by the accused and PW I raised shouts that the bribe had been accepted before the amount was paid. PW. 3 has also stated that he did not see anybody giving or taking illegal gratification. [1143 B D] 4. There is no material at all on the record to explain why the powder treatment process was not followed even though the detection is alleged to have been handled by experienced people of the Anti Corruption Department. It is difficult to accept the position that PW. 6 was not aware of the powder treat 1138 ment. It has been in vogue for well over three decades. If such powder treat ment had been made the passing of the bribe would indeed not have been difficult to be proved. [1145 A B] Raghbir Singh vs State of Punjab , referred to.

tition Nos. 1304, 1262, 1119, 1118, 1574 75, 1373 74, 1244 45, 1230, 1494 97, 1566 67, 1143, 1440, 1586, 1420 23, 1441 43, 1389, 1144, 1461, 1437 39, 1431, 1268, 1145, 1263 and 1331 of 1979. (Under Article 32 of the Constitution) Anil Dev Singh, Lalit Kumar Gupta, Subhash Sharma, C. P. Pandey and section K. Sabharwal for the Petitioners in W.PS. 1389, 1437 39, 1262, 1497, 1586, 1230 and 1263 of 1979. Y. section Chitale, P. N. Duda, V. K. Pandita, R. Satish and E. C. Agarwala for the Petitioners in W.P. Nos. 1241 43, 1495 96, 1566 67, 1423, 1143 44,1118 19,1494, 1145 and 1331 of 1979. section K. Bisiaria for the Petitioner in W.P. 1461/79. Rishi Kesh and B. Datta for the Petitioner in W.Ps. 1373 74, 1304 and 1431/79. Y. section Chitale, D. N. Tiku, E. C. Agarwala, M. Mudgal, Ashok Kaul and Vineet Kumar for the Petitioners in W.Ps. 1244 45, 1420 22 and 1440/79. S.S. Khanduja for the Petitioners in W.Ps. 1268, 1574 75/79. section N. Kacker and Altaf Ahmed for the appearing Respondents. 85 The Judgment of the Court was delivered by BHAGWATI, J. These writ petitions under Article 32 of the Constitution challenge the validity of the admissions made to the Regional Engineering College, Srinagar for the academic year 1979 80. The Regional Engineering College, Srinagar (hereinafter referred to as the College) is one of the fifteen Engineering Colleges in the country sponsored by the Government of India. The College is established and its administration and management are carried on by a Society registered under the Jammu and Kashmir Registration of Societies Act, 1898. The Memorandum of Association of the Society in clause 3 sets out the objects for which the Society is incorporated and they include amongst other things establishment of the college with a view to providing instruction and research in such branches of engineering and technology as the college may think fit and for the advancement of learning and knowledge in such branches. Vide subclause (i). The Society is empowered by clause 3 sub clause (ii) of the Memorandum of Association to make rules for the conduct of the affairs of the Society and to add to, amend, vary or rescind them from time to time with the approval of the Government of Jammu and Kashmir State (hereinafter referred to as the State Government) and the Central Government. Clause 3 sub clause (iii) of the Memorandum of Association confers power on the Society to acquire and hold property in the name of the State Government. Sub clause (v) of clause 3 of the Memorandum of Association contemplates that monies for running the college would be provided by the State and Central Governments and sub clause (vi) requires the Society to deposit all monies credited to its fund in such banks or to invest them in such manner as the Society may, with the approval of the State Government decide. The accounts of the Society as certified by a duly appointed auditor are mandatorily required by sub clause (ix) of clause 3 of the Memorandum of Association to be forwarded annually to the State and Central Governments. Clause 6 of the Memorandum of Association empowers the State Government to appoint one or more persons to review the working and progress of the Society, or the college and to hold inquiries into the affairs thereof and to make a report and on receipt of any such report, the State Government has power, with the approval of the Central Government, to take such action and issue such directions as it may consider necessary in respect of any of the matters dealt with in the report and the Society or the College, as the case may be, is bound to comply with such directions. There is a provision made in clause 7 of the Memorandum of Association that in case the Society or the college is not functioning properly, the State Government will have the power to take over the 86 administration and assets of the college with the prior approval of the Central Government. The founding members of the Society are enumerated in clause 9 of the Memorandum of Association and they are the Chairman to be appointed by the State Government with the approval of the Central Government, two representatives of the State Government, one representative of the Central Government, two representatives of the All India Council for Technical Education to be nominated by the northern Regional Committee, one representative of the University of Jammu and Kashmir, one non official representative of each of the Punjab, Rajasthan, U.P. and Jammu and Kashmir States to be appointed by the respective Governments in consultation with the Central Government and the Principal who shall also be the ex officio Secretary. The Rules of the Society are also important as they throw light on the nature of the Society. Rule 3 clause (i) reiterates the composition of the Society as set out in clause 9 of the Memorandum of Association and clause (ii) of that Rule provides that the State and the Central Governments may by mutual consultation at any time appoint any other person or persons to be member or members of the Society. Rule 6 vests the general superintendence, direction and control of the affairs and its income and property in the governing body of the Society which is called the Board of Governors. Rule 7 lays down the constitution of the Board of Governors by providing that it shall consist of the Chief Minister of the State Government as Chairman and the following as members : Three nominees of the State Government, three nominees of the Central Government, one representative of the All India Council for Technical Education, Vice Chancellor of the University of Jammu and Kashmir, two industrialists/technologists in the region to be nominated by the State Government, one nominee of the Indian Institute of Technology in the region, one nominee of the University Grants Commission two representatives of the Faculty of the College and the Principal of the college as ex officio member Secretary. The State Government is empowered by rule 10 to remove any member of the Society other than a member representing the State or Central Government from the membership of the Society with the approval of the Central Government. Clause (iv) of Rule 15 confers power on the Board to make bye laws for admission of students to various courses and clause (xiv) of that Rule empowers the Board to delegate to a committee or to the Chairman such of its powers for the conduct of its business as it may deem fit, subject to the condition that the action taken by the committee of the Chairman shall be reported for confirmation at the next meeting of the Board. Clause (xv) of Rule 15 provides that the Board shall 87 have power to consider and pass resolution on the annual report, the annual accounts and other financial estimates of the college, but the annual report and the annual accounts together with the resolution passed thereon are required to be submitted to the State and the Central Governments. The Society is empowered by Rule 24, clause (i) to alter, extend or abridge any purpose or purposes for which it is established, subject to the prior approval of the State and the Central Governments and clause (ii) of Rule 24 provides that the Rules may be altered by a Resolution passed by a majority of 2/3rd of the members present at the meeting of the Society, but such alteration shall be with the approval of the State and the Central Governments. Pursuant to clause (iv) of Rule 15 of the Rules, the Board of Governors laid down the procedure for admission of students to various courses in the college by a Resolution dated 4th June, 1974. We are not directly concerned with the admission procedure laid down by this Resolution save and except that under this Resolution admissions to the candidates belonging to the State of Jammu and Kashmir were to be given on the basis of comparative merit to be determined by holding a written entrance test and a viva voce examination and the marks allocated for the written test in the subjects of English, Physics, Chemistry and Mathematics were 100, while for viva voce examination, the marks allocated were 50 divided as follows: (i) General Knowledge and Awareness 15; (ii) Broad understanding of Specific Phenomenon 15; (iii) Extra curricular activities 10 and (iv) General Personality Trait 10, making up in the aggregate 50. The admissions to the college were governed by the procedure laid down in this Resolution until the academic year 197980, when the procedure was slightly changed and it was decided that out of 250 seats, which were available for admission, 50% of the seats shall be reserved for candidates belonging to the Jammu & Kashmir State and the remaining 50% for candidates belonging to other States including 15 seats reserved for certain categories of students. So far as the seats reserved for candidates belonging to States other than Jammu & Kashmir were concerned, certain reservations were made for candidates belonging to Scheduled Castes and Scheduled Tribes and sons and wards of defence personnel killed or disabled during hostilities and it was provided that "inter se merit will be determined on the basis of marks secured in the subjects of English, Physics, Chemistry and Mathematics only". The provision made with regard to seats reserved for candidates belonging to Jammu & Kashmir State was that "apart from 2 seats reserved for the sons and daughters of the permanent college employees, reservations shall be made in accordance with the 88 Orders of Jammu and Kashmir Government for admission to technical institutions and the seats shall be filled up on the basis of comparative merit as determined under the following scheme, both for seats to be filled on open merit and for reserved seats in each category separately; (1) marks for written test 100 and (2) marks for viva voce examination 50, marking up in the aggregate 150. It was not mentioned expressly that the marks for the written test shall be in the subjects of Physics, English, Chemistry and Mathematics nor were the factors to be taken into account in the viva voce examination and the allocation of marks for such factors indicated specifically in the admission procedure laid down for the academic year 1979 80, but we were told and this was not disputed on behalf of the petitioners in any of the writ petitions, that the subjects in which the written test was held were English, Physics, Chemistry and Mathematics and the marks at the viva voce examination were allocated under the same four heads and in the same manner as in the case of admissions under the procedure laid down in the Resolution dated 4th June, 1974. In or about April 1979, the college issued a notice inviting applications for admission to the first semester of the B.E. course in various branches of engineering and the notice set out the above admission procedure to be followed in granting admissions for the academic year 1979 80. The petitioners in the writ petitions before us applied for admission to the first semester of the B.E. course in one or the other branch of engineering and they appeared in the written test which was held on 16th and 17th June, 1979. The petitioners were thereafter required to appear before a Committee consisting of three persons for viva voce test and they were interviewed by the Committee. The case of the petitioners was that the interview of each of them did not last for more than 2 or 3 minutes per candidate on an average and the only questions which were asked to them were formal questions relating to their parentage and residence and hardly any question was asked which would be relevant to any of the four factors for which marks were allocated at the viva voce examination. When the admissions were announced, the petitioners found that though they had obtained very good marks in the qualifying examination, they had not been able to secure admission to the college because the marks awarded to them at the viva voce examination were very low and candidates who had much less marks at the qualifying examination, had succeeded in obtaining very high marks at the viva voce examination and there by managed to secure admission in preference to the petitioners. The petitioners filed before us a chart showing by way of comparison the marks obtained by the petitioners on the one hand and some of the successful candidates on the other at the qualifying examination, in the written test and at the viva voce exami 89 nation. This chart shows beyond doubt that the successful candidates whose marks are given in the chart had obtained fairly low marks at the qualifying examination as also in the written test, but they had been able to score over the petitioners only on account of very high marks obtained by them at the viva voce examination. The petitioners feeling aggrieved by this mode of selection filed the present writ petitions challenging the validity of the admissions made to the college on various grounds. Some of these grounds stand concluded by the recent decision of this Court in Miss Nishi Maghu vs State of Jammu & Kasmir & Ors. and they were therefore not pressed before us. Of the other grounds, only one was canvassed before us and we shall examine it in some detail. But before we proceed to consider the merits of this ground of challenge, we must dispose of a preliminary objection raised on behalf of the respondents against the maintainability of the writ petition. The respondents contended that the college is run by society which is not a corporation created by a statute but is a society registered under the Jammu & Kashmir Societies Registration Act, 1898 and it is therefore not an 'authority ' within the meaning of article 12 of the Constitution and no writ petition can be maintained against it, nor can any complaint be made that it has acted arbitrarily in the matter of granting admissions and violated the equality clause of the Constitution. Now it is obvious that the only ground on which the validity of the admissions to the college can be assailed is that the society adopted an arbitrary procedure for selecting candidates for admission to the college and this resulted in denial of equality to the petitioners in the matter of admission violative of article 14 of the Constitution. It would appear that prima facie protection against infraction of article 14 is available only against the State and complaint of arbitrariness and denial of equality can therefore be sustained against the society only if the society can be shown to be State for the purpose of article 14. Now 'State ' is defined in article 12 to include inter alia the Government of India and the Government of each of the States and all local or other authorities within the territory of India or under the control of the Government of India and the question therefore is whether the Society can be said to be 'State ' within the meaning of this definition. Obviously the Society cannot be equated with the Government of India or the Government of any State nor can it be said to be a local authority and therefore, it must come within the expression "other authorities" if it is to fall within the definition of 'State '. That immediately leads us to a consideration of the question as to what are the "other authorities" contemplated in the definition of 'State ' in article 13. 90 While considering this question it is necessary to bear in mind that an authority falling within the expression "other authorities" is, by reason of its inclusion within the definition of 'State ' in Article 12, subject to the same constitutional limitations as the Government and is equally bound by the basic obligation to obey the constitutional mandate of the Fundamental Rights enshrined in Part III of the Constitution. We must therefore give such an interpretation to the expression "other authorities" as will not stultify the operation and reach of the fundamental rights by enabling the Government to its obligation in relation to the Fundamental Rights by setting up an authority to act as its instrumentality or agency for carrying out its functions. Where constitutional fundamentals vital to the maintenance of human rights are at stake, functional realism and not facial cosmetics must be the diagnostic tool, for constitutional law must seek the substance and not the form. Now it is obvious that the Government may act through the instrumentality or agency of natural persons or it may employ the instrumentality or agency of juridical persons to carry out its functions. In the early days when the Government had limited functions, it could operate effectively through natural persons constituting its civil service and they were found adequate to discharge governmental functions which were of traditional vintage. But as the tasks of the Government multiplied with the advent of the welfare State, it began to be increasingly felt that the frame work of civil service was not sufficient to handle the new tasks which were often specialised and highly technical in character and which called for flexibility of approach and quick decision making. The inadequacy of the civil service to deal with these new problems came to be realised and it became necessary to forge a new instrumentality or administrative device for handing these new problems. It was in these circumstances and with a view to supplying this administrative need that the corporation came into being as the third arm of the Government and over the years it has been increasingly utilised by the Government for setting, up and running public enterprises and carrying out other public functions. Today with increasing assumption by the Government of commercial ventures and economic projects, the corporation has become an effective legal contrivance in the hands of the Government for carrying out its activities, for it is found that this legal facility of corporate instrument provides considerable flexibility and elasticity and facilitates proper and efficient management with professional skills and on business principles and it is blissfully free from "departmental rigidity, slow motion procedure and hierarchy of officers". The Government in many of its commercial ventures and public enterprises is resorting to more and more frequently to this resourceful legal contrivance of a corporation because it has many practical advantages and at the 91 same time does not involve the slightest diminution in its ownership and control of the undertaking. In such cases "the true owner is the State, the real operator is the State and the effective controllorate is the State and accountability for its actions to the community and to Parliament is of the State. " It is undoubtedly true that the corporation is a distinct juristic entity with a corporate structure of its own and it carries on its functions on business principles with a certain amount of autonomy which is necessary as well as useful from the point of view of effective business management, but behind the formal ownership which is cast in the corporate mould, the reality is very much the deeply pervasive presence of the Government. It is really the Government which acts through the instrumentality or agency of the corporation and the juristic veil of corporate personality worn for the purpose of convenience of management and administration cannot be allowed to obliterate the true nature of the reality behind which is the Government. Now it is obvious that if a corporation is an instrumentality or agency of the Government, it must be subject to the same limitations in the field of constitutional law as the Government itself, though in the eye of the law it would be a distinct and independent legal entity. If the Government acting through its officers is subject to certain constitutional limitations, it must follow a fortiorari that the Government acting through the instrumentality or agency of a corporation should equally be subject to the same limitations. If such a corporation were to be free from the basic obligation to obey the Fundamental Rights, it would lead to considerable erosion of the efficiency of the Fundamental Rights, for in that event the Government would be enabled to over ride the Fundamental Rights by adopting the stratagem of carrying out its functions through the instrumentality or agency of a corporation, while retaining control over it. The Fundamental Rights would then be reduced to little more than an idle dream or a promise of unreality. It must be remembered that the Fundamental Rights are constitutional guarantees given to the people of India and are not merely paper hopes or fleeting promises and so long as they find a place in the Constitution, they should not be allowed to be emasculated in their application by a narrow and constricted judicial interpretation. The courts should be anxious to enlarge the scope and width of the Fundamental Rights by bringing within their sweep every authority which is an instrumentality or agency of the Government or through the corporate personality of which the Government is acting, so as to subject the Government in all its myriad activities, whether through natural persons or through corporate entities, to the basic obligation of the Fundamental Rights. The constitutional philosophy of a democratic socialist republic requires 92 the Government to undertake a multitude of socioeconomic operations and the Government, having regard to the practical advantages of functioning through the legal device of a corporation, embarks on myriad commercial and economic activities by resorting to the instrumentality or agency of a corporation, but this contrivance of carrying on such activities through a corporation cannot exonerate the Government from implicit obedience to the Fundamental Rights. To use the corporate methodology is not to liberate the Government from its basic obligation to respect the Fundamental Rights and not to over ride them. The mantle of a corporation may be adopted in order to free the Government from the inevitable constraints of red tapism and slow motion but by doing so, the Government cannot be allowed to play truant with the basic human rights. Otherwise it would be the easiest thing for the government to assign to a plurality of corporations almost every State business such as Post and Telegraph, TV and Radio, Rail Road and Telephones in short every economic activity and there by cheat the people of India out of the Fundamental Rights guaranteed to them. That would be a mockery of the Constitution and nothing short of treachery and breach of faith with the people of India, because, though apparently the corporation will be carrying out these functions, it will in truth and reality be the Government which will be controlling the corporation and carrying out these functions through the instrumentality or agency of the corporation. We cannot by a process of judicial construction allow the Fundamental Rights to be rendered futile and meaningless and thereby wipe out Chapter III from the Constitution. That would be contrary to the constitutional faith of the post Menaka Gandhi era. It is the Fundamental Rights which along with the Directive Principles constitute the life force of the Constitution and they must be quickened into effective action by meaningful and purposive interpretation. If a corporation is found to be a mere agency or surrogate of the Government, "in fact owned by the Government, in truth controlled by the government and in effect an incarnation of the government," the court must not allow the enforcement of Fundamental Rights to be frustrated by taking the view that it is not the government and therefore not subject to the constitutional limitations. We are clearly of the view that where a corporation is an instrumentality or agency of the government, it must be held to be an 'authority ' within the meaning of article 12 and hence subject to the same basic obligation to obey the Fundamental Rights as the government. We may point out that this very question as to when a corporation can be regarded as an 'authority ' within the meaning of article 12 arose for consideration before this Court in R. D. Shetty vs The International 93 Airport Authority of India & Ores. There, in a unanimous judgment of three Judges delivered by one of us (Bhagwati, J) this Court pointed out: "So far as India is concerned, the genesis of the emergence of corporations as instrumentalities or agencies of Government is to be found in the Government of India Resolution on Industrial Policy dated 6th April, 1948 where it was stated inter alia that "management of State enterprises will as a rule be through the medium of public corporation under the statutory control of the Central Government who will assume such powers as may be necessary to ensure this. " It was in pursuance of the policy envisaged in this and sub sequent resolutions on Industrial policy that corporations were created by Government for setting up and management of public enterprises and carrying out other public functions. Ordinarily these functions could have been carried out by Government departmentally through its service personnel but the instrumentality or agency of the corporation was resorted to in these cases having regard to the nature of the task to be performed. The corporations acting as instrumentality or agency of Government would obviously be subject to the same limitations in the field of constitutional and administrative law as Government itself, though in the eye of the law, they would be distinct and independent legal entities. If Government acting through its officers is subject to certain constitutional and public law limitations, it must follow a fortiori that Government acting through instrumentality or agency of corporations should equally be subject to the same limitations. " The Court then addressed itself to the question as to how to determine whether a corporation is acting as an instrumentality or agency of the Government and dealing with that question, observed: "A corporation may be created in one of two ways. It may be either established by statute or incorporated under a law such as the or the . Where a Corporation is wholly controlled by Government not only in its policy making but also in carrying out the functions entrusted to it by the law establishing it or by the Charter of its incorporation, there can be no doubt that it would be an instrumentality or agency of Government. But ordinarily where a corporation 94 is established by statute, it is autonomous in its working, subject only to a provision, often times made, that it shall be bound by any directions that may be issued from time to time by Government in respect of policy matters. So also a corporation incorporated under law is managed by a board of directors or committee of management in accordance with the provisions of the statute under which it is in corporated. When does such a corporation become an instrumentality or agency of Government? Is the holding of the entire share capital of the Corporation by Government enough or is it necessary that in addition there should be a certain amount of direct control exercised by Government and, if so what should be the nature of such control? Should the functions which the Corporation is charged to carry out possess any particular characteristic or feature, or is the nature of the functions immaterial? Now, one thing is clear that if the entire share capital of the corporation is held by Government, it would go a long way towards indicating that the corporation is an instrumentality or agency of Government. But, as is quite often the case, a corporation established by statute may have no shares or shareholders, in which case it would be a relevant factor to consider whether the administration is in the hands of a board of directors appointed by Government though this consideration also may not be determinative, because even where the directors are appointed by Government, they may be completely free from governmental control in the discharge of their functions. What then are tests to determine whether a corporation established by statute or incorporated under law is an instrumentality or agency of Government ? It is not possible to formulate an inclusive or exhaustive test which would adequately answer this question. There is no cut and dried formula, which would provide the correct division of corporations into those which are instrumentalities or agencies of Government and those which are not." The Court then proceeded to indicate the different tests, apart from ownership of the entire share capital: " . if extensive and unusual financial assistance is given and the purpose of the Government in giving such assistance coincides with the purpose for which the corporation is expected to use the assistance and such purpose is of 95 public character, it may be a relevant circumstance supporting an inference that the corporation is an instrumentality or agency of Government. . It may therefore be possible to say that where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with governmental character . . But a finding of State financial support plus an unusual degree of control over the management and policies might lead one to characterise an operation as State action Vide Sukhdev vs Bhagatram ; at 658. So also the existence of deep and pervasive State control may afford an indication that the Corporation is a State agency or instrumentality. It may also be a relevant factor to consider whether the corporation enjoys monopoly status which is State conferred or State protected. There can be little doubt that State conferred or State protected monopoly status would be highly relevant in assessing the aggregate weight of the corporation 's ties to the State." "There is also another factor which may be regarded as having a bearing on this issue and it is whether the operation of the corporation is an important public function. It has been held in the United States in a number of cases that the concept of private action must yield to a conception of State action where public functions are being performed. Vide Arthur section Miller: "The Constitutional Law of the Security State" (10) Stanford Law Review 620 at 664)." "It may be noted that besides the so called traditional functions, the modern state operates as multitude of public enterprises and discharges a host of other public functions. If the functions of the corporation are of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government. This is precisely what was pointed out by Mathew, J., in Sukhdev vs Bhagatram (supra) where the learned Judge said that "institutions engaged in matters of high public interest of performing public functions are by virtue of the nature of the functions performed government agencies. Activities which are too fundamental to the society are by definition too important not to be considered government functions. " 96 The court however proceeded to point out with reference to the last functional test: ". . the decisions show that even this test of public or governmental character of the function is not easy of application and does not invariably lead to the correct inference because the range of governmental activity is broad and varied and merely because an activity may be such as may legitimately be carried on by Government, it does not mean that a corporation, which is otherwise a private entity, would be an instrumentality or agency of Government by reason of carrying on such activity. In fact, it is difficult to distinguish between governmental functions and non governmental functions. Perhaps the distinction between governmental and non governmental functions is not valid any more in a social welfare State where the laissez faire is an outmoded concept and Herbert Spencer 's social statics has no place. The contrast is rather between governmental activities which are private and private activities which are governmental. [Mathew, J. Sukhdev vs Bhagatram (supra) at p. 652]. But the public nature of the function, if impregnated with governmental character or "tied or entwined with Government" or fortified by some other additional factor, may render the corporation an instrumentality or agency of Government. Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of the inference. " These observations of the court in the International Airport Authority 's case (supra) have our full approval. The tests for determining as to when a corporation can be said to be a instrumentality or agency of Government may now be called out from the judgment in the International Airport Authority 's case. These tests are not conclusive or clinching, but they are merely indicative indicia which have to be used with care and caution, because while stressing the necessity of a wide meaning to be placed on the expression "other authorities", it must be realised that it should not be stretched so far as to bring in every autonomous body which has some nexus with the Government within the sweep of the expression. A wide enlargement of the meaning must be tempered by a wise limitation. We may summarise the relevant tests gathered from the decision in the International Airport Authority 's case as follows (1) "One thing is clear that if the entire share capital of the corporation is held by Government it would go a long 97 way towards indicating that the corporation is an instrumentality or agency of Government." (2) "Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with governmental character." (3) "It may also be a relevant factor. .whether the corporation enjoys monopoly status which is the State conferred or State protected." (4) "Existence of deep and pervasive State control may afford an indication that the Corporation is a State agency or instrumentality." (5) "If the functions of the corporation of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government." (6) "Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference of the corporation being an instrumentality or agency of Government. " If on a consideration of these relevant factors it is found that the corporation is an instrumentality or agency of government, it would, as pointed out in the International Airport Authority 's case, be an 'authority ' and, therefore, 'State ' within the meaning of the expression in Article 12. We find that the same view has been taken by Chinnappa Reddy, J. in a subsequent decision of this court in the U. P. Warehousing Corporation vs Vijay Narain and the observations made by the learned Judge in that case strongly reinforced the view we are taking particularly in the matrix of our constitutional system. We may point out that it is immaterial for this purpose whether the corporation is created by a statute or under a statute. The test is whether it is an instrumentality or agency of the Government and not as to how it is created. The inquiry has to be not as to how the juristic person is born but why it has been brought into existence. The corporation may be a statutory corporation created by a statute or it may be a Government Company or a company formed under the or it may be a society registered under the or any other similar statute. Whatever be its genetical origin, it would be an "authority" within the meaning of Article 12 if it is an instrumentality or agency of the Government and that would 98 have to be decided on a proper assessment of the facts in the light of the relevant factors. The concept of instrumentality or agency of the Government is not limited to a corporation created by a statute but is equally applicable to a company or society and in a given case it would have to be decided, on a consideration of the relevant factors, whether the company or society is an instrumentality or agency of the Government so as to come within the meaning of the expression "authority" in Article 12. It is also necessary to add that merely because a juristic entity may be an "authority" and therefore "State" within the meaning of Article 12, it may not be elevated to the position of "State" for the purpose of Articles 309, 310 and 311 which find a place in The definition of "State" in Article 12 which includes an "authority" within the territory of India or under the control of the Government of India is limited in its application only to and by virtue of Article 36, to it does not extend to the other provisions of the Constitution and hence a juristic entity which may be "State" for the purpose of Parts III and IV would not be so for the purpose of Part XIV or any other provision of the Constitution. That is why the decisions of this Court in section L. Aggarwal vs Hindustan Steel Ltd. and other cases involving the applicability of Article 311 have no relevance to the issue before us. The learned counsel appearing on behalf of the respondents Nos. 6 to 8, however, relied strongly on the decision in Sabhajit Tewary vs Union of India & Ors(2) and contended that this decision laid down in no uncertain terms that a society registered under the can never be regarded as an "authority" within the meaning of Article 12. This being a decision given by a Bench of five Judges of this Court is undoubtedly binding upon us but we do not think it lays down any such proposition as is contended on behalf of the respondents. The question which arose in this case was as to whether the Council of Scientific and Industrial Research which was juridically a society registered under the was an "authority" within the meaning of Article 12. The test which the Court applied for determining this question was the same as the one laid down in the International Airport Authority 's case and approved by us, namely, whether the Council was an instrumentality or agency of the Government. The Court implicitly assented to the proposition that if the Council were an agency of the Government, it would undoubtedly be an "authority". But, having regard to the various 99 features enumerated in the judgment, the Court held that the Council was not an agency of the Government and hence could not be regarded as an "authority". The Court did not rest its conclusion on the ground that the Council was a society registered under the , but proceeded to consider various other features of the Council for arriving at the conclusion that it was not an agency of the Government and therefore not an "authority". This would have been totally unnecessary if the view of the Court were that a society registered under the can never be an "authority" within the meaning of Article 12. The decision in Sukhdev Singh vs Bhagat Ram ; was also strongly relied upon by the learned counsel for respondents Nos. 6 to 8 but we fail to see how this decision can assist the respondents in repelling the reasoning in the International Airport Authority 's case or contending that a company or society formed under a statute can never come within the meaning of the expression "authority" in Article 12. That was a case relating to three juristic bodies, namely, the Oil and Natural Gas Commission, the Industrial Finance Corporation and the Life Insurance Corporation and the question was whether they were "State" under Article 12. Each of these three juristic bodies was a corporation created by a statute and the Court by majority held that they were "authorities" and therefore "State" within the meaning of Article 12. The Court in this case was not concerned with the question whether a company or society formed under a statute can be an "authority" or not and this decision does not therefore contain anything which might even remotely suggest that such a company or society can never be an "authority". On the contrary, the thrust of the logic in the decision, far from being restrictive, applies to all juristic persons alike, irrespective whether they are created by a statute or formed under a statute. It is in the light of this discussion that we must now proceed to examine whether the Society in the present case is an "authority" falling within the definition of "State" in Article 12. Is it an instrumentality or agency of the Government? The answer must obviously be in the affirmative if we have regard to the Memorandum of Association and the Rules of the Society. The composition of the Society is dominated by the representatives appointed by the Central Government and the Governments of Jammu & Kashmir, Punjab, Rajasthan and Uttar Pradesh with the approval of the Central Government. The monies required for running the college are provided entirely by the Central Government and the Government of Jammu & Kashmir and even if any other monies are to be received by the 100 Society, it can be done only with the approval of the State and the Central Governments. The Rules to be made by the Society are also required to have the prior approval of the State and the Central Governments and the accounts of the Society have also to be submitted to both the Governments for their scrutiny and satisfaction. The Society is also to comply with all such directions as may be issued by the State Government with the approval of the Central Government in respect of any matters dealt with in the report of the Reviewing Committee. The control of the State and the Central Governments is indeed so deep and pervasive that no immovable property of the Society can be disposed of in any manner without the approval of both the Governments. The State and the Central Governments have even the power to appoint any other person or persons to be members of the Society and any member of the Society other than a member representing the State or the Central Government can be removed from the membership of the Society by the State Government with the approval of the Central Government. The Board of Governors, which is in charge of general superintendence, direction and control of the affairs of Society and of its income and property is also largely controlled by nominees of the State and the Central Governments. It will thus be seen that the State Government and by reason of the provision for approval, the Central Government also, have full control of the working of the Society and it would not be incorrect to say that the Society is merely a projection of the State and the Central Governments and to use the words of Ray, C.J. in Sukhdev Singh 's case (supra), the voice is that of the State and the Central Governments and the hands are also of the State and the Central Governments. We must, therefore, hold that the Society is an instrumentality or agency of the State and the Central Governments and it is an 'authority ' within the meaning of article 12. If the Society is an "authority" and therefore "State" within the meaning of Article 12, it must follow that it is subject to the constitutional obligation under Article 14. The true scope and ambit of Article 14 has been the subject matter of numerous decisions and it is not necessary to make any detailed reference to them. It is sufficient to state that the content and reach of Article 14 must not be confused with the doctrine of classification. Unfortunately, in the early stages of the evolution of our constitutional law, Article 14 came to be identified with the doctrine of classification because the view taken was that Article forbids discrimination and there would be no discrimination where the classification making the differentia fulfils two conditions, namely, (i) that the classification is founded on an intelligible differentia which distinguishes persons or things 101 that are grouped together from others left out of the group; and (ii) that differentia has a rational relation to the object sought to be achieved by the impugned legislative or executive action. It was for the first time in E.P. Royappa vs State of Tamil Nadu that this Court laid bare a new dimension of Article 14 and pointed out that Article has highly activist magnitude and it embodies a guarantee against arbitrariness. This Court speaking through one of us (Bhagwati, J.) said : "The basic principle which therefore informs both Articles 14 and 16 is equality and inhibition against discrimination. Now, what is the content and reach of this great equalising principle ? It is a founding faith, to use the words of Bose, J., "a way of life", and it must not be subjected to a narrow pedantic or lexicographic approach. We cannot countenance any attempt to truncate its all embracing scope and meaning, for to do so would be to violate its activist magnitude. Equality is a dynamic concept with many aspects and dimensions and it cannot be "cribbled, cabined and confined" within traditional and doctrinaire limits. From a positivistic point of view, equality is antithetic to arbitrariness. In fact, equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch. 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 arbitrariness in State action and ensure fairness and equality of treatment." This vital and dynamic aspect which was till then lying latent and submerged in the few simple but pregnant words of Article 14 was explored and brought to light in Royappa 's case and it was reaffirmed and elaborated by this Court in Maneka Gandhi vs Union of India where this Court again speaking through one of us (Bhagwati, J.) observed : "Now the question immediately arises as to what is the requirement of Article 14 : what is the content and reach of the great equalising principle enunciated is this article ? There can be no doubt that it is a founding faith of the 102 Constitution. It is indeed the pillar on which rests securely the foundation of our democratic republic. And, therefore, it must not be subjected to a narrow, pedantic or lexicographic approach. No attempt should be made to truncate its all embracing scope and meaning for, to do so would be to violate its activist magnitude. Equality is a dynamic concept with many aspects and dimensions and it cannot be imprisoned within traditional and doctrinaire limits. . . Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. The principle of reasonableness, which legally as well as philosophically, is an essential element of equality or non arbitrariness pervades Article 14 like a brooding omnipresence. " This was again reiterated by this Court in International Airport Authority 's case (supra) at page 1042 of the Report. It must therefore now be taken to be well settled that what Article 14 strikes at is arbitrariness because any action that is arbitrary, must necessarily involve negation of equality. The doctrine of classification which is evolved by the courts is not para phrase of Article 14 nor is it the objective and end of that Article. It is merely a judicial formula for determining whether the legislative or executive action in question is arbitrary and therefore constituting denial of equality. If the classification is not reasonable and does not satisfy the two conditions referred to above, the impugned legislative or executive action would plainly be arbitrary and the guarantee of equality under Article 14 would be breached. Wherever therefore there is arbitrariness in State action whether it be of the legislature or of the executive or of "authority" under Article 12, Article 14 immediately springs into action and strikes down such State action. In fact, the concept of reasonableness and non arbitrariness pervades the entire constitutional scheme and is a golden thread which runs though the whole of the fabric of the Constitution. We may now turn to the merits of the controversy between the parties. Though several contentions were urged in the writ petitions, challenging the validity of the admissions made to the college, they were not all pressed before us and the principal contention that was advanced was that the society acted arbitrarily in the matter of granting of admissions, first by ignoring the marks obtained by the candidates at the qualifying examination; secondly by relying on viva voce examination as a test for determining comparative merit of the candidates; thirdly by allocating as many as 50 marks for the viva voce examination as against 100 marks allocated for the written test and 103 lastly, by holding superficial interviews lasting only 2 or 3 minutes on an average and asking questions which had no relevance to assessment of the suitability of the candidates with reference to the four factors required to be considered at the viva voce examination. Now so far as the challenge on the first count is concerned, we do not think it is at all well founded. It is difficult to appreciate how a procedure for admission which does not take into account the marks obtained at the qualifying examination, but prefers to test the comparative merit of the candidates by insisting on an entrance examination can ever be said to be arbitrary. It has been pointed out in the counter affidavit filed by H. L. Chowdhury on behalf of the college that there are two universities on two different dates and the examination by the Board of Secondary Education for Jammu is also held on a different date than the examination by the Board of Secondary Education for Kashmir and the results of these examinations are not always declared before the admissions to the college can be decided. The College being the only institution for education in engineering courses in the State of Jammu & Kashmir has to cater to the needs of both the regions and it has, therefore, found it necessary and expedient to regulate admissions by holding an entrance test, so that the admission process may not be held up on account of late declaration of results of the qualifying examination in either of the two regions. The entrance test also facilitates the assessment of the comparative talent of the candidates by application of a uniform standard and is always preferable to evaluation of comparative merit on the basis of marks obtained at the qualifying examination, when the qualifying examination is held by two or more different authorities, because lack of uniformity is bound to creep into the assessment of candidates by different authorities with different modes of examination. We would not, therefore, regard the procedure adopted by the society as arbitrary merely because it refused to take into account the marks obtained by the candidates at the qualifying examination, but chose to regulate the admissions by relying on the entrance test. The second ground of challenge questioned the validity of viva voce examination as a permissible test for selection of candidates for admission to a college. The contention of the petitioners under this ground of challenge was that viva voce examination does not afford a proper criterion for assessment of the suitability of the candidates for admission and it is a highly subjective and impressionistic test where the result is likely to be influenced by many uncertain and imponderable factors such as predelictions and prejudices of the interviewers, his attitudes and approaches, his pre conceived notions and idiosyncrasies and it is also capable of abuse because it leaves scope 104 for discrimination, manipulation and nepotism which can remain undetected under the cover of an interview and moreover it is not possible to assess the capacity and calibre of a candidate in the course of an interview lasting only for a few minutes and, therefore, selections made on the basis of oral interview must be regarded as arbitrary and hence violative of article 14. Now this criticism cannot be said to be wholly unfounded and it reflects a point of view which has certainly some validity. We may quote the following passage from the book on "Public Administration in Theory and Practice" by M. P. Sharma which voices a far and balanced criticism of the oral interview method : "The oral test of the interview has been much criticised on the ground of its subjectivity and uncertainty. Different interviews have their own notions of good personality. For some, it consists more in attractive physical appearance and dress rather than anything else, and with them the breezy and shiny type of candidate scores highly while the rough uncut diamonds may go unappreciated. The atmosphere of the interview is artificial and prevents some candidates from appearing at their best. Its duration is short, the few questions of the hit or miss type, which are put, may fail to reveal the real worth of the candidate. It has been said that God takes a whole life time to judge a man 's worth while interviewers have to do it in a quarter of an hour. Even at it 's best, the common sort of interview reveals but the superficial aspects of the candidate 's personality like appearance, speaking power, and general address. Deeper traits of leadership, tact, forcefulness, etc. go largely undetected. The interview is often in the nature of desultory conversation. Marking differs greatly from examiner to examiner. An analysis of the interview results show that the marks awarded to candidates who competed more than once for the same service vary surprisingly. All this shows that there is a great element of chance in the interview test. This becomes a serious matter when the marks assigned to oral test constitute a high proportion of the total marks in the competition. 01 Glenn Stahl points out in his book on "Public Personnel Administration" that there are three disadvantages from which the oral test method suffers, namely, "(1) the difficulty of developing valid and reliable oral tests; (2) the difficulty of securing a reviewable record on an oral test; and (3) public suspicion of the oral test as a channel 105 for the exertion of political influence" and we may add, other corrupt, nepotistic or extraneous considerations. The learned author then proceeds to add in a highly perceptive and critical passage : "The oral examination has failed in the past in direct proportion to the extent of its misuse. It is a delicate instrument and, in inexpert hands, a dangerous one. The first condition of its successful use is the full recognition of its limitations. One of the most prolific sources of error in the oral has been the failure on the part of examiners to understand the nature of evidence and to discriminate between that which was relevant, material and reliable and that which was not. It also must be remembered that the best oral interview provides opportunity for analysis of only a very small part of a person 's total behaviour. Generalizations from a single interview regarding an individual 's total personality pattern have been proved repeatedly to be wrong. " But, despite all this criticism, the oral interview method continues to be very much in vogue as a supplementary test for assessing the suitability of candidates wherever test of personal traits is considered essential. Its relevance as a test for determining suitability based on personal characteristics has been recognised in a number of decisions of this Court which are binding upon us. In the first case on the point which came before this Court, namely, R. Chitra Lekha and Others vs State of Mysore and Others this Court pointed out : "In the field of education there are divergent views as regards the mode of testing the capacity and calibre of students in the matter of admissions to colleges. Orthodox educationists stand by the marks obtained by a student in the annual examination. The modern trend of opinion insists upon other additional tests, such as interview, performance in extra curricular activities, personality test, psychiatric tests etc. Obviously we are not in a position to judge which method is preferable or which test is the correct one. . . . . . . . . . The scheme of selection, however, perfect it may be on paper, may be abused in practice. That it is capable of abuse is not a ground for quashing it. So long as the order lays down relevant objective criteria and entrusts the business of selection to quali 106 fied persons, this Court cannot obviously have any say in the matter. and on this view refused to hold the oral interview test as irrelevant or arbitrary. It was also pointed out by this Court in A. Peeriakaruppan vs State of Tamil Nadu & Ors : "In most cases, the first impression need not necessarily be the past impression, but under the existing conditions, we are unable to accede to the contentions of the petitioners that the system of interview as in vogue in this country is so defective as to make it useless. " It is therefore not possible to accept the contentions of the petitioners that the oral interview test is so defective that selecting candidates for admission on the basis of oral interview in addition to written test must be regarded as arbitrary. The oral interview test is undoubtedly not a very satisfactory test for assessing and evaluating the capacity and calibre of candidates, but in the absence of any better test for measuring personal characteristics and traits, the oral interview test must, at the present stage, be regarded as not irrational or irrelevant though it is subjective and based on first impression, its result is influenced by many uncertain factors and it is capable of abuse. We would, however, like to point out that in the matter of admission to college or even in the matter of public employment, the oral interview test as presently held should not be relied upon as an exclusive test, but it may be resorted to only as an additional or supplementary test and, moreover, great care must be taken to see that persons who are appointed to conduct the oral interview test are men of high integrity, calibre and qualification. So far as the third ground of challenge is concerned, we do not think it can be dismissed as unsubstantial. The argument of the petitioners under this head of challenge was that even if oral interview may be regarded in principle as a valid test for selection of candidates for admission to a college, it was in the present case arbitrary and unreasonable since the marks allocated for the oral interview were very much on the higher side as compared with the marks allocated for the written test. The marks allocated for the oral interview were 50 as against 100 allocated for the written test, so that the marks allocated for the oral interview came to 33 1/3% of the total number of marks taken into account for the purpose of making the selection. This, contended the petitioners, was beyond all reasonable proportion and rendered the selection of the candidates arbitrary and violative of the equality clause of the Constitution. Now there can be no doubt that, 107 having regard to the drawbacks and deficiencies in the oral interview test and the conditions prevailing in the country, particularly when there is deterioration in moral values and corruption and nepotism are very much on the increase, allocation of a high percentage of marks for the oral interview as compared to the marks allocated for the written test, cannot be accepted by the Court as free from the vice of arbitrariness. It may be pointed out that even in Peeriakaruppan 's case (supra), where 75 marks out of a total of 275 marks were allocated for the oral interview, this Court observed that the marks allocated for interview were on the high side. This Court also observed in Miss Nishi Maghu 's case (supra): "Reserving 50 marks for interview out of a total of 150. does seem excessive, especially when the time spent was not more than 4 minutes on each candidate". There can be no doubt that allocating 33 1/3 of the total marks for oral interview is plainly arbitrary and unreasonable. It is significant to note that even for selection of candidates for the Indian Administrative Service, the Indian Foreign Service and the Indian Police Service, where the personality of the candidate and his personal characteristics and traits are extremely relevant for the purpose of selection, the marks allocated for oral interview are 250 as against 1800 marks for the written examination, constituting only 12.2% of the total marks taken into consideration for the purpose of making the selection. We must, therefore, regard the allocation of as high a percentage as 33 1/3 of the total marks for the oral interview as infecting the admission procedure with the vice of arbitrariness and selection of candidates made on the basis of such admission procedure cannot be sustained. But we do not think we would be justified in the exercise of our discretion in setting aside the selections made for the academic year 1979 80 after the lapse of a period of about 18 months, since to do so would be to cause immense hardship to those students in whose case the validity of the selection cannot otherwise be questioned and who have nearly completed three semesters and, moreover, even if the petitioners are ultimately found to be deserving of selection on the application of the proper test, it would not be possible to restore them to the position as if they were admitted for the academic year 1979 80, which has run out long since. It is true there is an allegation of mala fides against the Committee which interviewed the candidates and we may concede that if this allegation were established, we might have been inclined to interfere with the selections even after the lapse of a period of 18 months, because the writ petitions were filed as early as October November, 1979 and merely because the Court could not take up the hearing of the writ petitions for such a long time should be no ground for denying relief to the petitioners, if they are otherwise so entitled. But we do not think that on the material placed before us we can 108 sustain the allegation of mala fides against the Committee. It is true, and this is a rather disturbing feature of the present cases, that a large number of successful candidates succeeded in obtaining admission to the college by virtue of very high marks obtained by them at the viva voce examination tilted the balance in their favour, though the marks secured by them at the qualifying examination were much less than those obtained by the petitioners and even in the written test, they had fared much worse than the petitioners. It is clear from the chart submitted to us on behalf of the petitioners that the marks awarded at the interview are by and large in inverse proportion to the marks obtained by the candidates at the qualifying examination and are also, in a large number of cases, not commensurate with the marks obtained in the written test. The chart does create a strong suspicion in our mind that the marks awarded at the viva voce examination might have been manipulated with a view to favouring the candidates who ultimately came to be selected, but suspicion cannot take the place of proof and we cannot hold the plea of mala fides to be established. We need much more cogent material before we can hold that the Committee deliberately manipulated the marks at the viva voce examination with a view to favouring certain candidates as against the petitioners. We cannot, however, fail to mention that this is a matter which required to be looked into very carefully and not only the State Government, but also the Central Government which is equally responsible for the proper running of the college, must take care to see that proper persons are appointed on the interviewing committees and there is no executive interference with their decision making process. We may also caution the authorities that though, in the present case, for reasons which we have already given, we are not interfering with the selection for the academic year 1979 80, the selections made for the subsequent academic years would run the risk of invalidation if such a high percentage of marks is allocated for the oral interview. We are of the view that, under the existing circumstances, allocation of more than 15% of the total marks for the oral interview would be arbitrary and unreasonable and would be liable to be struck down as constitutionally invalid. The petitioners, arguing under the last ground of challenge, urged that the oral interview as conducted in the present case was a mere pretence or farce, as it did not last for more than 2 or 3 minutes per candidate on an average and the questions which were asked were formal questions relating to parentage and residence of the candidate and hardly any question was asked which had relevance to assessment of the suitability of the candidate with reference to any of the four factors required to be considered by the Committee. When the time spent on each candidate was not more 2 or 3 minutes on an average, 109 contended the petitioners, how could the suitability of the candidate be assessed on a consideration of the relevant factors by holding such an interview and how could the Committee possibly judge the merit of the candidate with reference to these factors when no questions bearing on these factors were asked to the candidate. Now there can be no doubt that if the interview did not take more than 2 or 3 minutes on an average and the questions asked had no bearing on the factors required to be taken into account, the oral interview test would be vitiated, because it would be impossible in such an interview to assess the merit of a candidate with reference to these factors. This allegation of the petitioners has been denied in the affidavit in reply filed by H. L. Chowdhury on behalf of the college and it has been stated that each candidate was interviewed for 6 to 8 minutes and "only the relevant questions on the aforesaid subjects were asked". If this statement of H. L. Chowdhury is correct, we cannot find much fault with the oral interview test held by the Committee. But we do not think we can act on this statement made by H. L. Chowdhury, because there is nothing to show that he was present at the interviews and none of the three Committee members has come forward to make an affidavit denying the allegation of the petitioners and stating that each candidate was interviewed for 6 to 8 minutes and only relevant questions were asked. We must therefore, proceed on the basis that the interview of each candidate did not last for more than 2 or 3 minutes on an average and hardly any questions were asked having bearing on the relevant factors. If that be so, the oral interview test must be held to be vitiated and the selection made on the basis of such test must be held to be arbitrary. We are, however, not inclined for reasons already given, to set aside the selection made for the academic year 1979 80, though we may caution the State Government and the Society that for the future academic years, selections may be made on the basis of observation made by us in this judgment lest they might run the risk of being struck down. We may point out that, in our opinion, if the marks allocated for the oral interview do not exceed 15% of the total marks and the candidates are properly interviewed and relevant questions are asked with a view to assessing their suitability with reference to the factors required to be taken into consideration, the oral interview test would satisfy the criterion of reasonableness and non arbitrariness. We think that it would also be desirable if the interview of the candidates is tape recorded, for in that event there will be contemporaneous evidence to show what were the questions asked to the candidates by the interviewing committee and what were the answers given and that will eliminate a lot of unnecessary controversy besides acting as a check on the possible arbitrariness of the interviewing committee. 110 We may point out that the State Government, the Society and the College have agreed before us that the best fifty students, out of those who applied for admission for the academic year 1979 80 and who have failed to secure admission so far, will be granted admission for the academic year 1981 82 and the seats allocated to them will be in addition to the normal intake of students in the College. We order accordingly. Subject to the above direction, the writ petitions are dismissed, but having regard to the facts and circumstances of the present cases, we think that a fair order of costs would be that each party should bear and pay its own costs of the writ petitions. S.R. Petitions dismissed.

Dismissing the writ petitions, the Court ^ HELD : (1). Having regard to the Memorandum of Association and the Rules of the Society, the respondent college is a State within the meaning of Article 12. The composition of the Society is dominated by the representatives appointed by the Central Government and the Governments of Jammu & Kashmir, Punjab, Rajasthan and Uttar Pradesh with the approval of the Central Government. The monies required for running the college are provided entirely by the Central Government and the Government of Jammu & Kashmir and even if any other monies are to be received by the Society, it can be done only with the approval of the State and the Central Governments. The Rules to be made by the Society are also required to have the prior approval of the State and the Central Governments and the accounts of the Society have also to be submitted to both the Governments for their scrutiny and satisfaction. The Society is also to comply with all such directions as may be issued by the State Government with the approval of the Central Government in respect of any matters dealt with in the report of the Reviewing Committee. The control of the State and the Central Governments is indeed so deep and pervasive that no immovable property of the Society can be disposed of in any manner without the approval of both the Governments. The State and the Central Governments have even the power to appoint any other person or persons to be members of the Society and any member of the Society other than a member representing the State or the Central Government can be removed from the membership of the Society by the State Government with the approval of the Central Government. The Board of Governors, which is incharge of general superintendence, direction and control of the affairs of the Society and of its income and property is also largely controlled by nominees of the State and the Central Governments. The State Government and by reason of the provision for approval, the Central Government also thus have full control of the work 80 ing of the Society and therefore, the Society is merely a projection of the State and the Central Governments. The voice is that of the State and the Central Governments. The Society is an instrumentality or the agency of the State and the Central Governments and it is an "authority" within the meaning of Article 12. If the Society is, an "authority" and, therefore, the "State" within the meaning of Article 12, it must follow that it is subject to the constitutional obligation under Article 14. [99F H, 100 K F] (2) The expression "other authorities", in Article 12 must be given an interpretation where constitutional fundamentals vital to the maintenance of human rights are at stake, functional realism and not facial cosmetics must be the diagnostic tool, for constitutional law must seek the substance and not the form. The Government may act through the instrumentality or agency of juridical persons to carry out its functions, since, with the advent of the welfare State its new task have increased manifold. [90B D] It is, undoubtedly, true that the corporation is a distinct juristic entity with a corporate structure of its own and it carries on its functions on business principles with a certain amount of autonomy which is necessary as well as useful from the point of view of effective business management, but behind the formal ownership which is cast in the corporate mould, the reality is very much the deeply pervasive presence of the Government. It is really the Government which acts through the instrumentality or agency of the corporation and the juristic veil of corporate personality worn for the purpose of convenience of management and administration cannot be allowed to obliterate the true nature of the reality behind which is the Government. It is clear that if a corporation is an instrumentality or agency of the Government, it must be subject to the same limitations in the field of constitutional law as the Government itself, though in the eye of the law it would be a distinct and independent legal entity. If the Government acting through its officers is subject to certain constitutional limitations, it must follow a fortiorari that the Government acting through the instrumentality or agency of a corporation should equally be subject to the same limitations. If such a corporation were to be free from the basic obligation to obey the Fundamental Rights, it would lead to considerable erosion of the efficiency of the Fundamental Rights, for in that event the Government would be enabled to override the Fundamental Rights by adopting the stratagem of carrying out its functions through the instrumentality or agency of a corporation, while retaining control over it. The Fundamental Rights would then be reduced to little more than an idle dream or a promise of unreality. [91B F] The Courts should be anxious to enlarge the scope and width of the Fundamental Rights by bringing within their sweep every authority which is an instrumentality or agency of the Government or through the corporate personality of which the Government is acting, so as to subject the Government in all its myriad activities, whether through natural persons or through corporate entities, to the basic obligation of the Fundamental Rights. The constitutional philosophy of a democratic socialist republic requires the Government to under take a multitude of socioeconomic operations and the Government, having regard to the practical advantages of functioning through the legal device of a corporation, embarks on myriad commercial and economic activities by resorting to the instrumentality or agency of a corporation, but this contrivance of carrying on such activities through a corporation cannot exonerate the Government from implicit obedience to the Fundamental Rights. To use the 81 corporate methodology is not to liberate the Government from its basic obligation to respect the Fundamental Rights and not to override them. The mantle of a corporation may be adopted in order to free the Government from the inevitable constraints of red tapism and slow motion but by doing so, the Government cannot be allowed to play truant with the basic human rights, otherwise it would be the easiest thing for the government to assign to a plurality of corporations almost every State business such as Post and Telegraph, TV, Radio, Rail, Road and Telephones in short every economic activity and thereby cheat the people of India out of the Fundamental Rights guaranteed to them. That would be a mockery of the Constitution and nothing short of treachery and breach of faith with the people of India, because though apparently the corporation will be carrying out these functions, it will in truth and reality be the Government which will be controlling the corporation and carrying out these functions through the instrumentality or agency of the corporation. Courts cannot by a process of judicial construction allow the Fundamental Rights to be rendered futile and meaningless and there by wipe out Chapter III from the Constitution. That would be contrary to the constitutional faith of the post Menaka Gandhi era. It is the Fundamental Rights which along with the Directive Principles constitute the life force of the Constitution and they must be quickened into effective action by meaningful and purposive interpretation. If a corporation is found to be a mere agency or surrogate of the Government, "in fact owned by the Government, in truth controlled by the government and in effect an incarnation of the government," the court must not allow the enforcement of Fundamental Rights to be frustrated by taking the view that it is not the government and, therefore, not subject to the constitutional limitations. Therefore, where a corporation is an instrumentality or agency of the Government, it is an authority within the meaning of Article 12 and, hence, subject to the same basic obligation to obey the Fundamental Rights as the government. [91G H, 92A G] R. D. Shetty vs The International Airport Authority of India & Ors., and U.P. Warehousing Corporation vs Vijay Narain, ; , followed. (3) The test for determining as to when a corporation can be said to be an instrumentality or agency of Government may be culled out from the judgment in the International Airport Authority 's case. They are not conclusive or clinching, but they are merely indicative indicia which have to be used with care and caution, because while stressing the necessity of a wide meaning to be placed on the expression "other authorities", it must be realised that it should not be stretched so far as to bring in every autonomous body which has some nexus with the Government with the sweep of the expression. A wide enlargement of the meaning must be tempered by a wise limitation. The relevant tests gathered from the decision in the International Airport Authority 's case may be summarized as: (i) "One thing is clear that if the entire share capital of the corporation is held by Government it would go a long way towards indicating that the Corporation is an instrumentality or agency of Government. (ii) 'Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with governmental character. ' (iii) 'It may also be a relevant factor. whether the corporation enjoys monopoly status which is the State conferred or State protected. ' (iv) 'Existence of 'deep and pervasive State control may afford an indication that the Corporation is a state 82 agency or instrumentality. ' (v) 'If the functions of the corporation of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation an instrumentality or agency of Government. ' (vi) 'Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference" of the corporation being an instrumentality or agency of Government. "[96F H, 97A D] It is immaterial for this purpose whether the corporation is created by a statute or under a statute. The test is whether it is an instrumentality or agency of the Government and not as to how it is created. The enquiry has to be not as to how the juristic person is born but why it has been brought into existence. The corporation may be a statutory corporation created by a statute or it may be a Government company or a company formed under the or it may be a society registered under the or any other similar statute. Whatever be its genetical origin, it would be an "authority" within the meaning of Article 12 if it is an instrumentality or agency of the Government and that would have to be decided on a proper assessment of the facts in the light of the relevant factors. The concept of instrumentality or agency of the Government is not limited to a corporation created by a statute but is equally applicable to a company or society and in a given case it would have to be decided, on a consideration of the relevant factors, whether the company or society is an instrumentality or agency of the Government so as to come within the meaning of the expression "authority" in Article 12. [97F H, 98A B] (4) Merely because a juristic entity may be an "authority" and, therefore, "State" within the meaning of Article 12, it may not be elevated to the position of "State" for the purpose of Articles 309, 310 and 311 which find a place in The definition of "State" in Article 12 which includes an "authority" within the territory of India or under the control of the Government of India is limited in its application only to and by virtue of Article 36, to and it does not extend to the other provisions of the Constitution and, hence, a juristic entity which may be "State" for the purpose of Parts III and IV would not be so for the purpose of Part XIV or any other provision of the Constitution. [98B D] section L. Aggarwal vs Hindustan Steel Ltd., [1970] 3 S.C.R. 365; Sabhajit Tewary vs Union of India & Ors., and Sukhdev Singh vs Bhagat Ram, [1975] 3 S.C.R. 619, explained and distinguished. (5) Article 14 must not be identified with the doctrine of classification. What Article 14 strikes at is arbitrariness because any action that is arbitrary, must necessarily involve negation of equality. The doctrine of classification which is evolved by the courts is not para phrase of Article 14 nor is it the objective and end of that Article. It is merely a judicial formula for determining whether the legislative or executive action in question is arbitrary and therefore constituting denial of equality. If the classification is not reasonable and does not satisfy the two conditions, namely, (1) that the classification is founded on an intelligible differentia and (2) that differentia has a rational relation to the object sought to be achieved by the impugned legislative or executive action, the impugned legislative or executive action, would plainly be arbitrary and the guarantee of equality under Article 14 would be breached. Wherever, therefore, there is arbitrariness in State action whether it be the 83 legislature or of the executive or of an "authority" under Article 12, Article 14 immediately springs into action and strikes down such State action. In fact, the concept of reasonableness and non arbitrariness pervades the entire constitutional scheme and is a golden thread which runs through the whole of the fabric of the Constitution. [100G, 102D F] E.P. Royappa vs State of Tamil Nadu, [1974] 2 S.C.R. 348; Maneka Gandhi vs Union of India, [1978] 2 S.R. 621 and R. D. Shetty vs The International Airport, Authority of India, & Ors., , applied. (6) The procedure adopted by the respondent Society cannot be regard as arbitrary merely because it refused to take into account the marks obtained by the candidates at the qualifying examination but chose to regulate the admissions by relying on the entrance test. The entrance test facilitates the assessment of the comparative talent of the candidates by application of a uniform standard and is always preferable to evaluation of comparative merit on the basis of marks obtained at the qualifying examination, when the qualifying examination is held by two or more different authorities, because lack of uniformity is bound to creep into the assessment of candidates by different authorities with different modes of examination. [103A B, D F] (7) The oral interview test is undoubtedly not a very satisfactory test for assessing and evaluating the capacity and calibre of candidates, but in the absence of any better test for measuring personal characteristics and traits, the oral interview test must, at the present stage, be regarded as not irrational or irrelevant though it is subjective and based on first impression, its result is influenced by many uncertain factors and it is capable of abuse. In the matter of admission to college or even in the matter of public employment, the oral interview test as presently held should not be relied upon as an exclusive test, but it may be resorted to only as an additional or supplementary test and, moreover, great care must be taken to see that persons who are appointed to conduct the oral interview test are men of high integrity, calibre and qualification. [106C E] R.Chitra Lakha and Others vs State of Mysore and Others, ; , followed. (8) Having regard to the drawbacks and deficiencies in the oral interview test and the conditions prevailing in the country, particularly when there is deterioration in moral values and corruption and nepotism are very much on the increase, allocation of a high percentage of marks for the oral interview as compared to the marks allocated for the written test, is not free from the vice of arbitrariness. The allocation of as high a percentage as 33 1/3 of the total marks for oral interview suffers from the vice of arbitrariness. [107A D] The court, however, to avoid immense hardship being caused to those students in whose case the validity of the selection cannot otherwise be questioned and who have nearly completed three semesters and taking into consideration the fact that even if the petitioners are ultimately found to be deserving of selection on the application of the proper test, it would not be possible to restore them to the position as if they were admitted for the academic year 1979 80, which has run out long since declined to set aside the selection made. The Court was, however, of the view that under the existing circumstances. 84 allocation of more than 15% of the total marks for the oral interview would be arbitrary and unreasonable. [107G H, 108A F] A. Peeriakaruppan vs State of Tamil Nadu, [1971] 2 S.C.R. 430; Miss Nishi Meghu vs State of Jammu & Kashmir & Ors., [1980] 3 S.C.R. p. 1253, applied. (9) There can be no doubt that if the interview did not last for more than two or three minutes on an average and the questions asked had no bearing on the factors required to be taken into account the oral interview test would be vitiated, because it would be impossible in such an interview to assess the merit of a candidate with reference to these factors. Here the absence of proper affidavit by the members of the committee to the contrary leads to the only conclusion that the selection made on the basis of such test must be held to be arbitrary. However, if the marks allocated for the oral interview do not exceed 15% of the total marks and the candidates are properly interviewed and relevant questions are asked with a view to assessing their suitability with reference to the factors required to be taken into consideration, the oral interview test would satisfy the criterion of reasonableness and non arbitrariness. Further it would be desirable if the interview of the candidates is tape recorded, for in that event there will be contemporaneous evidence to show what were the questions asked to the candidates by the interviewing committee and what were the answers given and that will eliminate a lot of unnecessary controversy besides acting as a check on the possible arbitrariness of the interviewing committee. [109A B, D E, F H]

ition (Civil) No. 12847 of 1985 & 1081 of 1987. (Under Article 32 of the Constitution of India). R.B. Mehrotra, Amicus Curiae, Kishan Patnayak in person, and Ranjan Dwivedi for the Petitioners. G. Rath, Advocate General, Orissa, R.K. Mehta, Inderjit Roy, Ms. Mona Mehta, K.R. Nagaraja, and Ms. Madhu Moolchan dani for the Respondents. 60 The Judgment of the Court was delivered by DUTT, J. Writ Petition (Civil) No. 12847 of 1985 has its origin in a letter written by Shri Kishen Pattnayak and Shri Kapil Narayan Tiwary, two social and political workers, addressed to the Hon 'ble the Chief Justice of India. In this letter, they have brought to the notice of this Court the miserable condition of the inhabitants of the district of Kalahandi in the State of Orissa on account of extreme poverty. It is alleged that the people of Kalahandi, in order to save themselves from starvation deaths, are com pelled to subject themselves to distress sale of labour on a large scale resulting in exploitation of landless labours by the well to do landlords. It is alleged that in view of distress sale of labour and paddy, the small peasants are deprived of the legitimate price of paddy and they somehow eke out their daily existence. Further, their case is that being victims of 'chill penury ', the people of Kalahandi are sometimes forced to sell their children. It has been prayed that the State Government should be directed to take immedi ate steps for the purpose of ameliorating the misery of the people of the District of Kalahandi. On receipt of the said letter, this Court directed the same to be treated as a writ petition and it was registered as such. Another writ petition being Writ Petition (Civil) No. 1081 of 1987 has been filed by the Indian People 's Front. This writ petition not only relates to the misery of the people of Kalahandi, but also of the people of another district, namely, the district of Koraput. In this writ petition, it has been alleged that the starvation deaths of the inhabitants of the districts of Koraput and Kalahandi are due to utter negligence and callousness of the adminis tration and the Government of Orissa. It is alleged that the starvation deaths, drought diseases and famine have been the continuing phenomena in the said two districts since 1985. The Government of Orissa has been accused of utter failure to protect the lives of the people of the two districts. The State of Orissa appeared in both these writ peti tions and opposed the same by filing counter affidavits denying the allegations of the petitioners. The State of Orissa filed two statements one dated October 20, 1986 consisting of 160 pages and the other dated December 1, 1986 consisting of 181 pages. In these statements, it has been alleged by the State of Orissa that the State Government has implemented the social welfare measures in the district of Kalahandi. 61 In order to ascertain the correct state of affairs, this Court by its order dated January 16, 1987 requested the District Judge of Kalahandi to enquire as to whether the State Government has, in fact, implemented the social wel fare measures in the district of Kalahandi and whether such measures were adequate to meet the needs of the people there. The learned District Judge was asked to submit a report to this Court. It was further directed by this Court that the learned District Judge, while preparing his report, would consider the feasibility of the implementation of some suggestions made by the petitioners regarding the steps to be taken for the purpose of ameliorating the condition of the people in the said district. The learned District Judge has since submitted his report which runs into 36 1 pages. The petitioners are not at all satisfied with the said report of the learned Dis trict Judge. They have challenged the correctness of facts found by him, particularly with regard to the question of starvation deaths. It has been stated by the learned Dis trict Judge that there was hardly any case of starvation death; on the other hand, there has been implementation by the Government of the social welfare measures. We do not think it necessary to consider the report of the learned District Judge. It is agreed by the parties including Shri Pattnayak, the petitioner No. 1 in Writ Petition No. 12847 of 1985, who has appeared before us in person, that some steps should be taken for the purpose of alleviating the miseries and sorrows of the poor inhabitants of both the said districts. It is not disputed that the people of the districts of Kalahandi and Koraput are very poor and most of them have been living below the poverty line. Although the learned District Judge 's report is against the alleged starvation deaths, we are of the view that the happening of one or two cases of starvation deaths cannot altogether be ruled out. Shri Pattnayak laid much emphasis in his submissions on the duty of the Government to take immediate steps to prevent starvation deaths. He has submitted before us some suggestions in writing, So far as prevention of starvation deaths is concerned, his suggestion are inter alia that the Government should constitute a 11 Member Committee, of which the majority should be social workers, for the purpose of supervising matters arising out of drought and other natural calamities. This committee may be called the Kalahandi Relief Implementation Committee (KRIC). The nonofficial members should not be members of any political party and should belong to well known organisa tions of social work, such as, Sarvodaya Gandhi Peace Foun dation and registered voluntary agen 62 cies, as contained in the State approved list of voluntary agencies. He has also enumerated the duties of the Commit tee. The learned Advocate General of Orissa, appearing on behalf of the State of Orissa, has drawn our attention to paragraph 39 of the Orissa Relief Code which provides as follows: "39. Reports on starvation: (i) In spite of taking adequate precautions in providing relief works for able bodied persons, and gratuitous relief and feeding programmes for those who cannot under take physical labour and other relief meas ures, reports of starvation cases very often appear in the Press. Whenever a report of death due to starvation is published and it comes to the notice of the Collector, he shall immediately cause an enquiry into the allega tion. The enquiry shall be conducted by a gazetted officer in the presence of the Sar panch, Ward Member or some gentlemen of the village and the result of the enquiry reported in the Pro forma in Appendix VI within 48 hours, if possible. The Pro forma is not exhaustive. The Collector should include such other information which he considers necessary to give Government a complete picture of the situation in which the alleged death has taken place. If all the information cannot be col lected forthwith a preliminary report should be furnished immediately to be followed by a complete report soon. (ii) After the receipt of the enquiry report, the Collector shall review the relief measures undertaken in the area and also if he deems proper, may visit the area himself or depute a senior officer to take stock of the situation and be satisfied about the adequacy of labour employment, food position, and other relief arrangements. He should take further steps to alleviate distress in the area as far as possible. In case he considers necessary to further strengthen the relief measures, he shall furnish concrete proposals promptly with necessary justification through the Revenue Divisional Commissioner to the Board of Reve nue/Special Relief Commissioner. " In this connection, we may also refer to paragraph 40 relat ing to 63 verification of Press reports and issue of contradiction, if any. Paragraph 40 reads as follows: "40. Verification of Press reports and issue of contradiction, if any Besides alleging starvation deaths, reports on large scale migration of population on account of lack of work, scarcity of drinking water, outbreak of epidemics etc. appear in the Press very often. The Collector shall take steps to get such reports immediately verified by proper enquiry or otherwise and if found true should take immediate remedial action. Proper publicity relating to the relief measures undertaken should also be given. If on the other hand, the report is found inaccurate, exaggerated or incor rect a contradiction stating the correct facts may be issued by the Collector immediately. Copies of such contradictions should be made available to the higher author ities. " It is apparent from paragraph 39 that ample provision has been made for taking steps as soon as the report of starvation death is published or any starvation death comes to the notice of the Collector. It is also submitted by the learned Advocate General that there is a district level Natural Calamities Committee consisting of the Collector, other officials and the popular representatives like MPs and MLAs of the district, who are required to review the progress of relief work and the measures taken to meet the drought conditions from time to time. He submits that instead of constituting another Com mittee, the Natural Calamities Committee will serve the purpose. Shri Pattnayak also agrees that another separate Committee need not be constituted, but he submits that the Natural Calamities Committee should include at least five non official and non political members belonging to well known organisations of social work, such as, Sarvodaya Gandhi Peace Foundation and registered voluntary agencies, as already suggested by him. The learned Advocate General states that the Government has no objection to induct into the Committee non officials, such as, representatives of the recognised voluntary organisations as suggested by Shri Pattnayak. In the circumstances, we direct the Government of Orissa that it shall, within a month from date, nominate the names of at least five persons belonging to the recognised volun tary organisations like Sarvodaya Gandhi Peace Foundation, Ramakrishna Mission, Bharat Sewa Sangha and registered voluntary agencies as members of the said 64 Natural Calamities Committee of the district. We also accept the suggestion of Shri Pattnayak that the Committee shall hold at least one meeting every two months. The function of the Committee will not be confined only to the cases of starvation deaths, but it shall be responsible for looking after the welfare of the people of the district. We are given to understand that there is also such a dis trict level Natural Calamities committee in the district of Koraput. We make it clear that the Government will also nominate at least five such persons belonging to recognised voluntary organisations within a month from today and the Committee will also perform the same functions. So far as the district of Kalahandi is concerned, it has been urged by the learned Advocate General that the Govern ment of Orissa has already undertaken appropriate measures for mitigating the miseries of the people of that district. The steps which have been taken by the Government may be stated in brief. The State Government has allotted a sum of Rs.8054 lakhs for Kalahandi during the Sixth Plan. The State Government is fully aware of the situation in Kalahandi and constant vigilance is maintained under the direct supervi sion of the Chief Minister to redress the distress of the people. The labour intensive work has been undertaken by the government on a massive scale to provide employment opportu nity to the people of the district of Kalahandi. During the year 1984 85, in areas of acute distress, free feeding pro gramme has been undertaken on a massive scale. During 1987 88 the coverage under the Normal Feeding Programme was 2,12,800 persons. Besides, 1,20,000 persons were also cov ered under the Emergency Drought Feeding Programme covering all the drought affected areas of the district. In 128 Gram Panchayats where crop damage was more than 50%, 1,20,000 persons were covered under the Emergency Feeding Programme during 1987 88. During the current year, preliminary survey indicated that crop damage was likely to occur in 74 Gram Panchayats and, accordingly, 40,000 persons from the said affected areas have been covered under the Emergency Feeding Programme in addition to the Normal Feeding Programme for 2,12,800 persons. Under the Area Development Approach Pro gramme for Total Backwardness Scheme covering certain blocks, about 20,000 persons are being fed under the Feeding Programme. According to the Government, 2,72,000 persons are being covered by the Feeding Programme in Kalahandi district in 1988. Kalahandi is a drought prone district and Government has, according to the learned Attorney General, already taken a number of 65 major, medium and small Irrigation Projects in the said district to provide irrigation facilities for agricultur ists. 485 tube Wells are stated to have been dug as a major source of drinking water in Kalanandi. The Government has also started aforestation programme so as to prevent the recurrence of drought conditions. Much facilities are stated to have been given to the weavers of the district. Elaborate measures have also been taken for ensuring that poor cultivators are not coerced to sell their surplus paddy at a lower rate on account of their poverty. The Orissa Agricultural Produce Marketing Act is being strictly implemented. The entire procurement of paddy has been en trusted to the Food Corporation of India and the State Cooperative Marketing Federation. These two Organisations specialised in such purchases, are possessed of godowns and have their local centres throughout the State for purchase of surplus paddy. The FCI at the request of the State Gov ernment, has established purchase centres at Junagarh, Khariar Road and Kesinga in the district of Kalahandi. The FCI has also made arrangements for direct purchase of paddy at Dharmagarh, Junagarh and Narala. The State Cooperative Marketing Federation has also opened direct purchase centres at Boden and Sinapalli in the district of Kalahandi. Fur thermore, when surplus paddy comes to market, additional purchase centres are provided for purchase of the surplus paddy. The minimum purchase price for paddy is fixed by the Government of India. Adequate funds are provided to the purchasing agents to purchase the surplus paddy at the rates prescribed by the Government. State Government also ensures that unscrupulous traders do not coerce the farmers to sell paddy at a distress price. Assistance to agriculturists is also being given by the Government. Due to drought conditions, the Kharif crop was damaged in some areas of Kalahandi district in 1987 88. To enable cultivators to undertake resowing, Government is stated to have supplied seeds free of cost in mini bags. The measures which have been taken and are being taken, as stated in the written note submitted by the learned Advocate General, have been briefly mentioned. There is no reason not to accept the statements made on behalf of the State of Orissa that the measures, stated above, are being taken for the purpose of mitigating hunger, 66 poverty, starvation deaths, etc. of the people of Kalahandi. If such measures are taken, there can be no doubt that it will alleviate to a great extent the miseries of the people of Kalahandi. Such measures are also being taken in respect of the district of Koraput. The Natural Calamities Committee shall also keep a watch over the working of the social welfare measures which are being taken and may be taken in future. Shri Pattnayak also does not dispute that if such measures are continued to be taken, it will be a great relief to the people of Kalahandi and Koraput. We hope and trust that in view of the prompt action that has been taken by the Government, soon the miseries of the people of these two districts will be over. As prayed for by Shri Pattnayak, the petitioners are granted liberty to mention before this Court, if necessary. The Writ Petitions are disposed of as above. There will be no order as to costs. T.N.A. Petitions disposed of.

In November 1976, the respondent issued a notice to the appellant under section 11 of the Jammu & Kashmir Houses & Shops Rent Control Act, 1966 calling upon it to pay the arrears of rent. The notice also terminated the tenancy and called upon the appellant to vacate the demised premises. The notice sent by registered post was received back by the respondent with the endorsement "left without address, returned to sender". Thereupon the respondent caused a copy of the notice to be fixed to one of the doors of the premises in question. No payment of rent was however made by the appellant subsequently. The respondent, therefore, filed a suit in June 1977 seeking ejectment of the appellant on the ground of default in the payment of rent. The Trial Court ordered eviction. and the appellant 's appeals before the District .Judge and the High Court against the order of eviction failed. Before this Court the appellant contends that (1) the safeguards in sections 11 and 12 of the Act are intended for the benefit and protection of the tenant and therefore, where the Act provides for the service of the notice, by post. this requirement has to be strictly complied with; (2) such postal service can neither be presumed nor considered to be good service where The latter is returned to the sender due to non availability of the addressee; (3) in the absence of any enabling provision, service by some other mode, such as affixture, cannot be treated as sufficient compliance with the statute; and (4) where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and other methods of performance are necessarily forbidden. Dismissing the appeal, it was, HELD: (1) The proviso to clause (i) of section 11(1) and the proviso to section 12(3) are intended for the protection PG NO 983 PG NO 984 of the tenant. A Nevertheless, it will be easy to see that too strict and literal a compliance of their language would be impractical and unworkable. [988H; 989Al (2) The proviso insists that before any amount of rent can be said to be in arrears, a notice has to be served through post. All that a landlord can do to comply with this provision is to post a prepaid registered letter (acknowledgment due or otherwise) containing the tenant 's correct address. Once he does this and the letter is delivered to the post office, he has no control over it. It is then presumed to have been delivered to the addressee under section 27 of the General Clauses Act. [989A B] (3) To interpret the provision as requiring that the letter must have been actually delivered to the addressee, would be virtually rendering it a dead letter. [989F] (4) If a registered letter addressed to a person at his residential address does not get served in the normal course and is returned, it can only be attributed to the addressee 's own conduct. If he is compelled to be away for some time, all that he has to do is to leave necessary instructions with the postal authorities. [989H; 990A] (5) The more reasonable, effective, equitable and practical interpretation would be to read the words "served" as "sent by post". correctly and properly addressed to the tenant, and the word "receipt" as the tender of the letter by the postal peon at the address mentioned in the letter. No other interpretation will fit the situation as it is simply not possible for a landlord to ensure that a registered letter sent by him gets served on, or is received by the tenant. [990B C] (6) The statute prescribes only one method of service for the notice and none other. To require service by some other method to be effected over and above the postal service would be to travel outside the statute. [99OF] (7) Where the statute does not specify any additional or alternative mode of service, there can be no warrant for importing into the statute a method of service on the lines of the provisions of C.P.C. This Court would therefore not like to hold that a substituted ' ' service. such as the one effected by the landlord in the present case, is a necessary or permissible requirement of the statute. [990G] (8) The provision in regard to the notice contemplated by the statute is unsatisfactory and it is hoped that the PG NO 985 legislature would soon set it right. On the provision as it stands, a landlord must be held to have complied with the statutory requirement by sending a notice correctly addressed to the tenant by registered post. [991H; 992A] Hare Krishna Das vs Hahnemann Publishing Co. Ltd. 1965 66, ; Surajmull Ghanashamdas vs Samardarshan Sur, ILR ; Taylor vs Taylor, 11875] 1 Ch. D. 426.

Special Leave Petition (Criminal) No. 408 of 1978. From the Judgment and order dated 22 11 1973 of the Bombay High Court in Criminal Appeal No. 747/ 72 with Criminal Review Application No. 685/72. In person for the Petitioner H. R. Khanna and M. N. Shroff for the Respondent. The order Gr the Court was delivered by KRISHNA IYER, J. A short paragraph might perhaps have been sufficient as obituary note on this Special Leave Petition but two basic issues one of prison justice and the other of sentencing caprice challenge our attention and deserve more elaboration. The facts, more flabbergasting than fantasy, present themselves in this Special Leave Petition. The appeal is against a conviction con currently rendered for a novel and daring set of crimes and follow up sentence of three year prison term. 'The offence is bizarre, the 196 offender perplexing, the sentence incredibly indiscreet at the Sessions Court stage but reasonably just at the High Court level and, to cap it all the delay in seeking leave from this Court is doubly shocking be cause it is inordinate and implicates the prison administration. A miniaturised version of the prosecution, which has culminated in the conviction, is all that is necessary in view of the ultimate order we propose to make. The petitioner, a Reader in the Saurashtra University, claims to be a Ph. D. Of Karnataka University, although there is a controversy as to this high academic qualification being a fabrication. In the present case we are not concerned with it directly. His moot academic proficiency apart, his abortive enterprise in an other field has landed him in the present criminal case. According to the prosecution, Dr. Hoskot, the petitioner, approached Dabhol kar, a block maker of Bombay, placed an order to prepare an embossing seal in the name of the Karnataka University, Dharwar, and forged a letter of authority purporting to have been signed by the Personal Assistant to the Vice Chancellor of the said University authorisig him to get the seals made. This Project Counterfeit Degrees, if we may so call it, had, perhaps, as its object the concoction of certificates of degrees by the Karnataka University. A degree hungry community like ours offers a happy hunting ground for professionals in the fine art of fabricating academic distinctions. If the expertise is perfect and its exercise undetected there is more money in it that in an honest doctorate. Anyway, the petitioner 's mis adventure was intercepted before it could fulfil itself because Dabholkar, the Bombay block maker, was too clever a customer. He gave pre emptive information to the police leading to the unearthing in time of the criminal scheme. The Sessions court tried the petitioner and held as proved beyond reasonable doubt that the petitioner was guilty of the grave offences charged, namely, under sections 417 read with 511 I.P.C. section 467 I.P.C., section 468 I.P.C. and sections 471 read with 467 I.P.C. After having rendered this draconian verdict against a person who was a Reader in a University and claimed to be M.Sc., Ph. D., around 30 years old and coming from a middle class family beyond economic compulsions to make a living by criminal means, the court swerved towards a soft sentence of simple imprisonment till the rising of the court and some fine. We are scandalized by this soft justice syndrome vis a vis white collar offenders. It stultifies social justice and camouflages needed severity with naive leniency. However, two appeals were carried to the High Court, one by the petitioner against his conviction and the other by The State against the naive sentence. The High Court dismissed the appeal against the conviction and, in allowance of the State 's 197 prayer for enhancement, imposed rigorous imprisonment for three years. The present petition for special leave to appeal is against this heavy sentence. The High Court 's judgment was pronounced in November 1973 but the Special Leave Petition has been made well over four years later. This hiatus may appear horrendous, all the more so because the petitioner has undergone his full term of imprisonment during this lengthy interregnum. The explanation offered by him for condonation of the delay, if true, discloses a disturbing episode of prison injustice. To start with the petitioner complained that the High Court granted a copy of the judgment of 1973 only in 1978, a further probe disclosed that a free copy had been sent promptly by the High Court, meant for thc applicant, to the Superintendent. Yeravada Central Prison, Pune. The petitioner denies having been served that copy and there is nothings on record which bears his signature in token of receipt of the High Court 's judgment. The Prison Superintendent on The other hand, would have us believe that a clerk of his office did deliver it to the prisoner but took it back for the purpose of enclosing L it with a mercy petition to the Governor for remission of sentence. This exonerative story may be imaginary or true but there is no writing to which the petitioner is a party to validate this plea. The fact remains that prisoners are situationally at the mercy of the prison 'brass ' but their right to appeal, which is part of the constitutional process to resist illegal deprivation of liberty, is in peril, if district jail officials ' ipse dixit that copies have been served is to pass muster without a title of prisoner 's acknowledgment. What is more, there is no statutory provision for free legal serives to a prisoner, in absence of which, a right of appeal for the legal illiterates is nugatory and therefore, a negation of that fair legal procedure which is implicit in article 21 of the Constitution, as made explicit by this Court in Maneka Gandhi(1). Having narrated the necessary facts which project the two profound but neglected problems of criminal jurisprudence we should have proceeded to discuss the merits of the evidence to decide whether leave should be granted to this petitioner. Indeed, although the court had assigned a lawyer to render free legal service to the petitioner and argue the case on his behalf, Dr. Hoskot decided to dispense with legal assistance and argued on his own. Of course, he has presented his case capably and with analytical precision in his endeavor to controvert the correctness of the findings of the courts below. We have listened to him at some length since this Court is the last in the (1) [1978 2 S.C.R. 621. 198 Indian pyramid of justice and a party in person elicits from us extra solicitude so that he may not suffer from a sense of handicap due to the absence of professional legal service. Nevertheless this Court has laid down certain fundamental principles governing its jurisdiction when special leave is sought. We cannot depart from these criteria 13 lest the endless chase for justice by every defeated litigant, civil and criminal, should flood this Court into dysfunction by a docket flood. It is dangerous to be too good. The recent pronouncement of a Bench of This Court, through the Learned Chief Justice, settles with clarity the decisive jurisdictional guideline. We quote: "In view of the concurrent findings of the Sessions Court and the High Court on the principal issues arising in the case we see no justification for granting special leave for a reconsideration of the question as regards the guilt of the petitioners. There is hardly a case, civil or criminal, which does not raise some question of law or the other. But no question of law of general public importance is involved in these petitions. It is time that it was realised that the jurisdiction of this Court to grant special leave to appeal can be invoked only in very exceptional circumstances. A question of law of general public importance or a decision which shocks the conscience of the court are some of the prime requisites for the grant of` special leave.(1) [Ujjagar Singh & Anr. vs State (Delhi Admn. ) ] Bearing this policy in mind, coupled with the efficacy of concurrent findings of Fact, we decline the request for leave even assuming there are some improbabilities in the prosecution case or errors in the con current holdings. In this view, we do not examine the merits further but insist on clarifying the two larger questions lying half hidden. No observations made by us should be understood as affecting the petitioner 's plea in any other criminal case he may be facing. The Sessions Court. having found a university professor guilty of organising (abortively though) a scheme of making bogus degrees suddenly slumped at the sentencing stage and, awarded a single day 's simple imprisonment. The reasons given arc symptomatic or chaotic sentencing and confusion about the correctional orientation of punishment. The court observed: "Accused is a young man. He has no previous conviction . He has a good family background. His father was a Deputy Collector and Magistrate in the Mysore State. He (1) order in SLP(Crl. No.1319ete. Of 1977dt.31 7 1978(unreported case) 199 struck mc as having intelligence above the average. He is not a person with a criminal tenancy. It is suggested by the learned P.P. that possibly accused did this in a fit of despartion as he was given notice of discharge by The Saurashtra University regarding his Readership in Mathematics. The modern emphasis on the corrective aspect of punishment cannot be ignored in this case which determining the adequacy of sentence, having regard to the nature of the offence and the background of the accused, I think that I should give one chance for the accused to improve. Hence I do not think it desirable to send him to jail as he might return as a confirmed criminal? which may he a liability to the society. If, on the other hand, mercy is shown to him at this stage of his first impact with justice, then it is probable that he may be reclaimed as a good citizen who call harness his talent for desirable activities. In view. of this T propose to pass the following order to which the learned Spl. Public prosecutor has no objection Substantive sentences of one day S.I. to run concurrently. (emphasis added) It is surprising that the Public Prosecutor has consented, on behalf of the State, to this unsocial softness to an anti social offender on conviction for grave charges. Does the Administration sternly view white collar offenders, or abet them by agreeing to award of token punishment, making elaborate trials mere tremendous trifles ? Social defence is the criminological foundation of punishment. The trial judge has confused between correctional approach to prison treatment and nominal punishment verging on decriminalisation of serious social offences. The first is basic, the second pathetic. That Court which ignores the grave injury to society implicit in economic crimes by the upper berth 'mafia ' ill serves social justice. Soft sentencing justice is gross injustice where many innocents are the potential victims. It is altogether a different thing to insist on therapeutic treatment, hospital setting and correctional goals inside the prison (even punctuated by parole, opportunities for welfare work, meditational normalisation and healthy self expression), so that the convict may be humanised and, on release? rehabilitated as a safe citizen. This Court has explained the correctional strategy of punishment in Giasuddin 's case(1). Coddling is not correctional, any more than torture is deter rent. While iatrogenic prison terms are bad because they dehumanize, (1) Mohammad Giasuddin vs State of Andhra Pradesh [1978]1 S.C.R.153. 200 it is functional failure and judicial pathology to hold out a benignly self efeating non sentence to deviants who endanger the morals and morale, the health and wealth of society. The 47th Report of the Law Commission of India noticed this weakness for economic offenders in the judicial personnel (of course, also in the administrative and legislative actors) and recommended: "18.2. Suggestions are often made that in order that the lower Magistracy may realise the seriousness of some of the social and economic offences, some method should be evolved of making the judiciary conscious of the grave damage caused to the country 's economy and health by such anti social crimes. The frequency and emphasis with which these suggestions have been made, and the support which they have received from very high officers has caused some anxiety to us. But we hope that the higher courts are fully alive to the harm, and we have no doubt that on appropriate occasions, such as, judicial conferences, the subject will receive attention. It is of utmost importance that all State instrumentalities involved in the investigation, prosecution and trial of these offences must be oriented to the philosophy which treats these economic Offence as a source or grave challenge to the material wealth of the nation. We hope we shall not be misunderstood if we suggest that even the holding of periodical meetings on sentencing may be beneficial, not in the context of economic offences only, but in the evolution of a rational and consistent policy of sentencing. Experience of England is, by now, familiar to those interested in the subject. A meeting of over 100 judges was held in the Royal Courts of Justice in London on January 7 8, 1965 to take part in exercises designed to increase the uniformity of sentencing. The Lord Chief Justice expressed the hope that the meeting would be a model for similar ones throughout the country. Conferences between judges, magistrates and penal administrators are, in England, organised with increasing frequency in many parts of the country with an annual conference in London for judges of the Supreme Courts. Besides holding councils on sentencing, it may be worthwhile to hold "workshops ' which would be less formal 201 but equally useful and likely to give concrete results. Such workshops could, for example, be attended by all Special Judges or other officers concerned with economic offences. National courses on sentencing strategies vis a vis social justice is a neglected cause and the Administration is, as yet, 'innocent ' of this imperative need. The second profound issue, thrown up accidentally by Dr. Hoskot 's sojourn in the Yeravada jail, disturbs us more because less capable men most prisoners in this country belong to the lower, illiterate bracket suffer silent deprivation of liberty caused by unreasonableness, arbitrariness and unfair procedures behind the 'stone walls ' and 'iron bars '. Freedom is what freedom does, and here we go straight to article 21 of the Constitution, where the guarantee of personal liberty is phrased with superb amplitude: article 21: Protection of life and personal liberty: No person shall be deprived of his life or personal liberty except according to procedure established by law. (emphasis added). 'Procedure established by law ' are words of deep meaning for all lovers of liberty and judicial sentinels. Amplified, activist fashion, 'procedure ' means 'fair and reasonable procedure ' which comports with civilised norms like natural justice rooted firm in community consciousness, not primitive processual barbarity nor legislated normative mockery. In a land mark case, Maneka Gandhi(1), Bhagwati, J. (on this point the Court was unanimous) explained: "Does Article 21 merely require that there must be some semblance of procedure, howsoever arbitrary or fanciful. prescribed by law before a person can be deprived of his personal liberty or that the procedure must satisfy certain requisites in the sense that it must be fair and reasonable ? Article 21 occurs in Part III of the Constitution which confers certain fundamental rights". "Is the prescription of some sort of procedure enough or must the procedure comply with any particular requirements ? obviously, the procedure cannot be arbitrary, unfair or unreasonable. This indeed was conceded by the learned Attorney General who with his usual candour frankly (1) [1978] 1 SCC 248 at 277, 281 and 284 14 520 SCI/78 202 stated that it was not possible for him to contend that any procedure howsoever arbitrary, oppressive or unjust may be prescribed by the law." "The principle of reasonableness, which legally as well. as philosophically, is an essential element of equality or nonarbitrariness pervades Article 14 like a brooding omnipresence and the procedure contemplated by Article 21 must answer the test of reasonableness in order to be in conformity with Article 14. It must be "right and just and fair and not arbitrary, fanciful or oppressive; otherwise it would be no procedure at all and the requirement of Article '21 would not be satisfied. Any procedure which permits impairment of the constitutional right to go abroad without giving reasonable opportunity to show cause can not but be condemned as unfair an(3 unjust and hence, there is in the present case clear infringement of the requirement of Article 21". One of us in his separate opinion there observed(u): "Procedure established by law", with its lethal potentiality, will reduce life and liberty to a precarious plaything it we do not ex necessitate import into those weighty words an adjectival rule of law, civilised in its soul, fair in its heart and fixing those imperatives of procedural protection absent which the processual tail will wag the substantive head. Can the sacred essence of the human right to secure which the struggle for liberation, with 'do or die ' patriotism, was launched be sapped by formalistic and pharisaic prescriptions, regardless of essential standards ? An enacted apparition is a constitutional illusion. Processual justice is writ patently on Article 21. Procedure which deals with the modalities of regulating; restricting or even rejecting a fundamental right falling with in Article 21 has to be fair, not foolish, carefully designed to effectuate, not to subvert, the substantive right itself. Thus understood, 'procedure ' must rule out anything arbitrary, freakish or bizarre. A valuable constitutional right II can be canalised only by civilised process. What is fundamental is life and liberty. What is procedural is the manner (1) per Krishna lyer, J. at 337, 338. 203 of its exercise. This quality of fairness in the process is emphasised by the strong word 'established ' which means 'settled firmly ' not wantonly or whimsically. If it is rooted in the legal consciousness of the community it becomes 'established ' procedure. And 'law ' leaves little doubt that it is normae regarded as just since law is the means and justice is the end. Procedural safeguards are the indispensable essence of liberty. In fact, the history of personal liberty is largely the history of procedural safeguards and right to a hearing has a human right ring. In India, because of poverty and illiteracy, the people are unable to protect and defend their rights; observance of fundamental rights is not regarded as good politics and their transgression as bad politics. To sum up, 'procedure ' in Article 21 means fair, not formal procedure. 'Law ' is reasonable law, not any enacted piece. '` one component of fair procedure is natural justice. Generally speaking and subject to just exceptions, at least a single right of appeal on facts, where criminal conviction is fraught with long loss of liberty is basic to civilised jurisprudence. It is integral to fair procedure, natural justice and normative universality save in special cases like the original tribunal being a high bench sitting on Lt collegiate basis. Ill short, a first appeal from the Sessions Court to the High Court, as provided in the Criminal Procedure Code, manifests this value upheld in article 21. What follows from the appellate imperative ? Every step that makes the right of appeal fruitful is obligatory and every action or in action which stultifies it is unfair and, ergo, unconstitutional ( In a sense, even article 19 may join hands with article 21, as the Menka Gandhi reasoning discloses). Pertinent to the point before us are two requirements: (1) service of a copy of the judgment to the prisoner in time to file all appeal and (ii) provision of free legal ser vices to a prisoner who is indigent or otherwise disabled from securing legal assistance where the ends of justice call for such service. Both these are State responsibilities under article 21. Where the procedural law provides for further appeals what we have said regarding first appeals will similarly apply. In the present case there is something dubious about the delivery of the copy of the judgment by the Jailor to the prisoner. A simple proof of such delivery is the latter 's written acknowledgment. Any 204 jailor who, by indifference or vendetta, withholds the copy thwarts the court process and violates article 21, and may pave the way for holding the further imprisonment illegal. We hope that Jail Manuals will be updated to include the mandate, if there be any omission, and deviant jail officials punished. And courts, when prison sentence is imposed, will make available a copy of the judgment if he is straight marched into the prison. All the obligations we have specificated are necessarily implied in the right of appeal conferred by the Code read with the commitment to procedural fairness in article 21. Section 363 of the Cr. P. Code is all activist expression of this import of article 21 and is inviolable. We say no more because we have condoned the delay in the present case although it is pathetic that for want of a copy of judgment the leave is sought after the sentence has been served out. The other ingredient of fair procedure to a prisoner, who has to seek his liberation through the court process is lawyer 's services. Judicial justice, with procedural intricacies, legal submissions and critical examination of evidence, leans upon professional expertise; and a failure of equal justice under the law is on the cards where such supportive skill is absent for one side. Our judicature, moulded by Anglo American models and our judicial process, engineered by kindred legal technology, compel the collaboration of lawyer power or steering the wheels of equal justice under the law. Free legal services to the needy is part of the English criminal justice system. And the American jurist, Prof. Vance of Yale, sounded sense for India too when he said(1): "What does it profit a poor and ignorant man that he is equal to his strong antagonist before the law if there is no one to inform him what the law is ? or that the courts are open to him on the same terms as to all other persons when he has not the wherewithal to pay the admission fee ?" Gideon 's trumpet has been heard across the Atlantic. Black, J: there observed(2): "Not only those precedents but also reason and reflection require us to recognise that ill our adversary system of criminal justice, any person haled into court, who is too poor to hire a lawyer, cannot be assured a fair trial unless counsel is provided for him. This seems to us to be an obvious truth. Governments, both State and Federal, quite (1) Justice and Reform, Earl Johnson Jr. p. 11. (2) Processual Justice to the People (May, 1973) p. 69. 205 properly spend vast sums of money to establish machinery to try defendants accused of crime. Lawyers to prosecute are everywhere deemed essential to protect the public 's interest in an orderly society. Similarly, there. are few defendants charged with crime who fail to hire the best lawyers they can get to prepare and present their defences. That government hires lawyers to prosecute and defendants who have the money hire lawyers to defend are the strongest indications cf the widespread belief that lawyers in criminal courts are necessities, not luxuries. The right of one charged with crime to counsel may not be deemed fundamental and essential to fair trials in some countries, but is in ours. From the very beginning, our state and national constitutions and laws have laid great emphasis on procedural and substantive safeguards designed to assure fair trials before impartial tribunals in which every defendant stands equal before the law. This noble idea cannot be realised if the poor man charged with crime has to face his accusers without a lawyer to assist him". The philosophy of legal aid as an inalienable element of fair procedure is evident from Mr. Justice Brennan 's(1) well known words: "Nothing rankles more in the human heart than a brooding sense of injustice. Illness we can put up with. But injustice makes us want to pull things down. When only the rich can enjoy the law, as a doubtful luxury, and the poor, who need it most, cannot have it because its expense puts it beyond their reach, the threat to the continued existence of free democracy is not imaginary but very real, because democracy 's very life depends upon making the machinery of justice so effective that every citizen shall believe in and benefit by its impartiality and fairness". More recently, the U.S. Supreme Court, in Raymond Hamlin has extended this processual facet of Poverty Jurisprudence. Douglas, J. there explicated(2): "The right to be heard would be, in many cases, of little avail if it did not comprehend the right to be heard by counsel. Even the intelligent and educated layman has small and sometimes no skill in the science of law. If (1) Legal aid and Legal Education p. 94. (2) United States Supreme Court Reports, Vol. 32 p. 530. 206 charged with crime, he is incapable, generally, of determining for himself whether the indictment is good or bad. He is unfamiliar with the rules of evidence. Left without the aid of counsel he may be put on trial without a proper charge, and convicted upon incompetent evidence, or evidence irrelevant to the issue or otherwise inadmissible. He lacks both the skill and knowledge adequately to prepare his defense, even though he have a perfect one. He requires the guiding hand of counsel it every step in the proceedings against him. Without it, though he be not guilty, he faces the danger of conviction because he does not know how to establish his innocence. If that be true of men of intelligence, how much more true is it of the ignorant and illiterate or those of feeble intellect. " The right of one charged with crime to counsel may not be deemed fundamental and essential to fair trials in some countries, but it is in ours. From the very beginning, our state and national constitutions and laws have laid great emphasis on procedural and substantive safeguards designed to assure fair trials before impartial tribunals in which every defendant stands equal before the law. This noble ideal cannot he realized if the poor man charged with crime has to face his accusers without a lawyer to assist him. 372 US at 344. 9 L Ed 2d at 805; , Both Powell and Gideon involved felonies. But their rationale has relevance to any criminal trial, where an accused is deprived of his liberty. The court should consider the probable sentence that will follow if a conviction is obtained. The more serious the likely consequences, the greater is the probability that a lawyer should be appointed. . The court should consider the individual factors peculiar to each case. These, of course, would be the most difficult to anticipate. One relevant factor would be the competency of the individual defendant to present his own case. (Jon Richard Argersinger vs Raymond Hamlin ; 32L Ed 2d 530 at 535 36 and 554. (Emphasis added) The American Bar Association has upheld the fundamental premise that counsel should be provided in the criminal proceedings for offences punishable by loss of liberty, except those types of offences for which such punishment is not likely to be imposed. Thus in 207 America, strengthened by the Powell, Gideon and Hamlin cases, counsel for the accused in the more serious class of cases which threaten a person with imprisonment is regarded as an essential component of the administration of criminal justice and as part of procedural fair play. This is so without regard to the VIth amendment because lawyer participation is ordinarily an assurance that deprivation of liberty will not be in violation of procedure established by law. In short, it is the warp and woof of fair procedure in a sophisticated, legalistic system plus lay illiterate indigents aplenty. The Indian social legal milieu makes free legal service, at trial and higher levels. an imperative processual piece of criminal justice where deprivation of life or personal liberty hangs in the judicial balance. The widespread insistence on free legal assistance, where liberty is in jeopardy? is obvious from the Universal Declaration of Human Rights article 8. Everyone has the right to an effective remedy by the competent national tribunals for acts violating the fundamental rights granted by the Constitution or by law. article 14(3) of the International Covenant on Civil and Political Rights guarantees to everyone: "the right to be tried in, his presence, and to defend himself in person or through legal assistance of his own choosing; to be informed, if he does not have legal assistance, of his right; and to have legal assistance assigned to him in any case where the interests of justice shall require, and without payment by him in any such case if he does not have sufficient means to pay for it. " Many high level Indian Committees and Commissions have emphasised the free legal service desideratum as integral to processual fair play for pr sellers. For example, one such committee has stated(1): 93. Prisoners, men and women, regardless of means, are a peculiarly handicapped class. The morbid cell which con fines them walls them off from the world outside. Legal remedies, civil and criminal, are often beyond their physical and even financial reach unless legal aid is available within the prison as is provided in some States in India and in other countries. Without legal aid, petitions of appeal, applications for commutation or parole, bail motions and claims (1) Processual Justice to the people May, 1973, p. 34. 208 for administrative benefits would be well nigh impossible. There is a case for systematised and extensive assistance through legal aid lawyers to our prison population. The Central Government is evolving a comprehensive programme while many States already have fragmentary schemes. It needs no argument to drive home this point, now that Arts 39A, a fundamental constitutional directive, states: 39A. Equal Justice and free legal aid. The State shall secure that the operation of the legal system promotes justice, on a basis of equal opportunity, and shall, in particular, provide free legal aid, by suitable legislation or schemes or in any other way, to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities. (emphasis added) . This article is an interpretative tool for article 21. Partial statutory implementation of the mandate is found in Sec. 304, Cr. P. Code, and in other situations courts cannot be inert in the face of article 21 and 39A. We may follow up the import of Maneka Gandhi and crystallise the conclusion. Maneka Gandhi 's case has laid down that personal liberty cannot be cut out or cut down without fair legal procedure. Enough has been set out to establish that a prisoner, deprived of his freedom by court sentence but entitled to appeal against such verdict, can claim, as part of his protection under article 21 and as implied in his statutory right to appeal, the necessary concomitant of right to counsel to prepare and argue his appeal. If a prisoner sentenced to imprisonment, is virtually unable to exercise his constitutional and statutory right of appeal, inclusive of special leave to appeal, for want of legal assistance, there is implicit in the Court under article 142, read with articles 21, and 39A of the Constitution, power to assign counsel for such imprisoned individual for doing complete justice. This is a necessary incident of the right of appeal conferred by the Code and allowed by article 136 of the Constitution. The inference is inevitable that this is a State 's duty and not government 's charity. Equally affirmative is the implication that while legal services must be free to the beneficiary, the lawyer himself has to be reasonably remunerated for his services. Surely, the profession has a public commitment to the people but mere philanthropy of its members yields short mileage in the long run. Their services, 209 especially when they are on behalf of the State, must be paid for. Naturally, the State concerned must pay a reasonable sum that the court may fix when assigning counsel to the prisoner. Of course, the court may judge the situation and consider from all angles whether it is necessary for the ends of justice to make available legal aid in the particular case. In every country where free legal services are given it is not done in all cases but only where public justice suffers otherwise. That discretion resides in the court. In the present petition, the party, though proferred legal aid by the court, preferred to argue himself. Even so we uphold the right to counsel not in the permissive sense of article 22(1) and its wider amplitude but in the peremptory sense of article 21 confined to prison situations. While dismissing the Special Leave Petition we declare the legal position to put it beyond doubt: 1. Courts shall forthwith furnish a free transcript of the judgment when sentencing a person to prison term; 2. In the event of any such copy being sent to the jail authorities for delivery to the prisoner, by the appellate, revisional or other court, the official concerned shall, with quick despatch, get it delivered to the sentence and obtain written acknowledgment thereof from him. Where the prisoner seeks to file an appeal or revision, every facility for exercise of that right shall be made available by the Jail Administration. Where the prisoner is disabled from engaging a lawyer, on reasonable grounds such as indigence or incommunicado situation, the Court shall, if the circumstances of the case, the gravity of the sentence, and the ends of justice so requires assign competent counsel of for the prisoner 's defence, provided the party does not object to that lawyer 5. The State which prosecuted the prisoner and set in motion the process which deprived him of his liberty shall pay to assigned counsel such sum s the court may equitably fix. These benign prescriptions operate by force of article 21 [strengthened by article 19(1)(d)] read with sub article (5) from the lowest to the highest court where deprivation of life and personal liberty is in substantial peril. S.R. Petition dismissed.

Under section 363(1) of the Criminal Procedure Code, 1973 "when the accused is sentenced to imprisonment, a copy or the judgment shall immediately after the pronouncement of the judgment, be given to him free of cost". Under section 363(2), "on the application of the accused, a certified copy of the judgment or when he so desires z. translation in his own language if practicable or in the language of the Court, shall be given to him without delay and such copy shall in, every case where the judgment is appealable by the accused be given free of cost: Provided that where the sentence of death is passed or confirmed by the High Court, a certified copy of the judgment shall be immediately given to the accused free of cost whether or not he applies for the same". section 387 of the Code, these provisions contained in Chapter XXVII are applicable so far as may be practicable to the judgment in appeal by a Court of Sessions or Chief Judicial Magistrate. section 388, however, requires that the order of the High Court on appeal should be certified to lower court and the court to which the High Court certifies its judgment shall make such orders as are comfortable to the judgment of the High Court. The petitioner was tried for the various offences under s.417 read with s.511 I.P.C`., section 467 I.P.C. section 468 I.P.C. and 471 read with section 467 I.P.C. by the Sessions Court and found guilty of the said offences but sentenced to a soft sentence of simple imprisonment till the rising of the Court and some fine. Two appeals were filed one by the petitioner and the other by the State. The High Court dismissed the petitioner 's appeal and accepting the State 's appeal enhanced the sentence to three years on 22 11 73. On 26 11 73, in conformity with the Judgement of the High Court, the Sessions Court passed necessary orders to the Central Prison Authority Bombay to take him into custody. He was later on transferred to Yeravada Jail, Pune. The petitioner under went the full period of im 193 prisonment and filed the special leave petition with a petition for condonation , of delay contending that on 10 12 73 he had applied under section 363(2) read with section 387 of the Code for a certified copy of the judgment dated 22 11 73 through the jail authorities and that though the copy was received by the jail authorities in March 1 1974 from the High Court it was never delivered to him, with the result he not only lost his right to appeal by special leave but was forced to come up with a condonation petition after obtaining another certified copy from the High Court. Condoning the delay and dismissing the petition the Court ^ HELD: l. Freedom is what freedom does. In article 21 of the Constitution the guarantee of the personal liberty is phrased with superb amplitude with the words, "No person shall be deprived of his life or personal liberty except according to procedure established by law". "Procedure established by law" are words of deep meaning for all lovers of liberty and judicial sentinels. Amplified activist fashion, 'procedure ' means 'fair and reasonable procedure ' which comports with civilised norms like natural justice rooted firm in community consciousness not primitive processual barbarity nor legislated normative mockery. [201C E] 2. One component of 'fair procedure ' is natural justice. Generally speaking and subject to just exceptions, at least a single right of appeal on facts, where criminal conviction is fraught with long loss of liberty, is basic to civilized jurisprudence. It is integral to fair procedure, natural justice and normative universality save in special cases like the original tribunal being a high bench sitting on a collegiate basis. In short, a first appeal from the Sessions Court to the High Court, as provided in the Criminal Procedure Code, manifests this value upheld in article 21. Every step that makes the right of appeal fruitful is obligatory and every action or inaction which stultifies it is unfair and, ergo, unconstitutional (In a sense, even article 19 may join hands with article 21, as the Maneka Gandhi reasoning discloses). Maneka Gandhi 's case has laid down that personal liberty cannot be cut out or down without fair legal procedure. [197F, 203D E. F 208E] Pertinent to the point in the case are two requirements: (i) service of a copy of the judgment to the prisoner in time to file an appeal an(l (ii) provision of free legal services to a prisoner who is indigent or otherwise disabled from securing legal assistance where the ends of justice call for such service. Both these are. State responsibilities under article 21 and apply where procedural law provides. for further appeals as well. [203F G] Maneka Gandhi vs Union of India , referred to. Judicial Justice with procedural intricacies, legal submissions and critical examination of evidence, leans upon professional expertise; and a failure of equal justice under the law is on the cards where such supportive skill is absent for one side. Our Judicature and Judicial Process, engineered by kindred legal technology, compel the colloboration of lawyer power for steering the wheels of equal justice under the law. [204C D] If a prisoner who is sentenced to imprisonment is virtually unable to exercise his constitutional and statutory right of appeal, inclusive of special leave to appear for want of legal assistance, there is implicit in the Court under article 142 194 read with Articles 21 and 39A of the Constitution power to assign counsel for such imprisoned individual "for doing complete justice". This is a necessary incident of the right of appeal conferred by the Code and allowed by article 136 of the Constitution. The accused has a right to counsel not in the permissive sense of article 22(1) and its wider amplitude but in the peremptory sense of article 21 confined to prison situations. [28F G, 209C] 4. Where the prisoner seeks to file an appeal or revision every facility for exercise of that right shall be made available by the jail administration. [209E] (a)Courts shall forthwith furnish free transcript copy OF the judgment when sentencing a person to prison term. In the event of any such copy being sent to the jail authorities for delivery to the prisoner by the appellate, unrevisional or other Court, the official concerned shall with quick despatch. get it delivered to the sentence and obtain written acknowledgement thereof from him. Any jailor who by indifference or vendetta, withholds the copy thwarts the Court process and violates article 21 and may pavc the way for holding the further imprisonment illegal. These obligations are necessary implied in the right of appeal conferred by the Code read with the commitment to procedural fairness in article 21. section 363 of the Cr. P.C. is an activist expression of this import of article 21 and is inviolable. [204A B & 209DE] John Richard Argersinger vs Raymond Hamlin, ; 530 at 535 36 and 554, quoted with approval. article 8 of the Universal Declaration on Human Rights and article 14(3) of the International Covenant on Civil and Political Rights referred to. (b) The State which prosecuted the prisoner and set in motion the process which deprived him of his liberty shall pay to the assigned counsel such sum as the Court may equitably fix. the Court may judge the situation and consider from all angles whether it is necessary in the ends of justice to make available legal aid in the particular. That discretion resides in the Court. [209A B, & G] (c) These benign prescriptions operate by force of article 21 "strengthened by article 19(1)(d) read with sub article (5) from the lowest to the highest Court where deprivation of life and personal liberty is in substantial peril. [209H] 5. Since the Supreme Court is the last in Indian pyramid of justice every party in person elicits from the Court extra solicitude so that he may not suffer from a sense of handicap due to the absence of professional legal service. The present petition, the party though proffessional legal aid by the Court preferred to argue himself [1971H. 198A, 209B] 6. (a) The Supreme Court has laid down certain fundamental principles its governing its jurisdiction when special leave is sought under article 136 of the Constitution. The Court cannot depart from this criteria lest the endless chase for justice by every defeated litigant, civil and criminal should flood it into dysfunction.[198A B] 195 Ujjagar Singh & Anr. vs State (Delhi Admn), order in S.L.P. (Crl.) No. A 1319 etc. Of 1977 dt. 31 7 78 (unreported case). (b) The soft justice syndrome vis a vis white collar offenders scandalizes the Court. It stultifies social justice and camouflages needed severity with naive leniency. [196G] (c) Social defence is the criminological foundation of punishment. In the instant case, the trial judge has confused between correctional approach to prison treatment and nominal punishment verging on decriminalisation of serious social offences. The first is basic and the second pathetic. That Court which ignores the grave injury to society implicit in economic crimes by the upperberth 'mafia ' ill serves social justice. Soft sentencing justice is gross injustice where many innocents are the potential victims. It is altogether a different thing to insist on therapeutic treatment, hospital setting and correctional goals inside the prison "even punctuated by parole, opportunities for welfare work meditational normalisation and healthy self expression so that the convict may be humanised and on release rehabilitated as a safe citizen. Coddling is not correctional any more than torture is deterrent. While iatrogenic prison terms are bad because they dehumanize, it is functional failure and judicial pathology to hold out a benignly self defeating non sentence to deviants who endanger the morals and morale, the health and wealth of society. [199E H, 200A] Mohammad Giasuddin vs State of Andhra Pradesh [1978] I SCR 153. applied.

N: Criminal Appeal No. 646 of 1992. From the Judgment and Order dated 3.4.92 of the Gujarat High Court in Crl. A. No. 161 of 1992. T.U.Mehta, N.N. Keshwani, Ashok D. Shah, R.N. Keshwani and S.K. Gupta for the Appellant. Anip Sachthey and Badri Nath for the Respondent. The Judgment of the Court was delivered by YOGESHWAR DAYAL, J. On 4th September, 1992 this Court had directed issue of notice on the Special Leave Petition as well as on application for bail returnable in four weeks and it was indicated that the matter will be heard and finally decided on that date. However, there is no appearance on behalf of the State today. Leave granted. The matter is being disposed of. This is an appeal by Special Leave against the judgment of the Division Bench of the Gujarat High Court dated 3rd April, 1992. Four accused persons were tried by Special Judge, Ahmedabad. Out of the said four accused only one of the accused person, namely accused No. 2, a Food Inspector has been convicted of offences punishable under Section 161 of the Indian Penal Code and Sections 5(1) (d) and 5(2) of the Prevention of Corruption Act, 1947. The three other accused were acquitted by the learned Special Judge. The State tiled the appeal against the acquittal of the three acquitted accused whereas accused No. 2 filed an appeal against his conviction and sentence. The High Court dismissed the appeal of the State against the acquittal of accused No.1, 3 and 4 and at the same time dismissed the appeal of accused No. 2. Accused No. 2 has come up to this Court by way of a Special Leave Petition against the aforesaid decision of the Division Bench. The prosecution case is that the complainant Mohanlal Chhatramal Samnani is running a shop and inter alia dealing in Kimam opposite Maninagar Railway Station, Ahmedabad. On 7th January, 1984, the Chief Inspector in the Health Department (accused No.1) and accused No. 2 (appellant herein) and accused No. 4, who were working under him as Food Inspectors, had approached the complainant at his shop and stated that they had been inspecting the food articles for adulteration and took a bottle of Kimam and opened it for sample and the complainant told them that it may be taken in sealed condition but they refused to do so and stated that the sample would not be passed and the complainant would be put to difficulties. This was stated by accused No. 1 who further stated that the complainant should be practical. The complainant enquired as to what was meant by being practical and the accused No. 2 (appellant) replied that "being practical" means "money". The complainant then enquired as to the amount and he was told Rs. 5,000.00. The complainant was not willing to make such payment. However, he was pressurised. The complainant stated that he did not have that much money and, therefore, he was asked to pay whatever the amount he could pay immediately and the complainant opened his `galla ' and gave Rs. 600.00 to accused No. 1. The next day, on 8th January, 1984, accused No. 4 had come to his shop and enquired whether the money had been arranged but the complainant replied that it could not be done. However, under pressure he gave Rs. 500.00 to accused No. 4 and asked for more time for making arrangement for more amount. Thereafter, after about 15 days accused Nos. 2 & 4 had come to his shop demanding illegal gratification and the complainant requested for four days time. After four days again the accused Nos. 2 & 4 came to his shop and the complainant again stated that the money could not be arranged and he may be given two days time. After great difficulties, on complainant making a promise that he would pay the amount with 100% certainty, and on this final promise, accused Nos. 2 & 4 asked the complainant to keep the money ready on 30th January, 1984 at 3.00 p.m. On 30th January, 1984 the complainant approached the office of the Anti Corruption Bureau and gave his complainant. Two Panchas were called by the A.C.B. In the presence of those two Panchas, the numbers of 40 currency notes of Rs. 100.00 each were noted done in two batchs of 20 each. Each of these currency notes was treated with anthracene powder and a demonstration was made and shown to thc complainant and the Panchas. One bundle of Rs. 2000.00 was to be given to accused No. I and another bundle was to be given to accused Nos. 2 & 4. Panch No. 1 was to remain with the complainant and Panch No. 2 was to remain with the raiding party. After making this preliminary panchnama raided party went to Maninagar and the complainant and Panch No. 1 went to the shop at about 6.30 p.m. and the others waited outside a little away. After about an hour accused No. 2 came to the shop and the complainant asked accused No. 2 to come and sit but the accused No. 2 replied that he was in a hurry and asked the complainant to come with him where another Inspector was waiting near the Post Office. Therefore, the complainant went with accused No. 2 and Panch No. 1 followed them. Accused No. 3 and Jinto (absconding accused) were waiting and accused No. 2 introduced them to the complainant and asked the complainant as to what he had done about the money which was earlier talked about. The complainant replied that he had brought the money. The accused No. 2 demanded the same and the complainant took out the bundle of currency notes from one of his pockets and gave it to accused No. 2 who accepted it by his right hand and asked the complainant as to how much it was and the complainant replied that it was Rs. 2,000.00 and accused No. 2 asked as to for how many persons it was and the complainant replied that it was for three persons. The accused No. 2 asked accused No. 3 to count the same and while Modi, accused No.3, was counting the same, the complainant gave the signal and the raiding party which had followed them immediately came there alongwith Panch No. 2. All of them wont to the shop of the complainant where Modi was asked to give currency notes to the Panchas and exercise of ultra violet Iamp was undertaken and in the ordinary light, hands of each of the three Food Inspectors did not indicate any light change. Thereafter, under ultra violet light, hands of all were seen and the hands of Panch No. 2 and the members of the raiding party did not show any change on their hands. The hands of accused No.2 (appellant) were seen in the ultra violet light and the four fingers and thumb of the right hand showed the light blue colour and white sparkle. So also was the position with regard to the right hand fingers and thumb of Jinto and his clothes, namely the right hand pocket of the pant, so also the fingers and thumb of both the hands of accused No.3, Modi, and the left hand pocket and the woollen cap of Modi showed white sparkle and the light blue colour. The numbers of currency notes were compared with the numbers which were recorded in the preliminary panchnama and they were found to tally. The currency notes also showed the anthracene powder in the ultra violet light. The complainant 's hands were also seen and they also showed the anthracene powder in ultra violet light so also both his inside pockets of the coat. Thereafter, the complainant and the Panchas went to the residence of accused No.1. The complainant alongwith Panch No.1 went to the first floor of the flat of accused No.1. Accused No.1 opened the door and asked these people to come inside and made them sit. The complainant offered money to accused No.1. He, however, refused to accept the same and, therefore, they came Out and no raid was made. As stated earlier all the accused were tried by the learned Special Judge and accused Nos. 1, 3, & 4 were acquitted and ultimately the appeal of the State against their acquittal was dismissed by the High Court. The High Court dismissed the appeal of accused No.2 also after noticing (i) that the Panchas did not recognize any of the accused persons; (ii) that there is no corroboration to what had happened in the meetings preceding the raid on 30th January, 1984; (iii) that the evidence of the complainant was disinterested and did not require any corroboration; and (iv) that the hands of accused No.2 were seen in ultra violet light and four fingers and thumb of the right hand showed the light blue colour and white sparkle. The High Court had acquitted accused Nos. 3 & 4 in spite of the fact that their fingers have also showed light blue colour and white sparkle in ultra violet light but the High Court was not prepared to rely on that circumstance alone with the uncorroborated testimony of the complainant. Since according to the High Court no demand had been made by accused Nos. 3 and 4 from the complainant for any bribe. It will be noticed that not only the two Panchas could not recognize any of the accused persons but there is no corroboration to the various statements of the complainant vis a vis accused Nos. 1 to 4 by the police officials who constituted the raiding party either. The raiding party including the police officials reached the spot at a time when they could neither hear the talk, if any, between the accused No. 2 and the complainant nor could see the alleged acceptance of money by accused No.2 and passing it on to accused No.3. We are thus left with the sole testimony of the complainant and the test of seeing anthracene powder on the hands and fingers of accused No.2. The High Court had acquitted accused No.3 and did not find it safe to convict him on the sole testimony of the complainant supported by the test of seeing anthracene powder on the hands and fingers of accused No.3. in ultra violet light. But on the same evidence the High Court upheld the conviction of accused No.2 relying on the same evidence which was rejected vis a vis accused No.3. The High Court felt that the complainant was totally dis interested in the success of the raid and could not be called interested person and thus felt no need for corroboration of his statement. The fact remains that the High Court totally ignored the statement of the complainant made during cross examination on behalf of accused No.2. In his cross examination the complainant stated; "It is true that accused No.2 used to carry out raids on and often on Pan gallas. It is true that I had felt that he is harassing businessmen selling Pan and Masalas. It is true that is why we thought of teaching him a lesson. It is true that in my statement before police, I have not stated that when accused No.1 asked as to why have you come, then I told that I am Kimamwala of Maninagar and according to talk with Shantilal, I have come to give money. " It is clear that it is not a case merely of a complainant from whom bribe was demanded and he was forced to pay the same but the complainant had thought of teaching a lesson to accused No.2 for harassing the businessmen selling Pan Masalas and, therefore, it could not be said that the complainant was not interested in success or otherwise of the raid. In fact the High Court acquitted accused No.3, though the evidence against him was the same as it was against accused No.2. When the High Court could not find it safe to rely on the uncorroborated statement of the complainant while upholding the acquittal of accused No.3 we also find it unsafe to rely on the pise dixit of the complainant which is unsupported by both the Panch witnesses and the police officials who formed the raiding party for upholding the conviction of accused No.2, appellant before us. The result is that the appeal succeeds, the conviction and sentence of the appellant is set aside and the appellant is acquitted. N.V.K. Appeal allowed.

This Court, by its order dated 20.11.1986, while disposing of Writ Petition (Crl.) No. 1061 of 1982, gave comprehensive directions for rehabilitation of Adivasis/landholders affected by the Rihand Super Thermal Power Project to be set up by the National Thermal Power Corporation Limited (NTPC), and appointed a Board of Commissioners to supervise the implementation of the said directions. Since then this Court was monitoring the project. Disposing of the proceedings and the monitoring process so far as the NTPC was concerned, this Court, HELD: In order to ensure that the rights of the oustees are determined in their respective holdings and they are properly and adequately compensated, the NTPC shall take, in collaboration with the State Government, the following measures to rehabilitate the evictees who were in actual physical possession of the lands/houses etc. : (i) The NTPC shall submit a list of the evictees claimants to the District Judge, Sonebhadra who shall be the final authority to finalise the list. (ii) One plot of land measuring 60 ' x 40 ' to each of the evictee families be distributed for housing purposes through the district administration. (iii) Shifting allowance of Rs. 1500 and in addition a lumpsum rent of Rs. 3000 towards housing be given to each of the evictee families. 858 (iv) Free transportation shall be provided for shifting. (v) Monthly subsistence allowance equivalent to loss of net income from the acquired land to be determined by the District Judge Sonebhadra subject to a maximum of Rs. 750 for a period of 10 years. The said payment shall not be linked with employment or any other compensation. (vi) Unskilled and semi skilled posts in the project shall be reserved for the evictees. (vii) The NTPC shall give preference to the oustees in employment in class III and IV posts under its establishment. (viii) The evictees be offered employment through the contractors employed by the NTPC. (ix) Jobs of contractors under the administration of the NTPC be offered to the evictees. (x) The shops and other business premises within the NTPC campus be offered to the evictees. (xi) The NTPC shall operate for the benefit of the evictees selfgenerating employment schemes such as carpentry training (free tools to be provided after completion of training) carpet weaving training, sericulture, masonary training, dairy farming, poultry farming and basket weaving training etc. (xii) The NTPC shall provide facilities in the rehabilitative area such as pucca roads, pucca drainage system, handpumps, wells, portable water supply, primary school, adult education classes, health centre, Panchayat Bhavan, sports centres, electricity connections, bank and sulabh Sauchalaya complex etc. The Deputy Commissioner Sonebhadra shall supervise and ensure that the rehabilitation measures are fully complied with. (xiii) As regards compensation for crops and land, the provisional compensation at the rate of Rs. 850 per acre per year for crops and Rs. 10,000 per acre for the land be paid to the oustees. [pp.861B H; 862A H; 863A B] 859 The District Judge Sonebhadra shall be the authority to determine the compensation. The orders passed by the District Judge shall be treated as orders under section 17 of the Indian Forest Act, as amended by U.P. Act 25 of 1965. [p.863B,F]

Civil Appeal No. 87 of 1959. Appeal from the judgment and decree dated April 6, 1955, of the former Andhra High Court in A.S.O. No. 134/50. T. V. R. Tatachari, for the appellants. Bhimasankaram, K. R. Choudhuri and T. M. Sen, for the respondent. December 21. The Judgment of the Court was delivered by: RAGHUBAR DAYAL, J. This is an appeal on a certificate granted by the High Court of Andhra Pradesh, against the judgment and order of the High Court reversing the judgment and order of the District Judge, Vizagapatam, holding that the place of worship in suit was not a temple as defined in the Madras Hindu Religious Endowments Act, 1926 (Madras Act II of 1927), hereinafter called the Act. On March 28, 1947, the Board of Commissioners for Hindu Religious & Charitable Endowments, Madras, held the institution in suit to be a temple as defined in the Act. The appellants, thereafter filed a petition under section 84(2) of the Act, in the Court of the District Judge, Vizagapatam, and prayed for the setting aside of the order of the Board. They alleged that the institution, known as the Poohari Fakir Sadavarthy, at Bondilipuram, Chicacole, a ongstanding institution, was started by one Malukdas 278 Bavajee, some time during the reign of the Moghul Emperor, Aurangazeb. The Emperor, in recognition of the Bavajee 's piety and devotion to God, made certain grants to him with the object and purpose of enabling him to maintain himself and carry on the distribution of Sadavarthy to Fakirs and Sadhus and to pray to God for the prosperity of the Empire and Emperor, according to what was stated in the well known historical works like Bhakthamala by Maharaja Raghunandha Singh Deo of Rewa. The institution flourished and continues up to this day. The original plaintiff No. 2, Rajaram Das Bavajee, was the ninth in succession from the founder Malukdas Bavajee. He died during the pendency of the proceedings and is now represented by appellant No. 2, Mahant Gangaram Das Bavajee. Sithaldas Bavajee, the sixth head of the institution, who lived in the first half of the Nineteenth Century built a temple and installed therein certain idols for his private worship. The shrine was an adjunct of the institution Poohari Fakir Sadavarthy. It is alleged to be a private temple known as Jagannadhaswami temple, Balaga, and is meant for the worship of the Mahant and his disciples, one of whom conducts the daily worship. The income from the various properties granted to Malukdas Bavajee or his successors had been regularly utilised for the maintenance of the head of the institution and for distributing charities to the sadhus and pilgrims passing through Balaga. A part of the income was, however spent on the expenses of the worship in the temple and the incidental expenses connected with it. The respondent Board denied that Jagannadhaswami temple was a private place of worship, that the public had no access to it without the permission of the Bavajee and alleged that the temple possessed all the features of a place of public 279 religious worship and was dedicated to or for the benefit of or used as of right by the Hindu community as a place of religious worship. The appellants examined five witnesses, including plaintiff No. 2, in support of their case. The respondent examined one witness. The plaintiffs also filed a number of documents. The respondent filed a few documents which included the Board 's order dated March 28, 1947, and its enclosure. The learned District Judge concluded, from the evidence, that Jagannadhaswami temple was not a temple as defined in the Act, it being a private temple existing for the benefit of the appellants only. He therefore set aside the impugned order of the Board. On appeal, the High Court came to a different conclusion and allowed the appeal. It mainly relied on the entries in the Inam registers with respect to the institution and on the following facts which it considered to be established : (i) the temple is a very old temple constructed in or about the year 1750; (ii) the temple has the structure and polity of a public temple; (iii) there are utsava vigrahams and vahanams; (iv) it has a big compound wall with the gate opening into the Chinna Bazaar Road; (v) regular worship is performed every day at the scheduled time; (vi) there is an archaka who performs worship; (vii) a large number of pilgrims attend every day and partake in the food given after naivedyam to the God; 280 (viii) there are utsavams and the rathotsavam which is particularly conducted on large scale and is attended by members of the public. The High Court relied on the statement of the solitary witness examined for the Board and rejected the statements of the witnesses examined for the appellants. The sole question for determination in this appeal is whether this institution is a 'temple ' as defined in the Act. Clause (12) of section 9 of the Act reads: " 'Temple ' means a place, by whatever designation known, used as a place of public religious worship and dedicated to, or for the benefit of, or used as of right by, the Hindu community, or any section thereof, as a place of religious worship. " The institution in suit will be a temple if two conditions are satisfied. One is that is a place of public religious worship and the other is that it is dedicated to or is for the benefit of, or is used as of right by, the Hindu community, or any section thereof, as a place of religious worship. We are of opinion that the oral and documentary evidence fully establish the appellants ' case that it is not a temple as defined in the Act. The documents on record and bearing dates from 1698 to 1803 A. D. mention the grants to be for the purposes of the Bavajee, i.e., the head of the institution. The first document, Exhibit P 1, (is of the Hizri year 1117, corresponding to 1698 A.D., and purports to be executed by Ibrahim Khan, Bahadur, a humble servant of Badshah Alamgir Ghazi. , i.e., Emperor Aurangazeb. This order says: "The village of Cheedivalasa, Boonamali Pargana Haveli (town) towards Kaling of the 281 said Sirkar, has been fixed and continued as a complete inam in favour of Poohari (Poojari) Fakir Sadabarty in accordance with the Sanads of the previous rulers. Meanwhile, in view of the claims of the said person it has been confirmed as per endorsement in accordance with momooli (usage) and mustamir (continuing, lasting long). It is necessary that the said village be placed in the enjoyment of the said person so that, utilising the incomes thereof for his own maintenance, he may engage himself in praying for the stability of the State till eternity. " The purpose of the other grants is stated in practically similar terms aud it is necessary to quote them. None of the grants of land or other property on record bears a date subsequent to that of the year 1803 A.D. The documents, Exhibits P 47, P 48 and P 49 are orders of the Collectors and refer to the villages of Cheedivalasa and Thallavalasa, and the last two state that the income of these two villages was given for sadavarty (feeding) for the respective year to Phalari (Phulhari) Bavaji. There is no mention in any of these two documents that any grant was being made for the purposes of the temple or for the purposes of the Bavaji as well as for those of a temple. The only reference to the construction of the temple is in Exhibit P 52, an extract from the Register of Inams dated May 22, 1865, with respect to village Vanzangi. The name of the village, however, does not appear in the document itself. It is stated in this document: "About century ago, the trustees built a temple of Jagannadhaswamy. " According to this note, the temple may be said to have been built in about 1760 A.D. The documents of the period from 1761 to 1803 A.D. Exhibits P 31 282 to P 49, do not record that the grants under them were for the expenses of the temple as well. The grants simply mention them to be for the expenses of Fakirs, in the name of Poohari Fakir Sadavarthy, and not for the temple. The non reference to the temple in the various documents is consistent with the temple being for the private worship of the head of the Sadavarti Institution and being an adjunct to that institution, as in that case there was to be no grant to the temple and the grant had to be to the Sadavarti institution or to its head. It is also a matter for surprise that no independent grant to this temple was made subsequent to its coming into existence. Some one religiously and charitably disposed could have thought of endowing some property to this public temple erected by the Head of a well known institution in that part of the country, where, it has been held judicially, there is a presumption of a temple being a public temple. We may make it clear that among the documents referred to, we are not at the moment including entries in the Inam registers. It follows from an examination of the various documents of the period between 1608 and 1803 A.D., that the various endowments were for the Fakir or Bavajee who ran the Sadavarti institution and that none of the grants was for the temple or even for the Sadavarti institution itself, it being always in the name of the Bavajee in charge of that institution. Before discussing the entries in the inam registers which carry great weight, we may first refer to the Rules in pursuance of which the entries in the Inam registers were made, after due investigation. The various extracts from the Inam registers which have been filed show that the proposals for the grant were confirmed under rule 3, clause (1), tax free. This makes it of importance to consider the rule 283 thus referred to. It is one of the rules for the adjudication and settlement of the inam lands of the Madras Presidency and is quoted at page 219 in the case reported as Arunachellam Chetty vs Venkatachalapathi Guruswamigal (1) "If the inam was given for religious or charitable objects, such as for the support of temples, mosques, colleges, choultries, and other public buildings or institutions, or for services therein, whether held in the names of the institutions or of the persons rendering the services; it will be continued to the present holders and their successors, and will not be subject to further interference, so long as the buildings or institutions are maintained in an efficient state, and the services continue to be performed according to the conditions of the grant. " It was also said at page 217: "But the Inam Register for the year 1864 has been produced, and to it their Lordships attach importance. It is true that the making of this Register was for the ultimate purpose of determining whether or not the lands were tax free. But it must not be forgotten that the preparation of this Register was a great act of state, and its preparation and contents were the subject of much consideration under elaborately detailed reports and minutes. It is to be remembered that the Inam Commissioners through their officials made inquiry on the spot, heard evidence and examined documents, and with regard to each individual property the Government was put in possession not only of the conclusion come to as to whether the land was tax free, but of a statement of the history and tenure of the property itself. While their Lordships do not doubt that such a report would not displace actual 284 and authentic evidence in individual cases; yet the Board, when such is not available, cannot fail to attach the utmost importance, as part of the history of the property, to the information set forth in the Inam Register. " Exhibit P 50 is the extract from the Inam Register No. 48 relating to village Tallavalasa in the Taluk of Chicacole in the district of Ganjam. The note of the Deputy Collector, Inam Commissioner, records inter alia the following particulars: (1) The village was granted originally by the Nawab Mafuz Khan in Hiziri 1155 corresponding with A.D. 1739 to one Inamdar Bairagi; as the original sanad is not forthcoming it is impossible to mention here without entering into details, the object of the grant and the tenure of the village. This mokhasa jahagiri is in possession of the person in column (II) who is known by the name of Palahara Mahant Bartudoss Bavaji, 'a Bairagi '. (2) This Bartudoss Bavaji pleaded that this village and three other villages were granted in the district by the former Rulers for Sadavarti and for certain other Divine Service, and that the proceeds of them were appropriated to the expenses attendant on the temple of Sri Jagannadhaswami to some extent and to distributing Sadavarti or supplying victuals, fire wood, etc., or dressed food to Bairagis and others resorting to Rameswaram from Benaras and vice versa. (3) This Bartudoss Bavaji produced a sanad of Sri Seetaram Ranzi Maharaja, the former zamindar of Vizianagaram in Vizagapatam district, granted to one Gopaladass Palahari Bavaji, dated Subhakrutu year, corresponding with A.D. 1782. This Sanad 285 showed that the said Gopaladass was then a manager of the branch of charity and that this village was granted free from any tax in lieu of the income in the villages of Balaza, Petranivalasa and Serumohannadpuram which were granted originally by the authorities for the support of the charity and which were resumed and incorporated with circar lands. The sanad explicitly stated that the proceeds of the village were to be appropriated for Sadavarti. (4) On the whole it appears that this mokhasa was granted for 'Sadavarti ' and for the support of the temple of Sri Jagannadhaswami in Balaga. There is a Bairagi Mattam in Balaga and a temple of Sri Jagannadhaswami. This is therefore a charitable grant. To keep up the object of grant, I think the village may be confirmed on its present tenure. (5) Column 8, meant for noting the description of the inam, mentioned: 'Granted for the support for the Sadavarti Bairagi mattam in Balaga and of the temple of Sri Jagannadhaswami in the same village now efficiently kept up. ' (6) In column 10, under the heading 'hereditary, unconditional for life only or for two or yihre lives ' is mentioned 'hereditary '. (7) Column 11 meant for recording the name of the grantor and the year of the grant, mentions, under it, Mafusu Khan Nawab, dated Hijiri 1155. (8) In column 13, Mandasa Palahari Bairagi is mentioned as the original grantee. (9) Under column 18, referring to relationship to original grantee or subsequent registered holders, is written 'Sadavarti 286 Bairagi mattam and the temple of Sri Jagannadhaswami in Balaga Trustee Palahara Mahant Barta Dasu Bavaji '. It is clear from the fact that the grant was considered 'a charitable grant ' that the grant was not taken to be for the purposes of the temple, but was taken to be a grant for the purposes Sadavarti. This is also clear from the Statement of Bartudoss Bavaji that it is only a part of the proceeds which is spent on the temple and not a major portion of the proceeds, as his statement is to the effect that the proceeds are appropriated to the expenses attendant on the temple 'to some extent '. There is no suggestion that the temple was in existence in 1739 A. D. when the grant was made. This makes it clear that no grant could have been made for the expenses of the temple and that a small portion of the proceeds was naturally spend on the temple by the Bavaji after the temple had been constructed. Any statement in these entries about the grant being both for Sadavarti and for the expenses of the temple appears to be due to the wrong inference of the person making the enquiry. He could easily commit such an error on account of the existence of a temple at the time of the enquiry and on account of the expression 'divine service '. The 'divine service ' really meant, as would appear from the expression in the other documents of the period 1698 to 1802 A.D., service by way of prayers for the stability and continuity of the State '. The expression that the grant was 'hereditary ' also supports the conclusion that the grant was to the Bavajee personally and not to the temple even if the temple existed at the time of the original grant. In fact, the sanad granted by Seetaram Ranzi Maharaja and produced before the enquiry officers explicitly stated that the proceeds of the village were to be appropriated for Sadavarti. 287 This extract therefore supports the case of the appellants even though the name of the temple has been mentioned along with Sadavarti Bairagi. The confirmation of the grant, tax free, was recommended by the Deputy Collector, Inam Commissioner, under Rule 3, Clause (1). The order of the Officiating Inam Commissioner dated July 1864 is: 'Confirmed on present tenure ', and column 9 described the tenure as 'tax free '. Exhibit P 51 is the extract from the Inam Register in the Zamindari estate of Tekkaly in the Chicacole Taluk, Ganjam District, and relates to the village Chinna Zavanapalli. The report of the Deputy Collector shows that the claim of the then Bavajee was that the village was granted in the name of Gopaladass, trustee and priest of the mattam in Hijari 1165, corresponding to 1752 A.D. It further records: "It is explained by the Zamindar 's shiristadar on behalf of the Zamindar that this was granted for the support of the mattam and this is not a personal grant. This was entered in the permanent settlement account as an agrahar. The object of the grant is to feed Bairagis and etc., who travel between Benaras and Rameswaram or supply victuals clothes and etc. This branch of charity is known by the name of 'sadavarti '. The proceeds of this village with the other villages, which granted for the support of the charity are appropriated to sadavarti and to worship the idols in the temple of the mattam. As this is granted on the whole for the support of the charity branch, it should, I think, be confirmed on its present tenure. " The entries under the various columns are practically on the lines of the entries in Exhibit P 50. The entries in this register also support the case of the appellants to the extent that the original grant 288 in 1752 A. D., was to the then Bavajee and was for the purposes of the charity. Exhibit P 52 is the extract from the Register of Inams with respect to village Vanzangi. It records very clearly: "The object of this grant is to give 'sadavarti ' to travellers, that is, distributing alms and supplying victuals to travellers. This grant was made during the reign of 'Alangir Padsha '. Ever since the Inam is continued undisturbed. About century ago, the trustees built a temple of Jagannadhaswamy. Now in addition to distributing alms and giving Sadavarti to Bairagis and others, the idol in the temple is worshipped and annual festivals are made. It appears that the Trustee is defraying charges to meet the object of the grant and that he is not mis appropriating the proceeds of the Inam in any way. " The inam was confirmed as a charity grant to Mandasu Sadavarty Charity according to the terms of the grant. This extract is of great importance as it, in clear terms, mentions that the object of the grant was to give sadavarti to travellers and that it was confirmed as a charity grant to this charity. It speaks of the erection of the temple and still states that the Trustee was defraying the charges to meet the object of the grant. This indicates that the expenses of the temple were taken to be incidental to the expenses of the entire sadavarti and that the temple was just an adjunct to the sadavarti institution. Exhibit P 7, Parwana dated November 15, 1722, corresponding to 14th day of Rabial Awwal, 1135 Hijiri, refers to the grant of this village to Poohari Fakir Sadavarti. Exhibit P 53 is the extract from the Register of Inams relating to village Ragolu in Chicacole 289 Taluk. It records: 'In the sanad it was mentioned that the inam was given for the support of fakirs to the original grantee about a century ago. The other notes in this extract are practically identical with those in Exhibit P 52. The final order of the Inam Commissioner was also in terms similar, and was 'confirmed to the fakirs the sadavarti charity according to the grant, free, there being no excess. It is interesting to note that in column 2 (general class to which inam belongs) is noted 'Dewadayam ', i.e., dedicated to God; that in column 8 meant for the description of the inam is noted: 'for the support of Pagoda of Sri Jagannadhaswami in Bondilipuram ', and that the entry in column 11 indicates that Anavaruddin Khan Bahadur made the grant in Hijiri 1171 corresponding to 1754 55 A. D. It is clear that the note about the land being dedicated to God is wrong in view of the definite statement that the Sanad mentioned that the inam was given for the support of fakirs to the original grantee (Mandasa Palahari Bairagi in Column 13) about a century ago and that it was the trustees of the institution who constructed the temple. When the temple was constructed by the trustees of the institution, viz., the Sadavarti institution, the original grant could not have been to the temple or to God. The entries in this extract confirm the construction we have placed on similar entries in Exhibit P 52 and other extracts indicating the grant to the temple. Exhibit P 54 is the extract from the Inam Register of No. 85 'Tallavalasa in the Taluk of Chicacole in the District of Ganjam. It is mentioned in this that Pratapa Rudra Narayana Devu granted this village to Falar Gosayi for the support of the 'Bavajee ' or Swami, in Hiziri 1141 which would correspond to about 1747 A. D. It is also noted in the report that the object of the grant was that the proceeds should be appropriated for divine purpose and that the proceeds were appropriated to the temple and sadavarti. The note 'for the support 290 of the pagoda of Jagannadhaswami ' in column 8 meant for the description of the inam, again, appears to be an entry made under an erroneous impression. There was no temple in existence when the grant was made in about 1747 A. D. Exhibit P 55 is an extract from the Register of Inams in the village of Balaga of Chicacole taluk dated August 13, 1881. It mentions, under the heading 'by whom granted and in what year, "the grant was made by Rajah Narayana Gazapati raz Bahadur under orders of Alamgir Padsha on 14th May of Hiziri 1171 corresponding with English years 1754 55. It is also noted: the Sanad granted is in existence. ' It is stated therein that as these lands appear from a former firman to have been granted to Sadavarti Mandass Bavaji for planting topes and raising buildings; they should be restored to him in pursuance of the long standing right. This means that the firman, which was not forth coming during the inam enquiry, dated from very early time. It must be noted again that this extract also describes the inam as Devadayam, i. e., dedicated to God. Again, clearly, this entry is wrong in view of the sanad which was in existence clearly stating that the lands were granted under a firman to Sadavarti Mandass Bavaji for planting topes and raising buildings and also in view of what is recorded in Exhibit P 12, a parvana of 1742 A.D., under the seal of Nawab Jafer Ali Khan. It records: "It has been proved that Mandas, the successor of Poohari (Poojari) Faqir Sadabarti has, per endorsement six kattis of land, free from assessment, in the village of Balaga and etc. , villages of the said Haveli Sircar, fixed for the expenses of the coming and going Fakirs in accordance with the sanads of the previous rulers. Therefore in consideration 291 of the blessings to follow, it has been confirmed as of yore. " It was the result of this wrong view of the enquiry officer that the Inam Commissioner confirmed the grant free of quit rent so long as the service was kept up, presumably the service of the deity, as the distribution of charity would not be properly described as 'service. ' The fact that the Inam Commissioner treated the grant relating to Exhibit P 50 to be in support of Sadavarti and for support of the temple of Sri Jagannadhaswami, would not make the grant for the purposes of the temple when the temple was itself not in existence at the time the grant was made and when a later sanad referring to it definitely stated that the original villages were granted for the purposes of charity. The observations of the Privy Council in Arunachellam 's Case (1) that in the absence of the original grant the Inam Register is of great evidentiary value, does not mean that the entry or entries in any particular column or columns be accepted at their face value without giving due consideration to other matters recorded in the entry itself. We have already stated that the 'divine service ' referred to in this entry does not refer to any religious worship but to the prayers to be offered by the grantee for the preservation of the State. We do not find anything on record to support the observations in the High Court judgment that the Bavajee, with the consent of the Ruler for the time being, constructed a temple and appropriated the income for carrying out the worship of the temple. No document states that the temple was constructed by the Bavajee after obtaining the consent of the ruler for the time being. Exhibits P 52 and P 55 just mentioned that the trustees built a temple of Sri Jagannadhaswami. The 292 expression 'trustees ' refers to the trustees of the Sadavarti institution and not to the trustees of the temple as such. There is nothing in these documents to support the view that the temple was built with the consent of the ruler for the time being. The appellants examined five witnesses to support their case that the Hindu public have no right to offer worship in the temple which is a private temple. The learned Judges described the statement of Janardhana Prasad Bhatt, P.W. 4, as worthless. No particular reliance is placed on his statement by the appellants in this Court. The appellants, however contend that the statements of the other witnesses have been rejected by the High Court for inadequate reasons. The first witness is Iswara Satyanarayana Sarma, P.W. 1. He was aged 63 at the time of his deposition in 1949. He was a Sanskrit and Telugu Pandit in the Municipal High School and practised as an Ayurvedic Doctor. He has given reasons for the view that the temple is not a public temple. It is not necessary to refer to them. His statement, has been rejected as he was considered to be interested in the Mahant who had been his patient and as the statement made by him that people including the sishyas, i.e., the disciples, take permission of the Mahant for worshipping, was considered artificial. This witness did not state that even disciples had to take permission of the Mahant for worship and so the latter reason was based on an erroneous impression of his statement, The mere fact that the Mahant consults him for his ailments and the ailments of other sadhus is no ground for him to make false statements. He is not under obligation to the Mahant. It may be that the Mahant is under obligation to him. The next witness is P. Kameswara Rao, P.W. 2. He is aged about 30 years. He was the 293 Additional Public Prosecutor of Vizagapatam, had been Municipal Councillor for a decade, President of the Co operative Central Bank and resided close to the temple. He was in a very good position to know about the public worshipping at the temple as a matter of right. He stated that he never found the public using the temple and that he himself might have visited the temple roughly about hundred times. He was put a direct question in cross examination and gave a clear cut answer. He denied from personal knowledge that the place was used as a place of public religious worship and that members of the public who were Hindus had a right of access to the temple for purposes of religious worship. It may be mentioned that the question also referred to the temple being built as a place of public religious worship and the answer would include a denial of this fact. It is obvious that the witness could not have known anything about it. He seemed to have overlooked the significance of this part of the question. We do not consider that his denying this fact on personal knowledge affects his veracity in any way, and especially, when he further stated that his personal knowledge consisted of three facts: (i) his attending the Rathayatra and seeing that no offerings of harati and dakshina were made; (ii) his not seeing any member of the public entering the temple whenever he entered into the temple; and (iii) whenever he entered the temple, he took the permission of the mahant. The learned Judges rejected his testimony with this observation: "The evidence of this witness is more like an advocate supporting the case of mahant than that of a witness, who has come into the witness box to speak of facts. The aforesaid facts based on his personal knowledge afford a very slender foundation for the conclusion which this witness has so boldly asserted in the witness box. " 294 The expression 'the aforesaid facts ' had reference to the facts on which his personal knowledge was based. These facts, in our opinion, afford good ground for the view expressed by him that the temple was not a public temple. He visited the temple so many times, and never saw any member of the public visit it. He himself took permission from the Mahant when he entered the temple. Nothing could be better corroboration of his own statement than his own personal conduct in seeking permission from the Mahant. We do not see any good reason for discrediting his testimony. The next witness is G. Venkata Rao, P.W. 3, aged 48 years. He is a chairman of the Municipal Council, Chicacole, Secretary & Vice President of the Co operative Central Bank. His statement has been considered to be very artificial. His statement that whenever he visited the temple he asked the permission of the Mahant is good corroboration of his statement that he considered the temple to be a private temple and not a public one. The facts that the Mahant is also a Municipal Commissioner and consults him occasionally as a doctor, are no good grounds to discredit him. The last witness the plaintiff No. 2, the predecessor of the appellant No. 2. He is undoubtedly interested in the success of the proceedings started by him. But that alone is no reason to ignore his statement altogether. In fact, his statement should be accepted in view of the support it gets from the statements of the other three witnesses just referred to. It is very significant, as pointed out by learned counsel for the appellants, that none from the Hindu public of the place has been examined for the respondent in support of its contention that the Hindu public go to this temple for worship as a matter of right. Quite a good number of people 295 should have been available for the purpose if it was a fact. The respondent, on the other hand, examined only M. Adinarayana Rao, who had been Inspector of Hindu Religious Endowments Board of the Chicacole division from 1946 to 1948. He certainly states that the temple in suit is a public temple in which all people can go as a matter of right for worship. It is a moot question as to how he can make such a statement even if he had seen a number of people entering the temple and worshipping there, which itself is not a fact. When there be good evidence about the temple being a private one, the mere fact that a number of people worship at the temple is not sufficient to come to the conclusion that the temple must be a public temple to which those people go as a matter of right as it is not usual for the owner of the temple to disallow visitors to the temple, even if it be a private one. He stated that there were several festivals like Nethroshasevam, the car festival and kalyanam. In cross examination he had to admit that he had not visited the kalyan festival and did not know when it was celebrated. This is sufficient to indicate that he is a zealous witness. He stated that there was an archak, but he could not give the archak 's name. Ordinarily, it need not have been expected of him to have known the archak 's name. But, considering that he was an Inspector of the Board and had visited the temple officially also and had to submit a report, it is rather difficult to believe that if he had really found an archak, a priest other than the Mahant and his disciples, he would not have considered it essential for the purposes of his enquiry to know his name. We see no reason to prefer his shaky statement to the statements of the witnesses examined for the appellants. 296 We need not consider the statements of the witnesses with respect to the features associated with the public temple and which are said to be absent in the temple in suit. It is admitted by the respondent 's witness that there is a Tulsi plant before the shrine. It is strenuously urged for the appellants that no public has a Tulsi Kotta, and this contention seems to find support from the statement made by the respondent 's witness in reexamination that generally, in Oriya temples no flag staffs are located and Tulsi plants are grown instead. The description of the temple with respect to its construction, equipment, practices, observances and the forms of worship are not inconsistent with the inference from the other evidence that the temple is not a public temple. The statement of the respondent 's witness that generally Oriya temples have no flag staffs and have Tulsi plants has significance in one other connection also. It was said in Mundancheri Koman vs Achuthan Nair (1) at page 408 that in the greater part of the Madras Presidency, where private temples were practically unknown, the presumption is that temples and their endowments form public charitable trusts. The presumption is certainly rebuttable. The evidence in this case sufficiently rebuts it. The temple is situate at a place which was practically at the boundary of the Madras Presidency, and close to the common boundary between that Presidency and Orissa. The presumption with respect to the temple in the Madras Presidency, therefore, will be a very weak one with respect to the temple so situated. We are therefore of opinion that the temple in suit is not a temple as defined in the Act as it is not used as of right by the Hindu community, or any section thereof, as a place of religious worship. We therefore allow the appeal with costs throughout, set aside the order of the Court below and 297 restore the order of the District Judge, Vizagapatam, setting aside the order of the Board dated March 28, 1947. Appeal allowed.

The Emperor Aurangazeb made certain grants to one Mukuldas Babajee, founder of the institution Poohari Fakir Sadavarthy, for the purpose of his maintenance and to carry on the distribution of Sadavarthy to Fakirs etc. The sixth head of the institution built a shrine for his private worship. It was adjunct to the aforesaid institution, and the public had no access to it without the permission of Mahant. The income from various properties granted to the founder and his disciples had been regularly utilised for the maintenance of the head of the institution and for distributing charities for the Sadhus and pilgrims; a part was spent on the expenses of the worship in the temple. The Board of Commissioners for Hindu Religious and Charitable Endowments, Madras held that the temple in suit was a public temple. The sole question for determination was whether this institution was a public temple as defined in the Act. ^ Held, that an institution would be a public temple within the Hindu Religious Endowments Act, 1926, if two conditions are satisfied; firstly, that it was a place of public religious worship and secondly, that it was dedicated to, or was for the benefit of, or was used as of right by the Hindu Community, or any section thereof, as a place of religious worship. When there be good evidence about the temple being a private one, the mere fact that a number of people worship at the temple, is not sufficient to come to the conclusion to the temple must be a public temple to which those people as a matter of right as it is not usual for the owner of together temple to disallow visitors to the temple, even if it be private one. In the present case the description of the temple with respect to its construction, equipment, practices, observances 277 and the form of worship are not inconsistent with the inference from the other evidence that the temple is not a public temple. The temple is not a temple as defined in the Act and it is not used as of right by Hindu Community, or any section thereof, as a place of religious worship. Held, further that the Inam Register is of great evidentiary value, but that does not mean that the entry or entries in any particular column or columns be accepted at their face value without giving due consideration to other matters recorded in the entry itself.

ivil Appeal No. 10811 of 1983 From the judgment and order dated 11 10 83 of the Patna High Court in E.P. 27 of 1980. L.M. Singhvi, K.N. Rai and A.M. Singhvi for the appellant. L.R. Singh, A. Sharan & Solaman Khurshid for the respondent. D.P. Singh, and D.P. Mukherjee for the intervener. The Judgment of the court was delivered by VARADARAJAN, J. This appeal under section 116(A) of the Representation of people Act, 1951, hereinafter referred to as the `Act ' arises out of the judgment of a learned Single Judge of the Patna High Court in Election Petition No.27 of 1980, setting aside the appellant 's election to the Bihar Legislative Assembly from No. 64, Rui Saidpur constituency on the ground that the election is void on account of improper rejection of the nomination papers of one Ram Kumar Jha. The election petition was filed by the first respondent, Nawal Kishore Sahi, the defeated candidate. The election was held on 31 5 1980 and the results were announced on 1 6 1980 after the counting. The appellant who contested as the Congress (I) candidate secure 138,463 votes while the respondent who contested as the Janata Party candidate secured, 26,991 votes. The other candidates secured much less and the appellant who secured a majority of 11,472 votes over the respondent was declared elected by the Returning Officer. After having heard the learned counsel for the parties we dismissed the appeal without costs on 8 2 1984 for reasons to follow. Now we proceed to give the reasons. The respondent Pressed only one ground during the trial before the learned Singh Judge and that was the alleged improper rejection of the nomination papers of Ram Kumar Jha who filed four nomination papers numbered as 39 to 42. The proposer in the nomination 560 paper No.39 was one Nand Lal Sah while the proposer in the nomination paper No. 40 was one Ganesh Prasad Gaur. The proposer in the nomination papers Nos. 41 and 42 was Ram Kumar Jha 's own brother Birendra Kumar Jha who has given evidence on the side of the appellate as RW 9. All the four nomination papers of Ram Kumar Jha were presented to the Returning Officer RW 7 on 2 5 1980 and he scrutinize all the nomination papers of Ram Kumar Jha. Ram Kumar Jha had mentioned the serial number and part number as 415 and 13 respectively in the nomination paper No. 39, as 391 and 17 in the nomination paper No. 40, as 324 and 14 in the nomination paper No. 41 and as 326 and 14 in the nomination paper No. 42. The Returning Officer rejected the nomination paper No. 39 on the ground that the serial number and part number of the candidate were wrong with reference to the electoral roll exhibit 4, nomination paper No. 40 on the ground that the serial number and part number of the candidate were wrong and the age of the candidate was not mentioned, nomination paper No. 41 on the ground that the serial number of the candidate was wrong and nomination paper No. 42 on the ground that there was difference in the age of the candidate Ram Kumar Jha had declared in his nomination paper No. 42 dated 2 5 1980 in regard to which the argument was confined before us that he has completed 33 years of age while it is common ground that in the electoral roll exhibit 4 prepared in the year 1980 his age is mentioned as 37 years. The Returning Officer has deposed as RW 7 about the rejection of those four nomination papers exhibit 2 to 2, (c) on the above grounds by his orders exhibit B to B 3. S.100 (1) (c) of the Act Provides that if the High Court is of the opinion that any nomination paper has been improperly rejected it shall declare. the election of the returned candidate to be void. On a Consideration of the evidence available on the record and the arguments of the learned counsel for the parties in the light of the authorities placed before him the learned Singh Judge found that no nomination paper could be rejected unless the defect is of a substantial character as pointed out even in para 13(i) of the Handbook for Returning Officers issued by the Election Commission of India and that the difference in the age of the candidate as given in the electoral roll and the nomination papers is not a material error and no opportunity was given to the candidate, Ram Kumar Jha when the nomination papers were filed on 2 5 1980 to remove any defect though section 33(4) of the Act lays down that on the presentation of the nomination on papers the Returning Officer shall satisfy himself that the names and electoral roll numbers 561 of the candidates and their proposers as entered in the nomination papers are the same as those entered in the electoral roll. The learned Judge held that the rejection of the nomination papers, Exs.2, 2 a and 2 c by the Returning Officer was improper. In that view he allowed the election petition without costs only, to the extent of setting aside the appellants election as being void which was the only relief prayed for in the election petition. Before us, Dr. L.M. Singhvi, Senior Counsel who appeared for the appellant proceeded to draw our attention to the evidence of certain witnesses including that of Ram Kumar Jha 's brother Birendra Kumar Jha, RW 9 for proving that Ram Kumar Jha had filed the nomination papers pursuant to some collusion with the object of enabling an election petition being filed against any successful candidate. But for want of specific allegation about any collusion or fraud and also an issue regarding any collusion we declined to hear any argument on the question of collusion. Consequently, the only point which was canvassed before us by Dr. Singhvi appearing for the appellant and Mr. L.R. Singh appearing for the respondent was as to whether the nomination papers of Ram Kumar Jha were improperly rejected by the Returning Officer and the appellant 's election is therefore void under section 100 (I) (c) of the Act. section 33(6) of the Act lays down that nothing in that section shall prevent any candidate from being nominated by more than one nomination paper. But the proviso thereto says that not more than four nomination papers shall be presented by or on behalf of any candidate or accepted by the Returning officer for election in the same constituency. section 19 of the Act lays down that subject to the earlier provisions contained in Part 3 of the Act every person who is not less than 21 years of age on the qualifying date and is ordinarily resident in a constituency shall be entitled to be registered in the electoral roll for that constituency. Therefore, a person to be entitled to be registered in the electoral roll for the constituency should ordinarily be a resident in that constituency and should not be less than 21 years of age on the qualifying date. Article 173 of the Constitution prescribing the qualification for membership of a State Legislature lays down that a person shall not be qualified to be chosen to fill a seat in the Legislature of a State unless he is a citizen of India, and makes and subscribes before some person authorised in that behalf by the Election Commission an oath or affirmation according to the form set out for the purpose in the Third Schedule, and, is, in the case of a seat in the Legisla 562 tive Assembly, not less than 25 years of age and, in the case of a seat in the Legislative Council, not less than 30 years of age, and possesses such other qualifications as may be prescribed in that behalf by or under any law made by Parliament. Therefore, a person to be entitled to be chosen to fill a seat in the Legislative Assembly of a State should be not less than 25 years of age. In the present case Ram Kumar Jha is noted in the electoral roll, exhibit 4 prepared in 1980 as being 37 years old while he has declared in the nomination paper No. 42 marked as Ex.2 c that he had completed 33 years of age. As stated earlier the nomination paper had been rejected by the Returning officer, RW 7 on the ground that there is difference in the age of the candidate between what has been mentioned in the electoral roll and the nomination paper and it is not based on any other ground. It is nobody 's case that the Returning Officer found any difficulty regarding the identity of the candidate, Ram Kumar Jha on account of this difference in the age mentioned in an electoral roll and the nomination paper. The point for consideration therefore is whether the rejection of this nomination paper by the Returning officer on the ground of difference in the age in the electoral roll and the nomination paper is improper. section 33(4) of the Act lays down that on the presentation of a nomination paper, the Returning officer shall satisfy himself that the names and electoral roll numbers of the candidate, and his proposer as entered in the nomination paper are the same as entered in the electoral rolls. The proviso to that sub section reads thus: "Provided that no misnomer or inaccurate description or clerical, technical or printing error in regard to the name of the candidate or his proposer or any other person, or in regard to any place mentioned in the electoral roll or the nomination paper and no clerical, technical or printing error in regard to the electoral roll numbers of any such person in the electoral roll or the nomination paper, shall affect the full operation of the electoral roll or the nomination paper with respect to such person or place in any case whether the description in regard to the name of the person or place is such as to be commonly understood; and the returning officer shall permit any such misnomer or inaccurate description or clerical, technical or printing error to be corrected and where necessary, direct that any such misnomer, inaccurate description, clerical, technical or printing error in the electoral roll or in the nomination paper shall be overlooked. " We are of the opinion that the difference in the age of the candidate, Ram Kumar Jha as entered in the electoral roll and the nomi 563 nation paper would fall under the category of `inaccurate description ' mentioned in the above proviso and that it was obligatory on the part of the Returning Officer to have it corrected or to overlook it having regard to the language of the proviso. section 36(4) of the Act lays down that the Returning Officer shall not reject any nomination paper on the ground of any defect which is not of a substantial character. As stated earlier, a person to be entitled to be registered in the electoral roll for a constituency should be 21 years of age on the qualifying date and a person to be chosen to fill a seat in the Legislature of a State should not be less than 25 years of age. Ram Kumar Jha had declared in the nomination paper No. 42 that he had completed 33 years of age. Therefore, the substantial requirement as regards the question of age of the candidate, Ram Kumar Jha was that at the time of scrutiny of nomination paper he should have completed 25 years of age and should have been registered in the electoral roll for that constituency and not whether there was a difference of 4 years in the age of the candidate as mentioned in the electoral roll and the nomination paper. The difference in our opinion is not an error of substantial character. As the rejection of the nomination paper No. 42 was not on the ground that there was any difficulty as regards identity on account of the difference in the age mentioned in the electoral roll and the nomination paper we are clearly of the opinion that the rejection of the nomination paper on the ground of difference in the age was improper, for having regard to provisions of section 36(4) of the Act the defect is not of substantial character and we hold that the appellant 's election is consequently void under section 100 (1)(c) of the Act on the ground of improper rejection of the nomination paper. It is for this reason that we dismissed the appeal without any order as to costs as mentioned above. N.V.K. Appeal dismissed.

