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ivil Appeal No. 3154 of 1982. From the Judgment and Order dated 28.9.1981 of the Allahabad High Court in S.A. No. 1874 of 1970. Satish Chandra, S.N. Singh, T.N. Singh, H.L. Srivastava and Sudama Ojha for the Appellants. U.R. Lalit and R.D. Upadhyaya for the Respondents. The Judgment of the Court was delivered by FATHIMA BEEVI, J. This appeal is directed against the judgment dated 28 9 1981 of the High Court of Allahabad in Second Appeal No. 1874 of 1970. 167 The plaintiff respondent filed the suit alleging inter alia that before enforcement of the U.P. Zamindari Abolition and Land Reforms Act, 1950, hereinafter referred to as "Zamindari Abolition Act", defendants Nos. 3 to 25 were the tenants in chief of the plots in suit and his father Munni Lal was their sub tenant; that Munni Lal died in 1951 leav ing behind four sons including the plaintiff respondent; that remaining three brothers of the plaintiff had separated and consequently the plaintiff became sole tenant; that Munni Lal was recorded occupant in Khasra 1356 Fasli and in cultivatory possession in Khasra 1359 Fasli and consequen tially he acquired adhivasi rights and then sirdari rights, the rights of defendants 3 to 25 extinguished under section 240 A of the Zamindari Abolition Act; that in 1968, however, defendants Nos. 1 and 2 obtained fictitious sale deed from defendants Nos. 3 to 25 in respect of the plots in suit. They had started interfering with the plaintiff 's possession and, hence, the plaintiff respondent filed the suit for permanent injunction. Defendants Nos. 1 to 3, 5 to 7, 13 and 14 contested the suit. They denied the plaintiff 's claim and disputed that the plaintiff 's father, Munni Lal, was the sub tenant or that he acquired adhivasi rights or sirdari rights. It was further pleaded that the plaintiff or his father was never in possession of the plots in suit. The suit for permanent injunction was dismissed. Against the judgment of the trial court, the plaintiff respondent preferred Appeal No. 321 of 1969 which was dis missed by the first appellate court. The Second Appeal No. 1874 of 1970, filed before the High Court of Allahabad against the judgment of the first appellate court, was allowed on 28 9 1981. The respondent based his title on three grounds, namely, (i) that his father Munni Lal was recorded occupant in Khasra 1356 Fasli (be ginning from 1.7.1948 and ending with 30.6.1949) and became adhivas under section 20(b)(i) of the Zamindari Abolition Act; (2) that his father Munni Lal was in cultivatory possession of the disputed land it Khasra 1359 Fasli (beginning from 1.7.1951 and ending with 30.6.1952 and consequently he became adhivasi under section 3 of the U.P. Land Reforms (Supplementary) Act, (U.P. Act No. 31 of 1952);and (3) that his father Munni Lal was sub tenant over the disputed land and, there fore, he became an adhivasi and consequently the sirdar under the provisions of the zamindari Abolition Act. The trial court and the first appellate court recorded finding of 168 facts to the effect that the plaintiff 's father Munni Lal was not in cultivatory possession of 1359 Fasli and there fore he could not get adhivasi right under section 3 of the U.P. Land Reforms (Supplementary) Act, 1952. Both the courts further observed that the plaintiff 's father was not a recorded occupant within the meaning of section 20(b)(i) of the Zamindari Abolition Act, as the entry of his name in column 6 of the Khasra 1356 Fasli was suspicious, not being supported by Khatauni entry. It was further held that as his father died in 1951 before the date of vesting i.e. 1.7.1952 (when the zamindari was abolished in U.P. under the provi sions of Zamindari Abolition Act), the plaintiff is not entitled to the benefit of becoming adhivasi under section 20(b)(i) of the Zamindari Abolition Act. The trial court and the first appellate court also found that no contract or sub tenancy between Munni Lal and the proforma defendants was proved. The High Court held the view that the approach made by the courts below was wrong. The question that arose for decision in the suit was whether the appellant 's father was a sub tenant? The learned Single Judge noticed that if Munni Lal was a sub tenant, his heir being the adhivasi and the appellant must, therefore, suc ceed. The evidence relating to the sub tenancy and conse quent possession was therefore, considered in detail and the learned Judge concluded that Munni Lal was in cultivatory possession of the land in 1356 Fasli as a sub tenant. His rights as sub tenant devolved on the appellant who continued in possession as such and became adhivasi and rights of defendants 3 to 14 were extinguished under the Zamindari Abolition Act and defendants could not interfere with appel lants possession. In this view the appellant was granted a decree reversing the decision of the lower courts. The main contention advanced on behalf of the appellants before us is that the decision having been rendered by the trial court and the first appellate court on the basis of the finding of fact regarding the right claimed and the possession alleged, in the absence of any substantial ques tion of law, there was no jurisdiction of the High Court under section 100 C.P.C. to disturb the finding of a concur rent nature and upset the decision. The High Court, while exercising its power under section 100 C.P.C., has no juris diction to interfere with the finding of fact recorded by the first appellate court. Reliance was placed on V. Rarna chandra Ayyar & Anr. vs Ramalingam Chettiar & Anr., AIR 1963 SC 302. Section 100(1)(c) refers to a substantial error or defect in the procedure. The error or defect in the proce dure to which the clause refers is not an error or defect in the appreciation of 169 evidence adduced by the parties on the merits. Even if the appreciation of evidence made is patently erroneous and the finding of fact recorded in consequence is grossly errone ous, that cannot be said to introduce a substantial error or defect in the procedure. If in dealing with a question of fact the lower appellate court has placed the onus on wrong party and its finding of fact is the result substantially of this wrong approach that may be regarded as a defect in procedure. When the first appellate court discarded the evidence as inadmissible and the High Court is satisfied that the evidence was admissible that may introduce an error or defect in procedure. So also in a case where the court below ignored the weight of evidence and allowed the judg ment to be influenced by inconsequential matters, the High Court would be justified in reappreciating the evidence and coming to its own independent decision as held in Madan Lal vs Gopi, ; The substantial issue in the present suit was whether the respondent was in possession of the disputed land. The respondent claimed possession under his father as sub tenant and thereafter as sirdar. In support of his claim respondent relied on the entries in the revenue records and the re ceipts for payment of rent. The effect of these documents had been wholly ignored by the lower courts on the assump tion that these were fabricated. The U.P. Zamindari Aboli tion Act came into force on July 1, 1952. Section 20(b)(i) of the Act provided that every person, recorded as occupant of a land in the Khasra or Khatauni of 1356 Fasli prepared under sections 28 and 33 of the U.P. Land Revenue Act 190 1, be called the adhivasi of the land. This Court in Amba Prasad vs Abdul Noor Khan & Ors., ; examined the scheme of the section and held that the title to posses sion as adhivasi depends on the entry in the Khasra of 1356 Fasli. The section eliminates enquiries into possession in accepting the record in the Khasra. The Court observed at page 808: "The word 'occupant ' is not defined in the Act. Since khasra records possession and enjoyment the word 'occupant ' must mean a person holding the land in possession or actual enjoyment. The khasra, however, ma mention the proprietor, the tenant, the sub tenant and other person in actual pos session, as the case may be. by occupant is meant the person in actual possession it clear that between a proprietor and a tenant the tenant and between a tenant and the sub tenant the latter and 170 between him and a person recorded in the remarks column as "Dawedar qabiz" the dawedar qabiz are the occupants. ' ' In Nath Singh & Ors. vs The Board of Revenue & Ors., ; in answering the contention that the cor rectness of the entry in the record of Khasra of 1356 Fasli could be gone into and where the respondents are recorded only as sub tenant and not as occupant, they could not get the benefit of section 20(b)(i) of the Act, this Court held as under: "The record of rights for the year 1356F. had not been corrected afterwards. We have to go by the entry in the record of rights and no enquiry need be made as to when the respondents became sub tenants after the decision in favour of the landlord, Ram Dhani Singh. The last decision of this Court also shows that as between the tenant and the sub tenant the entry in the record of rights in favour of the sub tenant makes him the occupant entitled to the adhivasi rights under section 20 of the Act. " In this case the Khasra entry for 1356 Fasli Ex 4 showed that the respondent 's father Munni Lal was sub tenant. As rightly stated by the High Court, it is not for the plain tiff to prove that this entry is correct. It was for the defendants to show that the entry had been introduced sur reptitiously out of ill will or hostility. In the absence of such proof, the genuineness has to be presumed and the entry accepted as evidence of the sub tenancy in favour of the respondent 's father. The Khasra entry of 1371 Fasli and 1372 show the respondent 's name as person in possession. It is clear indication that possession of the subtenant continued with the respondent. The rent receipts of the year 1929 and subsequent years are not required to be proved by the re spondent as pointed out by the learned Judge. These furnish evidence of possession as sub tenant. We agree that the lower appellate court was not justified in ignoring these documents. The High Court was, therefore, well within its powers in appreciating the evidence and arriving at its own conclusion. The contention that the second appeal abated on account of non filing of substitution application after the death of defendants Nos. 6, 10 and 11 had been reiterated before us. These defendants were only proforma parties and the High Court was right in holding hat appeal did not abate. We may refer to The State of Punjab vs 171 Nathu Ram; , where it is held "that ordinari ly the considerations which weigh with the Court in deciding upon this question are whether the appeal between the appel lants and the respondents other than the deceased can be said to be properly constituted or can be said to have all the necessary parties for the decision of the controversy before the Court. " The Civil Court had jurisdiction to try the suit for injunction when the question of title arose only incidentally. The objection to jurisdiction of the Civil Court to try the suit on the ground that revenue court had exclusive jurisdiction is not sustainable the suit being one for permanent injunction and the question of title arises only incidentally. We find no merit in the appeal which is accordingly dismissed. No order as to costs. G.N. Appeal dis missed.