The appellant was elected to the State Legislative Assembly and the first respondent, the defeated candidate filed an Election Petition for setting aside the election as being void on account of improper rejection of the nomination papers of one of the candidates by the Returning Officer. It was contended that the Returning Officer rejected four nomination papers submitted by the candidate, three on the ground that the serial number and part number of the candidates were wrong with reference to the electoral roll, and the fourth on the ground that there was difference in the age of the candidate. The High Court held that no nomination paper could be rejected unless the defect was of a substantial character, and that the difference in the age of the candidate as given in the electoral roll and the nomination paper was not a material error and no opportunity having been given to the candidate when the nomination papers were filed to remove any defect, the rejection of the nomination papers by the Returning Officer was improper, and the election of the appellant was set saside as being void on that ground. Dismissing the appeal, ^ HELD: 1. The rejection of the nomination paper on the ground of difference in the age was improper, for having regard to the provisions of section 36(4) of the of the Representation of the People Act, 1951 the defect is not of a substantial character. The appellant 's election is consequently void under section 100 (I)(c) of the Act on the ground of improper rejection of the nomination paper.[564 E F] In the instant case, the difference in the age of the candidate, as entered in the electoral roll and the nomination paper would fall under the category of `inaccurate description ' mentioned in the proviso to section 33(4) and it was therefore obligatory on the part of the Returning officer to have it corrected or to overlook it having regard to the language of the said proviso. [563 H; 564 A] 2. A person to be entitled to be registered in the electoral roll for a constituency should be 21 years of age on the qualifying date and a person to be chosen 559 to fill a seat in the Legislature of a State should not be less than 25 years of age. The substantial requirement as regards the question of the age of the candidate, at the time of scrutiny of nomination paper is that he should have completed 25 years of age and should have been registered in the electoral roll for that constituency and not whether there was a difference of 4 years in the age of the candidate as mentioned in the electoral roll and the nomination paper as in the instant case. The difference in age is not an error of substantial character. [562 G H; 564 C D]

Appeals Nos. 847 and 848 of 1966. 388 Appeals by special leave, from the judgment and order dated January 20, 1965 of the Allahabad High Court, Lucknow Bench in Writ Petitions Nos. 108 and 109 of 1962. section C. Manchanda and section section Shukla, for the appellant (in both 'the appeals). C. B. Agarwala and K. P. Gupta, for the respondents (in both the appeals). The Judgment of the Court was delivered by Bachawat, J. These appeals are directed against orders of the Allahabad High Court (Lucknow Bench), quashing the im. Position of a water rate imposed by the Municipal Board Sitapur. Section 126(1)(x) of the U.P. Municipalities Act, 1916 (U.P Act No. 2 of 1916) empowers the Board to impose a water tax on the annual Value of buildings or lands or of both. Sections 131 to 135 lay down the procedure for imposing the tax. The High Court held that the levy was invalid as the Board did not comply with this procedure. A municipal board desiring to impose the tax is required by section 131 sub section (1) to pass a special resolution framing the preliminary proposal for the tax. The Municipal Board, Sitapur, passed a special resolution on January 24, 1956 framing the proposal for the levy of water tax at the rate of 12% per annum on the annual value of buildings and lands and exempting buildings and lands whose annual value was Rs. 24 or below. Section 131 sub section (2) requires the Board to prepare a draft of t he rules in respect of the proposed tax. The Board duly prepared the necessary draft rules. Section 131 sub &. (3) requires the Board to publish in the manner prescribed in section 94 the proposal and the draft rules along with a notice in the form set forth in Schedule III. The draft rules along with the notice was published in the Rashtra Sandesh, a local paper published in Hindi. The proposal was not separately published. But the proposal was to be found in the draft rules published in the local paper. Objections against the proposal were filed by the inhabi tants of the municipality. The Board duly considered the objections and passed orders thereon under section 132 sub section After considering the objections and the recommendations of the prescribed authority under section 133 sub section (1) the Board decided to modify the original proposal by reducing the tax to 10% on the annual value and by exempting all lands and buildings whose annual value was Rs. 36 or below. Section 132 sub section (2) requires the Board to publish the modified proposal along with a, notice indicating that it is in modification of the original proposal, and section 132 sub section (3) provides that the objec 389 tions to the modified proposal shall be dealt with in the manner prescribed by sub section The modified proposal was not published as required by section 132 subs. The prescribed authority acting under section ' 132 sub section (2) duly sanctioned the final proposal and made the necessary rules in respect of the tax. It may be noted that the Commissioner, Lucknow Division, was the prescribed authority. On receipt of the order of sanction and the copy of the rules, the Board acting under section 134 sub section (2) pas sed a special resolution on April 23, 1957 directing the im position of the tax with effect from October 1, 1957. This special resolution was not published in the manner prescribed by section 94. On receipt of the special resolution the prescribed authority acting under section 135 sub section (2) notified in the official gazette dated August 3, 1957 the imposition of the tax from the appointed date. Section 135 sub section (3) provides that, "a notification of the imposition of a tax under sub section (2) shall be conclusive proof that the tax has been imposed in accordance with the provisions of this Act. " The respondents raised three objections against the validity of the imposition of the water tax : ( 1 ) omission to publish the preliminary proposal separately in the manner prescribed by section 131 sub section (3) read with section 94; (2) non publication of the modified proposal in accordance with section 132 sub section (2); and (3) non publication of the special resolution directing the imposition of the tax in accordance with section 94. The procedure laid down by the Act was, not strictly complied with before imposing the tax ' But all the procedural defects in the imposition of the tax are cured by section 135 sub section (3), where, as in this case, the Municipal Board has the power to levy the tax and has passed the special 'resolution necessary for the imposition of the tax and the defects are not of a fundamental character. The procedural defects cannot be regarded as fundamental or as invalidating the imposition, if no substantial prejudice is caused thereby to the, inhabitants of the municipality. The issue of the notification under section 135 sub section (2) is conclusive proof that all necessary steps for the imposition of the tax have been taken in accordance with the provisions of the Act. In Municipal Board vs Raghuvendra(1) the Court held that the defect of non publication of the special resolution proposing the tax in a local Hindi paper and omission to publish the draft rules as required by section 131 sub section (3) read with section 94 sub section (3) was cured by section 135 sub section (3) and that the publication of the special resolution by affixing a copy of it on the notice board and by beat of drum was sufficient. In Bland Sugar vs Municipal Board(2) the Court held that the publication of the pro (1) ; (2) ; 390 posals and ;the draft rules in Hindi in a local Urdu paper was sufficient compliance with section 131 sub section In Berar Swadeshi Vanaspathi vs Municipal Committee, Shegaon,(1) the Court held that in view of the similar provisions of section 67 sub section (7) of the C. P. and Berar Municipal Act, 1922, the validity of imposition of the octroi tax could not be challenged on the ground that the objections were not considered on the merits. As to the first objection we find that there, was substantial compliance with section 131 sub section The draft rules were published in the Rashtra Sandesh. They incorporated the preliminary proposal and mentioned the special resolution dated January 24, 1956 by which the proposal was framed. There was thus sufficient publication of the proposal. The proposal was not separately published in the prescribed form, but the omission to do so was a mere irregularity. The inhabitants of the municipality had due notice of the proposal. The object of the publication under section 131 sub section (3) is to inform the inhabitants of the proposal so that, they can file their objections to it. That object was fully achieved by the publication in the Rashtra Sandesh. As to the second objection, we, find that the original proposal was to levy water tax at the rate of 12% per annum on the annual value. The inhabitants had full opportunity to raise objections to the rate of the tax and to submit whether the rate should be 12% or 10% or less. After considering their objections, the Board proposed to levy the tax at the reduced rate of 10% per annum on the annual value. No prejudice was caused by not inviting fresh objections to the modified proposal of levying the tax at the reduced rate. It is interesting to notice that the U.P. Municipalities (Amendment) Act, 1964 (U.P. Act No. XXVII of 1964) inserted in section 132 sub section (2) the following proviso : "Provided that no such publication shall be necessary where the modification is confined to reduction in the amount or rate of the tax originally proposed. " This proviso was not in force. on January 24, 1956. But it does indicate that it is unnecessary to publish a modified proposal reducing the rate of tax originally proposed. The original proposal exempted all buildings and lands whose annual value was Rs. 24 or below. The modified proposal raised the exemption limit and provided that all buildings and lands whose annual value was Rs. 36 or below would be exempted. The inhabitants of the municipality had full opportunity to raise objections as to the exemption limits as originally proposed and to submit whether buildings and lands of the value of Rs. 24 or Rs. 36 or more should be exempted. No prejudice was caused by not inviting fresh objections to the (1) 391 modified proposal raising the exemption limit. The inhabitants submitted all objections which they could possibly I raise both with regard to the rate of tax and the exemption limit. In our opinion, the non publication of the modified proposal was a mere irregularity, and the defect was cured by section 135 sub section As to the third objection it is to be observed that section 134. section (2) does not provide for the publication of the special resolution passed under it. Assuming that this special resolution had to be published under the general provisions of section 94, we think that the non publication was a mere irregularity. The inhabitants had no right to file any objections against the special resolution. They had clear notice of the imposition of the tax from the notification published in the official gazette on August 3, 1957. The defect of the non publication of the special resolution in the manner prescribed by section 94 was cured by section 135 sub section The High Court was in error in quashing the imposition of the water tax. In the result, the appeals are allowed with costs in this Court and in the High Court, the order of the High Court is set aside and the writ petitions are dismissed. There will be one hearing fee.

The appellant was convicted for offences punishable under sections 3(1) and 4(1) of the Suppression of Immoral Traffic in Women and Girls Act, 1956. The special police officer conducted a raid on the appellant 's house which was being kept as a brothel and recovered marked currency notes from the appellant. He took with him two persons to witness the search but they were not inhabitants of the locality as required by section 15(2) of the Act. After the search he prepared a document. It did not satisfy the requirements of section 15(1) as it did not contain any ground on which he formed the belief that an offence under the Act was being committed in the premises and that a search of the premises with warrant cannot be made without undue delay. On the question whether the trial was illegal as there was a violation of section 15(1) and (2). HELD: The Act being a special one a search under the Act must comply with section 15. Investigating agencies ought not to disregard the special safeguards such as those in section 15(1) and (2) provided by the Legislature, but the trial itself would not be vitiated if there was noncorrosive with such directions unless thereby some prejudice is caused to the accused. The court however, has to be very careful in weighing the evidence where there has been such non observance of the provisions. [803 G H; 805 E G] (a) Though the recording of reasons may be a necessary condition for making a search, jurisdiction to make a search is not derived therefrom. The power to search is conferred by statute. Therefore, omission to record reasons before the search or even thereafter in a proper way, would not by itself affect the validity of the search. [803 A B] State of Rajasthan vs Rehman, [1960] 1 S.C.R. 991, followed. (b) Under section 5(2) Criminal Procedure Code, all proceedings including investigation of offences under any law, have to be conducted in accordance with the procedure laid down in the Code except to the extent of any specific provision contained in a special Act. Under the Suppression of Immoral Traffic Act there Tim no provision dealing with the effect of contravention of section 15. Therefore, the law with regard to the effect of an irregular search under section 165 of the Code would apply. Where a trial has taken p1ace, under section 537 of the Code a defect or an illegality in the investigation has no bearing on the result of the trial unless the irregularity or illegality is Shown to have brought about a miscarriage of justice. Since the non observance of the provisions of section 15(2) of the Act in the present case, is a mere irregularity, the conviction of the appellant could not be set aside as it was not shown that the irregularity caused any failure of justice. [804 B C; 805 B, E, H 806 B] 800 H.N. Rishbud & Inder Singh vs State of Delhi, ; and State of U.P.v. Bhagwati Kishore Joshi, ; , followed. Delhi Administration vs Ram Singh, ; and Public Prosecutor, Andhra Pradesh vs U. Nageswararao A.I.R. 1965 A.P. 176, referred to.

Special Leave Petition Nos. 937 939 of 1980. From the Judgment and Order dated 1 8 1979 of the Madras High Court in A.A.O. Nos. 815 817 of 1977. T. A. Ramachandran and K. Ramkumar for the Petitioner. The Order of the Court was delivered by KRISHNA IYER, J. Sri Ramachandran, ably assisted by Sri K. Ram Kumar, presented the case of the petitioner for special leave, as persuasively as the facts permit but while we were impressed with the 102 industry and advocacy of counsel, we heartily dismiss this petition. Why heartily? Because the High Court, if at all, has erred in favour of the petitioner, not against him. The Facts: A stage carriage belonging to the petitioner was on a trip when, after nightfall, the bus hit an over hanging high tension wire resulting in 26 casualties of which 8 proved instantaneously fatal. A criminal case ensued but the accused driver was acquitted on the score that the tragedy that happened was an act of God! The Accidents Claims Tribunal, which tried the claims for compensation under the Motor Vehicles Act, came to the conclusion, affirmed by the High Court, that, despite the screams of the passengers about the dangerous over hanging wire ahead, the rash driver sped towards the lethal spot. Some lost their lives instantly; several lost their limbs likewise. The High Court, after examining the materials, concluded: "We therefore sustain the finding of the Tribunal that the accident had taken place due to the rashness and negligence of R.W. 1 (driver) and consequently the appellant is vicariously liable to pay compensation to the claimant. " The plea that the criminal case had ended in acquittal and that, therefore, the civil suit must follow suit, was rejected and rightly. The requirement of culpable rashness under section 304A I.P.C. is more drastic than negligence sufficient under the law of tort to create liability. The quantum of compensation was moderately fixed and although there was, perhaps a case for enhancement, the High Court dismissed the cross claims also. Being questions of fact, we are obviously unwilling to re open the holdings on culpability and compensation. Road accidents are one of the top killers in our country, specially when truck and bus drivers operate nocturnally. This proverbial recklessness often persuades the courts, as has been observed by us earlier in other cases, to draw an initial presumption in several cases based on the doctrine of res ipsa loquitur. Accidents Tribunals must take special care to see that innocent victims do not suffer and drivers and owners do not escape liability merely because of some doubt here or some obscurity there. Save in plain cases, culpability must be inferred from the circumstances where it is fairly reasonable. The court should not succumb to niceties, technicalities and mystic maybes. We are emphasising this aspect because we are often distressed by transport operators getting away with it thanks to judicial laxity, despite the fact that they do not exercise sufficient disciplinary control over the drivers in the matter of careful driving. The heavy economic 103 impact of culpable driving of public transport must bring owner and driver to their responsibility to their 'neighbour '. Indeed, the State must seriously consider no fault liability by legislation. A second aspect which pains us is the inadequacy of the compensation or undue parsimony practised by tribunals. We must remember that judicial tribunals are State organs and Article 41 of the Constitution lays the jurisprudential foundation for state relief against accidental disablement of citizens. There is no justification for niggardliness in compensation. A third factor which is harrowing is the enormous delay in disposal of accident cases resulting in compensation, even if awarded, being postponed by several years. The States must appoint sufficient number of tribunals and the High Courts should insist upon quick disposals so that the trauma and tragedy already sustained may not be magnified by the injustice of delayed justice. Many States are unjustly indifferent in this regard. We have been taken through a few intricate legal submissions by counsel but we decline to interfere under Article 136 of the Constitution especially where human misery is pitted against operational negligence. P.B.R. Petition dismissed.

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

Appeals Nos. 25 and 26 of 1958. Appeals from the judgments and orders dated August 7, 1956, of the Allahabad High Court in Special Appeals Nos. 151 and 152 of 1955. C. B. Agarwala, A. N. Goyal and Mohan Lal Agarwala, for the appellant. Gopi Nath Dikshit and C. P. Lal, for the respondents. March 30. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. These two appeals arise out Gajen, of two writ petitions filed by the appellant Raja Harish Chandra Raj Singh against the respondents the Deputy Land Acquisition Officer and another in the Allahabad High Court and they were based on the same facts and asked for the same relief. Both of them raise a short common question of limitation the decision of which would depend upon the determination of the scope and effect of the provisions of the proviso to section 18 of the Land Acquisition Act I of 1894 (hereafter called the Act). Since the facts in both the appeals are substantially the same we would refer to the facts in Civil Appeal No. 25 of 1958. The decision in this appeal would govern the decision of the other appeal, Civil Appeal No. 26 of 1958. The appellant Raja Harish Chandra Raj Singh was the proprietor of a village Beljuri in the District of Nainital. It appears that proceedings for compulsory acquisition of land including the said village for a public purpose were commenced by respondent 2, the State of Uttar Pradesh; notifications under sections 4 and 6 of the Act were issued in that behalf, and the 678 provisions of section 17 were also made applicable. Accordingly, after the notice under section 9(1) of the Act was published possession of land was taken by the Collector on March 19, 1960. Thereupon the appellant filed his claim to compensation for the land acquired in accordance with section 9(2), and proceedings were held by the Deputy Land Acquisition Officer, respondent 1, for determining the amount of compensation. It appears that in these proceedings an award was made, signed and filed in his office by respondent I on March 25, 1951. No notice of this award was, however, given to the appellant as required by section 12(2) and it was only on or about January 13, 1953 that he received information about the making of the said award. The appellant then filed an application on February 24, 1953 under a. 18 requiring that the matter be referred for the determination of the Court, as, according to the appellant, the compensation amount determined by respondent I was quite inadequate. Respondent I took the view that the application thus made by the appellant was beyond time under the proviso to section 18 and so he rejected it. The appellant then filed a writ petition in the Allahabad High Court on December 21,1953 in which he claimed appropriate reliefs in respect of the order passed by respondent I on his application made under a. 18. This petition was heard by Mehrotra, J. and was allowed. The learned Judge directed respondent 1 to consider the application made by the appellant on the merits and deal with it in accordance with law. He held that in dealing with the said application respondent 1 should treat the application as filed in time. Against this decision the respondents preferred an appeal to a Division Bench of the said High Court. Mootham, C. J. and Chaturvedi, J., who heard this appeal took the view that the application filed by the appellant under section 18 of the Act was barred by time, and so they allowed the appeal, set aside the order passed by Mehrotra, J. and dismissed the writ petition filed by the appellant. The appellant then moved for and obtained a certificate from the said High Court and it is with this certificate that he has come to this 670 Court in the present appeal; and so the short question which the appellant raises for our decision is whether the application filed by him under section 18 of the Act( was in time or not. Before proceeding to construe the material provisions of section 18 it is necessary to refer very briefly to, some other sections of the Act which are relevant in( order to appreciate the background of the scheme in relation to land acquisition proceedings. Section 4 deals with the publication of the preliminary notification and prescribes the powers of the appropriate officers. Whenever it appears to the appropriate Government that land in any locality is needed for any public purpose a notification to that effect shall be published in the official gazette and a public notice of its substance shall be given at convenient places in the said locality; that is the effect of section 4(1). Sec tion 4(2) deals with the powers of the appropriate authorities. Section 5 A provides for the hearing of objections filed by persons interested in any land which has been notified under section 4(1). After the objections are thus considered a declaration that land is required for a public purpose follows under section 6(1). Section 6(2) provides for the publication of the said declaration; and section 6(3) makes the declaration conclusive evidence that the land is needed for a public purpose. Section 9 requires the Collector to give public notice in the manner specified stating that the Government intend to take possession of the land and calling for claim,% to compensation in respect of all interests in such land. Section 9(2) prescribes the particulars of such notice, and section 9(3) an 4) provide for the manner of serving such notice. Section II deals with the enquiry and provides for the making of the award by the Collector. Section 12(l) then lays down that the award when made by the Collector shall be filed in his office, and shall, except as otherwise provided, be final and conclusive evidence as between the Collector and the persons interested whether they have respectively appeared before the Collector or not, of the true area and value of the land, and the apportionment of the compensation 680 among the persons interested. Section 12(2) is important. It makes it obligatory on the Collector to give immediate notice of his award to such of the persons interested as are not present personally or by their representatives when the award is made. It is common ground that no such notice was given by respondent 1 to the appellant. That briefly is the scheme of the relevant provisions of Part II of the, Act which deals with acquisition. Part III which deals with reference to Court and procedure thereon opens with section 18. Section 18(1) provides that any person interested who has not accepted the award may, by written application to the Collector, require that the matter be referred by him for determination of the Court, inter alia, whether the amount of compensation is adequate or not. It is under this provision that the appellant made an application from which the present appeal arises. Section 18(2) requires that the application shall state the grounds on which objection to the award is taken. These grounds have been stated by the appellant in his application. The proviso to section 18 deals with the question of limitation. It prescribes that every such application shall be made (a) if the person making it was present or represented before the Collector at the time when he made his award within six weeks from the date of the Collector 's award; (b) in other cases within six weeks of the receipt of the notice from the Collector under section 12(2), or within six months from the date of the Collector 's award whichever shall first expire. The appellant 's case falls under the latter part of el. (b) of the proviso. It has been held by the Allahabad High Court that since the application made by the appellant before respondent I was made beyond six months from the date of the award in question it was beyond time. The view taken by the High Court proceeds on the literal construction of the relevant clause. As we have already seen the award was signed and delivered in his office by respondent 1 on March 25, 1951 and the application by the appellant was made under section 18 on February 24, 1953. It has been held that the effect of the relevant 681 clause is that the application made by the appellant is plainly beyond the six months permitted by the said clause and so respondent I was right in rejecting it as barred by time. The question which arises for our decision is whether this literal and mechanical way of construing the relevant clause is justified in A law. It is obvious that the effect of this construction is that if a person does not know about the making of the award and is himself not to blame for not knowing about the award his right to make an application under section 18 may in many cases be rendered ineffective. If the effect of the relevant provision unambiguously is as held by the High Court the unfortunate consequence which may flow from it may not have a material or a decisive bearing. If, on the other hand, it is possible reasonably to construe the said provision so as to avoid such a consequence it would be legitimate for the Court to do so. We must therefore enquire whether the relevant provision is capable of the construction for which the appellant contends, and that naturally raises the question as to what is the meaning of the expression "the day of the Collector 's award". In dealing with this question it is relevant to bear in mind the legal character of the award made by the Collector under section 12. In a sense it is a decision of the Collector reached by him after holding an enquiry as prescribed by the Act. It is a decision, inter alia, in respect of the amount of compensation which should be paid to the person interested in the property acquired; but legally the award cannot be treated as a decision; it is in law an offer or tender of the compensation determined by the Collector to the owner of the property under acquisition. If the owner accepts the offer no further proceeding is required to be taken; the amount is paid and compensation proceedings are concluded. If, however, the owner does not accept the offer section 18 gives him the statutory,, right of having the question determined by Court, and ' it is the amount of compensation which the Court may determine that would bind both the owner and 86 682 the Collector. In that case it is on the amount thus determined judicially that the acquisition proceedings would be concluded. It is because of this nature of the award that the award can be appropriately described as a tender or offer made by the Collector on behalf of the Government to the owner of the property for his acceptance. In Ezra vs The Secretary of State (1). It has been held that "the meaning to be attached to the word "award" under section 11 and its nature and effect must be arrived at not from the mere use of the same expression in both instances but from the examination of the provisions of the law relating to the Collector 's proceedings culminating in the award. The considerations to which we have referred satisfy us that the Collector acts in the matter of the enquiry and the valuation of the land only as an agent of the Government and not as a judicial officer; and that consequently, although the Government is bound by his proceedings, the persons interested are not concluded by his finding regarding the value of the land or the compensation to be awarded. " Then the High Court has added that such tender once made is binding on the Government and the Government cannot require that the value fixed by its own officer acting on its behalf should be open to question at its own instance before the Civil Court. The said case was taken before the Privy Council in Ezra vs Secretary of State for India (2 ), and their Lordships have expressly approved of the observations made by the High Court to which we have just referred. Therefore; if the award made by the Collector is in law no more than an offer made on behalf of the Government to, the owner of the property then the making of the award as properly understood must involve the communication of the offer to the party concerned. That is the normal requirement under the contract law and its applicability to cases of award made under the Act cannot be reasonably excluded. Thus considered the date of the award cannot be determined solely by reference to the time when the award is signed by the Collector or delivered by him in his office; it must (1) Cal. 36, 86. (2) Cal. 683 involve the consideration of the question as to when it was known to the party concerned either actually or constructively. If that be the true position then the literal and mechanical construction of the words "the date of the award" occurring in the relevant section would not be appropriate. There is yet another point which leads to the same conclusion. If the award is treated as an administrative decision taken by the Collector in the matter of the valuation of the property sought to be acquired it is clear that the said decision ultimately affects the ' rights of the owner of the property and in that sense, like all decisions which affect persons, it is essentially fair and just that the said decision should be communicated to the said party. The knowledge of the party affected by such a decision, either actual or constructive, 'is an essential element which must be satisfied before the decision can be brought into force. Thus considered the making of the award cannot consist merely in the physical act of writing the award or signing it or even filing it in the office of the Collector; it must involve the communication of the said award to the party concerned either actually or constructively. If the award is pronounced in the presence of the party whose rights are affected by it can be said to be made when pronounced. If the date for the pronouncement of the award is communicated to the party and it is accordingly pronounced on the date previously announced the award is said to be communicated to the said party even if the said party is not actually present on the date of its pronouncement. Similarly if without notice of the date of its pronouncement an award is pronounced and a party is not present the award can be said to be made when it is communicated to the party later. The knowledge of the party affected by the award, either actual or constructive, being an essential requirement of fair play and natural justice the expression "the date of the award" used in the proviso must mean the date when the award is either communicated to the party or is known by him either actually or constructively. In our opinion, therefore, it would be unreasonable to 684 construe the words "from the date of the Collector 's award" used in the proviso to section 18 in a literal or mechanical way. In this connection it is material to recall the fact that under section 12(2) it is obligatory on the Collector to give immediate notice of the award to the persons interested a,, are not present personally or by their representatives when the award is made. This requirement itself postulates the necessity of the communication of the award to the party concerned. The Legislature recognised that the making of the award under section 11 followed by its filing under section 12(1) would not meet the requirements of justice before bringing the award into force. It thought that the communication of the award to the party concerned was also necessary, and so by the use of the mandatory words an obligation is placed on the Collector to communicate the award immediately to the person concerned. It is significant that the section requires the Collector to give notice of the award immediately after making it. This provision lends support to the view which we have taken about the construction of the expression "from the date of the Collector 's award" in the proviso to section 18. It is because communication of the order is regarded by the Legislature as necessary that section 12(2) has imposed an obligation on the Collector and if the relevant clause in the proviso is read in the light of this statutory requirement it tends to show that the literal and mechanical construction of the said clause would be wholly inappropriate. It would indeed be a very curious result that the failure of the Collector to discharge his obligation under section 12(2) should directly tend to make ineffective the right of the party to make an application under section 18, and this result could not possibly have been intended by the legislature. It may now be convenient to refer to some judicial decisions bearing on this point. In Magdonald vs The Secretary of State, for India in Council (1) Rattigan and Shah Din, JJ. held that under the proviso to section 18 until an award is announced or communicated to the parties concerned it cannot be said to be legally made. (1) (1005) 4 Ind. C. 914. 685 An award under the Act, it was observed in the judgment, is in the nature of a tender and obviously no tender can be made unless it is brought to the( , knowledge of the person to whom it is made. The learned Judges observed that this proposition seemed to them to be self evident. The same view has been expressed by the Oudh Judicial Commissioner in Hari Das Pal vs The Municipal Board, Lucknow (1). On the other hand, in Jehangir Bomanji vs G. D. Gaikwad (2) the Bombay High Court has taken the view that the element of notice is only an essential ingredient of the first part of cl. (b) of the proviso to s.18 which prescribes the period of limitation as six weeks from the date of the receipt of the notice from the Collector, not of the second part which prescribes the maximum period of six months from the date of the Collector 's award in absolute terms. According to that decision, as far as the limitation under the latter part is concerned it runs from the date of the award and the date of the award has nothing whatever to (lo with the notice which the Collector has to give under section 12(2). In our opinion this decision is based on a misconstruction of the relevant clause in the proviso to section 18. The same comment falls to be made in regard to the decision of the Kerala High Court in State of Travancore Cochin vs Narayani Amma Ponnamma (3). It may, however, be pertinent to point out that the Bombay High Court has taken a somewhat different view in dealing with the effect of the provision as to limitation prescribed by section 33A(2) of the Indian Income tax Act. This provision prescribes limitation for an application by an assessee for the revision of the specified class of orders, and it says that such an application should be made within one year from the date of the order. It is significant that while provid ing for a similar period of limitation section 33(1) specifically lays down that the limitation of sixty days therein prescribed is to be calculated from the date on which the order in question is communicated to the (1) (1914) 22 Ind. C. 652. (2) A.I.R. 1954 Bom. 419, (3) A.I.R. (1958) Kerala 272. 686 assessee. In other words, in prescribing limitation section 33(1) expressly provides for the commencement of the period from the date of the communication of the order, whereas section 33A(2) does not refer to any such communication; and naturally the argument was that communication was irrelevant under section 33A(2) and limitation would commence as from 'the making of the order without reference to its communication. This argument was rejected by the Bombay High Court and it was hold that it would be a reasonable interpretation to hold that the making of the order implies notice of the said order, either actual or constructive, to the party affected by it. It would not be easy to reconcile this decision and particularly the reasons given in its support with the decision of the same High Court in the case of Jehangir Bomanji (1). The relevant clause under section 33A(2) of the Indian Income tax Act has also been similarly construed by the Madras High Court in O.A.O.A.M. Muthia Chettiar vs The Commissioner of Income tax, Madras (2). "If a person is given a right to resort to a remedy to get rid of an adverse order within a prescribed time", observed Rajamannar, C.J., "limitation should not be computed from a date earlier than that on which the party aggrieved actually knew of the order or had an opportunity of knowing the order, and therefore must be presumed to have the knowledge of the order". In other words the Madras High Court has taken the view that the omission to use the words "from the date of communication" in section 33A(2) does not mean that limitation can start to run against a party even before the party either knew or should have known about the said order. In our opinion this conclusion is obviously right. A similar question arose before the Madras High Court in Annamalai Chetti vs Col. J. G. Cloete(3). Section 25 of the Madras Boundary Act XXVIII of 1860 limited the time within which a suit may be brought to set side the decision of the settlement officer to two months from the date of the award, and (1) A.I.R 1954 Bom. (2) I.L.R. (3) Mad. 687 so the question arose as to when the time would begin to run. The High Court held that the time can begin to run only from the date on which the decision is communicated to the parties. "If there was any decision at all in the sense of the Act", says the judgment, "it could not date earlier than the date of the communication of it to the parties; otherwise they might, be barred of their right, of appeal without any knowledge of the decision having been passed". Adopting the same principle a, similar construction has been placed by the Madras High Court in K. V. E. Swaminathan alias Chidambaram Pillai vs Letchmanan Chettiar (1). On the limitation provisions contained in sections 73(1) and 77(l) of the Indian Registration Act XVI of 1908. It was held that in a case where an order was not passed in the presence of the parties or after notice to them of the date when the order would be passed the expression "within thirty days after the making of the order" used in the said sections means within thirty days after the date on which the communication of the order reached the parties affected by it. These decisions show that where the rights of a person are affected by any order and limitation is prescribed for the enforcement of the remedy by the person aggrieved against the said order by reference to the making of the said order, the making of the order must mean either actual or constructive communication of the said order to the party concerned. Therefore, we are satisfied that the High Court of Allahabad was in error in coming to the conclusion that the application made by the appellant in the present proceedings was barred under the proviso to section 18 of the Act. In the result we allow the appeal, set aside the orders passed by Mootham, C. J. and Chaturvedi, J., and restore those of Mehrotra, J. In the circumstances of this case there would be no order as to costs. Appeal allowed. (1) Mad 491.

In 1922, the Municipal Committee, Khandwa imposed a tax on the trade of ginning and pressing cotton by means of steam or mechanical process. Certain suits were filed challenging the validity of the tax and ultimately in 1937, the Privy Council held that the tax had not been validly imposed. In 1941, the Governor enacted the Khandwa Municipality (Validation of Tax) Act, 1941, which sought to validate the tax imposed in 1922. In the meantime, section I42 A was introduced in the Government of India Act, 1935, sub section (2) Of which provided that the 'total amount payable in respect of any one person by way of taxes on professions, trades, callings and employments shall not, after March 31, 1939, exceed Rs. 50 per annum '. The appellant contended that the validating Act was hit by section 142 A(2) and to the extent that it imposed a tax above Rs. 50 per person per annum it was invalid. Held, that the Validating Act was not hit by section I42 A (2) Government of India Act, 1935. The powers of the Indian Legislatures included a power to pass retrospective and validating laws. Section 142 A(2) which put a limit on the amount of tax did not affect laws relating to a period prior to March 31, 1939, but affected only those relating to periods after that date. It circumscribed the legislative power by putting a date line after which a tax in excess of Rs. 50 for a period after the dateline could not be collected unless it came within the proviso. The Validating Act imposed the tax in excess of Rs. 5o not after March 31, 1939, but before it. The United Provinces vs Atiqa Begum, and Piare Dusadh vs King Emperor, [1944] F.C . R. 61, referred to.

Appeal No. 128 of 1963. Appeal by special leave from the judgment and order dated September 21, 1961 of the Bombay High Court in Income Tax Reference No. 32 of 1959. N.D. Karkhanis, R.N. Sachthey and B.R.G.K. Achar, for the appellant. R.J. Kolah, J.B. Dadachanji, O.C. Mathur and Ravinder Narain, for the respondent. December 2, 1963. The Judgment of the Court was delivered by SHAH, J. Henry Gannon who was a registered holder of 2674 shares of Gannon Dunkerley & Company a private Limited Company with its registered office in Bombay died on May 13, 1945, having made and published a will disposing of his extensive estate in the United Kingdom and in British India. The National Bank of India Ltd. obtained probate of Gannon 's will in the United Kingdom and appointed the respondent James Anderson its attorney to administer the estate in British India. Anderson applied for and obtained in India on August 14, 1946, Letters of Administration "durante absentia" to the estate of Gannon in British India. 450 out of the shares were specifically bequeathed by Gannon to certain legatees, and in the course of administration, share certificates with transfer forms duly executed were delivered to the legatees in respect of those shares and no question arises in this appeal in regard to those shares. By agreement dated August 14, 1946, between the executor to the estate, the Company and one Morarka, the executor agreed to sell the remaining 2224 shares of the Company to Morarka and pursuant thereto the relevant share certificates with transfer deeds were handed over to Morarka on October 12, 1946, against payment of the price at the rate of Rs. 140 per share. Morarka, for some reason which is not clear from the record, failed to present the transfer deeds and the share certificates for registration at 593 the office of the Company and the name of Gannon remained at all material times on the register of shareholders in respect of those 2224 shares. In the assessment of the Company for the assessment years 1946 47 and 1947 48 the Income tax Officer, Bombay, made an order on March 26, 1953, under section 23A of the Income tax Act, 1922 (as it then stood) that certain undistributed parts of the assessable income of the Company shall be deemed to have been distributed as dividends amongst the shareholders as at the dates, viz., May 26, 1947, and December 22, 1947, of the General Meetings of the Company. The net dividends so deemed to be distributed in respect of the shares were Rs. 61,051 and Rs. 3,73,099. The Income tax Officer then issued on March 28, 1953, a notice under section 34(1)(b) of the Income tax Act addressed to "James Anderson, Administrator to the Estate of late Mr. Henry Gannon" reciting that he had reason to believe that Anderson 's "income assessable to income tax for the year ending 31st of March 1949" had escaped assessment and that he proposed to re assess the escaped income and for that purpose called upon Anderson to make a return of his total income and the total world income assessable for the year ending March 31, 1949. In compli ance with the requisition Anderson submitted a return, but did not include therein the dividend deemed to have been distributed under the order dated March 26, 1953. The Income tax Officer in his order of assessment included dividends deemed to be distributed and after processing the amount under section 18(5) included it in the total income of Anderson and levied tax thereon at the appropriate rate. Anderson 's appeals against the order of the Income tax Officer to the Appellate Assistant Commissioner and to the Income tax Appellate Tribunal, Bombay, were unsuccessful. At the instance of Anderson the following questions were referred by the Tribunal to the High Court of Bombay under section 66(1) of the Income tax Act: 1/SCI/64 38 594 "(1)Whether in the facts and in the circumstances of the case the assessment made on Mr. James Anderson, Administrator to the estate in India of Mr. Henry Gannon (deceased) is valid in law? If the above question is answered in the affirmative (2 ) whether in the facts and in the circumstances of the case the dividends of Rs. 61,051 and "Rs. 3,73,099 deemed to have been distributed on 26th May 1947 and 22nd December 1947 respectively under section 23A of the Income tax Act were assessable in the hands of the applicant?" The High Court answered the first question in the negative and declined to answer the second question. With special leave, the Commissioner of Income tax, Bombay, has appealed to this Court. The estate of Gannon to which the Letters of Administration relate, vested by virtue of section 211 of the Indian Succession Act, in Anderson, but he did not take steps to get his name entered in the register of shareholders maintained by the Company, and the Income tax Officer sought to tax the dividends deemed to have been distributed in the hands of Anderson as administrator of the estate of Gannon. The order made by the Income tax Officer under section 23A gives rise to a notional income: it merely creates a fiction about distribution and consequential receipt of dividend. The order by its own force however does not charge the income to tax: it has to be followed by an order of assessment to make tax on such income eligible. The sole question in this appeal is whether the Act contains machinery for assessing dividends deemed to have been distributed by virtue of an order under section 23A in respect of the shares held by a shareholder, when before the date on which the fiction of distribution becomes effective viz. , the date of the relevant General Meeting of the Company the registered shareholder has died and his representatives have not been substituted in the register of the Company. 595 It was held by this Court in Commissioner of Income tax, Bombay City II vs Shakumtala and others(1) following Howrah Trading Company Ltd. vs Commissioner of Income tax, Central Calcutta(2) that the expression "shareholder" in section 23A of the Indian Income tax Act, 1922, means a shareholder registered in the books of the company, and such shareholder alone is liable to be taxed in respect of the dividend deemed to be distributed. Counsel for the Commissioner submits that the principle of those cases applies only when the registered share holder is alive and the beneficial ownership in the shares is vested as a result of some transaction inter vivos in a person in whose name the shares do not stand in the Company 's register, but not where by the grant of representation to the estate of a registered shareholder who has died, the representative is invested, without his name being entered in the register, with the rights of the shareholder. Whether on the death of a shareholder his executor or administrator may enforce the rights of the shareholder or incur liability in respect of the shares to the Company, depends upon the nature of the right and the obligation, and terms of the statute and the articles of the Company which create those rights and obligations. The legal representative of a deceased person cannot vote on behalf of the shareholder and may not become a director of the Company on the strength of the representation alone. Again by the express provision contained in section 35 of the Indian Companies Act, 1913, a transfer of the share or other interest of a deceased member by his legal representative although he is himself not a member is as valid as if he were a member at the time of the execution of the transfer. This implies that the legal representative does not acquire in all cases the rights of a shareholder of a company in respect of shares of which the name of the deceased was registered as holder. But if the estate of a shareholder of a com (1) (2) 596 pany is by virtue of the Articles of the Company liable in respect of calls upon shares whether made during the life time of the holder or after his death, the legal representative is obliged to satisfy the calls in his representative character. This obligation arises not because the legal representative becomes, by virtue of probate or Letters of Administration, a shareholder in place of the person whose estate is vested in him, but because as a representative it is his duty to discharge the obligations enforceable against the estate. Under an order made by the Income tax Officer under section 23A of the Indian Income tax, 1922, dividend is deemed to be distributed among the shareholders and by the express provision contained in the statute the proportionate share of the dividend of each shareholder has to be included in the total income of such shareholder for the purpose of assessing his total income. The statute therefore in terms applies to the shareholder and makes the dividend taxable as his income. The obligation to pay the tax on the dividend so deemed to be distributed is of the shareholder, and may be enforced against him or his legal representative in the manner and to the extent the statute permits. There is no special machinery devised by the Income tax Act enabling assessment and levy of tax in respect of such deemed income from the estate of the shareholder in the hands of his legal representative when the order of the Income tax Officer pursuant to which the income was to be deemed to be distributed becomes effective was made after the death of the shareholder, and the general provision in section 24B for enforcement of liability against the legal representative of a deceased person to pay tax which would have been payable if such person had not died, has a limited application. In Commissioner of Income tax Bombay vs Ellis C. Reid(" it was observed by the Bombay High Court in rejecting the claim made by the Income tax Department to assess a deceased person 's estate (1) I.L.R. 5 Bom. 312: 597 in the hands of his legal representative to tax, that the definition of "assessee" in section 2(2) of the Indian Income tax Act, 1922 (as it stood at the material date) in terms only applied to a living person, the words being "a person by whom income tax is payable" and not "a person by whom or by whose estate Income tax is payable", and in the absence of appropriate provisions, for collecting tax from the estate of a deceased person in the Act, the claim of the Income tax Officer to make an assessment under section 23(4) must fail. The Court also observed that throughout the Income tax Act there is no reference to the decease of a person on whom the tax had been originally charged, and it was difficult to suppose that the omission was unintentional. In Reid 's case(" the tax payer had died after the commencement of the financial year but before the income of the previous year was assessed, and it was held that the executors under the will of the tax payer were not liable to pay tax on receipt of income due to the deceased, notwithstanding that he died while assessment proceedings were pending, because the proceedings could not be continued and the assessment could not be made after the tax payer 's death. To rectify the lacuna in the machinery of assessment the Legislature enacted section 24B, by the Indian Income tax (Second Amendment) Act, 18 of 1933. The first sub section of section 24B provided: "Where a person dies, his executor, administrator or other legal representative shall be liable to pay out of the estate of the deceased person to the extent to which the estate is capable of meeting the charge the tax assessed as payable by such person, or any tax which would have been payable by him under this Act if he had not died." In interpreting that enactment this Court held in a recent case: Commissioner of Income tax, Bombay City 1 vs Amarchand Shroff (2) that by the incorporation of section 24B the Legislature has extended the legal personality of a deceased person for the duration (1) I.L.R. (2) 598 of the entire previous year in the course of which he died, and therefore the income either received by him before his death or by his heirs and representatives after his death in that previous year becomes assessable to tax in the relevant assessment year, but not the income received in the year subsequent to the previous or account year. In Amarchand Shroff 's case(1), 'A ' who was a partner in a firm of solicitors which maintained accounts "on cash basis" died on July 7, 1949. Outstandings of the firm in respect of professional services rendered prior to the death of 'A ' were realized during five years subsequent to 'A 's death and were divided between the partners of the firm and certain sums were paid to the heirs and legal representatives of 'A ' as his share. The Income tax Department sought to assess the amounts received by the legal representative of 'A ' as his share to tax under section 34 (1)(b) read with section 24B. It was held that section 24B did not authorise the levy of tax on receipts by the legal representative of a deceased person in the years of assessment succeeding the year of account in which such person died and accordingly the income received by him before his death and that received by his heirs and legal representatives after his death in that previous year became assessable to income tax in the relevant assessment year, but not receipts by the legal representatives after the expiry of the account year in which 'A ' died. In the case before us Gannon died in May 1945, and the dividend in respect of which orders under section 23A were passed was deemed to be distributed in the year of account ending March 31, 1949. The legal personality of Gannon as held in Amarchand Shroff 's case(1) came to an end for the purpose of section 24B at the end of the account year in which Gannon died and no tax could be levied under section 24B on the dividends deemed to have been received by him or his legal representatives after the end of that year. Counsel for the Commissioner sought to rely on the following observations made by Kapur, J, who spoke for the Court in Amarchand Shroff 's case(1) (at p. 67): (1)48 I.T.R. 59. 599 "In the present case the amounts which are sought to be taxed and which have been held not to be liable to tax are those which were not received in the previous year and are there fore not liable to tax in the several years of assessment. It cannot be said that they were income which may be deemed by fiction to have beer received by the dead person and therefore they are not liable to be taxed as income of the deceased, Amarchand, and are not liable to be taxed in the hands of the heirs and legal representatives who cannot be deemed to be assessees for the purpose of assessment in regard to those years", and on the latter part of the opinion sought to raise two arguments (1) that even if after the expiry of the year of account receipts which if the person earning had not died would have been treated as his income, ceased to be liable to assessment as income of the deceased, they could still be taxed as his income in the hands of the legal representatives and (2) that where the income was notional as under section 23A the legal personality of the deceased must be regarded as extended to the end of the year in which such notional income must be deemed to have been received by the legal representatives of the deceased. The first argument is plainly inconsistent with what was decided in Amarchand Shroff 's case(1). In that case the Court held that the receipts by the heir or legal representative for professional services rendered by the deceased solicitor were liable to be brought to tax in the hands of the legal representatives only to the limited extent permitted by section 24B. The second argument involves the importation into the expression "deemed by fiction to have been received" a concept which was wholly alien to what was decided by the Court, for in Amarchand Shroffs case(1) the Court was dealing not with a fiction of distribution by an order under section 23A of dividends which never reached the shareholder or his legal representative, but to a fiction of receipt by a deceased person of income by extending (1) 600 his legal personality. Section 24B does not warrant the application of two different interpretations in the matter of extension of the legal personality of the deceased according as the income is actual or notional. Section 24B in terms refers to the liability of the legal representative to pay tax assessed as payable by such deceased person, or any tax which would have been payable by him under the Act if he had not died, and if the expression "tax which would have been payable under this Act, if he had not died" is intended to impose liability for tax on income received in the year of account in the course of which the tax payer died, a different interpretation of the same expression in the context of notional income would be impermissible. The Legislature not having made any provision generally for assessment of income receivable by the estate of the deceased person, the expression "any tax which would have been payable by him under this Act if he had not died" cannot be deemed to have supplied the machinery for taxation of income received by a legal representative to the estate after the expiry of the year in the course of which such person died. It was then urged that apart from section 24B, the legal representatives of a deceased person also represent his estate in the matter of taxation of income and it is competent to the taxing authorities to assess them on income received on behalf of the estate. Counsel did not rely upon any specific provision of the Act in support of the contention, and merely asserted that the Act seeks to tax all assessable incomes, and income received by a legal representative of the estate of a deceased person should not be permitted to escape tax to the detriment of public revenue. But if the Legislature has failed to set up the procedure to assess such income, the Courts cannot supply it. The expression "assessee" in section 2(2) as substituted by the Indian Income tax (Amendment) Act, 25 of 1953, with effect from April 1, 1952, means a person by whom income tax or any other 601 every person in respect of whom any proceeding and this Act has been taken for the assessment of his income or of the loss sustained by him or of the amount of refund due to him. By section 3 where income tax is chargeable for any year at any rate or rates prescribed by the Act of the Central Legislature, tax at that rate shall be charged for that year in accordance with and subject to the provisions of the Act in respect of the total income of the previous year of every individual, Hindu undivided family, company and local authority, and of every firm and other association of persons or the partners of the firm or the members of the association individually. The charge to income tax has therefore to be in accordance with and subject to the provisions of the Act, and the Legislature has not provided that the income received by a legal representative which would, but for the death of the deceased, have been received by such deceased person, is to be regarded for the purpose of assessment as the personal income of the legal representative To assess tax on such receipts on the footing that it is the personal income of the legal representative is to charge tax not in accordance with the provisions of the Act. We therefore agree with the High Court, though for somewhat different reasons. The appeal therefore fails and is dismissed with costs. Appeal dismissed.

G, a holder of certain shares of a private limited company made a will disposing of his estate and died on May 13, 1945. The respondent obtained Letters of Administration "durante absentia" to the estate, and in pursuance of an agreement between himself, the company and one M to sell the shares to M, handed over the share certificates to M against payment of the price. M failed to present the share certificates for registration and the name 591 of G remained on the register of shareholders of the Company. The Income tax Officer made an order under section 23A of the Income tax Act (as it then stood) that certain undistributed part of the assessable income of the company shall be deemed to have been distributed as dividend amongst the shareholders as at the dates of the general meetings, viz., May 26, 1947 and December 22, 1947. The Income tax Officer then issued a notice under section 34(1) (b) to the respondent proposing to re assess his income and calling upon him to file a return for the relevant year. The respondent submitted a return, but did not include the dividend deemed to have been distributed by the order passed under section 23A The Income tax Officer included the dividends in the total income of the respondent and levied tax. The respondent 's appeals to the Appellate Assistant Commissioner and the Income tax Appellate Tribunal were unsuccessful. On reference, the High Court held that the assessment made on the respondent Administrator to the estate of G (deceased) was not valid in law. In appeal by special leave: Held (i) The legal representative does not acquire in all cases, the right of a share holder in respect of shares of which the deceased was registered as holder. But if the estate of a share holder of a company is by virtue of the Articles of the Company liable in respect of calls whether made during the life time of the holder or after his death, the legal representative is obliged to satisfy the calls in his representative character. (ii) There is no special machinery devised by the Income tax Act enabling assessment and levy of tax in respect of such deemed income from the estate of the share holder, in the hands of his legal representative when the order of the Income tax Officer pursuant to which the income was to be deemed to be distributed becomes effective was made after the death of the share holder. The provision in section 24B for enforcement of liability against the legal representative of a deceased person to pay tax which would have been payable if such person had not died, has a limited application. The expression "tax which would have been payable under this Act, if he had not died," in section 24B is intended to impose liability for tax on income actually received or deemed fictionally to be received in the year of account in the course of which the taxpayer died. This expression does not supply machinery for taxation of income received by a legal representative after the expiry of the year in the course of which such person died. Commissioner of Income tax Bombay vs Amarchand Shroff, [1963] Supp. I S.C.R. 699 and Commissioner of Income tax, Bombay vs Ellis C. Reid. I.L.R. , referred to. (iii) To assess tax on such receipts after the expiry of the year in the course of which the original owner died on the footing that it is the personal income of the legal representative is to charge tax not in accordance with the provisions of the Act.

ivil Appeal Nos. 4094 & 4095 of 1991. 418 From the Judgment and Order dated 6.3.1991 of the Rajas than High Court in D.B. Civil Special Appeal (Writ) Nos. 48 & 50 of 1990. P.P. Rao, M.K. Ramamurthi, S.K. Singh, Sudhanshu Atreya, Sushil Kumar Jain, Ms. Bina Gupta, Manoj Swarup, Miss. Lalita Kohli, R.F. Nariman and Mrs. Binu Tamta for the appearing parties. The Judgment of the Court was delivered by KASLIWAL, J. Special Leaves granted. Briefly stated the facts are that University of Rajas than invited applications for the post of Professor in the department of Botany. The Selection Committee constituted under Sec. 5 of the Rajasthan University Teachers and Offi cers (Selection for appointment) Act of 1974 (herein after referred to as the 'Act of 1974 ') held interviews on 20th June, 1989 and selected Dr. G.S. Nathawat for the post of Professor in Botany. The name of Dr. Urea Kant was mentioned in the reserve list by the Selection Committee. The syndi cate of the University approved the list and appointed Dr. Nathawat on the said post. Dr. Nathawat retired on 30th September, 1989 and Dr. Urea Kant who was already selected and kept in the reserve list was appointed as Professor in the department of Botany. Dr. Bhikalal, Dr. Shiv Sharma, Dr. Sudhakar Mishra and Dr. T.N. Bhardwaj who were not selected filed a writ petition in the High Court initially challeng ing the appointment of Dr. Nathawat on the ground that the Selection Committee was not constituted in accordance with law and objection was also raised that once a selected person joins the post, the reserve list exhausted itself. Dr. Bhikalal and others subsequently impleaded Dr. Uma Kant also as one of the respondents in the writ petition. The respondents, in their reply to the writ petition, submitted that the selection committee was properly constituted. The appointment of Dr. Uma Kant was rightly made as the life of the reserve list was initially for six months and subse quently extended to one year by a resolution of the Syndi cate dated 3.12.1983. Learned Single Judge held that the constitution of the Selection Committee was valid but as regards the appointment of Dr. Urea Kant from the reserve list it was held that once a person selected by the Selec tion Committee had been appointed the reserve list stood exhausted and the person named in the reserve list could not be appointed against a future vacancy. The appointment of Dr. Urea Kant was held illegal and it was directed that Dr. Uma Kant be removed from the said post of Professor of Botany. Both Dr. Uma Kant as well as the University of Rajasthan tiled special appeal before/he Division Bench. The Division Bench of the High Court by a common order dated March 6, 1991 upheld the order of 419 the Learned Single Judge and dismissed the appeals. The Division Bench after considering Sections 3, 5 and 6 of the Act of 1974 held that the purpose of preparation of the reserve list seems to be that if the person selected at No. 1 does not join then the next man in the reserve list should be appointed. But if the person selected by the Selection Committee is given appointment and he joins, then, selection made by the Committee is exhausted and the reserve list is of no avail and becomes extinct. It was also held that once a person selected by the Selection Committee has joined, that post is filled and some vacancy is caused thereafter a fresh and de novo selection committee 'procedure has to be started because that will be a case of future vacancy aris ing after the post had been filled up on the recommendations of the Selection Committee. Aggrieved against the order of the Division Bench of the High Court, Dr. Uma Kant as well as the University have come in appeal by grant of special leave. In order to appreciate the controversy we would advert to certain relevant provisions of the Act of 1974. Relevant provisions of Sections 3, 5 and 6 are as follows: .LM15 Section 3 Restrictions on appointments of teachers and officers: (1) Notwithstanding anything contained in the relevant law, as from the commencement of this Act, no teacher and no officer in any Univer sity in Rajasthan shall be appointed except on the recommendations of the Selection Committee constituted under Sec. (2) Save as otherwise provided in sub section (3), every appointment of a teacher or of an offi cer in any University made in contravention of sub section (1) shall be null and void. Section 5 Constitution of Selection Committee (1) For every selection of a teacher or of an officer in a University, there shall be con stituted a committee consisting of the follow ing: (i) Vice Chancellor of the University con cerned, who shall be the Chairman of the Committee; (ii) an eminent educationist to be nominated by the Chancellor for a period of one year; 420 (iii) an eminent educationist to be nominated by the State Government for a period of one year; (iv) One member of the Syndicate to be nomi nated by the State Government for a period of one year; and (v) such other persons as members specified in column 2 of the Schedule for the selection of the teachers and officers mentioned in column 1 thereof. Section 6 Procedure of Selection Committee (1) The quorum required for the meeting of a selection committee constituted under Section 5 shall not be less than five, out of which at least two shall be the experts, if the selec tion to be made is for the post of a lecturer or any other post of a teacher equivalent thereto. The quorum required for the meeting of a selection committee for the selection of non teaching posts shall be not less than one half of the number of members of the Selection Committee, out of which at least one shall be an expert. (2) The selection committee shall make its recommendations to the Syndicate, if the Syndicate disapproves the recommendations of the selection committee, the Vice Chancellor of the University concerned shall submit such recommendations alongwith reasons for disap proval given by the syndicate to the Chancel lor for his consideration and the decision of the Chancellor thereon shall be final. (3) Every selection committee shall be bound by the qualifications laid down in the rele vant law of the University concerned for the post of a teacher, as the case may be, of an officer. (4) The Selection Committee while making its recommendations to the Syndicate under sub section (2) shall prepare a list of candidates selection by it in order of merit and shall further prepare a reserve list in the same order and to the extent of 50% of the vacan cies in the post of teachers or officers for which the selection committee was constituted under sub section (1) of Section 5 and shall forward the main list and the reserve list alongwith its recommendations to the Syndi cate. 421 Initially the reserve list was to remain valid upto six months from the date of approval of the Syndicate as per the resolution of the Syndicate dated 10th July, 1978 and subse quently the Syndicate by its resolution passed in its spe cial meeting on 3.12.1983 decided that the reserve list recommended by the Selection Committee for selection of employee be treated valid for one year instead of six months. According to the University this was done in order to curtail the ad hoc appointments and also because the regular selections take a lot of time. It may also be noted that the Syndicate in its meeting held on 10th July, 1978 had resolved as under: i. Every Selection Committee may draw a Re serve List of suitable candidates upto a number not exceeding 50% of the number of post for which vacancies exist (part vacancy be rounded or to the next whole number) and place them in order of priority. The Reserve List of drawn be treated valid upto six months the date of approval by the Syndicate of the recommendations of the selec tion committee(s). On the vacancies caused within the cadre during six months of the approval of the recommendations, the candidates found suitable and placed in the reserve list be appointed in the order of priority given by the Selection Committee. As already mentioned above the period of ' six months was subsequently extended to one year by resolution dated 3.12.1983. The University has taken a categorical stand that since 1978 not only in the University of Rajasthan but all other universities in the State of Rajasthan reserve lists are prepared and appointments are being made from the re serve list against future vacancies arising on account of resignation, retirement or promotion. A long list of ap pointments made from reserve list in various departments of the University of Rajasthan from time to time after joining of the persons from the main list from 1978 to 1990 have been furnished by the appellants before this court by an additional affidavit. It has also been stated that even out of the petitioners who had filed the writ petition, Dr. T.N. Bhardwaj himself was kept in the reserve list and was there after appointed on the post of reader having fallen .vacant subsequently on account of the promotion of Dr. P. Khanna as Professor. Section 3 (1) of the Act of 1974 puts a restriction that no teacher in any university in Rajasthan shall be appointed except on the recommenda 422 tions of the Selection Committee constituted under Sec. 5 (1), and, under Sec. 3(2) any appointment made in contraven tion of sub section (1) of sec. 3 shall be null and void. In the present case Dr. Uma Kant was recommended by the Selection Committee constituted under Section only provides for the constitution of Selection Committee. The High Court has found that there was no violation of Section 5 in the Constitution of the Selection Committee and the said finding has not been challenged before us on behalf of the respondents. Section 6 provides for the procedure of Selection Committee and sub section (4) of Section 6 clearly provides that the Selection Committee shall prepare a list of candidates selected by it in order of merit and shall further prepare reserve list in the same order and to the extent of 50% of the vacancies in the post of teachers or officers for which the Selection Committee was constituted. The Syndicate in its Resolution dated 10th July, 1978 had resolved that the reserve list recommended by the Selection Committee shall be valid upto six months from the date of the approval of the Syndicate which was subsequently extend ed to one year instead of six months in a resolution passed on 3.12.1983. In our view the High Court was wrong in taking the view that a regular vacancy of Professor having arisen on the retirement of Dr. G.S. Nathawat on 30th September, 1989 again a fresh Selection Committee should have been constituted and no appointment on such post could have been made from the reserve list prepared by the Selection Commit tee on 20th June, 1989. Section 6(4) clearly provided for the preparation of reserve list to the extent of 50% of the vacancies in the post of teachers or officers for which the Selection Committee was constituted. It is not in dispute that the main list and the reserve list prepared by the Selection Committee on 20th June, 1989 were approved by the Syndicate. We agree with the contention of the university that a reserve list is always prepared to meet the contin gency of anticipated or future vacancies caused on account of resignation, retirement, promotion or otherwise. This is done in view of the fact that it takes a long time in con stituting a fresh Selection Committee which has a cumbersome procedure and in order to avoid ad hoc appointments keeping in view the interest of the student community. The Selection Committee in the present case was constituted for the selec tion of Professor in Botany and such Selection Committee had approved and recommended the name of the appellant Dr. Urea Kant in the reserve list finding him suitable for appoint ment on the post of Professor in Botany. The Syndicate which is the highest executive body in the university had also approved the name of Dr. Uma Kant in the reserve list which remained valid upto one year and we cannot accept the con tention raised on behalf of the respondents that the reserve list is exhausted as soon as the person recommended in the main list joined the post. In the present case Dr. G.S. Nathawat was selected on 423 20th June, 1989 and was going to retire on 30th September, 1989 and in these circumstances it was perfectly valid to select one more person and to keep him in the reserve list for being appointed on the regular vacancy which was shortly anticipated on account of retirement of Dr. Nathawat. The High Court committed a clear error in restricting the scope of reserve list only against the post for which the selec tion was made and which according to the High Court could only be available to the incumbent in the reserve list if the person recommended in the main list did not join such post. Such interpretation is not borne out from any of the provisions of Section 3(1), Section 5 or sub section (4) of Section 6 of the Act of 1974. The High Court took the view that the expression 'appointment ' in sub sec. (1) of Sec. 3 shall mean appointed initially. Then, sub sec. (1) of Sec. 5 provides that for every selection of a teacher in universi ty, there shall be constituted a Committee consisting of persons mentioned therein. The High Court held that the words "for every selection" are very pertinent and when read with Sec. 3(1) and 3(2), it only means that whenever there is a regular vacancy for a post, a Selection Committee has to be constituted. When Dr. G.S. Nathawat retired on 30th September, 1989, a regular vacancy arose and therefore a Selection Committee should have been constituted afresh. In our view the High Court was wrong in taking the aforesaid view. 5 only provides for the constitution of Selection Committee and the words "for every selection" used in sub sec. (1) of Sec. 5 only mean that in case of every selection of a teacher or of an officer in university, a Committee would be constituted of the persons mentioned in sub clause (i) to (v) of the said Section. So far as the present case is concerned, even the High Court has arrived to the conclusion that the Committee constituted for the selection of a professor in Botany was proper and in accord ance with the provisions of Sec. 5 of the Act of 1974. The appellant, Dr. Uma Kant was found suitable for the post of professor in Botany and his name was recommended in the reserve list by the duly constituted Selection Committee. 6(4) of the Act of 1974 clearly provides that the Selection Committee while making its recommendations to the syndicate under sub sec. (2) shall prepare a list of candi dates selected by it in order of merit and shall further prepare a reserve list in the same order and to the extent of 50% of the vacancies for the post of teachers or offi cers. Thus a reading of Sec. 5 with Sec. 6(4) makes it quite clear that the Selection Committee constituted shall recom mend not only the candidates selected by it in order of merit but shall further prepare a reserve list to the extent of 50% of the vacancies and persons kept in the reserve list will be considered as having been selected for the concerned post and shall be entitled for appointment if any 424 vacancy is caused during the validity period of the reserve list. The suitability of the persons kept in the reserve list is also adjudged by the Selection Committee which is constituted for selection of a teacher in the university. Thus no fault can be found that the incumbent recommended in the reserve list by the Selection Committee was not selected for the concerned post of teacher. In our view the very purpose of preparing a reserve list would be defeated if the view taken by the High Court is accepted that once a person selected by the selection committee has joined that post then selection made by the Committee is exhausted and the reserve list is of no avail and becomes extinct. There was no meaning or purpose of keeping the reserve list alive for a long period of one year, as no person selected for the post can at all be expected not to join for such a long period of one year. If we examine the matter from another angle, it would be clear that according to the university such a procedure is in vogue in all the universities of Rajasthan that a reserve list is used for the appointment on a vacant post caused during the validity period of the reserve list, and numerous appointments had been made in the last decade from the reserve list. The university has also submitted that if the view taken by the High Court is held to be correct, it will create chaotic situation in the university as all appoint ments so far made from the reserve list will become assail able. It is well settled that in matters relating to educa tional institutions, if two interpretations are possible, the courts would ordinarily be reluctant to accept that interpretation which would upset and reverse the long course of action and decision taken by such educational authorities and would accept the interpretation made by such educational authorities. In the result, we allow these appeals, set aside the impugned Judgment of the High Court and hold the selection and appointment of the appellant, Dr. Urea Kant as valid on the post of Professor in Botany in the University of Rajas than. T.N.A Appeals allowed.

One Smt. 'M ' inherited from her husband certain agri cultural lands. Some of the lands were under mortgage and in the possession of defendants 2 to 6. She died intestate after the came into force. As there was no heir entitled to succeed to her property, mutation was sanctioned in favour of the State. The grandson of her brother claiming to be her legal heir filed a suit for possession of the property and for a declaration that he was entitled to redeem the mortgaged property from defend ants 2 to 6. 'The suit was resisted by the First Defendant, viz. the State on the ground that the intestate had left no heir to succeed and the mutation effected in favour of the State was valid. Defendants 2 to 6 contended that the right to redeem the mortgage had extinguished, and they have become the owners of the property as they were in possession for more than sixty years. The Trial Court dismissed the suit holding that the plaintiff was not entitled to succeed to the property of the deceased since the property was inherited from her husband. As regards the mortgage, it was left open to be decided later as agreed to by the parties. Plaintiff preferred an appeal and the District Judge dismissed the same. On a second appeal preferred by him, the High Court decreed the 459 suit for possession even against defendants 2 to 6. The State as well as the defendants 2 to 6 have preferred the present appeals by special leave. The appellant State contended that the plaintiff Re spondent was not a qualified heir under the and hence it was a case of failure of heirs resulting in the devolution of estate on the Government. The other appel lants (Defendants 2 to 6) contended that the High Court ought not have decreed the suit against them since the plaintiff Respondent 's right to redeem the mortgage was not adjudged by the trial court and by agreement the question was expressly left open. Dismissing the appeal preferred by the State and allow ing the appeal of defendants 2 to 6, this Court, HELD: 1. The property is escheated to the Government when an intestate has left no heir qualified to succeed to his or her property. The property shall devolve on the Government and the Government shall take the property sub ject to all the obligations and liabilities of the property. It is only in the event of the deceased leaving behind no heir to succeed, the State steps in to take the property. The State does not take the property as a rival or preferen tial heir of the deceased but as the Lord paramount of the whole soil of the country. [464 B,C] 2. Section 29 of the shall not operate in favour of the State if there is any other heir of the intestate. Indeed, Section 29 itself indicates that there must be failure of heirs. 'Failure ' of heirs means the total absence of heirs to the intestate. A female Hindu being the full owner of the property becomes a fresh stock of descend. If she leaves behind any heir either under sub section (1) or under sub section (2) of Section 15, her property cannot be escheated. [464 E,F] Halsbury 's Laws of England, 4th Edn. 17 para 1439; referred to. Sub Section (2) of Section 15, intended only to change the order of succession specified under sub section (1) and not to eliminate the other classes of heirs. Section 15(2) came to be incorporated on the recommendations of the Joint Committee of the two Houses of Parliament. The report of the Joint Committee which was accepted by Parliament indicates that this sub section was intended to revise the order of succession among the heirs to a Hindu female and to prevent the properties from passing into the hands to per sons to whom justice would 460 demand that they should not pass. That means the property should go in the first instance to the heirs of the husband or to the source from where it came. [464 F, H, 465 C] 3.2. Sub section (2)(b) of Section 15 emphasises that the property of the intestate shall not devolve upon the heirs referred to in sub section (1) in the order specified thereunder but upon heirs of the husband. The object is not to eliminate the other heirs under sub sectiOn (1) and not to exclude them from inheritance altogether. There is no justice in such a construction of Section 15. The Parliament could not have intended that result. [465 F G.] Bhajya vs Gopikabai and Anr, ; , referred to.

ION: Criminal Appeals Nos. 100 to 105 and 124 to 129 of 1954. Appeals from the judgment and order dated August 2. 1954, of the Punjab High Court in Criminal Appeals Nos. 112 of 49, 333,382, 383 and 410 of 1950 and 241 of 1951, arising out of the judgment and order dated June 26, 1950, of the Punjab Special Tribunal. WITH Petition No. 31 of 1952. Petition under Article 32 of the Constitution of India for enforcement of Fundamental rights. Harnam Singh, Hardyal Hardy and P. C. Aggarwala, for the appellant in Cr. 100 to 105 of 1954, Petition No. 31 of 52 and Respondent in Cr. 124 to 129 of 1954. C. K. Daphtary, Solicitor General of India, Kartar Singh Chawla, T. M. Sen and D. Gupta, for the appellant in Cr. 100 to 105 of 1954 and Petition No. 31 of 1952 and Appellant in Cr. 124 to 129 of 1954. October 28. The judgment of Sinha, C.J., Imam, Wanchoo and Das Gupta, JJ., was delivered by Imam, J. Kapur, J., delivered a separate judgment. Imam J. IMAM J. These appeals are on a certificate granted by the Punjab High Court and they have been heard 93 together as they rise out of a single judgment of the High Court. In Criminal Appeals Nos. 100 to 105 of 1954 Satwant Singh is the appellant and in Criminal Appeals Nos. 124 to 129 of 1954 the State of Punjab is the appellant. Although in these appeals only questions of law have been urged it is necessary to set out briefly some of the facts which led to the prosecution and conviction of Satwant Singh. As a result of the Japanese invasion of Burma in 1942 the Government of Burma and the Allied forces stationed there were compelled to leave that country. In connection with the evacuation from Burma and the defence of that country, the Government of Burma and the army had to execute certain works such as the construction of roads, repairs and construction of bridges, strengthening and repairing of old tracks and converting railway lines into motor roads. Some of these works were executed by the army and some were entrusted to contractors. After evacuation of Burma its Government was located at Simla. In August, 1942, the Government of Burma advertised inviting claims from contractors who had executed works or had supplied materials in Burma and had not yet been paid. Satwant Singh had worked as a contractor in Burma. He at first submitted a claim for a sum of a little over Rs. 18,000. Later on, he put in further claims the total amount of which ran into several lakhs of rupees. These claims were sent by the Government of Burma to Major Henderson at Jhansi in March and May, 1943, for verification as he was the officer who had knowledge of these matters. This officer certified many of these claims to be correct and sent the papers back to Simla. He did not pass one claim because it was within the knowledge of another officer Mr. Nasa. On the certification of the claims by Henderson, the Finance Department of the Government of Burma sanctioned the same and the Controller of the Military Claims at Kolhapur was directed to pay the amounts sanctioned. On the request of Satwant Singh cheques drawn on the Imperial Bank of India at Lahore were posted to him from Kolhapur and these cheques were 94 encashed at Lahore. In all Satwant Singh was paid Rs. 7,44,865 12 0. Subsequently, suspicions of the Government of Burma were aroused concerning the many cliams made on it and it was discovered that many of them, including some of those of Satwant Singh, were false. A police investigation followed which revealed that a large number of claims made by various persons including Satwant Singh in respect of works done for the benefit of the army were false. Satwant Singh was arrested on the 12th of April, 1944, at Ambala and was taken to Lahore. He had also submitted a claim in the name of his wife Surjit who was also arrested. Henderson was arrested at lmphal and brought to Lahore for interrogation. According to the prosecution, Satwant Singh had committed the offence of cheating punishable under section 420, Indian Penal Code and Henderson had abetted him in the commission of that offence by falsely certifying Satwant Singh 's claims to be true, knowing that they were false and thereby had committed an offence punishable under section 420/109, Indian Penal Code. Satwant Singh having expressed a desire to make a confession, his confession was recorded by a First Class Magistrate on the 9th of May, 1944. There being many cases of acceptance of bribe and criminal breach of trust by public servants and cheating of Government by certain persons and cases similar to that of Satwant Singh, Ordinance No. XXIX of 1943, hereinafter referred to as the Ordinance, for trial of such cases was promulgated by the Governor General of India in 1943. Subsequently, this Ordinance was amended by Ordinance XII of 1945. By virtue of a notification issued under the Ordinance as amended the case of Satwant Singh was allotted to the Third Special Tribunal at Lahore for trial with Henderson as his co accused. After the partition, the trial by the Special Tribunal took place at Simla. Henderson had absconded to England and extradition proceedings had to be taken against him under the Fugitive Offender 's Act of 1881. He was brought 95 before the Special Tribunal in December, 1949. In the meantime, Satwant Singh 's case was separated and the trial against him alone continued. On Henderson 's return, the trial once again became a joint trial. Henderson applied for examination of certain witnesses on commission in England. His prayer was granted. Satwant Singh fearing that the trial of the cases against him would be delayed, requested that his cases be separated from the cases against Henderson. This prayer was allowed and his trials proceeded against him as the sole accused except in the trial of Cases Nos. 54, 55 and 56 in which Henderson was a coaccused with him. The Special Tribunal imposed sentences of imprisonment ranging from one year to three and a half years in the several trials. In addition, it imposed fines of various amounts. It divided the fines into "ordinary" and "compulsory", the latter by virtue of section 10 of the Ordinance. In default of payment of the " ordinary " fines it directed the appellant to undergo further imprisonment for certain periods. There was no such direction with respect to the " compulsory " fines. The High Court reduced the sentence of imprisonment to two years in all the trials where such sentence was in excess of that period. The sentences of imprisonment in all the trials were to run concurrently. The High Court maintained the sentence of " ordinary " fines imposed by the Special Tribunal but set aside the sentence of " compulsory " fines. The State had filed a petition before the High Court for the enhancement of the sentences of fine passed against Satwant Singh which was dismissed on the ground that the " compulsory " fines imposed were invalid in view of the decisions of this Court in the case of Rao Shiv Bahadur Singh and Another vs The State of Vindhya Pradesh (1) and the case of Kedar Nath Bajoria vs The State of West Bengal (2). In the opinion of the High Court, enhancement of sentences of fine would be a method by which the provisions of article 20 of the Constitution would be circumvented. (1) (2) ; 96 Satwant Singh has appealed against his conviction and sentence as ordered by the High Court. The State of Punjab has also appealed against the decision of the High Court that the "compulsory " fines imposed were illegal. The State also has made a prayer that the " ordinary " fines imposed upon Satwant Singh may be enhanced. On behalf of the appellant his conviction was challenged on several points of law. Firstly, it was urged that the provisions of section 188 of the Code of Criminal Procedure had not been complied with. The charge framed against the appellant stated that he had committed the offence of cheating at Simla and Kolhapur. Kolhapur was a place outside British India at the relevant time. In the present case there was neither a certificate of the Political Agent nor a sanction of the Provincial Government as required under section 188 of the Code of Criminal Procedure. The facts established that the offence of cheating was committed at Kolhapur and therefore it could not be inquired into in British India without such a certificate or such sanction. The trial of the appellant therefore was without jurisdiction. Secondly, it was urged that the appellant committed the offence at Kolhapur and Henderson at Jhansi. They could not be tried together in a single trial by the Special Tribunal at Simla as neither section 179 nor section 180 of the Code of Criminal Procedure applied to the facts of the case and in view of the provisions of section 188 of the Code. Thirdly, it was submitted that sections 233 to 239 of the Code of Criminal Procedure deal with joinder of charges and joinder of persons in a trial. Sections 234 and 239 of the Code could not be combined to try the appellant and Henderson in a single trial for 3 offenses of cheating by the former and 3 offenses of abetment thereof by the latter. Section 239 of the Code was a self contained provision and had to be read without bringing into aid the provisions of section 234. Fourthly, it was pointed out that as no sanction under section 197 of the Code by the proper authority had been given for the prosecution of Henderson, he could not be tried without such a sanction. Joint trial of Henderson and the 97 appellant without such a sanction vitiated the trial. Fifthly, it was submitted that as Burma was not a Dominion of His Majesty 's Government in 1943 the Ordinance did not apply. In the course of the argument the fifth submission was abandoned and, we think, rightly ' It would be convenient to deal together with the first and the fourth submissions regarding the noncompliance with the provisions of sections 188 and 197 of the Code of Criminal Procedure. Before the provisions of section 188 can apply it must be established that the offence for which the appellant was charged was committed outside British India. The appellant was charged with the offence of cheating. He had filed certain claims before the Government of Burma at Simla. Those claims were certified as true by Henderson at Jhansi. The claims of the appellant were found to be untrue. In fact, he was not entitled to any payment in respect of these claims. The misrepresentation by Satwant Singh was at Simla and the false certification of the claims as true by Henderson was at Jhansi. Simla and Jhansi were places in British India. As the result of the misrepresentation by the appellant and the false certification by Henderson the Government of Burma was induced thereby to make the payment of a large sum of money to the appellant at Lahore. The payment at Lahore to the appellant was made at his own request by cheques on the Imperial Bank of India at its Lahore Branch. Lahore was also a place at the relevant time in British India. It is true that in the charge framed Kolhapur was mentioned as one of the places where the cheating had taken place. In our opinion, it was an error in the charge, as framed, to have mentioned that any offence of cheating took place at Kolhapur. That error in the charge, however, was a mere irregularity on a misunderstanding of the facts which could not vitiate the trial. It was, however, urged that as the cheques in favour of the appellant were posted at Kolhapur, in law, the payment to the appellant had been made in Kolhapur and delivery of property, namely, the cheques, which must be regarded as 13 98 valuable security, was made at Kolhapur. The offence of cheating, therefore, was committed at Kolhapur and neither at Simla nor at Lahore. In our opinion, this submission is misconceived. The posting of the cheques at Kolhapur cannot be regarded as delivery of the cheques to the appellant at Kolhapur because the Post Office at that place could not be treated, in the circumstances of the present case, as the agent of the appellant to whom the delivery of the cheques bad been made. In fact, they were not delivered to the appellant at Kolhapur but were delivered to him at Lahore. As regards the place of payment it was urged that when the cheques were issued and posted at Kolhapur, the payment to the appellant must be regarded as having been made at Kolhapur. Reliance was placed on The Commissioner of Income Tax, Bombay South, Bombay vs Messrs. Ogale Glass Works Ltd., Ogale Wadi (1). That case was considered by this Court in the case of The Commissioner of Income Tax, Bihar & Orissa vs Messrs. Patney & Co.decided on the 5th of May, 1959, and it was held that the rule in the Ogale Glass Works ' case (1) was inapplicable to the facts of the case. In the latter case it was found by this Court that : "Whatever may be the position when there is an express or implied request for the cheque for the amount being sent by post or when it can be inferred from the course of conduct of the parties, the appellant in this case expressly required the amount of the commission to be paid at Secunderabad and the rule of Ogale Glass Works ' case (1)would be inapplicable." In the present case an inquiry was made from the appellant how he would like the payment to be made and he replied that cheques payable at the Imperial Bank of India, Lahore Branch, should be sent to him. Accordingly, cheques on the Imperial Bank of India, Lahore Branch, were sent to the appellant by post in Lahore and the appellant encashed them there. In these circumstances, the rule in Ogale Glass Works ' case (1) is inapplicable and it must be held that the payment was (1) (2) , 99 made to the appellant at Lahore and not at Kolhapur where the cheques had been posted. Furthermore, what may be relevant for consideration as to the place of payment for the purpose of the Income Tax Act may not necessarily be relevant for the purposes of a criminal case in which the Courts have to ascertain where the offence of cheating was committed. It seems to us, on the facts established in this case, that no part of the offence of cheating was committed by the appellant outside British India. His false repre sentation to the Government of Burma that money was due to him was at a place in British India which induced that Government to order payment of his claims. In fact, he was paid at Lahore at his own request by means of cheques on the Branch of the Imperial Bank of India at Lahore. The delivery of the property of the Government of Burma, namely, the money, was made at Lahore, a place in British India, and we cannot regard, in the circumstances of the present case, the posting of the cheques at Kolhapur either as delivery of property to the appellant at Kolhapur or payment of his claims at Kolhapur. The entire argument founded on the provisions of section 188 of the Code therefore, fails. As the offence committed by the appellant was not at a place beyond British India, there was no need for the existence of a certificate of a Political Agent or, in the absence of such a person, a sanction of the Provincial Government. Coming to the question whether the absence of a sanction under section 197 of the Code vitiated the trial, it has to be established that Henderson was a public servant removable by the Governor General in Councll or the Provincial Government. As no objection had been taken before the Special Tribunal by the appellant in this respect it was urged by the Solicitor General that the prosecution had no opportunity of establishing that Henderson, though a public servant, was a person not removable by the Governor General in Council or the Provincial Government. On the other hand, it was urged by Mr. Harnam Singh that in the High Court the objection had been taken but it had been overruled on the ground that there was in fact a 100 sanction in existence. The High Court was under a misapprehension. The sanction which was in existence was under section 270 of the Government of India Act, 1935, which is given by the Governor General himself, where as the sanction under section 197 of the Code is given by the Governor General in Council. The sanction under section 270 of the Government of India Act, 1935, could not therefore be treated as a sanction under section 197 of the Code. In the High Court, apparently, no submission was made that Henderson was not a public servant removable by the Governor General in Council or the Provincial Government. If it is being urged now that Henderson was not such a person then the appellant should be given an opportunity to show that he was a public servant so removable. It is unnecessary to deal with these submissions, which relate to a question of fact, in view of our conclusion as mentioned below with respect to the applicability of the provisions of section 197 of the Code in the present case. Under, section 197 no Court shall 'take cognizance of an offence committed by a public servant who is removable from his office by the Governor General in Council or a Provincial Government, save upon a sanction by one or the other as the case may be, when such offence is committed by him while acting or purporting to act in the discharge of his official duty. Henderson was charged with intentionally aiding the appellant in the commission of an offence punishable under section 420 of the Indian Penal Code by falsely stating as a fact, in his reports that the appellants claims were true and that statement bad been made knowing all the while that the claims in question were false and fraudulent and that he had accordingly committed an offence under section 420/109, Indian Penal Code. It appears to us to be clear that some offences cannot by their very nature be regarded as having been committed by public servants while acting or purporting to act in the discharge of their official duty. For instance, acceptance of a bribe, an offence punishable under section 161 of the Indian Penal Code, is one of them and offence of cheating or abetment thereof is another. We have no hesitation in saying that where a public 101 servant commits the offence of cheating or abets another so to cheat, the offence committed by him is not one while he is acting or purporting to act in the discharge of his official duty, as such offences have no necessary connection between them and the performance of the duties of a public servant, the official status furnishing only the occasion or opportunity for the commission of the offences (vide Amrik Singh 's case (1) ). The Act of cheating or abetment thereof has no reasonable connection with the discharge of official duty. The act must bear such relation to the duty that the public servant could lay a reasonable but not a pretended or fanciful claim, that he did it in the course of the performance of his duty (vide Matajog Dobey 's case (2) ). It was urged, however, that in the present case the act of Henderson in certifying the appellant 's claims as true was an official act because it was his duty either to certify or not to certify a claim as true and that if he falsely certified the claim as true he was acting or purporting to act in the discharge of his official duty. It is, however, to be remembered that Henderson was not prosecuted for any offence concerning his act of certification. He was prosecuted for abetting the appellant to cheat. We are firmly of the opinion that Henderson 's offence was not one committed by him while acting or purporting to act in the discharge of his official duty. Such being the position the provisions of section 197 of the Code are inapplicable even if Henderson be regarded as a public servant who was removable from his office by the Governor General in Council or a Provincial Government. Elaborate arguments were advanced in support of the contention that the provisions of section 197 of the Code were not inconsistent with the Ordinance and therefore had to be complied with before the Special Tribunal could try Henderson. It was pointed out that under section 6 of the Ordinance the Special Tribunal was specifically authorized to take cognizance of an offence without the accused being committed to it for trial and sub section (2) of that section stated that " Save (1) ; (2) ; 102 as provided in sub section (1) the Code of Criminal Procedure,1898 (V of 1898), except the provisions of section 196 A and of Chapter XXXIII, shall so far as they are not inconsistent with this Ordinance, apply to proceedings of a Special Tribunal ; and for the purposes of the said provisions the Special Tribunal shall be deemed to be a Court of Session, trying cases without a jury, and a person conducting a prosecution before a Special Tribunal shall be deemed to be a Public Prosecutor. "It was urged that by virtue of this sub section the provisions of the Code of Criminal Procedure would be applicable except the provisions of section 196 A and Chapter XXXIII which had been expressly excluded. If section 197 of the Code was intended to be excluded, the Ordinance would have said so. Having regard to the view we take that the provisions of section 197 of the Code do not apply to the facts of the present case as the offence of abetment of cheating by Henderson cannot be regarded as an offence committed by him while acting or purporting to act in the discharge of his official duty, it is unnecessary to consider the arguments advanced in this connection. Coming now to the 2nd and 3rd submissions made on behalf of the appellant we have to consider whether the appellant and Henderson could at all be jointly tried, having regard to the fact that they were jointly tried up to a certain stage in some of the trials and to the conclusion of the trial concerning cases Nos. 54,55 and 56. We have already held that no part of the offence of cheating was committed by the appellant outside British India and consequently the provisions of section 188 of the Code did not apply. The provisions of sections 179 and 180 are wide enough to enable cognizance to be taken either by a Court where anything was done within the local limits of its jurisdiction or a court where the consequences ensued. Illustration (c) to section 179 clearly states that if A is put in fear of injury within the local limits of the jurisdiction of Court X,and is thereby induced, within the local limits of the jurisdiction of Court Y, to deliver property to the person who put him in fear, the offence of extortion committed against A may be inquired into or tried 103 either by X or Y. The appellant could have been ' therefore tried either at Lahore or at Simla for the offence of cheating as the misrepresentation was at,Simla and the consequence was at Lahore as the Government of Burma was induced by the misrepresentation to deliver property (money) at Lahore. Under section 180 when an act is an offence by reason of its relation to any other act which is also an offence, a charge of the first mentioned offence may be inquired into or tried by a Court within the local limits of whose jurisdiction either act was done. Illustration (a) to this section states that a charge of abetment may be inquired into or tried either by the Court within the local limits of whose jurisdiction the abetment was committed or by the Court within the local limits of whose jurisdiction the offence abetted was committed. The offence of cheating by the appellant could have been tried either at Lahore or at Simla. Consequently, Henderson could also have been tried for the abetment of that offence either at Lahore or at Simla. The case of these accused was allotted to the Special Tribunal at Lahore and would have normally been tried there but for the partition of India. The trial under the authority of law, was concluded at Simla. There seems, therefore, to have been no illegality committed in trying the appellant and Henderson together at Simla. The other line of argument in support of the objection that the appellant and Henderson could not be tried together was based on the provisions of sections 233 and 239 of the Code. It was pointed out that under the provisions of section 233 of the Code for every distinct offence of which any person is accused there shall be a separate charge and every such charge shall be tried separately except in the cases mentioned in sections 234, 235, 236 and 239. Unless, therefore, the joinder of trial of the appellant and Henderson was permitted under section 239 of the Code they could not be tried together. It was: urged that in construing section 239 of the Code it was not permissible to take into consideration the provisions of section 234. The only provision by which a person accused of an offence and a person accused 104 of abetment of that offence can be tried together in a single trial is under section 239(b) which permits persons accused of an offence and persons accused of abetment to be charged and tried together. Under the terms of these provisions any number of persons accused of commuting a single offence could be tried together with any number of persons who had abetted that offence. But cl. (b) did not permit the trial of persons accused of several offences and persons accused of abetment of those offences in one trial and to try a person accused of three offences along with a person accused of abetment of those offences would be contrary to the provisions of cl. If the provisions of section 239(b) and section 234 were combined the result would be to create another exception to be added to the exceptions stated in section 233 of the Code. No Court had any authority to create a ' new exception to section 233. section 239 being an exception to section 233 its provisions had to be construed strictly. The plain words of section 239(b) make it quite clear that persons who had committed a single offence and those who abetted it only could be tried together. Since the appellant is said to have committed three offences of cheating and Henderson three offences of abetment thereof, the provisions of section 239(b) did not apply and their trial together was vitiated. It was further pointed out that if there had been misjoinder of trial in the present case it could not reasonably be said that the appellant had not been prejudiced. If the appellant bad been tried apart from Henderson. Henderson 's confession and all the evidence against him would have been excluded at the trial of the appellant. As the result of Henderson and the appellant being tried together all the evidence against Henderson and his confession must have necessarily adversely affected the case of the appellant. On the other hand, the Solicitor General submitted that the provisions of the Code of Criminal Procedure must be construed as they stand and reference to decided cases may be made to assist the court in the matter of construction if necessary. The Code itself nowhere stated that sections 234 and 239 of the Code 'were mutually exclusive. The entire scheme of joinder of 105 charges and joinder of persons in a single trial has been set out in the Code. Although section 233 of the Code is clear enough, it has expressly expected from the application of its provisions sections 234, 235, 236 and 239. Sections 234, 235, 236 and 239 are permissive sections. They are not compelling sections. That is to say, although these sections permit joinder of charges and joinder of persons a Court may well consider it desirable in the interest of justice and having regard to the circumstances of a particular case that the charges framed should be split up and separate trials should take place in respect of them and the accused be tried separately. It was to avoid multiplicity of trials, harassment to the accused and waste of time that the permissive sections 234, 235, 236 and 239 enable a court, within their terms, to join charges and persons in a single trial. Section 239 permitted joinder of charges and persons in a single trial in cases covered by cls. (a) to (g). These clauses permitted the joinder of persons as accused in one trial and they contemplated the various circumstances in which such persons could be tried together. Joinder of several persons in one trial necessarily involves the framing of more than one charge. If the joinder of charges was within the terms of the section, then the provisions of section 233 had no application. Although in cl. (b) of the section the words used are "persons accused of an offence and persons accused of abetment, or of an attempt to commit such offence ", a reasonable construction of these words could not lead to the conclusion that the words " an offence " meant a single offence because under section 13 of the General Clauses Act (Central Act X of 1897) words in the singular shall include the plural and vice versa. Under cl. (b), therefore, persons accused of several offences and persons accused of abetment thereof could be tried together in a single trial. The concluding words of section 239 " and the provisions contained in the former part of this Chapter shall, so far as it may be, apply to all such charges " permitted a court to apply that part of Chapter XIX which preceded section 239.S. 234 was one such provision and a court could resort to its provisions so far as they were applicable, 14 106 It was further pointed out by the Solicitor General that although the appellant was asked to specify the points of law upon which these appeals would be urged, he did not state that, in fact, he had been pre judiced by a joint trial of himself and Henderson. He also pointed out that as the result of the amendment of the Code of Criminal Procedure misjoinder of charges did not vitiate the trial unless the misjoinder had, in fact, occasioned failure of justice. we now proceed to consider some of the provisions of Chapter XIX of the Code which deal with the form of charges and the joinder of charges as well as joinder of persons. So far as the form of the charge is concerned, the provisions of sections 221 to 232 of the Code would apply in any event where a single accused was being tried on a single or several charges or where several accused were tried for various offences at one trial within the terms of section 239 of the Code. So far as joinder of charges is concerned, section 233 clearly required that for every distinct offence of which any person was accused there must be a separate charge and every such charge must be tried separately. The framers of the Code, however, realised that it would be impracticable to have for all circumstances such a rigid rule. The section, accordingly, excepted from its provisions cases which were covered by sections 234, 235, 236 and 239. section 234 accordingly permitted a single accused to be tried at one trial for more offences than one of the same kind committed within the space of 12 months provided they did not exceed three in number. section 235 went a step further. It permitted an accused person to be tried for more offences than one committed by him and the framing of a charge with respect to every such offence, provided that the series of acts were soconnected together as to from the same transaction. It also permitted that if the acts alleged constitute an offence falling within two or more separate definitions of any law in force for the time being by which offences are defined or punished, the person accused of them may be charged with, and tried at one trial for,each of such offences. It also provided that if several acts of which one or more than one would by or them selves constitute an offence, constitute when combined 107 a different offence, the person accused of them may be charged with, and tried at one trial for the offence constituted by such acts when combined, and for any offence constituted by any one, or more of such acts. section 236 permitted the framing of alternative charges where a single act or series of acts is of such a nature that it is doubtful which of several offences the facts which can be proved will constitute, the accused may be charged with having committed all or any of such offences and any number of such charges may be tried at once. By section 239 joinder of persons in a single trial is permitted in the circumstances mentioned in cls. (a) to (g). At the trial of such persons charges would have to be framed. Indeed, the section commences with the following words : " The following persons may be charged and tried together. " Leaving cl. (b) out for the moment the other clauses of the section clearly contemplate the framing of more than one charge against accused persons when tried together. Under cl. (a) persons accused of the same offence committed in the course of the same transaction can be tried together. Under cl. (c) persons accused of more than one offence of the same kind within the meaning of section 234 committed by them jointly within the period of 12 months can also be tried together. Under cl. (d) persons accused of different offences committed in the course of the same transaction can be tried together. Similar is the position in cases mentioned in cls. (e), (f) and It is clear, therefore, that the general rule that for every distinct offence of which any person is accused there shall be a separate charge, and every such charge shall be tried separately has no application to these clauses. Indeed section 233 contemplated that and expressly excluded the application of its provisions to section 239. The entire tenor of the provisions of section 239 indicates that several persons could be tried together for several offences committed in the circumstances mentioned therein. There is no apparent reason why cl. (b) should be construed in the way suggested by Mr. Harnam Singh, 108 according to whom, in one trial any number of persons could be tried for a single offence along with any number of persons accused of abetment of that offence. The argument was based on the words " an offence in that clause and the suggestion was that these words meant a single offence. Having regard to the providers of section 13 of the General Clauses Act, the singular includes the plural and it would not be straining the language of the clause if the same was construed also to mean that persons accused of several offences and persons accused of abetment thereof could be tried together at one trial. So construed framing of three charges under section 420, Indian Penal Code, against Satwant Singh and three charges of abetment against Henderson in the same trial did not infringe the provisions of cl. Furthermore, the concluding words of the section make it clear that the provisions contained in the former part of Chapter XIX, i.e., previous to section 239 as a far as may be shall apply to all charges framed at the trial. It was suggested that the words " the former part of this Chapter " referred to sections 221 to 232 as Chapter XIX is in two parts, the first part being the form of charges and the second part joinder of charges. Although such headings do appeal in the Chapter, it is to be noticed that Chapter X LX does not divide itself into several parts as is to be found in many of the Chapters of the Code, e.g., in Chapter XXIII the parts are headed A to L. It is further to be noticed that words similar to the concludingwords of section 239 do not appear in section 235 of the Code. The reason for these words appearing in section 239 of theCode appears to be that this section permits persons to be charged and tried together. The (lode obviously contemplated that when charges were being framed against each of the several accused in the cases contemplated in section 239, not only the provisions concerning the form of charges but also the provisions concerning the joinder of charges, as far as may be, should apply. In these appeals the appellant was charged in one trial for three offences of cheating and Henderson for abetment of the same. If the appellant had been tried alone he could have been tried for three charges of cheating 109 committed within 12 months and Henderson, in a separate trial, could have been tried for three offences of abetment of the same offences committed within 12 months. There is no good reason for thinking that when cl. (b) of section 239 permitted the joinder of the appellant and Henderson in a single trial for the commission of the offence of cheating and abetment thereof, the same was confined to one offence of cheating and one offence of abetment. In our opinion, the trial of the appellant and Henderson together on the charges as framed did not vitiate the trial. It is unnecessary to deal with the last submission of the Solicitor General that the appellant had taken no ground that he had been prejudiced by his joint trial with Henderson because such a question does not arise, having regard to the view we take that there was no misjoinder of trial. On behalf of the appellant, certain circumstances were urged in mitigation of the sentence. It was pointed out that Henderson 's sentence was reduced to 2 month 's imprisonment and a small fine, the proceedings against the appellant had been going oil since 1945, the appellant had already served some three months ' imprisonment and that there was also a substantial fine. Accordingly, it was prayed that the sentence of imprisonment may be reduced to the period already undergone while the sentence of " ordinary " fine may be maintained. The measure of punishment must be commensurate with the nature and the seriousness of the crime. The appellant had cheated the Government of Burma to the extent of something like 7 lakhs of rupees. It is impossible to say that the sentence of imprisonment as reduced by the High Court was in any way excessive. The fact that Henderson received a light punishment is not a relevant circumstance. The prayer for a further reduction of the sentence cannot be acceded to. The appeals filed by Satwant Singh are accordingly dismissed. Criminal Appeals Nos. 124 to 129 of 1954. In these appeals the State of Punjab has appealed against that part of the judgment of the High Court 110 which set aside the order of the Special Tribunal imposing what has been described as 'compulsory" fines. The High Court felt that it was bound by the decisions of this Court in the cases of Rao Shiv Bahadur Singh vs The State of Vindhya Pradesh and Kedar Nath Bajoria vs The State, of West Bengal (2). It was urged by the Solicitor General that the Special Tribunal was in error in describing the fines imposed by it as " ordinary " and " compulsory ".Section 10 of the Ordinance contemplated no such distinction. What it did direct was, whether or not a sentence of imprisonment was imposed by the Special Tribunal, that a sentence of fine must be imposed and that fine shall not be less in amount than the amount of money or value of other property found to have been procured by the offender by means of the offence. In other words, the section imposed a minimum fine, in any event, whether a sentence of imprisonment was or was not imposed. In the present case a sentence of imprisonment was, in fact,imposed and the total of fines imposed, whether described as " ordinary " or " compulsory ", was not less than the amount of money procured by, the appellant by means of his offence. Under section 42O of the Indian Penal Code an unlimited amount of fine could be imposed. Article 20(1) of the Constitution is in two parts. The first part prohibits a conviction of any person for any offence except for violation of law in force at the time of the commission of the act charged as an offence. The latter part of the Article prohibited the imposing of a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence. The offence with which the appellant had been charged was cheating punishable under section 420 of the Indian Penal Code, which was certainly a law in force at the time of the commission of the offence. The sentence of imprisonment which was imposed upon the appellant was certainly not greater than that permitted by section 420, The sentence of fine (1) (2) ; 111 also was not greater than that which might have been inflicted under the law which had been in force at the time of the commission of the offence, as a fine unlimited in extent could be imposed under the section. It was further pointed out that at least Case No. 58, out of which arose Criminal Appeal No. 112 of 1949 in the High Court, was one to which the provisions of article 20 could not apply as the conviction in that case was recorded on the 24th of January, 1949, before the Constitution came into force. Mr. Harnam Singh, on the other hand, drew our attention to section 63 of the Indian Penal Code and submitted that a sentence of fine could at no time be excessive and therefore the, sentence of fine which could be imposed under section 420 was not entirely unlimited as it could not be excessive. In considering whether a fine would or would not be excessive various considerations had to be kept in mind including the seriousness of the offence and the means of the accused. Section 63 of the Indian Penal Code expressly states that where no sum is expressed to which a fine may extend the amount of fine to which the offender is liable is unlimited. Section 420 of the Indian Penal Code does not express a sum to which a fine may extend, as some of the sections of the Indian Penal Code do. As the section stands, therefore, the extent of fine which may be imposed by a Court under it is unlimited. Whether a fine imposed in a particular case is excessive would be a question of fact in each case. That consideration, however, is entirely irrelevant in considering whether article 20 of the Constitution has been contravened by the provisions of section 10 of the Ordinance as the extent of fine which can be imposed under section 420, by law, is unlimited. It cannot be said that section 10 of the Ordinance in imposing the minimum fine which a court shall inflict on a convicted person was a penalty greater than that which might have been inflicted on that person under the law in force at the time of the commission of the offence, where under such law the extent of fine which could be imposed is unlimited. 112 In the case of Rao Shiv Bahadur Singh (1), referred to above, this Court held that article 20 of the Constitution must be taken to prohibit a conviction or subjection to penalty after the Constitution in respect of ex post facto law whether the same was a pre Constitutional law or a post Constitutional law. The prohibition under the Article was not confined to the passing or the validity of the law but extended to the conviction or :the sentence and was based on its character as ex post facto law and therefore fullest effect must be given to the actual words used in the Article. It had been urged in that case that the Vindhya Pradesh Ordinance (No. XLVIII of 1949) was an ex post facto law. This Court, however, held that Ordinance was not ail ex post facto law. The contention that the provisions of article 20 of the Constitution had, been contravened was rejected and it was held that the criminal law relating to offences charged against the accused at the time of their commission was substantially the same as obtained at the time of the conviction and sentence under the Indian Penal Code. In Rao Shiv Bahadur Singh 's case (1) this Court had not to consider whether an ex post facto law imposing a minimum fine for an offence with respect to which an unlimited fine could be imposed by the law in existence at the time of the commission of the offence contravened the provisions of article 20. In Kedar Nath Bajoria 's case (2), in addition to the sentence imposed under the ordinary law, the first appellant was fined Rs. 50,000, including the sum of Rs. 47,550 received by him as required by section 9(1) of the West Bengal Criminal Law (Amendment) Act of 1949. Reference to the decision in Rao Shiv Bahadur Singh 's case(1)was made and this Court held that, in any event, the fine to the extent of Rs. 47,550 would be set aside. This Court, however, did not decide whether the total fine imposed was greater than what could be imposed under the law as it was at the commission of the offence. It assumed that Rao Shiv Bahadur Singh 's case (1) supported the contention of the first appellant in that case. It is significant that in directing that the appeal would be heard in due course on merits this Court stated that it would be open to the Court in case (1) (2) ; 113 the conviction was upheld to impose such appropriate fine as it thought fit in addition to the sentence of imprisonment. In the present case even if it be assumed that section 10 of the Ordinance as an ex post facto law ill that in the matter of penalty a minimum sentence of fine was directed to be imposed by a court whereas at the time that the appellant committed the offence section 420 contained no such provision, what is prohibited under article 20 of the Constitution is the imposition of a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence. The total sentence of fine "ordinary " and " compulsory " in the present case cannot be said to be greater than that which might have been imposed upon the appellant under the law in force at the time of the commission of the offence, because the fine which could have been imposed upon him under section 420 was unlimited. A law which provides for a minimum sentence of fine on conviction cannot be read as one which imposes a greater penalty than that which might have been inflicted under the law at the time of the commission of the offence where for such an offence there was no limit as to the extent of fine which might be imposed. Whether a fine was excessive or not would be a question of fact in each particular case but no such question can arise in a case where the law imposes a minimum sentence of fine. Under article 20 of the Constitution all that has to be considered is whether the ex post facto law imposes a penalty greater than that which might be inflicted under the law in force at the time of the commission of the offence. For the reasons already stated it cannot be said that section 10 of the Ordinance imposed any such penalty and therefore was in contravention of the provisions of article 20. These appeals are accordingly allowed and the order of the High Court setting aside the "compulsory " fines imposed by the Special Tribunal is set aside and the orders of the Special Tribunal imposing the " compulsory " fines are restored. KAPUR J. I have read the judgment prepared by my learned brother Imam, J. I agree to the order 15 114 proposed and the reasons therefor except that I would base the inapplicability of section 197, Criminal Procedure Code, to the facts of the present case on different grounds. The legislature in India has considered it necessary to provide a large measure of protection for public officials from unnecessary harassment and for that purpose section 197 was enacted in the Criminal Procedure Code and this was recognised by Lord Simonds in the Privy Council case Gill vs The King(1). That this is the legislative policy may also be gathered from a subsequent enactment, the Prevention of Corruption Act where such provision was incorporated in regard to offences of bribery, corruption and also misapprehend privation. But the question still remains to what cases this protection is made applicable. The contention raised on behalf of the appellant was that his case was prejudiced because of a joint trial with Henderson, who it is contended, was a Major in the Indian Army and who was charged for abetting the offence of cheating committed by the appellants The argument raised was that Henderson having been commissioned to and in the Indian Army was not removable from his office except with the sanction of the Central Government, i.e., the then Governor General in Council and as there was no such sanction he could not validly be tried for the offence he was charged with. The case made before us in this Court was that the claims put forward by the appellant were sent to Henderson for verification and Henderson verified them to be correct and that he did this while acting or purporting to act in the discharge of his duty as public servant. The question then is whether the facts which are alleged to constitute the offence of abetment of cheating under section 420, read with section 109, Indian Penal Code,fall within section 197, Criminal Procedure Code. In Gill vs The King (1) the Privy Council laid down the following test as to when a public servant is said to or purports to act in the discharge of his official duty. Lord Simonds there said at p. 59: (1) 75 I.A. 41. 115 "A public servant can only be said to act or to purport to act in the discharge of his official duty. if his act is such as to lie within the scope of Is official duty. The test may well be whether the public servant, if challenged, can reasonably claim that, what he does, he does in virtue of his office." The same test was repeated in Meads ' case (1) and in Phenindra Chandra Neogy vs The King(2). Gill 's case(3) and Neogy 's case (2) dealt with an offence of bribery under section 161, but Meads ' case(1) was a case of a Courtmartial against an officer who was alleged to have misappropriated money entrusted to him and his defence was that while he was sleeping, the currency notes were burnt by the falling of a candle which was burning in his room. In Hori Rain Singh 's case (4) which was approved by the Privy Council and this Court in Amrik Singh 's case (5), Vardachariar, J., had accepted the correctness of that track of decision which had held that sanction was necessary when the act complained of attached to the official character of the person doing it. The test was thus stated by Venkatarama Aiyar, J., in Amrik Singh 's case (5) at p. 1307: " but if the act complained of is directly concerned with his official duties so that, if questioned, it could be claimed to have been done by virtue of the office, then sanction would be necessary; and that would be so, irrespective of whether it was, in fact, a proper discharge of his duties, because that would really be a matter of defence on the merits, which would have to be investigated at the trial, and could not arise at the stage of the grant of sanction, which must precede the institution of the prosecution. " Even in regard to cases of misappropriation, this Court in Amrik Singh 's case (5) was of the opinion that if the act complained of is so integrally connected with the duties attaching to the office as to be inseparable from them, then sanction would be necessary, but if there is no connection between them and the performance of those duties, the official status furnishing (1) 75 I.A. 185. (3) 75 I. A. 41. (2) 76 I.A. 10. (4) (5) ; 116 only the occasion or opportunity for the act, then no sanction would be necessary. There are two other cases reported in the same volume, Ronald Wood Mathams vs State of West Bengal (1) and Shree Kanthiah Ramayya Munipalli vs The State of Bombay(2 )which also relate to sanction under section 197, Criminal Procter Code. After reviewing all these various authorities Venkatarama Aiyar, J., held at p. 1310: "The result then is that whether sanction is necessary to prosecute a public servant on a charge of criminal misappropriation, will depend on whether the acts complained of hinge on his duties as a public servant. If they do, then sanction is requisite. But if they are unconnected with such duties, then no sanction is necessary. " In this view of the law we have to decide whether sanction was necessary or not and it is a matter for investigation as to whether an Army officer situated as Henderson was so removable even if there was evidence to show that he was attached to the Indian Army. Secondly, it will have to be decided oil evidence that the act complained of against Henderson, that is, verifying the claim of the appellant which is the basis for the allegation of abetment of the offence of cheating is directly concerned with his official duties or it was done in the discharge of his official duties and was so integrally connected with and attached to his office as to be inseparable from them. There is evidence neither in support of one, nor of the other. In this particular case if it was desired to raise such a question, that should have been done at the earliest moment in the trial Court when the facts could have been established by evidence. This is not the stage for asking the facts to be proved by additional evidence. In the grounds of appeal to the High Court the objection was to the form of the sanction. It also appears that no argument was raised in the High Court that the sanction under section 270 of the Constitution Act could not take the place of a sanction under section 197, Criminal Procedure Code, because the scope of the two (1) , (2) ; 117 provisions is different. But as I have said above the evidence to support the plea under section 197 and to establish the requisite nexus between the act done by Henderson and the scope and extent of his duties is lacking and therefore the applicability of section 197 to the facts of the present case cannot be held to have been proved. In my opinion the foundation has not been laid for holding that sanction under section 197 was necessary in the instant case. I therefore agree that the appeals be dismissed. By court. The petitioner 's Criminal Appeals Nos. 100 to 105 of 1954 having been dismissed and the conviction of the petitioner having been upheld, this petition is dismissed.

The appellant, who had been a contractor in Burma, in response to an advertisement issued in August, 1942, by the evacuee Government of Burma, then functioning at Simla, inviting claims from contractors for works of construction and repairs executed by them, submitted claims aggregating to several lacs of rupees. The Government of Burma sent these claims for verification to Major Henderson at Jhansi in March and May, 1943, as he was the officer who had knowledge of these matters. He certified many of these claims to be correct and on his certification the Government of Burma sanctioned the claims and directed the Controller of Military claims at Kolhapur to pay the amounts. On the request of the appellant cheques drawn on the Imperial Bank of India at Lahore were posted to him from Kolhapur and they were encashed at Lahore. The largeness of such claims aroused the suspicions of the Government and it was discovered that the claims made by the appellant were false. He was tried in several trials under section 420 of the Indian Penal Code along with Henderson, charged under section 420/109 of the Code for abetment of those offences, before a special Tribunal at Lahore, functioning 90 under Ordinance No. XXIX of 1943, as amended by ordinance No. XII of 1945. After the partition of India, the trials by the Special Tribunal took place at Simla. The appellant was convicted at these trials and sentenced to imprisonment ranging from Punjab one year to three years, and payment of fines of various amounts. The Tribunal divided the fines into 'ordinary ' and 'compulsory ', the latter by virtue of s, 10 of the Ordinance, which prescribed a minimum fine equal to the amount procured by the offence. In default of payment of the 'ordinary ' fines it directed the appellant to undergo further imprisonment for certain periods, but there was no such direction with respect to the 'compulsory ' fines. The High Court, on appeal, affirmed the convictions but varied the sentences by reducing the term of imprisonment and setting aside the 'compulsory ' fines. The appellant as also the State of Punjab appealed to this Court. It was contended on behalf of the appellant that (1) the offences having been committed at Kolhapur, then outside British India, the trial at Simla, in the absence of any certificate or sanction given under section 188 of the Code of Criminal Procedure, was illegal ; (2) the joint trial of the appellant and Henderson at Simla was also illegal : (3) SS. 234(1) and 239(b) of the Code could not be combined to try a person charged with three offences of cheating with another charged with abetment in respect thereof in a single trial and (4) sanction under section 197 of the Code was necessary for the prosecution of Henderson and the absence of such sanction vitiated the joint trial. The contention of the State in the appeals preferred by it was that the imposition of the 'compulsory ' fines by the Tribunal was perfectly valid in law and the High Court was in error in setting aside the same. Held, that before the provisions of section 188 of the Code of Criminal Procedure could apply to a case, it was necessary to establish that the crime was committed outside British India In the instant case the misrepresentation by the appellant, the false certification by Henderson and the resulting payment having been made respectively at Simla, Jhansi and Lahore, then in British India, no part of the offence could be said to have taken place outside British India. The contention that the posting of the cheques at Kolhapur was tantamount to delivery of them to the appellant at Kolhapur, the Post Office being the agent of the appellant, was wholly misconceived in the facts and circumstances of the case. Moreover, what might be a relevant consideration as to the place of payment for the purpose of the Income tax Act would not necessarily be relevant for the purposes of a criminal case. The Commissioner of Income tax, Bombay South, Bombay vs Messrs. Ogle Glass Works Ltd., Ogale Wadi, [1955] 1 S.CR. 185, held inapplicale. The Commissioner of Income tax, Bihar & Orissa vs Messrs. Patney & Co. , referred to. 91 The words " an offence " in section 239(b) of the Code which is singular, must, by virtue of section 13 of the General Clauses Act, 1879, include the plural and therefore, a person accused of several offences of the same kind can be tried in a single trial with another accused of abetment thereof, The concluding words of section 239 of the Code obviously mean that, in framing charges against each of the several persons mentioned in its different clauses, not only the provisions relating to the form of charges but also those in respect of joinder of charges should apply. Consequently, the joint trial of the appellant with the abettor on the charges as framed did not vitiate the trial The provisions of sections 179 and 180 of the Code are wide enough to enable either the court within whose territorial jurisdiction anything was done, or the court where the consequences ensued, to take cognisance of the matter. Under section 179 the appellant could be tried either at Lahore or Simla and under section 180 Henderson could be tried at either of the two places. There was, therefore, no illegality in trying the appellant and Henderson together at Simla. Section 420 of the Indian Penal Code, read with section 63 of the Code, prescribes a fine that is unlimited. It was not, therefore, correct to contend that section 10 of the Ordinance, in prescribing the minimum fine, imposed a penalty that was greater than what could be inflicted under the former so as to contravene article 20(1) of the Constitution. As section 10 of the Ordinance prescribed a minimum fine, no question as to its excessive character could arise and the order of the High Court setting aside the compulsory fines must, therefore, be set aside and the orders of the Special Tribunal restored. Rao Shiv Bahadur Singh and Another vs The State of Vindhya Pradesh, and Kedar Nath Bajoria vs The State of West Bengal, ; , explained and distinguished. Per Sinha, C.J., Imam, Wanchoo and Das Gupta, JJ.Offences such as bribery and cheating or abetment thereof cannot by their very nature be regarded as having been committed by public servants while acting or purporting to act in the discharge of their official duties. Such offences can have Do reasonable connection with the performance of their duties as such ; no sanction, therefore, is necessary under section 197 of the Code of Criminal Procedure for their prosecution. Amrik Singh vs The State of PEPSU, ; and Matajog Dobey vs H. C. Bhari, ; , referred to. Per Kapur, J. In order that the protection afforded by section 197 of the Code of Criminal Procedure might be available to Henderson, it was not enough to show that he was a Major in the Army but it must also be shown that he was an officer not removable from office except with the sanction of the Central Government and that in certifying the appellant 's claims, which was the crux of the offence charged against him he was acting or purporting to act in the discharge of his official duty. 92 The true test as to whether a public servant was acting or purporting to act in discharge of his duties would be whether the act complained of was directly connected with his official duties or it was done in the discharge of his official duties or it was so integrally connected with or attached to his office as to be inseparable from it. Gill vs The King, 75 I.A. 41; Albert West Meads vs The King, 75 I.A. 815, Phenindra Chandra Neogy vs The King, 76 I.A. 10, Hori Ram Singh vs The Crown, , Amrik Singh vs The State of PEPSU, ; , Ronald Wood Mathams vs State of West Bengal, and Shree Kanthiah Ramayya Munipalli vs The State of Bombay, , referred to. As there was no evidence, in the instant case, to show that Henderson was an officer as contemplated by section 197 of the Code and that in verifying the appellant 's claims he was discharging his official duty, section 197 could not apply.

vil Appeal No. 2080 (L) of 1977. Appeal by Certificate from the Judgment and Order dated 20.12.74 of the Calcutta High Court in Appeal No. 104 of 1972. R.N. Nath and Rathin Das for the Appellant S.P. Khera, M. Quamaruddin and Mrs. M. Quamaruddin for the Respondents. G.S. Chatterjee for the State. The Judgment of the Court was delivered by S.C. AGRAWAL, J. This appeal, by certificate granted under Article 133(1)(a) of the Constitution, is directed against judgment and order of the High Court of Judicature at Calcutta dated December 20, 1974, in Appeal No. 104 of 1972. Karnani Properties Ltd., appellant herein, is a company incorporated under the Companies Act, 1913. It owns several mansion houses known as Karnani Mansions at Park Street, Calcutta. There are about 300 flats in these mansions which have been let out to tenants. The appellant provides various facilities to its tenants in these flats, e.g. free supply of electricity, washing and cleaning of floors and lavato ries, lift service, electric repairs and replacing, sanitary repairs and replacing, etc., and for that purpose the appel lant employ over 50 persons, namely sweepers, plumbers, malis, lift man, durwans, pumpmen, electric and other mis tries, bill collectors and bearers, etc., in connection with these properties. A dispute arose between the employees of the appellant represented by Barabazar Zamandar Sangh (hereinafter referred to as 'the union ') and the appellant with regard to wages, scales of pay, dearness allowance and gratuity. The Government of West Bengal, by order dated July 29, 1967, referred for adjudication to the 6th Industrial Tribunal, West Bengal, the industrial dispute relating to: (a) Fixation of Grades and Scales of pay of the different categories of workmen; (b) Dearness Allowance; and (c) Gratuity. 937 The appellant raised preliminary objections with regard to the validity of the reference before the Industrial Tribunal on the ground that the alleged dispute is not an industrial dispute and that the reference is barred by Section 19 of the (hereinafter referred to as 'the Act ') for the reason that in 1960 there was an Award on the basis of settlement made with the union, and the said Award has not been terminated by either of the parties and is still binding on the parties. The Industrial Tribunal, by its order dated August 24, 1968, overruled the said preliminary objections raised by the appellant and thereafter the Tribunal gave the Award dated March 3, 1969. The Industrial Tribunal expressed its inability to fix any grades and scales of pay of the workmen for the reason that the evidence adduced by the Union on this issue was scrappy, none too convincing and not very much acceptable. As regards dearness allowance the Industrial Tribunal held that since November, 1964 the price index of working class in Calcutta has considerably gone up from 460 to 750 points (as was in October, 1968), i.e. roughly by 300 points. The Industrial Tribunal awarded enhanced DA at the rate of Rs.60 per month (Rs.20 per 100 points) to the sweeper, bearer, helper, mali, mazdoor, lift man, head sweeper, durwan, pumpman, and as sistant electric mistry. DA at the , 'ate of Rs.54 per month (Rs. 18 per 100 points) was awarded to the plumber, raj mistry, head durwan, electric mistry and driver and bill collector. It was also directed that the said rates of DA would remain in force as long as the price index will remain between 600 to 800 points and if the price index goes up beyond 800 points the rate of DA will be revised according to the rates mentioned and if it goes below 600 points it also may be revised accordingly. With regard to gratuity the Industrial Tribunal pointed out that under the existing scheme gratuity is payable to every workmen after completion of three years continued, faithful and satisfactory service at the rate of 10 days consolidated salary for every com pleted year of service since the date of appointment. The Industrial Tribunal held that three years ' period was too short to make a workman entitled to gratuity and that "satisfactory" and "faithful" are vague terms. The Industri al Tribunal framed a scheme of gratuity whereunder after completion of six years of continuous service with the appellant every workmen on retirement or on death will get an amount of gratuity at the rate of 10 days ' consolidated salary for every completed year of service since the date of appointment and a workman who resigns voluntarily would also be entitled to get the gratuity at the same rate provided he completed 10 years of continuous service. The Industrial Tribunal also directed that if the termination of service is the result of misconduct which caused financial loss to the employer 938 that loss would first be compensated from the gratuity payable to employee and the balance, if any, should be paid to him. It was also directed that the services of the work men prior to 1950 would not be taken into consideration for the purpose of payment of gratuity. The appellant filed a writ petition in the High Court under Article 226 of the Constitution wherein the. order dated August 24, 1968 and the Award dated March 7, 1969 given by the Industrial Tribunal were challenged. The said writ petition was heard by a learned single Judge, who by his judgment dated March 17 & 20, 1972, dismissed the said writ petition. Before the learned single Judge it was urged that the Award made by the Industrial Tribunal was without jurisdiction for the reason that the appellant does not carry on an "industry" as defined in the Act and that the dispute between the appellant and the workmen cannot come within the ambit of industrial dispute, and also. for the reason that there was a previous Award dated March 3, 1960 which has not been terminated and was still subsisting and in view of the said Award the present reference was invalid and further that no dispute was raised between the workmen and the appellant prior to the reference before the Indus trial Tribunal and as such the Tribunal has no jurisdiction to deal with the matter. The learned single Judge rejected all these objections. He held that in view of the nature of the activity carried on the appellant does carry on an industry within the meaning of the Act and the dispute between the appellant and its workmen come within the ambit of the Act. As regards the Award dated March 3, 1960 the learned single Judge found that the workmen concerned had given notice to terminate the previous Award and as such the existence of previous Award and as such the existence of previous Award would not preclude a fresh reference. The learned single Judge observed that no specific plea was raised by the appellant before the Industrial Tribunal challenging the order and the reference on the ground that there was no such dispute prior to the reference between the workmen and the appellant about the questions referred to in the order of reference and that whether there was any demand or not is a question of fact. the learned single Judge, however, held that from the evidence it is clear that the workmen concerned had demanded before the order of reference in their charter of demands dearness allowance and provident fund and gratuity and as such there was a dispute between the workmen concerned and the employers before the order of reference was made. The Award was challenged on merits before the learned single Judge on the ground that the Industrial Tribunal did not consider the appellant 's capaci ty to pay in granting dearness allowance to the workmen concerned. The learned single Judge 939 rejected the said contention on the view that reading the Award as a whole it could not be contended that the Tribunal did not take into consideration either the capacity to pay or the leval of the cost of living. The appellant filed an appeal against the judgment of the learned single Judge which was dismissed by a Division Bench of the High Court by its judgment and order dated December 20, 1974. The learned Judges agreed with the deci sion of the learned single Judge that the appellant is carrying on an industry under Section 2(j) of the Act. Before the Division Bench it was contended on behalf of the appellant that the earlier Award was made on the basis of a settlement between the two parties and that since the said Award was in a nature of settlement it could only be termi nated in accordance with the provisions of Section 19(2) of the Act relating to termination of a settlement. The learned Judges of the Division Bench held that the said contention was not raised by the appellant before the Tribunal and also before the learned single Judge and it could not be raised for the first time at the stage of the appeal and that it cannot be considered to be a pure question of law because for a settlement under Section 2(p) of the Act the necessary requirements of settlement as laid down in the statute and the rules have to be satisfied and whether the necessary recruitments have been satisfied or not will involve inves tigation into facts. The learned Judges were, however, of the view that even if the said plea was allowed to be raised it could not be accepted inasmuch as the materials on record do not establish that the requirement of "settlement" as defined in Section 2(p) of the Act are satisfied in respect of the earlier Award. It was held that an Award does not necessarily cease to be an Award merely because the same was made on the basis of a settlement arrived at between the parties and that the earlier Award was an "Award" within the meaning of Section 2(b) of the Act and was not a settlement as contemplated by Section 2(p) of the Act. With regard to the termination of the earlier Award, the learned Judges have held that in the facts and circumstances of the case it had been validly terminated in accordance with Section 19(6) as well as Section 19(2) of the Act. Before the Division Bench it was urged on behalf of the appellant that the Tribunal has not considered the financial capacity of the appellant while making the Award with regard to dearness allowance and reliance was placed on certain documents which were filed before the Division Bench. The learned Judges held that in considering the findings arrived at by the Tribunal the Court should generally consider the materials which were made available to the Tribunal and fresh or further materials which were not before the 940 Tribunal should not be allowed to be placed before the Court in a writ petition for determining whether the findings of the Tribunal are justified or not and that in the instant case no proper grounds have been made out for not producing the materials which were then available at the time of the hearing before the Tribunal and why the said documents could not be produced even before the learned single Judge. The learned Judges further held that even if the said documents are taken into consideration the same would be of no partic ular assistance to the appellant inasmuch as the said docu ments consist mainly of balance sheets and assessment or ders, and that the legal position is settled that while computing gross profits for the purpose of revising wage structure and dearness allowance the provision made for taxation, depreciation and development rebate cannot be deducted and the provisions of the Companies Act contained in Sections 205 and 211 and the principles of accountancy involved in preparation of profit and loss accounts have no relevance or bearing while considering the revision of wages and dearness allowance. The learned Judges have held that on the materials on record the Tribunal was justified in making the Award and that the materials on record before the Tribu nal establish that the amount ordered by the Tribunal was not beyond the financial capacity of the appellant. Aggrieved by the decision of the Division Bench of the High Court the appellant has flied this appeal after obtain ing leave to appeal from the High Court under Article 133(1)(a) of the Constitution. Shri R.N. Nath, the learned counsel for the appellant, has submitted that the High Court was in error in holding that the appellant is an industry under Section 2(j) of the Act. Shri Nath has submitted that in arriving at the said conclusion the learned Judges of the Division Bench of the High Court have relied upon the decision of this Court in Management of Safder Jung Hospital vs Kuldip Singh Sethi, [ ; which decision was overruled by this Court in Bangalore Water Supply & Sewerage Board vs R. Rajappa and Others, ; The submission of Shri Nath is that in accordance with the principles laid down in Bangalore Water Supply & Sewerage Board Case, (supra) the appellant cannot be taken to be carrying on an "industry" under Section 2(j) of the Act. In our opinion there is no substance in this contention. It is no doubt true that the learned Judges of the Division Bench of the High Court have placed reliance on the decision of this Court in the Safdar Jung Hospital Case, (Supra) for holding that the appellant is carrying on an industry under Section 2(j) of the Act and the decision in Safdar Jung Hospital case, (supra) has 941 been overruled by a larger Bench of this Court in Bangalore Water Supply & Sewerage case, (supra). But this does not mean that the view of the High Court that the appellant is carrying on an industry under Section 2(j) of the Act is erroneous. In Safdar Jung Hospital case, (supra), a six member Bench of this Court had overruled the earlier deci sion in State of Bombay vs Hospital Mazdoor Sabha, ; and gave a restricted interpretation to the definition of "industry" contained in Section 2(j) of the Act. Bangalore Water Supply & Sewerage Board, case (decided by a seven member Bench of this Court) by overruling the decision in Safdar Jung Hospital case, has restored the Hospital Mazdoor Sabha case. In other words, the effect of decision on Bangalore Water Supply & Sewerage Board case, is that the expression "industry" as defined in Section 2(j) has to be given the meaning assigned to it by this Court in the earlier decisions in D.N. Banerjee vs P.R. Mukherjee, ; , Corporation of the of Nagpur vs Its employees, [ ; and the Hospital Mazdoor Sabha case Krishna Iyer, J., who delivered the main judgment in Bangalore Water Supply & Sewerage Board case, has summed up the principles which are decisive, positively and nega tively, of the identity of "industry" under the Act. The first principle formulated by the learned Judge is as under: "I, Industry, as defined in Section 2(j) and explained in Banerjee has a wide import: (a) Where (i) systematic activity (ii) organised by cooper ation between employer and employee, (the direct) and sub stantial element is chimerical) (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to celestial bliss e.g. making, on a large scale prasad or food), prima facie, there is an industry in that enterprise. (b) Absence of profit motive or gainful objective is irrele vant, be the venture in the public joint or other sector. (c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer employee relations. (d) If the organisation is a trade or business it does not cease to be one because of philanthropy animating the under taking. " 942 If the said principles are applied to the facts of the present case and there can be no doubt that the activity carried on by the appellant satisfies the requirements of the definition of "industry" contained in Section 2(j) of the Act. In this regard, it may be mentioned that the learned Judges of the Division Bench of the High Court have found as under: "(i) The Memorandum of Association of the appellant company indicate that the principal object for which the appellant company was incorporated is to acquire by purchase, trans fer, assignment or otherwise lands, buildings and landed properties of all description and in particular to acquire from the Karnani Industrial Bank Ltd., the immovable proper ties now belonging to the said Bank and to improve, manage and develop the properties and to let out the same on lease or otherwise dispose of the same. (ii) The principal business of the company is to deal with the real property and it is a real estate company. (iii) The income which the appellant derives is not from mere letting out the properties to the tenants and that the tenants pay not only for mere occupation of the property but also for enjoyment of the various services which are ren dered by the appellant to the tenants and to which services the tenants are entitled as a matter of right for the occu pation of the premises. (iv) The services which are rendered to the tenants and about which there does not appear to be any dispute are: (a) elaborate arrangements for supply of water; (b) free supply of electricity; (c) washing and cleaning of floors and lavatories; (d) lift services; (e) electric repairs and replacing; and (f) sanitary repairs and replacing etc. 943 (v) For offering these services to the tenants, the appel lant has employed a number of workmen and these services which undoubtedly confer material benefits on the tenants and constitute material services, are rendered by the em ployees. (vi) The employees of the appellant company are engaged in their respective calling or employment to do their work in rendering the services. (vii) Activity carried on by the appellant company is un doubtedly not casual and is distinctly systematic. (viii) The work for which labour of workmen is required is clearly productive of the services to which the tenants are entitled and which also form a part of the consideration for the payments made by the tenants. (ix) The appellant carries on its business with a view to profits and it makes profits and declares dividends out of the profits earned. From the aforesaid findings recorded by the High Court, with which we find no reason to disagree, it is evident that the activity carried on by the appellant falls within the ambit of the expression "industry" defined in Section 2(j) of the Act as construed by this Court in Bangalore Water Supply & Sewerage Board case (supra). The Award of the Industrial Tribunal cannot, therefore, be assailed on the basis that the appellant is not carrying on an industry under the Act. Shri Nath has next contended that the Industrial Tribu nal was not competent to make the Award as the earlier Award dated March 3, 1960, had not been validly terminated. He has urged that the earlier Award was in the nature of a settle ment under Section 2(p) of the Act and it could be terminat ed only in accordance with Section 19(2) of the Act. Shri Nath has pointed out that for terminating a settlement under Section 19(2) a written notice is necessary whereas for termination of an Award under Section 19(6) of the Act a written notice is not required and a notice is sufficient. In our opinion this contention does not require consid eration in view of the finding recorded by the learned Judges of Division Bench of the High Court that the letter dated November 24, 1966 was a notice 944 under Section 19(6) as well as under Section 19(2) of the Act. It has been found that the said letter of the union which was addressed to the Labour Commissioner was sent to the appellant company and that in the said letter there is a clear intimation of the intention of the employees to termi nate the Award and from the letter of the appellant dated February 13, 1967 it appears that the appellant had become aware of the intention of the union to terminate the Award and that the order of reference was made on July 29, 1967, long after the expiry of the period of two months. It is not the requirement of Section 19(2) of the Act that there should be a formal notice terminating a settlement and notice can be inferred from the correspondence between the parties (See: Indian Link Chain Manufacturers Ltd. vs Their Workmen, ; In the aforesaid facts and circumstances the High Court was justified in holding that the Award dated March 3, 1960 had been validly terminated before the passing of the order of reference. Shri Nath has urged that there has been non compliance of the provisions of Section 19(7) of the Act which lays down that no notice given under sub section (2) or sub sec tion (6) shall have effect unless it is given by a party representing the majority of the persons bound by the set tlement or Award as the case may be. This question has been raised by the appellant for the first in this Court. It involves an inquiry into questions of fact which cannot be made at this stage. The same, therefore, cannot be allowed to be agitated. Shri Nath has lastly urged that the Industrial Tribunal was in error in making the Award in relation to Dearness Allowance without examining the capacity of the appellant to pay the additional amount and that the High Court should have remanded the matter to the Tribunal for considering this issue in the light of the documents which were submit ted by the appellant before the High Court. We find no substance in this contention. The High Court has rightly held that in considering the finding arrived at by the Tribunal the High Court while exercising its jurisdiction under Article 226 of the Constitution should generally consider the materials which were made available to the Tribunal and fresh or further materials which were not before the Tribunal should not normally be allowed to be placed before the Court. The appellant has not been able to show why the said documents were not produced before the Tribunal. It is not the case of the appellant that the Tribunal had precluded the appellant from producing these documents. In these circumstances we find no justification for accepting the plea of the learned counsel for the appel lant for 945 reconsideration of the Award of the Tribunal in the light of the documents submitted by the appellant during the pendency of the appeal before the High Court. The appeal is, therefore, dismissed with costs. During the pendency of this appeal, the appellant has made a deposit before the Tribunal. The respondent .union will be entitled to withdraw the said amount along with the interest that has accrued on it. T.N.A. Appeal dismissed.

The land belonging to the respondent intermediaries comprising of certain plots stood vested in the State of West Bengal by operation of a Notification issued under Section 4(1) of the West Bengal Estates Acquisition Act, 1953. Since the plots were recorded as 'tank fisheries ' (used as pisciculture), they stood excluded from the purview of the vesting Notification under Section 6(1)(e) of the Act and preserved to the respondent intermediaries. Subsequently the primary authority the Assistant Set tlement Officer initiated suo moto proceedings by issuing notice to the respon 92 dents under Section 44(2a) of the Act for correction of classification of lands on the ground that the plots were wrongly recorded as fishery plots. The respondents objected to reclassification of the lands by contending that in 1952 they were granted Dakhilas to the said land by one `B ', the Principal landlady, and thereafter they have been cultivat ing pisciculture on the said plots of the land and conduct ing fishery business. The Assistant Settlement Officer rejected the claim of the respondents and ordered reclassi fication of the plots. The respondents filed an appeal before the Tribunal (District Judge) under section 44(3) of the Act. The Appellate Tribunal reversed the order of the Assistant Settlement Officer and confirmed the original classification of the plots. Against the decision of the Appellate Tribunal, the State filed a writ petition in the Calcutta High Court which dismissed the petition in limine. In appeal to this Court it was contended on behalf of the State: (i) that the Appellate Tribunal had reversed the findings without considering the validity of the reasons recorded by the Assistant Settlement Officer; (ii) that the Appellate Tribunal had taken irrelevant factor or non exist ing factors into account and thereby its findings were based on no evidence and hence vitiated in law. On behalf of the respondents it was contended that since the Appellate Authority has recorded the findings of fact that pisciculture was in existence as on the date of vesting the Supreme Court cannot interfere with the findings of fact recorded by the Appellate Court, particularly, when the High Court did not choose to interfere with the finding. Allowing the Appeal, this Court, HELD: 1. Giving of reasons is an essential element of administration of justice. A right to reason is, therefore, an indispensable part of sound system of judicial review. Reasoned decision is not only for the purpose of showing that the citizen is receiving justice, but also a valid discipline for the Tribunal itself. Therefore, statement of reasons is one of the essentials of justice. [99C D] 1.1 The appellate authority in particular a trained and experienced District Judge is bound to consider the entire material evidence adduced and relied on by the parties and to consider whether the reasons assigned by the primary authority is cogent, relevant to the 93 point in issue and based on material evidence on record. The appellate authority being final authority on facts, is enjoined and incumbent upon it to appreciate the evidence; consider the reasoning of the primary authority and assign its own reasons as to why it disagrees with the reasons and findings of the primary authority. Unless adequate reasons are given, merely because it is an appellate authority, it cannot brush aside the reasoning or findings recorded by the primary authority. [99D; 102E F] 2. If the appellate authority had appreciated the evi dence on record and recorded the findings of fact, those findings are binding on this Court or the High Court. By process of judicial review this Court cannot appreciate the evidence and record its own findings of fact. If the find ings are based on no evidence or based on conjectures or surmises and no reasonable man would, on given facts and circumstances, come to the conclusion reached by the appel late authority on the basis of the evidence on record, certainly this Court would oversee whether the findings recorded by the appellate authority is based on no evidence or beset with surmises or conjectures. [99A C] 2.1 In the instant case the Appellate Tribunal disre garded the material evidence on record, kept it aside, indulged in fishing expedition and crashed under the weight of conjectures and surmises. The appellate order is, there fore, vitiated by manifest and patent error of law apparent on the face of record. The order of Appellate Tribunal is quashed and the order of Assistant Settlement Officer is restored. [103F G; 104D] 3. Tank fishery means the lands being used for piscicul ture or any fishing in a reservoir or storage place whether formed naturally or by artificial contrivance as a permanent measure except such portion of embankment as are included in a homestead or in a garden or orchard to be tank fishery. Such lands occupied by pisciculture or fishing stand pre served to the intermediaries and thus stands excluded from the operation of sections 4 and 5 of the West Bengal Estates Acquisition Act, 1953. But the crucial date for establish ing, as a fact that the pisciculture was being carried on in the disputed land is the period of vesting. The existence of fishery subsequent to that period is not of any relevance. [100G H; 101E] Chamber 's 20th Century Dictionary, page 829; Webster comprehensive Dictionary, Vol. II and Stroud 's Judicial Dictionary, Vol. II 4th Edn., page 1051, referred to. 94 3.1 In the instant case the respondents did not produce before the Assistant Settlement Officer either post or pre record till date of vesting to establish that from 1952 to 1955 56 i.e. from the date of obtaining settlement till date of vesting, the lands were recorded in settlement records as pisciculture of fishery. Therefore, there is no documentary evidence to establish that the lands were being used, on the date of settlement or also on the date of vesting, as pisci culture or fishery. [101F; 102A] 4. Admittedly the High Court did not go into any of the questions raised by the appellant in the writ petition. It summarily dismissed the writ petition. The High Court com mitted error of law in dismissing the writ petition in limine. [98G; 103F]

Appeal No. 486 of 1963. Appeal from the judgment and order dated September 27, 1962, of the Calcutta High Court in Appeal from Original Decree No. 424 of 1962. S.Chaudhuri, R. C. Deb and section section Shukla, for the appellant. Hari ' Prosonna Mukherjee, K. G. Hazra Chaudhari and D. N. Mukherjee, for the respondents Nos. 1 and 2. August 14, 1963. This is an appeal on a certificate granted by the High Court of Calcutta under article 133(1)(c) of the Constitution. No preliminary objection having been taken as to the competency of the certificate, we have heard the appeal on merits. The short facts giving rise to the appeal are these The appellant before us is Gurugobinda Basu who is a chartered accountant and a partner of the firm. of auditors carrying on business under the name and style of G. Basu and Company. This firm acted as the auditor of certain 313 companies and corporations, such as the Life Insurance Corporation of India, the Durgapur Projects Ltd., and the Hindustan Steel Ltd., on payment of certain remuneration. The appellant was also a Director of the West Bengal Fi nancial Corporation having been appointed or nominated as such by the State Government of West Bengal. The appointment carried with it the right to receive fees or remuneration as director of the said corporation. In February March, 1962, the appellant was elected to the House of the People from Constituency No. 34 (Burdwan Parliamentary Constituency) which is a single member constituency. The election was held in February, 1962. There were two candidates, namely, the appellant and respondent No. 3 to this appeal. The appellant was declared elected on March 1, 1962, he having secured 1,55,485 votes as against his rival who secured 1,23,015 votes. This election was challenged by two voters of the said constituency by means of an election petition dated April 10, 1962. The challenge was founded on two grounds : (1) that the appellant was, at the relevant time, the holder of offices of profit both under the Government of India and the Government of West Bengal and this disqualified him from standing for election under article 102 (1)(a) of the Constitution; and (2) that he was guilty of certain corrupt practices which vitiated his election. The second ground was abandoned at the trial, and we are no longer concerned with it. The election Tribunal held that the appellant was a holder of offices of profit both under the Government of India and the Government of West Bengal and was therefore disqualified from standing for election under article 102(1)(a) of the Constitution. The Election Tribunal accordingly allowed the election petition and declared that the election of the appellant to the House of the People was void. There was an appeal to the High Court under section 116 A of the Representation of the People Act, 1951. The High Court dismissed the appeal, but granted a certificate of fitness under article 133(1) (c) of the Constitution. The only question before us is whether the appellant was disqualified from being chosen as, and for being, a member of the House of the People under article 102(1)(A) of the Constitution. The answer to the question depends 21 2 S C India/6 314 on whether the appellant held any offices of profit under the Government of India or the Government of any State other than such offices as had been declared by Parliament by law not to disqualify their holder. It has not been seriously disputed before us that the office of auditor which the appellant held as partner of the firm of G. Basu and Company was an office of profit. It has not been contended by the appellant before us that the office of profit which he held had been declared by Parliament by law not to disqualify the holder. Therefore the arguments before us have proceeded entirely on the question as to the true scope and meaning of the expression "under the Government of India or the Government of any State" occurring in cl. (a) of article 102(1) of the Constitution. The contention on behalf of the appellant has been that on a true construction of the aforesaid expression, the appellant cannot be said to hold an office of profit under the Government of India or the Government of West Bengal. On behalf of the respondents the contention is that the office of auditor which the appellant holds is an office of profit under the Government of India in respect of the Life Insurance Corporation of India, the Durgapur Projects Ltd. and the Hindustan Steel Ltd., and in respect of the West Bengal Financial Corporation of which the appellant is a Director appointed by the Government of West Bengal, he holds an office of profit under the Government of West Bengal. These are the respective contentions which fall for consideration in the present appeal. It is necessary to state here that if in respect of any of the four companies or corporations it be held that the appellant holds an office of profit under the Government, be it under the Government of India or the Government of West Bengal, then the appeal must be dismissed. It would be unnecessary then to consider whether the office of profit which the appellant holds in respect of the other companies is an office of profit under the Government or not. We would therefore take up first the two companies, namely, the Durgapur Projects Ltd., and the Hindustan Steel Ltd., which are 100% Government companies and consider the respective contentions of the parties before us in respect of the office of auditor which the appellant holds in these two companies. If we hold that in 315 respect of any of these two companies the appellant holds an office of profit under the Government of India, then it would be unnecessary to consider the position of the appellant in any of the other companies. It is not disputed that the Hindustan Steel Ltd., and the Durgapur Projects Ltd. are Government companies within the meaning of section 2(18) read with section 617 of tile Indian . It has been stated before us that 100% of the shares of the Durgapur Projects Ltd. are held by the Government of West Bengal and 100% of the shares of the Hindustan Steel Ltd. are held by the Union Government. We may now read section 619 of the Indian . "(1) In the case of a Government company, the following provisions shall apply, notwithstanding any thing contained in sections 224 to 233. (2)The auditor of a Government company shall be appointed or re appointed by the Central Government ,on the advice of the Comptroller and Auditor General of India. (3)The Comptroller and Auditor General of In dia shall have power (a)to direct the manner in which the company 's accounts shall be audited by the auditor appointed in pursuance of sub section (2) and to give such auditor instructions in regard to any matters relating to the performance of his functions as such : (b) to conduct a supplementary or test audit of the company 's accounts by such person or persons as he may authorise in this behalf; and for the purposes of such audit, to require information or additional information to be furnished to any person or persons so authorised, on such matters, by such person or persons, and in such form, as the Comptroller and Auditor General may, by general or special order, direct. (4) The auditor aforesaid shall submit a copy of his audit report to the Comptroller and Auditor General of India who shall have the right to comment upon, or supplement, the audit report in such manner ,as he may think fit. (5) Any such comments upon, or supplement 316 the audit report shall be placed before the annual general meeting of the company at the same time and in the same manner as the audit report. " It is clear from the aforesaid provisions that not with standing section 224 of the Act which empowers every company to appoint an auditor or auditors at each annual general meetings, the appointment of an auditor of a Government company rests solely with the Central Government and in making such appointment the Central Government takes the advice of the Comptroller and Auditor General of India. Under section 224(7) of the Act an auditor appointed under section 224 may be removed from office before the expiry of his term only by the company in general meeting, after obtaining the previous approval of the Central Government in that behalf. The remuneration of the auditors of a company is to be fixed in accordance with the provisions of sub section (8) of section 224. It is clear however that sub section (7) of section 224 does not apply to a Government company because the auditor of a Government company is not appointed under section 224 of the Act, but is appointed under sub section (2) of section 619 of the Act. It is clear therefore that the appointment of an auditor in a Government company rests solely with the Central Government and so also his removal from office. Under sub section (3) of section 619 the Comptroller and Auditor General of India exercises control over the auditor of a Government company in respect of various matters including the manner in which the company 's accounts shall be audited. The Auditor General has also the right to give such auditor instructions in regard to any matter relating to the performance of his functions as such. The Auditor General may conduct a supplementary or test audit of the company 's accounts. by such person or persons as he may authorise in this behalf. In other words, the Comptroller and Auditor General of India exercises full control over the auditors of a Government company. The powers and duties of auditors in respect of companies other than Government companies are laid down in section 227 of the Act but by virtue of sub section (1) of section 619 of the Act, the provisions in section 227 of the Act do not apply to a Government company because a Government company is subject to the provisions ,of section 619 of the Act. Under section 619 A of the Act, where the 317 Central Government is a member of a Government company, an annual report of the working and affairs of the company has to be prepared and laid before both Houses of Parliament with a copy of the audit report and the comments made by the Comptroller and Auditor General. Under section 620 of the Act the Central Government .may by notification direct that any of the provisions of the Act, other than sections 618, 619 and 639, shall not apply. to any Government company. The net result of the aforesaid provisions is that so far as the Durgapur Projects Ltd. and the Hindustan Steel Ltd. are concerned, the appellant was appointed an auditor by the Central Government; he is removable by the Central Gov ernment and the Comptroller and Auditor General of India exercises full control over him. His remuneration is fixed by the Central Government under sub section (8) of section 224 of the Act though it is paid by the company. In these circumstances the question is, does the appellant hold an office of profit under the Central Government? We may now read article 102(1) of the Constitution. (1) A person shall be disqualified for being chosen as, and for being, a member of either House of Parliament (a) if he holds any office of profit under the Government of India or the Government of any State, other than an office declared by Parliament by law not to disqualify its holder (b) (c) (d) We have stated earlier that the sole question before us is whether the office of profit which the appellant undoubtedly holds as auditor of the Durgapur Projects Ltd., and the Hindustan Steel Ltd. is or is not under the Government of India. According to Mr. Chaudhuri who has argued the appeal on behalf of the appellant, the expression "under the Government, occurring in article 102(1)(a) implies sub ordination to Government. His argument is that ordinarily there are five tests of such subordination, namely, (1) whe ther Government make , the appointment to the office; (2) whether Government has the right to remove or dis 318 miss the holder of office; (3) whether Government pays the remuneration; (4) what are the functions which the holder of the office performs and does he perform them for Government; and (5) does Government exercise any control over the performance of those functions. His argument further is that the tests must all co exist and each must show subordination to Government so that the fulfillment of only some of the tests is not enough to bring the holder of the office under the Government. According to him all the tests must be fulfilled before it can be said that the holder of the office is under the Government. His contention is that the Election Tribunal and the High Court were in error in holding that the appellant was a holder of office under the Government, because they misconstrued the scope and effect of the expression "under the Government" in article 102(1)(a) of the Constitution. He has contended that tests (3), (4) and (5) adverted to above are not fulfilled in the present case. The appellant gets his remuneration from the company though fixed by Government; he performs functions for the company and he is controlled by the Comptroller and Auditor General who is different from the Government. On behalf of the respondents it is argued that the tests are not cumulative in the sense contended for by the appellant, and what has to be considered is the substance of the matter which must be determined by a consideration of all the factors present in a case, and whether stress will be laid on one factor or the other will depend on the circumstances of each particular case. According to the respondents, the tests of appointment and dismissal are important tests in the present case, and in the matter of a company which is a 100% Government company, the payment of remuneration fixed by Government, the performance of the functions for the company and the exercise of control by the Comptroller and Auditor General, looked at from the point of view of substance and taken in conjunction with the power of appointment and dismissal, really bring the holder of the office under the Government which appoints him. One point may be cleared up at this stage. On behalf of the respondents no question has been raised that the Durgapur Projects, Limited, or the Hindustan Steel, Limi 319 ted, is a department of Government or an emanation 'of Governments question Which was considered at some length in Narayanaswamy vs Krishnamurthi(1). Learned counsel for the respondents has been content to argue before us on the basis that the two companies having been incorporated under the Indian are separate legal entities distinct from Government. Even on that footing he has contended that in view of the provisions of section 619 and other provisions of the Indian , an auditor appointed by the Central Government and liable to be removed from office by the same Government, is a holder of an office of profit under the Government in respect of a company which is really a hundred per cent Government company. We think that this contention is correct. We agree with the High Court that for holding an office of profit under the Government, one need not be in the service of Government and there need be no relationship of master and servant between them. , The Constitution itself makes a distinction between 'the holder of an office of profit under the Government ' and 'the holder of a post or service under the Government '; see articles 309 and 314. The Constitution has also made a distinction between 'the holder of an office of profit under the Government ' and 'the holder of an office of profit under a local or other authority subject to the control of Government '; see article 58(2) and 66(4). In Maulana Abdul Shakur vs Rikhab Chand and another(1) the appellant was the manager of a school run. by a committee of management formed under,the provisions of the Durgah Khwaja, Saheb Act, 1955. He was appointed by the administrator of the Durgah and was paid Rs. 100 per month. The question arose whether he was disqualified to be chosen as a member of Parliament in view of article 102(1)(a) of the Constitution. It was contended for the respondent in that case that under sections 5 and 9 of the Durgah Khwaja Saheb Act, 1955 the Government of India had the power of, appointment and removal of members of the committee of management as also the power to appoint the administrator in consultation with the committee; therefore the appellant was under the control and super (1) I.L.R. [1958] Mad 513. (2) [1958] S.C.R. 387 320 vision of the Government and that therefore he was holding an office of profit under the Government of India. This contention was repelled and this court pointed out the distinction between 'the holder of an office of profit under the Government ' and 'the holder of an office of profit under some other authority subject to the control of Government '. Mr. Chaudhuri has contended before us that the decision is in his favour. He has argued that the appellant in the present case holds an office of profit under the Durgapur Projects Ltd. and the Hindustan Steel Ltd. which are incorporated under the Indian ; the fact that the Comptroller and Auditor General or even the Government of India exercises some control does not make the appellant any the less a holder of office under the two companies. We do not think that this line of argument is correct. It has to be noted that in Maulana Abdul Shakur 's case(2) the appointment of the appellant in that case was not made by the Government nor was he liable to be dismissed by the Government. The appointment was made by the administrator of a committee and he was liable to be dismissed by the same body. In these circumstances this Court observed: "No doubt the Committee of the Durgah Endowment is to be appointed by the Government of India but it is a body corporate with perpetual succession acting, within the four corners of the Act. Merely because the Committee or the members of the Committee are removable by the Government of India or the Committee can make bye laws prescribing the duties and powers of its employees cannot in our opinion convert the servants of the Committee into holders of office of profit under the Government of India. The appellant is neither appointed by the Government of India nor is removable by the Government of India nor is he paid out of the revenues of India. The power of the Government to appoint a person to an office of profit or to continue him in that office 'or revoke his appointment at their discretion and payment from out of Government revenues are important factors in determining whether that person is holding an office of profit under the Government though pay [1958] S.C.R. 387. 321 ment from a source other than Government revenue is not always a decisive factor. But the appointment of the appellant does not come within this test. " It is clear from the aforesaid observations that in Maulana Abdul Shakur 's case(1) the factors which were held to be ,,decisive were (a) the power of the Government to appoint a person to an office of profit or to continue him in that ,office or revoke his appointment at their discretion, and (b) payment from out of Government revenues, though it was pointed out that payment from a source other than Government revenues was not always a decisive factor. In the case before us the appointment of the appellant :as also his continuance in office rests solely with the Government of India in respect of the two companies. His remuneration is also fixed by Government. We assume for the purpose of this appeal, that the two companies are statutory bodies distinct from Government but we must remember at the same time that they are Government com panies within the meaning of the Indian and 1000% of the shares are held by the Government. We must also remember that in the performance of his functions the appellant is controlled by the Comptroller and Auditor General who himself is undoubtedly holder of an office of profit under the Government, though there are safeguards in the Constitution as to his tenure of office and removability therefrom. Under article 148 of the Constitution the Comptroller and Auditor General of India is appointed by the President and he can be removed from office in like manner and on the like grounds as a judge ,of the Supreme Court. The salary and other conditions of service of the Comptroller and Auditor General shall be such as may be determined by Parliament by law and until they are so determined shall be as specified in the Second Schedule to the Constitution. Under cl. (4) of article 148 the Comptroller and Auditor General is not eligible for further office either under the Government of India or under the Government of any 'State after he has ceased to hold his office. (5) of the said Article lays down that subject to the provisions of the 'Constitution and of any law made by Parliament, the administrative powers of the Comptroller and Auditor (1)[1958] S.C.R. 387. 322 General shall be such as may be prescribed by rules made by the President after consultation with the Comptroller and Auditor General. Under article 149 of the Constitution the Comptroller and Auditor General shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States and of any other authority or body as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States as were conferred on or exercisable by the Auditor General of India immediately before the commencement of the Constitution in relation to the accounts of the Dominion of India and of the Provinces respectively. The reports of the Comptroller and Auditor General of India relating to the accounts of the Union have to be submitted to the President and the reports of the Comptroller and Auditor General relating to the accounts of 2 State have to be submitted to the Governor. From the aforesaid provisions it appears to us that the Comptroller and Auditor General is himself a holder of an office of profit under the Government of India, being appointed by the President and his administrative powers arc such as may be prescribed by rules made by the President, subject to the provisions of the Constitution and of any law made by Parliament. Therefore if we look at the matter from the point of view of substance rather than of form, it appears to us that the appellant as the holder of an office of profit in the two Government companies, the Durgapur Projects Ltd. and the Hindustan Steel Ltd., is really under the Government of India; he is appointed by the Government of India, lie is removable from office by the Government of India; he performs functions for two Government companies under the control of the Comptroller and Auditor General who himself is appointed by the President and whose administrative powers may be controlled by rules made by the President. In Ramappa vs Sangappa(1) the question arose as to whether the holder of a village office who has a hereditary right to it is disqualified under article 191 of the ' Constitution, which is the counterpart of article 102, in the matter (1) [1959]1 S.C.R. 1167. 323 of membership of the State Legislature. It was observed therein: "The Government makes the appointment to the office though it may be that it has under the statute no option but to appoint the heir to the office if he has fulfilled the statutory requirements. The office is, therefore, held by reason of the appointment by the Government and not simply because of a hereditary right to it. The fact that the Government cannot refuse to make the appointment does not alter the situation. " There again the decisive test was held to be the test of appointment. In view of these decisions we cannot accede to the submission of Mr. Chaudhury that the several factors which enter into the determination of this question the appointing authority, the authority vested with power to terminate the appointment, the authority which determines the remuneration, the source from which the remuneration is paid, and the authority vested with power to control the manner in which the duties of the office are discharged and to give directions in that behalf must all co exist and each must show subordination to Government and that it must necessarily follow that if one of the elements is, absent, the test of a person holding an office under the Government, Central or State, is not satisfied. The cases we have referred to specifically point out that the circumstance that the source from which the remuneration is paid is not from public revenue is a neutral factor not decisive of the question. As we have said earlier whether stress will be laid on one factor or the other will depend on the facts of each case. However, we have no hesitation in saying that where the several elements, the power to appoint, the power to dismiss, the power to control and give directions as to the manner in which the duties of the office are to be performed, and the power to determine the question of remuneration are all present in a given case, then the officer in question holds the office under the authority so empowered. For the reasons given above we have come to the conclusion that the Election Tribunal and the High Court were right in coming to the ' conclusion that the appellant as an auditor 'of the two Government companies ' held an 324 office of profit under the Government of India within the meaning of article 102(1)(a) of the Constitution. As such he was disqualified for being chosen as, and for being, a member of either House of Parliament. It is unnecessary to consider the further question whether he was a holder of an office of profit either under the Government of India or the Government of West Bengal by reason of being an auditor for the Life Insurance Corporation of India or a Director of the West Bengal Financial Corporation. The appeal accordingly fails and is dismissed with costs. Appeal dismissed.

The appellant was found carrying 286 tolas of gold in running train between Kerla and Pali stations by the Sub Inspector of Barmer District. After the gold was seized, criminal proceedings were instituted against the appellant. The trial court acquitted the appellant but the High Court convicted him. The appellant 's case in this Court was that the seizure of the gold from him had not been proved; that the Sub Inspector was not a Customs Officer for the place where the seizure was made, and so the 709 seizure was not under the Land Customs Act; and that, in any view of the case, the prosecution had failed to prove the necessary mens rea in the appellant. Section 3 of the Land Customs Act authorises the Central Government to appoint by notification one person to be the Collector of Land Customs for any area adjoining a foreign frontier and specified in the notification. The section also authorises the Central Government to appoint such other persons as it thinks fit to be customs officer for the same area by a similar notification. The relevant notification issued was as follows: "1. In exercise of the powers conferred by sub section (1) of section 3 of the (19 of 1924) read with the notification of the Government of India in the late Finance Deptt. (Central Revenues) No. 5444, dated 1st December 1924, the Central Board of Revenue hereby appoints for the areas adjoining the Land Customs Frontier separating West Pakistan from India, the officers of the Government of Rajasthan specified in the Schedule hereto annexed, to be land Customs Officers within the jurisdiction of the Collector of Land Customs Delhi. ""The Schedule." "All officers of the Rajasthan Civil Police and the Rajasthan Armed Constabulary of and above the rank of Head Constable posted in the Districts of Barmer, Bikaner, Ganganagar, Jaisalmer and Jalore in the State of Rajasthan. " Held, that the word "adjoining" in the above notification means the whole compact block consisting of the State of Punjab, Jammu and Kashmir and Rajasthan and the Union territories of Himachal Pradesh and Delhi as one area adjoining the West Pakistan Frontier, and that for this entire area one person was appointed the Collector of Land Customs. Every officer, therefore, mentioned in the Schedule would be a Customs Officer not for any particular District mentioned in the Schedule but for the whole area which forms the jurisdiction of the Collector of Land Customs Delhi. Since in the instant case, the Sub Inspector was an officer mentioned in the Schedule, he would be an officer for the entire area which formed the jurisdiction of the Collector of Land Customs, Delhi, including the place where the seizure was made, and was therefore, competent to make the seizure. Held, further, that on the evidence the story of the re covery of gold from the appellant was true, and that the circumstances, manner, quantity and the form in which gold was carried, clearly showed that the appellant was smuggling gold knowingly and with the intention of evading the prohibition in force with respect to the import of gold into the country.

Appeals Nos. 125 to 129 of 1957. Appeals by special leave from the judgment and decree dated October 7, 1952, of the Bombay High Court in Second Appeals Nos. 601 to 605 of 1952. S.T. Desai, Avadh Behari and B. P. Maheshwari, for the appellants. A.V. Viswanatha Sastri and A. G. Ratnaparkhi, for the respondents. March 14. The Judgment of the Court was delivered by SHAH, J. These five appeals raise a common question about the validity of Rule 2C framed by the respondent the Municipality of Barsi under section 58(j) of the Bombay Municipal Boroughs Act, 1925 hereinafter called the Act. The Lokmanya Mills hereinafter called the appellants are a company registered under the Indian Companies Act holding an expensive area of land City Survey No. 2554 within the Municipal Borough on which are constructed buildings of the factory, ware houses, bungalows and other structures appurtenant to the factory. The respondent, a Borough Municipality constituted under the Act is by section 73, 308 entitled to levy a rate on lands and buildings and also a water rate. Under the rules framed by the Municipality house tax and water tax were levied on buildings and non agricultural lands on their annual letting value at uniform rates whether the purpose was residential, business or manufacturing. In 1944, the Municipality resolved to enhance the assessment of lands and buildings within its area. After some correspondence with the Commissioner, Central Division, the General Body of the Municipality resolved that the rental value for leaving rates on mills and factories within its limits be fixed at Rs. 40 for every 100 square feet. Notices of this resolution under section 75(b) of the Act were issued and objections to the proposed enhancement were invited from the taxpayers and after obtaining the approval of the Government of Bombay, the new rules were made operative from April 1, 1947. The rules relevant for the purposes of these appeals are: Rule 2A: "The assessment of house tax on all lands, buildings and non agricultural lands, other than Government, buildings coming under Proviso A of section 73 of the Bombay Boroughs Act of 1925, at rates mentioned in the Schedule attached to these rules." Rule, 2B: In case Government buildings coming under Proviso A of section 73 of the Bombay Boroughs Act are used beneficially, the assessment of such buildings shall be made as specified in sub section 2 and 3 of section 74. Rule 2C: As regards Mills, factories and buildings relating thereto, the annual letting value shall be fixed at Rs. 40 per 100 square feet or part thereof for every floor. , ground floor or cellar and the tax shall be assessed on the said annual letting value, at the ordinary rate. Explanation: The words "buildings pertaining thereto" include buildings in the compound of the Mills such as ware houses, godowns, shops of the mills etc. but does not include residential buildings that is to say bungalows and out houses. Note: Assesstnent shall be made at the ordinary 309 rate on buildings which are not taxed under rule 2C above. The Municipality prepared an assessment list under the new scheme of taxation in respect of factory buildings and buildings relating thereto and issued notices of demand calling upon the appellants to pay house tax and water tax newly assessed thereon. The appellants paid under protest the tax demanded, and filed five suits in the 'court of the, Civil Judge, Junior Division of Barsi to recover the amounts levied by the Municipality in excess of the amounts due under the old scheme. In all these suits, the principal issue raised was about the validity of rule 2C framed by the Municipality for levy of rates "on Mills, Factories and other buildings relating thereto". The trial court held that rule 2C was valid and within the competence of the Municipality and dismissed the suits for refund of house tax and water tax. The District Court at Sholapur in appeal declared rule 2C "illegal and ultra vires" and by injunction restrained the Municipality from making any claim or demand for house tax and other taxes from the appellants on the basis of them rule. The High Court of Judicature at Bombay, set aside the decree of the District Court disagreeing with the view that rule 2C was ultra vires. In these appeals filed with special leave against the judgments of the High Court, the only question which falls to be determined is whether by rule 2C the Municipality is entitled to collect tax leviable as a rate after computing the annual letting value solely on the area of the factory and buildings related thereto. By section 73, the Municipality is authorised subject to any general or special orders which the State Government may make in that behalf and to the provisions of as. 75 and 76, to impose for the purposes of the Act any one or more of the classes of taxes, amongst which are included a rate on buildings or lands or both situate within the municipal borough and general water rate which may be imposed in the form of a rate assessed on buildings or lands or in any other form. Section 75 prescribes the procedure preliminary to imposing a tax. The procedure for assessing the 310 liability to rates on lands and buildings is prescribed by sections 78 to 84 of the Act which provide for preparation of the assessment list, its authentication and amendment. When a rate on building or lands or both is imposed, the Chief Officer causes ail assessment list of all buildings or lands or lands and buildings in the municipal borough to be prepared containing inter alia the names of the owner, the valuation based on capital or annual letting value as the case may be on which the property is assessed and the amount of tax assessed thereon. The expression "Annual; letting value" is defined in section 3(1) of the Act as meaning the annual rent for which any building or land, exclusive of furniture or machinery contained or situate therein or thereon might reasonably be expected to let from year to year, and shall include all payments made or agreed to be made by a tenant to the owner of the" building or land on account of occupation, taxes, insurance or other charges incidental to his tenancy. By section 78 sub section (1) cl. (d) and Explanation to section 75, the rate to be levied on lands and buildings may be assessed on the valuation of the lands and buildings based on capital or the annual letting value. By the rules in operation prior to April 1, 1947, house tax and water tax were levied as rates in respect of all lands, buildings and non agricultural lands on the annual letting value (except Government buildings). Even under the new rules, house tax and water tax continued to be levied in respect of all buildings and, non agricultural lands as rates: but the rate in respect of buildings falling within rule 2C was assessed on a valuation computed on the floor area of the structures, and not on the capital value nor on the annual rent for which the buildings may reasonably be expected to let. This was clearly not a tax based on the annual letting value, for "Annual letting value" postulates rent which a hypothetical tenant may reasonably be expected to pay for the building if let. A rate may be levied under the Act on valuation made on capital or on the annual letting value. If the rate 311 is to be levied on the basis of capital value, the building to be taxed must be valued according to some recognised method of valuation: if the rate is to be levied on the basis of the annual letting value, the building must be valued at the annual rental which a hypothetical tenant may pay in respect of the building. The Municipality ignored both the methods of valuation and adopted a method not sanctioned by the Act. By prescribing valuation computed on the area of the factory building, the Municipality not only fixed arbitrarily the annual letting value which bore no relation to the rental which a tenant may reasonably pay, but rendered the statutory right of the tax. payer to challenge the valuation illusory. An assessment list prepared under section 78, before it is authenticated and finalised, must be published and the taxpayers must be given an opportunity to object to the valuation. By the assessment list in which the valuation is not based upon the capital value of the building or the rental which the building may fetch, but on the floor area, the objection which the tax payers may raise is in substance restricted to the area and not to the valuation. Counsel for the Municipality sought to rely upon The Madras and Southern Mahratta Railway Co., Ltd. vs The Bezwada Municipality (1) decided by the Judicial Committee of the Privy Council, in support of the plea that the rate based on valuation in proportion to the floor area is validly levied. By section 81 sub section (2) of the Madras District Municipalites Act, 1920, a tax for general purposes and a water and drainage tax were to be levied at such fractions of the annual value of lands or buildings or both as may be fixed by the Municipal Council. By section 82 Sub section (2) of that Act, the annual value of lands and buildings was to be the gross annual rent at which they may reasonably be expected to let, but by the proviso, it was enacted that in the case of any Government or Railway building, the annual value of the premises shall be deemed to be 6% of the total of the estimated value of the land and the estimated present cost of erecting the (1) I.L.R. 312 building subject to certain deductions. The Municipality of Bezwada levied property tax on a piece of vacant land belonging to the Madras and Southern Mahratta Railway Company on the annual value computed at 6% of its capital value. This method of taxation was challenged by the Railway Company on the contention that all methods of valuation other than the method prescribed by the proviso to section 82(2) were by necessary implication prohibited. This contention was rejected because the generality of the sub. stantive enactment was left unqualified except in so far as it concerned the particular subjects to which the proviso related. Open lands were not covered by the proviso and it was competent to the municipality to levy the tax under section 82(2) on the annual value and that value would be determined by any of the recognised methods of arriving at the rent which a hypothetical tenant 'may reasonably be expected to pay for the lands in question. This case has in our judge ment no relevance to the present case. If the Municipality of Barsi had adopted any of the recognised methods of valuation for assessing the annual letting value, the tax would not, be open to challenge, but the method adopted was not a recognised method of levying the rate. ' The High Court relied upon its earlier judgment in The Borough Municipality of Amalner vs The Pratap Spinning Weaving and Manufacturing Co.p Ltd., Amalner (1). In that case, the court negatived the challenge to the validity of the rules similar to those impugned in these appeals. The Amalner Municipality had by rules framed under the Bombay Municipal Boroughs Act sought to levy a rate equal to a per centage of the annual letting value which was computed on the floor area of "mills and factories". The court held that the method of taxation adopted by the Municipality had remained unchallenged for a long time,, that the rules had been sanctioned by the Government and they were not shown to be "capricious, arbitrary and unreasonable and that the valuation of the property by reference to the floor area was (1) I.L.R. 313 not altogether unknown to the law of rating. The High Court also observed that in assessing the rent 2 which a hypothetical tenant may pay several methods are open to the Municipality and if on examining the cases of all the factory buildings within their jurisdiction, the Municipality concluded that the rent which the hypothetical tenant may reasonably be expected to pay for those buildings fits in with the rent which they had fixed by adopting the flat and uniform rate the principle of fixing the annual letting value on the basis of the floor area would not be open to challenge. It was assumed in that case that all factory buildings within the area of the Amalner Municipality were. alike in essential features and were intended to be used for purposes which were alike, and that probably the Municipality may have been satisfied that the principle enunciated in the rule impugned worked out on the whole as a fair basis for determining the valuation of the building in question. In our view, this approach to a rating problem arising under the Act is not permissible. In any event, there is no evidence on the record of this case that the factories and "buildings relating thereto" such as ware houses, godowns and shops of the Mills situate in the compound of the mills, may be separately let at the uniform rate prescribed ' by the Municipality. The vice of the rule lies in an assumed uniformity of return per square foot which structures of different classes which are in their nature not similar, way reasonably fetch if let out to tenants and in the virtual deprivation to the rate payer of his statutory right to object to the valuation. Another judgment of the Bombay High Court in Motiram Keshavdas vs Ahmedabad Muncipal Borough (1) calls for reference. It was held in Motiram 's case that a water tax imposed by the Ahmedabad Municipality as a rate not depending upon the value of the property assessed but in lump sum was not a rate for the purpose of section 73(x) of the Bombay Municipal Boroughs Act, 1925 and the rule which authorised the levy of such a lump sum was ultra vires (2) (1942) Bom. L. R.280 40 314 These appeals must be allowed and the decrees passed by the High Court set aside and the decrees passed by the District Court of Sholapur restored with costs in this court and the High Court. One hearing fee. Appeals allowed.