The plaintiff respondent claimed that before the U.P. Zamindari Abolition and Land Reforms Act, 1950 came into force, his father was a sub tenant under defendants 3 to 25 and after his father 's death, the other 3 sons separated from the plaintiff and consequently he has become the sole tenant. According to him, his father was recorded occupant of Khasra 1356 Fasli (1.7.1948 to 30.6.1949) and was in cultivatory possession in Khasra 1359 Fasli (1.7.1951 to 30.6.1952) as a result of which he had acquired adhivasi rights and sirdari rights, and the rights of defendants 3 to 25 extinguished under section 240 A of the said Act. He alleged that in 1968, defendants I and 2 obtained fictitious sale deed from defendants Nos. 3 to 25 in respect of the said land and started interfering with his possession. He, therefore, filed a suit for permanent injunction. The suit was contested by some of the defendants who pleaded that neither the plaintiff nor his father was in possession of the said land at any point of time and there was no question of sub tenancy or acquiring of adhivasi/sirdari rights. The trial court dismissed the suit. The appeal preferred by the plaintiff respondent was dismissed by the first appellant court. The trial court as also the first appellate court held that the respondent was not entitled to become an adhivasi under section 20(b)(i) of the Act since his father died in 1951 before the date of vesting i.e. 1.7.1952. Both the courts also held that his father was not in cultivatory possession of Khasra 1359 Fasli and, therefore, he could not get adhivasi rights under section 3 of the U.P. Land Reforms (Supple 165 mentary) Act, 1952. It was also held that there was no contract or sub tenancy in the name of his father. The plaintiff respondent preferred an appeal before the High Court which allowed the appeal and granted a decree reversing the decision of the courts below. Aggrieved, the appellants have flied the present appeal contending inter alia that since there were concurrent findings of facts by the trial court and the first appellate court, and in the absence of any substantial question of law, the High Court had no jurisdiction under section 100 C.P.C. to disturb the concurrent findings of facts. Dismissing the appeal, this Court, HELD: 1. Section 100(1)(c) of the Code of Civil Proce dure refers to a substantial error or defect in the proce dure. The error or defect In the procedure to which the clause refers is not an error or defect in the appreciation of evidence adduced by the parties on the merits. Even if the appreciation of evidence made is patently erroneous and the finding of fact recorded inconsequence is grossly erro neous, that cannot be said to introduce a substantial error or defect in the procedure. If in dealing with a question of fact the lower appellate court has placed the onus on wrong party and its finding of fact is the result substantially of this wrong approach that may be regarded as a defect in procedure. When the first appellate court discarded the evidence as inadmissible and the High Court is satisfied that the evidence was admissible that may introduce an error or defect in procedure. So also in a case where the court below ignored the weight of evidence and allowed the judg ment to be influenced by inconsequent matters, the High Court would be justified in reappreciating the evidence and coming to its own independent decision. [168H; 169A C] Madan Lal vs Gopi, ; relied on. V. Ramachandra Ayyar & Anr. vs Ramalingam Chettiar & Anr., AIR 1963 SC 302 referred to. Section 20(b)(1) of the Act eliminates enquiries into possession in accepting the record in the Khasra. In the instant case the Khasra entry for 1356 Fasli showed that the appellant 's father was the subtenant. It is not for the appellant to prove that this entry Is incorrect. It was for the defendants to show that the entry had been introduced 166 surreptitiously out of ill will of hostility. In the absence of such proof, the genuineness has to be presumed and the entry accepted as evidence of the sub tenancy in favour of the appellant 's father. The Khasra entry of 1371 Fasli and 1372 show the appellant 's name as person in possession. It is clear indication that possession of the sub tenant con tinued with the appellant. The rent receipts of the year 1929 and subsequent years are not required to be proved by the appellant as pointed out by the learned Judge. These furnish evidence of possession as sub tenant. The lower appellate court was not justified in ignoring these docu ments. The High Court was, therefore, well within its power in appreciating the evidence and arriving at its own conclu sion. [170B, E G] Amba Prasad vs Abdul Noor Khan & Ors., ; and Nath Singh & Ors. vs The Board of Revenue & Ors., ; relied on. Though the revenue courts had exclusive jurisdiction, the civil court had jurisdiction to try the suit for injunc tion when the question of title arose only incidentally. [171B] 4. The High Court was right in holding that the appeal did not abate on account of non filing of substitution application after the death of certain defendants. [170H] The State of Punjab vs Nathu Ram, ; relied on.

vil Appeal No. 1 147 of 1975. From the Judgment and Order dated 28.12.1973 of the Andhra Pradesh High Court in W.P. No. 4818 of 1973. With Civil Appeal Nos. 1054 55 of 1976, 1503 and 1546 of 1977 T.S. Krishnamurthy Iyer, C. Sitaramiah, K. Madhava Reddy, Chella Sitaramani, K. Ram Kumar, Mrs. J. Ramachan dran, Mrs. Anjani, TVSN Chari, A.V. Rangam, Jagan Rao and A.V.V. Nair for the appearing parties. 316 The Judgment of the Court was delivered by OZA, J. This appeal arises out of the judgment of the High Court of Andhra Pradesh in Writ Petition No. 48 18 of 1973 wherein the writ petition filed by the Appellant/Peti tioner was dismissed. In the writ petition before the High Court the petition er sought mandamus directing the respondent to pay forthwith to the petitioner compensation for the lands surrendered by her under the Andhra Pradesh Ceiling on Agricultural Hold ings Act 1961. A further direction was sought prohibiting the third respondent from proceeding with the revision under section 19(1) of the Act as amended by Act No. I of 1972 w.e.f. 19.1.72. Necessary facts are that the petitioner 's husband owned extensive lands in Gadwal. After the Act came into force the Revenue Divisional Officer, Gadwal issued a notice under section 3(2) of the Act directing the petitioner 's husband to file a declaration of his holdings. The petitioner 's husband accordingly filed the declaration. Thereafter he died in 1969 leaving behind the petitioner and three minor children. The Revenue Divisional Officer held an enquiry under section 6 of the Act and by his order dated 25.1.71 he held that the petitioner 's husband legal representatives were holding 29.72 family holdings in excess of the ceiling area which they were entitled to hold. A notice was then issued to the petitioner under section 7(2) on 25 ! .71 requiring the petitioner to file a state ment indicating the land which she proposes to surrender. The petitioner thereupon filed a detailed statement of lands she proposes to surrender on 19.3.71. The Revenue Divisional Officer on being satisfied after an enquiry that the lands proposed to be surrendered satisfy the requirements of sec. 7(1) and (2) of the Act passed an order on 31.3.71 under section 7(3) of the Act approving the surrender of 7 13.16 acres (an equivalent of 29.72 family holdings) by the petitioner. Thereafter the petitioner filed an application before the Revenue Divisional Officer for fixation of compensation in respect of lands surrendered by her under section 10 of the Act. The Revenue Divisional Officer fixed the compensa tion of Rs.6,44,265.09 in respect of lands surrenderd by her. 317 The .Revenue Divisional Officer published a notification containing particulars of the lands surrendered by the petitioner and the compensation payable therefor in the Andhra Pradesh Gazette on 7.7.71 according to section 11 of the Act. Instead of paying the compensation as determined, the District Revenue Officer Mahboobnagar issued a notice dated 21.3.72 proposing to revise the orders of the Revenue Divi sional Officer dated 15.4.71 fixing compensation of the lands surrendered by the petitioner. This notice is purport ed to have been issued under section 19 clause 1 of the Act as amended. The petitioner filed an objection contending that the 3rd respondent had no jurisdiction to revise the order fixing compensation which was passed before, as on the day the Divisional Officer issued notice the order sought to be revised had become final. In spite of this the 3rd respond ent has not disposed of the revision proceedings and it because of this writ petition was filed before the High Court. Learned counsel for the appellant contended before us that once under section 7 the land which is in excess of the ceiling limit is determined and a statement of surrender is filed by a holder which is accepted by the Revenue Division al Officer under clause 3 of section 7, the land vests in the State and thereafter the authorities have no jurisdic tion to attempt to revise the compensation or any order which has already been passed under the Act. Whereas on behalf of the State it was contended that clause 3 of section 7 uses the word "deemed to have been surrendered" which clearly indicates that although by an order passed by Revenue Divisional Officer the proposal made by the holder about the surrender of land is accepted and it is finalised but still it is only deemed surrender as even after this land does not vest in the State but it only vests as has been contemplated under section 8 which clearly lays down that the land which is deemed to have been surrendered under section 7 only vests in the State when it is taken over after payment of compensation in accordance with sec tion 8. The High Court accepted the contention of the State and it took the view that unless taking over is completed under sec. 8 the land does not vest in the State and therefore it could not be said that the proceedings under this Act has come to an end and at this stage when the land has yet not vested in the State if the authorities have jurisdiction 318 to revise the compensation it could not be said that the authorities have done something beyond their jurisdiction. The main argument before the High Court and before us on behalf of the appellant is that once under the scheme of the Act an order is passed by the competent authority under section 7 sub clause 3 so far as the holder is concerned he has surrendered the surplus land and what remains under the scheme of section 10 and 11 is only the question of deter mining of compensation and once that is determined there is no option to the authorities but to pay compensation to the person Who has surrendered the holding in accordance with the scheme of section 7 of the Act. It is not in dispute that the proceedings were taken under Andhra Pradesh Ceiling on Agricultural Holdings Act 1961 and after the declaration was filed the ceiling area was determined in accordance with section 6. It is also not in dispute that in accordance with section 7 sub clause 2 a notice was served on the petitioner/appellant for filing a statement indicating the land which she proposes to surren der and it is after the statement was filed by the appellant that an order in accordance with sub clause 3 of section 7 was passed. Section 7 reads: "(1) If the extent of the holding of a person is not more than the ceiling area determined under section 6, he shall be entitled to retain such holding, but if it is more than the ceiling area, he shall be liable to sur render the extent of land in excess of the ceiling area. (2) The Revenue Divisional Officer shall serve on every person who is liable to surrender land in excess of the ceiling area under sub section (1), a notice specifying therein the extent of land which he has to surrender, and requiring him to file a statement in such manner and within such period as may be pre scribed indicating therein the land which he proposes to surrender. (3) If the person, on whom a notice is served under sub section (2), files the statement referred to in that subsection, within the prescribed period and Revenue Divisional Officer is satisfied, after making an inquiry in the prescribed manner, that the proposed surrender of the land is in accordance with the provisions of sub sections (1) and (2), he shall pass an order approving the surrender and the 319 said land shall thereupon be deemed to have been surrendered by such person. (4) If the person, on whom a notice is served under subsection (2), does not file the state ment referred to in that sub section within the prescribed period, or filed such statement within the prescribed period, but does not specify therein the entire extent of land which he has to surrender, the Revenue Divi sional Officer may himself select, in the former case, the entire extent and in the latter case the balance of the extent which such person has to surrender, and pass an order to that effect; and thereupon the said land or the balance of land, as the case may be, shall be deemed to have been surrendered by such person". The scheme of this section indicates that when the extent of holding of a person is determined under section 6 and if while determining it under section 6 it is found that he is holding more than the ceiling area he shall be liable to surrender the extent of the land which is in excess of the ceiling area. Sub clause 2 of this section contemplates that the Revenue Divisional Officer will serve a notice on all such persons who are liable to surrender the land in excess of the ceiling area and this notice will specify the extent of the land which he has to surrender and a direction that the person concerned will file a statement indicating the land which the holder proposes to surrender. Sub clause 3 of the this section contemplates that after the notice under sub clause 2 is served and the person concerned files his statement within the prescribed period, the Revenue Divisional Officer if he is satisfied from the statement filed in response to a notice under clause 2 about the land which the holder proposes to surrender, he shall pass an order approving the surrender of the land. Sub clause 4 contemplates a situation where after a notice is served under clause 2 the holder does not file a statement as contemplates under clause 3. It is, therefore, clear that so far as the surplus land which a holder will surrender is concerned it is finally determined when an order under clause 3 of section 7 is passed by the Revenue Divisional Officer but it is signifi cant that in spite of the finality of these proceedings the legislature uses the phrase "thereupon deemed to have been surrendered by such person". It is significant that instead of using the 320 phrase "have been surrendered" the legislature uses the term "deemed to have been surrendered" and it is clear from these words that something more remains to be done. Section 8 reads as under: (8) "Where any land is deemed to have been surrendered under section 7 by an owner, the Revenue Divisional Officer may, by order, take over such land on payment of compensation under section 10, and such land shall be disposed of in the prescribed manner by as signment to landless poor persons". This provides for vesting 'of the land deemed to have been surrendered by the owner. This terminology used in the heading of the section itself indicates that even after determination of the surplus land which is deemed to have been surrendered ' vesting only takes ' place when something more is done and that is what is provided in this section. This section authorises the Revenue Divisional Officer to take over the land on payment of compensation, compensation which is determined u/s 10 and land which is deemed to have been surrendered u/s 7 and it is only after this taking over under section 8 'that under the scheme of this section the land vests in the State and thereafter it is provided that such land shall be disposed of in the prescribed manner by assignment to landless poor persons. A perusal of the scheme of the section therefore clearly indicates that after an order is passed under sub clause 3 of sec. 7 although the proceedings for surrender of the surplus land and the selection of the land which is sought to be surrendered is complete but still it is not surrender but it is only deemed to have been surrendered which clearly indicates that so far as the holder is concerned he has finally got determined the lands which he will surrender as surplus which in due course will vest in the State for distribution to other landless persons but it is also clear from the language of section 8 and also from the language used in sub clause 3 of section 7 that unless the land which is deemed to have been surrendered is taken over by payment of compensation determined under section 10 it does not vest in the State. The scheme of section 8 therefore indicates that vesting in the State that is taking over by the Revenue Divisional Officer and payment of compensation has to be simultaneous with and an order under section 8. It, there fore, appears that after proceeding for determination of surplus under section 7 is completed, proceedings for deter mination of compensation will start as is provided in sec tion 10 and it is only when compensation is also finally determined that under section 8 321 taking over will take place after the compensation is paid. It is, therefore, clear that after the proceedings have been completed in accordance with section 7 sub clause 3 and even after the compensation has been determined but action under section 8 has not been taken it could not be said that the land vests in the State. The competent authorities can revise the orders passed if an amendment has taken place in between. It is apparent that in spite of proceedings having come to an end under sub clause 3 of section 7 and that the compensation has been determined still the land remains with the holder who is enjoing the benefits out of the land until action under section 8 is completed. Under these circumstances therefore the contention advanced by the appellant that when the proceedings are concluded under subclause 3 of section 7 the surrender is complete and the land vests in the State cannot be accepted as admittedly action under section 8 has not been taken. On the basis of some orders which appear to have been passed under section 10 it was contended that taking over is complete but in these orders only language of section 10 is reproduced. Section 10 reads as under: "Compensation for lands taken over by the Revenue Divisional Officer: (1) The compensa tion payable for any land taken over by the Revenue Divisional Officer under section 8 or section 9 shall be an amount calculated at the rates specified in the Second Schedule. Where there are any structures of a permanent nature or trees on such land the value of such struc tures or trees shall be determined by the Revenue Divisional Officer in the manner pre scribed and paid to the person who is entitled thereto. (2) The compensation payable under sub section (1) shall be paid either in cash or in bonds, or partly in cash and partly in bonds as the Government may deem fit. The bonds shall be issued on such terms and carry such rate of interest as may be prescribed." But admittedly no order could be produced under section 8. It is clear that orders under section 8 can only be passed after compensation as determined under section 10 is paid. 322 Therefore no advantage could be taken from these orders under section 10. It was also alleged on behalf of the State that against these orders under section 10, it were the appellants (some of them) who filed writ petitions in the High court challenging the compensation and thus question of determination of compensation itself remained pending. Consequently, in our opinion, the High Court was right in rejecting the writ petitions filed by the appellants. We therefore see no reason to entertain this appeal. It is therefore dismissed. No order as to costs. For the reasons stated above, Civil Appeal Nos. 1054/76, 1055/ 76, 1503/77 and 1546/77 are allowed. No order as to costs. P.S.S. Appeal dismissed.