The Industrial Tribunal, on a reference under section 12 Of the , framed a gratuity scheme for the appellant company. The company challenged the validity of some of the provisions of the scheme on the grounds, inter alia, (1) that the scheme was framed on the basis of the units, while it should have been done on industry cum region basis, (2) that the scheme provided for the award of gratuity on the retirement or resignation of a workmen after ten years ' service instead of fixing the period as fifteen years, and (3) that cl. (ii)(b) of the scheme which provided that if a workman was dismissed or discharged for misconduct causing financial loss to the works, gratuity to the extent of the loss should not be paid to the workman concerned, was erroneous, because, on principle, misconduct put a blot on the character/of his service and that disqualified him from any claim of gratuity. Held:(1) that industry cum region basis is not the only basis on which a gratuity scheme could be framed and one framed on the basis of the units cannot be challenged as in valid. The Bharatkhand Textile Manufacturing Co. Ltd. vs The Textile Labour Association, Ahmedabad, ; , explained. (2) that the clause in the scheme prescribing ten years ' minimum service to enable an employee to claim gratuity is valid. The Express Newspapers (P.) Ltd. vs Union of India, , explained. (3) that gratuity is not paid to an employee gratuitously or merely as a matter of boon, but is paid to him for the service rendered by him to the employer; consequently he should not be wholly deprived of the benefit thus earned by long and meritorious service even though at the end of such service he might have been found guilty of misconduct which entailed his dismissal. Accordingly, cl. (ii)(b) of the scheme is a valid provision.

minal Appeal No. 107 of 1961. Appeal by special leave from the judgment and order dated June 16, 1961, of the Bombay High Court in Cr. A. No. 21 of 1961. 345 Rajni Patel, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant. H.R. Khanna, R. H. Dhebar and R. N. Sachthey, for the respondents. September 26. The judgment of the Court was delivered by SUBBA RAO, J. This appeal by special leave against the judgment of the High Court of judicature at Bombay raises the question of construction of s.3(b) of the Drugs Act, 1940, as amended by the Drugs (Amendment) Act, 1955, hereinafter called the Act. This appeal has been argued on the basis of facts found by the High Court. The appellant was carrying on business in the name of Deepak Trading Corporation at Bulakhidas Building, Vithaldas Road, Bombay. On December 27, 1958, the Sub Inspector of Police, accompanied by the Drug Inspector, raided the said building and found large quantities of absorbent cotton wool, roller bandages, gauze and other things. It was found that the appellant was not only storing these goods in large quantities but was actually manufacturing them in Bombay and passing them off as though they were manufactured by a firm of repute in Secunderabad. The samples of the aforesaid articles and lint were sent to the Government Analyst, who reported that out of the samples sent to him only the lint was of standard quality and the other articles were not of standard quality. The appellant was ' prosecuted before the Presidency Magistrate, 16th Court Bombay, for an offence under section 18 of the Act, inter alia, for manufacturing drugs which were not of standard quality. The learned Presidency. Magistrate acquitted the appellant on the ground that the prosecution had failed to prove that the articles were in the possession of the appellant. The High Court on a resurvey of the evidence came to a different conclusion and found that the said articles 346 were not only found in the possession of the appellant but also were manufactured by him and that they were below the standard prescribed. On the finding ', it convicted the. appellant and sentenced him to undergo rigorous imprisonment for three months and to pay a fine of Rs. 500/ under each count. Hence the appeal. Though an attempt was made to argue that the said articles had not been proved to be below the prescribed standard, it was subsequently given up ' The only question that was argued is whether the said articles are drugs within the meaning of section 3(b) of the Act. The said section reads ""drug" includes (i)all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the treatment mitigation or prevention of disease in human beings or animals other than medicines and substances exclusively used or prepared for use in accordance with the Ayur vedic or Unani systems of medicine, and (ii)such substances (other than food) intended to affect the structure or any function of the human body or intended to be used for the destruction of vermin or insects which cause disease in human beings or animals as may be specified from time to time by the Central Government by notification in the Official Gazette. The said definition of ""drug" is comprehensive enough to take in not only medicines but also substances intended to be used for or in the treatment of diseases of human beings or animals. This artificial definition 347 introduces a distinction between medicines and substances which are not medicines strictly so called. The expression "substances", therefore, must be something other than medicines but which are used for treatment. The part of the definition which is material for the present case is " 'substances invented to be used for or in the treatment". The appropriate meaning of the expression "substances" in the section is "things". It cannot be disputed, and indeed it is not disputed, that absorbent cotton wool, roller bandages and gauze are "substances" within the meaning of the said expression. If so, the next question is whether they are used for or in "treatment". The said articles are sterilized or otherwise treated to make them disinfectant and then used for surgical dressing; they are essential materials for treatment in surgical cases. Besides being aseptic these articles have to possess those qualities which are utilized in the treatment of diseases. Thus for instance, in the case of gauze one of the articles concerned in this appeal it has to conform to a standard of absorbency in order that it might serve its purpose: otherwise the fluid which oozes is left to accumulate at the site of the wound or sore. The Legislature designedly extended the definition of " 'drug" so as to take in substances which are necessary aids for treating surgical or other cases. The main object of the Act is to prevent substandard in drugs, presumably for maintaining high standards of medical treatment. That would certainly be defeated if the necessary concomitants of medical or surgical treatment were allowed to be diluted: the very same evil which the Act intends to eradicate would continue to subsist. Learned counsel submitted that surgical instruments would not fall within the definition and that gauze and lint would fall within the same class. It is not necessary for the purpose of this appeal to definite exhaustively "the 'substances" falling within the definition of " 'drugs"; and we consider that whether or not surgical instruments are drugs", the articles concerned in this case are. 348 Learned counsel for the appellant sought to rely upon a report of a high powered committee consisting of expert doctors, who expressed the opinion in the report that as the surgical dressings did not come under the purview of the Drugs Act, no control on their quality was being exercised. Obviously, the opinion of the medical experts would not help us in construing a statutory provision. We, therefore, hold, agreeing with the High. Court, that the said articles are substances used for or in the "treatment" within the meaning of section 3(b) of the Act. An impassioned appeal was made for reducing the sentences imposed upon the appellant. When a similar argument was advanced in the High Court, it pointed out that this was a gross case where large quantities of spurious drugs had been manufactured by the appellant and passed off as goods manufactured by a firm of repute. The appellant was guilty of an anti social act of a very serious nature. In our view, the punishment of rigorous imprisonment for three months was more lenient than severe. There is no case for interference with the sentences. The appeal fails and is dismissed. Appeal dismissed.

The appellant was found in possession of large quantities of absorbent cotton wool, roller bandages and gauze which he had manufactured. On analysis these were found to be sub standard and the appellant was prosecuted under section 18 of the Drugs Act, 1940, for manufacturing sub standard drugs. He was convicted and sentenced to undergo rigorous imprisonment for three months and to pay a fine of Rs. 500/. The appellant contended that these articles were not drugs as defined in section 3(b) of the Act and that the sentence imposed was too severe. Held, that absorbent cotton wool, roller bandages and gauze were "drugs" within the meaning of section 3(b) and the appellant was rightly convicted. In the definition "drugs" "included substances intended to be used for or in treatment of diseases". "Substances" was something other than "medicines" and meant "things". The said articles were sterilized or otherwise treated to make them disinfectant; they were used for surgical dressings and were essential materials for treatment in surgical cases. The object of the Act of maintaining high standards of medical treatment would be defeated if the necessary concomitants of medical or surgical treatment were allowed to be diluted. Held, further,that the sentence erred on the side of leniency rather than severity and could not be reduced. It was a case where large quantities of spurious and sub standard drugs had been manufactured by the appellant. He was guilty of an antisocial act of a very serious nature.

Appeal No. 4568 of 1991. From the Judgment and Order dated 30.1.89 of the Punjab & Haryana High Court in LPA No. 1251 of 1987. WITH CA Nos 4569 4686/91 482 M. Chandra Sekhar, Additional Solicitor General, G.L. Sanghi, Hatbans Lal, Har Dev Singh, S.P. Goyal, Harinder Pal Singh, Ms. Naresh Bakshi, S.M. Sarin, P.N. Puff, M.K. Dua, Ms. Madhu Moolchandani, Manoj Swamp, Dr.(Ms.) Meera Agarwal, R.C. Mishra, M.N. Krislmamam, K.P. Sunder Rao, Attar Singh, S.N. Terdal, Hemant Sharma, T.C. Sharma, N.D. Garg, Ms. Kusum Chowdhary and S.P. Sarin for the appearing parties. The Judgment of the Court was delivered by KANIA, J. Leave granted. Counsel heard. As the controversy before us is a limited one and relates only to the question of granting of benefit of the provisions of Section 23(1 A) introduced into the Land Acquisition Act, 1894 (hereinafter referred to as "the said Act") by the Land Acquisition (Amendment) Act, 1984, (referred to hereinafter as "the Amendment Act of 1984") only a few facts are necessary for the appreciation of the submissions made before us. This appeal, arising out of S.L.P. (Civil) No, 14297 of 1990 by Special Leave, is directed against the judgment of a Division Bench of the Punjab and Haryana High Court in Letters Patent Appeal No.1251 of 1987. The other appeals before us are connected appeals filed by the Union of India or the claimants. The respondent was the owner of a piece of land in one of the villages in District Bhatinda in Punjab. Land admeasuring 74375 acres situated in various villages in Bhatinda District including the land of the respondent was acquired by the appellants under the said Act. The Notifications under Sections 4 and 6 of the said Act were published on May 10,1979 and March 27, 1981, re spectively. The Special Land Collector made and declared his award of compensation in respect of the acquisition of the said land and several other plots of land on March 31,1981. Being aggrieved by the said award, the respondent and other landowners filed Reference applications under Section 18 of the said Act which were decided by the learned District Judge concerned in 1985 and 1986. The land acquired was classified into various grades and compensation awarded accordingly. In the case before us and several other similar cases the benefits under Section 23(1 A) of the said Act were granted to the land owners. The State appealed to the High Court. In several other cases where the land owners were not satisfied with the compensation awarded, including the cases where the benefits conferred by Section 23(1 A) were not awarded the land owners filed appeals before the High Court. 483 What is relevant for our purpose is that a learned Single Judge of the High Court confirmed the grant of bene fits under Section 23(1 A)of the said Act where such bene fits had been granted by the learned District Judge and awarded the same where that had not been done by the learned District Judge. Letters Patent Appeals were filed by the State being dissatisfied with the judgment of the learned Single Judge. It was submitted on behalf of the Union of India before the Division Bench deciding the Letters Patent Ap peals that the claimants/land owners were not entitled to the benefit of Section 23(1 A) of the said Act introduced by the said Amendment Act, 1984 as aforestated. It was submit ted on behalf of the appellants that the right to get addi tional amount at the rate of 12% per annum on the enhanced amount of compensation from the date of Notification under Section 4 of the said Act and till the date of the award of the Collector or the date of taking possession whichever is earlier conferred under the provisions of Section 23(1 A) of the said Act was available only in cases where the Collector made his award after 30th day of April, 1982, being the date of the introduction of the Land Acquisition (Amendment) Bill, 1982 in the House of the People, whereas in the present case, the Collector had made his award on March 31, 1981. Reliance was placed on the Judgment of a Full Bench of the Punjab and Haryana High Court in State of Punjab vs Krishan Lal, AIR (1987) Punjab and Haryana, 222. The Divi sion Bench repelled this contention and pointed out that the learned Chief Justice H.N. Seth, who spoke for the Full Bench in Krishan Lal 's case (supra) had explained that judgment in the subsequent decision rendered in Maya Devi and Others vs The Union Territory of Chandigarh, Punjab Law Journal (1988) 189. and pointed out that the land owner was entitled to the additional amount in terms of Section 23(1 A) of the Amendment Act of 1984 if the proceedings for determination of compensation were decided after September 24, 1984, and since the Regular First Appeal in respect of the proceedings for determination of the compensation was decided after September 24, 1984, the Court while adjudi cating upon the amount of compensation payable to the claim ant was bound to grant the additional amount in terms of Section 23(1 A) of the said Act. The Division Bench in its impugned judgment gave to the claimant the benefit of the added amount referred to in Section 23(1 A) of the said Act. The same submissions have been made on behalf of the respective parties before us. Before discussing the submissions of the respective parties, it would not be out of place to set out the rele vant provisions of the said Act. The said Act, namely, the Land Acquisition Act, 1894, provides for compulsory acquisition of land. The term 'Award ' has not been defined in 484 the said Act. Sub clause (d) of Section 3, the definition section, defines the expression 'Court ' as follows: "(d)the expression 'Court ' means a principal Civil Court of original jurisdiction, unless the appropriate Government has appointed, as it is hereby empowered to do, a special judi cial officer within any specified local limits to perform the function of the Court under this Act. ' Part II of the said Act deals with the question of acquisition of land. Section 11 of the said Act deals with the enquiry and award of compensation by the Collector. Section 11 A which was introduced into the said Act by the Land Acquisition (Amendment) Act, 1984 (Act No.68 of 1984) provides for the period within which the award shall be made. Generally speaking, it prescribes that the period for making the award is limited to two years, and the section provides that, if the award is not made within that period, the entire proceedings for acquisition of land shall lapse. There is a proviso to the said section and an Explanation, but it is not necessary to consider the same for the purpose of this case. Sub section (1) of Section 18 which is includ ed in Part III of the said Act runs as follows: "18. Reference to Court (1) Any person interested who has not accepted the award may, by written application to the Collector, require that the matter be referred by the Collector for the determina tion of the Court, whether his objection be to the measurement of the land, the amount of compensation, the person to whom it is pay able, or the apportionment of the compensation among the persons interested." Section 23 deals with the matters to be considered by the Court for determining the compensation to be awarded for the land acquired under the said Act. We may mention here that under the general scheme of the said Act, the landowner whose land has been acquired is entitled to be paid the market value of the land acquired as prevailing at the time of the publication of the notification under Section 4 issued together with the solatium at the prescribed rate in consideration of the compulsory nature of the acquisition. Prior to the coming into effect of the Amendment Act of 1984 solatium was fixed at the rate of 15 per centum. Sub section (1 A) which was introduced into Section 23 of the said Act by the Amendment Act of 1984 runs as follows: "In addition to the market value of the land, as above provided, the Court shall in every case award an amount calcu 485 lated at the rate of twelve per centum per annum on such market value for the period commencing on and from the date of the publi cation of the notification under Section 4, subsection (1), in respect of such land to the date of the award of the Collector or the date of taking possession of the land, whichever is earlier. " By the said Amendment Act of 1984 the expression "thirty per centum" was substituted in place of the expression "fifteen per centum" in sub section (2) of Section 23 of the said Act. Sub section (2) of Section 23 now runs as follows: "(2) In addition to the market value of the land, as above provided, the Court shall in every case award a sum of thirty per centum on such market value, in consideration of the compulsory nature of the acquisition." .lmo These amendments were effected in the Land Acquisition Act (the said Act) by the Land Acquisition (Amendment) Act, 1984, ("the Amendment Act of 1984") as set out earlier. Sub sections (1) and (2) of Section 30 of the Amendment Act of 1984 run as follows: "30 Transitional Provisions: (1) The provisions of sub section (1 A) of Section 23 of the principal Act, as inserted by Clause (a) of Section 15 of this Act, shall apply, and shall be deemed to have applied, also to, and in relation to, (a) every proceedings for the acquisition of any land under the principal Act pending on the 30th day of April, 1982 the date of intro duction of the Land Acquisition (Amendment) Bill, 1982, in the House of the People, in which no award has been made by the Collector before that date; (b) every proceeding for the acquisition of any land under the principal Act commenced after that date, whether or not an award has been made by the Collector before the com mencement of this Act. (2) The provisions of sub section (2) of Section 23 and Section 28 of the principal Act, as amended by Clause (b) of Section 15 and Section 18 of this Act respectively shall apply, and shall be deemed to have applied, also to, and in relation to, any award made by the Collector or Court or to any order passed by the High Court or Supreme Court in appeal against 486 any such award under the provisions of the principal Act later the 30th day of April, 1982, the date of introduction of the Land Acquisition (Amendment) Bill. 1982, in the House of the People and before the commence ment of this Act. " (emphasis supplied by us) On behalf of the appellants reliance was placed by learned Counsel on the decision of this Court in Union of India and Others vs Filip Tiago De Gama of Vedem Vasco De Gama, [1990] 1 SCC 277. The respondent, on the other hand, placed strong reliance on the decision of a Full Bench of the Bombay High Court in Jaiwant Laxman P. Sardesai and etc. vs Government of Goa, Daman Diu and Another etc, AIR 1987 Bombay 214. On the basis of the aforesaid judgment of the Bombay High Court it was submitted by the respondent/claim ant that a wide and liberal interpretation should be given to the provisions of sub section (1 A) of section 23 and the amount calculated as set out in the said sub section awarded in all cases where any proceeding was pending in any court including the High Court or this Court in connection with the determination of compensation for the land acquired. We may mention that both the parties referred us to the deci sion of a Constitution Bench of this Court in Union of India and Another etc:. vs Raghuvir Singh (dead) by Lrs etc; , We propose to discuss these decisions a little later but before doing so, we propose to analyse the relevant provisions of the said Act and the effect thereof. A perusal of the provisions of sub section (1 A) of Section 23 makes it clear that the said sub section deals with substantive rights and it confers a substantive right to claim the additional amount calculated as set out in the said sub section in the circumstances set out therein. Similarly, sub section (2) of Section 23 also confers a substantive right on the claimant to a higher solatium. Under the well settled rules of interpretation, the said provisions of the said Act, being substantive in nature, can have only prospective application unless the language in which the provisions are couched, read in the context, shows that the intention of the legislature was to give retrospec tive effect to them. The language of sub section (lA) of Section 23 shows that a duty is cast on the court tO award an amount calculated as stated therein in addition to the market value of the land acquired for the period commencing from the date of the publication of the Section 4 Notifica tion to the date of the award of the Collector or the date of taking possession, whichever is earlier. (Emphasis supplied) The expression "award" used in section 23 (I A) suggests that the 487 intention of the legislature was to make the provisions of the said subsection applicable to cases where the Collector had yet to make his award or the Trial Court heating the Reference under Section 18 of the Land Acquisition Act had still to make its award after the coming into force of the said sub section on September 30, 1984. The expression "award" is to be distinguished from the expression "decree" and hence, it appears that in the absence of any contrary or inconsistent provision in the said Act the provisions of sub section would not come into play where the award had been made by the Collector earlier as well as by the Refer ence Court but ton the date of coming into effect of the said sub section, an appeal from the said award might have been pending in a court. In that case, the Court would not be "awarding" any amount but would be making a "decree" for an amount. By reason of the provision of section 30(1)(a) of the Amendment Act of 1984 the provisions of section 23(1 A) of the said Act were, by a deeming provision, made also ap plicable to every proceeding for the acquisition of land under the said Act where the Collector had not made his award by April 30,1982. On a correct interpretation of the provisions of section 23 (1 A) read with section 30(1)(a) of the Amendment Act of 1984, an additional amount calculated in the manner indicated in section 23(1 A) is also payable in those cases where the Collector had not made his award on or before April 30, 1982, even in cases where the court might have made its award before September 24, 1984. It is true that the aforesaid construction we are giving to the provisions of Section 23(1 A) and Section 30(1)(a) will, in a sense, limit the benefits strictly conferred by Section 30(1)(a) to only those cases where the Collector as well as the Court have made their respective awards between April 30, 1982 and September 24, 1984 but, in our view, that cannot be helped as that is the result of the plain grammatical construction of the clear language used in the relevant provisions. We are of the opinion that we would not be justified in giving an unduly restricted meaning to the provisions of Section 23(1 A) unwarranted by the plain language of that sub section as appears to have been done in the case of Union of India and Others vs Filip Tiago De Gama of Vedem Vasco De Gama discussed more particularly hereinaf ter, in order to give a wider meaning of the provisions of Section 30(1)(a). Section 23(1 A) refers clearly to the duties of the Court. As we have already pointed out, the court is defined by Section 3(d) as the principal court of original jurisdiction, except in the circumstances set out in the said sub section, which would be the court having jurisdiction to decide the reference under Section 18 of the said Act. There, is therefore, no warrant to read in the place of the word 488 "Court" in Section 23(1 A) the word "Collector". Moreover, the decision of such a court determining compensation is regarded as an award under the said Act. In the light of these provisions, there is no warrant to give an unduly restricted meaning to Section 23(1 A) of the said Act, as pointed out above. Coming now to the decisions cited before us we find that in the case before the Full Bench of the Bench of the Bombay High Court in Jaiwant Laxman P. Sardesai and etc. vs Govern ment of Goa, Daman and Diu and Another etc. (AIR 1987 Bombay 214) the facts were that the Notification under Section 4 of the said Act was published on October 3, 1969, in the Gov ernment Gazette of the Government of Goa. The Notification under Section 6 was published on June 10, 1971 The Land Acquisition Officer declared his award on August 2, 1972. All these events undoubtedly occurred prior to April 30, 1982. However, on a Reference made under Section 18 of the said Act on December 24, 1973, the Civil Court investigated the claim and gave its award on June 24, 1985. The award was, therefore, made by the Court not before April 30, 1982, but after September 30, 1984, when the provisions of the Land Acquisition (Amendment) Act, 1984, had already come into effect. It was, therefore, strictly speaking, not necessary for the court to make any observation regarding the legal position in a case where both the Collector as well as the Court in a Reference under Section 18 had made their respective awards before April 30,1982. Moreover, we find that the judgment appears to proceed on a somewhat unwarranted assumption. This is clear from the following observations which appear at paragraph 5 of the aforesaid Report (p 217): "It is not in dispute that where on the date of the commencement of the amending Act any proceedings for determination of compensation were pending before the Collector under Sec tion 11 of the Act or before the Court under reference under Section 18 of the Act or before the High Court in appeal under Section 54 of the Act, then the amended section 23 (I A) would be applicable to such proceedings, in absence of subsection (1) of Section 30. " In our view, it was erroneously taken as undisputed that had the provisions of sub section (1) of Section 30 not been in existence, the provisions of the amended section 23(1 A) would have applied to a case where the Collector as well as the Court had already made their award before April 30, 1982, but an appeal was pending in the High Court on April 30, 1982, or on the commencement of the Land Acquisition (Amendment) Act. As we have already pointed out, the cor rectness of this as 489 sumption is very much in dispute before us. In these circum stances, we find ourselves unable to accept as correct the view taken by the Full Bench of the Bombay High Court to the extent that it extends the operation of the provisions of section 23(1 A) even to cases where the Collector as well as the Reference Court had made their awards before April 30, 11982, in the case before the Full Bench of the Bombay High Court in Jaiwant Laxman P. Sardesai and etc. vs Government of Goa, Daman and Diu and Another etc., AIR 1987 Bombay 214. As far as the decision of a Division Bench comprising two learned Judges of this Court in Union of India and Others vs Filip Tiago De Gama of Vedem Vasco De Gama [1990] 1 S.C.C. 277 strongly relied upon by the appellants is concerned, we find that in that case the Land Acquisition Officer made his award determining the compensation on March 5, 1969. On a reference under Section 18 the Civil Court made its award on May 28, 1985, that is, even after Septem ber 24,1984, when the Amendment Act of 1984 came into ef fect. The view taken by the Division Bench is that, as the Collector had made his award before April 30, 1982, then the additional amount referred to in section 23 (1 A) could not be awarded. This view has been taken on the basis that sub section (1)(b) of Section 30 of the said Act provides that the provisions of section 23(1 A) shall be applicable to every acquisition proceeding commenced after April 3 O, 1982, irrespective of the fact whether the Collector has made the award on or before September 24, 1984, and that sub section (1) of Section 30 does not refer to court award and the court award is used only in sub section (2) of Section 30. (See para 21 of the said report). We find that on the plain language of section 23(1 A) itself, which we have set out earlier, the duty was cast on the Court to award an additional amount calculated as prescribed therein which would mean that it is directed to be awarded by the court, namely, the Reference Court, in all cases which are pending before that court on September 1,1984. Sub section (1)(a) of Section 30 undoubtedly lays down that the provi sions of section 23(1 A) of the Act are also made applicable to all proceedings for the acquisition of any land under the said Act pending on April 30, 1982, where no award had been made by the Collector before that date. At first glance this would appear to suggest that the additional amount referred to in section 23 (1 A) could not be awarded where the Col lector had made his award before April 30, 1982. But this provision cannot be allowed to cut down the benefits avail able to the claimants on a plain reading of section 23(1 A). This is clear from the use of the word "also" in the opening pan of section 30(1). In our opinion, the view taken by the Bench comprising two learned Judges of this Court in that case cannot be accepted as correct as it is too narrow and unduly cuts down the operation of the benefit conferred under the 490 plain language of section 23 (1 A) of the said Act. As far as the provisions of section 30(2) are concerned, we do not feel that we are called upon to interpret the same in this decision. In our view, therefore, the said decision cannot be accepted as good law in so far as it lays down that in order to bring the provisions of section 23(1 A) of the said Act into play the Collector must have made his award after April 30, 1982. Coming to the decision in Union of India and Another vs Raghuvir Singh (dead) by Lrs. (Supra) referred to earlier, we find that it mainly concerned itself with the provisions of section 30(2) of the said Amendment Act with which we are not directly concerned here and in that connection, the Constitution Bench of this Court has made the following observations (p. 779): "In construing section 30(2), it is just as well to be clear that the award made by the Collector referred to here is the award made by the Collector under Section 11 of the parent Act, and the award made by the Court is the award made by Principal Civil Court of Original Jurisdiction under Section 23 of the parent Act on a reference made to it by the Collector under Section 19 of the parent Act. There can be no doubt that the benefit of the enhanced solatium is intended by section 30(2) in respect of an award made by the collector between April 30, 1982, and September 24, 1984, Likewise the benefit of the enhanced solatium is extended by section 30(2) to the case of an award made by the Court between April 30, 1982, and September 24, 1984, even though it be upon reference from an award made before April 30, 1982. " The Court went on to point out that (p.780): "Section 30(2) of the Amendment Act extends the benefit c. the enhanced solatium to cases where the award by the Collector or by the Court is made between April 30, 1982, and September 24, 1984, or to appeals against such awards decided by the High Court and the Supreme Court whether the decisions of the High Court or the Supreme Court are rendered before September 24, 1984, or after that date. All that is material is that the award (empha sis supplied) by the Collector or by the Court should have been made between April 30, 1982, and September 24, 1984. We find ourselves in agreement with the conclusion reached by this Court in K. Kamalajammanniavaru vs Special Land Acquisition Officer, and 491 find ourselves unable to agree with the view taken in Bhag Singh vs Union Territory of Chandigarh ; The expanded meaning given to section 30 (2) in the latter case does not, in our opinion, flow reasonably from the language of that sub section. It seems to us that the learned Judges in that case missed the significance of the word 'such ' in the collocation 'any such award ' in section 30(2). Due significance must be at tached to that word, and to our mind it must necessarily intended that the appeal to the High Court or the Supreme Court, in which the benefit of the enhanced solatium is to be given, must be confined to an appeal against an award of the Collector or of the Court rendered between April 30, 1982, and September 24, 1984. " We find that this decision which was rendered by a Constitution Bench of this Court comprising 5 learned Judges runs in no way counter to the view which we have taken and, in fact, it leads some support to the view which we are taking. In the case before us, as the Reference Court has made its award after September 24, 1984 the benefit of the provisions of section 23(1 A) was clearly available to the claimant as held in the impugned judgment. In the result, the appeal arising out of Special Leave Petition (Civil) No.14297 of 1990 in Union of India vs Zora Singh must be dismissed with costs. As far as the other appeals filed by the Union of India which have been heard together with the Zora Singh 's case are concerned, learned Counsel for the Union of India has not drawn our attention to any material difference in the relevant facts therein from the facts in Zora Singh 's case. In fact, the arguments proceeded on the footing that all the relevant facts were the same as in the case of Zora Singh. In a result, all these appeals must also be dismissed, however, with no order as to costs. As far as the appeals before us which have been filed by the claimants are concerned, the same will have to be placed before appropriate Benches of this Court for disposal in the light of this decision. V.P.R. Appeals dis missed.

The position of the Gajendragad estate which had been recognised by the British Government as a saranjam and which had been declared by the Bombay High Court in 1868 to be partible, was re examined in 1891 and Government passed a Resolution in 1891 that "the whole of the Gajendragad estate was a saranjam continuable as hereditary in the fullest sense of the word. It is continuable to all male legitimate descendants of the holder at the time of the British con quest." In 1932 by another Resolution Government formally resumed the grant and re granted it to the plaintiff who belonged to the first branch of the family of the original grantee with a direction that it should be entered in his sole name in the accounts of the Collector. The other two branches felt aggrieved and in 1936 Government passed anoth er Resolution which confirmed the Resolution of 1891 and modified the Resolution of 1932, by declaring that the portions of the 403 estate held by the branches shall be entered as de facto shares and that each share shall be continuable hereditarily as if it were a separate saranjam estate. The plaintiff instituted a suit impleading the representatives of the other two branches as defendants 1 and 2, and the Province of Bombay as the 3rd defendant, alleging that the Resolution of 1936 was ultra vires and praying (A) for a declaration (i) that the defendants 1 and 2 had no right to go behind the Resolution of 1932 under which the plaintiff was recog nised as the sole saranjamdar and that the assignments held by defendants were held by them as mere potgi holders, (ii) that the plaintiff had the sole right to all privileges appertaining to the post of saranjamdar, and (iii) that the Government had no right to change the Resolution of 1932, and (B) for restraining the defendants 1 and 2 from doing any acts in contravention of the aforesaid right of the plaintiff. Held, (i) that the suit was a suit "against the Crown" and also a suit "relating to lands held as saranjam" within the meaning of sec. 4 of the Bombay Revenue Jurisdiction Act, 1876, and the Civil Courts had no jurisdiction to entertain the suit; (ii) that the plaintiff could not be given even the reliefs claimed against defendants 1 and 2 alone, as the rights claimed against these defendants could not be di vorced from the claim against the Government and considered separately; (iii) in any event if the claim against the Government was to be ignored it can only be on the basis that its orders could not be challenged and if the orders stood, the plaintiff could not succeed because both sides held their respective properties on the basis of those orders. Basalingappagowda vs Secretary of State (28 Born. L.R. 651) and Basangauda vs Secretary of State (32 Bom. L.R. 1370) approved. Province of Bombay vs Hormusji Maneklal (74 I.A. 03) distinguished. Held also, that see. 4 of the said Act would apply even if the only relief claimed in the suit against the Govern ment was a declaration. Dattatreya Viswanath vs Secretary of State for India (I.L.R. disapproved. Daulatrao vs Government of Bombay approved.

Special Leave Petition (Civil) No. 13180 of 1985. From the Judgment and order dated 17.4.1985 of the Madhya Pradesh High Court in Misc. F.A. No. 252 of 1981. S.N. Kacker and R. Ramachandran for the Petitioner. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This is an application under Article 136 of the Constitution for leave to appeal to this Court from the judgment and order of the High Court of Madhya Pradesh dated 17th April, 1985. In order to appreciate the points involved, it is neces 106 sary to state that the petitioner entered into a contract dated 31st March, 1970 with respondent, State of Madhya Pradesh for the construction of Rip Rap on right bund of Masonary Dam of Tawa Project. The contract could not be completed within the stipulated time because of alleged gross delay on the part of the State, according to the petitioner, in allotment of work and discharge of its obligations under the contract. The petitioner incurred unforeseen expenditure, it is claimed, to the tune of Rs.5,29,812 and approached the Superintending Engineer for payment. Upon refusal of the Superintending Engineer to pay the claim and his refusal to refer the matter to arbitration, the petitioner moved the learned District Judge under section 20 of the (hereinafter called 'the Act ') for filing of the arbitration agreement and for reference of the disputes to the arbitration. On 24th April, 1976 the learned District Judge allowed the petitioner 's application and directed the respondent, State of Madhya Pradesh to file the agreement in Court and made a reference for specific question to the arbitration. The High Court on 22nd September, 1976 dismissed the State 's appeal against the order of the District Judge. Thereafter in March, 1977 Retired Engineer in Chief, P.W.D. Bhopal was appointed arbitrator. There was an award dated 29th October, 1978 on all the issues referred, partly allowing the petitioner 's claim. The award was filed in the Court of the District Judge and the respondent filed objections to the award under sections 30 and 33 of the Act and the petitioner filed replies. The District Judge made the award a rule of the Court. The respondent appealed to the High Court. The High Court remanded the matter to the District Judge for fresh decision. The District Judge accepted the objections and set aside the award. The High Court by the impugned judgment dismissed the appeal of the petitioner. It is from this judgment of the High Court that the petitioner seeks leave to appeal to this Court. As mentioned hereinbefore by the impugned judgment and order of the High Court the award has been set aside. The agreement contained an arbitration clause. The work, however, could not be completed within the stipulated time, the period of contract was extended. The contractor attributed delay on the part of the State Government whereas the State Government blamed the contractor. This was a disputed question. While the work was in progress, the contractor was required to meet extra expenditure on labour charges and materials due to revision in wage scales and escalation of prices. Alterations and substitutions of works also led to extra expenses. There were certain items for which rates were not provided but all the same work had to be done. The contractor therefore, advanced claims 107 for compensation. The Superintending Engineer dismissed the claims on the ground that the claims were barred under clause 3.3.15. He also held that some of the claims were not covered by the contract. The contractor sought to invoke the arbitration clause but the State sought to oppose on the ground that the dispute attracting the arbitration clause had not arisen. It was contended that the claim was barred by clause 3.3. 15 and it had not been made within the time. It was contended further that there was only one contract and there being no separate agreement for extension of period of the contract the rate as provided in the original contract alone was permissible. As there was no separate contract and no reference under clause 3.3.29 could be made for the enhanced period beyond the period of the contract. Relevant clauses of the contract were as follow: "3.3.15 Clause 15. Time limit for unforseen claims: Under no circumstances whatever shall the contractor be entitled to any compensation from Government on any account unless the contractor shall have submitted claim in writing. to the Engineer in Charge within one month of the cause of such claim occurring. 3.3.29 Clause 29. Decision of Superintending Engineer, to be final except where otherwise specified in the contract. The decision of the Superintending Engineer of the Circle for the time being shall be final, conclusive and binding on all parties to the contract upon all question relating to the meaning of the specification, design drawings and instructions hereinbefore mentioned and as to the quality of workmanship or material used on the work or as to any other question, claim, right matter or thing whatsoever, in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders, or those conditions or otherwise concerning the work of execution or failure to execute the same, whether arising during the progress of the work, or after the completion or abandonment thereof. Provided that if the contractor is dissatisfied with the final decision of the Superintending Engineer in respect of any matter, he may within 28 days after receiving notice of such decision give notice in writing to the Superintending 108 Engineer requiring that the matter may be referred to the arbitration and furnishing detailed particulars of the dispute or difference specifying clearly the point at issue. If the contractor fails to give such notice within the period of 28 days as stipulated above the decision of the Superintending Engineer already given shall be conclusive and binding on the contractor. In case an arbitration is to be held it shall be effected by an arbitrator to be appointed by the State Government whose decision shall be final, conclusive and binding. If the work under the contract has not been completed when a dispute is referred to arbitration work shall continue during arbitration proceedings if it is reasonably possible and no payment due to contractor should be with held on account of arbitration proceedings unless it is required by the arbitrator 3.3.32 Clause 32. Action where no specification: In case of any class of work for which there is no such specification as is mentioned in Rules, such work shall be carried out in accordance with the specification approved by Superintending Engineer/Chief Engineer, or application to works in the district and the event of there being no such specification, then in such case the work shall be carried out in all respect in accordance with the instructions and requirements of the Engineer in Charge. 3.3.33 Clause 33. Definition of work: The expression "works" or "work" where used in these conditions shall, unless there by something either in the subject or context repugnant to such construction be constructed and taken to mean the works by or by virtue of the contract contracted to be executed, whether temporary or permanent, and whether original, altered, substituted or additional. 3.3.34 Clause 34. Claim for quantities entered in the tender or estimate: 109 Quantities shown in the tender are approximate and no claim shall be entertained or work executed being either more or less than those entered in the tender estimate. " The learned single Judge as mentioned hereinbefore of the High Court after exhaustive discussion dismissed the appeal and upheld the order. Being aggrieved the petitioner went up in appeal before the Division Bench and the Division Bench on consideration of the matter dismissed the appeal. The Division Bench considered the following issues raised before the District Judge: 1. Whether the contractor had incurred extra costs towards wetting and washing of stones used in masonry of Group II Tawa Masonry Dam? 2. Was the petitioner entitled to payment of this extra costs of Rs. 1.20,355? 3. Whether the petitioner contractor had to incur extra cost of material and labour to the tune of Rs. 14,72,456 within the contract period for executing work assigned to it? 4. Whether the contractor had incurred extra cost of Rs.8,84,336 for the work beyond the contract period due to unforeseen circumstances? 5. Whether the petitioner 's claim on both the counts was in whole or in part of it was barred by time in terms of clause 3.3. 15? 6. Whether the contract was rendered ineffective in terms of section 56 of the Contract Act due to unexpected change in the market rate of material and labour charges? 7. Was the claim not entertainable in accordance with the terms ' of the contract under clause 3.3.32, 3.3.33 and 3.3.34 during the extended period of contract? 8. Was the work delayed because of the presence of shale zone in the foundation which factor was not made known to the contract? 9. Whether the contractor was entitled to extra costs of damages 110 for the delay caused on account of shale zone? The Division Bench came to the findings as follows: 1. The contractor did incur expenditure on wetting and washing of stones in Masonry Group II, Tawa Masonry Dam but this was according to agreement. The petitioner is not entitled to the payment of the extra costs of Rs.1,20,355. 3. The petitioner/contractor did incur an extra cost of Rs.14,72,456 within the contract period for executing the assigned work. The petitioner/contractor did incur an extra cost of Rs.6,81,796 for the work done beyond the contract period due to unforseen circumstances. The petitioner is entitled to the claim to the extent of Rs.2,65,000 against Issue No. 3 and Rs.6,81,796 against Issue No. 4 above and the same is not barred by time in terms of clause 3.3.15. The contract was not rendered ineffective in terms of section 56 of the Contract Act due to abnormal rise in the market rates of materials and labour. 7. The claim under reference cannot be ruled out merely be cause of the provisions of clause 3.3.32, 3.3.33 and 3.3.34. Yes, the work was delaved due to the presence of shale zone in the foundations, a factor which was unforeseen and was not made known to the contractor. The contractor is entitled to claim extra cost due to the delay caused on account of the shale zone in foundations. The Division Bench felt that the four factual issues decided by the District Judge were more or less by the agreement and therefore, the Division Bench did not deal with these. So far as three legal issues which were referred to him, namely, whether the claim was barred under clause 3.3. 15, the contract was rendered ineffective in terms of 111 section 56 of the Contract Act due to abnormal rise in the market rate of material and labour and the claim not entertainable under clause 3.3.32, 3.3.33 and 3.3.34. The High Court considered whether the appellant was entitled to extra cost towards rise in prices of materials and labour within and beyond the contract period. The Division Bench noted that the learned District Judge held that since three legal issues were specifically referred to the arbitrator and therefore his decision had become final and binding on the parties and cannot be re agitated before the Court. Regarding the remaining issues, the State had taken objection while opposing the application under section 20 that the appellant was not entitled to extra cost for material and labour in terms of the contract but the Court directed that this matter had to be agitated before the arbitrator and the application under section 20 could not be dismissed on the ground that the claim would not ultimately succeed. The District Judge found and in our opinion rightly that the question regarding extra cost was a general question and not a specific legal question and the decision of the arbitrator was not final one. The arbitrator misconducted himself in allowing the claim without deciding the objection of the State. In view of the specific clauses, the appellant was not legally entitled to claim for extra cost. The decision of this Court in Seth Thawardas vs Union of India, [1955] 2 SCR 18 is of no avail on this point. If no specific question of law is referred, the decision of the arbitrator on that question is not final however much it may be within his jurisdiction and indeed essential for him to decide the question incidentally. The arbitrator is not a conciliator and cannot ignore the law or misapply it in order to do what he thinks is just and reasonable. The arbitrator is a tribunal selected by the parties to decide their disputes according to law and so is bound to follow and apply the law, and if he does not he can be set right by the Court provided his error appears on the face of the award. In this case, the contractor having contracted, he cannot go back to the agreement simply because he does not suit him to abide by it. The decision of this Court in M/s. Alopi Parshad vs Union of India, ; may be examined. There it was observed that a contract is not frustrated merely because the circumstances in which the contract was made, altered. The Contract Act does not enable a party to a contract to ignore the express covenants thereof, and to claim payment of consideration for performance of the contract at rates different from the stipulated rates, on some vague plea of equity. The parties to an executory contract are often faced, in the course of carrying it out, with a turn of event which they did not at all anticipate, a wholly abnormal rise or fall in prices, a sudden depreciation of currency, an unexpected obstacle to execution, or the like. There is no general 112 liberty reserved to the courts to absolve a party from liability to perform his part of the contract merely because on account of an uncontemplated turn of events, the performance of the contract may become onerous. It was argued on behalf of the appellant that since specific issues 13 were framed and referred by the District Judge to the arbitrator, the same had been answered by a non speaking award, there is no mistake of law apparent on the face of record and the District Judge erred in setting aside the award by looking into the terms of the contract which it was submitted, neither formed part of the award nor appended to it. We are unable to agree. This being a general question, in our opinion, the District Judge rightly examined the question and found that the appellant was not entitled to claim for extra cost in view of the terms of the contract and the arbitrator misdirected himself by not considering this objection of the State before giving the award. In Kapoor Nilokheri Co operative Dairy Farm Society Ltd. vs Union of India, , it was held that where an arbitrator is called upon to decide the effect of the agreement, he has really to decide a question of law, i.e. Of interpreting the agreement, and hence, his decision is not open to challenge. This was also a decision against a reasoned award but since the reference was to a specific question of law, the decision of the arbitrator, it was held, was not open to challenge. The limits of the jurisdiction of the Court to challenge the award are well settled. While considering objection under section 30 of the Act, the Court does not act as an appellate court, it can only interfere with the award if the arbitrator misconducts himself or the proceedings or if the award has been made after the issue of an order by the Court superseding the arbitration or if the arbitration proceedings have become invalid under section 35(c) of the Act or the award has been improperly procured or is otherwise invalid. The Judicial Committee in Champsey Bhara & Co. vs Jivraj Balloo Spinning & Weaving Co. Ltd., A.I.R. 1923 P.C. 66 has laid down the extent of the jurisdiction of the Court to set aside an award on the ground of an error in making the award. It has been reiterated that the award of the arbitrator may be set aside on the ground of an error on the face thereof only when in the award or in any document incorporated with it as for instance, a note appended by the arbitrator, stating the reason for his decision, there is found some legal proposition which is the basis of the award and which is erroneous. See also in this connection Re. King & Duveen, and Government of Kelantan vs Duff Development Co. Ltd., , if how 113 ever, a specific question is submitted to the arbitrator and he answers it, the fact that the answer involves an erroneous decision in point of law, does not make the award bad on its face so as to permit of it being set aside. See also the observations of this Court in Bungo Steel Furniture vs Union of India; , It is well settled that the contract remained part of the award. The Judicial Committee in Saleh Mohd. vs Nathoo Mal, 54 I.A. 427 considered an award in which the arbitrator recited a contract made between the parties and the dispute arising under it. It was contended that the contract was incorporated in the award by its reference and so the award disclosed an error of law in construing the terms of the contract. But that contention was negatived. It was held that the reference to the contract in the award was to earmark the disputes between the parties and was not incorporated into the award. In Abosalom Ltd. vs Creat Western, , it was held that if an award referred to the terms of a clause in the contract, the clause though not set out in full must be taken to be incorporated in it. This Court has reiterated in Allen Berry & Co. vs Union of India, 119711 3 SCR 282 that mere reference to the contract in the award is not to be held as incorporating it. In the aforesaid light, we are of the opinion, the High Court was right that the District Judge was entitled to examine the contract in order to find out the legality of the claim of the appellant regarding extra cost towards rise in prices of material and labour. As was pointed out by the learned District Judge clauses 2.16 and 2.4 stipulated that the contractor had to complete the work inspite of rise in prices of materials and also rise in labour charges at the rates stipulated in the contract. There was a clear finding of the arbitrator that the contract was not rendered ineffective in terms of section 56 of the Act due to abnormal rise in prices of material and labour. This being so and the contractor having completed the work, it was not open to him to claim extra cost towards rise in prices of material and labour. The arbitrator misconducted himself in not deciding this specific objection raised by the State regarding the legality of extra claim of the appellant. In that view of the matter, the award, in our opinion, was properly set aside by the learned District Judge and the High Court was right in not interfering with it. The question about specific reference on a question of law was examined by this Court recently in the case of Tarapore and Comapny vs Cochin Shipyard Ltd., Cochin and another; , There it was observed that if the agreed fact situation, on the basis of 114 which agreement was entered into, ceases to exist, the agreement to that extent would become otiose. If rate initially quoted by the contractor became irrelevant due to subsequent price escalation, it was held in that case that contractor 's claim for compensation for the . excess expenditure incurred due to the price rise could not be turned down on ground of absence of price escalation clause in that regard in the contract. Agreement as a whole has to be read. Reliance was placed very heavily on this decision on behalf of the appellant before us. It has to be borne in mind that in the instant case there are specific clauses referred to hereinbefore which barred consideration of extra claims in the event of price escalation. That was not so in Tarapore and Company 's case. That made all the difference. The basis of bargain between the parties in both these two cases were entirely different. In the aforesaid view of the matter we are of the opinion that the High Court was right in the view it took and there is no ground to interfere. The petition for special leave fails and is accordingly dismissed. S.L. Petition dismissed.

% The State of Bihar had a Directorate of Indigenous Systems of Medicines which was a part of its Health Department and one Dr. Nagesh Dwivedi was its Director. On 6.5.1978 the State Government created a separate Directorate of Indigenous Medicines, the Director being from one of the systems of medicines consisting of Ayurvedic, Unani and Homeopathic. At the time of creation of the separate Directorate, the Government sanctioned the posts of two Deputy Directors for each of the two remaining systems. The State Government had in the meanwhile prescribed a 50 point roster to implement the policy of reservation to posts and appointments for members of the backward classes under article 16(4). It was laid down that 'if in any grade, there is only one vacancy for the first time, then it will be deemed to be unreserved and for the second time also, if there be only one vacancy, then it will be deemed to be reserved '. Acting upon this roster the Government reserved the post of Deputy Director (Homeopathic) for a scheduled caste candidate. The Public Service Commission on being moved by the Government, issued an advertisement inviting applications from members of the scheduled caste and the appellant was selected for appointment to the post. Respondent No. 4 challenged the selection of the appellant in the High Court by filing a petition under Article 226 of the Constitution. In October, 1982 an additional post of Deputy Director (Ayurvedic) was created and filled. The High Court allowed the writ petition and quashed the said advertisement and the consequent order of appointment of the appel 131 lant. The High Court was of the view that the post of Director and three Deputy Directors could not be clubbed together for reservation of posts and appointments. Nor could the posts of Deputy Directors Homeopathic, Ayurvedic and Unani which form distinct and separate systems of medicines be grouped for purposes of reservation. The appellant contended that there were four posts in the Directorate of Indigenous Medicines and all the posts were Class I posts and therefore according to the 50 point roster the post of Director having been treated as unreserved by the Rotational system, the post of Deputy Director (Homeopathic) was rightly reserved for a scheduled caste candidate. Dismissing the appeal, this Court, ^ HELD: The posts of the Director and those of the Deputy Directors constitute different cadres of the service. It is manifest that the post of the Director of Indigenous Medicines, which is the highest post in the Directorate carried on a higher grade or scale, could not possibly be equated with those of the Deputy Directors on a lower grade or scale. In view of this, according to the 50 point roster, if in a particular cadre a single post falls vacant, it should, in the case of first vacancy, be considered as general. That being so, the State Government could not have directed reservation of the post of Deputy Director (Homeopathic) which was the first vacancy in a particular cadre i.e. that of the Deputy Directors, for candidates belonging to the schedule castes. Such reservation was not in conformity with the principles laid down in the 50 point roster and was impermissible under article 16(4) of the Constitution and clearly violative of the guarantee enshrined in article 16(1) of equal opportunity to all citizens relating to public employment. Clause (4) of article 16 is by way of an exception of the proviso to article 16 (i). The High Court rightly held that the reservation of the post of Deputy Director (Homeopathic) amounted to 100% reservation which was impermissible under article 16(4) as otherwise it would render the guarantee of equal opportunity in the matter of public employment under article 16(1) wholly elusive and meaningless. [137F H; 138A C] If there is only one post in the cadre, there can be no reservation under article 16(4) of the Constitution. The whole concept of reservation for application of the 50 point roster is that there are more than one posts, and the reservation as laid down by this Court in M.R. Balaji 's case can be upto 50%. The Government cannot, for instance, declare that the post of the Director of Indigenous Medicines shall be reserved 132 for candidates belonging to scheduled castes. The Directorate is a paramedical service with Director as its head and the three Deputy Directors belonging to three distinct and separate disciplines viz. Homeopathic, Unani and Ayurvedic under him. In the para medical system the three posts of Deputy Directors pertain to three distinct systems and therefore each of them is an isolated post by itself. The same principles should, we think, as in the case of Director, apply. We refrain from expressing any opinion on the aspect whether the isolated posts like those of the Deputy Directors can be subjected to the 50 point roster by the rotational system as it does not arise in the present case. Assuming that the 50 point roster applied, admittedly, the first vacancy in the cadre of Deputy Directors was that of the Deputy Director (Homeopathic) and it had to be treated as unreserved, the second reserved and the third unreserved. The first vacancy of the Deputy Director (Homeopathic) in the cadre being treated as unreserved according to the roster, had to be thrown open to all. A candidate belonging to the Scheduled caste had therefore to compete with others. [138C G] The three posts of Deputy Directors of Homeopathic Unani and Ayurvedic are distinct and separate as they pertain to different disciplines and each one is isolated post by itself carried in the same cadre. There can be no grouping of isolated posts even if they are carried on the same scale. The Government of India instructions relating to reservations of posts and appointments for the scheduled castes and scheduled tribes contained in the Brochure on Reservation for Scheduled Castes and Scheduled Tribes in Services and which have been issued to carry out the mandate of article 16(4) consistent with the equality clause under article 16(1) and 16(2) and the requirements of article 335, namely, the maintenance of efficiency of administration clearly show that there can be no grouping of one or more isolated posts for purposes of reservation. To illustrate, Professors in medical colleges are carried on the same grade and scale of pay but the posts of Professor of Cardiology, Professor of Surgery, Professor of Gynecology pertain to particular disciplines and therefore each is an isolated post. [138H; 139A F] Article 16(4) is an exception to article 16(1) and article 16(2) and therefore the power to make a special provision for reservation of posts and appointments in favour of the backward classes must not be so excessive which would in effect efface the guarantee of equal opportunity in the matter of public employment or at best make it illusory. We are not aware of any decision of this Court where excessive reservation of appointments or posts in favour of any backward class of citizens to the extent of 100% has been upheld, except in the application of the carry forward rule. [139G H] 133 M.R. Balaji & Ors. vs State of Mysore, [1963] Suppl. 1 S.C.R. 439; T. Devadasan vs Union of India & Anr., ; ; State of Kerala & Anr. vs N.M. Thomas & Ors., ; ; Akhil Bharatiya Soshit Karamchari Sangh (Railway) vs Union of India & Ors., ; ; State of Karnataka vs Shivaji Y. Garge (C.A. No. 4117 of 1984 decided on 19th October, 1984; K.C. Vasanth Kumar & Anr. vs State of Karnataka, [1985] Suppl. S.C.C. 714 and Arati Ray Choudhury vs Union of India & Ors., ; , referred to.

LATE JURISDICTION: Civil Appeal No. 1479 of 1971. From the Judgment and Order dated 25 4 1969 of the Gujarat High Court in SCA No. 271/65. G.A. Shah, N.S. Pande and M.N. Shroff for the Appellant. P.R. Mridul, Vimal Dave and Miss Kailash Mehta for Respondent No. 1. I. N. Shroff and H. section Parihar for Respondent No. 2. The Judgment of the Court was delivered by SEN, J. This appeal on certificate from a judgment of the Gujarat High Court raises a question as to the validity or otherwise or a fresh notification issued by the Government of Gujarat under section 6 of the d Acquisition Act, 1894, consequent upon an earlier notification under section 6 of the Act being discovered to be invalid. The first respondent in this case owned certain land bearing Final Plot No. 38 forming part of Town Planning Scheme No. III (Ellis bridge) situate within the city of Ahmedabad. At the request of the second respondent Sri Ayodhya Nagar Co operative Housing Society Ltd., registered under the Bombay Co operative Societies Act, 1925, now deemed to be registered under the Gujarat Co operative Societies Act, 1961, formed with the object of enabling its members to construct houses, the State Government on August 3, 1960 issued a notification 286 under section 4 stating that the land was likely to be needed for a public purpose. This was followed by a notification of the State Government dated August 21, 1961 under section 6 of the Act stating that the land was to be acquired at the expense of Sri Ayodhya Nagar Cooperative Housing Society Ltd. for the public purpose specified in column 4 of the schedule annexed thereto. The public purpose specified in column 4 of the schedule was 'For construction of houses for Sri Ayodhya Nagar Co operative Housing Society Ltd., Ahmedabad. The entire expense of the acquisition was to be borne by the second respondent, i.e., the Co operative Housing Society. The first respondent moved the High Court under article 226 of the Constitution challenging the validity of the notification under section 6 on the ground that the acquisition of the land for a public purpose at the expense of the second respondent was legally invalid. On December 4, 1961 the High Court issued an ad interim injunction restraining the appellant from proceeding with the acquisition proceedings. While this writ petition was pending, the State Government by its notification dated May 27, 1963 cancelled the notification under section 6. on September 10, 1964 the State Government issued a fresh notification under section 6 stating that the land was to be acquired at the public expense, for the public purpose specified in column 4 of the schedule. The public purpose specified in column 4 in the schedule was 'For housing scheme undertaken by Sri Ayodhya Nagar Co operative Housing Society Ltd. The High Court following its earlier decision in Dosabhai Ratansha Keravala vs State of Gujarat & Ors. struck down the second notification under section 6 dated September 10, 1964. It held inter. alia that the first notification under section 6 issued on August 21, 1961 being an acquisition for a society at its cost, was valid and the Government could have proceeded to complete the acquisition under it but, under a false sense of apprehension as to its validity, the Government cancelled it on May 27, 1963. There was no justification for cancelling the first notification under section 6 and even if the Government wanted to cancel it out of a feeling of apprehension as to its validity, the Government need not have taken one year and ten months to do so. (2) After the issue of the first notification under section 6 on August 21, 1961, the notification dated August 3, 1960 under section 4 was exhausted and, therefore, could not be used to support the second notification issued under section 6 on September 11, 1964. (3) The cancellation of the first notification under section 6 by the notification dated May 27, 1963 did not have the effect of reviving the notification under section 4 so as to make it available for supporting the second notification under section 6. The second notifi 287 cation under section 6 not being supported by any notification under section 4 Was consequently invalid. (4) A notification under section 6 in order to be valid must follow within a reasonable time after the issue of a notification under section 4. The notification under section 4 was issued on August 3, 1960 and the second notification under s 6 on September 10, 1964 and there was thus an interval of about four years and one month between the two notifications. This interval of time, could not be regarded as reasonable. Even tested by the yardstick of reasonable time provided by the legislature in the second proviso introduced in section 6 by the Land Acquisition (Amendment and Validation) Act. 1967, namely three years, the period of about four years and one month between the two notifications under section 4 and section 6 would be clearly unreasonable. The second notification must, therefore, be held to be invalid on this ground also. We are clearly of the opinion that the High Court was in error m striking down the second notification under section 6 issued on September 10, 1964. In Valjibhai. Muljibhai Soneji. vs State of Bombay the Court held that the Government has no power to issue a notification for acquisition of land for a public purpose, where the compensation is to be entirely paid by a company. The first notification issued by the Government under section 6 for acquisition of the land for a public purpose, at the expense of the second respondent, the Co operative Society, was, therefore, invalid. The State Government was, there fore, justified in issuing the second notification under section 6 after removing the lacuna i.e., by providing for acquisition of the land for the said public purpose, at public expense. In an endeavour to support the judgment, counsel for the first respondent advanced a three fold contention. It was urged, firstly, that successive notifications cannot be issued under section 6 placing reliance on State of Madhya Pradesh & Ors. vs Vishnu Prasad Sharma & Ors. It was pointed out that the Land Acquisition (Amendment and Validation) Act, 1967 had a limited scope and it validated only successive notifications issued under section 6 in respect of different parcels of land but did not validate successive notifications in respect of the same land. Further, it was urged that the Act was not retrospective in operation and, therefore, the validity of the second notification dated September 10, 1964 had to be Adjudged with reference to the pre amendment law, i.e., according to the law as declared by this Court in Vishnu Prasad Sharma 's case. Secondly, it was urged, on the strength of the deci 288 sion in Dosabhai Ratansha Karevala 's case (supra) that a notification under section 4 is exhausted when it is followed by declaration under section 6 It was urged that the first notification under section 6 dated August 21, 1961 was valid and the High Court was, therefore, justified in holding that with its cancellation, the notification under section 4 lapsed. Thirdly, it was urged that there was unreasonable delay in issuing the second notification under section 6 and, this, by itself, was sufficient to invalidate it. In Vishnu Prasad Sharma 's case the Court held that sections 4, S A and 6 are integrally connected and present a complete scheme for acquisition and, therefore, it was not open to the Government to make successive declarations under section 6. Wanchoo J. (as he then was), speaking for himself and Mudholkar J., observed: "It seems to us clear that once a declaration under section 6 is made, the notification under section 4(1) must be exhausted, for it has served its purpose. There is nothing in sections 4, 5 A and 6 to suggest that section 4(1) is a kind of reservoir from which the government may from time to time draw out land . and make declarations with respect to, it successively. If that was the intention behind sections 4, S A and 6 we would have found some indication of it in the language used there in But as we read these three sections together we can only find that the scheme is that section 4 specifies the locality, then there may be survey and drawing of maps of the land and the consideration whether the land is adapted for the purpose for which it has to be acquired, followed by objections and making up of its mind by the government what particular land out of that locality it needs. This is followed by a declaration under section 6 specifying the particular land needed and that in our opinion completes the process and the notification under section 4(1) cannot be further used there after. At the stage of section 4 the land is not particularised but only the locality is mentioned; at the stage of section 6 the land in the locality is particularized and thereafter it seems to us that the notification under section 4(1) having served its purpose exhausts itself. " Sarkar J., in a separate but concurring judgment, observed: "My learned brother has said that sections 4, 5A and 6 of the Act have to be read together and. so read, the conclusion is clear that the Act contemplates only a single declaration under section 6 in respect of a notification under section 4. " 289 After rejecting the contention that the Government may have difficulty A in making the plan of its projects complete at a time, particularly where the project is large, and therefore, it is necessary that it should have power to make successive declarations under section 6, he observed: "I cannot imagine a Government, which has vast resources, not being able to make a complete plan of its project at a time. Indeed, I think when a plan is made, it is a complete plan. I should suppose that before the Government starts acquisition proceedings by the issue of a notification under section 4, it has made its plan for otherwise it cannot state in the notification, as it has to do, that the land is likely to be needed. Even if it had not then completed its plan, it would have enough time before the making of a declaration under section 6 to do so. I think, therefore, that the difficulty Of the Government, even if there is one, does not lead to the conclusion that the Act contemplates the making of a number of declarations under section 6. " In the present case, the question, however, does not arise as the first notification under section 6 dated August 21, 1961 being invalid, the Government was not precluded from making a second notification. Due to the invalidity of the notification under section 6, the notification under section 4 still held the field and on its strength another notification under section 6 could be issued. It is, therefore, not necessary to deal with the effect of the validating Act. The matter is squarely covered by the decision of the Court in Girdharilal Amratlal Shodan & Ors. vs State of Gujarat & Ors. The Court rejected the contention that by cancelling the first notification under section 6, as here, the Government must be taken to have withdrawn from the acquisition and consequently could not issue a second notification under section 6. there also the first notification under section 6 was invalid and of no effect, as the Government had no power to issue a notification for acquisition for a public purpose where the compensation was to be paid entirely by a company? as held by this Court in Sham Behari & Ors. vs State of Madhya Pradesh & Ors. It will be noticed that in Girdharilal Amratlal Shodan 's case the facts were identical. On August 3, 1960 the Government of Gujarat issued a notification under section 4 in respect of certain land falling in Final Plot No. 460 of the Town Planning Scheme No. III of Elisbridge in the city of Ahmedabad, stating that the land was likely to be needed for a public purpose, viz., for construction of houses for Sri Krishna 290 kunja Government Servants ' Co operative Housing Society Ltd. On July 18, 1961 the State Government issued a notification under section 6 stating that the land was to be acquired for the aforesaid public purpose at the expense of Sri Krishnakunj Government Servants ' Co operative Housing Society Ltd. On September 22, 1961, the landholder filed a writ petition in the High Court for an order quashing the notification under section 6. During the pendency of the proceedings, the Government issued a notification dated April 28, 1964 cancelling the aforesaid notification dated July 18, 1961. On August 14, 1964 the Government issued a fresh notification under section 6 stating that the land notification under section 6 staling that the land was needed to be acquired at the public expense for a public purpose viz, for the housing scheme undertaken by Sri Krishnakunj Government Servants ' Co operative Housing Society Ltd. The contention was that by cancelling the first notification under section 6, the Government must be deemed to have withdrawn from the acquisition and cancelled the notification under section 4, and therefore, could not issue the second notification under section 6, without issuing a fresh notification under section 4. It was also urged that the power of the State Government to issue a notification under section 6 was exhausted, and the Government could not issue a fresh notification under section 6. The Court rejected both the contentions observing: "Having regard to the proviso to ' section 6, of the Act, a declaration for acquisition of the land for a public purpose could only be made if the compensation to be awarded for it was to be paid wholly or partly out of public revenues or some fund controlled or managed by a local authority. The Government had no power to issue a notification for acquisition for a public purpose where the compensation was to be paid . entirely by a company. The notification dated JULY 18, 1961 was, therefore, invalid and of no effect, see Shyam Behari vs State of Madhya Pradesh. The appellants filed the writ petition challenging the aforesaid notification on this ground. The challenge was justified and the notification was liable to be quashed by the Court. " "The State Government realised that the notification was invalid, and without waiting for an order of Court. cancelled the notification on April 28, 1964. The cancellation was in recognition of the invalidity of the notification. The Government had no intention of withdrawing from the acquisition. Soon after the cancellation, the Government issued a fresh notification under section 6 whereas in this case the notifi 291 cation under section 6 is incompetent and invalid, the Government may treat it as ineffective and issue a fresh notification under section 6. This is what, in substance, the Government did in this case. The cancellation on April 28, 1964 was no more than a recognition of the invalidity of the earlier notification. " The first notification issued under section 6 on August 21, 1961 was obviously invalid and of no effect. By the issue of this notification, the Government had not effectively exercised its powers under section 6. In the circumstances, the Government could well issue a fresh notification under section 6 dated September 10, 1964. In State of Gujarat vs Musamiyan Imam Haider Bux Razvi & Anr. etc. this Court while reversing the decision of the Gujarat High Court in Dosabhai Ratansha Kerravala (supra) on which the High Court based its decision, has laid down two important principles: (1) In view of the decisions of this Court in Pandit Jhandu Lal & Ors. vs The State of Punjab & Ors., Ratilal Shankarbhai & Ors. vs State of Gujarat & Ors. and Ram Swarup vs The District Land Acquisition Officer, Aligarh & Ors. the acquisition of land for a co operative housing society is a public purpose. The Government is the best Judge to determine whether the purpose in question is a public purpose or not; and, it cannot be said that a housing scheme for a limited number of persons cannot be construed to be a public purpose inasmuch as the need of a section of the public may be a public purpose. (2) When a notification under section 6 is invalid, the government may treat it as ineffective and issue a fresh notification under section 6, and nothing in section 48 of the Act precludes the government from doing so, as held by this Court in Girdharilal Amratlal Shodan. The High Court had not the benefit of these decisions when it held that acquisition of land for a co operative housing society was not a public purpose and, therefore, the first notification dated August 21, 1961 issued under section 6 of the Act was valid. The substratum on which the decision of the High Court rests has, therefore, disappeared. This Court in Musamiyan 's case distinguished the decision in State of Madhya Pradesh & Ors. vs Vishnu Prasad Sharma & Ors. (supra) by quoting the passage referred to above. The decision in Vishnu Prasad Sharma 's case is not an authority for the proposition that where a notification under section 6 is found to be invalid it cannot be followed by a fresh notification under section 6. In fact, the decision of the High Court 292 runs counter to what it had observed in Dosabhai Ratansha Keravala 's case, after referring to the decisions of this Court in Vishnu Prasad Sharma 's case and Girdharilal Amratlal Shodan 's case: "If the first section 6 notification is invalid, that is, non est, section 4 notification cannot be regarded as exhausted, for its purpose is yet unfulfilled; its purpose could be fulfilled only by issue of a valid notification under section 6. " There remains the question whether the High Court was right in quashing the second notification under section 6 on the ground of unreasonable delay in its issuance. The respondent had not taken any such ground in the writ petition filed by him. The High Court was, therefore, not justified in observing that 'the appellant had not explained the delay by filing any affidavit '. We fail to appreciate that if there was no ground taken, there could be no occasion for filing of any such affidavit. Further, the delay, if any, was of the respondent 's own making. He had challenged the first notification under section 6, presumably on the ground that the acquisition being for a public purpose, could not be made at the expense of the second respondent. The challenge was justified and the State Government, therefore, withdrew the first notification under section 6 without waiting for an order of the High Court. The cancellation was in recognition of the invalidity of the notification. The Government had no intention of withdrawing from the acquisition. Thereafter, the Government issued a fresh notification under section 6 making a declaration for acquisition of the land for a public purpose at public expense. There is nothing in the Act which precludes the Government from issuing a fresh notification under section 6, if the earlier notification is found to be ineffective. The delay of one year and four months between the date of cancellation and the issue of the second notification cannot be regarded to be unreasonable, in the facts and circumstances of the case. In somewhat similar circumstances, this Court recently in Gujarat State Transport Corpn. vs Valji Mulji Soneji held the delay of about fifteen years in making the second notification under section 6 not to be unreasonable. We cannot, therefore, uphold the High Court 's decision that the second notification must be struck down on the ground of delay. In the result, the appeal succeeds and is allowed with costs, the judgment of the High Court is set aside, and the writ petition filed by the first respondent is dismissed. Respondent No. 1 shall bear the costs. N.K.A. Appeal allowed.

In respect of arrears of rent the respondent landlord and the appellant who was his tenant entered into an agreement on June 13, 1960 that the tenant would pay every month Rs. 50/ representing Rs. 25/ as arrears of rent and Rs. 25/ towards the current rent. For sometime the appellant made the payments in accordance with the agreement but thereafter fell in arrears. The respondent served a notice of demand upon the appellant on August 21, 1961. Eventually the respondent instituted a suit for damages and eviction of the appellant from the premises. The appellant pleaded that the arrears of rent due at the date of notice were Rs. 75/ only which did not exceed three months rent and that the balance of the amount demanded represented only past arrears covered by the agreement in respect of which the landlord had waived his right of ejectment. Dismissing the suit the trial court held that only three months rent was in arrears and no ground for eviction had been made out under section 3(1)(a) of the U.P. (Temporary) Control of Rent and Eviction Act, 1947. On appeal the Civil Judge was of the view that the rent in arrears on the date of agreement did not lose its character as "arrears of rent" merely because there was an agreement to pay it in instalments. The High Court affirmed the finding of the Civil Judge. In appeal to this Court it was contended on behalf of the appellant that out of Rs. 150/ due to the respondent on the date of his notice only Rs. 75/ was due towards the arrears of rent for three months preceding the notice while the balance of Rs 75/ was a distinct liability under the agreement and therefore, could not be treated and tacked on as arrears of rent to the rent due for the three months preceding the date of notice, for the purpose of section 3(1) (a) of the Act. Allowing the appeal and accepting the appellant 's contention, ^ HELD: 1. The appellant was not in "arrears of rent for more than three months" within the meaning of section 3(1)(a) of the Act and therefore was not liable to be evicted under the clause. [71 F] 2. As a result of the agreement dated June 13, 1960 the pre agreement arrears lost their original character of "arrears of rent" and assumed the character of a consolidated debt, which under the terms of the agreement, was payable by the debtor (appellant) in monthly instalments. The agreement 68 brought into being a new cause of action and created a liability against the tenant, independent and distinct from that founded on the rent note or the lease of the premises. The arrears of three instalments due under the agreement had ceased to be "arrears of rent" and could not be tacked on to the rent due for three months preceding the date of notice, for the purpose of the section.[71 A B]

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

In April, 1986, the Selection Committee constituted by the Chief Justice of Allahabad High Court recommended the grant of super time scale to the appellant, a member of the U.P. Higher Judicial Services, under Rule 27A of the U.P. Higher Judicial Services Rules, 1975. The Full Court of the High Court considered the recommendation on two occasions, but no decision could be taken as each time the Administrative Judge made certain new allegations against the appellant. Finally, on January 17, 1987, the Full Court found the appellant unfit for a post in the super time scale. On the eve of the Full Court Meeting the Administrative Judge was stated to have written a secret letter to the Chief Justice. Aggrieved, the appellant filed a writ petition before the Division Bench. Meanwhile, the appellant made a representation to the High Court on its Administrative side for reconsideration of the resolution of the Full Court. While no decision was taken by the Full Court at its meeting held on May 16, 1987, an adverse entry for the year 1986 87 was recorded by the Administrative Judge. The Chief Justice enquired into the allegations contained in the adverse entry and found that the allegations had no foundation whatsoever. He recorded in his minutes that he regarded the appellant as a very good, able and competent administrator with an unblemished integrity. 318 The Division Bench, after noticing the remarks of the Chief Justice, quashed the resolution of the Full Court, and referred back the matter to the Full Court for reconsideration. It also directed that the appellant be given an opportunity of explaining the imputations made against him in the letter written by the Administrative Judge on the eve of the Full Court meeting! of January 17, 1988. Dissatisfied with the above decision, the appellant filed an appeal by special leave in this Court. Meanwhile, the Full Court at its meeting held on February 20, 1988, again rejected the recommendation of the Selection Committee for the grant of super time scale to the appellant. Allowing the appeal by special leave, ^ HELD: 1.1 Whether a member of the Higher Judicial Service should be granted the selection grade or the super time scale is a matter exclusively within the administrative jurisdiction of the High Court. This Court will not ordinarily interfere with any decision of the High Court in such a matter. However, if the High Court acts in violation of any rule framed by it or of the principles of natural justice or comes to any finding not supported by any reliable material, this Court has to examine the matter for ends of justice. But, interference does not mean granting of relief which the High Court is entrusted to grant in its administrative jurisdiction. The Court will ordinarily refer back the matter for reconsideration of the High Court. [322F H] However, in the instant case ends of justice would require interference by disposing of the matter finally, without referring it again to the High Court. [323A] 1.2 Proviso to Rule 4(B) of the U.P. Higher Judicial Service Rules requires that before an adverse remark is communicated to the concerned judicial officer; it must be placed before the Chief Justice. By necessary implication, therefore, the rule requires concurrence of the Chief Justice for taking necessary action on the adverse remark by communicating to the judicial officer concerned. [324A B] In the instant case, although the Chief Justice did not agree with the adverse remarks, action was taken by communicating them to the appellant in utter violation of the proviso to Rule 4B and also in disregard of the minutes of enquiry of the Chief Justice. [324B C] 319 The appellant had denied the allegations contained in the letter of the Administrative Judge but no attempt was made by the Full Court to have the comments of the retired Judge who orally made the allegations. Further, the allegations which were made from time to time against the appellant resulting in the postponement of consideration by the Full Court were all found to be untrue. [324C D] An enquiry was made by the Chief Justice and the allegations contained in the adverse entry for 1986 87 have been found to be without foundation. Indeed, the Chief Justice recorded that he regarded the appellant as a very good, able and competent administrator with an unblemished integrity. [323E F] Therefore, in the absence of any material on record to form the foundation in support of the allegations and in view of the minutes of the Chief Justice, the Full Court was not at all justified in acting on the allegations contained in the letter of the Administrative Judge and depriving the appellant of the grant of super time scale. [323F] The appellant was, therefore, entitled to a posting in the supertime scale. Since the appellant has already retired he shall be paid the monetary benefit with effect from January 1, 1987 and his pension suitably altered. [324F G]

il Appeals Nos. 245 and 202 of 1953. Appeal under Article 132(1) of the Constitution of India from the judgment and order dated the 27th January 1953 of the Calcutta High Court in Matter No. 139 of 1952. Ranadeb Chaudhry, Anil Kumar Das Gupta and Sukumar Ghose, for the appellant. S.M. Bose, Advocate General, ' for West Bengal (B. Sen and P. K. Bose, with him) for the respondent. December 23. The Judgment of the Court was delivered by JAGANNADHADAS J. This is an appeal by leave of the High Court of Calcutta under article 132(1) of the Constitution. The appellant before us was the 1333 Registrar and Accountant General of the High Court at Calcutta on its Original Side. He was appointed to the post by the Chief Justice of the High Court on the 4th March, 1948 and confirmed therein on the 15th of November, 1948. He was dismissed therefrom with effect from the 1st September, 1951, by an order of the Chief Justice dated the 3rd September, 1951. There were various charges against him and Mr. Justice Das Gupta was deputed by order of the Chief Justice dated the 28th May, 1651, to make an ' enquiry and submit a report. Mr. Justice Das Gupta made a full enquiry and submitted his report on the 11th August, 1951, in which he exonerated the appellant in respect of some of the charges but found him guilty in respect of the other charges. The learned Judge expressed his conclusion as follows: "Mr. Bose (the appellant) must be held to be guilty of misconduct and dishonest conduct and (that) he is unfit to hold the office of Registrar of the Original Side of this Court". The Chief Justice issued to the appellant a notice on the 16th August, 1951, intimating that be agreed with the report after careful consideration thereof and asking him to show cause why he should Dot be dismissed from his post. The appellant was given a hearing by the Chief Justice on the 31st August, 1951. The order dated the 3rd September, 1951, of the Chief Justice dismissing the appellant from his office, a copy of which was served on him, runs as follows: "A full and thorough enquiry was held by Mr. Justice K. C. Das Gupta into the charges made against Sri P. K. Bose the Registrar of the Original Side of this Court. Sri P. K. Bose was represented by eminent Counsel and every opportunity was given to him to meet the charges and put forward his explanation and defence. The learned Judge however in a full and very carefully considered report found Sri P. K. Bose guilty of serious charges involving moral turpitude and dishonesty and further he was of opinion that Sri P. K. Bose was by reason thereof unfit to hold the said office of Registrar. I considered this report and the evidence most 1334 anxiously and found myself in entire agreement with the learned Judge. Sri P. K. Bose was, in my view, clearly guilty of the matter comprised in the charges specified by ' Mr. Justice K. C. Das Gupta. I considered that prima facie the conduct of Sri P. K. Bose warranted dismissal and I therefore gave him notice under article 311(2) of the Constitution of India to show cause against the action proposed against him, namely, dismissal. On the 31st august, 1951, Sri P.K. Bose showed cause before me and I heard Sri Sachin Chaudhuri his counsel and Sri P. K. Bose personally. In all the circumstances this is not a case in which I can properly show any leniency. Sri P. K. Bose has abused the trust and confidence reposed in him and has been found guilty of serious malpractices and dishonesty. Conduct such as this of an officer of the status of the Registrar of the Original Side of this Court is unpardonable and must be dealt with severely. I there fore dismiss Sri P. K. Bose from his office as Registrar of the Original Side of the Court, the dismissal to take effect from the 1st September, 1951. Let a copy of this order be served on Sri P. K. Bose". On the 25th January, 1952, the appellant submitted a petition to the Governor of West Bengal for cancellation of the above order. He received intimation dated the 9th July, 1952, that the "Governor declines to interfere on his behalf". Thereupon he filed an application to the Chief Justice for review of the prior order of dismissal. It may be mentioned that it was Chief Justice, Sir Arthur Trevor Harries, who had initiated the proceedings against the appellant and passed the order of dismissal. He retired in June, 1952. The application for review was made to the successor Chief Justice, Shri P. B. Chakravarti, on the 11th September, 1952. This application was rejected on the 16th September, 1952. Thereafter on the 24th November, 1952, i.e., more than an year after the order of dismissal, a writ application was filed on the Original Side of the High Court under article 226 of the Constitution against the Hon 'ble 1335 the Chief Justice of the High Court "for calling upon him to bring up the records of the proceedings relating to his dismissal in order that justice may be done by quashing or otherwise dealing with the said proceedings and the said order dated the 3rd September, 1951, purporting to terminate his services and for directions being given to the Chief Justice to desist from giving effect to or acting in any manner under the said order". On the presentation of the application the learned Judge on the Original Side, Mr. Justice Bose, issued a rule nisi calling upon the Hon 'ble the Chief Justice to show cause why an order in the nature of a writ as asked for should not be made. This order was duly served and on its return the learned Judge made an order referring the hearing of the application to a Special Bench of three Judges as per the rules of the Court. Accordingly the petition was, under the directions of the Chief Justice, heard by three learned Judges of the High Court, who after elaborate hearing and consideration of the points urged on behalf of the appellant dismissed the application. Leave to appeal to this Court was, however, granted by them under article 132(1) on the ground that the case involves substantial questions of law relating to interpretation of the Constitution. The main points that have been urged by the appellant before us, as before the High Court, are that (1)the Chief Justice of the High Court had no power under the law to dismiss him; (2)even if he had the power, he could not delegate the enquiry into the charges, to another Judge but should have enquired into the same himself; and (3)in any case the order of dismissal could not have been passed in the absence of previous consultation with the Public Service Commission of the State as provided under article 320 of the Constitution. On behalf of the respondent, i.e., the Hon 'ble the Chief Justice of the High Court at Calcutta, the learned Advocate General of West Bengal has 1336 appeared before us. In addition to controverting the correctness of the above contentions raised on behalf of the appellant, he strongly urged that (1)no writ could issue from the High Court against its own Chief Justice; (2)the order of the Chief Justice, the validity of which is being challenged, is a purely administrative order against which no application for writ is maintainable; and (3)this was not a case in which having regard to all the circumstances, any application by way of a writ should have been entertained. The points urged on behalf of the appellant may first be taken up. The most important out of them is the one relating to the authority of the Chief Justice to pass the order of dismissal as against the appellant. It is beyond dispute that the Chief Justice is the authority for appointing the appellant. It was in fact the Chief Justice who appointed the appellant and confirmed him. But it is strongly urged that he had not the power to dismiss. This argument is based on the assumption that the appellant falls within the category of public servants who are governed by the Civil Services (Classification, Control and Appeal) Rules, (hereinafter referred to as the Civil Services Rules) of the year 1930 as amended from time to time and that the said rules continue to apply, to an officer holding the post which he did, even after the Government of India Act, 1935, and later the Constitution of India of 1950 successively came into force. I the argument recognises the fact that dismissal is a matter which falls within conditions of service of a public servant as held by the Privy Council in North West Frontier Province vs Suraj Narain Anand(1) and that the power of making rules relating to conditions of service of the staff of the High Courts is vested in the Chief Justice of the Court under section 242(4) taken with section 241 of the Government of India Act, 1935, as also under article 229(2) of the Constitution of India, 1950. But (1) [1948] L.R. 75 I.A. 843. 1337 it is said that no such rules have been framed by the Chief Justice, and that therefore by virtue of section 276 of the Government of India Act, 1935, and article 313 of the Constitution, the Civil Services Rules continued to apply to him, It is necessary to examine the correctness of these assumptions. The Civil Services Rules were framed by the Secretary of State in Council under powers vested in him by section 96 B(2) of the Government of India Act, 1915, as amended in 1919. These rules were framed on the 19th June, 1930, and published on the 21st June, 1930. It is desirable therefore to consider the position relating to the staff of the High Courts before that date. It is not disputed that the said position was governed by the Letters Patent of the High Court. Clause 8 of the Letters Patent of 1865 as amended in 1919, which continues to be operative, as also clause 4 thereof, are relevant for the present purpose. They are as follows: "8. We do hereby authorize and empower the Chief Justice of the said High Court of Judicature at Fort William in Bengal, from time to time, as occasion may require, and subject to any rules and restrictions which may be prescribed by the Governor General in Council, to appoint so many and such clerks and other ministerial officers as shall be found necessary for the administration of justice, and the due execution of all the powers and authorities granted and committed to the said High Court by these Our Letters Patent. And it is Our further will and pleasure and We do hereby for Us, Our heirs and successors give grant, direct, and appoint, that all and every the officers and clerks to be appointed as aforesaid shall have and receive respectively such reasonable salaries as the Chief Justice shall, from time to time, appoint for each office and place respectively, and as the Governor General in Council shall approve of. Provided always, and it is Our will and pleasure, that all and every the officers and clerks to be appointed as aforesaid shall be resident within the limits of the jurisdiction of the said Court, so long as they shall hold their respective offices; but 1338 this proviso shall not interfere with or prejudice the right of any officer or clerk to avail himself of leave of absence under any rules prescribed by the Governor General in Council, and to absent himself from the said limits during the term of such leave, in accordance with the said rules". We do hereby appoint and ordain, that every clerk and ministerial officer of the said High Court of Judicature at Fort William in Bengal, appointed by virtue of the said Letters Patent of the Fourteenth of May, One thousand eight hundred and sixty two, shall continue to hold and enjoy his office and employment, with the salary thereunto annexed, until he be removed from such office and employment; and he shall be subject to the like power of removal, regulations, and provisions if he were appointed by virtue of these Letters Patent". It will be noticed that clause 8 specifically vests in the Chief Justice the power of appointment, but makes no mention of the power of removal or of making regulations or provisions. But it is obvious from the last portion of clause 4 that such power was taken to be implicit under clause 8 and presumably as arising from the power of appointment. It may be mentioned that under clause 10 of the Charter of the Supreme Court of Calcutta issued in 1774, the said Court also was in specific terms "authorized and empowered from time to time, as occasion may require, to appoint so many and such clerks and other ministerial officers as shall be found necessary for the administration of justice". The power of removal or of taking other disciplinary action as regards such appointees was not in terms granted. But there is historical evidence to show that the power of appointment conferred under the Charter was always understood as comprising the above powers. Sir Charles Wood, the then Secretary of State for India in paragraph 10 of his dispatch to the Governor General dated the 17th May, 1862, (on the formation of the new High Courts) stated as follows: "The Supreme Court exercises an authority entirely independent of the Government in respect of 1339 its ministerial officers". It is this power and authority along with other judicial power and authority that was succeeded to by the High Courts (on their formation in supersession of the Supreme and Sadar Courts) by virtue of section 9 of the Indian High Courts Act, in the following terms. "Each of the High Courts to be established under the Act shall have and exercise all jurisdiction and every power and authority whatsoever in any manner vested in any of the Courts . . . abolished under this Act . . " Thus it is clear that both under the Charter of the Supreme Court as well as under the Letters Patent of the High Court, the power of appointment was throughout understood as vesting in the High Court or the Chief Justice, the complete administrative and disciplinary control over its staff, including the power of dismissal. There can be no doubt that this position continued at least until the Government of India Act, 1915. Now, section 106 of the Government of India Act, 1915, in terms continued the above by providing that the jurisdiction of the High Court would "include all such powers and authority over and in relation to the administration of justice including power to appoint clerks and other ministerial officers of the Court as are vested in them by Letters Patent". It follows that the position continued to be the same even under the Government of India Act, 1915, at any rate up to 1930, when the Civil Services Rules came into operation. All the powers under the Letters Patent were, however, subject to alteration by competent legislative authority by virtue of clause 44 of the Letters Patent. Clause 8 of the Letters Patent itself provided that the power of appointment of the Chief Justice was to be "subject to rules and restrictions which may be prescribed by the Governor General in Council". Now, the Civil Services Rules were made by the Secretary of State in Council under section 96 B of the Government of India Act, 1915. It is the case of the appellant that though the 169 1340 Civil Services Rules framed by virtue of delegated power under the Act could not override the specific power of appointment vested in the Chief Justice by virtue of section 106 thereof, they would override the alleged implications of that power such as the power of dismissal and power to frame rules relating to conditions of service in so far as they are specifically provided for under the Civil Services Rules. It is further urged that the said situation continues up to date by virtue of section 276 of the Government of India Act, 1935 and article 313 of the Constitution, Now, the appellant is a person who was appointed in 1948 and dismissed in 1951. It is, therefore, desirable in the first instance to examine the situation under the Government of India Act, 1935 and under the Constitution of 1950 on the assumption that the Civil Services Rules made a change in the prior situation so far as the High Court staff is concerned and applied thereto between 1930 and 1935. Under the Government of India Act, 1935, the position relating to the Civil Services of the Crown in India is contained in a number of general provisions in Chapter 11 of Part X thereof Section 240(1) reiterates what was first statutorily declared by section 96 B of the 1915 Act, viz., that except as expressly provided by the Act every, person who is a member of a civil service of the Crown in India, or holds any civil post under the Crown in India, holds office during His Majesty 's pleasure. Section 241 provides for the recruitment and conditions of service of such persons and prescribes the various authorities who can make the appointments and frame the rules relating to conditions of service. Section 242(4), in so far as it is relevant for the present purpose, provides that section 241 in its application to appointments to and to persons serving on the staff attached to a High Court shall have effect as if, in the case of a High Court, for any reference to the Governor in paragraph (b) of section (1), in paragraph (a) of sub section (2) and in sub section (5), there was substituted a reference to the Chief Justice of the Court. Making the necessary substitutions as prescribed 1341 above, the statutory provisions in the Government of India Act, 1935, relating to recruitment and conditions of service of the staff of the High Court may be read as follows: "(1) Appointments to the Civil Services and civil posts under the Crown in India in relation to the staff attached to the High Court shall be made by the Chief Justice or such person as he may direct. (2)The conditions of service of persons serving. His Majesty in relation to the staff attached to the High Court shall be made by the Chief Justice of the High Court or by some person or persons authorised by him to make the rules for the purpose. Provided that (a)the Governor may in his discretion require that in such cases as he may in his discretion direct no person not already attached to the court shall be appointed to any office connected with the Court save after consultation with the Provincial Public Service Commission; (b)rules made under sub section (2) by a Chief Justice shall,, so far as they relate to salaries, allowances, leave or pensions, require the approval of the Governor". These sections, while keeping intact the power of ap pointment of the members of the staff of the High Court with the Chief Justice as contained in the Letters Patent, provide, statutorily for the first time and in express terms what was implicit in clause 8 of the Letters Patent, viz., that the power to regulate and frame rules relating to conditions of service governing such staff is also vested in the Chief Justice subject however to two limitations indicated by the provisos mentioned above. The corresponding provisions in the present Constitution relating to the powers of the Chief Justice in relation to the recruitment and service conditions of the staff of the High Court are almost identical and are contained in article 229. They are as follows: "229. (1) Appointments of officers and servants of a High Court shall be made by the Chief Justice of 1342 the Court or such other Judge or officer of the Court as he may direct: Provided that the Governor of the State in which the High Court has its principal seat may by rule require that in such cases as may be specified in the rule no person not already attached to the Court shall be appointed to any office connected with the Court save after consultation with the State Public Service Commission. (2)Subject to the provisions of any law made by the Legislature of the State, the conditions of service of officers and servants of a High Court shall be such as may be prescribed by rules made by the Chief Justice of the Court or by some other Judge or officer of the Court authorised by the Chief Justice to make rules for the purpose: 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 Governor of the State in which the Court has its principal seat". It does not appear from the record that any rules have been made by the Chief Justice of the Calcutta High Court, at any rate, in so far as they may be applicable to the Registrar of the Original Side of the High Court. On the assumption, therefore, that the Civil Services Rules applied to the case of a person in his position between 1930 and 1935, it has got to be seen whether they continue to be so applicable. The relevant provisions in this behalf are section 276 of the Government of India Act, 1935, and article 313 of the Constitution. They are as follows: "Section 276: Until other provision is made under the appropriate provisions of this Part of this Act, any rules made under the Government of India Act relating to the Civil Services of, or civil posts under, the Crown in India which were in force immediately before the commencement of Part III of this Act, shall, notwithstanding the repeal of that Act, continue in force so far as consistent with this Act, and shall be deemed to be rules made under the appropriate provisions of this Act". 1343 "Article 313: Until other provision is made in this behalf under this Constitution, all the laws in force immediately before the commencement of this Constitution and applicable to any public service or any post which continues to exist after the commencement of this Constitution, as an all India service or as service or post under the Union or a State shall continue in force so far as consistent with the provi sions of this Constitution". Now, it has to be observed that the continuance, under section 276 of the Government of India Act, 1935, of the Civil Services Rules, could only be in so far as such continuance may be consistent with the new Act. Further in their application to the High Court staff, the rules are to be deemed to be rules made under the appropriate provisions of the Act. The rules, therefore, must be deemed to be rules made by the Chief Justice consistently with the scheme and the provisions of the Act relating to the High Court staff which specifically vest in him the powers of appointment and of the regulation of conditions of service including the power of dismissal. Such continuance, therefore, can only operate by a process of adaptation implicitly Authorised by the very terms of section 276. It would follow that, in their continued application to the High Court staff, the word "Governor" has to be read as substituted by the word "Chief Justice" wherever necessary in the same way as section 242(4) of the Act requires the provisions of section 241 to be read as though any reference to the Governor therein is substituted by a reference to the Chief Justice of the High Court. The continued application of the Civil Services Rules without such adaptation would result in the anomalous position, that although the 1935 Act specifically vests in the Chief Justice the power of appointment and of framing rules regulating conditions of service including the power of dismissal and hence thereby indicates the Chief Justice as the authority having the power to exercise disciplinary control, be has no such disciplinary control merely because he did not choose to make any fresh rules and was content with the continued appli 1344 cation of the old rules. Now, the relevant provision in the Civil Services Rules which deals with disciplinary action including dismissal is rule 52 thereof. That rule shows that "the Governor General in Council or Local Government of a Governor 's Province may impose any of the penalties specified in rule 49 (which includes dismissal) on any person included in any of the classes I to 5 specified in rule 14 who is serving under the administrative control of the Governor General in Council or the Local Government, as the case may be". This rule, if it originally applied to the High Court staff, must after 1935 be read by substituting "Chief Justice" in the place of "the Local Government" wherever it occurs therein and making other consequential alterations. Thus read, there can be no doubt that as from the commencement of the Government of India Act, 1935, the power of dismissal of a member of the High Court staff including, a person in the position of the appellant, Would vest in the Chief Justice. This would be so even apart from the normal implication of the power of appointment specifically recognised under the Act. It follows that even on the assumption that Civil Services Rules applied between 1930 and 1935 to the High Court staff their continuance after 1935 makes a change in the dismissing authority and the power of dismissal is vested in the Chief Justice. That being the correct position prior to 1950, the Constitution has made no change in this respect and article 313 would also continue rule 52 of the Civil Services Rules as above adapted. It would, therefore, follow that, at any rate, from the time of passing of the Government of India Act, 1935, as also under the Constitu tion, the power of dismissal vests in the Chief Justice notwithstanding that no specific rules have been made in this behalf by the Chief Justice. It must be mentioned, at this stage, that so far as the power of dismissal is concerned, the position under the Constitution of 1950 is not open to any argument or doubt. Article 229(1) which in terms vests the power of appointment in the Chief Justice is equally effective to vest in him the power of dis 1345 missal. This results from section 16 of the General Clauses Act which by virtue of article 367(1) of the Constitution applies to the construction of the word "appointment" in article 229(1). Section 16 of the General Clauses Act clearly provides that the power of "appointment" includes the power "to suspend or dismiss". In view of the clear conclusion we have arrived at as above, we do not consider it necessary to deal with the arguments addressed to us on both sides as to the applicability or otherwise of the Civil Services Rules to the High Court staff, including a person in the position of the appellant, and we express no opinion thereon. The main contention, therefore, of the appellant as to the competency of the Chief Justice to pass the order of dismissal against him fails. The further subordinate objections that have been raised remain to be considered. The first objection that has been urged is that even if the Chief Justice had the power to dismiss, he was not, in exercise of that power, competent to delegate to another Judge the enquiry into the charges but should have made the enquiry himself. This contention proceeds on a misapprehension of the nature of the power. As pointed out in Barnard vs National Dock Labour Board(1) at page 40, it is true that "no judicial tribunal can delegate its functions unless it is enabled to do so expressly or by necessary implication". But the exercise of the power to appoint or dismiss an officer is the exercise not of a judicial power but of an administrative power. It is nonetheless so, by reason of the fact that an opportunity to show cause and an enquiry simulating judicial standards have to precede the exercise thereof It is well recognised that a statutory functionary exercising such a power cannot be said to have delegated his functions merely by deputing a responsible and competent official to enquire and report. That is the ordinary mode of exercise of any administrative power. What cannot be delegated except where the law specifically so provides is the ultimate responsibility for the exercise (1) ; , 40. 1846 of such power. As pointed out by the House of Lords in Board of Education vs Rice(1), a functionary who has to decide an administrative matter, of the nature involved in this case, can obtain the material on which he is to act in such manner as may be feasible and convenient, provided only the affected party "has a fair opportunity to correct or contradict any relevant and prejudicial material". The following passage from the speech of Lord Chancellor in Local Government Board V. Arlidge (2) is apposite and in structive. "My Lords, I concur in this view of the position of an administrative body to which the decision of a question in dispute between parties has been entrusted. The result of its enquiry must, as I have said, be taken, in the absence of directions in the statute to the contrary, to be intended to be reached by its ordinary procedure. In the case of the Local Government Board it is not doubtful what this pro cedure is. The Minister at the head of the Board is directly responsible to Parliament like other Ministers. He is responsible not only for what he himself does but for all that is done in his department. The volume of work entrusted to him is very great and he cannot do the great bulk of it himself. He is expected to obtain his materials vicariously through his officials, and he has discharged his duty if he sees that they obtain these materials for him properly. To try to extend his duty beyond this and to insist that he and other members of the Board should do everything personally would be to impair his efficiency. Unlike a Judge in a Court he is not only at liberty but is compelled to rely on the assistance of his staff". In view of the above clear statement of the law the objection to the validity of the dismissal on the ground that the delegation of the enquiry amounts to the delegation of the power itself is without any substance and must be rejected. The second objection that has been taken is that even if the power of dismissal is vested in the Chief Justice, the appellant was entitled to the protection (1) , 182. (2) ,133. 1347 of article 320(3)(c) of the Constitution. It is urged that the dismissal in the absence of consultation with the Public Service Commission of the State was invalid. There can be no doubt that members of the staff in other Government departments of the Union or the State are normally entitled to the protection of the three constitutional safeguards provided in articles 311(1), 311(2) and 320(3) (c). Article 320(3) (e) so far as it is relevant for the present purpose, runs as follows: "The Union Public Service Commission or the State Public Service Commission, as the case may be, shall be consulted on all disciplinary matters affecting a person serving under the Government of India or the Government of a State in a civil capacity, including memorials or petitions relating to such matters". The phrase "all disciplinary matters affecting a person" is sufficiently comprehensive to include any kind of disciplinary action proposed to be taken in respect of a particular person. The question for consideration, therefore, is whether a person belonging to the staff of a High Court is within the scope of the phrase (Ca person serving under the Government of India or the Government of a State in a civil capacity". The learned Judges of the High Court were of the opinion that article 320(3) can have no application to the present case. In their view the provisions of article 320(3) would be inconsistent with the power vested in the Chief Justice of a High Court under article 229, as regards the appointment of officers and ser vants of a High Court and hence also of dismissal or removal and as regards the framing of rules prescribing conditions of service of such officers or servants. They also point out that the proviso to article 229(1) indicates the requirement that the State Public Service Commission should be consulted only in respect of the specific cases of future appointments and that too if the Governor of the State so requires by rule. They take this and the fact that under the Constitution the provisions relating to High Court staff are taken out of Part XIV relating to the services, as imply 170 1348 ing, that in the exercise of the powers vested in the Chief Justice under article 229, consultation with the State Public Service Commission in respect of any other matter must be taken to have been excluded. This reasoning is not without force. Undoubtedly there is much to be said for the view that article 320(3) taken as a whole is inconsistent with article 229. But it is possible to treat the requirement of prior consultation under article 320(3) (c) which relates to disciplinary action against individual Government employees and which is in the nature of an important constitutional safeguard for individual government employees as standing on a somewhat different footing from that under article 320(3) (a) or (b), which relate to general matters relating to recruitments, appointments, etc. Prior consultation in respect of individual cases may not be considered necessarily inconsistent with the actual exercise of the overriding power of the Chief Justice in such cases. While, therefore, recognising the force of the view taken by the High Court, it appears desirable to consider the requirement under article 320(3)(c) taken by itself with reference to the actual terms thereof, in view of the importance of this provision as a constitutional safeguard in cases to which it applies. A scrutiny of the provisions in Chapter I of Part XIV of the Constitution relating to the services shows that the various articles in this Chapter designate the services to which the articles relate by a variety of terminology. Under article 309, the appropriate Legislature is vested with the power to regulate recruitment and conditions of service "of persons appointed to public services and posts in connection with the affairs of the Union or of any State". Under article 310 "every person who is a member of a civil service of the Union or holds any civil, post under a State" holds office during the pleasure of the President or, as the case may be, of the Governor or of the Rajpramukh of the State. Under article 311 the two constitutional safeguards, viz., (1) of not being liable to be dismissed or removed or reduced in rank until he has been given a reasonable opportunity 1349 of showing cause against the action proposed to be taken in regard to him, and (2) of not being liable to be dismissed or removed by ail authority subordinate to that by which he was appointed, are available to "a person who is a member of a civil service of the Union or of a civil service of a State, or holds a civil post under the Union or a State". Under article 320(3)(c) however, the requirement of con sultation with the appropriate Public Service Commission on disciplinary matters is available to "a person serving under the Government of India or the Government of a State in a civil capacity". A close scrutiny of the terminology so used shows a marked departure in the language of article 320 (3) (c) from that in articles 310 and 311. Officers and members of the staff attached to a High Court clearly fall within the scope of the phrase "persons appointed to public services and posts in connection with the affairs of the State" and also of the phrase "a person who is a member of a civil service of a State" as used in articles 3lO and 311. The salaries of these persons are paid out of the State funds as appears from article 229(3) which provides that the administrative expenses of a High Court including all salaries, allowances and pensions payable to or in respect of officers and servants of the High Court, are chargeable upon the Consolidated Fund of a State. The item relating to such administrative expenses has to form part of the annual financial statement to be presented to the State Legislative Assembly under article 202 and estimates thereof can form the subject matter of the discussion in the Legislature under article 203(1). They must, therefore, be taken "to hold posts in connection with the affairs of the State and to be members of the civil service of the State". But can it be said that members of the High Court staff are "persons serving under the Government of a State in a civil capacity" which is the phrase used in article 320(3) (c). The use of different terminology in the various articles was not likely to have been accidental. It is to be noticed that even article 320 in its various clauses uses different phrases. Article 320(1) refers to "appoint 1350 ments to the services of the Union and the services of the State" and the proviso to article 320(3) refers to "services and posts in connection with the affairs of the Union and to services and posts in connection with the affairs of the State". It appears, therefore, not unlikely that in using somewhat different phraseology, the intention was to demarcate the staff of the High Courts from the other civil services of the Union or the State. The phrase "persons serving under the Government of India or the Government of a State" seems to have reference to such persons in respect of whom the administrative control is vested in the respective executive Governments functioning in the name of the President or of the Governor or of a Rajpramukh. The officers and staff of the High Court cannot be said to fall within the scope of the above phrase because in respect of them the administrative control is clearly vested in the Chief Justice, who under the Constitution, has the power of appointment and removal and of making rules for the con ditions of services. Articles 53, 77, 154 and 166 of the Constitution show that while the executive power of the Union or the State is vested, respectively, in the President or the Governor and that executive action is to be taken in their respective names, such action is the action of the Government of India or the Government of a State. But the administrative action of the Chief Justice is outside the scope of these articles. It appears therefore that in using the phrase "Government of India and Government of a State" in article 320(3) (c), the Constitution had in view the above mentioned demarcation. A close comparison of the terminology used in the corresponding provisions of the Government of India Act of 1935 also seems to confirm this demarcation. Section 290 (1) of the said Act refers to "every person who is a member of a civil service of the Crown in India or holds any civil post under the Crown in India" while section 266(3)(c) relates to "a person serving His Majesty in a civil capacity in India". A perusal of the main paragraph of sub section (3) of section 266 clearly shows that it has reference to three cate 1351 gories of services (1) Secretary of States services, (2) Federal services under the Governor General, and (3) Provincial Services under the Governor. In the context of this section, the comprehensive phrase "serving His Majesty" seems to have been used as comprising only the above three services and should be exclusive of the staff of the High Court. The fact that different phrases have been used in the relevant sections of the Government of India Act and the Constitution,,, relating to the constitutional safeguards in this behalf appears to be meant to emphasise the differentiation of the services of the High Court from other services, and to place the matter beyond any doubt as regards the non applicability thereto of this constitutional protection. It may be noticed that while the constitutional safeguards under article 311 are available to every person in the civil service, the safeguard in article 320(3)(c) is one capable of being taken away by regulations to be made by the President or Governor. The Constitution itself appears, therefore, to have classed this safeguard on a different footing. This may well have been intended not to apply to the High Courts. Therefore both on the ground that article 320(3)(c) would be contrary to the implication of article 229 and on the ground that the language thereof is not applicable to the High Court staff, we are of the opinion that for the dismissal of the appellant by the Chief Justice, prior consultation with the Public Service Commission was not necessary. We accordingly hold that the appellant was not entitled to the protection under article 320(3)(c). It follows that none of the three contentions raised on behalf of the appellant, i.e., (1) as to the power of the Chief Justice to dismiss him, (2) as to his competence to delegate the enquiry to Mr. Justice Das Gupta, and (3) as to his obligation to consult the State Public Service Commission, have been substantiated. This application must accordingly fail on the merits. This would be enough to dispose of the case against the appellant. The learned Judges of the High Court have also dealt at some length with the question as 1352 to the maintainability of an application for a writ in a case of this kind and of the availability of any remedy by way of a writ against the action of the Chief Justice, whether administrative or judicial. Arguments in this behalf have also been strongly urged before us by the learned Advocate General of West Bengal. In the view, however, that we have taken as to the contentions raised before us regarding the validity of the order of dismissal, we do not feel called upon to enter into the discussion relating to the availability of the writ. We express no opinion on the questions so raised. We consider it, however, desirable to say that our view that the exercise of power of dismissal of a civil servant is the exercise of administrative power may not necessarily preclude the availability of remedy under article 226 of the Constitution in an appropriate case. That is a question on which we express no opinion one way or the other in this case. In the result the appeal must be dismissed with costs. Along with this appeal, the appellant filed an application to this Court for leave under article 136 to appeal against the orders dated the 3rd September, 1951, and 16th September, 1952, dismissing him from service and declining to review it. In view of our judgment just delivered, that application must also be rejected.

The appellant company executed .a Loan and Note Purchase Agreement with a foreign bank. Under that agreement the appellant was to authorise the creation and issuance of secured notes, Series A and B, and the Notes were to be issued under and secured by a Deed of Trust and Mortgage between the Company and the Bank. The Deed of Trust and Mortgage stated that as the appellant was in the process of constructing a refinery for the refining of crude oil and deemed it necessary to borrow money from time to time to finance such construction and to issue its Notes therefor, and to mortgage and charge its properties to secure the payment of such Notes, it executed the Deed of Trust and Mortgage as Security in accordance with the terms and condi tions of Article 2 of the Deed of Trust and Mortgage to secure the due payment of the principal and the premium, if any, and the interest on the Notes, and of all other monies for the time being and from time to time owing on the security of the indenture and on the Notes and the perform ance by the Company of all of its obligations thereunder. It was also agreed that the Notes shall be secured and shall have the other terms and conditions provided in the agree ment and shall be guaranteed by the President of India pursuant to the terms of the Guarantee Agreement. The Guarantee Agreement state. that the President of India, as the guarantor, unconditionally guaranteed as primary obligor and not as surety merely, the due and .punctual payment from time to time of the principal as well as interest stated m the Agreement. The obligations of the guarantor were abso lute and unconditional under any and all circumstances and were not be to any extent or in any way discharged, impaired or otherwise affected, except by performance thereof in accordance with the terms thereof. It was also provided that each and every remedy of the Trustee shall be cumula tive and shall be in addition to any other remedy given therein or under the mortgage or any of the other collateral or now or hereafter existing at law or in equity or by statute. The Guarantee Agreement was executed on the same day as the Deed of Trust and Mortgage between the President of India and the foreign bank as a Trustee. The High Court decided that stamp duty was chargeable on the Trust and Mortgage Deed under article 40(b) of Schedule I to the Act. In appeal to this Court it was contended that it was the Guarantee Agreement which was the principal and primary security and that the Deed of Trust and Mortgage was a collateral or auxillary security and as such stamp duty was payable under article 40(c) and that the Guarantee Agreement was exempt from duty under section 3 and debentures under article 27. Dismissing the Appeal, HELD: (1) It is the real and true meaning of the deed of Trust and Mortgage and the Guarantee Agreement which has to be ascertained irrespective of the description given by the parties. [568 E] (2) The Trust and Mortgage Deed was executed before the execution of the Guarantee Agreement though both of them were executed on the same day. It was the Deed of Trust and Mortgage which was the security for the 566 loan though the loan was also guaranteed by the President in terms of the Guarantee Agreement. [568 G H] (3) The. terms and conditions of the Guarantee Agreement cannot detract from the basic fact that the Deed of Trust and Mortgage was executed first in point of time and was the principal or the primary security for the loan. The Deed of Trust and Mortgage was clearly the principal or the pri mary security and could not be said to be a collateral agreement. [569 H] (4) The Deed of Trust clearly stated that the terms "Collateral Agreements" shall mean the Guarantee Agreement and the Undertaking. [570 A B] (5) The Guarantee Agreement was not an instrument of sale, mortgage or settlement and did not fall within the purview of section 4(1) of the Act. [571 E.F] (6) There is no justification for the contention that the debentures were the principal instruments and not the Deed of Trust and Mortgage. The secured notes were issued under and secured by the Deed of Trust and Mortgage. The notes were issued in consequence of and on the security of the Deed of Trust and Mortgage. [571 H, 572 A]

Appeals Nos. 86 to 97 of 1962. Appeals from the judgment and order dated July 25, 1955, of the Assam High Court in Civil Rule Nos. 94 97, 105, 106, 114 and 175 to 179 of 1953. M. C. Setalvad, Sohan Shroff, P. K. Kapila and Sukumar Ghosh, for the appellants. Naunit Lal, for the respondents. February 4, 1964. The Judgment of the Court was delivered by SHAH J. These appeals have been filed with certificates granted by the High Court of Assam under article 132 of the Constitution against orders passed in certain petitions filed by the appellants praying for writs of certiorari or other appropriate writs quashing orders relating to assessment of sales tax, and prohibiting the Superintendent of Taxes, Dhubri and other officers from taking action in enforcement of the said orders. The appeals raise common questions and may be disposed of by a common judgment. The appellants are merchants carrying on business as dealers in jute, and have their principal place of business at Calcutta. The appellants have a branch office at Dhubri in the State of Assam and are registered dealers under the Assam Sales Tax Act, 1947 (17 of 1947). The appellants purchased jute at Dhubri and other places in the State of Assam and despatched bales 'of jute to diverse factories ,outside the Province of Assam. The appellants submitted returns of turnover for purposes of sales tax before the Superintendent of Taxes, Dhubri, under the Assam Sales Tax Act in respect of transactions of sale during the period 657 between March 1948 to March 1950. The Superintendent of Taxes called upon the appellants under section 17(2) of the Act to produce their books of account and other evidence in support of their returns and granted them time to enable them to comply with the requisition, but the appellants failed to do so. The Superintendent of Taxes then made "best judgment assessments" exercising his powers under section 17(4) of the Act and issued demand notices for the tax determined. Against the orders passed by the Superintendent of Taxes appeals were preferred to the Assistant Com missioner of Taxes. Before the appellate authority the appellants produced some but not all their books of account and documents in support of their returns. Before the appellant authority it was contended, inter alia, that the definition of "sale" in section 2(12) of the Act was beyond the legislative competence of the Provincial Legislature, that tax was sought to be levied on sales effected outside the State, and that imposition of sales tax on the transactions of the appellant amounted to levying an "export tax" which was not open to the Provincial Legislature. It was however not contended before the Assistant Commissioner of Taxes that the jute bales, sale price of which was included in the turnover were not at the time of the contracts in the form of jute bales actually within the State of Assam and there fore the Explanation to section 2(12) did not make that sale price liable to be included in the turnover of the appellants. The Assistant Commissioner of Taxes, Assam, dismissed the appeals. In the revision applications preferred to the Commissioner of Taxes, Assam, against the order of the Assistant Com missioner of Taxes it was contended for the first time that the price of jute included in the turnover under the orders passed by the Superintendent of Taxes was not liable to be taxed because within the meaning of the Explanation to section 2(12) the goods were not at the time of the contracts actually in the Province of Assam. The Commissioner rejected the contention after examining what he called the "time table of cultivation". He observed that the usual time for marketing jute of the new crop was between July and June of the following year, jute being planted in or 134 159 S.C. 42. 658 about February and being ready for marketing some time about the month of June. The Commissioner further observed that the contracts were made on diverse dates between March and September and deliveries under the contracts were made after the month of July when the new crop was brought into the market. The contracts between the months of March and July were therefore in respect of the last year 's crop and the goods sold must actually have been in the Province of Assam at the date of the contracts. The Commissioner made certain modifications in the assessment order, but with those modifications we are not concerned in these appeals. Against the order passed by the Commissioner, petitions under article 226 of the Constitution were filed by the appellants for writs of certiorari and prohibition. Amongst the grounds urged before the High Court were the following two grounds, which alone survive for determination in these appeals: (1) that the Explanation to section 2(12) of the Act was ultra vires the Assam Legislature under the provisions of the Government of India Act, 1935, and therefore tax could not be levied on sales irrespective of the place where the contracts were made merely relying upon the circumstance that at the time of the contracts of sale the goods contracted to be sold were actually in the Province of Assam; and (2) that the finding recorded by the Commissioner that the goods were actually in the Province of Assam at the time when the contracts were made was "speculative". The High Court held that the Explanation to section 2(12) was. in respect of the period prior to the Constitution, not ultra vires the authority of the Provincial Legislature, and that no attempt was made to establish before the appellate authority that the books of account supported the contention that the goods were not actually in existence in the State of Assam at the time of the contracts of sale. Holding that the reasons which the Commissioner had given in support of his finding were not "altogether unjustified" and that the taxing 659 authorities being "fully conscious" that one of the essential ingredients of tax liability was that the goods must be actually in existence in the State of Assam at the time of the contracts of sale, the High Court declined to consider whether the conclusions of the taxing authorities on questions of fact were correct. But the High Court held that the plea about the vires of section 2(12) and the Explanation thereto raised a substantial question as to the interpretation of the Constitution, and accordingly granted certificates of fitness under article 132 of the Constitution. At the hearing of these appeals counsel for the appellants sought leave to challenge the correctness of the decision that the goods were when the contracts were made actually within the Province of Assam. We have heard counsel for the appellants at great length upon this application for leave to appeal on grounds other than constitutional on which the certificates were granted by the High Court. After carefully considering the arguments, we are of the view that no case has been made out for acceding to that request. A person appealing to this Court under article 132 of the Constitution may not challenge the correctness or propriety of the decision appealed against on grounds other than those on which the certificate is granted, unless this Court grants him leave to raise other questions. Such leave is generally granted where the trial before the High Court has resulted in grave miscarriage of justice or where the appeal raises such substantial questions that on an application made to this Court under article 136 of the Constitution leave would be granted to the applicant to appeal against the decision on those questions. The Assam Sales Tax Act, 1947, was enacted in 1947. By section 2(3) the expression "dealer" is defined as meaning any person who carries on the business of selling or supplying goods in the Province, and by the Explanation the manager or agent of a dealer who resides outside the Province and carries on the business of selling or supplying goods in the Province is in respect of such business to be deemed a dealer for the purpose of the Act. Clause (12) of section 2 defines 'sale '. Section 3 is the charging section and section 4 prescribes the rates of tax. The sales tax authority may, 660 if he is not satisfied that the return furnished by the dealer is correct and complete, serve on the dealer a notice requiring him either to attend in person and to produce or cause to be produced any evidence on which he may rely in support of his return [sub section (2) of section 17], and may make an assessment to the best of his judgment if the dealer fails to make a return or fails to comply with the terms of the notice issued under sub section (2) of section 17. Section 30 confers a right of appeal to an aggrieved dealer to the authority prescribed by the rules, and by section 31 revisional jurisdiction may be exercised by the Commissioner of Sales Tax against the order of the sales tax authorities. By section 32, within sixty days from the date of service of any order in appeal or revision, the dealer may, by application in writing, require the Board of Revenue or the Commissioner, as the case may be, to refer to the High Court any question of law arising out of such order, and if the Board or the Commissioner decline to state the case, the dealer may apply to the High Court calling upon the Board or the Commissioner to state the case, and the High Court may if it be not satisfied with the correctness of the decision of the Com missioner, require the authority concerned to state the case and refer it and on receipt of any such requisition, such authority shall state and refer the case. The High Court upon hearing any such case decides the question of law raised on the reference and delivers its judgment thereon containing the grounds on which such decision is founded [sub section The Act therefore provides a hierarchy of taxing tribunals competent to decide question as to the liability of the tax payer under the Assam Sales Tax Act, with a right to have questions of law arising out of the order decided by the High Court of the Province. Primarily it is the Superintendent of Taxes who assesses the liability to pay tax. An appeal against the order of the Superintendent lies to the Assistant Commissioner of Taxes and against the order of the Assistant Commissioner a revision application lies to the Commissioner Against the order of the Commissioner a reference may be demanded on questions of law to the High Court and if reference is refused the High Court may be moved to call for a reference. The scheme evolved by the Legislature for determination 661 of tax liability is that all questions of fact are to be decided by the taxing authorities and on questions of law arising out of the decision of the taxing authorities the opinion of High Court may be obtained. The High Court has however no power to decide questions of fact, which are exclusively within the competence of the taxing authorities. The High Court is again not an appellate authority over the decision of the Commissioner; it has merely to give its opinion on questions of law arising out of the order of the Commissioner. Whether the decision of the Commissioner is not supported by any evidence, or is based upon a view of facts which could never be reasonably entertained, is a question of law which arises out of the order. Against the order of the Commissioner an order for reference could have been claimed if the appellants satisfied the Commissioner or the High Court that a question of law arose out of the order. But the procedure provided by the Act to invoke the jurisdiction of the High Court was bypassed. The appellants moved the High Court challenging the competence of the Provincial Legislature to extend the concept of sale, and invoked the extraordinary jurisdiction of the High Court under article 226 and sought to reopen the decision of the taxing authorities on questions of fact. The jurisdiction of the High Court under article 226 of the Constitution is couched in wide terms and the exercise thereof is not subject to any restrictions except the territorial restric tions which are expressly provided in the Article. But the exercise of the jurisdiction is discretionary; it is not exercised merely because it is lawful to do so. The very amplitude of the jurisdiction demands that it will ordinarily be exercised subject to certain self imposed limitations. Resort to that jurisdiction is not intended as an alternative remedy for relief which may be obtained in a suit or other mode prescribed by statute. Ordinarily the Court will not entertain a petition for a writ under article 226, where the petitioner has an alternative remedy which, without being unduly onerous, provides an equally efficacious remedy. Again the High Court does not generally enter upon a determination of questions which demand an elaborate examination of evidence to establish the right to enforce which the writ is 662 claimed. The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under article 226 trench upon an alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit, by entertaining a petition under article 226 of the Constitution, the machinery created under the statute to be by passed, and will leave the party applying to it to seek resort to the machinery so set up. In the present case the appellants had the right to move the Commissioner to refer a case to the High Court under section 32 of the Act, and to move the High Court if the Commissioner refused to refer the case. But they did not do so and moved the High Court in its jurisdiction under article 226 of the Constitution, and invited the High Court to reopen the decision of the taxing authorities on questions of fact, which jurisdiction by the statute constituting them is exclusively vested in the taxing authorities. This they did, without even raising the questions before the Superin tendent of Taxes and the Assistant Commissioner. The appellants who are dealers registered under the Assam Sales Tax Act submitted their returns to the Superintendent of Taxes, but failed when called upon to produce their books of account and other evidence in support of their returns. Even before the Assistant Commissioner, they produced some but not all their books of account and evidence demanded by the Superintendent. By the Explanation to section 2(12) of the Act the expression 'sale ', notwithstanding anything contained in the Indian , includes sale of any goods which are actually in the Province at the time when the contract of sale in respect thereof is made, irrespective of the place where the said contract is made and such sales are deemed for the purposes of the Act to have taken place in the Province. Under the Indian , a sale takes place when property in the goods passes. But, for the purposes of the Assam Sales Tax Act situation of the goods 663 is seized by the Legislature for the purpose of fictionally regarding the sale as having taken place within the Province of Assam if at the time of the contract of sale the goods are within the Province. Liability to sales tax in respect of the goods where the transfer in the property of the goods has taken place outside the Province of Assam undoubtedly arose if the conditions prescribed by the Explanation, exist : viz. the goods are actually in the Province when the contract of sale is made, and not otherwise. But the question whether the goods at the date of the contract of sale were actually in the Province is a question of fact which had to be determined by the sales tax authorities. Before the Superintendent of Taxes liability to pay tax was challenged but it does not, appear to have been contended that at the time of the contract of sale, :the goods were not actually within the Province, and no such contention appears to have been even raised before the Assistant Commissioner of Taxes. Before the Commissioner in the revision application filed by the appellants it was urged that part of the goods the price of which was sought to be included in the turnover were not within the Province at the time of the contract of sale and therefore the price of those goods could not be taken into account in computing the taxable turnover. The Commissioner held having regard to the "time table of cultivation of jute" and the time when the jute is brought into the market for sale, that the goods sold were within the Province on the dates of the contracts and therefore the price thereof was liable to be included in the taxable turnover. The High Court, as we have already observed, took the view that the finding of the Commissioner was not "altogether unjustified", nor could it be said that the Commissioner and the other taxing authorities "were not quite conscious of" the requirements which attracted the application of the Explanation to section 2(12) and declined to enter upon a reappraisal of the evidence which in the view of the High Court the taxing authorities alone were competent to enter upon. In these appeals Mr. Setalvad on behalf of the appellants contends that there is clear evidence on the record to show that even applying the test laid down by the Commissioner 664 some of the contracts of sale were made before the goods were marketable and therefore the view taken by the taxing authorities that the goods were at the date of the contract in existence within the Province of Assam was "without any foundation". Counsel also submitted that some of the contracts related to jute grown in Pakistan and with respect to those contracts also the assumption made by the Com missioner that the goods were within the State of Assam at the date of the contract of sale could not be warranted. Counsel then said that the description of the goods in the contracts of sale indicated that they related to bales whereas the contracts for purchase by the appellants were in respect of loose jute and as the goods purchased were not identical or ascertainable with reference to the contracts of sale made by the appellants, liability to pay tax was not attracted under section 2(12) of the Act. We are unable to entertain these pleas because they were never raised before the Superintendent of Taxes and the Assistant Commissioner and no evidence was produced by the appellants to support those pleas. Before the Commissioner it was broadly urged that the goods in respect of the con tracts could not have been in existence within the Province at the date of the respective contracts of sale but that argument was for reasons already mentioned rejected by the Commissioner and the High Court declined to allow the question whether the findings of the Commissioner were "speculative" to be agitated. The appellants now seek to plead that the taxing authorities were in error in holding that the goods conformed to the conditions as to the sites of the goods at the dates of the contracts of sale, prescribed by section 2(12) so as to make the price liable to be included in the taxable turnover. The Legislature has entrusted power to ascertain facts on which the price received on sales becomes taxable, to the authorities appointed in that behalf with right of recourse to the High Court on questions of law arising out of the order of the Commissioner of Taxes. It is therefore contemplated by the Legislature that all material evidence on which a tax payer relies to justify his claim that his transactions are not taxable, should be placed before the taxing authorities so that they may have an opportunity to adjudicate upon the claim. If after a proper trial, the claim is negatived, 665 because the facts on which it is founded are not proved, the proceeding must end. If, however, the adjudication of the Commissioner is vitiated because there is no evidence to support it or it is based on conjectures, suspicions or irrelevant materials, or the proceedings of the taxing authorities are otherwise vitiated so that there has been no fair trial, the High Court may undoubtedly advise the Com missioner on questions properly referred to it in the manner provided by the Act. But the High Court cannot be asked to assume the role of an appellate authority over the decision of the Commissioner on questions of fact or even of law. Assuming that there is some substance in the contention that the adjudication by the Commissioner proceeded on grounds which the appellants characterised as "speculative", it was open to them to resort to the machinery provided by the Act, and having failed to do so, they could not ask the High Court to act as an appellate authority in clear violation of the statutory provisions and to bypass the machinery provided by the Act. We accordingly decline to entertain the application to raise questions other than those raised by the certificate granted by the High Court, because the questions sought to be raised are questions of fact which were not canvassed at the appropriate stage before the taxing authorities and the machinery provided under the Act for determination of questions relating to liability to tax is attempted to be bypassed. The constitutional question on which certificate was granted does not need consideration in any detail. By the Explanation to section 2(12) of the Act notwithstanding anything to the contrary contained in the provisions of the Indian , a sale is deemed to be complete when the goods which are actually within the State of Assam at the time when the contract of sale is made, irrespective of the place where the contract is made. Under the , in the absence of a contract to the contrary a sale is complete when property in the goods passes, but by the Assam Sales Tax Act the Legislature has attempted to locate the sites of sale for the purpose of levy 666 of sales tax by fixing upon the actual situation of the goods within the Province at the date of the contract, for the purposes of levying tax on sales. The Legislature has thereby not overstepped the limits of its authority : The Tata Iron & Steel Company Ltd. vs The State of Bihar(1). No argument has therefore been advanced before us to support the plea of unconstitutionality. All the appeals fail and are dismissed with costs. One hearing fee. Appeals dismissed.

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

l Appeal No. 1827 of 1967. Appeal by special leave from the judgment and order dated the '29th April 1966 of the Rajasthan High Court at Jodhpur in D. B. ,Civil Regular First Appeal No. 57. U. N. Trivedi and Ganpat Rai, for the Appellants. Sobhagmal Jain, for the respondent. The Judgment of the court was delivered by MATHEW, J. This is an appeal by special leave against the judgment and decree of the High Court of Rajasthan, setting aside decree for recovery of damages under the Patel Accidents Act, 1855 hereinafter referred to as the 551 Navneetlal was a resident of Udaipur. He was in the employment of the State of Rajasthan and was, at the material time, working in the office of the Executive Engineer, Public Works Department, Bhilwara as a Store Keeper. In connection with the famine relief works undertaken by the department he was required to proceed to Banswara. For that purpose he boarded truck No. RJE 131 owned by the department from Bhilwara on May 19, 1952 and reached Chittorgarh in the evening. Besides himself, there were Fateh Singh Fundilal and Heera Singh, the driver, cleaner and a stranger in the truck. On May 20, 1952, they resumed the journey from Chittorgarh at about 11 A. M. and reached Pratapgarh in the same evening. The truck started from Pratapgarh to Banswara at about 10 A.M. on May 21, 1952. After having travelled for 4 miles from Pratapgarb, the engine of the truck caught fire. As soon as the fire was seen the driver cautioned the occupants to jump out of the truck. Consequently, Navneetlal and the other persons jumped out of the truck. While doing so, Navneetlal struck against a stone lying by the side of the road and died instantaneously. Parwati Devilwidow of Navneetlal brought a suit against the State of Rajasthan for damages under the provisions of the Act, The plaintiff alleged that it was on account of the negligence of the driver of the truck that a truck which was not road worthy was put on the road and that it caught, fire which led to the death of Navneetlal and that the State was liable for the negligence of its employees in the course of his employment. The plaint also alleged that the decreased had left behind him his widow, , namely, the plaintiff, two minor sons,one minor daughter and his parents. The plaintiff claimed damages to the tune of Rs. 20,000./ and prayed for a decree for that amount. The State contended that the truck was quite in order when it started from Bhilwara and even when it started from Pratapgarh to Banswara and that if it developed some mechanical troubles suddenly which resulted in its catching fire, the defendant was not liable as there was no negligence the part of the driver. The trial court found that the act of the driver in putting the truck on the road was negligent as the truck was not roadworthy and since the driver was negligent, the, State was vicariously liable for his act. The Court assessed the damages at Rs. 14,760/ and granted a decree for the amount to this plaintiff. It was against this decree that the State appealed to the High Court. The High Court came to the conclusion that the plaintiff had not proved by evidence that the driver was negligent, that the mere fact that the truck caught fire was not evidence of negligence on his part and that the maxim res ipsa loquitur had no application. The Court said that the truck travelled safely from Bhilwara to Pratapgarh and that the engine caught fire after having 552 travelled a distance of 4 miles from Pratapgarh and that there was nothing on record to show that the engine of the truck was in any way defective or that it was not functioning properly. The Court was of the view that the mechanism of an automobile engine is such that with all proper and careful handling it can go wrong while it is on the road for reasons which it might be difficult for a driver to explain. The Court then discussed the evidence and came to the conclusion that no inference of negligence on the part of the driver was possible on the basis that the engine of the truck got heated of and on and that water was put in the radiator frequently, or that it took considerably long time to cover the distance between Bhilwara and Chittorgarh and that between Chittorgarh and Pratapgarh. The High Court therefore, allowed the appeal. The main point for consideration in this appeal is, whether the fact that the truck caught fire is evidence of negligence on the part of the driver in the course of his employment. The maxim res ipsa loquitur is resorted to when an accident is shown to have occurred and the cause of the accident is primarily within the knowledge of the defendant. The mere fact that the cause of the accident is unknown does not prevent the plaintiff from recovering damage,,, if the proper inference to in drawn from the circumstances which are known is that it was caused by the negligence of the defendant. The fact of the accident may, sometimes, constitute evidence of negligence and then the maxim res ipsa loquitur applies. The maxim is stated in its classic form by Erle, C. J. " Where the thing is to shown to be under the management of the defendant or his servants, and the accident is such as in the ordinary course of things does not happen if those who have the management use proper care, it affords reasonable evidence, in the absence of explanation by the defendants, that the accident arose from want of care. " The maxim does not embody any rule of substantive law nor a rule of evidence. It is perhaps not a rule of any kind but simply the caption to an argument on the evidence. Lord Shaw remarked that if the phrase had not been in Latin nobody would have called it a principle (2). The maxim is only a convenient label to apply to a set of circumstances in which the plaintiff proves a case so as to call for a rebutting from the defendant, without having to allege and prove any specific act or omission on the part of the defendant. The principal function of the maxim is to prevent injustice which would result if a plaintiff were invariably compelled to prove the precise cause of the accident and the dependent responsible for it, even when the facts bearing on the matter are at the outset unknown to him and often within the knowledge of the defendant. But though the parties ' relative access to evidence is an influential factor, it is not controlling. Thus the fact that (1) See SCOtt vs London St. Katherine Docks ; , 601. (2) See Ballard vs North British Railway Co. 1923 section C. (H.L.) 43. 553 the defendant is as much at a loss to explain the accident or himself died in it, does not preclude an adverse inference against him if the odds otherwise point to his negligence (see John G. Fleming, The Law of Torts, 4th ed., p. 264). The mere happening of the accident may be more consistent with the negligence on the part of the defendant than with other causes. The maxim is based on common sense and its purpose is to do justice when the facts bearing on the causation and on the care exercised by defendant are at the outset unknown to the plaintiff and are or ought to be within the knowledge of the defendant (see Barkway vs section Wales Transport(1). The plaintiff merely proves a result, not any particular act or. omission producing the result. If the result in the circumstances in which he proves it, makes it more probable than not that it was caused by the negligence of the defendant, the doctrine of res ipsa loquitur is said to apply, and the plaintiff Will be entitled to succeed unless the defendant by evidence rebuts that probability. The answer needed by the defendant to meet the plaintiff Is case may take alternative forms. Firstly, it may consist in a positive explanation by the defendant of how the accident did in fact occur of such a kind as to exonerate the defendant from any charge of negligence. It should be noticed that the defendant does not advance his case inventing fanciful theories, unsupported by evidence, of how the event might have occurred. The whole inquiry is concerned with probabilities and facts are required, not mere conjecture unsupported by facts. As Lord Macmillan said in his dissenting judgment in Jones vs Great Western (2) "The dividing line between conjecture and inference is often a very difficult one to draw. A conjecture may be plausible, but it is of no legal value, for it sessense is that it is a mere guess. An inference, inthe, legalsense, on the other hand,is a deduction from the evidence, and if it is are a sonable deduction it may have the validity of legal proof. The attribution of an occurrence to a cause is, I take it, always a matter of inference. The cogency of a legal inference of causation may vary in degree between practical certainty and reasonable probability. Where the coincidence of cause and effect is not a matter of actual observation there is necessarily a hiatus in the direct evidence, but this may be legitimately bridged by an inference from the facts actually observed and proved. " In other words, an inference is a deduction from established facts.and an assumption or a guess is something quite different but not necessarily related to established facts. (1) [1950] 1 All England Reports 392, 399. 7 M 45 Sup CI/75 (2) 554 Alternatively, in those instances where the defendant is unable to explain the accident, it is incumbent upon him to advance positive proof that he had taken all reasonable steps to avert foreseeable harm. Res ipsa loquitur is an immensely important vehicle for importing strict liability into negligence cases. In practice, there are many cases where res ipssa loquitur is properly invoked in which the defendant is unable to show affirmatively either that he took all reasonable precautions to avoid injury or that the particular cause of the injury was not associated with negligence on his part. Industrial and traffic accidents and injuries caused by defective merchandise are so frequently of this type that the theoretical limitations of the maxim are quite overshadowed by its practical significance (1). Over the years, the general trend in the application of the maxim has undoubtedly become more sympathetic to plaintiffs. Concomitant with the rise in safety standards and expanding knowledge of the mechanical devices of our age less hesitation is felt in concluding that the miscarriage of a familiar activity is so unusual that it is most probably the result of some fault on the part of whoever is responsible for its safe performance (see John, G. Fleming, The Law of Torts,4th ed., p. 260). We are inclined to think the learned District Judge was correct in inferring negligence on the part of the driver. Generally speaking, an ordinary road worthy vehicle would not catch fire. We think that the driver was negligent in putting the vehicle on the road. From the evidence it is clear that the radiator was getting heated frequently and that the driver was pouring water in the radiator after every 6 or 7 miles of the journey. The vehicle, took 9 hours to cover the distance of 70 miles between Chittorgarh and Pratapgarh. The fact that normally a motor vehicle would not catch fire if its mechanism is in order would indicate that there v as some defect in it. The District Judge found on the basis of the evidence of the witnesses that the driver knew about this defective condition of the truck when he started from Bhilwara. It is clear that the driver was in the, management of the vehicle and the accident is such that it does not happen in the ordinary course of things. There is no evidence as to how the truck caught fire. There was no explanation by the defendant about it. It was a matter within the exclusive knowledge of the defendant. It was not possible for the plaintiff to give any evidence as to the cause of the accident. In these circumstances, we think that the maxim res ipsa loquitur is attracted. It was, however, argued on behalf of the respondent that the State was engaged in performing a function appertaining to its character as sovereign. as the driver was acting in the course of his employment in connection with famine relief work and therefore, even if the driver (1) See Millner : "Negligence in Modern Law". 555 was negligent, the State would not be liable for damages. Reliance was placed on the ruling of this Court in Kasturilal Ralia Ram Jain vs State of Uttar Pradesh (1) where this Court said that the liability of the State for a tort committed by its servant in the course of his emp loyment would depend upon the question whether the employ ment was of the category which could claim the special characteristic of sovereign power. We do not pause to consider the question whether the immunity of the State for injuries on its citizens committed in the exercise of what are called sovereign functions has any moral justification today. Its historic and jurisprudential support lies in the oftquoted words of Blackstone(2) : "The king can do no wrong. The king, moreover, is not only incapable of doing wrong, but even of thinking wrong; he can never mean to do an improper thing : in him is no folly or weakness". In modern times, the chief proponent of the sovereign immunity doctrine has been Mr. Justice Holmes who, in 1907, declared for a unanimous Supreme Court(3) : "A sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on the logical and practical ground that there can be no legal right as against the authority that makes the law on which the right depends. " Today hardly anyone agrees that the stated ground for exempting the sovereign from suit is either logical or practical. We do not also think it necessary to consider whether there is any rational dividing line between the so called sovereign and proprietary or commercial functions for determining the liability of the State. We are of the view that, as the law stands today, it is not possible to say that famine relief work is a sovereign function of the State as it has been traditionally understood. It is a work which can be and is being undertaken by private individuals. There is nothing peculiar about it so that it might be predicated that the State alone can legitimately undertake the work. In the view we have taken on the merits of the case, we do not think it necessary to canvass the correctness of the view expressed by the High Court that the appeal by the State before the High Court did not abate even though the legal representatives of the plaintiff respondent there were not impleaded within the period of limitation. In the result, we set aside the decree of the High Court, restore the decree and judgment passed by the District Judge and allow the appeal with costs. S.B.W. (1) ; (2) Blackstone, Commentaries (10th ed., 1887) (3) Kawananaka V. Polyblank, ; , 353. Appeal allowed.

V, the father of the appellants had a brother R who died childless leaving behind him his widow, N. After R 's death a series of litigation started between V & N. V filed a suit in 1913 against R. for waste committed by her husband 's estate and was appointed a receiver in that suit. In that suit, he got a decree, V as receiver filed 3 suits on the foot of 3 mortgages in favour of R. In execution of the decrees, 3 valuable properties were purchased. These three properties are the subject matter of the present appeal. V died in 1947 and N in 1951 after executing a will bequeathing in favour of her brother S all her properties. S filed the suit out of which this appeal arises, for pos session of the properties bequeathed to him under the will and for mesne profits. The Sub judge held that the said properties became accretions to the main estate of R and therefore, the plaintiff was entitled only to an account of the income from these properties till the death of V. On appeal, the High Court allowed the appeal in part. Before this Court four points were raised by the appellants : (I) The High Court committed an err or in not hearing the whole appeal but confining the hearing merely to the points on which the finding was called for from the lower court. (2) a portion of the properties which was lost to the estate due to N 's negligence of not paying the land revenue, should be debited against her share in them. (3) the cost incurred by V in the suit and in the execution proceedings should have been taken into account in allocating the properties between the appellants and the respondents and (4) that the widow N, bad treated the properties as accretion to the husband 's estate and therefore, the appellants are entitled to the whole of the property. Allowing the appeal, HELD : (1) When a finding is called for on the basis of certain issues framed by the Appellate Court, the appeal is not disposed of either in whole or in part. Therefore the parties cannot be barred from arguing the whole appeal after the findings are received from the Court of first instance. [597 E) Gopi Nath Shukul vs Sal Narain Shukul, A.I.R. 1923 Allahabad 384, referred to. (2) A Hindu widow is entitled to the full beneficial enjoyment of the estate. So long as she is not guilty of wilful waste, she is answerable to no one. In her lifetime, the reversionary right is a mere possibility or spes successionis. It cannot be predicted who would be the nearest reversioner at the time of her death. It is, there , fore, impossible to contend that for any loss to the estate due to the negligence on the part of the widow, he should be compensated from out of the widow 's separate properties. He is entitled only to the property left on the date of the death of the widow. [599 C; FG] (3) The income received by V and the amounts spent for the suit and the execution proceeding were taken into account at the time of settlement of accounts and it was open to V to realise the excess amount from the estate of R. It is not now open to the appellants to claim that these amounts should be separated from the amount of the decree and should be added to the amount of principal and interest accrued during the lifetime of R. [600 A C] (4) From the evidence, it is clear that the widow did not show any intention to treat the income from, the husband 's estate as an accretion to that estate. [601D] Akkanna vs Venkayya, I.L.R. , referred to. The appeal was sent back to High Court for hearing afresh.

iminal Appeal No. 30 of 1961. Appeal from the judgment and order dated September 6, 1960 of the Calcutta High Court in Cr. Revision No. 647 of 1960. B. Sen, P. K. Chatterjee and P. K. Bose, for the appellant. D. C. Roy and P. K. Mukherjee, for the respondent. April 12. The Judgment of the Court was delivered by KAPUR, J. This is an appeal against the judgment and order of the High Court of Calcutta quashing the investigation started against the respondent in regard to offences under section 420, Indian Penal Code, and section 120B read with section 420 of the Indian Penal Code. On March 26, 1960, Sub Inspector. B. L. Gbose of Police Inforcement Branch filed a written report before the Officer in charge Chakdha P. section, alleging that the respondent in conspiracy with three others 54 had cheated the Government of West Bengal of a sum of Rs. 20,000. The respondent at the time was an Assistant cum Executive Engineer, Kancbrapara Development Area, Kalyani Division. On the basis of this report a First Information Report was drawn up and the police started investigation. On April 4, 1960, the respondent surrendered in the court of the Judicial Magistrate at Ranaghat and was released on bail for a sum of Rs. 1,000/ . The respondent then on May 9, 1960, filed a petition under sections 439 and 561A of the Criminal Procedure Code and prayed for a rule against the District Magistrate, Nadia, to show cause why the judicial case pending in the court of the Senior Magistrate Ranagaghat arising out of the Chakdah Police Station Case No. 33 dated March 26, 1960, be not quashed. The High Court held : "In our view, the statutory power of investigation given to the police under Chapter XIV is not available in respect of an offence triable under the West Bengal Criminal Law Amendment (Special Courts) Act 1949, and that being so, the investigation concerned is without jurisdiction. In so saying, we are consicious of the observations of their Lord ships of the Privy Council in Nazir Ahmad 's case, 71 Indian Appeals, 203". and therefore quashed the police investigation of the case holding it to be without jurisdiction. It is against this judgment and order that the state has come in appeal to this Court on a certificate granted by the High Court under article 134 (1) (c) At the time the respondent filed the petition in the High Court only a written report was made to the police by the Sub Inspector of police Enforcement Branch and on the basis of that report a :First Information Report was recorded by the 55 Officer in charge of the Police Station and investigation had started. There was no case pending at the time excepting that the respondent had appeared before the Court, had surrendered and had ' been admitted to bail. The powers of investigation into cognizable offences are contained in Chapter XIV of the Code of Criminal Procedure. Section 154 which is in that Chapter deals with information in cognizable offences and section 156 with investigation into such offences and under these sections the police has the statutory right to investigate into the circumstances of any alleged cognizable offence without authority from a Magi strate and this statutory power of the police to investigate cannot be interfered with by the exercise of power under section 439 or under the inherent power of the court under section 561A of Criminal Procedure Code. As to the powers of the Judiciary in regard to statutory right of the police to investigate, the Privy Council in King Emperor vs Khwaja Nazir Ahmad (1) observed as follows: "The functions of the judiciary and the police are complementary, not overlapping, and the combination of individual liberty with a due observance of law and order is only to be obtained by leaving each to exercise its own function, always, a course, subject to the right of the court to intervene in an appropriate case when moved under section 491 of the Criminal Procedure Code to give directions in the nature of habeas, corpus. In such a case as the present, however, the court 's functions begin when a charge is preferred before it, and not until then. It has sometimes been thought that a. 561A has given increased powers to the Court which it did not possess before that section was enacted. But this is not so, the section gives no now powers, it (1)(1944),L. R. 71. 1. A. 203, 212. 56 only provides that those which the court already inherently possesses shall be preserved and is inserted as their Lordships think, lest it should be considered that the only powers possessed by the court are those expressly conferred by the Criminal Procedure Code and that no inherent powers had survived the passing of that Act". With this interpretation, which has been put on the statutory duties and. powers of the police and of the powers of the Court, we are in accord. The High Court was in error therefore in interfering with the powers of the police in investigating into the offence which was alleged in the information sent to the Officer in charge of the police station. We therefore allow this appeal and set aside the order of the High Court. The investigation will now proceed in accordance with law. Appeal allowed.

The Mysore Tenancy Act, 1952, was enacted, inter alia, for the purpose of regulating the law which governed the relations of landlords and tenants of agricultural lands. Subsection (1) of section 6 of the Act provided : "Notwithstanding any agreement, usage, decree or order of a court or any law, the maximum rent payable in respect of any period. by a tenant for the lease of any land shall not exceed one half of the crop or crops raised on such land or its value as determined in the prescribed manner". "The Government may, by notification in the Mysore Gazette, fix a lower rate of the maximum rent payable by the tenants of lands situate in any particular area or may fix such rate on any other suitable basis as they think fit". In exercise of the powers conferred by s.6(2), the Government of Mysore issued a notification purporting to fix the standard rent for land 227 specified in Sch. I which dealt with Maidan areas i.e., lands on the plains at one third of the produce, and for those specified in Sch. II which dealt with Malnad areas i.e., lands on hilly tracts at one fourth. The appellant who owned garden land in the district of Shimoga in Mysore State and who had leased out the land to a tenant, challenged the validity or s 6(2) of the Act as well as the notification on the rounds that they contravened articles 14, 19(1) (f), 26, 31 and 31 A of the Constitution of India, and that, in any case, the notification was inconsistent with section 6(1) inasmuch as it was based on section 6(2) which being an exception to section 6(1) could not be allowed to swallow up the general rule and that was precisely what the notification purported to do. The Mysore Tenancy Act was modelled on the pattern of the Bombay Tenancy and Agricultural Lands Act, 1948, and the provisions of s.6 of the Mysore Act were. similar to s.6 of the Bombay Act. In Vasantlal Maganbhai Sanjanwala vs The State of Bombay, ; ; it was held that section 6 of the Bombay Act was vaild. The appellant contended that the aforesaid decision was not applicable because there were difference,; between the two Acts inasmuch as (1) in the preamble to the Bombay Act it was stated that it was passed inter alia for the purpose of improving the economic and social conditions of peasants and this was not mentioned in the Mysore Act, (2) unlike the Mysore Act, the Bombay Act, made a distinction between the irrigated and non irrigated land (3) the Bombay Act while prescribing a maximum took the precaution of also prescribing a minimum and the absence of the latter provision in the Mysore Act made a I material difference. Held, that : (1) the Mysore Tenancy Act, 1952, was substantially similar to Bombay Tenancy and Agricultural Lands Act, 1948, and that the question as to be whether section 6 (2) of the Mysore Act was valid must be held to be covered by the decision the Vasantlal Maganbhai Sanjanwala vs The State of Bombay ; Accordingly, s.6(2) of the Mysore Tenancy Act, 1952, was valid. (2) on its true construction, section 6(1) of the Mysore Tenancy Act, 1952, wag intended to apply to all agricultural leases until a notification was issued under s.6(2) in respect of the areas where the leased lands might be situated ; s 6(2) could not, therefore, be considered as an exception to s.6(1) Consequently, the notification in question was valid, 228 Macbeth vs Ashley, (1874) L.R. 2 Sc. App. 352, considered and held inapplicable.

Appeal No. 1174 of 1967. Appeal from the judgment and order dated August 22, 1966 of the Assam & Nagaland High Court in income tax Reference No. 3 of 1966. Jagadish Swarup, Solicitor General, G. C. Sharma, R. N. Sachthey and B. D. Sharma, for the appellant. T. A. Ramachandran, for the respondent. The Judgment of the Court was delivered by Hegde, J. The Commissioner of Income tax, Assam and Nagaland has brought these appeal by certificate. The assessment with which we are concerned in this appeal is for the assessment year 1963 64, the relevant accounting year is the financial year 1962 63. The assessee was the manager of a Tea Estate under the managing agency of M/s. Gillanders Arbuthnot & Co. Ltd. The said Co. had a Provident Fund scheme for its employees. But that provident fund was not a recognised one. The assessee retired during the previous year relevant to assessment year 1963 64 and received out of this provident fund an 439 amount of Rs. 27,948/ which represented the interest on the amount of his own contribution to the fund. The Income tax Officer assessed this amount as the assessee 's income from other sources. That order was confirmed in appeal by the Appellate Assistant Commissioner. But on further appeal to the tribunal 'by the assessee, the tribunal came to the conclusion that the receipt in question being profits 'in lieu of salary ', the same was his salary as defined in section 17 of the Income tax Act, 1961 (to be hereinafter referred to as the Act); the same having not been assessed as his salary, the assessment order relating to that item of receipt was not legal. At the instance of the Commissioner, the tribunal referred the following question of law to the High Court of Assam and Nagaland for its opinion: "Whether on the facts and circumstances of the case and having regard to the provisions of section 17 (3) (ii) of the Income tax Act, 1961 the amount Rs. 27,948/ representing the interest on the amount of the assessee 's own contributions to an unrecognised provident fund was assessable under the residuary section 56 of the said Act?" The High Court answered that question in the negative and in favour of the assessee. While it came to the conclusion that the, receipt in question cannot be considered as salary as defined in section 17, in its view the same was exempt from payment of tax in view of section 17(3) (ii). The Commissioner is challenging the above conclusion. The receipt of Rs. 27,948/ is undoubtedly an income as defined by section 2(24). The receipt of an interest on any investment is a gain made by the investor and therefore the same is "income". The next question is whether the said income is exempt from tax or if it is not exempt under what head the same has to be brought to tax? Section 14 of the Act gives the heads of income. They are (A) Salaries; (B) Interest on securities; (C) Income from house property; (D) Profits and gains of business or profession; (E) Capital gains and (F) Income from other sources. The salaries are 'brought to tax under section 15 and "the income from other sources" is brought to tax under section 56. In this appeal we are not concerned with the other heads of income The salary is defined in section 17 as including any "profits in lieu of or in addition to any salary or wages" [section 17(1)(iv)]. Subsection (3) of section 17 says : profits in lieu of salary" includes. 440 (ii) any payment. . due to or received by an assessee from an employer or a former employer or from a provident or other fund (not being an approved superannuation fund) to the extent to which it does not consist of contribution by the assessee or interest on such contributions. " The contributions to recognised provident funds are dealt with by other provisions of the Act. Herein we are concerned with the contribution to an unrecognised provident fund. The learned judges of the High Court opined that the receipt by the assessee with which we are concerned is exempt from the payment of tax in view of section 17 (3) (ii). In our opinion they were clearly in error in arriving at that conclusion. Deductions from salaries are dealt with by section 16. In view of section 17 ( I ) (iv), all receipts of profits in lieu of salary have to be considered as salary. But then the question is what is meant by "profits in lieu of salary". In defining the expression "Profits in lieu of salary", the legislature excluded from the scope of that expression any payments received by the assessee from a provident fund, his own contributions to the fund or any interest on such contributions. From that it follows that the receipt of Rs. 27,948/ by the assessee in the relevant accounting year cannot be considered as salary though undoubtedly that is an income. Section 17 has nothing to do either with deductions or with exemptions. It is merely a provision defining the expression "salary". As the income in question is not salary and the same cannot be said to be either interest on the securities; income from house pro perty; profits and gains of business or profession or capital gains. it has to be considered as "income from other sources" and brought to tax under section 56. Section 56 (I) provides that income of every kind which is not to be excluded from the total income under the Act shall be chargeable to income tax under the head income "from other sources" if it is not chargeable to income tax under any of the heads specified in section 1.4 items 'A ' to 'E '. In our opinion the meaning of section 17(3) (ii) is plain and unambiguous. Hence there is no need to call into aid any of the rules of construction as was sought to be done by the High Court. The respondent was not represented before this Court. We are obliged to Mr. T. A. Ramachandran for acceding to our request to appear on his behalf an amicus curiae and assist us at the time of hearing of the appeal. 441 For the reasons mentioned above we allow this appeal, dis charge the answer given by the High Court and answer the question referred to the High Court in the affirmative and in favour of the Department. Under the circumstances of the case we make no order as to costs.