Sub clause (2) of section 7 of the Andhra Pradesh Ceiling on Agricultural Holdings Act, 1961 mandates the Revenue Divi sional Officer to serve a notice on every person liable to surrender land in excess of the ceiling area requiring him to file a statement indicating the land which he proposes to surrender. Sub clause (3) requires the Revenue Divisional Officer to pass orders on that statement approving the surrender, and the said land shall thereupon be deemed to have been surrendered. Section 8 provides for the Revenue Divisional Officer to take over such land on payment of compensation under section 10. Section 10 lays down the mode of compensation. In the instant case, proceedings under section 7(3) of the Act in respect of appellant 's land having concluded the Revenue Divisional Officer had made an order under section 10 fixing the compensation. The District Revenue Officer howev er instead of making the payment, issued a notice, purport ing to be under section 19(1), as amended, proposing to revise the said order. The appellant filed a writ petition contending that when the proceedings are concluded under sub clause (3) of section 7 the surrender is complete and the land vests in the State, that what remains under the scheme of section 10 is only the question of determining compensation, and once that is determined the authorities have no jurisdiction to revise the compensation. On behalf of the State it was contended that cl. (3) of section 7 uses the words "deemed to have been surrendered" which indicates that although by an order passed by the Revenue Divisional Officer the proposal about the surrender of land is finalised but still it is only 315 deemed surrender, and that the land only vests in the State when it is taken over after payment of compensation in accordance with section 8. The High Court took the view that unless taking over is completed under section 8 the land does not vest in the State and, therefore, it could not be said that the proceedings under the Act had come to an end and at this stage if the authorities have jurisdiction to revise the compensation it could not be said that the authorities have done something beyond their jurisdiction. Dismissing the appeals, the Court, HELD: The scheme of section 7 of the Andhra Pradesh Ceiling on Agricultural Holdings Act, 1961 indicates that the sur plus land which a holder will surrender is finally deter mined when an order under cl. (3) is passed. However, in spite of the finality of these proceedings the legislature instead of using the phrase "have been surrendered" in the said clause uses the term "deemed to have been surrendered. " It is clear from these words that something more remains to be done, and that is what is provided in section 8 by authorising the Revenue Divisional Officer to take over the land, which is deemed to have been surrendered, on payment of compensa tion determined under section 10. It is only after this taking over that the land vests in the State. [319G; 320A; 320C D] It is, therefore, apparent that orders under section 8 can only be passed after compensation as determined under section 10 is paid, and so far action under section 8 has not been taken it could not be said that the land vests in the State. The competent authorities can revise the orders passed under section 10 if an amendment has taken place in between. [321H; 321B] In the instant case, action under section 8 had not been taken. The High Court was, therefore, right in rejecting the writ petitions. [321H; 322B]

Civil Appeal No. 274 of 1959. Appeal by special leave from the judgment and order dated July 27,1956, of the Madras High Court, in C.R.P. No. 90 of 1955. N. C. Chatterjee, R. Ganapathy Iyer and G. Gopalakrishnan for the appellant. K. N. Rajagopala Sastri, R. Mahalinga Iyer and M. section K. Aiyengar, for respondent No. 1. 1960. November, 28. The Judgment of the Court was delivered by WANCHOO, J. This is an appeal by special leave in an insolvency matter. The brief facts necessary for present purposes are these. S.V.N. Nanappa Naicker and his sons were adjudged insolvents on an application of Smt. Engammal (hereinafter referred to as the respondent). They had preferred an appeal before the High Court of Madras but it was dismissed on April 17, 1953. Thereafter the official receiver took steps to sell the property of the insolvents, which consisted of two lots, the first lot comprising 145 acres 10 cents of dry land and masonry house, and the second lot, 8 acres and odd of dry land. Both these properties were subject to mortgage. The official receiver fixed September 28, 1953, for sale of the properties by auction. Fifteen of the creditors were present when the sale by auction took place, including the son of the respondent. No request was made on that day by anyone for postponing the sale and consequently bids were made. The highest bid for lot 1 was of 692 Rs. 4500/ and the highest bid for lot 2 was of Rs. 70/ . Both these bids were made by the appellant who is a brother in law of Nanappa Naicker. The reason why the two lots were sold for Rs. 4570/ was that there was an encumbrance on the entire property of Rs. 17,200/ . The official receiver did not close the sale on that day in the hope that some higher offers might be made by the creditors and postponed it to various dates upto October 26, 1953. On all these dates, the respondent 's son was present but no higher offer was made on behalf of the respondent. On October 26, 1953, an application was made on behalf of the respondent praying that the sale be postponed for another three months apparently on the ground that there had been drought in that area for some years past and agricultural lands were not fetching good price. The official receiver, however, saw no reason to postpone the sale, particularly when no higher offer was forthcoming from the side of the respondent and decided to knock down the properties in favour of the appellant. Later, an application was made on behalf of the respondent on November 18, 1953 under section 68 of the , No. V of 1920 (hereinafter referred to as the Act). The case of the respondent was that the sale had been made for a very inadequate price and there had been drought in the village for several years in the past and there was very great stringency in the money market and it was hoped that if the sale was postponed for three or four months, the properties would fetch a good price of not less than Rs. 15,000/ , exclusive of the sum due on the encumbrances. The respondent also stated that if the sale was postponed for three months she would be prepared to bid more than Rs. 7500/ for the properties. There were some other allegations in the petition suggesting collusion between the official receiver on the one side and the 693 insolvent and the appellant on the other. The respondent therefore prayed that the official receiver should be ordered not to sell the properties to the appellant at the price bid by him. The application was opposed by the official receiver as well as by the appellant. The official receiver contended that he had done his best and that no higher bid could be obtained. He also denied the allegation made against him in the nature of collusion and also about the manner of conducting the sale. The Subordinate Judge allowed the application on the ground that the price fetched was low and that the general body of creditors to whom debts to the extent of Rs. 30,000/ were payable would be considerably prejudiced if the sale was allowed to stand. Thus the only ground on which the application under section 68 was allowed was that the price fetched was low. Thereupon there was an appeal to the District Judge under section 75 of the Act. The District Judge allowed the appeal. He pointed out that there was nothing to show that there was any irregularity in the conduct of the sale. He also pointed out that there was no reason to hold that the official receiver was in any way in collusion with the insolvent and the appellant. He also pointed out that the respondent 's son was all along present and if he really thought that the price fetched at the auction sale was low he could offer a higher price on behalf of the respondent. Finally, the District Judge held that the Subordinate Judge was not right in his view that the property had been sold for a low price and gave various reasons for coming to that conclusion. The matter was then taken in revision under the proviso to section 75 of the Act, which lays down that "the High Court for the purpose of satisfying itself that an order made in any appeal decided by the District Court was according to law, may call for the case and pass such order with respect thereto as it 694 thinks fit". The High Court however did not consider the question whether the order of the District Judge was according to law. It appears that before the High Court an offer was made by the respondent that she was prepared to deposit Rs. 9,000/ if a fresh auction was held and would start the bid at Rs. 9,000/ and also that she would pay Rs. 1,000/ to the appellant for any loss caused to him. The High Court accepted this offer, though it was of opinion that it could not be said that the price fetched at the auction was unconscionably low; it however held that the price was low considering the extent and nature of the properties, and if Rs. 9,000/ or more could be got for the properties the creditors would receive appreciably more as dividend. It therefore allowed the revision on the terms offered by the respondent. It is this order of the High Court which has been brought before us by special leave and the only question that has been urged on behalf of the appellant is that the High Court had no jurisdiction to interfere with the order of the District Judge unless it came to the conclusion that the order was not according to law. It is contended at the High Court 's order does not show that it applied its mind to the question whether the order of the District Judge was according to law or not and that the High Court seems to have been carried away by the offer made by the respondent to make minimum bid of Rs. 9,000/ for those properties. It is pointed out however that this offer was made three years after the auction and is no indication that the price fetched in the auction in 1953 was inadequate, for prices may have risen during this period of three years. On the other hand, it is contended on behalf of the respondent that the court 's power under section 68 in appeal from an act of the receiver is much wider than the power of the court in dealing with 695 auction sales in execution proceedings and therefore the Subordinate Judge was right in setting aside the act of the receiver in knowing down the properties to the appellant and the High Court was consequently right in setting aside the order of the District Judge and resorting that of the Subordinate Judge. It may be accepted that the power of the court under section 68 in not hedged in by those considerations which apply in cases of auction sales in execution proceedings. Even so, the power under section 68 is a judicial power and must be exercised on well recognised principles, justifying interference with an act of the receiver which he is empowered to do under section 59 (a) of the Act. The fact that the act of the receiver in selling properties under section 59 (a) is subject to the control of the court under section 68 does not mean that the court can arbitrarily set aside a sale decided upon by the official receiver. It is true that the court has to look in insolvency proceedings to the interest in the first place of the general body of creditors; in the second place to the interest of the insolvent, and lastly, where a sale has been decided upon by the official receiver to the interest of the intending purchaser in that order. Even so, the decision of the official receiver in favour of a sale should not be set aside unless there are good grounds for interfering with the discretion exercised by the official receiver. These grounds may be wider than the grounds envisaged in auction sales in execution proceedings. Even so, there must be judicial grounds on which the court will act in setting aside the sale decided upon by the official receiver. These grounds may be, for example, that there was fraud or collusion between the receiver and the insolvent or the intending purchaser; the court may be also interfere if it is of opinion that there were irregularities in the conduct of the sale which might have affected the 696 price fetched at the sale; again, even though there may be no collusion, fraud or irregularity, the price fetched may still be so low as to justify the court to hold that the property should not be sold at that price. These grounds and similar other grounds depending upon particular circumstances of each case may justify a court in interfering with the act of the official receiver in the case of sale by him under section 59 (a) of the Act. The High Court had therefore to see whether the Subordinate Judge 's order was justified on these grounds and whether the District Judge made any mistake in law in reversing that order. If the Subordinate Judge 's order was not justified on these grounds or if the District Judge made no mistake in law in interfering with that order, the High Court cannot interfere in revision under the proviso to section 75, for the High Court 's jurisdiction to interfere arises only if it is of opinion that the District Judge 's order was not according to law. If the High Court comes to that conclusion, it can then pass such order as it may think fit. Let us therefore turn first to the order of the Subordinate Judge and see if it is justified on the ground mentioned above. Now both the Subordinate Judge and the District Judge found that there was no reason to hold that there was any fraud or collusion on the part of the official receiver in this case. Further, the Subordinate Judge did not find that there was any irregularity committed by the official receiver in conducting the sale and the District Judge has definitely found that there was no such irregularity. The only ground on which the Subordinate Judge held that the sale should be set aside was that the price fetched was low. Now if that ground is justified, the Subordinate Judge would have been right in interfering with the sale proposed by the official receiver. That matter has been considered by the District Judge and he has 697 held that there is no reason to hold that the properties were being sold for a low price. The Subordinate Judge in dealing with the question of price has pointed out that the insolvent had valued the properties at Rs. 80,000/ , though he was conscious of the fact that this was properly an exaggeration. He therefore did not hold that the properties were worth Rs. 80,000/ . He came to the conclusion that the properties would be worth at least Rs. 40,000/ and the main reason why he said so was that the properties had been mortgaged for over Rs. 20,000/ in 1936. According to him there seems to be some infallible rule that one must double the mortgaged money in order to arrive at the valuation of the properties mortgaged. The District Judge has pointed out and we think, rightly that there can be no such rule. Therefore, the main basis on which the Subordinate Judge held that the properties were worth Rs. 40,000/ and therefore the bid of the appellant was low, falls to the ground as pointed out by the District Judge. The Subordinate Judge also pointed out that the insolvents were in possession of the properties during the pendency of the insolvency appeal and had been depositing Rs. 2000/ annually on the order of the High Court in order to remain in possession. The Subordinate Judge however did not calculate the value of the properties on the basis that their annual income was Rs. 2,000/ and rightly so because the amount deposited by a litigant on the order of a court in order to retain possession of some property cannot necessarily lead to the inference that was the annual income of the property. It seems therefore that the District Judge was right when he held that there was no evidence on the record which would justify the finding of the Subordinate Judge that the price fetched by the sale in this case was inadequate or unreasonable. We may add that it was open to the respondent to show to the Subordinate Judge by well recognised methods 698 of valuation as to what the value of the properties was. The Subordinate Judge should have then taken into account the total amount of the encumbrance on these properties. The mortgage deed is not on the record and we do not know what interest, if any, the mortgage money carried. Before the Subordinate Judge could come to the conclusion that the price offered by the appellant was low, he had first to find out the price of the properties by some recognised method. He had then to find what was the total amount of encumbrance on the properties. If on finding these things it appeared that the difference between the two was much larger than the price bid by the appellant, the Subordinate Judge would have been justified in interfering with the order of the official receiver, even if there was no question of fraud, collusion or irregularity in the present case. But no such findings have been given by the Subordinate Judge and the District Judge consequently was right when he said that the view of the Subordinate Judge that the price fetched was inadequate and unreasonable is incorrect. Unfortunately, the High Court did not address itself to the question whether the order of the District Judge was according to law or not. It seems to have been impressed by the offer made by the respondent, overlooking the fact that the offer of Rs. 9,000/ as the minimum bid and Rs. 1000/ for the appellant was being made three years after the auction during which, for all that we know, the prices might have risen. Further, the High Court has remarked that the price offered by the appellant was not unconscionably low but it felt that it was still low on a comparison with the offer made by the respondent in 1956. As the High Court did not consider the question whether the order of the District Judge was according to law or not and did not come to the conclusion that order was not according to law, the High Court would have no jurisdiction to interfere with that order. 699 Learned counsel for the respondent urged that even though the High Court may not have considered the matter from this aspect, we should not interfere with the order of the High Court if we are satisfied that in fact the price offered by the appellant was low, in the circumstances prevailing in 1953. We agree that if it was possible for us to come to the conclusion that the price offered by the appellant was low, there would be no reason to interfere with the order of the High Court, even though it might not have considered what was necessary for it to do for interfering under the proviso to section 75; but as are have pointed earlier, there is no sufficient material on the record on which we can say that the price offered by the appellant is low. As we have already pointed out, no attempt was made in the Subordinate Judge 's court to value the properties by any of the well recognised methods by which properties are valued. Further no attempt was made to show the total encumbrance on the property. Unless the valuation was properly made and the encumbrance was found out, it is not possible to say that the offer made by the appellant was low, for that would depend upon the difference between the value of the properties and the amount of encumbrance. In these circumstances, it is not possible for us to say that the order of the District Judge when he held that the Subordinate Judge was not right in holding that the price fetched was inadequate or unreasonable, is not according to law. We therefore allow the appeal, set aside the order of the High Court and restore the order of the District Judge. The appellant will get his costs in this Court from the first respondent. Appeal allowed.

Though a few isolated transactions of purchase of raw mate rials in India by a manufacturer carrying on business outside India may not amount to the carrying on of an " operation " in India within the meaning of section 42 (3) of the Indian Income tax Act, where raw materials are purchased systematically and habitually in India through an established agency having special skill and competency in selecting the goods, such an activity will be an "operation" within a. 42 (3), and the portion of the profits 455 attributable to the purchases in India can be assessed to incometax under section 42(1) and (3) of the Indian Income tax Act. Bangalore Woollen, Cotton & Silk Mills Co. Ltd. vs Commis sioner of Income tax, Madras , Commissioner of Income tax, Bombay vs Ahmedbhai Umarbhai d Co. ([1950] S.C.R. 335), Commissioners of Taxation vs Kirk ([1900] A.C. 588), Rogers Pyatt Shellac Co. vs Secretary of State for India ([1925] I.L.R. and Webb Sons & Co. vs Commissioner of Incometax, East Punjab ([1950] relied on. An isolated transaction between a non resident and a resident in India without any course of dealings such as might fairly be described as a business connection does not attract the application of section 42, but when there is a continuity of business relationship between the person in India who helps to make the profits and the person outside India who receives or realises the profits, such relationship constitutes a business connection.