On the question whether an amount representing the interest on the amount of the assessee 's own contributions to an unrecognised provident fund was assessable under the residuary section 56 of the Income tax Act, 1961, HELD : The amount was liable to be assessed. The receipt of an interest of any investment is a gain made by the investor and therefore the same is 'income '. In view of section 17 ( 1) (iv), all receipts of profits in lieu of salary have to be considered as salary. In defining the expression 'profits in lieu of salary ', the legislature excluded from the scope of that expression any payments received by the assessee from a provident fund, his own con tribution,; to the fund or any interest on such contributions. Therefore this receipt cannot be considered as salary, though undoubtedly that is an income. As the income in question is not salary and the same cannot be said to be either interest on the securities; income from house property, profits and gains of business of profession or capital gains, it has to be considered as 'income from other sources ' and brought to tax under section 56. Section 56(1) provides that income of every kind which is not to be ex cluded from the total income under the Act shall be chargeable to Incometax under any of the heads specified in section; 14 item "A" to "E". [43 9 C G]

Civil Appeal No. 3072 of 1980 etc. From the Judgment and order dated 5. 10.1979 of the Allahabad High Court in Civil Misc. Writ No. 3587 of 1974. S.N. Kacker, C.P. Lal, M.N. Krishnamani, Dalip Tandon, E.C. Agganvala, Vijay Pandit, Atul Sharma and Ms. Purnima Bhat for the Appellants. Govind Das, Anil Dev, K.K. Singhvi, P.P. Rao, Kapil Sibbal, V.A. Bobde, G.L Sanghi, A. Subba Rao, C.V.S. Rao, C. Ramesh, Miss A. Subhashini, Mrs. section Dikshit, A.S. Bhasme, A.M. Khanwilkar, R.K. Mehta, V.J. Francis, N.M. Popli, J.R. Dass, S.P. Kalra, Mrs. Rani Chhabra, V.B. Joshi, L.K. Pandey, D.D. Gupta and K.K. Khurana for the Respondents. P.N. Mishra for the Intervener. The Judgment of the Court was delivered by 292 INTRODUCTION RANGANATHAN, J. 1. The controversies arising in this batch of cases are by way of sequel to three earlier decisions of this court in regard to the constitution of the Indian Forest Service viz. Kraipak vs Union of India, AIR 1970 S.C. 150; Parvez Qadir vs Union of India, ; and Union of India vs Chothia, [1978] 3 S.C.R. 652. A little historical background is, therefore, necessary to appreciate the problems before us. THE ALL INDIA SERVICES ACT 2. A few months before India gained Independence, a decision was taken that one of the primary needs of the federal constitution envisaged for India would be the setting up of All India Services common to the Centre and to the States. The members were to be recruited from the intelligent youth of the country by competitive examinations of high standard. They were to be free from political control, contended and having a sense of security. The idea was to build up a bureaucracy consisting of efficient officers of integrity and impartiality who could man important administrative posts and make possible the continued governance of the country unaffected by periodical changes in the political set ups in the Centre and various States consequent on quinquennial elections to the various legislatures in the country. The recruitment to these services and their ultimate disciplinary control was to be with the Union Government but the officers would serve, under the immediate control of the State Governments, on various State cadres. Initially, the All India Services viz. the Indian Administrative Service and the Indian Police Service were created to replace the former Indian Civil Service and Indian Police respectively. p The statutory basis for the implementation of the above policy was provided by Chapter I of Part XIV of the Constitution (articles 308 to 314) supplemented by the All India Services Act, 1951 (hereinafter referred to as "the Act") passed by Parliament as envisaged in article 312 of the Constitution. The Act, initially applicable to the two Services above mentioned, was extended by Amendment Act 27 of 1963 to cover the constitution of three new All India Services one of which was the Indian Forest Service (I.F.S. for short). section 3 of the Act empowers the Government of India to make, after consultation with the State Governments, rules for the regulation of recruitment, and the conditions of service of persons appointed, to an All India Service. Such rules are to be laid, as soon as possible after they are made and for not less than fourteen days, before Parliament. 293 THE RULES 3. Pursuant to the amendment of 1963, mutual consultations were held between the Union Government and the various State Governments and the broad pattern I already in existence for the Indian Administrative Service and the Indian Police Service was decided to be adopted for the Indian Forest Service also. Once this decision was taken, the statutory rules followed. There were five sets of rules framed between 1966 and 1968: (i) The IFS (Cadre) Rules, 1966 (ii) The IFS (Recruitment) Rules, 1966 (iii) The IFS (Probation) Rules, 1968 (iv) The IFS (Pay) Rules, 1968 (v) The IFS (Regulation of Seniority) Rules, 1968 Some of the rules relevant for our present purposes may now be set out. 4(a) Cadre Rules: The Cadre Rules came into force on 1st July, 1966. Rule 3 provides that there shall be constituted for each State or group of States an Indian Forest Service Cadre. The cadre constituted for a State is called a 'State Cadre ' and a cadre constituted for a group of states, a 'Joint Cadre '. Rule 4 is important and can be extracted: "4. Strength of Cadres: (1) The strength and composition of each of the cadres constituted under rule 3 shall be as determined by regulations made by the Central Government in consultation with the State Government in this behalf. (2) The Central Government shall, at the interval of every three years, re examine the strength and composition of each such cadre in consultation with the State Government concerned and may make such alterations therein as it deems fit; Provided that nothing in this sub rule shall be deemed to affect the power of the Central Government to 294 alter the strength and composition of any cadre at any time: Provided further that the State Government concerned may add for a period not exceeding one year, and with the approval of the Central Government for a further period not exceeding two years, to a State or Joint Cadre one of. more posts carrying duties or responsibilities of a like nature to cadre posts. " Rule 7 empowers the State Government to make the appointments to the State cadre and one of the 'concerned ' State Governments to a Joint cadre. Under rule 8, every cadre post has to be filled by a cadre officer. Rule 9 envisages temporary appointments of non cadre officers to cadre posts. Under rule 10, cadre posts are not be kept vacant or held in abeyance for a period exceeding six months without approval of the Central Government. Under rule 11, temporary arrangements or leave arrangements could be made enabling a single cadre officer to look after two cadre posts but such arrangements cannot extend beyond 12 months. (b) Recruitment Rules: The Recruitment Rules were also framed simultaneously and came into force on 1st of July, 1966. They contemplate the initial recruitment of the officers of certain Services already in existence (hereinafter referred to as the State Forest Service or S.F.S. in short). Rule 3 and rule 4 are relevant for our present purposes . The relevant portions of these rules reads as follows: "3. Constitution of the Service: The Service shall consist of the following Persons, namely: (a) Members of the State Forest Service recruited to the service at its initial constitution in accordance with the provisions of sub rule (1) of rule 4; and (b) Persons recruited to the service in accordance with the provisions of sub rules (2) to (4) of rule 4. Method of recruitment to the Service (1) As soon as may be after the commencement of 295 these rules, the Central Government may Recruit to the Service any person from amongst the members of the State Forest Service adjudged suitable in accordance with such regulations as the Central Government may make in consultation with the State Governments and the Union Public Service Commission (U.P.S.C.): (2) After the recruitment under sub rule (1), subsequent recruitment to the Service, shall be by the following methods, namely: (a) by a competitive examination (aa) by selection of persons from amongst the Emergency Commissioned officers and Short Service Commissioned officers of the Armed Forces of the Union who were commissioned after the Ist November, 1961, and who are released in the manner specified in sub rule (I) of rule 7A; (b) by promotion of substantive members of the State Forest Service. Rule 6 makes it clear that all appointments to the service are to be made by the Central Government. No appointment can be made except after recruitment by one of the methods specified in rule 4. The appointments of persons recruited to the service under rule 4(2)(a) (i.e. by competitive examination) can only be made to the junior time scale of pay and the appointments of persons recruited to the service under rule 4(2)(b) (i.e., by promotion of substantive members of the State Forest Service) shall be in the senior time scale of pay. "However, under rule 6A, "an officer in the junior time scale of pay shall be appointed by the State Government concerned to a post in the senior time scale of pay if, having regard to his length of service, experience and performance in the junior time scale of pay, the State Government is satisfied that he is suitable for appointment to a post in the senior time scale of Pay. " Rule 7 deals with the recruitment by competitive Examination, rule 296 7A deals with recruitment by selection of persons from among officers released from the Armed Forces and rule 8 with recruitments by promotion. Rule 9 provides that the recruitment of persons under rule 8 is not to exceed 331/3 per cent of the number of senior duty posts borne on the cadre of that State. (c) Pay Rules: The Pay Rules provide for time scales of pay for the members of the service. There are two scales prescribed, one a Junior scale, the top of which is reached after 18 years of service and the other a senior scale which runs over a period of about 22 years. Under rule 4, the initial pay of a member of the service appointed under rule 4(1) of the Recruitment Rules has to be fixed in the junior time scale of the service at he stage he would have got if he had been appointed in that scale on the deemed date of appointment in the year of allotment. Sub rule (b) of rule 4(1) contemplates appointment of such an officer simultaneously to a post in the senior time scale and prescribes the mode of fixation of his salary in the senior time scale. (d) Seniority Rules: So far as seniority rules are concerned, two rules are relevant for our present purposes. One is the definition of 'senior post ' contained in rule 2(g), which reads thus: "2(g) 'Senior post ' means a post included and specified under item (1) of the Cadre of each State in the Schedule to the Indian Forest Service (Fixation of Cadre Strength) Regulations. and includes: a post included in the number of posts specified in item 2 and 5 of the said cadre, when held on senior scale of pay, by an officer recruited to the Service in accordance with sub rule ( 1) of rule 4 or rule 7 of the Recruitment Rules. " Rule 3 describes the mode of appointment and the allotment of a year of allotment to every officer appointed to the service. The seniority of officers is determined primarily by the year of allotment and, inter se officers having the same year of allotment, by the principles set out in rule 4. THE REGULATIONS 5. It may be mentioned that the rules contemplate regulations 297 being made by the Central Government in consultation with the State Government on various matters. Some of these regulations are also relevant: 6(a) Cadre Strength Regulations: The Fixation of Cadre Strength Regulations were framed in exercise of the powers conferred by rule 4(1) of the Cadre Rules. These regulations were first issued by a notification of the Government of India dated 31.10.1966 and were deemed to have come into force with effect from Ist October, 1966. There is only one substantive clause in this regulation, which reads thus: "2. Strength and Composition of Cadres The posts borne on, and the strength and composition of the cadre of, the Indian Forest Service in each of the States, shall be as specified in the Schedule to these regulations. " The schedule proceeds to set out the strength and composition of the cadres of various States. In these matters before us we are concerned with the position in regard to three States,: Uttar Pradesh, Maharashtra and Orissa. The provisions of the Schedule in so far as these States are concerned are as follows: Maharashtra U.P. Orissa 1. Senior posts under the State Government Chief Conservator of 1 1 1 Forests Deputy Chief Conservator of Forests 2 Addl. Chief Conservator of Forests 1 Conservator of Forests 7 9 4 Conservator of Forests (Development Circle) 1 Conservator of Forests, Working Plan Circle 1 1 298 Conservator of Forests, Headquarters 1 Special officer, Revenue & Forest Department 1 Deputy Conservators of Forests 35 48 24 Deputy Conservators of Forests, Integrated Unit 3 Deputy Conservator of Forests, Working Plans 8 Deputy Conservators of Forests, Foresters ' Training Division 2 Deputy Conservator of Forests, Forest Resources Survey Division 1 Forest Utilisation officer 1 1 Working Plan officer 7 4 Forest Extension officer 1 Chief Wild Life Warden 1 Timber Supply officer 1 Silviculturist 1 2 1 Working Plan officers Officer on Special Duty for Forest Labourers Cooperative Society 1 Officer on Special Duty for Forest Labourers Cooperative Society 1 Assistant to Chief Conservator of Forests 1 P.A. to the Chief Conservator of Forests 1 __ __ __ Total: 62 76 37 __ __ __ 2. Senior posts under the Central Government 5 6 3 __ __ __ 67 82 40 __ __ __ 299 3. Posts to be filled by promotion in accordance with rule 8 of the Indian Forest Service (Recruitment) Rules 1966 22 27 13 4. Posts to be filled by direct recruitment 45 55 27 __ __ __ 67 82 40 __ __ __ 5. Deputation Reserve 15% of 4 above 7 8 4 6. Leave Reserve 11% of 4 above 5 6 3 7. Junior posts 20% of 4 above 9 11 5 8. Training Reserve 5% of 4 above 2 3 1 __ ___ __ 90 110 53 __ ___ __ Direct Recruitment posts 68 83 40 Promotion posts 22 27 13 __ ___ __ Total Authorised Strength 90 110 53 __ ___ __ (b) Initial Recruitment Regulations: The second set of regulations is the Initial Recruitment Regulations framed in pursuance of rule 4(1) of the Recruitment Rules. These regulations are somewhat important for our present purposes and they have to be referred to in some detail. These also came into force with effect from Ist July, 1966. Regulation 3 provides for the constitution of a Special Selection Board (S.S.B.) for the purpose of making selections to the service. The S.S.B. consists of a number of officers, one of whom is the Chief Conservator of Forests (C.C.F.) of the State Government, concerned. Regulations 4. 5 and 6 have to be set out in full: "4. Conditions of eligibility (1) Every officer of the State Forest Service who, on the date of constitution of the Service (a) is holding a cadre post substantively or holds a lien on such post, or (b) (i) holds substantively a post in the State Forest Service, 300 (ii) who has completed not less than eight years of continuous service (whether officiating or substantive) in that Service, and (iii)who has completed not less than three years continuous service in an officiating capacity in a cadre post or in any other post declared equivalent thereto by the State Government concerned, shall be eligible for selection to the Service in the senior scale. (2) Every officer of the State Forest Service who has completed four years of continuous service on the date of constitution of the Service shall be eligible for selection to the Service in the junior scale. Explanation: In computing the period of continuous service for the purpose of sub regulation (1)(b) or sub regulation (2) there shall be included any period during which an officer has undertaken: (a) training in a diploma course in the Forest Research Institute and Colleges, DehraDun; or (b) such other training as may be approved by the Central Government in consultation with the Commission in any other institution. Preparation of list of suitable officers: (1) The Board shall prepare, in the order of preference, a list of such officers of State Forest Service who satisfy the conditions specified in regulation 4 and who are adjudged by the Board suitable for appointment to posts in the senior and junior scales of the Service. (2) The list prepared in accordance with sub regulation (1) shall then be referred to the Commission for advice, by the Central Government along with: 301 (a) the records of all officers of State Forest Service included in the list; (b) the records of all other eligible officers of the State Forest Service who are not adjudged suitable for inclusion in the list, together with the reasons as recorded by the Board for their non inclusion in the list; and (c) the observations, if any, of the Ministry of Home Affairs on the recommendations of the Board. (3) on receipt of the list, along with the other documents received from the Central Government, the Commission shall forward its recommendations to that Government. Appointment to the Service The officers recommended by the Commissioner under sub regulation (3) of regulations shall be appointed to the Service by the Central Government, subject to availability of vacancies in the State Cadre concern. (c) The Appointment by Competitive Examination Regulations: We may next refer to the appointment by Competitive Examination Regulations, 1968. All that is necessary for our present purposes is that, under these regulations, a candidate, to compete at the examination, must, inter alia have attained the age of 20 and not attained the age of 24 on the Ist day of July of the year in which the examination is held. There is a provision for relaxation of the upper age limit in respect of persons who are directly recruited to the gazetted cadre of the State Forest Service and put in less than 4 years ' service (including 2 years ' training for Diploma course in the Foreign Research Institute and Colleges, Dehradun on the Ist July, 1966. But persons who have put in more than 4 years ' service in the State Forest Service would not be eligible to appear in these examinations firstly because they would have crossed the maximum age limit and secondly because the provision for relaxation does not enuse in their favour. (d) Appointment by Promotion Regulations: Recruitment by promotion under rule 9(1) of the Recruitment Rules is governed by the Appointment by Promotions Regulations, 1966, which came into force with effect from 1.7.1966. A selection committee is constituted under regulation 3 to select candidates whose conditions of eligibility for 302 promotion are defined in regulation 4. Briefly speaking, the selection committee is to consider the cases of all substantive members of the State Forest Service, who on the first day of January of that year, have completed not less than eight years of continuous service (whether officiating or substantive) in a post not lower in rank than that of Assistant Conservator of Forests. This Committee would then prepare a list of eligible members which, after approval by the U.P.S.C., would be forwarded to the State Government for making appointment to the cadre posts. INITIAL RECRUITMENT 7. Kraipack case: Sometime after these rules and regulations were framed the initial recruitment to the service was taken on hand. S.S.Bs., including the C.C.F., made selections of officers to the various cadres. The process brought to light a serious defect in the constitution of the S.S.Bs. It has been mentioned earlier that, under the Initial Recruitment Regulations, a S.S.B. had been constituted for selection L) of officers at the time of the initial constitution of the service and that the Chief Conservator of Forests (C.C.F.) was one of the officers on the Selection Board. A perusal of the Schedule to the Cadre Strength Regulations would show that the C.C.F. was also one of the cadre posts mentioned in the Schedule. At the time of the initial recruitment, therefore, it was necessary also to recruit an officer who might eventually fill this post. Thus, the C.C.F. was not only on the S.S.B. but was also a prospective candidate for consideration in the initial recruitment. This somewhat anamolous position was considered by the Supreme Court in the case of A.K. Kraipak vs Union of India, AIR 1970 S.C. 150 in its judgment dated 29th April, 1969. The Supreme Court held that the initial recruitment to the State Cadre of Jammu & Kashmir was vitiated by the above circumstance and quashed the same. Though the question arose only with regard to one of the States, namely, Jammu & Kashmir, the position was identical in respect of several States in the Indian Union. Hence all the initial recruitments made to the various State cadres had to be quashed either suo moto by the Government or got quashed by proceedings in a court of law. It may be mentioned here that, in the States with which we are concerned here, the position was as follows. In Orissa, a select list of 41 officers was issued in January 1967, which had to be set aside as a result of the decision in Kraipak. In Uttar Pradesh, 85 persons were initially recruited to the service and this initial recruitment was held to be bad, on 11.12.1979, in Jagat Narain vs Union, CMWP 58 of 1968 following the decision in Kraipak. In Maharashtra, a selection was 303 made on 2.6.1967 of 57 persons but this selection was set aside by the High Court following Kraipak. LEGISLATIVE INTERVENTION 8.(a) Rule 4(3A) The decision in Kraipak having rendered the initial appointment in all the States invalid, the defect had to be cured and fresh selections had to be made by way of initial recruitment. Perhaps a second selection could have been made even under general law by way of implementation of the decision but Government wanted to make sure and, therefore, it introduced rule 4(3A) in the Recruitment Rules. This provision reads as follows: "4(3A) Notwithstanding anything contained in this rule where appointments to the Service in pursuance of the recruitment under sub rule (1) have become invalid by reason of any judgment or order of any court, the Central Government may make fresh recruitment under that subrule and may give effect to the appointments to the service in pursuance of such fresh recruitment from the same date on which the appointments which have become invalid as aforesaid had been given effect to. " This rule was introduced with effect from 1.3.1971. section 3(1A) It appears that certain doubts had arisen in the meanwhile regarding the power of the Government to make rules with retrospective effect. Since such retrospective effect was necessary for various reasons and particularly for implementing the decision of the Third Central Pay Commission, it was considered necessary to make a specific statutory provision clarifying the power of the Central Government to make rules, if necessary, with retrospective effect. Parliament, therefore, enacted the All India Service (Amendment) Act, 1975. The statement of objects of the Amendment Act shows that section 3 of the Act was amended "so as to empower the Central Government to make rules with retrospective effect subject to the safeguard that no rules shall be made retrospectively so as to prejudicially affect the interests of any person, who may be governed by such rules. " The Amendment Act also proposed to validate rules which had been made in the past with retrospective effect. It may the convenient here to set out the new sub section ( lA) introduced in section 3 of the Act the 1975 Amendment Act. This sub section reads as follows: 304 " 1A The power to make rules conferred by this section shall include the power to give retrospective effect from a date not earlier than the date of commencement of this Act, to the rules or any of them but no retrospective effect shall be given to any rule so as to prejudicially affect the interests of any person to whom such rule may be applicable. " It is also necessary to refer to section 3 of the Amendment Act, which was in the following terms. "3. Validation No rule made, or purporting to have been made, with retrospective effect, under section 3 of the Principal Act before the commencement of this Act shall be deemed to be invalid or ever to have been invalid merely on the ground that such rule was made with retrospective effect and accordingly every such rule and any action taken or thing done thereunder shall be as valid and effective as if the provisions of section 3 of he Principal Act, as amended by this Act, were in force at all material times when such rule was made or action or thing was taken or done. Purvez Qadir 's Case Exercising the powers conferred by the amendment of the Act and the rules, the Central Government constituted fresh S.S.Bs. to consider the initial recruitment to the various State cadres in place of the one that was quashed in Kraipak. This raised the question of the validity of rule 4(3A), introduced with substantial retrospective effect. The seniority of persons recruited to the service as affected by the provision that recruitments to be made pursuant to the new sub rule would be deemed to have taken effect from Ist October, 1966. The validity of the rule was, therefore, challenged by various concerned officers but this challenge was repelled by the Supreme Court in the case of Parvez Qadir vs Union of India & Ors., ; 11. Chothia Case Another challenge was also posed to the initial recruitment made in certain States under rule 4(1). It appears that the S.S.Bs. had considered not all the officers who were eligible under the initial recruitment rules but only such number of them as was considered necessary to fill up the vacancies that were then available in the State cadre. Thus, for example, in the State of Maharashtra, although there were 116 officers eligible for consideration, the State is 305 said to have considered only about 95 of them. The others were not, it is alleged, considered by the S.S.B. This procedure was challenged by a number of officers. A contention was raised that rule 4(1) and the regulation thereunder envisaged a consideration by the S . Of (broadly speaking) all the officers belonging to the State Forest Service who had put in 8 years of service or 4 years of service (as the case may be) for recruitment to the service and that the S.S.B. had to arrange the names of all the officers found to be eligible and adjudged suitable for appointment in the order of preference. Thereafter, subject to the availability of vacancies, these officers had to be recruited to the service. It was also urged that in respect of each one of the officers not placed in the select list, the SSB had to record and forward to the U.P.S.C. specific reasons for their non inclusion in the list. It was not sufficient for the S.S.B. generally to say that it had considered the other officers and found them unsuitable as initial recruits. This contention was accepted by the Supreme Court in Union of India vs Chothia., [1978] 3 S.C.R. 652. 12. Present Cases In the present matters, we have to consider certain questions arising out of the second (in the case of U.P., the second and third) set of selections made by the SSBs in place of the first selection set aside by Kraipak. To avoid confusion, we may clarify here that what we are concerned with in all the cases is the INITIAL RECRUITMENT under section 4(1) of the Recruitment Rules but made for the second or third time, the first selection having been set aside by Kraipak. The problem arises this way. It has been mentioned that the first selections by way of initial recruitments to the State cadres were made sometime in 1966 and 1967. The Kraipak decision came in 1969. In the meanwhile in many of the States the first selection had been followed up by subsequent recruitments largely made on the basis of competitive examination under rule 4(2)(a) of the Recruitment Rules and a few also by promotion under rule 4(2)(b). As a result of the second (and third) selections made by the SSBs, a number of officers in the respective S.F.S. have been given appointment in the I.F.S. with effect from 1. 10.1966 under rule 4(3A) and have thus been placed in a position of higher seniority vis a vis the recruits under rule 4(2) (all of whom are, for convenience, hereinafter referred to as 'direct recruits '). The direct recruits are dissatisfied with this for obvious reasons. The present batches of cases relate to three State cadres, Maharashtra, Orissa and Uttar Pradesh. Before dealing with the contentions, it may perhaps be convenient to give a brief resume of the position in each of these States. 306 14. Uttar Pradesh The nine petitioners in the High Court (of whom 8 are appellants before this court) are direct recruits of 1968 and 1969 confirmed between 1969 and 1972 after probation. In this State, the initial recruitment was made in 1966 67 of 85 officers, 58 to posts in the senior time scale and 27 to posts in the junior time scale. Subsequently, six persons were promoted under rule 4(2)(b) and nine persons were recruited under rule 4(2)(a) of the Recruitment Rules. The initial recruitment having been declared bad, a fresh SSB was appointed and, on its recommendations 104 persons were appointed to the Service, 60 to senior time scale posts and 44 to junior time scale posts. Again in 1976, six more persons were added and thus 110 persons have been taken in as and by way of initial recruitment as against 85 persons taken in the first selection. The direct recruits are aggrieved by these selections. They contend: (a) Under the Maharashtra Schedule to the Cadre Regulations, there can be initial recruitment only to 28 junior posts. This has been exceeded by the second and third selections; (b) As on 23.12.1974, the total strength of the cadre rose to 104 plus 15, appointed earlier under rule 4(2), thus making a total of 119 as against an authorised strength of 110 only; (c) The second and third selections can only be made to validate the initial recruitment of 85 which had been invalidated and cannot be made use of to increase the number of initial recruits; (d) The third selection of six officers is, in any event, bad as the power under rule 4(3A) could have been exercised only once; and (e) It appears that in the subsequent selections certain officers not adjudged suitable at the first selection have been included. This could have been done only if their confidential report (CRs) subsequent to, or other than, those considered at the time of the first selection had been considered. This is not. justified as a recruitment under rule 4(3A) has to be made as if it was being made at the time of the initial recruitment i.e. 1. 10.1966 and subsequent records cannot be taken into account. Their contentions having been rejected by the High Court, they are in appeal. 307 15. Maharashtra Turning to Maharashtra, the position is as follows: The first selection was made on 2.2.1967 of 57 officers, 36 for the senior time scale posts and 21 for the junior time scale posts. This was set aside. On 13.7.1971, at the second selection, 116 officers were found to be eligible but only 66 officers were considered suitable for appointment. 39 out of 51 eligible officers were found suitable for senior scale out of whom 35 were appointed immediately and four later. 27 were found suitable for junior scale out of whom 23 were appointed initially and four later. All these 66 appointments were made w.e.f. 1. 10. 1966. The writ petitioners before the High Court (in. CA No. 2443/74) were persons who had joined the SFS in 1962 and had put in 4 years.of service as on 1. 10. 1986 and were thus eligible for consideration to junior scale posts. Their grievance was that the Government had not considered the case of all the officers who were eligible for consideration for junior posts (viz. those in section Nos. 52 to 116 on the eligibility list) because the Government, which had found 23 officers suitable when they reached section No. 96 stopped there and did not consider the names of the others at all as they should have done under Chothia. Initially, the writ petition was dismissed on 2.6.1979 for the failure to implead all persons affected as parties but this Court by its order dated 24.10.1980 (in CA 2359/80) restored the matter for fresh disposal after adding the affected persons as parties. The High Court eventually allowed the writ petition on 7.8.1981 holding that all the 116 officers should be considered and that the omnibus reason given for rejecting some is not sufficient compliance with regulation 5(2)(b) of the Initial Recruitment Regulations. It directed that now the 116 persons should be considered for the 90 posts available in the State cadre in strict compliance with regulation 5. Some of the respondents, comprising persons who had been directly recruited under rule 4(2) between 1968 and 1970, have preferred the appeals to this Court. While they have in principle no objection to a fresh selection, their contention is (a) that the recruitments to the senior time scale posts should not be redone as there is no controversy regarding the selection of 39 out of 5 1 eligible officers; (b) that the number of selections to junior time scale posts from out of the candidates section Nos. 52 to 116 should not exceed 23; and (c) that the selections should be made on the basis of CRs upto 1. 10. 1966 without reference to subsequently changes made therein or the CRs for subsequent periods. On behalf of the writ petitioners before the High Court (respondents here), a preliminary objection has been taken. They point out that the appellants had not raised any protest of this type either at the stage of hearing of the original writ petitions or at the stage of their rehearing (when they had been added as parties). Neither was any counter affidavit filed nor was 308 there any appearance on their beahlf. In view of this, it is contended that their appeal is not maintainable. It is also submitted that the selections now being made are for an initial recruitment as on 1.1().1966, a date at which the appellants had not been "born" into the service, and so they do not have any locus standi to complain against any recruitments as on the said date. Without prejudice to the above preliminary objections, they also support the judgment of the High Court on merits. Orissa In the case of Orissa, writ petitions have been directly filed in this court. There are eight petitioners who had joined the Orissa State Forest Service as on 1.4.1962. After two years ' training, they were appointed as Assistant Conservators of Forests on 1.4.1964. By 1.4.1966 they had completed 4 years ' continuous service in the State Cadre. They were, therefore, eligible for selection to junior scale posts in the IFS. Two selections were made by way of initial recruitment, once in January 1967 when 4 1 officers were selected and, then in 1972 when 42 out of 82 eligible officers were selected. The petitioners were not adjudged suitable at either of these selections but they were eventually taken into the IFS under Rule 4(2)(b) between 1975 and 1977. The petitioners ' contention is that their names were not considered at all either at the first selection or at the second selection under an impression that the number of posts in the junior time scale were limited. It is said that the selections were made by considering eligible officers in the order of seniority only to an extent necessary to recruit 41 or 42 persons and the Government did not consider all the 82 eligible officers and select 42 out of them arranged in the order of preference. This, it is argued vitiates the selection as held in Chothia. In the counter affidavit, these allegations are vehemently denied. It is claimed that the petitioners were all considered at the time of drawing up the earlier select lists. The respondents, are (a) the persons selected and appointed in 1972 who are still in service and (b) persons who have come in between 1966 and 1975 by way of recruitment under rule 4(2)(a). They plead that the writ petition should be dismissed on grounds of laches as the petitioners raised no such protest or objection at any earlier stage and have come to court after a lapse of twelve years. They also deny the allegations in the writ petitions and contend that the petitioners had all been duly considered at the earlier selections but had not been adjudged suitable for recruitment to the service. These, in brief, are the problems raised in these cases and we may now proceed to deal with them one after the other. 309 CAN NUMBER EXCEED INITIAL SELECTIONS? 18. The first contention urged on behalf of the direct recruits is that rule 4(3A) authorises the Government to fill in only the number of posts the appointment to which had been declared void by the Court and no more. Thus, in U.P., the initial recruitment which had to be quashed because of Kraipak was of 85 persons. Taking advantage of this situation, the Government purported to recruit 104 persons on 23.12.1974 and six more in 1976, thus completing the total strength of 110 as against 85 first filled up. Likewise, in Maharashtra the first selection was of 57 persons which was expanded to 66 in 1971. ln Orissa, the first selection was of 41 persons but the second selection resulted in the recruitment of 42 persons. T his addition to the number of officers first recruited in the subsequent selections is challenged by the direct recruits principally because the subsequent selections, which are deemed to be a remaking of the initial recruitment, have been given retrospective effect from 1. 10.1966 and thus these persons rank higher in seniority to the direct recruits who have come in from 1967 onwards. We are unable to accept this contention. The initial recruitment regulations clearly envisage that the S.S.B. should consider the cases of all the officers in the S.F.S. who fulfill the conditions of eligibility and judge their suitability for appointment to posts in the service and prepare a list of such officers in the order of preference. This selection was initially done by a Board, the constitution of which was found to be vitiated. The logical consequence of this would be that the process has to be redone by a competent and validly appointed S.S.B. from out of the eligible officers. It is not anybody 's case that, in the second or third selections, the Board has considered persons other than those in the SFS who were eligible as on 1.10.1966. In other words, the range of selection was the same as was considered or should have been considered by the initial S.S.B. It is also not anybody 's case that the Board has considered the records of any of these officers subsequent to 1.10.1966. It, however, appears that there had been some changes, subsequent to 1. 10.1966, in the CRs of some of the officers pertaining to the period upto 1. 10.1966, consequent on representations made for expunction or modification of adverse remarks. Sri Kackar suggested that such revised CRs should not have been taken with account but we are unable to agree. We do not think that anyone can validly object to this course since the case of an officer who has succeeded in having an adverse remark against him struck off or modified is exactly on the same footing as if such adverse remarks had 310 not been there at all or had been there in the modified form right from the beginning. What has happened therefore is only that, from the same set of officers as had been considered by the initial S.S.B., the subsequent Boards have adjudged more officers as suitable for recruitment, partly due to inherent differences of approach between one Board and another in the process of adjudication and partly due to the fact that the records of some of the officers for the relevant period had undergone changes which had to be taken into account. One further reason for the increase in the number of officers adjudged suitable (which we shall discuss in some detail later) is that the initial S.S.B. considered only some out of all the eligible officers and did not extend their scrutiny to all the eligible officers as they should have done as per the decision in Chotia to sum up, the decision in Kraipak necessitated a complete review of the first selection. On no logical basis can the subsequent Selection Boards be compelled to restrict their adjudication of suitability to the same list number of persons as the first Board had selected, so long as the same list of eligible officers and their records as on 1. 10.1966 were considered. We see, therefore, no t) merit in the first contention urged on behalf of the direct recruits. STRENGTH & COMPOSITION OF THE CADRE 20. The second contention urged on behalf of the direct recruits is more substantial and is perhaps the vital contention on which their case rests. It is pointed out that the Cadre Strength Regulations not merely prescribe the strength of the various cadres but also their composition. One of the principal features of the composition as per the schedules is that the authorised strength prescribed is to consist of a certain number of senior posts and a certain number of junior posts. According to the direct recruits, the schedules prescribe the minimum number of senior posts and the maximum number of junior posts. It is pointed out: (a) that all the posts enumerated against items nos. 1 and 2 in each of the schedules are specifically described as senior posts; (b) that items nos. 3 and 4 set out in each of the schedules pertain to recruitments (subsequent to the initial recruitment) under rule 4(2) of the Recruitment Rules and that these items have to be left out of account in considering the initial recruitment under rule 4(1);(c) that all the posts enumerated against item No. 7 are described as junior posts; and (d) that the posts mentioned against items nos. S, 6, and 8 depend upon item No. 4 and so partake of the same character. Even assuming that all the posts against item nos. 5 to 8 are only junior posts, the total number of junior posts cannot exceed 13, 28 and 23 respectively in the case of Orissa, Uttar Pradesh and Maharashtra. On 311 this premise, it is contended that the appointments purportedly made by way of initial recruitment in the subsequent selections have exceeded the quotas prescribed by the schedules in regard to senior and junior posts. Thus in U.P., while the first recruitment of 58 officers to the senior scale and 27 to the junior scale was in order, the second recruitment of 44 persons to junior scale posts was not warranted. Likewise, in Maharashtra while the Government restricted itself in the first selection to the appointment of 23 persons to the junior scale, the High Court has now directed the filling up of all the 90 posts in the cadre by considering the 116 eligible officers, overlooking that the maximum number of officers found eligible for consideration to senior scale posts is only 51 and that out of the balance of 65 persons only 23 can be appointed to junior scale posts. The petitioners submit that, while they do not wish to attack the validity of the appointment of officers in excess of the respective quotas, it is necessary at least to ensure that the officers so appointed do not steal a march over those who have been rightly recruited in terms of rule 4(2) after the first recruitment in terms of rule 4(1) had been completed. The Government and the initial recruits seek to meet the above contention in two ways. They contend, firstly, that the assumption of the direct recruits that the prescription of strength of the service in the schedule will apply to the initial recruitment is wrong and that, even if this were correct, the further assumption that the schedule separately prescribes limitations on the number of junior and senior posts is wrong. Secondly, they submit that, even if both the above assumptions are granted, the argument overlooks that the rules confer power on the Central Government to alter the strength and composition of the cadres at any time and that, therefore, any appointments, even if made in excees, should be treated as an automatic expansion of the cadre strength and would not be irregular or invalid. We may take up the second argument first. If it were correct. it would be a complete answer to the contentions of the direct recruits. The argument is that it is for the Central Government to fix the strength and composition of the cadres and that this power can be exercised by it at any time. The first proviso to rule 4(2) of the cadre rules, it is said, places this beyond all doubt. As against this, it is contended by the direct recruits that the proviso relied upon is only a proviso to rule 4(2) and does not extend to rule 4(1). it is urged that it has application only to the power of the Central Government to make alterations to the cadre strength in between the three year review contemplated by rule 4(2). Shri Kackar, in this context, referred us to 312 the following observations in Royappa vs State of Tamil Nadu, [19741 2 SCR 348 at p. 379: "We now turn to the first ground of challenged which alleges contravention of the second proviso to r. 4(2) of the Indian Administrative Service (Cadre) Rules, 1954 and r. 9, sub s.(1) of the Indian Administrative Service (Pay) Rules, 1954. So far as the second proviso to r. 4(2) of the Indian Administrative Service (Cadre) Rules, 1954 is concerned, we do not think it has any application. That proviso merely confers limited authority on the State Government to make temporary addition to the cadre for a period not exceeding the limit therein specified. The strength and composition of the cadre can be determined only by the Central Government under r. 4( l) and the Central Government alone can review it trienially or at any other intermediate time under r. 4(2). We do not think that such a narrow interpretation of the proviso is warranted. As we see it, the proviso only outlines the general principle that, whoever has the power to do a particular thing has also the power to exercise it from time to time, if need be: (vide, section 14 of the ). It had to be specifically put in because of the language of the main part of sub rule (2) providing for a triennial review lest it should be construed as a restriction on the general power otherwise available. We, therefore, agree with the contention of the initial recruits that the Central Government has the power to alter the strength and composition of the cadres at any time. We are, however, still of the view that the contention urged on behalf of the initial recruits cannot be accepted for a different reason. If the terms of the relevant rules are scrutinised, it will be seen that the strength and composition of the cadre has to be determined by regulations and that these regulations have to be made by the Central Government in consultation with the State Government. It is a well settled principle that, if a statutory power has to be exercised in a particular manner, any exercise of that power has to comply with that procedure. [t follows, therefore, that if the initial composition can be only drawn up in consultation with the State Government and by regulations, it will not be permissible for the Central Government to modify or alter the same save in the same manner. In fact also, it has been brought to our notice, there have been subsequent increases in the authorised strength of almost all State Cadres and this has been effected by an appropriate amendment to the Regulations. It is not the 313 case of the Government that before the second and third selections were made, either the State Government was consulted or the regulations were amended for increasing the strength. Nor is it even their case that there was any specific order by the Central Government changing the strength and composition of any cadre. We are, therefore, of opinion that it is not possible to accpet the contention of the initial recruits that the mere appointment of an excess number of officers should be treated as an automatic expansion of the cadre strength and composition in exercise of the power available under rule 4( 1). On behalf of the Government and the initial recruits, it was contended that the Regulations, in this respect, cannot be considered to be mandatory, particularly as they do not outline the consequences that will follow on a violation of their requirements. Reference was made, in this context, to the decision of this court in Lila Gupta vs Lakshmi Narain; , at p. 932; Atlas Cycle Industries Ltd. vs State of Haryana, ; at p. 1076 and 1084 5 and G.S. Lamba vs Union of India, at p. 1032. We do not think the observations cited are in point. The nature and context of the provisions considered in the cited decisions were totally different. In Lila Gupta, the court was concerned with the question whether a marriage contracted in violation of the proviso to section 15 of the Hindu Marriage Act should be considered void; and the Atlas case, the question was whether the non lying of a notification before the Legislature rendered it null and ineffective; and in the Lamba case the court, in the context of certain facts, came to the conclusion that the exercise of a power of relaxation should not be treated as vitiated merely because reasons were not recorded. Here we are concerned with a set of Regulations whose whole purpose is to fix the cadre strength. It is also a provision in regard to an All India Services in regard to the constitution of which both the Central Government and State Governments have a say. It is difficult to accept, in this context, the submission that the cadre strength could be varied without amending the Regulations and schedule of without consulting the State Government concerned. The former course would leave the strength of the cadre easily alterable, fluctuating and indeterminable and thus nullify the entire purpose of the Cadre Strength Regulation. So far as the latter is concerned, this Court held, in Kapur vs Union of India, that it is not open to a State Government to overutilise the deputation reserve in all All India Service without consulting the Central Government. Equally, we think, it is not open to the Central Government to alter the strength and composition of the Cadre without con 314 sulting the State Government concerned. The second argument of the initial recruits is, therefore, rejected. We may now turn to the first argument which, again consists of two parts. The first is that the restriction on number of officers in the schedule does not apply to the initial recruitment at all. It is argued that the idea and intention of the Initial Recruitment regulations is that all officers of the SFS found eligible for appointment either in the senior time scale or in the junior time scale and adjudged suitable for such appointment to the service by the S.S.B. and U.P.S.C. will automatically stand recruited to the service irrespective of the number of such of . Thus, it is argued that even if, in any particular State, the number of such officers exceeds the total authorised strength of that State Cadre as per the Schedule to the Cadre Regulations, there can be no bar to their initial recruitment to the service. In support of this contention, it is pointed out that items nos. 3 and 4 mentioned in the schedule, viz., posts to be filled by direct recruitment, are references to recruitments under rule 4(2) of the Recruitment Rules. It is then said that item No. S and 8 which are expressed as a percentage of item No. 4 can also be considered only as a reference to such subsequent recruitment. It follows, it is argued, that the total authorised strength which is the aggregate of item nos. 3 to 8 can pertain only to the strength of recruitments under rule 4(2) and not to the initial recruitment. Plausible as this argument appears, we are unable to accept this contention. The Cadre Regulations read with the Cadre Rules leave no doubt that the strength and composition referred to, or prescribed, therein is of the entire cadre of the service in the State concerned and is not restricted to the recruitments made after the initial recruitment. The total authorised strength referred to is the total number of officers who, at any point of time, can man the posts in the cadre. It could not have been the intention that the cadre should consist of an indefinite number of persons recruited by the SSB from the SFS supplemented by the number of officers referred to as the total authorised strength. This conclusion is reinforced by three important considerations. The first, as rightly pointed out by Sri Kackar, is that if the intention were that the Schedule was to operate only in respect of recruitments under rule 4(2), it would have been specifically so mentioned. Not only has this not been done; the regulations have been made retrospective with effect from the date of commencement of the Service which would be totally without purpose on the argument addressed by the initial recruits. Such a situation cannot be accepted. The second is that the number of officers referred to against item nos. 3 and 4 is the same as the numbers indicated against 1 and 2 which represents posts already in 315 the State cadre and in Central Government and which have to be filled in by way of initial recruitment. Thus, for example, if in Maharashtra, 67 officers in the SFS are found eligible and are recruited to the service against the various cadre posts and if subsequently 67 officers are recruited against item nos. 3 & 4, the total authorised strength will rise to 134. The fact that the total of items 1 and 2 is the same as the total of items 3 and 4 indicates beyond doubt that, apart from officers recruited against items 5 to 8, the cadre, at any point, can only consist of the number prescribed as the authorised strength and not virtually twice that number. The more harmonious way of reading the entries in the schedule in that the maximum strength of the cadre at any point can only be the total authorised strength which will comprise of the senior posts mentioned against items nos. 1 and 2 and the adjuncts specified against items nos. 5 to 8. Items 3 and 4 are indicated in the schedule only to show that after the initial recruitments are over and recruitments are to be made to senior posts in the cadre under rule 4(2), the number of promotes should not exceed 331/3% of the senior posts in the cadre, which is the requirement of rule 9 of the Recruitment Rules. The break up and composition of the cadre, referred to against items nos. 3 and 4, will only be relevant at the stage when, all the initial recruits having retired or ceased to be in service, the cadre comprises exclusively of persons recruited under rule 4(2). The third consideration which reinforces our conclusion is the significant mandate that the initial recruitment under rule 4(1) shall be "subject to the availability of vacancies in the State Cadre concerned". If the number of initial recruits can be indefinite and limitless as urged, this expression would be meaningless. The apprehension that the interpretation placed by us would create difficulties where the number of eligible officers of the SFS adjudged suitable exceeds the total strength is really without foundation. In the first place, a good deal of discussion preceded the framing of the rules and regulations and one can reasonably assume that the cadre strength has been fixed for each State with a fair idea about the number of SFS officers who may be eligible and are likely to come into the cadrs at the time of initial recruitment. The actual experience in the three States before us also shows that the contingency of such officers exceeding the total authorised strength is quite remote. Secondly, even if in any case there should be an excess of such officers, no insurmountable problems will be created. The Central Government, in consultation with the State Government (which would only be too anxious to place its eligible officers in the All India Service) can increase the authorised total strength to accommodate them. Even otherwise, the surplus officers will be kept in the waiting list and will get into the service as and when vacancies available due to retirement 316 or other vacation of office by the initial recruits arise or as and when the cadre strength is augmented. All that is necessary is that they should all be accommodated before recruitment under rule 4(2) is undertaken. There is, therefore, no difficulty in holding that the total authorised strength of the cadre is to be counted by including the initial recruits and that all eligible officers adjudged suitable cannot be recruited to the Service in excess of the total authorised strength. The truly critical, and really difficult, question that needs consideration in these appeals is not that appointments by way of initial recruitment were made in excess of the total authorised strength but that the Government has failed to keep in mind the restrictions placed on the number of senior and junior posts in each cadre while making appointments. The point made is that, in each State cadre, the posts indicated against items nos. I and 2 are senior posts. These, say the petitioners, can be filled up subject to the availability by officers found eligible under regulation 4(1). Items nos. 3 and 4 do not at all figure at the time of initial recruitment. So far as items 5 to 8 are concerned, it is submitted, items 7 and 8 are clearly junior posts and, though there is no indication whether items nos. 5 and 6 are to be junior or senior posts, the total number of junior posts in the cadre cannot exceed the total number mentioned against items nos. 5 to 8. The grievance of the petitioners is that more recruitments have been made against junior posts than is permissible under the respective schedule. The above contention arises in the following way. In U.P. as has been pointed out earlier, the first recruitment of 58 and 27 fell within the prescribed strength. But, in the second selection, 44 junior posts and again six more officers in a third selection were taken in. This it is said, was not justified as the maximum number of junior posts in the cadre was only 28. While it is suggested that, strictly speaking, the appointment of surplus officers is invalid, the petitioners say that they do not want those appointments declared invalid but only pray that they should not be treated as initial recruits and hence should be placed in seniority below the direct recruits. In Maharashtra, the setting aside of the initial recruitment is not, and cannot be, complained against in view of the earlier decision of this Court. The only grievance here is that the High Court, while ordering a redo of the initial recruitment, by a second selection, has directed that, the 116 eligible persons should be considered for 90 posts, without specifying that officers eligible for senior scale will have to be considered for 67 senior posts and a maximum of only 23 officers could be taken for junior posts. In 317 Orissa, 41 officers were recruited in 1967 and 42 in 1972 by way of initial recruitment. It is not known whether the number of officers appointed to junior posts has been restricted to 13 (the total of items nos. 5 to 8 in the Schedule) or not but there is no allegation that this number has been exceeded and so this question does not arise. The answer of the initial recruits to this contention is that it proceeds on a complete misapprehension of the nature of the all India Service and the composition of the cadre. They say that the rules contemplate two stages. The first is a recruitment of an officer to the All India Service, whether under rule 4(1) or 4(2), in accordance with the regulations and subject to the total strength authorised thereunder. This is done by the Central Government and it is with this that we are concerned here. The second is the appointment of a person recruited to the Service to a particular post in the cadre. This has to be done by the State concerned under rule 7 of the Cadre Rules. At the first stage, the post which the person may eventually accept in the service is totally irrelevant. Once a person is recruited, whatever may be the post to which he may be assigned, he will be an I.F.S. Officer belonging to the cadre. To give an easily understood analogy, a person who succeeds in the written and viva voce tests held for recruitment to the Indian Administrative Service becomes a member of the Service once he is recruited having been selected and having come within the scope of the available posts in the service. Thereafter, whether he is to be appointed as a Collector or as an officer in the Secretariat or is to occupy one of the innumerable cadre posts allotted to the service and whether he should be given a junior post or senior post will be a concern of the State concerned and will have no bearing on the validity of his initial recruitment to the service. The initial recruits also object to the attempt of the direct recruits to equate senior and junior posts with senior time scale and junior time scale posts mentioned in the Initial Recruitment Regulations. They say that a senior officer can occupy a junior scale post if exigencies of the service so require. This will not cause any prejudice to the officer because he will be carrying his own time scale of pay on any post. So also, a very junior officer can be appointed to a senior post, for the Pay Rules envisage an officer just recruited to the service being appointed simultaneously to a post on the senior time scale. Attention is also invited to the definition in the Seniority Rules which defines certain posts as senior in the light of the status of the officer occupying the same. It is urged, therefore, that though the Cadre Regulations describe some posts as senior and some as junior, this is 318 only a description of the nature of the posts on the cadre and has no bearing on the nature of the initial recruitment. Hence, it is said, a reference to the junior and senior posts should not be confounded with the right of an appointee to be placed on a junior or senior time scale post, as the case may. We have given careful thought to the various aspects of the issue and it seems to us that the initial recruits are right in contending that the Cadre Regulations do not lay down any water tight classification of junior and senior posts in the manner contended for by the direct recruits. It is true that the Cadre Regulations make a reference to senior and junior posts but this is not intended to be an essential element in the composition of the cadre. For one thing, the Cadre Regulations do not indicate, in respect of a number of posts, whether they are to be considered as junior or senior. This would not have been the position if this classification was intended to be a vital feature of the composition. Secondly, the Cadre Regulations contain no definition of the words 'senior ' and 'junior ' posts. There is a definition only in the seniority rules but even that definition declares a post indicated in item No. 2 of the schedule as a senior post to be a senior post only when the current incumbent therein at any point of time is an officer on the senior time scale of pay. Nor can we conclude that the posts are divided into senior time scale and junior time scale posts, the former of which can be describe as senior, and the latter as junior posts. This is because the Pay Rules show that if regard be had to pay scales, some of the posts are on scale of pay higher than either of the scales indicated in rule 3 thereof. Again the rules envisage that (a) officers recruited under rule 4(1) should be placed on either of the scales depending, broadly speaking, on the length of their service; (b) direct recruits through competitive examination should be taken on the junior scale; and (c) that recruits through promotion should be placed on the senior scale. In other words, it cannot be postulated that entrants to the service will first enter on a junior scale post and work his way upward. Though rule 6A of the Recruitment Rules permits an appointment of an officer on a junior time scale post to a post on the senior time scale only if "having regard to his length of service, experience and performance in the junior scale of pay, the State Government is satisfied that he is suitable for appointment to a post in the senior time scale of pay", rule 4 of the Pay Rules envisages an officer recruited under rule 4(1) of the Recruitment Rules being simultaneously appointed to a post on the senior time scale. This rule indeed takes away the basis of the arguments on behalf of the direct recruits for it will be open to the State Government to appoint even officers recruited on junior time 319 scale to posts on the senior time scale. Equally, there appears to be no specific bar to an officer recruited to the senior time scale being appointed to a post described as a junior post in the Schedule to the Cadre Regulations as such an officer will carry his time scale with him, although, normally, such an appointment is not likely to be made. All these rules therefore show that an officer being in the junior or senior time scale or a on a junior post or senior post depend upon various eventualities and it is not possible to pin down any posts as senior or junior or any officer as on one of the two time scales. We are, therefore, inclined to agree with the initial recruits that the reference to junior and senior posts in the cadre should not be considered to be so a rigid or integral part of the cadre composition as to affect the validity of appointments made in excess of a particular number. However, we would like to say that, in the view we take of the regulations as discussed below, it is unnecessary to express any concluded opinion on the above issue. One thing that is plain on the terms of the regulations is this: that, once a person is found to be eligible and is adjudged suitable for recruitment under the Initial Recruitment Regulations, he has to be taken into the service as part of the initial recruitment either immediately on 1. 10. 1966 or as and when vacancies arise in the cadre. When the number of officers found eligible for each category is less than the number of available posts in the corresponding category, there is no difficulty. But where the number of suitable candidates to either category or in both categories exceeds the number of posts, difficulties arise on the stand taken by the direct recruits. In this context, we can conceive of four types of situations. To illustrate with reference to a concrete example, we may consider a State where, on the basis urged by the direct recruits, there are 45 senior and 20 junior posts in the cadre. Let us suppose that the SSB 's selections reveal one of the following alternative states of affairs: (i) that 25 persons in the SFS are suitable for senior posts and 15 persons for junior posts; (ii) that 25 persons in the SFS are suitable for senior posts and 40 persons for junior posts; G (iii)that 50 persons in the SFS are suitable for senior posts and 15 for junior posts; and (iv) that 75 persons in the SFS are found suitable for senior post and 40 for junior posts. 320 Situation (i) will create no difficulty. The initial recruitment will be inadequate to fill up the cadre and the remaining posts will have to be filled in by recruits under rule 4(2). In situation (iii) also, there will be no difficulty if it can be agreed that persons found eligible for senior posts can be given junior posts for the time being. But if this is not conceded, five of the officers found suitable for senior posts will be left out even though five of the junior posts are vacant and will have to wait until enough senior posts fall vacant and then compete for them alongwith others who may have become eligible therefor by then. In situation (ii) above, though there are 40 persons found suitable for junior posts, twenty of them will have to be left out even though there are 20 senior posts remaining vacant. And, in situation (iv) above, 30 . Officers adjudged suitable for senior posts and 20 for junior posts will he left out. The situations thus result (a) either in vacancies being unfilled though there are available officers adjudged suitable (b) or in officers adjudged suitable being left out altogether. The first of these positions is contrary to the spirit of the Recruitment. Rules that no cadre posts should remain vacant for long spells particularly when cadre officers are available to occupy them. It is necessary to remember in this context that if the vacancies are in senior posts they can be filed up only by SFS officers with X years ' continuous service and, ex hypothesi, such officers will not be available for at least four more years, and if the vacancies are of junior posts, they can be filled in only after a competitive examination is held and this will take time. The second of the positions will leave the officers selected for the service and having more than 4 years of experience in the SFS in a very uneviable position. They cannot be appointed according to the petitioners, because there are no vacancies of posts for which there have been found suitable. They cannot seek recruitment under rule 4(2)(a), as regulation 4(3) of the Appointment by Competitive Examination Regulations prescribes an upper age limit of 24 years which they would have crossed already and permits relaxation of that age limit only to persons directly recruited to the SFS officers who had put in less than four years ' service including their training period. They cannot also hope for recruitment under rule 4(2)(b) until they put in eight years ' of service. The result will be that these persons will be in the dilemma of looking on and seeing younger people and people with shorter service being recruited under rule 4(2). Surely that could not, have been the intention of these rules and regulations. Such an interpretation also amounts to an arbitrary and discriminatory treatment of a group of officers incompatible with the spirit of article 14 of the competition. We cannot, therefore, accept the contention that officers of the SFS who have been adjudged suitable by the SSB should 321 not be taken into the service merely because their number exceeds the number of posts available. True, they cannot be appointed immediately but the consequence cannot be that they should be ignored and persons recruited under rule 4(2) given preference over them. The correct solution, in our opinion, on a proper construction of the rules, is this. Even accepting the position, for the sake of argument, that the number specified for each category of posts in the Cadre Regulations limits, as contended for by the petitioners, the number of persons who could have been taken into the service in those posts in the first instance, the others are also entitled to be absorbed into the service as and when vacancies occur, by reason of Rule 6 of the initial Recruitment Regulations. The filing up of such vacancies will also be part of the initial recruitment contemplated under rule 4(1) and no recruitment under rule 4(2) can start before the above process is complete. It is only rational to interpret the rules as laying down that all those officers of the SFS with 8 or 4 years ' experience, as the case may be, who are adjudged suitable for the service should be recruited to the service before any recruitment can at all start under rule 4(2). Whether all such persons are entitled to the back dating of their appointment to 1. 10. 1966 or not, they are certainly entitled to contend that their appointment should be given precedence over the appointments of recruits under rule 4(2) of the Recruitment Rules. That being so, if there are vacancies against which recruitments could have been made under rule 4(2) they should have first gone to these left overs among the eligibles. In this view of the matter the plea of the petitioners that they will get precedence over these surplus officers among the eligible cannot at all be accepted. CAN THERE BE RECRUITMENT MORE THAN ONCE? 33. The next contention urged by Shri Kackar was that a fresh selection by way of initial recruitment can take place only once and cannot be repeated twice as has been done in the State of Maharashtra. He cited, in this connection, a decision of the Punjab & Haryana High Court in Union of India vs Harnek Singh, L.P.A. 406/83 decided on 20.9.83 affirming the decision of the Single Judge in W.P 545 75. We think that this argument proceeds on a misapprehension. To recapitulate the facts relating to this cadre, there were 116 officers who were eligible for consideration by the Selection Board. The first selection was of 57 persons (36 to senior scale posts and 21 for Junior scale posts). This was set aside because of Kraipak. This necessitated a reconsideration of the cases of the 116 eligible officers by a different 322 SSB of suffering from the defect that vitiated the earlier one. This S.S.B. appears to have committed the mistake of considering only 97 persons out of 116. This was not correct, as it was the duty of the Selection Board, under Chotia, to consider all the 116 officers, arrange those adjudged suitable in their order of preference and give reasons for not including in the list the names of those not adjudged suitable. This has, therefore, necessitated the second selection which the High Court has directed. Apart from the fact that such a fresh selection has to follow as a necessary consequence of the setting aside of the earlier selection by the court, it is also specifically warranted by the terms of rule 4(3A) which authorises such fresh recruitment under sub rule ( 1) '.where appointments to the service in pursuance of sub rule (1) have become invalid by reason of any judgment or order of any court. " It is not limited to a fresh recruitment becoming necessary on account of Kraipak. The position in this regard in U.P. is slightly different. Here 5 persons were recruited initially but this became bad due to Kraipak. Subsequently, 104 persons were recruited. We have already held that this recruitment cannot be challenged either because it is of a number larger than the initial 85 or because it selects 44 officers eligible only for the junior time scales. Sri Kackar, however, contends that there was no justification to recruit six more persons in 1976. Here again, though ostensibly there have been two selections, there has been in substance only one selection in place of the one set aside by reason of Kraipak. It is not in dispute that the Selection Board has considered only such of the officers as were eligible on 1. 10. It is also common ground that the selection has been made only on the basis of the C. Rs. pertaining to that period. We have already pointed out that it is only right that persons should be adjudged on the basis of the correct C.Rs. pertaining to them. Any expunction or modification in the CR of a period naturally relate back to that period and no legitimate objection can be taken if the correct CRs are taken into account. In our view, therefore, there was nothing wrong in the selections made by the Selection Board. Though made in two stages, the Board was only considering and selecting suitable officers out of those eligible for consideration on 1 10 1966 on the strength of their CRs uptil then and this has to be taken only as the initial recruitment, done in two stages but really one. RETROSPECTlVE EFFECT OF RULE 4(3A) 35. Sri Kackar took considerable pains to urge that the persons 323 selected in 1972 and later cannot claim seniority over the petitioners recruited earlier under rule 4(2). The argument was that, even if this be treated as authorised by rule 4(3A), the retrospective effect to this rule has to be limited by reference to section 3(lA) of the Act. He contends, relying on the decision in Inderjit Singh vs Union of India, that the Act has been framed in exercise of the powers conferred by Article 312 of the Constitution and that, unlike rules framed under Article 309 of the Constitution, the rules framed under the Act cannot have greater retrospective effect than is authorised by the Act itself. He therefore urges that rule 4(3A) should not be as interpreted as to "prejudicially affect the interests" of the petitioners who, by reason of their earlier appointments under rule 4(2) have earned a higher seniority than the respondents who are subsequent recruits under rule 4(1). We do not think it is necessary to go into all these questions. Granting all the premises of Sri Kackar, we think that rule 4(3A) does not offend any of them. The rule only places the fresh recruits in the same position as if they had been recruited in the first instance i.e. On 1.10.1966 as indeed they should have been and thus involves no retrospective effect beyond the date of commencement of the Act. It is also not correct to suggest that it prejudicially affects the direct recruits in any way. The fresh selectees of 1974 were all in the SFS on 1. 10.1966, at a time when the petitioners were nowhere in the picture. As we have pointed out earlier the petitioners acquire under the rules no right to be in the service until after the initial recruitment is over. The mere fact that, due to certain fortuitous circumstances, that initial recruitment has had to be set aside and time has been consumed in the process of remaking that selection validly and properly, cannot, in our view, confer a right on the recruits under section 4(2) so as to justify their complaint that some benefits given to them have been taken away. Under the rules, they can rank only after the candidates who get in by way of initial recruitment. In that position there is no change and the petitioners cannot be aggrieved that those in service in the SFS are found suitable for recruitment to the service and taken into the service w.e.f. 1. 10.1966. As we have observed earlier, those persons, even if not entitled to appointment as on 1.10.1966, are entitled to be appointed as and when vacancies arise and must always be given a position of precedence over the recruits under rule 4(2). In this view of the matter the direct recruits can hardly claim that they are prejudicially affected by the remaking of the initial recruitment. We, therefore, do not see any force in Sri Kakker 's contention. THE POSITION IN ORISSA 36. So far as orissa is concerned, the position is very simple. It 324 clearly emerges from our discussion above that all the 82 eligible officers had to be considered for initial recruitment. Though it has been alleged in the counter affidavit that they had been so considered, the Government note referred to by counsel dated 2.6.1967 (at p. 47 of the paper book) indicates to the contrary. The S.S.B. merely selected 42 officers and made an omnibus observation that the others were found unsuitable. This, as explained in Chothia, is not proper compliance with the rules and so the selection has to be aside with a direction that it should be redone properly. It has been vehmently contended for the respondents that the writ petition should be dismissed on the ground of laches. It is true that the petitioners have come to court somewhat belatedly. Counsel urged that they had been under a bona fide impression that they had been considered and found ineligible. But this does not appear to be correct. T here is on record (at p. 44 of the paper book) a representation made by one of them on 20.4.67 from which it seems that he was even then aware that his name had not been considered at all because of an interpretation that the junior posts were limited to 19 only. Nevertheless, they did not take any steps. The Gujarat, Karnataka and Maharashtra judgments on which the petitioners rely had been rendered in 1978, Jan. 1981 and August 1981 respectively but even after that the petitioners allowed time to lapse. There has therefore been delay on the part of the petitioners in coming to Court. Nevertheless, having regard to the complicated nature of the issues involved, we do not think that the petitioners should be put out of court on the ground of laches. The position as it has now emerged is that all 82 eligible officers as on 1. 10. 1966 should be considered and not merely some of them. Their suitability should be adjudged. If they are not found suitable, reasons should be given which the U.P.S.C. should be able to consider. If they are found suitable a list of such officers should be drawn up with ranking given to them in the order of preference for the consideration of the U.P.S.C. Since this has not been done the recruitments have to be set aside and the matter remanded with directions that it should be finalised as per the Recruitment Rules and in the light of the above discussion. OTHER CONDITlONS 38. Before concluding, we may touch upon certain other contentions which were urged before us: (i) Shri Kackar, for instance, made a reference to rules 3 and 4 325 of the All India Services (Conditions of Service Residuary Matters) Rules, 1960, the Government of India 's decisions thereunder and the decisions of this Court in Shri Amrik Singh and others vs Union of India and others, [1980] 2 S .L . R. 1 10 and R. R. Verma and Ors. The Union of India & Ors., interpreting the same. These rules confer powers on the Central Government to relax or dispense with the requirements of any rule in case they cause undue hardship in any particular case and also to decide questions arising as to the application or interpretation of certain rules applicable to All India Services. Apart from the fact that no relaxation, dispensation or interpretation has been made by the Government, we see no occasion at all to involve these provisions and we need not go with the question of their interpretation. (ii) Shri Kackar also made a reference to rule 3(3) of the Pay Rules inserted in 1980 to highlight the fact that since promotions in the service are under this rule, based on "merit with due regard to seniority", the interests of the direct recruits is vitally affected by the fall in their seniority resulting from the induction of initial recruits by a second or third or even further selection. We have already pointed out that this argument proceeds on a misconception. The direct recruits cannot have any grievance against the remaking of the initial selection because they cannot deny to the eligible officers on the S.F.S. their legitimate dues. No doubt, they can complain against the fall in their seniority if these subsequent selections are invalid but, if, as we have explained above, they are the logical consequence of Kraipak and have been validly made, they can have no grievance. In the latter event, it is actually the persons who ought to have been included in the first selection but were not, due to no fault of theirs, who have room for legitimate complaint that recruits under section 4(2) have been allowed to forestall them. (iii) Sri Kakkar submitted that the view we have taken that recruitment under rule 4(2) cannot be restored to until initial the recruitment under rule 4(1) is complete runs contrary to the following Observations of this Court in Parvez Qadir; , at p. 443. "If the interpretation urged by the petitioner 's learned Advocate to be accepted, then the initial recruitment not having taken place till after the Kraipak 's case was decided any subsequent recruitment to the Service under sub rule (2) of rule 4 cannot take place. Such cannot, in our view, be 326 the purpose of the rules and regulations, nor was it so in tended . " We do not agree The above observations were made in the context of answering an argument that. the officers for initial recruitment have to be considered not as on 1. 10.1966 but as on the date of the (second, third or subsequent) selection that may have to be made consequent on Kraipak. The court pointed out that, to uphold such a contention would virtually render the rules and regulations meaningless as, then, one unsuccessful aspirant after another could hold up the selections by way of initial recruitment indefinitely and thus deprive others of benefits they could have otherwise obtained. This Court did not, and did not intend to, observe, inspite of the language of rule 4(2), that recruitment under that rule could be made even before recruitment under rule 4(1) are complete. (iv) Shri Singhvi in supporting his plea that the appeal in the Maharashtra cases is not maintainable relied on the following observations of the Court in HarjeetSingh vs Union, ; "On the other hand we think that the Fixation of Cadre Strength Regulations made under Rule 4 of the Cadre Rules do not over ride the Recruitment Rule, the remaining Cadre Rules and the Seniority Rules so as to render invalid any service rendered by a non cadre officer in a Cadre post on the mere ground of breach of the Fixation of Cadre Strength Regulations, when there has been strict compliance with Rule 9 of the Cadre Rules. We think that fixation of Cadre Strength is the exclusive concern of the Central and the State Governments and the Regulations are made for their convenience and better relationship. Excessive utilisation of 'Deputation or Central Reserve ' is a matter for adjustment and controversy between the Central and the State Governments and is of no concern to any member of the Service. For example no can cadre officer who is asked to fill a deputation post can refuse to join the post on the ground that the 'Deputation Reserve ' has already been exceeded. The Regulations are not intended to and do not confer any right on any member of the Service, unlike some other Rules which do confer or create rights in the members of the Services. Among other Rules, for instance Rule 9(2) of the Recruitment Rules stipulates that the total number of persons recruited by promotion shall not at 327 any time exceed 25% of the posts shown against item Nos. 1 and 2 of the cadre in the schedule to the fixation of Cadre Strength Regulations. Now, if at a point of time this limit is exceeded, direct recruits may have a just cause for complaint and it may perhaps be held that to the extent of the excess the appointments by promotion are invalid and confer no rights of seniority over direct recruits. But, as we said, the Fixation of Strength Regulations confer no rights on members of the Service and a mere breach of the Regulations furnishes no cause of action to any member of the service on the ground that his seniority is affected in some round about way. We may add that there is no suggestion that Rule 9(2) of the Recruitment Rules was contravened. " He urged, on the strength of these observations, that the Cadre Strength Regulations only provide for internal adjustments at the discretion of the Government that no one can claim a right on the strength of those Regulations. In our opinion the argument places the case of the initial recruits on too high a pedestal to be accepted and we do not think that the cited observations help him sustain such a tall argument. The exception, given by way of illustration in the above passage, indicates that there can be circumstances in which rights can be created in certain recruits under the Cadre Strength Regulations. If we had agreed with the direct recruits that there had been some invalidity or infirmity attached to the subsequent selections by way of initial recruitment, we would not have rejected the appeal on the ground that the Regulations cannot give rise to a cause of action. It is only because we have come to the conclusion, on a proper interpretation of the Cadre Strength Regulations and the Recruitment Rules, that there is no error in the procedure followed by the Government that we are rejecting the appellants ' contention. We would like to make one more thing clear before we conclude. It is not our intention, nor can it be the result of our discussion, that the appointment of any of the officers recruited under rule 4(1) or 4(2) should be considered invalid. All the officers selected will have to be adjusted, if necessary, by amending the Cadre Regulations. The only result of our findings will be the readjustment of their seniority with necessary and consequential effect on their promotions in the Service. CONCLUSlON 40. In the result, we see no merits in the appeals from U.P. and 328 Maharashtra which, consequently, stand dismissed subject to what we have observed above. So far as the Orissa writs are concerned, they are allowed and the S.S.B. is directed to redo the selections in the light of the principles set out in this judgment. We make no order as to costs.

% The respondent mortgaged his shop and delivered possession thereof to the mortgagees with the right to collect rent from the tenant in payment of the interest on the mortgage amount. The mortgagees let out the premises to the appellant (tenant), during the subsistence of the mortgage. The respondent filled a suit against the mortgagees for redemption of the mortgage and recovery of vacant possession of the mortgaged shop. The appellant tenant was also impleaded as a party defendant in the suit. The suit was decreed and the mortgage was redeemed, with an order to the mortgagees to give possession of the shop to the respondent. The appellant tenant filed an application under Section 47, read with Section 151 of the C.P.C. stating that the decree of redemption could not be executed and possession given by the mortgagees to the respondent/decree holder, as the tenancy of the appellant subsisted and the same had not been terminated under the provisions of the Rajasthan Premises (Control of Rent and Eviction) Act, 1950. This plea of the appellant was rejected by the executing Court which held that the decree was executable and the appellant had no interest and he could not resist the execution of the decree. Against this Judgment and order of the court, the appellant filed an appeal which was allowed. Thereupon, the respondent preferred a second appeal which was allowed by the High Court. The appellant appealed to this Court by special leave against the order of the High Court. Dismissing the appeal, the Court on a conspectus of the various decisions of the Court on the subject, 100 ^ HELD: The lease given by the mortgagee during the subsistence of the mortgage came to an end on the redemption of the mortgage. The tenant of the mortgagee in possession is not entitled to the protection of the Rent Act against the mortgagor after redemption of the mortgage, as held by the Rajasthan High Court in 1984 R.L.R. 709, following the decisions of this Court. The letting out of the premises to the appellant tenant was not a prudent act done in the ordinary course of management, as held by all the Courts below. The respondent/mortgagor landlord is entitled to get recovery of possession. [106A D] M/s. Sachalmal Parasram vs Mst. Ratanbai and Ors., AIR 1972 (SC) 637; The All India Film Corp. Ltd. & Ors. vs Sri Raja Gyan Nath & Ors. ; Mahabir Cope & Ors. vs Harbans Narain Singh & Ors., ; Hanhar Prasad Singh & Anr. vs Must. Of Munshi Nath Prasad & Ors., [1956] SCR t; Asa Ram & Anr. vs Mst. Ram Kali Anr. AIR 1958 (SC) 183 and Om Prakash Garg vs Ganga Sahai & Ors. JT , referred to.

ON: Writ Petition (Criminal) No. 1451 of 1985 Under Article 32 of the Constitution of India. S.B. Bhasme, Harbans Lal, A.S. Bhasme, Badri Das Sharma, 445 C.V. Subba Rao, R. Kumar, D.N. Mukharji, R. Mukherji, Tapash A Roy, Dilip Sinha and J.R. Das for the Respondents. The order of the Court was delivered by BHAGWATI, CJ. This application under Article 32 of the Constitution has asked for release of children below the age of 16 years detained in jails within different States of the country, production of complete information of children in jails, information as to the existence of juvenile courts homes and schools and for a direction that the District Judges should visit jails or sub jails within their jurisdiction to ensure that children are properly looked after when in custody as also for a direction to the State Legal Aid Boards to appoint duty counsel to ensure availability of legal protection for children as and when they are involved in criminal cases and are proceeded against. The Union of India and all the States and Union Territories have been impleaded as respondents. On September 24, 1985, notice was directed to all the respondents. A few of the respondent States filed counter affidavits in response to the notice. The matter was adjourned on March 31, 1986. to April 15, 1986, to enable the respondents who had not yet filed their affidavits to file such affidavits. On April 15, 1986, after hearing counsel who appeared for the parties this Court pointed out: " . It is an elementary requirement of any civilised society and it had been so provided in various statutes concerning children that children should not be confined to jail because incarceration in jail has a dehumanising effect and it is harmful to the growth and development of children. But even so the facts placed before us, which include the survey made by the Home Ministry and the Social Welfare Department show that a large number of children below the age of 16 years are confined in jails in various parts of the country . " This Court directed the District Judges in the country to nominate the Chief Judicial Magistrate or any other Judicial Magistrate to visit the District Jail and Sub Jail in their districts for the proposes of ascertaining how many children below the age of 16 years are confined in jail, what are the offences in respect of which they are charged, how many of them have been in detention whether in the same jail or previously 446 in any other jail before being brought to the jail in question, whether they have been produced before the children 's court and, if so, when and how many times and whether any legal assistance is provided to them. The Court also directed that "each District Judge will give ut most priority to this direction and the Superintendent to each jail in the district will provide full assistance to the District Judge or the Chief Judicial Magistrate or the Judicial Magistrate, in this behalf who will be entitled to inspect the registers of the jail visited by him as also any other document/documents which he may want to inspect and will also interview the children if he finds it necessary to do so for the purpose of gathering the correct information in case of any doubt. The District Judge, Chief Judicial Magistrate or the Judicial Magistrate, as the case may be, will submit report to this court within 10 weeks from today. It will also be stated in the report as to whether there are any children 's home, Remand Home or observation Homes for children within his district and if there are, he will inspect such children homes, remand homes and observation homes for the purpose of ascertaining as to what are the conditions in which children are kept there and whether facilities for education or vocational training exist. Such reports will be submitted by each District Judge through the Registrars of the respective High Courts to the Registrar of this Court. Each State Government will also file affidavit stating as to how many children homes, remand homes and observation homes for children are in existence in the respective State and how many inmates are kept in such children homes, remand homes or observation homes. The would also direct the State Legal Aid & Advice Board in each State or any other Legal Aid organisation existing in the State concerned, to send two lawyers to each jail within the State once in a week for the purpose of providing legal assistance to children below the age of 16 years who are confined in the jails. " The writ petition was adjourned to July 17, 1986. On April 24, 1986 the Court again made the following order: "We have adjourned the writ petition to 17.7.1986 for hearing and final disposal but we feel that it would be desirable to take it up when the Bench sits in vacation. We would direct that the matter may be placed for final disposal before a Bench of this Court on 24.6.1986. We have granted two months ' time to the District Judges to make their reports vide our order dated 15.4.1986. Fresh intimation to this effect may be sent to the District Judges through the Registrars of the High Courts. We may re 447 iterate that as soon as the reports are received copies A thereof may be supplied to the Advocates during the vacation itself . " The writ petition was thereafter listed on July 12, 1986, during the long vacation for hearing. The Court found that though reports from several District Judges had come in response to the earlier direction, yet several District Judges had not sent their reports. The Court observed: "It is a little surprising that though we gave directions long back directing the District Judges/Chief Judicial Magistrates to send their reports of inspection of not only the District Jails but also Sub Jails in the districts on or before 10.6.86 (24.6.86), the reports have not yet come in respect of several Districts and particularly in respect of sub jails in the Districts. We propose to give directions for expediting submission of these reports at the next hearing of the writ petition. We are very keen that the High Courts should be requested to monitor the submission of these reports and we have therefore requested the counsel appearing in the case to make constructive suggestions in that behalf. Six further weeks have passed beyond the time indicated if the order dated April 15, 1986, and even till this day analysis shows that several District Judges have not complied with the direction. This Court had intended that the report of the District Judges would be sent to the Registry of this Court through the Registrars of the respective High Courts. This obviously meant that the Registrars of the High Courts were to ensure compliance. We are both concerned and surprised that a direction given by the apex Court has not been properly carried out by the District Judges who are an effective instrumentality in the hierarchy of the judicial system. Failure to submit the reports within the time set by the Court has required adjournment of the hearing of the writ petition on more than one occasion. We are equally surprised that the High Courts have remained aloof and indifferent and have never endeavoured to ensure submission of the reports by the District Judges within the time indicated in the order of this Court. We direct that every defaulting District Judge who has not yet submitted his report shall unfailingly comply with the direction and furnish the report by August 31, 1986, through his High Court and the Registrar of every High Court shall ensure that compliance with the present direction is made. 448 Article 39(f) of the Constitution provides that the State shall direct its policy towards securing that children are given opportunities and facilities to develop in a healthy manner and in conditions of freedom and dignity and that childhood and youth are protected against exploitation and against moral and material abandonment. Every State excepting Nagaland has a Children 's Act. It is a fact some of the Acts have been in existence prior to inclusion of the aforesaid clause in Article 39 by the amendment of 1976. Though the Acts are on the statute hook. in some States the Act has not yet been brought into force. This piece of legislation is for the fulfilment of a constitutional obligation and is a beneficial statute. Obviously the State Legislatures have enacted the law on being satisfied that the same is necessary in the interest of the society, particularly of children. There is hardly any justification for not enforcing the statute. For instance, in the case of Orissa though the Act is of 1982, for four years it has not been brought into force. Ordinarily it is a matter for the State Government to decide as to when a particular statute should be brought into force but in the present setting we think that it is appropriate that without delay every State should ensure that the Act is brought into force and administered in accordance with the provisions contained therein. Such of the States where the Act exists but has not been brought into force should indicate by filing a proper affidavit by August 31, 1986, as to why the Act is not being brought into force in case by then the Act is still not in force. Under the Jail Manuals prevalent in different States every jail has a nominated committee of visitors and invariably the District and Sessions Judge happens to be one of the visitors. The purpose of having visitors is to ensure that the provisions in the Manual are strictly complied with so far as the convicts and the under trials prisoners detained in jail are concerned. Being in jail results in curtailment of freedom. lt is, therefore, necessary that the safeguards which are provided in the Manual should be strictly complied with and the prisoners should have the full benefit of the provisions contained in the Manual. We direct that every District and Sessions Judge should visit the District Jail at least once in two months and in course of his visit he should take particular care about child prisoners, both convicts and undertrials and as and when he sees any infraction in regard to the children in the prison he should draw the attention of the Administration as also of his High Court. We hope and trust that as and when such reports are received in the High Court the same would he looked into 449 and effective action would be taken thereupon. It is hardly necessary A to point out that it is the obligation of the High Court to ensure that all persons in judicial custody within its jurisdiction are assured of acceptable living conditions. The Court had made a direction to the State Legal Aid Boards to provide the facility of lawyer 's service in regard to under trial children. No report has yet been received from any Board as regards action taken in this direction. The State Boards will now furnish the information also by August 31, 1986. Certain other directions have been given earlier by this Court. All such directions shall be complied with and returns shall be furnished to this Court also by August 31, 1986. We hope and trust that there would be strict compliance with these directions now made and there would be no occasion for any further direction to be made for the self same purpose. The writ application shall be placed for directions on September 8, 1986. The petitioner, we must record, has undertaken real social service in bringing this matter before the Court. She has stated to us that she intends visiting different parts of the country with a view to gathering further information relevant to the matter and verifying the correctness of statements of facts made in the counter affidavits filed by the respondent States. We are of the view that the petitioner should have access to information and should be permitted to visit jails, children 's homes, remand homes, observation homes, Borstal schools and all institutions connected with housing of delinquent or destitute children. We would like to point out that this is not an adversary litigation and the petitioner need not be looked upon as an adversary. She has in fact volunteered to do what the State should have done. We expect that each State would extend to her every assistance she needs during her visit as aforesaid. We direct that the Union Government respondent No. 1 shall deposit a sum of rupees ten thousand for the time being within two weeks in the Registry of this Court which the petitioner can withdraw to meet her expenses. We would like to make it clear that the information which the petitioner collects by visiting the children 's institutions in different States as indicated above is intended to be placed before this Court and utilised in this case and not intended for publications otherwise.

'A ', a company, the managing agents of two Indian companies entered into a sub partnership with one 'B ' in 1907 and shared equally the emoluments from the managing agency. 'B ' died in 1316 leaving a Will bequeathing all his property to his wife 'C '. 'C ' executed two deeds of assignment in 1927 assigning her share of the emoluments under the sub partnership in favour of her son 'D ', who began to receive the half share of the emoluments from the managing agency. 'D ' executed a Will in 1935 appointing his wife and a solicitor as executors and trustees upon trust of his real and personal estate. 'D ' who was domiciled in England died in 1943. The High Court in England granted probate of the Will in June, 1943. Letters of Administration were obtained in India in August, 1944. The widow of 'D ' was a non resident and not a citizen of India. The Will inter alia empowered the two trustees to sell, call in and convert into money such parts of the estate as may not consist of money, at such time and in such manner as they thought fit, postponing such sale and conversion for such period as they thought proper. They were enjoined after meeting the funeral and testamentary expenses, and debts and legacies to invest the residue of the ready monies arising from such calling in and conversion of the estate, with the consent of the assessee during her life and afterwards at the discretion of the trustees, in the investments authorised under the Will and to transpose with investments into others, and to stand possessed of the residue of such monies and all investments and the income thereof upon trust subject to the further powers and provisions declared under the Will. It was provided that the trustees would pay the income of the residuary trust fund to the assessee during her life. After the death of the assessee the trustees would stand possessed of the residuary trust fund in trust for 675 the benefit of the testator 's children in accordance with the further provisions of the Will. The corpus of the trust consisted of certain shares in an Indian company and the income from the managing agency of the Indian companies. The question that arose was whether the widow of 'D ' was liable to wealth tax on her interest in the Indian assets in the hands of the trustees. The Wealth Tax officer assessed her to tax for the assessment years; 1957 58 to 1962 63. The appeals filed against the assessments were dismissed by the Appellate Assistant Commissioner, who held that the assessee possessed rights and interest in the shares and the managing agency which were tangible moveable properties located in India and, therefore, subject to wealth tax under the Act. In appeals before the Appellate Tribunal it was contended by the assessee that the assets held by her were situated outside India and being a non resident she was not taxable thereon. Alternatively it was urged that she was entitled to exemption under sub cl. (iv) of cl. (e) of s.2 of the Wealth Tax Act. The Tribunal held that the assessee who has a life interest in the testamentary trust estate comprising inter alia of the shares in an Indian Company and commission from the managing agency of an Indian Company can be said to have an interest in such shares and commission and that such interest is property located in India so as to be taxable under the Wealth Tax Act. It further held that the life interest of the assesee in the testamentary trust estate is not an annuity which is exempt under section 2(e)(iv) of the Wealth Tax Act. The matter was referred to the High Court at the instance of the assessee. It took the view that the right which the assessee acquired h under the trust was a right to have the trust administered in accordance with the provisions of the Will. While the legal ownership of the trust properties including the shares and the managing agency, vested in the trustees and remained so vested, the beneficial interest of the assessee did not extend to any right in any of the trust properties in specie and did not confer upon her any right of ownership over any property. (, Having regard to the nature and character of the right considered with the nature and extent of the powers conferred on the trustees to deal with the estate before the assessee could be said to have any right to the residual income, and the fact that the appropriate forum for the administration of the trust estate and for enforcement of the rights of the beneficiary under the Will were the appropriate courts in England, I I 676 the High Court held that the assets of the assessee must be regarded as foreign assets and, therefore, not located in India. The Revenue obtained a certificate under section 23 of the Act and preferred appeals to this Court On the question whether during the year ending on the valuation date the assessee 's life interest in the testamentary estate of her husband consisting of the Indian shares and the commission from the managing agency of the Indian companies could be said to constitute an asset located outside India, and whether the assessee was entitled to the benefit of cl. (i) of section 6 of the Wealth Tax Act. Dismissing the Appeals, ^ HELD: The asset in question of the assessee was a right in the nature of a chose in action enforceable in an appropriate Court in England and, therefore, must be regarded as a foreign asset, an asset not located in India. The assessee was, therefore, entitled to the benefit of cl. (i) of section 6 of the Wealth Tax Act. [686C] On the relevant valuation dates the estate of the testator had not been completely and finally administered and the trustees had not proceeded to the point where it could be said that there was a clear and ascertained residue from which the income payable to the assessee as a beneficiary under the Will could be known, and whether the assessee was entitled to income arising from the Indian shares and the managing agency of the lndian Companies. All that the assessee was then entitled to was the right to have the trust administered. [685G H; 686A] Having regard to the several considerations patent in this case that the settlement was an English settlement created by an Englishman who was resident in England, that it was an English Will proved in England, and the trustees were residents in England and moreover that the assessee, the beneficiary, was an English woman, who was also residing in England, the High Court rightly held that the right of assessee was in the nature of chose in action enforceable in England. [686B C] Attorney General vs Johnson, ; In re Smyth, [1898] 1 Ch. 89; Sudeley (Lord) vs Attorney General, [1897] Appeal Cases 11; Philipson Stow and others vs Inland Revenue Commissioners, [1961] Appeal Cases 727; Skinner and others vs Attorney General, ; In re Smith, Decd. Executor Trustee and Agency 677 Company of South Australia Ld. vs Inland Revenue Commissioners, A [1951] I Ch 360; Commissioner of Stamp Duties (Queensland) vs Hugh Duncan Livingston, [1965] Appeal Cases 694; Dr. Barnardo 's Homes vs Special Income Tax Commissioners, [1921] 2 Appeal Cases 1; A. & F. Harvey Ltd. as Agents to Executors of the Estate of late Andrew Harvey vs Commissioner of Wealth Tax, , referred to.

No. 12437 of 1985 etc. (Under Article 32 of the Constitution of India) Raju Ramachandra, Mukul Mudgal, Mrs. R. Ramachandran, N.J. Mehta, P.H. Parekh, D. Krishnamurthy, K.N. Rai, K.R. Nagaraja, Ms. Malinio Poduval, N.N. Verma, S.K. Bhardwaj and P.D. Sharma for the Petitioners. K. Parasaran, Attorney General, V.P. Sarthy and Ms. A. Subhashini for the Respondents. S.K. Sinha and S.K. Verma for the Respondents. The Judgment of the Court was delivered by BHAGWATI, CJ. I am in entire agreement with the judgment prepared by my learned brother Ranganath Misra, but since the questions involved in these writ petitions are of semi nal importance affecting as they do, the structure of the judicial system and the principle of independence of the Judiciary, I think I would be failing in my duty if I did not add a few words of my own. There are two questions which arise for consideration in these writ petitions and they have been succinctly set out in the judgment of Ranganath Misra, J. The first question is whether the exclusion of the jurisdiction of the High Court under Articles 226 and 227 of the Constitution in service matters specified in section 218of the Administrative Tribu nals Act, 1985 (hereinafter referred to as the impugned Act) and the vesting of exclusive jurisdiction in such service matters in the Administrative Tribunal to be constituted under the impugend Act, subject to an exception in favour of the jurisdiction of this Court under Articles 32 and 136, is unconstitutional and void and in any event, even if the first question be answered against the petitioners and in favour of 441 the Government, the second question required to be consid ered is, whether the composition of the Administrative Tribunal and the mode of appointment of Chairman, Vice Chairmen and members have the effect of introducing a con stitutional infirmity invalidating the provisions of the impugned Act. I agreed with the answers given to these questions in the judgment of Ranganath Misra, J. I would articulate my reasons as follows: It is now well settled as a result of the decision of this Court in Minerva Mills Ltd. & Others vs Union of India and Ors. ; that judicial review is a basic and essential feature of the Constitution and no law passed by Parliament in exercise of its constituent power can abrogate it or take it away. If the power of judicial review is abrogated or taken away the Constitution will cease to be what it is. It is a fundamental principle of our constitu tional scheme that every organ of the State, every authority under the Constitution, derives its power from the Constitu tion and has to act within the limits of such power. It is a limited Government which we have under the Constitution and both the executive and the legislature have to act within the limits of the power conferred upon them under the Con stitution. Now a question may arise as to what are the powers of the executive and whether the executive has acted within the scope of its power. Such a question obviously cannot be left to the executive to decide and for two very good reasons. First, the decision of the question would depend upon the interpretation of the Constitution and the laws and this would pre eminently be a matter fit to be decided by the judiciary, because it is the judiciary which alone would be possessed of expertise in this field and secondly, the constitutional and legal protection afforded to the citizen would become illusory, if it were left to the executive to determine the legality of its own action. So also if the legislature makes a law and a dispute arises whether in making the law, the legislature has acted outside the area of its legislative competence or the law is viola tive of the fundamental rights or of any other provisions of the Constitution, its resolution cannot, for the same rea sons, be left to the determination of the legislature. The Constitution has, therefore created an independent machinery for resolving these disputes and this independent machinery is the judiciary which is vested with the power of judicial review to determine the legality of executive action and the validity of legislation passed by the legislature. The judiciary is constituted the ultimate interpreter of the Constitution and to it is assigned the delicate task of determining what is the extent and scope of the power con ferred on each branch of Government, what are the limits on the exercise of such power under the Constitution and wheth er any action of any branch transgresses such limits. It is also a basic principle of the rule of law which permeates every provision of the Constitution and which forms its very core and essence that the exercise of power by the executive or any other authority must not only be conditioned by the Constitution but also be in 442 accordance with law and it is the judiciary which has to ensure that the law is observed and there is compliance with the requirements of law on the part of the executive and other authorities. This function is discharged by the judi ciary by exercise of the power of judicial review which is a most potent weapon in the hands of the judiciary for mainte nance of the rule of law. The power of judicial review is an integral part of our constitutional system and without it, there will be no Government of laws and the rule of law would become a teasing illusion and a promise of unreality. That is why I observed in my judgment in Minerva Mills 'Ltd. case (supra) at pages 287 and 288: "I am of the view that if there is one feature of our Constitution which, more than any other, is basic and fundamental to the mainte nance of democracy and the rule of law, it is the power of judicial review and it is unques tionably, to my mind, part of the basic struc ture of the Constitution. Of course, when I say this I should not be taken to suggest that however effective alternative institutional mechanisms or arrangements for judicial review cannot be made by Parliament. But what I wish to emphasise is that judicial review is a vital principle of our Constitution and it cannot be abrogated without affecting the basic structure of the Constitution. If by a Constitutional amendment, the power of judi cial review is taken away and it is provided that the validity of any law made by the legislature shall not be liable to be called in question on any ground, even if it is outside the legislative competence of the legislature or is violative of any fundamental rights, it would be nothing short of subver sion of the Constitution, for it would make a mockery of the distribution of legislative powers between the Union and the States and render the fundamental rights meaningless and futile. So also if a constitutional amendment is made which has the effect of taking away the power of judicial review and providing that no amendment made in the Constitution shall be liable to be.questioned on any ground, even if such amendment is violative of the basic structure and, therefore, outside the amendatory power of Parliament, it would be making Parliament sole judge of the consti tutional validity of what it has done and that would, in effect and substance, nullify the limitation on the amending power of Parliament and affect the basic structure of the Consti tution. The conclusion must therefore inevita bly follow that clause (4) of the Article 368 is unconstitutional and void as damaging the basic structure of the Constitution. " 443 It is undoubtedly true that my judgment in Minerva Mills Ltd. case (supra) was a minority judgment but so far as this aspect is concerned, the majority Judges also took the same view and held that judicial review is a basic and essential feature of the Constitution and it cannot be abrogated without affecting the basic structure of the Constitution and it is equally clear from the same decision that though judicial review cannot be altogether abrogated by Parliament by amending the Constitution in exercise of its constituent power, Parliament can certainly, without in any way violat ing the basic structure doctrine, set up effective alterna tive institutional mechanisms or arrangements for judicial review. The basic and essential feature of judicial review cannot be dispensed with but it would be within the compe tence of Parliament to amend the Constitution so as to substitute in place of the High Court, another alternative institutional mechanism or arrangement for judicial review, provided it is no less efficacious than the High Court. Then, instead of the High Court, it would be another insti tutional mechanism or authority which would be exercising the power of judicial review with a view to enforcing the constitutional limitations and maintaining the rule of law. Therefore, if any constitutional amendment made by Parlia ment takes away from the High Court the power of judicial review in any particular area and vests it in any other institutional mechanism or authority, it would not be viola tive of the basic structure doctrine, so long as the essen tial condition is fulfilled, namely that the alternative institutional mechanism or authority set up by the parlia mentary amendment is no less effective than the High Court. Here, in the present case, the impugned Act has been enacted by Parliament in exercise of the power conferred by clause (1) of Article 323A which was introduced in the Constitution by Constitution (42nd Amendemnt) Act, 1976. Clause (2) (d) of this Article provides that a law made by Parliament under clause (1) may exclude the jurisdiction of courts, except the jurisdiction of the Supreme Court under Article 136, with respect to the disputes or complaints referred to in clause (1). The exclusion of the jurisdiction of the High Court under Articles 226 and 227 by any law made by Parliament under clause (1 ) of Article 323A is, there fore, specifically authorised by the constitutional amend ment enacted in clause (2) (d) of that Article. It is dear from the discussion in the preceding paragraph that this constitutional amendment authorising exclusion of the juris diction of the High Court under Articles 226 and 227 postu lates for its validity that the law made under clause (1) of Article 323A excluding the jurisdiction of the High Court under Articles 226 and 227 must provide for an effective alternative institutional mechanism or authority for judi cial review. If this constitutional amendment were to permit a law made under clause (1) of Article 323A to exclude the jurisdiction of the High Court under Articles 226 and 227 without setting up an effective alternative 444 institutional mechanism or arrangement for judicial review, it would be violative of the basic structure doctrine and hence outside the constituent power of Parliament. It must, therefore, be read as implicit in this constitutional amend ment that the law excluding the jurisdiction of the High Court under Articles 226 and 227 permissible under it must not leave a void but it must set up another effective insti tutional mechanism or authority and vest the power of judi cial review in it. Consequently, the impugned Act excluding the jurisdiction of the High Court under Articles 226 and 227 in respect of service matters and vesting such jurisdic tion in the Administrative Tribunal can pass the test of constitutionality as being within the ambit and coverage of clause (2) (d) of Article 323A, only if it can be shown that the Administrative Tribunal set up under the impugned Act is equally efficacious as the High Court, so far as the power of judicial review over service matter is concerned. We must, therefore, address ourselves to the question whether the Administrative Tribunal established under the impugned Act can be regarded as equally effective and efficacious in exercising the power or judicial review as the High Court acting under Articles 226 and 227 of the Constitution. It is necessary to bear in mind that service matters which are removed from the jurisdiction of the High Court under Articles 226 and 227 of the Constitution and entrusted to the Administrative Tribunal set up under the impugned Act for adjudication involve questions of interpretation and applicability of Articles 14, 15, 16 and 311 in quite a large number of cases. These questions require for their determination not only judicial approach but also knowledge and expertise in this particular branch of constitutional law. It is necessary that those who adjudicate upon these questions should have same modicum of legal training and judicial experience because we find that some of these questions are so difficult and complex that they baffle the minds of even trained Judges in the High Courts and the Supreme Court. That is the reason why at the time of the preliminary hearing of these writ petitions we insisted that every bench of the Administrative Tribunal should consist of one judicial member and one administrative member and there should be no preponderance of administrative members on any bench. Of course, the presence of the administrative member would provide input of practical experience in the function ing of the services and add to the efficiency of the Admin istrative Tribunal but the legal input would undeniably be more important and sacrificing the legal input or not giving it sufficient weightage would definitely impair the efficacy and effectiveness of the Administrative Tribunal as compared to the High Court. Now section 6 provides that the Chairman of the Administrative Tribunal should be or should have been a Judge of the High Court or he should have for at least two years held office of Vice Chairman or he should have for at least two years held the post of 445 Secretary to the Government of India or any other post under the Central or State Government carrying a scale of pay which is not less than that of a Secretary to the Government of India. I entirely agree with Ranganath Misra, J. that the Chairman of the Administrative Tribunal should be or should have been a Judge of a High Court or he should have for at least two years held office as Vice Chairman. If he has held office as Vice Chairman for a period of at least two years he would have gathered sufficient experience and also within such period of two years, acquired reasonable familiarity with the constitutional and legal questions involved in service matters, But substituting the Chief Justice of a High Court by a Chairman of the Administrative Tribunal who has merely held the post of a Secretary to the Government and who has no legal or judicial experience would not only fail to inspire confidence in the public mind but would also render the Administrative Tribunal a much less effective and efficacious mechanism than the,High Court. We cannot afford to forget that it is the High Court which is being supplant ed by the Administrative Tribunal and it must be so manned as to inspire confidence in the public mind that it is a highly competent and expert mechanism with judicial approach and objectivity. Of course, I must make it clear that when I say this, I do not wish to cast any reflection on the mem bers of the Civil Services because fortunately we have, in our country, brilliant civil servants who possess tremendous sincerity, drive and initiative and who have remarkable capacity to resolve and overcome administrative problems of great complexity. But what is needed in a judicial tribunal which is intended to supplant the High Court is legal train ing and experience. I am, therefore, of the view, in agree ment with Ranganath Misra, J. that clause (c) of section 6 (1) must be struck down as invalid. I also fail to see why a District Judge or an advocate who is qualified to be a Judge of a High Court should not be eligible to be considered for appointment as Vice Chairman of the Administrative Tribunal. It may be noted that since the Administrative Tribunal has been created in substitution of the High Court, the Vice Chairman of the Administrative Tribunal would be in the position of a High Court Judge and if a District Judge or an advocate qualified to be a Judge of the High Court, is eligible to be a High Court Judge, there is no reason why he should not equally be eligible to be a Vice Chairman of the Administrative Tribunal. Can the position of a Vice Chairman of the Administrative Tribunal be considered higher than that of a High Court Judge so that a person who is eligible to be a High Court Judge may yet be regarded as ineligible for becoming a Vice Chairman of the Administrative Tribunal? It does appear that the provisions of the impugned Act in regard to the composition of the Administrative Tribunal are a little weighted in favour of members of the Services. This weightage in favour of the members of the Services and value discounting of the judi cial members does have the effect of 446 making the Administrative Tribunal less effective and effi cacious than the High Court. I would therefore suggest that a District Judge or an Advocate who is qualified to be a Judge of the High Court should be regarded as eligible for being Vice Chairman of the Administrative Tribunal and unless an amendment to that effect is carried out on or before 31st March, 1987, the impugned Act would have to be declared to be invalid, because the provision in regard to composition of the Administrative Tribunal cannot be severed from the other provisions contained in the impugned Act. That takes me to another serious infirmity in the provi sions of the impugned Act in regard to the mode of appoint ment of the Chairman, Vice Chairman and members of the Administrative Tribunal. So far as the appointment of judi cial members of the Administrative Tribunal is concerned, there is a provision introduced in the impugned Act by way of amendment that the judicial members shall be appointed by the Government concerned in consultation with the Chief Justice of India. Obviously no exception can be taken to this provision, because even so far as Judges of the High Court are concerned, their appointment is required to be made by the President inter alia in consultation with the Chief Justice of India. But so far as the appointment of Chairman, Vice Chairmen and administrative members is con cerned, the sole and exclusive power to make such appoint ment is conferred on the Government under the impugned Act. There is no obligation cast on the Government to consult the Chief Justice of India or to follow any particular selection procedure in this behalf. The result is that it is left to the absolute unfettered discretion of the Government to appoint such person or persons as it likes as Chairman, Vice Chairman and administrative members of the Administra tive Tribunal. Now it may be noted that almost all cases in regard to service matters which come before the Administra tive Tribunal would be against the Government or any of its officers and it would not at all be conducive to judicial independence to leave unfettered and unrestricted discretion in the executive to appoint the Chairman, Vice Chairmen and administrative members, if a judicial member or an adminis trative member is looking forward to promotion as Vice Chairman or Chairman, he would have to depend on the good will and favourable stance of the executive and that would be likely to affect the independence and impartiality of the members of the Tribunal. The same would be the position vis a vis promotion to the office of Chairman of the ' Admin istrative Tribunal. The administrative members would also be likely to carry a sense of obligation to the executive for having been appointed members of the Administrative Tribunal and that would have a tendency to impair the independence and objectivity of the members of the Tribunal. There can be no doubt that the power of appointment and promotion vested in the executive can have prejudicial effect on the 447 independence of the Chairman, Vice Chairmen and members of the Administrative Tribunal, if such power is absolute and unfettered. If the members have to look to the executive for advancement, it may tend, directly or indirectly, to influ ence their decision making process particularly since the Government would be a litigant in most of the cases coming before the Administrative Tribunal and it is the action of the Government which would be challenged in such cases. That is the reason why in case of appointment of High Court Judges, the power of appointment vested in the executive is not an absolute unfettered power but it is hedged in by a wholesome check and safeguard and the President cannot make an appointment of a High Court Judge without consultation with the Chief Justice of the High Court and the Chief Justice of India and a healthy convention has grown up that no appointment would be made by the Government which is not approved by the Chief Justice of India. This check or safe guard is totally absent in the case of appointment of the Chairman, Vice Chairmen and administrative members of the Administrative Tribunal and the possibility cannot be ruled out indeed the litigating public would certainly carry a feeling that the decisionmaking process of the Chairman, Vice Chairmen and members of the Administrative Tribunal might be likely to be affected by reason of dependence on the executive for appointment and promotion. It can no longer be disputed that total insulation of the judiciary from all forms of interference from the coordinate branches of Government is a basic essential feature of the Constitu tion. The Constitution makers have made anxious provision to secure total independence of the judiciary from executive pressure or influence. Obviously, therefore if the Adminis trative Tribunal is created in substitution of the High Court and the jurisdiction of the High Court under Articles 226 and 227 is taken away and vested in the Administrative Tribunal, the same independence from possibility of execu tive pressure or influence must also be ensured to the Chairman, Vice Chairmen and members of the Administrative Tribunal. Or else the Administrative Tribunal would cease to be an equally effective and efficacious substitute for the High Court and the provisions of the impugned Act would be rendered invalid. I am, therefore, of the view that the appointment of Chairman, Vice Chairmen and administrative members should be made by the concerned Government only after consultation with the Chief Justice of India and such consultation must be meaningful and effective and ordinarily the recommendation of the Chief Justice of India must be accepted unless there are cogent reasons, in which event the reasons must be disclosed to the Chief Justice of India and his response must be invited to such reasons. There is also another alternative which may be adopted by the Government for making appointments of Chairman, Vice Chairmen and mem bers and that may be by setting up a High Powered Selection Committee headed by the Chief Justice of India or a sitting Judge of the Supreme Court or concerned High Court nominated by the Chief Justice of 448 India. Both these mOdes of appointment will ensure selection of proper and competent persons to man the Administrative Tribunal and give it prestige and reputation which would inspire confidence in the public mind in regard to the competence, objectivity and impartiality of those manning the Administrative Tribunal. If either of these two modes of appointment is adopted, it would save the impugned Act from invalidation. Otherwise, it will be outside the scope of the power conferred on Parliament under Article 323 A. I would, however hasten to add that this judgment will operate only prospectively and will not invalidate appointments already made to the Administrative Tribunal. But if any appointments of Vice Chairmen or administrative members are to be made hereafter, the same shall be made by the Government in accordance with either of the aforesaid two modes of ap pointment. I may also add that if the Administrative Tribunal is to be an equally effective and efficacious substitution for the High Court on the basis of which alone the impugned Act can be sustained, there must be a permanent or if there is not sufficient work, then a Circuit Bench of the Administrative Tribunal at every place where there is a seat of the High Court. I would, therefore, direct the Government to set up a permanent bench and if that is not feasible having regard to the volume of work, then at least a Circuit Bench of the Administrative Tribunal wherever there is a seat of the High Court, on or before 31st March, 1987. That would be neces sary if the provisions of the impugned Act are to be sus tained. So far as rest of the points dealt with in the judgment of Ranganath Misra, J. are concerned, I express my entire agreement with the view taken by him. RANGANATH MISRA J: The challenge raised to the vires of the , (hereinafter re ferred to as 'the Act ') in an application under Article 32 of the Constitution and the other connected matters has been referred to the Constitution Bench for adjudication. Indis putably the Act has been framed within the ambit of Article 323A which was brought into the Constitution by the Forty Second Amendment Act in 1976. In exercise of power vested under Section 1(3) of the Act, the Central Government ap pointed 1.11.1985 as the date from which the Act would come into force. Thereupon Sampat Kumar and others (W.P. 12460 of 1985) moved this Court and the connected matters were brought before this Court or different High Courts which have since been transferred ' to this Court to be analogously heard. On 31.10. 1985 a Division Bench of this Court gave certain interim directions including stay of transfer of the pending applications under Article 32 which were liable to be transferred to the Tribunal and also for continuance of exercise of jurisdiction under Article 32 in regard to disputes covered under the Act notwithstanding the bar provided in Section 28. 449 In the writ applications as presented the main challenge was to the abolition of the Jurisdiction of this Court under Article 32 in respect of specified service disputes. Chal lenge was also raised against the taking away of the juris diction of the High Court under Articles 226 and 227. It was further canvassed that establishment of benches of the Tribunal at Allahabad, Bangalore, Bombay, Calcutta, Gauhati, Madras. and Nagpur with the principal seat at Delhi would still prejudice the parties whose cases were already pending before the respective High Courts located at places other than these places and unless at the seat of every High Court facilities for presentation of applications and for hearing thereof were provided the parties and their lawyers would be adversely affected. The interim order made on October 31, 1985, made provisions to meet the working difficulties. Learned Attorney General on behalf of the Central Government assured the Court that early steps would be taken to amend the law so as to save the jurisdiction under Article 32, remove other minor anomalies and set up a bench of the Tribunal at the seat of every High Court. By the Administra tive Tribunals (Amendment) Ordinance, 1986, these amendments were brought about and by now an appropriate Act of Parlia ment has replaced the Ordinance. Most of the original grounds of attack thus do not survive and the contentions that were canvassed at the hearing by the counsel appearing for different parties are these (1) Judicial review is a fundamental aspect of the basic structure of our Constitution and bar of the jurisdiction of the High Court under Articles 226 and 227 as contained in Section 28 of the Act cannot be sustained; (2) Even if the bar of jurisdiction is upheld, the Tribunal being a substitute of the High Court, its constitution and set up should be such that it would in fact function as such substitute and become an institution in which the parties could repose faith and trust; (3) Benches of the Tribunal should not only be established at the seat of every High Court but should be available at every place where the High Courts have permanent benches; (4) So far as Tribunals set up or to be set up by the Central or the State Govern ments are concerned, they should have no jurisdiction in respect of employees of the Supreme Court or members of the subordinate judiciary and employees working in such estab lishments inasmuch as exercise of jurisdiction of the Tribunal would interfere with the control absolutely vested in 450 the respective High Courts in regard to the judicial and other subordinate officers under Article 235 of the Constitution. After oral arguments were over, learned Attorney Gener al, after obtaining instructions from the Central Government filed a memorandum to the effect that section 2(q) of the Act would be suitably amended so as to exclude officers and servants in the employment of the Supreme Court and members and staff of the subordinate judiciary from the purview of the Act. In the same memorandum it has also been said that Government would arrange for sittings of the benches of the Tribunal at the seat or seats of each High Court on the basis that 'sittings ' will include 'circuit sittings ' and the details thereof would be worked out by the Chairman or the Vice Chairman concerned. With these concessions made by the learned Attorney General, only two aspects remain to be dealt with by us, namely, those covered by the first and the second conten tions. Strong reliance was placed on the judgment of Bhagwati, J (one of us presently the learned Chief Justice) in Minerva Mills Ltd. & Ors. vs Union of India & Ors. , ; , 287 where it was said: "The power of judicial review is an integral part of our constitutional system and without it, there will be no Government of laws and the rule of law would become a teasing illu sion and a promise of unreality. I am of the view that if there is one feature of our Constitution which, more than any other, is basic and fundamental to the maintenance of democracy and the rule of law, it is the power of judicial review and it is unquestionably, to my mind, part of the basic structure of the Constitution. Of course, when 1 say this I should not be taken to suggest that, however effective alternative institutional mechanisms or arrangements for judicial review cannot be made by Parliament. But what I wish to empha sise is that judicial review is a vital prin ciple of our Constitution and it cannot be abrogated without affecting the basic struc ture of the Constitution. If by a constitu tional amendment, the power of judicial review is taken away and it is provided that the validity of any law made by the Legislature shall not be liable to be called in question on any ground, even if it is outside the legislative competence of the Legislature or is violative of any 451 fundamental rights, it would be nothing short of subversion of the Constitution, for it would make a mockery of the distribution of legislative powers between the Union and the States and render the fundamental rights meaningless and futile. So also if a constitu tional amendment is made which has the effect of taking away the power of judicial review. " Article 32 was described by Dr. Ambedkar in course of the debate in the Constituent Assembly as the 'soul ' and 'heart ' of the Constitution and it is in recognition of this position that though Article 323A(2)(d) authorised exclusion of jurisdiction under Article 32 and the original Act had in Section 28 provided for it, by amendment jurisdiction under Article 32 has been left untouched. The Act thus saves jurisdiction of this Court both under Article 32 in respect of original proceedings as also under Article 136 for enter taining appeals against decisions of the Tribunal on grant of Special Leave. Judicial review by the apex court has thus been left in tact. The question that arises, however, for consideration is whether bar of jurisdiction under Articles 226 and 227 affects the provision for judicial review. The right to move the High Court in its writ jurisdiction unlike the one under Article 32, is not a fundamental right. Yet, the High Courts, as the working experience of three and a half dec ades shows have in exercise of the power of judicial review played a definite and positive role in the matter of preser vation of fundamental and other rights and in keeping admin istrative action under reasonable control. In these thirty six years following the enforcement of the Constitution, not only has India 's population been more than doubled but also the number of litigations before the courts including the High Courts has greatly increased. As the pendency in the High Courts increased and soon became the pressing problem of backlog, the nation 's attention came to be bestowed on this aspect. Ways and means to relieve the High Courts of the load began to engage the attention of the Government at the Centre as also in the various States. As early as 1969, a Committee was set up by the Central Government under the chairmanship of Mr. Justice Shah of this Court to make recommendations suggesting ways and means for effective, expeditious and satisfactory disposal of matters relating to service disputes of Government servants as it Was found that a sizable portion of pending litigations related to this category. The Committee recommended the setting up of an independent Tribunal to handle the pending cases before this Court and the High Courts. While this report was still engaging the attention of Government, the Administrative Reforms Commission also took note of the situation and recommended the setting up of Civil Services Tribunals to deal with appeals of Government servants against discipli nary action. In certain States, Tribunals of this type came into existence and started functioning. But the Central 452 Government looked into the matter further as it transpired that the major chunk of service litigation related to mat ters other than disciplinary action. In May 1976, a Confer ence of Chief Secretaries of the States discussed this problem. Then came the Forty Second Amendment of the Consti tution bringing in Article 323A which authorised Parliament to provide by law "for the adjudication or trial by adminis trative tribunals of disputes and complaints with respect to recruitment and conditions of service of persons appointed to public services and posts in connexion with the affairs of the Union or of any State or of any local or other au thority within the territory of India or under the control of the Government of India or of any Corporation owned or controlled by the Government. " As already stated this Arti cle envisaged exclusion of the jurisdiction of all courts, except the jurisdiction of. the Supreme Court under Article 136, with respect to the disputes or complaints referred to in clause (1). Though the Constitution now contained the enabling power, no immediate steps were taken to set up any Tribunal as contemplated by Article 323A. A Constitution Bench of this Court in K.K. Dutta vs Union of India, ; observed: "There are few other litigative areas than disputes between members of various services inter se, where the principle that public policy requires that all litigation must have an end can apply with greater force. Public servants ought not to be driven or required to dissipate their time and energy in court room battles. Thereby their attention is diverted from public to private affairs and their inter se disputes affect their sense of oneness without which no institution can function effectively. The constitution of Service Tribunals by State GOvernments with an apex Tribunal at the Centre which in the generality of the cases, should be the final arbiter of controversies relating to conditions of serv ice, including the vexed question of seniori ty, may save the courts from the avalanche of writ petitions and appeals in service matters. The proceedings of such Tribunals can have the merit Of informality and if they will not be tied down to strict rules of evidence, they might be able to produce solutions which will satisfy many. " In the meantime the problem of the backlog of cases in the High Courts becomes more acute and pressing and came to be further discussed in Parliament and in conferences and seminars. Ultimately in January 1985, both Houses of Parlia ment passed the Bill and with the Presidential assent on 27th February, 1985, the law enabling the long awaited Tribunal to be constituted came into existence. As already noticed, the Central Government notified the Act to come into force with effect from 1.11.1985. 453 Exclusion of the jurisdiction of the High Courts in service matters and its propriety as also validity have thus to be examined in the background indicated above. We have already seen that judicial review by this Court is left wholly unaffected and thus there is a forum where matters of importance and grave injustice can be brought for determina tion or rectification. Thus exclusion of the jurisdiction of the High Court does not totally bar judicial review. This Court in Minerva Mills ' case did point out that "effective alternative institutional mechanisms or arrangements for judicial review" can be made by Parliament. Thus it is possible to set up an alternative institution in place of the High Court for providing judicial review. The debates and deliberations spread over almost two decades for explor ing ways and means for relieving the High Courts of the load of backlog of cases and for assuring quick settlement of service disputes in the interest of the public servants as also the country cannot be lost sight of while considering this aspect. It has not been disputed before us and perhaps could not. have been that the Tribunal under the scheme of the Act would take over a part of the existing backlog and a share of the normal load of the High Courts. The Tribunal has been contemplated as a substitute and not as supplemen tal to the High Court in the scheme of administration of justice. To provide the Tribunal as an additional forum from where parties could go to the High Court would certainly have been a retrograde step considering the situation and circumstances to meet which the innovation has been brought about. Thus barring of the jurisdiction of the High Court can indeed not be a valid ground of attack. What, however, has to be kept in view is that the Tribu nal should be a real substitute of the High Court not only in form and de jure but in content and de facto. As was pointed out in Minerva 's Mills, the alternative arrangement has to be effective and efficient as also capable of uphold ing the constitutional limitations. Article 16 of the Con stitution guarantees equality of opportunity in matters of public employment. Article 15 bars discrimination on grounds of religion, race, caste, sex or place of birth. The touch stone of equality enshrined in Article 14 is the greatest of guarantees for the citizen. Centering around these articles in the Constitution a service jurisprudence has already grown in this country. Under Sections 14 and 15 of the Act all the powers of the Courts except those of this Court in regard to matters specified therein vest in the Tribunal either Central or State. Thus the Tribunal is the substitute of the 'High Court and is entitled to exercise the powers thereof. The High Courts have been functioning over a century and a quarter and until the Federal Court was established under the Government of India Act, 1935, used to be the highest courts within their respective jurisdiction subject to an appeal to the Privy Council in a limited category of cases. In this 454 long period of about six scores of years, the High Courts have played their role effectively, efficiently as also satisfactorily. The litigant in this country has seasoned himself to look upto the High Court as the unfailing protec tor of his person, property and honour. The institution has served its purpose very well and the common man has thus come to repose great confidence therein. Disciplined, inde pendent and trained Judges well versed in law and working with all openness in an unattached and objective manner have ensured dispensation of justice over the years. Aggrieved people approach the Court the social mechanism to act as the arbiter not under legal obligation but under the belief and faith that justice shall be done to them and the State 's authorities would implement the decision of the Court. It is, therefore, of paramount importance that the substitute institution the Tribunal must be a worthy successor of the High Court in all respects. That is exactly what this Court intended to convey when it spoke of an alternative mechanism in Minerva Mills ' case. Chapter II of the Act deals with establishment of Tribu nals and Benches thereof. Section 4 provides for establish ment while Section 5 deals with composition of the Tribunal and Benches thereof. Section 6 lays down the qualifications of Chairman, Vice Chairman and members. So far as the Chair man is concerned, sub section (1) requires that he should be or have been (a) a Judge of a High Court; or (b) has for at least two years, held office as Vice Chairman; or (c) has, for at least two years, held the post of a Secretary to the Government of India or any other post under the Central or a State Government carrying a scale of pay which is not less than that of a Secretary to the Government of India. Sub section (2) prescribing the qualification for Vice Chairman provides that he should be or have been (a) a Judge of a High Court; or (b) for at least two years, held the post of a Secretary to the Government of India or any other post under the Central or a State Gov ernment carrying a scale of pay which is not less than that of a Secretary to the Govern ment of India; or (bb) for at least five years, held the post of an Additional 455 Secretary to Government of India or any other post carrying equivalent pay; or (c) for a period of not less than three years held office as a judicial member of an Admin istrative Tribunal. Sub section (3) prescribes the qualification of a judi cial member and requires that: (a) he should be or should have been or qualified to be a Judge of a High Court; or (b) has been a member of the Indian Legal Service and has held a post in Grade I of that service for at least three years. Sub section (3 A) provides the qualification for ap pointment as administrative member and lays down that such person should have, for at least two years, held the post of an Additional Secretary to the Government of India or any other post under the Central or a State Government carrying a scale of pay not less than that of an Additional Secretary to Government of India; or (b) has, for at least three years, held the post of a Joint Secretary to the Government of India or any other post under the Central or the State Government carrying a scale of pay which is not less than that of a Joint Secretary to Government of India. So far as the Chairman is concerned, we are of the view that ordinari ly a retiring or retired Chief Justice of a High Court or when such a person is not available, a Senior Judge of proved ability either in office or retired should be ap pointed. That office should for all practical purposes be equated with the office of Chief Justice of a High Court. We must immediately point out that we have no bias, in any manner, against members of the Service. Some of them do exhibit great candour, wisdom, capacity to deal with intri cate problems with understanding, detachment and objective ness but judicial discipline generated by experience and training in an adequate dose is, in our opinion, a necessary qualification for the post of Chairman. We agree that a Vice Chairman with these qualifications and experience of two years may be considered for appointment as Chairman but in order that the Tribunal may be acceptable to the liti gants who are themselves members of the various services, section 6(1)(c) should be omitted. We do not want to say anything about Vice Chairman and members dealt with in sub sections (2), (3) or (3A) because so far as their selection is concerned, we are of the view that such selection when it is not of a sitting Judge or retired Judge of a High Court should be done by a high powered committee with a sitting Judge of the Supreme Court to be nominated by the Chief Justice of India as its Chairman. This will ensure selection of proper and competent people to man these high offices of trust and help to build up reputation and acceptability. Once the qualifications indicated for appointment of Chair man are adopted and the manner of selection of Vice Chairman and members is followed, we are inclined to think that the manning of the Tribunal would be proper and conducive to appropriate functioning. We 456 do not propose to strike down the prescriptions containing different requirements but would commend to the Central Government to take prompt steps to bring the provisions in accord with what we have indicated. We must state that unless the same be done, the constitution of the Tribunal as a substitute of the High Court would be open to challenge. We hasten to add that our judgment shall operate prospec tively and would not affect appointments already made to the offices of Vice Chairman and Member both administrative and judicial. Section 8 of the Act prescribes the term of office and provides that the term for Chairman, Vice Chairman or mem bers shall be of five years from the date on which he enters upon his office or until he attains the age of 65 in the case of Chairman or Vice Chairman and 62 in the case of member, whichever is earlier. The retiring age of 62 or 65 for the different categories is in accord with the pattern and fits into the scheme in comparable situations. We would, however, like to indicate that appointment for a term of five years may occasionally operate as a dis incentive for well qualified people to accept the offer to join the Tribu nal. There may be competent people belonging to younger age groups who would have more than five years to reach the prevailing age of retirement. The fact that such people would be required to go out on completing the five year period but long before the superannuation age is reached is bound to operate as a deterrent. Those who come to be Chair man, Vice Chairman or members resign appointments, if any, held by them before joining the Tribunal and, as such, there would be no scope for their return to the place or places from where they come. A five year period is not a long one. Ordinarily some time would be taken for most of the members to get used to the service jurisprudence and when the period is only five years, many would have to go out by the time they are fully acquainted with the law and have good grip over the job. To require retirement at the end of five years is thus neither convenient to the person selected for the job nor expedient to the scheme. At the hearing, learned Attorney General referred to the case of a member of the Public Service Commission who is appointed for a term and even suffers the disqualification in the matter of further employment. We do not think that is a comparable situation. On the other hand, membership in other high powered Tribu nals like the Income tax Appellate Tribunal or the Tribunal under the Customs Act can be referred to. When amendments to the Act are undertaken, this aspect of the matter deserves to be considered, particularly because the choice in that event would be wide leaving scope for proper selection to be made. We hope and trust that within a reasonable period not beyond 31st 457 March, 1987, the amendments indicated shall be brought about so as to remove the defects found in the Act. Khalid, Oza and Dutt 3.3. We have read both the Judgments just delivered the main judgment of learned Brother Ranganath Misra and the other of Hon 'ble the Chief Justice. We agree with both.

While dismissing, by its order dated 8 4 71, the writ petition filed by the appellant challenging the findings of the appellate and revisional orders passed by the Collector of Central Excise, Bombay and the Government of India respectively holding that the appellant had been rightly assessed and called upon to pay excise duty in respect of cloth manufactured in some powerlooms and purported to have been purchased by him from the owners of those powerlooms, the Bombay High Court, by its order dated 12th January, 1972 granted certificate of fitness to appeal under Article 133(1)(a) against the said judgment. Dismissing the appeal, the Court, ^ HELD: 1. The books of accounts produced by the appellant before the excise authorities contained clear evidence of the fact that the appellant himself was the owner of the yarn alleged to have been sold by Tejpal to the powerloom owners and that the appellant got back that very yarn in the shape of cloth after it was woven into cloth. Consequently the appellant himself was the manufacturer of the cloth in question and liable to excise duty in respect of the cloth so got manufactured in the powerlooms of private owners. [182G H; 183D]

minal Appeal No. 260 of 1968. Appeal by special leave from the judgment and order dated October 18, 1968 of the Bombay High Court in Criminal Appeal No. 1161 of 1966. A. section R. Chari, section section Khanduja and Maya Rao, for the appellant. M. C. Bhandare and section P. Nayar, for respondent No. 1. V. M. Tarkunde, Janendra Lal and B. R. Agarwala, for respondent No. 2. The Judgment of the Court was delivered by P. Jaganmohan Reddy, J. This appeal is by special leave against the order of the High Court of Bombay dated the 18th October 1968 allowing the oral application of the learned advocate for the respondent for the amendment of the charge of terms of the draft submitted by him and directing the Chief Presidency Magistrate to assign the case to some court for holding a new trial in respect of the amended charge. This order was made in the following circumstances The appellant was one of the partners of a firm Chandulal Kanji & Co. along with his brother Chandulal K. Mehta. By and under an agreement called the Packing Credit Agreement entered into between the firm and the second respondent, the Union Bank of India, the appellant obtained 75 per cent of the value of groundnut extraction to be purchased by the firm and exported to the United kingdom and other European countries from the Bank on the condition that immediately after the purchase of the goods and its export the shipping documents would be sent to it. This arrangement required the firm while sending a letter requesting the credit to be given to it, to enclose the contract of sale of groundnut extraction entered into between it and the foreign firm. On receipt of this letter and the agreement. the bank would advance 75 per cent of the money required to purchase the groundnut extraction. After the amount was received, goods had to be purchased from the mills and shipped for export and the shipping documents sent to the Bank within a month from the date of such advance. It appears that under this arrangement the second respondent Bank had advanced under the Cash Credit Agreement and the Packing Credit Agreement nearly rupees 4 lacs on several dates the first of which was 744 March 27, 1965 which was for the purchase of 200 tons of groundnut extraction and with which we are now concerned. The Cash Credit Agreement, the Packing Credit Agreement and the letter requesting the advance of Rs. 60,000/ were all signed on the same date. The advance, as requested, was also made on the 27th March 1965. Goods were purchased but could not be shipped within a month from the date of the advance because, as stated in the letter of the appellant dated the 27th April, due to change in the schedule of departure of the ships it was not possible to export the goods on the 24th or 25th March as originally planned as such he undertook to ship the goods a week thereafter. On the same day, the appellant further sent a declaration that the firm had purchased 300 tons from the advance made to it and is holding the stock. On the 6th May the Bank requested the firm to forward the shipping documents in respect of the seven agreements of which one related to the agreement of 27th March. When the shipping documents were not sent to it in conformity with the several documents the bank made certain enquiries from its branch in Veraval, a port in Kathiawar and received certain information as to the dates on which the various quantities were exported and the ships in which they were sent. As the shipping documents were not sent to the second respondent as required under the agreements entered into with it, it again called on the firm on the 24th May to hand over the documents to it in respect of the groundnut exported. When this request was not complied with, it filed a complaint against the appellant who alone was the active partner of the firm, in the court of the Presidency Magistrate on the 26th May alleging against him misappropriation of moneys and goods contrary to the agreement. In support of this complaint the manager of the Bank gave evidence and at the stage of framing the charge the Magistrate heard the lawyers for both sides. He framed only one charge against the accused for misappropriation of the moneys under section 406 I.P.C. advanced by the Bank in respect of which the Magistrate ultimately convicted him on 31st August 1966 and sentenced him to 18 months ' R.I. Against this conviction the appellant appealed to the High Court and when the case came up for hearing and had been argued for a considerable length, the advocate for the complainant, the second respondent, appears to have made an oral application for amending the charge framed by the Magistrate as per the draft handed over to the learned Judge which was to be added as an alternative charge to the charge already framed. It was contended that the Magistrate had framed a charge merely in respect of the entrustment of the moneys that were advanced by the Bank to the appellant but even so the evidence had been led on behalf of the complainant at the trial to show that apart from the money with which the appellant was said to have been 745 entrusted with, even the goods that were purchased by the appellant with the moneys so advanced had also been entrusted to him and which he had agreed to hold on account of the Bank. This prayer was opposed by the learned advocate for the appellant who contended that it was open to the complainant to have urged the Magistrate at the time when the charge was being framed to have an alternate charge similar to the one now required to be added. In fact it was stated by the learned advocate that the charge was actually framed by the Magistrate after substantial evidence of the complainant had been recorded by him and after the complainant 's advocate in the lower court had discussions on the question of the framing of charge, but in spite of it only one charge was framed against the appellant for breach of trust in respect of moneys said to have been entrusted to the appellant by the Bank. The charge relating to goods was omitted and not framed. It was also pointed out that the altering or amending of charge at this stage would really amount to the framing of a totally new charge in regard to altogether a new subject matter, namely, alleged entrustment of goods, which if permitted would prejudice the accused in his defence. The learned Judge, however, after hearing these arguments thought that a charge which would include entrustment of moneys as well as entrustment of goods ought to have been framed by the Magistrate but having regard to the materials which have already been brought on record by the complainant at the trial he thought that it was desirable in the interest of justice to allow the amendment. The following directions given by the learned Judge are relevant for the determination of the contention urged before us : "I direct that the charge as framed by the learned Magistrate be altered and amended in terms of the draft amendment submitted and send the case back for a new trial on this amended charge so as to enable the appellant to have full opportunity to meet this case, till which time this appeal is kept pending. I direct that the papers be sent to the learned Chief Presidency Magistrate forthwith and the learned Chief Presidency Magistrate is further directed to assign the case to some Court for holding the new trial. I further direct that the new trial should be expeditiously completed and preferably within two months from the receipt of the papers by the Court to which the case would be assigned by the learned Chief Presidency Magistrate. The other two appeals being Criminal Appeals Nos. 1162 and 1163 of 1966 should also be adjourned as part heard matters and to be put up along with Cri 746 minal Appeal No. 1161 of 1966 after the record and the proceedings of the new trial is received by this Court." Mr. Chari on behalf of the appellant construing the above order as a direction for a new trial without disposing of the appeal contends that it is unwarranted, unfair, inequitable and unsupported 'by any of the provisions of the Code of Criminal Procedure. The learned advocate further submits that it is grossly prejudicial to the accused, for the prosecution to wait till the end of the trial and then say that the charge should be amended. It could have easily insisted at the stage of framing the charge itself that an additional charge should be framed and if the prayer was not accepted it could have come in revision. The, prosecution having let the trial proceed to the end without insisting on any additional charge cannot now before an appellate court ask for its amendment nor should the said amendment be permitted. Secondly, he submits that the learned Judge did not consider the question whether there was or was not a prima facie case of entrustment of goods. In fact it is the contention that the cumulative effect of the agreement and the transaction between the appellant and the second respon dent Bank does not disclose entrustment of moneys to sustain the charge for which the appellant was convicted and if there can be no question of any entrustment of moneys there can be no entrustment of goods. The learned Judge, it is stated, should have adverted his mind to this aspect of the case before he permitted the framing of additional charge and directed the Magistrate to hold a new trial. In fact the learned advocate urged that before the Magistrate the second respondent 's advocate had specifically stated that the trial should proceed only on one charge relating to entrustment of moneys as a test case and having taken up this position no prayer for the addition of another charge can be made or ought to have been granted. But Shri Tarkunde appearing on behalf of the second respondent denies that there was any such submission and contends that in fact Tulzapurkar J. did not direct a new trial as suggested by the advocate on behalf of the appellant though the use of the words "new trial" has unhappily given rise to such a contention. What in fact the learned Judge did was to send the case back to the Magistrate to enable the appellant to have full opportunity to meet the case and return the record to the court to enable it to dispose of the appeal on both the charges. The learned advocate submits that there is no illegality in the order of the learned Judge because what the appellate court could have done itself it is directing the Magistrate to do, namely, to give an opportunity to the accused to call the prosecution witnesses if he so desires, obtain his statement under section 342 in respect of the additional charge and to allow him to record any evidence on 747 his behalf if he is so desirous. It appears to us that the contention of Shri Tarkunde is amply justified by the following observations of the learned Judge allowing the application for amendment made by Mr. Patel on behalf of the second respondent: "I have therefore asked Mr. Khambata as to whether the appellant would like to have an opportunity of a new trial where he could meet this case and Mr. Khambata has stated that the proper course for the court, after allowing amendment of the charge in the manner sought by the complainant, would be to order a new trial. Mr. Patel for the complainant, however, has stated before me that even during such new trial that would be ordered by the court, no fresh evidence would be led on behalf of the complainant and the complainant would be relying upon the self same material that has already been brought on record by the complainant at the trial, which is already concluded. Mr. Khambata also urged before me that if I were inclined to allow the application of Mr. Patel, I should dispose of the appeal which deals with the alleged entrustment of the monies and either accept the findings or set aside the findings and thereafter order a new trial in regard to the alleged entrustment of the goods. I feel that it would be desirable and proper to keep this pending till the opportunity that is being given to the appellant accused No. 2 to meet this new case is fully availed of by him and the record of such new trial is received by this court. I accordingly allow the application of Mr. Patel for amendment of the charge in terms of the draft submitted by him." From the above observations it would be clear that the learned Judge did not intend that the trial should be a new trial in the sense that the Magistrate would record the evidence afresh, see whether there, was a prima facie case for framing a charge and if there was, to frame a charge then permit the complainant to lead evidence, record the statement of the accused under section 342 and adduce evidence on his behalf after which he would pronounce judgment of conviction or acquittal. If he had so intended and had directed a totally new trial as is alleged, he could not have rejected the contention of Shri Khambata for the appellant that he should dispose of the appeal and order a new trial on the additional charge nor would he have directed that the appeal should be kept pending till the record of the new trial is received back in his court which could only be after giving 748 the accused appellant an opportunity to meet the case on the additional charge. On this interpretation of the order the question is whether what has been directed by the learned Judge is in conformity with the provisions of the Code of Criminal Procedure. In our view the Criminal Procedure Code gives ample power to the courts to alter or amend a charge whether by the trial court or by the appellate court provided that the accused has not to face a charge for a new offence or is not prejudiced either by keeping him in the dark about that charge or in not giving a full opportunity of meeting it and putting forward any defence open to him, on the charge finally preferred against him. The power of the appellate court is set out in section 423 Cr. P. C. and invests, it with very wide powers. A particular reference may be made to clause (d) of sub section (1) as empowering it even to make any amendment or any consequential or incidental order that may be just or proper. Apart from this power of the appellate Court to alter or amend a charge, section 535 Cr. P. C. further provides that no finding or sentence pronounced or passed shall be deemed to be invalid merely on the ground that no charge has been framed unless the Court of appeal or revision thinks that the omission to do so has occasioned failure of justice and if in the opinion of any of these courts a failure of justice has been occasioned by an omission to frame a charge, it shall order a charge to be framed and direct that the trial be recommenced from the point immediately after the framing of the charge. The wide and extensive power which an appellate or revisional court can exercise in this regard has also the support of the Privy Council. Lord Porter who delivered the opinion of the Judicial Committee in Thakar Sahab vs Emperor(1) had occasion to point out that while the history of the growth of Criminal Law in England its line of development and the technicalities consequent thereon would have made it more difficult and may be impossible to justify a variation of the charge, Indian Law was subject to no such limitation but is governed solely by the Penal Code and Criminal Procedure Code. In that case the Privy Council was called on to decide whether the alteration of the charge and the conviction from one of abetment of forgery by known person or persons to abetment of forgery by an unknown person or persons vitiated the conviction. It was held that it did not, because an Appellate Court had wide powers conferred upon it by section 423 and in particular by sub section (1)(a) of that section, which is "always of course subject to the limitation that no course should be taken by reason of which the accused may be prejudiced either because he (1) [1943] P.C.192. 749 is not fully aware of the charge made or is not given full opportunity of meeting it and putting forward any defence open to him on the charge finally preferred. " In this case Shri Chari contends that : (1 ) what the High Court should have done if it found that interest of justice required it either to have recorded the evidence itself or to have asked the trial court to record it and send it back, but it cannot refuse to give a finding on the charge for which he was convicted and (2) that the prosecution having proceeded with the trial on the charge framed and not having asked for an amendment at that stage cannot ask the appellate court to amend or add to the charge. It appears to us that both these contentions are based on a misreading of the order of the High Court. As already pointed out the learned Judge of the High Court did not intend nor did he direct a new trial in the sense that it is contended he had done. There was in fact no retrial directed, but only an opportunity was given to the accused to safeguard himself against any prejudice by giving him an opportunity to recall any witnesses and adduce any evidence on his behalf. The appellant has also understood the order not as a retrial is clear from ground (f) of the Special Leave Petition filed before us. It is therefore not necessary for us to examine the scope and extent of the power or circumstances in which a retrial should be ordered. The complainant 's Advocate Shri Tarkunde in fact said and even now submits before is that he does not want to lead any evidence and would be satisfied on the same evidence to sustain a conviction on the amended charge, nor does the alternative charge now framed requires him to answer a charge against him of a new offence which would cause prejudice. The offence 'With which he is now charged alternatively is the same namely under Section 406 but as the entire transaction was one and indivisible he is not only required to answer the charge of misappropriation of money but in the alternative misappropriation of goods which the complainant Bank contends became their 's as soon as the accused purchased them with the moneys it advanced. In our view no prejudice is caused or is likely to be caused to the accused by the amendment of the charge as directed by the High Court. It was again contended that the High Court ought to have considered whether there was a prima facie case against the accused to justify the framing of the amended charge particularly when it took the view that the first charge could not be sustained. We do not think the learned Judge expressed any view as to the maintainability or otherwise of the conviction, but thought there should have also been framed an alternate charge in respect of the goods. It is true that the court did not give any reasons as 750 to why it thinks there was a prima facie case, but being an appellate court perhaps it was anxious to avoid giving an impression that it has taken any particular view on the evi dence. The accused raised no ground on this account in the Special Leave Petition, nor do we think on this account we should interfere with the judicial exercise of discretion of the learned Judge in framing the charge and in giving the accused an opportunity to recall any witnesses or adduce fresh evidence on his behalf. If no objection could be taken to the trial Court in framing the original charge it is difficult to see how an objection can be taken at this stage to the framing of an alternate charge on the same allegation in the complaint. The appeal is accordingly dismissed. Y.P. Appeal dismissed.

The appellants, a firm of brokers, entered into a contrct for the sale and purchase of a quantity of jute under a "sold note" addressed to the respondents which they signed as "A & Co., brokers" and a "bought note" of the same date and for the same quantity of jute addressed to a third person in which also they signed as "A & C0. , brokers ". The" sold note" contained the usual arbitration clause under which all matters, questions, disputes, differences and/or claims, arising out of and/or concerning, and/or in connec tion and/or in consequence of, or relating to, the contract . . shall be referred to the arbitration of the Bengal Chamber of Commerce. " A dispute having arisen with regard to a matter which admittedly arose out of the contract evidenced by the sold note, the appellants referred the dispute for arbitration. The respondents raised before the arbitrators the further contention that as the appel lants were only brokers they were not entitled to refer the matter to arbitration. The arbitrators made an award in favour of the appellants. The respondents made an applica tion to the. High Court under the Indian Arbitration Act for setting aside the award: Held that, assuming that it was open to the respondents to raise this objection at that stage, inasmuch as this further dispute 793 was also one which turned on the true interpretation of the contract and the respondents must have recourse to the contract to establish their claim, this was also a dispute arising out of or concerning the contract and as such fell within the arbitration clause, and the award could not be set aside under the Indian , on the ground that it was beyond jurisdiction and void. Heyman vs Darwins Ltd. ([1942.] A.C. 356) referred to.

161 165 of 1988. section Ganesh, Arun Jaitely, Miss Bina Gupta, Miss Madhu Khatri, A.N. Haksar, Praveen Anand, Anip Sachthey, B.L. Pagaria, P.K. Jain, Udai Holla and T. Sridharan for the petitioners. G. Ramaswamy, Soli, J. Sorabjee, M.H. Baig, F.S. Nari man, H.N. Salve, R. Sasiprabhu, S.S. Shroff, Mrs. P.S. Shroff and S.A. Shroff for the Respondents. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. In these transferred writ peti tions and one suit, we are concerned with the powers, func tions and the role of the Controller of Capital Issues. By an order dated 9th September, 1988 this Court had directed that the four writ petitions and one civil suit i.e., W.P. No. 1791/88 pending before the Delhi High court, W.P. No. 2708/88 pending before the Jaipur Bench of the Rajasthan High Court, W.P. No. 12176/88 pending before the Karnataka High court, W.P. No. 4388/88 pending before the High Court of Bombay and Civil Suit No. 1172/88 pending before the Civil Judge, Junior Division Bench, Baroda, Gujarat, be transferred to this Court for disposal. It would be appro priate to deal with the facts of one of these, i.e., W.P. No. 1791/88, which was filed in Delhi High Court in T.C. No. 161/88. The other writ petitions and the suit raise more or less identical problems and issues on more or less same facts. The petitioner in that writ petition is one Narendra Kumar Maheshwari and the respondents are the Union of India, the Controller of Capital Issues, and Reliance Petro chemi cals Ltd. (RPL). The case of the petitioner is that he is an individual who is a public spirited 58 person and is an existing shareholder of the Company known as Reliance Industries Ltd. (RIL), which was the promoter of Reliance Petrochemicals Limited, being the respondent No. 3. The petitioner held at all relevant times 144 shares of RIL and 100 debentures of different categories. The respondent No. 3, being RPL, was a newly set up public limited company for the purpose of carrying on the business of manufacture of petrochemicals. These petitions were filed in different courts challenging the consent of the Controller of Capital Issues granted for the issue of shares (Rs. 50 crores) and debentures (Rs.516 crores) by the RPL. It was contended in the petition that the respondents Nos. 1 & 2, being the Union of India and the Controller of Capital Issues, ought not to have granted consent to respondent No. 3, namely, RPL to issue share and debenture capital at an aggregate value of approx. Rs.600 crores. It may be mentioned that after these writ petitions and suit were filed, attempts were made to obtain injunction restraining the issue of share capital and debentures as advertised. By an order dated 19th August, 1988 passed by this Court, this Court had restrained the issue of such injunctions and directed that the shares and debent ures would be issued irrespective of any order of injunction passed by any court or authority in India. Different cases, as mentioned hereinbefore, were thereafter transferred to this Court. On the basis of the said consent, it was stated that the respondent No. 3 had issued prospectus and at the relevant time had intended to open the issue from 22nd August, 1988, of about 3 crores debentures of the face value of Rs.200 each which was the largest convertible debentures issue in India. It was alleged that the respondents had adopted very sharp methods to collect money from the public and ultimate ly to defraud them. It was stated that under the terms of the prospectus, each debenture of the face value of Rs.200 would be fully convertible: Respondent No. 3 would issue one share of Rs. 10 at par on the date of allotment. There would, thus, be an equity capital of about Rs.30 crores in all on allotment. Further, it was stated that the Company would convert Rs.40 of each convertible debentures into share after 3 years and the balance of Rs. 150 into share at any time between five and seven years. It was mentioned by the Company that it would convert at the second stage of conversion at such premium to be allowed by the Controller of Capital Issues. The petitioner alleged that it was not clear as to whether the investors would get 2 shares or 3 shares or 4 shares for each debenture, at the second conver sion of Rs.40. Similarly, it was alleged that the last portion of Rs. 150 would be converted into shares any time between five and seven years at which time again the Con troller, would fix the premium for conversion. The 59 petitioner further stated that it was thus not clear what the equity capital of the Company would be, whether it would be Rs. 150 crores or Rs.600 crores or whether the residual amount would go into reserve account or whether a separate account would be opened in respect of the premium. It was alleged that the respondent No. 3 being RPL had been promot ed by RIL and the past history of RIL showed that the share prices of RIL had fluctuated widely leaving lot of scope for manipulations. It was alleged in the petition that there was no explanation from the company or anybody from the share market as to why the share prices fluctuated so widely and it was obvious that there were market operators who prop up or bring down the prices depending on how it suited their convenience. The share value of RIL, the promoter company, was subjected to wide fluctuations on account of the pur chase and sale operations of certain interested quarters close to the management of the respondent No. 3 Company, it was alleged. On more than one occasion during the past six months, the sale of the share in the stock market was banned in some Stock Exchanges due to fall in price. It was alleged that it indicated the cooperation and support from the authorities for maintaining the fictitious value of the share in the market; and thus on an equity capital of Rs. 152 crores an amount of Rs.800 crores in the premium account has been obtained, but there would be no amount in General Reserve account because the Company had not earned anything worthwhile to put in General Reserve. It was further alleged that the lack of bona fide of the Reliance group was well known; and that RIL had issued debentures of 'G ' Series and had assured to pay interest up to 5th February, 1988. It was alleged that the Company did not keep up this assurance, but converted the debentures into equity shares in the month of August, 1987 thereby avoiding payment of interest. In this manner, it was alleged, the Company saved interest of Rs.30 crores whereas in fact it incurred a loss. The case of the petitioner was that the Company was obviously trying to repeat the same game through the new Company by maintaining the share price only on an equity capital converted on each debenture. The paramount duty of respondents Nos. 1 & 2 before according permission was, it was asserted, to ensure that the requirement of the Company in raising such capital was bona .fide. It was observed that no public interest was intended to be served by respondent No. 1, as it had chosen to allow respondent No. 3 to collect such huge amounts in excess of the requirement. It is further the case of the petitioner that the opera tions ' of RIL (Promoter) subsequent to the raising of past issues made by it were subjected to severe criticisms both in the press and in the public. It was 60 pointed out that though the issue proposed was of shares of Rs.50 crores and debentures of Rs.516 crores, the company was allowed to retain over subscription to the tune of 15% amounting to Rs.77.40 crores. It was alleged that the re spondent No. 3 was a new Company and it should not be al lowed 15% retention; and if it wanted to raise Rs.600 crores, it should have come out with an issue of that amount. It was further alleged that the respondent No. 2, without considering the propriety of the situation, allowed the respondent No. 3 to make issue of the capital for the interest of a few people. Hence, the sanction of the issue of convertible debentures of respondent No. 3 calls for judicial review. It was also alleged that the sanction was approved at exorbitant terms: 5% of the face value (equal to nothing) according to the petitioner, would be converted at par on allotment, another 20% {Rs.40) at a premium to be decided by the Controller of Capital Issues after 3 years but before 4 years of allotment and the balance of Rs. 150 at such premium as might be permitted by the Controller of Capital Issues after 5 years but before the end of 7 years from the date of allotment. It was stated that the investors would be completely left thrown at the mercy of respondents Nos. 3 & 4; and that till date no convertible debenture had been issued on such vague terms. In those circumstances, it was submitted, the consent of the Controller of Capital Issues was bad, illegal on the ground hereinafter alleged: The consent order was hit by arbitrary and capricious exercise of jurisdiction by respondent No. 1. It was further alleged that the respondent No. 3 's promoters i.e. RIL had been obtaining from respondent No. 1/2 such Consent Orders on the ground that it was in a position to raise such huge moneys from the public for the purpose of implementation of its projects without recourse to the Financial Institutions. According to the petitioner, for the first time, in the corporate history of India, RIL (Promoter) was allowed to raise Rs. 100 crores by way of issuance of 'F ' Series deben tures. On account of the campaigning through Brokers for attractive returns, the public was misled and RIL wooed the public and collected Rs. 406 crores. RIL had not made any allotment on a proper basis but made allotments on some basis of 'Private Placement '. It was further alleged that the management of RIL through its associate companies ob tained huge borrowals from nationalised banks; and several bank employees got into trouble due to advancing of loans for the purpose of subscription in the 'F ' Series debentures through the associated companies of respondent No. 3/RIL which had popularly come to be known as 'Reliance Loan Mela '. It was alleged that the Controller of Capital Issues and Union of India acted mala fide in issuing the consent order 61 which was designed to benefit respondent No. 3 and prejudice the interests of the investing public. It was further al leged that in giving the consent order the respondent No. 1 blatantly overlooked the magnitude of the sum of Rs.600 crores, proposed to be raised from the public through the new issue of debentures. It was alleged that the act of respondent No. 1/2 was vitiated as in issuing the consent order respondent No. 2 was influenced by extraneous considerations not germane to the public interest. The Capital Market in India has under gone turbulent changes in the recent years. Small investors such as employees, workers and small business community were coming forward, according to the petitioner, for the purpose of investment in corporate sector. It was further stated that the small investors had no means of verifying the correctness or otherwise of the statements and the sound ness/financial viability of any company. It was further alleged that the respondents Nos. 1/2 had acted wrongly and illegally in allowing the respondent No. 3 to raise share capital on premium for financing new projects. It was con tended in the petition of the petitioner that the consent order was a fraud. In those circumstances it was prayed that the court should exercise its jurisdiction under article 226 and set aside the consent order which was for the public issue on 22nd August, 1988. The facts and the circumstances leading to this consent order have been stated in the affidavit on behalf of re spondent No. 3 to the writ application. After disputing the locus of the petitioner, who challenged the consent order for making the public issue of 12.5 Secured Convertible Debentures by 3rd respondent, the respondent No. 3 stated that the petition suffers from laches and delays. On behalf of respondent No. 3 it was asserted that the public issues made by the 3rd respondent had been promoted by RIL. The RIL and RPL are inter connected and represented companies in the large industrial house known as 'Reliance Group '. According to respondent No. 3, they represented India 's fastest grow ing private sector companies and comprised the world 's second largest investor family of over 30 lakhs investors. It was further asserted that the 3rd respondent would have India 's largest private sector Petrochemical Complex for the manufacture of critically scarce raw materials. It was stated that the 3rd respondent would manufacture versatile raw material which was behind the plastic revolution, par ticulars whereof have been mentioned in the Annexure. It was further stated that the petrochemical complex of the 3rd respondent would come up at Hazira, District Surat in the 62 State of Gujarat and the production was planned to start in a phased manner between the next 18 24 months. The 3rd respondent would be setting up a state of art world class plant in collaboration with the world leaders in the respec tive fields, i.e. (a) Du Pont, Canada for HDPE (b) B.F. Goodrich & Co. for PVC, and (c) Scientific Design Co. for MEG. The terms of the issue of debentures of the face value of Rs.200 being fully converted into equity shares were the following: "(i) A sum of Rs. I0 being 5% of the face value of each debentures by way of first conversion immediately into one equity share at par on allotment; (ii) A sum of Rs.40 being the 20% of the face value of each debenture by way of second conversion after three years but before four years from the date of allotment at a premium to be fixed by the Controller of Capital issues; (iii) The balance of Rs. 150 representing 75% of the face value of each debenture as third conversion after five years but not later than seven years from the date of allotment at a premium to be fixed by the Controller ofapital Issues. " The premium, it was stated on behalf of respondent No. 3, that would be charged at the time of conversion into equity shares would be as fixed and decided by the pre scribed statutory authority, namely, the Controller of Capital issues, and the 3rd respondent and its Board of Directors would not have any say in the matter or be enti tled to fix the same on their own. It was further stated that, subject to the necessary approvals being obtained in that behalf, the shareholders and the convertible debenture holders of the respondent No. 3, promoter company, would be entitled to participate in all the future issues of the 3rd respondent. The fully convertible debentures of the 3rd respondent would thus be a growth instrument with different rights, viz., earning a fixed rate of interest from the first day till it was converted into equity and thereafter entitled to dividend that might be declared after conversion into Equity. It is to that extent different from a purely equity share on which investor would earn dividend only when profits are declared. Thus, the instrument proposed by the 3rd respondent, according to it, has the best features of share as well as debenture. Apart from the above, in accord ance with the application for listing made by the 3rd re spondent to the Bombay Stock Exchange and 63 Ahmedabad Stock Exchange, the 3rd respondent has proposed that all the three components or parts of the instrument, namely, Part 'A ' representing an equity share on first conversion, Part 'B ' being 20% of the face value of the debenture and Part 'C ' being the balance 75% of the face value of the debentures, would all be listed separately and independently so that after allotment, an investor can sell if he so desires the convertible portion of the debentures being Part 'B ' and 'C ', and just retain the equity share being Part 'A '. It was intended to ensure both liquidity and appreciation in the hands of the investor. The products which were intended to be manufactured by the 3rd respondent were many, namely, (a) High Density Polyethylene (HDPE) and Poly Vinyl Chloride (PVC) which are raw materials behind plastic revolution; (b) Mono Ethylne Glycol (MEG) is a critical polyester raw material; HDPE and PVC being vital thermo plastic play an important role in the core sector and are used for manufacture of everything from films to pipes, auto parts to cable coatings, and containers to furnishings. It is not necessary for the issues involved in these applications to set out in detail the very many particulars given by the respondent No. 3 in support of the contention that a petrochemical complex proposed to be set up by the new Company respondent No. 3 would be beneficial socially and economically for the country as well as for the investors. The advantages of convertible debentures proposed to be issued at that time by the respondent No. 3 were also high lighted. It is stated that debentures are treated as equity. The 3rd respondent 's borrowing capacity remains unutilised and this would help it in implementing the future projects expeditiously. The first phase of the project is financed by the proposed issue of debentures and not by large capital borrowings from the public financial institutions (except to the extent of foreign currency loans of Rs.85 crores from them). The interest which would, therefore, have been pay able to the financial institutions will be paid to the debenture holders ensuring them a return and simultaneously the convertible clause which would have been applicable to term loans obtained from the financial institutions would be available to the investors thereby ensuring them growth in equity value. It was further stated that since the preferen tial allotment of 50% of the total issue was made to RIL shareholders, the shareholding pattern of the 3rd respondent will be the most widely held people 's shareholding in the country and it was pleaded that there will be at least 20 lacs shareholders of the 3rd respondent which would be a world market record. 64 It was further stated that RIL, who are the promoters of the project, have one of the best track records for setting up of the Projects such as Polyester Staple Fibre (PSF), Polyester Filament Yarn (PFY), Linear Alkyl Benzene (LAB) and Purified Terphthalic Acid (PTA) plants at Patalganga in record time. Business records of Reliance 's 'Vimal ' and 'Recorn ' were also emphasised. It is, however, not necessary for the purpose of the issues involved in these applications either to dilate upon these or to consider the correctness or otherwise of these assertions. Reliance 's plant at Patal ganga complex in the State of Maharashtra and its beneficial effects to the community and the State, as asserted on behalf of respondent No. 3, are also not relevant. It was stated that Reliance is privy to the technology of the world leaders, such as Du Pont of U.S.A. and Imperial Chemical Industries of UK. Mr. Pageria, learned counsel appearing for one of the petitioners, Radhey Shyam Goyal tried to impress upon us that among the world leaders of technology, Du Pont of USA and Imperial Chemical Industries of UK cannot claim such high position. Neither is it necessary nor is it possi ble for us to consider these assertions and denials. The industrial licences have been applied for and it was stated that pending the formation and incorporation of RPL on 4.1. 1988 under the , RIL had under taken and performed various acts and deeds, particulars whereof have been mentioned in the Statement of Facts. In the Statement of facts filed on behalf of respondent No. 3, a list of consents and approvals obtained by the 3rd re spondent, has also been indicated. It was further stated that pursuant to the order of this Court, dated 19th August, 1988 the public issue was made under the prospectus dated 27th July, 1988 which opened on 22nd August, 1988 and closed on 31st August, 1988. There had been an overwhelming response to the issue from all catego ries of investors including nonresidents, RIL shareholders/employees and the issue was heavily oversub scribed. On behalf of the RPL, it was stated that the time frame of 10 weeks commencing from 1st September, 1988 and ending on th November, 1988 had to be strictly adhered to. The provisions of Section 73 and other applicable provisions of the , the provisions of the Securities (Contract and Regulation) Act, 1956 and the listing require ments of the Stock Exchanges were also complied with. It was stated on behalf of the 3rd respondent that for the purpose 65 of finalising the means of finance of HDPE, PVC and MEG Projects, RIL as the promoters of the 3rd respondent had engaged the services of the Merchant Banking Division of ICICI which is a public financial institution and one of the foremost consultants in the field. During the discussions which were initiated in the second half of 1987 with ICICI, the idea of implementing these projects through a new inde pendent Company instead of RIL had taken shape duly taking into account the financial aspects, management aspects, issues related to management and operation control of set ting up the projects within the existing company vis a vis the setting up of the projects in the new company, namely the 3rd respondent company, was taken up. The 3rd respondent company and ICICI also considered various alternative means of financing project keeping in view the following criteria: (a) That the project should be financially beneficial to the company. (b) That it should be financially attractive to the investor. (c) That it should be operationally easy for the company and the investor. (d) That it should meet the institutional/stock exchange/Ministry of Finance norms and guidelines as regards financing of projects. (e) That it should be sustainable and attractive enough in terms of the profitability/servicing capability of the project. (f) That it should reduce the dependence of the company on institutional finance. (g) That it should encourage the capital market activity in India. The various alternative means of issue of security such as equity share and/or convertible cumulative preference shares (CCP) and/or partially convertible debentures and/or non convertible debentures and/or equity linked debenture issue and/or fully convertible debentures were all examined by the management and ICICI at length from various aspects including the aforesaid aspect, it was asserted on behalf of respondent No. 3. It was reiterated that the Controller of Capital Issues had applied his mind and considered all relevant, pertinent and proximate matters and the Controller bona fide bestowed painstaking consideration by examining the entire gamut of means of finance, the volume of finance needed and types of securities, marketability of securities, conditions of the capital market and other relevant considerations as are normally and properly to be evaluated by him as an expert authority. A specialised expert statutory authority or agency under a valid and legal enactment has been set up for the purpose of examining on what basis securities such as share and/or convertible debenture should be issued 66 and the merits of his conclusions are not open to judicial review. It has to be borne in mind that the writ petitioners were only potential investors in the shares and debentures proposed to be issued at the time when a large part of the averments had been made. It was open to them, if they felt that the scheme was not attractive not to subscribe to the issues. It was, however, not possible for them, contend the respondents, to prohibit the issue. or prevent the taking of other steps in pursuance thereof. Respondents 3 and 4 have set out various reasons why an interim injunction should not be granted. These are unnecessary to be dealt with now when the matter is being finally disposed of. Two other affidavits are necessary to be referred to. One is the rejoinder affidavit on behalf of the petitioner in writ petition No. 1791 of 1988 before the Delhi High Court, and the other is on behalf of the Government. So far as the petition of Narendra Kumar Maheshwari is concerned, it is necessary to note that he has stated that the capital market had undergone changes in raising issues and the investors had no means of verifying the correctness and soundness of the financial viability of the scheme. It was stated that the Central Govt. did not take the responsibili ty for financial soundness of the scheme. It was asserted that a new share of a new company could not be raised at a premium but the Govt. had improperly permitted the issue of shares of a new company at a premium in the instant case. It was stated that the consent order of the Controller of Capital Issues stated that premium would be payable on the shares to be allotted on conversion which, according to the deponent, amounted to fraud on the investing public and the subterfuge to boost up the market value of shares of RIL. It was reiterated that the RPL had been promoted by RIL whose shares had fluctuated in the share market so widely for which no explanation came forth from the company. These fluctuations in the share market were, according to the petitioner, on account of purchases/ sales made by certain interested quarters close to the management. On many occa sions the sale of the share of RIL in the stock market was banned in some stock exchanges due to fall in prices which, according to the deponent, was a clear indication of cooper ation and support from the authorities. It was further alleged that there was discrimination in respect of time period of conversion of loan/investment into equity between the shareholders of RIL and the investing public. Immediately on allot 67 ment the conversion of percentage of investment of the rights holders is 53.49% whereas that of the investing public is only 5%. At the end of 3 years from the debenture allotment date, percentage debenture conversion of invest ment of the rights holders is 46.51% and that of the invest ing public is nil. Hence, after the end of 3 years time the percentage of conversion in investment of rights holders is 100% whereas that of the investment of right holders at the end of 3 years in figures is approx Rs. 107.50 crores and the investing public is only 29.67 crores. Between 3 and 4 years of debenture allotment the percentage of conversion of allotment of rights holders is nil and that of the investing public is 20%. Between 5 and 7 years of the debenture allot ment date the percentage of conversion of investment of the rights holders was nil and that of the investing public is 75%. Thus the conversion of the debenture allotment between 3 and 7 years of rights holders is nil and that of the investing public is 95%, which in figures comes to about Rs.563.73 crores. In a democratic set up in the country, it was asserted on behalf of the petitioners, the sanction of the issue amounted to concentration of wealth in one hand which brought danger to the national economy and was against the Directive Principles of State policy enshrined in the Con stitution. It was submitted that the validity of the consent order had to be decided on the merits of the case in the background of the aforesaid. The petitioner had every right to question the validity of the consent order, it was stat ed. One consolidated reply to all these writ petitions on behalf of the Union of India through the Secretariat, Minis try of Finance, Deptt. of Economic Affairs and Controller of Capital Issues was filed by means of an affidavit affirmed by Mr. Prabhat Chandra Rastogi who. at the relevant time, was the Under Secretary in the Ministry of Finance, and Deputy Controller of Capital Issues in the office of Con troller of Capital Issues. He has mentioned that the consent of Capital Issues was granted on 4th July, 1988 and the same was amended to a certain extent on 19th & 26th July, 1988. He has explained in his affidavit the background of the circumstances leading to the consent order. In relation to the 3 projects, namely, (i) for manufac ture of 1,00,000 tonnes per annum Polyvinyl Chloride (PVC), (ii) 60,000 tonnes per annum of MEG (Mono Ethylene Glycol); and (iii) 50,000 tonnes per annum. of HDPE (High Density Polyethylene), RPL submitted an application for issue of capital on or about 4th May, 1988 in 68 the prescribed form. RPL proposed raising of capital by various instruments, like, equity shares, cumulative con vertible preference shares (CCP '), partly convertible deben tures, intended to be issued to the public, to the share holders of RIL, debenture holders and deposit holders of RIL. The original proposal for approval related to the following instruments: Instrument Amount in Rs. (Crores) Equity Reliance Industries Ltd. 47.00 Shareholders, debentureholders 4.00 and deposit holders of Reliance Industries Ltd. Public 6.00 Cumulative convertible Preference Shares (CCPS) Non resident Indians/Foreign Collaborators/Indian Resident Public 81.00 Convertible Debentures Sharesholders, debentureholders and 214 deposit holders of Reliance Industries Ltd. Public 241 The instrument of convertible cumulative preference shares was proposed to be converted at a price to be fixed by the 2nd respondent at premium not exceeding Rs.40 per share between the third and fifth year from the date of allotment. The debentures proposed were to be of the face value of Rs.500 each and the conversion was to be of Rs.200 into 10 shares as follows: "6% of the face value (Rs.30) would be compulsorily converted into equity at par at 1 year from allotment. 16% of the face value (Rs.80) would be compulsorily converted at 2 years from allot ment into equity at a premium to be decided at the time of conversion but not greater than Rs.20 per share. 69 18% of the face value (Rs.90) would be compulsorily converted into equity at 3 years from allotment at a premium decided at the time of conversion but not greater than Rs.30 per share. 60% of the face value (Rs.300) would be redeemed between 8th and th years from allot ment by draw of lots. " It appears that the Industrial Credit and Investment Corpn. of India Ltd. (for short ICICI), was the lead finan cial institution and lead manager for the issue of capital of RPL, and its merchant banking department, having the necessary expertise, was interacting between the 2nd re spondent, namely, the Controller of Capital Issues and RPL. Discussions were held with ICICI to evaluate whether the company could proceed with the proposal by respondent No. 3 (RPL) by removing the instrument of cumulative preference shares as also the nonconvertible portion of the debentures. This would have been necessitated by the sluggishness in the capital market, the market reactions to non convertible debentures and the discount at which such instruments were traded after they came into existence, the complexity of cumulative convertible preference shares and the general reaction anticipated from the public for investment. It was stated that it was necessary to encourage investments and draw out savings from the home saving sector so that invest ments into productive and industrial sectors are promoted. The need to encourage growth of the Capital Market and to provide impetus for investment in a depressed market condi tion through several liberalisation steps, were factors in the consideration of the Controller of Capital Issues so that on balance investment in the industrial sector in high priority industries could be encouraged. RPL revised its proposal under which it proposed to raise equity shares of Rs.50 crores from RIL its promoter. The fully convertible debenture issue of Rs.5 16 crores from public was sought to be subscribed to in a manner that 50% on preferential share basis to be allotted to shareholders, debenture holders and fixed deposit holders of RIL. RPL made a suggestion for issue of debentures ' of the face value of Rs.200 each with the following terms and conditions: (i) 5% of the face value of the debentures at par on allotment; (ii) 20% of the face value (inclusive of premium) at a premium as may be decided in consultation with the Controller of Capital Issues at the end of the fourth year from the date of allotment. 70 (iii) the residual portion (inclusive of premium) at a premium as may be decided in consultation with the Controller of Capital Issues at the end of the seventh year from the date of allotment. In view of the revised project cost it was felt that the promoter 's contribution of Rs.50 crores was less and RIL as promoters were told, as asserted in the affidavit, to in crease the promoter 's contribution to 15% of the total project cost of Rs.700 crores. RIL in view of this require ment, agreed to bring in Rs. 107.50 crores as its contribu tion to RPL, out of which a sum of Rs.50 crores was directed to be kept as interest free unsecured loan at the time of allotment which would be converted into equity at par at the expiry of 36 months from the date of allotment of converti ble debentures. As a practice, it is asserted, respondent No. 2 being the CCI, observed that debenture holders/fixed deposit holders of RIL were not eligible for preferential reserva tion in the capital issue of RPL, and thus RPL was not permitted to issue capital to these categories on preferen tial basis and only the shareholders of RIL were permitted preferential entitlement in accordance with the practice. By a Press Release dated 15th September, 1984 the 2nd respondent had issued certain non statutory guidelines for approval of issue of secured convertible and non convertible debentures. These guidelines had been subsequently amended by Press Release dated 8.3. Guidelines were also issued by Press Release on 19.8.1985 for issue of converti ble cumulative preference shares. There are guidelines issued by Press Release dated 1.8.1985 for employees stock option scheme. In accordance with the guidelines of 15.9.1984, as amended on 8.3. 1985, the consent for capital issue for secured fully convertible debentures was issued as the projects originally to be established in RIL were per mitted by the Deptt. of Company Affairs to be transferred to RPL. The application for industrial licences and endorse ments thereof from RIL to RPL had already been filed includ ing, inter alia, the endorsement of the letters of intent for the MEG Project. The scheme of finance for setting up of 3 projects, namely, PVC, HDPE and MEG had already been approved by the Deptt. of Economic Affairs in favour of RIL, promoter of respondent No. 3 and the Deptt. of Company Affairs also approved the transfer of project to RPL, and a revised scheme of finance was to be submitted by RPL. It was asserted that it was on the basis of appraisal by the ICICI, a public financial institution which had evaluated the project cost for the 3 71 projects for the purpose of implementation of RPL. ICICI had evaluated the estimated project cost at Rs.700 crores for setting up 3 undertakings of RPL post transfer from RIL, to RPL for implementation. Applications for the endorsement of industrial licences and the Letter of Intent had been filed with the Deptt. of Industrial Development, Secretariat for industrial Approvals and these were pending consideration. The object of the issue was setting up of a new project and was within the scope of the guide lines. The proposal contemplated was within the debt equity norms and ratio in accordance with para 4 of the non statu tory guidelines as the debt in the proposal aggregated to Rs.47 1 crores. This is because debentures are considered as debt only when they are unredeemed beyond the period of 5 years as per Explanation to Section 5(ii) of the Capital Issues (Exemption) Order, 1969. In the present case, 25% of the face value of the debenture would stand redeemed by the 3rd and 4th year and before the 5th year, and it would therefore not be considered as debt for evaluating debt equity ratio as per the guidelines. Similarly, the promot er 's contribution of Rs. 100 crores plus 25% converted debentures at the end of 5 years would be categorised as equity representing share capital and free reserves convert ed from the total investment of Rs.516 crores proposed by RPL. It was assumed to aggregate to Rs.229 crores and debt equity ratio thus came to 2.05:1 which approximates the ratio of 2: 1. It was further asserted that these guidelines being non statutory and not rigid, a relaxation in the norm of debt equity ratio of 2:1 is considered favourably for capi tal intensive projects like petrochemicals which require large investments as would appear from the Note annexed to the guidelines. The guidelines postulate that these deben tures should be secured. The proposal itself contemplated that the security would be in such form and manner as re quired by the trustees for the debenture holders for con vertible debentures. It was asserted that it was not a requirement of the guidelines that the debenture issue be compulsorily under written. The guidelines themselves con templated that the 2nd respondent could satisfy himself that the issue need not be underwritten. An application to this effect had been made by RPL and was granted by the 2nd respondent after carefully examining this issue. The guide lines contemplated simultaneous listing of shares and deben tures. In the present case, upon allotment, there was simul taneous compulsory conversion of 5% of the face value of the convertible debentures. It was stated that it was not an equity linked debenture as was asserted on behalf of the petitioner. 72 However, it was further stated that, in view of the size of the issues, there was a modification dated 19th July, 1988 of the consent order which restricted and put a non transferability condition on the preferential entitlement of the shareholders of RPL. It was limited to the corporate shareholders of RIL and relaxed for individual shareholders of RIL. The restrictive condition on their right to sell. transfer and hypothecate their shareholding was thought necessary in order to ensure that they do not disinvest soon after the issue and thus dilute their stake in the Company. On behalf of the Controller it was asserted that the guidelines should not be construed in a manner which would fetter, constrict or inhibit statutory discretion vested in the 2nd respondent for taking decisions in the interest of the Capital market and for national purpose of furthering the growth of industrialisation and investment in priority sectors so as to encourage employment and demand in the national economy. The objectives of the control, according to the deponent, contemplated under the was to prevent wasteful investments and to promote sound methods of corporate finance. It was asserted that the administrative guidelines were only enabling in nature and could not and ought not to be construed as pre venting the statutory authority from adopting or modifying varying norms in operational area of implementing the pur poses of the Act especially when there were no fetters under the Statute. The Controller of Capital Issues had issued, it was stated, guidelines as a result of the war time needs and controls, since the year 1947 and flow from the experience gained under the Defence of India Rules 1939. Hence, accord ing to the deponent, these controls have been progressively reduced and the Capital Issue (Exemption) Order, 1969 was brought into force so as to reduce the rigours of the Act. In the absence of any control for capital issues for securi ties, according to the deponent, there would be no fetter or restriction on the part of the Company to borrow or raise capital from the market. It is to check raising of wasteful capital and to avoid investment being made in nonproductive, non priority sectors and non commensurate with the needs that the Act in question was brought into force. This is being implemented with the aid of competent bodies. It is further stated that the stipulation for fixation of premium at the time of conversion is not a new practice and had been applied in the year 1986 in the case of Standard Medical Leasing as also in ATV Projects Ltd. and the Industrial Credit & Investment Corpn. of India Ltd. As regards Convert ible Debenture Issue, it was asserted that there is no violation of the provi 73 sions of Section 81(5) of the as the section contemplates only an optional conversion of Govern ment loan into equities. In the instant case,there is a compulsory conversion of publicly held debentures of the convertible type. In the premises, Sec. 81(5) of the said Act has absolutely, according to the deponent, no applica tion to the facts and circumstances of the case. All these petitions challenge only the grant of sanction by the Controller of Capital Issues, though different as pects have been highlighted in the different petitions and we have heard different learned counsel. We have, therefore, to examine what is the scope of the powers and functions of the Controller of Capital Issues while discharging his statutory functions in according sanctions to capital issues. It is further necessary to examine if that role has in anyway, changed or altered due to the present economic and social conditions prevailing in the country. It has also to be considered whether the guidelines or the provisions of law under which the Controller has functioned or has pur ported to function in this case, were proper or there had been deviations from these guidelines. If so, were such deviations possible or permissible? It is further necessary to examine whether the Controller has acted bona.fide in law. These are the broad questions which have to be viewed in respect of the challenge to the consent order. It is, therefore, necessary to examine the broad features as have emerged. Counsel for the petitioners contended that the RPL 's application had been entertained even without the company fulfilling the requirements of a proper application and furnishing the necessary consents and approvals, processed with undue expedition within a very short time and sanc tioned without any application of mind to the crucial terms of the issue which were detrimental to public interest. This contention, when analysed, turns on a number of aspects which can be dealt with separately. (a) It is submitted that the application was made on 4.5.88 and sanctioned on 4.7.88 within hardly a period of two months; this reflects undue haste and favouritism, particularly if one has regard to the magnitude of the public issue proposed to be made and the various financial and other intricacies involved. We are unable to accept this contention. In the first place, an application of this type is intended to be disposed of with great expedition. In particular, in a project of the type proposed to be launched by the petitioner, passage of time may prejudicially affect the applicant and it is not only desirable but also 74 necessary that the application should be disposed of within as short a time as possible. It is, therefore, difficult to say that the period of two months taken in granting consent in the present case is so short that an inference of haste must follow. Secondly, on behalf of the Union of India a list of various applications received and disposed of by the office of the CCI between September 1987 and September 1988 has been placed before us to show that, generally speaking. these applications are disposed of within a month or two. It is true that none of these issues is of the same colossal magnitude as the. present issue. Nevertheless, the Control ler of Capital Issues could hardly keep the application pending merely because the amount involved is heavy. It is not possible therefore to say merely from the short span of time that there was a hasty grant of consent in the present case. (b) Secondly, it has been submitted that the RPL was a company which was incorporated only on 11.1.88. RIL had issued a 'G ' series of debentures as recently as 1986 for the same projects. In granting consent to the present issue the Controller of Capital Issues has completely over looked the fact that in respect of the same projects the RIL had been permitted to raise debentures on earlier occasions. We do not think that the petitioners are correct in saying that the Controller of Capital Issues has over looked or was not aware of the debenture issues by the RIL or the purposes for which these debenture issues had been sanctioned. The appli cation for consent makes it clear that the petitioner compa ny is a new company promoted by RIL and that RIL was promot ing this company to manufacture HDPE, PVC and MEG at Hazira. The application refers to the fact that the total cost of the project was expected to be Rs.650 crores and that this cost had been approved earlier in 1985. Considering that RPL had come into existence only on 11.1.1988, this was clear indication that the projects for which the debenture issue was being proposed were projects which had been mooted even by the RIL as early as 1985. Again in the detailed applica tion form submitted by the RPL it has been mentioned that the RIL had already obtained approval of the Central Govern ment for implementation of the aforesaid projects under the MRTP Act. In part C of the application form it has been mentioned that the promoter company had made necessary applications for endorsement in favour of the company of the Letter of Intent/Industrial Licences already issued by the Central Government under the Industries (Development & Regulation) Act, 195 1, in the name of the holding company, the RIL. In the context of these statements it is extremely difficult to agree that the fact of issue of the earlier series of debentures by the RIL or the purposes thereof could have escaped the 75 notice of the CCI, particularly, when it is remembered that the issue of G series of debentures by the RIL was quite recent and had also attracted a lot of publicity. We have elsewhere discussed the contention raised on behalf of the petitioners that the consent given has contravened the guidelines because finances were being raised for no new project but for the same old projects for which RIL had collected funds. We have there pointed out that, MEG project, for all practical purposes, was a new project that was to be implemented by the RPL and the funds raised by the RIL had been insufficient for even the PAT and LAB projects launched by it. The learned Addl. Solicitor General states that there was earlier correspondence between the RIL and the CCI regarding the cost over run of the PTA and LAB projects. We have not gone into the details of this corre spondence as it is not our purpose to enquire into the details of the matter. We are referring to it only for indicating that the CCI was fully aware of the earlier series of debentures, of the stage of the various projects proposed therein, of the actual implementation of the projects, of the cost over run, of the proposal to transfer to some of those from RIL to RPL and the exact requirements of the present issue. It is not possible to accept the contention that the consent of the CCI was accorded in ignorance of the facts pertaining to the G series of deben tures. (c) Thirdly, it is submitted that having regard to the requirements of the pro forma prescribed under the rules, the application for consent could not have at all been considered by the CCI until the RPL produced the industrial licence in its favour, the collaboration agreements, the approvals of the financial institutions and the approvals under the MRTP Act. It is submitted that the application of the petitioner was cleared hurriedly without insisting upon these clearances and this was done specially to oblige the company. We must first of all point out that the pro forma relied on indicates a general procedure and should not be understood as a rigid requirement. It is, of course, the duty of the CCI to be satisfied that before the debentures are actually issued the applicant company has all the neces sary licences, consents, orders, approvals, etc. in its favour. We are satisfied that in the present case there is no reason to doubt that he had been so satisfied if one remembers that those projects had been initiated by the RIL which had gone through the necessary exercises and all that remained to be done was a formal approval of their transfer for implementation to the RPL. We shall first refer to the steps taken by the RIL in this regard. 76 On 10th October, 1983 as RIL proposed to engage in manufacture of MEG, it filed an application for grant of an Industrial Licence under the Industries (Development & Regulation) Act, 195 1. On 16th August, 1984 RIL received a Letter of Intent No. 653(84) Regn. No. 1323(83) IL/SCS issued by the Govt. of India for the manufacture of 40,000 TPA of MEG. Thereafter, from time to time on the applica tions made by the RIL, the Govt. of India by various letters extended the validity of the period ending up to 30th June, 1989. The last of such extensions was made by a letter dated 2nd September, 1988. On 11th May, 1988 pursuant to an appli cation made, the Govt. of India permitted expansion of capacity for manufacture of MEG from 40,000 TPA to 60,000 TPA. From 12th January, 1988 to 22nd July, 1988 applications were made by RIL for change of Company from RIL to RPL for the MEG Project. It appears that on 11th August, 1988 ap proval/sanction was granted by the Govt. of India for change in the implementing agency from RIL to RPL. On or about 19th January, 1985 a letter from the Govt. of Maharashtra was issued, stating that there was no objection to the Company 's proposal for change of location for the MEG Project from Maharashtra to Gujarat. It also appears from the various documents which are mentioned in Vol. IV of the present Paper Books at different pages (from 22 to 44) that by var ious orders under the MRTP Act, sanctions and modifications were approved, the latest sanction being dated 11th October, 1988 whereby the Govt. approved the proposal of RPL for modified scheme of Finance. It is also significant to men tion that on 25th January, 1988 an application was made under Sec. 22(3)(d) of the MRTP Act with the proposal to implement the MEG Project along with other projects of RPL. It may be mentioned that by a letter dated 6th June, 1988 RIL had informed that they had originally planned to utilise a sum of Rs.85 crores from 'G ' Series debentures for this project. But, however, they were not able t9 utilise this money as the entire 'G ' Series amount had been utilised for PTA and Lab projects including the working capital on ac count of overrun in the cost of LAB and PTA projects. Hence, it applied for permitting a new scheme of finance. By an order dated 2 Ist July, 1988 the Govt. accorded approval to the proposal of RIL for modified scheme of finance to be implemented by RIL. Thereafter, RPL made an application for modification of the scheme of finance and the same was approved by the Govt 's order dated 11th October, 1988. It appears that on 9th October, 1984 pursuant to an application made by RIL for foreign collaboration with M/s Union Carbide Corporation, USA, the Govt. of India by its order of that date accorded approval to the terms of the foreign collaboration for a 77 period of six months for this project. It further appears that on 14th March, 1986 pursuant to an application made by RIL, the Govt. accorded approval for foreign collaboration with M/s Scientific Design Company. It may, however, be mentioned that there was a letter dated 30.4. 1986 whereby approval was granted by the Reserve Bank of India in respect of foreign collaboration agreement with M/s Scientific Design Co. USA. The next aspect of the matter which has to be borne in mind in view of the contentions urged was regarding the licences. It appears that there was an application on 25th March, 1987, for licence. On 9th August, 1988 the Industrial Licence dated 25.3. 1984 granted to RIL for manufacture of PVC was endorsed to RIL. This is important because one of the contentions that Shri Pagaria during the course of his long submissions made was that there was no valid licence. It also appears that so far as the MRTP Act is con cerned, an application was made by RIL on or about 12th October, 1984 under Sec. 22(3)(a) for manufacture of PVC. Several other steps were taken and on 29th June, 1988 there was an order of the Govt. of India under Sec. 22(3)(d) of the Act, according approval to the proposal for modified scheme of finance. There was a further proposal for modification and fur ther orders. Last of such order was dated 11th October, 1988. Similarly, regarding the foreign collaboration, there were approval letters and the last one was dated 12th Au gust, 1988 for endorsement of foreign collaboration approval in favour of RPL. So far as HDPE is concerned, it appears that there was a valid licence; and it may be mentioned that on 24th August, 1985 pursuant to an application made by RIL under section 22(3)(a) of the MRTP Act, the Govt. granted approval for the establishment of a new undertaking for manufacture of HDPE. Regarding foreign collaboration, an application was made by RIL in 1984 for approval of foreign collaboration with M/s Du Pont Inc. Canada, for manufacture of HDPE. Such approval was given and the validity was extended and the foreign collaboration approval was endorsed in favour of RPL on 12th October, 1988. Similar other consents were there. Mention may be made of letters dated 28th April, 11th March, 6th December, 1986, 2nd January, 1987, 15th July, 25th, 26th July, 19th August, 1988 which appear at various pages of Vol. IV of the papers. Finally, capital goods clearance was endorsed in favour 78 of RPL for the PVC project on 12th August, 1988. Capital goods clearance was also endorsed in favour of RPL for HDPE project on 23rd August, 1988. Thus, it will be seen that all the basic groundwork had already been done by the RIL. It is in above perspective that one has to examine the events that have happened. The question that has to be considered is whether the CCI could take it for granted that these approvals, consents, etc. would stand automatically transferred to the RPL. On 16th June, 1987 by a Press Note issued by the Deptt. of Industrial Development in the Minis try of Industry, the Govt. of India declared that where a transferee Company is a fully owned subsidiary of the Compa ny holding the Letter of Intent or licence, the change of the Company implementing the project would be approved. It is in the light of this that the Board of RIL on 30th Decem ber, 1987 passed a resolution to incorporate a 100% subsidi ary Company whose main objects were, inter alia, to imple ment the licences/Letters of Intent received by RIL and the objects of undertaking, processing, converting, manufactur ing, formulating, using, buying, dealing, acquiring, stor ing, packing, selling, transporting, distributing and im porting etc. and approved the name of the Company as RPL. On 11th January, 1988 the RPL was incorporated and the Certifi cate of Incorporation was issued. Thereafter, on 12th Janu ary, 1988 letters were written by RIL for endorsement of licences/Letters of Intent in favour of RPL. The certificate of commencement of business was thereafter issued. The Press note earlier referred to makes it clear that the transfers from one company to an allied company were considered unexceptionable except where trafficking in licences is intended. In this situation the change of name from RIL to RPL, of the licences, letters of intent and other approvals was only a matter of course and much impor tance cannot be attached to the fact that CCI did not insist upon these endorsements being obtained even before the letter of consent is granted. In any event the letter of consent is very clear. Clause (h) of the conditions attached to the consent letter makes it clear that the consent should not be construed as exempting the company from the operation of the provisions of the Monopolies & Restrictive Trade Practices Act, 1969, as amended. Clause (e) makes it clear that it is a condition of this consent that the company will be subject to any measures of control, licensing, or acqui sition that may be brought into operation either by the Central or any State Government or any authority therein. Under clause (t) the approval granted is without prejudice to any other approval/permission that may be required to be 79 obtained under any other Acts/laws in force. Having regard to the above history as well as having regard to the terms and conditions of the consent letter, the grant of consent itself being conditioned on the RPL obtaining the necessary approvals, consents and permissions before embarking on the project, we do not think that there was any impropriety in the CCI granting the consent without waiting for the formal endorsement of the various licences, letters and approvals in favour of the RPL. (d) It is next submitted that under para 3 of the guidelines issued the Government, the amount of issue of debentures for project financing and other objects will be considered on the basis of the approvals of the scheme of finance by the financial institutions/banks/ Government under the provi sions of the MRTP Act, etc. The criticism in this respect is that since no approvals of the scheme of finance by the financial institutions/banks/Government under the provisions of the MRTP Act etc. had been produced before the Controller of Capital Issues he could not have been satisfied that the amount of issue of debentures was necessary and adequate on the basis of such approvals. This argument proceeds on a misconception of the Government set up for dealing with these matters. The learned Additional Solicitor General points out that the Controller of Capital Issues does not function in isolation, sitting at his desk and awaiting the various types of clearances and consents that are necessary to be obtained from various quarters before granting consent to an issue. He points out that the CCI functions in close coordination with all the concerned departments of the Government. He is in close touch with the progress of var ious projects. On references from the Department of Company Affairs, the CCI (MRTP) Section furnishes comments on the scheme of finance relating to the proposals of industrial undertakings covered under the MRTP Act for effecting sub stantial expansion for setting up of new undertakings, merger/amalgamations; and acquisition/takeover of other undertakings. The comments are furnished to the Department of Company Affairs with reference to the norms relating to equity debt ratio promoter 's contribution, dilution of foreign equity, listing requirements for shares on Stock Exchanges and on analysis of balance sheets for cash genera tion etc. An officer attends regular meetings of the Adviso ry Committee meetings held in the Department of Company Affairs in terms of the MRTP Act, hearing held in Department of Company Affairs under section 29 of the MRTP Act, inter departmental meetings held in the Department of Company Affairs to consider specific issues relating to applications received under the MRTP Act, Licensing cum MRTP Committee meetings 80 held in the Department of Industrial Development, screening committee meetings held in the Administrative Ministries to consider applications from MRTP companies and statutory public hearings held in the MRTP Commission. The submission of the learned Solicitor General in short is that, in deal ing with application for consent to an issue of capital, the CCI does not act in isolation but the entire Central Govern ment functions with various Departments closely monitoring and coordinating the scrutiny of applications. He, there fore, submits that the Controller of Capital Issues is aware of the progress of the various applications made by the company. The Controller is also aware that the ICICI had looked into the financial soundness and feasibility of the project and there is material to show that the comments of the ICICI were made available to him. When a project is being appraised by the institution like the ICICI and when the CCI is also aware, by reason of the participation of his representatives at the meetings of the Department of Indus try and the Department of Company Affairs about the stage or outcome of the proposals made under the IDR and MRTP Acts, it is clear that the CCI did not overlook any crucial aspect and that his grant of consent in anticipation of the neces sary transfers to the RPL was based on a practical appraisal of the situation and fully in order. The assumptions behind the petitioners ' arguments that the terms of the issue as proposed by the RPL were approved in toto by the CCI without examination is also unfounded. The record before us indicates that there were frequent discussions leading to alterations in the original proposals from time to time as well as changes in the conditions of consent both before and even after the letter of consent dated 4.7.1988. Some aspects of these have been referred to elsewhere and some are referred to below and these will show that consent was not granted as a matter of course. The allegation that consent was accorded without any application of mind is, on the materials before us, clearly untenable. It is stated in the affidavit that in March/April, 1988 discussions centered around the concept of cumulative con vertible preference shares (CCP) which was mooted as an instrument for the means of finance. The instrument offered would have been equity shares to the extent of Rs.57 crores, cumulative convertible preference shares to the extent of Rs.81 crores and convertible debentures to the extent of Rs.478 crores with four conversions. In this connection, reference may be made to Annexure 1 at page 39 of the reply affidavit filed in these proceedings by RPL. Thereafter, on 4th May, 1988 RPL made an 81 application to the Controller of Capital Issues seeking permission to make an Issue of Capital on certain condi tions. Specific details thereof are not necessary to be set out here. It also made a proposal for issue of 81 lakhs 10% cumulative convertible preference shares of Rs. 100 each for cash at par through prospectus to non resident Indians/resident Indian public 81 crores. It is stated that in accordance with the present guidelines issued by the Govt. of India, the Company intended to retain excess sub scription amount to the extent of 15% of Rs.566 crores, i.e., a right to retain an additional amount. It was further stated that in accordance with the Guide lines issued by the Government of India, the Company had intended to retain excess subscription amount to the extent of 15% of Rs.566 crores, i.e., a right to retain an addi tional amount of Rs.85 crores. The idea was that the company would in the event of over subscription request the CCI for allotment of such additional amount of Rs.85 crores. It was further proposed to issue a part of the cumulative converti ble preference shares to NRIS and a part to the foreign collaborators. Terms of the proposed convertible debentures were: (a) Convertible debentures upto 12.5% (interest) taxable: Each convertible deben tures of Rs.500 would be converted into 10 equity shares of Rs. 10 each as per scheme envisaged. The residual portion of each Con vertible Debenture would be redeemable at the end of th year from the date of allotment with an option to the company to repay these amounts in one or more instalments by drawing lots at any time after the end of 5th year from the date of allotment. (b) Cumulative Convertible Preference Shares 10% (dividend) taxable. Each CCP would be fully converted into equity share of Rs. 10 each at such a premium not exceeding Rs.40 per share as might be approved by the CCI at any time between the 3rd and/or 5th year from the date of allotment to be decided by the compa ny, by draw of lots, if necessary. Then there are other conditions regarding securities, under writing, allotment of equity shares to RIL shareholders. In May, 1988, several NRIS also evinced interest in equity participation in RPL. It was stated that though the CCP shares appeared to be most appropriate instrument, the computation of reserved/preferential entitle 82 ment resulted in very low entitlement to the existing share holders of RIL. It was then contemplated to increase the preferential entitlement of RIL investors on partially convertible debentures and the ratio of convertible deben tures was altered so as give equal share between RIL inves tors and the members of public. A three stage conversion was contemplated. Thereafter, in June 1988, a revised proposal to the CCI was made by RPL. It is not necessary to set out in detail the said revised proposal. After several discus sion, on or about 1st June, 1988, between the company, RPL, the Merchant Bankers, ICICI and the Office of CCI, it was asserted on behalf of the respondent No. 3 that serious reservations were expressed that the marketability of CCP shares and the investors resistance was likely to be there. It was in this context and also after considering the reser vations that might be there on the part of the foreign collaborators and NRIs, that the CCI required the issue of fully convertible debentures. The institutional proposal of the project cost emerged at Rs.700 crores instead of Rs.650 crores and it was then felt that RIL should increase its own contribution to the project by way of a promotors ' contribu tion at Rs. 100 crores, thereby increasing its stake to 14% at the suggestion of CCI. It was stated that this was also a requirement of the CCI guidelines and MRTP conditions. At the end of June, 1988, there was an amendment of the Order by the Department of Company Affairs in favour of RPL for PVC. Similarly, on 21st July, 1988, the order for MEG passed for RIL was amended permitting RPL to undertake the new projects for implementation of the MEG Project. It is not necessary to set out in detail these proposals. On 4th July, 1988, CCI granted the consent under the to the public issue. There were varia tions between the proposal and the Order of consent of the CCI. It may be necessary at this stage to refer to the Order dated 4th July, 1988, which is as follows: "With reference to your letter No. BOK/DKG/505(c) dated 8.6.1988, I am directed to say that the Central Govt. in exercise of the powers conferred by the , do hereby give their consent to an issue by M/s Reliance Petrochem icals Ltd., a company incorporated in the State of Maharashtra, of capital of the value of Rs.650.90 crores (inclusive of retainable excess subscription to the extent of Rs.84.90 crores). (A) 5,75,00,000 Equity shares of Rs. 10 each for cash at par ' to M/s Reliance Industries Ltd. (inclusive of retainable excess 83 subscription to the extent of Rs.7.50 crores). (B) 2,96,70,000 12.5% secured, redeemable, convertible debentures of Rs.200 each for cash at par to public by a prospectus (inclusive of retainable excess subscription of 77.40 crores). Out of (B) above, reservations for prefer ential allotment will be made as follows: (i) Shareholders of M/s Reliance Industries Ltd. 50%. (ii) Employees (including Indian working Directors)/ workers of the company and of M/s RIL. 5% Unsubscribed portion, if any, of the reservations will be added to the public offer. The Convertible debentures will carry interest 12.5% p.a. (taxable). The Debentures will be fully and compulsorily convertible in the following manner: (a) 5% of the face value at par on allot ment of the debentures. (b) 20% of the face value at a premium if any, as may be decided by this office after three years but before four years from the date of allotment of debentures. (c) The balance at such a premium if any, as may be decided by this office after 5 years but before the end of 7 years from the date of allotment. The consent given as aforesaid is qualified by the conditions mentioned in the Annexure and the company shall comply with the terms of the conditions so imposed. I am to make it quite clear that the grant of consent to the issue of capital represents no commitment of any kind on the part of the Central Govt. to render assistance in the matters. of priorities or licences for sup plies of raw materials, machinery, steel, etc., of transport facilities or any other governmental assistance, including the provi sion for foreign exchange. This order also conveys the approval of the Central Govt. under proviso to Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957 subject to the condition that the allotment to the employees shall not exceed 200 shares per individual. This letter is issued in the name and under the authority of the President of India. " There was Annexure to the said Order. In that Annexure, certain conditions were laid down and condition (a) stipulated that in any prospectus or other document referred to in section 4 of the , relating to this issue, the statement required by that section must be worded as follows: "Consent of the Central Government has been obtained to this issue by an order of which a complete copy is open to public inspection at the Head Office of the Company. It must be distinctly understood that in giving this consent the Central Govt. do not take any responsibility for the financial soundness of any scheme or for the correctness of any of the statements made or opinions expressed with regard to them. " It further imposed the condition (b) that the consent to lapse on the expiry of twelve months from the date of con sent. Order also stipulated that the consent should not be construed as exempting the company from the operation of the provisions of the Monopolies & Restrictive Trade Practices Act, 1969, as amended. The consent also indicated that the company would be subject to any measures of control, licens ing, or acquisition that might be brought into operation either by the Central or any State Govts. or any authority therein. It also enjoined the company to ensure that the prospectus for the issue of securities consented to should be printed subject to certain conditions. It also enjoined, inter alia, that the convertible debentures should be allot ted to the employees of the company and of M/s RIL and the shareholders of M/s RIL. On conversion the equity shares so converted should not be transferred/sold/hypothecated for a minimum period of three years from the date of allotment of convertible debentures. The other special conditions con tained the following: "(v) The equity shares to be allotted to the promoters of the company shall not be sold/hypothecated/transferred for 85 at least three years from the date of allot ment. (w) It is a condition of this consent order that the proceeds from the issue of debentures should be invested in fixed duration depos its/instruments with the cooperative/ nationalised banks, UTI, Financial Institu tions, Public Sector Undertakings (other than public sector bonds) and be used strictly for the requirements of the projects mentioned in the application and not for any other purpose. (x) M/s Reliance Industries Limited will bring in additional amount of Rs.50 crores as inter est free unsecured loans, at the time of allotment of the above convertible debentures as additional promoters contribution which will be converted into equity at par on the expiry of 36 months from the date of allotment of convertible debentures. (y) (i) The company shall scrupulously adhere to the time limit of 10 weeks from the date of closure of the subscription list for allotment of all securities and despatch of allotment letters/certificates and refund orders. (ii) The company shall, at the time of filing its application for listing to the regional Stock Exchange, furnish an undertak ing for compliance of the above condition, along with a scheme incorporating the neces sary details of the arrangements for such compliance. This undertaking shall be signed by the Chief Executive or a person authorised by the Board of the company. (iii) The company shall file, with the Executive Director or Secretary of the region al Stock Exchange, within five working days of the expiry of the stipulated period as above, a statement signed by the Chief Executive or a person authorised by the Board, certifying that the allotment letters/securities and the refund orders have been despatched within the prescribed time limit as per the condition above. A copy of the statement shall be en dorsed to the office of the CCI quoting this consent order and date. (iv) Non compliance of conditions above shall be; 86 punishable by the Stock Exchange, in addition to the action that may be taken by other competent authorities. " The other conditions mentioned therein are not very relevant. These only enjoin certain procedural safeguards. The said consent order was amended on the 19th July, 1988, which clarified that the intention for imposing condition (w) as set out above, was not to block all the funds raised out should be invested in terms of the conditions laid down aforesaid. The amendment enjoined that the approval of the Central Government should be subject to the condition that allotment to the employees should not exceed 50 debentures per individual. It was further added that the company should obtain prior approval of the Reserve Bank of India, Exchange Control Department, for the allotment of debentures to the non residents as required under the Foreign Exchange Regula tion Act, 1973. There was a further amendment of the Consent Order on the 26th July, 1988 which added condition (s) to the following effect: "(s) The convertible debentures to be allotted to the employees of M/s RPL and M/s RIL and the corporate shareholders of M/s RIL (other than individual shareholders of M/s RIL) shall not be sold/transferred/hypothecated till the end of 3 years from the date of allotment of debentures. On conversion the equity shares so converted shall not be transferred/sold/hy pothecated for a minimum period of 3 years from the date of allotment of convertible debentures. " It was stated that between 4th January, 1988 to 24th July, 1988, news about the formation of RPL and to set up the projects at Hazira, Gujarat and the consent granted by CCI for convertible debentures for RPL all these were widely reported in various newspapers and magazines including national dailies such as Times of India, Indian Express, Financial Express, Gujarat Samachar, Hindustan Times, Bombay Samachar, Business Standards and other magazines and news items. Thereafter, till mid August, 1988, there were de tailed advertisements about the company and nearly 1600 insertions in nearly 200 newspapers and dailies were made advising the opening of the issue. There were from mid July, 1988 onwards till August, 1988, advertisement campaigns in television and radio to attract investments in Petrochemi cals advising the public about the issue of Rs.593.40 crores of convertible debentures of RPL. It is asserted on behalf of the respondents that the public issue of these shares was made known 87 since mid July, 1988. As mentioned hereinbefore since the words "till conversion" were capable of wide interpretation and might have rendered the shares/convertible debentures non transferable for upto 7 years, the CCI modified the consent and limited this restriction to a period of 3 years. On July 27, 1988, the prospectus of RPL was filed with the Registrar of Companies, Gujarat and the Stock Exchanges at Bombay and Ahmedabad. On August 22, 1988, the issue of RPL opened for subscription. A letter was addressed to the CCI on August 23, 1988, requesting for the lifting of embargo for non transferability for three years for the corporate shareholders of RIL also. It is asserted that by August 31, 1988, the issue of RPL was fully/over subscribed and closed. By October 25, 1988, the basis of allotment was approved by Ahmedabad Stock Exchange. A resolution of the Board of Directors of RPL was passed on October 27, 1988 to allot the debentures/shares. On November 4, 1988, lease deed for land at Hazira between RPL and GIDC was executed. There was no objection certificate obtained from GIDC. It is asserted that the Debenture Trust Deed between RPL and ICICI was executed at Surat and was lodged for registration on Novem ber, 7, 1988. Certificate of Mortgage under Section 132 of the was issued by the Registrar of Companies, Gujarat regarding the creation of charge for the Debentures on November 11, 1988 itself. In this context, on behalf of the respondents, Mr. Baig drew our attention to certain dates indicating that the writ petitioners were aware of this and it was stated that on July 20, 1988, Mr. Radheyshyam Goyal, the Writ Petitioner in Rajasthan High Court, wrote a letter to the Editor of the Financial Express that the premia for the issue of shares upon the second and third conversion had not been fixed and the terms and conditions were vague. Shri Goyal also made certain other allegations. Though, of course, no complaint was ever made to RIL or RPL on this aspect, on August 16, 1988, one Mr. J.P. Sharma filed a complaint of Unfair Trade Practices under the MRTP Act before the MRTP Commission seeking injunction against the issue opening on 22nd August, 1988 and alleging the same breaches as claimed by the peti tioners in the Transfer cases. On being moved, this Court, on August 19, 1988, passed an order in Transfer Petition,; No. 192 193 of 1988 staying the three pending Writ Petitions in the three High Courts, namely, Bangalore, Delhi and Jaipur and further stayed the proceedings in the suit being Civil Suit No. 1172 of 1988 filed in Baroda. It was directed that the issue of deben tures would proceed without hindrance notwithstanding any 88 proceedings instituted or orders passed and that any order or direction or injunction already passed or which might be passed would remain suspended till further orders of this Court. It was mentioned that on August 29, 1988, the com plaint filed by Shri Sharma before the MRTP Commission was dismissed. On August 31, 1988, one Shri Arvind Kumar Sanga neria issued notice through his Advocate advising that a Writ Petition was being preferred in the Bombay High Court. On September 1, 1988, this Court granted an ex parte stay of the proceedings in Writ Petition No. 4388 of 1988 pending before the Bombay High Court. As mentioned hereinbefore, on September 9, 1988, this Court had transferred the four Writ Petitions in the four High Courts and civil suit to this Court. It appears that there was a further writ petition filed by Shri Suni1 Ambani in the High Court of Allabahad on the basis of two articles published in the Indian Express. Shri Ganesh made submissions in Transfer Case No. 164 of 1988. Shri Haksar made his submissions in T.C. No. 161 of 1988. Shri Pagaria argued T.C. 162 of 1988. Shri Udai Holla who was the counsel for the petitioner in Karnataka matters, appeared in T.C. 163 of 1988 and made his submissions. We heard Mr. G. Ramaswamy, Additional Solicitor General. Shri Soli J. Sorabjee, Shri Baig and Shri Salve argued on behalf of respondents 1 and 2 and Shri F.S. Nariman for respondent No. 3 in T.C. No. 162 of 1988. Inasmuch as the charge is the non evaluation by the CCI in enforcing and applying the principles of guidelines properly, it would be appropriate at this stage to refer to the said guidelines. It appears that from time to time, in exercise of the powers conferred by section 12 of the Capi tal Issues (Control) Act, 1947, the Central Government had issued rules and guidelines. On or about April 17, 1982, guidelines were issued by the Government of India under the said Act for the "Issue of Debentures by public Limited Companies". It is not necessary to set out in detail these guidelines, but it may be necessary to refer to clauses (4) and (6) of the said guidelines. Clause (4) reads as follows: "4. Debt equity. ' The debt equity ratio shall not normally exceed 2: 1. For this purpose: "Debt" will mean all term loans, debentures and bonds with an initial maturity period of five years or more, including inter est accrued thereon. It also includes all deferred payment liabilities but it does not include short 89 term bank borrowings and advances, unsecured deposits or loans from the public, sharehold ers and employees, and unsecured loans or deposits from others. It should also include the proposed debenture issue. "Equity" will mean paid up share capital including preference capital and free reserves. Notes: (1) The computations under guidelines 3 and 4 mentioned above will be based on the latest available audited balance sheet of the company. (2) A relaxation in the norm of debt equity ratio of 2:1 will be considered favourably for capital intensive projects such as fertiliz ers, petro chemicals, cement, paper, shipping etc. " Clause (6) of the said guidelines deals with the period of redemption and is as follows: "6. Period of Redemption. ' Debentures shall not normally be redeemable before the expiry of the period of seven years except in the following cases: (i) A company will have the option of redeeming the debentures from the 5th to the 9th year from the date of issue in such a way that the average period of redemption contin ues to be seven years. While exercising such option the small investors having debentures of the face value not exceeding Rs.5,000 will have to be paid in one instalment only. (ii) In case of non convertible debentures or nonconvertible portion of con vertible debentures a company may have the option of getting the debentures converted into equity fully with the approval of and at such. price as may be determined by the Con troller of Capital Issues. The debenture holders will, however, be free not to exercise this right. " Clause (8) provides for the denomination of debentures. Clause (9) enjoins the listing of debentures on the Stock Exchange. Clause (10) stipulates that only secured deben tures would be permitted for issue to 90 the public. Clause,(11) enjoins the underwriting of the debentures and clause (12) also provides for listing of the shares of the company proposing debenture issue. Clause (13) permits linked issue of shares and debentures. There were certain amendments to these guidelines which would be noted at the relevant time. While considering the question of the application or non application of mind or infringement of guidelines, it is necessary to bear in mind the role of the CCI in this re spect. The CCI functions under the . This is an Act to provide for control over the issue of capital. Section 2(e) of the said Act defines "securities" and states that the "securities" means any of the following instruments issued or to be issued, or created or to be created, by or for the benefit of a company, name ly: (i) shares, stocks and bonds; (ii) debentures; (iii) mortgage deeds, etc.; and (iv) instruments acknowledging loan or indebt edness. Section 3(1) of the said Act enjoins that no company incorporated in the States shall, except with the consent of the Central Government, make an issue of capital outside the States. The other sub sections of Section 3 deal with the modalities of such consent. It may be mentioned that the Statement of Objects and Rea sons of the Act states that the object of this measure is to keep in existence . the control over capital issue which was imposed by Rule 94 A of the Defence of India Rules in May, 1943 and continued in force after the expiry of the Defence of India Act by Ordinance No. XX of 1946. The State ment further states that although there has been an appre ciable change in the general conditions which constituted the principal reason for the introduction of the control during war time, it was thought in the light of experience gained that the control was still necessary to secure a balanced investment of the country 's resources in industry, agriculture and the social services. (See Gazette of India, 1947, Part V, p. 264). In this connection, Shri G. Ramaswamy, learned Addi tional I Solicitor General for the Union of India drew our attention to the 91 Debates of the Lok Sabha and the Rajya Sabha in February March, 1956 when the question of continuance of the control of the capital issues came up for consideration. The Minis ter of Finance, Shri C.D. Deshmukh stated that the control of capital issues was first introduced in May, 1943 under the Defence of India Rules. It was continued after the termination of the war by an Ordinance, thereafter in 1947 by an Act for a term of three years and it was again succes sively extended in 1950 and 1952. The Act as it stood ex pired on the 31st March, 1956. The main purpose which the Minister explained was to prevent the diversion of investi ble resources to none essential projects (emphasis supplied), the control had also been used for many other purposes and the most important of these purposes which might be called ancillary purposes were the regulation of the issue of bonus shares, regulation of capital reorganisa tion plans of companies including mergers, and amalgamations which involved the use or re issue of capital and the regu lation of the capital structure. Shri Ashok Mehta, then a Member of Parliament, suggested that the purpose of the Act might be used for evolving a national investment policy. The Minister of Finance further observed that many things might have been done to give a proper form and shape to the na tional investment policy (emphasis supplied), but the Minis ter expressed his surprise how these could have been secured through a negative piece of control (emphasis supplied) like the Capital Issue Control Act. He observed that there were other provisions like the Industries (Development & Regula tion) Act, under which licences were given to new indus tries. But this, according to the Minister, was not the purpose of the negative control of the capital issue. Var ious suggestions were made by the members of the Parliament about the role of the Act, for instance, to encourage public companies, not too much concentration of particular indus tries at particular areas, etc. The Minister referred to the various other Acts which control the industry and the Minis ter also referred that there should not be undue delay. Similar statements were made by Mr. M.C. Shah in Rajya Sabha, who was then the Minister for Revenue and Civil Expenditure. One Member in Rajya Sabha made it particularly clear that the consent of the Government had been misleading to some investors and thought that by a regulation, it was essential that in the prospectus it should be clearly stated that the sanction by the Government did not mean any guaran tee about the suitability or the successful running of the industry. Therefore, this sanction of the Government should be stated more clearly and the public should be clearly warned that a sanction of the Government did not imply any sort of guarantee by the Government. 92 We have referred to the debates only to highlight that the purpose of the Bill was to secure a balanced investment of the country 's resources in the industry and not to ensure so much the soundness of the investment or give any guaran tee to the investors. The section of the Act in question in express terms does not enjoin the CCI to discharge such obligations nor does the background of the Act so encompass. There was considerable discussion before us as to the scope of the powers and responsibilities of the CCI while granting his consent to an issue of shares and debentures proposed by a company. As stated above, the learned Addi tional Solicitor General submitted that the restrictions on issue of capital were introduced as part of the control measures found necessary during the period of the first world war and that, after the war ended, the control was continued as it was thought "in the light of experience gained that control is still necessary to secure a balanced investment of the country 's resources in industry, agricul ture and the social services" (vide, the statement of Ob jects and Reasons of the Act in 1947). He urged, relying also upon the speech of the concerned Minister at the time of moving the amendment bill of 1956 in Parliament, (which placed the measure on a permanent footing) that all that the CCI is concerned with is to ensure that the investible resources of the country are properly utilised for priority purposes and are not invested in non essential projects or in a manner which runs counter to the accepted investment policies of the Government. The CCI, he submitted, has neither the duty, nor the staff, the facilities or the expertise to enquire about. or investigate into, the finan cial soundness or acceptability of the issue proposed to be made. He pointed out that one of the conditions on which all consent is granted is that the Central Government does not take any responsibility for the financial soundness of any scheme or the correctness of any statement made or opinions expressed in the prospectus and the condition is also ex plicitly set out in the prospectus. We are unable to agree fully with this somewhat narrow aspect of the CCI 's role. In the very speech in Parliament to which the learned Additional Solicitor General referred, the Minister also stated: "Apart from this main object of the Bill which is thus to prevent the diversion of investible resources of non essential projects, the control has also been used for man), other purposes. The more important of these purposes which may be called ancillary purposes are the regulation of the 93 issue of bonus shares, regulation of capital reorganisation plans of companies including mergers and amalgamations which involved the issue or re issue of capital, the regulation of the capital structure of companies with a view to discouraging undesirable practices, namely, issue of shares with disproportionate voting rights and encouraging the adoption of sound methods and techniques in company flota tion, regulation of the terms and conditions of additional issues of capital etc." (emphasis added) That apart, whatever may have been the position at the time the Act was passed, the present duties of the CCI have to be construed in the context of the current situation in the country, particularly, when there is no clear cut delin eation of their scope in the enactment. This line of thought is also reinforced by the expanding scope of the guidelines issued under the Act from time to time and the increasing range of financial instruments that enter the market. Look ing to all this, we think that the CCI has also a role to play in ensuring that public interest does not suffer as a consequence of the consent granted by him. But, as we have explained later, the responsibilities of the CCI in this direction should not be widened beyond the range of expedi tious implementation of the scheme of the Act and should, at least for the present, be restricted and limited to ensuring that the issue to which he is granting consent is not, patently and to his knowledge, so manifestly impracticable or financially risky as to amount to a fraud on the public. To go beyond this and require that the CCI should probe in depth into the technical feasibilities and financial sound ness of the proposed projects or the sufficiency or other wise of the security offered and such other details may be to burden him with duties for the discharge of which he is as yet iII equipped. Shri Ganesh submitted that the CCI is duty bound to act in accordance with the guidelines which lay down the princi ples regulating the sanction of capital issues. This is especially so because the guidelines had been published. It was submitted that the investing public is, therefore, entitled to proceed on the basis that the CCI would act in conformity with the guidelines and would enforce them while sanctioning a particular capital issue. It was submitted that it is not permissible to deviate from the guidelines. In this connection, reliance was placed by him as well as by Shri Haksar, appearing for the petitioner in T.C. No. 161/88, upon the observations of this Court in Ramanna Dayaram Shetty vs International Airport Authority, [1979] 3 94 SCR 10 14, where this Court observed that it must be taken to be the law that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licence or granting other forms of largess, the government could not act arbitrarily at its sweet will and, like a private individual, deal with any persons it please, but its action must be in conformity with standard or norm which is not arbitrary, irrational or irrelevant. We accept the position that the power of discre tion of the government in the matter of grant of largess including award of jobs, contracts, quotas, licences etc. must be confirmed and structured by rational, relevant and nondiscriminatory standard or norm and if the government departed from such standard or norm in any particular case or cases, the action of the government would be liable to be struck down, unless it could not be shown by the government that the departure was not arbitrary but was based on some valid principle which in itself was not irrational, irrele vant, unreasonable or discriminatory. Mr. Haksar drew our attention to the observations of this Court in the case of Motilal Padampat Sugar Mills vs Uttar Pradesh, ; , where this Court reiterated that claim of change of policy would not be sufficient to exonerate the government from the liability; the government would have to show what precisely was the changed policy and also its reason and justification so that the Court could judge for itself which way the public interest lay and what the equity of the case demanded. It was contended by Shri Haksar that there were departures from the guidelines and there was no indication as to why such departures had been made. We are unable, however, to accept the criticism that there has been derivations from the guidelines which are substantial. We have referred to the guidelines. We do not find that there has been any requirement of such guidelines which could be considered to be mandatory which have not been complied with. We have considered this carefully and found that there have been no deviations from paras 3, 5, 12, 13 and 14 of the guidelines. Nor has there been, as pointed out by the respondents, any infraction of guidelines nos. 2 and 4. The fact that debentures of the face value of Rs.200 have been approved as against the normal face value of Rs. 100 envisaged under para 8 or that the requirements of the service of underwriters have been dispensed with in exercise of the discretion conferred by para 11 do not constitute arbitrary, substantial or unjustified deviations from those guidelines. There has been sufficient compliance with the guidelines on the quantum of issue, debt equity ratio, interest rate and the period of redemption and also guideline No. 10 about the security of the debenture and there was sufficient security for the debentures in the 95 facts and circumstances of this case. The preference in favour of shareholders of RIL was justified and based on intelligible differentia. Indeed, if we consider the role of the CCI, it is primarily concerned to ensure a balanced investment policy and not to guarantee the solvency or sufficiency of the security. In our opinion, most of the criticism directed against deviation from guidelines were misplaced. It was submitted by Shri Ganesh that there was an obli gation cast on the CCI to ensure that the guideline regard ing security for the debentures was fulfilled. Shri Ganesh took us through the documents filed before the CCI includ ing, in particular, the draft prospectus which, according to him, clearly showed that there was in reality no security for the debentures. We are unable to accept this contention. Perhaps the most important of the arguments addressed on behalf of the petitioners was that the scrutiny by the CCI of the prospectus was so cursory that the most glaring travesty of truth contained therein has passed unnoticed by him. Sri Ganesh points out that the guidelines were clear that a company can issue only secured debentures and draws attention to the fact that the company proclaimed the issue to be of "fully secured convertible debentures". Yet, the prospectus, on its very face, disclosed that the debentures were unsecured. Shri Ganesh urges that, if only the CCI had perused carefully the figures and statements made in the prospectus he could never have accepted, at face value, the assertion of RPL that the debentures were "secured" ones within the meaning of the guidelines or accorded his consent to the issue. This argument is in three parts and may be dealt with accordingly. (i) The first criticism of the petitioners is that, in certain brochures and pamphlets issued by RPL, the deben tures are described as "fully secured convertible deben tures" which they are not. The description but explained that this was due to an oversight; the words "fully secured convertible debentures" were print ed in some brochures instead of the words "secured fully convertible debentures" without meaning or intending any change. It is submitted that the company 's representation was that the debentures were "secured fully convertible" ones. This is also what had been set out in the application for consent. Though the company does claim that the deben tures were also fully secured, it is submitted that the emphasis in the issue was that the debentures were fully convertible and secured. We think this explanation is plau sible and do not think that any importance or significance need be attached 96 to the different description in some places, particularly, in view of our discussion below as to the extent and nature of the security actually provided for the debentures. (ii) The second contention is that the security offered, on the face of it, falls far short of the face value of the debentures. Sri Ganesh analysed before us some statements indicating the inadequacy of the security. It was submitted by him that as per page 6 of the prospectus issuing the debentures, after implementation of the projects only the following assets would be available with the company: Rs. in Crores Land and site development 11 Buildings 26 Plant and Machinery 305 Total 342 The assets of Rs.51.25 crores, mentioned in the balance sheet as at 31.5.88 as per the Auditor 's report, are also included in the above because the above figures are of the total assets which would come in existence after implementa tion of the project. This, according to Shri Ganesh, clearly showed the inadequacy of the security. On behalf of RPL, it is submitted that there is no justification to exclude, from the figures of assets shown on p. 6 of the prospectus, items such as technical know how fees, expatriation fees and engineering fees amounting to Rs.79 crores and preliminary and pre operative expenses amounting to Rs. 138 crores as these are capitalised in the accounts and result in accretion to the value of the compa ny 's capital assets. The calculation also ignores miscella neous fixed assets of the value of Rs.70 crores shown on the page. If these are added, the value of the investment in assets would work out to Rs.629 crores which far exceeds the value of the debentures after the first conversion which comes to Rs.563.73 crores. This figure of Rs.629 crores takes into account only the investment in assets made out of the borrowed funds and not the future profits and assets acquired therefrom. But, even taking this as the basis, it is clear that, with the escalation in the value of the fixed assets with the passage of time on the one hand and the redemption of a good portion of the debentures by the end of three years on the other, the security provided is complete and, in any event, more than adequate to safeguard the interests of the debenture holders. There is substance in this contention. 97 (iii) The third loophole, according to the petitioners, is the insecurity created by the terms of clauses 5 and 6 of the prospectus dealing with 'security ' and 'borrowings '. Sri Ganesh submits that clauses 5 and 6 severely qualify the rights of the debenture holders under the present issue in several respects. (a) There is, in their favour, only a residual charge on all or any of the assets of the company at Hazira and other places which shall "rank expressly subject to subservient and subordinate" to all existing and future mortgages, charges and securities as may be hereafter created by the company in any manner whatsoever; (b) The company need not obtain the consent or concur rence of the debenture holders for creating any such mort gages etc. which will have priority over the present deben ture issue or for disposing of any of the assets of the company; (c) Not only is the residential complex of the company excluded from the purview of the security, it is also open to the company and the trustees of the debenture holders to agree to the exclusion of any of the assets of the company from the purview of the security. (d) The current assets or the bankers ' goods such as stocks, inventories, book debts, receivables, work in progress, finished and semi finished goods etc. stand ex cluded from the security. (e) Clause 6 again emphasises that the company shall be at liberty to raise any further loans and secure the same in priority to the present security and/or on such terms as to security, ranking or otherwise as may be mutually acceptable to the. company and the trustees of the debenture holders without being required to obtain any further sanction from the debenture holders. If these clauses are closely perused, Sri Ganesh urges, it will be seen (a) that the charge in favour of the debenture holders has a very poor priority as it can rank subservient to any securities that may be created by the company in future in respect of further borrowings, (b) that the compa ny and debenture trustees, by mutual agreement, can take any of the assets of the company outside the purview of the present security and (c) that the company can create such future securities as have a priority over the present issue or exclude assets from the purview of the security without the consent or concurrence of the present debenture holders. 98 We think, as has been urged on behalf of the company, that these arguments proceed on a mis apprehension of the true nature and scope of clauses 5 and 6 above as well as of the nature and legal effect of a floating charge what has been described in this prospectus as a 'residual charge ' that is created at the time of issue of such deben tures. In the first place, these clauses are only enabling in nature so as to permit the company, despite the mortgage in favour of debenture holders, to carry on its business normally. It will be appreciated that the company 's normal business activities would necessarily involve, inter alia, alienation of some of the assets of the company from time to time (such as, for example, the sale of the goods manufac tured by the company) as well the procurement and discharge of loans and accommodation facilities from banks, financial institutions and others (such as, for example, entering into agreements for hire purchase of plant and machinery and making payments of instalments towards their price). The entire progress of the company would come to a standstill in the absence of such an enabling provision. Such a provision is not only usual but also essential because the basic idea is that the finances raised by the debentures should be employed for running the project profitably and thereby generating more and more funds and assets which will also be available to the debenture holders. Secondly, we think and indeed RPL also conceded both in arguments as well in an affidavit filed on its behalf by Sri Mohan Ramachandran dated th January. 1989 that what the two clauses provide is only that the consent and concurrence of the debenture holders need not be obtained by the company before creating securities that may have priority over the present issue and that, under clauses 5 and 6 read harmoniously together, the trustees for the debenture holders have to concur before the company can raise any future borrowings and create therefor a security which will have priority over the security avail able to the present debenture holders. The Trustees here are not stooges of the company. The ICICI is not only a finan cial institution in the public sector but is also one of the institutions financing the project and thus having a stake in the success of the project. It can be trusted to ade quately look after the interests of the debenture holders. Thirdly, as has been pointed out by the company, the misap prehensions of the petitioners are more imaginary than real. The company, in its affidavit, has pointed out that the Debenture Trust Deed dated 7.11.1988, which has since been executed in the present case, contains a provision by which. at the time of creation of any future charge, the terms and conditions as to ranking have to be agreed upon between the RPL and ICICI. Also clause 16 of the Debenture Trust Deed authorises the debenture trustees to intervene 99 and crystallise the charge in their favour, inter alia, in the following circumstances: "If the Company sells the Mortgaged Premises or any part thereof not in the ordinary course of business except a sale, transfer or dispo sition allowed under the terms of these presents to be made with the consent of the Trustees." (Sub clause (f)) "If the Company (except as hereinafter ex pressly provided) creates or attempts or purports to create any charge or mortgage of the Mortgaged Premises or any part of parts thereof prejudicial to the interests of the Debentureholders." (Sub Clause (i)) "If, in the opinion of the Trustees, the security of the Debentureholders is in jeop ardy." (Sub clause (k)) Thus if at any time the company proposes to create such higherranking charges, the trustees for debenture holders can stultify the same by taking immediate action. Fourthly, the impression sought to be created by the petitioners that the company may go on creating encumbrances, left and right, to the detriment and prejudice of the present debenture holders overlooks several restraints imposed on the company in this respect under the , the CCI` Act, the MRTP Act and involving the consent of public financial institutions, commercial banks, the term lenders, the share holders, the MRTP Commission, the Central Government and the CCI before the creation of such securities. Lastly, the contention of the petitioners completely overlooks the basic principles underlying the commercial law concept of deben tures secured by a floating charge as evolved in British Jurisprudence over the past two hundred years. Clauses like clauses 5 and 6 are usually inserted in debenture issues and the company has drawn our attention to two like instances in certain issues approved in December 1988 and January, 1989. It has also been argued for the company that a fully con vertible debenture is not a debenture at all in the true sense of the term and is more akin to an issue of equity and that, therefore, there is no need that it should be covered by adequate security at all. These aspects of the matter are dealt with by us at some length later; it is sufficient here to say that we are unable to accept the contention that the security in favour of the debenture holders is illu 100 sory and inadequate because of the wide language of clauses (5) and (6) of the prospectus. Both these clauses have to be read together and so read, we have no doubt, do not permit the creation of any charge ranking in priority to the charge created under these debentures save with the consent of the trustees of debenture holders. The further argument of Sri Ganesh is that the company law in its application as well as the prospectus, carefully skirted round the issue by merely stating that security will be provided to the satisfaction of the trustees and that this is not very helpful as the debenture holders come into the picture only after the funds have been raised. This argument is untenable. We have already pointed out, there was sufficient security as was warranted by the issue. This was an issue of 12.5% fully secured convertible debentures of Rs.200 each. We have examined the share capital, the present issue and the scheme of conversion. In the premises, it is not possible to accept the submission of Shri Ganesh that the Controller satisfied himself (as stated by him in his affidavit) with the bare statement of the applicant company (RPL) that security would be created as per the requirements of the debenture trustees. There was this statement that the debenture trustees were well known finan cial instutitions and they had been entrusted with this obligation. Learned Additional Solicitor General drew our attention to similar debentures and submitted and, in our opinion, rightly that this was the usual practice. It is not possible for the CCI to ensure more than that. The prospec tus was not misleading to that extent. It, therefore, cannot be accepted that the CCI failed to apply its mind to the documents before him. Reliance was placed on the fact that the RIL had proposed the issue of shares for G series for more or less identical project. It was contended that if capital issues had once been sanctioned for a project and the issue had been converted for that purpose and then a fresh capital issue could not be applied for or granted for the same purpose. It was urged by Shri Ganesh that the project under those circumstances could not be considered to be a 'new project ' within the meaning oflll para 2(i) of the Guidelines for Issue of Debentures by Public Limited Compa nies. Secondly, it was urged by Shri Ganesh that the basic object of the was to ensure .sufficient and fruitful utilisation of capital would be completely defeated if more than one capital issue is permitted for the same project. In this connection, Shri Ganesh referred to the affidavit of the CC1 which, according to him, clearly indicated that CCI was specifically aware of the fact that the scheme of finance for setting up the very same project had been approved in favour of RIL. Our atten tion was drawn to the affidavit filed on behalf of the CCI, 101 where he had stated at p. 203 of the Paper Book of T.C. No. 164 of 1988, that by a Press Release dated 15th September, 1984, certain guidelines which the said deponent described as "non statutory guidelines" for approval of issue of secured convertible and nonconvertible debentures. These guidelines had been subsequently amended by a Press Release dated 8th March, 1985 and these were released on 19th Au gust, 1985 for issue of convertible cumulative preference shares and also there are guidelines issued by Press Release dated 1st August, 1985 for employees stock option scheme. In accordance with .these guidelines, according to the deponent on behalf of the CCI, the consent of the CCI for capital issue for secured fully convertible debentures was issued as the projects originally to be established in RIL were per mitted by the Department of Company Affairs to be trans ferred to RPL and endorsements thereof from RIL to RPL had already been filed including, inter alia, for endorsement of the letter of intent for the MEG Project. The scheme: of finance for setting up of three projects namely PVC, HDPE and MEG had already been approved by the Department of Economic Affairs in favour of RIL. In that context, in our opinion, to contend that there was violation of the guide lines because the RPL 's project was not a new project was too narrow and legalistic view. Shri Ganesh tried to urge that the CCI ought to have been aware of the fact that he had sanctioned a capital issue of Rs.400 crores (subsequent ly enhanced to Rs.500 crores) to RIL for the same project and that the said issue had been implemented and capital of Rs.500 crores had been mopped up from the public by RIL. The CCI ought to have withheld permission for a fresh capital issue in the name of RPL for the very same project. However, the CC1 did not appear to have applied his mind, according to Shri Ganesh. Consent Order, therefore, according to Shri Ganesh, was bad. We are, however, unable to accept this submission. The CCI was not performing the role of a social mentor taking into account the purpose of RIL. If RlL has misutilised any of its funds or the funds had not been utilised for G series, then RIL would be responsible to its shareholders or to authorities in accordance with the rele vant provisions of the . This aspect does not enter into sanctioning the capital issue for the new project in accordance with the guidelines enumerated herein before. That apart, even if RIL and RPL have to be treated as one for this purpose and the grant of consent for earlier debenture issues in favour of RIL are to be taken into account in judging the necessity of the issues, there is no illegality or irregularity in the impugned grant of consent to RPL. As referred to elsewhere, RIL had not been able to utilise any part of the 'G ' series of debentures on the MEG project as there had been a cost overrun in 102 the PTA & LAB projects. Eventually, for reasons adverted to earlier, it was decided to have the MEG, PVC and HDPE projects undertaken by floating RPL, a wholly owned subsidi ary. In the result, even if we look at the projects not as new ones but only as those of the RIL to be implemented by RPL, the additional finances were needed for the extention, expansion and diversification of the projects originally envisaged. This is one of the objects for which a debenture issue is permissible under the guidelines. Shri Ganesh then submitted that Guideline No. 3 for the Issue of Debentures by Public Limited Companies laid down that the CCI would consider an application for capital issue only after the approval of the financial institutions, banks and Government are received. The statutory application form prescribed by the Capital Issues (Application for Consent) Rules, 1966 requires, according to Shri Ganesh, that the consent and clearances of the various authorities and insti tutions should be annexed to the application. Shri Ganesh submitted that in the present case, many of the relevant applications had not even been filed by RIL and RPL as on 4th July, 1988 when the CCI passed the Consent Order. It was submitted by Shri Ganesh, also by Shri Haksar and especially by Shri Pagaria, that RPL 's application had been processed in unseemly haste and without due and proper application of mind. It is true that things moved speedily in the case. This has caused us certain amount of anxiety. Speed is good; haste is bad, and it is always desirable to bear in mind that one should hasten slowly. However, whether in a particular case, there was haste or speed depends upon the objective situation or on overall appraisement of the situa tion. Here, as discussed earlier, the material shows that the details of the proposals have been examined and dis cussed and that an examination of the merits has not been a casualty due to the speed with which the application was processed; and especially in view of the fact that no injury has been caused to the investors and no substantial loss to their securities have been occasioned, we are of the opinion that much cannot be made of this criticism. Learned Addi tional Solicitor General placed before us other instances where applications had been sanctioned within shorter times. Shri Ganesh tried to urge that RIL had declared itself as a promoter of RPL and the prospectus stated that no benefit was being provided to RIL as promotor. But, the entire amount spent by RIL was being reimbursed to it by RPL. In these circumstances, RIL could not be treated dif ferently from the general public in the matter of 103 allotments of the shares of RPL. However, the scheme of allotment was such that gross discrimination resulted against the general investing public and in favour of RIL. The long term implications, it was urged by Shri Ganesh, of the said discrimination were highly anomalous and unjust for the investing public who had subscribed to the debentures of RPL. However, there had been no application of mind by the CCI, according to Shri Ganesh, to the matter of quantifica tion of the extent of benefits conferred on RIL and consid eration of whether the same are justified or not. The CCI, however, had merely mentioned in his affidavit that RIL was a promotor and had given an interest free advance of Rs.50 crores to RPL for a period of three years. In our opinion, these factors were sufficient to justify the treatment of RIL differently from other investing public and thus the treatment does not amount to any discriminatory benefit to RIL in respect of the debentures of RPL. As a matter of fact, this was a known fact and the shareholders or the subscribing debenture holders would be aware of the same. Shri Ganesh sought to urge that the CCI had not made any attempt to appreciate or quantify the extent of the said benefits and advantages and go into the question whether the same are fair, reasonable and just. Consequently, for this reason also, there had not been, according to Shri Ganesh, due application of mind by the CCI before the Consent Order was issued. We are unable to accept this criticism. The discrimination alleged is on two grounds. The first is that RIL is entitled straightaway to the allotment of shares of the face value of Rs.57.50 crores whereas only 5% of the investment by the debenture holders can be converted into shares at par simultaneously with the issue. The second is that a loan of Rs.50 crores advanced by RIL to RPL will be converted into shares at par at the end of 3 years where as the debenture~holders will have to pay a premium even for converting 20% of their debentures into shares by that time. These allegations do not bear scrutiny. So far as the first ground is concerned, there is no justification for a com parison between these two categories of investors. RIL is the promoter company which has conceived the projects, got them sanctioned, invested huge amounts of time and money and transferred the projects for implementation to RPL. It is, therefore, in a class by itself and there is nothing wrong if it is allotted certain shares in the company, quite independently of the debenture issue, in lieu of its invest ments. So far as the second ground is concerned, it over looks certain disadvantages attached to RIL in regard to the loan of Rs.50 crores advanced by RIL as compared with the investor in the debentures. Firstly, RIL 's advance is inter est free 104 for 3 years whereas the debenture holders get interest at the rate of 12.5% during the period. Secondly, the debenture loan is secured while the RIL 's are not. Thus the debenture holders have certain benefits which RIL does not have and, if the debenture holders have the disadvantage of having to pay a premium, that cannot constitute basis for a ground of discrimination. These considerations apart, we would like to observe that we are unable to appreciate how any question of dis crimination is at all relevant in the present context. It is a company not the State or a State instrumentality that is issuing the shares and debentures. It is entirely for the company to issue the shares and debentures on such terms as they may consider practicable from their point of view. There is no reason why they should not so structure the issue that it confers certain greater advantages and bene fits on the existing shareholders or promoters than on the new subscribers to the debentures. We do not think that it is permissible for the CCI to withhold consent only for this reason or to stipulate that consent can be given only if the shareholders and promoters as well as prospective debenture holders are all treated alike. The subscribers to the deben tures are only lenders to the company who have an option to convert their debt into equity on certain terms. It is perfectly open to the subscribers to balance the pros and cons of the issue anti to desist from taking the debentures if they feel that the dice are loaded unfavourably in favour of the "proprietors" of the company. Shri Pagaria, who appeared in T.C. No. 162/88 in the matter of Shri Radheyshyam Goyal vs Union of India & Ors., where the petitioner was a Chartered Accountant, prefaced his submission by submitting that ours is a sovereign, social ist, secular democratic republic governed by the Constitu tion of India. Shri Pagaria drew our attention to Article 19(1)(g) of the Constitution. He submitted that the is a pre constitutional law and the Act was enacted as being expedient to provide for con trol of issue of capital. Under Article 14 read with Article 38, it was obligatory to ensure that there was no dispropor tionate wealth. He drew our attention to MRTP Act and other Acts and also to a large number of decisions to highlight that the directive principles should be imported for ensur ing that the CCI performs his functions for the welfare of the community and to bring about an egalitarian society. That was his first submission and he further submitted that the petitioner was really in a position to come under the Public Interest Litigation propounding the cause of the public. Secondly, he submitted that the concept of com 105 pany being the property of the Board of Directors had under gone a radical change. He submitted that company in a new socio economic set up is a social institution having duties and responsibilities towards community for which it func tions. According to him, maximisation of social welfare should be the legitimate goal of the companies and the shareholders. He, therefore, stated that the CCI should take upon himself a social role and ensure that Capital issues are satisfactorily implemented. One may perhaps concede that, with the vast expansion in recent years of the corporate sector and its constant tend ency to have recourse to public funds for securing finances for its projects (either by way of share capital or borrowed capital), the scope of the responsibilities of the CCI can no longer be as limited as before. It may no longer be restricted merely to the task of preventing an imbalance of investment in various sectors or the diversion of investment to non essential projects. The petitioners may perhaps have a point in suggesting that the CCI should be burdened with a duty also to safeguard the interests of the public who are invited to participate in such financing on large scale and at least to satisfy himself that the project for which funds are needed is not in the nature of a "South sea bubble" and that the volume, terms and conditions of the issue proposed by the company are not such as to constitute a fraud on the public. But we think that the time is not yet ripe for placing on the office of the CCI, as at present constituted, more than a skelital outline of responsibility in this direction; his shoulders are, as yet, not strong enough to bear such burden. He does not have the time, the staff, the powers of enquiry, the benefit of public hearing, the requi site background, or the economic commercial or financial skill or expertise to so assess the technical, commercial and financial aspects of the projects as to be able to give the public investor a guarantee that he is not being led up the garden path. All that one can say at present is that th parameters of his action have to be found within the four corners of the Act and the guidelines. May be, he can legit imately withhold his consent to a project that is ex facie impracticable (for instance, as was put to the parties in the course of hearing, a project to convert base metal into gold) or a project, which in the present state of finances and scientific knowledge and progress of our country, is an impossibility (for example, to have a transport service to the moon). May be, he also can in a proper case, refuse his consent to a scheme of finance if, ex facie, and without any detailed investigation, he is satisfied, that it is too big for the applicant company to handle, or too risky and oner ous to be permitted in public interest. But this is a deci sion which he will have to 106 venture upon, on his own responsibility, in patent cases where the nature of the project or the scheme of financing is, on its face, startlingly non feasible, impracticable or risky. He cannot, however, be compelled to withhold consent. or found fault with for having granted consent, in a case such as this, where the proposed project is in a core indus trial sector. where there is considerable scope for foreign currency savings and the scheme of financing proposed has been developed in consultation with and scrutinised and approved by a leading public sector financial institution (which has also agreed to be the trustee for the Debenture holders). It is too much to suggest that the CCI should be held to have failed in his duty by accepting the opinion of such institutions and not investigating for himself from various angles and in particular, the adequacy of the secu rity offered to the debentureholders under the scheme. While we do appreciate that in the changed atmosphere, the corporate sector, when seeking to attract public moneys while raising new capital must perform both responsible and responsive roles, it is difficult to enjoin that the CCI while considering the question of consent/sanction of the capital issues can fulfil any role beyond the policies prescribed under which, as noticed before, it was enjoined to function. There are other various Acts like the Income Tax Act, , MRTP Act to subserve other social objectives which are conducive or ancillary to the directive principles. Nelson, it is reported to have said before the battle of Waterloo. that England expected every man to do his duty. It is well to remember that every authority in a vast developmental society must perform his role keeping in view the part he is expected to play in the background of the whole perspective anti should not encroah upon others taking the onus upon himself to do everything. That would lead to chaos and confusion. Shri Pagaria drew our attention to Section 237 of the . If there was any violation of some of the rights of the parties, they are at liberty to proceed in accordance with law. It was contended that it was an admit ted position that RPL is a newly established company though initially financed by RIL. No ceiling had been put on the allotment of the shares to the business associates of Direc tors whereas at item 5 page 2 of the Consent Order dated 4th July, 1988, the limit of the shares for the employees of the RPL had been reduced from 200 to only 50, thereby, according to Shri Pagaria, depriving the employees having large share holding in the company which discriminated them vis a vis the business associates, for whom no such ceiling had been kept. 107 We find the factual position to be this. The application for consent to the issue had not specifically earmarked any portion of the issue to the employees of RPL and RIL. In the course of the discussion with the CCI, it was suggested that 12,90,000 debentures should be offered by way of preferen tial allotment to the employees of the RIL and RPL. Para 5 of the consent order by the CCl conveyed the approval by the Central Government under proviso to rule 19(2)(6) of the Securities Contracts (Regulation) Rules, 1957 "subject to the condition that the allotment to the employees shall not exceed 200 shares per individual". The Company by its letter of 7th July pointed out that "shares" in the above para was a mistake for "debentures" and also suggested that a maximum of 200 debentures which on first conversion would become 200 shares be allotted to each of the employees of RPL as well as RIL. The CCI, however, modified Para 5 by his letter of the 19th July, 1988 to say that allotment to the employ ees shall not exceed 50 debentures per individual. In this context, it does not appear that the restriction of the allotment to the employees was at the instance of the compa ny nor does it seem that any discrimination was intended in respect of the allotments to the employees. Nor has our attention been invited to any legal requirement or guide lines prescribing any fixed or minimum quota of allotment to the employees of the company. We are, therefore, unable to see any discrimination. In any case, the petitioner in this case has no cause for grievance on that score. It was submitted that the Consent Order suffered from arbitrariness, mala fides, unprecedented hurry and with extraneous considerations. We are unable to see any such discrimination. It was submitted that the Consent Order had been passed without, satisfying that the pre requisite condition of the various clearances and no objection certif icates and licences under MRTP Act, FERA Act and Petroleum Act and the Essential Commodities Act, Securities Contract (Regulation) Act, , and other allied laws had been fulfilled. The CCI has given consent for 12.5% secured redeemable convertible debentures of Rs.200 each for cash at par to the public. This nomenclautre has not been changed, but in the prospectus, fully convertible debentures have been shown. According to Shri Pagaria, the most important is the concentration of wealth in the hands of Ambani family and this aspect has not been considered in granting the consent, which according to him, resulted in violation of Article 39(b) & (c) of the Constitution of India and section 22(3) of the MRTP Act. It was submitted that the consent could not be given in favour of any applicant or company, who had no valid industrial licence nor it pos 108 sessed the letter of intent under the provisions of Indus tries (Development and Regulation) Act, 1951. It was submit ted that the CCI did not give judicial consideration to the application as in this connection reliance was placed on the decision of the Gujarat High Court in Navjivan Mills Co. Ltd. Kalol, vs In re. Kohinoor Mills Co. Ltd. Bombay, [1972] 42 Co. Cases 265. Some passages of Halsbury 's Statutes of England, 4th edn., vol. 8, were referred. It was submitted that the Directors who had received money without disclosing full facts were bound to refund the same and were construc tive trustees of the company. This proposition, in our opinion, is irrelevant in the present context. Shri Pagaria sought to urge that RIL management had passed an ultra vires resolution in transferring the industrial licence and letter of intent to RPL and for that act, the office bearers were personally liable and he referred to certain decisions. Shri Pagaria also submitted that by advertisement on Television, radio and print media under the caption "Your Family Khaza na", without first creating a solid and viable security for the fully paid convertible debentures under the impugned invalid consent order, the application money had been raised to the tune of more than Rs. 1,200 crores. According to him, the advertisement given was not only violative of section 58A of the but also contrary to provisions of Security Contract (Regulation) Act, 1956 and Rules made thereunder. Shri Pagaria then submitted that in view of what he described as improper or insufficient security, no con sent could have been granted and even if the issue was over subscribed, the money was repayable to the persons who had subscribed to the issue on the basis of the promises and they were entitled not only to the refund of the money but to all benefits by way of interest, etc. He drew our atten tion to certain decisions, which in our opinion, are irrele vant. He submitted that the people have a right to know and this right had been violated by not telling the people the full facts. It was submitted that RPL did not place any material before the Central Government to justify the con sent. We are unable to accept this submission. It was next submitted that the guidelines were mandatory. It was next contended by Shri Pagaria that there was nondisclosure of true and correct facts not only in respect of the interest of Directors of RIL in the RPL properties but also the security and with regard to the approval of the financial scheme under MRTP Act, the licence under the Petroleum Act, Explosive Act, etc., Shri Pagaria has referred to the re quirements under a large number of enactments and contended that, until requisite consents, approvals, licences etc. are obtained under the said enactments, the Company cannot be permitted to raise public finances for the projects on hand. In this context, he referred, in addition to the provisions of the , the 109 MRTP Act, CCI Act, rules and guidelines, and the Industries (Development & Regulation) Act which have been considered by us, to certain provisions of the (and rules and orders made thereunder); Explosives Act (and rules made thereunder); Essential Commodities Act, Atomic Energy Act; Insecticide Act; Air (Prevention and Control of) Pollu tion Act, 1981; Indian Standards Institution Certification (Marks) Act, 1952 (and rules and regulations thereunder); Foreign Exchange Regulation Act, 1973; ; Securities Regulation Act and . We have gone through these provisions. They relate to var ious types of controls and regulations which have to be observed in the actual running of various types of business. We are satisfied that neither these statutes nor those regulating the grant of consent to the issue of shares and debentures intend that clearances thereunder should all be obtained before filing an application for consent. In our considered view, such requirement is neither practical nor feasible and is not envisaged by the statutes referred to. Some of the contentions of Sri Pagaria alleging misleading statements made by the Company to attract investments, such as the one based on the and the de scription of the issue as the "Family Khazana", are far fetched and unrealistic besides being irrelevant to the issue to be considered at the stage of consent for the issue by the CCI. Sri Pagaria then submitted that the grant of consent was without lawful authority and on extraneous considerations. He referred to certain decisions in support of that broad proposition. If the basis of his submission was correct, undoubtedly, the consent was bad but we do not find any merit in the submission. The next submission by Shri Pagaria was that the issue had been made public subject to the injunctive relief granted by this Court on 19th August, 1988 without entering into the merits of the case and it was submitted that RPL did not possess any industrial licence or letter of indent and whatever licence it had, had expired. This position is not factually correct as noted before. It was submitted that there had been violation of several laws. No particular violation had been indicated. Furthermore, it was submitted that the Industries (Development & Regulation) Act, 1951, , , MRTP Act, 1969, FERA, 1973 have to be read in conjunction and as such the corporate sector should not be permitted to accumulate wealth on account of favour from the Government. The factual position being as indicated before, it is not possible to entertain these bald submissions. On behalf of the CCI, it was submitted that the contention that 110 the CCI had not followed his own guidelines relating to the sanction of the issue is misconceived. It was further sub mitted that the security for debentures had been properly there. It was submitted that the following facts would establish that there had been no breach of duty or obliga tion cast on the CCI either under the Act or under the Guidelines or under Capital Issues (Application for Consent) Rules. The relevant guidelines for consideration of this question are as follows: (a) Guidelines for Issue of Debentures by Public Limited Companies Press Release 1984. DEBT EQUITY RATIO: The debt equity ratio shall not normally exceed 2:1. For this purpose 'debt ' will mean all term loans, debentures and bonds with an initial maturity period of five years or more including interest accrued thereon. It also includes all deferred payment liabilities but it does not include short term bank borrowings and advances, unsecured deposit or loans for the public, share holders and employees, and unsecured loans or deposits from others. 'Equity ' would mean paid up share capital including preference capital and free reserves. Guideline No. 11 is also instructive. The Press Release also was referred to. The trustees to the debenture holders were enjoined to supervise the implementation of the condi tions regarding creation of the security of the debentures. It was, therefore, submitted that the trustees of the debenture issue who were to supervise the implementation of the conditions regarding the creation of security, were vested with the requisite powers for protecting the interest of debenture holders. Before formulating the guidelines for protection of the interest of debenture holders considerable deliberations took place between the concerned departments in the Ministry and between the Public financial institu tions, investment institutions, Department of Banking and CCI and Reserve Bank of India as a large quantum of deben tures were coming to the period of maturity in 1989 onwards and redemption and a need was felt to protect the interest of debenture holders so that no defaults endanger their interests. Consequently,/he question of debenture redemption reserve and the security creation was examined by the finan cial institutions and the scheme with debenture trustees was formulated with sufficient degree of precision and urgency. The debenture trustees are normally public financial insti tutions and nationalised banks. Public 111 financial institutions have the necessary expertise and infrastructure to examine the aspects of security creation and the quality of the security offered for protecting the interest of debenture holders. The original guidelines of 14th January, 1987 were continuously being monitored by the CCI and on 25th June, 1987, a further clarificatory guide line was published on the concept of security to be offered for the debentures. In the present case, the application dated 4th May, 1988 as filed by the RPL with the CCI cate gorically mentioned that "the security will be in such form and manner as required by the trustees for debenture hold ers". These requirements are contained in Part V(E): Partic ulars of Issues Particulars of Preference Shares and Deben tures (e) indicate the security to be offered in the case of debentures. It is in these circumstances that it was not necessary for the CCI to evaluate the security or the ade quacy thereof at the stage of grant of consent. The CCI did examine the proposal with reference to the debenture residu al value beyond the fifth year of its allotment and in relation to the asset creation and take on record prior to grant of consent the project estimations and cash flows statements of the ICICI for the years 1989 to 1996 which had looked into the projects and also examined the question of creation of security and asset creation for RPL in relation to the issue for three projects. It was further submitted that as per this statement, the debt service coverage ratio was 1.89 in 1991 and going upto 2.55 in 1995. It was there fore inaccurate to say that the CCI had not satisfied him self on the matter of security or had failed to apply his mind to documents before him. It is further stated on behalf of the CCI that the CCI consented to the proposal of RIL for 'G ' series for projects including PTA, LAB, MEG and HDPE and also for working capital requirement in November, 1986 and not merely for MEG and HDPE as alleged by the petitioner. During the implementation of projects, there was cost over run for PTA and LAB which was taken due note of by ICICI in December, 1987 and CCI was informed of this cost overrun in 1987 itself by ICICI. Major part of 'G ' Series was utilised for PTA and LAB, CCI was also aware of this cost overrun through the proposal of the company to MRTP Commission much prior to granting consent to RPL as CCI is represented in the process of approval for MRTP. CCI 's office was in formed by ICICI of likely deployment of 'G ' Series funds for projects other than MEG and HDPE much prior to the grant of consent to RPL. It was submitted that RIL had received approval to its modified scheme on 17th May, 1988 for its LAB project and on 13th July, 1988 for its PTA Project. However, these formal communications were preceded by the awareness of the CCI in regard to cost overruns in PTA and LAB projects and consequently the non implementation of MEG and HDPE. 112 Learned Additional Solicitor General, therefore, submitted that it was incorrect to state that the CCI granted consent for issue of debentures for financing the projects of RPL which were already given financing facilities earlier against the 'G ' Series debentures. It was submitted that since the projects of MEG and HDPE were not implemented in RIL and were now being implemented in RPL for the first time these were 'new projects ' within the meaning of paragraph 2(a) of the guidelines dated 15th September, 1984. There fore, it is incorrect to say that more than one capital issue was permitted by the CCI to finance the same project. It is clear, according to learned Additional Solicitor General, that CCI satisfied himself before granting the consent on 4th July, 1988 to RPL, that the capital raised by RIL was not used for HDPE and MEG and the scheme of finance for the G Series of RIL, as modified, and for the present issue of RPL were different. It was denied that the CCI ought to have withheld permission for a fresh issue of capital in RPL for HDPE and MEG, especially since these two projects were not permitted. It was submitted on behalf of the CCI that there was no bar for receiving finance for either a cost overrun, or for an unimplemented portion of a project. It is a fact that the MEG and HDPE projects had not been implemented in RIL and they were now being implemented only in RPL. It is further submitted on behalf of the CCI that the public financial institution, namely, ICICI looked into the project and reported to the CCI, in their letter dated 15th June. 1988 that the estimated cost of projects for which the consent was being sought was Rs.650 crores. The consent order of the CCI clearly indicated that the consent conveyed in the letter shall lapse on the expiry of 12 months from the date thereof. The consent order further categorically stated that the approval was without prejudice to any other approval/permission that might be required to be obtained under any other Acts and laws in force. It necessarily therefore followed that the obligation to obtain other permissions continued. There was no legal condition that other approvals should be examined by the CCI before grant of its own consent. This was submitted on behalf of the CCI and there is substance in the submission. In the application form prescribed in Schedule A of the Capital Issues (Applications for Consent) Rules, 1956 other than the Bonus shares, the indications are only directory and not mandatory requirements. The words used are "normally insist ed". Therefore, it does not preclude the CCI from granting its consent before the grant of other approvals. Through a chart, it was highlighted before us that there was no undue haste and it is the normal time taken in respect of others also. It is further stated that the statutory information clearly indicated that no amount had been paid or given to the companies promoters or 113 officers or offered to them. The prospectus and the terms and conditions were not approved by the CCI at the time of granting of consent. No discrimination had been practised against the existing shareholders of RIL, while according consent to RPL. The proposal of the 8th June, 1988, as submitted by RPL to the CCI, sought approval for equity participation to the extent of Rs.50 crores only. This Rs.50 crores was by way of unsecured interest free deposit to be converted at the end of the 36 months into equity shares at par. This substantial addition to the promoter 's contribu tion was to ensure an enhanced participation in the project and to ensure its stake. The Petrochemical Industry has a long gestation period for yielding high profits. The con vertible debentures have a fixed return as contrasted to equity participation which might earn a flexible dividend. In the initial period, no dividend , 'night be earned. The CCI therefore applied its mind while evaluating this aspect since a sum of Rs.50 crores was to be non interest bearing and unsecured whilst computing the position on the debt equity ratio. The enhanced contribution sought from the promoter was a condition imposed on them. The long term implications and the balance capital structure of the compa ny were placed for consideration of the CCI through the cash flow analysis of ICICI and the CCI applied its mind to the scheme of financing and correctly granted the consent order on relevant considerations. So far as the grievance of alleged discrimination is concerned, it arises from the petitioner 's assumption of the possible capital appreciation of equity shares of RIL at the second conversion which might be at a premium, if any, at the time of such conversion. It was submitted on behalf of the CCI that CCI had imposed a condition that any conversion would be at a premium, if any, as might be decided by the CCI 's office, at the time of such conversion. It was further submitted that the computation of premium depends on several factors, such as the net worth of the company, the performance of the company, the profit earning capacity value of the company, etc. Since RPL was in the Petrochemical sector, which had ordinarily the gestation period, at the time of grant of the consent, it was not possible for the CCI to forecast or estimate the rate of conversion on the second and the third stage and advisedly the CCI reserved to itself the right to determine this premium on factual data available at the time of conversion. Therefore, this cannot be said to be bad. The convertible debentures would receive interest @ 12.5% on the sum of Rs.190 (31.5% interest would accrue on this amount). It was, therefore, not necessary for the CCI to quantify the extent of benefits and advantages before grant of consent and had to enter into computation for evaluating this. Naturally, the RIL, as a promoter, stood on a different footing and there were rational intelligible critera distinguishing general 114 members of the public from a promoter proposing the capital issue and the establishment of new projects. It was further relevant to notice, it was submitted, that RPL was a 100 per cent subsidiary company of RIL at the time of its conversion and even presently a proposal for a capital issue would have sought that the entire issue of capital be allotted to itself. The CCI had the option to grant the consent in terms of the application or to impose such conditions as were necessary for the balanced capital structure of the company. The consent, it was submitted, could not be evaluated in hindsight, after the issue was closed and subscribed. It was asserted that today RIL is the third largest industrial house in India. It was stated that the present portfolio of RIL spreads over 2.5 million sharesholders/debenture holders/deposit holders. Till date, it has made 7 debentures issues besides making three equity share capital issues (rights) and 2 bonus shares issue. All the debentures issues were at a premium and over subscribed. E Series partly convertible debentures of Rs.80 crores were issued in 1984 85. F series non convertible debentures of Rs.270 crores were issued in 1985 86. G Series fully con vertible debentures for Rs.500 crores were issued in 1986 87. According to the respondent, the investment in RIL, during this period has proved to be consistently and remark ably profitable to investors. The RIL commenced business in the year 1966 for the manufacture of synthetic cloth made from synthetic yarn and fibre. Their factory was commenced and installed in the vicinity of Ahmedabad at Naroda. In order to manufacture synthetic fabric, the company was importing polyester filament yarn and polyester staple fibre and re exporting fabrics produced from the same. It was one of the recognised export houses doing business in textiles. In the year 1977, Reliance Textile Industries merged with a company, Minylon Ltd. and, after the merger, changed its name back to Reliance Textile Industries Ltd. Its tradition al line of business was manufacturing of synthetic fabrics. However since 1977, through several capital issues, (both of debentures and of equity) it has diversified and backwardin tegrated. In the first instance, the company decided to install a plant for the manufacture of polyester staple fibre and polyester staple yarn which item it was previously importing for manufacturing synthetic fabrics. These plants were established at Patalganga in the State of Maharashtra. Thereafter, the company decided to further backward inte grate and to manufacture PTA (Purified Teriphthalic Acid) which is one of the raw materials used in the manufacture of polyester filament yarn/polyester staple fibre. Simultane ously, it also diversified horizontally into the manufacture of Linear Aklyl Benzene (LAB) 115 used in the manufacture of detergents, as this product could also be manufactured from the petrochemical downstream products in which the company was engaged. RIL 's 3rd stage of backward integration involved, it was asserted, in the manufacture of Mono Ethylene Glycol (MEG), used in the manufacture of polyester staple fibre and pol yester staple yarn. It also decided to diversify into the manufacture of critically scarce plastic raw materials like High Density ' Polyethylene (HDPE), Poly Vinyl Chloride (PVC) and Mono Ethylene Glycol (MEG) a polyester raw material used in the manufacture of polyester fibre, etc. The company had also applied for Gas Cracker Project, which is said to have been cleared recently, whereby (natural) gas oil would be cracked to produce ethylene and other petrochemicals. Thus right from the Naphtha stage to the yarn fibre and fabric stage, the company has attempted the complete range of products necessary for the manufacture of fabrics from the raw material namely, natural gas. Hazira has been selected with special reference to the availability of natural gas oil from South Sea Basin and it is country 's first ethylene handling port and has economies of transportation and terminal facility at Hazira etc. It is not necessary to set out however how the company developed in different stages. The application for consent was filed on 4th May, 1988 as mentioned hereinbefore. The licence and letter of intent were endorsed in favour of the RIL and the scheme for finance in favour of the RPL. Both Shri Baig and Shri Salve, appearing for the re spondents 3 and 4, gave us the factual background of the business of the RPL. It is not necessary to set out these in greater detail than what has been mentioned hereinbefore. It is further submitted by both that the CCI had examined the nature and quantum of security in cases of the debentures. It was submitted that the submission of Shri Ganesh that the security was inadequate was wrong. It was submitted that clauses (5) and (6) of the Prospectus read together indicate how the power has been exercised. These clauses visualise the creation of a residual or floating charge on all or any of the movable or immovable assets and properties of RPL at Hazira and/or at any other location. These further postulate future charge, superior in priority, might be created by RPL. Future charges might be created without the consent or concurrence of the debenture holders. Nor was their consent required for purposes of dealing with the assets and proper ties of the company. It was submitted that the following properties are excluded from charge, namely, 116 (a) Residential complex at Hazira or at any other location. (b) Current assets or Banker 's goods. (c) Any other property that might be spe cifically excluded by agreement with the trustees. Future charges might be created on such terms regarding ranking, etc. as might be agreed to by the trustees. It was submitted that whereas clause (5) essentially visualised creation of a floating charge in favour of debenture holders without any restrictions or limitation, clause (6) incorpo rated a limitation and a safeguard that controls the normal characteristics of floating charge. It has to be borne in mind that convertible debenture is a new type of instrument introduced in this case and these appear to have caught the imagination of the investors. It has been asserted before us that subsequent to RPL issue, others have also gone for this type of project. Our atten tion was drawn to rule 2(b)(x) of the Companies (Acceptance of deposits) Rules, 1975 which provided clearly that a convertible debenture was not to be included in the defini tion of debenture. it was further asserted that the security visualised in clauses (5) and (6) of the Prospectus was one which was prevalent and customary in corporate practice and was regarded as valid and adequate. Nothing contrary to this was indicated before us. Our attention was drawn to Sec. 2(12) of the under which a debenture need not be secured at all. In that light the guidelines should be interpreted. Therefore, it was submitted, Guideline 10, reasonably interpreted, means that such security should be provided as is customari ly adopted in corporate practice in the matter of issuing debentures. It has to be borne in mind that the debentures issued in the present case are compulsorily convertible. Therefore, no repayment of principal is really involved. The question of security becomes relevant for the purpose of payment of interest on these debentures and the payment of principal only in the unlikely, event of winding up. The debentures need not necessarily be secured. Guidelines do not provide for quantum and nature of the security. A debenture has been defined to mean essentially as an acknowledgement of debt, with a commitment to repay the principal with interest (Palmer 's Company Law; p. 672; 24th Edition). Reference, in this connection, may be made to The British India Steam Navigation Co. vs The Commissioner of Inland Revenue. ; at pages 172 117 and 173. A debenture may contain charge only on a part of the assets of the company Re. Colonial Trusts Corporation, or it may not contain any charge on any of its assets (See Speyer Brothers vs The Commissioner of Inland Revenue, and Lemon vs Austin Friars Investment Trust Ltd., A debenture may, therefore, be secured or unsecured (Palmer 's Company Law; p. 675; 24th Edition). An ordinary debenture has to be distin guished from a 'mortgage debenture ' which necessarily creates a mortgage on the assets of a company (See Palmer 's Company Law p, 706). A compulsorily convertible debenture does not postulate any repayment of the principal. There fore, it does not constitute a 'debenture ' in its classic sense. Even a debenture, which is only convertible at option has been regarded a 'hybrid ' debenture by Palmer 's Company Law (Para 44.07 at page 676). In this connection, reference may be made to the guidelines for the '"Protection of Deben ture Holders" issued on the 14th January, 1987 which have recognised the basic distinction between a convertible and a nonconvertible debenture. It is apparent that these were issued for the purpose of ensuring the serviceability and repayment of debentures on time. It has been asserted before us that the compulsorily convertible debentures in corporate practice was adopted in India some time after the year 1984. Wherever the concept of compulsorily convertible debentures is involved, the guidelines treat these as "equity". This is clear from Guideline IV(i) read with IV (iii) of the Guide lines for Issue of Cumulative Convertible Preference Shares and Guidelines No. 8 and 11 of the Employees Stock Option Guidelines, These two sets of Guidelines clearly indicate that any instrument which is compulsorily convertible into shares, is regarded as an "equity" and not as a loan or debt. Even a non convertible debenture need not be always secured. In fact, modern tendency is to raise loan by unse cured stock, which does not create any charge on the assets of the Company (The Encyclopaedia of Forms and Precedents; 4th Edn. 6 para 17 at pages 1094, 1095 and para 22 at pages 1097 98). Whenever, however, a security is created, it is invariably in the form of a floating charge (See ' The Encyclopaedia of Forms and Precedents, 4th Edn., Vol. 6 Para 25 at page 1099). It follows, therefore, that the secured debenture almost invariably contains a floating charge. In addition to the floating charge, debentures are frequently secured by trust deed also as had happened in the present case where specific property, land, etc. has been mortgaged to trustees. Shri Ganesh made a submission that under clause (5) of the Prospectus, the company could deal with its assets and properties with 118 out the permission of debenture holders or debenture trus tees and that it could create future charges which would rank superior in priority. The concept of floating charge was, invented by the Victorian Lawyers only because of its special advantages inasmuch as it leaves a company free to deal with its assets in the ordinary course of business and does not require the permission of debenture holders or debenture trustees for dealing with them or creating further charges. It has been pointed out that the business of a corporation would be paralysed if it could not deal with its assets and create future charges, ranking superior in prior ity, and if it would have to obtain the permission of the debenture holders for doing so. (See the discussion in Palmer 's Company Law; page 709 and 682) (See also the obser vations in Re. Florence Land & Public Works Co., ; Re. Colonial Trust Corporation, (supra). In fact, in Re. Florence Land 's case (supra), the Court observed that if the companies were not allowed to resort to floating charge, they would have to call the meeting of existing charge holders/debenture holders each time they intend to create future charge. The decision in Re. Panama, New Zea land, and Australian Royal Mail Co., as indicated in Palm er 's Company Law at page 708 is a landmark because it estab lished the validity and the utility of a floating charge. In the instant case, if the permission of the debenture holders were required or is insisted upon to create future security, 2.5 million debenture holders would have to be informed and invited for meeting. The extravagant effects of this course would be colossal especially when a shareholders ' meeting is also additionally called for the same body of persons. It is, therefore, incorrect to say that a floating charge creates an illusory charge because future securities can be created ranking in priority over it. The legal position is that a floating charge creates a present equitable right in favour of the debenture holders/trustees. It creates a present charge.in the property/undertaking of a company even before the time of payment of the debenture arrives. The fact is that a company can deal with its property without the permission of debenture holders/trustees, before crys tallisation by resorting to a floating charge on the under taking (See the observations in this connection in Re. Florence Land 's case (supra); Re. Standard Manufacturing Co., ; Re. Borax Foster vs Borax Co., and Creatnor Maritime Co. Ltd. vs Irish Marine Management Ltd., This however does not mean that the company can keep on creating future charges with superior ranking without any let or hindrance because the debenture holders/trustees can any time move to crystal lise the floating security if they felt that the security is in jeopardy. 119 In the present case, there is no case to suggest or believe that ICICI (which is one of the most important national Government financial institutions), will not act effectively and promptly to ensure that the security in favour of the debenture holders is not rendered illusory. Even Guidelines dated 14th January, 1987 has cast the re sponsibility of supervising, creating, monitoring and imple mentation of security in favour of debenture trustees. The company cannot normally create a general floating charge ranking in priority to or pari passu with a prior floating charge unless the prior floating charge itself permits such a course. In this connection, reference may be made to the observations in The Encyclopaedia of Forms and Precedents, 4th Edn., Vol. 6 para 27 at pages 1102 1103. It, therefore, follows that: (i) A debenture is usually secured by floating charge only. (ii) A company which creates floating charge has a right to create future security which may rank superior in ranking. (iii) However, this right of the compa ny may be restricted by agreement. (iv) Where no restriction is provided, any future specific charge will rank superior to the earlier floating charge (Section 123 of the ) (v) Again, where no specific provision is made in the earlier floating charge with respect to the ranking of future floating charge then any future floating charge will be inferior to the earlier floating charge. In this connection, reference may be made to sec. 48 of the Transfer of Property Act. The risk of floating charges can be controlled by creating legal mortgage in favour of debenture trustees as has been explained in "All About Debentures" by Sen & Chandrashekhar (pp. 66 67). In the present case, a legal mortgage has been created by RPL in favour of the trustees in respect of its immovable and movable assets, except book debts, in respect of which financial institutions will hold a first charge on account of foreign loan. In the present case, RPL does not have any existing loans. Therefore, the charge in favour of the debenture holders is presently the first charge. No future borrowing is contemplated at this stage except the foreign currency loan to the 120 extent of Rs. 84 crores. Therefore, the submission that the security is illusory cannot be accepted and the CCI is right that the apprehension is based on factually unsound and unfounded grounds. Even if the value of the foreign currency which has been sanctioned in principle by the three finan cial institutions, is taken into account, the assets cover age goes down at each stage and does not make any critical difference to the value of the security of the debenture holders under the Trust Deed. The purposes of borrowings, namely, term loan borrowings, deferred payment credits/guarantees and borrowing for financing new projects do not, on analysis, raise any difficulty. There are suffi cient in built checks and controls. The company, being an MRTP company would have to obtain both MRTP permission for creating any security irrespective of its value and fresh CCI consent under the CCI Act. except in case of exempted securities. Therefore, in our opinion, this submission is really in the nature of. red herring. It was submitted that we should at least direct that the future security should not rank superior to the floating charge in favour of the existing debentures holders. Having regard to the factors which the investors should have taken into consideration, we are of the opinion that all relevant factors were borne in mind by the CCI. There is no substance also in the ground of discrimination. It is reiterated that Article 14 of the Constitution does not forbid reasonable classification. RIL is a promoter company. It had conceived the projects, got them sanctioned and invested huge amounts of time and money in the process. It was open to RIL to undertake these projects on its own and not to make any public issue at all. The ground that there was non application of mind be. cause the CCI did not take into consideration the issue of G Series is also without substance. Under Guideline 2(a) of the Guidelines of 1984, capital could be raised only for setting up of new project. MEG, it was submitted, was not a new project for capital had been raised for it by RIL under G Series. It was further submitted that the Controller did not ask RPL to get the bankers prior clearance certificate under Guideline II(v) of the Guidelines of January 14, 1987. Finally, the CCI did not take note of the fact that the application under Schedule I of Rule III of the Capital Issues (Application for Consent) Rules did not contain the relevant information. The position of cost over run has been explained. So there was no sub stance in the submission that it was not a new project. Secondly, it cannot be accepted that the CCI did not insist the bankers prior clearance certificate. These guidelines apply to "non convertible debentures" or "partly convertible debentures". These do not apply to "compulsorily convertible debentures". 121 Even assuming that these are applied to "compulsorily con vertible debentures", there was no need for the CCI to ask for the bankers prior clearance certificate because RPL was not issuing any new set of debentures. All requisite infor mation had been furnished. Shri Ganesh as well as Shri Pagaria tried to submit that in order to protect the investors, a function, which they submitted, the CCI, in changed circumstances, should deter mine whether the project is profitable. Where a project has been appraised by an institution like ICICI, the Controller can safely assume that it is profitable and he need not engage in separate independent exercise of his own in this regard. The scope and nature of the Controller 's powers and jurisdiction have to be determined in the light of the specific provisions of the CCI Act, its history, the de bates, to which we have referred, the capital structure of the national economy and its over all direction, in higher priorities, are decided by the Government and the Planning Commission by formulating Five Year Plans. However, the capital structure and the direction of a particular industry is decided in terms of the provisions of IDR Act. That a particular industrial house may become a monopoly or other wise have a restrictive and detrimental effect on the econo my of the country, is the concern of MRTP Act. Therefore, the scope of the CCI under the Act is of a limited nature and must be kept in its proper perspective. It is true that he cannot, as was contended on behalf of the petitioner, be oblivious of the fact that small scale investors are coming into operation and there is a social obligation of the State to provide safe guidelines. Yet, each authority must circum scribe its. work in the proper light. Unless, therefore, CCI acts perversely, irrationally or with procedural improprie ty, his decisions cannot and should not be faulted on the ground that other consequences might follow. Of course, no other consequences have been indicated before us. As a matter of fact, there was no allegation that the CCI acted mala fide or on extraneous considerations. The CCI applied its mind to the facts of this case and the factors in general. There was no undue haste. A statement was pro duced indicating that the application for grant of consent had been disposed after some time, but within the time frame in which such applications are normally disposed of. It may, however, be stated that being not statutory in character, these guidelines are not enforceable. See the observations of this Court in Fernandez vs State of Mysore, ; Also see R. Abdullah Rowther vs State Transport, etc., AIR 1959 SC 896; Dy. 122 Asst. Iron & Steel Controller vs Manekchand Proprietor, ; ; Andhra Industrial Work vs CCI & E, ; ; K.M. Shanmugham vs S.R.V.S. Pvt. Ltd., ; A policy is not law. A statement of policy is not a prescription of binding criterion. In this connection, reference may be made to the observations of Sagnata invest ments Ltd. vs Norwich Corpn., and p. 626. Also the observations in British Oxygen Co. vs Board of Trade, 10. See also Foulkes ' Administrative Law, 6th Ed. at page 18 1 184. In exhibit P. Khan, [1981] 1 All E.R. page 40, the court held that a circular or self made rule can become enforceable on the application of persons if it was shown that it had created legitimate expectation in their minds that the authority would abide by such a policy/guideline. However, the doctrine of legitimate expec tation applies only when a person had been given reason to believe that the State will abide by the certain policy or guideline on the basis of which such applicant might have been led to take certain actions. This doctrine is akin to the doctrine of promissory estoppel. See also the observa tions of Lord Wilberforce in IRC vs National Federation, ; However, it has to be borne in mind that the guidelines on which the petitioners have relied are not statutory in character. These guidelines are not judicially enforceable. The competent authority might depart from these guidelines where the proper exercise of his discretion so warrants. In the present case, the statute provided that rules can be made by the Central Government only. Further more, according to Section 6(2) of the Act, the competent authority has the power and jurisdiction to condone any deviation from even the statutory requirements prescribed under Sections 3 and 4 of the Act. In Regina vs Preston Supplementary, [1975] 1 WLR p. 624 at p. 631, it had been held that the Act should be administered with as little technicality as possible. Judicial review of these matters, though can always be made where there was arbitrariness and mala fide and where the purpose of an authority in exercis ing its statutory power and that of legislature in confer ring the powers are demonstrably at variance, should be exercised cautiously and soberly. We would also like to refer to one more aspect of the enforceability of the guidelines by persons in the position of the petitioners in these cases. Guidelines are issued by Governments and statutory authorities in various types of situations. Where such guidelines are intended to clarify or implement the conditions and requirements precedent to the exercise of certain rights conferred in favour of citizens or persons and a deviation therefrom directly affects the rights so vested the persons whose rights are affected have a clear right to 123 approach the court for relief. Sometimes guidelines control the choice of persons competing with one another for the grant of benefits largesses or favours and, if the guide lines are departed from without rhyme or reason, an arbi trary discrimination may result which may call for judicial review. In some other instances (as in the Ramanna Shetty, case), the guidelines may prescribe certain standards or norms for the grant of certain benefits and a relaxation of, or departure from, the norms may affect persons, not direct ly but indirectly, in the sense that though they did not seek the benefit or privilege as they were not eligible for it on the basis of the announced norms, they might also have entered the fray had the relaxed guidelines been made known. In other words, they would have been potential competitors in case any relaxation or departure were to be made. In a case of the present type, however, the guidelines operate in a totally different field. The guidelines do not affect or regulate the right of any person other than the company applying for consent. The manner of application of these guidelines, whether strict or lax, does not either directly or indirectly, affect the rights or potential rights of any others or deprive them, directly or indirectly, of any advantages or benefits to which they were or would have been entitled. In this context, there is only a very limited scope for judicial review on the ground that the guidelines have not been followed or have been deviated from. Any member of the public can perhaps claim that such of the guidelines as impose controls intended to safeguard the interests of members of the public investing in such public issues should be strictly enforced and not departed from departure therefrom will take away the protection provided to them. The scope for such challenge will necessarily be very narrow and restricted and will depend to a considerable extent on the nature and extent of the deviation. For in stance, if debentures were issued which provide no security at all or if the debt equity ratio is 6000:1 (as alleged) as against the permissible 2:1 (or thereabouts) a Court may be persuaded to interfere. A Court, however, would be reluctant to interfere simply because one or more of the guidelines have not been adhered to even where there are substantial deviations, unless such deviations are, by nature and extent such as to prejudice the interests of the public which it is their avowed object to protect. Per contra, the Court would be inclined to perhaps overlook or ignore such deviations, if the object of the statute or public interest warrant, justify or necessitate such deviations in a particular case. This is because guidelines, by their very nature, do not fall into the category of legislation, direct, subordinate or ancillary. They have only an advisory role .to play and non adherence to or deviation from them is necessarily and implicitly permissible if the circumstances of any particu lar fact or law 124 situation warrants the same. Judicial control takes over only where the deviation either involves arbitrariness or discrimination or is so fundamental as to undermine a basic public purpose which the guidelines and the statute under which they are issued are intended to achieve. But in the instant case, in the view we have taken, it ' is not necessary to base our decision on this aspect. We find that the CCI has, in fact, acted in substantial compli ance with the principles of these guidelines. He has acted objectively and bona fide. He has not acted in undue haste. No substantial prejudice or injury to the petitioners have been demonstrated. In the aforesaid view of the matter, we are, therefore, unable to interfere. In this connection, furthermore, a common sense view has to be adopted See the observations in Council of Civil Service Unions & Others vs Minister for the Civil Service, [1985] AC at 407. Public interest in this case does not require that we should inter fere. In this case, there is no illegality in the decision of the Controller of Capital Issues. He has not exercised a power which he does not possess. There is also no irration ality. He has not acted in any manner that no reasonable authority would have acted in the decision. There is no procedural impropriety in his decision. He has not failed in his duty to act fairly insofar as fairness was warranted by the justice of the situation. In the aforesaid view of the matter, we are of the opinion that there was no substance in the writ petitions and also in the civil suits covered by these transfer appli cations. The main question, as mentioned hereinbefore, canvassed in these transfer petitions is whether the CCI has acted in the manner he should act in the present atmosphere of socio economic development in view of our constitutional commitments. The purpose of the Act must be found from the language used. The scheme and the language used, strictly speaking, do not indicate any positive role for the CCI in discharging his functions in respect of grant of sanction. But it has to be borne in mind that he is a part of a State instrumentalities committed to the endeavours of the consti tutional aspiration to secure justice, inter alia, social and economic, and also under Article 39(b) & (c) of the Constitution to ensure that the ownership and control of the material resources of the community are so distributed as to best subserve the common good and that the operation of the economic system does not result in concentration of wealth and means of production to the common detriment. Yet, every instrumentality and functionary of the State must fulfil its own role and should not trespass or encroach/ 125 entrench upon the field ' of others. Progress is ensured and development helped if each performs his role in the common endeavour. In that light it is true that as was contended by learned counsel appearing 'on behalf of the petitioners that in the changed socioeconomic conditions of the country one who is charged to ensure capital investment has to perform the social role in capital formation and to protect the interest of the capital market, and to oversee the growth of industrialisation and investment in such a manner as to ensure employment and demand in the national economy to prevent wasteful investment and to promote sound methods of corporate finance. The guidelines are only a guide and nothing more. The application of mind by the CCI before sanction must be in the perspective for which he is enjoined by the Act. He must endeavour to secure a balanced invest ment of the country 's resources in industry, agriculture and social services. The Controller should perform the role of social control and fulfil the social purpose in conjunction with other authorities and functionaries. It is necessary for him in discharge of his functions to ensure that there is not too much concentration of particular industries in particular areas, and that there is a scientific development and proper investment in key and core projects. The present petitions have perhaps brought to the fore for the first time a public interest aspect of the issue of shares and debentures. In the past decades, investors in shares and equities constituted a very limited section of the public and consisted of two extreme types either persons who could shrewdly appraise the merits of each issue and take a considered decision or persons who just wanted to invest and get a return for their moneys but were indiffer ent to the terms and conditions of such investment. The position has changed in recent years. There has been a vast increase in the number of members of the public who have surplus money to invest; the size of the issues has assumed macro proportions; and the types of instruments are also becoming more and more sophisticated. Entrepreneurs, with legal and expert assistance at their command, could easily trap unwary investors and the development of a public inter est lobby that can scrutinise issues carefully and advise prospective investors on their comparative merits and demer its may not be entirely undesirable. It is also perhaps necessary that the CCI, in considering the grant of consent to such issues, should have these aspects brought to his notice. We think that it may be too cumbersome to have a provision that the details of every proposed application for consent should be publicised to the maximum extent by the CCI, that objections and comments from the public 126 should be called for, that there should be a public hearing before the CCI before grant of consent and that the CCI should pass a reasoned order granting or withholding con sent. That would also delay the whole process of approvals which should be as expeditious as possible. But we have no hesitation in saying that some procedure has to be evolved to ensure that the CCI gets the benefit of the comments, suggestions and objections from the public before arriving at his decision whether to grant consent or not and, if so, on what terms and conditions. Perhaps, evolution of certain rules in this respect could be examined at this juncture of industrial growth in our country. But having regard to the facts and the circumstances of the case in view of the various facts mentioned hereinbefore, we are of the opinion that there was no undue haste. There was proper application of mind that the sanction was for a new project. Sufficient security for the debentures as was enjoined to be ensured before sanction has been ensured in the facts and the cir cumstances of this case and guidance provided by means of guidelines has been substantially complied with. There has been no infraction as such of the norms required to be followed in granting the sanction. The challenge to the sanction, therefore, must fail. Before we conclude, we must note that good deal of argument was adduced that these applications in different High Courts in civil suits were not genuine and properly motivated, but were mala fide. Even though these might not have been to feed fat an innocent object, it was apparent that it was to feed fat a grudge in respect of a competitive project by a competitor. Anyway, in the view we have taken, it is not necessary to decide the bona fides or mala fides of the applicants. Shri Nariman, when he moved the applica tion initially, had suggested that we should lay down cer tain norms as to how the courts in different parts of the country should grant injunction or entertain applications affecting an all India issue or having remifications all over the country. Except that before the courts grant any injunction, they should have regard to the principles of comity of courts in a federal structure and have regard to self restraint and circumspection, we do not at this stage lay down any more definite norms. We may also perhaps add that it may be impossible to lay down hard and fast rules of general application because of the diverse situations which give rise to problems of this nature. Each case has its own special facts and complications and it will be a disadvan tage, rather than an advantage, to attempt and apply any stereo typed formula to all cases. Perhaps in this sphere, the High Courts themselves might be able to introduce a certain amount of discipline having regard to the principles of comity of courts 127 administering the same general laws applicable all over the country in respect of granting interim orders which will have repercussion or effect beyond the jurisdiction of the particular courts. Such an exercise will be useful contribu tion in evolving good conventions in the federal judicial system. On the 9th September, 1988, when we transferred these matters, we directed respondent No. 3 to deposit a sum of Rs. 1 lac to be held if the petitioners were made to spend unduly. Having considered the facts and circumstances of the case, we do not think that we would be justified in ordering disbursement of this sum to the petitioners whose cases have been transferred or the plaintiffs whose cases have been transferred. The sum should, therefore, be refunded to the respondent No. 3. All the writ petitions and the suit fail, and are dis missed. In the facts and the circumstances of the case, there will be no order as to costs. G.N. Petitions dismissed.

The respondent assessee is a co operative society run ning a sugar mill. With a view to inducing its members to make further contribution to its capital it incorporated a bye law which provided for the establishment of a 'Loss Equalisation & Capital Redemption Reserve Fund '. Every producer shareholder was required to deposit every year an amount to this fund which was to be utilised for the purpose of making the partly paid shares fully paid, and after defraying the loan taken from the Industrial Finance Corpo ration the balance was to be refunded to the members. The money available in the Fund was utilised by the society for the purpose of its business. A part of the amount was even tually utilised for converting the partly paid shares into fully paid shares. It was then decided by the society to pay interest on the balance available in the Fund. The interest thus paid to its members was sought to be claimed as deduc tion in computing the income of the assessee. The Income Tax Officer rejected the claim holding that the amount did not represent loans taken by the assessee .or capital borrowed for the purpose of its business. The Appel late Assistant Commissioner confirmed the disallowance. The Income Tax Appellate Tribunal accepted the second appeal of the assessee and held that it was not necessary that borrow ing must contain an element of payment of interest and that even if a deposit was made by the members of the society which waS utilised for the purpose of the business of the assessee, the funds represented by such deposit would be 'capital borrowed ' for the purpose of section 36(1)(iii) of the Income Tax Act, 1961. The High Court agreed with the view taken by the Appellate Tribunal and answered the questions referred to it in favour of the assessee and against the Revenue. While allowing the appeals and answering the questions in the negative in favour of the Revenue, this Court. 841 HELD: (1) Section 36(1)(iii) of the Income Tax Act, 1961 provides that in computing the income chargeable under the head 'profits and gains of business or profession ' a deduc tion shall be allowed of the amount of interest paid in respect of capital borrowed for the purposes of the business or profession. [845G,H] (2) The words 'borrowed money ' should not be given a strained meaning and it should be considered whether in ordinary commercial usage the relationship was that of a borrower and lender and the transactions 'were loan transac tions. To constitute borrowed money there must be a real borrowing and a real lending. [846B,D] (3) It is apparent that the deposits made by the members cannot be regarded as loans advanced by the members to the assessee. There was never any intention between the assessee and its members to treat the deposits made by the members as loans and that the relationship between the assessee and the members should be that of borrower and lender. , [847F,G] Port of London Authority vs Commissioner of Inland Revenue, ; Commissioner of Inland Reve nue vs Port of London Authority, ; Inland Revenue Commissioner vs Rowntree & Co. Ltd., ; Commissioner of Income tax, Gujarat vs Rajkot Seeds, Oil & Bullion Merchants Association Ltd., ; Commissioner of Excess Profits Tax, Central Calcut ta vs Bhartia Electric Steel Co. Ltd., ; Bombay Steam Navigation Co. [1953]; Private Ltd. vs Commis sioner of Income tax Bombay, and Madhav Prasad Jatia vs Commissioner of Income tax Uttar Pradesh, ; , referred to. (4) A loan necessarily supposes a return of the money loaned. The circumstance that there was no certainty that any balance would remain for refund to the members would in itself indicate that the deposits could not be regarded as loans. [847G,H]

ivil Appeal No. 217 of 1959. Appeal by special leave from the judgment and order dated June 20, 1958, of the Jammu and Kashmir High Court, in Writ Petition No. 108 of 1958. H. N. Sanyal, Additional Solicitor General of India, N. section Bindra, R. H. Dhebar and T. M. Sen, for the appellants. R. K. Garg and M. K. Ramamurthy, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the respondents. November 26. The Judgment of the Court was delivered by SUBBA RAO J. This appeal by special leave raises the question of the scope of article 132(2) of the Constitution. The first respondent is one of the shareholders of the second respondent, M/s. Jammu Kashmir Mechanics And Transport Workers Co operative Society Limited Jammu (hereinafter called the Society). The Society was registered under the Jammu and Kashmir Co operative Societies Act No. 6 of 1993 (Vikrimi). They put in a number of applications before the third appellant for the grant of stage carriage and public carrier permits to them for various routes in the State of Jammu & Kashmir, but no permits were granted to them on the ground that under r. 4 47 of the Jammu 348 and Kashmir Motor Vehicle Rules (hereinafter called the Rules), service licence could only be issued to a person or a company registered under the Partnership Act and that, as the Society was neither a person nor a partner Ship, it was not entitled to a licence under the Rules. The respondents filed a petition in the High Court of Jammu & Kashmir under section 103 of the Constitution of Jammu & Kashmir challenging the vires of r. 4 47 of the Rules. To that petition the appellants herein, viz., the Government of Jammu & Kashmir State, the Transport Minister, the Registering Authority and the Traffic Superintendent, were made party respondents: The High Court held that the said rule was ultra vires as offending article 14 of the Constitution, and, on that finding directed a writ of mandamus to issue against the appellants herein from enforcing the provisions of the said rule. The appellants filed an application in the High Court for a certificate under article 132(1) of the Constitution, but the High Court rejected it on the ground that no substantial question of law as to the interpretation of the Constitution was involved in the case. Therefter the appellants applied for special leave under article 132(2) of the Constitution and this Court granted the same. The order giving the special leave expressly granted liberty to the respondents herein to raise the question of the maintainability of the appeal at its final hearing. Learned Counsel for the respondents raises a preliminary objection to the maintainability of the appeal. Shortly stated his objection is that under article 132(2) of the Constitution special leave can be given only if the Supreme Court is satisfied that the case involves a substantial question of law as to the interpretation of the Constitution that in the present case the interpretation article 14 of the Constitution has been well settled and put beyond dispute by a series of decisions of this court, that, therefore, no question of law as to the interpretation of the Constitution, much less a substantial question of law in regard to that mattter, arises for consideration and that, therefore, no special leave can be granted under the said Article. 349 This argument is sought to be met by the learned Additional Solicitor General in the following manner: Whenever a question of classification is raised, it involves the interpretation of article 14 of the Constitution with reference to the classification impugned. To state it differently, the argument is that the question in each case is whether the classification offends the principle of equality enshrined in article 14. Therefore, whether a registered firm, a limited company and a person have equal attributes is a question of interpretation of article 14 of the Constitution. Before considering the validity of the rival contentions it would be convenient to ascertain precisely what was the question raised in the High Court and what was the decision given thereon by it. The argument advanced before the High Court on behalf of the Society was that under r. 4 47 a licence can be issued only to a person or a firm registered under the Partnership Act and not to a corporation registered under the Co operative Societies Act or otherwise, and, therefore, the said rule, being discriminatory in nature, offends article 14 of the Constitution. The learned AdvocateGeneral appearing for the appellants contended that under article 14 of the Constitution rational classification is permissible and the legislature has framed the impugned rule on such a basis, the object of which is to safeguard the interest of the public. The High Court, after considering the rival arguments, expressed the opinion that the said rule did not proceed on any rational basis of classification and that, as a corporation had been arbitrarily singled out for discriminatory treatment, the impugned rule offended the equality clause of the Constitution. The appellants in their petition for special leave filed in this Court questioned the correctness of the conclusion of the High Court. They asserted that the said rule was based upon reasonable classification and therefore could not be struck down as repugnant to article 14 of the Constitution. In other grounds they elaborated the same point in an attempt to bring out the different attributes of the two classes affording an intelligible differentia for 45 350 classification. They clearly posed the question proposed to be raised by them in the appeal as under Ground The Grouns iv: " The aforesaid rule 4 47 (of the Motor Vehicles Rules) is based upon reasonable classification and is and was perfectly intra vires and valid and could not be struck down as repugnant to article 14 of the Constitution of India. " Ground vi: " There is a marked difference between a corporate body and partnership registered under the Provisions of the Partnership Act and these points of difference provide an intelligible differentia for classification. The Hon 'ble High Court has only referred to one point of difference and has overlooked other points of distinction and has erred in striking down the aforesaid rule 4 47." Ground viii : " Rule 4 47 was framed in the light of local conditions prevailing. Co operative Societies and Corporations in the matter of transport were not considered to be proper objects for the grant of licence or permit. The classification is rational and reasonable. The exclusion of artificial persons from the ambit of the Rule is natural and not discriminatory. " The other grounds are only a further clarification of the said grounds. In part It of their statement of case the appellants stated as follows; " It is now well established that while article 14 forbids class legislation, it does not forbid reasonable classification for the purpose of legislation. " The respondents, in their statement of case, accepted the said legal position but contested the position that there was reasonable classification. It is therefore manifest that throughout there has never been a controversy between the parties in regard to the interpretation of article 14 of the Constitution, but their dispute centered only on the question whether the impugned rule stood the test of reasonable classification. In the premises, can special leave be granted to the appellants under Art 132(2) of the Constitution ? Article 132(2) reads: ,,Where the High Court has refused to give such a certificate, the Supreme Court may, if it is 351 satisfied that the case involves a substantial question of law as to the interpretation of the Constitution, grant special leave to appeal from such judgment, decree or final order." Under cl. (2) of article 132 there is no scope for granting a special leave unless two conditions are satisfied: (i) the case should involve a question of law as to the interpretation of the Constitution; and (ii) the said question should be a substantial question of law. The principle underlying the Article is that the final authority of interpreting the Constitution must rest with the Supreme Court. With that object the Article is freed from other limitations imposed under articles 133 and 134 and the right of appeal of the widest amplitude is allowed irrespective of the nature of the proceedings in a case involving only a substantial question of law as to the interpretation of the Constitution. What does interpretation of a provision mean ? Interpretation is the method by which the true sense or the meaning of the word is understood. The question of interpretation can arise only if two or more possible constructions are sought to be placed on a provision one party suggesting one construction and the other a different one. But where the parties agree on the true interpretation of a provision or do not raise any question in respect thereof, it is not possible to hold that the case involves any question of law as to the interpretation of the Constitution. On an interpretation of article 14, a series of decisions of this Court evolved the doctrine of classification. As we have pointed out, at no stage of the proceedings either the correctness of the interpretation of article 14 or the principles governing the doctrine of classification have been questioned by either of the parties. Indeed accepting the said doctrine, the appellants contended that there was a valid classification under the rule while the respondents argued contra. The learned Additional Solicitor General contended, for the first time, before us that the appeal raised a new facet of the doctrine of equality, namely, whether an artificial person and a natural person have equal attributes 352 within the meaning of the equality clause, and, therefore, the case involves a question of interpretation of "the Constitution. This argument, if we may say so, involves the same contention in a different garb. If analysed, the argument only comes to this: as an artificial person and a natural person have different attributes, the classification made between them is valid. This argument does not suggest a new interpretation of article 14 of the Constitution, but only attempts to bring the rule within the doctrine of classification. We, therefore, hold that the question raised in this case does not involve any question of law as to the interpretation of the Constitution. Assuming that the case raises a question of law as to the interpretation of the Constitution, can it be said that the question raised is a substantial question of law within the meaning of cl. (2) of Art 14. This aspect was considered by the Federal Court in T. M. Krishnaswamy,Pillai vs Governor General In Council (1). That decision turned upon the provisions of section 205 of the Government of India Act, 1935. The material section 205: " (1) An appeal shall lie to the Federal Court from any judgment, decree or final order of a High Court if the High Court certifies that the case involves a substantial question of law as to the interpretation of this Act or any Order in Council made thereunder. " The Madras High Court gave a certificate to the effect that the case involved a substantial question of law as to the interpretation of section 240(3) of the Government of India Act, 1935. Under section 240(3) of the said Act, no person who was a member of civil service of the Crown in India or held any civil post under the Crown in India could be dismissed or reduced in rank until he had been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. The High Court, on the facts found, held that the appellant therein had been offered A reasonable opportunity of showing cause within the meaning (1) (1947) 52 C.W.N. (F.R.) 1. part of that section says : 353 of the said section, but gave a certificate under section 205(1) of the Government of India Act, 1935.In dealing with the propriety of issuing the certificate in the circumstances of that case, Zafrulla Khan, J., speaking on behalf the Court, concisely and pointedly stated at p. 2 : " It was urged before us that the case involved a question relating to the interpretation of sub section (3) of section 240 of the Act. To the extent to which any guidance might have been needed for the purposes of this case on the interpretation of that sub section that guidance was furnished so far as this Court is concerned in its judgment in Secretary of State for India vs I.M. Lal [(1945) F.C.R. 103 The rest was a simple question of fact. In our judgment no " substantial question of law " as to the interpretation of the Constitution Act was involved in this case, which could have formed the basis of a certificate under section 205(1) of the Act. " On the question of interpretation of article 14 of the Constitution this Court in Budhan Choudhry vs The State of Bihar (1) explained the true meaning and scope of that Article thus: " It is now well established that while article 14 forbids class legislation, it does not forbid reason. able classification for the purposes of legislation. In order, however, to pass the the test of permissible classification two conditions must be fulfilled, namely, (i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and (ii) that that differentia must have a rational relation to the object sought to be achieved by the statue in question. The classification may be founded on different bases: namely, geographical, or according to objects or occupations or the like. What is necessary is that there must be nexus between the basis of classification and the object of the Act under consideration." (1) ; ,1049. 354 This in only a restatement of the law that has been enunciated by this Court in Chiranjit Lal Chowdhuri vs The Union of India (1) and in other subsequent decisions. The said principles were reaffirmed in the recent decisions of this Court in Rama Krishna Dalmia vs Justice Tendolkar (2 ) and in Mohammed Haneef Qureshi vs State of Bihar (3). In view of the said decision there is no further scope for putting a new interpretation on the provisions of article 14 of the Constitution vis a vis the doctrine of classification. The interpretation of article 14 in the context of classifi cation has been finally settled by the highest Court of this land and under article 141 of the Constitution that interpretation is binding on all the Courts within the territory of India. What remained to be done by the High Court was only to apply that interpretation to, the facts before it. A substantial question of law, therefore, cannot arise where that law has been finally and authoritatively decided by this Court. In the result we accept the preliminary objection and dismiss the appeal with costs. Appeal dismissed.

Sub section (1)(a) of section 58 of the , provides, " A stage carriage permit or a contract carriage permit other than a temporary permit issued under section 62 shall be effective without renewal for such period not less than three years and not more than five years, as the Regional Transport Authority may specify in the permit. " Sub section (2) provides, " A permit may be renewed on an application made and dis posed of as if it were an application for a permit. Provided that . . . . " The stage carriage permits of the petitioners were ending on March 31, 1958, and they applied to the Regional Transport Authority, Bangalore for a renewal of them. The Transport Department of the Mysore State Government opposed such renewal and applied that fresh permits for the routes in question might be granted to it as the State Government intended to nationalise the transport services. The Authority, however, dismissed the applications of both the contending parties, but, on appeal, its orders were set aside and the matter was remanded for a fresh decision. A scheme under section 68C of Ch. IVA of the Act was in the meantime published and approved by the State Government, which was later on quashed by the High Court at the instance of the petitioners. The Authority passed orders renewing the permits of the petitioners for a period of one year from April 1, 1958, to March 31, 1959. Appeals against the said orders having proved abortive the petitioners applied to the 147 High Court under articles 226 and 227 of the Constitution and those applications were summarily dismissed and certificates to appeal to this Court refused. The petitioners thereupon applied to this Court under article 32 of the Constitution. The question for determination was whether on a proper construction of sub section (1)(a) and, sub section (2) of section 58 of the Act, read together, the period of renewal was to be the same as provided for the grant of permits under the former and the Authority in renewing a permit was bound to specify the period of such renewal. It was contended on behalf of the Department that, even supposing that a renewal must be for the same period as provided for the original grant, this Court by writ could do no more than quash the order made by the Authority, leaving it to decide the question of renewal in accordance with the law as laid down by it. Held (per Sinha, C.J., Imam, Wanchoo and Das Gupta, JJ.), that under section 58 of the , properly construed, the period for which a permit could be renewed under sub section (2) of that section must be not less than three years and not more than five years as provided for the grant of a permit under sub section (1)(a) thereof and the Regional Transport Authority, in exercising its discretion to grant a renewal where it chose to do so, must specify the period of renewal accordingly. The words " without renewal " occurring in sub section (1)(a) do not signify a contrary intention. V. C. K. Bus Service Ltd. vs The Regional Transport Authority, Coimbatore, , distinguished. Since, in the instant case, the intention of the Authority to grant renewal was clear, but in doing so it had, under a misapprehension of the law, limited the renewal to one year only, it was open to this Court to sever the legal part of its order from the illegal and quash the latter. R. M D. Chamarbaughwalla vs The Union of India, ; and Shewpujanrai Indrasanrai Ltd vs The Collector of Customs, ; , referred to. Since this Court was not bound by the technical rules relating to issue of writs by English Courts, a direction in the nature of mandamus must issue requiring the Authority to specify the period of renewal in accordance with the law as laid down by this Court. T. C. Basappa vs T. Nagappa, ; , relied on Per Kapur, J. In cases such as the one under review, the power of judicial review possessed by this Court under article 32 of the Constitution extends to quashing and not substituting an order in place of what an Administrative tribunal has done or to direct what it should do. All that the Court can do is to quash the order and leave it to the tribunal to reconsider the matter and to exercise its 148 jurisdiction keeping in view the law laid down by the Court. In issuing such orders the courts would act in consonance with the broad and fundamental principles governing the granting of writs in English Law. Consequently, even assuming that in renewing a permit the Regional Authority had to do so for a period of not less than three and not more than five years, this Court would only quash the orders passed by the Regional Transport Authority in the present case, and leave it to that Authority to reconsider the matter in the light of the decision of this Court. Associated Provincial Picture Houses, Ltd. vs Wednesbury Corporation, ; , The King vs Willesden justices, Ex Parte Utley, , Veerappa Pillai vs Raman and Raman Ltd., and Basappa vs Nagappa; , , referred to. Shewpujanrai Indrasamrai Ltd. vs The Collector of Customs, ; , explained and distinguished. R. M. D. Chamarbaugwalla vs Union of India, [1959] S.C.R. 930, held inapplicable. Kochunni vs State of Madras, ; and United Motors Transport Co. vs Sree Lakshmi Motor Transport Co Lid . distinguished.

Appeals Nos. 344 346 of 1960. Appeals by special leave from the judgment and order dated September 8. 1958, of the Madhya Pradesh High Court (Indore Bench), Indore, in Civil Second Appeals Nos. 11.0 1,12 of, 1952. section T.Desai and J. B. Dadachanjifor the appellant. B. Sen,J. Bhave and 1. N. Shroff,for the respondent. July 17. The Judgment of the Court was delivered by HIDAYATULLAH, J. These three consolidated appeals by special leave are against a common judgment and order of the High Court of Madhya Pradesh, dated September 8, 1958, in three second appeals filed under R. 13 of the Indore Industrial Tax Rules, 1927 of the former Holkar State, which were in force before the State became part of Madhya Bharat State. They concern three assessments relating to the assessment years, 1941,1942 and 1943 respectively. These second appeals were originally filed in the Madhya Bharat High Court as early as 1952 ; but the records of the appeals 'were destroyed by fire and had to be reconstructed. By the time the appeals were ready, Madhya Bharat had merged in the new state of Madhya Pradesh, and the appeals were accordingly heard by a Divisional Bench of that High Court. The appellant is a Textile Mill and a public Joint Stock Company called the Nandlal Bhandari Mills, Ltd. The appellant had appointed a" firm, Messrs Nandlal Bhandari and Sons as agents, secretaries and treasurers of the Mills, and under cl. (6) of the agreement of agency, it agreed to pay to the agents an office allowance, commission on the Company 's net profits and commission on the sale proceeds. of sales of yam, cloth, etc. The 861 remuneration of the agents for the three accounting years was as follows : ___________________________________________________________ Remuneration As per Accounting Years, agree ment. 1941 1912 1943 Rs. Rs. Rs. __________________________________________________________ Clause 6 1500 18,000 18,00018,000 (a) Fixed P.M. for the for the monthly allow year. ance as office allowance. (b) Commission @ 16% 2,68,335 6,15,946 10,52,939 on the Com net on painy 's Net profits Profits. (c) Commission @ 1 9 0 1,10,156 1,10156 1,64,751 2,71,672 on the sale Per Cent, proceeds of on sales sales of yarn, cloth etc. ___________________________________________________________ In computing the tax, the Mills claimed to deduct under R. 3(2)(ix) of the Rules the above amounts paid as remuneration. The Rule reads : "(ix) any expenditure (not being in the nature of capital) incurred solely for the purposes of earning such profits or gains." The Assessing Officer accepted the appellant 's claim for deduction but only as. to a part. We are not required in these appeals to consider the correctness of the quantum of the deduction in view of what transpired later. The Assessing Officer also disallowed certain other claims made by the appellant, which again need 'not be mentioned. The appellant then. appealed to the Appellate Authority, and on December 31, 1951 the Appellate Authority, while accepting some of 862 the appellant 's other contentions upheld the order refusing to deduct the agent,s commission on profits under R. 3(2)(ix). Three second appeals were preferred in the Madhya Bharat High Court under R. 13 of the amended Rules. They were dismissed by the High Court of Madhya Pradesh, and hence the present appeals. The Indore Industrial Tax Rules were first promulgated in 1926 by a Cabinet Resolution (No. 373 dated March 22, 1926). In 1927, by, Cabinet Resolution No. 1991 dated November 23 1927, the Rules were modified, and the new Rules, were made applicable retrospectively from May 1, 1926. These Rules were framed for the levy of the tax and for ascertainment and determination of the income of cotton mills. The taxcalled the "Industrial Tax" was leviable under R. 3, which imposed the charge. It says that the Industrial Tax shall be payable by an assessee in respect of the profits or gains of any Cotton Mill industry carried on by him in the Holkar State. Sub r. (2) of R. 3 provides that such profits or gains are to be computed after making allowances, inter alia, for any expenditure incurred solely for the purpose of earning such profits or gains, R. 6, which is a part of the Rule imposing a charge, lays down the rates which are : (a) on all incomes up to Rs. 50,000, at 1 1/2 annas per rupee, and (b) above, at 2 1/2 annas per rupee. The short question thus was whether in computing the profits and gains of the appellant, the remuneration paid to the agents was deductible under R. 3 (2) (ix). It is necessary At this stage to see the legislative machinery existing in the Holkar State in 1927 and onwards. On February 27, 1926, His Highness Maharaja Tukoji Rao III abdicated, and, his son, H.H. Maharaja Yeshwant Rao Holkar, became the Ruler, whose installation ceremony ' was performed on March 11, 1926. A Regency Council was appointed under the orders of the 863 Government of India for the administration ' of the State during the minority of the Maharaja. This Regency Council, which was called the Cabinet, was entrusted with the administration of the State according to existing rules and practice, under the supervision and with the advice of the Agent to the Governor General in Central India. Prime Minister of the State was the Chairman. H. H. Maharaja Yeshwant Rao Holkar attained majority on September 6, 1929 and resumed sovereign powers on May 9, 1930. It was during the minority of the Ruler that the Cabinet had promulgated the amended Rules of 1927. In 1931, the decision of the Privy Council in the well known case of Pondicherry Railway Co., Ltd. vs Commissioner oF Income tax (1) was rendered. In that case, a Railway Company had agreed to make over to the French Colonial Government half of the Company 's net profits in consideration of a 99 year concession. This was sought to be deducted by the Company from its assessable profits as an expenditure incurred solely for the purpose of earning such profits. The Privy Council disallowed the deduction. Lord Macmillan observed as follows : "A payment out of profits and conditional on profits being earned cannot accurately be described as a payment made to earn profits. It assumes that profits have first come into existence. But profits on their coming into existence attract tax at that point and the revenue is not concerned with the subsequent application of the profits. " It seems that, as a result of this decision, a notification was issued in August, 1931, and another on February 2/3, 1932 by the Commerce. and Industry Department of the Holkar State. The latter notification reads as follows (1) (1931) L.R. 38 I.A. 239. 864 "Commerce and Industry Department Notification. Notification No. 1 dated the 2nd/3rd Feb. 19 32. In continuation of this office Notification No. 4733 dated the 6th December, 1927 (Vide Issue No. 11 dated the 12th December, 1927, of the Holkar Sirkar Gazette) embodying modified rules for the levy of the Industrial Tax the Cabinet,in their Resolution No. 1072 dated the 25th August, 1931, have ordered that the Agents ' Commission on 'Profits ' should not be allowed to be deducted from the assessable profits. " It is, to be noticed that this notification refers to the earlier notification No. 4733 of December 6, 1927, under which were published the amended Industrial Tax Rules, 1927, and to the notification of August 1931. The latter has not been produced before us. This notification led to representations by the persons affected by it. The Maharaja of Holkar thereupon referred the matter for the opinion of the, Full Bench of the High Court of the State. It appears that the opinion of the High Court was in favour of disallowing such deductions. On July 14, 1933, another notification (No. 13) was issued which reads as follows : "In continuation of this office Notification No. 1 dated 3rd February,, 1932, it is hereby published for the information of the mills and factories concerned that on submission of the Prime Minister 's (Legal Department) report No. 25 dated 11th May, 1933, His Highness the Maharaja is please to order (vide Huzur Shri Shankar, Order No. 173 dated 29th June,1933) that the opinion of the Full Bench of the High Court being that the Managing Agent 's Commission an profit 's is 865 not an item of expenditure incurred solely for the purpose of earning the said profit within the meaning of Rule 3(2)(ix) of the said Industrial Tax Rules and this being. also the view of the Cabinet as expressed in their resolution No. 1072 dated 28th August, 1931, the aforesaid Cabinet Resolution be given effect to and the industrial tax due on the amount of the managing agent 's commission on profits be recovered with effect from the date of the said Cabinet Resolution. " This notification, it is contended before this Court had not the force of law and was not enforceable against the appellants, who claim that they are entitled to show that the remuneration paid to the agents was deductible from the profits of the Mills before. computing the Industrial Tax. In this connection, the appellants wish to use the later decisions of the House of Lords in The Union Cold &wage Co., Ltd. vs Adamson(1) and of the Privy Council in The Indian Radio and Cable Communication Co., Ltd. vs Commissioner of I Income tax (2), in which the decision in the Pondicherry Railway Company case (3) was explained. In the case before the Privy Council, Lord Maugham observed: "It is not universally true to say that a, payment the making of which is conditional on profits being earned cannot properly be described as an expenditure incurred for the purpose of earning such profits. The typical exception is that of a payment to a, director or a manager of a commission on the profits of a company '. If a company having made; an apparent net profit, of pound 10,000 has then to pay pound 1,000 to directors, or managers as the contractual recompense for their service during the year, it: is plain that the real net profit is only pound 9,000. " (1) (2) (3) (1931) L.R. 58 (1) A. 239. 866 Lord Macmillan in the former case observed that the Pondicherry Railway Company case (1) must be read in the context of the facts of that case, and the obligation was first to find out the net profits of the company and then to divide them. These two sets of cases proceed upon different principles. If the agreement is to share the profits the expenditure cannot properly be treated as one incurred solely for the purpose of earning such profits; but if a slice of the profits is;to be paid to persons as remuneration to help in the earning of the profits, the deduction can be claimed. All this would of course be pertinent to consider, if there was no legislative enactment on the subject. If the matter was not one concluded by law, then there would be room for judicial interpretation of the Rule. The rival claims in these appeals are thus confined to the legislative force of the notifications issued in 1931, 1932 and 1933 respectively,. The appellant 's contention is that the notifications were not an act of legislation but an interpretation by the Sovereign. Mr. Desai concedes that if they be regarded as legislation, then the later decisions of the Privy Council and some of this Court cannot be called in aid, because where the law itself speaks with clarity, judicial interpretation is out of place. He contends, how ever that the two notifications were not framed as rules and were not expressly stated to be amendments of the rules then existing. He points out that after the first notification which was nothing more than an administrative direction to the assessing officers to include in the profits the remuneration of the agents, the opinion of the High Court was obtained, and the second notification merely pointed out that the earlier notification was to be given effect to, and did no more than add a second administrative direction. On the other side, it is contended that the Cabinet could make laws as often as it pleased and that (1) (1931) L. R. 58 I. A. 239. 867 the notifications must be read either as independent rules or as a legislative explanation of R. 3 (2) (ix). In so far as the legislative supremacy of the Cabinet was concerned, no question was raised before us. When the Indore Industrial Tax Rules, 1926 were framed, they came into existence by virtue of a Cabinet Resolution of that year. When they were modified, they were superseded by yet another Cabinet Resolution of the year 1927, which promulgated the new Rules with retrospective effect from May 1926. The source of the Rules 'was thus a Resolution of the Cabinet on both the occasions, and it is not denied that the Rules thus framed had legislative sanction and were unquestionable. When the Cabinet promulgated its notifications in 1931, 1932 and 1933, it followed the same procedure, and it stated that the notification of 1932 was " 'in continuation of this office Notification No. 4733 dated December 6, 1927. " This has reference to that notification under which the Indore Industrial Tax Rules, 1927 were orginally published. From this, it follows that new Rules were framed by a resolution of the Cabinet and were promulgated by a notification in the Gazette as part of the Rules. The mode followed in 1926 and 1927 was repeated in 1932 and 1933 and also presumably in 1931, though the notification of that year has not been printed in the record of this case. This view was taken by the Full Bench of the ' Madhya Bharat High Court in Raj Kumar Mills Ltd. vs Madhya Bharat State (1). The question which is involved in these appeals also arose in that case. It was observed by the Full Bench : "This Notification makes it abundantly clear that His Highness the Maharaja ordered that the industrial tax due on the amount of the managing agent 's commission on profits be recovered. This being. an order of the (1) A.I.R. 1953 Madbya Bharat 135. 868 ruler, who enjoyed sovereign Powers, that order is not open to challenge. This is a mandate emanating from a sovereign and as such has the force of law. This Court has, therefore, no power to go behind the order and enquire as to whether the managing agent 's commission on profits is an item of expenditure solely incurred for the 'purpose of earning profits or not: In this view of the matter the point at issue is concluded by Huzur Shri Shanker order No. 173 dated 29th June, 1933. " Thus view was affirmed by the High Court of Madhya Pradesh in the judgment under appeal. In our judgment, the two notifications cannot be described as "judicial ,interpretation". If any this, they must be interpreted as legislative exposition of R. 3(2)(ix) and in the nature of an explanation. This Court in Ameer un nissa Begum vs Mahboob Begum in dealing with the 'Firmans" of His Exalted Highness the Nizam of Hyderabad, observed as follows : "It cannot be disputed that prior to the integration of Hyderabad State with the Indian Union and the coming into force of the Indian Constitution, the Nizam of Hyderabad enjoyed uncontrolled sovereign powers. He was the supreme legislature, the supreme judiciary and the, supreme head of the executive, and there were no ;constitutional limitations upon his authority to act in any of these capacities. The 'Firmans ' were expressions of the sovereign will of the Nizam and they were binding in the same way as any other law; nay they would override all other laws which were in conflict with them. so long as a particular 'Firman ' held the field, that alone would govern or regulate (1)A.I.R. 869 the rights of the parties concerned, though it could be annulled or modified by a latter 'Firman ' at any time that the Nizam willed. " The same can be said of the Ruler of the Holkar State. When to the order of the Ruler was added the usual mode of making and promulgating rules, the position which emerges is really unassailable. Mr. Desai in attempting to show that the ruling does not apply to the case, raised two contentions. The first was based upon a more recent decision of this Court in Madhaorao vs State of Madhya Bharat (1), where certain Kalambandis of the Maharaja of Gwalior were considered. This Court in deciding whether the Kalambandis were existing law under article 372 of the Constitution, observed : "In dealing with the question as to whether the orders issued by such an absolute monarch amount to a law or regulation having the force of law, or whether they constitute merely administrative orders, it is important to bear in mind that the distinction between executive orders and legislative commands is likely to be merely academic where the Ruler is the source of all power. There was no constitutional limitation upon the authority of the Ruler to act in any capacity he liked ; he would be the supreme legislature, the supreme judiciary and the supreme head of the executive, and all his orders, however issued, would have the force of law and would govern and regulate the affairs of the State including the rights of its citizens.", It was, however, pointed out in the case that even where an order is issued by the sovereign ruler, one must look to the character of the order and its content to find out whether it enacted a binding rules (1) ; 870 Mr. Desai has constructed his entire argument on the basis of these observations, and has contended that the orders only expressed an opinion and did not bind. He pointed out as the second limb of his argument that these notifications were not expressed as a rule but as an order, and that they did not seek to amend the rules, nor to add to them. He referred to other notifications in which a legislative act was clearly discernible, as for example, Notification No. 22/Com. dated May 17, 1946, by which for the existing Rule 4, a new Rule was substituted. An examination of the Rules, however, shows that there was no set pattern of language. Some of the Rules do not read like rules at all. Notes have been appended to the rules, which are not rules proper, and R. 29 says : "All matters not dealt with in these rules may be submitted to the member incharge., Commerce and Industry Department for decision. " The existence of such a rule seems to obliterate the frontiers between legislative, judicial and executive exercise of the power of a State, such as we understand it. There being no invariable use of a clear cut legislative language, each general order emanating from the sovereign ruler and promulgated in the same manner as any other rule and having its roots in a resolution of the Cabinet must be regarded as one binding upon the subject. This is the purport of the decisions of this Court, and the present case falls in line with those which have been previously decided. There is nothing in the content, the character or the nature of these notifications, which would put them on a level lower than the Rules, which had been earlier promulgated. In our opinion., the judgment of the High Court under appeal is correct, and the appeals are accordingly dismissed with costs, one set. Appeals dismissed.

The appellants, one a Sub Divisional Officer and the other a Naib Tehsildar, were entrusted with the duty of allotting land to displaced persons. The first respondent forcibly occupied the land allotted to B. On May 9, 1958, the first appellant ordered that B and other allottees similarly situated would be given possession of lands allotted to them on May 20, 1958. On May 16, 1958. the first respondent and others threatened with dispossession filed petitions in the High Court under article 226 of the constitution and obtained interim stay of delivery of possession till May 19, 1958, when the petitions would come up before the Division Bench for admission. On May 19, 1958, the Division Bench extended the operation of the stay order until May 23, 1958. The notice of the first stay order reached the appellants on May 19, 1958, but no notice of the second order was officially communicated to them till May 21, 1958. It was alleged that on May 20, 1938, the appellants, although informed of the second stay order by certain interested persons and the Advocate for one of the parties, formally dispossessed the respondent in disobedience of the Court 's order and handed over possession of the land to B. On the complaint of the respondent the High Court field that the .appellants were guilty of contempt of Court and, instead of committing them for contempt, administrated a warning as the appellants honestly believed that they were not bound to stay delivery of possession in absence of an official communication. The appellants appealed by special leave. Held, (per Das and Subba Rao, JJ.)that in a case of contempt for disobedience of a prohibitive order, as distinguished from an order of affirmative nature, it was not necessary to show that notice of the prohibitory order was served upon the party against whom it was granted. It would be sufficient if it was proved that the party had notice of it aliunde. N.Baksi vs O. K. (Thosh, A. T. R. (19.)7) Patn. 528, referred to. 128 There may be circumstances where officials entrusted with the carrying out of a legal order might have valid reasons to doubt The authenticity of the order conveyed to them by interested parties. But in the present case there could hardly be any such reasons. The appellants had really no justification for doubting the authenticity of an order communicated to them by an Advocate. Held, further. that in a matter relating to contempt of court, there cannot be both justification and apology. shareef vs The Hon 'ble Judges of the High Court of Nagpur; , , referred to. Although the appellants might have honestly believed that they were not bound to bold their band in absence of an official communication, that would be no defence to the charge of contempt of court, but only a relevant consideration in awarding the sentence. Per Daval, J. Contempt proceedings are criminal or quasi criminal in nature and it is essential that before any action can be taken the accusation must be specified in character. In the instant case, the respondent did not state that he was formally dispossessed. This would 'be for some reason if actual posssssion had been delivered. He could not be said to have come to court with clean hands. Further, the finding of the High Court that the appellants delivered possession honestly believing that they were not bound not to do so in the absence or the official communication meant that there was no defiance of the High Court 's order. There could be no willful disobedience since there was no belief in the existence of the order. It may not be necessary that the party against whom a prohibitory order was made must be served with the order, but it should have notice of the order before it could be expected to obey. Such notice must be from sources connected with the court passing the order. The alleged knowledge of the party cannot be made, to depend on the veracity of the witnesses examined by the party praying for action. In re Bryant L.R (1987 6) In Ex Parte Langly, Exparte Smith. In re Bishop L. R. and The Seraglio. L. R. , discussed.

ivil Appeal No. 1357 of 1973. From the Judgment and Order dated 10.10.1972 of the Gujarat High Court in Second Appeal No. 93 of 1968. 689 G.A. Shah and M.N. Shroff for the Appellants. Krishan Kumar and Vimal Dave (N.P.) for the Respondents. , The Judgment of the Court was delivered by VENKATARAMIAH, J. The question for consideration in this case is whether the hereditary right of the respondents to recover a sum of Rs.3,500 per annum under an agreement dated 10.8.1914 entered into between the predecessor in interest of the respondents and the former princely State of Junagadh came to an end by virtue of provisions contained in the Gujarat Surviving Alienations Abolition Act, 1963 (hereinaf ter referred to as 'the Act '). There was one Darbar Harsurvala of Mandavad in the former princely State of Junagadh. He had a hereditary right to collect certain quantities of grass, fire wood and timber from the Gir Forest in the State of Junagadh and that right was recognised by a declaratory decree made by the Rajastha nik Court of Kathiawar in the year 1884. On the death of Harsurvala the said right was being enjoyed by his son Jiva Vala till the year 1914. On 10th August, 1914 an agreement was entered into between Jiva Vala and the State of Junagadh under which the State of Junagadh agreed to pay every year (commencing with 1st September of the preceding year and ending with the 31st August of the succeeding year) in the month of January a sum of Rs.3,500 to Jiva Vala and after him to the heirs claiming under him in lieu of the right to collect grass, fire wood and timber which was being exer cised by Jiva Vala. Accordingly, Jiva Vala was receiving the sum of Rs.3,500 every year and on his death his son Kalubhai was receiving the said sum every year from the State of Junagadh and on the State of Junagadh becoming part of the Union of India from the Saurashtra State, then from the State of Bombay in which Saurashtra State was merged and thereafter from the State of Gujarat which came to be estab lished under the Bombay Reorganisation Act, 1960 till his death. After his death Respondent No.1 Kamlaben, the wife of Kalubhai and the other respondents, who were children of Kalubhai were receiving the amount due to them till the year 1964. However, in January, 1965 the Mamlatdar of Visavadar issued notice under the orders of the Collector, Junagadh to the respondents stating that the right to receive the said amount had come to an end on the coming into force of the Act, i.e., the Gujarat Surviving Alienations Abolition Act, 1963, which had come into force on 1st October, 1963 and threatening the respondents that measures such as attachment etc. would be taken if the amount 690 paid for the year 1.9.1963 to 31.8.1964 was not refunded by them to the State Government. Thereupon the respondents instituted the suit before the Court of the Civil Judge, Junagadh out of which this appeal arises for a declaration that they continued to enjoy the right to receive the sum of Rs.3,500 per annum hereditarily and for an injunction re straining the appellants, the State of Gujarat and the Collector of Junagadh from taking any action to recover the amount which had already been paid to them. The Trial Court dismissed the suit. Aggrieved by the judgment and decree of the Trial Court, the respondents filed an appeal before the District Judge, Junagadh in Civil Regular Appeal No. 135 of 1966. The District Judge allowed the appeal holding that the right to receive the amount had not come to an end on the coming into force of the Act. The decree passed by the learned District Judge was confirmed by the High Court of Gujarat in Second Appeal No. 93 of 1968 vide its Judgment dated 10.10.1972. The appellants have filed this appeal by special leave against the judgment of the High Court. There is no dispute about the facts involved in this case. The right of Harsurvala to take grass, fire wood and timber from the Gir Forest belonging to the State of Juna gadh had been declared in a decree (Exhibit 21) passed by the Rajasthanik Court on April 14, 1884. By a further agree ment dated 10th August, 1914 (Exhibit 24) which had been arrived at between Jiva Vala, descendant of Harsurvala and the State of Junagadh, the State of Junagadh had agreed to pay every year a sum of Rs.3,500 to Jiva Vala and his heirs in lieu of the right to collect grass, fire wood, timber from the Gir Forest, as stated above. That the State of Junagadh and then the State of Saurashtra, the State of Bombay and the State of Gujarat were paying the said amount annually to Jiva Vala and his successors till the year 1964. The only question which arises for consideration is whether the said right to receive Rs.3,500 per annum came to an end on the coming into force of the Act. The Act was passed with the object of abolishing certain alienations which were not affected by the earlier enact ments which had been enacted for the abolition of various kinds of alienations in the State of Gujarat and to provide for matters consequential and incidental thereto. The ex pression 'alienation ', as defined in clause (3) of section 2 of the Act reads thus: "3, 'alienation ' means 691 (a) any right in respect of an aghat land enjoyed by an aghat holder immediately before the appointed day, (b) any right in respect of a Taluqdari watan enjoyed by the holder thereof immediate ly before the appointed day, (c) any right, with or without any condition of service, in respect of any other land, village or portion of a village and consisting of (i) any proprietary interest in the soil coupled or not coupled with exemption from the payment of the whole or part of the land revenue, or (ii) a right only to the land revenue or a share of land revenue of the land, vil lage or portion of a village, enjoyed by the holder thereof for the time being and subsisting immediately before the appointed day in limitation of the right of the State Government to assess the land or village or portion of a village to land reve nue in accordance with the Code, whether by virtue of an express grant or recognition as a grant by the ruling authority for the time being or otherwise, or (d) any right to any cash allowance or allowance in kind, by whatever name called, payable by the State Government and enjoyed by any person immediately before the appointed day;" Section 6 of the Act reads thus: "6. Abolition of alienations together with their incidents and alienated lands liable to payment of land revenue. Notwithstanding any usage or custom, settlement, grant, agree ments, sanad or order or anything contained in any decree or order of a court or any law for the time being applicable to any alienation, with effect on and from the appointed day (a) all alienations shall be and are hereby abolished; (b) save as expressly provided by or under this Act, 692 all rights legally subsisting on the said day under such alienations and all other incidents of such alienations (including any right to hold office, or any liability to render serv ice appertaining to an alienation) shall be and are hereby extinguished; (c) subject to the other provisions of this Act, all alienated lands shall be, and are hereby made liable to the payment of land revenue in accordance with the provisions of the Code and the rules made thereunder; and accordingly the provisions therein relating to unalienated land shall apply to all alienated lands. " On such abolition the alienee is entitled to compensation as provided in section 13 of the Act, if the alienation is one covered by section 2(3)(d) of the Act. The right to receive a sum of Rs.3,500 per annum which the respondents were enjoying admittedly did not fall under sub clauses (a), (b) and (c) of clause (3) of section 2 of the Act. The question is whether the said right falls under sub clause (d) of clause (3) of section 2 of the Act and if it falls under that clause whether the payment of the said sum can be abolished constitutionally under the Act. Sub clause (d) of clause (3) of section 2 of the Act is very widely worded and refers to any right to any cash allowance or allowance in kind, by whatever name called, payable by the State Government and enjoyed by any person immediately before the appointed day. The Act is included in the Ninth Schedule to the Constitution of India as Item No. 33 which reads thus: "33. The Gujarat Surviving Alienations Aboli tion Act, 1963 (Gujarat Act XXXIII of 1963), except in so far as this Act relates to an alienation referred to in sub clause (d) of clause (3) of section 2 thereof." Sub clause (d) of clause (3) of section 2 of the Act having been specifically excluded, the said clause does not receive the protection of Article 31B of the Constitution of India. The question which remains to be considered is wheth er the said sub clause can be deemed to be protected by Article 31A of the Constitution of India. Article 3 IA of the Constitution of Indian refers to matters described in sub clauses (a) to (e) of Article 31A(1) of the Constitution of India. It is not claimed 693 on behalf of the State Government that the present case falls under sub clauses (b) to (e) of Article 31A(1) of the Constitution of India. It is, however, urged that the present case falls under sub clause (a) of clause (1) of Article 31A of the Constitution of India, which reads thus: "(a). the acquisition by the State of any estate or of any rights therein or the extin guishment or modification of any such rights, or" In other words it is urged that the provision in question should be treated as a part of a legislation intended for bringing about agrarian reform to which Article 31A(1)(a) of the Constitution of India is attracted. In the instant case the right which the family of the respondents possessed was the right to collect grass, fire wood and timber etc. from the Git Forest and that right had already been surrendered under the agreement dated 10.8.1914 by the said family in lieu of the annual payment of Rs.3,500. In an earlier deci sion in Civil Application No. 1399 of 1968 decided on 18/19.3.1971 a Division Bench (J.M. Mehta and A.D. Desai, JJ.) of the Gujarat High Court had held that sub clause (d) of clause (3) of section 2 of the Act was not ultra vires so far as the alienation in question was by way of an agrarian reform. The judgment in that case had been delivered by J.M. Mehta, J. The Judgment out of which the present Second Appeal arises was also rendered by J.M. Mehta, J. himself. Distinguishing his earlier decision from the present case J.M. Mehta, J. has observed thus: "In the present case the right of plaintiff has originated in the right to take forest produce of the Gir Forest belonging to the former Junagadh State and which had been enjoyed by the ancestor Shri Harsurvala. The right was recognised by the Rajasthanic Court of the then Kathiawad Agency. It was under the agreement, exhibit 24 dated August 10, 1914 that this right was commuted into a lump sum amount of Rs.3,500 and this was enjoyed hereditarily by the plaintiffs ' ancestor. Therefore, this alienation has nothing to do with any agrarian reform and this alienation would not fall within the section 2(3)(d) so that it can have any immunity from the challenge. The State could only succeed if the term 'alienation ' in section 2(3)(d) is interpreted in such wide context which would make it ultra vires as per the settled legal position in the aforesaid Divi 694 sion Bench decision. That is why narrow inter pretation was given by me confining to only those alienations which were incidental to the agrarian reform. The present alienation which consisted of cash allowance as per exhibit 24 is not incidental to any agrarian reform, and therefore, ,the Act would not abolish this alienation. The plaintiffs ' rights are to take forest produce and on commutation of their rights by exhibit 24 they are property rights. When such allowance is being paid the right to this cash allowance could never be acquired by the State as per the aforesaid settled legal position . ." In view of the foregoing the High Court held that sec tion 2(3)(d) of the Act should be read down and construed as not including payment of cash allowance of the type in question. It held that otherwise the said clause would be violative of Articles 14, 19 and 31 of the Constitution of India. It is not disputed by the learned counsel for the State Government that unless the present case receives the protec tion of Article 3 IA of the Constitution of India the action taken by the State Government to treat the right of the respondents as having come to an end would be unconstitu tional since it would be violative of Articles 14, 19 and 31 of the Constitution of India. It is, therefore, necessary to examine the nature of the transaction under which the amount of Rs.3,500 was payable every year to the respondents on the hereditary basis in order to find out whether the abolition of the said right can be considered as a part of agrarian reform which re ceives the protection of Article 31A of the Constitution of India. An extract of the Records of Rights giving particu lars of the agreement dated 10th August, 19 14 entered into between Vala Jiva Harsur and the State of Junagadh is pro duced before the Court. It shows that Vala Jiva Harsur, the predecessor in interest of the respondents had the right to remove from the Gir Forest every year (i) 75 cart loads of teak wood, (ii) 100 cart loads of atcot wood, (iii) 600 cart loads of sarpan, and (iv) 250 cart loads of grass, in addi tion to the right of grazing of cattle and removing two lakhs bundles of grass during the time of famine. It is clear from the above statement that certain rights which the family of respondents possessed in the land comprised in the Gir Forest were agreed to be surrendered against payment of Rs.3,500 annually. It is no doubt true that long before the date on which the Act came into force the agreement had come into existence but it was a 695 right which was originally annexed to land. It may be that the said land formed part of the said forest, but still it falls within the definition of the expression 'estate ' in clause (a) of Article 31A(2) of the Constitution of India. Article 31A(2)(a)(iii) states that any land held or let for purposes. of agriculture or for purposes ancillary thereto, including waste land, forest land for pasture or sites of buildings and other structures occupied by cultivators of land, agricultural labourers and village artisans is includ ed in the expression 'estate ' for purposes of Article 3 IA of the Constitution of India. Article 3 IA, as it stood on the date of the passing of the Act, provided that notwith standing 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 rights shall be deemed to be void on the ground that it was inconsistent with or took away or abridged any of the rights conferred by Article 14 or Article 19 or Article 31 of the Constitution of India. The expression 'rights ' is again defined in Article 31A(2) of the Constitution of India as in relation to an estate, including any rights vesting in a proprietor, sub proprietor, underproprietor, tenure hold er, raiyat, under raiyat or other intermediary and any rights or privileges in respect of land revenue. It is an inclusive definition. The Fight which was being enjoyed by the predecessor ininterest of the respondents was a right in a waste land or a forest land or a land for pasture. In order to .treat a particular law as a part of an agrarian reform, it is not necessary that on the land which is the subject matter of the said law actual cultivation should be carried on. In the State of Kerala and Anr. vs The Gwalior Rayon silk Manufacturing (Wvg.) Co. Ltd. etc. ; , the. constitutionality of the Kerala Private Forests (Vesting and Assignment) Act, 1971 came up for consideration before this Court. In that case one of the questions which arose for consideration was whether the said Act which related to private forests envisaged a scheme of agrarian reform. In that case this Court held that even though the said legislation had the effect of extinguishing or modifying rights annexed to or arising out of the forest land it could be considered as part of agrarian reform because such forest lands also if prudently and profitably exploited could bring about relief to people engaged in agriculture. This Court further observed in that case that agrarian reform was more humanist than mere land reform and scientifically viewed covered not merely abolition of inter mediary tenures, zamindaris and the like but restructuring of village life itself taking in its broad embrace the socia economic regeneration of the rural population. In the present case the extinguishment of the right to receive a certain amount in lieu of the right to remove timber, grass, etc. from a forest area, therefore, formed part 696 of the process of agrarian reform as there was clear nexus between the agreement to pay the amount and the rights arising out of the forest area. It is significant that under the agreement of the year 1914 the State of Junagadh under took to pay Rs.3,500 every year hereditarily in lieu of the rights which the predecessor in interest of the respondents had in the forest area, thereby meaning that if the amount was not paid, the original right to carry timber, grass etc. from the forest area would revive. It cannot, therefore, be said that the extinguishment of the right to receive money alone unconnected with land was contemplated in the instant case. When once the above conclusion is reached then the legislation in question should be construed as having the effect of bringing about the extinguishment of the right in an estate for the purpose of better management of the forest area keeping in view the interests of the people of the State in general and of the people living in or around the Gir Forest in particular. Sub clause (d) of clause (3) of section 2 of the Act should be deemed to include the cash allowance of the type involved in this case and the Act must be held to be valid even though it affects the rights of the respondents which undoubtedly originated from the land covered by the forest area. We, therefore, hold that the view taken by the High Court that it the transaction in question is construed as covered by sub clause (d) of clause (3) of section 2 of the Act, the Act would become void to that extent is not correct. We are of the view that the legislation has the effect of validly extinguishing the right of the respondents to receive annually a sum of Rs.3,500 on a hereditary basis. The respondents are entitled to the payment of whatever compensation is payable under the Act notwithstanding the provisions of Articles 14 and 19 and Article 31 of the Constitution of India (as it existed prior to its deletion). We, therefore, set aside the judgment of the High Court and dismiss the suit instituted by the respondents. We, however, make it clear that the dismissal of the suit does not come in the way of the respondents being paid whatever compensation they are entitled to under the Act. If such compensation has not been paid yet, the authority concerned shall proceed to compute the amount of compensation payable to the respondents and to disburse it within three months from today. The appeal is accordingly allowed. No costs. R.N.J. Appeal allowed.

The assessee South Eastern Railway, a registered dealer under the Bengal Finance (Sales Tax) Act, 1941, disposing of unclaimed and unconnected goods for money consideration under Section 56 of the Indian Railways Act, 1890, applied to the Commercial Tax Officer for cancellation of registra tion as a "dealer". The Commercial Tax Officer rejected the application on the ground that the disposal of unclaimed goods for valuable consideration was a regular feature of the assessee 's activ ities, and, therefore, the assessee fell within the scope of the Bengal Finance (Sales Tax) Act, 1941. Assessee 's revision application was rejected by the Assistant Commissioner of Commercial Taxes on the ground that the sales effected by the assessee were sales under the Act and that the assessee was a "dealer". A second revision of the assessee was also dismissed by the Additional Commis sioner of Sales Tax. On a further revision the Board of Revenue also con firmed the status of the assessee as a "dealer", holding that in the systematic and organised character of business of auctioning by the assessee, a transfer of property was involved and therefore a sale of goods took place. At the instance of the assessee a reference was made to the High Court. The High Court answered the question in favour of the assessee by holding that the disposal of the goods did not indicate that the 778 Railway was carrying on business as a dealer liable to assessment under the Act. The assessee in the connected appeal, Eastern Railway, was engaged in selling scrap and unserviceable material, and a similar order was passed by the High Court in its favour. Hence these appeals by the Revenue. Allowing the appeals and setting aside the judgments of the High Court, this Court, HELD: 1. The assessee South Eastern Railway was a carri er of the goods and if at the stage of delivery, goods remained unclaimed for a period, the Railway was entitled to dispose them of. The activity of so disposing of the goods was adjunctive to the principal activity of the carriage of goods by the Railway. It is an activity which may be regard ed as necessarily incidental or ancillary to its business as carrier of the goods. Therefore, the assessee South Eastern Railway was a "dealer" for the purposes of the Bengal Fi nance (Sales Tax) Act, 1941. [780G H] 2. The assessee in the connected appeal, Eastern Rail way, who was disposing scrap and unserviceable material was also a "dealer" for the purposes of the Bengal Finance (Sales Tax) Act, 1941. [780H; 781A] District Controller of Stores, Northern Rly, Jodhpur vs The Assistant Commercial Taxation Officer & Anr., [1976] 37 S.T.C. 423 applied.

ivil Appeal Nos. 1506 1507 of 1974. From the Judgment and Order dated 4.8.1972 of the Guja rat High Court in Special Civil Appln. No. 121 of 1972 and 1187 of 1970. 248 G.A. Shah and M.N. Shroff for the Appellants. V.V. Vaze, Ms. Gitanjali, P.H. Parekh (N.P.), Vimal Dave (N.P.) and M. Mudgal (N.P.) for the Respondents. The Judgment of the Court was delivered by RANGANATH MISRA, J. These appeals by special leave are directed against the judgment of the Gujarat High Court dated 4.8.1972 quashing the declaration under section 6 of the Land Acquisition Act, Act 1 of 1894, on the ground that the same made on 18th of January, 1969, was issued beyond rea sonable time. The short facts are: The preliminary notification under section 4(1) of the Act was made on 26.7.1963. On 16/18, 1,J969, the declaration under section 6 was duly notified. On 17.1.1972 a writ petition was filed in the High Court challenging the declaration. The High Court took notice of the Land Acquisi tion (Amendment & Validation) Act of 1967 but relying upon a Division Bench judgment of the same High Court in Valji Mulji vs State, held that the period of 5 1/2 years from the date of the preliminary notification was unreasonable delay for making of the declaration under section 6 of the Act. The validation provision came into force on 20th Janu ary, 1967. Two judgments of this Court dealing with this aspect being Gujarat State Transport Corporation vs Valji Mulji Soneji & Ors., ; and State of Gujarat & Anr. vs Punjabai Nathubhai & Ors., have now concluded the position with reference to the provisions of the Validation Act and on the ratio of these judgments the decision of the Gujarat High Court on which reliance was placed by the High Court in disposing of these matters cannot be sustained. We accordingly allow the appeals, set aside the decision of the High Court and sustain the decla ration under section 6 of the Land Acquisition Act dated 18.1. There shall be no order as to costs. G.N. Appeals allowed.

The grievance of the respondents who have been recruited to Indian Forest Service and the Indian Police Service is that although the Emergency Commissioned Officers & Short Service Commissioned Officers in Short ECOS & SSCOS respec tively have been recruited after the respondents yet their year of appointment has been fixed earlier than the year of allotment of the respondents under rule 3(2)(d) of the IFS (Regulation of Seniority) Rules, 1968 & Clauses (c) & (d) of sub rule (3) of Rule 3 of I;P.S. (Regulation of Seniority) Rules, 1954 which is retrospective in operation. The Tribu nal struck down the rules as ultra vies of Articles 14 & 16 of the Constitution. Both the High Court and the Tribunal have taken the view that although Section 3 of the All India Services (Amendment) Act, 1975 validates the impugned rules purporting to have been made with retrospective effect, yet the impugned rules are invalid in as much as they prejudi cially, affect the interests of the respondents. While allowing the appeals and disagreeing with High Court and the Tribunal, this Court, HELD: The Tribunal has struck down the impugned rules, namely rule 3(2)(d) of the Indian Forest Service (Regulation of Seniority) Rules, 1968 and clauses (c) and (d) of sub rule (3) of Rule 3 of the Indian Police Service (Regulation of Seniority) Rules, 1954 as ultra vires Articles 14 and 16. Office Memorandum dated January 29, 1966 provides for the rehabilitation of the ECOS and SSCOs recruited since 276 November 1, 1962 after their release from the Armed Forces. The contents of the Memorandum are in the nature of execu tive instructions. [277D: 282B; 286B] Although the impugned rules were not in existance in 1966 the executive instructions as contained in the Office Memorandum conferred the same benefit as conferred by the impugned rules. In other words, it is apparent that the executive instructions have now been adopted as rules framed under the Act. [286E] The Released Emergency Commissioned Officers and Short Service Commissioned Officers (Reservation of Vacancies) Rules, 1967 framed by the President of India under the proviso to Article 309 and clause (5) of Article 148 of the Constitution of India, contained similar provisions as to the seniority and pay of ECOS & SSCOs. [286F] No invidious discrimination has been made between the ECOs & SSCOs on the one hand and the respondents on the other, both as regard the Indian Forest Service and Indian Police Service, as contended. [290E] As soon as it is found that the ECOs and SSCOs have been classified into a distinct and separate class and that such classification is reasonable, no objection can be taken to the year of allotment given to them in accordance with the impugned rules. Disagreeing with the High Court and the Tribunal, this Court is of the view that no illegality has been committed by the Government in framing the impugned rules with retrospective effect. Held that the impugned rules are quite legal and valid. [290G H; 291A] It is now a settled principle of law that if the statute under which a rule is flamed does not confer on the authori ty concerned the power to make such a rule with retrospec tive effect, the authority will have no power to frame any rule with retrospective effect. [280F] A. Janaradhana vs Union of India, ; , referred to.