Appeals Nos. 631 and 632 of 1965. Appeals by special leave from the judgment and order dated January 7, 8, 1963 of the Gujarat High court in Civil Revision Applications Nos. 116, 117, 173 and 174 of 1961. Purshottam Trikamadas and I. N. Shrojj for the appellant (in both the appeals). section section Shukla, for the respondent (in both the appeals). The Judgment of the Court was delivered by Mitter, J. These are two appeals by special leave against the judgment and order dated January 8, 1963 of the Gujarat High Court dismissing Civil Revision Applications 116 and 117 of 1961 filed by the appellant and all owing similar applications Nos. 173 and 174 of 1961 filed by the respondent against the common judgment dated December 1, 1960 passed by the District and Sessions Judge of Panchmahals. The matter arises out of assessments made by the appellant constituted under the Bombay Municipal Boroughs Act, 1925 on the respondent under section 73 of the Act. The respondents are an electricity company owning inter alia properties bearing several numbers in the municipal borough of Godhra. For the years 1956 57 and 1957 58 the appellant had fixed the valuation of the properties belonging to the respondent at Rs. 3,25,000/ . On appeal by the respondent, the Judicial Magistrate fixed the valuation of the properties at Rs. 90,000/ . On the appellant going in revision, the Sessions Judge fixed the valuation at Rs. 1,25,000/ . As a result of the High Court 's decision the valuation stood reduced to Rs. 90,000/ . The present appeals are by the Municipality. Under section 73(1) of the Bombay Municipal Boroughs Act, 1925 (hereinafter referred to as the 'Act ') "Subject to any general or special orders which the State Government may make in this behalf and to the provisions of sections 75 and 76, a municipality may impose for the purposes of this Act any of the following taxes, namely 483 (i) a rate on buildings or lands or both situate within the municipal borough. " The procedure preliminary to imposing tax is laid down in section 75 and section 78 deals with the preparation of an assessment list. Section 58 empowers the municipality to make rules prescribing the taxes to be levied in a municipal brought for municipal purposes etc. Rules 4, 5 and 7 relevant for our purpose read as follows: "4. Modes of valuation: (1) For the purpose of detennining tax the following properties shall be valued on the capital basis : (a) All open lands, buildings and yards belonging to the Railway Administration. (b) All buildings and lands other than those which are actually used for residential purposes belonging to Mills and Factories to which the Indian Factories Act, is applied. (2) All properties other than those mentioned above shall be valued on the basis of the annual letting value as defined in section 3(1) of the Act. Mode of determining capital value: The capital value of properties mentioned in rule 4(1) shall, in each case, be determined on such reliable data as the Railway Authorities and the Agents of the mills and the factories may furnish when called upon from time to time to do so and in the absence of any such trust worthy reliable data, it shall be determined by the Chief Officer or by expert valuers employed by the municipality for that purpose. 6. . . . . 7. Amount of tax : (1) in case of properties which as stated above, are valued on the capital basis the tax to be levied shall be assessed at Rs. 0 8 0 per cent of the capital value and it shall be a direct tax thereon provided however that any fraction of hundred in excess of fifty rupees shall be taken as the next higher hundred and any fraction of fifty rupees or less be taken as the lower hundred. (2) In case of properties which, as stated above, are valued on the annual letting value the tax to be levied shall be assessed as shown in the appendix annexed hereto. " 484 Under rule 4(1) (b) above, the buildings of the respondent had to be valued on the capital basis. Under r. 5 the capital, value of properties had to be determined on such reliable data as the respondent might furnish and in the absence thereof, it would be the duty of the Chief Officer to determine the same. Before the Judicial Magistrate, one R. R. Tewari, an Assistant Secretary of the respondent who had affirmed an affidavit showing that the approximate value of the seven items of property on which tax was sought to be imposed as per the books of the company was Rs. 41,541 12 9. He sought to rely on the balance sheets and accounts of the company audited under the Companies Act for the purpose. The Judicial Magistrate observed that the properties were 40 years old and according to Tewari the life of the office buildings was 50 years while that of others was only 30 years. Acting on the admission of Tewari that the price of building materials had increased three times the original figures in 195657 and taking, into Consideration the properties were over 40 years old, the Magistrate assessed the capital value at Rs. 90,000/ . The Sessions Judge dealt with the matter in greater detail and noted that neither party had given him real assistance in determining what should be the proper assessment. According to him the assessment papers preceding the bills had not been produced and neither party had led any evidence as to how the capital value was to be arrived at. He however felt that the capital value could not mean merely the book value shown in the books of account ,of the assessee. He noted that according to the balance sheet for 1955 56 the property and assets under the head"buildings" was shown as below: Buildings. Cost up to 31st March 1955 Rs. 1,72,866 5 11 Additions during the year 12,398 10 3 Total Rs. 1,85,265 0 2 The said figure included the value of all the buildings of the ,company but those which were to be assessed were only seven ,out of which two residential bungalows and servants quarters ' were to be assessed on the rental value. The Sessions Judge therefore inferred from the above figures that Rs. 1,85,265/ included at least Rs. 1,00,000/ as the cost up to 31st March, 1955 of the factory buildings in question. The Sessions Judge found himself unable to accept the contention that the depreciated selling value of the property was the capital value for the purpose of assessment of house tax. He also did not accept the municipality 's ,contention that the cost of construction of buildings had gone up 485 five times since 1920. Considering the rival contentions he fixed the capital value at three times the figure shown by the company, viz., Rs. 41,541/ and rounded the same off to Rs. 1,25,000/ . Taking the view that it was not open to "a Judge in India to base his judgment as a whole or in part or his conclusion upon either Halsbury 's Laws of England or Bean and Lock wood 's book on Rating Valuation Practice" on the ground that these books were irrelevant under the Indian Evidence Act, the learned Judge of the High Court held that "capital value" in night possibly bear four different meanings but the meaning given to the expression in Halsbury 's Laws of England was "not appropriate in the context of the Indian enactment and the Indian Rules". Referring to the rules made by Godhra Municipality he observed that it could not be said that the municipality had adopted the capital value as one of the methods of ascertaining the rental value or that the municipality had adopted the rental value as one of the methods of ascertaining the capital value. According to the learned Judge, "capital value ' has to be treated as meaning the value of the building treated as capital at the time of the assessment; in other words, the original cost of construction minus the depreciation or at the most the original cost of construction without depreciation. " Accepting the figure of Rs. 41,541 12 ,9 as the cost of construction of the building in 1920 as found by the courts below, he observed that the capital value should be "either Rs. 41,541 12 9 or something less after deducting depreciation." According to him "the assessee has not come in revision against the order of the Magistrate fixing the value at Rs. 90,000/ . Both the courts have erred in considering the probable cost of construction of a new building. " He therefore held that the courts below had committed a material mistake in the exercise of jurisdiction in relying upon the probable cost of constructing a new building of a similar type in order to estimate the capital value as contemplated by Godhra Municipality and accordingly reduced the capital value fixed by the Sessions Judge to Rs. 90,000/ . We find ourselves unable to accept the views expressed or the reasoning given in the judgment of 'the High Court. Section 73 empowered the municipality to impose a rate on buildings or lands. Now the word 'rate ' had not been defined in the Act but it has a well known meaning. As observed in Patel Gordhandas Hargovindas vs Municipal Commissioner, Ahmedabad( ') the word has come to our country for the purpose of local taxation from England. " In that case this Court examined Various statutes bearing on the English Rating Law and held that the word " 'rate ' was (1) [1964] 2 S.C.R.608 at 616. 