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

The appellant was a leaseholder in respect of tolls of a public ferry crossing the river Damodar. The respondent filed a complaint against him alleging that the appellant used to realise illegally 20 np per cart from the cultivators who used to drive their carts across the dry bed of the river. After hearing of the respondent 's complaint on November 29, 1964 the appellant realised double the amount of toll from the respondent. The appellant was, thereafter convicted for offences under sections 23 and 24 of the Bengal Ferries Act, 1885. In revision, the Additional Sessions Judge recommended acquittal of the appellant in respect of his conviction under both the provisions. As to the conviction under section 24, according to the Additional Sessions Judge, the collection of money from the people using the river bed and not the ferry might amount to extortion under the Indian Penal Code but it would not attract the provisions of section 24. Although the High Court accepted the recommendation with respect to the acquittal under section 23, it rejected the reference in respect of the conviction under section 24. In the appeal to this Court by special leave, it was contended that the realisation of 40 np per cart from those who did not use the ferry could not as a matter of law fall within the mischief of s, 24. HELD: dismissing the appeal. Section 24 of the Bengal Ferries Act does not speak of taking toll in excess of the lawful limit only from those persons who use the ferry. This Act was enacted for regulating ferries but that does not mean that an illegal demand under the pretext of claim by way of toll under this Act, when it is not legally claimable, was not intended by the legislature to be prohibited and made punishable by the language of section 24. Demanding or receiving more than lawful dues and unduly delaying persons, animals, vehicles or things in crossing the river are both rendered penal and punishable. Whether the person from whom the amount is demanded or received is under no obligation to pay anything by way of toll while crossing the river bed or is bound by law only to pay 20 ps per cart as toll would thus be immaterial when payment is demanded or received on the pretext that it is due as toll when it is legally not so due. [181 C F] To exclude cases like the present from the operation of section 24 would unduly restrict its effectiveness and would indeed facilitate illegal recoveries prohibited by it. To that extent it would defeat the object and purpose which this section is intended to achieve. [182 A]

No. 136 of 1957. Writ Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights. 193 Purshottam Tricumdas, Mukund R. Mody, Anil B. Divan, Ramesh A. Shroff and I. N. Shroff, for the petitioner. C. K. Daphtary, Solicitor General of India, R. Ganapathy Iyer and R. H. Dhebar, for respondent. August 17. The Judgment of the Court was delivered by SUBBA RAO J. This is a petition under article 32 of the Constitution for the issue of a writ of mandamus or a writ in the nature of mandamus or any other appropriate direction, order or writ to direct the respondent, the Union of India, to withdraw or cancel the notification dated August 31, 1957, recognising " the Stock Exchange, Bombay " under section 4 of the (XLII of 1956), (hereinafter referred to as"the Act "). At the outset it is necessary to notice briefly how a Stock Exchange is worked and how it is controlled or regulated by the State. " Stock Exchange " means, " any body of individuals, whether incorporated or not, constituted for the purpose of assisting or con. trolling the business of buying, selling or dealing in securities ". The history of stock exchanges in foreign countries as well as in India shows that the development of joint stock enterprise would never have reached its present stage but for the facilities which the stock exchanges provided for dealing in securities. They have a very important function to fulfil in the country 's economy. Their main function, in the words of an eminent writer, is " to liquify capital by enabling a person who has invested money in, say, a factory or a railway, to convert it into cash by disposing of his share in the enterprise to someone else ". Without the stock exchange, capital would become immobilized. The proper working of a stock exchange depends upon not only the moral stature of the members but also on their calibre. It is a trite saying that a jobber or dealer is born and not made. In the words of the same author, a jobber must be a man of good nerve, cool judgment, and ready to deal 25 194 under any ordinary conditions, and he must be a man of financial standing, considerable experience, with an understanding of market psychology. There are three modes of dealing in shares and stores, namely, (1) spot delivery contract, i.e., a contract which provides for the actual delivery of securities on the payment of a price thereof either on the day of the contract or the next day, excluding perhaps the period taken for the despatch of the securities or the remittance of money from one place to another; (2) ready delivery contract, which means a contract for the purchase or sale of securities for the performance of which no time is specified and which is to be performed immediately or within a reasonable time; (3) forward contracts, i.e., contracts whereunder the parties agree for their performance at a future date. If the stock exchange is in the hands of unscrupulous members, the second and third categories of contracts to buy or sell shares may degenerate into highly speculative transactions or, what is worse, purely gambling ones. Where the parties do not intend while entering into a contract of sale or purchase of securities that only difference in prices should be paid, the transaction, even though speculative, is valid and not void, for " there is no law against speculation as there is against gambling ". But, if the parties do not intend that there should be any delivery of the shares but only the difference in prices should be accounted for, the contract, being a wager, is void. More often than not it is difficult for a court to distinguish one from the other, as a wagering transaction may be so cleverly camouflaged as to pass off as a speculative transaction. These mischievous potentialities inherent in the transactions, if left uncontrolled, would tend to subvert the main object of the institution of stock exchange and convert it into a den of gambling which would ultimately upset the industrial economy of the country. For that reason, in Bombay as early as 1925, the Bombay Securities Contracts Control Act was passed to regulate and control contracts for the purchase and sale of securities in the City of Bombay and elsewhere in the Bombay Presidency. Under section 6 of that Act, 195 " Every contract for the purchase or sale of securities, other than a ready delivery contract, entered into after a date to be notified in this behalf by the Provincial Government shall be void, unless the same is made subject to and in accordance with the rules duly sanctioned under section 5 and every such contract shall be void unless the same is made between members or through a member of a recognised stock exchange; and no claim shall be allowed in any Civil Court for the recovery of any commission, brokerage, fee or reward in respect of any such contract ". But this Act defined " ready delivery contract " to mean " a contract for the purchase or sale of securities for performance of which no time is specified and which is to be performed immediately or within a reasonable time ". It was also stated therein by way of explanation that what was reasonable time was in each particular case a question of fact. This Act did not achieve its purpose, for under section 6 thereof contracts entered into in contravention of the provisions of that section were not made illegal but only void, with the result that even members of a stock exchange not recognised under that Act were able to do business in that line. What is more, the explanation to the definition of " ready delivery contract " which is excluded from the operation of the Act was so elastic that in the name of ready delivery contracts unrecognised stock exchanges. and individuals were able to carry on business in forward contracts. ( ,ambling in shares went on unchecked in Bombay as elsewhere. After the Second World War, the post war boom gave an unhealthy impetus to the stock exchange transactions. Various expert committees appointed by the Government from time to time considered the question of regulation of stock exchanges and the latest of those committees was the Gorwalla Committee. The report of that Committee was circulated to the principal stock exchanges, Chambers of Commerce, and other interested associations and individuals. After considering the reports of the committees and the comments made thereon by the various bodies, the Government introduced a bill in the Parliament, which became law on 196 September 4, 1956. The Act was passed to prevent undesirable transactions in securities by regulating the business therein by prohibiting auction and by providing for certain other matters connected therewith. The Act mainly provides for the recognition of stock exchanges and for controlling the rule making of the said exchanges. Section 4 of the Act empowers the Central Government to recognise stock exchanges subject to two conditions. Section 13 enables it to issue a notification that in a particular State or area every contract which is entered into after the date of the notification otherwise than between members of a recognised stock exchange in such State or area or through or with such member shall be illegal. Without resorting to such drastic procedure the Government is also given power to prohibit contracts in certain securities in certain areas from doing business without obtaining a licence. Spot delivery contracts are excluded from the operation of sections 13, 14, 15 and 17 of the Act, unless the Central Government by notification thinks fit to extend the operation of section 17 of the Act to such contracts. Section 19 prohibits formation of stock exchanges other than recognised ones except with the permission of the Central Government. It declares all auctions in securities entered into after the commencement of the Act illegal. It also provides penalties for the infringements of the provisions of the Act. In short, the Act confers an effective controlling power on the Central Government over the stock exchanges. In exercise of the power conferred upon the Central Government to make rules, the Central Government made rules described as the Securities Contracts (Regulation) Rules, 1957, providing, inter alia, for the qualification for membership of a stock exchange seeking recognition, the procedure for recognition, the manner of keeping accounts, the submission of annual reports, the constitution of governing bodies and for taking disciplinary action against any member of such bodies and other similar matters. In Greater Bombay there were two stock exchanges, 197 one called the Native Share & Stock Brokers ' Association, and the other the Indian Stock Exchange Limited. The former was in existence for more than., 80 years and it was registered under the Bombay Securities Contracts Control Act, 1925. Its rules and bye laws were approved by the Government of Bombay and it was doing business in both forward as well as ready transactions. It has a clearing house and was doing extensive business in different kinds of securities. The other, namely, the Indian Stock Exchange Limited, was a company incorporated under the Indian Companies Act, 1913, as a company limited by guarantee without any share capital. The said Company had been functioning since 1937, but was not registered under the Bombay Securities Contracts Control Act, 1925. It was mainly doing business in Tata Ordinary and Bombay Dyeing shares and had hardly any investment business. Not being registered under the Bombay Securities Contracts Control Act, 1925, it could only deal in ready delivery contracts; and as the definition of " ready delivery contract " under that Act was elastic and as forward contracts were not made illegal thereunder, this Exchange was also doing speculative business mainly in the said two shares. After the Act came into force, both the Exchanges applied for recognition under the Act. The Government, after considering the relative merits and the relevant circumstances, issued a notification dated August 31, 1957, recognising the Native Share and Stock Brokers ' Association under the name " The Stock Exchange, Bombay " subject to the conditions mentioned therein. One of the conditions imposed was that the members of the Indian Stock Exchange Limited would be entitled to apply for membership of the Stock Exchange, Bombay, provided they were active members of the Indian Stock Exchange Limited for 12 months immediately preceding August 6, 1957, and they were also eligible under r. 8(1) of the Securities Contracts (Regulation) Rules, 1957, to be members of a recognised stock exchange. The notification 198 further gave some concessions to such active members in the matter of payment of the membership fee. They had to apply for membership before October 15, 1957, or before such period as the Board of the recognised Stock Exchange might think fit to extend. It appears that within the extended time a number of active members of the Indian Stock Exchange Limited as defined by the notification applied for membership and were admitted as members of the recognised Stock Exchange. Though three years have passed by, no member other than the petitioner has so far thought fit to question the validity of the notification, that is, the validity of the notification has been accepted and the recognised Stock Exchange has become stabilised on that basis. Subsequent to the filing of. the petition on November 30, 1957, the Central Government issued another notification applying section 13 of the Act to Greater Bombay; with the result that thereafter every contract in shares between the members of any unrecognised stock exchange in that City would be illegal. The petitioner had become a member of the Indian Stock Exchange Limited on February 27, 1956, but he had not been transacting any business on the floor of the said Stock Exchange either on his own account or on account of his clients. He avers in the affidavit filed in support of the petition that he has been doing considerable business on his own account or on account of his clients through other members of the Stock Exchange and that he intends to commence business directly in ready delivery contracts. As the impugned notifications affect his right to do business, he seeks for the issue of a writ of mandamus for the aforesaid reliefs. Shri Purshottam Trikumdas, learned counsel for the petitioner, raised before us the following contentions: (1) under article 19(1)(g) of the Constitution the petitioner has a fundamental right to carry on the business in shares and the notification dated August 31, 1957, and the subsequent notification dated November 30, 1957, imposed unreasonable restrictions on his said right; (2) the notification dated August 31, 199 1957, is void inasmuch as it is not sanctioned by the provisions of section 4 of the Act; and (3) the condition 2(i)(a) of the said notification classifying members of A the Indian Stock Exchange Limited as active members and members who were not active infringes the fundamental right enshrined in article 14 of the Constitution and that as the said condition is not severable the entire notification is bad. Learned Solicitor General in addition to controverting the said contentions pressed on us to hold that as the vires of the Act was not questioned, the notification issued thereunder could not be questioned by the petitioner on the ground that it contravened one or other of the said fundamental rights. It would be convenient to take first the contention of the learned Solicitor General as it is in the nature of a preliminary point. He says that as the validity of the Act was not questioned the notification issued in the exercise of the power conferred thereunder cannot also be questioned. There is a fallacy underlying this contention. Under article 13(2) of the Constitution, the State shall not make any law which takes away or abridges the rights conferred by Part III thereof; and " law " is defined under article 3(a) to include a notification. Therefore, the validity of a notification issued by the State, it being law, is as much vulnerable to attack as that of the Act itself on the ground that it infringes any of the fundamental rights. If an Act is a self contained one and the notification issued there under only restates the provisions of the Act, the validity of the notification cannot obviously be questioned as the validity of its contents were accepted. But if the Act confers a power on the State in general terms and the notification issued thereunder infringes one or other of the fundamental rights, the validity of the Act cannot equally obviously prevent an attack on the notification. In the former case the notification only reflects the provisions of a valid Act and in the latter it is the notification and not the Act that infringes the fundamental rights. Take an example of an Act imposing restrictions on the freedom of speech. The Act authorizes the State to impose conditions on 200 the said freedom in the interests of security of State. The Act is constitutionally valid. But, if a notification issued under that Act imposes unreasonable restrictions infringing the said rights, it is liable to be challenged on the ground of unconstitutionality. So too, in the instant case section 4 of the Act empowers the Central Government to issue a notification recognising a stock exchange subject to certain conditions expressed in general terms. The general terms can comprehend both reasonable and unreasonable restrictions. If the notification imposes unreasonable restrictions if the contention of the learned counsel for the petitioner be accepted, the restrictions imposed would certainly be unreasonable it is liable to be set aside. We cannot, therefore, accept this contention. (1): Article 19(1)(g) of the Constitution states that every citizen shall have the right to carry on any business; but the State in empowered under el. (6) of the said Article to make any law imposing in the interest of the general public reasonable restrictions on the exercise of the said right. Briefly stated, the argument is that the combined effect of the two notifications is that the petitioner is driven out of his business of stock exchange in as much as, it is said, they confer a monopoly on the Stock Exchange, Bombay, and the rules of the said Stock Exchange exclude any outsider from becoming its member without obtaining a nomination and that too only in the place of an existing member. To put it differently, the argument proceeds that under the rules of the Stock Exchange, Bombay, membership is not thrown open to the public. This leads us to the consideration of the relevant provisions of the Stock Exchange Rules, Bye laws and Regulations, 1957. Under r. 3 the membership of the Exchange shall consist of such number of members as the Exchange in general meeting may from time to time determine. It is common case that the membership of the Exchange is not limited. Under the heading " Election of New Members ", the Rules prescribe the conditions of eligibility for election as a member of the Exchange. These Rules adopt the provisions of r. 8 of the Securities 201 Contracts (Regulation) Rules, 1957. The Rules do not contain any limitation on the eligibility of a person to be elected as a member such as that the person, should be nominated in the manner provided by the Rules or that he should come only in the vacancy caused by another member ceasing to be one in one of the ways mentioned thereunder. The words " no person " in r. 17 are comprehensive enough to take in any outsider seeking for election as a, member. Rule 22 provides for an application for admission in the form prescribed in Appendix A to the Rules. This rule also does not impose any such limitation. The admission application form in Appendix A is also general in terms and enables any person of India to apply for membership provided he agrees to abide by the conditions imposed therein. In the form also there is no such limitation. But it is contended that a fair reading of the provisions of rr. 20 and 21 makes it clear that a candidate for admission is confined only to two categories, viz., (1) a candidate nominated by a member or a legal representative of a deceased member seeking admission to membership in the place of ' the deceased; and (2) a person recommended for admission to membership in the place of a member who has forfeited his right to membership. A careful scrutiny of the Rules does not bear out the contention; nor do they enable us to cut down the wide amplitude of rr. 17 to 22. Rule 10 says: " When a right of membership is forfeited to or vests in the Exchange under any Rule, Bye law, or Regulation of the Exchange for the time being in force it shall belong absolutely to the Exchange free of all rights, claims or interest of such member or any person claiming through such member and the Governing Body shall be entitled to deal with or dispose of such right of membership as it may think fit." Rule 54 is to the following effect: " A member 's right of membership shall lapse to and vest in the Exchange immediately be is declared a defaulter." Rule 11 is as follows. 26 202 "(a) A member of not less than seven years ' standing who desires to resign may nominate a person eligible under these Rules for admission to membership of the Exchange as a candidate for admission in his place (b) The legal representatives of a deceased member or his heirs or the persons mentioned in Appendix C to these Rules may with the sanction of the Governing Board nominate any person eligible under these Rules for admission to membership of the Exchange as a candidate for admission in the place of the deceased member. In considering such nomination the Governing Board shall be guided so far as practicable by the instructions set out in Appendix C to these Rules. " Appendix B gives the nomination forms Nos. 1 and 2 to be filled by a member or a legal representative, as the case may be, under r. 11 (a) and (b). Now it would be convenient to read rr. 20 and 21. They are as follows: Rule 20: " A candidate for admission except ' a candidate applying for a membership vesting in the Exchange must obtain a nomination in the manner provided in these Rules. " Rule 21: " A candidate for admission must be recommended by two members none of whom should be a member of the Governing Board. The recommenders must have such personal knowledge of the candidate and of his past and present circumstances as shall satisfy the Governing Board. " The argument is that under r. 20 a candidate for ad. mission falls under two categories, namely, (1) a candidate who must obtain a nomination in the manner provided in the Rules, i.e., r. 11 (a) and (b); and (2) a candidate applying for a membership vesting in the Exchange; and, therefore, these two categories exhaust the candidates for admission and that when under r. 21 the same words, " a candidate for admission ", are used they must carry the same meaning as in r. 20, that is, they must be confined only to the two categories comprehended by r. 20. This argument appears to be plausible and even incontrovertible, if 203 rr. 20 and 21 are taken out of their setting and construed independently of other rules. But in the setting in which they appear they can bear only one meaning, namely, that r. 20 provides for nomination only in the case of a candidate for admission who requires a nomination in the manner provided by the rule and r. 21 provides, for all the candidates for admission, that they should be recommended by two members who have personal knowledge of the candidates. To put it in other words, under the Rules candidates for admission fall under three groups, viz., (1) candidates falling under r. 11, (a) and (b); (2) candidates applying for membership vesting in the Exchange; and (3) other candidates. All the three categories of candidates must be recommended by two members. But the candidates belonging to the first category shall in addition be nominated in the manner provided by the Rules. We, therefore, hold that the Stock Exchange Rules do not operate as a bar against the petitioner becoming a member of the Stock Exchange subject to the rules governing such application. The petitioner has the right to do business in shares: in spite of the notifications he can still do business in spot delivery contracts. He can apply to become a member of the Stock Exchange subject to the conditions laid down by the Rules. The Act the validity of which he has not chosen to question, enables the State to give or refuse recognition to any Stock Exchange and it has chosen to give recognition to the Stock Exchange, Bombay, subject to the conditions prescribed. The restrictions, in our view, are not unreasonable, having regard to the importance of the business of a stock exchange in the country 's national economy and having regard to the magnitude of the mischief sought to be remedied in the interest of the general public. At another place we have already dealt with the necessity for stringent rules governing this type of business For the reasons Mentioned we reject the first contention. (2): The second contention also has no merits. The criticism is that condition 2(i) (a) annexed to the notification cannot be supported on the basis of any 204 of the provisions of section 4 of the Act. Condition 2 (i) reads as follows: " The Members of the Indian Stock Exchange Limited, Bombay, will be entitled to apply for Membership of the Stock Exchange, Bombay, provided they fulfil or comply with the following terms and conditions: (a) they have been active members of the Indian Stock Exchange Limited, for twelve months immediately preceding the 6th August, 1957. Explanation:" Active Members " for purpose of this condition means members who have themselves transacted business regularly on the floor of the Indian Stock Exchange Limited either on their own account or on account of their clients. To appreciate the argument it is also necessary to read the material provisions of section 4 of the Act. Section 4: " (1) If the Central Government is satisfied, after making such inquiry as may be necessary in this behalf and after obtaining such further information, if any, as it may require, (a) that the rules and bye laws of a stock exchange applying for registration are in conformity with such conditions as may be prescribed with a view to ensure fair dealing and to protect investors; (b) that the stock exchange is willing to comply with any other conditions (including conditions as to the number of members) which the Central Government after consultation with the governing body of the stock exchange and having regard to the area served by the stock exchange and its standing and the nature of the securities dealt with by it, may impose for the purpose of carrying, out the objects of this Act; and (c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stock exchange; It may grant recognition to the stock exchange subject to the conditions imposed upon it as aforesaid and in such form as may be prescribed. (2) The conditions which the Central Government 205 may prescribe under clause (a) of sub section (1) for the grant of recognition to the stock exchanges may include, among other matters, conditions relating. to, (i) the qualifications for membership of stock exchanges; (ii) the manner in which contracts shall be entered into and enforced as between members; (iii) the representation of the Central Government on each of the stock exchanges by such number of persons not exceeding three as the Central Government may nominate in this behalf; and (iv) the maintenance of accounts of members and their audit by chartered accountants whenever such audit is required by the Central Government. " The argument proceeds that condition 2(i)(a) enables only the active members of the Indian Stock Exchange Limited to apply for membership of the Stock Exchange, Bombay and that such a condition can be imposed only if it amounts to a qualification of membership within the meaning of sub section (2) of section 4, as the other conditions in that sub section are obviously inapplicable. It is further pointed out that sub section (2) refers back to sub section (i)(a) and under that clause the condition imposed must only be that prescribed by the Rules made under the Act and that the condition imposed by the notification is not a condition so prescribed. There is force in this argument; but, the acceptance of this contention does not advance the case of the petitioner, for, if the condition is not covered by cl. (a) of section 4(1), it falls under cl. (b) thereof. Under that clause, the Central Government may grant recognition to a stock exchange if the said stock exchange is willing to comply with " any other conditions ". It is said that the other conditions in section 4 (1) (b) must only be conditions relating to the area served by the stock exchange, its standing and the nature of the securities dealt with by it. This is not what cl. (b) of section 4(1) says. The conditions under cl. (b) of section 4(1) no doubt shall be such as may be imposed by the Government, having regard to the aforesaid three considerations, but they need not necessarily be 206 confined only to the said considerations. The Government may impose any conditions, no doubt germane to the recognition of a stock exchange, after consultation with its governing board, and having regard to the said considerations. It cannot be said that condition 2(i)(a) imposed on the Stock Exchange is not a condition germane to its recognition. The record discloses that the Central Government in recognising the Stock Exchange sought to avoid the consequential hardship on the members of the rival stock exchange and therefore imposed the said condition on the Stock Exchange, Bombay, as a condition for its recognition. The condition is germane to recognition of the Stock Exchange and is, therefore, a condition within the meaning of " any other conditions " in cl. (b) of sub section (1) of section 4 of the Act. (3): Learned counsel for the petitioner advanced a forcible argument questioning the validity of condition 2(i)(a) of the notification on the ground that it infringed article 14 of the Constitution. Elaborating his argument, the learned counsel stated that the said condition classified members of the Indian Stock Exchange Limited into two groups, one active members and the other who were not active members, and that that classification was arbitrary and had no reasonable relation to the object sought to be achieved by the notification. He further pointed out that the defining of active members as those who had themselves transacted business regularly on the floor of the Indian Stock Exchange Limited either on their own account or on account of their clients for 12 months immediately preceding August 6, 1957, was not only arbitrary and vague but also, if analysed, would lead to anomalies destructive of any standard of reasonableness. It is alleged in the affidavit filed by the petitioner that from the inception of the Indian Stock Exchange Limited, 199 members of the said Stock Exchange were actually trading on the floor of the said Exchange from time to time but for some reason or the other were not trading during the period of 12 months immediately preceding August 6, 1957; that there were 34 members of the said Stock Exchange who were regularly 207 transacting business on the floor of the said Stock Exchange prior to August 6, 1956, and for some time after August 6, 1956, but not during the entire period of 12 months from August 6, 1956 to August 6, 1957; and that there were 24 members of the said Stock Exchange who started transacting business regularly on the floor of the said Stock Exchange some time after August 6, 1956 and continued to transact business right upto and after August 6, 1957. It was asked what was the reasonable basis for confining the definition of active members to those who were carrying on business during the period of 12 months from August 6, 1956 to August 6, 1957, while excluding the aforesaid three categories who were equally active members and indeed more active than those included in the definition. It was further asked what was the justification for excluding a member who was an active member for years before the crucial year and irregularly conducted business on the floor of the Stock Exchange during the crucial year while including a member who might have been a newcomer or who might have been earlier a nominal member but began to do business regularly only during the said year. Emphasis was also laid upon the alleged elastic and indefinite content of the word " regular " and it was suggested that the said word could not possibly afford a precise standard. These are all weighty con siderations and we must confess that there is force in them. But there is the other side of the picture. It is well settled that a classification must have reasonable relation to the object sought to be achieved. The standard of reasonableness is inextricably conditioned by the extent and nature of the evil and the urgency for eradicating the same. The object of the notification is twofold. The main object is to carry out the purpose of the Act, namely, to prevent undesirable transactions in securities by regulating the business in them. The subsidiary object is to assuage the hardship that recognition of only one stock exchange would cause to the members of the other association. To achieve this twin object the classification is made between active members and inactive members. While 208 on the one hand the Government found it necessary to exclude the nominal members who would add their deadweight to the recognised association and bring down its efficiency and affect its disciplined conduct of business, on the other hand it gave opportunity to persons who were actively interested in the business to become regular members of the Stock Exchange, Bombay. There is every justification for excluding members who had not been taking active interest in the business, for, as we have already pointed out, the efficient carrying out of the business of the Stock Exchange depends upon the moral stature, high caliber, and genuine and active interest evinced by the members. The active members justified themselves to the preferential treatment by their sustained interest in the business whereas the members who were not active showed their continued indifference to that line of business. But the crux of the question is, what is the justification for fixing twelve months immediately preceding August 6, 1957, as the standard for active membership ? The Under Secretary to the Govern ment of India, Ministry of Finance, filed an affidavit describing the circumstances whereunder this classification was made. It discloses that the notification was issued after taking into consideration the representations made on behalf of both the Stock Exchanges and also the facts pertaining to the course of business conducted by the Indian Stock Exchange Limited. It also gives the vicissitudes through which the said Stock Exchange passed from the date of its formation and the circumstances under which the membership of that Exchange was divided into full members and associate members. It points out that the Indian Stock Exchange Limited became moribund in a few years and to revive its activities it allowed the members of the East India Chamber of Commerce, by relaxing its entrance fee and security deposit requirements in 1950 51 and created a new class of Associate Members, which facilitated the enrollment of hundreds of Associate Members on payment of a nominal entrance fee of Rs. 100. The Government on a consideration of the necessary data and presumably 209 having regard to the record of the activities of the various members fixed the activities in the crucial year 1956 57 as the standard of activity for membership. There is a presumption in favour of the State that there is a reasonable basis for the classification. Except the mere allegations in the affidavit which are not admitted, the petitioner has not placed before us any materials to ascertain that any other members, who were regularly doing business on the floor of the Indian Stock Exchange Limited before August 6,1956, temporarily suspended their business for one reason or other over which they had no control. No statement from the accounts has been produced to enable us to evaluate the activities of the members before the crucial date so as to enable us to form a view that really active members were excluded by the fixing of this period. Nor are we in a position to verify whether any of the members excluded were regularly doing business during a part of the year in continuation of their business in the earlier period. We cannot also say that the words "carrying on business regularly " are so vague that the parties did not understand their connotation, for it is admitted that some of the regular members applied for membership of the Stock Exchange, Bombay and most of them were admitted. There is also the fact that though three years have elapsed since the date of the notification no other member of the Indian Stock Exchange Limited thought fit to question the notification on the ground that the period fixed was unreasonable and that really active members were excluded from membership of the Stock Exchange, Bombay. So far as the petitioner is concerned, he was admittedly not an active member, though lie now pretends that he was doing business through other members. There is also no material placed before us to support the said assertion. If the classification, between active members and others who were not, is justifiable we hold it is the Government has to draw a line somewhere and to fix a period of activity reasonable in its opinion as a 27 210 standard to satisfy the test of " active member ". The burden which lies upon the petitioner who impeaches the validity of the classification to show that it violates the guarantee of equal protection has not been discharged. On the material placed before us we cannot say that the period fixed by the Government as the standard for ascertaining the active membership is arbitrary or unreasonable. We must make it clear that this finding must be confined only to the validity of the impugned notification dated August 31, 1956. The petition accordingly fails and is dismissed with costs. Petition dismissed.

The Assam Taxation (on goods carried by Roads and Inland Waterways) Act, 1954, was passed under Entry 56 of List II of Seventh Schedule to the Constitution. The appellants contended that the Act violated the freedom of trade guaranteed by article 301 Of the Constitution and as it was not passed after obtaining the previous sanction of the President as required by article 304(b) it was ultra vires. The respondent urged that taxing laws were not governed by Part XIII (which contained articles 301 and 304) but only by Part XII and in the alternative that the provisions of Part XIII applied only to such legislative entries in the Seventh Schedule as dealt specifically with trade, commerce and intercourse. Held, (per Gajendragadkar, Wanchoo and Das Gupta, JJ.) that the Act violated article 30i and since it did not comply with the provisions of article 304(b) it was ultra vires and void. The freedom of trade, commerce and intercourse guaranteed by article 301 was wider than that contained in section 297 Of the Government of India Act, 1935, and it included freedom from tax laws also. Article 301 provides that the flow of trade shall run smooth and unhampered by any restriction either at the boundaries of the States or at any other points inside the States themselves ; and if any Act imposes any direct restrictions on the movement of goods it attracts the provisions of article 301, and its validity can be sustained only if it satisfied the requirements of article 302 or article 304. The operation of article 301 cannot be restricted to legislation under the Entries dealing with trade and commerce. The Assam Act directly affected the freedom contemplated by article 301. Ramjilal vs Income tax Officer, Mohindargarh, [1951] S.C.R. 127, M. P. V. Sundararamier & Co. vs The State of Andhra Pradesh, [1058] S.C.R. 1422, James vs Commonwealth of Australia, , The State of Bombay vs The United Motors (India) Ltd., ; , Saghir Ahmed vs The State of U.P. 810 ; , James vs State of South Australia, ; and James vs Cowan, , referred to. Per Sinha, C. J. The Assam Act did not contravene article 301 and was not ultra vires. Neither the one extreme position that article 301 included freedom from all taxation nor the other that taxation was wholly outside the purview of article 301 was correct. The freedom conferred by article 301 did not mean freedom from taxation simpliciter but only from the erection of trade barriers, tariff walls and imposts which had a deleterious effect on the free flow of trade, commerce and intercourse. The Assam Act was a taxing statute simpliciter and did not suffer from any of the vices against which Part XIII of the Constitution was intended. Ramjilal vs Income tax Officer, Mohindargarh, [1951] S.C.R. 127, referred to. Further, the impugned Act was within the competence of the State Legislature and fell directly within Entry 56 of List 11 ; it was not in conflict with the Tea Act Of 1953 enacted by Parliament; it did not contravene article 14 and it was not extra territorial in operation. The Tata Iron & Steel Co. Ltd. vs The State of Bihar, ; , followed. Per Shah, J. The Assam Act infringed the guarantee of freedom of trade and commerce under article 301 and as the Bill was not moved with the previous sanction of the President as required by article 304(b) nor was it validated by the assent of the President under article 255(c), it was ultra vires and void. Article 301 guarantees freedom in its widest amplitude, freedom from prohibition, control, burden or impediment in commercial intercourse. The freedom includes not only freedom from discriminative tariffs and trade barriers but also from all taxation on commercial intercourse. Part XIII of the Constitution places restrictions upon the legislative power granted by articles 245, 246 and 248 and the Lists and these restrictions include burdens in the nature of taxation. James vs Commonwealth of Australia, , referred to.

minal Appeal No. 131 of 1967. Appeal from the judgment and order dated January 9, 1967 of the Judicial Commissioner 's Court Tripura, Agartala in Criminal Appeal Case No. 8 of 1963. M. K. Ramamurthi, J. Ramamurthi and Vineet Kumar, for the appellant. H. R. Khanna and R. N. Sachthey, for the respondent. The Judgment of the Court was delivered by Dua, J. Pursuant to a complaint by Shri Joy Shanker Bhattacharyya, the appellant Sushil Kumar Gupta was tried in the court of Assistant Sessions Judge, Tripura on the following charges "(1) That you in between the month of September, 1958 and July, 1959 at Agarwala P. section Kotwali being a servant viz. Secretary in the employment of the Tripura Central Marketing Co operative Society Ltd., and in such capacity entrusted with certain property to wit a total sum of Rs. 18,200 being the fund of the Society committed criminal breach of trust in respect of the said property and thereby committed an offence punishable under section 408 of the Indian Penal Code and within the cognizance of this Court. Secondly : that you in between the period of September, 1958 and July, 1959 at the same place being a Secretary in the employment of the Tripura Central Marketing Co operative Society Ltd., wilfully and with intent to defaud, falsified certain books and other relevant papers to wit cash book etc., which belonged to the said society, your employer and thereby committed an offence punishable under section 477 A of the Indian Penal Code and within the cognizance of this Court. " As the appellant was tried jointly along with five others who have been acquitted and as if was argued on behalf of the appellant that in view of the acquittal of his co accused the appellant 772 also should have been acquitted, the charges against them may also be reproduced : "That Sushil Kumar Gupta, Secretary of the Tripura Central Marketing Co operative Society Ltd., in between the period of September, 1958 and July, 1959 at Agartala p.s. Kotwali committed the offence of criminal breach of trust in respect of Rs. 18, 200 and that you the aforesaid persons at the same place and time abetted the said Shri. Sushil Kumar Gupta in the commission of the same offence of criminal breach of trust in respect of the said amount which was committed in consequence of your abetment and that you have thereby committed an offence punishable under section 109, I.P.C. read with section 408, I.P.C. and within my cognizance. Secondly : that Shri Sushil Kumar Gupta, Secretary of the Tripura Central Marketing Co operative Society Ltd. in between the period of September, 1958 and July, 1959 at Agartala p.s. Kotwali committed the offence of falsification of accounts and that you the aforesaid persons at the same place and time abetted the said Shri Sushil Kumar Gupta in the commission of the same offence of falsification of account which was committed in consequence of your abetment and that you have thereby committed an offence punishable u/s 109, I.P.C. read with section 477 A of the I.P.C. and within my cognizance. " The trial court acquitted all the six accused persons. An appeal against the acquittal of all of them was preferred under section 417 (3), Cr. P.C. in the court of the Judicial Commissioner, Tripura. That court allowed the appeal against section K. Gupta only and dismissed it as against the others. section K. Gupta was held guilty of the offence of criminal breach of trust under section 408, I.P.C. and also of the offence of falsification of accounts under section 477 A, I.P.C. regarding the sum of Rs. 18,200. He was sentenced under each count to undergo rigorous imprisonment for one year, the sentences to be concurrent. The convict section K. Gupta has appealed to this Court on certificate granted under article 134(1)(c) of the Constitution. 'Me order granting the certificate does not disclose on its face what exactly the difficulty of the court of the Judicial Commissioner is and precisely what question of outstanding difficulty this Court is desired to settle. On behalf of the appellant his learned advocate Shri Ramamurthy, however, addressed elaborate arguments questioning the order of the learned Judicial Commissioner allowing 773 the appeal against the appellant section K. Gupta 's acquittal. His, challenge was based on three main contentions. The fourth point that the learned Judicial Commissioner erred in law in considering exhibit P 59 to be admissible in evidence, in disagreement with the trial court, according to which it was hit by section 24, Indian Evidence Act, was not allowed to be argued in this Court because this ground was not taken in the grounds of appeal. The first contention seriously pressed on behalf of the appellant is that in view of the acquittal of his co accused who were tried along with him the court of the Judicial Commissioner was wrong in law in holding that there was falsification of accounts and embezzlement of the funds of the Tripura Central Marketing Co operative Society. This submission is unacceptable. The acquittal of the other co accused as affirmed by the learned Judicial Commissioner is not based on the finding that there was no falsification of accounts and no embezzlement of the funds of the Society. section K. Gupta, appellant, it may be pointed out was the Secretary of the Society since April 13, 1957 when the first general meeting of the Society was held and was in that capacity entrusted with its funds. He worked as such till August 10, 1960. He was accordingly responsible for the cash and maintenance of current accounts of the Society during the period in question. Turning to the Bye laws of the Society, bye law No. 41 prescribes the duties of the Secretary. According to this bye law the Secretary has inter alia : "(3) To make disbursement and to obtain vouchers and to receive payments and pass receipts, under the general or special orders of the Board of Directors on this behalf from time to time. (4) To keep all accounts and registers required by the rules. (13) To countersign cash book in token of the balance being correct and to produce the cash balance. whenever called upon to do so by the Chairman or any person authorised to do so. In the absence of the Secretary the Board of Directors may authorise the Manager to perform the duties of the Secretary. The Board of Directors may also authorise the Manager to perform any of the duties of the Secretary to facilitate, the working of the Society. Receipts passed on behalf of the Society shall be, signed by the Secretary. Share certificates and other 774 documents shall be signed by the Secretary and one member of Board of Directors jointly. " Byelaw 42 contains directions I regarding advances against proof goods and clause (1) of this byelaw provides : "(1) The Board of Directors shall, at the beginning of the session, fix the amount of advance, indicating the percentage of the market price of produce or goods pledged with the society, that may be granted to a member. Such limits may be fixed for different com modities and varied from time to time according to fluctuation in markets or otherwise. It shall also be competent for the Board of Directors to call on a borrower at any time before the due date to repay a portion of the loan or advance issued or to produce additional security for the outstanding loan or advance within a time fixed by them, if in their opinion, there is fall or likely to be a fall in the market value of the produce or goods pledged. " Under byelaw 44 loans may be granted to members in suitable cases on such terms and conditions as regards individual and maximum limits, repayment of loan,, rate of interest thereon etc., as may be fixed by the Board of Directors from time to time. According to the learned judicial Commissioner "the overall picture" emerging .from the evidence on the record, to quote his own words, it "(1) A sum of Rs. 18,200/ was said to have been disbursed in 1958 and 1959. (2) It was said to have been repaid in the last week of June, 1959 towards the end of the co operative year of 1959 and long after the maximum period of 6 months allowed by rule 42 (4) of the byelaws. (3) The same amount was again said to have been ,disbursed in a few days in the first week of July commencing with the next cooperative year (1959 60). (4) Except the 2nd and 4th respondents, the others were not members of the Co operative Society and in this regard the 1st respondent disregarded sub rule (1) ,of r. 42 of the byelaws. (5) The 1st respondent did not obtain any general or special orders of the Board of Directors to make the disbursements and violated sub rule (1) of r. 42 of Ext. P 41. 775 (6) Ext. P 56 and P 59 show that the alleged collections of the monies in June 1959 was false and that the accounts were got up. (7) The fact that a discount of Rs. 10/ was paid to cash a cheque on 29 6 1959 shows that the society had no funds on that day. (8) None of the alleged loanees was a Jute grower and no jute was deposited in the godowns of the society before the advances were made and in this regard the mandatory provisions of sub r. (2) of r. 42 were also disregarded by the 1st respondent. (9) A number of adjustments were made in the Accounts to show that the sum of Rs. 18,200/ was disbursed. (10) The three persons to whom ultimately the amounts were said to have been disbursed are interested in the 1st respondent. The 4th respondent C. C. Das Gupta is a relation of the 1st respondent and proved by P. Ws 1, 6 and 8 and as admitted by the 4th respondent himself in Ext. The 3rd respondent Sudhir Ranjan Roy is a servant of D.W. I who is a co Director of the Match Factory and friend of the 1st respondent. The 3rd respondent Haradhan Deb was appointed by the 1st respondent in the C.M.S. The 3rd respondent was also an employee of the C.T.S. of which the 1st respondent was a Director. " On the basis of these observations the appellant was held to ,have committed criminal breach of trust and to have either misappropriated or misapplied the funds of the Society dishonestly to benefit himself of his relations and friends. Counsel failed to point out any legal infirmity in the final conclusion drawn in the impugned order from the overall picture. Indeed, counsel, after a faint attempt to find fault with this conclusion felt constrained to admit that the money had been advanced against the rules of the Society and also to the persons not entitled to it, his only contention in support of the appeal being that it did not constitute a criminal offence and that in any event the Board of Directors of the Society having ratified the advances, the foundation for the criminal charge must be deemed to have disappeared. We are unable to agree. The offence of criminal breach of trust is committed when a person who is entrusted in any manner with property or With dominion over it, dishonestly misappropriates it, or converts it to his own use, or dishonestly uses it or disposes it of in violation 776 of any direction of law prescribing the mode in which the trust is to be discharged, or of any lawful contract, express or implied, made by him touching such discharge, or wilfully suffers any other person so to do. The appellant 's manner of dealing with the money entrusted to his custody clearly constitutes criminal breach of trust. Counsel was not able to point out any provision which empowers the Directors to prescribe the mode of making advances, which violates or is in breach of, or contrary to the Byelaws. If the Directors, possess no authority to give any directions contrary to the byelaws they can scarcely claim or assume power to ratify violation of the Byelaws in the matter of dealing with the trust money. Our attention was not drawn to any over riding provision conferring power on the Board of Directors to ratify use of the trust money contrary to the directions contained in the Byelaws. Exhibit P 27, the resolution of the Board of Directors dated January 10, 1960, on which reliance in support of ' the argument was placed, merely states "investments made by the Secretary uptodate are hereby approved" without pointing out the provisions under which such approval could validate breaches of the Byelaws. Incidentally it may be mentioned that the learned Judicial Commissioner also entertained some suspicion about the manner in which the meeting, in which this resolution was passed, was held. This contention of the counsel must, therefore, be repelled. In the last submission the counsel made a grievance against the joint trial of several accused persons on several items of embezzlement. According to him there was a misjoinder of charges which vitiated the trial. In our opinion, charges under section 408 and section 477 A, Indian Penal Code, could, in the circumstances of this case, be tried together and the joint trial of all the accused was proper and lawful. Our attention was not drawn to any provision of law against the legality of the joint trial. In any event no failure of justice in consequence of the joinder of charges was pointed out, with the result that the question of misjoinder of charges must be held to be of little consequence at the stage of appeal. Before closing we may point out, as has repeatedly been said by this Court, that there is normally no right of appeal to this Court in criminal matters except in cases provided :by article 134 ( 1 ) (a) and (b) of the Constitution. Clause (c) of this Article empowers the High Court to certify cases to be fit for appeal to this Court. The word "certify" is a strong word; it postulates exercise of judicial discretion by the High Court and the certificate should ordinarily show on the face of it that the discretion was invoked and properly exercised. This Court should be in a position to know that the High Court has not acted mechanically 777 but has applied its mind. A certificate under this clause is impermissible on questions of fact and when a case does not disclose a substantial question of law or principle then the certificate granted by the High Court is liable to be revoked by this Court, though such prima facie non disclosure would not by itself automatically invalidate the certificate. In the case in hand no substantial question of law or principle was made out at the bar and the certificate was clearly misconceived though it vaguely states that several questions of law are involved. The appeal fails and is dismissed. V.P.S. Appeal dismissed.

The appellant, who was the Secretary of a Cooperative Society and was responsible for the cash and maintenance, of the accounts of the Society, was charged with the offenses of criminal breach of trust and falsification of accounts under sections 408 and 477 A, I.P.C. He was tried along with 5 others who were charged with the offence of abetment of the offenses. The, trial court acquitted all of them, but the appellate court (the Court of Judicial Commissioner) convicted the appellant and acquitted the. others. The appellate Court held that the appellant had advanced money against the rules of the Society and also to various persons not entitled to it, that the appellant had thereby committed criminal breach of trust and either misappropriated or misapplied the funds of the Society dishonestly to benefit himself or his relations and friends. The 'appellate Court certified that the case was a fit one for appeal to this Court under article 134(1) (c), but, the order granting the certificate did not disclose on its face what exactly was the difficulty of the appellate Court and what question of outstanding difficulty this Court was to settle. In appeal to this Court, HELD : (1) The acquittal of the co accused was not based on the finding that there was no falsification of accounts or embezzlement. Therefore, the appellant could not contend that no offence was committed because of the acquittal of the co accused. [773 G D] (2) On the finding of the appellate court, it was not a mere civil liability of the appellant. The appellant 's manner of dealing with the money entrusted to his custody constituted criminal breach of trust. The Directors had no authority under the bye laws to give any directions contrary to the bye laws and so, could not ratify the violation of the bye laws. Any resolution ratifying the use of trust money contrary to the directions contained in the bye laws would not validate the breach of the bye laws. [775G; 776 A C] (3) There was no misjoinder of charges and no prejudice was caused to the appellant. [776 F] (4) The appellate Court should not have granted the certificate, under article 134(1)(c) in the present case. The word 'certify ' in the Article 771 postulates the exercise. of judicial discretion by the appellate Court and the certificate should ordinarily show on the face of it that the discretion was invoked and properly exercised. This Court should be in a position to know that the appellate Court has not acted mechanically but has applied its mind. A certificate under this clause is impermissible on questions of fact. When the case does not disclose a substantial question of law or principle the certificate. granted by the appellate Court is liable to be revoked by this Court, though such_ prima facie non disclosure would not by itself automatically invalidate the certificate [777 A C]

Civil Appeal Nos. 1629, 1857 & 2087 of 1979. From the Judgment and Order dated 1 5 1979 of the Delhi High Court in Civil Writ No. 408 of 1978. F. section Nariman, section D. Parekh, A. D. Mehta, Lalit Bhasin, Vinay Bhasin and Vineet Kumar for the Appellants in C.A. No. 1629 and for R. 1 in C.A. No. 2087/79. V. N. Tarkunde, section Ganesh, K. Vasudev and T.V.S.N. Chari for the Appellants in CA 1857/79. Soli J. Sorabjee, Solicitor General and Girish Chandra for Appellants in CA 2087 and for Respondent (UOI) in CA 1629/79. Soli J. Sorabjee, Solicitor General, section Ganesh Vasdev and T.V.S.N. Chari for Respondent No. 2 in CA 1629. T. V. section N. Chari for Respondent No. 4 in CA 2087 Suresh Parik and section Swarup for Respondent No. 3 in CA 2087. F. section Nariman, B. P. Maheshwari and Suresh Sethi for Respondent Swadeshi Cotton Mills Co. Ltd. in CA No. 1857 and 2087/79. C. M. Chopra for Intervenor. The Judgment of R. section Sarkaria and D. A. Desai, JJ. was delivered by Sarkaria, J. O. Chinnappa Reddy, J. gave a dissenting Opinion. 542 SARKARIA,J. These appeals arise out of a judgment, dated May 1, 1979, of the High Court of Delhi, in the following circumstances: Appellant No. 1 in Civil Appeal 1629 of 1979 is Swadeshi Cotton Mills Co. Ltd. (hereinafter referred to as the Company). It was incorporated as a private company with an authorised capital of Rs. 30 lakhs in 1921 by the Horseman family by converting their partnership business into a Private Joint Stock Company. Its capital was raised in 1923 to Rs. 32 lakhs and thereafter in 1945 to Rs. 52.50 lakhs by issue of bonus shares. In 1946, the Jaipuria family acquired substantial holding in the Company. Jaipuria family is the present management. By issue of further bonus shares in 1946, the capital of the Company was increased to Rs. 122.50 lakhs. In 1948, the paid up capital of the Company was raised to Rs. 210 lakhs by the issue of further bonus shares. The subscribed and issued capital consisting mainly of the bonus shares has since remained constant at Rs. 210 lakhs. In the year 1946, the Company had only one undertaking, a Textile Unit at Kanpur, known as "The Swadeshi Cotton Mills, Kanpur". Between 1956 and 1973, the Company set up and/or acquired five further Textile Units in Pondicherry, Naini, Udaipur, Maunath Bhanjan and Rae Bareilly. Each of these six Units or undertakings of the Company was separately registered in accordance with the provisions of Section 10 of the Industries (Development and Regulation) Act, 1951 (hereinafter called the IDR Act). In addition to these six industrial undertakings, the Company (it is claimed) had other distinct businesses and assets. It holds inter alia 97 per cent shares in the subsidiary, Swadeshi Mining and Manufacturing Company Ltd., which owns two sugar Mills. The Company claims, it has substantial income from other businesses and activities including investments in its subsidiary and in other shares and securities which include substantial holding of 10,00,000 Equity Shares of Rs. 10/ each in Swadeshi Polytex Ltd., representing 30 per cent of the total equity capital value of Swadeshi Polytex Ltd., the intrinsic value whereof exceeds Rs. 5 crores. The Company made considerable progress during the years 1957 to 1973. The reserves and surplus of the Company increased from Rs. 2.3 crores in 1957 to Rs. 4.3 crores in 1973 74, but declined to Rs. 2.8 crores in 1976 77. The fixed assets of the Company increased from 5.8 crores in 1957 to 19 crores in 1973 74, but declined to Rs. 18 crores, registering a marginal decrease of Rs. 1 crore in 1976 77. 543 The Company maintained separate books of accounts for each of its six industrial undertakings. From and after April 1973, the Company maintained separate sets of books of accounts of the businesses and assets other than of the said six industrial undertakings. Annual accounts of the six industrial undertakings were first prepared separately in seven sets which were separately audited. The consolidated annual accounts of the Company were then prepared from such annual accounts at the registered office of the Company at Kanpur, and after audit, were placed before the shareholders of the Company. The Company made over all profits up to the year 1969 and even thereafter up to 1975. The Balance Sheet showed that the Company suffered a loss of Rs. 86.23 lakhs after providing depreciation of Rs. 93.93 lakhs and gratuity of Rs. 48.79 lakhs, though the trading results showed a gross profit of Rs. 56.49 lakhs. During the year ending March 31, 1976, the Company again suffered a loss of Rs. 294.82 lakhs after providing for depreciation. The last Balance Sheet and Profit & Loss Account adopted by the shareholders and published by the Company relates to the year ending March 31, 1977. It shows that the Company suffered a loss of Rs. 200.34 Lakhs after taking into account depreciation of Rs. 73.27 lakhs which was not provided in accounts. Between 1975 and 1978, the Company created the under noted encumbrances on the fixed assets: Unit As on As on As on As on Remarks 31 3 75 31 3 76 31 3 77 31 3 78 (in lakhs) (in lakhs) 1 2 3 4 5 6 (i) Pondi 2.40 Nil Nil Nil On fixed chery assets of of Pondi cherry Unit. (ii) Maun 11.40 5.71 Nil Nil On fixed ath assets of Bhanjan Unit. (iii)Udaipur 2.76 Nil Nil Nil On fixed assets of Udaipur Unit. (iv) Kanpur 13.44 9.75 5.95 2.00 On fixed (ICICI) asset of Kanpur Unit. (v) Kanpur Nil 150.00 150.00 150.00 On fixed assets of Kanpur, Maunath Bhanjan & Pondi cherry Units for wages and Bank Dues 544 1 2 3 4 5 6 vi)Company 67.53 68.45 59.44 59.44 On diesel generating sets of Kanpur, Naini, Pondi cherry, Maunath Bhanjan and Rae Bareilly Units. (vii)Udaipur Nil 25.00 25.00 25.00 On fixed assets of Udaipur Unit for gratuity fund. (viii)Naini Nil Nil 70.00 70.00 On fixed assets of Naini for gratuity. (ix) Kanpur, 106.20 75.31 50.67 15.97 On new Rae machinery Bareilly of Kanpur, & Naini Rae Bareilly & Naini Units under de ferred payment credit. 203.73 334.22 361.06 322.41 The borrowings of the Kanpur, Pondicherry, Naini, Udaipur, Maunath Bhanjan and Rae Bareilly Units of the Company as on March 31, 1978 against current assets were Rs. 256.78, 183.92, 271.05, 70.72, 47.98 and 55.82 lakhs respectively. All the encumbrances on fixed assets (except the encumbrances of Rs. 70 lakhs on the fixed assets of Naini Unit for gratuity funding to get the benefit of Section 44A of the Income tax Act) were created prior to March 31, 1976. In the accounting year 1976 77, only one new encumbrance was created by the Company on its fixed assets. The following are statistics of production in each of the six units of the Company during the years 1975 76, 1976 77 and 1977 78: Name of the Unit 1975 76 1976 77 1977 78 (figures in lakhs) Naini 66.13 kgs. 65.76 kgs. 72.35 kgs. Udaipur 18.51 kgs. 18.50 kgs. 18.60 kgs. Maunath Bhanjan 15.59 kgs. 16.63 kgs. 18.49 kgs. Rae Bareilly 12.09 kgs. 13.58 kgs. 14.00 kgs. Pondicherry 170.52 Mtrs 178.77 Mtrs 176.54 Mtrs Kanpur 318.75 Mtrs 472.12 Mtrs 238.22 Mtrs 545 On April 13, 1978, the Government of India in exercise of its power under clause (a) of sub section (1) of Section 18AA of the IDR Act, passed an order (hereinafter referred to as the impugned order) which reads as follows: "SO 265(E)/18AA/IDRA/78 Whereas the Central Government is satisfied from the documentary and other evidence in its possession, that the persons in charge of the industrial undertakings namely, (i) M/s. Swadeshi Cotton Mills, Kanpur, (ii) M/s. Swadeshi Cotton Mills, Pondicherry, (iii)M/s. Swadeshi Cotton Mills, Naini, (iv) M/s. Swadeshi Cotton Mills, Maunath Bhanjan, (v) M/s. Udaipur Cotton Mills, Udaipur, and (vi) Rae Bareilly Textile Mills, Rae Bareilly of M/s. Swadeshi Cotton Mills Company Ltd., Kanpur (hereinafter referred to as the said industrial under takings), have, by creation of encumbrances on the assets of the said industrial undertakings, brought about a situation which has affected and is likely to further affect the production of articles manufactured or produced in the said industrial undertakings and that immediate action is necessary to prevent such a situation; Now, therefore, in exercise of power conferred by clause (a) of sub section (1) of Section 18AA of the Industries (Development and Regulation) Act, 1951 (65 of 1951), the Central Government hereby authorises the National Textile Corporation Limited (hereinafter referred to as the Authorised person) to take over the management of the whole of the said industrial undertakings, subject to the following terms and conditions, namely: (i) The authorised person shall comply with all the directions issued from time to time by the Central Government; (ii) the authorised person shall hold office for a period of five years from the date of publication of this order in the Official Gazette; (iii)the Central Government may terminate the appointment of the authorised person earlier if it considers necessary to do so. 546 This order shall have effect for a period of five years commencing from the date of its publication in the Official Gazette. Sd/ R. Ramakrishna Joint Secretary to the Govt. of India (Seal). " On April 19, 1978, three petitioners, namely, the Company through its Joint Secretary, Shri Bhim Singh Gupta, its Managing Director, Dr. Rajaram Jaipuria, and its subsidiary company, named Swadeshi Mining and Manufacturing Company, through its Directors and Shareholders filed a writ petition under Article 226 of the Constitution in the Delhi High Court against the Union of India and the National Textile Corporation to challenge the validity of the aforesaid Government Order dated April 13, 1978. The writ petition was further supplemented by subsequent affidavits and rejoinders. The Union of India and the National Textile Corporation Ltd., who has been authorised to assume management of the undertakings concerned were impleaded, as respondents. The writ petition first came up for hearing before a Division Bench who by its order dated August 11, 1978, requested the Chief Justice to refer it to a larger Bench. The case was then heard by a three Judge Bench who by their order dated October 12, 1978, requested the Hon 'ble the Chief Justice to constitute a still larger Bench to consider the question whether a prior hearing is necessary to be given to the persons affected before the order under Section 18AA is passed. Ultimately, the reference came up for consideration before a Full Bench of five Judges to consider the question, which was reframed by the Bench as under: "Whether in construing Section 18AA of the Industries (Development and Regulation) Act, 1951, as a pure question of law compliance with the principle of audi alteram partem is to be implied. If so, (a) whether such hearing is to be given to the parties who would be affected by the order to be passed under the said Section prior to the passing of the order; or (b) whether such hearing is to be given after the passing of the order; and (c) if prior hearing is to be normally given and the order passed under the said Section is vitiated by not giving of such 547 hearing whether such vice can be cured by the grant of a subsequent hearing. " The Bench by a majority (consisting of Deshpande, C.J.,R. Sacher and M. L. Jain, JJ.) answered this three fold question as follows: "(1) Section 18AA(1) (a) (b) excludes the giving of prior hearing to the party who would be affected by order thereunder. (2) Section 18F expressly provides for a post decisional hearing to the owner of the industrial undertaking, the management of which is taken over under Section 18AA to have the order made under Section 18AA cancelled on any relevant ground. (3) As the taking over of management under Section 18AA is not vitiated by the failure to grant prior hearing, the question of any such vice being cured by a grant of a subsequent hearing does not arise." H. L. Anand and N. N. Goswamy, JJ, however dissented. In the opinion of the minority, in compliance with the principles of natural justice, a prior hearing to the owner of the undertaking was required to be given before passing an order under Section 18AA, that the second question did not arise as the denial of a prior hearing would not cure the vice by the grant of subsequent hearing, but it would be open to the Court to moderate the relief in such a way that the order is kept alive to the extent necessary until the making of the fresh order to subserve public interest, and to make appropriate directions to ensure that the subsequent hearing would be a full and complete review of the circumstances of the take over and for the preservation and maintenance of the property during the interregnum. After the decision of the reference, the case was reheard on merits by a Bench of three learned Judges (consisting of Deshpande, C.J., Anand and M. L. Jain, JJ.) who by their judgment, dated May 1, 1979, disposed of the writ petition. The operative part of the judgment reads as under: "In the result, the writ petition succeeds in part, the challenge to the validity of the impugned order fails and to that extent the petition is dismissed. The petition succeeds in so far as it seeks to protect from the impugned order the corporate entity of the company, the corporate entity of the subsidiary and its assets, the holding of the company in Polytex and the assets and property of the company which are not referable to any of the industrial undertakings. The respondents are hereby restrained from in any manner interfering 548 with the corporate entity, the assets and property which are outside the impugned order. The respondents would release from its control and custody and/or deliver possession of any assets or property of the company, which are not referable to the industrial undertakings in terms of the observations made in paras 46 and 47 of the judgment, within a period of three months from today (May 1, 1979). In the peculiar circumstances the parties would bear their respective costs. " On the application of the Company, the Delhi High Court certified under Article 133 of the Constitution that the case was fit for appeal to this Court. Subsequently, on July 12,1979, a similar certificate was granted by the High Court to the Union of India and the National Textile Corporation Ltd. Consequently, the Company, the Union of India and the National Textile Corporation have filed Civil Appeals 1629, 2087 and 1857 of 1979, respectively, in this Court. All the three appeals will be disposed of by this judgment. The primary, two fold proposition posed and propounded by Shri F. section Nariman, learned counsel for the appellant Company in Civil Appeal 1629 of 1979, is as follows: (a) Whether it is necessary to observe the rules of natural justice before issuing, a notified order under Section 18AA, or enforcing a decision under Section 18AA, or (b) Whether the provisions of Section 18AA and/or Section 18F impliedly exclude rules of natural justice relating to prior hearing. There were other contentions also which were canvassed by the learned counsel for the parties at considerable length. But for reasons mentioned in the final part of this judgment, we do not think it necessary, for the disposal of these appeals to deal with the same. Thus, the first point for consideration is whether, as a matter of law, it is necessary, in accordance with the rules of natural justice, to give a hearing to the owner of an undertaking before issuing a notified order, or enforcing a decision of its take over under Section 18AA. Shri Nariman contends that there is nothing in the language, scheme or object of the provisions in Section 18AA and/or Section 18F which expressly or by inevitable implication, excludes the application of the principles of natural justice or the giving a pre decisional hearing, adapted to the situation, to the owner of the undertaking. It is submitted that mere use of the word "immediate" in sub clause (a) of Section 18AA (1) does not show a legislative intent to exclude the 549 application of audi alterm partem rule, altogether. It is maintained that according to the decision of this Court in Keshav Mills Company Ltd. vs Union of India, even after a full investigation has been made under Section of the I.D.R. Act, the Government has to observe the rules of natural justice and fairplay, which in the facts of a particular case, may include the giving of an opportunity to the affected owner to explain the adverse findings against him in the investigation report. In support of his contention, that the use of the word "immediate" in Section 18AA(1)(a) does not exclude natural justice, learned counsel has advanced these reasons: (i) The word "immediate" in clause (a) has been used in contra distinction to 'investigation '. It only means that under Section 18AA action can be taken without prior investigation under Section 15, if there is evidence in the possession of the Government, that the assets of the Company owning the undertaking are being frittered away by doing any of the three things mentioned in clause (a); or, the undertaking has remained closed for a period of not less than three months and the condition of plant and machinery is such that it is possible to restart the undertaking. This construction, that the use of the word "immediate" in Section 18AA(1)(a) only dispenses with investigation under Section 15 and not with the principle of audi alterm partem altogether, is indicated by the marginal heading of Section 18AA and para 3 of the Statement of Objects and Reasons of the Amendment Bill which inserted Section 18AA, in 1971. (ii) The word 'immediate ' occurs only in clause (a) and not in clause (b) of Section 18AA(1). It would be odd if intention to exclude this principle of natural justice is spelt out in one clause of the sub section, when its other clause does not exclude it. (iii) Section 18F does not exclude a pre decisional hearing. This section was there, when in Keshav Mills ' case, (ibid), it was held by this Court, that even at the post investigation stage, before passing an order under Section 18A, the Government must proceed fairly in accordance with the rules of natural justice. The so called post decisional hearing contemplated by Section 18F cannot be and is not intended to be a substitute for a pre decisional hearing. Section 18F, in terms, deals with the power of Central Government to cancel an order of take over under two conditions, namely: First when "the purpose of an order under Section 18A has been fulfilled, or, second when "for any other reason it is not necessary that the order should remain in force". "Any other reason" has reference to post "take 550 over" circumstances only, and does not cover a reason relatable to pre takeover circumstances. An order of cancellation under Section 18F is intended to be prospective. This is clear from the plain meaning of the expressions "remain in force", "necessary" etc. used in the Section. Section 18 incorporates only a facet, albeit qualified, of Section 21 of the General Clauses Act, (Kamla Prasad Khetan vs Union of India, referred to.) Therefore, the illusory right given by Section 18F to the aggrieved owner of the undertaking, to make an application for cancellation of the order, is not a full right of appeal on merits. The language of the Section impliedly prohibits an enquiry into circumstances that led to the passing of the order of "take over", and under it, the aggrieved person is not entitled to show that on merits, the order was void ab initio. As held by a Bench (consisting of Bhagwati and Vakil JJ.) of the Gujarat High Court, in Dosabhai Ratanshah Keravale vs State of Gujarat, a power to rescind or cancel an order, analogous to that under Section 21, General Clauses Act, has to be construed as a power of prospective cancellation, and not of retroactive obliteration. It is only the existence of a full right of appeal on the merits or the existence of a provision which unequivocally confers a power to reconsider, cancel and obliterate completely the original order, just as in appeal, which may be construed to exclude natural justice or a pre decisional hearing in an emergent situation. (Reference on this point has been made to Wade 's Administrative Law, 4th Edition, PP.464 to 468.) (iv) 'Immediacy ' does not exclude a duty to act fairly, because, even an emergent situation can co exist with the canons of natural justice. The only effect of urgency on the application of the principle of fair hearing would be that the width, form and duration of the hearing would be tailored to the situation and reduced to the reasonable minimum so that it does not delay and defeat the purpose of the contemplated action. (v) Where the civil consequences of the administrative action as in the instant case are grave and its effect is highly prejudicial to the rights and interests of the person affected and there is nothing in the language and scheme of the statute which unequivocally excludes a fair pre decisional hearing, and the post decisional hearing provided therein is not a real remedial hearing equitable to a full 551 right of appeal, the Court should be loath to infer a legislative intent to exclude even a minimal fair hearing at the pre decisional stage merely on ground of urgency. (Reference in this connection has been made to Wade 's Administrative Law, ibid, page 468 bottom.) Applying the proposition propounded by him to the facts of the instant case, Shri Nariman submits that there was ample time at the disposal of the Government to give a reasonably short notice to the Company to present its case. In this connection, it is pointed out that according to para 3 of the further affidavit filed by Shri Daulat Ram on behalf of the Union of India and other respondents, the Central Government had in its possession two documents, namely: (a) copy of the Survey Report on M/s. Swadeshi Cotton Mills Company Ltd., covering the period from May to September, 1977 prepared by the office of the Textile Commissioner, and (b) Annual Report (dated September 30, 1977) of the Company for the year ending March 31, 1971. In addition, the third circumstance mentioned in the affidavit of Shri Daulat Ram is, that by an order dated January 28, 1978, the Central Government appointed four Government Officials, including one from the office of the Textile Commissioner, to study the affairs of the Company and to make recommendation. This Official Group submitted its report on February 16, 1978. It is submitted that this evidence on the basis of which the impugned order was passed, was not disclosed to the appellant Company till May 1978, only after it had filed the writ petition in the High Court to challenge the impugned order. It is emphasised that if the Survey Report was assumed to contain something adverse to the appellants, there was time enough about six weeks between the submission of the Survey Report and the passing of the impugned order for giving a short, reasonable opportunity to the appellants to explain the adverse findings against them. It is urged that even if there was immediacy, situational modifications could be made to meet the requirement of fairness, by reducing the period of notice; that even the manner and form of such notice could be simplified to eliminate delay, that telephonic notice or short opportunity for furnishing their explanation to the Company might have satisfied the requirements of natural justice. Such an opportunity of hearing could have been given after the passing of a conditional tentative order and before its enforcement under Section 18AA. For the interregnum suitable interim action such as freezing the assets of the Company or restraining the Company from creating further encumbrances, etc. could be taken under Section 16. 552 Reference in this connection has been made to Keshav Mills case (ibid); Mohinder Singh Gill vs Election Commissioner of India; Maneka Gandhi vs Union of India Sukhdev Singh & Ors. vs Bhagatram Sardar Singh; A. K. Kraipak vs Union of India; Ridge vs Baldwin; Heatley vs Tasmanian Racing & Gaming Commission; Commissioner of Police vs Tanos; Secretary of State for Education & Science vs Metropolitan Borough of Tameside; Wiseman vs Borneman; Nawabkhan Abbaskhan vs State of Gujarat and State of Orissa vs Dr. Bina Pani Dei. As against this, Shri Soli Sorabji, learned Solicitor General appearing on behalf of respondent 1, contends that the presumption in favour of audi alteram partem rule stands impliedly displaced by the language, scheme, setting, and the purpose of the provision in Section 18AA. It is maintained that Section 18AA, on its plain terms, deals with situations where immediate preventive action is required. The paramount concern is to avoid serious problems which may be caused by fall in production. The purpose of an order under Section 18AA is not to condemn the owner but to protect the scheduled industry. The issue under Section 18AA is not solely between the Government and the management of the industrial under taking. The object of taking action under this Section is to protect other outside interests of the community at large and the workers. On these premises, it is urged, the context, the subject matter and the legislative history of Section 18AA negative the necessity of giving a prior hearing; that Section 18AA does not contemplate any interval between the making of an order thereunder and its enforcement, because it is designed to meet an emergent situation by immediate preventive action. Shri Sorabji submits that this rule of natural justice in a modified form has been incorporated in Section 18F which gives an opportunity of a post decisional hearing to the owner of the undertaking who, if he feels aggrieved, can, on his application, be heard to show that even the original order under Section 18AA was passed on invalid grounds and should be cancelled or rescinded. Thus, 553 Shri Sorabji does not go to the length of contending that the principles of natural justice have been fully displaced or completely excluded by Section 18AA. On the contrary, his stand is that on a true construction of Section 18AA read with Section 18F, the requirements of natural justice and fair play can be read into the statute only "in so far as conformance to such canons can reasonably and realistically be required of it", by the provision for a remedial hearing at a subsequent stage. Shri Sorabji further submits that since Section 18F does not specify any period of time within which the aggrieved party can seek the relief thereunder, the opportunity of full, effective and post decisional hearing has to be given within a reasonable time. It is stressed that under Section 18F, the Central Government exercises curial functions, and that Section confers on the aggrieved owner a right to apply to the Government to cancel the order of take over. On a true construction this Section casts an obligation on the Central Government to deal with and dispose of an application filed thereunder with reasonable expedition. Shri Sorabji further concedes that on the well settled principle of implied and ancillary powers, the right of hearing afforded by Section 18F carries with it the right to have inspection and copies of all the relevant books, documents, papers etc. and the Section obligates the Central Government to take all steps which are necessary for the effective hearing and disposal of an application under Section 18F. Shri Sorabji has in connection with his arguments cited these authorities: Mohinder Singh Gill vs Chief Election Commissioner (ibid); In re. K. (An Infant), Official Solicitor vs K. & Anr.; Collymore vs Attorney General; Union of India vs Col. J. N. Sinha; Judicial Review, 3rd Edn. by De Smith; Queen vs Davey; Gaiman vs National Association for Internal Revenue; John H. N. Fahey vs Paul Millionee; Schwartz 's Administrative Law '; Madhav Hayawadanrao Hoskot vs Maharashtra; Vijay Kumar Mundhra vs Union of India; Joseph Kuruvilla Vellukumel vs 554 Reserve Bank of India; Corporation of Calcutta vs Calcutta Tramways and Furnell vs Whapgarei High School. Before dealing with the contentions advanced on both sides, it will be useful to have a general idea of the concept of "natural justice" and the broad principles governing its application or exclusion in the construction or administration of statutes and the exercise of judicial or administrative powers by an authority or tribunal or constituted thereunder. Well then what is "natural justice" ? The phrase is not capable of a static and precise definition. It cannot be imprisoned in the straight jacket of a cast iron formula. Historically, "natural justice" has been used in a way "which implies the existence of moral principles of self evident and unarguable truth. In course of time, judges nurtured in the traditions of British jurisprudence, often invoked it in conjunction with a reference to "equity and good conscience". Legal experts of earlier generations did not draw any distinction between "natural justice" and "natural law". "Natural justice" was considered as "that part of natural law which relates to the administration of justice". Rules of natural justice are not embodied rules. Being means to an end and not an end in themselves, it is not possible to make an exhaustive catalogue of such rules. But two fundamental maxims of natural justice have now become deeply and indelibly ingrained in the common consciousness of man kind, as pre eminently necessary to ensure that the law is applied impartially, objectively and fairly. Described in the form of Latin tags these twin principles are :(i) audi alteram partem and (ii) nemo judex in re sua. For the purpose of the question posed above, we are primarily concerned with the first. This principle was well recognised even in the ancient world. Seneca, the philosopher, is said to have referred in Medea that it is unjust to reach a decision without a full hearing. In Maneka Gandhi 's case, Bhagwati, J. emphasised that audi alteram partem is a highly effective rule devised by the Courts to ensure that a statutory authority arrives at a just decision and it is calculated to act as a healthy check on the abuse or misuse of power. Hence its reach should not be narrowed and its applicability circumscribed. During the last two decades, the concept of natural justice has made great strides in the realm of administrative law. Before the epoch making decision of the House of Lords in Ridge vs Baldwin, it was 555 generally thought that the rules of natural justice apply only to judicial or quasi judicial proceedings; and for that purpose, whenever a breach of the rule of natural justice was alleged, Courts in England used to ascertain whether the impugned action was taken by the statutory authority or tribunal in the exercise of its administrative or quasi judicial power. In India also, this was the position before the decision, dated February 7, 1967, of this Court in Dr. Bina Pani Dei 's case (ibid); wherein it was held that even an administrative order or decision in matters involving civil consequences, has to be made consistently with the rules of natural justice. This supposed distinction between quasi judicial and administrative decisions, which was perceptibly mitigated in Bina Pani Dei 's case, was further rubbed out to a vanishing point in A. K. Kraipak vs Union of India (ibid), thus: "If the purpose of these rules of natural justice is to prevent miscarriage of justice one fails to see why those rules should be made inapplicable to administrative enquiries. Often times it is not easy to draw the line that demarcates administrative enquiries from quasi judicial enquiries. . . . Arriving at a just decision is the aim of both quasi judicial enquiries as well as administrative enquiries. An unjust decision in an administrative enquiry may have more far reaching effect than a decision in a quasi judicial enquiry. " In A. K. Kraipak 's case, the Court also quoted with approval the observations of Lord Parker from the Queens Bench decision in In re H. K. (An Infant) (ibid), which were to the effect, that good administration and an honest or bona fide decision require not merely impartiality or merely bringing one 's mind to bear on the problem, but acting fairly. Thus irrespective of whether the power conferred on a statutory body or tribunal is administrative or quasi judicial, a duty to act fairly, that is, in consonance with the fundamental principles of substantive justice is generally implied, because the presumption is that in a democratic polity wedded to the rule of law, the state or the Legislature does not intend that in the exercise of their statutory powers its functionaries should act unfairly or unjustly. In the language of V.R. Krishna Iyer, J. (vide Mohinder Singh Gill 's case, ibid.): "Subject to certain necessary limitations natural justice is now a brooding omnipresence although varying in its play. Its essence is good conscience in a given situation; nothing more but nothing less. " 556 The rules of natural justice can operate only in areas not covered by any law validly made. They can supplement the law but cannot supplant it (Per Hegde, J. in A. K. Kraipak, ibid). If a statutory provision either specifically or by inevitable implication excludes the application of the rules of natural justice, then the Court cannot ignore the mandate of the Legislature. Whether or not the application of the principles of natural justice in a given case has been excluded, wholly or in part, in the exercise of statutory power, depends upon the language and basic scheme of the provision conferring the power, the nature of the power, the purpose for which it is conferred and the effect of the exercise of that power. (See Union of India vs Col. J. N. Sinha, ibid.) The maxim audi alteram partem has many facets. Two of them are: (a) notice of the case to be met; and (b) opportunity to explain. This rule is universally respected and duty to afford a fair hearing in Lord Loreburn 's oft quoted language, is "a duty lying upon every one who decides something", in the exercise of legal power. The rule cannot be sacrificed at the altar of administrative convenience or celerity; for, "convenience and justice" as Lord Atkin felicitously put it "are often not on speaking terms". The next general aspect to be considered is: Are there any exceptions to the application of the principles of natural justice, particularly the audi alteram partem rule ? We have already noticed that the statute conferring the power, can by express language exclude its application. Such cases do not present any difficulty. However, difficulties arise when the statute conferring the power does not expressly exclude this rule but its exclusion is sought by implication due to the presence of certain factors: such as, urgency, where the obligation to give notice and opportunity to be heard would obstruct the taking of prompt action of a preventive or remedial nature. It is proposed to dilate a little on this aspect, because in the instant case before us, exclusion of this rule of fair hearing is sought by implication from the use of the word 'immediate ' in Section 18AA(1). Audi alteram partem rule may be disregarded in an emergent situation where immediate action brooks no delay to prevent some imminent danger or injury or hazard to paramount public interests. Thus, Section 133 of the Code of Criminal Procedure, empowers the magistrates specified therein to make an exparte conditional order in emergent cases, for removal of dangerous public nuisances. Action under Section 17, Land Acquisition Act, furnishes another such instance. Similarly, action on grounds of public safety public health may justify disregard of the rule of prior hearing. 557 Be that as it may, the fact remains that there is no consensus of judicial opinion on whether more urgency of a decision is a practical consideration which would uniformly justify non observance of even an abridged form of this principle of natural justice. In Durayappah vs Fernando. Lord Upjohn observed that "while urgency may rightly limit such opportunity timeously perhaps severely, there can never be a denial of that opportunity if the principles of natural justice are applicable. These observations of Lord Upjohn in Durayappah 's case were quoted with approval by this Court in Mohinder Singh Gill 's case. It is therefore, proposed to notice the same here. In Mohinder Singh Gill 's case, the appellant and the third respondent were candidates for election in a Parliamentary Constituency. The appellant alleged that when at the last hour of counting it appeared that he had all but won the election, at the instance of respondent, violence broke out and the Returning Officer was forced to postpone declaration of result. The Returning Officer reported the happening to the Chief Election Commissioner. An officer of the Election Commission who was an observer at the counting, reported about the incidents to the Commission. The appellant met the Chief Election Commissioner and requested him to declare the result. Eventually, the Chief Election Commissioner issued a notification which stated that taking all circumstances into consideration the Commission was satisfied that the poll had been vitiated, and therefore in exercise of the powers under Article 324 of the Constitution, the poll already held was cancelled and a repoll was being ordered in the constituency. The appellant contended that before making the impugned order, the Election Commission had not given him a full and fair hearing and all that he had was a vacuous meeting where nothing was disclosed. The Election Commission contended that a prior hearing has, in fact, been given to the appellant. In addition, on the question of application of the principles of natural justice, it was urged by the respondents that the tardy process of notice and hearing would thwart the conducting of elections with speed, that unless civil consequences ensued, hearing was not necessary and that the right accrues to a candidate only when he is declared elected. This contention, which had found favour with the High Court, was negatived by this Court. Delivering the judgment of the Court, V. R. Krishna Iyer, J., lucidly explained the meaning and scope of the concept of natural justice and its role in a case where there is a competition between the necessity of taking speedy 558 action and the duty to act fairly. It will be useful to extract those illuminating observations, in extenso: "Once we understand the soul of the rule as fairplay in action and it is so we must hold that it extends to both the fields. After all, administrative power in democratic set up is not allergic to fairness in action and discretionary, executive justice cannot degenerate into unilateral injustice. Nor is there ground to be frightened of delay, in convenience and expense, if 'natural justice gains access. For fairness itself is a flexible, pragmatic and relative concept, not a rigid, ritualistic or sophisticated abstraction. It is not a bull in a china shop, nor a bee in one 's bonnet. Its essence is good conscience in a given situation; nothing more but nothing less. The 'exceptions ' to the rules of natural justice are a misnomer or rather are but a shorthand form of expressing the idea that in those exclusionary cases nothing unfair can be inferred by not affording an opportunity to present or meet a case. " After referring to several decisions, including the observations of Lord Upjohn in Durayappah vs Fernando, the Court explained that mere invocation or existence of urgency does not exclude the duty of giving a fair hearing to the person affected: "It is untenable heresy, in our view, to lock law the victim or act behind his back by tempting invocation of urgency, unless the clearest case of public injury flowing from the least delay is self evident. Even in such cases a remedial hearing as soon as urgent action has been taken is the next best. Our objection is not to circumscription dictated by circumstances, but to annihilation as an easy escape from benignant, albeit inconvenient obligation. The procedural pre condition or fair hearing, however minimal, even post decisional, has relevance to administrative and judicial gentlemanliness." "We may not be taken to. say that situational modifications to notice and hearing are altogether impermissible. . the glory of the law is not that sweeping rules are laid down but that it tailors principles to practical needs. doctors remedies to suit the patient promotes not freezes Life 's processes, if we may mix metaphors. ". . . 559 The Court further emphasised the necessity of striking pragmatic balance between competing requirements of acting urgently and fairly, thus: "Should the cardinal principle of "hearing ' as condition for decision making be martyred for the cause of administrative, immediacy? We think not. The full panoply may not be there but a manageable minimum may make do." "In Wiseman vs Borneman there was a hint of the competitive claims of hurry and hearing. Lord Reid said: 'Even where the decision has to be reached by a body acting judicially, there must be a balance between the need for expedition and the need to give full opportunity to the defendant to see material against him (emphasis added). We agree that the elaborate and sophisticated methodology of a formalised hearing may be injurious to promptitude so essential in an election under way. Even so, natural justice is pragmatically flexible and is amenable to capsulation under the compulsive pressure of circumstances. To burke it altogether may not be a stroke of fairness except in very exceptional circumstances. " The Court further pointed out that the competing claims of hurry and hearing can be reconciled by making situational modifications in the audi alteram partem rule: "Lord Denning M.R., in Manward vs Boreman, summarised the observations of the Law Lords in this form. No doctrinaire approach is desirable but the Court must be anxious to salvage the cardinal rule to the extent permissible in a given case. After all, it is not obligatory that counsel should be allowed to appear 'nor is it compulsory that oral evidence should be adduced. Indeed, it is not even imperative that written statements should be called for disclosure of the prominent circumstances and asking for an immediate explanation orally or otherwise may, in many cases be sufficient compliance. It is even conceivable that an urgent meeting with the concerned parties summoned at an hour 's notice, or in a crisis, even a telephone call, may suffice. If all that is not possible as in the case of a fleeing person whose passport has to be impounded lest he should evade the course of justice or a dangerous nuisance needs immediate abate 560 ment, the action may be taken followed immediately by a hearing for the purpose of sustaining or setting aside the action to the extent feasible. It is quite on the cards that the Election Commission, if pressed by circumstances may give a short hearing. In any view, it is not easy to appreciate whether before further steps got under way he could have afforded an opportunity of hearing the parties, and revoke the earlier directions. All that we need emphasize is that the content of natural justice is a dependent variable, not an easy casualty." "Civil consequence ' undoubtedly cover infraction of not merely property or personal rights but of civil liberties, material deprivations and non pecuniary damages. In its comprehensive connotation, everything that affects a citizen in his civil life inflicts a civil consequence." (emphasis added) In Maneka Gandhi, it was laid down that where in an emergent situation, requiring immediate action, it is not practicable to give prior notice or opportunity to be heard, the preliminary action should be soon followed by a full remedial hearing. The High Court of Australia in Commissioner of Police vs Tanos, ibid, held that some urgency, or necessity of prompt action does not necessarily exclude natural justice because a true emergency situation can be properly dealt with by short measures. In Heatley vs Tasmanian Racing & Gaming Commission, ibid, the same High Court held that without the use of unmistakable language in a statute, one would not attribute to Parliament an intention to authorise the Commission to order a person not to deal in shares or attend a stock exchange without observing natural justice. In circumstances of likely immediate detriment to the public, it may be appropriate for the Commission to issue a warning off notice without notice or stated grounds but limited to a particular meeting, coupled with a notice that the Commission proposed to make a long term order on stated grounds and to give an earliest practicable opportunity to the person affected to appear before the Commission and show why the proposed long term order be not made. As pointed out in Mohinder Singh Gill vs Chief Election Commissioner and in Maneka Gandhi vs Union of India ibid, such cases where owing to the compulsion of the fact situation or the necessity of taking speedy action, no pre decisional hearing is given but the action is followed soon by a full post decisional hearing to the 561 person affected, do not, in reality, constitute an 'exception ' to the audi alteram partem rule. To call such cases an 'exception ' is a misnomer because they do not exclude 'fair play in action ', but adapt it to the urgency of the situation by balancing the competing claims of hurry and hearing. "The necessity for speed", writes Paul Jackson, "may justify immediate action, it will, however, normally allow for a hearing at a later stage. The possibility of such a hearing and the adequacy of any later remedy should the initial action prove to have been unjustified are considerations to be borne in mind when deciding whether the need for urgent action excludes a right to rely on natural justice. Moreover, however the need to act swiftly may modify or limit what natural justice requires. it must not be thought 'that because rough, swift or imperfect justice only is available that there ought to be no justice ' Pratt vs Wanganui Education Board. " Prof. de Smith the renowned author of 'Judicial Review ' (3nd Edn.) has at page 170, expressed his views on this aspect of the subject, thus: "Can the absence of a hearing before a decision is made be adequately compensated for by a hearing ex post facto ? A prior hearing may be better than a subsequent hearing, but a subsequent hearing is better than no hearing at all; and in some cases the courts have held that statutory provision for an administrative appeal or even full judicial review on the merits are sufficient to negative the existence of any implied duty to hear before the original decision is made. The approach may be acceptable where the original decision does not cause serious detriment to the person affected, or where there is also a paramount need for prompt action, or where it is impracticable to afford antecedent hearings. " In short, the general principle as distinguished from an absolute rule of uniform application seems to be that where a statute does not in terms, exclude this rule of prior hearing but contemplates a post decisional hearing amounting to a full review of the original order on merits, then such a statute would be construed as excluding the audi alteram partem rule at the pre decisional stage. Conversely, if the statute conferring the power is silent with regard to the giving of a pre decisional hearing to the person affected and the administrative decision taken by the authority involves civil consequences of a grave nature, and no full review or appeal on merits against that decision is provided, courts will be extremely reluctant to con 562 strue such a statute as excluding the duty of affording even a minimal hearing, shown of all its formal trappings and dilatory features at the pre decisional stage, unless, viewed pragmatically, it would paralyse the administrative process or frustrate the need or utmost promptitude. In short, this rule of fairplay "must not be jettisoned save in very exceptional circumstances where compulsive necessity so demands". The court must make every effort to salvage this cardinal rule to the maximum extent possible, with situational modifications. But, to recall the words of Bhagvati, J., the core of it must, however, remain, namely, that the person affected must have reasonable opportunity of being heard and the hearing must be a genuine hearing and not an empty public relations exercise. Keeping the general principles stated above, let us now examine the scheme content, object and legislative history of the relevant provisions of the I.D.R. Act. The I.D.R. Act (Act 65 of 1951) came into force on May 8,1952 The Statement of Objects and Reasons published in the Gazette of India, dated March 26, 1949, says that its object is to provide the Central Government with the means of implementing their industrial policy which was announced in their Resolution, dated April 6, 1948, and approved by the Central Legislature. The Act brings under Central Control the development and regulation of a number of important industries specified in its First Schedule, the activities of which affect the country as a whole and the development of which must be governed by economic factors of all India import. The requirement with regard to registration, issue or revocation of licences of these specific industrial undertakings has been provided in Chapter II of the Act. Section 3(d) defines an 'industrial undertaking ' to mean "any undertaking pertaining to a scheduled industry carried on in one or more factories by any person or authority including Government": Clause (f) of the same section defines "owner" in relation to an undertaking. Section 15 gives power to the Central Government to cause investigation to be made into a scheduled industry or industrial undertaking. The Section reads as follows: "where the Central Government is of the opinion that (a) in respect of any scheduled industry or industrial undertaking or undertakings (i) there has been, or is likely to be a substantial fall in the volume of production in respect of any article or class 563 of articles relatable to that industry or manufactured or produced in the industrial undertaking or undertakings, as the case may be; for which having regard to the economic conditions prevailing, there is no justification, or (ii) there has been, or is likely to be, a marked deterioration in the quality of any article or class of articles relatable to that industry or manufactured or produced in the industrial undertaking or undertakings, as the case may be, which could have been or can be avoided; or (iii) there has been or is likely to be a rise in the price of any article or class of articles relatable to that industry or manufactured or produced in the industrial undertaking or undertakings, as the case may be, for which there is no justification; or (iv) it is necessary to take any such action as is provided in this Chapter for the purpose of conserving any resources of national importance which are utilised in the industry or the industrial undertaking or undertakings, as the case may be; or (b) any industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest. the Central Government may make or cause to be made a full and complete investigation into the circumstances of the case by such person or body of persons as it may appoint for the purpose. " Section 16 empowers the Central Government to issue appropriate directions to the industrial undertaking concerned on completion of investigation under Section 15. Such directions may be for all or any of the following purposes: "(a) regulating the production of any article or class of articles by the industrial undertaking or undertakings and fixing the standards of production; (b) requiring the industrial undertaking or undertakings to take such steps as the Central Government may consider necessary, to stimulate the development of the industry to which the undertaking or undertakings relates or relate; 564 (c) prohibiting the industrial undertaking or undertakings from resorting to any act or practice which might reduce its or their production, capacity or economic value; (d) controlling the prices, or regulating the distribution of any article or class of articles which have been the subject matter of investigation. " Sub section (2) enables the Central Government to issue such directions to the industrial undertakings pending investigation. In the course, of the working of I.D.R. Act, certain practical difficulties came to light. One of them was that "Government cannot take over the management of any industrial undertaking, even in a situation calling for emergent action without first issuing directions to it and waiting to see whether or not they are obeyed." In order to remove such difficulties, the Amending Act 26 of 1953 inserted Chapter IIIA containing Sections 18A to 18F in the I.D.R. Act. Section 18A confers power on the Central Government to assume management or control of an industrial undertaking in certain cases. The material part of the Section reads as under: "(1) If the Central Government is of opinion that (a) an industrial undertaking to which directions have been issued in pursuance of Section 16 has failed to comply with such directions, or (b) an industrial undertaking in respect of which an investigation has been made under Section 15 (whether or not any directions have been issued to the undertaking in pursuance of Section 16), is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest; the Central Government may, by notified order, authorise any person or body of persons to take over the management of the whole or any part of the undertaking or to exercise in respect of the whole or any part of the undertaking such functions of control as may be specified in the order. (2) Any notified order issued under sub section (1) shall have effect for such period not exceeding five years as may be specified in the order. " Section 18B specifies the effect of notified order under Section 18A Sub section (1) of the section reads thus: 565 "On the issue of a notified order under Section 18A authorising the taking over of the management of an industrial undertaking (a) all persons in charge of the management including, persons holding office as managers or directors of the industrial undertaking immediately before the issue of the notified order, shall be deemed to have vacated their offices as such; (b) any contract of management between the industrial undertaking and any managing agent, or any director thereof holding office as such immediately before the issue of the notified order shall be deemed to have been terminated; (c) the managing agent, if any, appointed under Section 18A shall be deemed to have been duly appointed as the managing agent in pursuance of the Indian Companies Act, 1913 (7 of 1913), and the memorandum and articles of association of the industrial undertaking, and the provisions of the said Act and of the memorandum and articles shall, subject to the other provisions contained in this Act, apply accordingly, but no such managing agent shall be removed from office except with the previous consent of the Central Government; (d) the person or body of persons authorised under Section 18A to take over the management shall take all such steps as may be necessary to take into his or their custody or control all the property, effects and actionable claims to which the industrial undertaking is or appears to be entitled, and all the property and effects of the industrial undertaking, shall be deemed to be in the custody of the person or, as the case may be, the body of persons as from the date of the notified order; and (e) the persons, if any, authorised under Section 18A to take over the management of an industrial undertaking which is a company shall be for all purposes the directors of industrial undertaking duly constituted under the Indian Companies Act, 1913 (7 of 1913), and shall alone be entitled to exercise all the powers of the directors of the industrial undertaking, whether such powers are derived from the said Act or from the memorandum or articles of association of the industrial undertaking or from any other source." 566 Section 18D provides that a person whose office is lost under clause (a) or whose contract of management is terminated under clause (b) of Section 18B shall have no right to compensation for such loss or termination. Section 18F is material. It reads thus: "If at any time it appears to the Central Government on the application of the owner of the industrial undertaking or otherwise that the purpose of the order made under Section 18A has been fulfilled or that for any other reason it is not necessary that the order should remain in force, the Central Government may, by notified order, cancel such order and on the cancellation of any such order the management or the control, as the case may be of the industrial undertaking shall vest in the owner of the undertaking. " By the Constitution Fourth Amendment Act 1955, Chapter IIIA of the I.D.R. Act was included as Item 19 in the Ninth Schedule of the Constitution. Before we may come to Section 18AA, we may notice here the legislative policy with regard to Cotton Textile Industry, as adumbrated in the Cotton Textile Companies Management of Undertakings and Liquidation or Reconstruction Act, 1967 (Act XXIX of 1967). The Statement of Objects and Reasons for enacting this statute, inter alia, says: "The cotton textile industry provides one of the basic necessities of life and affords gainful employment to millions of people. Over the last few years, this vital industry has been passing through difficult times. Some mills have already to close down and the continuing economic operation of many others is beset with many difficulties. These difficulties have been aggravated in many cases by the heavy burden of past debts. The taking over the management of the mills for a limited time and then restoring them to original owners has not remedied the situation. Steps are therefore, necessary to bring about a degree of rationalisation of the financial and managerial structure of such units with a view to their rehabilitation, so that production and employment may not suffer. " Textile Industry is also among the industries, included in the First Schedule to the I.D.R. Act. 567 The Amendment Act 72 of 1971 inserted Section 18AA in the original I.D.R. Act. The material part of the Statement of Objects and Reasons for introducing this Bill of 1971 published in the Gazette of India Extraordinary, is as follows: "The industries included in the First Schedule . not only substantially contribute to the Gross National produce of the country, but also afford gainful employment to millions of people. For diverse reasons a number of industrial undertakings engaged in these industries have had to close down and the continuing economic operation of many others is beset with serious difficulties affecting industrial production and employment. During the period of take over Government has to invest public funds in such undertakings and it must be able to do so with a measure of confidence about the continued efficient management of the undertaking at the end of the period of take over. In order to ensure that at the end of the period of take over by Government, the industrial undertaking is not returned to the same hands which were responsible for its earlier misfortune, it has been provided in the Bill that in relation to an undertaking taken over by them, Government will have the power to move for (i) the sale of the undertaking at a reserve price or higher (Government purchasing it at the reserve price if no offer at or above the reserve price is received), action being taken simultaneously for the winding up of the company owning the industrial undertaking; or (ii) the reconstruction of the company owning the industrial undertaking with a view to giving the Government a controlling interest in it. With a view to ensuring speedy action by Government, it has been provided in the Bill that if the Government has evidence to the effect that the assets of the company owning the industrial undertaking are being frittered away or the undertaking has been closed for a period not less than three months and such closure is prejudicial to the concerned scheduled industry and that the financial condition of the company owning the industrial undertaking and the condition of the plant and machinery installed in the undertaking is such that it is possible to restart the undertaking and such restarting is in the public interest, Government may take over the management without an investigation." (emphasis added). 568 With the aforesaid Objects in view, Section 18AA was inserted by the Amendment Act No. 72 of 1971. The marginal heading of the Section is to the effect: "Power to take over industrial undertakings without investigation under certain circumstances". This marginal heading, it will be seen, accords with the Objects and Reasons extracted above. Section 18AA runs as under: "Without prejudice to any other provision of this Act, if, from the documentary or other evidence in its possession, the Central Government is satisfied, in relation to an industrial undertaking that (a) the persons incharge of such industrial undertaking have, by reckless investments or creation of encumbrances on the assets of the industrial undertaking, or by diversion of funds, brought about a situation which is likely to affect the production of articles manufactured or produced in the industrial undertaking, and that immediate action is necessary to prevent such a situation; or (b) it has been closed for a period of not less than three months (whether by reason of the voluntary winding up of the company owning the industrial undertaking or for any other reason) and such closure is prejudicial to the concerned scheduled industry and that the financial condition of the company owning the industrial undertaking and the condition of the plant and machinery of such undertaking are such that it is possible to re start the undertaking and such re starting is necessary in the interests of the general public, it may, by a notified order, authorise any person (hereinafter referred to as the 'authorised person ') to take over the management of the whole or any part of the industrial undertaking or to exercise in respect of the whole or any part of the undertaking such functions of control as may be specified in the order. (2) The provisions of sub section (2) of Section 18A shall, as far as may be, apply to a notified order made under sub section (1) as they apply to a notified order made under sub section (1) of Section 18A. (3) Nothing contained in sub section (1) and sub section (2) shall apply to an industrial undertaking owned by a company which is being wound up by or under the supervision of the Court. 569 (4) Where any notified order has been made under sub section (1), the person or body of persons having, for the time being, charge of the management or control of the industrial undertaking, whether by or under the orders of any court or any contract, instrument or otherwise, shall notwithstanding anything contained in such order, contract, instrument or other arrangement, forthwith make over the charge of management or control, as the case may be, of the industrial undertaking to the authorised person. (5) The provisions of Section 18 B to 18 E (bot inclusive) shall, as far as may be, apply to, or in relation to the industrial undertaking in respect of which a notified order has been made under sub section (1), as they apply to an industrial undertaking in relation to which a notified order has been issued under Section 18 A." A comparison of the provisions of Section 18A(1)(b) and Section 18AA(1)(a) would bring out two main points of distinction: First, action under Section 18A (1)(b) can be taken only after an investigation had been made under Section 15: while under Section 18AA(1)(a) or (b) action can be taken without such investigation. The language, scheme and setting of Section 18AA read in the light of the objects and Reasons for enacting this provision make this position clear beyond doubt. Second, before taking action under Section 18A(1) (b), the Central Government has to form an opinion on the basis of the investigation conducted under Section 15, in regard to the existence of the objective fact, namely: that the industrial undertaking is being managed in a manner highly detrimental to the Scheduled industry concerned or to public interest; while under Section 18AA(1) (a) the Government has to satisfy itself that the persons incharge of the undertaking have brought about a situation likely to cause fall in production, by committing any of the three kinds of acts specified in that provision. This shows that the preliminary objective fact attributable to the persons in charge of the management or affairs of the undertaking, on the basis of which action may be taken under Section 18A(1) (b), is of far wider amplitude than the circumstances, the existence of which is a sine qua non for taking action under Section 18AA(1). The phrase "highly detrimental to the scheduled industry or public interest" in Section 18A is capable of being construed to over a large variety of acts or things which may be considered wrong with the manner of running the industry by the management. In contrast with it, action under Section 18AA(1) (a) can be taken only if the Central Gov 570 ernment is satisfied with regard to the existence of the twin conditions specifically mentioned therein, on the basis of evidence in its possession. From an analysis of Section 18AA(1) (a), it will be clear that as a necessary preliminary to the exercise of the power thereunder, the Central Government must be satisfied "from documentary or other evidence in its possession" in regard to the co existence of two circumstances: (i) that the persons in charge of the industrial undertaking have by committing any of these acts, namely, reckless investments, or creation of incumbrances on the assets of industrial undertaking, or by diversion of funds, brought about a situation, which is likely to affect the production of the article manufactured or produced in the industrial undertaking, and (ii) that immediate action is necessary to prevent such a situation. Speaking for the High Court (majority), the learned Chief Justice (Deshpande, C.J.) has observed that only with regard to the fulfilment of condition (i) the satisfaction of the Government is required to be objectively reached on the basis of relevant evidence in its possession; while with regard to condition (ii), that is, the need for immediate action, it is purely subjective, and therefore, the satisfaction of the Government with regard to the immediacy of the situation is outside the scope of judicial review. Shri Sorabji has in his arguments, forcefully supported this opinion of the High Court. He maintains that the satisfaction of the Government with regard to the existence of the immediacy is not justiciable. Reliance has been placed on the following passage in the judgment of Channell, J. in Queen vs Davey & Ors.: "The general principle of law is that an order affecting his liberty or property cannot be made against any one without giving him an opportunity of being heard; the result is that, if general words used in a statute empowering the making of such an order as this, it must be made on notice to the party affected. There are, however, exceptions to this rule, which arise where it can be seen on the words of the statute that it was intended that the order should be made on an ex parte application, and the case in which it is easiest to see the propriety of the exception is where, looking 571 at the scope and object of the legislation, it was clearly intended that the parties putting the law in force should act promptly. Such a case is an order for the destruction of unsound meat, which clearly may be made ex parte, because it is desirable in the interest of the public health that it should be acted upon at once. The case of removing an infectious person, likely to spread abroad the infection, to an infectious hospital is obviously of the same character. " According to the learned Solicitor General, the power conferred on the Central Government is in the nature of an emergency power, that the necessity for taking immediate action is writ large in Section 18AA(1) (a) the provision being a legislative response to deal with an economically emergent situation fraught with national repercussions. The object of the exercise of this power is not to punish anyone but to take immediate preventive action in the public interest. On the other hand, Shri Nariman submits that the High Court was clearly in error in holding that the satisfaction of the Central Government with regard to the necessity of taking immediate action was not open to judicial review at all. It is emphasised that the very language of the provision shows that the necessity for taking immediate action is a question of fact, which should be apparent from the relevant evidence in the possession of the Government. We find merit in this contention. It cannot be laid down as a general proposition that whenever a statute confers a power on an administrative authority and makes the exercise of that power conditional on the formation of an opinion by that authority in regard to the existence of an immediacy, its opinion in regard to that preliminary fact is not open to judicial scrutiny at all. While it may be conceded that an element of subjectivity is always involved in the formation of such an opinion, but as was pointed out by this Court in Bariam Chemicals (ibid), the existence of circumstances from which the inferences constituting the opinion, as the sine qua non for action are to be drawn, must be demonstrable, and the existence of such "circumstances", if questioned, must be proved at least prima facie. Section 18AA(1)(a), in terms, requires that the satisfaction of the Government in regard to the existence of the circumstances or conditions precedent set out above, including the necessity of taking immediate action, must be based on evidence in the possession of the Government. If the satisfaction of the Government in regard to the existence of any of the conditions, (i) and (ii), is based on no evidence, or on irrelevant evidence or on an extraneous consideration, 572 it will vitiate the order of 'take over ', and the Court will be justified in quashing such an illegal order on judicial review in appropriate proceedings. Even where the statute conferring the discretionary power does not, in terms, regulate or hedge around the formation of the opinion by the statutory authority in regard to the existence of preliminary jurisdictional facts with express checks, the authority has to form that opinion reasonably like a reasonable person. While spelling out by a construction of Section 18AA(1)(a) the proposition that the opinion or satisfaction of the Government in regard to the necessity of taking immediate action could not be the subject of judicial review, the High Court (majority) relied on the analogy of Section 17 of the Land Acquisition Act, under which, according to them, the Government 's opinion in regard to the existence of the urgency is not justiciable. This analogy holds good only upto a point. Just as under Section 18AA of the I.D.R. Act, in case of a genuine 'immediacy ' or imperative necessity of taking immediate action to prevent fall in production and consequent risk of imminent injury paramount public interest, an order of 'take over ' can be passed without prior, time consuming investigation under Section 15 of the Act, under Section 17(1) and (4) of the Land Acquisition Act, also, the preliminary inquiry under Section 5A can be dispensed with in case of an urgency. It is true that the grounds on which the Government 's opinion as to the existence of the urgency can be challenged are not unlimited, and the power conferred on the Government under Section 17(4) of that Act has been formulated in subjective term; nevertheless, in cases, where an issue is raised, that the Government 's opinion as to urgency has been formed in a manifestly arbitrary or perverse fashion without regard to patent, actual and undeniable facts, or that such opinion has been arrived at on the basis of irrelevant considerations or no material at all, or on materials so tenuous, flimsy, slender or dubious that no reasonable man could reasonably reach that conclusion, the Court is entitled to examine the validity of the formation of that opinion by the Government in the context and to the extent of that issue. In Narayan Govind Gavate vs State of Maharashtra & Ors. this Court held that while exercising the power under Section 17(4) of the Land Acquisition Act, the mind of the officer or authority concerned has to be applied to the question whether there is an urgency of such a nature that even the summary proceedings under Section 5A of the Act should be eliminated. It is not just the existence of an 573 urgency but the need to dispense with an inquiry under Section 5A of the Act which has to be considered. If the circumstances on the basis of which the Government formed its opinion with regard to the existence of the urgency and the other conditions precedent, recited in the notification, are deficient or defective, the Court may look beyond it. At that stage, Section 106, Evidence Act can be invoked by the party assailing the notification and if the Government or the authority concerned does not disclose such facts or circumstances especially within its knowledge, without even disclosing a sufficient reason for their abstention from disclosure, they have to take the consequences which flow from the non production of the best evidence which could be produced on behalf of the State if its stand was correct. Again, in Dora Phalauli vs State of Punjab & Ors., this Court held that where the purported order does not recite the satisfaction of the Government with regard to the existence of urgency, nor the fact of the land being waste or arable land, the order was liable to be struck down and the mere direction, therein, to the Collector to take action on ground of urgency was not a legal and complete fulfilment of the requirement of the law. Recently, in State of Punjab vs Gurdial Singh, V. R. Krishna Iyer, J., speaking for the Court, made these apposite observations: "It is fundamental that compulsory taking of a man 's property is a serious matter and the smaller the man the more serious the matter. Hearing him before depriving him is both reasonable and preemptive of arbitrariness, and denial of this administrative fairness is constitutional anathema except for good reasons. Save in real urgency where public interest does not brook even the minimum time needed to give a hearing, land acquisition authorities should not, having regard to Articles 14 (and 19), burke an enquiry under Section 17 of the Act. " From these decisions, it is abundantly clear that even under Section 17 of the Land Acquisition Act, the satisfaction or opinion of Government/authority in regard to the urgency of taking action thereunder, is not altogether immune from judicial scrutiny. For the reasons already stated, it is not possible to subscribe to the proposition propounded by the High Court that the satisfaction of the Central Government in regard to condition (ii), i.e. the exis 574 tence of 'immediacy ', though subjective, is not open to judicial review at all. From a plain reading of Section 18AA, it is clear that it does not expressly in unmistakable and unequivocal terms exclude the application of the audi alteram partem rule at the pre decisional stage. The question, therefore, is narrowed down to the issue, whether the phrase "that immediate action is necessary" excludes absolutely, by inevitable implication, the application of this cardinal canon of fairplay in all cases where Section 18AA(1)(a) may be invoked. In our opinion, for reasons that follow, the, answer to this question must be in the negative. Firstly, as rightly pointed out by Shri Nariman, the expression "immediate action" in the said phrase, is to be construed in the light of the marginal heading of the Section, its context and the Objects and Reason for enacting this provision. Thus construed, the expression only means "without prior investigation" under Section 15. Dispensing with the requirement of such prior investigation does not necessarily indicate an intention to exclude the application of the fundamental principles of natural justice or the duty to act fairly by affording to the owner of the undertaking likely to be affected, at the pre decisional stage, wherever practicable, a short measure fair hearing adjusted, attuned and tailored to the exigency of the situation. At this stage, it is necessary to examine two decisions of this Court, viz., Ambalal M. Shah vs Hathi Singh Manufacturing Co Ltd.; and Keshav Mills Co. Ltd. vs Union of India (ibid), because according to the High Court (as per Deshpande, C.J., who wrote the leading opinion) these two decisions which are binding on the High Court conclusively show that: "The only prior hearing consisted of the investigation under Section 15 read with Rule 5 before action under Section 18A is taken. The very object of Section 18AA is to enable action to be taken thereunder without being preceded by the investigation under Section 15. On the authority of the two Supreme Court decisions in Ambalal M. Shah and Keshav Mills that the only hearing prior to action under Section 18A was the investigation under Section 15, it would follow that action under Section 18AA is to be taken without the investigation under Section 15 and, therefore, without a prior hearing. " 575 Shri Nariman maintains that the High Court has not correctly construed these decisions. According to the learned counsel, the corollary deduced by the High Court, viz., that exclusion of the investigation under Section 15 includes exclusion of the audi alteram partem rule at the pre takeover stage, is just the contrary of what was laid down by this Court in Keshav Mills in which Ambalal 's case was also noticed. Indeed, Shri Nariman strongly relies on this decision in support of his argument that if the application of this rule of natural justice at the pre decisional stage is not excluded even where a full investigation has been made, there is stronger reason to hold that it is to be observed in a case where there has been no investigation at all. We will first notice the case of Keshav Mills because that is a later decision in which Ambalal 's case was referred to. In that case, the validity of an order passed by the Central Government under Section 18A was challenged. By that impugned order the Gujarat State Textile Corporation Ltd. (hereinafter referred to as the Corporation) was appointed as authorised controller of the Company for a period of five years. The Company was the owner of a cotton textile mill. Till 1965, the Company made flourishing business. After the year 1964 65, the Company fell on evil days and the textile mill of the Company was one of the 12 sick textile mills in Gujarat, which had to be closed down during 1966 and 1968. On May 31, 1969, the Central Government passed an order appointing a Committee for investigation into the affairs of the Company under Section 15 of the I.D.R. Act. After completing the inquiry, the Investigating Committee submitted its report to the Government who thereafter on November 24, 1970, passed the impugned order under Section 18A authorising the Corporation to take over the management of the Company for a period of five years. The Company challenged the order of 'take over ' by a writ petition in the High Court of Delhi. The High Court dismissed the petition. The main contention of the Company before the High Court was that the Government was not competent to proceed under Section 18A against the Company without supplying before hand, a copy of the report of the Investigating Committee to the Company. It was further contended that the Government should also have given a hearing to the Company before finally deciding upon take over under Section 18A. This contention was pressed on behalf of the Company in spite of the fact that an opportunity had been given by the Investigating Committee to the management and the employees of the Company for adducing evidence and for making representation before the completion of the investigation. On the contentions raised by the Company and 576 resisted by the respondent, in that case, the Court formulated the following questions: (1) Is it necessary to observe the rules of natural justice before enforcing a decision under Section 18A of the Act? (2) What are the rules of natural justice in such a case? (3)(a) In the present case, have the rules to be observed once during the investigation under Section 15 and then again, after the investigation is completed and action on the report of the Investigating Committee taken under Section 18A? (b) Was it necessary to furnish a copy of the Investigating Committee 's Report before passing an order of take over? Mukherjea, J. speaking for the Court, answered these questions, thus: (1) "The first of these questions does not present any difficulty. It is true that the order of the Government of India that has been challenged by the appellants was a purely executive order embodying on administration decision. Even so, the question of natural justice does arise in this case. It is too late now to contend that the principles of natural justice need not apply to administrative order or proceedings; in the language of Lord Denning M.R. in Regina vs Gaming Board, exparte Beniam "that heresy was scotched in Ridge vs Baldwin" (2) "The second question, however, as to what are the principles of natural justice that should regulate an administrative act or order is a much more difficult one to answer We do not think it either feasible or even desirable to lay down any fixed or rigorous yard stick in this manner. The concept of natural justice cannot be put into a straight jacket. It is futile, therefore, to look for definitions or standards of natural justice from various decisions and then try to apply them to the facts of any given case. The only essential point that has to be kept in mind in all cases is that the person concerned should have a reasonable opportunity of presenting his case and that the administrative authority concerned should act fairly, impartially and reasonably. Where administrative officers are concerned, the duty is not so much to act judicially as to act fairly. See, for instance, the observations of Lord Parker in In re 577 H.K. (an infant). It only means that such measure of natural justice should be applied as was described by Lord Reid in Ridge vs Baldwin as insusceptible of exact definition but what a reasonable man would regard as a fair procedure in particular circumstances. However, even the application of the concept of fairplay requires real flexibility. Everything will depend on the actual facts and circumstances of a case." (3) (a) "For answering that question we shall keep in mind . and examine the nature and scope of the inquiry that had been carried out by the Investigating Committee set up by the Government, the scope and purpose of the Act and rules under which the Investigating Committee was supposed to act, the matter that was being investigated by the Committee and finally the opportunity that was afforded to the appellants for presenting their case before the Investigating Committee." (After noticing the object, purpose and content of the relevant provisions, the judgment proceeded): "In fact, it appears from a letter addressed by appellant No. 2 Navinchandra Chandulal Parikh on behalf of the Company to Shri H. K. Bansal, Deputy Secretary, Ministry of Foreign Trade and Supply on 12th September, 1970 that the appellants had come to know that the Government of India was in fact considering the question of appointing an authorised controller under Section 18A of the Act in respect of the appellants undertaking. In that letter a detailed account of the facts and circumstances under which the mill had to be closed down was given. There is also an account of the efforts made by the Company 's Directors to restore the mill. There is no attempt to minimise the financial difficulties of the Company in that letter . The letter specifically mentions the company 's application to the Gujarat State Textile Corporation Ltd., for financial help. the Corporation ultimately failed to come to the succour of the Company. Parikh requested Government not to appoint an authorised controller and further prayed that the Government of India should ask the State Government and the Gujarat State Textile Corporation Ltd., to give a financial guarantee to the Company. " "Only a few days before this letter had been addressed, Parikh, it appears, had an interview with the Minister of 578 Foreign Trade on 26th August, 1970, when the Minister gave him, as a special case, four weeks ' time with effect from 26th August, 1970 to obtain the necessary financial guarantee from the State or the Gujarat State Textile Corporation without which the Company had expressed its inability to reopen and run the mill. In a letter of 22 September, 1970, Bansal informed Parikh in clear language that if the Company failed to obtain the necessary guarantee by 26 September 1970, Government was proceeding to take action under the Act. It is obvious, therefore, that the appellants were aware all long that as a result of the report of the Investigating Committee the Company 's undertaking was going to be taken up by Government, Parikh had not only made written representations but had also seen the Minister of Foreign Trade and Supply. He had requested the Minister not to take over the undertaking and, on the contrary, to lend his good offices so that the Company could get financial support from the Gujarat State Textile Corporation or from the Gujarat State Government." (emphasis added) "All these circumstances leave in no manner of doubt that the Company had full opportunities to make all possible representations before the Government against the proposed take over of its mill under Section 18A. In this connection, it is significant that even after the writ petition had been filed before the Delhi High Court the Government of India had given the appellants at their own request one month 's time to obtain the necessary funds to commence the working of the mill. Even then, they failed to do so . ." "There are at least five features of the case which make it impossible for us to give any weight to the appellants complaint that the rules of natural justice have not been observed. First on their own showing they were perfectly aware of the grounds on which Government had passed the order under Section 18A of the Act. Secondly, they are not in a position to deny (a) that the Company has sustained such heavy losses that its mill had to be closed down indefinitely, and (b) that there was not only loss of production of textiles but at least 1200 persons had been thrown out of employment. Thirdly, it is transparently clear from the affidavits that the Company was not in a position 579 to raise the resources to recommence the working of the mill. Fourthly, the appellants were given a full hearing at the time of the investigation held by the Investigating Committee and were also given opportunities to adduce evidence. Finally, even after the Investigating Committee had submitted its report, the appellants were in constant communion with the Government and were in fact negotiating with Government for such help as might enable them to reopen the mill and to avoid a take over of their undertaking by the Government. Having regard to these features it is impossible for us to accept the contention that the appellants did not get any reasonable opportunity to make out a case against the take over of their undertaking or that the Government has not treated the appellants fairly. There is not the slightest justification in this case for the complaint that there has been any denial of natural justice." "In our opinion, since the appellants have received a fair treatment and also all reasonable opportunities to make out their own case before Government they cannot be allowed to make any grievance of the fact that they were not given a formal notice calling upon them to show cause why their undertaking should not be taken over or that they had not been furnished with a copy of the report. They had made all the representations that they could possibly have made against the proposed take over. By no stretch of imagination, can it be said that the order for take over took them by surprise. In fact, Government gave them ample opportunity to reopen and run the mill on their own if they wanted to avoid the take over. The blunt fact is that the appellants just did not have the necessary resources to do so. Insistence on formal hearing in such circumstances is nothing but insistence on empty formality." (emphasis added) (3) (b) "In our opinion it is not possible to lay down any general principle on the question as to whether the report of an investigating body or an inspector appointed by an administrative authority should be made available to the persons concerned in any given case before the authority takes a decision upon that report. The answer to this question also must always depend on the facts and circumstances of the case. It is not at all unlikely that there may be certain cases where unless the report is 580 given the party concerned cannot make any effective representation about the action that Government takes or proposes to take on the basis of that report. Whether the report should be furnished or not must therefore, depend in every individual case on the merits of that case. We have no doubt that in the instant case, non disclosure of the report of the Investigating Committee has not caused any prejudice whatsoever to the appellants. (emphasis added) It will be seen from what has been extracted above that in Keshav Mills case, this Court did not lay it down as an invariable rule that where a full investigation after 'notice to the owner of the industrial undertaking has been held under Section 15, the owner is never entitled on grounds of natural justice, to a copy of the investigation report and to an opportunity of making a representation about the action that the Government proposes to take on the basis of that report. On the contrary, it was clearly said that this rule of natural justice will apply at that stage in cases "where unless the report is given the party concerned cannot make any effective representation about the action that Government takes or proposes to take on the basis of that report. " It was held that the application or non application of this rule depends on the facts and circumstances of the particular case. In the facts of that case, it was found that the non disclosure of the investigation report had not caused any prejudice whatever because the Company were "aware all along that as a result of the report of the Investigating Committee the Company 's undertaking was going to be taken (over) by Government", and had full opportunities, to make all possible representations before the Government against the proposed take over of the Mill. Shri Sorabji submitted that the observations made by this Court in Keshav Mills case, to the effect, that in certain cases even at the post investigation stage before making an order of take over under Section 18A, it may be necessary to give another opportunity to the affected owner of the undertaking to make a representation, appear to be erroneous. The argument is that the Legislature has provided in Sections 15 and 18A of the Act and Rule 5 framed thereunder, its measure of this principle of natural justice and the stage at which it has to be observed. The High Court, therefore, was not right in engrafting any further application of the rule of natural justice at the post investigation stage. According to the learned Solicitor General for the decision of the case, it was not necessary to go beyond the 581 ratio of Shri Ambalal M. Shah & Anr. vs Hathi Singh Manufacturing Co. Ltd which was followed in Keshav Mills case. In our opinion, the observations of this Court in Keshav Mills in regard to the application of this rule of natural justice at the post investigation stage cannot be called obiter dicta. There is nothing in those observations, which can be said to be inconsistent with the ratio decidendi of Ambalal 's case. The main ground on which the order of take over under Section 18A was challenged in Ambalal 's case was that on a proper construction of Section 18A, the Central Government had the right to make the order under that Section on the ground that the Company was being managed in a manner highly detrimental to public interest, only where the investigation made under Section 15 was initiated on the basis of the opinion as mentioned in Section 15(b), whereas in the present case (i.e. Ambalal 's case), the investigation ordered by the Central Government was initiated on the formation of an opinion as mentioned in clause (a) (i) of Section 15. It was urged that in fact, the Committee appointed to investigate had not directed its investigation into the question whether the industrial undertaking was being managed in the manner mentioned above. The High Court came to the conclusion that on a correct construction of Section 18 A(1) (b) it was necessary before any order could be made thereunder that the investigation should have been initiated on the basis of the opinion mentioned in Section 15(b) of the Act. It also accepted the petitioner 's contention that no investigation had, in fact, been held into the question whether the undertaking was being managed in a manner highly detrimental to public interest. On appeal by special leave, this Court reversed the decision of the High Court, and held that the words used by the Legislature in Section 18A (1) (b) "in respect of which an investigation has been made under Section 15" could not be cut down by the restricting phrase "based on an opinion that the industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest"; that Section 18A (1) (b) empowers the Central Government to authorise a person to take over the management of an industrial undertaking if the one condition of an investigation made under Section 15 had been fulfilled irrespective of on what opinion that investigation was initiated and the further condition is fulfilled that the Central Government was of opinion that such undertaking was being managed in a manner highly detrimental to the scheduled industry concerned or to public interest. In this Court, it 582 was urged on behalf of the Company that absurd results would follow if the words "investigation has been made under Section 15" are held to include investigation based on any of the opinions mentioned in Section 15(a). Asked to mention what the absurd results would be, the counsel could only say that an order under Section 18A (1) (b) would be unfair and contrary to natural justice in such cases, as the owner of an industrial undertaking would have no notice that the quality of management was being investigated. The Court found no basis for this assumption because in its opinion, the management could not but be aware that investigation would be directed in regard to the quality of management, also. It is to be noted that the question of natural justice was casually and halfheartedly raised in a different context as a last resort. It was negatived because in the facts and circumstances of that case, the Company was fully aware that the quality of the management was also being inquired into and it had full opportunity to meet the allegations against it during investigation. The second reason which is more or less a facet of the first for holding that the mere use of the word "immediate" in the phrase "immediate action is necessary", does not necessarily and absolutely exclude the prior application of the audi alteram partem rule, is that immediacy or urgency requiring swift action is a situational fact having a direct nexus with the likelihood of adverse effect on fall in production. And, such likelihood and the urgency of action to prevent it, may vary greatly in degree. The words "likely to affect production" used in Section 18AA (1) (a) are flexible enough to comprehend a wide spectrum of situations ranging from the one where the likelihood of the happening of the apprehended event is imminent to that where it may be reasonably anticipated to happen sometime in the near future. Cases of extreme urgency where action under Section 18AA(1) (a) to prevent fall in production and consequent injury to public interest, brooks absolutely no delay, would be rare. In most cases, where the urgency is not so extreme, it is practicable to adjust and strike a balance between the competing claims of hurry and hearing. The audi alteram partem rule, as already pointed out, is a very flexible, malleable and adaptable concept of natural justice. To adjust and harmonise the need for speed and obligation to act fairly, it can be modified and the measure of its application cut short in reasonable proportion to the exigencies of the situation. Thus, in the ultimate analysis, the question, (as to what extent and in what measure) this rule of fair hearing will apply at the pre decisional stage will depend upon the degree of urgency, if any, evident from the facts and circumstances of the particular case. 583 In the instant case, so far as Kanpur Unit is concerned, it was lying closed for more than three months before the passing of the impugned order. There was no `immediacy ' in relation to that unit, which could absolve the Government from the obligation of complying fully with the audi alteram partem rule at the pre decisional or pre takeover stage. As regards the other five units of the Company, the question whether on the basis of the evidential matter before the Government at the time of making the impugned order, any reasonable person could reasonably form an opinion about a likelihood of fall in production and the urgency of taking immediate action, will be discussed later. For the purpose of the question under consideration we shall assume that there was a likelihood of fall in production. Even so, the undisputed facts and figures of production of 2 or 3 years preceding the take over, relating to these units, show that on the average, production in these units has remained fairly constant. Rather, in some of these units, an upward trend in production was discernible. Be that as it may, the likelihood of fall in production or adverse effect on production in these five units, could not, by any stretch of prognostication or feat of imagination, be said to be imminent, or so urgent that it could not permit the giving of even a minimal but real hearing to the Company before taking over these units. There was an interval of about six weeks between the Official Group 's Report, dated February 16, 1978 and the passing of the impugned order dated April 13, 1978. There was thus sufficient time available to the Government to serve a copy of that report on the appellant Company and to give them a short measure opportunity to submit their reply and representation regarding the findings and recommendations of the Group Officers and the proposed action under Section 18AA(1). The third reason for our forbearance to imply the exclusion of the audi alteram partem rule from the language of Section 18AA(1) (a) is, that although the power thereunder is of a drastic nature and the consequences of a take over are far reaching and its effect on the rights and interests of the owner of the undertaking is grave and deprivatory, yet the Act does not make any provision giving a full right of a remedial hearing equitable to a full right of appeal, at the post decisional stage. The High Court seems to be of the view that Section 18F gives a right of full post decisional remedial hearing to the aggrieved party. Shri Soli Sorabji also elaborately supported that view of the High Court. In the alternative, the learned counsel has committed himself on behalf of his client, to the position, that the Central Government will if required, give the Company a full and fair hearing on merits, 584 including an opportunity to show that the impugned order was not made on adequate or valid grounds. Shri Nariman on the other hand contends and we think rightly that the so called right of a post decisional hearing available to the aggrieved owner of the undertaking under Section 18F is illusory as in its operation and effect the power of review, if any, conferred thereunder, is prospective, and not retro active, being strictly restricted to and dependent upon the post takeover circumstances. By virtue of sub section (2) of Section 18AA, the reference to Section 18A in Section 18F will be construed as a reference to Section 18AA, also. The power of cancellation under Section 18F can be exercised only on any of these grounds : (i) "that the purpose of the order made under Section 18A has been fulfilled", or (ii) "that for any other reason it is not necessary that the order should remain in force". These `grounds ' and the language in which they are couched is clear enough to show that the cancellation contemplated thereunder cannot have the effect of annulling, rescinding or obliterating the order of take over with retro active force; it can have only a prospective effect. Section 18F embodies a principle analogous to that in Section 21 of the General Clauses Act. The first `ground ' in Section 18F for the exercise of the power, obviously does not cover a review of the merits or circumstances preceding and existing at the date of passing the order of `take over ' under Section 18AA(1). The words "for any other reason" if read in isolation, no doubt, appear to be of wide amplitude. But their ambit has been greatly cut down and circumscribed by the contextual phrase "no longer necessary that it should remain in force". Construed in this context, the expression "for any other reason" cannot include a ground that the very order of take over was invalid or void ab initio. Thus, the post decisional hearing available to the aggrieved owner of the undertaking is not an appropriate substitute for a fair hearing at the pre decisional stage. The Act does not provide any adequate remedial hearing or right of redress to the aggrieved party even where his under taking has been arbitrarily taken over on insufficient grounds. Rather, the plight of the aggrieved owner is accentuated by the provision in 18D which disentitles him and other persons whose officers are lost or whose contract of management is terminated as a result of the `take over ', from claiming any compensation whatever for such loss or termination. Before we conclude the discussion on this point, we may notice one more argument that has been advanced on behalf of the respondents. It is argued that this was a case where a prior hearing to the Company could only be a useless formality because the impugned action has been 585 taken on the basis of evidence, consisting of the Balance sheet, account books and other records of the Company itself, the correctness of which could not have been disputed by the Company. On these premises, it is submitted that non observance of the rule of audi altrem partem would not prejudice the Company, and thus make no difference. The contention does not appear to be well founded. Firstly, this documentary evidence, at best, shows that the Company was in debt and the assets of some of its `units ' had been hypothecated or mortgaged as security for those debts. Given an opportunity the Company might have explained that as a result of this indebtedness there was no likelihood of fall in production, which is one of the essential conditions in regard to which the Government must be satisfied before taking action under Section 18(1)(a). Secondly, what the rule of natural justice required in the circumstances of this case, was not only that the Company should have been given an opportunity to explain the evidence against it, but also an opportunity to be informed of the proposed action of take over and to represent why it be not taken. In the renowned case, Ridge vs Baldwin & Ors. (ibid), it was contended before the House of Lords that since the appellant police officer had convicted himself out of his own mouth, a prior hearing to him by the Watch Committee could not have made any difference; that on the undeniable facts of that case, no reasonable body of men could have reinstated the appellant. This contention was rejected by the House of Lords for the reason that if the Watch Committee had given the police officer a prior hearing they would not have acted wrongly or unreasonably if they had in the exercise of their discretion decided to take a more lenient course than the one they had adopted. A similar argument was advanced in section L. Kapoor vs Jagmohan & Ors to which decision two of us (Sarkaria and Chinnappa Reddy, JJ.) were parties. In negativing this argument, this Court, inter alia, quoted with approval the classic passage, reproduced below, from the judgment of Megarry, J. in John vs Rees & Ors. "As everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were not; of unanswerable charges which, in the event, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determinations that, by discussion, suffered a change. Nor are those with any knowledge of human 586 nature who pause to think for a moment likely to under estimate the feelings of resentment of those who find that a decision against them has been made without their being afforded any opportunity to influence the course of events. " In General Medical Council vs Spackman, Lord Wright condemned the oft adopted attitude by tribunals to refuse relief on the ground that a fair hearing could have made no difference to the result. Wade in his Administrative Law, 4th Edn., page 454, has pointed out that "in principle it is vital that the procedure and the merits should be kept strictly apart, since otherwise the merits may be prejudged unfairly". In Maxwell vs Department of Trade & Industry, Lawton L.J. expressed in the same strain that "doing what is right may still result in unfairness if it is done in the wrong way. " This view is founded on the cordinal canon that justice must not only be done but also manifestly be seen to be done. Observance of this fundamental principle is necessary if the courts and the tribunals and the administrative bodies are to command public confidence in the settlement of disputes or in taking quasi judicial or administrative decisions affecting civil rights or legitimate interests of the citizens. The same proposition was propounded in R. V. Thames Magistrates ' Court ex p. Polemis, by Lord Widgery C.J. at page 1375; and by the American Supreme Court in Margarita Fuentes et al., vs Tobert L. Shevin. In concluding the discussion in regard to this aspect of the matter, we can do no better than reiterate what was said by one of us (Chinnappa Reddy, J.) in section L. Kapoor vs Jagmohan (ibid) : "In our view the principles of natural justice know of no exclusionary rule dependent on whether it would have made any difference if natural justice had been observed. The non observance of natural justice is itself prejudice to any man and proof of prejudice independently of proof of denial of natural justice is unnecessary. It ill comes from a person who has denied justice that the person who has been denied justice is not prejudiced. " 587 We, therefore, over rule this last contention. In sum, for all the reasons aforesaid, we are of the view that it is not reasonably possible to construe Section 18AA(1) as universally excluding, either expressly or by inevitable intendment, the application of the audi alteram partem rule of natural justice at the pre takeover stage, regardless of the facts and circumstances of the particular case. In the circumstances of the instant case, in order to ensure fairplay in action it was imperative for the Government to comply substantially with this fundamental rule of prior hearing before passing the impugned order. We therefore, accept the two fold proposition posed and propounded by Shri Nariman. The further question to be considered is : What is the effect of the non observance of this fundamental principle of fairplay? Does the non observance of the audi alteram partem rule, which in the quest of justice under the rule of law, has been considered universally and most spontaneously acceptable principle, render an administrative decision having civil consequences, void or voidable ? In England, the outfall from the watershed decision, Ridge vs Baldwin brought with it a rash of conflicting opinion on this point. The majority of the House of Lords in Ridge vs Baldwin held that the non observance of this principle, had rendered the dismissal of the Chief Constable void. The rationale of the majority view is that where there is a duty to act fairly, just like the duty to act reasonably, it has to be enforced as an implied statutory requirement, so that failure to observe it means that the administrative act or decision was outside the statutory power, unjustified by law, and therefore ultra vires and void. (See Wade 's Administrative Law, ibid, page 448). In India, this Court has consistently taken the view that a quasi judicial or administrative decision rendered in violation of the audi alteram partem rule, wherever it can be read as an implied requirement of the law, is null and void. (e.g. Maneka Gandhi 's case, ibid, and section L. Kapoor vs Jagmohan, ibid). In the facts and circumstances of the instant case, there has been a non compliance with such implied requirement of the audi alteram partem rule of natural justice at the pre decisional stage. The impugned order therefore, could be struck down as invalid on that score alone. But we refrain from doing so, because the learned Solicitor General in all fairness, has both orally and in his written submissions dated August 28, 1979, committed himself to the position that under Section 18F, the Central Government in exercise of its curial functions, is bound to give the affected owner of the undertaking taken over, a "full and effective hearing on all aspects touching the validity and/or correctness of the order and/or action of take 588 over", within a reasonable time after the take over. The learned Solicitor has assured the Court that such a hearing will be afforded to the appellant Company if it approaches the Central Government for cancellation of the impugned order. It is pointed out that this was the conceded position in the High Court that the aggrieved owner of the undertaking had a right to such a hearing. In view of this commitment/or concession fairly made by the learned Solicitor General, we refrain from quashing the impugned order, and allowing Civil Appeal 1629 of 1979 send the case back to the Central Government with the direction that it shall, within a reasonable time, preferably within three months from today, give a full, fair and effective hearing to the aggrieved owner of the undertaking, i.e., the Company, on all aspects of the matter, including those touching the validity and/or correctness of the impugned order and/or action of take over and then after a review of all the relevant materials and circumstances including those obtaining on the date of the impugned order, shall take such fresh decision, and/or such remedial action as may be necessary, just, proper and in accordance with law. In view of the above decision, no separate order is necessary in Civil Appeals 1857 and 2087 of 1979. All the three appeals are disposed of accordingly with no order as to costs. Since the appeals have been disposed of on the first and foremost point canvassed before us, in the manner indicated above, it is not necessary to burden this judgment with a discussion of the other points argued by the counsel for the parties. CHINNAPPA REDDY, J. I have the misfortune to be unable to agree with the erudite opinion of my learned brother Sarkaria on the question of the applicability of the principles of natural justice. I do so with diffidence and regret. The first of the submissions of Shri F. section Nariman, learned counsel for the appellant company was that there was a violation of the principles of natural justice. He submitted that the provisions of the Industries (Development and Regulation) Act did not rule out natural justice and that there were several occasions in the march of events that led to the passing of the order under Sec. 18AA when an opportunity could have been given to the Company and the principles of natural justice observed but the Government of India refrained from doing so. He urged that the immediate action contemplated by Sec. 18AA(1) (a) was not to be construed as negat 589 ing natural justice but as intended merely to distinguish it from action under Sec. 18A which was to be taken only after investigation under Sec. 15. He drew inspiration for this argument from the marginal note to Section 18AA which is "power to take over industrial undertakings without investigation under certain circumstances". He also urged that Sec. 18F contemplated a post decisional situation necessitating cancellation of the order of take over but did not contemplate cancellation of the order of take over on the ground that such order ought never to have been made. He urged that the scope of Sec. 18F was very narrow and did not entitle the party affected to a fair hearing. In any case he argued that the remedy such as it was provided by Sec. 18F was not an answer to the claim to pre decisional natural justice. His submission was that natural justice was not to be excluded except by the clear and unmistakable language of the statute, though the "quantum" of natural justice to be afforded in an individual case might vary from case to case. Shri Soli Sorabji, learned Solicitor General, while conceding that statutory silence on the question of natural justice should ordinarily lead to an implication by presumption that natural justice was to be observed, urged that the presumption might be displaced by necessary implication, as for instance where compliance with natural justice might be inconsistent with the demands of promptitude, and delayed action might lead to disaster. The presumption of implication of natural justice was very weak where action was of a remedial or preventive nature or where such action concerned property rights only. In appropriate situations post decisional hearing might displace pre decisional natural justice. The statute itself might well provide for a post decisional hearing as a substitute for pre decisional natural justice in situations requiring immediate action. 18 F of the Industries Development and Regulation Act expressly provided for such a post decisional hearing and the urgency of the situation contemplated by Sec. 18AA necessarily excluded pre decisional natural justice. There was no reason to belittle the scope of Sec. 18F, so, to exclude a fair post decisional hearing at the instance of the party affected and consequently, to imply pre decisional natural justice. Both the learned counsel invited our attention to considerable case law. I do not propose to discuss the case law as my brother Sarkaria has referred to all the cases in great detail. Before I consider the submissions of the learned counsel as to the applicability of the principles of natural justice, a few prefatory remarks, however, require to be made. 590 Natural justice, like Ultra Vires and Public Policy, is a branch of the Public Law and is a formidable weapon which can be wielded to secure justice to the citizen. It is productive of great good as well as much mischief. While it may be used to protect certain fundamental liberties, civil and political rights, it may be used, as indeed it is used more often than not, to protect vested interests and to obstruct the path of progressive change. In the context of modern welfare legislation, the time has perhaps come to make an appropriate distinction between natural justice in its application to fundamental liberties, civil and political rights and natural justice in its application to vested interests. Our Constitution, as befits the Constitution of a Socialist Secular Democratic Republic, recognises the paramountcy of the public weal over the private interest. Natural justice, Ultra Vires, Public Policy, or any other rule of interpretation must therefore, conform, grow and be tailored to serve the public interest and respond to the demands of an evolving society. In Ridge vs Baldwin, it was thought by Lord Reid that natural justice had no easy application where questions of public interest and policy were more important than the rights of individual citizens. He observed : "If a Minister is considering whether to make a scheme for, say, an important new road, his primary concern will not be with the damage which its construction will do to the rights of individual owners of land. He will have to consider all manner of questions of public interest and, it may be, a number of alternate schemes. He cannot be prevented from attaching more importance to the fulfilment of his policy than to the fate of individual objectors, and it would be quite wrong for the Courts to say that the Minister should or could act in the same kind of way as a board of works deciding whether a house should be pulled down." And, as pointed out by a contributor in 1972 Cambridge Law Journal at page 14 : ". the safeguarding of existing rights can after all in some circumstances amount to little more than the fighting of a rear guard action by the reactionary element in society seeking only to preserve its own vested position. " The United States Supreme Court has recognised the distinction between cases where only property rights are involved and cases where other civil and political rights are involved. In cases where only 591 property rights are involved postponement of enquiry has been held not to be a denial of due process, vide : Annie G. Phillips vs Commissioner of Internal Revenue, John H. Fahey vs Paul Mallonee, Margarita Fuentes vs Robert L. Shevin, Attorney General of Florida, and Lawrence Mitchell vs W. F. Grant Co. In the first case ; , Brandeis J observed: "Where only property rights are involved, mere postponement of the judicial inquiry is not a denial of due process, if the opportunity given for the ultimate judicial determination of the liability is adequate. Delay in the judicial determination of property rights is not uncommon where it is essential that Governmental needs be immediately satisfied. For the protection of public health, a state may order the summary destruction of property by administrative authorities without antecedent notice or hearing. Because of the public necessity the property of citizens may be summarily seized in war time. And at any time, the United States may acquire property by eminent domain, without paying, or determining the amount of the compensation before the taking. " The principles of natural justice have taken deep root in the judicial conscience of our people, nurtured by Binapani, Kraipak, Mohinder Singh Gill, Maneka Gandhi etc. They are now considered so fundamental as to be "implicit in the concept of ordered liberty" and, therefore, implicit in every decision making function, call it judicial, quasi judicial or administrative. Where authority functions under a statute and the statute provides for the observance of the principles of natural justice in a particular manner, natural justice will have to be observed in that manner and in no other. No wider right than that provided by statute can be claimed nor can the right be narrowed. Where the statute is silent about the observance of the principles of natural justice, such statutory silence is taken to imply compliance with the principles of natural justice. The implication of natural justice being presumptive it may be excluded by express words of statute or by necessary intendment. Where the conflict is between the public interest and the private interest, the presumption must necessarily be weak and may, therefore, be readily displaced. The presumption is also weak where what are involved are mere property rights. In cases of urgency, particularly where the public interest is involved, pre emptive 592 action may be a strategic necessity. There may then be no question of observing natural justice. Even in cases of preemptive action. if the statute so provides or if the Courts so deem fit in appropriate cases, a postponed hearing may be substituted for natural justice. Where natural justice is implied, the extent of the implication and the nature of the hearing must vary with the statute, the subject and the situation. Seeming judicial ambivalence on the question of the applicability of the principles of natural justice is generally traceable to the readiness of judges to apply the principles of natural justice where no question of the public interest is involved, particularly where rights and interests other than property rights and vested interests are involved and the reluctance of judges to apply the principles of natural justice, where there is suspicion of public mischief and only property rights and vested interests are involved. In the light of these prefatory remarks, I will proceed to consider the relevant statutory provisions. The Industries (Development and Regulation) Act, 1951, was enacted pursuant to the power given to Parliament by Entry 52 of List I of the Seventh Schedule to the Constitution. As required by that Entry Section 2 of the Act declares that it is expedient in the public interest that the Union should take under its control the industries specified in the First Schedule to the Act. Item 23 of the First Schedule to the Act relates to Textiles of various categories, Sec. 3(d) defines "Industrial undertaking" to mean "any undertaking pertaining to a scheduled industry carried on in one or more factories by any person or authority including Government". The expression undertaking is not, however, defined Sec. 3(f) defines "Owner", "in relation to an industrial undertaking" as "the person who, or the authority which, has the ultimate control over the affairs of the undertaking, and, where the said affairs are entrusted to a manager, managing director or managing agents, such manager, managing director or managing agent shall be deemed to be the owner of the undertaking". Sec. 3(j) provides that words and expressions not defined in the Act but defined in the Companies Act shall have the meaning assigned to them in that Act. 10 obliges the owner of an industrial undertaking to register the undertaking in the prescribed manner. 10A authorises the revocation of registration after giving an opportunity to the owner of the undertaking in certain circumstances. 11 provides for the licensing of the new industrial undertaking and Sec. 11A provides for the licensing of the production and manufacture of the new articles. Sec. 13 provides, among other things, that, except under, and in accordance with, a licence issued in that behalf by the Central Government, no owner of an industrial undertaking shall effect any substantial expansion or 593 change the location of the whole or any part of an industrial undertaking. 14 provides for a full and complete investigation in respect of applications for the grant of licence or permission under Sections 11, 11A, 13 or 29B. Sec. 15 authorises the Central Government to make or cause to be made a full and complete investigation into the circumstances of the case if the Central Government is of the opinion that : (a) in respect of any scheduled industry or industrial undertaking or undertakings (i) there has been, or is likely to be, a substantial fall in the volume of production. for which, having regard to the economic conditions prevailing, there is no justification; or (ii) there has been, or is likely to be, a marked deterioration in the quality of any article. . . which could have been or can be avoided; or (iii) there has been or is likely to be a rise in the price of any article. . for which there is no justification; or (iv) it is necessary to take any such action for the purpose of conserving any resources of national importance; or (b) any industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest. After the investigation is made under Sec. provides, if the Central Government is satisfied that such action is desirable, it may issue appropriate directions for (a) regulating the production of any article . and fixing the standards of production; (b) requiring the industrial undertaking to take such steps as the Central Government may consider necessary, to stimulate the development of the industry; (c) prohibiting resort to any act or practice which might reduce the undertaking 's production, capacity or economic value; (d) controlling the prices, or regulating the distribution of any article. 16(2) also provides for the issue of interim directions by the Central Government pending investigation under Sec. 15. Such directions are to have effect until validly revoked by the Central Government. 594 Chapter III A consisting of Sections 18A, 18 AA. 18 B, 18 C, 18 D, 18 E and 18 F deals with "direct management or control of Industrial Undertakings by Central Government in certain cases". 18 A which is entitled "Power of Central Government to assume management or control of an industrial undertaking in certain cases" provides that the Central Government may, by notified order, authorise any person or body of persons to take over the management of the whole or any part of an industrial undertaking or to exercise in respect of the whole or any part of the undertaking such functions of control as may be specified in the order, if the Central Government is of opinion that : (a) an industrial undertaking to which directions have been issued in pursuance of Sec. 16 has failed to comply with such directions, or (b) an industrial undertaking in respect of which an investigation has been made under section 15 is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest. 18 AA refers to "Power to take over industrial undertakings without investigation under certain circumstances". It enables the Central Government by a notified order to authorise any person or body of persons to take over the management of the whole or any part of an industrial undertaking or to exercise in respect of whole or any part of the undertaking such functions of control as may be specified in the order, if, without prejudice to any other provisions of the Act, from the documentary or other evidence in its possession, the Central Government is satisfied in relation to the industrial undertaking, that "(a) the persons incharge of such industrial undertakings have, by reckless investments or creation of encumbrances on the assets of the industrial undertaking, or by diversion of funds, brought about a situation which is likely to affect the production of articles manufactured or produced in the industrial under taking, and that immediate action is necessary to prevent such a situation; or (b) it has been closed for a period of not less than three months (whether by reason of the voluntary winding up of the company owning the industrial undertaking or for any other reason) and such closure is prejudicial to the concerned scheduled industry and 595 that the financial condition of the company owning the industrial undertaking and the condition of the plant and machinery of such undertaking are such that it is possible to re start the undertaking and such re starting is necessary in the interests of the general public". 18 AA(5) stipulates that the provisions of Sections 18 B to 18 E shall be applicable to the industrial undertaking in respect of which an order has been made under section 18 AA even as they apply to an industrial undertaking taken over under Sec. 18 A. Sec. 18 B specifies the effect of a notified order under Sec. 18 A. Sec. 18C empowers the Court to cancel or vary contracts made in bad faith etc. by the management of an undertaking before such management was taken by the Central Government. 18 D provides that there shall be no right to compensation for termination of office or contract as a result of the `take over '. 18 E deprives the shareholders and the Company of certain rights under the Indian Companies Act. if the industrial undertaking whose management is taken over is a Company. 18 F empowers the Central Government on the application of the owner of the industrial undertaking or otherwise to cancel the order made under Sec. 18 A if it appears to the Central Government that the purpose of the order has been fulfilled or that for any other reason it is not necessary that the order should remain in force. 18FD(3) enables the Central Government to exercise the powers under Sec. 18 F in relation to an undertaking taken over under Sec. 18 AA. The question for consideration is whether Sec. 18 AA excludes natural justice by necessary implication. The development and regulation of certain key industries was apparently considered so basic and vital to the economy of our country that Parliament, in its wisdom, thought fit to enact the Industries Development & Regulation Act, after making the declaration required by Entry 52 of List I of the Seventh Schedule to the Constitution that it was expedient, in the public interest, that the Union should take under its control the industries specified in the schedule to the Act, as earlier mentioned by us. Apart from making provision for the establishment of a Central Advisory Council and other Development Councils, and the licensing of scheduled industries, the Act empowers the Central Government to cause a full and complete investigation to be made where there is a substantial fall in the volume of production for which there is no justification having regard to the prevailing economic conditions or there is marked deterioration in the quality of the 596 goods produced or the price of the goods produced is rising unjustifiably or where conservation of resources of national importance is necessary or the industrial undertaking is being managed in a manner highly detrimental to the scheduled industry or to public interest (Sec. 15) and thereafter to issue necessary and appropriate directions to the industrial undertaking to mend matters suitably (Sec. 16). Where the instructions issued under Sec. 16 are not complied with or where the investigation reveals that the industrial undertaking is being managed in a manner highly detrimental to the scheduled industry or to the public interest the Central Government may take over the industry under Sec. Whether there is an investigation or not, the Central Government may also `take over ' the management of the industry under Sec. 18 AA, if consequent on certain wilfull acts of commission on the part of the management the production is likely to be effected but immediate action may prevent such a situation, or the industrial undertaking has been closed for a period of not less than three months and the closure is prejudicial to the scheduled industry. Action under Sec. 18 AA is thus preventive and remedial. Where there is an apprehension that production is likely to be affected as a result of the wilfull acts of the management or where the production has already come to a stand still because of the closure of the undertaking for a period of not less than three months the Central Government is authorised to intervene to restore production. The object clearly is to take immediate action to prevent a situation likely to affect production or to restore production. There was some argument at the Bar that the expression `immediate action ' was not to be found in Sec. 18 AA(1) (b). I do not think that the absence of the expression "immediate action in Sec. 18 AA(1)(b) makes any difference. 18 AA(1)(a) refers to a situation where immediate preventive action may avert a disaster, whereas Sec. 18 AA contemplates a situation where the disaster has occurred and action is necessary to restore normalcy. Restoration of production where production has stopped in a key industry or industrial undertaking is as important and urgent, in the public interest, as prevention of a situation where production may be affected. Immediate action is, therefore, as necessary in the situation contemplated by Sec. 18 AA(1)(b) as in the situation contemplated by Sec. 18 AA(1)(a). It is true that the marginal note refers to the power to take over without investigation but there is no sufficient reason to suppose that the word `immediate ' is used only to contra distinguish it from the investigation contemplated by Sec. 15 of the Act, though, of course a consequence of immediate action under Sec. 18 AA may be to dis 597 pense with the enquiry under Sec. 15. In fact, facts which come to light during the course of an investigation under Sec. 15 may form the basis of action under Sec. 18 AA(1)(a). Where in the course of an investigation under Sec. 15 it is discovered that the management have, by reckless investments or creation of encumbrances on the assets of the industrial undertaking or by diversion of funds brought about a situation which is likely to affect the production of the articles manufactured or produced in the industrial undertaking, if the Government is satisfied that immediate action is necessary to prevent such a situation, there is no reason why the Central Government may not straight away take action under Sec. 18 AA(1)(a) without waiting for completion of investigation under Sec. 15. Parliament apparently contemplated a situation where immediate action was necessary, and having contemplated such a situation, there is no reason to assume that Parliament did not contemplate situations which brooked not a moments delay. If Parliament also contemplated situations which did not brook a moment 's delay, it would be difficult to read natural justice into Sec. 18 AA. The submission of Shri Nariman was that the immediacy of the situation would be relevant and relatable to the quantum of natural justice and not to a total denial of natural justice. According to him the scope and extent of the opportunity to be given to the party against whom action is taken may depend upon the situation but nothing would justify a negation of a natural justice. He pointed out that in a situation of great urgency which brooked no delay, an order under Sec. 18 AA might be made, the situation could be so frozen that the persons incharge of the industrial undertaking might do no more mischief and the Government could then, without giving further effect to the order under Sec. 18 AA, give a notice to the person incharge to show cause why the order under Sec. 18 AA should not be given effect. In another given case, according to Shri Nariman, notice of, say two weeks, might be given before making an order, if the making of an order was not so very urgent. He suggested that the opportunity to be given might vary from situation to situation but opportunity there must be, either before the decision was arrived at or so shortly after the decision was arrived at and before any great mischief might result from the order. The argument of Shri Nariman would vest in the Government a power to decide from case to case the extent of opportunity to be given in each individual case and, as a corollary, a corresponding right in the aggrieved party to claim that the opportunity provided was not enough. Such a procedure may be possible, practicable and desirable in situations where there is no statutory provision enabling the decision making authority to review, or reconsider its decision. Where there is a 598 provision in the statute itself for revocation of the order by the very authority making the decision, it appears to us to be unnecessary to insist upon a pre decisional observance of natural justice. The question must be considered by regard to the terms of the statute and by an examination, on the terms of the statute, whether it is possible, practicable and desirable to observe pre decisional natural justice and whether a post decisional review or reconsideration provided by the statute itself is not a sufficient substitute. The likelihood of production being jeopardized or the stoppage of production in a key industrial undertaking is a matter of grave concern affecting the public interest. Parliament has taken so serious a view of the matter that it has authorised the Central Government to take over the management of the industrial undertaking if immediate action may prevent jeopardy to production or restore production where it has already stopped. The necessity for immediate action by the Central Government, contemplated by Parliament, is definitely indicative of the exclusion of natural justice. It is not as if the owner of the industrial undertaking is left with no remedy. He may move the Central Government under Sec. 18 F to cancel the order made under Sec. 18 AA. True some mischief affecting the management and top executives may have already been done. On the other hand, greater mischief affecting the public economy and the lives of many a thousand worker may have been averted. While on the one hand mere property rights are involved, on the other vital public interest is affected. This . again, in the light of the need for immediate action contemplated by Parliament, is a clear pointer to the exclusion of natural justice. It was submitted by the learned counsel that Sec. 18 F did not provide any remedy but merely provided for cancellation of an order of take over on the fulfilment of the purpose of the order of take over or for any other reason which rendered further continuance in force of the order unnecessary because of the happening of subsequent events. According to the learned counsel the basic assumption of Sec. 18 F was the validity of the order under Sec. 18 A or Sec. 18 AA. All that Sec. 18 F did was to prescribe conditions for the exercise of the general power which every authority had under Sec. 21 of the General Clauses Act to cancel its own earlier order. It was said that if Sec. 18 F could be said to impliedly exclude natural justice there is then no reason not to hold that Sec. 21 of the General Clauses Act similarly excluded natural justice in every case. I am unable to agree with these submissions of the learned counsel. Neither Sec. 18 F of the Industries (Development and Regulation) Act nor Sec. 21 of the General Clauses Act, by itself, excludes natural justice. The exclusion of natural justice, where such exclusion is not express, has to be implied by reference 599 to the subject, the statute and the statutory situation. Where an express provision in the statute itself provides for a post decisional hearing the other provisions of the statute will have to be read in the light of such provision and the provision for post decisional hearing may then clinch the issue where pre decisional natural justice appears to be excluded on the other terms of the statute. That a post decisional hearing may also be had by the terms of Sec. 21 of the General Clauses Act may not necessarily help in the interpretation of the provisions of the statute concerned. On the other hand even the general provision contained in Sec. 21 of the General Clauses Act may be sufficient to so interpret the terms of a given statute as to exclude natural justice. As I said it depends on the subject, statute and the statutory situation. I am, therefore, satisfied that the principles of natural justice are not attracted to the situations contemplated by Sec. 18 AA of the Industries (Development and Regulation) Act. In view of the order proposed by my learned brothers Sarkaria and Desai JJ. I do not propose to consider the other questions. ORDER As per majority decision, the appeals are allowed. N. K. A. Appeals allowed.

A notice was issued to the Sajjadanashin of the appellant institution stating that consequent on the coming into force of the Bombay Personal Inams Abolition Act 1952 exemption from payment of land revenue was extinguished in respect of the inam village and that he should hand over the village records to mamlatdar. The appellent in a suit filed in the Civil Court claimed that the inam was held by a religious institution and that, therefore, the provisions of the 1952 Act had no application to it. In replication the State claimed that under the provisions of the 1952 Act the State Government alone was competent to decide the question whether the grant was a personal or a religious inam and that the Civil Court had no jurisdiction to decide it. Holding that it was a personal inam the Trial Court dismissed the appellant 's suit. When the appellant 's appeal was pending before the High Court the Gujarat Devasthan Inams Abolition Act, 1969 was passed abolishing the inams held by religious charitable institutions as well. On the question of jurisdiction to decide whether an inam was personal or religious the High Court held that it was the State Government and not the Civil Court which had exclusive jurisdiction in this respect. In appeal to this Court it was contended on behalf of the appellant that unless the jurisdiction of the Civil Court is barred specifically or by necessary implication the Civil Court would have jurisdiction and that the finality contemplated by Explanation I to section 2 (1) (e) (which provides that if any question arises whether any grant is a personal inam such question shall be referred to the State Government and that the decision of the State Government shall be final) is only for the purposes of the 1952 Act and could not stand in the way of the Civil Court entertaining the suit. 883 Allowing the appeal, ^ HELD: 1. The finality of the decision of the Government as contemplated by Explanation I to section 2(1) (e) of the Act cannot exclude the jurisdiction of the Civil Court. Except for the Explanation, there is no other provision in the Act touching upon the jurisdiction of the Civil Court. [890 C D] 2. In Dulabhai vs State of Madhya Pradesh, ; this Court held that where a statute gave finality to the orders of the special tribunal the . Civil Court 's jurisdiction must be held to be excluded if there is adequate remedy to do what the Civil Courts would normally do in a suit. Under the provisions of the 1952 Act it cannot be said that an adequate remedy is available to the plaintiffs on reference made to the Government. [888 G.H] 3. The second principle laid down in the above case is that where there is an express bar to the jurisdiction of the Court, an examination of the scheme of the Act to find out the adequacy or the sufficiency of the remedies provided there in may be relevant. In the absence of any details in the enactment about the reference to be made to the Government, the procedure to be followed by the Government, and the opportunity to be afforded to the aggrieved party, it cannot be held that the expression "finality of the decision of the Government" used in the Explanation was meant to bar the jurisdiction of the Civil Court. [890 F G] 4. The High Court, however, erred in travelling beyond the provisions of the 1952 Act by referring to the provisions of the 1969 Act and coming to the conclusion that Explanation I to section 2(1) (e) of the 1952 Act and section 20 of the 1969 Act put beyond the pale of any doubt that the jurisdiction of the Civil Court had been taken away by the legislature to determine the question whether a particular Inam was a personal or devasthan inam. The High Court was not justified in invoking the provisions of the 1969 Act while deciding a case under the 1952 Act. [891 E G] 5. An entry in the alienation register as to whether an inam is personal or religious cannot be said to be so sacrosanct that it cannot be changed. Explanation 1 to section 2 (1) (e) of the 1952 Act indicates that the entry in the register is not an essential part of the definition of personal inam but is only descriptive. If the Government decides a case contrary to the entry in the register of alienation the register shall be deemed to have been amended. If an entry in the register would be deemed to have been automatically amended by the decision of the Government, there is no sanctity to such entry. The explanation itself contemplates a change in view of the decision of the Government on the question. An entry in the register is mainly intended to serve the purpose of realisation of land revenue. [892 C D] 6. Section 203 of the Bombay Land Revenue Code provides for an appeal to a superior officer from an order passed by the revenue officer. This section cannot be said to completely bar the jurisdiction of the Civil Court because section 212 of the Code contemplates that whenever it is declared that a decision or order shall be final such expression shall be deemed to mean that no appeal lies from such decision or order. If this is what finality meant under section 212 it cannot be said that the jurisdiction of the Civil Court is barred. [893 A C] 884

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

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

Civil Appeals Nos. 2208, 2209 of 1968. From the Judgment and Decree dated the 10th/llth August. 1965 of the Bombay High Court (Nagpur Bench) in First Appeal Nos. 120 and 123 of 1965. S.T. Desai, D.N. Mishra and B.N. Mohta, for the appellant M.N. Phadke, .4. G. Ratnaparkhi, for respondent. The Judgment of the Court was delivered by KRISHNA IYER, J. The two appeals, measured by their legal merits or factual dimensions, may. not justify their longevity from June 23, 1949 to February 1977 the former being the date of birth of the suit and the later the termi nation, at long last, of the cases in this Court. The subject matter is a relatively small money claim which, perhaps, is less than the amount each side has spent on the forensic scrimmage. Before, we narrate the facts and discuss the law, we permit ourselves a pensive reflection about our processual justice. If we (law makers and law yers) tarry any longer to forge a speedy and radical juris prudence of remedies in action, the long quest for the fruits of rights may tempt suitors into the traditional quagmire of processual legalistics where from extrication may prove an expensive futility. The story which hopefully comes to. a close with this judgment, among many others like this, bears testimony to the crying need for serious reform not oblique by pass of the court system by an aware legislature, lest the considerable social cost of pursuing judicial remedies stultify and disenchant seekers of legal justice. The facts, when unfolded, will validate this obiter intended to alert the law maker. The High Court, thanks to the then rule of valuation under Art, 133 (1)(a) of the Constitution, granted a certif icate of fitness. The appellant plaintiff, as kartha of a joint Hindu family, Was running a business in the name and style of Jasraj Inder Singh with two shops, 975 one in Khamgaon and the other in Bombay. (The trade name for the Bombay Shop was slightly different.) The respondent defendant had been having dealings with the plaintiff at both places between October 1947 and May 1948. The accounts between the parties fluctuated from time to time, since deposits, advances, withdrawals and entrustment of silver, castor, cotton and the like for sale as agents and crediting the prices in the accounts were a running feature of the mutual dealings. The plaintiff isolated the transactions which took place in Khamgaon and brought a suit claiming a sum of Rs. 11,401 7 9 which represented the net balance due on the Khamgaon khata to him from the defendant on May 12, 1948. Interest was also demanded on an alleged agreed rate. It is noteworthy that the plaintiff 's initial folly as Shri Desai, for the appellant frankly admitted, was in excluding from the suit claim the amounts due one way or the other from the Bombay branch of the business. The contracting parties were identical, the dealings were simi lar and on any fair basis either could get from the other the net amount legally due from both the shops together. But legal sense and commonsense were abandoned by the plaintiff out of the oblique motive of claiming a larger sum than would be due in case a joint balance was struck. This dubious device, as will be seen presently, has backlashed on the plaintiff whose disaster in the High Court has been largely courted by this motivated cleverness. To revert to the litigative narrative, the defendant urged in defence that the demand was untenable since he bad deposited six bars of silver with the Khamgaon shop of the plaintiff to be sold through his Bombay branch and if the sale proceeds thereof were taken into account in the Khamgaon khata a larger sum would be due to him. (We bypass, for the time being, the fight over this claim being a set off under order VIII, rule 6 C.P.C., or a counter claim in the nature of a substantive relief for the balance). This counter claim was met by the plaintiff in an additional pleading wherein he urged that the sale of silver bars was a matter for the Bombay shop and should not be mixed up with the Khamgaon dealings which were the basis of the action. What falls for regrettable comment is that even at this stage the plaintiff did not invoke the obvious argument that the Khamgaon and the Bombay shops both belonged to the same owner and since the transactions were between the same parties (in differ ent places though) when a suit for (or on) final accounts were filed, all the items in the twin places should figure in the resultant decree. If this straight forward plea were taken the facts tend to show the plaintiff would still have got a decree, may be for a lesser sum. Oftentimes, obdurate legal obscruantism of litigants, leads to protraction of proceedings, projection of intricate procedural punctilios and the phyrric processual victory forensically won being a potent source of perverting truth, draining resources and undoing justice. This sombre scenario of the case we are deciding proves how on account of the correct curial ap proach being blinded by the cantankerousness of the plain tiff, conveniently concurred in by the other side, revision and appeal, remand and appeal, and attendant decades of delay and disproportionate litigative spending by both and two friendly businessmen, thanks to this feud, turning into foes, followed at once a disaster to both and detriment to the business community. And some pre trial conciliation activism by the court at an 976 early stage might well have sorted out the dispute, bettered their relations and pre empted this cock fight. Doing justice is a noble behest which blesses all; deciding the lis within a judicative pyramid, provocative of appeals and revisions, bleeds both and unwittingly incites the. bitter persistence in the struggle to win (and lose 1). We are courts of justice guided by law and the signature tune of the indicature is Fiat Justitia. We gently suggested, in this spirit, whether the parties would be disposed to com pose their quarrel. Counsel as often happens, constructive ly helped, but the purchase of peace at this late stage was difficult and we gave up. Of course, adjudication on the .law and the facts cannot and shall not be influenced by this extra curial excursion. We pick up the story of the suit where we left it. In the dog fight that followed, a question of court fee was raised and decided. That was taken up to the High Court and returned. A preliminary decree for accounts of the Bombay khata was passed and that too leapt to the High Court re sulting in a remand, fresh issues and so on. Then a decree was passed and both sides challenged it in appeal and crossobjections and the last lap of the tiring race is this court where the vanquished plaintiff is the appellant. We proceed to decode the justice and the law of the cause. We may state that the plaintiff 's obstinate attitude in treating the Bombay shop and Khamgaon shop as two different persons each being entitled to sue the defendant without reference to the amounts due to the latter from the former in inter connected business dealings is a legal fallacy and cute perversity. However we may repeat that the defendant also proceeded on that 'shop autonomy ' theory but only urged that the silver bars were wrongfully omitted from the Khamgaon khata. Shops are not persons although suits may be filed in trade names. The trial court took a commonsense view in commingling the business account of the same par ties. This was good law. A plurality of shops owned by the same person does not proliferate into many shop persons. At an intermediate stage of the many involved interlocutory skirmishes, the plaintiff did allege: "The alleged silver bars were sold by the defendant Suwalal through the said Bombay shop and naturally the sale proceeds of that quantity of silver are credited in the defend ant 's Khata in the Bombay shop. The plain tiff, therefore in reply to the defendant 's claim of Rs. 17000/ has to file the extracts of accounts of the Bombay shop to put the full picture of transactions before the court. As the Bombay shop shows the balance of Rs. 4535 12 0 as due to the defendants, the said fact has been so mentioned by the plaintiff in his statement. " In passing, we may mention that the counter claim led to a demand for court fee and the High Court affirmed this order but reduced the sum on which such fee was payable. Later, issues were framed by the trial Court which reflected the integrated nature of the dealings between the two par ties in the shops at Khamgaon and Bombay. The 977 learned District Judge, not obsessed by the wrong headed pleadings, took the view that the shops, though located at different places, were owned by the same family and the claims were so inter connected that, in equity and law, set off was permissible and the net sum due to the plaintiff less than what he had sued for should be de creed. We may mention the relevant issues framed at the first round even here since we may have to refer to them later when dealing with a supportive submission of Shri Phadke for the defendant. Issues 5 and 7 may be reproduced here: "5. Whether the Bombay & Khamgaon shops owned by plaintiff 's partners are so connect ed with each other that a composite account of the entries in the two shops can be made by the Defendants ? * * * * 7. Whether on making an account of the two shops of the Plaintiff of Bombay and Khamgaon, the Defendants are entitled to a set off thereafter to a sum of : (a) Rs. 17,000/ as claimed by the Defendants or to a set off. (b) Rs. 4,535 12 0 as stated by the Plaintiff ?" Later, amended pleadings led to amended issues of which issues 4 to 6 are meaningful and are set out below with the findings thereon; "4. Whether the Bombay and Khamgaon shops owned by plaintiff 's partners are so connected with each other that a composite account of the entries in two shops can be made by the defendants ? Yes 5. (a) Whether a sum of Rs. 44,697/10 is debited to the defendants in the account of the Bombay shop ? Yes . (b) Are these entries proper and correct ? Yes. (c) And in time ? Yes. Whether on making an account of the two shops of the plaintiff of Bombay and Khamgaon the defendants are entitled to a set off and thereafter to a sum of (a) Rs. 17,000/ as claimed by the defendants or to a set off No. (b) Rs. 4,535/12/ as stated by the plaintiff ? Yes. The plain fact emerges that the two parties were having dealings with each other, that the dealings in Khamgaon and Bombay were inter related and not totally different transac tions, dissociated in nature and divorced in period. The trial judge treated the totality of transactions as a com posie account and the suit as one on accounts. He ' granted a decree on these terms 978 "The Plaintiff shall render an account of the Bombay shop to the defendant, who shall be entitled to falsify and surcharge. A preliminary decree for accounts under order 20, rule 16 CPC shall be drawn up. After making an account and the necessary adjust ment, the eventual liability inter se shall be determined. Costs shall abide the result. " The plaintiff appealed and the defendant filed cross objec tions. After a 'study of O.8, r. 6 CPC, the High Court felt that the Bombay accounts should not have been gone into and the defendant 's claim by way of set off alone was available for adjudication. Since it had been held that the silver bars were an item in the Khamgaon shop accounts, the direc tion for rendition of the Bombay account was illegal. The Court observed: "The learned lower Court was thus in error in converting the claim of set off into a claim for rendering accounts by the plain tiff to the defendants in respect of the deal ings made in the Bombay shop. The lower Court was bound in terms of Order 8 Rule 6, to treat this claim of set off as a money claim in respect of the ascertained amount and to find whether such amount was due to the defendants from plaintiff. If such amount was found due to the defendants from the plaintiff, then the defendants would be entitled to set off that amount as against the claim of the plaintiff. The decree as passed by the learned lower Court will, therefore, have to be set aside. It is necessary for the trial Court to decide as to, what amount was due to the defendants from the plaintiff. The issue was framed and parties have led evidence. The tower Court shall decide the issues left undecided for final decree. The learned lower Court will decide whether it is proved on the facts that the defendants have to recover Rs. 17,000/ from the plaintiff, and if so found, will adjust the eventual liability inter se, and if it is found that any of the parties has to recover any amount from the other, a decree should be accordingly passed. The case is, therefore, sent back to the trial Court who will decide as to what amount is due to the defendants from the plaintiff. Thereafter whatever amount is found due to the defendants shall be adjusted towards the proved claim of the plaintiff in respect of the deposits in the Khamgaon shop. The Court shall pass a decree in favour of the party in whose favour the. balance will be found due. " It is true that the High Court 's observations inhibited the Bombay accounts being generally reopened but when the case was remanded for fresh decision, the trial Court, apparently pressed by the injustice of amputating the composite deal ings, went on to hold that while the plaintiff was right in his demand vis a vis the Khamgaon Khata, the defendant was entitled to a sum of Rs. 4,535/12/ from the Bombay accounts and awarded to the plaintiff a decree for the net balance of 979 Rs. 7,464/4/ . This he did in purported compliance with the High Court 's direction. He was bound by it and to act contrary to a higher court 's order is to be subversive of the discipline that the rule of law enjoys in our hierarchi cal justice system. The trial Judge, in recording findings on all the issues, did a comprehensive investigation of the Bombay accounts since the silver bars, although entrusted to the Khamgaon shop,. were sold in Bombay and rightly credited in the Bombay Khata. To pick out a single true item which had been inextrica bly got enmeshed in the skein of entries and cross entries was to tear up the fabric of the whole truth. In a finer sense, harmony is the beautiful totality of a whole sequence of notes and the concord of sweet sounds is illtuned into disjointed discord if a note Or two is unmusically cut and played. Truth, ' like song, is whole and half truth can be noise: Justice is truth, is beauty and the strategy of healing injustice is discovery of the whole truth and harmo nising human relations. Law 's finest hour is not in medi tating on abstractions but in being the delivery agent of full fairness. This divagation is justified by the need to remind ourselves that the grammar of justice according to law is not little litigative solution of isolated problems but resolving the conflict in its wider bearings. Let us pick up the threads of the litigation. Even the interrogatories served and the answers elicited made it clear that while there were two shops in two different venues, the dealings between the plaintiff and the defendant were closely connected rather, integrated. That furnished the justification for the trial Judge to examine the Bombay accounts between the parties and he came to the factual conclusion: 'I see absolutely no reason to doubt the cor rectness of any of the entries in these extracts of plain tiffs account book (exht. P 23). I answer issues 5 (a) and (b) in the affirmative. exhibit P. 23 contains on the credit side the sale proceeds of defendant 's silver which was sold in Bombay. A plea had been feebly raised by the defendants that some of the items in the Bombay account were barred by limitation and the plaintiff could not claim credit for them. This plea was also examined by the trial Court and negatived with the observation: 'I hold that in view of the credit and debit entries in exhibit P. 23 all the debit entries were within time at the material period. I answer issue 5(c) in the affirmative '. Thus there was no denial of fairness in the trial be cause the Bombay accounts in their entirety were put in issue, and focused on by both sides in the evidence followed by appropriate findings. The upshot of this process was, in the language of the trial Court: 'Thus all things consid ered plaintiff is entitled to Rs. 12,000/ minus Rs. 4,535/12/ i.e., Rs. 7,464/4/ from the defendants '. The court denied costs to both since neither came with clean hands. Both sides were guilty of not playing cricket and, in this game of over reaching each other, the Court 's penal ty is denial of costs. This rule was adopted by the trial Court. 980 When the case went up in appeal, the High Court harked back to the order of the Nagpur Bench in the same case in a revision filed against the order of payment of court fee for the counter claim. It is true the High Court had then held that only a specific sum relating to the sale of silver bars was the basis of the counter claim and the entire accounts of the Bombay shop was not at large before the Court. The High Court referred again to the decree first passed by the trial Court to render an account of the Bombay shop to the defendant on the footing that the accounts in Bombay and Khamgaon were so interconnected as to warrant a composite understanding of the entries in the two shops. This ap proach of the trial Court in passing a preliminary decree for rendition of accounts was set aside by the High Court in appeal at the first round on the score that the plea the defendant was confined to one of set off under O.8, r. 6 Therefore, argued the High Court, "A mere liability to account cannot be an answer by way of set off to the claim of the plaintiff. In fact, the defendants in their written statement, claimed by way of set off such ascertained sum of money which, according to, them, was Rs. 17,000/ . It is because such ascertained sum was claimed by way of set off that the claim was entertained for investigation by the lower Court. Therefore, the only question that was before the learned lower Court was to find out what amount was due to the plaintiff from the defendants in respect of the deposits of amounts made in the Khamgaon shop and also to find out what amount was due to the defendants from the plaintiff in respect of the silver transactions made in the Bombay shop. The question of rendering accounts by the plain tiff to the defendants could not arise on the facts of the case. " The remand order was undoubtedly binding on the lower Court and had directed a limited enquiry and passing of a decree 'in favour of the party in whose favour the balance will be found due '. The High Court held that after the remand the learned trial Judge had no jurisdiction to look into the Bombay accounts as a whole and on account of the misapprehension of the observations of the remand order an illegal decree had been passed in favour of the plaintiff. What was the misapprehension about? While directing a remand, the High Court ordered that issue 6 should be decid ed by the trial Court and this issue has been set out earli er by us. Naturally, the trial Court took the view that the High Court, having ordered an adjudication of issue No. 6, vested it with the jurisdiction to enquire into the Bombay accounts in taro and pass the decree that woe have already indicated, viz., a deduction of the surplus due to the defendant from the Bombay accounts from the amount due to the plaintiff from the defendant according to the Khamgaon accounts. The arithmetic is not in dispute and, indeed, while both the counsel have taken us through the evidence in the case we are satisfied that if both the Khamgaon and the Bombay accounts had to be gone into, 981 the decree passed was correct both regarding the quantum and on the issue of limitation. This we affirm because Shri Phadke had feebly pressed before us that in any case his client should be given a fresh opportunity to make out his case regarding the various entries in the Bombay Khatha. We are not satisfied that the defendant has not had a full say and we are therefore disinclined to accede to this request. The surviving question before us is whether it was in order for the trial Court to have investigated the accounts in the two shops together as if they were transactions between the same two persons or whether the remand order of the High Court at the first round had lettered the trial Court 's hands in doing justice in this comprehensive way. The suit is for a sum due on accounts. The parties are the same. There are two shops belonging to the same owner. The return of the income from the two shops, for income tax pur poses, is a consolidated one. In short, there was only one person who owned two shops and it is wrong to construe the situation as if there were two juristic entities or person al. Secondly, the defendant, who dealt with the plaintiff in the two shops, was the same person. He had no dual charac ters to play. The dealings were either in one or in the other shop. They were business dealings between two busi nessmen, during the same period, and even inter related, to such an extent that sometimes advances were made from one shop and realisations were made in the other shop. In short an artificial dissection of these transactions could not square up with the reality of the situation. Shri Phadke urged that one contract was one transaction and a set of contracts need not be necessarily brought up in the same action between the same parties. We consider that the true nature of the action here is a suit on accounts for the sum due on striking a balance. That itself is the cause of action. Such a suit is not unfamiliar and such a cause of action may be made up of various minor transactions. Viewed at the micro level each may be a single contract. But viewed at the macro level as a suit on accounts, it is a single cause of action. If the present action is one on accounts and if the various entries in the two shops at Khamgaon and Bombay involve transfusion of funds and goods, there is no reason why we should not accept as sound the approach made by the trial Court that the entirety of accounts in the two shops should be viewed as a composite one. It reduces litigation; it promotes the final financial settlement as between the parties it has the stamp of reali ty. Otherwise it would be an odd distortion to grant a decree for the plaintiff for, say Rs, 10,000/ on the strength of the Khamgaon accounts while he owes.the defend ants Rs. 50,000/ according to the Bombay accounts. Order 8, rule 6, CPC deals with a specific situation and does not prevent the Court, Where the facts call for wider relief, from looking into the accounts in both places to do ultimate justice between the parties. Procedure is the. handmaid and not the mistress of justice and, in this spirit, the trial Court 's adjudication cannot be faulted. Be that as it may, in an appeal against the High Court 's finding, the Supreme Court is not bound by what the High Court might have 982 held in its remand order. It is true that a subordinate court is bound by the direction of the High Court. It is equally true that the High Court, hearing the matter on a second occasion or any other court of co ordinate authority hearing the matter cannot discard the earlier holding, but a finding in a remand order cannot bind a higher Court when it comes up in appeal before it. This is the correct view of the law, although Shri Phadke controverted it, without reliance on any authority. Nor did Shri S T Desai, who asserted this proposition, which we regard as correct, cite any precedent of this Court in support. However, it tran spires that in Lonankutty vs Thomman(1) this proposition has been affirmed. Viewed simplistically, the remand order by the High COurt is a finding in an intermediate stage of the same litigation. When it came to the trial court and esca lated to the High Court, it remained the same litigation. The appeal before the Supreme Court is from the suit as a whole and, therefore, the entire subject matter is available for adjudication before us. If, on any other principle of finality statutorily conferred or on account of res judicata attracted by a decision in an allied litigation the matter is concluded, we too are bound in the Supreme Court. Other wise, the whole lis for the first time comes to this Court and the High Court 's finding at an intermediate stage does not prevent examination of the position of law by this Court. Intermediate stages of the litigation and orders passed at those stages have a provisional finality. After discussing various aspects of the matter, Chandrachud J., speaking for the Court in Lonankutty (supra) observed: "The circumstance that the remanding judgment of the High Court was not appealed against, assuming that an appeal lay therefrom, cannot preclude the appellant from challenging the correctness of the view taken by the High Court in that judgment." The contention barred before the High .Court is still available to be canvassed before this Court when it seeks to pronounce finally on the entirely of the suit. Shri Desai cited before us the decision of the Bombay High Court, in Ratanlal(2), as Fart of his argument. There in it is laid down that a remand order will not operate as res judicata and preclude the remanding court from reopening it at the subsequent stage of the same continuing proceeding when the law underlying the remand order is differently interpreted by a larger Bench or by the Supreme COurt. Such an order or finding recorded at the stage of remand happens to be interlocutory and cannot terminate the cause finally so that when the litigation comes up before the remanding court, the previous remand order would ordinarily be conclu sive and binding like any other interlocutory order. But exceptions there are where a re consideration of such an order is necessitated either by discovery of fresh matter or of unforeseen development subsequent to the order or change of law having retrospective effect. We do not make any comments on this argument of Shri Desai and leave it at that. (1) ; (2) 983 The trial Court 's judgment has therefore to be restored. It accords with justice and with law. There will thus be a decree in favour of the plaintiff in a sum of Rs. 7,464/4/ . Even truthful cases urged through unveracious forensic processes must be visited with the punitive curial displeas ure of denial of costs and discretionary interest. Here the plaintiff sued for a sum of Rs. 12,000/ and gets a decree for less than Rs. 8,000/ . We deny him costs for the amount decreed in his favour but allow costs for the defendant to the extent he has succeeded (viz., for Rs. 4,535/12/ ). The equities of the situation are such, especially having regard to the long lapse of time and. the dubious attitude of the plaintiff and litigative prolixity, that we do not award interest on the amount decreed at all. P.B.R. Appeal al lowed.

The appellants were put up for trial along with others before the Court of Sessions. The charge against them set out the fact that they formed an unlawful assembly, stated the common object specifying in detail the part each accused had played and then gave a list of ten sections of the. Travancore Penal Code including sections which correspond to section 302 of the Indian Penal Code read with section 149. The Sessions Judge acquitted them under section 302 read with section 149 but convicted them on the lesser charges. They appealed to the High Court against their convictions and the State appealed against their acquittals under section 302 read with section 149. The High Court dismissed their appeals and allowed the appeals against their acquittals and sentenced each of them to transportation for life. It was contended on their behalf that the charge was not in accordance with law and their examinations under section 342 of the Code of Criminal Procedure were defective and prejudiced them. Held, that the charge framed was a legal one and was expressly covered by section 225 of the Code of Criminal Procedure. Each of the accused was apprised of the facts alleged against him and he could easily pick out the relevant sections under which he was charged. There could, therefore, be no prejudice to any one of them. Held further, that as no objection was taken to the defective examination under section 342 of the Code of Criminal Procedure at an earlier stage although the accused were represented by counsel, and as the petition of appeal did not set out the questions the court should have put to them and the answers they would have given and as they thereby withheld from the court facts which were within their special knowledge, the court was entitled to draw an adverse conclusion against them and hold that no prejudice had been caused to them. That when an accused person is not properly questioned under section 342 so as to enable him to explain the circumstances appearing in the evidence against him he is entitled to ask the appellate Court, which is the ultimate court of fact, to place him in the same position 1058 he would have been in if he had been properly questioned and to take the explanation he would have given, if he had been asked, into consideration when weighing the evidence in just the same way as the court would have done if the explanation had been there all along. But he cannot ask to be placed in a better position than he would have been in if the court had done its duty from the start. Therefore, when complaining of prejudice he must set out the questions he should have been asked and indicate the answers he would have given.

n the recommendation of the High Court and the action of the Government is challenged by way of a writ petition, in order to facilitate appreciation of issues raised, the administrative side of the High Court, if joined as a party, must appear and place before the Court the entire record for a fair and judicial adjudication of the issues on the judicial side of the High Court. In this case the appellants in their writ petition requested the High Court to produce the proceedings which culminated in the recommendation of the High Court to the Governor for appointment of respondents 3, 4 and 5 as DSJ/ADSJ. No action appears to have been taken on this request because no such record appears to have been produced before the High Court. Such silence militates against fair adjudication of the issues. Just and fair adjudication must not only inform the administrative side of the High Court 368 but in order to put its record beyond the slightest pale of controversy it must avoid any secrecy in this behalf consistent with public interest. [381 C F] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 991 of 1975. From the Judgment and Order dated 25 9 1973 of the Himachal Pradesh High Court in Civil Writ Petition No. 158/71. Yogeshwar Prasad, A. K. Srivastava and Mrs. Rani Chhabra for the Appellant. Dr. section Chitale, R. N. Sachthey and section K. Dhingra for Respondent No. 1. section K. Mehta, P. N. Puri and EME Anam for Respondent No. 4. K. R. Nagaraja for Respondent No. 6. The Judgment of the Court was delivered by DFSAI, J. Would Article 16 of the Constitution come to the rescue and be successfully invoked by appellants, admittedly juniors in the gradation list of Subordinate Judges in the State of Himachal Pradesh to respondents 3, 4 and 5, questioning the legality and validity of their promotion to the cadre of District/Additional District & Sessions Judges ( 'DSJ/ADSJ ' for short), as also questioning the legality and validity of promotion of respondents 6 and 7 to the selection grade post of Subordinate Judge ? Uncontroverted facts are that Himachal Pradesh was a Union Territory till January 25, 1971, when at the apex of judicial hierarchy there was a Court of Judicial Commissioner. On the introduction of the Punjab Reorganization Act, 1966, ( 'Reorganization Act ' for short) effective from November 1, 1966, certain territories were transferred and added to the Union Territory of Himachal Pradesh simultaneously extending the jurisdiction of the Court of Judicial Commissioner of Himachal Pradesh to the transferred territories. Consequently, provision was made for allocation of persons belonging to different services in pre reorganised State of Punjab (Respondents 4 to 7 being such allocated officers) to Union Territory of Himachal Pradesh. On May 2, 1967, the Union Territory of Himachal Pradesh was placed under the jurisdiction of Delhi High Court which continued till January 25, 1971, when statehood was conferred on the Union Territory and a full fledged High Court of Himachal Pradesh was set up. Himachal Pradesh (Courts) Order, 1948, ( '1948 Order ' for short), was issued by the Union Government in exercise of the power conferred by sections 3 and 4 of the Extra Provincial Jurisdiction , and this Order remained in force till it was replaced by the Himachal Pradesh Subordinate Judicial Service Rules, 1962 ( '1962 Rules ' for short). Para 16 (2) of the 1948 Order provided for the appointment of District & Sessions Judges. The Chief Commissioner had power to appoint as many persons as he considered necessary to be District Judges. 1962 Rules appear not to have made any departure in this behalf. Promotional avenue in Himachal Pradesh Subordinate Judicial Service moves vertically from the grass root entry as Subordinate Judge promotable as Senior Sub Judge cum Assistant Sessions Judge and then the further promotional avenue is DSJ/ADSJ. Both the appellants were working as Senior Sub Judge cum Assistant Sessions Judge and they questioned the validity and legality of promotion of respondents 3, 4 and 5 given on May 18, 1971, as DSJ/ADSJ on the ground that the post of DSJ/ADSJ is a selection post and the criterion for selection must be merit alone, seniority being treated as thoroughly irrelevant and, therefore, all those who were within the zone of eligibility should have been considered before selecting respondents 3, 4 and 5 and this having not been done, the promotion having been given purely on the basis of seniority, their promotion is invalid. Simultaneously they contended that same criterion would mutatis mutandis apply while giving promotion to Senior sub Judge cum Assistant Sessions Judge to selection grade post and that having not been done and the promotion having been given only on the basis of seniority, the same is invalid. In support of the contention reliance has been placed amongst other thing on a Memorandum dated June 15, 1957, issued by the Himachal Pradesh Administration. There is a serious controversy whether this memorandum was effective and in force on the date of impugned promotions and whether the same would apply to the case of judicial officers. Appellants impleaded the State of Himachal Pradesh as respondent 1 and the High Court of Himachal Pradesh as respondent 2. Though the High Court would be the most competent to throw light on the vexed question as to by what criterion it selected respondents 3, 4 and 5 for promotion to the post of DSJ/ADSJ and recommended their names for appointment to the Governor, surprisingly the High Court through its Registrar did not appear and participate in the proceedings. Nor did the Bench hearing the matter call for the relevant files from the office of the High Court though a prayer to that effect was made in the writ petition. 370 Respondent 1 State of Himachal Pradesh filed the return to the writ as per the affidavit of Shri A. K. Goswami, Joint Secretary to the Government, Department of Personnel, Simla. State Law Department also appears to have scrupulously kept out from the arena of controversy. In the return it was admitted that appointments to the post of Subordinate Judges were made in accordance with the provisions of para 18 of the 1948 Order till the 1962 Rules were enacted and brought into force on April 10, 1962. It was averred that the appointment to the post of Distt. Judge used to be made under the provisions of para 16 (2) of the 1948 Order which conferred power on the Chief Commissioner after consultation with the Judicial Commissioner to appoint as many persons as he thought necessary to be District Judges. It was further contended that since Himachal Pradesh attained full statehood on January 25, 1971, appointment to the post of DSJ was governed by article 233 of the Constitution and, therefore, the appointments were to be made by the Governor in consultation with the High Court and accordingly respondents 3, 4 and 5 were promoted and appointed as DSJ/ADSJ on the recommendation of the High Court. The averment to that effect in para 12 of the writ petition was admitted in the return. Identical position was adopted supporting the promotion to selection grade given to respondents 6 and 7. The return leaves no room for doubt that the promotions to the post of DSJ/ADSJ were given by the Governor on the recommendation made by the High Court to the Governor and the Governor acted upon the recommendation. It was, therefore, absolutely incumbent upon the High Court to have pointed out what criterion it adopted in selecting respondents 3, 4 and 5 for promotion before it went in search of what principle ought to be adopted in selecting persons from Sub ordinate Judicial Service for promotion to the post of DSJ/ADSJ. There is not even a whimper as to what criterion was adopted by the High Court in formulating its recommendations both for promotion as DSJ/ADSJ and to selection grade in the scale of Subordinate Judge cum Assistant Sessions Judge, the latter having been given by the High Court itself evidenced by the notification dated March 19, 1971. Relevant provisions of the Constitution bearing on the question of appointment of District Judges and control of the High Court over the subordinate courts may be noticed. Article 233 reads as under: "233. Appointment of district judges (1) Appointments of persons to be, and the posting and promotion of, 371 district judges in any State shall be made by the Governor of the State in consultation with the High Court exercising jurisdiction in relation to such State. (2) A person not already in the service of the Union or of the State shall only be eligible to be appointed a District Judge if he has been for not less than seven years an advocate or a pleader and is recommended by the High Court for appointment". Article 235 reads as under: "235. Control over subordinate courts The control over district courts and courts subordinate thereto including the posting and promotion of, and the grant of leave to, persons belonging to the judicial service of a State and holding any post inferior to the post of district judge shall be vested in the High Court, but nothing in this article shall be construed as taking away from any such person any right of appeal which he may have under the law regulating the conditions of his service or as authorising the High Court to deal with him otherwise than in accordance with conditions of his service prescribed under such law". Article 236 provides that in Chapter VI of Part VI of the Constitution the expression 'District Judge ' includes a judge of a city civil court, additional district judge, joint district judge, assistant district judge, chief judge of a small cause court, chief presidency magistrate, additional chief presidency magistrate, sessions judge, additional sessions judge and assistant sessions judge. The expression 'Judicial Service ' in the chapter means a service consisting exclusively of persons intended to fill the post of district judge and other civil judicial posts inferior to the post of district judge. Article 309 confers power on the legislature by appropriate legislation to regulate the recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the union or of a State and till such legislation is enacted the power is conferred by the proviso to Article 309 on the President and the Governor, as the case may be, to make rules in that behalf. At the outset it must be noticed that no Rules appear to have been enacted under article 309 proviso regulating recruitment and conditions of service of DSJ/ADSJ. Undoubtedly such rules will have to be in conformity with other provisions of the Constitution such as article 16, and the provisions included in Chapter VI of Part VI of the 372 Constitution. Till such rules are framed appointment to the post of DSJ/ADSJ will have to be made in accordance with the provisions of articles 233 and 235 of the Constitution. Article 233 confers power on the Governor of the State to appoint persons either by direct recruitment or by promotion from amongst those in the judicial service as District Judges but this power is hedged in with the condition that it can be exercised by the Governor in consultation with the High Court. In order to make this consultation meaningful and purposive the Governor has to consult High Court in respect of appointment of each person as District Judge which includes an Additional District Judge and the opinion expressed by the High Court must be given full weight. Article 235 invests control over subordinate courts including the officers manning subordinate courts as well as the ministerial staff attached to such courts in the High Court. Therefore, when promotion is to be given to the post of District Judge from amongst those belonging to subordinate judicial service, the High Court unquestionably will be competent to decide whether a person is fit for promotion and consistent with its decision to recommend or not to recommend such person. The Governor who would be acting on the advice of the Minister would hardly be in a position to have intimate knowledge about the quality and qualification of such person for promotion. Similarly when a person is to be directly recruited as District Judge from the Bar the reasons for attaching full weight to the opinion of the High Court for its recommendation in case of subordinate judicial service would mutatis mutandis apply because the performance of a member of the Bar is better known to the High Court than the Minister or the Governor. In Chandra Mohan vs State of Uttar Pradesh & Ors.,(1) a Constitution Bench of this Court observed as under: "The constitutional mandate is clear. The exercise of the power of appointment by the Governor is conditioned by his consultation with the High Court, that is to say, he can only appoint a person to the post of District Judge in consultation with the High Court. The object of consultation is apparent. The High Court is expected to know better than the Governor in regard to the suitability or otherwise of a person, belonging either to the 'judicial service ' or to the Bar, to be appointed as a district judge. Therefore, a duty is enjoined on the Governor to make the appointment in consultation with a body which is the appropriate authority to give advice to him". 373 This view was reaffirmed in Chandramouleshwar Prasad vs Patna High Court & Ors.(1) observing: "The High Court is the body which is intimately familiar with the efficiency and quality of officers who are fit to be promoted as District Judges. The High Court alone knows their merits as also demerits". In A. Panduranga Rao vs State of Andhra Pradesh & Ors. (2) this Court observed that there are two sources of recruitment to the post of District Judge, viz., judicial service in subordinate rank and members of the Bar. In either case the consultation would assume the form of recommendation made by the High Court. It is thus incontrovertible that appointment to the post of DSJ/ADSJ in Himachal Pradesh will have to be made in accordance with the provisions contained in article 233. If any rules are enacted under article 309 for regulating recruitment and conditions of service of DSJ/ADSJ, the rules will have to be in conformity with article 233 and if they violate the constitutional mandate of article 233 of the rules will be held ultra vires as succinctly laid dow in Chandra Mohan 's case (supra). To be precise so as to leave no ambiguity, in that case rule 13 of U.P. Higher Judicial Services Rules provided for procedure for selection by promotion to the post of District Judge from the subordinate judicial service and amongst others, the procedure provided for selection to be made by a Committee consisting of two judges of the High Court and the Judicial Secretary to Government. This rule was held to be ultra vires as being violative of article 233 inasmuch as the High Court could be said to have abdicated its constitutional function of making recommendation to an outside authority not known to Constitution. Turning to the facts of the case, save and except the 1948 Order no rules appear to have been enacted regulating recruitment and conditions of service DSJ/ADSJ in Himachal Pradesh. Therefore, appointment to the post of DSJ/ASDJ in Himachal Pradesh will have to be made in conformity with article 233. Even if para 16(2) of the 1948 Order held the field it merely provided for appointment by the Chief Commissioner (now replaced by the Governor) in consultation with the Judicial Commissioner (now replaced by the High Court). That provision would be in conformity with article 233. The High Court in this case recommended the names of respondents 3, 4 and 5 for promotion to the post of DSJ/ADSJ as averred by appellants 374 themselves and the Governor accepted the recommendation and the appointments were made consistent with the recommendation. It cannot be gainsaid that this is in conformity with article 233 and the constitutional mandate is complied with and no statutory rule in the absence of any could be said to have been violated by promotion being given in this manner. In our opinion the matter should have ended there. The High Court, however, completely obliterating from its mind the criterion it must have followed in making the recommendation which prima facie appears to be one of the seniority cum merit, under took an exercise of a search of what ought to be the criterion for promotion from the subordinate judicial service to the responsible post of District Judge. The High Court framed the question thus: "The first question is whether in law appointment to the post of District Judge/Addl. District Judge must be made by selection of most meritorious officer upon an appraisal of the comparative merit of eligible subordinate judges or is it sufficient that it is made on the basis of seniority cum fitness ?" We find it a bit difficult to follow and appreciate how the High Court could proceed on such a fruitless and bizarre enquiry unconnected with and wholly unnecessary in the fact of the case before it. The same High Court on its administrative side must have known its own mind when while making recommendation for promotion, the principle or criterion it adopted. The High Court must be presumably aware even while making recommendation for promotion to the post of DSJ/ADSJ that it was a responsible post and merit alone must guide it in making recommendation. Presumably the full court made the recommendation. The High Court took notice of the fact that there were no rules at the relevant time in Himachal Pradesh formulating the principle or criterion on which such promotion as Distt. Judge was to be recommended. If thus there was no rule and the High Court proceeded to adopt merit cum seniority, or seniority cum fitness ' as a criterion for recommending promotions from subordinate judges to the post of district judge neither of which appears to violate either article 233 or article 16 or any other constitutional mandate or any statutory rule, it would be futile to proceed to examine what ought or possible criterion should really govern the decision for recommending persons from subordinate judicial service for promotion to the post of DSJ/ADSJ. If the High Court felt that the post of district judge is a very responsible post and merit alone should govern promotion from subordinate judicial service to the post of district judge it was 375 incumbent upon the High Court to propose necessary rules and get them enacted under article 309. That appears not to have been done. Alternatively, High Court should while making recommendation for promotion put the principle of merit cum seniority in the forefront and act accordingly. The High Court and the Governor appear to be agreed that the recommendation for promotion made was proper and the same was accepted without a demur. In our opinion it is then futile to examine what ought to be the criterion for such promotion, unless there is no discrenible principle on which recommendation can be justified or the recommendation is attacked as arbitrary, malafide or vitiated by bias. There is no such allegation. The High Court after referring to some books on public administration and public services and keeping in view the status and responsibility attaching to the post of District Judge, concluded as under: "I would therefore hold that having regard to the duties and responsibilities attaching to the post of District Judge and the position occupied by the District Judge in the judicial hierarchy, appointment to that post must be made by selection of the most meritorious officer upon an appraisal of the comparative merit of eligible Subordinate Judges. In my opinion, the principle of seniority cum fitness would not be a valid principle". It is difficult to appreciate how such a principle can be enunciated in abstract. If for regulating recruitment and conditions of service of district judges it was considered essential by the High Court that promotion to the post of District Judge from the subordinate judicial service shall be on merit alone and seniority having no place in the consideration unless two are considered equally meritorious, it was incumbent upon the High Court to have proposed such a rule to be enacted under article 309. Neither the High Court nor the Government have proposed such rules. And surprisingly, after reaching this conclusion the High Court rejected the writ petition, frankly, on an untenable ground that the petitioners have failed to show that if they had been considered at the time when the impugned promotions were made they would have stood a fair choice of being preferred over respondents 3, 4 and 5. This is an unsustainable conclusion. If the High Court is otherwise right that when promotion is to be given on the criterion of merit alone, all those in the zone of selection or field of eligibility must be simultaneously considered and the best among them should be selected and recommended for promotion. The silence of the High Court on the most important question as to what 376 criterion it adopted while formulating its recommendation coupled with the fact that those at the top of gradation list according to their seniority were recommended is eloquent enough to conclude that principle of seniority cum merit was adopted by the High Court. What the High Court appears to have done is as and when the vacancy occurred the seniormost in the cadre of subordinate judges was considered and if found fit was recommended. The present grievance is by persons junior to respondents 3, 4 and 5 whose promotion is questioned and the grievance is that they were not considered along with other eligible. It is impossible to expect a person to aver that if along with others eligible he was considered he would have been selected. Right to be considered for selection is distinct from an assertion that if considered the person so considered would of necessity be selected and then alone his grievance that he was not considered even though eligible could be examined by the Court. It is, however, not necessary to dilate on this point because in our opinion as the situation stood at the time of the impugned recommendation for promotion and the consequent appointments made by Governor there was no such rule providing merit alone as the criterion for promotion and the High Court, though it does not reveal its mind, appears to have proceeded on the criterion of seniority cum merit which is a valid criterion under article 16 and not violative of article 233 and the appellants, therefore, who were junior to respondents 3, 4 and 5, cannot be heard to make a grievance about the promotion of respondents 3, 4 and 5 who as and when their turn came were considered and on being found fit were recommended for promotion and the Governor appointed them. It was, however, said that Office Memorandum No. F.1/4/55 RPS dated May 16, 1957, issued by the Government of India, Ministry of Home Affairs, was applicable to the services including subordinate judicial service under the Union Territory of Himachal Pradesh before it attained statehood and that even if an office memorandum of the Government of India may not be directly applicable, it appears to have been adopted by the Union Territory of Himachal Pradesh because the same was issued by the Assistant Secretary to the Himachal Pradesh Administration as per his Memorandum No. Apptt.1/350/57, dated June 15, 1957, with a request that the contents of the Memorandum may also be brought to the notice of each member of the Departmental Promotion Committee for Class I, II and III posts constituted for each Department under the Union Territory of Himachal Pradesh. This Memorandum, appellants say, prescribes guideline and lays down criterion in giving promotions to posts which are styled as 'selection posts ' as also to selection grades. Broadly 377 stated, the guidelines are that appointments to selection post and selection grade should be made on the basis of merit with regard to seniority only to the extent indicated in the memorandum. It further provided that Departmental Promotion Committee or other selecting authority should first decide the field of choice, i.e., the number of eligible officers awaiting promotion who should be considered for inclusion in the selection list provided, however, that an officer of outstanding merit may be included in the list of eligible candidates even if he is outside the normal field of choice. Field of choice was to be confined to five or six times the number of vacancies expected within a year. It was indicated that those found unfit should be excluded. Even in respect of those who are included in the field of choice each officer should be classified as outstanding, very good, good, on the basis of merit as determined by the respective records of service and thereafter a select list should be drawn up by placing the names in the order of merit as indicated earlier without disturbing the seniority inter se within each cadre. Promotion should thereafter be confined, it was suggested, to the select list and by following the order in which the names are finally arranged. It was considered desirable to periodically revise the select list. Appellants contend that the memorandum laying these guidelines was issued, no doubt, by the Government of India when Himachal Pradesh was a Union Territory and, therefore, Government of India was competent to issue such directions in respect of services under the Union Territory of Himachal Pradesh but even if there is any doubt, once the same was adopted by Himachal Pradesh Administration, in the absence of any statutory rule it is binding and any promotion made in breach or violation of the prescribed guidelines would be invalid. There is nothing to show that that office memorandum was endorsed to the High Court and that the Administration suggested that the High Court should adopt it while making recommendations for promotion to the post of DSJ/ADSJ. In the absence of a return by the High Court to writ petition it is difficult to say whether the Administration desired that the guidelines prescribed in the memorandum should also be accepted or adopted by the High Court. In the return filed on behalf of the Himachal Pradesh Government it has been stated that the memorandum was received from the Government of India and that the memorandum did contain some guiding principles for appointment to selection posts and selection grade but they were merely directory in nature and were only issued for the sake of guidance implying that if the facts and circumstances of any particular case so warranted, the concerned authority could make deviation therefrom. It was, further stated that after Himachal Pradesh attained statehood on 378 January 25, 1971, the memorandum ceased to have any force and in the absence of any other statutory rule promotions and appointments to the posts of DSJ/ADSJ can only be made in conformity with article 233 of the Constitution and any other direction to the contrary would be void and of no effect. The High Court disposed of the memorandum by a cryptic observation that there has been a serious debate before the Court on the question whether the direction contained in the aforesaid memorandum had to be complied with by the High Court and the State Government when the impugned appointments were made. After noting this debate the High Court did not proceed to dispose of the contention and did not record a finding whether the memorandum was or was not required to be complied with by the High Court while making recommendations for promotion to the posts of DSJ/ADSJ. In the absence of any material as to whether the memorandum was endorsed to the High Court or whether the High Court adopted or acted upon the same or not it is difficult to accept that it was binding on the High Court and any recommendation for promotion made in breach or contravention thereof would render the promotion invalid. Even apart from this, the impugned promotions were made on May 18, 1971, after Himachal Pradesh became a full fledged State with a High Court at the apex of judicial and the memorandum would cease to have any force or binding effect. The same memorandum was relied on in support of the contention that in giving promotion to selection grade to respondents 6 and 7 the guidelines in the memorandum of 1957 were not only not followed but the promotions were made completely overlooking the guidelines or in contravention of the guidelines. Reasons for rejecting the efficacy of memorandum in relation to promotion to the post of DSJ/ADSJ will mutatis mutandis apply and the contention will have to be negatived. This contention must also be negatived for the additional reason that promotion from the post of subordinate judge to the selection grade post of subordinate judge is a promotion from one post in subordinate judicial service to another post in the same service. This promotion would definitely be under the control of the High Court as provided in article 235 of the Constitution. No statutory rule was pointed out as to how such promotion was to be given. In the absence of a statutory rule the High Court would be the sole authority to decide the question of promotion in exercise of its control under article 235. By article 235 the High Court has been vested with complete control over the subordinate courts and this exercise of control comprehends the power to decide eligibility for promotion 379 from one post in the subordinate judicial service to higher post in the same service except where one reaches the stage of giving promotion as DSJ/ADSJ when article 233 would be attracted and the power to give promotion would be in Governor hedged in with the condition that the Governor can act after consultation with the High Court which has been understood to mean on the recommendation of the High Court. But when it comes to promotion in the judicial service under the Distt. Judge the High Court would be the sole authority to decide the question of promotion (see The High Court, Calcutta vs Amal Kumar Roy). This becomes manifestly clear from State of Assam & Anr. vs Kuseswar Saikia & Ors. In that case one Upendra Nath Rajkhowa was promoted by the Governor as Addl. District Judge purporting to act under article 233 and a writ of quo warranto was sought challenging the appointment on the ground that the promotion as Addl. District Judge could only be made by the High Court acting under article 235. It was also contended that his further appointment as District Judge by the Governor would be void. It was so held by the High Court. On appeal when the matter came to this Court, analysing article 233 this Court held as under: "It means that appointment as well as promotion of persons to be District Judges is a matter for the Governor in consultation with the High Court and the expression 'District Judge ' includes an additional district judge and an additional sessions judge. It must be remembered that District Judges may be directly appointed or may be promoted from the subordinate ranks of the judiciary. The article is intended to take care of both. It concerns initial appointment and initial promotion of persons to be either District Judges or any of the categories included in it. Further promotion of District Judges is a matter of control of the High Court. What is said of District Judges here applies equally to additional District Judges and Additional Sessions Judges. " This Court accordingly held that the promotion of Rajkhowa as Addl. District Judge by the Governor was made under article 233 and that it was a valid appointment. Accordingly the appeal was allowed. It thus becomes crystal clear that while promotion to the post of District Judge which includes various posts as set out in article 236, is with the Governor, the High Court alone would be competent to decide the promotion from one post in subordinate judicial service to any higher post in subordinate judicial service under the District 380 Judge. Appellants contend that promotion of respondents 6 and 7 from the rank of subordinate judge to the selection grade post of subordinate judge is invalid as being in contravention first of the memorandum and secondly such promotion must only be on the basis of merit and not seniority. This contention must fail because no statutory rule is pointed out as to how the promotion was to be given and the High Court having given the promotion it was most competent to do so. The challenge must accordingly fail. Appellants also contended that even if the criterion for recommendation for promotion to the post of DSJ/ADSJ is seniority cum merit, respondents 3, 4 and 5 did not deserve to be promoted because their unfitness stares in the face inasmuch as they were not considered suitable for confirmation as subordinate judge as and when their turn came for confirmation and that would show that they were not men of merits. It was pointed out that respondents 4 and 5 were not confirmed due to their unsatisfactory performance in discharge of duties while their colleagues in the same batch were confirmed earlier. It was further pointed out that respondent 4 was not even allowed to cross the efficiency bar for a period of about 10 years and that he was allowed to cross it for the first time in 1970. These averments have hardly any relevance. The power to confirm any one in the subordinate judicial service vests in the High Court in exercise of the control vested in the High Court under article 235. In fact the power to promote to various posts in the subordinate judicial service under the District Judge comprehends also the power to confirm and that vests in the High Court. It is not necessary to dilate on this point because it is concluded by a decision of this Court in State of Assam & Anr. vs section N. Sen & Anr., wherein this Court held that under Art 235 of the Constitution the power of promotion of persons holding posts inferior to that of the District Judge being in the High Court, the power to confirm such promotees is also in the High Court and any rule in conflict with article 235 must be held to be invalid. This view was affirmed in State of Bihar vs Madan Mohan Prasad & Ors. This Court held that since article 235 of the Constitution vests the power of confirmation in the High Court, the power of determining the seniority in the service is also with the High Court. Of course, in doing so the High Court is bound to act in conformity with any rules made by the Governor under the provisions of article 309 of the Constitution, if there be a rule. 381 The administrative side of the High Court having chosen not to participate in the proceedings this Court must dispose of the appeal on the scanty material available on record. On the available material the appellants failed to establish violation of any existing rule, statutory or otherwise, governing promotion of persons to the post of DSJ/ADSJ as there is no such rule. The impugned appointments appear to have been made by promotion of those belonging to subordinate judicial service by the Governor on the recommendation of the High Court as envisaged by article 233 and in the absence of any other valid rule, promotions made on the generally well accepted principle of seniority cum merit appear to be valid. There is, therefore, no substance in the contention that the promotion of respondents 3, 4 and 5 to the post of DSJ/ADSJ and the promotion of respondents 6 and 7 to the selection grade post were in any manner invalid. Before we conclude it must be pointed out that where the Government acts on the recommendation of the High Court and the action of the Government is challenged by way of a writ petition, in order to facilitate appreciation of issues raised, the administrative side of the High Court, if joined as a party, must appear and place before the Court the entire record for a fair and judicial adjudication of the issues on the judicial side of the High Court. In this case the appellants in their writ petition requested the High Court to produce the proceedings which culminated in the recommendation of the High Court to the Governor for appointment of respondents 3, 4 and 5 as DSJ/ADSJ. No action appears to have been taken on this request because no such record appears to have been produced before the High Court. Such silence militates against fair adjudication of the issues. Just and fair adjudication must not only inform the administrative side of the High Court but in order to put its record beyond the slightest pale of controversy it must avoid any secrecy in this behalf consistent with public interest. If the High Court felt that the criterion for promotion to the post of District Judge being a post of status and responsibility in the judicial hierarchy must only be merit, seniority having no or very little place, it was incumbent upon the High Court to propose such a rule to be made under article 309 or adopt to itself such a rule and conform to it. But if the High Court on the one hand recommended respondents 3, 4 and 5 according to their seniority as it appears to be the case, when the vacancies occurred and accepted their appointment and on the other hand when such appointments were challenged it went in search of a principle on the basis of which promotion to the 382 post of DSJ/ADSJ should be given, it is rather difficult to reconcile these diametrically opposite actions. The High Court also was in error in proceeding to reject the appellants petition without recording a finding regarding the basis on which recommendations were made by it. We have, however, on the basis of the material before us tried to resolve the said question. Having examined the matter in all its ramifications we are no substance in this appeal and the same is dismissed with no order as to costs. S.R. Appeal dismissed.

Dismissing the Writ Petitions, the Court, ^ HELD: 1. The provision contained in Section 3(3) of Act LXVII of 1976 is peremptory and the prohibition is mandatory because there is punishment provided for contravention of that provision. Breach of Section 3(3) is made punishable with imprisonment. The 1976 Act totally prohibits working of any coal mines by any agency other than those which have been set out in Section 3(3). Surely, there is no authority for the managements under whom the present petitioners are alleged to be workmen to operate coal mines in the face of the prohibition of the 1976 Act. Even for granting leases and their renewal by the State itself, the frown and force of the law stand four square between the mines and extraction of coal by any but the agencies specified in section 3(3) of the 1976 Act [589F G, 591A, B & C] 2. Investigation of the State or intimation by the private managements are obligatory under the appropriate legislation and in the absence of any intimation the presumption is that there are no such coal mines as are set up before the Court. What apparently has been done, if at all, is to do what has been described as 'scratching ' that is surface mining of coal bearing areas, destructive of the natural resources of the nation without any thought for the morrow and without any reference to the planned, phased programme of exploitation of coal for the benefit of the country in the public sector. The mines, if any, are illicitly being operated, there being no sanction of the law. It is precisely to prevent this mischief of slaugter mining that s.3(3) was introduced and s.4 was enacted to make the activity punishable. The proscription is comprehensive and the penalty makes it imperative. When it is accepted that it is not permissible to operate these mines save by those specified in the 1976 statute, it necessarily follows that workmen, genuine or other, cannot claim any fundamental right to work these mines. [591D G] 3. The prohibition of mining as under section 3(3) of the 1976 Act, is in the public interest and indeed, the scheme shows that wherever public interest requires exploitation of coal mines it has been permitted in the public sector and even in the private sector so far as certain specified industries, such as iron and steel industries, are concerned. The ban is part of a national policy, conceived for conservation of a vital national resource and the wisdom of the regulation of 587 fuel sources and their planned user is beyond argument. Therefore, the language of section 3(3) is express, explicit and admits of no exception. An aware Court will not relax when the language is peremptory, the legislation is charged with a critical purpose and even the commiserative case of workmen not wolves in sheep 's clothing, cannot override the larger cause of the nation. No nation, no workmen. [591G H, 592A] 4. It is audacious for the dubious managements under whom the petitioners are supposed to be innocent workmen to represent to the Court that they are "deemed custodians" working on behalf of the Central Government. [592D E] Under section S, notifications are a sine qua non for custodianship, actual or deemed and absent such notification taking over management no private agency can self style itself as "deemed custodian". Therefore, the managements other than those specified in section 3(3) of the 1976 Act, can not claim to extract coal from any coal mines. If this be so, no one can claim as a workman, although in public interest, although it is imperative that such operation should stop. [593E F] 5. There is no violation of Article 14 of the Constitution vis a vis the workmen concerned assuming them to be real workmen. After the dismissal of the management 's writ petitions, the argument that the Act impugned is ultra vires vis a vis workmen is a daring legal workmanship. If a larger Bench of this Court has already upheld the vires of a statute the discovery of a new argument cannot invalidate that decision. That proposition will make the binding effect of precedents, read in the light of article 141 a vanishing cream once a novel thought strikes a legal brain. [593F H] The question of discrimination between two classes of workmen hardly arises because one set of mines has been closed down validly. If the closure is valid, no one employed there has a right to force it open on the score of discrimination. Denial of lay off or other benefits belong to a different jurisdiction. If any workmen are really aggrieved that their interests are not protected and that their future is in jeopardy, it is certainly open to them to make representation to the Central Government for consideration of their lot, and certainly a welfare State will give due consideration for such representation if it is satisfied that the grievance is genuine. [594A B] 6. Section 3(3) of the 1976 Act being mandatory and having been held constitutional by this Court, it is no longer permissible for any court in India to appoint a receiver or otherwise permit extraction of coal or cooling coal. [594D E]

Criminal Appeal No. 208 of 1978. From the Judgment and Order dated 23.12. 1977 of the Punjab and Haryana High Court in Criminal Appeal No. 259 of 1974 M.R. Sharma, C.M. Sharma and H.K. Puri for the Appellant. 117 Harbans Lal, I.S. Goel and C.V. Subba Rao for the Respond ent. The Judgment of the Court was delivered by OZA, J. This appeal has been filed by the appellant after the grant of special leave by this Court against his conviction under Sec. 5(2) of the Prevention of Corruption Act and sentence to rigorous imprisonment for 2 years and fine of Rs. 150 and also under Sec. 161 of the Indian Penal Code and rigorous imprisonment for one year and a fine of Rs. 100 awarded by Special Judge, Ambala and maintained by the High Court of Punjab & Haryana by its judgment dated 23.12. According to the prosecution Shri M.G. Devasahayam P.W.4 Sub Divisional Officer , Jagadhri had sent a complaint against the appellant to the Station House Officer, Jagadhri on 7.6.1972 on the basis of which the first information report was recorded at Police Station about 4 P.M. on 7.6.1972. The Sub Divisional Officer has received an appli cation from one Gian Singh complainant about the conduct of the appellant. It was alleged by Gian Singh P.W.2 in the complaint that the appellant who was a Patwari of Bambhol Circle, had been demanding money for supply of copies from the revenue record and Gian Singh needed those copies in connection with the execution of a sale deed. Gian Singh was to purchase land form Brij Bhushan who was to act as an Attorney for his mother. It was alleged that for this Rs.200 were settled out of which Rs.50 were paid and Rs. 150 were to be paid on the date of the sale deed. The copies of the documents required were obtained after Rs.50 were paid. The sale deed was to be executed on 7.6.72 and therefore on this date (Gian Singh and Brij Bhushan approached the Sub Divi sional Officer with an application making these allegations against the appellant. The Sub Divisional Officer attempted to contact the Deputy Superintendent of Police and the Sub Inspector of Police incharge of the Police Station con cerned, but when none of them were available he himself decided to lay a trap. It is alleged that Gian Singh P.W.2, Brij Bhushan P.W.3, Raj Kumar and Mangal Singh P.W. 1 had gone to the house of the Sub Divisional Officer at 2.40 P.M. on 7.6.1972. Gian Singh narrated the whole story and stated that he had promised to pay he appellant Rs. 150 on the date on which the sale deed was to be executed. Rs. 150 were produced by Gian Singh which included a 100 rupee note and 5 notes of Rs. 10 each. Their number were noted and the Sub Divisional Officer initialled the currency notes and were given to Gian Singh and a trap was laid. Brij Bhushan was asked to act as a witness. Gian Singh 118 and Brij Bhushan therefore reached the canteen near the Tehsil. The Sub Divisional Officer, Raj Kumar and Mungal Singh went to Tensil premises in a Jeep and waited near the tea stall for a signal. On receiving the signal they reached there and on personal search currency notes of Rs. 150 were recovered from the person of the appellant. On these facts the appellant was prosecuted and was convicted and sentenced as mentioned above. The facts are not disputed. The money has been recovered from the possession of the appellant and it is also not disputed that he received this money from Gian Singh. Even before the High Court these facts were not disputed. The plea taken by the appellant was that the Govt. wanted to collect money from the land holders for small savings schemes and the Patwaris were instructed to collect this amount. Appellant also examined some defence to indi cate that such circulars were issued to the Patwaris and they were collecting the amounts to be deposited in the small savings schemes and on this basis they received appre ciation and those who could not collect sufficient amount to meet the target also received remarks. It was contended before the High Court and also before this Court that this amount the appellant had received as a deposit for the small savings scheme and which was ultimately recovered by the Sub Divisional Officer. It was also contended that in fact the copies of the revenue record which were needed by Gian Singh had already been supplied to him and in fact the sale deed was registered on 7th June before this trap and there fore it was alleged that Rs. 150 were paid as alleged by appellant and it was on this basis contended that the expla nation given by the appellant that he had received the money to be deposited under the small savings scheme appear to be reasonable. It is significant that when the Sub Divisional Officer on getting the signal reached the canteen alongwith the witnesses and conducted the search it was not the stand of the appellant that he had received the money for small scale deposits as it is apparent that if the money was received for that purpose, as soon as the Sub Divisional Officer reached the canteen with the witnesses and wanted to search the appellant, appellant would have immediately came out with this explanation. Learned counsel for the appellant frankly conceded that this was not the case of the appellant that he came out with this explanation on the spot at that time. This is not his case even in the statement recorded at the trial nor such a suggestion was put to anyone of the prosecution witnesses in the course of cross examination. In view of this it could not be disputed that this explanation has been given as an after thought and this itself goes to show that this explanation is just as an imagination. 119 There appears to be some controversy about the fact as to whether the Patwaris were directed to collect funds for small savings schemes and in this respect the learned Trial Court also examined the Tehsildar as a Court witness and after considering all the evidence disregarded the explana tion given by the appellant in respect of the money (Rs. 150) recovered from his person. The learned Trial Court after considering the defence evidence and the evidence of the Tehsildar did not accept the defence version and convicted the appellant. The Trial Court also considered the evidence of P.W .5 Jeet Ram who was the keeper of the tea stall who was examined by the prosecution but he turned 'hostile ' and supported the de fence version. Learned counsel for the appellant went through the evidence in detail and attempted to contend that as the copies of the documents had already been received there was no occasion for Gian Singh to pay Rs.150. According to the prosecution the bargain was settled for Rs.200. Rs.50 were paid in advance and therefore copies were given but the appellant was to receive the balance of Rs. 150 for which Gian Singh had promised to pay it on the date of the regis tration and accordingly on the date of registration it was fixed up that the appellant will be available at the tea stall near the Tehsil where this amount will be paid and it was because of this that Gian Singh appreached the Sub Divisional Officer with the complaint. In fact where the receipt of the amount and its recovery is not disputed it is not necessary for us to go through the evidence and examine it afresh, although learned counsel went through the evi dence in detail. The only question is as to whether the Courts below were fight in rejecting the explanation of the appellant for receipt of Rs. 150. The explanation given by the appellant which was seriously pressed by the learned counsel for the appellant was that he had received this amount to be deposited in the small savings scheme on behalf of Gian Singh but it is significant that neither he had made any note of this fact nor given any receipt to Gain Singh. Apart from it it is significant that the Sub Divisional Officer who was a revenue officer and the appellant being a Patwari was his subordinate. The normal conduct of the appellant would have been to tell him as soon as he arrived for search that in fact he had received this amount to be deposited in the small savings scheme. It is impossible to believe that if the appellant had received this amount for being deposited in the small savings scheme he would have not opened his mouth and permitted the search and recovery of this amount from his pocket to be done by the Sub Divisional Officer and allowed the matter to be 120 handed over to the Police and still would not have come out to say what he chose to say at the trial. This conduct of the appellant in not coming out with this explanation in stantaneously goes a long way to make this explanation just an after thought specially when Sub Divisional Officer con ducted the search and recovered this amount from his person. In this view of the matter therefore in our opinion both the Courts below were fight in discarding this explanation of the appellant. We therefore see no substance in this conten tion advanced on behalf of the appellant. Learned counsel ultimately contended that this appellant a Patwari who had faced the trial and pendency of this appeal for about 14 years will now have to go to jail for serving out a part of this sentence which remained to be served. It is no doubt true that having been convicted for these offences the appellant is bound to lose his service. It was also stated that he had served out some sentence of the imprisonment also. The incident is of 1972 and we are now in 1987. In view of these circumstances in our opinion the sentence of the imprisonment already undergone and sentence of find imposed by Hon 'ble the Trial Court will meet the ends of justice. Consequently appeal is partly allowed. The conviction of the appellant under Sec.5(2) of the Prevention of Corruption Act and Sec. 161 of the Indian Penal Code is maintained. However his sentence as regards sentence of imprisonment is reduced to the sentence already undergone but the sentence of fine is maintained. He is on bail. His bail bond shall be cancelled if he had not paid the amount of fine he shall do so within one month from today. A.P.J. Appeal al lowed.

A show cause notice dated 29.1.1976 issued by the re spondent to the appellant calling upon him to explain as to why excise duty treating his product as "fabric" and not as "yarn" may not be levied, was challenged in the High Court of Karnataka in Writ Petition No. 2632/ 1976. Pending final disposal of the writ petition, an interim order staying the collection of excise duty as a "fabric" for the period 1.4.1975 to 18.8.75 alone was passed with a specific direc tion that the appellant should continue to pay excise duty as "yarn". Finally the writ petition was dismissed on 16.2.1981. On 20th May, 1982, another notice No. 913 to show cause was issued to the appellant simultaneously seeking to raise a demand for the period from 20.6.1976 to 28.2.1981 apart from for the period between 1.4.1975 to 18.8.1975 challenged in the earlier writ petition. The Karnataka High Court having rejected the plea of bar of limitation under section 11A of the raised in the writ petition challenging the said second show cause notice and demand, the appellant has come in appeal by way of special leave. Allowing the appeal, the Court, HELD: 1.1 Section 3 of the Act which contains the charg ing provision clearly shows that levy and collection are two distinct and separate steps. [312H] 1.2 The provision of section 11A(1) and (2) of the make it clear that the statutory scheme is that in the situations covered by the sub section(1), a notice of show cause has to be issued and sub section(2) requires that the cause shown by way of representation has to be considered by the prescribed au thority and then 310 only the amount has to be determined. The scheme is in consonance with the rules of natural justice. An opportunity to be heard is intended to be afforded to the person who is likely to be prejudiced when the order is made, before making the order thereof. Notice is thus a condition prece dent to a demand under sub section(2). In the instant case, compliance with this statutory requirement has not been made, and, therefore, the demand is In contravention of the statutory provision. [313E G] 2. Explanation to section 11A of the , which incorporates a well known principle of law, in clear terms refers to 'stay of service of notice '. The High Court order did not at all refer to service of notice. The High Court having directed stay of collection of duty as 'fabric ' has not issued any interim direction in the matter of issue of notice of levy of the duty. Therefore, the benefit of Explanation to section 11A of the Act is not available to the Respondent. [313C D] Sirajul Haq Khan & Ors. vs The Sunni Central Board of Waqf, U.P. & Ors. , ; and N.B. San jane As sistant Collector of Central Excise, Bombay & Ors. vs El phinstone Spinning & Weaving Mills Co. Ltd., ; , 514 referred to.

Appeals Nos. 29 to 33, 89 and 90 of 1949. Appeals from the Judgment and Decree dated the 30th October 1945 of the High Court of Judicature at Madras (Lionel Leach C.J. and Rajamannar J.) in Appeals Nos. 230, 300 302, 355, 356 and 413 of 1943. G.S. Pathak (T. section Santhanam, with him) for the appellant in Civil Appeals Nos. 28 and 29 of 1949, respondent No. 1 in Civil Appeals Nos. 30, 32 and 33 of 1949 and respondent No. 2 in Civil Appeal No. 31 of 1949, for respondent No. 3 in Civil Appeal No. 31 of 1949 and for respondents Nos. 1 and 2 in Civil Appeals Nos. 89 and 90 of 1949. V.V. Raghavan, for the appellant in Civil Appeals Nos. 31 to 33 of 1949, respondent No. 1 in Civil Appeals Nos. 28 and 29 of 1949 and respondent No. 2 in Civil Appeal No. 30 of 1949.B. Somayya (K. Subramaniam and Alladi Kuppuswami, with him) for the appellant in Civil Appeals Nos. 30, 89 and 90 of 1949, respondent No. 1 in Civil Appeal No. 31 of 1949 and respondent No. 2 in Civil Appeals Nos. 28, 29, 32 and 33 of 1949. December 14. The Judgment of the Court was delivered by MAHAJAN J. 244 MAHAJAN J. These eight appeals arise out of a common judgment of the High Court of Madras dated the 30th October, 1945, given in seven appeals preferred to it against the judgment of the District Judge of Madura in four suits, O.S. Nos. 2, 5, 6 and 7 of 1941, all of which related to the zamindari of Bodinaickanur "in the Madura district and the properties connected therewith. The appeals were originally before the Privy Council in England, some by leave of the High Court and others by special leave and are now before us for disposal. The zamindari of Bodinaickanur is an ancient impartible estate in the district of Madura, owned by a Hindu joint family. The genealogical tree of the family is as follows : 245 Thirumalai Bodi Naicker Faisal Zamindar : : Rajaya Naicker(Died) : : (1) Bangaru Thirumali Bodi Naicker Zamindar 1849 1862(Died) : : : : : : T. B. Kamaraja Pandia Naicker Vadamalai Raja Zamindar1962 1888(Died15 12 1888) Pandia Naicker (Widow) Kamuluammal Zamindarini (Died in 1901) 1888 1921(Died 13 1 1921) : : Meenakshi Ammal (Died) : : : : : : : Peria Thayi Chainnathayi alias Satpur alias Muthumeenakshi Veeralakshmi Ammal Zamindar Veerakamulu Ammal (2nd Deft.) T.V.K. (3rd defendant) Kamaraja pandia Naicker, late Zamindar (2) Viswanatha Naicker (Died before 1888) : : Kandasami Naicker plff in O.S. 16 of 1889(Died 20 2 1901) : : : : : : Viswanatha Kamaraja Pandia T.V.K. Kamaraja (No.II) Naicker (Died on 29 7 1918) Pandiaya Naicker (Died 16 2 1941) Zamindar 1921 1941 Widow Chinnathayi alias Veeralakshmi Ammal (2nd Deft.) (3) Sundara Pandia Naicker (Died in 1893) : : : : : : : : : : : : Viswanathaswami Thirumalai Seelaraja Seela Kamaraja Naicker Muthu Vijaya Naicker Bodi pandia (died) Dalapathi Died on Naicker Naicker Pandia 25 9 1931) Naicker (Died) : : : : : : : T.B.S.S. Rajaya Pandiya Chokkalingaswami Naicker (Plaintiff) Naicker (4) Kulasekara pandia Naicker(No.1) (Died after 10 5 1889 but before 1902) : : : : : : Kulasekara pandiya Muthu Bangaruswami Naicker (No. 2) Naicker (Died) (Died before 1902) : : : : V.Kulasekara pandiya Naicker (1st Deft.) : : : : Vadamalai Muthu Thirumalai Bodaya Kulasekara Sundararaja Pandiya Naicker Pandiya Naicker (5) Chokkalingasami Naicker (Died after 10 5 1889 but before 1902) : : : : : : : : : Tirumalai Bodaya Chhokkalingasami T.B. Kamaraja Sundararau Pandiya Naicker (Died) Pandiya Naicker Naicker (Died) : : : : : : T.B.M.S.K. Pandiya Pandiya Raja Naicker Naicker 246 The zamindari was last held by Kamaraja II of the second branch. He died on 16th February, 1941, without male issue, but leaving him surviving a widow Chinnathayi alias Veeralakshmi Ammal, and members of the family belonging to the third, fourth and fifth branches. Succession to the zamindari is admittedly governed by the rule of lineal primogeniture modified by a family custom according to which the younger son by the senior wife is preferred to an eider son by junior wife. According to this custom T.B.S.S. Rajaya Pandiya Naicker of the third,branch was entitled to the zamindari after the death of Kamaraja II of the second branch. His claim was denied by the widow and by Kulasekara Pandiya Naicker of the fourth branch, both of whom claimed the zamindari on different grounds. It was alleged by the widow that the zamindari was the separate and exclusive property of her husband and that being so, she was entitled to it under the rule of Mitakshara applicable to devolu tion of separate property. Kulasekara of the fourth branch claimed it on the basis that Sundata Pandiya Naicker of the third branch who died in 1893, had separated from the family and had renounced his and his descendants ' rights of succession to the zamindari and the third 'branch having thus lost all interest in the joint family zamindari, he was the next person entitled to it by survivorship. On 28th April, 1941, the revenue officer allowed the claim of Kulasekara and held that he was entitled to posses sion of the zamindari and the pannai lands (home farm lands) which were in the possession of Kamaraja II. As regards one of the villages comprised in the zamindari, viz., Boothipu ram, the title of the widow was recognized. In pursuance of this order, Kulasekara got into ,possession of the zamindari and the pannai lands after the death of Kamaraja II. Boot hipuram village remained in the possession of the widow. Dissatisfied with the order of the revenue officer, the parties have instituted the suits out of which these appeals arise. 247 On the 22nd June, 1941, the widow (Chinnathayi) brought suit No. 5 of 1941 for possession of the zamindari against Kulasekara of the fourth branch, Rajaya and his uncle Seela bodi Naicker of the third branch, T.B.M.S.K. Pandiya Naicker and Kamaraja Pandiya Naicker of the fifth branch, on the allegations set out, above. On the 4th July, 1941, she and her sister instituted suit No. 2 of 1941 against the same set of defendants for cancellation of the deed of release that had been executed by her and her sister in favour of Kamaraja II on the 9th June, 1934, in respect of the pannai lands that were in the possession of Kulasekara of the fourth branch under the order of the revenue officer. The third suit, O.S. No. 6 of 1941, was brought by Rajaya of the third branch on 27th August, 1941, for posses sion of the zamindari, Boothipuram village and the pannai lands, against Kulasekara of the fourth branch and the two plaintiffs in suit No. 2 of 1941, on the allegation that under the rule of lineal promogeniture he was the person next entitled to succeed to the zamindari after the death of Kamaraja II. The last suit, O.S. No. 7 of 1941, was instituted by Kulasekara of the fourth branch on 13th October, 1941, against the widow and Rajaya, his rival claimants to the zamindari for a declaration that he was the rightful heir and successor to the zamindari and was entitled to posses sion of Boothipuram village registered in the name of the widow. The zamindari of Bodinaickanur orginally consisted of fifteen villages mentioned in schedule (A) to the plaint in O.S. No. 6 of 1941 and of certain pannai (home farm)lands and buildings. Tirumalai Bodi Naicker was the holder of this impartible raj. He was succeeded by his son Rajaya Naicker who died in 1849, leaving him surviving five sons, Bangaru Tirumalai Bodi Naicker, Viswanatha Naicker, Sundara Pandiya. Naicker, Kulasekara Pandiya Naicker and Chokkalin gaswami Naicker, representing the first, second, third, fourth and fifth branches respectively. Rajaya 248 Naicker was succeeded by his eldest 'son Bangaru Thirumalai Bodi Naicker who died on the 27th October, 1862, and was succeeded by his son. T.B. Kamaraja Pandiya Naicker (Kamara ja I) who remained as zamindar till his death on 15th Decem ber. He had no son and on his death his widow Kamulu ammal got into possession of the estate. Proceedings for transfer were taken in the revenue court for registry of the zamindari and statements of the male members of the family belonging to the second, third, fourth and fifth branches and of the widow were recorded by the Deputy Collector. On 18th December, 1888, the representatives of these branches stated that they had no objection to Kamuluammal enjoying the zamindari. On the 19th Kamuluammal asserted that her husband by his will had bequeathed the zamindari to her and had given her permission to make an adoption. On the same date the representatives of all branches of the family made a joint statement before the Deputy Collector. The relevant portion of it is in these terms : "We four persons are his heirs to succeed and yet we agree to his widow Kamuluammal taking and enjoying the above said zamin and all other properties save the undermentioned lands set apart for our maintenance. Remission of the tirwah of the said lands allowed to us and of the tirwah of the lands registered in our names and enjoyed till now, should be granted to us. " 544 kulies of pannai lands under the Bangaruswami tank and the Marimoor tank were earmarked for the maintenance of the four branches. The widow made a statement on 20th ac cepting this arrangement. The Deputy Collector submitted his report on the 5th of January, 1889, to the Collector upholding the will. The Collector in his turn also recorded the statements of the representatives of the several branch es of the family. Persons representing the third, fourth and fifth branches adhered to the previous statements made by them but Kandasami of the second branch resiled from his earlier statement and asserted that the 249 family being divided he was the next heir to the zamindari. No notice was taken in these proceedings of Vadamalai, the half brother of Kamaraja I Sundara Pandiya 's statement before the Collector on the 9th January, 1889, was in these terms : "The wish of the family is that the widow should be in charge of the estate. I know nothing about the execution of the will. After the death of the widow, the next heir should succeed. He is Kandaswami, son of Viswanathaswami Naicker, my eldest brother, deceased. ' ' To the same effect were the statements of Kulasekara of the fourth branch and of Chokkalingaswami of the fifth branch. Kandaswami 's statement was recorded on the 14th January, 1889, and he said as follows : "I am the next heir to the zamin, the family being undivided. I must get it." He repudiated his earlier statement on the ground that at that time he was ill and was drowned in sorrow and "some rogue imitated his signature" and put it on his previous statement. The revenue Officer ordered that the widow 's name be registered as the next person entitled to the zamindari subject to any order that the civil court might make in the case. On the 1st May, 1889, Kandasami filed O. S No. 16 of 1889 in the court of the Subordinate Judge of Madura im pleading the widow and the Collector as defendants for recovery of the entire zamindari as it then existed, includ ing the villages of Boothipuram and Dombacheri and the pannai lands. He alleged that he as a member of the undivided Hindu family was entitled to succeed to the zamindari by survivor ship and in accordance with the established rule applicable to the devolution of this zamindari. Kamuluammal denied this claim and asserted that the zamindari was the separate property of her husband and she was entitled to it in pref erence to her husband 's collaterals. She also based her claim on the alleged will of her husband. Sundara Pandiya of the third branch laid a claim to the zamindari and the 33 250 pannai lands on the ground that he as senior in age amongst the family members was entitled to them in preference to Rajaya on the rule of simple primogeniture. In view of the pending and threatened litigation the contesting parties thought it fit to end their disputes by a mutual settlement beneficial to all of them. Sundara Pandiya was the first to strike a bargain with the widow. On the 6th May, 1890, a deed of release (Exhibit P 17) was executed by him in favour of Kamuluammal incorporating the terms of the agreement. He managed to get from her in consideration of the release the village of Dombacheri absolutely for himself and his heirs. She bound herself to pay the peishkush and road cess of the said village without any concern about that on the part of Sundara Pandiya. He was also allowed to enjoy free of rent from generation to generation with power of alienation by way of gift, sale, etc. the one fourth share in the pannai lands under the irrigation of the Bangaruswami tank and the Marimoor tank and mentioned in the joint state ment made by the several branches of the family before the Deputy Collector in December 1888. Over and above this, he received a cash payment of Rs. 3,000. With the exception of Dombacheri village and of the one fourth share in the said pannai lands, all the other properties which belonged to Kamaraja I were to be held and enjoyed with all rights by Kamuluammal and her heirs with the power of alienation thereof by way of gift, sale etc. absolutely. The fourth clause of the release is in these terms : "Whatever rights over the said zamin properties and in all the other above mentioned properties, the said Sundara Pandiya Naicker Avargal might possess, he gives up such rights absolutely in favour of the said Kamuluammal Avargal and her heirs enabling them to enjoy them with the power of alienation thereof by way of gift, sale, etc. and whatever rights the said Kamuluammal might possess over the Dombach eri village and over the lands lying under the irrigation of the Bangarusami tank and the Marimoor tank and specified in the third column of the schedule hereto, 251 which are given up to the aforesaid Sundarn Pandiya Naicker Avargal, the said Kamuluammal Avargal hereby gives up such rights absolutely in favour of the said Pandiya Naicker Avargal and his heirs, enabling them to enjoy them with the power of alienation thereof by way of gift, sale etc. " Clause 5 runs thus : "The said Kamuluammal and her heirs shall have no claim at all to the properties shown as belonging to Sundara Pandiya Naicker Avargal as aforesaid and the said Sundarn Pandiya Naicker Avargal and his heirs shall have no claim at all to the properties shown as belonging to the said Kamu luammal Avargal. " This deed was presented for registration on 10th May, 1890. On the same day O.S. No. 16 of 1889, i.e., Kandasami 's suit, was also compromised Exhibit P 18 contains the terms of that compromise. The following are its important provi sions : (a) The zamindari shall be enjoyed by Kamuluammal till her lifetime and she shall have no right to mortgage those properties in any way prejudicial to the plaintiff. (b) Kandasami and his heirs shall after the lifetime of Kamuluammal, enjoy the zamindari excepting Dombacheri vil lage together with such rights if any as the first defendant Kamuluammal may have acquired under the deed of release executed between her and Sundarn Pandiya. (c) Boothipuram village shall be given to the plaintiff by Kamuluarnmal so that she may enjoy it with absolute rights. The entire peishkush and the road cess for the entire zamindari inclusive of the said village shall be paid by Kamuluammal. (d) The one fourth share in pannai lands situated on the irrigation areas of Bangaruswami tank and Marimoor tank shall be enjoyed by Kandaswami and his heirs with powers of alienation and with absolute rights. (e) Rs. a5,000 shall be paid to Kandasami by Kamuluam mal. 252 (f) All the other pannai lands, buildings and movables which belonged to the deceased Kamaraja Pandiya Naicker shall be held and enjoyed by Kamuluammal and her heirs with powers of alienation etc. and with absolute rights free from any future claim on the part of Kandaswami and his heirs. (g) The movable and immovable properties which may be acquired by Kamuluammal from out of the income of the za mindari shall belong to her with power of alienation etc. and shall go to her own heirs after her lifetime. (h) Kamuluammal shall not make an adoption. By the proceedings taken before the Collector and by the arrange ment made under Exhibits P 17 and P 18, the disputes that had then arisen in the family were settled. Kamuluammal, however, did not with good grace part with the properties which she had agreed to give to others under the arrange ment. The terms of the compromise had to be enforced against her by a number of suits and actions one by one. Be that as it may, it is not denied now that the arrangement arrived at was eventually acted upon. Kandasami and his sons enjoyed the Boothipuram village and one fourth of the pannai lands in the two tanks absolutely. Sundara Pandiya and his descendants enjoyed Dombacheri and one fourth pan nailands, the fourth and fifth branches obtained possession of one fourth share of the pannai lands under the two tanks. Kamuluammal secured revenue registration and remained in possession of the property down to the date of her death on lath January, 1921. On her death the estate became vested in the possession of Kamaraja II, the sole male representative of the second branch, his father Kandasami and his brother Viswanathaswami having predeceased Kamuluam mal. He had been married to Chinnathayi (Veeralakshmi) one of the grand daughters of Kamuluammal during her lifetime. In the year 1925, the zamindar of Saptur, the son of Kamulu 's deceased daughter Meenakshi, instituted 253 O.S. No. 7 of 1925 against his sisters, Chinnathayi and Periathayi, and Kamaraja II, for recovery of the pannai lands and buildings which had vested absolutely in Kamulu under the compromise decree, on the allegation that these were held by her as a widow 's estate and that he as the daughter 's son was entitled to succeed to them. The suit was resisted by the two sisters on the plea that these lands were stridhanam properties of Kamulu and they as stridhanam heirs were entitled to them in preference to their brother. Kamaraja II contended that he was entitled to these lands and buildings as they formed an integral part of the zamind ari and were treated as such by Kamulu. This suit was dis missed and the plea of the two sisters was upheld. On 9th June, 1934, both of them executed a deed of release in favour of Kamaraja II whereby they conceded his claim to the pannai lands and the buildings as being appurtenant to the zamindari in consideration of his agreeing to pay Rs. 300 per mensem for life to each of them. On the death of Kamaraja II on the 16th February, 1941, as already stated, the second branch of the family became extinct, and disputes arose in regard to the succession to the zamindari, pannai lands, buildings etc. and the village of Boothipuram. As above stated, the claimants to the za mindari are three in number, Rajaya of the third branch, Kulasekara of the fourth branch, and Chinnathayi alias Veeralakshmi, the widow of the late zamindar. The District Court and on appeal the High Court have concurrently held that Rajaya was the person entitled to the zamindari. The District Court further held that the village of Boothipuram continued to be part of the zamin and decreed the same to the plaintiff Rajaya. As regards the pannai lands, it was held that these had been conveyed absolutely to Kamulu under Exhibit P 18 and that her daughter 's daughters, Periathayi and Chinnathayi. succeeded to the same as her stridhanam heirs and that the release deed executed by them on the 9th June, 1934, was invalid and inoperative to convey a valid title to Kamaraja 11. On appeal the High Court 254 confirmed the findings of the District Court as regards the pannai lands and buildings but reversed its findings as regards succession to Boothipuram. It held that Kandasami obtained Boothipuram village as his selfacquired property and that Chinnathayi was entitled to succeed to the same on the demise of her husband Kamaraja II. The various sets of parties have preferred the above appeals against the deci sion of the High Court to the extent it goes against them. The points for determination in these appeals are the following : 1. Who out of the three claimants is entitled to the zamindari. Whether Boothipuram village is still an integral part of the zamindari or did it become the self acquired property of Kandasami by the compromise, Exhibit P 18. 3. Whether the pannai lands and buildings are part of the zamindari or became the stridhanam of Kamuluammal by the compromise decree and did not merge in the zamindari by the release deed of 1934. The question relating to the pannai lands and buildings can be shortly disposed of. Both the courts below have held that under the arrangement arrived at amongst the members of this family in the year 1890 these lands became the stridha nam of Kamuluammal and passed on to her stridhanam heirs, i.e., her granddaughters Chinnathayi and Periathayi, and that the deed of release executed by the two sisters in favour of Kamaraja II was vitiated by fraud and was not binding on Chinnathayi and the other heirs. This finding could not be seriously disputed by Mr. Somayya appearing for Rajaya or by Mr. Raghavan appearing for Kulasekara. It was faintly argued that the pannai lands were left with the widow in the same status in which she was allowed to retain the zamindari. This contention is contrary to the clear recitals of the compromise deed. Kamuluammal was a forceful personality and it seems clear that she agreed to accept the title of Kandasami as next entitled to the 255 estate and to give up her contention based on the will because she was given the zamindari for her lifetime and these pannai lands and buildings absolutely. Kandasami in whom the inheritance had vested was competent, in view of the decision in Sartaj Kuari 's case(1), to alienate these lands in her favour and to vest her with absolute interest in them. It has therefore been rightly held that Kamulu became the absolute owner of the lands which in due course devolved on her grand daughters and ceased to be part of the joint family estate. Moreover, it does not lie in the mouth of Sundarn Pandiya 's descendants to challenge Kamuluammal 's absolute title to these lands while retaining absolute title in the village of Dombacheri which under the same arrange ment Sundarn Pandiya got absolutely with rights of aliena tion. It was conceded that to the family arrangement ar rived at in the year 1890 and evidenced by the statements made before the Collector, the recitals contained in the release deed, Exhibit P 17, and those made in the compromise deed, Exhibit P 18, all the members of the family were either parties or they accepted it and acted upon it. The result is that the widow Chinnathayi is entitled to the possession of those lands and no other person has any right to them whatever. As regards Boothipuram village, the point is a simple one. Under the compromise, Exhibit P 18, this village was left with Kandasami, the person next entitled to the zamind ari after the death of Kamaraja I. It was separated from the zamindari estate which remained m possession and enjoyment of Kamuluammal for her lifetime. It was said in the compro mise that Kandasami would be the absolute owner of this village. It was argued by Mr. Somayya, and the same was the view taken by the trial Judge, that Kandasami being the holder of an impartible estate could not by his own unilat eral act enlarge his estate and take a part of this estate in a different right than the right of a holder of an im partible zamindari and that he could not make it separate property by his own act. (1) (1888) 15 I.A. 51. 256 The High Court did not accept this view but reached the decision that all the branches of the family agreed to Kandasami having this village as his private property and that by common consent it was taken out of the zamindari and given to him absolutely and it was thus impressed with the character of separate property. On Kandasami 's death it devolved on his son by succession and not by survivorship and Chinnathayi has a widow 's estate in it after the death of her husband. In the High Court it was conceded that all the members of the family were aware of the terms of the family arrangement and were bound by them. In view of this concession it seems to us that it is not open to any of the parties to these appeals to deny at this stage the right of the widow to this village as an heir to her husband 's es tate. The main fight in all these appeals centres round the title and heirship to the zamindari. The question four determination is, whether the zamindari by some process became the separate property of Kandasami and that of his son Kamaraja II. If it became the separate property of Kamaraja II, then Chinnathayi, his widow, would succeed to it on his death; on the other hand, if the zamindari re tained its character of joint family property in the hands of Kamaraja II, then the question to decide is whether as a result of the arrangement made in 1890 Sundarn Pandiya relinquished his right to succeed to the family zamindari on the failure of nearest male heirs of Kandasami. If such relinquishment on his part is held satisfactorily estab lished, then Kulasekara of the fourth branch would be enti tled to succeed to the zamindari; otherwise Rajaya of Sun darn Pandiya 's branch alone is entitled to it under the rule of succession applicable to the devolution of the zamindari. The claim made by the widow that the zamindari became by the arrangement of 1890 the separate property of Kandasami was disallowed by the High Court on the short ground that the documents, Exhibits P 17 and P 18, read along with the various statements made in 1889 cannot be read as changing the character 257 of the estate from that of an impartible estate belonging to the joint family to an estate owned by Kandasami in his individual right. In the view of the High Court the only change effected by the arrangement so far as the estate was concerned was to defer the right of Kandasami to its posses sion as the next in succession until after the death of Kamuluammal. Kandasami could not himself make it his own private property and this was conceded by all. After hear ing Mr. Pathak at considerable length we are in agreement with the High Court on this point. Mr. Pathak argued that on the true construction of Exhibits P 17 and P 18 and on the evidence furnished by these two documents and the statements made antecedent to their execution and also in view of the subsequent conduct of the parties, the correct inference to draw was that all the five branches of the family separated in the year 1890 and thus put an end to the joint family character of the zamindari that Kandasami was allotted the zamindary, Boot hipuram village and one fourth pannai lands under the two tanks, Sundara Pandiya was allotted Dombacheri village and one fourth of the pannai lands and that the fourth and fifth branches in lieu of their share were assigned one fourth of the pannai lands irrigated by the two tanks mentioned above and by these allotments the joint family was completely disrupted and the properties allotted to the different branches became their separate properties. Reference was made to the decisions of the Privy Council in Vadreun Ranganayakamma vs Vadrevu Bulli Ramaiya (1); Sivagnana Tevar vs Periasami(2); Thakurani Tara Kumari vs Chaturbhuj Narayan Singh (3); and it was contended that the present case was analogous to the facts of those cases and should be decided on similar lines. We are of the opinion that the facts of none of those cases bear any close resem blance to the facts of the present case. The decision in (1) (3) (1915) 42 I.A. 192, (2) (1877) 5 I.A. 51. 34 258 each one of those cases was given on their own peculiar set of circumstances. In the first case the owner of an impartible zamindari forming part of family property died leaving four sons and an infant grandson by his eldest son. During the minority of the grandson the four surviving sons executed a sanad which directed that the zamindari should be held by the grandson and that they should take an equal share of the inam lands and also manage the zamindari during the infancy of the grandson, which on his attaining majority had to be handed over to him, each confining himself to the share of the inam lands allotted to them. Certain family jewellery was also divided in a similar manner. This grandson then died leaving a son, who also died without any issue but leaving a widow. Her title to the zamindari was denied by the descendants of the four sons of the zamindar. It was held that the sanad amounted to an agreement by which the joint family was divided and that on the death of the last holder his widow was entitled to the zamindari. It was observed in this case that having partitioned the lands, the parties to the sanad proceeded to partition the jewels and this circumstance was inconsistent with the supposition that the document was executed with the intention of merely providing allotments in lieu of maintenance. It is clear from the facts of this case that the family owned other coparcenary properties besides the zamindari and the zamind ari in dispute fell to the lot of the grandson as his sepa rate property. There were other materials in the case indicating that there was complete separation between the members of this family. In the next case an impartible zamindari had devolved on the eldest of three undivided Hindu brothers. He exe cuted an instrument appointing his second brother to be zamindar. The instrument recited that if the widow of the deceased who was pregnant did not give birth to a son but a daughter, he and his offspring would have no interest in the zamindari of 259 which his younger brother would be the sole zamindar who would also allow maintenance to the third brother. The widow gave birth to a daughter and the second brother took over the zamindari. The third brother also died without issue. On the death of the second brother his son succeeded and the zamindari devolved on him who died leaving a widow. The son of the eldest brother who had renounced the zamind ari sued to recover the estate against the widow. It was held that the instrument executed by the eldest brother was a renunciation by him for himself and his descendants of all interests in the zamindari either as the head or as a junior member of the joint family and consequently it became the separate property of the second brother and the widow was entitled to succeed to it in preference to the line of the eldest brother. The document on the interpretation of which this decision was given was in these terms : "I and my offspring shall have no interest in the said palayapat, but you alone shall be the zamindar and rule and enjoy the same, allowing, at the same time, as per former agreement to the younger brother, P. Bodhagurusami Tevar, who in the pedigree is called Chinnasami, the village that had been assigned to him before. " These words were interpreted as amounting to a renuncia tion of all interest in the palayapat either as the head of or as a junior member of the joint family. The rights of the youngest brother Chinnasami were expressly reserved. It was said that the effect of the transaction was to make the particular estate the property of the two instead of the three brothers, with, of course, all its incidents of im partibility and peculiar course of the descent, and to do so as effectually as if in the case of an ordinary partition between the eider brother on the one hand and the two young er brothers on the other, a particular property had fallen to the lot of the other two. Other clauses in the deed and the attending circumstances fully corroborated the construc tion placed upon it. 260 In the last case the holder of an impartible estate of a joint Hindu family made a mokurari grant to his younger brother for maintenance. The grantee built a separate house, divided from his brother 's by a wall, established therein a tulsi pinda and thakurbari, and lived there sepa rately from his brother. He derrayed the marriage expenses of his daughter subsequently to the grant. Upon these facts it was held that there was a complete separation between the brothers, and that the impartible estate consequently became separate property of the holder whose widow was entitled to succeed and have a widow 's estate in the zamindari. It was observed that the evidence clearly proved that there had been complete separation between Thakur Ranjit Narayan Singh and his brother Bhupat Narayan Singh in worship, food and estate. In our opinion, the decision in this case must be limited to the facts therein disclosed and can have no general application to cases of impartible estates where the only right left to the junior members of the family is the right to take the estate by survivorship in case of failure of lineal heirs in the line of the last zamindari. The junior members can neither demand partition of the estate nor can they claim maintenance as of right except on the strength of custom, nor are they entitled to possession or enjoyment of the estate. In our opinion, division amongst the members of this family by allotment of properties was not possible as the only property known to belong to the family was the imparti ble zamindari of which partition could not be made or de manded. To establish that an impartible estate has ceased to be joint family property for purposes of succession it is necessary to prove an intention, express or implied, on the part of the junior members of the family to give up their chance of succeeding to the estate. In each case, it is incumbent on the plaintiff to adduce satisfactory grounds for holding that the joint ownership of the defendant 's branch in the estate was determined so that it became the separate property of the last holder 's branch. The test to be applied is whether the 261 facts show a clear intention to renounce or surrender any interest in the impartible estate or a relinquishment of the right of succession and an intention to impress upon the zamindari the character of separate property. Reference in this connection may be made to the decision of the Privy Council in Konammal vs Annadana (1). In that case on the death of a holder, his eider son being feeble in mind, his younger son succeeded to the zamindari by an arrangement with the adult members of the family in the year 1922. The estate then descended from father to son till 1914 when the junior branch became ex tinct and possession was taken by a senior member of the branch who claimed it by survivorship; while the mother of the last holder claimed the estate as an heir to separate property, and it was held that the setting aside of the eider son in 1822 did not deprive his descendants of their rights as members of the family to succeed on failure of the junior branch. In this case there was complete passing over of one branch of the family to succession vested in the next junior branch; yet when that branch failed, the mem bers of the senior branch were held yet to possess their right to succeed to the zamindari by survivorship. In Collector of Gorakhpur vs Ram Sundar Mal(1), the claim of a Hindu to succeed by survivorship to an ancestral impartible estate was in issue in the suit. The family admittedly had been joint. It appeared that the common ancestor of the deceased holder and of the claimant had lived 200 years before the suit, that for a long period there had been a complete separation in worship, food and social intercourse between the claimant 's branch of the family and that of the deceased holder, and that upon the death of the holder the claimant had not disputed that the widow of the deceased was entitled to succeed. It was held that there was not to be implied from the circumstances (1) (1928) 55 I.A. 114. (2) All. 468 (P.C.). 262 stated above a renunuciation of the right to succeed so as to terminate the joint status for the purposes of that right. In Sri Raja Lakshmi Devi Garu vs Sri Raja Surya Nara yana Dhatrazu Bahadur Garu (1), the last zamindar died without any issue in 1888, and when his widow was in posses sion, the suit was brought for possession by a male collat eral descended from a great grandfather common to him and to the last zamindar. The plaintiff claimed to establish his right as a member of an undivided family holding joint property against the widow who alleged that her husband had been the sole proprietor. In proof of this she relied on certain arrangements as having constituted partition, viz., that in 1816, two brothers, then heirs, agreed that the eider should hold possession, and that the younger should accept a village, appropriated to him for maintenance in satisfaction of his claim to inherit; again, that in 1866, the fourth zamindar compromised a suit brought against him by his sister for her inheritance, on payment of a stipend to her having already, in the claim of his brother, granted to him two villages of the estate; and by the compromise, this was made conditional on the sister 's claim being set tled; again, that in 1871, the fourth zamindar having died pending a suit brought against him to establish the fact of an adoption by him, an arrangement was made for the mainte nance of his daughter, and two widows, who survived him, the previous grant for maintenance of his brother holding good, the adoption being admitted, and the suit compromised. It was held that there was nothing in the arrangement which was inconsistent with the zamindari remaining part of the common family property and that the course of the inheritance had not been altered. The facts of this case were much stronger than those of the present one. The mere circumstance that by an arrangement a village out of the zamindari was given to one of the brothers was not inconsistent with the zamindari remaining part of the common family property. (1) (1897)I.L.R. 263 The document executed by the brother in the reported case was in these terms : "I or my heirs shall not at any time make any claims against you or your heirs in respect of property movable or immovable, or in respect of any transaction. As our father put you in possession of the Belgam zamindari, I or my heirs shall not make any claim against you or your heirs in respect of the said zamindari. " It was observed by their Lordships that they did not find any sufficient evidence in the arrangement made by these documents of an intention to take the estate out of the category of joint or common family property so as to make it decendible otherwise than according to the rules of law applicable to such property, that the arrangement was quite consistent with the continuance of that legal charac ter of the property, that the eider brother was to enjoy the possession of the family estate, and the younger brother accepted the appropriated village for maintenance in satis faction of such rights as he conceived he was entitled to and that it was nothing more in substance than an arrange ment for the mode of enjoyment of the family property which did not alter the course of descent. The evidence in the present case is trivial and incon clusive and from the documents above mentioned no intention can be deduced on the part of the junior members or on the part of any other member of the family of disrupting and dividing the family and renouncing their expectancy of succession. On the other hand, the statements made in 1880 and 1800 by the members of the family clearly indicate that none of them had any intention of giving up his rights of heirship to the zamindari. There was no change of this frame of mind at any later stage of the family arrangement. Sundara Pandiya on the 9th January, 1889, clearly stated that the wish of the family was that the widow should be in charge of the estate and after her the next heir should succeed and that it was Kandasami. Kandasami said that he was the next 264 heir, the family being undivided. In the compromise this statement was reiterated. Their intention was to preserve their rights to take the zamindari if the line of Kandasami became extinct. Mr. Pathak then put his ease from a different point of view. He urged that Kandasami had the power to alienate 'the zamindari or any part of it and by an act of alienation he could defeat the right of survivorship vesting in the other members to claim the zamindari on failure of his line. Similarly he said he could divide the impartible estate amongst the different members of the family and that is what he must be presumed to have done in the present 'case. The argument, though plausible, is fallacious. The right to bring about a partition of an impartible estate cannot be inferred from the power of alienation that the holder thereof may possess. In the case of an impartible estate the power to divide it amongst the members does not exist, though the power in the holder to alienate it is there and from the existence of one power the other cannot be deduced, as it is destructive of the very nature and character of the estate and makes it partible property capable of partition. It seems to us that Kandasami instead of intending to separate from the family was by his actions consolidating the family unity. By the family arrangement he no doubt successfully got himself declared as the next person enti tled to hold the joint family zamindari, but he evinced no intention of converting it into his own separate property: He preserved the estate for the family by saving it from the attack of the widow who wanted to take it under the will of her husband and antagonistically to the family. By the suit which he brought and which was eventually compromised he successfully avoided that attack on the family estate at the sacrifice of his right of enjoying it during the lifetime of the widow. He also by this arrangement safeguarded himself against the attack of Sundara Pandiya on his title as an heir. By his act the rule of descent of lineal primogeni ture prevailing in the family with regard to the zamindari was firmly 265 established. It would be unjust and uncharitable to conclude from the circumstances that the actions of Kandasami in 1890 were in any way hostile to the interests of the family. As he was throughout acting for the benefit of the family his actions were approved by all the members and they got a provision made for themselves for their maintenance in the arrangement. In the suit that he filed against Kamuluammal he in unambiguous terms alleged that he was claiming the zamindari as a member of the undivided Hindu family and it was in that status that he made the compromise with her and agreed to obtain possession of the estate after her death. After Kandasami 's death ' when the zamindari came by descent to Kamaraja II, he also followed in the footsteps of his ancestor. During the period of his stewardship of the estate he tried to implement it by recovering the pannai lands which under the compromise had gone out of the estate to Kamulu absolutely. He was successful in his efforts though as a result of the decision in the present case his labours in this direction have proved futile as the release deed has been held to be vitiated by fraud. For the reasons given above we hold that there exist no satisfactory grounds for holding that the arrangement made in 1890 evidences a partition amongst the members of the joint family or proves an intention on the part of the junior members of the family to renounce their expectancy of succession by survivorship on failure of male lineal de scendants in the second branch of the family. The question whether there was separation among the members of the family is primarily a question of fact and the courts below having held that it is not proved, there are no valid grounds for disturbing that finding. Chinnathayi 's claim therefore to the zamindari must be held to have been rightly disallowed. As regards the claim of Kulasekara to the zamindari, it has been disallowed in the two courts below on the ground that the deed of release, Exhibit P 17, 35 266 does not extinguish the right of survivorship of the third branch to take the estate on the second branch becoming extinct and that the document could not be read as evidenc ing an intention on the part of Sundara Pandiva to surrender the right of succession of his branch. It has been further held that the release was not executed in favour of the head of the family or in "favour of all the members of the family in order to be operative as a valid relinquishment. There can be no doubt that a member of a joint family owning an impartible estate can on behalf of himself and his heirs renounce his right of succession; but any such relinquish ment must operate for the benefit of all the members and the surrender must be in favour of all the branches of the family, or in favour of the head of the family as represent ing all its members. Here the deed was executed in favour of the widow of a deceased copgrcener who as such was a stranger to the coparcenary, the family being admittedly joint at the death of Kamaraja I. It was contended that in view of the attitude taken by the parties before the High Court that the deed of release and the compromise evidenced only one arrangement to which all the members were in reali ty parties it should be held that the surrender of his rights by Sundara Pandiya was made in favour of Kandasami, the head of the family, and it extinguished the rights of the third branch in the family zamindari. We think, howev er, that Kandasami in dealing with Sundara Pandiya was safeguarding his own right of succession against the attack personally directed against him and was successful in buying him off by agreeing to hand over to him a village. Both of them were claiming headship of the family on different grounds and both were asserting that the zamindari belonged to the joint family. In the compromise Kandasami was acting for his own benefit and was not making any bargain with Sundara Pandiya on behalf of the family. The family as such could not have been prejudiced in any way by the circum stance that succession went to one or the other. Be that as it may, we think the decision 267 of this case can be made to rest on a more solid foundation than furnished by the considerations set out above. The whole emphasis of Mr. Raghavan who represented Kulasekara was on the words of the deed contained in clause 5 set out above. Sundara Pandiya by this clause stipulated that he will have no right to the property shown as belonging to the widow. Sundara Pandiya was then agreeing that the widow should retain the zamindari absolutely, his mind being affected by the will. Later on by the compromise made in Kandasami 's suit what had been given absolutely to the widow was converted into a life estate with the excep tion of the pannai lands and Kandasami was acknowledged as the rightful heir. The recitals in the release deed there fore have to be read in the light of the terms and condi tions of the deed of compromise and the proper inference from these is that Sundara Pandiya relinquished his rights to succeed to the zamindari immediately as the seniormost member of the family but that he did not renounce his con tingent right of succeeding to it by survivorship if and when the occasion arose. It is well settled that general words of a release do not mean release of rights other than those then put up and have to be limited to the circum stances which were in the contemplation of the parties when it was executed: vide Directors etc. of L. & S.W. Ry. Co. vs Richard Doddridge Blackmore (1). In that case it was said that general words in a release are limited to those things which were specially in the contemplation of the parties when the release was executed. This rule is good law in India as in England. The same rule has been stated in Norton on Deeds at page 206 (2nd Ed.) thus : "The general words of a release are limited always to that thing or those things which were specially in con templation of the parties at the time when the release was given, though they were not mentioned in the recitals." (1) 268 In Hailsham 's Edition of Halsbury 's Laws of England, Vol. 7, at para 345 the rule has been stated in these terms : "General words of release will be construed with refer ence to the surrounding circumstances and as being con trolled by recitals and context so as to give effect to the object and purpose of the document. A release will not be construed as applying to facts of which the creditor had no knowledge at the time when it was given." In Chowdhry Chintaman Singh vs Mst. Nowlukho Kunwari(1), where the document was drafted in almost the same terms as Exhibit P 17, it was said that though the words of the petition of compromise were capable of being read as if the executants were giving up all rights whatever in the taluka of Gungore, yet in the opinion of their Lord ships the transaction amounted to no more than an agreement to waive the claim to a share in and to the consequent right to a partition of the taluka and there was no intention to change the character of the estate or the mode in which it was to descend. The parties in the year 1890 were not thinking of their future rights of survivorship at all. What Sundara Pandiya must be taken to have said by this release was "I am giving up my present rights as a senior member in favour of Kandasami whom I recognize as the right ful heir to the zamindari as a member of the joint Hindu family." Kandasami agreed to give him the village of Domb acheri in lieu of recognition of his title by him. It was not within the ken of the parties then as to what was to happen to the zamindari in case Kandasami 's line died out. For the reasons given we are of the opinion that by the release Sundara Pandiya did not renounce his rights or the rights of his branch to succeed to the zamindari by survi vorship in case the line of Kandasami became extinct. We hold therefore that (1) (1874) 2 I.A. 263. 269 Kulasekara 's claim was rightly negatived in the courts below and that of Rajaya was rightly decreed. In the result all these appeals fail and are dismissed with costs. Appeals dismissed. Agent for the appellant in Civil Appeals Nos. 28 & 29 of 1949, respondent No. 1 in Civil Appeals Nos. 30, 32 & 33 of 1949 and respondent No. 2 in Civil Appeal No. 31 of 1949 and for Respondent No. 3 m Civil Appeal No. 31 of 1949: M.S.K. Sastri. Agent for the appellant in Civil Appeals Nos. 31 to 33 of 1949, respondent No. 1 in Civil Appeals Nos. 28, 29 of 1949 and respondent No. 2 in Civil Appeal No. 30 of 1949: M.S.K. Aiyangar. Agent for the appellant in Civil Appeals Nos. 30, 89 and 90 of 1949, respondent No. 1 in Civil Appeal No. 31 of 1949 and respondent No. 2 in Civil Appeals Nos. 28, 29, 32 & 33 of 1949: section Subrahmanyam. Agent for the respondents Nos. 1 and 2 in Civil Appeals Nos. 89 and 90 of 1949: V.P.K. Nambiyar.

On 13th November 1951, the respondent agreed to sell to the appellants a stock of 415 tons of newsprint in sheets then lying in the respondent 's godown. On 26th November, the parties varied the contract by agreeing that the appellants would buy only 300 tons out of the. stock of 415 tons. After taking delivery of a part of the newsprint, the appellants refused to take delivery of the balance and repudiated the contract on 29th March 1952. On 21st April the respondent, after notice to the appellants. resold the balance at a lesser rate. The suit flied by the respondent claiming from the appellants the deficiency on resale was decreed. In appeal to this Court, Held: (1) The claim was unsustainable. (a) As the respondent was not a pledge of the newsprint, the respondent had no right to sell the goods under section 176 of the . [242H] (b) A seller can claim as damages the difference between the contract price and the amount realised on resale of the goods where he has the right of resale under section 54 (2) of the Indian . But this statutory power of resale arises only if the property in the goods has passed to the buyer subject to the lien of the unpaid seller. Under section 18 of the Sale of Goods Act. it is a condition precedent to the passing of property under a contract of sale that the goods are ascertained. In the present case, when the contract was originally entered into for the sale of 415 tons there was an unconditional contract for the sale of specific goods in a deliverable state and the property in those goods then passed to the appellants. But the effect of the variation was not to make the appellants and respondent joint owners of the stock of 415 tons. Nor was it merely to relieve the appellants from their liability to take 115 tons. The effect was to annul the passing of the property. so that. as from 26th November the property in the entire stock of 415 tons belonged to the respondent. The result was that in place of the original contract for sale of specific goods a contract for sale of unascertained goods was substituted. No portion of the stock of 415 tons was appropriated to the contract by the respondent with the appellants ' consent before the resale. Therefore, on the date of resale. the property in the goods had not passed to the buyer (appellants) and the respondent had no right to resell.1243A. E. F H; 244A B] Gillett vs Hill; ,, ; , applied. (2) As no time was fixed under the contract of sale for acceptance of the goods, under section 73 of the Indian Contract Act, the respondent was entitled to the difference between the contract price and the market price on 29th March 1952, the date of repudiation, as damages. [244E C] 240

Appeal No. 162 of 1954. Appeal by special leave from the judgment and order dated the 21st day of July 1953 of the Labour Appellate Tribunal of India, Lucknow in Miscellane ous Case No. C III 33 of 1952. H.J. Umrigar and R. A. Govind for the appellant B.P. Maheshwari for the respondent. October 4. The Judgment of the Court was delivered by BHAGWATI J. The Labour Appellate Tribunal of India at Lucknow dismissed the application of the appellant made under section 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950, for permission to dismiss the respondent, its workman, and the appellant obtained from this Court Special Leave to Appeal against that order. The respondent has been working as a Steno typist with the appellant since 3rd December, 1946, and is also the Vice President of the Union of workers which is affiliated to the Indian National Trade Union Congress and is known as Chini Mills Mazdoor Sangh One M. P. Singh has at all relevant times been and is still the General Manager of the appellant. The relations between the appellant and its work men are governed by the Standing Orders framed by mutual agreement between the Labour and the Sugar Mills in Uttar Pradesh which have been approved by 97 748 the Government of Uttar Pradesh. ClauseL(1)(j)of the said Standing Orders runs as under: "Drunkenness or gambling or riotous or disorderly behaviour while on duty in factory premises, or in quarters provided by the mills or elsewhere or any act subversive of discipline". These are among the items of misconduct which would entitle the appellant, after due enquiry, to dismiss a workman from its employ. There were longstanding disputes between the appellant and its workmen since October, 1946, and on the 23rd February, 1949, Kedar Nath Khetan, one of the partners of the appellant, wrote to Shri Kashi Nath Pandey, General Secretary, Indian National Sugar Workers Federation, promising to remove the General Manager as soon as the season of the Chhitauni factory was over. There was, however, an agreement arrived at between the partners of the factory and the Chini Mills Mazdoor Sangh on the 13th September, 1949, under which the demand for the removal of the General Manager was withdrawn by the workers. The disputes, however, continued and matters came to a head in 1952. In May, 1952, the management charged 76 members of the Union for participation in a 'Tools down 'strike. The matter went up to the Labour Appellate Tribunal which, by its award, reinstated all the 76 workmen. The management preferred writ petitions Nos. 402 and 409 in the Allahabad High Court but the same also were dismissed. Special Leave was obtained from this Court against those decisions of the Allahabad High Court and the same are pending. During the pendency of the application of the management for the discharge of the said 76 workmen before the Labour Appellate Tribunal., the workers held a meeting on the 10th June, 1952, near an old mosque outside the factory area to consider the situation arising out of the suspension of the 76 workmen and the ways and means of meeting the same. The respondent participated in the said meeting as the Vice President of the Union and made a speech criticising the attitude of the General Manager in terms 749 which were set out in the report dated the 10th June, 1952 submitted by two workers by name Ganga Dhar Tewari and Jamuna Prasad to the General Manager. The speech of the respondent as reported there was to the following effect: "The General Manager of this factory wants to crush the Labour movement from the very beginning. He allowed some of his intermediaries to join strike when Shri Shibban. Lal Saxena had served a strike notice. His men had also persuaded some of our members to join the strike. As a result of this we had decided to launch a strike. On the other hand, the Manager Sahib was sitting on the phone for the permission of the Collector to dismiss all our fellow workers. Shri Moti Lal Singh was able to discover this conspiracy and he at once prevented us from going on strike. Then Manager Sahib could not succeed in his plan. This time he has falsely accused 76 of our workers of resorting to Tools down strike. These workers will surely be reinstated. But our efforts are rendered useless due to the acts of the Government Officers; the Collector of this District is getting some thing secretly from the Manager Sahib. We have only one alternative open to us, let us again agitate for his dismissal. Many of the proprietors have written to me against him". A resolution was moved at that meeting for the reinstatement of the 76 workers and dismissal of Shri Madan Pal Singh, the General Manager and the same was passed. As stated above, the two workers Ganga Dhar Tewari and Jamuna Prasad reported the proceedings of the said meeting to the General Manager on the very same day. The General Manager thereafter addressed a letter to the respondent on the 16th July, 1952 stating that he, the respondent, was present in and addressed a meeting held on the 10th June, 1952, wherein, among other matters, a resolution for the reinstatement of the 76 suspended workers and the removal of the General Manager was passed. He asked the respondent to give him information regard 750 ing the above mentiond facts within 24 hours of the receipt of the letter. The respondent replied on the 17th July, 1952, stating that he never attended any meeting whatever in his capacity as the Steno typist of the factory and expressed his inability, therefore, to say anything in the capacity in which the letter dated the 16th July, 1952, had been addressed by the General Manager to him. Not being content with bypassing the whole issue in this manner, he proceeded to observe that it was none of the factory 's business to seek information from him for his personal, social or political activities outside the factory area. He stated that as a matter of courtesy any information asked for would have been supplied by him, but, as the things stood, he very much regretted his inability to comply with the wishes of the General Manager. The General Manager again addressed a letter to the respondent on the 17th July, 1952, stating that he was entitled to seek the information from him even in his personal capacity and asked him to let him have the reply to the queries contained in the letter dated the 16th July, 1952. The respondent, in his letter dated the 17th July, 1952 in reply, observed that some of the conclusions drawn by the General Manager were "simply out of self complacency" and he respectfully begged to differ from the General Manager. He stated that he had nothing further to add to his earlier reply dated the 17th July, 1952. The General Manager waited for a while and on the 1st August, 1952, served upon the respondent a chargesheet calling upon the respondent to show cause why action should not be taken against him under clause L(1)(j) of the Standing Orders for making a speech in a meeting held near the local mosque on the 10th June, 1952, 'wherein, among other defamatory remarks he, the respondent, instigated the workers to take steps for the removal of the General Manager. The respondent was asked to submit his explanation latest by 10 a.m. on the 2nd August, 1952. The respondent submitted his written statement accordingly wherein he stated that there was absolutely no justification whatsoever for charging him with broach of 751 the Standing Orders under clause L(1)(j). He denied the allegations contained in the charge sheet and wound up by asking the General Manager to enlighten him as to under what rules of the Factories Act, Commercial Establishments Act or the Standing Orders, written replies in the matters other than one 's daily routine work of the factory were demanded at such short notice. The General Manager fixed 10 a.m. on Monday the 4th August, 1952, for the holding of the enquiry and the respondent was called upon to present himself in time and he was also intimated that he would be at liberty to produce oral or documentary evidence in defence against the charges framed against him. An enquiry was accordingly (held by the General Manager on the 4th August, 1952. The proceedings thereat were recorded in the form of questions and answers. The respondent adopted an attitude which was consistent with the one which he had adopted in the course of the correspondence above referred to. He refused to answer the questions which were categorically put by the General Manager to him and stated that he had nothing to add to his written statement. He also took up the attitude that if he had taken part in any meeting held under the auspices of the Chini Mills Mazdoor Sangh outside the factory, the General Manager should write to the officials of the Sangh for necessary information. When it was specifically put to him that no confidential work was taken from him as he had been taking active interest in the anti management activities maliciously and had been exploiting the poor labour to force himself being confirmed by the management, he said that he did not agree with it and it was not a question which needed any reply. As a result of the enquiry, the General Manager made his report on the 24th October, 1952, wherein he found that the respondent had made a speech exhorting the workmen of the factory to pass a resotion for the removal of the General Manager, that the management was bound to lose confidence if a worker who had excited other workers against the General 752 Manager of the concern refused to give a direct reply to direct questions, that, in the absence of a Stenotypist who could enjoy the confidence of the management, it was impossible to run the factory without the risk of any trouble and that the respondent was thus guilty of misconduct and acts subversive of discipline. As, however, there was a pendency of a proceeding before the Labour Appellate Tribunal, an application should be made to that authority for permitting his dismissal. This report was accepted by the management and the appellant made the application under section 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950, for permission to dismiss the respondent from its employ. The Labour Appellate Tribunal embarked on the freedom of speech vouchsafed to the citizens of India under article 19(1)(a) of the Constitution, observed that the making of the speech in question at the meeting held by the respondent as the Vice President of the Union was within the scope of the legitimate activities of the Union and held that the speech said to have been made by the respondent at the meeting could not be said to be an act subversive of discipline. The application of the appellant was accordingly dismissed. Hence this appeal before us. The only question for determination before us is whether the speech made by the respondent at the meeting held on the 10th June, 1952, was an act subversive of discipline. The respondent was the Vice President of the Union and, prima facie, any resolution passed by the Union asking for the removal of the General Manager would be perfectly legitimate if the members of the Union thought that there were circum stances warranting the same. The correctness or otherwise of the reasons given for such removal would not be liable to scrutiny by the Court, the only thing requisite being that the Union was not acting mala fide or was not actuated by any malice or illwill against the General Manager in passing such resolution. The resolution by itself would not have the effect of harming the General Manager at all, 753 It would have to be forwarded to the management and the management would take such steps as it may be advised on receipt of the resolution. It would then be for the management to find for itself whether the reasons given for the removal of the General Manager were such as to warrant his removal. The management would then, if it thought necessary, institute proper enquiries and come to his own conclusion as to the desirability or otherwise of the re moval of the General Manager. So far as the Union is concerned, apart from mala fides or malice or illwill, the act of its passing the resolution would be innocuous and would not be liable to be visited with any punishment and the members of the Union would no be committing any breach of the Standing Orders nor would they be guilty of any act subversive of discipline. The gravamen of the charge made by the management against the respondent, however, was that the latter was not merely responsible for the passing of such resolution, but, in the speech which he made in support, he gave vent to such expressions as were quite false and defamatory and was actuated by malice against the General Manager. He Edited the members of the Union who were there assembled against the General Manager with the result that his act was thus subversive of discipline. The speech had the effect of lowering the General Manager in the esteem of the workmen and subjecting him to hatred or ridicule and the necessary effect of making such speech before the workmen would be that they would look down upon the General Manager and would not be amenable to discipline and it would be impossible to conduct the management with efficiency with such disgruntled workmen in the factory. The words used by the respondent were, therefore, it was urged, calculated to undermine the discipline in the factory and his act was, therefore, subversive of discipline bring ing him well within the mischief of clause L(1) (j). of the Standing Orders. It was further urged that the conduct of the respondent in the course of the correspondence which took place between the General Manager and himself 754 was, to say the least, impudent. He relied upon his dual personality distinguishing between his capacity as the Steno typist and his capacity as the Vice President of the Union. The act complained of was attributed to his capacity as the Vice President of the Union and he refused to give any reply to the queries addressed to him because in the letter; addressed by the General Manager to him he was described as the Steno typist. He refused to give any information to the General Manager and asked him to communicate with the Sangh or the Union if any information was required by the General Manager in the matter of what took place at the meeting of the Union on the 10th June, 1952. In the enquiry also, he adopted a similar attitude and refused to answer the direct questions addressed to him by the General Manager in regard to the proceedings of that meeting. It was strenuously urged before us by the learned counsel for the appellant that this conductor the respondent was subversive of discipline and amounted to such misconduct as would entitle the appellant to dismiss him from its employ. There is considerable force in this argument and we are of the opinion that the respondent adopted an attitude unbecoming an employee of the appellant. He adopted a truculent attitude in the course of the correspondence and resorted to the theory of his dual personality refusing to answer the queries addressed to him by the General Manager. This attitude was, to say the least, reprehensible. Even though he happened to occupy what he considered to be the august position of the Vice President of the Union he did not cease to be an emPloyee of the appellant and the attempt to distinguish between his capacity as the Steno typist and his capacity as the Vice President of the Union was absolutely puerile. He ought to have realised that he was first and foremost an employee of the appellant and owed a duty to the appellant to answer all the queries which had been addressed to him by the General Manager. His evasion to give such replies on the pretext of shielding himself under his capacity as the Vice President of the Union was absolutely 755 unjustifiable and if such insubordination and breach of discipline had been the subject 'Matter of the charges made against him, we do not see how the respondent could have escaped the punishment of dismissal. Similar is the position in regard to the attitude which the respondent adopted at the enquiry. He refused to answer the direct questions which were addressed to him and had the temerity to ask the General Manager to see his written statement and find out for himself the answers to the same. To say the least, the respondent was guilty of insubordina tion and if his attitude was such as would not conduce to the maintenance of discipline in the factory, here also we would have found it difficult to resist the appellant 's claim for his dismissal if he had been charged with having been guilty of such misconduct. The charge sheet, however, only complained about the speech which he had made on the 10th June, 1952, wherein, among other defamatory remarks, he, the respondent, had instigated the workers to take steps for the removal of the General Manager. The enquiry which was held on the 4th August, 1952, also concentrated on this particular charge and the report which was made by the General Manager on the 24th October, 1952, also found that the respondent had made a speech exhorting the workers to pass the resolution for the removal of the General Manager. The acts of insubordination calculated to undermine the discipline in the factory which we have adverted to above were neither the subject matters of the charge nor were they relied upon by the General Manager in his report as the grounds of misconduct entitling the management to dismiss the respondent ' from its employ. The passing of the resolution for the removal of the General Manager by itself was not, as already stated, an act subversive of discipline and would not entitle the management to dismiss him and we are of the opinion that, on the record as it stood, the Labour Appellate Tribunal was justified in refusing to the appellant the permission to dismiss the respondent from its employ. The charge sheet which was furnished by the appel 98 756 lant to the respondent formed the basis of the enquiry which was held by the General Manager and the appellant could not be allowed to justify its action on any other grounds than those contained in the chargesheet. The respondent not having been charged with the acts of insubordination which would have really justified the appellant in dismissing him from its employ, the appellant could not take advantage of the same even though these acts could be brought home to him. We have, therefore, come to the conclusion 'that the order made by the ' Labour Appellate Tribunal was correct even though we have done so on grounds other than those which commended themselves to it. We accordingly dismiss this appeal but having regard to the conduct of the respondent which We have characterised above as reprehensible we feel that the ends of justice will be met if we ordered that each party do bear and pay its own costs of this appeal. Appeal dismissed.

The respondent, a stenotypist and the Vice President of the Labour Union, was charged by the appellant with misconduct and indiscipline under clause L(1)(j) of the Standing Orders of the Government of Uttar Pradesh for instigating the workmen to pass a resolution for the removal of the General Manager by a defamatory speech delivered at a meeting of the Union. The question in issue was whether the respondent by doing so had committed "any act subversive of discipline" within the meaning of that clause. In course of the correspondence with the General Manager over the matter, as also during the enquiry made by him, the respondent took up the attitude that he, as a stenotypist, was not answerable to his employers for his activities as Vice President of the Union outside the factory area and persistently refused to answer questions categorically put to him by the General Manager. The appellant applied to the Labour Appellate Tribunal under section 22 of the Industrial Disputes (Appellate Tribunal) Act of 1960 for permission to dismiss the respondent. That application having been refused the appellant obtained Special Leave to appeal to the Supreme Court and it was contended that the passing of the resolution and the refusal to answer questions in course of the correspondence,and the enquiry amounted to acts subversive of discipline and the respondent was liable to be dismissed. Hold, that it was perfectly legitimate for the Union to pass the, resolution they did and no guilt either of a breach of the Standing Orders or of committing an act subversive of discipline could attach to the respondent for what part he took in the meeting as Vice President of the Union and the order of dismissal passed by the Labour Appellate Tribunal must be affirmed. That where, as in the present case, the members of the Union were of opinion that the circumstances warranted the resolution, it 747 was not for the court to scrutinies the correctness or otherwise the reasons for it. Held further, that the respondent was primarily an employ of the appellant before he could be anything else and was in dut bound to answer such queries as were put to him by the Gener Manager and his persistent refusal to do so, on the pretext of a dual capacity, amounted to insubordination which would have justifie his dismissal but the appellant having omitted to include this as ground in the charge sheet, which was served on the responds and formed the basis of the enquiry, could not be allowed to rel on it.

Appeal No. 1789 of 1966. Appeal from the judgment and decree dated May 24, 1961 of the Allahabad High Court in Second Appeal No. 1302 of 1952. B.C. Misra, G.S. Chatterjee and M.M. Kshatriya, for the appellants. J.P. Goyal and G.N. Wantoo, for the respondents. The Judgment of the Court was delivered by Hegde, J. The scope of section 9 of the U.P. Zamindari Abolition and and Reforms. Act, 1950 (U.P. Act 1 of 1951) (to be hereinafter referred to as the Act) comes up for decision in this appeal by certificate. The facts relevant for deciding this appeal are no more in dispute. The respondents were Ryots under the appellants in village Nagli Abdulla, a hemlet of village Machhra. The site of the building in dispute in this appeal had been taken by the father of the respondents from the appellant 's ancestors over 60 years ago and thereafter the respondents put up some buildings on that site for their residential purposes. During the communal disturbances in 1947 they left the village temporarily as a measure of safety and took shelter with some of their relations in some other village at a distant place. They came back to their village in the year 1949 when the conditions improved. At that time they found the appellants occupying that site after putting up a cow shed on the site in which their residential buildings stood. Those residential buildings had been demolished and the site in question included as a part of the house of the appellants. As the appellants refused to deliver possession of the suit property, the respondents instituted a suit for possession of the same on January 9, 1951. On January 26, 1951, the Act came into force. Section 4 of the Act provided for the vesting of the Estates in the State. It prescribes that as soon as may be after the commencement of the Act, the State Government may, by notification, declare that as from a date to be specified, all Estates situate in Uttar Pradesh shall vest in the State and as from the beginning of the date so specified, all such Estates shall stand transferred to and vest, except as otherwise provided in the Act, in the State free from all encumbrances. Section 6 of the Act enumerates the consequences of the vesting of an Estate in the State. Section 9 deals with the buildings in the abadi. Reading sections 4, 6 and 9 together, it follows that all Estates notified under s.4 vest in the State free from all encumbrances. The quondam proprietors or tenure holders of those Estates lose all interests in those Estates. As proprietors ' 13 or tenure holders they retain no interest in respect of them whatsoever. But 'in respect of the land or buildings enumerated in section 6 and section 9, the State settled on the person who held them certain rights. Though in fact the vesting of the Estates and the deemed settlement of some rights in respect of certain classes of land or buildings included in the Estate took place simultaneously, in law the two must be treated as different transactions; first there was a vesting of the Estates in the State absolutely and free of all encumbrances. Then followed the deemed settlement by the State of some rights with the persons mentioned in sections 6 and 9. Therefore in law it would not be correct to say that what vested in the State are only those interests not coming within sections 6 or 9; see Rana Sheo Ambar Singh vs Allahabad Bank Ltd., Allahabad(1). In this connection reference may also usefully be made to the decision of this Court in Shivashankar Prasad Shah and Ors. vs Vaikunth Nath Singh and Ors.(2), a decision rendered under the Bihar Land Reforms Act, 1950, the relevant provisions of which are similar to the provisions of the Act. In this case notification under s.4 of the Act was issued on July 1, 1952. Hence the vesting contemplated under section 4 took place on that date. Section 9 of the Act, the section with which we are concerned in this case, reads thus: "All wells, trees in abadi, and all buildings situated within the limits of an estate, belonging to or held by an intermediary or tenant or other persons, whether residing in the village or not, shall continue to belong to or be held by such intermediary or tenant or person as the case may be, and the site of the wells or the buildings within the area appurtenant thereto shall be deemed to be settled with him by the State Government on such terms and conditions as may be prescribed. " In view of that provision all buildings situate within the limits of an Estate held by an intermediary or tenant or other person, whether residing in the village or not continues to be held by him and the site: of the buildings within the area appurtenant thereto should be deemed to have been settled with him by the State Government on such terms and conditions as may be prescribed. As seen earlier till about 1947, the respondents were lawfully holding the buildings and the site with which we are concerned in this case as Ryots. They never gave up their possession of (1) ; (2) Civil Appeal No. 368/66 decided on 3 7 1969. 14 the buildings voluntarily. The fact that they vacated those buildings and took shelter with their relations during the time of the communal disturbances cannot be considered as abandonment of the buildings. In law they continued to be in possession of the buildings. Hence the appellant 's entry into the suit site was an unlawful act. In the eye of law they were trespassers. In demolishing the buildings put up by the respondents, they, committed the offence of mischief. The fact they had put up new structures cannot under the Transfer of Property Act, enhance their rights to the property. We have no material before us from which we can find out the value of the buildings. demolished by them and the value of the buildings put up by them unlawfully. From the description of the buildings given in evidence, it appears that the newly put up building is only cattle shed. We are not satisfied that the newly put up building is worth more than the buildings that had been demolished by the appellants. In the the circumstances of the case all that can be said is that the old buildings have been substituted by the new building. Therefore the owners of the old buildings continue to be the owners of the new building. In that view of the matter it is not necessary to consider whether if a stranger builds a building on the land of another, the true owner of the land is entitled to recover the land with the building on it. Equitable considerations persuade us to hold that when the respondents came back to their village in 1949, they were entitled to recover not only the site but also the building constructed on it by the appellants. Hence it should be held that on the date of vesting, the respondents were the owners the building in question. In law they were holding the same. The controversy between the parties in this appeal is as to the meaning to be attached to the word "held" in s.9 of the Act. Is the holding contemplated therein 'lawful holding" or a mere holding lawful or otherwise. It is contended on behalf of the appellants that the dictionary meaning of the word "held" merely means 'to have a possession of s 9 merely contemplates Physical possession and nothing more; on the date of the vesting they were in physical possession of the site as well as the building; therefore the building must be deemed to have been settled with them. On the other hand it is contended on behalf of the respondent that the word "held" in section 9 of the Act means "lawfully held" and that section does not confer any benefit on a trespasser. The meaning of the word "held" in s.9 came up for consideration before a Division Bench of the Allahabad High Court consisting of Agarwala and Chaturvedi, JJ. in Pheku Chamar and Ors. vs Harish Chandra and Ors.(1). In that case the learned 1) A.I.R. 1953 All. 406. 15 judges held that the legislature has deliberately used the word "held" and that word connotes the existence of a right or title in the holder. They further opined that section 9 does not confer a right on the persons having no title to the land. The settlement contemplated by the section is confined in its application to the case where the building is lawfully held by the person in possession. The learned judges also observed that in enacting s.9, the legislature never meant to deprive the citizens of their lawful rights over the lands merely because a trespasser has succeeded in making some construction on it. Section 9 does not mean that if a person has made some construction whatsoever over any land lying within the limits of an estate, however wrongful or recent the possession might be, that construction must be deemed to have been settled with him by the State Government. The meaning of the word "held" in s.9 again came up before another Division Bench of the Allahabad High Court consisting of Desai and Takru, JJ. in Bharat and anr. vs Ch. Khazan Singh & ant.(1) The learned judges declined to follow the decision in Pheku Chamar 's case(2). They came to the conclusion that the legislature used a wide language in s.9 and it covers the case of buildings belonging to persons who constructed them lawfully or unlawfully. It is unfortunate that the latter. Division Bench should have thought it proper to sit in judgment over the correctness of a decision rendered by a Bench of co ordinate jurisdiction. Judicial propriety requires that if a bench of High Court is unable to agree with the decision already rendered by an other coordinate bench of the same High Court, the question should be referred to a larger bench. Otherwise the decisions of High Courts will not only lose respect in the eyes of the public, it will also make the task of the sub ordinate courts difficult. The question of law referred to hereinbefore again arose for decision in this case. When this case came up in the second appeal before Sahai, J. he referred it to a Full Bench in view of the conflict of opinion noticed earlier. The Full Bench was presided over by Dasai, C.J. who was a party to the decision in Bharat 's case(1). The other members of the bench were Mukerji and Dwivedi, JJ. Mukerji and Dwivedi, JJ. agreed with the view taken in Pheku Chamar 's case(2). Desai, C.J. in his dissenting judgment did not deal with the meaning of the word "held" in section 9 but on the other hand opined that the suit should have been dismissed because of the fact that the buildings put up by the respondents were not there on the date of vesting and hence the respondents were not entitled to the benefit of s.9. Before considering the meaning of the word "held" in section 9, it is necessary to mention that it is proper to assume that the lawmakers who are the representatives of the people enact laws (1) A.I.R. 1958 All. (2) A.I.R.1953 All. 406 which the society considers as honest, fair and equitable. The object of every legislation is to advance public welfare. In other words as observed by Crawford in his book on Statutory Constructions the entire legislative process is influenced by considerations of justice and reason. Justice and reason constitute the great general legislative intent in every piece of legislation. Consequently where the suggested construction operates harshly,. ridiculously or in any other manner contrary to prevailing conceptions of justice and reason, in most instances, it would seem that the apparent or suggested meaning of the statute, was not the one intended by the law makers. In the absence of some other indication that the harsh or ridiculous effect was actually intended by the legislature,, there is little reason to believe that it represents the legislative intent. We are unable to persuade ourselves to believe that the legislature intended to ignore the rights of persons having legal title to possession and wanted to make a gift of any building to a trespasser howsoever recent the trespass might have been if only he happened to be in physical possession of the building on the date of vesting. We are also unable to discern any legislative policy in support of that construction. It was urged before us by the learned Counsel for the appellants that the legislature with a view to put a stop, to any controversy as to any rights in or over any building directed that whoever was in physical possession of a building on the date of vesting shall be deemed to be the settle of that building. He further urged that it would have been a hard and laborious. task for the State to investigate into disputed questions relating to title or possession before making the settlement contemplated by section 9 and therefore the legislature cut the Gordian Knot by conferring title on the person who was in possession of the building. We see no merit in this argument. The settlement contemplated by section 9 is a deemed settlement. That settlement took place immediately the vesting took place No inquiry was contemplated before that settlement. If there is any dispute as to who is the settle, the same has to be decided by the civil courts. The State is not concerned with the same. Section 9 merely settles the building on the person who was holding it on the date of vesting. It is true that according to the dictionary meaning the word "held" can mean either a lawful holding or even a holding without any semblance of a right such as holding by a trespasser. But the real question is as to what is the legislative intent? Did the legislature intend to settle the concerned building with a person who was lawfully holding or with any person holding lawfully or otherwise? Mr. Misra contended that there is no justification for us to read into the section the word "lawfully" before the word "held". According to him, if the legislature intended 17 that the holding should be a lawful one, it would have said"lawfully held". He wanted us to interpret the section as it stands. It is true that the legislature could have used the word "lawfully held" in place of the word "held" in section 9 but as mentioned earlier one of the dictionary meanings given to the word "held" is, "lawfully held". In Webster 's New Twentieth Century Dictionary (Second Edition), it is stated that in legal parlance the word "held" means to possess by "legal title". In other words the word "held" is technically understood to mean to possess by legal title. Therefore by interpreting the word "held" as "lawfully held", we are not adding any word to the section. We are merely spelling out the meaning of that word. It may further be seen that the section speaks of all buildings . within the limits of an Estate, belonging to or held by an intermediary or tenant or other person" . The word "belonging" undoubtedly refers to legal title. The words "held by an intermediary" also refer to a possession by legal title. The words "held by tenant" also refer to holding by legal title. In the sequence mentioned above it is proper to construe the word "held" in section 9 when used in relation to the words "other person" as meaning "lawfully held" by that person. That interpretation flows from the context in which the word "held" has been used. We have earlier mentioned that the said interpretation accords with justice. The expression "held" has been used in the Act in various other sections see sections 2(1)(c), 13, 17, 18, 21, 144, 204, 240A, 298, 304, and 314 to connote possession by legal title. Mr. Misra, learned Counsel for the appellants does not deny that the expression "held" in those sections means held lawfully. But according to him that is because of the context in which the word is used. Mr. Misra is right in saying so but he overlooks the context in which that expression is used in section 9. We have already made reference to that context. He failed to point out to us any section in the Act, leaving aside section 9 for the time being where the word "held" has been used as meaning mere holding, lawful or otherwise. In K.K. Handique vs The Member, Board of Agricultural Income Tax, Assam(1) this Court was called upon to consider the meaning of the word "holds" in sections 12 and 13 of ' the Assam Agricultural Income Tax Act. Subba Rao, J. (as he then was ) speaking for the Court observed that the expression "holds" includes a two fold idea of the actual possession of a thing and also of being invested with a legal title though some times it is used only to mean actual possession. After reading sections 12 and 13 together he observed that the word "holds" in those sections means holding by legal title. In Eramma vs Verrupanna & Ors.(2), this Court considered the meaning of the word (1) A.I.R. 1966 S.C. 1191. (2) [1966] 2, S.C.R. 626. "possessed" in section 14 (1 ) of the Hindu Succession Act which laid down that "any property possessed by a female Hindu whether acquired before or after the commencement of this Act shall be held by her as full owner thereof and not as a limited owner". It held that the property possessed by a female widow, as contemplated in the section, is clearly a property to which she has acquired some kind of title whether before or after the commencement of the Act. It is true that in arriving at that conclusion the Court took into consideration the language of the provision as a whole and also the explanation to the section. The scheme of the Act is to abolish all Estates and vest the concerned property in the State but at the same time certain rights were conferred on persons in possession of lands or buildings. It is reasonable to think that the persons who were within the contemplation of the Act are those who were in possession of lands or buildings on the basis of some legal title. Bearing in mind the purpose with which the legislation was enacted, the scheme of the Act and the language used in section 9, we are of opinion that the word "held" in section 9 means "lawfully held". In other words we accept the correctness of the view taken by Mukerji and Dwivedi, JJ. For the reasons already mentioned we are unable to agree with Desai, C.J. that the fact that the appellants had demolished the buildings put up by the respondents and put up some other building in their place had conferred any rights on them under section 9. In the result the appeal is dismissed with costs. G.C. Appeal dismissed.

The disputes between the appellant and the respondent, arising out of a contract between them, were referred to. arbitration under the arbitration clause in the contract. The award was made and signed on April 26, 1950. The arbitrator did not send any notice of the making and signing of the award but sent a copy of the signed award to the appellant. The appellant acknowledged receipt of the copy by two letters dated May 5, 1950 May 16, 1950. On March 30, 1951, the appellant filed an application in the Subordinate Judge 's Court for passing a decree in terms of the award. On the question whether the application was out of time, because, under article 178 of the Indian Limitation Act, 1908, the application had to be filed within 90 days of the date. of service of the notice of the making of the award, HELD: Under section 14(1) of the , when the arbitrators have given their award, they shall sign it and shall give notice in writing to the. parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbirtation and the award. The notice need not be in the form of a separate letter. It is sufficient, if it is in writing and intimates clearly that the award has been made and signed. The non mention of the amount of the fees and charges payable in respect of the arbitration and award will not affect the notice as it is not an essential part of it for the purpose of limitation. In the present case, since the appellant had sufficient notice that the award had been made and signed when a copy of the award signed by the arbitrator was sent to the appellant, the application for passing a decree in terms of the award was out of time. [138 B, F G; 139 ' A, C D]

PPeal NO 4454 of 1985. From the Judgment and Order dated 15.2.1984 of the Punjab and Haryana High Court in L.P.A. No. 224 of 1984. V.M. Tarkunde, Miss Meenakshi Arora, R.N. Karanjawala and Mrs. Manik Karan jawala for the Appellant. K.K Jain, A.D. Sanger, Ajay K. Jain, Pramod Dayal, B.R. Appeal, P.G. Gokhale, Janendra Lal and Miss Yashmin Tarapore for the Respondents. PG NO 705 The Judgment of the Court was delivered by RAY, J. The only question that arises for decision in this appeal is whether an employee promoted to a post reserved for Scheduled Castes and Scheduled Tribes is entitled to have his seniority determined from the date of his appointment to the post or his seniority inter se will be reckoned as it was in the class or grade from which he was promoted to a post in a higher rank. The appellant, who is a Scheduled Caste joined service as a Clerk in the Electricity Branch of the Punjab Public Works Department on February 20, 1954. The terms and conditions of his service were governed by the Punjab P.W.D. (Electricity Branch) Provincial Service Class 111 (Subordinate posts) Rules, 1952. In February, in and Punjab State Electricity Board was constituted under Section 3 of the and the employees of the Electricity Branch were transferred to the Board. The conditions of service of the employees were governed by their existing terms and conditions as well as existing service Rules. In 1967 the Haryana State Electricity Board was constituted and the appellant was allocated to the Haryana State Electricity Board with existing terms and conditions of service. The Board being a statutory corporation was requested by letter dated December 13, 1972 by the Government to provide for reservation of 22% of vacancies initial recruitment and promotion posts for being filled up by members of the Scheduled Castes and Scheduled Tribes as well as by members of backward classes. The Haryana State Electricity Board adopted the above circular by its Resolution dated March 1976 providing for reservation of posts both for initial requirement as well as for promotion. The appellant was promoted on September 1973 as Deputy Superintendent the respondent No.2, Rajinder Singh Marya was also promoted by the same order as Deputy Superintendent. In the said order of appointment the following note was appended: The earlier promotion of the above officials as Deputy Superintendent will not confer upon them any right to claim seniority over those who may otherwise be senior to them due to any reason whatsoever. On April 27, 1972 a circular was issued by the Chief Secretary Government of Haryana to all its departments regarding reservation for members of Scheduled Castes and Scheduled Tribes in service and fixation of seniority Paragraphs 2 and 4 of the said circular which are relevant are quoted hereinbelow: PG NO 706 "2. It has to be pointed out that this was irregular and inter se seniority of all the candidates taken together (i.e. whether appointed against reserved vacancies or against open ones) must be fixed according to the combined merit list and not otherwise. Vacancies assigned to Scheduled Castes/Backward Classes under block system are so assigned for the purposes of reservation only and are not intended for fixing inter se seniority of the candidates contrary to their order in the combined merit list prepared by the Public Service Commission/Subordinate Service Selection Board. The above instructions, regarding determination of inter se seniority will however? apply only in those cases where the departmental service rules do not provide for seniority being determined from the date of joining or from the date of confirmation or by a method otherwise than the merit determined by the Public Service Commission/S.S.S. Board. In other words, in all cases where the service rules have not yet been framed, or where the service rules provide for seniority being determined according to the merit laid down by the Commission/S.S.S. Board, the seniority of the officials shall be determined in the manner stated above. In other cases, where the service rules specifically provide for seniority being determined from the date of joining or from the date of confirmation by the recruiting authority the seniority shall be determined by such different methods. " As the seniority of the appellant was not determined from the date of his appointment to the post of Deputy Superintendent he made a representation to the Board requesting for determination of his seniority from the date of his appointment to the promoted post and also for considering his case for promotion to the post of Superintendent. This representation of the appellant was rejected on the ground that: "The officials belonging to the scheduled castes/tribes and backward classes who are promoted against the posts reserved for them under the block system and for reasons other than inefficiency of their seniors will not be assigned seniority from the date of their joining in the PG NO 707 promoted rank. They shall be assigned seniority in the promoted rank with reference to their inter se seniority of their previous posts. Thereafter, on January 20, 1977 the appellant was finally informed that his seniority will not be computed from the date of his promotion to the post of Deputy Superintendent. On January 12, 1977 the respondent Nos. 2 and 3 i.e. Rajinder Singh Marya and Jagdish Lal Lamba who were junior to the appellant as Deputy Superintendents, were promoted as Superintendents superseding the claim of the appellant. Aggrieved by this, the appellant instituted an application under Article 226 of the Constitution of India in the High Court of Punjab and Haryana praying for a writ of mandamus directing the respondent No. 1 to consider his case for promotion to the post of Superintendent on the basis of his being seniormost Deputy Superintendent according to the continuous length of service on that post and to promote him to the post of Superintendent with effect from the date his juniors have been promoted and for other consequential reliefs. An affidavit was filed on behalf of Respondent No. 1 verified by Shri R. Prakash, Secretary, Haryana State Electricity Board wherein in para 3 it has been submitted that: " . .the seniority of the petitioner has been determined in the post of Deputy Superintendent in accordance with the exception below Rule 9 of the 1952 Rules. " In Para 5 it has been admitted that the appellant was promoted as Deputy Superintendent on 25th September, 1973 and since then he is continuing on the said post. It has further been submitted that the promotion of the appellant was in an officiating capacity and he still continues to officiate as Deputy Superintendent. The appellant was promoted to the post of Deputy Superintendent against a post which was reserved for the Scheduled Castes, though he was far junior in the cadre of Assistants. In para 7 it has been stated that: ". The petitioner cannot claim seniority above those two officials in the rank of Deputy Superintendent. In view of the exception to Rule 9, if a member of service is promoted temporarily to a post earlier than his senior for PG NO 708 reasons other than the inefficiency of the senior person, they will take rank inter se according to their relative seniority in the class from which they were promoted and junior persons thus promoted shall not be confirmed from a date earlier than the date of confirmation of his senior except on the score of inefficiency of the latter. In the present case, the petitioner was promoted temporarily to the post of Deputy Superintendent earlier to the other two officials on the ground that the petitioner belonged to the scheduled castes. The other two officials were not superseded on the ground of inefficiency . " On February 4, 1984 the learned single Judge of the High Court dismissed the writ petition holding inter alia that the instructions governing the matter of promotion in favour of the Scheduled Caste candidates had nothing to do with the determination of the seniority of these candidates. Moreover, in the letter promotion the petitioner it was specifically mentioned that the earlier promotion would not confer on him any right or claim to seniority over and above those who were otherwise senior to him in the cadre from which he had been promoted. It was further held that m the light of exception to Rule 9, the petitioner being promoted temporarily, his seniority cannot be counted from the date of his appointment in the higher post and the respondent Nos. 2 and 3 would be treated senior to him in the rank of Deputy Superintendent as they were senior to the petitioner in the grade of Assistants. It was therefore, found that respondent Nos. 2 and 3 were entitled to be promoted as Superintendents earlier to the petitioner . Against this judgment and order Letters Patent Appeal being LPA No. 224 of 1984 was filed. The said appeal was however. dismissed summarily as being without any merit. The appellant, thereafter, filed the instant appeal assailing the said judgment. Before proceeding to consider the question whether the appellant 's seniority was properly determined under Rule 9 of the Punjab P.W.D. (Electricity Branch) Provincial Service Class 111 (Sub ordinate posts) Rules 1952 (in short to be referred herein as the said Rules) it is necessary to set out herein the relevant provision of Rule 9: "9. Seniority of the members of the Service The seniority of the members of the Service for the time being serving in each class of appointment shown in Appendix `A ' shall be determined as follows: PG NO 709 (i) Prior to confirmation (i.e. in the case of persons serving on probation or in an officiating capacity) in the order of the dates of their appointment or if such date be the same in respect of two or more persons, in the order of their ages, the older being placed above the younger. (ii) After confirmation by their respective dates of confirmation, provided that where two or more members are confirmed w.e.f. the same date they will retain the order to confirmation. Exception: If a member of the service is promoted temporarily to a post earlier than his senior, for reasons other than the inefficiency of the senior person they will take rank inter se according to their relative seniority in the class from which they were promoted and the junior person thus promoted shall not be confirmed from a date earlier than the date of confirmation of his senior except on the score of inefficiency of the latter. Provided further that if a member is appointed to a higher class later than a person who was junior to him in the lower class for reasons which the appointing authority may certify in writing to be connected with the Public interest the person so appointed shall be given the same seniority in the higher class vis a vis such junior as he held in the lower class. Thus, on a plain reading of the Rule it appears that the seniority of the members of the Service serving in an officiating capacity shall be prior to confirmation `in the order of the dates of their appointment ' and after confirmation by their respective dates of confirmation. There is an exception to this Rule to the effect that if a member of the Service is promoted temporarily to a post earlier than his senior for reasons other than inefficiency of the senior person they will take rank inter se according to their relative seniority in the class from which they were promoted and the junior person so promoted shall not be confirmed from a date earlier than the date of confirmation of the senior. The provision contained in the exception to Rule 9 is applicable only in the case of temporary promotion of a member of the service to a post earlier than his senior for the purposes other than inefficiency of the senior persons. PG NO 710 In the instant case admittedly the appellant has been promoted to the post of Deputy Superintendent which was reserved under the block system for members of the Scheduled Castes. The appointment to the said reserved post on promotion is a regular one and this has been admitted in paragraph 5 of the counter affidavit referred to hereinbefore. The appointment letter does not articulate that the promotion of the appellant to the post of Deputy Superintendent was purely temporary. The promotion has been made on a regular basis to the post of Deputy Superintendent reserved on the basis of quota of vacancies for being filled up by promotion of members belonging to the Scheduled Castes. The appointment of the appellant to the said promotional post of Deputy Superintendent, in our considered opinion cannot be designated to be purely a temporary promotion. This being the position the exception to Rule 9(ii) of the said rules cannot be applied to determine the seniority of the appellant in the post of Deputy Superintendent and his seniority cannot be based in accordance with the inter se seniority of the respondent Nos. 2 and 3 in the cadre of Assistants from which the appellant and respondent Nos. 2 and 3 were promoted to the post of Deputy Superintendent. Rule 9(i) of the said Rules is applicable in this case and the seniority of the appellant is to be reckoned from the date of his appointment In the post of Deputy Superintendent. The appellant is thus senior to respondent Nos. 2 and 3 in the rank of Deputy Superintendent as he was promoted to the said post earlier than the respondents Nos. 2 and 3 and as such his claim for promotion to the post of Superintendent on the dates when the respondent Nos. 2 and 3 were promoted to such post is legal and valid. It may be mentioned that during the pendency of the writ petition, the appellant had been promoted to the post of Superintendent on 29.5.1981 and as such he pleaded in para 6 of the special leave petition that his seniority in the cadre of Deputy Superintendent should not be affected on the basis of the judgments rendered by the High Court. On a consideration of the facts and circumstances stated hereinbefore, the finding of the High Court that the appellant was promoted temporarily and so exception to Rule 9(ii) applies for determination of seniority of the appellant as Deputy Superintendent, in our considered opinion, cannot be sustained as we have already held that the promotion of the appellant in a reserved vacancy, is a regular one and it does not smack of purely temporary character. The seniority of the appellant is to be reckoned from the date of his appointment to the said post according to the provisions of Rule 9(i) of the said Rules. The judgments of the High Court in Letters Patent Appeal No. 224 of 1984 as well as in the writ petition No. 773 of 1977 are PG NO 711 set aside and the appeal is allowed. The respondent No. 1 is directed to treat the appellant promoted to the post of Superintendent from the date the respondent Nos. 2 and 3 were promoted to the said post and to pay him the emoluments attached to the said post of Superintendent minus the emoluments paid as Deputy Superintendent from that date till the date of his actual appointment as Superintendent, i.e. May 29, 1981. The appeal is thus allowed with costs. N.V.K. Appeal allowed.

The Range Officer, Forest of the appellant State lodged complaints with the .judicial Magistrate Ist Class against the respondents accused alleging that they had committed offences under section 51 of the Wild Life Protection Act, 1972. The learned Magistrate took cognizance of the offence and ordered issue of process to the respondents accused. However. before lodging the aforesaid complaints, a case had also been registered against the respondents accused with the concerned police station under sections 447, 429 and 379, IPC read with sections 54 and 39 of the Wild life Protection Act. 1972 and the matter was under investigation by the police. The respondents accused moved the High Court under section 482 of the Code of Criminal Procedure for quashing the aforesaid order of the Magistrate. The High Court quashed the proceedings against the respondents accused on the ground: (a) that the Magistrate acted with out jurisdiction in taking cognizance of the offence and ordering issue of process against the accused, since it was a case to which section 210(1) of the Code of Criminal Procedure 1973 attracted and that as an investigation by the police was in progress in relation to the same offence the Magistrate would be required to stay the proceedings on the complaint and call for a report in the matter from the Police; and (b) that on the face of the complaint, it PG NO 455 PG NO 456 could not be said that the complaint spelts out the ingredients of the offence alleged. Hence these appeals by special leave by the appellant State. Allowing the appeals to this Court HELD: (1) The orders of the High Court in Crl. 223 of 1987 dated 13.2.1987 and the two orders in Crl. No. 25X of 1987(R) and Crl. No. 259 1987(R) dated 18.2.1987 are set aside and the order dated 1.7.1986 of the learned Magistrate taking cognizance of the offence and ordering issue of summons to the respondents is restored. The criminal case initiated on the complaint will now be proceeded with , in accordance with law. [470H; 471A B] 2(1) A perusal of sections 2(16), 2(36), 9(1), 51 and 55 of the Wild Life Protection Act, 1972 shows that cognizance of an offence against the "Act" can be taken by a Court only on the complaint of the officer mentioned in section 55. Even if the jurisdictional police purported to register a case for an alleged offence against the Act, sec. 210(1) Cr. P.C. would not be attracted having regard to the position that cognizance of such an offence can only be taken on the complaint of the Officer mentioned in that section. [462H; 463A B] 2(ii) Where a Magistrate takes cognizance of an offence instituted otherwise than on a police report and an investigation by the police is in progress in relation to same offence, the two cases do not lose their separate identity. The section seeks to obviate the anomalies that might arise from taking cognizance of the same offence more than once. But, where, as in the instant case. cognizance can be taken only in one way and that on the complaint of a particular statutory functionary. there is no scope or occasion for taking cognizance more than once and accordingly, section 210 Cr. P.C. has no role to play. [463R C] 3(i) Jurisdiction under section 482 Cr. which saves the inherent power of the High Court, to make such orders as may he necessary to prevent abuse of the process of any court or otherwise to secure the ends of justice, has to be exercised sparingly and with circumspection. In exercising that jurisdiction, the High Court would not embark upon an enquiry whether the allegations in the complaint are like to be established by evidence or not. that is the function of the Trial Magistrate when the evidence comes before him. [463E F] 3(ii) When the High Court is called upon to exercise jurisdiction under Section 482 Cr. P.C. to quash a proceeding PG NO 457 at the stage of the Magistrate taking cognizance of an offence, the High Court is guided by the allegations, whether those allegations, out in the complaint or the charge sheet, do not in law constitute or spell out any offence and that resort to criminal proceedings would, in the circumstances, amount to an abuse of the Process of the court or not. [463G H] In the instant case, it is difficult to agree with the High Court that the allegation in the complaint, taken on their face value, would not amount in law to any offence against the Wild Life Protection Act, 1972. [465G] Municipal Corporation of Delhi vs R.K. Rohtagi, ; at 890 and Municipal Corporation of Delhi vs P.D. Jhunjunwala; , at 897 followed. 4(i) The ingredients of an offence under sec. g(l) read with sec. 50(1) of the Act require for its establishment certain ingredients which are not part of the offence under sec. 429 I.P.C. and vice versa. [470G] 4(ii) The expression "any act or omission which constitutes any offence under this Act" in section 56 of the Act, merely imports the idea that the same act or omission might constitute an offence under another law and could be tried under such other law or laws also. [466H; 467A] 4(iii) The proviso to section 56 has also a familiar ring and is a facet of the fundamental and salutory principles that permeate penalogy and reflected in analogous provisions of sec. 26 of ; Section 71 IPC; Section 100 of the Cr. P.C. 1973, and constitutionally guaranteed under article 20(2) of the Constitution. [467A B] 5. The expression "the same offence", "substantially the same offences", "in effect the same offence", or "practically the same", have not done much to lessen the difficulty in applying the tests to identify the legal common denominators of "same offence". The same set of facts, in conceivable cases, can constitute offences under two different laws. An act or an omission can amount to and constitute an offence under the IPC and at the same time constitute an offence under any other law. [468B C; 470A B] Leo Roy Frey vs The Superintendent, District Jail, Amritsar, ; ; State of Madhya Pradesh vs Veereshwar Rao Agnihotry; , ; Omprakash Gupta vs PG NO 458 Slate of U. P.; , ; The State of Bombay vs section L. Apte & Anr., ; ; "Double Jeoparady" the Encyclopedia of Crime and Justice, vol. 2, (p. 630) 1983 Edn. by Sanford H. Kudish vs The Free Press, Collier Mac Millan Publishers. London and Friedland in "Double Jeoparady" (Oxford 1969) referred to. 6(i) The policy and object of the Wild life laws have a long history and are the result of an increasing awareness of the compelling need to restore the serious ecological imbalance introduced by the depradations inflicted on nature by man. [460E F] 6(ii) The State to which the ecological imbalances and the consequent environmental damage have reached is so alarming that unless immediate, determined and effective steps were taken, the damage might become irreversible. [460F G] 6(iii) The largest single factor in the depletion of the wealth of animal life in nature has been the 'civilized man" operating directly through excessive commercial hunting or, more disastrously, indirectly through invading or destroying natural habitats. [462B C]

N: Criminal Appeal Nos. 170 and 171 of 1977 From the Judgment and Order dated 29th May, 1975 of the Calcutta High Court in Criminal Appeal No. 308 of 1972 and Govt. Appeal No. 5 of 1973. 116 D.P. Mukherjee and G.S. Chatterjee for the Appellant. Rathin Dass and Pankaj Kalra for the Respondents. The Judgment of the Court was delivered by THAKKAR, J. The validity of the trial of three Army Officers is in question. The High Court has taken the view that the learned Judge presiding over the Special Court had acted without jurisdiction in taking cognizance of the case and proceeding with the trial of three Army Officers resulting in the conviction of one of them, and the acquittal of the remaining two and has quashed the proceedings. The question which calls for determination in these two allied appeals by special leave preferred by the State of West Bengal is whether the High Court was right in doing so. The following facts are not in dispute: (1) Three accused persons who were tried by the Judge presiding over the Fourth Addl. Special Court, Calcutta (hereinafter referred to as the learned Trial Judge for the sake of brevity) were Army Officers. They were charged with offences in respect of which the ordinary Criminal Court and the Court Martial both had concurrent jurisdiction. (2) The Learned Trial Judge had failed to follow the procedure prescribed by the Criminal Courts and Court Martial (Adjustment of Jurisdiction) Rules, 1952 (referred to as Rules hereinafter) framed under Section 549 (1) of the Code of Criminal Procedure of 1898 (Cr. P.C.) The following contentions were urged before the High Court on behalf of the State with a view to substantiate the contention that the learned Trial Judge had jurisdiction to take cognizance of the case and that the trial was not null and void notwithstanding the fact that the procedure prescribed by the Rules had not been followed. (1) The rules framed under Section 549(1) of Cr. P.C. 117 were not attracted inasmuch as the rules applied to Magistrates and not to a Judge presiding over a Special Court. (2) Having regard to the provision contained in section 122 of the , which prescribes a period of limitation of three years, which period had already elapsed during the pendency of the proceedings in the High Court, the Court Martial would have no jurisdiction to try the accused and that the trial held by the learned Trial Judge could not be said to have been vitiated in view of this circumstance. (3) In view of a letter addressed by the Brigadier of the Division concerned to the Police Officer for investigating the offences, it can be said by necessary implication that the Army authorities had opted for the trial of the case by the ordinary Civil Court. The High Court repelled all the three contentions, allowed the appeal of the officer who was convicted, and dismissed the appeal of the State calling into question the acquittal of the remaining two. Besides reiterating the same three contentions before this Court, learned counsel for the appellant has raised a new point which was not urged before the High Court. We propose to deal with the submissions which were urged in the High Court before coming to grips with the new point sought to be raised by the learned counsel for the appellant State. For a proper appreciation of the first point, a quick look at the statutory provisions and the position emerging therefrom is called for. In regard to the offences which fall within the purview of Section 70 of the of 1950, an offender can be tried only by Court Martial whereas in regard to offences falling within the purview of Section 52 of the said Act, the offences can be tried both by the ordinary criminal court as also by the Court Martial both of which have concurrent jurisdiction. The offences with which the concerned accused were charged before the learned Trial Judge were offences which fell within the scope of Section 52 of the of 1950 and accordingly the ordinary criminal court as also the Court Martial had concurrent jurisdiction. In order to avoid any conflict of jurisdiction between the 118 criminal court and the court martial in regard to offenders who are charged with having committed offences which fall under the purview of Section 52 of the , Section 549(1)1 of Cr. P.C. provides that Central Government may make Rules consistent with Cr. P.C. and the . In pursuance of this provision contained in Section 549(1) Cr. P.C. the Central Government has framed Rules known as Criminal Courts and Court Martial (Adjustment of Jurisdiction) Rules, 1952. Rule 3 of the said Rules requires that when person subject to military, Naval or Air Force law is brought before a Magistrate on accusation of an offence for which he is liable to be tried by Court Martial also the magistrate shall not proceed with the case unless he is requested to do so by the appropriate military authority. On a combined reading of rules 3 and 4/2, it is evident that in case the Megistrate is of the opinion that he should proceed with the case without there being any such request from the appropriate military authority, the concerned Magistrate is enjoined to give notice to the commanding officer in this behalf. Till the expiry of seven days from the service of such notice on the commanding officer, the Magistrate is prohibited from making any order of conviction or acquittal or framing any charges or committing the accused. 1 "The Central Government may make rules, consistant with this Code and the , the Naval Discipline Act and the Indian Navy (Discipline) Act, 1934 and the Air Force Act and any similar law for the time being in force, as to the cases in which persons subject to military, naval or air force law shall be tried by a Court to which this Code applies, or by court martial; and when any person is brought before a Magistrate and charged with an offence for which he is liable to be tried either by a Court to which this Code applies, or by a court martial, such Magistrate shall have regard to such rules, and shall in proper cases deliver him, together with a statement of the offence of which he is accused, to the commanding officer of the regiment, corps, ship or detachment to which he belongs, or to the commanding officer of the nearest military, naval, or air force station, as the case may be for the purpose of being tried by the Court Martial." ________________________________ 2. Where a person subject to military, naval or Air Force law is brought before a Magistrate and charged with an offence for which he is liable to be tried by a court martial, such magistrate shall not proceed to try such person or to issue orders for his case to be referred to a Bench, or to inquire with a view to his commitment for trial by the Court of Sessions or the High Court for any offence triable by such Court, unless (a) he is of opinion, for reasons to be recorded, that he should so proceed without being moved thereto by competent military, naval or Air Force Authority, or (b) he is moved thereto by such authority. 119 It is in the background of these provisions that the High Court has taken the view that compliance with the procedure prescribed by the Rules is a mandatory requirement and that any proceedings undertaken by the learned Trial Judge without compliance with the aforesaid mandatory procedure would vitiate the trial before the ordinary criminal court and the entire proceedings would be rendered null and void. Faced with this situation, counsel for the State contended before the High Court that the procedure embodied in Section 549(1) of the Cr. P.C. and Rules framed thereunder were applicable only to the court presided over by a magistrate and not to a Judge presiding over a Special Court. This contention was negatived by the High Court. And it has now been reiterated before us, it being an admitted position that the prescribed procedure has not been followed by the learned trial judge in the case giving rise to the present appeals. This argument was possibly inspired by a point debated in Major E.G. Barsay vs The State of Bombay. ; The view was taken therein that inasmuch as the aforesaid Rules refer to a Magistrate the Rules were not attracted with regard to a trial before a Special Judge. It was presumably on accout of this decision that the Criminal Law (Amendment) Act of 1952 was amended by incorporating Sections 8 (3A) and 11, reading as under: Section 8(3A): In particular, and without prejudice to the generality of the provisions contained in sub section (3), the provisions of Sections 350 and 549 of the Code of Criminal Procedure, 1898 shall, so far as may be, apply to the proceedings before a Special Judge, and for the purposes of the said provisions a Special Judge shall be deemed to be a Magistrate. Section 11: Military, naval and air force laws not to be affected 4. Before proceeding under clause (a) of rule 3 the Magistrate shall give written notice to the Commanding Officer of the accused and until the expiry of a period of seven days from the date of the service of such notice he shall not (a) Convict or acquit the accused under sections 243, 245, 247 or 248 of the Code of Criminal Procedure, 1898(V of 1898), or hear him in his defence under section 244 of the said Code, or (b) frame in writing a charge against the accused under section 254 of the said Code; or (c) make an order committing the accused for trial by the High Court or the Court of Sessions under section 213 of the said Code. " 120 (1) Nothing in this Act shall affect the jurisdiction exercisable by, or the procedure applicable to, any Court or other authority under any military, naval or air force law. This amendement was effected by virtue of Central Act XXII of 1966. Having regard to the provision contained in Section 8 (3A) of the Criminal Law (Amendment) Act of 1952 as it now stands it is clear that a Sepcial Judge is deemed to be a Megistrate for the purposes of the Rules framed under Section 549 (1) of the Code of Criminal Procedure with the end in view to eschew the conflict between Court Martial on the one hand and the ordinary criminal courts on the other. The High Court was therefore perfectly justified in repelling this contention urged on behalf of the appellant State, albeit on a reasoning which is somewhat obscure. Confronted by this situation counsel for the appellant State has raised a new point to which a reference was made in the earlier part of the judgment. The new point which has been so raised is that Sections 8(3A) and 11 quoted hereinabove which were incorporated by Central Act 11 of 1958 as further amended by Central Act XXII of 1966 were not applicable to the State of West Bengal from where the matter giving rise to the present appeals stems. Since no such argument was advanced before the High Court, initially, we were reluctant to permit counsel to raise this new point. But having regard to the fact that it goes to the root of the matter we have permitted counsel to urge this contention. We will however deal with it after exhausting all the points which were urged before the High Court. The next point which was unsuccessfully urged before the High Court was in the context of Section 122 of the of 1950 which prescribes a period of limitation of three years. The High Court did not accede to the submission in this behalf having regard to the law enunciated by this Court in Delhi Police Establishment, New Delhi vs Lt. Col. Loraiya. ; We are of the opinion that the High Court was right. This Court in the aforesaid case has taken the view to the effect that the question being essentially one of the initial jurisdiction of the ordinary criminal court on the one hand and the court martial on the other, unless the procedure prescribed by the rules is complied with the ordinary criminal court would not have initial jurisdiction in regard to the matter, as is evident from the following passage: "It is an admitted fact in this case that the procedure speci 121 fied in rule 3 was not followed by the Special Judge, Gauhati before framing charges against the respondent. Section 549 (1) Cr. P.C. and rule 3 are mandatory. Accordingly the charges framed by the Special Judge against the respondent cannot survive. But counsel for the appellant has urged before us that in the particular circumstances of this case the respondent is not 'Iiable to be tried ' by a Court martial. Section 122 (1) of the , provides that no trial by court martial of any person subject to the for any offence shall be commenced after the expiry of the period of three years from the date of the offence. The offences are alleged to have been committed by the respondent in November December, 1962. So more than three years have expired from the alleged commission of the offence. It is claimed that having regard to Sec. 122(1), the respondent is not liable to be tried by court martial. This argument is built on the phrase "is liable to be tried either by the court to which this Code applies or by a Court martial" in section 549(1). According to counsel for the appellant this phrase cannotes that the ordinary criminal court as well as the court martial should not only have concurrent initial jurisdiction to take cognizance of the case but should also retain jurisdiction to try him up to the last stage of conviction or acquittal. We are unable to accept this construction of the phrase. As regards the trial of offences committed by Army men, the draws a threefold scheme. Certain offences enumerated in the are exclusively triable by a Court martial; certain other offences are exclusively triable by the ordinary criminal courts; and certain other offences are triable both by the ordinary criminal court and the court martial. In respect of the last category both the Courts have concurrent jurisdiction. Section 549 (1) Cr. P.C. is designed to avoid the conflict of jurisdiction in respect of the last category of offences. The clauase "for which he is liable to be tried either by the Court to which this Code applies or by a court martial" in our view, qualifies the preceding clause "when any person is charged 122 with an offence" in section 549 (1). Accordingly the phrase "is liable to be tried either by a court to which this Code applies or a court martial" imports that the offence for which the accused is to be tried should be an offence of which cognizance can be taken by an ordinary criminal court as well as a court martial. In our opinion, the phrase is intended to refer to the initial jurisdiction of the two courts to take cognizance of the case and not to their jurisdiction to decide it on merits. It is admitted that both the ordinary criminal court and the court martial have concurrent jurisdiction with respect to the offences for which the respondent has been charged by the Special Judge. So, section 549 and the rules made thereunder are attracted to the case at hand" Having regard to the enunciation of law to this effect it is evident that the ordinary criminal court would have no jurisdiction to take cognizance of the case and to try the accused in a matter where the procedure prescribed by the Rules has not been complied with. The initial lack of jurisdiction to take cognizance and try the case would of logical necessity vitiate the trial and the order of conviction and sentence would be liable to be quashed as a result thereof. We are therefore unable to accede to the submission urged on behalf of the appellant State that even if the rules are applicable, having regard the fact that more than three years have expired from the date of the commission of the alleged offence, the trial is not vitiated. The last contention raised before the High Court was that having regard to the fact that the investigation which preceded the lodging of the complaint before the learned Trial Judge was commenced in pursuance of a letter written by the Brigadier of the Division, which contained a request for investigation by the Police into alleged offences, it can be said that the Army authorities had opted for the trial of the accused person by the ordinary criminal court. The argument was that by necessary implication this would follow as a logical corollary. The High Court brushed aside this contention as untenable, taking into account the contents of the letter in question. The said letter was in the following terms: "Dear Sir, (1) Please refer to Memo No. 8940 dated August 28, 1963 123 from Shri R.K. Bhattacharyya, Superintendent of Police, D.E.B., Darjeeling. (2) At appendix 'A ' please find a copy of the investigation that had been carried by us. We request you to take over the case and submit your detailed report to us at your earliest convenience. " The High Court relied on the fact that the Army had called for a detailed report by the Police which would show that the Army authorities had not taken any such decision either expressly or by necessary implication. Counsel for the appellant has not been able to press this point with any vigour for the obvious reason that it relates to the stage of investigation preceding the complaint. The question regarding exercise of jurisdiction by the court martial would arise only after the investigation was completed and the police report was available. What is more, it is only after the prescribed procedure under Rules 3 and 4 of the Rules is resorted to by the ordinary criminal court that the question of exercising an option can arise. In the present matter, admittedly the procedure prescribed by the Rules was not followed. Under the circumstances it is futile to contend that the Army authorities had voluntarily abandoned their option to try the accused person in the court martial. There is no substance in the plea and it has been rightly repelled by the High Court. At long last, we come to the last point, the point which was not urged before the High Court but which we have permitted the learned counsel for the State to raise before us. It is argued that the Criminal Law (Amendment) Act of 1952 was not applicable to the State of West Bengal inasmuch as the State of West Bengal had enacted an Act of its own known as West Bengal Criminal Law Amendment (Special Courts) Act, 1949 which was in operation throughout the whole of West Bengal. No doubt it is true that Criminal Law is a subject which falls within the scope of Entry 1 of List III (concurrent list) embodies in 7th Schedule to the Constitution of India. The Union Government as well as the State Government both can therefore legislate in regard to criminal law. The contention that the Criminal Law (Amendment) Act, 1952 enacted by the Parliament of India is not applicable to the State of West Bengal is altogether misconceived. It is necessary to advert to the legislative history for a proper appreciation of the point at issue. In 1938 the Government of India had enacted the Criminal Law (Amendment) Act of 1938. In 1949 the State of West Bengal 124 introduced the State legislation being the West Bengal Criminal Law Amendment (Sepcial Courts) Act, 1949 (West Bengal Act). This Act was further amended after the enforcement of the Constitution of India by incorporating Section 13 in 1953 3. The said Section 13 has great significance from the stand point of the present argument: "Certain Sections of Act XLVI of 1952, not to apply to West Bengal: 13. Sections 6, 7, 8, 9 and 10 of the Criminal Law Amendment Act, 1952 shall not apply and shall be deemed never to have applied to West Bengal. " It will thus be seen that Section 13 of the West Bengal Act in terms accords recognition to the applicability of the Criminal Law (Amendment) Act of 1952 except and save some of the sections namely sections, 6, 7, 8, 9 and 10 thereof which as provided in Section 13 shall not apply and shall be never deemed to have applied to West Bengal. It is implicit in Section 13 of the West Bengal Act that the Central Act namely Criminal Law (Amendment) Act of 1952 is applicable to the State of West Bengal except and save the aforesaid five sections. There can be no doubt or debate about this position having regard to the fact that criminal law is a subject which falls under the concurrent list and the Criminal Law (Amendment) Act of 1952 enacted by the Parliament is applicable subject to inconsistency, if any, between the said Act and the West Bengal Act. So far as the coverage of the present point is concerned, there is no such inconsistency. The West Bengal Act does not contain any provisions pertaining to personnel governed by the . It is altogether silent in regard to the matter pertaining to the procedure to be followed in regard to Army personnel from the perspective of Section 549 Cr. P.C. and the rules framed under the authority thereof. There is thus no conflict between the Criminal Law (Amendment) Act of 1952 and the West Bengal Act in so far as this matter is concerned. Such being the position the provisions contained in Criminal Law (Amendment) Act of 1952 with a special eye on the procedure to be followed in Section 8(3A) and Section 11 of the Criminal Law (Amendment) Act of 1952 will operate in this sphere without any let or hindrance. And inasmuch as Section 8(3A) in terms provides that the provision of Section 549 Cr. P.C. shall so far as may be applied to the proceeding before the Special Judge 3. This section was added by Section 3 of the West Bengal Criminal Law Amendment (Special Courts) Amending Act of 1953 (West Bengal Act of 1953). 125 and that for the purposes of that provision a Special Judge shall be deemed to be a Magistrate, the said provisions remain fully alive and uneffected by the West Bengal Act. In view of this provision the procedure prescribed by Section 549 Cr. P.C. read with the rules framed thereunder which have been quoted in the earlier part of the judgment will be applicable to a proceeding before a Special Judge in West Bengal as well. In so far as the Army personnel are concerned therefore the law governing them and the procedure required to be followed in their case would be the same in West Bengal as elsewhere in India as it should be. It may incidentally be mentioned that in the West Bengal Act also the Judge presiding over the Special Court is called a Special Judge (vide Schedule to the West Bengal Act). He would therefore deemed to be a Magistrate for the Purposes of the Rules in view of Section 8(3A) of the Criminal Law (Amendment) Act of 1952. The mandatory procedure prescribed by the Rules is accordingly obligatory even in respect of proceedings before a Special Court under the West Bengal Act. There is thus no substance in this point. We are of the opinion that this feeble and faint hearted attempt is born out of desperation and deserves no more consideration. We have therefore no hesitation in negativing this plea. No other point has been urged. The appeal must therefore fail. But before we write 'finis ' it may be made clear that the acquittal rendered by the High Court is on the ground of lack of jurisdiction on the part of the learned Special Judge who tried the case in the Special Court and not on merits. The expression 'acquitted ' has been employed by the High Court though it was sufficient to say no more than this, that the order of conviction and sentence was without jurisdiction and was therefore being quashed. In the eye of law, it is not an acquittal since it is not on merits. It is thereore for the competent authority to decide whether or not to subject the accused to a fresh trial after following the procedure prescribed by the Rules. With these observations, we dismiss the appeal. M.L.A. Appeal dismissd.