486 used with respect to a tax which was levied on the net annual value or rateable value of lands and buildings and not on their capital value. It would therefore not be wrong to say that in the legislative history and practice in England up to 1925, 'rate for the purpose of local taxation meant a tax on the annual value of lands and buildings liable to such taxation. " The Court went on to examine the methods in use for the purpose of ascertaining the rateable value which were generally three. It was said : "Where the land or building was actually let, the valuation was based on the rent at which it was let. Where, however, the land or building was not let, two methods were evolved for the purpose of finding out the rateable value. The first was to assume a hypothetical tenancy (such as where the same person is the owner and occupier) and find out the rent at which the premises would be let. The second was based on the capital value of the premises. But the tax was not levied on the capital value itself. ; the capital value was determined on the structural value of the building to be assessed by what was known to be contractors method or contractor 's test in addition to the market value of the land. Sometimes the words "effective capital value" were also used since in most cases the actual capital cost of the building plus the market value of land might for some reason or the other be in effective i.e., it might not be rent producing. Having arrived at the effective capital value it was necessary to apply percentages thereto in order to arrive at the annual value. " When legislatures in this country enact statutes which closely resemble statutes in England and have the same purpose and object in view, then unless the expressions used in the Indian Statutes are defined, courts of law cannot go wrong in interpreting them in the way English Judges have done. Further, the words which have acquired a particular shade of meaning in England may be given the same meaning unless there is anything in the statute itself which would be contra indicative. In Patel Gordhandas 's case( ') the statute which this Court had to interpret was the same Act which is before us in this case. Consequently, that decision affords us a good guide in forming our own conclusions in this case. Section 75 of the Act has an Explanation introduced in 1966 which reads as follows : "Explanation For the purposes of a rate on buildings or lands, the basis of valuation may be (i) the annual letting value; (1) ; 487 (ii) the annual value; (iii) the floor area, in the case of Mills, Factories and buildings and lands connected therewith; (iv) the capital value, in the case of vacant lands. " The Explanation is deemed always to have been substituted for the original by Maharashtra Act 3 of 1966, section 3(b). Rule 4 of Godhra Municipal Rules shows what properties are to be valued on the capital basis. What the capital basis is not defined. The capital value however can be determined in the way laid down in Patel Gordhandas 's case( ') by adopting the contractor 's method. What that method is has been explained in Ryde on Rating (Eleventh Edition) Chapter 20. In R. vs School Board for London( ') Cave, J. applied the contractor 's test to schools. Ryde points out that it was tacitly recognised as applicable in various other cases. The principle on which the contractor 's basis rests are given by the author at page 439 and the method of its application is given at page 442. The learned author notes that in "applying the contractor 's basis it is possible to discern five stages. The first stage is the estimation of the cost of construction of the building. " There is a difference of view as to whether it is better to take the cost of relacing the actual building. as it is, or,the cost of a substitute building on the same plan as the actual building but otherwise in an up to date form. The second stage is "to make deductions from the cost of construction to allow for age, obsolescence and any other factors necessary to arrive at the I effective capital value. "The third stage is to estimate the cost of the land. The fourth stage is to apply the market rate or rates at which money can be borrowed or invested to the effective capital value of the building and the land. The fifth stage is to con sider whether the result of the fourth stage really represents what the hypothetical tenant would pay for the annual tenancy on the statutory terms, and to make any adjustments necessary to ensure that no higher rent is fixed as the basis of assessments than that which it is believed the owner would really be willing to pay for the occupation of the premises. Rule 5 of the Godhra Municipal Rules lays down that the capital value is to be determined in each case on reliable data furnished by the Mills and the Factories when called upon to do so and in the absence thereof is to be determined by the Chief Officer or expert valuer. The learned counsel for the respondent contended that here there were reliable data in that the balance sheet of the company showing the value of these properties for the purpose of the Companies Act and there was no reason why the same figures should not be adopted as the capital value of the lands (1) ; (2) (1885) 55 L.J.M.C. 33; C.A. 488 and buildings within the jurisdiction of Godhra municipality. This clearly is fallacious as under section 211 of the the balance sheet of a company has to be drawn up in the form prescribed by Schedule VI. Under the said Schedule, , the value of fixed assets has to be shown "distinguishing as far as possible between expenditure upon (a) good will, (b) land, (c) buildings, (d) leaseholds, (e) railway sidings, (f) plant and machinery, (g) furniture and fittings '. (h) development of property etc. The fourth column of the form which gives the instructions in accordance with which assets should be made out shows under each head "the original cost and ' the additions thereto and deductions therefrom during the year, and the total depreciation written off or provided up to the end of the year is to be stated. " It will there fore be noticed that the figures given in the balance sheet are merely statements in terms of the form given in Schedule VI. They have no relevance in determining the capital value of property for the purpose of assessment to a rate. It appears to us therefore that the true method of determination of the capital value was not adopted in the courts below. We therefore set aside the judgment and order of the High Court and remand the matter back to the District Judge for him to determine the capital value in the light of the observations made by us after giving an opportunity to the parties to adduce evidence on the subject. The costs will abide by the decision of the District Judge. G.C. Appeal allowed and case remanded.

For the period 1st April 1948 to 25th January 1950, goods (oil) were manufactured produced in the State of Uttar Pradesh by the appellants who were carrying on business in the State in those goods. Part of the goods were sent to their depots outside the State before any contract of sale in respect of them was made, and thereafter, sold to various parties. those outside sales were also assessed to sales tax under the U.P. sales Tax Act, 1948. The matter was taken to the Appellate Authority and thereafter to the Revising Authority constituted under the Act. Though the revision was filed before last April 1954 when the Amending Act of 1954 came into force, it was disposed of in 1957, in favour of the appellants. On the application of the commissioner of Sales Tax two questions of law were referred to the High Court one of which related to the constitutional validity of Explanation II (ii) to section 2(h) of the Act, according to which, the sale of any goods 'which are produced or manufactured in U.P. by the producer or manufacture thereof, shall, wherever the delivery 'or contract of We is made, be deemed for the purposes of this Act to ,have taken place in U.P ' The High Court decided both questions in favour of the Commissioner. In appeal to this Court it was contended that : (1) For attracting tax liability the Explanation requires that the goods should have been manufactured or produced in U.P. after the contract of sale was entered into , (2) the Explanation was ultra vires as being outside legislative competence, because, Wes tax legislation was concerned with tax on the transaction of a completed sale, and a State could not impose sales tax on the basis that one of the component parts of sale constitutes sufficient nexus between the taxing state and the sale; (3) the Revising Authority could not refer to the High Court and the High Court could not decided on such reference, any question regarding the constitutional validity the Explanation; and (4) the Revising Authority could not make a reference to the High Court under section 11, at the instance of the Commissioner, as the Commissioner had no power to apply when the revision was filed before the Authority but was empowered to do so only by the amending Act of 1954 which had no retrospective operation. HELD : (I) For the application of the Explanation and attracting tax liability, it is only necessary that the goods must have been sold by the person who produced or manufactured them, but there is no requirement that he must have manufactured or produced them after the contract of sale and not before. (518 C] (2)To confer jurisdiction upon the 'State Legislature to impose sales tax, 'it is sufficient if there is a proper territorial nexus or connection 512 513 between the taxing authority and the transaction sought to be taxed. and, the fact that goods were manufactured in the State constitutes a real and pertinent nexus. [519 C] The Tata Iron and Steel Co. Ltd. vs State of Bihar, ; and Bharat Siigar Mills vs The State of Bihar, 11 S.T.C. 793, followed (3) The appellants did not challenge the jurisdiction of the High Court to examine the constitutional validity of the Explanation; nor was any such challenge made in the special leave petition to this Court or in the statement of case. On the contrary, the appellants contended in the revision before the Revising Authority that the Explanation was ultra vires. Therefore, having voluntarily submitted to the jurisdiction of the Revising Authority it is not open to the appellants to challenge the. jurisdiction Of the Revising Authority to refer the question of the constitutional validity of the Explanation to the High Court, or of the High Court to decide it. [522 E G] (4) The Commissioner had the power to apply for a reference on the date he applied for a reference, as the amending Act had by then come into force. There is nothing in the language or in the context of section 1 1 to suggest that he could exercise the right only if it existed on the date on which the revision was filed before the Revising Authority. The rule that a statute should be interpreted, as far as possible, so as to respect vested rights has no application because,, the amendment does not affect any vested right of the appellants, but only deals with a procedural matter. [523 E H] Gardner vs Lucas, , 603, applied.