The word 'shall ' occurring in sub section (4) Of section 173 and sub section (3) Of section 207A of the Code of Criminal Procedure is not mandatory but directory and a non compliance with the provisions of those subsections, unless it can be shown to have prejudiced the accused person in his defence, cannot invalidate the commitment proceedings or the subsequent trial. Magistrates holding inquiries under section 207A(3) Of the Code of Criminal Procedure must, however, be circumspect and see that an accused person is not handicapped in his defence by any omission on the part of the Police Officer to furnish him with necessary copies. Where such non compliance is found to cause any prejudice to the accused, the Court should in the interest of justice reopen the proceedings and insist on a full compliance with the provisions. When it causes no prejudice, it is a mere irregularity curable under section 537 Of the Code. Abdul Rahman vs The King Emperor, (1929) L.R. 55 I.A. 96, Pulukuri Kolayya vs King Emperor, (1947) L.R. 74 I.A. 65 and Gurbachan Singh vs The State of Punjab, Cr. A. NO. 48 of 1957 applied. 284 Consequently, in a case where an accused person was com mitted to the Court of Session on a charge under section 302 of the Indian Penal Code and found guilty thereunder by the Sessions judge and awarded the capital sentence and the order of conviction and sentence was unassailable on merits, but the Police Officer had omitted to furnish him copies as required by section 173(4) and the inquiring Magistrate to cause such copies to be furnished to him under section 207A(3) of the Code of Criminal Procedure and such omission could not be shown to have in any way prejudiced the accused person in his defence, it was a mere irregularity that did not vitiate either the commitment proceedings or the trial and was cured by section 537 Of the Code.

al Writ Petition No. 15 of 1962 Petition under article 32 of the Constitution of India for the enforcement of Fundamental Rights. B. Sen and K. L. Hathi for the petitioner. C. K. Daphtary, Solicitor General of India, B. B. L. Iyengar and B. H. Dhebar, for the respondents. S.Choudhury, section C. Banerjee and P. K. Chatterjee for the Intervener. May 3. The judgment of Sinha, C. J., Gajendradagkar, Wanchoo and Shah, JJ., was delivered by Gajendragadkar, J., Subba Rao, J. delivered a separate Judgment. GAJENDRAGADKAR, J. The four petitioners who are in charge of the working of the mine owned by the colliery known as Salanpur ,A" Seam Colliery in the District of Buidwan, are being prosecuted for the alleged contravention of the provisions of Regulation 127(3) of the Coal Mines Regulations, 1957, framed under the (35 of 1952) (hereinafter called the Act). By their petition filed under article 32 of the Constitution, the petitioners pray that an order or writ in the mature of prohibition should be issued quashing the said criminal proceedings on the ground that the said proceedings contravene article 20(1) of the Constitution and as such, are void. To this petition have been impleaded as opponents 1 to 4, the Union of India, the Chief Inspector of mines, Dhanbad (W.B.), the Regional Inspector of Mines, Sitarampur and the Sub Divisional Magis trate, Asansol, respectively. The prosecution of 907 the petitioners has commenced at the instance of opponents 2 and 3 and the case against them is being tried by opponent No. 4. The petitioners ' contention is that Regulation No. 127(3)whose alleged contravention has given rise to thepresent proceedings against them is invalid, ultra vires and inoperative and so, the prosecution of the petitioners contravenes article 20(1) of the Constitution. It is on this basis that they want the said proceedings to be quashed and ask for an order restraining opponents 2 and 3 from proceeding with the case and opponent No. 4 from trying it. The case in question is C. 783 of 1961 pending in the court of opponent No. 4. Regulation 127(3) is a part of the Coal Mines Regulations framed by opponent No. 1 in exercise of the powers conferred upon it by section 57 of the Act, the same having been previously published as required by sub section (1) of B. 59 of the said Act. Regulation 127(3) provides that no working which has approached within a distance of 60 metres of any disused or abandoned workings (not being workings which have been examined and found to be free from accumulation of water or other liquid matter), whether in the same mine or in an adjoining mine, shall be extended further except with the prior permission in writing of the Chief Inspector and subject to such conditions as he may specify therein. There is a proviso and explanation attached to this provision, but it is unnecessary to refer to them. The case against the petitioners is that they have contravened the provisions of Regulation 127(3) in that they extended the working of the mine further than the permitted limits without the prior permission in writing of opponent No. 2. The petitioners ' case is that this Regulation is invalid and inoperative and so, its contravention cannot validly be made 908 the basis of their prosecution having regard to the provisions of article 20(1) of the Constitution. According to the petitioners opponent No, 1 is no doubt conferred with the power of making Regulations under section 57 of the Act,but O. as it stood at the relevant time, has imposed an obligation on opponent No. 1 that the draft of the said Regulations shall not be published unless the Mining Boards therein specified have had a reason. able opportunity of reporting to it as to the expediency of making the Regulations in question and as to the suitability of its provisions. The petitioners allege that at the relevant time, 'when the Regulations were made in 1957, no Mining Boards bad been established under section 12 of the Act. Three Boards had been established under section 10 of the Indian of 1923, but as a result of the subsequent amendments made in the provisions of section 10, the composition of two of the 'said Boards became invalid with the result that two of them could not be treated as Boards validly constituted. These invalid Boards were the Madhya Pradesh Mining Board and the West Bengal Mining Board. A third Board existed at the relevant time and that is the Bihar Mining Board. This Board had been constituted on the 22nd February, 1946 under section 10 of the earlier Act as it then stood. The petitioner ' case is that it was obligatory for opponent No. 1 to consult all the three Boards and since to out of the three Boards were not properly constituted, the fact that reference was made to the individual members of the said two invalid Boards did not satisfy the requirement of section 59(3). According to the petition, a reference was made to the Bihar Mining Board, but the Board did not, make a report to opponent No. 1 as a Board but its individual members communicated their opinions to opponent No. 1. Therefore, on the whole, section 59(3) had not been complied with and that makes the whole body 909 of Regulations issued in 1957 invalid and inoperative. That, in brief, is the basis on which the petitioners want the criminal proceedings pending against them to be quashed. The respondents dispute the main contention of the petitioners that section 59(3) has not been complied with. According to them, section 59(3) has been duly complied with and the Regulations made ire valid. The respondents concede that two of the three existing Boards were invalid; but their case is that it is only the validly existing Board that had to be consulted and the Bihar Mining Board, which was the validly existing Board at the relevant time, had been duly consulted. The respondents allege that the fact that individual members of the Bihar Mining Board communicated their opinions to opponent No. 1 does not introduce any infirmity in the Regulations which were subsequently published in the Gazette and which, under section 59(5) have, in consequence, the effect as if enacted in the Act. On behalf of the petitioners, Mr. Sen contends that section 59(3) 'imposes 'an obligation on the Central Government to consult the Boards therein specified and he argues that reading section 12 of the Act in the light of section 59(3), it follows that the Central Government has to constitute Mining Boards for the areas or mines in respect of which the Regulations are intended to be made and since two of the Boards had not been validly constituted, section 12 had not been complied with and section 59(3) had been contravened. Mr. Sen suggested that his contention about the mandatory character of the provisions contained in sections 12 and 59(3) is concluded by a recent decision of this Court. On the other hand, the learned Solicitor General for the respondents contends that the said decision has no material or direct bearing on the question about the construction of section 12. He concedes that 910 the said decision has concluded the point that the requirement of a. 59(3) is mandatory. It is, therefore, necessary, in the first instance, to examine the effect of the said decision. In "Banwari Lal Agarwalla vs State of Bihar" (1), this Court had occasion to consider the validity of the prosecution launched against the appellant on the ground of the contravention of one of the Regulations made in 1957. It appears that in that case, the respondents stated before the Court that the Mining Boards constituted under s.10 of the Act of 1923 were continuing to operate at the time the relevant Regulations were framed and that there was full consultation with the said Mining Boards before the said Regulations were framed. The respondents, no doubt, contended that s.59(3) was directory and not mandatory and according to them, no obligation had been imposed upon the Central Government to consult Mining Boards even if they were in existence. Alternatively, it was suggested that the Mining Boards which had been constituted under the earlier Act were continued under the Act by virtue of s.24 of the General Clauses Act and that the said Boards bad been duly consulted. On the other hand, the appellant urged that the Boards to which the respondents referred were not validly constituted under the Act and had not been properly consulted. It was also argued on his behalf that both sections 12 and 59(3) were mandatory. It is in the light of these facts that the effect of the decision of this Court in Banwari Lal 's case (1) has to be appreciated. Das Gupta, J., who spoke for the Court set out in his judgment the argument of the appellant that both sections 12 and 59 were mandatory, but, as the judgment shows, the Court considered the question as to whether s.59 (3) was mandatory and came to (1) ; 911 the conclusion that it was. The Court did not consider whether s.12 was mandatory and in the course of the judgment, there is no reference at all either to the question of construing s.12 or to its effect. Having held that s.59 (3) was mandatory, the Court remanded the case to the learned Magistrate before whom the proceeding were pending with a direction that he should try the issue as to whether the Boards constituted under the earlier Act validly functioned under the Act and whether they had been duly consulted. It would be noticed that if the Court had considered the question about the mandatory character of the provisions of s.12, it would have construed the said provisions and would have addressed itself to the question as to whether the failure of the Central Government to constitute valid Boards as suggested by the appellant in that case itself made the impugned Regulation invalid. This course was not adopted obviously for the reason that the respondents pleaded that the requisite Boards were in existence and had been consulted and so, the controversy between the parties was narrowed down to the question as to whether section 59 (3) requires that the Central Governments must consult existing Boards or not. Apparently, the respondents contended that even if Boards have been constituted under section 1 2, it is not obligatory on the Central Government to consult them under s.59(3). The requirement about the said consultation is directory and not mandatory. It is this contention which has been rejected by the Court and having held that s.59 (3) was mandatory and that existing Board must be consulted before Regulations are framed, the question of fact which then fell to be considered was remitted to the trial Magistrate for his decision. Therefore, we are satisfied that the effect of the decision of this Court in Banwari Lal Agarwalla 's case is that if a Board is in existence at the relevant time, it is obligatory, on the Central Government to consult it before a draft 912 Regulation is published and in that sense s.59(3) is mandatory. It would, we think, not be right to assume that the contention of appellant that s.12 like a.59(3) is mandatory was decided without discussing the question about its construction and its effect. The facts pleaded by the respondents in that case made it unnecessary to decide the appellant 's contention based on the mandatory character of s.12. Therefore we do not think Mr. Sen is justified in contending that the point which he seeks to raise in the present appeal about the effect of section 12 is concluded by the decision in Banwari Lal Agarwalla 's case. That being so, we must proceed to examine Mr. Sens contention on the merits. At this stage, it is necessary to read both sections 12 and 59. Section 12 deals with the constitution of Mining Boards. Section 12(1) provides that the Central Government may constitute for any part of the territories to which the Act extends, or for any group or class of mines, a Mining Board consisting of seven persons as specified in clauses (a) to(e). The point which calls for our decision is whether the first part of section 12(.1) imposes an obligation on the Central Government to constitute Board when it is proposed to make Regulations to which s.59(3) applies. Section 59 as it stood in the Act prior to its amendment in 1959 read thus: "59 (1) The power to make regulations and rules conferred by sections 57 and 58 is subject to the condition of the regulations and rules being made after previous publication. (2) The date to be specified in accordance, with clause (3) of section 23 of the (10 of 1897), as that after which a draft of regulations or rules proposed to be 913 made will be taken under consideration, shall not be less than, three months from the date on which the draft of the proposed regulations or rules is published for general information. (3) Before the draft of any regulation is published under this section, it shall be referred to every Mining Board which is, in the opinion of the Central Government, concerned with the subject dealt with by the regulation and the regulation shall not be so published until each such Board has had a , reasonable opportunity of reporting as to the expediency of making the same and as to the suitability of its provisions. (4) No rule shall be made unless the draft thereof has been referred to every Mining Boar( constituted in that part of the territories to which this Act extends which is affected by the rule, and unless each such , Board has had a reasonable opportunity of reporting as to the expediency of making the same and as to the suitability of its provisions. (5) Regulations and rules shall be published in the Official Gazette and, on such publication, shall have effect as if enacted in this Act. (6) The provisions of sub sections (1), (2) and( 4) shall not apply to the first occasion on which rules referred to in clause (d) or clause (e) of section 58 are made. 914 (7) The regulations and rules made under sections 57 and 58 shall be laid down before Parliament, as soon as may be, after they are made. " The petitioners ' contention is that in construing section 12, we must have regard to the provisions of s.59(3). By an amendment made in 1959 by Act 62 of 1959, sub. s(3) of section 59 has been deleted and combined provision is made both for regulations and rules by subsection (4) by making a suitable amendment in the said sub section so as to include both regulations and rules within its scope. Sub section (4) thus amended reads thus: "59(4). No regulation or rule shall be made unless the draft thereof has been referred to every Mining Board constituted in that part of the territories to which this Act extends which is affected by the regulation or rule and unless each such Board has had a reasonable opportunity of reporting as to the expediency of making the same and as to the suitability of its provisions. " Before construing s.12, it may be useful to refer to the relevant provisions of the Act which confer power on or assign some duties or functions to the said Boards. Section 14(1) provides inter alia that a Board constituted under section 12 may exercise such of the powers of an Inspector under this Act as it thinks necessary or expedient to exercise for the purpose of deciding or reporting upon any matter referred to it. Section 14(2) confers upon the Board the powers of a Civil Court for the purposes therein specified. It would thus be seen that the Boards constituted under section 12 may have occasion 915 either to make a report in respect of regulations or rules referred to them tinder section 59, or ' they may have to decide cases sent to them under section 81. Section 59 which speaks of reference of the rules and regulations to the Boards has already been cited. Section 81(1) provides that if the court trying any case instituted at the instance of the Chief Inspector or other officers therein specified is of opinion that the case is one which should, in lieu of a prosecution, be referred to a Mining Board, it may stay the criminal proceedings, and report the matter to the Central Government with a view to such reference being made. Section 81(2) authorises the Central Government either to refer the case to the Mining Board or to direct the court to proceed with the trial. Thus, if the Central Government decides to refer a pending criminal case to the Board, the Board has to decide it. That is the two fold function which may be assigned to the Board under provisions of the Act. Mr. Sen contends that if section 59(3) is mandatory, it follows that consultation with the relevant Board was treated as essential by the legislature before the Central Government finalised the regulations ; and from this obligation imposed by section 59(3), it must follow as a corollary that the relevant Boards must be constituted by the Central Government ' under section 12. In other words, the argument is that a. 59(3) postulates the existence of the relevant Boards and makes it obligatory on the Central Government to consult them and this can be satisfied only if the Central Government is compelled to constitute Boards under section 12. Prima facie. , there is some force in this contention. But, on the other hand, if section 59(3) is read as imposing an obligation on the Central Government to consult the Board if it is in existence, then no corollary would follow from the mandatory character of the said provision as 916 is suggested by Mr. Sen. Section 59(3) as it stood before the amendment of 1959, provides that every Mining Board which, in the opinion of the Central Government, is concerned with the subject dealt with by the regulation, shall be consulted ; and this means that there should be a Mining Board before it is consulted and that the said Mining Board should, in the opinion of the Central Government, be concerned with the subject dealt with by the regulation. This provision does not mean that a Mining Board must be constituted, for that is the subject matter of the provisions contained in section 12. If section 12 is not mandatory, then section 59(3) must be read in the light of the position that it is open to the Central Government to constitute the Board or not to constitute it, and that being so, section 59(3) would then mean only this and no more that if the Board is in existence and it is concerned with the subject, it must be consulted. Similarly, a. 59(4) as it stands after the amendment of 1959, requires that the draft of the rule or regulation shall be referred to every. Mining Board constituted in 'that part of the territories to which the Act extends which is affected by. the regulation or rule. That again means no more than this that if a Board is constituted in the part of the territories which is affected by the regulation, it shall be consulted. It is not as if this construction adds any words in section 59(3) or section 59(4); it merely proceeds on the basis that s.12(1) is not mandatory. Therefore. in our opinion, in construing section 12 (1) it would not be logical to assume that section 59(3) or s.59(4) imposes an obligation on the Central Government to constitute a Board, because as we have just indicated the constitution of the Boards is not the subject matter of s.59 (3) or section 59 (4) ; that is the subject matter ' of 917 the Central Government to constitute a Board must be determined in the light of the construction of section 12. Reverting then to the material words used in section 12 itself, if, it seems clear that the said words do not permit the construction for which Mr. Sen contends. It is not disputed that the context may justify the view that the use of the word "may" means " 'shall"; but if we substitute the word "shall" for "may" in section 12(1), it would be apparent that the argument about the mandatory character of the provisions of section 12(1) would just not work. To say that the Central Government shall constitute for any part of the territories to which the Act extends, or for any group or class of mines a Mining Board, would emphatically being out the contradiction between the obligation sought to be introduced by the use of the word "shall" and the obvious discretion left to the Central Government to constitute the Board for any part of the territories or any group or class of mines ' The discretion left to the Central Government in the matter of constitution of Boards which is so clearly writ large in the operative part of the said provision indicates that in the context, "may" cannot mean "shall". Section 12(1) really leaves it to the discretion of the Central Government to constitute a Board for any part of the territories and that means, it may not constitute a Board for some parts of the territories. Likewise, discretion is left to the Central Government to constitute. a Board for a group or class of mines and that means that for some groups or classes of mines, no Board need be constituted. Whether or not Boards should be constituted for parts of territories or for groups or classes of mines, has been left to be determined by the Central Government according, to the requirements of the territories or the exigencies of the groups or classes of mines. Therefore, we are 918 unable to accept the argument that a. 12(1) imposes an obligation on the Central Government to constitute Boards in order that in making regulations, there should be appropriate Boards who have to be consulted under section 59(3). The directory nat ner of the provisions of section 121(1) rather strengthen the construction placed upon section 59(3) by this Court in the case of Banwari Lal Agarwalla that if there are Boards in existence, they must be consulted before draft regulations are published under section 59. But that is very different from saving that Boards must be constituted in all areas or in respect of all groups or classes of mines which are intended to be covered by the regulations ,proposed to be made by the Central Government. Mr. Sen relied on section 5 for showing that the use of the word "may" in that section really means "shall". The said section provides that the Central Government may appoint such a person as possesses the prescribed qualifications to be the Chief Inspector of Mines for all territories to which the Act extends; and it may be conceded that the implementation of the material provisions of the Act depends upon the appointment of the Chief Inspector of Mines and so, in the context, " 'may" in a. 5 would really mean , 'shall" so far as the appointment of the Chief Inspector is concerned. But this section itself shows that "may" may not necessarily mean , 'shall" in regard to the appointment of Inspectors contemplated by the latter part "may" means "may" or it means ""shall". would inevitably depend upon the context in which the said word occurs and as we have just indicated, the context of section 12(1) is not in favour of the construction for which Mr. Sen contends. It cannot be said that like the appointment of the Chief Inspector of Mines, the constitution of the Boards 919 is essential for the working of the Act, for, without the constitution of the Boards, the working of the Act can smoothly proceed apace. We have already pointed out that there are only two functions which can be assigned to the Boards; under section 81(2) it is; discretionary for the Central Government to refer a pending criminal case to the Board or not, and under a. 59(3) consultation with the Board is necessary only if the Board is in existence. Therefore, the working of the Act is not necessarily dependent on the constitution of the Boards, and that distinguishes the context or section 12 from the context of section 5. There is another provision of the Act to which reference may be made in this connection. Section 61 deals with the making of the bye laws. Section 61(1) provides that the owner, agent or manager of a mine may, and shall, if called upon to do so by the Chief Inspector, or Inspector, frame and submit to the Chief Inspector or Inspector a draft of bye law,% in the manner indicated in the said sub section. Section 61(2), inter alia, authorises the Chief Inspector or the 'Inspector to propose amendments in the said draft. Section 61(3) then lays down that if within a period of two months from the date on which ' any draft bye laws or draft amendments are sent by the Chief Inspector or Inspector to the owner, agent or manager under sub section (2), and the Chief Inspector or Inspector and the owner, agent or manager are unable to agree as to the terms of the bye laws to be made under sub section (1), the Chief Inspector or Inspector shall refer the draft bye laws for settlement to the Mining Board, or where there is no Mining Board, to such officer or authority as the Central Government may, by general or special order, appoint in this behalf It would be noticed that this sub section assumes that there may not be in exi stence a Mining Board in the area where the mine 920 in question is situated or for the group or class of mines to which the said mine belongs. Now, if the petitioners ' construction of section 12 read with section 59(3) is accepted, it would follow that in order to make the regulations binding on all the mines situated in the whole of the country, there must be Mining .Board in respect of all the said mines either territory wise or group wise or class wise and that would not be consistent with the assumption made by section 61(3) that in certain areas or in respect of certain groups or classes of mines a Mining Board may not be in existence. It is in this indirect way that s.61(3) supports the construction which we are disposed to place on section 12(1). It is then urged that if the respondents ' construction of s.12 is upheld, section 59(3) or section 59(4) would be rendered nugatory and the whole purpose of consuiting the Boards would be defeated. We are not impressed by this argument. In testing the validity of this argument, it is necessary to recall the scheme of section 59. Section 57 confers power on the Central Government to make regulations and section 58 confers power on the said Government to make, rules as therein specified respectively. Section 59(1) requires that the power. to make regulations is subject to the condition that the said regulations would be made after previous publication. Section 59(2) then provides for the period which has to pass before the said draft can be taken into consideration. Section 59(3) refer to the consultation with the Boards. Logically, consultation with the Boards is the first step to be taken in making ,regulations; publication of the draft regulations is ' the second step; allowing the prescribed period to pass before the draft is considered is the third step and publishing the regulations after considering them is the last step. After the regulations are thus published, they shall have effect as if enacted in the Act. That is section 59,5). The 921 'first publication is the publication of the draft under section 23(3) of the and it is significant that the object of this publication is to invite objections or, suggestions from persons or bodies affected by the draft regulations. Section 23(4) of the provides that the authority having power to make the rules or, regulations shall consider any objection or suggestion which may be received with respect to the draft before the date specified therein, so that the whole object ,of publishing the draft is to give notice to the parties concerned with the regulations which are intended to be framed and the object of the requirement that the said draft will not be considered until the prescribed period has passed is to enable parties concerned to file their objections. Therefore, the scheme of section 59 clearly shows that apart from consulting the Boards to which section 59(3) refers, all parties affected, by the draft would have an opportunity to make their suggestions or objections and they would be considered before the draft is settled and regulations are finally made. Therefore, in our opinion, it would not be correct to say that the construction of section 59(3) for which the respondents contend would enable the Central Government to make regulations without consulting the opinion of persons affected by them. The result then is that section 12(1) is directory and not .mandatory and section 59(3), or a. 59(4) after the amendment in 1959 is mandatory in the sense that before the draft regulation is published, it is obligatory for the Central Government to consult the Board which is constituted under section 12. If no Board is constituted, there can be, and need be, no consultation. It is in the light of this position that the grievance made by the petitioners against the validity of their prosecution has to be judged. We have already noticed that it is common ground 922 between the parties that the Madhya Pradesh Minning Board and the West Bengal Mining Board which were constituted under a. 10 of the Act of 1923 have become invalid after the amendment of section 10 by the Amending Act 5 of 1935. Under section 10 as it originally stood, the Board was constituted by the Provincial Government and it was composed of five members. After the amendment, a Board had to be constituted by the Central Government and, it was to consist of seven members. That is why the respondents concede that the Madhya Pradesh and West Bengal Mining Boards could not be said to be validly constituted for the purpose of section 12 even by the application of section 24 of the . The position then is that at the time when the regulations were framed in 1947, there, was only one Board which properly constituted and that is the Bihar Mining Board. It was constituted in 1946 and by virtue of a. 24 of the , it continued as a valid Board under s.12. This Board has been consulted by the Central Government before the regulations were made. It is not disputed that the draft regulations were sent by the Central Government to the Bihar Mining Board through the State Government. It_ appears that after the Board received the said draft, it was circulated by the Chairman of the Board to all the members of the Board and the members communicated their opinions individually. It is argued that the communication by individual members of the Board of their opinions to the Central Government cannot be said to amount to the consulation with the Board and so, it is urged that the requirement of s.59(3) has not been complied with. We do not think there is any substance in this argument. All that s.59(3) requires is that a reasonable opportunity should be 'given to the Board to make its report as to the expediency or the suitability of the proposed regulations. How 923 the Board chooses to make its report is not a matter, which the Central Government can control. The Central Government has discharged its obligation as ' soon as it is shown that a copy of the draft regulations was sent to the Board, and if the Board thereafter, instead of making a collective report, chose ' to. sent individual opinions, that cannot be said to constitute the contravention of s.59(3). Indeed, s.59(3) does not impose an obligation on the Board to make any report at all It is true that since under s.14, the Board is empowered to make a report, it is unlikely that any Board, when consulted, would refuse to make a report. But, nevertheless, the position still remains that if the Board refused to make a report, that will not introduce any infirmity in the regulations which the Central Government may ultimately frame and publish under s.59(5). We must accordingly hold that the regulations framed in 1957 have been duly framed and published under s.59(5) and as such, they shall have effect as if enacted in the Act. The result is, the petition fails and is dismissed. SUBBA RAO, J. I regret my, inability to agree. The facts relevant to the question raised lie in a small compass. The petitioners are incharge of the working of a mine, known as Salanpur "A" Seam Colliery, in the District of Burdwan, West Bengal. On the allegation that they contravened the provisions of Regulation 127(3) of the Coal Mines Regulations, 1957 (hereinafter called the Regulations), a criminal complaint was filed against them in the Court of Sub divisional Magistrate, Asansol, and the said Magistrate has taken cognizance of the said complaint under section 190(1) (c) of the Code of Criminal Procedure, read with section 73 of the .(hereinafter called the Act). The petitioners challenge the validity of the maid Regulations on the ground that they were 924 made in contravention of the provisions of section 59(3) of the Act. Section 59(3) of the Act imposes a condition on the Central Government to give a reasonable opportunity to a Mining Board before making regulations in exercise of the power conferred on it by the Act. Under s.10 of the Indian Mines Act, 1923, the Central Government in the year 1946 constituted the Bihar Mining Board with jurisdiction over the area covered by the Province of Bihar. The Central Government sent the draft Regulations to the said Board. The Chairman of the Board circulated the said draft Regulations to all the members of the Board and the members communicated their opinions individually to the Central Government. Thereafter the Central Government made the said Regulations governing the whole of India, except Jammu and Kashmir, and to every coal mine therein, in compliance with the other provisions of section 59 of the Act. The question in this petition is whether the Regulations so made after consulting the Bihar, Board alone would be valid and in force in the West Bengal area so as to sustain a criminal prosecution on the basis of an infringement of the said Regulation in respect of a mine in that area. This question may be divided into two parts, namely (1) where the Central Government has ' not constituted a Mining Board, can it ignore the condition laid down under section 59(3) of the Act and (2) if giving a reasonable opportunity within the meaning of section 59(3) of. the Act is necessary condition for the validity of the Regulations made thereunder, can the Central Government validly make a regulation in respect of West Bengal after giving such a reasonable opportunity to a Mining Board constituted for Bihar ? In my view, the first question is directly 925 covered by the decision of this Court in Banwari Lal V. State of Bihar(,). There, Das Gupta J., delivered the judgment of the Court. As it is contended that the said decision should be confined only a case where a Mining Board has been validly constituted under the Act and should not be applied to a case where such a Board has not been constitu ted, it would be necessary to scrutinize the decision carefully to ascertain ' the exact scope of the said decision. The facts of that case where there was an accident in the Central Bhowra Colliery in Dhanbad in Bihar, as a result of which 23 persons lost their lives the Regional Inspector of Mines, Dhanbad filed a complaint against the appellant for allegedly committing an offence under section 74 of the , i.e., for contravening regulations 107 and 127 of the Coal Mines Regulations, 1957 ; after the Sub Divisional Officer took Cognizance of the complaint, the appellant made an application to the Patna High Court under article 226 of the Constitution contesting the validity of the said proceedings on the ground, inter alia, that there was no Mining Board constituted under section 12 of the Act and therefore the Central Government had made the Regulations without, consulting Mining Board as it, should do under section 59(3) of the Act. The second ground on which a prayer for quashing the proceedings was based, with which alone we are now concerned, was stated in the judgment thus : "the Coal Mines Regulations, 1957, are invalid having been framed in contravention of section 59(3) of the ." The contention of learned counsel, who elaborated this ground, was stated thus : " 'As regards the other contention that the regulations are invalid the appellant 's argument is that the provisions of section 12 and section 59 of the , are mandatory. " Then the, learned Judge quoted in extenso section 59(3) of the Act and (1) ; 926 proceeded to state the relevant basic facts and posed the question raised in the case thus: "It was not disputed before us that when the Regulations were framed, No. Board , as required under section 12 had been constituted and so, necessarily there had been no reference to any Board as required under section 59. 'the question raised is whether the omission to make such a reference make the rules invalid. " It is manifest from the question so posed that the question considered by the Court was whether the making of the Regulation without reference to a Mining Board, as it was not in existence, would be invalid. Then the learned Judge considered the language of a. 59(3) of the Act and observed at P. 851 : ". . . it is legitimate to note that the language used in. this case is emphatic and appears to be designed to express, an anxiety of the legislature that the publication of the, regulation, which it; condition precedent to the making of the regulations, should itself be subject to two conditions precedent first, a reference to the Mining Board concerned, and secondly, that sufficient opportunity to the Board to make & report as regards. the expediency and suitability of the proposed regulations. " The learned Judge then proceeded to considered the reasons for imposing such a condition and observed. "Even a cursory examination of the purposes set in the 27 clauses of section 57 shows that that most of them impinge heavily on the actual working of the mines. To mention only a few of these are sufficient to 927 show that the very purpose of the Act may will be defeated unless suitable and practical regulations are ' framed to help the achieve ment of this purpose. " Then he pointed out that section 12 of the Act unabled the Government to appoint Boards providing representations for different interests which would be in a position to help the Central Government to make suitable and practical regulations. In the words of the learned Judge, "The constitution is calculated to ensure that all aspects including on the one hand the need for securing the safety and welfare of labour and on the other hand the practicability of the provision proposed from the point of view of the likely expense and other considerations can be throughly examined. It is certainly to the public benefit that Boards thus constituted should have an opportunity of examining regulations proposed in the first place,% by an administrative department of the government and of expressing their opinion. " According to him, the constitution of the Board in the manner prescribed served a real purpose and, therefore the constitution by the Central Government with such 'a Board was made a condition of the making of the Regulations. When it was contended that the insistence upon consultation might effect the public welfare under emergent circumstances he. pointed out that under section 60 of the Act, which provided for such a contingency, the Central Government might make regulations without previous reference to Mining Boards and therefore no such 'consideration could prevent the Court from holding that ' the giving of an opportunity to the Board was a condition precedent to the exercise of the power of making regulations. The learned Judge summarised his reasoning thus: 928 " 'An examination of all the relevant circumstances viz., the language used, the scheme of the legislation, the benefit to the public on insisting on strict compliance as well as the risks to public interest on insistence on such compliance leads us to the conclusion that the legislative intent was to insist on these provisions for consultation with the Mining Board as a prerequisite for the validity of the regulations. This conclusion is strengthened by the fact that in section 60 which providing for the framing of regulations in certain cases without following the procedure enjoined in section 59, the legislature took care to add by a proviso that any regulation so made "shall not remain in force for more than two years from the making thereof ". By an amendment made in 1959 the period has been changed to one year. It is not unreasonable to read this proviso as expressing by implication the legislature 's intention that when the special circumstances mentioned in section 60 do not exist and there is no scope for the application of that section no regulation made in contravention of a. 59 will be valid for a single day. " The learned Judge concluded his discussion thus, a ' p. 853 : "For all the reasons giving above, we are of opinion that the provisions of section 59(3( of the Mining Act, 1952, are mandatory. " Pausing here for a moment, I find it very difficult to bold that this Court held, expressly or by necessary implication, that section 59(3) of the Act was mandatory only if the concerned Board was in existence. The argument advanced, the question 929 posed, the reasons given and the conclusion arrived at were all against giving such a limited scope to the said judgment, It was contended that both section 12 and section 59 were mandatory. III Posing the question to be decided, the learned Judge clearly referred to "the omission to make such a reference". The word "such" clearly refers to the omission to make a reference, as no Board was constituted under section 12 of the Act. So, as regards the posing of the question there was absolutely no ambiguity and the learned Judge had clearly in mind what the Court was asked to decide upon. The reasons given by the learned Judge for holding that it was obligatory of the Central Government to consult the Board before the making the regulation would equally apply whether the Board existed or not. The conclusion arrived at by the learned Judge that consultation with such a Board was a condition precedent for the exercise of the power would apply to both the cases. If it was a condition precedent for the exercise of the power, how could it cease to be one if a Board was not in existence? The condition is not the existence of the Board, but the consultation with a Board. In one case, the Government would not consult the Board though it existed, and in the other case it would not consult, as the Board did not exist. In either case, the condition was broken. But it is said that the last three, paragraphs of the judgment make it clear that the learned Judge was not considering the case where a Board had not been constituted. There, the learned Judge was considering the question whether the Mining Boards constituted under section 10 of the Mines Act, 1923, were continuing to operate at the time the Regulation were made and there was full consultation with the ,Mining Boards before the, Regulations were framed. put tile learned Judge was not able to decide that 930 question, as there was not sufficient material on the record. Therefore, this Court directed the Magistrate to decide that question. I fail to see how these paragraphs in any way help us to hold that this Court confined its decision only to a case where a Board has been constituted. On the other hand, the observations in the first of these three paragraphs clearly indicate to the contrary. The relevant observations are "As has been pointed out above, it was not disputed before us that at time when the regulations were framed to now Mining Board had been constituted under the and consequently no consultation with any Mining Board constituted under the 1952 Act took place. " This shows that the entire judgment up to that point proceeded on the basis that there was no consultation with the Mining Board, as no such Board was constituted. Thereafter the learned Judge was only considering the alternative contention advanced by the State, namely, that the pro existing Board was consulted and that that consultation was sufficient compliance with the provisions of section 59(3) of the Act. If I might analyse the mind of the learned Judge, the process of reasoning may be summarized thus: On behalf of the appellant it was argued that there was no consultation with the Board as it was not constituted under section 12 of the Act and, therefore, the Regulations made under the Act without such consultation were void. The learned Judge accepted the contention. Then it was argued for the Government that though there was no consultation with the Board constituted under section 12 of the Act, consultation with a pre existing Board would be enough compliance with the section. As there was no material on the record, the learned Judge could 931 not decide on that question and therefore directed it to be decided by the Magistrate. On the other hand, as it was common case that no Board under section 12 of the Act had been constituted, if the contention of the Government, now pressed before us, was correct, no other question would have arisen for, according to the State, a. 59 (3) could not be invoked in a case where no Board had been in existence. The plea that there was a consultation with the pre existing Board was taken not by the appellant but by the State and such a plea would be unnecessary if section 58 (3) of the Act did not lay down the condition of consultation with the Board when it did not exist. To my mind, the judgment of the Court is clear and unambiguous on this point and it decided that, as there was no consultation with any Mining Board under section 59(3) of the Act, as the Board was not in existence, the Regulations were bad. The present argument is an attempt to persuade us to go back on a clear pronouncement on the point by a Constitution Bench of the Court. That apart, I am satisfied on a true construction of the provisions of section 12 and a. 59(3) of the Act that the Central Government has to exercise the power under section 12 if it intends to exercise the power under a. 59 of the Act. Under section 12, ,the Central Government may constitute for any part of the territories to which this Act extends or for any group or class of mines, a Mining Board", consisting of persons with specific qualifications representing different interests in the mines. Under ,R. 59, the power to make regulation conferred by a. 57 is subject to the condition of the regulations being made after previous publication, and under sub section (3) thereof ""Before the draft of any regulations is published under this section,it shall be referred to every Mining Board which is, the opinion of the Central Government, con 932 cerned with the subject dealt with by the regulation, and the regulation shall not be so published until each such Board has had a reasonable opportunity of reporting as to the expediency of making the same and as to the suitability of its provisions". As interpreted by this Court, the said condition is a condition precedent for the making of the Regulations under the said section. If the contention of the learned Solicitor General be accepted, the condition may have to be disannexed from the power by a situation brought about the conscious withholding of the exercise of the connected power by the Central Government under section 12 of the Act. Central Government by its own default can ignore the condition imposed in public interest. The construction leading to this anomalous result can. not be accepted unless the provisions compel us to do so. It is a well settled principle of construction that when it is possible to do so, it is the duty of the Court to construe provisions which appear to conflict so that they harmonies. To put it differently, of two possible constructions, one which gives a consistent meaning to different parts of an enactment should be preferred. In the instant case, the two sections can be harmonized without doing violence to the language used. Section 12 is an enabling provision under it a power it; given to the Central Government to appoint a Mining Board. Section 57, read with section 59, confers another power on the Central Government to make regulation subject to, among others a condition that the draft of the regulations shall be referred to a Mining Board. These two powers are connected: if they are read together, as we should do in an attempt to reconcile them, it could be reason '. ably hold that the power conferred under a. 12 has to be exercised by the Central Government if it intends to make regulations under section 57 of the Act. This construction carries out the full intention of Legislature in enacting s.59 as interpreted by this 933 Court. Both the powers can be exercised without the one detracting from the other. The construction suggested by the respondents enables the Central Government to defeat the public purpose underlying the imposition of the condition under s.59 of the Act and that suggested by the petitioners enables the exercise of the two powers without the one coming into conflict with the other. I would on the principle of harmonious construction, prefer 'to accept the latter construction to the former. Let us took at the provisions from a different perspective. It is a well established doctrine that when the power is coupled with a duty of the person to whom it is given to exercise it, then the exercise of the power is imperative: see Maxwell on interpretation of Statutes, 11th Edn., p. 234. It has also been bold that "if the object for which the power is conferred contemplates giving of a right, there would then be a duty cast on person to whom the power is given to exercise it for the benefit of the party to whom the right is given when required on his behalf. " Dealing with section 51, Income tax Act, 1918 which provides that the Chief Revenue Authority may" state the case to High Court Lord Phillimore observed in Alcock Ashdown & Co. vs The Chief Revenue Authority Bombay(1). "No doubt that the section does not say that the authority "shall" state the case, it only says that it may and it is rightly urged that "may" does not mean "shall, only the capacity or power is given to the authority. But when a capacity or power is given to a public authority there may be circumstances which couple with the power a duty to exercise it, and where there is a serious (1) A. 1. R. 934 point of law to be considered there does lie a duty upon the Revenue authority to state a case for opinion of the Court and if he does not appreciate that there is such a serious point, it is in the power of the Court to con trol him and to order him to state the case. " Under the Act, there are two connected powers a power to appoint a Mining Board and a power to make regulations subject to a condition. The condition imposed on the power confers a right on a Mining Board to be consulted before a regulation is made. A combined reading of section 12 and sections 57 and 59 shows that the power or powers conferred on the Central Government are coupled with a duty to consult the Board whenever the Central Government seeks to exercise the power under s.57. I have no hesitation in holding that the power is coupled with a duty and that the power has to be exercised when the 'duty demands it. The Central Government in making the Regulations has a duty to consult the Mining Board and the Mining Board has a right to be so consulted and to discharge its duty it is incumbent upon the Central Government to exercise the connected power by appointing the Board. It is said that under section 59 of the Act, the Regulations and the Rules shall be referred to a Mining Board and that under section 58 the Central Government has the power to make a rule providing for the appointment of the Chairman and members of the Mining Board and that if section 59 is mandatory, the Government can never exercise the power under section 58(a). No such difficulty could arise under the Act before its amendment in 1959. Under a. 69(3), as it stood then, the condition of consultation with a Mining Board was imposed only on the power of the Government to make a. regulation and that s.57 of the Act which confers a 935 power on the Central Government to make regulations did not contain any. clause corresponding to cl. (a) of section 58 of the Act. That apart, section 58(a) may legitimately be invoked by the Central ' Government only after a Board had been consti tuted in regard to the future appointments. how this argument may have some bearing when this question of construction of the provisions of section 59 was raised before this Court on the last occasion and none at present, as the true construction of the said section was finally settled by this Court. That apart, a comparative study of the other provisions of the Act would also lead to the same conclusion. Under the Act, there are many enabling provisions empowering the Central Government to appoint specified authorities to discharge different duties and functions described in various sections. Should it be held that the Central Government need not appoint the authorities under any circumstances, the Act would become a dead letter. Even the appointment of 'the Chief Inspector and Inspectors is left to the discretion of the Central Government: see section 5 of the Act. If the Government need not appoint the Chief Inspector or the Inspectors, the duties and functions allotted to them could not be discharged or performed. A resonable construction would, therefore, be that if the said duties and functions have to be per. formed, the Government hat; to appoint the officers. So too, if the Central Government seeks to exercise the powers under section 57 of the Act, read with section 59 thereof, it has to appoint the Board. I therefore , hold on a fair construction of sections 12 and 59 of the Act, that ' the Central Government has a duty to appoint the, Mining Board if it seeks to exercise its power under section 57 of the Act. The next argument is that the Bihar Board has been consulted in the manner prescribed by 936 section 59(3) of the Act and, therefore. the regulation made after such consultation are valid. I cannot agree with this contention either. The said Board was appointed under section 10(1) of the Indian Mines Act, 1923 and it is not disputed that the Board must be deemed to have been duly constituted under the present Act. It is also not disputed that the said Board was only constituted to have jurisdiction over the area comprised in the present Bihar State, that is, it has no jurisdiction over West Bengal. Under section 12 of the Act, the Central Government may constitute for any part of the territories to which this Act extends or for any group or class of a Mines., a Mining Board. Under section 59, the Central Government shall refer the draft to every Mining Board which, in the opinion of the Central Government, is concerned with the subject dealt with by the regulation '. Now, can it be said that the Board constituted for a part of the territories to which the Act extends, namely, to the State of Bihar, could be a Board concerned with the subject dealt with by the regulations, namely, the mines in West Bengal area ? The entire object of section 59 is to consult the persons intimately connected with the mining operations of a particular area so that suitable regulations may be made to govern the working of those mines. It could never have been the intention of the Legislature to empower the Government to make regulations in regard to mines in one part of the country by consulting a Board constituted for another part of the country. Such an intention could not be attributed to the Legislature. Indeed, the Central Government, when it is constituted the Boards, expressly indicated its intention that all the Boards, including the Board functioning in West Bengal, should be consulted, but as the Board constituted there was not one constituted legally under the Act, the consultation with. the said Board 937 had become futile. I therefore, hold that the Regulations in so far as they purport to regulate the mines situate in West Bengal have not been validly made under the Act inasmuch as a condition precedent imposed by section 59 of the Act on the exercise of the Government 's power to make a regulation was not complied with. In the result, I direct the issue of a writ of prohibition against respondents 1 to 4 restraining them from proceeding with the criminal case launched against the petitioners. The petitioners will have their costs. By COURT : In view of the majority opinion of the Court the Writ Petition fails and is dismissed.

Section 12 of the , provides that the Central Government may constitute a Mining Board for any part of the territories to which the Act extended or for any group or class of mine . In 1957 only one mining board i.e. the Bihar Mining Board was in existence and other mining boards were not constituted. Section 57 empowers the Central Government to make Regulations. Section 59(3), as it then stood, provided that before the draft of any regulation was published it should be referred to every Mining Board concerned and that it shall not be published until each such Mining Board had had a reasonable opportunity of reporting on it. The Central Government referred the draft of the Coal Mines Regulations to the Bihar Mining Board which circulated the draft to all the members of the Board and the members communicated their opinions individually to the Central Government. Thereafter, the Regulations were duly published and came into force. The petitioner 's, who were being prosecuted in Bengal for violation of the Regulations, contended that the Regulations were invalid as : (i) it was incumbent upon the Central Government under 'section 12 of the Act to constitute all the Mining Boards and to refer the draft Regulations to all the Boards before they. could be published under section 59. and (ii) the communication of opinions by individual members 'of the Bihar Mining Board did not amount to consultation with the Board within the meaning of section 59(3). Held (Per majority, Subba Rao, J., dissenting), that the 'Coal Mines Regulations, 1957, had been duly framed and published. Section 59(3) merely provided that if a Mining Board was in existence at the relevant time it was obligatory on the Central Government to consult it before 905 the draft Regulation was published. But section 12 was not mandatory and it was not obligatory on the Central Government to constitute any or all of the Mining Boards. There was nothing in the Act or. in the context which justified reading the word "may" in section 12 as "shall". The Mining Board constituted under section 12 had to perform two functions, viz., to make a report in respect of regulations or rules referred to it and to decide cases which may be referred to it under section 81. The working of the Act was not dependent on the constituting of Mining Boards. This construction of section 12 did not render the provisions of section 59(3) nugatory. Apart from consulting the Boards, all parties affected by the draft had an opportunity to make their suggestions or objections and these had to be considered before the draft was settled and the regulations were finally made. Banwarilal Agarwalla vs state of Bihar, , explained. Held, further, that the requirement of section 59(3) had been complied with in referring the draft Regulations to the Bihar Mining Board. All that section 59(3) required was that a reasonable opportunity should be given to the Board to make its report. How the Board chose to make its report, was not a matter which the Central Government could control. Per Subba Rao, J. ,The Coal Mines Regulations were not validly made. The Supreme Court had directly decided in Banwarilal vs State of Bihar that the Regulations were bad as there was no consultation with any Mining Board under section 59 (3) as the Boards were not in existence. A fair construction of sections 12 and 59 (3) of the Act ' also showed that if the Central Government wanted to ' make regulations under section 57 it had to appoint Mining Boards and to refer the regulations to them before publication. If the Central Government wanted to exercise the power under section 59 it had first to exercise the power under section 12. The power to make regulations was coupled with a duty to consult the Mining Boards, and to discharge its duty it was incumbent upon the Central Government to appoint the Mining Boards. Apart from this, the Regulations is so far as they purported to regulate mines in West Bengal had not been validly made as no Mining Board for the West Bengal area had been consulted before making the Regulations. The Act did not empower the Central Government to make regulations in regard to mines in one part of the country by consulting a Board constituted for another part of the Country. 906 Banwarilal Agarwalla vs State of Bihar. , followed. Alcock Ashdown & Co. vs The Chief Revenue Authority, Bombay, A. I. R. , referred to.

Civil Appeal Nos. 122 1244 of 1978. Appeal by special leave from the Judgment and order dated 23 11 77 of the Andhra Pradesh High Court in appeals against orders Nos. 236, 237, 241 to 243, 246, 253 to 260, 287, 288, 293, and 294 of 1977. Y. section Chitale, A. A. Khan, J. B. Dadachanji and D. N. Mishra for the appellants. S.V. Gupte, Attorney General of India and Girish Chandra for the Respondent. 83 The order of the Court was delivered by KRISHNA IYER, J. Law is essentially the formal expression of the regulation of economic relations in society. That is the key note thought in this case" where the core question is: who is an employee ? Secondly, to decide the meaning of a welfare measure a feeling for the soul of the measure is a surer guide than meticulous dissection with lexical tools alone. The definitional amplitude of 'employee ' in section 2(9) of the , (hereinafter referred to as the Act), is the sole contentious issue canvassed by counsel at the bar. We have heard Sri Chitale for the appellant and the learned Attorney General for the respondent Corporation at some length, because a decision by this Court as to the width of the definition and consequential fall out of statutory obligations may cover a considerable number of establishments. We have granted leave to appeal on that basis and now proceed to study the anatomy of 'employee ' as defined in section 2(9) of the Act. A brief factual narration may help get a hang of the case. The High Court, before which the present appellants had filed fruitless appeals has summarised the facts succinctly thus: "The appellants are owners of theatres in the twin cities of Hyderabad and Secunderabad, where films are exhibited. Within the same premises as the theatre, in every case, there in a canteen and a cycle stand. The canteen and the cycle stand are leased out to contractors under instruments of lease. The contractors employ their own servants to run the can teen and the cycle stand. In regard to persons so employed by the contractors, the owners of the theatres were treated 'Principal Employers ' and notices of demand were issued to them calling upon them to pay contribution under the employees ' State Insurance Act. Thereupon the owners of theaters filed application under Section 75 of the Employees State Insurance Act before the Employees Insurance Court for a declaration that the provisions of the Act were not applicable to their theaters and that they were not liable to any contribution in respect of the persons employed in the can teens and cycle stands attached to the theaters. The Insurance Court, on a consideration of the relevant lease deeds and other evidence, noticed the following features in regard to the running of the canteens: "(1) All these canteens are within the premisses of the cinema theatres (2) A few of these canteens have access 84 directly from the abutting roads whereas the other canteens can be reached only through the open space inside the cinema theatres. (3) The persons running the canteens are them selves responsible for equipping the canteens with the necessary furniture and for providing the required utensils. (4) The Managements of all these Cinema theaters pay the electricity charges due in respect of these canteens. (5) The persons working in these canteens are employed only by the contractors or tenants who run the canteens and they alone are responsible for the salaries payable to the persons. (6) The managements of the cinema theatres have absolutely no supervisory control over the persons employed in these canteens. (7) These canteens have to be run only during the show hours. This is made abundantly clear by Exhibits P 7 to P 10 and in the, face of the recitals contained in these agreements, I am not prepared to accept P.W. 1 's evidence that the tenants of these canteens are at liberty to run them at other times also. In particular Exhibit P 10 provides that the lessee shall run the business only during the show hours and that it shall be closed as soon as the cinema shows are closed. (8) A few of the persons working in the can teens are allowed inside the auditorium during the interval for vending eatables and beverages. They can enter the auditorium a few minutes before the interval and can remain inside the auditorium for a few minutes after the interval. (9) It is seen Freon Ex P. 10 that the management of the cinema theatre had reserved to itself the right to specify what types of things should be sold in the canteen. The canteens are expected to maintain a high degree of cleanliness and sanitation. (10) In some cases the managements of the theatres reserve the right to enter the canteen premises at all reasonable time for purposes of check and inspection. exhibit P. 9 contains a specific clause in that regard. " These features led the Insurance Court to arrive at the following findings of fact. "From the several circumstance mentioned above it is clear that these canteens are meant primarily for the convenience and comfort of those visiting the cinema theatres though in a few cases the persons in charge of canteens seem to be allowing the general public also to have access to the canteens taking advantage of the fact that the canteens can be recalls directly from the abutting road. But this Circum 85 stance does not by itself indicate that these canteens are A thrown open to the general public as other hotels, restaurants or eating houses. " In regard to cycle stands, the Insurance Court held: "Hence it may safely be concluded that these cycle stands are meant exclusively for the convenience of persons visiting B, the theaters." The Insurance Court found that the owners of theaters where principal employers with reference to the persons employed by contractors in the canteens and the cycle stands attached to the theaters and rejected the applications filed by the owners of theaters under Sec. 75 of the Act. The disappointed theatre owners appealed under Sec. 82, without avail, but undaunted. moved this Court for Special Leave to Appeal which we have granted, as stated earlier, so that we may discuss the facets of the definitional dispute in some detail and lay down the law on the main question. A conspectus of the statute, to the extent relevant, is necessary to appreciate the controversy at the Bar. The statutory personality and the social mission of the Act once projected, the resolution of the conflict of interpretation raised in this case is simple. Although, technically, the Act is a pre Constitution one, it is a post Independence measure and shares the passion of the Constitution for social justice. Articles 38, 39, 41, 42,,43 and 43 A of the Constitution show concern for workers and their welfare. Since Independence, this legislative motivation has found expression in many enactments. We are concerned with one such law designed to confer benefits on this weaker segment in situations of distress as is apparent from the Preamble. The machinery for state insurance is set up in the shape of a Corporation and subsidiary agencies. All employees in Factories or establishments are sought to be insured against sickness and allied disabilities, but the funding, to implement the policy of insurance, is by contributions from the employer and the employee. In view of the complexities of modern business organisation the principal employer is made primarily liable for payment of contribution "in respect of every employee, whether directly employed by him or by or through an immediate employer". Of course, where the employee is not directly employed by him but through another 'immediate employer ', the principal employer is empowered to recoup the contribution paid by him on behalf of the immediate employer (section 41). There is an Inspectorate to supervise the determination and levy of the contributions. 86 There is a chapter prescribing penalties; there is an adjudicating machinery and there are other policing processes for the smooth working of the benign project envisaged by the Act. The benefits belong to the employees and are intended to embrace is extensive a circle as is feasible. In short, the social orientation, protective purpose and human coverage of the Act are important considerations in the statutory construction, more weighty than mere logomachy or grammatical nicety. With this prefatory statement we may go straight to the crucial definition. The essential question is whether a cinema theatre manager who has no statutory obligation to run a canteen or provide a cycle stand but, for the better amenities of his customers and improvement of his business, enters into an arrangement with another to maintain a canteen and a cycle stand and that other employs, on his own, workers in connection with the canteen and the cycle stand, can be held liable for contribution as the principal employer of the workmen although they are engaged independently by the owner of the canteen or the cycle stand. It is common ground that there is no statutory obligation on me part of the appellants to run canteens or keep cycle stands. It is common ground? again. that the workers with whom we are concerned are not directly employed by the appellants and, if we go by the master and servant relationship under the law of contracts, there is no employer employee nexus. Even so, it has been held cone currently by the Insurance Court and the High Court that "canteens are meant primarily for the convenience and comfort of persons visiting the theatres and the cycle stands are meant exclusively for the convenience of the persons visiting theatres" and "that the persons employed in the` canteens and cycle stands are persons employed on work which is ordinarily part of the work of the theatre or incidental to the purpose of the theatres. In relation to the person so employed, therefore, the owners of the theatres are principal employers. ' ' The High Court proceeded further to affirm: "By undertaking to run the canteen or the cycle stand the contractor has undertaken the execution of the whole or part of the work which is ordinarily part of the work of the theatre of the principal employer or is incidental for the purpose of the theatre. We have already held that the running of canteen or cycle stand is work carried on in connection with the work of the theatre, work which may be considered to be either ordinarily part of the work of the theatre or incidental to the purpose of the theatre. If so, there is no reason why the contractor should not come within the definition of 'immediate employer ' ". 87 Before us counsel have mainly focussed on the definition of "employee" since the short proposition which creates or absolves liability of the appellants depends on the canteen workers and the cycle stand attendants being 'employees ' vis a vis the theatre owners. There is no doubt that a cinema theatre is an 'establishment ' and that the appellants, as theatre owners, are principal employers, being persons responsible for the supervision and control of the establishment. Admittedly, the canteens and cycle stands are within the theatre premises. Within this factual metrix let us see if the definition in section 2(9) will fit. We may read the definition of "employee" once again before analysing the components thereof 2(9) "employee" means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies, and (i) who is directly employed by the principal employer or any work of, or incidental or preliminary to or connected with the work, of the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or (ii) who is employed by or through an immediate employer on the premises of the factory of establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment, or (iii)whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service; and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of, the factory or establishment; but does not include: (a) any member of the Indian naval, military or air forces; or 88 (b) any person so employed whose wages (excluding remuneration for overtimes work) exceed five hundred rupees a month: Provided that an employee whose wages (excluding remuneration for overtime work) exceed five hundred rupees a month at any time after and not before, the beginning of the contribution period, shall continue to be an employee until the end of that period. The reach and range of the definition is apparently wide and deliberately transcends pure contractual relationships. We are in the field of labour jurisprudence, welfare legislation and statutory construction which must have due regard to Part IV of the Constitution. A teleological approach and social perspective must play upon the interpretative process. Now here is a break up of Sec. The clause contains two substantive parts. Unless the person employed qualifies under both he is not an 'employee '. Firstly he must be employed "in or in connection with the work of an establishment. The expression "in connection with the work of an establishment" ropes in a wide variety of workmen who may not be employed in the establishment but may be engaged only in connection with the work of the establishment. Some nexus must exist between the establishment and the work of the employee but it may be a loose connection. 'in connection with the work of an establishment ' only postulates some connection between what the employee does and the work of the establishment. He may not do anything directly for the establishment; he may not do anything statutorily obligatory in the establishment; he may not even do any thing which is primary or necessary for the survival or smooth running of the establishment or integral to the adventure. It is enough if the employee does some work which is ancillary, incidental or has relevance to or link with the object of the establishment. Surely, an amenity or facility for the customers who frequent the establishment has connection with the work of the establishment. The question is not whether without that amenity or facility the establishment cannot be carried on but whether such amenity or facility, even peripheral may be, has not a link with the establishment. Illustrations may not be exhaustive but may be informative. Taking the present case, an establishment like a cinema theatre is not bound to run a canteen or keep a cycle stand (in Andhra Pradesh) but no one will deny that a can teen service, a toilet service, a car park or cycle stand, a booth foresail of catchy film literature on actors, song hits and the like, surely have connection with the cinema theatre and even further the venture. 89 On the other hand, a book stall where scientific works or tools are A sold or stall where religious propaganda is done, may not have anything to do with the cinema establishment and may, therefore, be excluded on the score that the employees do not do any work in connection with the establishment, that is, the theatre. In the case of a five star hotel, for instance, a barber shop or an arcade, massage parlour, foreign exchange counter or tourist assistance counter may be run by some one other than the owner of the establishment but the employees so engaged do work in connection With the establishment or the hotel even though there is no obligation for a hotel to, maintain such an ancillary attraction. By contrast, not a lawyer 's chamber or architect 's consultancy. Nor indeed, is it a legal ingredient that such adjunct should be exclusively for the establishment, if it is mainly its ancillary. The primary test in the substantive clause being thus wide, the employees of the canteen and the cycle stand may be correctly described as employed in connection with the work of the establishment. A narrower construction may be possible but a larger ambit is clearly imported by a purpose oriented interpretation. The whole goal of the statute is to make the principal employer primarily liable for the insurance of kindred kinds of employees on the premises, whether they are there in the work or are merely in connection with the work of the establishment. Merely being employed in connection with the work of an establishment, in itself, does not entitle a person to be 'employee '. He must not only be employed in connection with the work of the establishment but also be shown to be employed in one or other of the three categories mentioned in Sec. 2(9) (i) covers only employees who are directly employed by the principal employer. Even here, there are expressions which take in a wider group of employees than traditionally so regarded, but it is imperative that any employee who is not directly employed by the principal employer cannot be eligible under Sec. 2 '(9) (i) . In the present case, the employees concerned are admittedly not directly employed by the cinema proprietors. Therefore, we move down to Sec. 2(9) (ii). Here again, the language used is extensive and diffusive imaginatively embracing all Possible alternatives of employment by or through all independent employer. In such cases, the 'principal employer ' has no direct employment relationship since the 'immediate employer ' of the employee, concerned is some one else. Even so, such an employee, if 7 520SCI/78 90 he works (a) on the premises of the establishment, or (b) under the supervision of the Principal employer or his agent '`on work which is ordinarily part of the work of the establishment or which is preliminary to the work carried on in or incidental to the purpose of the establishment", qualifies under Sec. 2(9) (ii). The plurality of persons engaged in various activities who are brought into the definitional net is wide and considerable; and all that is necessary is that the employee be on the premises or be under the supervision of the principal employer or his agent. Assuming that the last part of Sec. 2(9) (ii) qualifies both these categories, all that is needed to satisfy that requirement is that the work done by the employee must be (a) such as is ordinarily (not necessarily nor statutorily) part of the work of the establishment, or (b) which is merely preliminary to the work carried on in the establishment, or (c) is just incidental to the purpose of the establishment. No one can seriously say that a canteen or cycle stand or cinema magazine booth is not even incidental to the purpose of the theatre. The cinema goers ordinarily find such work an advantage, a facility an amenity and some times a necessity. All that the statute requires is that the work should not be irrelevant to the purpose of the establishment. It is sufficient if it is incidental to it. A thing is incidental to another if it merely appertains to something else as primary. Surely, such work should not be extraneous or contrary to the purpose of the establishment but need not be integral to it either. Much depends on time and place, habits and appetites, ordinary expectations and social circumstances. In our view, clearly the two operations in the present case, namely, keeping a cycle stand and running canteen are incidental or adjuncts to the primary purpose of the theatre. We are not concerned with Sec. 2(9) (iii) nor with the rest of the definitional provision. Shri Chitale tried to convince us that on a minute dissection of the various clauses of the provision it was possible to exclude canteen employees and cycle stand attendants. May be, punctilious sense of grammar and minute precision of language may sometimes lend unwitting support to narrow interpretation. But language is handmaid, not mistress. Maxwell and Fowler move along different streets, sometimes. When, as in Sec. 2(9), the definition has been cast deliberately in the widest terms and the draftsman has endeavoured to cover every possibility so as not to exclude even distant categories of men employed either in the primary work or cognate activities, it will defeat the object of the statute to truncate its semantic sweep and throw out of its ambit those who obviously are within the benign 91 contemplation of the Act. Salvationary effort, when the welfare of the weaker sections of society is the statutory object and is faced with stultifying effect, is permissible judicial exercise. In this view we have no doubt that the findings assailed before us are correct and that the conclusion reached deserves to be affirmed. We do so. Learned counsel for the appellants finally submitted that, in this event of our negativing his legal contention, he should be given the benefit of natural justice. We agree. The assessment of the quantum of the employers ' contribution has now been made on an ad hoc basis because they merely pleaded non viability and made no returns. on the strength of Sec. 45A the contribution was determined without hearing. In the circumstances of the case, and the learned Attorney General has no obiection we think it right to direct the relevant Corporation authorities to give a fresh hearing to the principal employers concerned, if sought within 2 months from to day, to prove any errors or infirmities in the physical determination of the contribution. Such a hearing in tune with the ruling, of this Court in the Central Press case(1) is fair and so we order that the assessment shall be reconsidered in the light of a de novo hearing to the appellants and the quantum of contribution affirmed or modified by fresh orders. Before we formally wind up we think it apt to make a critical remark on the cumbersome definition in Sec. 2(9) of the Act when has promoted considerable argument. This reminds us of the well known dictum or Sir James Fitzjames Stephen "that in drafting it is not enough to gain a degree of precision which a person reading in good faith can understand, hut it is necessary to attain if possible to a degree of precision which a person reading in bad faith cannot misunderstand. "(2) Subject to this direction we dismiss the appeals with costs (one set) . S.R. Appeals dismissed (1)[1977] 3 S.C.R. 35. (2)Lux Gentium Lex Than and Now 1799 1974 p. 7.

Section 21(1) of the Wealth Tax Act provides that in case of assets chargeable to tax under the Act which are held by . . any trustee appointed under a Trust, wealth tax shall be levied upon and recoverable from the trustee in the like manner and to the same extent as it would be leviable upon and recoverable from the person on whose behalf the assets are held. Sub section (4) provides that notwithstanding anything contained in this section, where the shares of the persons on whose behalf or for whose benefit any such assets are held are indeterminate or un known, wealth tax shall be levied upon and recovered from the trustee as if the persons on whose behalf or for whose benefit the assets are held were an individual for the purposes of this Act. The corpus of a family trust created by the Nizam of Hyderabad was notionally divided into 175 equal units, out of which 1611/2 units were allocated amongst relatives mentioned in the Second Schedule to the Deed in the manner specified therein. The essence of the Trust was that none of the beneficiaries was entitled to the corpus of the units allocated to him or her but was only entitled to be paid the income from the units allocated to him or her. The trust deed made detailed and elaborate provisions as to the dispo sition of the different units allocated to the various beneficiaries and also provided for every other contingency in such a manner that at any particular point of time one could say, if the owner of the life interest were to die at that point of time, who the beneficiaries entitled to the corpus would be. The Wealth Tax Officer assessed wealth tax on the value of the respective units allocated to each of the several beneficiaries. In appeal the Appellate Assistant Commissioner upheld the assessees ' contention that since each of them was enti tled only to a life interest in the corpus of the units allocated, they could not be assessed in respect of the entire value of the corpus. When assessments were made on this basis, the value of the remainder wealth escaped tax. The Wealth Tax Officer, therefore, assessed the remainder wealth under section 21(4) taking the view that the beneficiaries in respect of the several remainder estates after the lives of the immediate beneficiaries were unknown and their shares were indeterminate. On appeal the appellate Assistant Commissioner, without, deciding the contention as to the applicability of section 21(4), annulled the assessments on the ground that though the trust deed was one, it created several distinct and separate trusts, one in favour of each beneficiary with its own independent and complete provision in regard to devolution. after the death of each beneficiary and the Wealth Tax Officer was not justified in clubbing the entire remainder wealth in a single assessment. Before the Appellate Tribunal the. Revenue contended that the assessees were liable to be assessed as an individ ual under section 3 in respect of the entire corpus of the trust fund and section 21(4) being merely a machinery provision did not have the effect of overriding the charge imposed under section 3. 736 The Tribunal held (i) that 8. 3 was subject to section 21 and the assessees could not be assessed to wealth tax under that section in respect of the entire corpus ignoring the provisions of section 21; (ii) that section 21(1) was not applicable in this case and (iii) that section 21(4) was applicable because the beneficiaries in respect of the remainder estate were unknown. The following questions, among others, were referred by the Tribunal the High Court: 1. Whether the trustees were liable to be taxed under section 3 in the status of an "individual"? 2. Whether the Tribunal was right in hold ing that the provisions of section 3 should be considered as subject to the provisions of section 21 ? 3. Whether the Tribunal was correct in holding that under section 21(4) the remainder wealth could be assessed in respect of each of the several units or groups of units allocated in favour of the beneficiaries ? 4. Whether the Tribunal was right in holding that the provisions of section 21(4) are applica ble? The High Court held that (i) since the terms "individu al" occurring in section 3 is wide enough to include a group of persons forming a unit, the trustees were liable to be assessed under section 3 but, section 3 being subject to the provi sions of section 21, it was not permissible to tax the trustees under s 3 ignoring the provisions of section 21; (ii) it was not possible to say, on the valuation date, that the benefici aries of the remainder estate in respect of each unit were unknown or their shares were indeterminate so as to attract the applicability of section 21(4); and (iii) section 21(1) was ap plicable because it could be predicated with certainty and definiteness on the relevant valuation date as to who would succeed to the corpus of each set of unit and in what shares, if the conditions for the vesting of the corpus who fulfilled on that date. Dismissing the appeals in part, HELD: The trustees constituted an assessable unit and were liable to be assessed to wealth tax as "individual" under section 3. [747 E] (1)(a) Section 3 imposes the charge of wealth tax sub ject to other provisions of the Act and these other provi sions include section 21. Section 3 is, therefore, made express ly subject to section 21 and it must yield to that section in so far as the latter makes special provision for assessment of a trustee. [748 D E] (b) Section 21 is mandatory On a combined reading of ss 3 and 21,it is clear that an assessment on a trustee must be made in accordance with the provisions of s 21 Every case of assessment on a trustee must necessarily fall under section 21 and he cannot be assessed apart from and without reference to that section. To hold otherwise would be to refuse to give effect to the words "subject to the other provisions of this Act" in section 3 and to deny mandatory force and effect to the provisions of section 21. [749 E G] C.R. Nagappa vs Commissioner of Income tax , Commissioner of Income Tax vs Nandial Agarwal at 762 and Commissioner of Wealth Tax, Bihar & Orissa vs Kripashankar Dayashanker Worah followed. Commissioner of Income Tax, Ahmedabad vs Balwantrai Jetha lal Vaidya approved. (c) The assessment which is contemplated to be made on the trustee under section 21(1) or section 21(4) is assessment in a representative capacity. It is really the beneficiaries who are sought to be assessed in respect of their interest in the trust properties through the trustee. Section 21(1) can apply only where the trust properties are held by the trus tee for the benefit of a single beneficiary 737 or where there are more beneficiaries than one, the individ ual shares of the benenciaries in the trust properties are determinate and known. Where such is the case wealth tax can be levied on the trustee in respect of the interest of any particular beneficiary in the trust properties in the same manner and to the same extent as it would be leviable upon the beneficiary and in respect of such interest in the trust properties, the trustees would be assessed in a repre sentative capacity as representing the beneficiary. The beneficiary would always be assessable in respect of his interest in the trust properties since such interest belongs to him and the right of the Revenue to make direct asesss ment on him in respect of such interest stands unimpaired by the provisions enabling assessment to be made on the trus tees in a representative capacity. [750 G H, 751 A B, C] (d) The Revenue has thus two modes of assessment: (a) it may either assess such interest in the hands of the trustee in a representative capacity under sub section (1); or (b) assess it directly in the hands of the beneficiary by in cluding it in the net wealth of the beneficiary. In either case what is taxed is the interest of the beneficiary in the trust properties and not the corpus of the trust properties. So also where beneficiaries are more than one and their shares are indeterminate or unknown, the trustee would be assessable in respect of their total beneficial interest in the trust properties. In the instant case it is the beneficial interest which is assessed to wealth tax in the hands of the trustee and not the corpus of the trust properties. Since under sub sections (1) and (4) of section 21 it is the beneficial interest which is taxable in the hands of the trustee in a representative capacity and the liability of the trustee cannot be greater than the aggregate liability of the beneficiaries, no part of the corpus of the trust properties can be assessed in the hands of the trustee under section 3 and any such assessment would be contrary to the plain mandatory provisions of section 21. [751 D E, G H] (e) The consequences that flow from the proposition laid down in section 21(1) that the trustee is assessable "in the like manner and to the same extent" as the beneficiary, are: (i) There would have to be as many assessments on the trustee as there are beneficiaries with determinate and known shares, though for the sake of convenience, there may be only one assessment order specifying separately the tax due in re spect of the wealth of each beneficiary; (ii) The assessment of the trustee would have to be made in the same status as that of the beneficiary whose interest is sought to be taxed in the hand of the trustee; and (iii) The amount of tax payable by the trustee would be the same as that payable by each beneficiary in respect of his beneficial interest, if he were assessed directly. [752 B D] N.V. Shanmugham & Co., vs Commissioner of Income Tax, Madras, , Padmavati Jaykrishna Trust vs Commissioner of Wealth Tax, Gujarat , at 73 4, Trustee of Putlibai R.F. Mulla Trust vs Commissioner of Wealth Tax , at 657 8 and Chintamani Ghosh vs Commissioner of Wealth Tax at 341 referred to. (f) Once it is established that a trustee can be assessed only in accordance with the provisions of section 21 and under these provisions, it iS only the beneficial interests which are taxed in the hands of the trustee, it must follow that no part of the value of the corpus in excess of the aggre gate value of the beneficial interests can be brought to tax in the assessment of the trustee. To do so would be con trary to the scheme and provisions of section 21. It would be deafly erroneous to assess the trustee t.o wealth tax on the excess of the value the corpus over the actuarial valuations of the life interest and the reversionary interest of the beneficiaries. [753 C D] Commissioner of Wealth Tax, Gujarat vs Smt. Arundhati Balkrishna Trust approved. (g) No part of the corpus of the trust funds could be assessed in the hands of the trustees but the assessment could be made on them only in respect of the beneficial interests of the beneficiaries in the trust funds under sections 21 (1) and (4). [754 A] 738 (2)(a) Even if the beneficiaries were indeterminate or unknown, section 21(4) would apply and the trustees would be liable to be assessed in respect of the totality of the beneficial interest in the remainder as if it belonged to one single beneficiary. The expression 'where the shares of the beneficiaries are indeterminate or unknown ' carries with it by necessary implication a situation where the benefici aries themselves are indeterminate or unknown. [754 F G] (b) The correct interpretation of section 21(4) must be that even where the beneficiaries of the remainder are indetermi nate or unknown, the trustees can be assessed to wealth tax in respect of the totality of the beneficial interest in the remainder, treating the beneficiaries fictionally as an individual. [755 B] (c) The Wealth Tax Officer has to determine as to who the beneficiaries are in respect of the remainder on the relevant date and whether their shares are determinate and known. So long as it is possible to say on the relevant valuation date that the beneficiaries are known and their shares are determinate, the possibility that 'the benefici aries may change by reason of subsequent events such as birth or death would not take the case out of the ambit of section 21(1), [755 D El Khan Bahadur M. Habibur Rehman vs Commissioner of Income Tax, Bihar & Orissa Subashini Karuri vs Wealth Tax Officer, Calcutta , Commissioner of Wealth Tax, Bombay vs Trustees of Mrs. Hansabai Tribhu wandas Trust and Padmawati Jaykrishna Trust vs Commissioner of Wealth Tax, Gujarat , at 73 4 approved. (d) In order to determine the applicability of section 21(1) on the relevant valuation date, it has to be seen whether it is possible to say with certainty and definiteness as to who would be the beneficiaries and whether their shares would be determinate and specific, if the event on the happening of which the distribution is to take place occurred on that date. If it is, section 21(1) would apply, if not, the case will be governed by section 21(4). In the instant case the trust deed provided for every contingency and whenever a relative specified in Second Schedule, who is the owner of the life interest in the set of unit or units allocated to him or her dies, there would always be beneficiaries capable of being easily ascertained and identified who would be entitled to the corpus of such unit or units in determinate and specific shares, either immediately on the death of such life tenant or after anoth er life interest. The remainder in respect each set of unit or units allocated to the respective relative specified in the Second Schedule was, there fore, liable to be as sessed in the hands of the trustees under section 21(1) "in the same manner and to the same extent" as each beneficiary in respect of his determinate and known share in such remain der. That excluded the applicability of s.21 (4) in the assessment of the remainder. [756 'D E, F, H, 757 A C]

Civil Appeal No. 94 of 1972. Appeal by Special leave from the Judgment and order dated the 23rd July, 1971 of the Punjab and Haryana High Court in Execution Second Appeal No. 1941 of 1969. Uma Datta and Krishna Datta for the Appellant. S.K. Mehta, P.N. Puri and M.R. Dua for the Respondent. The Judgment of the Court was delivered by BAHARUL ISLAM, J. In this appeal by special leave under Article 136 of the Constitution, the appellant is the victim of Court 's craze for technicalities of law at the cost of justice. This Court 846 exercises its discretionary power under Article 136 of the Constitution to meet the ends of justice or to remove miscarriage of justice perpetrated in a case. This appeal arises out of an execution proceeding. The facts material for the purpose of disposal of this appeal may be stated thus. The appellant was the plaintiff in a pre emption suit and Bot a decree. Respondent No. I was the vendee and respondent No. 2, who was the real brother of the plaintiff appellant, was the vendor. The suit was for pre emption and possession in respect of some agricultural land. The trial court decreed the suit, on payment of Rs. 15,500 as the price of the land and Rs. 100 as the charges on account of registration and other charges of the deed. The appellant deposited the amount as directed by the Court. 3 Respondent No. I filed an appeal and the Additional District Judge who heard and disposed of the appeal dismissed the appeal with the modification directing the appellant to deposit a sum of Rs. 1836.25 more in the trial court for payment to the vendee, within 15.4.1967; in case of failure the suit was directed to be dismissed. On 14.4.1967, the appellant deposited Rs. 1836.00 instead of Rs. 1836.25. He, however, made good the short deposit of 25 paise on 28. 10.1968 with the permission of the Court on the allegation that the omission to deposit 25 paise was due to bona fide mistake. Respondent No. 1 filed a regular second appeal before the High Court of Punjab and Haryana. The High Court affirmed the decree of the first appellate Court but ordered the appellant to deposit a further sum of Rs. 500.00 for the improvements made to the land. The appellant was given three months ' time to make the payment of the said sum of Rs. 500.00, failing which, it was directed, the suit would stand dismissed. The appellant deposited this sum to. within the time limit. The appellant on 28.10.1968 filed an execution case before the executing court to get possession of the suit land. The executing court issued notice to the judgment debtor (respondent No. 1 herein). The judgment debtor filed an application under order XX, rule 14(1)(b) of the Code of Civil Procedure on the ground, inter alia that the appellant was directed to make the payment of the sum of Rs. 1836.25 within April 15, 1967, but the appellant had deposited only a sum of Rs. 1836.00 within the due date and the amount fell short of 25 paise, and as such the execution proceedings 847 should be struck off. The appellant filed a rejoinder to the objection petition of the judgment debtor. His plea was that the short deposit of 25 paise was due to a bona fide mistake on his part, but that the shortage was made good on October 28, 1968 after obtaining necessary permission from the trial Court. The executing Court, by its order dated February 1, 1969, held that the short deposit of 25 paise was due to a bona fide mistake on the part of the degree holder and over ruled the objection of the judgment debtor, taking the view that in the interest of justice the default on the part of the decree holder should be condoned. The Judgment debtor preferred an appeal in the Court of the IInd Additional District Judge, who, by his order dated October 24, 1969 set aside the order of the executing court. He held that the provisions of order 20, rule 14(1)(b) of the Code of Civil Procedure were mandatory, and as such the suit should be deemed to have stood dismissed. He also held that the short deposit of 25 paise was not on account of mistake and the default could not be condoned. The appellant preferred a second execution appeal, being Execution Second Appeal No. 1941 of 1969 in the High Court. The appeal was however presented without a certified copy of the order of the executing Court. The appellant, however, made an application for dispensing with the filing of the certified copy. The High Court while admitting the appeal passed the following order: E "Admitted. Certified copy to be filed as soon as it is available . . . . . . " Sd/ R.S. Narula 25.11.69". The appellant obtained the certified copy on June 3, 1970 and filed it in the High Court on June 10, 1970. The appellant filed an application on July 17, 1970 under section S of the Limitation Act for the condonation of the delay. The second appeal came up for hearing on March 25, 1971 before a single Judge. Respondent No. I raised the preliminary objection that the appeal was barred by limitation. The objection was upheld by the learned single Judge; asa result he dismissed the execution second appeal filed by the appellant herein. The appellant prayed for leave to appeal under Letters Patent. The prayer was also rejected. Hence this appeal by special leave. 848 7. Shri S.K. Mehta, learned counsel appearing for Respondent No. I submitted that the execution appeal filed by the appellant in the High Court was incompetent as the certified copy of the impugned order of the lower appellate Court was not filed alongwith the memorandum of appeal. We do not find any substance in the submission for the reason, as we have already stated above, that the appellant was granted time by the High Court at the time of the admission and was allowed to file the certified copy "as soon as it is available. " It is not the contention of the respondent that the copy was not filed at all, nor it is his submission that the Court had no power to grant time to file the copy of the impugned order. As stated above, the copy was obtained on 3.6.1970 and filed in court on 10.6.1970 seven days after the copy was obtained. So he filed the petition under Section 5 of the Limitation Act. There was no reason as to why the delay could not be condoned. That apart, under Section 148 of the Code of Civil Procedure, the Court has enough power to enlarge time from time to time. Section 148 provides: "Where any period is fixed or granted by the Court for the doing of any act prescribed or allowed by this Code, the Court, may, in its discretion, from time to time, enlarge such period, even though the period originally fixed or granted may have expired. " The power given to the Court under Section 148 is discretionary and is given for the purpose of securing the ends of justice in case of necessity. In our opinion, the High Court committed an error in not adverting to, and not exercising its powers under Section 148 C.P.C. and in dismissing the appeal without going to the merit of the matter. Mr. Mehta drew our attention to the second proviso to subrule of Order 41, rule (1) C.P.C. as amended by Punjab, Haryana and Chandigarh. The amendment is in the following words: "Provided further that the Court may permit the appeal to be filed with true copies duly authenticated by an advocate as correct." This provision hardly helps him. It is not understandable, how the counsel for the appellant could file 'true copies ', when his client had not obtained the certificate copy of the order tn question. 849 8. The next question for decision is whether the first execution A appellate Court was justified in holding that the amount directed to be deposited was not deposited as it fell short by 25 paise. Order 20, rule 14 CPC provides: "Decree in pre emption suits Where the Court decrees a claim to pre emption in respect of a particular scale of property and the purchase money has not been paid into Court, the decree shall (a) specify a day on or before which the purchase money shall be so paid, and (c) direct that on payment into Court of such purchase money, together with the costs (if any) decreed against the plaintiff, on or before the day referred to in clause (a), the defendant shall deliver possession of the property to the plaintiff, whose title thereto shall be deemed to have accrued from the date of such payment, but that, if the purchase money and the costs if any) are not so paid, the suit shall be dismissed with costs. (2) . . . . . . . . Under order 20, rule 14 CPC, the plaintiff decree holder, in order to get delivery of possession of the land, has to fulfil two conditions, (i) he has to deposit in Court the purchase money together with the cost, if any, decreed against him and (ii) the deposit must be made on or before the date fixed by the Court. F Here the admitted position is that the appellant deposited the entire amount of purchase money together with the costs decreed against him, less 25 paise within the time fixed by the Court and 25 paise too was deposited, but beyond time. The executing Court held that the short deposit was . due to a bona fide mistake, while the executing appellate Court held that it was not due to any bona fide mistake, but it was a default and thereby the executing appellate Court deprived the decree holder of the legitimate fruits of the decree he obtained in all the Courts. The finding of the first executing appellate Court that the non deposit could not be due to any bona fide mistake, is absolutely untenable for the reason that while the 850 appellant has deposited in total Rs. 17,936.00 from time to time as directed by the Courts, there was absolutely no reason as to why he would not have deposited 25 paise, unless it was due to a mistake. This was pre eminently a case in which the first execution appellate Court ought to have exercised its discretionary powers under section 148 CPC and accepted the delayed deposit of 25 paise, 85 was done by the original executing Court. In the result, we allow the appeal with costs, set aside the orders of the High Court as well as the first execution appellate Court and restore the order of the original executing Court. S.R. Appeal allowed.

On his retirement as Judge of the Punjab and Haryana High Court the respondent claimed cash equivalent of leave salary in respect of the unutilised earned leave standing to his credit. His claim was rejected by the Government. Allowing his petition under Article 226 of the Constitution the High Court directed the Government to pay the leave salary claimed by him. In its petition for grant of special leave the appellant contended that the being a complete code governing the conditions of service of High Court Judges it would not be permissible to proceed beyond those provisions to discover any further rights in favour of the Judges of the High Court. Dismissing the petition, ^ HELD : The High Court was right in upholding the respondent 's claim for payment of the cash equivalent of leave salary in respect of the period of unutilised earned leave at the credit of the Judge on the date of his retirement in accordance with the provisions of rule 20B of the All India Services (Leave) Rules 1955 read with rule 2 of the High Court Judges Rules 1956. [706 B C] Section 24(2)(a) of the 1954 Act enables the Central Government to make rules in respect of, among others, "any other matter which has to be or could be prescribed." [703 B] The second proviso to rule 2 of the High Court Judges ' Rules, 1956 provides that, in the case of a Judge of the High Court of Punjab and Haryana, if no provision had been expressly made in the 1954 Act, as to the conditions of his service, they shall be determined by the rules applicable to a member of the Indian Administrative Service of the rank of Joint Secretary to the Government of India stationed at New Delhi. Rule 20B of All India Services (Leave) Rules 1955, which is the rule applicable to a member of the Indian Administrative Service of the rank of Joint Secretary to the Government of India stationed at New Delhi, entitles him on retirement from service to the cash equivalent of leave salary in respect of the period of unutilised earned leave subject to a maximum of 180 days. By virtue of rule 2 of the High Court Judges Rules 1956 this 701 benefit must be read as a condition of service enjoyed by a Judge of the High Court. [704 B C, 705 A B] The concept of "earned leave" is embedded in the 1954 Act under which the time spent by a Judge on duty constitutes the primary ingredient in the concept of "actual service" which is the reason for crediting leave in the leave account of a Judge. Although the expression "earned leave" is not employed in the 1954 Act the fundamental premise for grant of leave to a Judge is that he has earned it. That a Judge earns the leave which is credited to his leave account is borne out by the proviso to section 6 of the 1954 Act. The concept on which rule 20B proceeds is familiar to and underlies the statutory scheme relating to leave formulated in the Act. It bears a logical and reasonable relationship to the essential content of that scheme. On that it must be regarded as a provision absorbed by rule 2 of the High Court Judges ' Rules 1956 into the statutory structure defining the conditions of service of a Judge of the High Court. [705 C H, 706A]

Civil Appeal No. 874 of 1971 On appeal by Special Leave from the Judgment and Order dated 25 2 71 of the Andhra Pradesh High Court of Judicature at Hyderabad in Writ Petition No. 975/1969. M. K. Ramamurthy and J. Ramamurthy for the Appellant. T. V. section N. Chari, B. Parthasarthy, A S Nambiar, Attar Singh and G. N. Rao for the Respondents. The Judgment of the Court was delivered by TULZAPURKAR, J. In April 1960 the Regional Transport Authority, Chittoor, acting under section 47 (3) of the decided to open a new long distance route called Tada to Tada (ring route) and fixed the number of vehicles for which stage carriage permits would be issued at two on that route. In August 1960 a Notification was published under section 57 (2) of the Act inviting applications for the grant of two such stage carriage permits. Several applications received in pursuance of such Notification were notified 806 under section 57 (3) on 18th October, 1960 for submission of representations in connection therewith. Two permits one to K. Ramachandra naidu and the other to M/s Associated Transports (Madras) Private Limited, were granted by the Regional Transport Authority in November 1960, The unsuccessful applicants filed appeals to the Appellate Authority (STAT) who s t aside the order granting the two permits on the ground that the Regional Transport Authority itself had not been properly constituted inasmuch as it did not comprise a non official member as required by section 44 of the Act and the matter was remanded. Thereafter the Regional Transport Authority was properly constituted by including within it a non official member. However, after it was so properly constituted the Regional Transport Authority did not issued a fresh Notification under section 57 (2) inviting fresh applications but proceeded to consider the several applications that had been received in pursuance of the earlier Notification issued under section 57 (2) and after re affirming the necessity for the grant of two permits only on that route granted two stage carriage permits one to the appellant (R. Srihari Naidu) and the other to respondent No. 5 (M/s Navyandhra Labour Transport). In appeals preferred by the aggrieved applicants the Appellate Authority (STAT) confirmed the grant of the state carriage permit to respondent No. 5 but set aside the permit granted to the appellant and instead granted it to respondent No.4 (V. Janakirami Reddy). The appellant went in revision to the State Government against the order of the Appellate Authority but the same was rejected by the State Government; in other words the grant of the permit to respondent No. 4 in place of the appellant was confirmed. The appellant moved the High Court by means of a writ petition under article 226 of the Constitution and challenged the order of the State Government passed in revision on 18th March, 1969. Two grounds were urged in support of the Writ Petition: (a) that after the Regional transport Authority had been properly constituted no Notification inviting fresh applications was issued by that Authority but the authority only considered those applications which had been received by the Secretary of the earlier Body the Regional transport Authority invalidly constituted in breach of section 44 under the authority that had been delegated by that body to the Secretary the contention being that at the time when such earlier Notification was issued under section S7(2) the delegation of power by such invalidly constituted Authority to its Secretary to issue such Notification would be invalid and therefore, the further proceedings adopted for consideration of such applications and grant of permits pursuant to 807 such consideration was invalid, and (b) that on merits the Appellate Authority ought not to have interfered with the five marks that had been granted to the appellant by the Regional Transport Authority and reduced the same to three and further that the Appellate Authority ought not to have relied upon the only solitary adverse entry in the appellant 's record to reject his application while preferring that of respondent No. 4. The High Court rejected both the contentions and dismissed the Writ Petition. It is this decision of the High Court that has been challenged by the appellant before us in this appeal. In support of the appeal counsel for the appellant pressed before us the self same two contentions that were urged before the High Court. In our view the first contention is liable to be rejected on three grounds. In the first place it was not disputed that applications under section 57 (2) of the Act for the grant of stage carriage permits could be filed voluntarily and without any Notification being issued in that behalf If that be so the question whether a fresh Notification inviting fresh applications by the properly constituted Regional Transport Authority ought to have been issued or not or whether the properly constituted Regional Transport Authority could proceed to act on the earlier Notification issued by the Secretary would be immaterial and of no consequence and the ultimate decision not to grant stage carriage permit to the appellant cannot be disturbed on this ground. Secondly in our view the non issuance of a fresh Notification by the properly constituted Regional Transport Authority could, if at all, be made a ground of attack by those persons who were unable to make applications because of such non issuance and not by the appellant who had made an application in that behalf and who took his chance to obtain the permit on the basis of his application which was in fact considered by the Regional Transport Authority and thereafter by the Appellate Authority. Thirdly sub s.(2) of section 134 of the Act provides: "No order made by a competent authority under this Act shall be reversed or altered on appeal or revision on account of any error, omission or irregularity in the proceedings, unless it appears to the prescribed appellate authority or revisional authority, as the case may be that such error omission or irregularity has, in fact, occasioned a failure of justice. " If was not disputed that the initial order granting the permit to the appellant was passed by a properly constituted Regional Transport 808 Authority and the appellate order was also passed by State Transport Appellate Tribunal which was the properly constituted Appellate Authority and both these Authorities had passed their orders on a consideration of the entire material placed before each of them and after giving a full hearing to the appellant and as such no failure of justice had occassioned; therefore, in our view the error or omission that is said to have taken place in the instant case [of there being no proper Notification issued inviting applications for permits under s.57 (2)1 can not be made a ground to upset the final order that has been passed in the case. On these grounds the first contention must be rejected. As regards the second contention it must be observed that the High Court has taken the view that the contention really pertained to the merits of the claim of the stage carriage permit and it could not interfere with the finding of fact recorded against the appellant in that behalf in exercise of its extra ordinary jurisdiction under article 226 of the Constitution and alternatively the High Court has also taken the view that the grounds on which the marks of the appellant were reduced and the reasons for ultimate rejection of the appellant 's application were justified. Having regard to this view of the High Court we do not feel that we should interfere in the matter on merits. The appeal is, therefore. dismissed with no order as to costs. M. L. A. Appeal dismissed.

The appellant 's family consisted of himself, his wife, and five children three daughters and two sons. On March 17, 1970, the appellant affected a partition of all his properties by a registered document between himself and his two minor sons. The appellant retained 1.85.63 hectors of land for himself. The first son Was allotted 7.10.24 hectors and the younger son was allotted 3.54.82 hectors. The appellant 's wife purchased in 1958, 5.74.87 hectors of land by utilising her Sridbanam money. On the failure of the appellant to file a return under section 7 (1) of the Act voluntarily, the Authorised Officer issued a notice Form 4 under . 8(1) of the Act. The appellant thereupon filed a return on December 12, 1915 stating that he and his wife were holding Only 7.67.91 hectors. Thereafter the Authorised Officer issued separate notices to the appellant and his wife to file further representations, if any, and to appear before him for enquiry. Separate representations were filed reiterating the original stand that the lands allotted to the minor sons under the partition as also the lands acquired by the appellant 's wife with the Sridhanam amounts could not be taken into account while computing the extent of the appellant 's holding. The Authorised Officer rejected these contentions and held that the appellant was holding an extent of 18.26.28 ordinary hectares equivalent to 11.48.55 standard hectares of land and he was eligible to retain only 8.40.00 standard hectares. 926 Aggrieved by the said order, the appellant preferred an appeal before the Land Tribunal, which allowed the appeal taking the view that since the sons of the appellant had become divided from him by the deed of partition executed in 1970, long prior to the appointed day specified in the Act, and the lands standing in the name of the appellant 's wife belonged to her independently in her own separate right, there was no justification for clubbing together the lands of the appellant with those of his wife and sons, and that the definition of ' family" under section (10) of the Act was not attracted to this case, and the appellant was well within the ceiling limit. The State respondent challenged the decision of the Land Tribunal before the High Court in a Civil Revision Petition under section 50, which set aside the decision and restored the Order passed by the Authorised Officer. The High Court held: (1) that a combined reading of In definition of ' family" contained in s 2(10) and the provision contained in section 4 (2), makes clear that notwithstanding any transaction of partition entered into prior to the appointed day, the minor sons of a person will I for the purposes of the Act, be Ideated as members of the family of such person together with his wife and unmarried daughters. and (2) that in computing the extent of the holding of the family" as defined in the Act (he separate property of the wife had to be included by reason of the express provision contained in section 4 (2). Dismissing the appellant 's appeal, ^ HELD: 1. The High Court was right in holding that the lands standing in the names of the wife and the two minor sons of the appellant as their separate properties were also liable to be included in the holding of the appellant for the purpose of fixation of ceiling under section 4 of the Act. [9 3 6F] 2. (i) The provisions of the Pondicherry Land Reforms (Fixation of Ceiling on Land) Act 1973 are applicable to all holders of Land in the Union Territory of Pondicherry irrespective of their religion, community etc. It is therefore, fallacious to assume that the ' family" referred to in the Act must conform to the concept of the joint family as known to Hindu Law. The concept OF a joint family is totally foreign to personal laws of some of the communities. [934F G] 2. (ii) It is manifestly wrong to approach the interpretation of the sections of the Act with the preconceived notion that in using the expression "family", the Legislature had intended to connote an undivided family as known to the Hindu Law and that after a partition had taken place in a Hindu joint family there cannot be a family ' consisting of the father and his divided minor sons for the purpose of fixation of ceiling under the Act. [934G] 927 2. (iii) The fact that the definition of "family" contained in section 2 (10) A does not treat the major sons of a person as members of his family is a clearly pointer that an undivided Hindu family was in the contemplation of the Legislature when it enacted the definition section [934H; 936A] 3. Sub section (3) (a) of section 4 which provides that in calculating the extent of land held by a member of a family or by an individual person, the share of the member of the family or of the individual person in the land held by an undivided Hindu family shall be taken into account, furnishes a conclusive indication that the "family" mentioned in the Act is wholly distinct and different from an 'undivided Hindu family. ' [935B] In the instant case, the circumstance that a partition had taken place disrupting the joint family consisting of the appellant and his minor sons is of no relevance in determining the total extent of the holding of the appellant in accordance with the provisions of section 2 (10) read with s 4 of the Act. A special statutory unit consisting of the persons satisfying the description contained in clause (10) of section 2 as constituting a "family" for the purpose of fixation of ceiling has been created. The stress is only on the existence of the relationship, and unity of title or jauntiness of holding in relation to properly are not essential elements. Under the definition contained in section 2 (10), a person, the wife or husband of such person and his or her minor sons and unmarried daughters together constitute a "family". [935C D] 4. The position emerging from the provisions of section 2 (10) and section 4(1) (2), is that the properties held by the minor sons of the appellant individually as well as the lands separately owned by his wife, purchased by her with her Sridhanam amounts, are all liable to be taken into account while computing the total extent of holding of the family of the appellant. [935F] 5. Explanation IV to section 7 proceeds on the footing that for purposes of computing the ceiling and determining the area of surplus land to be surrendered. the lands held separately by the husband and wife are to be pooled together. The liability to surrender excess land is to be fixed in proportion to the extent of land held separately by the two spouses, [936B] 6. The purpose of section 4(4) is to peg down the process of determination of ceiling area to the state of things that obtained on the 'appointed day ' and it is for the said purpose that the sub section provides that in calculating the extent of land held by and person, any land which was transferred, by sale, gift or otherwise Dr partitioned by that person after the appointed day but before the commencement of the Act, shall be taken into account, as if such land had not been transferred or partitioned. [936D E] 928

176 of 1959. Petition under Article 32 of the Constitution of India for enforcement of Fundamental Rights. Basudeva Prasad, M. K. Ramamurthi, K. N. Keshwa and R. Mahalingier, for the petitioner. Lal Narain Sinha, B. K. P. Sinha, L. section Sinha and section P. Varma, for the respondents. M. C. Setalvad, Attorney General for India, C. K. Daphtary, Solicitor General of India, H. J. Umrigar and T. M. Sen, for the Attorney General of India. August 1. The Judgment of the Court was delivered by SINHA C. J. By this petition under article 32 of the Constitution the petitioner raises almost the same 13 98 controversy as had been done in Writ Petition No. 122 of 1958, which was heard and determined by this Court by its judgment dated December 12, 1958, and by Writ Petition No. 106 of 1959, which was heard by this Court on November 10, 11 and 12, 1959, but which did not reach the stage of judgment by this Court, inasmuch as the petitioner 's Advocate requested the Court to permit him to withdraw the petition and the Court allowed the prayer and permitted the petitioner to withdraw the petition. In each of these petitions the petitioner, who is a journalist by profession and is functioning as the Editor of " the Searchlight ", an English daily newspaper published from Patna in the State of Bihar, impugned the validity of the proceedings before the Committee of Privileges and prayed for restraining the opposite party, namely, the Chief Minister of Bihar as Chairman of the Committee of Privileges, Bihar Legislative Assembly, Committee of Privileges and the Secretary of the Bihar Legislative Assembly, from proceeding against the petitioner for the publication in its issue dated May 31, 1957, of the Searchlight an account of the debate in the Legislative Assembly, Bihar, on May 30, 1957. The facts of the case have been stated in great detail in the majority judgment of this Court delivered by section R. Das, C. J., in M. section M. Sharma vs Sri Krishna Sinha (1). In the opening paragraph of this Court 's judgment aforesaid, the parties before the Court have been enumerated and the anomaly pointed out. This Court held in effect that under article 194(3) of the Constitution a House of a Legislature of a State has the same powers, privileges and immunities as the House of Commons of the Parliament of the United Kingdom had at the commencement of the Constitution. The House of Commons at the relevant date had the power or privilege of prohibiting the publication of even a true and faithful report of proceedings of the House and had a fortiori the power or privilege of prohibiting the publication of an inaccurate or garbled version of such debate or proceedings. The powers or privileges of a House of State Legislature are the same as (1) [1959] SUPP.1 S.C.R. 806. 99 those of the House of Commons in those matters until Parliament or a State Legislature, as the case may be, may by law define those powers or privileges. Until that event has happened the powers, privileges and immunities of a House of legislature of, a State or of its members and committees are the same as those of the House of Commons at the date of commencement of our Constitution. This Court also expressed the view that Legislatures in this country like the House of Commons will no doubt appreciate the benefit of publicity and will not exercise those powers, privileges and immunities, except in gross cases. The minority judgment delivered by Subba Rao, J., on the other hand, expressed the view that at the relevant date the House of Commons, even as the Legislatures in this country, had no privilege to prevent the publication of a correct and faithful report of the proceedings of those legislatures, except those of secret sessions, and bad only a limited privilege to prevent mala fide publication of garbled, unfaithful or expunged reports of the proceedings. He also held that the petitioner had the fundamental right to publish the report of the proceedings of the Legislature. In the result, this Court, in view of the judgment of the majority, dismissed the petition, but made no order as to costs. This Court further held that the Assembly of Bihar was entitled to take proceedings for breach of its privileges and it was for the House itself to determine whether there had in fact been any breach of any of its privileges. After Writ Petition No. 122 of 1958 had thus ended, the petitioner again moved this Court under article 32 of the Constitution. That case was registered as Writ Petition No. 106 of 1959. On January 5, 1959, the petitioner received a notice that the case of breach of privilege against him would be considered by the Committee of Privileges of the Assembly on February 3, 1959. That hearing was postponed from date to date, until in August, 1959, the petitioner filed his petition under article 32 of the Constitution. He contended in that petition that, as a citizen of India, the petitioner had the fundamental right under article 19(1)(a) of the 100 Constitution to freedom of speech and expression which included the freedom of publication and circulation and that the Legislature of the State of Bihar could not claim any privilege contrary to the right thus claimed. In effect, it was contended that the privilege conferred on the Legislature of a State by article 194(3) of the Constitution was subject to the fundamental right of a citizen contained in article 19(1)(a). It was also contended that the first respondent, the Chief Minister of Bihar, who, it was alleged, had control over the majority of the members of the Bihar Legislative Assembly and of the Committee of Privi leges, was proceeding mala fide in getting the proceedings instituted against the petitioner for alleged breach of the privilege of the House. Though not in terms, but in effect, the points raised in this petition were a reiteration of those already determined by this Court in its judgment aforesaid of December 12, 1958. The prayer made in the petition was that the proceedings of the Committee of Privileges at its meeting held on August 10, 1958, might be quashed and the respondents restrained by a writ in the nature of a writ of prohibition from proceeding against the petitioner in respect of publication aforesaid of the proceedings of the Bihar Legislative Assembly of May 30, 1957. After the petitioner had made his writ application to this Court as aforesaid, the Bihar Legislative Assembly reconstituted the Committee of Privileges of the Assembly, and on that very date a member of the Legislative Assembly sought to move a motion in that Assembly for revival and re reference of the matter of the alleged breach of privilege by the petitioner. Some members of the Bihar Legislative Assembly objected to the motion being moved and the Speaker of the Assembly deferred giving his ruling on that objection. At the instance of some of the members of the Assembly, the Speaker of the Assembly referred two questions to the Advocate General of Bihar for his opinion on the floor of the House on October 20, 1959, namely, (1) whether it was open to the Assembly to debate on an issue which might be sub judice in view of the writ petition aforesaid filed by the 101 petitioner in the Supreme Court under article 32; and (2) whether the matter which was dead by reason of prorogation of the House several times could be, legally revived and restored. On October 20, 1959, the Advocate General of Bihar attended the House and gave his opinion, which it is not relevant to ' state here. The Writ Petition, 106 of 1959, was heard in part and allowed to be withdrawn, as indicated above, on November 12, 1959. On November 24, 1959, the petitioner received a fresh notice from the Secretary of the Legislative Assembly, opposite party No. 3, calling upon the petitioner to show cause on or before December 1, 1959, why appropriate action should not be recommended against him for a breach of the privilege of the Speaker and the Assembly. The petitioner again instituted proceedings under article 32 of the Constitution complaining that the motion adopted by the Committee of Privileges of the Bihar Legislative Assembly at its meeting held on November 23, 1959, amounted to an abridgement of his fundamental right of speech and expression guaranteed under article 19(1) (a) of the Constitution and was an " illegal and mala fide threat to the petitioner 's personal liberty in violation of article 21 of the Constitution of India and that the Committee of Privileges, respondent No. 2 had no jurisdiction or authority to proceed against the petitioner as threatened by the notice aforesaid ". The grounds of attack raise substantially the same questions that were agitated on the previous occasions in this Court. It was contended before us that the petitioner, as a citizen of India, had the fundamental right of freedom of speech and expression which included the freedom of obtaining the earliest and most correct intelligence of the events of the time including the proceedings of a Legislature and publishing the same and that no Legislature of a State could claim a privilege so as to curtail that right. It was, therefore, contended that the majority decision of this Court in Pt. M. section M. Sharma vs Shri Sri Krishna Sinha (1) was wrong. In this connection it was also contended that (1) [1959] SUPP. 1 S.C.R. 806. 102 the rule of construction adopted by this Court in its pre vious decision had been wrongly applied. It was further contended that even if the House of a State Legislature had the same powers, privileges and immunities as those of the House of Commons, those will be only such as were being actually exercised at the date of the commencement of the Constitution and the right to prevent publication of its proceedings was not one of those powers, privileges or immunities. An appeal was also made to article 21 of the Constitution and it was contended that no citizen could be deprived of his personal liberty, except in accordance with the procedure established by law. Hence, it was further contended that the malafide act of respondents 1 and 2 calling upon the petitioner to show cause was a threat to his fundamental right, and, finally, it was contended that after several prorogations, the previous proceedings for breach of privilege were dead and the House of the Assembly had, therefore, no power or jurisdiction to issue the fresh notice in accordance with the motion of November 23, 1959, reviving the proceedings. It will thus appear that in the present proceedings also the very same questions which were discussed and decided in Writ Petition No. 122 of 1958 are sought to be raised once again. In effect, it is sought to be argued that the previous decision of this Court has proceeded on a wrong appreciation of the legal position. In short, it is insisted that the petitioner has the fundamental right of publishing the proceedings of the Bihar Legislature and that the Legislature has no power to restrict or control the publication of its proceedings. The Government Advocate of Bihar, on behalf of the opposite party, has contended, in the first instance, that the present writ petition against the parties, namely, the Chairman and the Members of the Committee of Privileges, respondents 1 and 2, is barred by the principle of res judicata and, therefore, not maintainable. His contention also is that the writ cannot issue either against an individual member or against the House of the Legislature as a whole in 103 respect of what has been done by it in exercise of its privilege of prohibiting or, at any rate, controlling the publication of its proceedings. On behalf of the petitioner it was contended by Mr. Basudeva Prasad that respondent No. 2, the, Committee of Privileges, has been reconstituted as aforesaid after the first decision of this Court which is sought to be availed of as res judicata and that therefore the rule of res judicata is inapplicable. In this connection it may be pointed out that in Writ Petition No. 122 of 1958, Sri Krishna Sinha, Chief Minister of Bihar, was impleaded as opposite party No. 1 in his capacity as the Chairman of the Committee of Privileges of the Bihar Legislative Assembly and opposite party No. 2 was cited as Committee of Privileges, Bihar Legislative Assembly, without any names being given. In the present writ petition, opposite party No. 1 is the same. Opposite party No. 2 is impleaded as the (New) Committee of Privi leges of Bihar Legislative Assembly and then a number of names are given including that of Dr. Sri Krishna Sinha, the Chief Minister, as Chairman. Would it make any difference that though opposite party No. 2 is the Committee of Privileges, its personnel is different from that of the Committee of Privileges constituted as it was in 1958 ? In our opinion, it does not make any difference. So long as the Assembly remains the same it is open to the Assembly to reconstitute its Committees according to the exigencies of the business of the Assembly. The Committee of Privileges is one of the agencies through which the Assembly has to transact its business. It is really the Assembly as a whole which is proceeding against the petitioner in purported exercise of its powers, privileges and immunities as held by this Court in its judgment in Writ Petition No. 122 of 1958. This Court has laid it down in the case of Raj Lakshmi Dasi vs Banamali Sen (1) that the principle underlying res judicata is applicable in respect of a question which has been raised and decided after full contest, even though the first Tribunal which decided (1) ; 104 the matter may have no jurisdiction to try the subsequent suit and even though the subject matter of the dispute was not exactly the same in the two proceedings. In that case the rule of res judicata was ,applied to litigation in land acquisition proceedings. In that case the general principles of law bearing on the rule of res judicata, and not the provisions of section 1 1 of the Code of Civil Procedure, were applied to the case. The rule of res judicata is meant to give finality to a decision arrived at after due contest and after hearing the parties interested in the controversy. There cannot be the least doubt that, though eo nomine opposite party No. 2 were not the same, but there is no escape from the conclusion that the Committee of Privileges is the same Committee irrespective of its personnel at a given time so long as it was a Committee constituted by the same Legislative Assembly. The question decided by this Court on the previous occasion was substantially a question affecting the whole Legislature of the State of Bihar and was of general importance and did not depend upon the particular constitution of the Committee of Privileges. It cannot, therefore, be said that the question decided by this Court on the previous occasion had not been fully debated and had not been decided after due deliberation. That there was difference of opinion and one of the Judges constituting the Court held another view only shows that there was room for difference of opinion. It was a judgment of this Court which binds the petitioner as also the Legislative Assembly of Bihar. For the application of the general principles of res judicata, it is not necessary to go into the question whether the previous decision was right or wrong. In our opinion, therefore, the questions determined by the previous decision of this Court cannot be reopened in the present case and must govern the rights and obligations of the parties which, as indicated above, are substantially the same. It is manifest, therefore, that the petitioner has no fundamental right which is being threatened to be infringed by the proceedings taken by the opposite party. It now remains to consider the other subsidiary 105 questions raised on behalf of the petitioner. It was contended that the procedure adopted inside the House of the Legislature was not regular and not strictly in accordance with law. There are two answers to this contention, firstly, that according to the previous decision of this Court, the petitioner has not the fundamental right claimed by him. He is, therefore, out of Court. Secondly, the validity of the proceedings inside the Legislature of a State cannot be called in question on the allegation that the procedure laid down by the law had not been strictly followed. Article 212 of the Constitution is a complete answer to this part of the contention raised on behalf of the petitioner. No Court can go into those questions which are within the special jurisdiction of the Legislature itself, which has the power to conduct its own business. Possibly, a third answer to this part of the contention raised on behalf of the petitioner is that it is yet premature to consider the question of procedure as the Committee is yet to conclude its proceedings. It must also be observed that once it has been held that the Legislature has the jurisdiction to control the publication of its pro ceedings and to go into the question whether there has been any breach of its privileges, the Legislature is vested with complete jurisdiction to carry on its proceedings in accordance with its rules of business. Even though it may not have strictly complied with the requirements of the procedural law laid down for conducting its business, that cannot be a ground for interference by this Court under article 32 of the Constitution. Courts have always recognised the basic difference between complete want of jurisdiction and improper or irregular exercise of jurisdiction. Mere non compliance with rules of procedure cannot be a ground for issuing a writ under article 32 of the Constitution vide Janardan Reddy vs The State of Hyderabad (1). It was also sought to be argued that the subjectmatter of the proceedings in contempt, whatever it was, took place more than three years ago, and that, therefore, it has become much too stale for proceeding (3) ; 14 106 against the petitioner in contempt. In our opinion, this is also a matter within the jurisdiction of the legislature which must decide whether or not it was recent enough to be taken serious notice of, or whether any punishment in the event of the petitioner being found guilty is called for. These are matters with which this Court is in no way concerned. Mr. Lal Narain Sinha, the Government Advocate of Bihar, who appeared on behalf of the respondents, informed the Court that the Legislature was interested more in the vindication of its constitutional rights than in inflicting any punishment on the petitioner. Hence, no more need be said on this aspect of the matter. It remains to consider one other point sought to be made on behalf of the petitioner that the Assembly had no power to proceed against the petitioner for breach of privilege in May, 1957 when we know as a fact that the Assembly was prorogued several times between May 31, 1957 and November 23, 1959. In our opinion, there is no substance in this contention, for the simple reason that the prorogation of the Assembly does not mean its dissolution. The House remains the same; only its sessions are interrupted by prorogation of the House according to the exigencies of public demands on the time and attention of the members of the Assembly and the volume of business of the Assembly itself. In this connection reliance was placed on the following passage in May 's Parliamentary Practice, 16th Edition, p. 279 " The effect of a prorogation is at once to suspend all business until Parliament shall be summoned again. Not only are the sittings of Parliament at an end, but all proceedings pending at the time are quashed, except impeachments by the Commons and appeals before the House of Lords. Every bill must therefore be renewed after a prorogation, as if it were introduced for the first time. " The observations quoted above do not support the extreme contention raised on behalf of the petitioner that the proceedings in contempt are dead for all time. The effect of the prorogation only is to interrupt the proceedings which are revived on a fresh motion to 107 carry on or renew the proceedings. In this case, it is not necessary to pronounce upon the question whether dissolution of the House necessarily has the effect, of 2 completely wiping out the contempt or the proceedings relating thereto. In our opinion, for the reasons given above, no grounds have been made out for the exercise by this Court of its powers under article 32 of the Constitution. The petition is accordingly dismissed. There will be no order as to costs. Petition dismissed.

The respondent, a firm carrying on tannery business, used to take out licences under the provisions of the Madras General Sales Tax Act, 1939, but did not renew the licence for the assessment year, 952 1953, and was assessed to sales tax on the sale value of tanned hides and skins during the year. It challenged the validity of the order of assessment by filing a petition before the High Court under article 226 of the Constitution of India, on the grounds that under section 5(vi) of the Act the liability to pay sales tax in respect of hides and skins could only be at a single point, that r. 16(5) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, which limited the operation of this mode of taxation to licensed dealers was ultra vires as it contravened section 5(vi) and had been so held in V. M. Syed Mohammed & Co. vs The State of Madras, ; , and that section 6A was not applicable to the case of a dealer which did not take out a licence. Held, that section 3 of the Madras General Sales Tax Act, 1939, envisages multipoint taxation on the total turnover of a dealer, 149 but under section 5 an exception is made in the case of sale transactions of certain specified goods, providing for single point taxation subject to certain restrictions and conditions which include conditions as to licences, and if the conditions and restrictions are not complied with, under section 6A the tax is to be levied under section 3 as if the provisions of section 5 did not apply to such sales. Accor dingly, r. 16 (5) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, is not ultra vires. Syed Mohamed & Company vs State of Andhra, [1956] 7 S.T.C. 465 and State of Mysore vs Sarvatula & Co., [1957] 9 S.T.C. 593, approved. V. M. Syed Mohammed & Company vs The State of Madras, , explained.

Appeal No. 480 of 1967. Appeal by special leave from the judgment and order dated September 21, 1966 of the Allahabad High Court, Lucknow Bench in Special Appeal No. 16 of 1966. L. M. Singhvi, B. Datta, D. N. Misra, J. B. Dadachan and O. C. Mathur, for the appellant. O. P. Rana, for respondents No. 1. J. P. Goyal, Sobhag Mal Jain and section P. Singh, for respondent No. 4. The Judgment of the Court was delivered by Shelat, J. Two questions arise for determination in this appeal, by special leave, against the judgment of the Appellate Bench of the High Court of Allahabad, namely, (1) whether a correction in its award by the Labour Court, Lucknow, was one of an error arising from an accidental omission within the meaning of section 6(6) of the U.P. , XXVIII of 1947 (hereinafter referred to as the Act), and (2) whether, even if it was so, it could so correct after its award was published and had become enforceable. 37 The Central Wage Board for sugar industry, appointed by the Union Government for determining a wage structure, revision of categories of workmen, their fitment into such categories and for fixing the principles governing the grant of bonus, had made certain recommendations. Amongst its recommendations, the Wage Board recommended that its decision should be brought into effect as from November 1, 1960. By its notification dated April 27, 1961, the U.P. Government accepted those recommendations including the one that they should be brought into force with effect from November 1, 1960. On a dispute having arisen between the appellant company and its workmen on the company failing to implement the said recommendations, the State Government referred it to the Labour Court for adjudication under section 4(k) of the Act. The dispute involved two questions (1) whether the company should fit the workmen named in the reference in the revised categories and in the new wage scales and (2) if so, with effect from what date. By its award dated November 6, 1963 the Labour Court held that two of the said workmen should be fitted in Grade II(B) and Grade IV respectively and directed the company to do so within one month after the award became enforceable. It, however, omitted to fix the date from which such fitment should have the effect. On December 7, 1963 the said award was published in the State Gazette. The company thereafter fitted the two workmen in the said two grades from a date one month hence after the award became enforceable and not from November 1, 1960. The workmen 's union thereupon applied to the Labour Court to amend its award on the ground that it had omitted to answer the second question arising under the reference and the Labour Court accordingly amended its award directing that the two workmen should be placed in the said grades with effect from November 1, 1960. The order amending the said award was gazetted on June 20, 1964. The company filed a petition in the High Court for certiorari and for quashing the said order of amendment. Nigam, J. who heard the petition in the first instance dis missed it holding that (1) the Labour Court had made an error arising from an accidental omission to answer the said second question and therefore had the power to correct it under section 6(6) of the Act, and (2) even if there was no such error arising from accidental omission, the amendment merely provided what was already contained in the notification dated April 27, 1961, that once the Labour Court had directed the company to fit the workmen in the said grades, such fitment had, under the force of that notification, to take effect from November 1, 1960 and that that result was arrived at not by reason of the correction of the award but by force of the original award read with the said notification. On a letters patent appeal having been filed against the said judgment, the Appellate Bench of the High Court agreed with Nigam, 38 J. that the correction amounted to one of an error arising from the accidental omission to answer the said second question within the scope of section 6(6) of the Act. The Appellate Bench, however, proceeded to examine the various provisions and the scheme of the Act and held (1) that the jurisdiction of the Labour Court under the Act was of a limited character, (2) that it gets seisen of an industrial dispute only when its jurisdiction is invoked by a reference under section 4(k) or by a voluntary reference to arbitration under section 5B, (3) that under section 4D proceedings before it are deemed to commence from the date of such reference and are, deemed to be completed on the date when its award becomes enforceable, (4) that its jurisdiction which emanates from the reference gets exhausted on the completion of the proceedings before it and the Labour Court itself becomes functus officio on the date when its award becomes final and enforceable, (5) that it cannot thereafter reconstitute itself or take seisen of a dispute, which it has already adjudicated and proceedings relating to it have become concluded, without a fresh reference and (6) that, therefore, its correctional jurisdiction under section 6(6), unlike that of a civil court under section 152 of the Code of Civil Procedure, is not unlimited. The Appellate Bench on this reasoning held that the two extreme points during which the Labour Court could correct its award were the date of its signing it and the date when the award becomes final and enforceable. Consequently, the Labour Court had no jurisdiction to correct the award after it became final and enforceable, i.e., after January 7, 1964, on expiry of30 days from December 7, 1963 when it was published and the correction, therefore, was in excess of its jurisdiction and invalid. The Appellate Bench, however, declined to issue the writ on the ground that the correction did no more than doing justice to the workmen by ordering implementation of the said notification of April 27, 1961 and observing that equity was on the side of the two workmen dismissed the appeal as also the said petition. Dr. Singhvi, who, on behalf of the company, disputed the correctness of the judgment, contended that (a) no clerical or arithmetical error through any accidental slip or omission had arisen, that section 6(6), therefore, did not apply to the facts of this case, and if at all, the application ought to have been under section 11B, which however, was never invoked; (b) that power under section 6(6) could be exercised only until the date on which the said award became enforceable and not thereafter, that the correctional jurisdiction under section 6 (6) is not without any limit as to time within which it could be invoked or exercised and expired or exhausted itself when the award became final; (c) that the principles of industrial law postulate the finality of an award made under it and that subject to exceptions as in section 6A, once the award had become 39 final it did not contemplate any disturbance of it by amendment or otherwise, and (d) that the High Court was in error in refusing remedy on a supposed consideration of equity once it found lack of jurisdiction in the Labour Court as it in fact did and, therefore, ought to have issued the remedial writ and quashed the impugned order of correction. As already stated, the Wage Board had recommended revised wage scales, revised categories and fitment of workmen in their respective categories on the revised wage scales as from November 1, 1960. The State Government had accepted those recommendations fully including the date of their implementation and the consequent fitment of workmen in appropriate categories, and revised wage scales. Its notification made it clear that such fitment on the revised wage scales should be as recommended by the Wage Board as from November 1, 1960. In the belief, perhaps, that the said recommendations and their acceptance by the Government were not binding on it, the company did not implement them and hence the union raised the dispute which was ultimately referred to the Labour Court. The terms of that reference leave no doubt that it comprised of two questions, (1) of fitment and (2) the date from which it was to have effect. The award of the Labour Court that the company was liable to fit the two workmen in grades 11 and IV respectively and pay them at the revised scales in respect of these grades was ' binding and therefore the company was liable to carry out the fitment and pay the revised scales in accordance with such fitment. But the award did not decide or fix the date from which the said fitment, when made, was to have effect. As rightly held by the High Court, the Labour Court thus omitted to answer the second question as it was bound to do and the reference remained partly unadjudicated. The Labour Court, no doubt, did direct that the award should be implemented within one month after it became enforceable under the Act, i.e., on or before February 7, 1964. But that direction meant only that the company should fit the two workmen in the two grades it had ordered and still left the question, as to the date from which such fitment was to have effect, unanswered. Thus, the fact that the Labour Court failed to answer the second question admits of no doubt. There can also be no doubt that since the first question was answered by it in accordance with the Wage Board 's recommendations and the Government 's notification accepting them fully, if its attention had been drawn it would in all probability have answered the second question also in consonance with those recommendations and the said notification. There is, therefore, no question that there was an error in the award due to an accidental omission on the part of the Labour Court, which error it undoubtedly had the jurisdiction to correct under section 6(6). The error was that 40 there was no direction in the award as to the date from which ,the fitment of the two workmen in the said grades and the revised scales should take effect, arising from an accidental omission to answer that part of the reference. The next question is whether there is under the Act any time limit within which the correction of the award can be made. The impugned correction, no doubt, was made by the Labour Court after its award had become final and enforceable. The principal premise in the High Court 's reasoning as also in that of counsel for the company was that the jurisdiction of the Labour Court to correct the award ceased when the award became final and enforceable. It may be observed at the very outset that no time limit within which such correction can be made has been laid down in any express terms in s: 6 (6). The question, therefore, is whether any such time limit can be inferred either from section 6 or from the other provisions of the Act. Section 4 (k) enables the, State Government to refer an industrial dispute which either exists or is apprehended to the Labour Court if the matter of the industrial dispute is one of those contained in the First Schedule to the Act or to a Tribunal if it is one contained in the first or the second Schedule. Even if the dispute relates to a matter in the second Schedule, if it is not likely to affect more than 100 workmen, the Government can, if it so thinks fit, refer such a dispute to the Labour Court. Under section 5B where any industrial dispute exists or is apprehended and the employer and the workmen agree, they may refer the dispute to arbitration of such person or persons including the presiding officer of a Labour Court or a Tribunal as may be specified in the arbitration agreement. Section 6(1) enjoins upon the Labour Court and the Tribunal to which an industrial dispute is referred for adjudication to hold its proceedings expeditiously and submit its award to the State Government as soon as it is practicable on the conclusion thereof. Subsec. 3 provides that subject to the provisions of sub section 4 every arbitration award and the award of a Labour Court or a Tribunal shall, within 30 days from the date of its receipt by the State Government, be published in such manner as the State Govern ment thinks fit. Sub section 4, to which sub section 3 is made subject, authorises the State Government before publication of an award of a Labour Court or a Tribunal to remit it for its reconsideration and provides that after such reconsideration it shall submit its award to the Government and the State Government, shall thereupon publish it in the manner provided in sub section Sub section 5 provides that subject to the provisions of section 6A an award published under sub section 3 shall be final and shall not be called in question in any court in any manner whatsoever Section 6A, to the provisions of which section 6(5) is made subject, provides by its sub section that an award, including an arbitration award, shall become en 41 forceable on the expiry of 30 days from the date of its publication. The first proviso thereof empowers the State Government, if it is of the opinion that it is inexpedient on public grounds affecting national or State economy or social justice to give effect to the whole or any part of the award, to declare by notification in the official gazette that it shall not become enforceable on the expiry of the said period of 30 days. The, second proviso pro vides, that an arbitration award shall not become enforceable if the State Government is satisfied that it was given or obtained. through collusion, fraud or misrepresentation. Thus, even though an award has been published under section 6(3) and has become final and would ordinarily become enforceable on expiry of 30 days from such publication, the , State Government can make a declaration under the first proviso and under sub section 2 can within 90 days from its publication make an order either rejecting or modifying it, in which event it has to lay the award and its said order before the State Legislature. Sub section 3 provides that if an award is rejected or modified by an order under sub section 2 and is laid before the Legislature, it shall become enforceable within 15 days from the date it is so laid. But where no such order under sub section 2 has been made, it shall become enforceable on the expiry of 90 days referred to in sub section Sub section 4 provides that subject to sub sections 1 and 3, an award shall come into; operation with effect from such date as may be specified therein but where no such date, is specified it shall come into operations on the date when the award becomes enforceable under sub section 1 or sub section 3, as the case may be. The provisions of section 6, and section 6A thus make it clear that whereas the former provides for the award becoming final, the latter provides for its enforceability and the time from which it has to be implemented. The two characteristics of the award, i.e., its finality on publication and its enforceability under section 6A, are distinct, having different points of ' time and should not, therefore, be mixed up, for, though an award has become final on its publication under section 6 it becomes en forceable in accordance with and subject to the eventualities provided in section 6A. There are thus three different stages in the case of an award; (1) when it is signed by the adjudicating authority, (2) when it is published by the St ate Government in the prescribed manner and (3) when it becomes enforceable. Even though an award may have become final on its being published, it becomes enforceable subject to the expiry of the different periods and the events prescribed in section 6A. The scheme of sections 6 and 6A is to retain a certain amount of control over awards, including an arbitration award, with the State Government. An award, therefore, does not become final as it ordinarily would be when the adjudicating authority signs M 12 Sup. CI/69 4 42 it but becomes final when it is published in the manner prescried by the State Government. Before such publication the Government is given the power to remit it to the adjudicating authority for reconsideration and the State Government has to publish it on its being resubmitted to it. In spite of its becoming final on such publication it becomes enforceable only on the expiry of 30 ,days after it has become final as laid down by sub section 1 of section 6A. But it does not so become enforceable if the Government were to make a declaration under the first proviso and an order under sub section 2 or the award specifies a date which is later than 30 days after its publication. Therefore, the words "subject to the provisions of section 6A" in sub section 5 ' of section 6 must mean that though an award has become final on its being published it does not immediately or automatically begin to be operative as that finality is subject to the expiry of periods and the powers of the State Government under section 6A. Having seen the effect of the provisions of sections 6 and 6A, we have next to consider the scope of the correctional jurisdiction conferred on the adjudicating authority under sub section 6 of section 6. As already observed, the sub section does not lay down in any express terms any time limit within which such jurisdiction is to be exercised. It contemplates a correction both before and after the publication of the award, i.e. after it has become final. If it ,is corrected before its publication the correction would be carried out without anything further having to be done. But if it is corrected after its publication and after it has become final, a copy of the order of correction has to be sent to the State Government and the provisions as to publication of an award under section 6(3) are mutatis mutandis applicable. The correctional jurisdiction is limited only to cases where clerical or arithmetical mistakes or errors arising from an accidental slip or omission have occurred. 'Though section 6(6) does not expressly provide for any time limit, the High Court appears to have been much impressed by section 6D which lays down the two points as to the commencement and the completion of proceedings before a labour court and a tribunal. From these two limits it came to the conclusion that though no time limit is expressly provided in section 6(6) it must be inferred that the correctional jurisdiction under section 6(6) can only be exercised upto the time that the award becomes final and enforceable. It will be observed that though section 6(6) empowers all the three adjudicating authorities, namely, a labour court, a tribunal and an arbitrator, to correct the award, section 6D lays down the two points of commencement and completion of proceedings only in the case of a labour court and a tribunal. Section 6D, therefore, does not furnish an indication or a ground for inferring a time limit in section 6 (6) in the case of an award by an arbitrator. Would that mean that though, according to the High Court, 43 there is a period within which a labour court and a tribunal can exercise the correctional jurisdiction, there would be no such limit in the case of an award by an arbitrator? In our view no such result could have been contemplated. It would thus, appear that the two extremeties of time provided in section 6D cannot be used as a ground for inferring a time limit for the correctional jurisdiction under section 6(6). Acceptance of the High Court 's reasoning becomes still more difficult when we examine the premises of that reasoning. The High Court does not appear to be sure whether the limit as to time is to be the date of finality of the award or its enforceability, for, it states that the correctional jurisdiction can be exercised until the award has become final and enforceable. As already stated, the concepts of finality and enforceability of an award are distinct and have been dealt with by the Legislature separately in sections 6 and 6A. If it is to be reasoned that the correctional Jurisdiction can be exercised till the date when the award is published and becomes final, such a reasoning would be contrary to the provisions of section 6(6) themselves which envisages correction of an award even after it is published and has become final. Sub section 6 expressly provides that when so corrected, the order correcting it has to be published in the manner prescribed under and within the time provided in section 6(3). It is, therefore, manifest that the date when an award becomes final cannot be the date within which the power under section 6 (6) has to be exercised. If, it is to be held, on the other hand, that the power to correct is to be exercised until the award has become enforceable,, the difficulty would be that there is nothing either in section 6 or section 6A or section 6D which warrants such a limitation by implication. Is it that an award is really final when it becomes enforceable? Such a conclusion would, firstly, be contrary to the clear language of section 6 and, secondly would lead to a curious result that though it has become final on publication, it is not really so, as that finality is subject to the provisions of section 6A. In that case, an award can be challenged in a court during the interval between its publication and the date when it becomes enforceable. That would be so, despite the clear language of section 6(5) that an award becoming final on publication cannot thence be challenged in any court whatsoever. Laying down by implication the time limit during which the correctional jurisdiction under section 6(6) can be exercised upto the time of the award becoming final under section 6 (5) or becoming enforceable under section 6A creates difficulties, besides, it would appear, being contrary to the provisions of these two sections and is therefore not commendable. The correctional jurisdiction conferred on the adjudicating authority under section 6 (6) is in terms identical with the one conferred under section 152 of the Code of Civil Procedure and rule 28 of the Industrial Disputes 44 (Central) Rules 1957 and is in consonance with the first and foremost principle that no party should suffer any detriment on account of a mistake or an error committed by an adjudicating authority. The circumstance that the proceedings before a labour court and a tribunal are deemed to be concluded under section 6D when their award becomes enforceable or that thereupon they become functus officio would also be no ground for inferring any limitation of time in section 6 (6), for, that would also be the case in the case of a civil court or an adjudicating authority under the even without a provision like section 6D and yet the legislature has not chosen in the case of either of them to lay down any limitation of 'time for exercising its correctional jurisdiction. In our view, there are no compelling reasons to read into section 6(6) any such limitation by implication. We are also not impressed with the difficulty which the High Court supposed would result in case section 6(6) is interpreted as not having by implication any time limit within which the, correctional power can be exercised by any of the three adjudicating authorities. The High Court felt that if there is no such time limit an award, even after it has become enforceable and in some cases even implemented, would be rendered unsettled. But as already stated, the power is a limited one which can be exercised only in cases where a mistake, clerical or arithmetical or an error arising from an accidental slip or omission has occurred. The award thus would have to be corrected only within this circumscribed field. It may be that the correction of an award might to a certain extent have an unsettling effect to what has already become settled, but the correction is made not due to any fault of the parties but of the adjudicating authority whose accidental slip or omission cannot be allowed to prejudice the interests of the parties. We do not visualise any substantial hardship resulting from the exercise of this power which the High Court thought might arise if an award is allowed to be amended even after it has become enforceable or even if it has been enforced. A similar difficulty can also be imagined when a civil court exercises a similar power under section 152 of the Code of Civil Procedure. But no one has so far suggested that because of that difficulty a limitation must be inferred in that section. A similar difficulty would also arise under r. 28 of the Industrial Disputes (Central) Rules, 1957. But so far no one has read a similar limitation in the correctional power provided by that rule. In our view the error which the Labour Court corrected clearly fell within section 6(6) and could be corrected even after the award had become final as a result of its having been published and had become enforceable under section 6A. In this view it is not necessary to consider s 1 1 B or its effect especially as it is nobody 's case 45 that it was at any stage invoked or resorted to. In the view that we have taken it was section 6 (6) and not section 1 1B which could on the facts of this case be resorted to. The appeal, therefore, is dismissed though for reasons different from those given by the High Court. The appellant company will pay the costs of this appeal to the respondents. V.P.S. Appeal dismissed.

The respondent, who was an occupant of agricultural land applied to the Collector, under section 65 of the Bombay Land Revenue Code, 1879, for permission to convert the land to non agricultural use. The Collector gave the permission in July 1960 on condition that the land shall be used exclusively for constructing residential houses. The Municipal Committee, which had objected to the grant of permission before the Collector, moved the Commissioner for exercising his powers under section 211 of the Code. The Commissioner, in October, 1961, passed an order in which, after reciting the objections of the Municipality and the arguments of counsel he boldly stated his conclusion that the land did not belong to the respondent and set aside the Collector 's order without giving any reasons. The Com missioner 's order was quashed by the High Court on the ground that the Commissioner had no authority to pass the order under section 211 of the Code. In appeal to this Court, HELD : The Commissioner 's order was rightly quashed. (a) Under section 65 of the Code, if the Collector does not inform an applicant of his decision on the application, within a period of 3 months, the permission applied for shall be deemed to have been granted Though no such period is prescribed by section 211, reading the two sections together it must be held that the Commissioner also must exercise his revisional powers within a reasonable time of the Collector 's order. What is reasonable would depend on the facts of the case. In the case when the permission is for building purposes, the Commissioner should exercise his power within a few months of the Collector 's order, because, after the grant of the permission the occupant is likely to spend money on building operations within a few months of the date of permission. Since the order of the Commissioner in the present case was passed more than a year after the Collector 's order, the order should be set aside. [343 E H] (b) The order should also be quashed on the ground that the Commissioner had not given any reasons for his conclusions. [343 H] (c) The Commissioner also erred in going into the question of title, because, when there was a serious dispute regarding title, he should have referred the parties to a competent court and not decide it himself. [344 D]

1982 on the facts of the case, in order to determine the computation of the ceiling area, first exclude the built area which is 464 sq. metres and then exclude the deductions allowed under section 2(g) i.e., 1000 sq. metres. Therefore, the total deduction would be 1464 sq. metres which is within the ceiling limit of 2000 sq. metres but as actual area is 2530 sq. metres the excess would be 530 sq. metres which will be taken over by the State [914 C E] & CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2005/82, 995, 1021 27180, 2927 28/81, 2006 07, 2008 24, 2025, 2026 27, 2028, 2029, 2030 33, 2176, 2179, 2180 84, 2234, 2235, 2241, 2178, 3224 28 and 2832/82 and 6840, 6943, 6842, 6846, 6847 52, 6855 6860, 6861, 6863, 6870, 6871, 6873 80, 6882, 6889, 6890 92, 6881, 6845, 6872, 6883 6888, 6899 6915, 6918, 6919 22, 6923 6943, 6945 54, 6969 76, 7174 7200, 7342 7347, 7202 45, 7247 54, 7257 83, 7296, 7297 to 7311, 7313, 7314 7333, 7201, 7335 7340, 8211 8217, 8218 23, 8224, 8230, 8231, 8243, 8245 8256, 8261, 8260, 8262 8265, 8296 8329, 8337 59, 8375 76, 8377 8377C. 8378 8385 of 1983. Appeals by Special leave & by Certificate from the Judgments and orders dated the 30th October, 1978, 8th November, 1978, 12, 15, 16th January, 1979, 8th, 12th, 17th, 21st, 23rd February, 1979, 2nd, 5th, 12th, 26th, 30th March, 1979, 2nd, 4th, 17th, 23rd, 25th, 26th April, 1979, 2nd, 7th, 9th, 10th, 16th May, 1979, 4th, 5th, 6th, 10th, 13th, 16th, 23rd July, 1979, 11th, 14th, 18th, 26th September, 1979, 24th October, 1979, 5th, 8th and 21st November, 1979, 10th, 12th, 18th December, 1979 and 15th, 16th, 21st January, 1980, 14th, 17th, 18th, 20th, 21st, 26th, 27th and 28th March, 1980, 1st, 15th, 30th April, 1980, 5th May, 1980, 30th June, 1980, 4th, 5th, 14th, 19th, 20th and 28th August, 1980. , 2nd, 5th, 15th September, 1980, 12th January, 1981, 10th 901 February, 1981, 9th, 11th, 13th March, 1981, 2nd, 8th, 11th, 18th, 21st May, 1981, 7th, 20th July, 1981, 7th August, 1981, 25th, 28th, 29th September, 1981, 12th, 15th, 16th, 19th, 21st, 23rd October, 1981, 2nd, 3rd 4th, 6th, 11th, 12th, 13th, 17th, 23rd, 24th. 27th November, 1981, 1st, 2nd, 23rd December, 1981, 11th, 18th, 26th February, 1982, 1st, 15th March, 1982, 5th April, 1982, 21st and 27th, May, 1952 of The Allahabad High Court in Civil Misc. Writ Nos. 3689/77, 7722/79, 6315, 6319, 6322, 6326, 6327, 6329, 5059, 5060, of 1979, 7392/78, 6286/78, 8264, 8265, 8266, 8651, 8654, 8655, 8659, 8660, 8661, 8696, 8697, 8698, 8765, 8766, 8767, 8773, 8774, 8653, 8259, 8210, 8258, 6288, 6690, 8263, 7394 95, 6287, 4104, 6302, 7393, 7739, 7743, 7744. of 1978, 4902/79, 339/79, 1167/78, 1860/78, 4772 4776/79, 2976/76. 8647, 4106/78, 5217/77, 8257/78, 8268, 8652, 8656, 8658, 8699, 8769, 7399, 7400, 7401, 8261, 8270, 8274, 6283, 6693, 4248, 5828, 6695/78, 1387, 3262, 537, 1459/79, 5820, 4249, 1086, 5081, 3028, 4725 28/79, 6692, 6694, 5824/78, 3027, 3030, 3031. 3032, 3033, 3035/79, 1419/77, 5827/78, 4105/78, 5825/78, 5237, 6189, 6633, 6634/79, 7396/77, 6190, 7049, 5232, 5233, 5234 38, 4903/79, 8768/78, 1612, 2316, 2312, 2775, 2776 78/79, 8271 72178, 1385, 1390, 1392, 1446 51, 2513 15, 2520, 2521, 1388 89, 1391, 2530, 2869, 1467 75, 2529, 1123, 2779 81, 2868, 3263 3264, 3658, 3307, 345179, 10359, 10353 58, 10360/78, 2516 18, 2522 and 2532, 1451 1462. 1464 1466, 1455 60/7745/78, 344/79, 1184, 1586, 5823, 5833178, 694, 697 712, 841 842, 843, and 893/79, 2060 67, 2068 2070, 8267, 442, 443, 446 52, 481, 538/79, 8829 32, 8862 8864, 8910, 8912/78, 340 42/79, 5192, 5225, 5822, 6282, 6284 85, 6303, 7731, 7742/78, 2953 56, 2519, 3654 55, 1548, 1705, 1708 09, 8833, 6314, 6318, 6321, 3402, 1706 07, 1710/79, 5831/78, 7993, 6339, 6331, 6333 36, 6338, 6340, 9432, 9431, 8345, 9430, 7989/79, 4247/78, 10558/79, 2883/80, 596, 2689, 2888, 1938, 2581, 2580, 5364/80, 10563, 5830/79, 3245/80, 7738/79, 447/80, 2755, 1712, 2895, 7173/80, 8510/79, 1939/801 7429, 7903, 3604, 6190, 7911, 3338, 1937, 3933/80, 8273/70, 5369/80, 7163/80, 356/81, 2803, 2804 06, 2125/81, 595/80, 2803/79, 2804, 3656/79, 10723/80, 9382, 8430, 8192, 9595, 8286, 8429, 9383/80, 6625/81, 6626, 6624, 5600/88, 7983/80, 11296/80, 8408/81, 5257/80, 10093/80, 1453/79, 1942/80, 1943, 1940, 2352, 7172, 5260/80, 9134/78, 4456/79, 9744/78, 4107/78, 2790, 517580/80, 646/819 6609/80, 5257/79, 650/81, 10406/80, 338, 8278, 5456/79, 8262/78, 6332/79, 3555, 250, 9629/81, 442/80, 648/81, 5258, 5253, 196/81, 3244/79, 5256, 6354, 2392/81, 8277/79, 8348/79, 6353, 7714, 7726, 6352, 6317/81, 8347, 3034/79, 1454/80, 10633/80, 8879/80, 14320/81, 1063/80, 6064/79, 3605/80, 14990/81, 75/82, 2853/82, 902 3933/80, 3758/82, 8681/81, 5258/80, 7598/80, 7234 35, 7237/80, 2978: 2974/80, 1956/82, 5256/80, 2831/82, 3430/82, 7594/80 and 2778 of 79 For The Appellants: Dr. L.M. Singhvi Prathvi Raj, B.P. Maheshwari and B.P. Singh For The Respondents: S.N. Kacker, R.K Jain Dr. Y.S. Chitale, Dr. Meera Agarwal and R.C. Mishra in CAs. 994 & 1021 1027 of 1980. Pramod Swarup and Arun Madan in CA. 2026 2027 of 1982. A.K Srivastava in CA. 208 2024 of 1980. S.K. Bisaria, Pradeep Misra and Sudhir Kulshreshtha in CA. 2176/82. R.N. Sharma and N.N. Sharma in CA. 7191/83 @ SLP. 2350/80. Probir Mitra in CA. 2178 of 1982. The Judgment of the Court was delivered by FAZAL ALI, J. Wedded to the ideal of achieving a socialist pattern of State and building up an egalitarian society as mandated in the Preamble of the Constitution of India and incorporated in the directive principles contained in part IV, which are indeed the heart and soul of the Constitution as held by this Court on several occasions, the Central Government brought forth the present legislation called the Urban Land (Ceiling & Regulation) Act, 1976 (Act No. 33 of 1976) (hereinafter referred to as the 'Act '). To avoid anomalies and controversies, inequalities and inconsistencies, the Central Government obtained the consent of the State Governments so as to pass a central law which would apply equally to all the States. The Act applies to the States and Union Territories and contains a schedule (Schedule I) in which the ceiling of urban 903 areas has been mentioned and which differs from area to area in ' various States and Union territories to which the Act applies. In the first phase at the hearing of the appeals, the constitutional validity of the Act was challenged but the Constitution Bench upheld the validity of the Act in the case of Union of India, etc. vs V.B. Chaudhry etc. etc.(1) It is therefore manifest that the challenge to the Act no longer survives. The Act was sought to be implemented by the States which empowered the competent authority to determine the ceiling area in accordance with the provisions of the Act and take over the excess land. In due fairness to the citizens, the Act provides an appeal to a judicial authority (District Judge) to examine the correctness of the decision of the competent authority. In the instant case the matter has travelled right from the competent authority to the ' High Court and the case has been placed before us for judging the correctness of the grounds taken by the High Court in determining the excess area of lands which come within the ambit of the ceiling fixed by the Act. We propose to decide all the 200 and odd appeals and the special leave petitions by one common judgment as the question of law relating to the interpreta tion of the principles contained in the various sections of the Act to determine the ceiling area is more or less common to all the appeals. Before we proceed to detail the relevant provisions of the Act, we would like to point out the aims and objects of the Act in the light of which the pivotal provisions have to interpreted. The aims and objects are contained in the Preamble of the Act, the relevant portions of which may be extracted thus: "An Act to provide for the imposition of a ceiling on vacant land in urban agglomerations, for the acquisitions, for the acquisition of such land in excess of the ceiling limit, to regulate the construction of buildings on such land and for matters connected therewith, with a view to preventing the concentration of urban land in the hands of a few persons and speculation and profiteering 904 therein and with a view to brining about an equitable distribution of land in urban agglomerations to subserve the common good. WHEREAS it is expedient to provide ' for the imposition of a ceiling on vacant land in urban agglomerations, for the acquisition of such land in excess of the ceiling limit, to regulate the construction of buildings 'on such land and for matters connected therewith, with a view to preventing the concentration of urban land in the hands of a few persons and speculation and profiteering therein and with a view to bringing about an equitable distribution of land in urban agglomerations to subserve the common good. " The opening words of the preamble, viz., An Act to provide for the imposition of a ceiling on vacant land in urban agglomerations" clearly indicate that the pith and substance of the Act is that a ceiling should be imposed on vacant lands situated in urban areas which may or may not have building constructed thereon. Side by side the other dominant object to be achieved seems to be to prevent the concentration of urban land in the hands of a few persons so as to checkmate speculation and profiteering therein on the one hand and to bring about an equitable distribution of land amongst the urban population. The second clause of the preamble merely repeats and stresses what is contained in the opening part. Analysing, therefore, the real object which 'the Act seeks to achieve, it seems to us that the provisions have to be construed against the background of two important considerations: (1) that the vacant land must be situated in an urban rather than a rural area, and (2) that even in those portions of urban land which contain buildings, substantial relief should be given to the owner for the beneficial enjoyment of the property left with him so that the Act may not be dubbed as being of a confiscatory nature. Moreover, the Act governs only urban vacant lands or lands which contain building or dwelling units or outhouses and the areas 905 set apart in compliance with the respective byelaws have to be taken into account while computing the ceiling area applicable to the towns and territories concerned Before discusing the problem in L.J. Johnson 's case which has given rise to these appeals, we would first like to give a birds eye view of the various provisions of the Act which are relevant to the decisions of these appeals. The relevant provisions in this case are sections 2(c), 2(q)(ii), 3 and 4(9). Section 2(c) states that the 'ceiling limit ' means the ceiling limit specified in section 4(1). This brings us to section 4(1) at once. The various clauses of section 4(1) (a) to (d) prescribe ceiling limits in urban agglomerations falling within different which may be extracted thus: "4(1) Subject to the other provisions of this section, in the case of every person, the ceiling limit shall be (a) where that vacant land is situated in an urban agglomeration falling within category A specified in Schedule I, five hundred square metres; (b) where such land is situated in an urban agglomeration falling within category specified in Schedule I, one thousand square metres; (c) where such land is situated in an urban agglomeration falling within category specified in Schedule I, one thousand five hundred square metres; (d) where such land is situated in an urban agglomeration falling within category specified in Schedule I, two thousand square metres. " In the instant case, we are concerned with the land in the ' town of Dehradun situated in the State of Uttar Pradesh, which was the subject matter of the writ petition before the Allahabad High Court. It is indisputable that the land in Johnson 's case (supra) falls under category where the ceiling limit is 2000 sq. metres. The only problem which is required to be resolved in these group of appeals by special leave by and large concerns the interpretation of section 4, sub section (9) of the Act. All the appeals are from Uttar 906 Pradesh but the principles laid down by us would apply to all the States and Union Territories. In fact, the substratum and the fate of the case depends on the outcome of the appeal arising out of State of Uttar Pradesh & Anr. vs L.J. Johnson & Anr.(1) decided by the Allabhabad High Court and which has been taken as a sample case so that other appeals would merely follow the decision in Johnson 's case (c.A. No. 2005/82 in this Court). There are some other cases like A. No. 995/80 where the facts and principles may differ but we do not intend to decide or go into the intricacies of the other points involved therein and will leave the competent authority to determine the excess land in the context of other points and in the light of the law laid down by us. In these appeals, we are mainly concerned with the interpretation of section 4 (9) and the allied construction of section 2(g) and 2(q) (iii) of the Act and their impact on section 4(9). It follows, therefore, that once the view taken in Johnson 's case in regard to this question is reversed all the matters will have to go back to the competent authority for a decision in the light of the view taken by this Court. This will be the ultimate outcome because in all the allied matters there is only a cryptic order disposing of the concerned matter in accordance with the view taken by the High Court in Johnsan 's case in regard to the interpretation of section 4 (9). The remaining questions raised by the land holders will have to be resolved and the actual computation of excess land, if any, would have to be undertaken by the competent authority on remand. Before going into the merits of Johnson 's case we may briefly narrate the admitted facts. It appears that the respondent (Johnson) had a parcel of land, the total area of which was 2530 sq. metres on which there was a building. After the coming into force of the Act. he wanted to sell some portion of the open land in his possession to Maj. Gen. Prem Chandra, a resident of Vasant Vihar, New Delhi. The competent authority refused permission to sell on the ground that the total area in possession of Johnson being 2530 sq. metres, it exceeded the ceiling limit and therefore no permission to sell could be given. Johnson thereafter filed an appeal before the District Judge assailing the decision of the competent authority as being based r on a wrong interpretation of the provisions of the Act. The District 907 Judge after considering the provisions of section 2 (g), 2 (q) (ii) held that the owner was entitled to exclude 500 sq metres in view of the bye laws prevailing in Dehradun and another 500 sq. metres for the beneficial and convenient enjoyment of the building to satisfy the requirement of town planning and environmental purposes. This, according to the District Judge, flowed as a logical consequence of section 2 (g) of the Act. Ultimately, the district judge held that after excluding the portions of areas indicated above, there was no excess and the land was not covered by the Act and the refusal of permission by the competent authority was not legally valid. Against the decision of the District Judge, the State filed a writ petition before the High Court contending that the interpretation placed by the District Judge was wrong and the competent authority was fully justified in computing the area. The High Court Strongly relied on the provisions of section 4 (9) read with section 2(q)(ii) and upheld the decision of the District Judge and accordingly dismissed the writ petition. After this decision, a number of petitions were filed before the High Court which were decided by it in the light of the decision taken in Johnson 's case. Before proceeding to section 4 (9) of the Act, we might mention as a prelude the nature, character and the spirit of the Act. The Act applies only to urban areas and not to any other area. Secondly, the statute fixes the ceiling limit in various urban areas of all the States where the Court has to determine the extent of the ceiling. It is clear that there can be only three categories of Urban lands (1) land which is entirely open in the sense that it does not contain any construction or building, (2) where the entire land is covered by building or dwelling house, and (3) land on a part of which there is a building with or without a dwelling unit thereon and the rest of the land is vacant, So far as the first category is concerned, no complexity is involved because any open area in excess of 2000 sq. metres in category States will be taken over by the Government. For instance, if an open land without construction consists Of 6000 sq. meters, the 908 computation of the ceiling area would present no difficulty because 4000 sq. metres will be taken over by the Government and 2000 sq. metres will be left to the landholder. Secondly, if the entire land is covered by a building, such an area would completely fall outside the ambit of the Act and no question of computation would arise. Thirdly, a question arises as to what would happen if there is a land on a part of which there is a building with a dwelling unit and an area (open land) which is appurtenant thereto is vacant. This category of land would doubtless present some difficulty in making the computation and the principles on which such computation is to be made. Section 4 (9) is designedly and artistically drafted to meet such a contingency which may be extracted thus: "Where a person holds vacant land and also holds any other land on which there is a building with a dwelling unit therein, the extent of such other land occupied by the building and the land appurtenant thereto shall also be taken into account in calculating the extent of vacant land held by such person." (Emphasis supplied) In order to understand the import of section 4 (9) it may be necessary to extract clauses (i) and (ii) of section 2 (q) which run thus: "(q) 'Vacant land ' means land, not being land mainly used for the purpose of agriculture, in an urban agglomeration, but does not include (i) land on which construction of a building is not permissible under the building regulations in force in the area in which such land is situated; (ii) in an area where there are building regulations the Gland occupied by any building which has been constructed before, or is being constructed on, the appointed day with the approval of the appropriate authority and the land appurtenant to such building; and . " Clause (i) gives a blanket exemption to any land situated in an urban area where the entire area is covered by land on which it is not permissible to raise a building which will not be deemed to be 909 vacant land within the meaning of section 2 (q). This is because such land in an urban area cannot be used for building purposes but being vacant falls beyond the purview. Of the Act. Clause (ii) postulates that where a land is occupied by any building constructed before or on the appointed day ( 'appointed day ' has been defined in section 2 (a) of the Act) and there is some vacant land appurtenant to the said building, land which is built upon and any area which is left out in accordance with the building regulations would not be included in the ceiling area. The term 'land appurtenant to such building ' would mean the contiguous land which remains after giving full allowance for the area left out under the municipal or building regulations subject to a maximum of 500 sq. metres and another 500 sq. metres which may be left for the beneficial use of the owner. The words 'land appurtenant ' used in section 4 (9) takes us to its connotation as defined in section (2) (g) (i) and (ii) which may be extracted thus: "(g) 'land appurtenant ', in relation to any building, means (i) in an area where there are building regulations, the minimum extent of land required under such regulations to be kept as open space for the enjoyment of such building, which in no case shall exceed five hundred square metres; or (ii) in an area where there are no building regulations an extent of five hundred square metres contiguous to the land occupied by such building, and includes, in the case of any building constructed before the appointed day with a dwelling unit therein, an additional extent not exceeding five hundred square metres of land, if any, contiguous to the minimum extent referred to in sub clause (i) or the extent referred to in tub clause (ii?, as the case may be;" It may, however, be necessary to explain the terms 'land appurtenant ' or 'other land ' as used in section 4 (9) and section 2(g) (ii) as a wrong interpretation of these terms by the High Court has made confusion worse confounded. To begin with, the plain language in which sub section (9) of section 4 has been expressed clearly shows that when the legislature used the word 'appurtenant ', it meant to qualify the 910 land which was occupied by the building. The words 'appurtenant thereto ' qualify the building which precedes the land. The expression 'appurtenant ' shows that the legislature intended that in taking into consideration the land, it must be the land not contiguous or close to the building but the very land on which the building stands. Similarly, the words 'other land occupied by the building ' also lead to the same conclusion, viz., that the other land will not be land in some other plot but refers only to the very land a portion of which is occupied by the building. In Words and Phrases, Legally Defined (Vol. I 2nd Edn.) at p. 105 it is clearly mentioned that 'land ' do not usually pass under the word 'appurtenances ' with reference to other land, in its strict sense, but they do pass if it appears that the word is used in a larger sense, Land has been held to pass under this word where is a gift of a house with its appurtenances. There has been a distinction between a gift of a land with appurtenances and a gift with the land appertaining thereto. A chose in action does not ordinarily pass as appurtenant 'to other property '. The word 'appurtenance ' has been further defined thus: "Appurtenance, in relation to a dwelling, or to a school, college or other educational establishment, includes all land occupied therewith and used for the purposes thereof . The word 'appurtenances ' has a distinct and definite meaning, and though it may be enlarged by the context. yet the burden of proof lies on those who so contend Prima facie, it imports nothing more than what is strictly appertaining to the subject matter of the device or grant, and which would. in truth, pass without being specially mentioned." Similarly, at page 220 in Words and Phrases, Judicially Defined (vol. I) the word 'appurtenances ' has been defined thus: "The word 'appurtenances ' includes all the incorporeal hereditaments attached to the land granted or demised such as rights of way, of common, or piscary, and the like but it does not include lands in addition to that granted." (Emphasis supplied) Likewise, in Words and Phrases, Permanent Edition (Vol. 3A) at p. 546, the word 'appurtenances ' has been explained thus 911 "The word 'appurtenances ', which is ordinarily used in connection with real property, while strictly confined to those incorporeal hereditaments that are commonly annexed to land and houses, includes corporeal articles of personal property. 'Appurtenances ' as used in a deed of trust of certain real estate conveying all and singular the tenements, hereditaments, and 'appurtenances ' thereto belonging or in anywise appertaining, means things belonging to another thing as principal, and which pass as incident to the principal thing." (Emphasis supplied) In Stroud 's judicial Dictionary (Third edn.) at page 176, the word 'appurtenances ' has been defined thus, "By the grant of a messuage; or a messuage with the appurtenances, doth pass no more than the dwelling house, barn dove house, and buildings adjoining, orchard, garden, yard, field, or piece of void ground, lying near and BELONGING to messuage, and houses adjoining to the dwelling house, and the close upon which the dwelling house is built, at the most." Thus, taking the legal and dictionary meaning of the word 'appurtenant ' or 'appurtenances ' the inescapable conclusion is that the words 'either other land or appurtenances ' are meant to indicate that the land in question should form an integral part of the main land containing the building in question. The Allahabad High Court, therefore, clearly misdirected itself in putting a wrong and loose interpretation on the words 'appurtenant or other land '. It is well settled that the language of a beneficial statute must be construed so as to suppress the mischief and advance its object. Bearing this in mind, we can see no other interpretation of the words 'appurtenant or other land ' than the one we have indicated above which is that the land appurtenant means not a land contiguous to some other land but the very land which is a part of the same plot or area which contains the building or dwelling house. This also seems to be the avowed object of section 4 (9) of the Act. In the ultimate analysis the position is quite clear that s 4 (9) contemplates that if a person holds vacant land as also other portion of land on which there is a building with a dwelling unit, the extent of 912 Land occupied by the building and the land appurtenant thereto shall betaken into account in calculating the extent of the vacant land. This sub section has to be read in conjunction with section 2 (q) (ii) and (iii). A combined reading of these two statutory provisions would lead to the irresistible inference that in cases which fall within the third category mentioned above, the (1) total area of the land of a landholder is first to be determined and if the total area, built or unbuilt, falls below 2000 sq. metres in category areas, there would be no question of any excess land, (2) where, however, there is a building and a dwelling unit then the area beneath the building and the dwelling unit would have to be excluded while computing the ceiling. Further, if there are any byelaws requiring a portion of the land to be kept vacant, the landholder would be allowed to set apart the said land to the maximum extent of 500 sq metres. He would also be allowed to retain an additional area of 500 sq. metres for the beneficial use af the building so that he may enjoy the use of a little compound also for various purposes. After excluding these items if the land falls below the ceiling limit there would be no question of excess but if there is excess that is beyond the ceiling limit, the same would have to be taken over by the Government. For instance, A has 4000 sq. metres of land out of which 2000 sq. metres is covered by building then in such a case the landholder will be entitled to keep the whole of the covered area, i.e., 2000 sq. metres plus 1000 sq. metres (500 under the municipal byelaws and another 500 for beneficial use) and the excess would only 1000 sq. metres. The scheme of the Act seems to be that if there is a constructed building with a dwelling unit, the structure thereon cannot be treated as open land for the purpose of declaring it as an excess land beyond the ceiling limit. Similarly, the Land kept open under the municipal regulations (upto 500 sq. metres) and an additional 500 sq. metres appurtenant to the land would not be available for being declared as excess land beyond the ceiling limit. The central idea governing this philosophy of putting a ceiling on urban land is that in an urban area none can hold land excess of the ceiling regardless of whether the land is entirely open or whether 913 there is a structure consisting of a dwelling unit thereon, subject to the rider mentioned above. Indeed, if the intention would have been to take over the entire open land without giving any benefit of appurtenant land to the landholder than the Act would perhaps be liable to be challenged on the ground of being of a confiscatory nature and would fall beyond the permissible limits of the directive principles enshrined in Part IV of the Constitution. Furthermore, such an interpretation would discourage new building enterprises or factories or industrial units coming up in the urban areas which would be contrary to the very tenor and spirit of the Act. Coming now to Johnson 's case, while the High Court of Allahabad was right in interpreting these provisions in so far as it held that the built area plus upto 500 sq. metres allowed under the municipal byelaws and another 500 sq. metres as additional area for beneficial enjoyment had to be excluded but it seems to have committed a grave error of law in applying this principle to concrete cases which had come up before it. Further, the High Court was absolutely wrong in importing the concept of contiguity on the assumption that section 4(9) was attracted only if the person concerned held a distinct parcel of land which was vacant land. As discussed above, these words do not envisage that there should be land other than the one which contains a building which is to be taken into consideration while computing the excess land but the section really refers to the very land which is a part of the plot which contains the building. The argument that once a plot contains a building, the whole of the plot would be exempt from the ceiling area cannot be countenanced on a plain and simple interpretation of section 5(q)(ii) read with section 4(9). In fact section 4(9) itself puts the matter beyond controversy by qualifying the words 'other land occupied by the building and the land appurtenant thereto '. The expression 'thereto ' manifestly shows that the intention of legislature was to the land on which building or the dwelling unit stands. In other words, the vacant land which contains a building would include appurtenant land or any other land situated in that particular plot. We have gone through the judgments of the High Court, the District Judge and that of the competent authority and we are not satisfied that all the details which are required for the purpose of determining the ceiling have been mentioned in any of the judgments. So far as Johanson 's case is concerned, all that is mentioned is that the total area of urban land was 2530 sq. metres, including the built 914 area. So far as the built area is concerned, it is mentioned as 464 sq. metres but the details of the calculations have not been given which would have to be redetermined by the competent authority. Even on the facts mentioned in the judgments of the High Court and the courts below the position appears to be as follows . Total area of the land owned by the landholder, is 2530 sq. metres. Prima facie 530 sq. metres is above the ceiling limit. In order however to calculate as to whether or not Johson had exceeded the permissible limit, we have to compute in the following manner: First exclude the built area which is 464 sq. metres (it is not clear whether 464 includes the area of servant quarters also which are also mentioned to be existing there). Then exclude the deductions allowed under section 2(g). i.e, 1000 sq. metres. Therefore, the total deduction would be 1464 sq. metres which is within the ceiling limit of 2000 sq. metres but as the actual area is 2530 sq. metres the excess would be 530 sq. metres which will be taken over by the State. The High Court seems to have made a wrong calculation by not relying on section 4(9) and in wrongly importing the concept of 'other land ' being a distinct plot. This however is not permissible. The landholder cannot have it both ways. He cannot take the benefit of the exclusion and then add that benefit to the total ceiling area in order to compute the excess. For these reasons, therefore, we p do not agree with the view taken by the High Court or the District Judge regarding the computation of the ceiling area. To sum up, the effect of the view taken in Johnson 's case virtually comes to this. Section 4(9) would be attracted regardless of whether the landholder owned a distinct part of land on which there is no construction alongwith any other parcel of land where there is some construction alongwith any other parcel of land where there is some construction. In other words, whether or not there is a surplus will not depend on whether the landholder holds a separate plot of land which is open land. To take the other view is to hold that if there is no separate plot but the construction is in the same plot then even if the entire plot comprises 10,000 sq. metres that would fall beyond the purview of section 4(9) if the 915 structure is built only on 1000 sq. metres of land. Such an interpretation of section 4(9) cannot be accepted by us as it goes against the very spirit and intent of the Act and allows the landholder to escape the ceiling area by merely putting a construction on a plot of land owned by him. On the other hand, the Madhya Pradesh High Court in M/s. gr Eastern oxygen and Acetylene Ltd. vs State of Madhya Pradesh(1) seems to have taken a correct view in holding that nothing turns upon whether or not the landholder holds open land and a separate parcel of land with a dwelling unit thereon. The High Court in paragraph 5 rightly pointed out that it will necessitate reading the words "not contiguous to the vacant land" after the words "any other land" in sub section (9) of section 4 and such qualifying words cannot be read into the provision by implication. If this be the interpretation then it would mean that if there is a boundary wall which separates the construction from the open land, the land would be within the purview of the ceiling and if there is no such wall it would fall outside the purview. Such an interpretation, would lead to a most absurd and anomalous situation. The Madhya Pradesh High Court was, therefore, fully justified in expressing its dissent from judgment of the Allahabad High Court. We fully endorse the decision of the Madhya Pradesh High Court. Where, however, it is found that any person holds vacant land in two or more categories of urban agglomerations specified in Schedule I, the computation and determination of ceiling area is to be done in accordance with the formula laid down in cl. (a) to (d) of section 4 (1) of the Act. In fine, therefore, the position in the instant case, as already pointed out by us, is that even taking into account the concessions and exemptions granted to Johnson, the landholder, the land in his possession exceeds the ceiling of 2000 sq. metres by 530 sq. metres which will have to be declared as surplus. Before concluding we might dwell on one more aspect of the matter which flows as a logical corollary of our interpretation of the various provisions of the Act; Where a person has several plots, some completely vacant and some partly built and partly vacant, a question may arise as to how 916 the computation of the ceiling area is to be made in such cases. This presents no difficulty in view of what we have fully discussed in our judgment because it is manifest that the legislature intended to leave with the landholder only the area of 2000 sq. metres in category area or the various ceiling areas mentioned in different categories of section 4 (1) of the Act. It is manifest that in such cases the competent authority will have to total the entire area of the lands in various ' places, completely vacant or partly built and partly vacant and permit the landholder to retain 2000 sq. metres or less as provided in clauses (a) to (d) of section 4 (1) and give the landholder the option (as provided under section 6) to select the area which he desires to retain provided that does not exceed the ceiling limit. By way of postscript we might dwell on certain consequences of the legislation flowing from the interpretation which we have put on the various provisions of the Act. The Act being a social piece of legislation should have been implemented long ago but as its constitutional validity was challenged, which was decided by this Court only in 1979 as indicated above, the operation of the Act remained stayed. The second phase however began when the correctness of the manner in which computation was to be made as held by the Allahabad High Court was challenged by the State which also we have now decided in this judgment. We hope and trust that all the States will now go ahead with implementing the Act and take over the excess land in order to distribute them according to the tenor, spirit and provisions of the Act. Any further delay is likely to defeat the very object for which the Act was passed. For the reasons given above, we allow all these petitions and appeals, set aside the judgments of the High Court and send back the cases to the competent authority to get fresh computations done in all the cases and then determine the ceiling area in the light of the principles enunciated and the law laid down by us. Civil appeal No. 995 of 1980 is also remanded to the competent authority for redetermination of the ceiling area as indicated above. In the circumstances of the case, there will be no order as to costs. H.S.K. Appeals and petitions dismissed.

The petitioners challenged the constitutional validity of Jammu and Kashmir Agrarian Reforms Act, 17 of 1976 on the ground that the Act violated Articles 14, 19 and 31 of the Constitution. The petitioners contended that as the Act contained certain provisions which were not co related to agrarian welfare, the Act could not be said to be a measure of agrarian reform and therefore not saved by Article 31A of the Constitution. Dismissing the petitions, ^ HELD: The Act is a measure of agrarian reform and is saved by article 31A from the challenge under articles 14, 19 or 31 of the Constitution. [541 D] The question as to whether any particular Act is a measure of agrarian reform has to be decided by looking at the dominant purpose of that Act. In the instant case the dominant purpose of the statute is to bring about a just and equitable redistribution of lands, which is achieved by making the tiller of the soil the owner of the land which he cultivates and by imposing a ceiling on the extent of the land which any person, whether landlord or tenant, can hold. The matters which are dealt with by the Act are essential steps in any well conceived scheme of agrarian reform. The decision in Kochuni was treated in Ranjit Singh as a special case which cannot apply to cases where the general scheme of legislation is definitely agrarian reform and under its provisions, something ancillary thereto in the interests of rural economy has to be under taken to give full effect to those reforms. [541 A D, 541 D] Ranjit Singh vs State of Punjab, ; and Kavalappara Rottarathil Kochuni & Ors. vs State of Madras & Ors., , referred to. The circumstance that the Act is made applicable to agricultural lands situated within the limits of local authorities will not affect its character as a measure of agrarian reform. If any land situated in a developed area is used predominantly for the purpose of agriculture, it is open to the legislature to 537 include that land in a scheme of agrarian reform so as to make the tiller of that land its owner. The hypothetical possibility that after becoming statutory owners of agricultural lands situated in developed areas on payment of a paltry price, the tillers will part with those lands at a high price which lands in developed areas like urban areas fetch, cannot affect the basic position that the Act is conceived in the larger interest of agrarian reform. The payment of a larger compensation to land holders under a land reform law than what would be payable under an Act like the Urban Ceiling Act does not lead to the conclusion that the former is not a measure of agrarian reform. [543 A F] Section 7(2)(b) of the Act creates an anomalous situation, especially in the context of the definition of 'personal cultivation ' in section 2(12) of the Act. If it is permissible to cultivate a land through another person as specified in clauses (b) to (g) of section 2(12), there is no reason why residence in the village where the land is situated or in an adjoining village should be compulsory for all persons, even for minors, widows, insane persons and persons in detention. The exception made by the legislature in favour of the members of defence forces ought to be extended to these other persons also. The exclusion of a constitutional challenge under Articles, 14, 19 and 31 which is provided for by Article 31A does not justify in equity the irrational violation or these articles. [543 G, 544 B D] Waman Rao & Ors. vs Union of India & Ors. ; , referred to.

Civil Appeals Nos. 3759 3761 of 1982. From the judgment and order dated the 26th June, 1980 of the High Court of Bombay in S.C. Application No. 752/75, 951 and 953 of 1975. P.H. Parekh, M.A. Ram and Hemant Sharma for the Petitioners V.N. Ganpule for the Respondents. The Judgment of the Court was delivered by VENEATARAMIAH, J. The Short question involved in these appeals by special leave is whether the transferees during the pendency of a suit for partition of parts of an estate assessed to payment of land revenue to the Government which is the subject matter of the suit have locus standi to appear before the Revenue authorities in proceedings under section 54 of the Code of Civil Procedure and ask for an equitable partition of the lands even though they had not been impleaded as parties to the suit in the civil court. Natu had filed a suit in the year 1940 against his nephew Laxman for partition of their joint family property and for separate possession of his half share in it and had obtained a decree for it. Natu and his four sons Shrawan, Nago, Digambar and Vithal assigned on August 22, 1945 3/8th share in the decree obtained by them in favour of Prem Chand Patil. Prem Chand Patil filed Special Civil Suit No. 67 of 1950 on the file of the Civil Judge, Senior Division, Jalgaon for partition of his 3/8th share in the decree. In that suit, a decree was passed on compromise. The said decree provided that if the sons of Natu paid Rs. 30,000 on or before March 1, 1958 then the decree holder would not be entitled to claim any partition and in default he should get possession of the share claimed by him. The sons of Natu failed to pay the amount of Rs. 30,000 as per decree and the result was that Prem Chand Patil became entitled to partition and separate possession of his share, 901 Prem Chand Patil, however, assigned his rights under the decree in favour of Vishnu Hari Patil, respondent No. 1 herein who started execution proceedings. Though the said proceedings were styled as execution proceedings, they were strictly final decree proceedings under section 54 of the Code of Civil Procedure under which the lands in respect of which assessment was payable to the Government had to be divided by the Collector and the parties had to be put in possession of their respective shares. The total area of the lands to be divided was in the order of 108 acres in which Vishnu Hari Patil had 3/8th share and the remaining land had to be allotted to the share of the sons of Natu. It should be stated here that five fields out of the lands which were to be divided by the Collector had been sold to the appellants during the pendency of the partition suit. Four of the said fields had been sold under private sales and one field in a court auction and they were in possession of the respective purchasers during the partition proceedings under section 54 of the Code of Civil Procedure. The appellants had acquired title to the said fields from the sons of Natu who were parties to the suit. The said fields were allotted by the Collector in favour of Vishnu Hari Patil as part of his 3/8th share without giving any consideration to the claims of the appellants for an equitable partition. The remaining 5/8th share was allotted in favour of the sons of Natu who had no objection to the partition effected by the Collector. The appellants challenged the validity of the partition proceedings in appeal before the Commissioner, Bombay. The appeals were dismissed on the ground that the appellants had no locus standi to ask for an equitable allotment under section 54 of the Code of Civil Procedure as their names did not figure in the decree. The appeals filed by the appellants before the State Government against the orders of the Commissioner were also dismissed. The appellants, thereafter filed petitions before the High Court of Bombay under Article 226 of the Constitution questioning the correctness of the partition. Those petitions were also dismissed. These appeals are filed against the judgment of the High Court. There is no dispute that each of the appellants had acquired certain rights under the sale deeds and the court auction referred to above and were in possession of certain parts of the estate which was to be partitioned under section 54 of the Code of Civil Procedure. It is also true that their names had not been mentioned 902 in the decree which was sent for execution to the Collector. The appellants do not also dispute that they being purchasers pendente lite are bound by the proceedings in the suit by virtue of the provisions of section 52 of the Transfer of Property Act. The only prayer made by them is that since the sales in their favour were not in dispute and as they had acquired title under the parties to the suit and were also in possession of the fields in question the Collector should have considered their prayer for an equitable partition of the estate and, if possible, to allot the fields in question to the share of the sons of Natu so that they could continue to remain in possession of the lands purchased by them. The appellants allege that the sons of Natu, their transferors, had colluded with Vishnu Hari Patil, respondent No. 1 and had accepted the partition made by the Collector in order to cause prejudice to them. The sons of Natu got their 5/8th share of the property in addition to the price paid by the appellants for the five fields purchased by them. The appellants were not allotted any lands at the partition. The question for consideration is whether the High Court, the Government and the Revenue authorities were right in the circumstances of the case in holding that the appellants had no locus standi to ask for an equitable partition particularly when the sales in favour of the appellants were not in dispute. Section 52 of the Transfer of Property Act no doubt lays down that a transferee pendente lite of an interest in an immovable property which is the subject matter of a suit from any of the parties to the suit will be bound in so far as that interest is concerned by the proceedings in the suit. Such a transferee is a representative in interest of the party from whom he has acquired that interest. Rule 10 of Order 22 of the Code of Civil Procedure clearly recognises the right of a transferee to be impleaded as a party to the proceedings and to be heard before any order is made. It may be that if he does not apply to be impleaded, he may suffer by default on account of any order passed in the proceedings. But if he applies to be impleaded as a party and to be heard, he has got to be so impleaded and heard. He can also prefer an appeal against an order made in the said proceedings but with the leave of the appellate court where he is not already brought on record. The position of a person on whom any interest has devolved on account of a transfer during the pendency of any suit or a proceeding is somewhat similar to the position of an heir or a legatee of a party who dies during the pendency of a suit or a proceeding, or an official receiver who 903 takes over the assets of such a party on his insolvency. An heir or a legatee or an official receiver or a transferee can participate in the execution proceedings even though their names may not have been shown in the decree, preliminary or final. If they apply to the court to be impleaded as parties they cannot be turned out. The Collector who has to effect partition of an estate under section 54 of the Code of Civil Procedure has no doubt to divide it in accordance with the decree sent to him. But if a party to such a decree dies leaving some heirs about whose interest there is no dispute should he fold up his hands and return the papers to the civil court ? He need not do so. He may proceed to allot the share of the deceased party to his heirs. Similarly he may, when there is no dispute, allot the shares of a deceased party in favour of his legatees. In the case of insolvency of a party, the official receiver may be allotted the share of the insolvent. In the case of transferees pendente lite also, if there is no dispute, the Collector may proceed to make allotment of properties in an equitable manner instead of rejecting their claim for such equitable partition on the ground that they have no locus standi. A transferee from a party of a property which is the subject matter of partition can exercise all the rights of the transferor. There is no dispute that a party can ask for an equitable partition. A transferee from him, therefore, can also do so. Such a construction of section 54 of the Code of Civil Procedure advances the cause of justice. Otherwise in every case where a party dies, or where a party is adjudicated as an insolvent or where he transfers some interest in the suit property pendente lite the matter has got to be referred back to the civil court even though there may be no dispute about the succession, devolution or transfer of interest. In any such case where there is no dispute if the Collector makes an equitable partition taking into consideration the interests of all concerned including those on whom any interest in the subject matter has devolved, he would neither be violating the decree nor transgressing any law. His action would not be ultra vires. On the other hand, it would be in conformity with the intention of the Legislature which has placed the work of partition of lands subject to payment of assessment to the Government in his hands to be carried out 'in accordance with the law (if any) for the time being in force relating to the partition or the separate possession of shares '. In view of the foregoing, the orders of the High Court, the State Government and the Commissioner holding that the appellants had no locus standi to ask the Collector to effect an equitable 904 partition have got to be set aside and they are accordingly set aside. The partition effected by the Collector is also set aside. The appeals are accordingly allowed and the case is remanded to the Collector to make a fresh partition on an equitable basis in accordance with the decree and the undisputed rights of the appellants referred to above. The Collector while effecting partition may consider whether the fields in possession of the appellants may be allotted to the share of the sons of Natu so that the appellants may continue to remain in possession of their respective fields. Since the suit is a very old one, the Collector may expeditiously complete the work of partition preferably within six months from the date of receipt of a copy of this order. No costs. S.R. Appeal allowed.

One Natu, m his suit filed in 1940 against his nephew Laxman for partition of the joint family property and for separate possession of his half share obtained a decree in his favour. The total area of the lands to be divided is 108 acres. Natu and his four sons assigned on August 22, 1945, 318th share in decree obtained by them in favour of Prem Chand Patil. Prem Chand filed a Special Civil Suit No 67 of 1950, for partition of his assigned share in the decree. In that suit, a compromise decree was passed providing that if the sons of Natu paid Rs. 30,000 on or before March 1, 1958, then the decree holder would not been titled to claim any partition and in default he should get possession of the share claimed by him. The sons of Natu committed default and Prem Chand Patil became entitled to partition of 318th share of 108 acres of land. Prem Chand Patil, however assigned his decree in favour of Vishnu Hari Patil, respondent No. 1, who started the execution proceedings, under section 54 of the Code of Civil Procedure under which the lands in respect of which assessment was payable to the Government had to be divided by the Collector and the parties had to be put in possession of their respective shares. During the pendency of these proceedings, the appellants purchased from the sons of Natu who were parties to the suit five fields out of these 108 acres four through private sales and one by court auction and were in possession of the said fields, having acquired title thereto. These fields were allotted by the Collector in favour of Respondent No. 1 as part of his 3/8th share without giving any consideration to the claims of the appellants for equitable partition. The appellants challenged the validity of the partition proceedings before the Commissioner, Bombay Division. The appeal was dismissed on the ground that the appellants had no locus standi to ask for an equitable allotment under section 54 Code of Civil Procedure, as their names did not figure in the decree even though the sates in their favour were not in dispute. The further appeals before the State Government as well as the Writ Petitions filed before the Bombay Hit h Court also failed. Hence the appeals by special leave. 899 Allowing the appeals, tho Court. ^ HELD : 1.1. Section 52 of the Transfer of Property Act, no doubt, lays down that a transferee, pendente lite of an interest in an immovable properly which is the subject matter of a suit from any of the parties to the suit will ba bound in so far as that interest is concerned by the proceedings in the suit. Such a transferee is a representative in interest of the party from whom he has acquired that interest. [902 E F] 1:2. A transferee from party of a property which is the subject matter of partition can exercise all the rights of a transferor. When a party can ask for an equitable partition, a transferee from him, therefore, can also do so. [903 D E] 2:1. Rule 10 of order XXII of the Code of Civil Procedure clearly recognises the right of a transferee to be impleaded as a party to the proceedings and to be heard before any order is made. It may be That if he does not apply to be impleaded, he may suffer by default on account of any order passed in the proceedings. But if he applies to be impleaded and heard he can also prefer an appeal against an order made in the said proceedings but with the leave of the appellate court, where he is not already brought on record. [902 FG ] 2:2. The position of a person on whom any interest has devolved on account of a transfer during the pendency of any suit or proceeding is some what similar to the position of an heir or a legatee of a party who dies during the pendency of a suit or a proceeding, or an official receiver who takes over the assets of such a party on his insolvency. An heir or a legatee or an official receiver or a transferee can participate in the execution proceedings even though their names may not have been shown in the decree, preliminary, or final. If they apply to the court to be impleaded as parties, they cannot be turned out. [902 G H; 903 A B] 3. The Collector, who has to effect partition of an estate under section 54 of the Code of Civil Procedure has, no doubt, to divide it, in accordance with the decree sent to him. But if a party to such a decree dies leaving some heirs about whose interest there is no dispute, he need not fold up his hands and return the papers to a civil court. He may proceed to allot the share of tho deceased party to his heirs. Similarly, he may, when there is no dispute, allot the share of a deceased party in favour of his legatees. In the case of insolvency of a party, the official Receiver may be allotted the share of the insolvent. In the case of transferees, pendente lite also, if there is no dispute, the Collector may proceed to make allotment of properties in an equitable manner instead of rejecting their claim for such equitable partition on the ground that they have no locus standi. Such a construction of section 54 of the Code of Civil Procedure advances the cause of justice. Otherwise, in every case where a party dies or where he transfers some interest in the suit property pendente lite the matter has got to be referred back to the Civil Court, even though there may be no dispute about the succession, devolution or transfer of interest. In any such case, where there is no dispute if the Collector makes an equitable partition taking into consideration the interests of all concerned including those on whom any interest in the subject matter has devolved, he would 900 neither be violating the decree nor transgressing any law. His action would not be ultra vires. On the other hand, it would be in conformity with the intention of the Legislature which has placed the work of partition of lands subject to payment of assessment to the Government in his hands to be carried out "in accordance with the law (if any) for the time being in force relating to the partition or the separate possession of shares". [903 B C; F G]