Appeal No. 3 of 1951. , Appeal from the Judgment and Order dated March 11, 1949, of the High Court of Judicature at Madras (Satyanarayana Rao and Viswanatha Sastri JJ.) in Original Side Appeal No. 3 of 1947, &rising out of the Judgment and Order dated November 15, 1946, of Clark J. and made in the exercise of the Ordinary Original Civil Jurisdiction of the High Court in Application No. 599 of 1946. M. C. Setalvad (Attorney General for India) (A. Balasubramanian, with him) for the appellant. N. Baja Gopala Iyengar for the respondent. December 9. The Judgment of Mehr Chand Mahajan, Das and Ghulam Hasan JJ. was delivered by Das J. Vivian Bose J. delivered a separate Judgment. DAS J. This appeal arises out of an application made by the Official Receiver representing Sha Mulchand & Company Ltd. (in liquidation) under section 38 of the Indian Companies Act for rectification of the register of the Jawahar Mills Ltd. Sha Mulchand & Company Ltd. (hereinafter referred to as " the Company") was incorporated in 354 1937 as a private limited company. At all material times it consisted of two members,. T. V. T. Govindaraju Chettiar and K. N. Sundara Ayyar. The Jawahar Mills Ltd. (hereinafter called " the Mills") was also incorporated in 1937 with an authorised capital of Rs. 10,00,000 divided into one lac shares of Rs. 10 each. The Company was the managing agent of the Mills from its inception and applied for and was allotted 5,000 ten rupee shares Nos. 1.5048 to 20047 on which Rs. 5 per share had been paid. The Company continued to act as the managing agent of the Mills till the 30th June, 1939, on which date it resigned the managing agency. Prior to the Company 's resignation the two members of the Company had entered into an agreement with one M. A. Palaniappa Chettiar, a partner of the incoming managing agency firm, up on certain terms which need not be referred to in greater detail. Within two months after the change of managing agents, the Mills made two calls, namely, one on the 22nd August, 1939, for Rs. 2 per share payable on the 1st October, 1939, and the other on the 1st October, 1939, for Rs. 3 payable, on the 1st December, 1939. The Company did not pay either of the calls. On the 23rd January, 1940, Govindaraju Chettiar was adjudged insolvent on the application of Sundara Ayyar. This insolvency of Govindaraju Chettiar was eventually annulled in 1944. During this period Govindaraju Chettiar, in law ', ceased to be a director of the Company, although it is alleged that he nevertheless continued to take part in the management of the Company. By a resolution of the Board of Directors of the Mills passed on the 12th August, 1940, the new managing agents were empowered to give notices to such persons as had not paid the allotment money and the call money within the date fixed and to intimate them that in default their shares would be ' forfeited. A notice was issued on the 16th September, 1940, and two copies thereof are said to have been sent to Sundara Ayyar and Govindaraju Chettiar. 355 No payment having been made, the 5,000 shares held by the Company were forfeited by a resolution of the Board of Directors of the Mills. The auditor of the Mills having pointed out that the purported forfeiture was irregular and illegal, this forfeiture was cancelled. By a resolution passed by circulation on the 26th February, 1941, the Board of Directors of the Mills resolved that a notice be sent to the Company informing it that it was in arrears with calls to the extent of Rs. 25,000, that the amount must be paid on or before the 31st March, 1941, and that, in default, its shares would be forfeited. A notice dated the 15th March, 1941, was accordingly addressed to the Company and sent by registered post with acknow ledgment due. It appears that the notice was actually posted on the 17th March, 1941, and was received by Govindaraju Chettiar on the 20th March, 1941. The Company did not pay the arrears of calls. On the 5th September, 1941, the Board of Directors of the Mills resolved that " the 5,000 shares Nos. 15048 20047 standing in the name of the Company have been forfeited. " On the 10th September, 1941, the Mills wrote a letter to the Company informing the latter that the Directors of the Mills bad at their meeting held on the 5th September, 1941, forfeited the 5,000 shares. There is no dispute that this letter which was sent by registered post was returned undelivered. On the 1st October, 1941, an entry was made in the share ledger of the Mills recording that the 5,000 shares of the Company had been forfeited. On the 16th November, 1941, these 5,000 shares were reallotted to 14 different persons and on the 17th November, 1941, a letter was sent to the Company intimating that the forfeited shares had been reallotted and calling upon the Company to send back to the Mills all the documents relating to the original allotment of the 5,000 shares to the Company. In the meantime on the 26th August, 1941, by an order made by the Registrar of Joint Stock Companies the Company was struck off the register of companies under section 247 356 of the Indian Companies Act. This order of 'the Registrar was published in the Official Gazette on the 9th September, 1941, i.e., four days after the shares were forfeited and one day before the notice intimating the fact of forfeiture was sent in a registered cover which was, however, returned undelivered. Under section 247 (5) of the Indian Companies Act the Company stood dissolved on and from the date of such publication. The Mills having come to know of the dissolution of the Company applied to the High Court (O.P. No. 10 of 1942) praying that the name of the Company be restored to the register of companies and that after such restoration was duly advertised the Company be wound up by the Court. A similar application was made on the 11th December, 1941, by the Income tax authorities (O.P. No. 11 of 1942). On the 23rd February, 1942, Sundara Ayyar filed an affidavit contending, amongst other things that the Directors of the Mills had no power to forfeit the shares. On the 2nd April, 1942, however, O.P. No. 10 of 1942 was compromised, and the Mills received Rs. 11,000 from Sundara Ayyar in full satisfaction of their claim against the Company. On the 25th June, 1942, O.P. No. 11 of 1942 was also compromised and Sundara Ayyar paid up the claim of the Income tax authorities. The two petitions for restoration of the Company were accordingly dropped. On the 27th June, 1942, Sundara Ayyar filed a suit against the Mills and others including Palaniappa Chettiar claiming a declaration that the forfeiture by the Mills of the 5,000 shares was illegal and inoperative and directing the Mills to pay to the plaintiff and the third defendant representing the estate of Govindaraju Chettiar the value of the forfeited shares with dividend or interest thereon and directing Palaniappa Chettiar to pay the plaintiff and the third defendant the sum of Rs. 25,000. This suit was dis missed on the 17th November, 1943, on the ground that Sundara Ayyar, who was only a member of the dissolved Company, had no locus standi and could 357 have no relief personally. Sundara Ayyar filed an appeal therefrom which was dismissed as against the Mills but the case was remanded to the trial Court for the trial of his claim as against the fourth defendant, Palaniappa Chettiar. During the pendency of Sundara Ayyar 's appeal he on the 12th August, 1944, filed O.P. No. 199 of 1944 for the restoration of the Company. On that application an order was made on the 16th February, 1945, that the name of the Company be restored to the register of companies, that the Company be deemed to have continued in existence as if its name had never been struck off, that such restoration be advertised and that the Company be wound up by the Court and the Official Receiver do forthwith take charge of the assets and liabilities of the Company. It was further ordered that the Official Receiver do recognise that as between the Mills and the Company, the Mills should be regarded as having been duly paid only Rs. 11,000 out of the total debt of Rs. 25,550 due ' to the Mills. By an order made on the 21st January, 1946, leave was given to the Official Receiver to take appropriate steps regarding the 5,000 shares purported to have been forfeited by the Mills. Accordingly on the 5th March, 1946, the Official Receiver, in the name of the Company, took out the present summons calling upon all parties concerned to show cause why the share register of the Mills should not be rectified by restoring the name of the Company to the said register in respect of 5,000 shares numbering 15048 20047 and why such other alternative or consequential relief should not be granted to the applicant as might be just and necessary in the circumstances of the case. The Mills contended, in opposition to that application, that the shares had been properly forfeited, that the Company was, on the principles of estoppel, acquiescence and laches, precluded from challenging the forfeiture, that the application was barred by limitation and that the shares having already been allotted to other persons, who had not been made 358 parties to the application, order for rectification of the register in respect of those shares could be made. The summons came up for hearing before Mr. Justice Clark. The learned Judge, by his judgment dated the 15th November, 1946, held that the notice dated the 15th March, 1941, which was posted on the 17th March, 1941, and delivered on the 20th March 1941, and on which the resolution of forfeiture passed on the 5th September, 1941, was founded, was not in conformity with the provisions of articles 29 and 30 of the articles of association of the Company which required 14 clear days ' notice. The learned judge further held that the plea of estoppel, acquiescence and laches was untenable, that article 49 of the Limitation Act did not apply either expressly or by way of analogy to the present application and that article 120, which prescribed a period of six years from the date when the right to sue accrued, would, by analogy, apply to the present proceedings and that so applied the present proceedings must be held to be within time. Having disposed of the controversy on the above points it remained to consider the form of the order which could properly be made on the application. It is quite clear that the specific shares having already been allotted to 14 different persons and those persons not being then before the Court, the Court could not then and there direct rectification of the register by restoring the name of the Company to the share register of the Mills in respect of those identical shares. There was nevertheless nothing to prevent the Court even at that stage to give notice of the application to the persons to whom the shares had been reallotted and/or those who were holding the shares at the time and after thus adding them as parties thereto to make the appropriate order of rectification and, if thought fit, to also award damages to the Company. There were, however, 16,000 shares of Rs. 10 each yet unissued. After discussing the matter with learned advocates on both sides to which, discussion a reference will be made hereafter the 359 learned Judge, in the belief that the advocates for the parties had agreed as to the form of the order, directed that the Mills do rectify their register by inserting the name of the applicant Company as owner of 5,000 shares out of the unissued shares of Rs. 10 each and that on such insertion the Company do on or before the 15th January, 1947, pay to the Mills Rs. 25,000, being the amount of calls in arrears. Pursuant to further directions given by the learned Judge on the 7th January, 1947, the Mills on the 10th January, 1947, received Rs. 25,000 and allotted 5,000 shares. Although the Mills thus acted upon the order they, nevertheless, on the 6th February, 1947, filed an appeal against the order. That appeal came up for hearing before a Bench consisting of Satyanarayana Rao and Viswanatha Sastri JJ. It was not disputed before the appeal Court that the forfeiture was invalid, but the contentions urged were that by reason of the irregularity the forfeiture was only voidable and not void and that as the forfeiture was only voidable it was open to the Company to waive or abandon its right to dispute the validity of the forfeiture and that in fact, by its conduct, it had done so, that the claim to rectify the register was barred by limitation and that in any event rectification was impossible because the shares were not available in specie, the same having been reallotted to other persons. The learned Judges by their judgment dated the 11th March 1949, held that the forfeiture was invalid, that the application was not barred by limitation for it was covered by article 120 of the Limitation Act. The learned Judges recognised that where a period of limitation was prescribed for a suit or a proceeding mere delay was no bar unless it was of such a character as would lead to an inference of abandonment of the right or unless it: was established that the person against whom the action or proceeding was instituted was actually prejudiced by reason of such delay. The learned Judges agreed with the 47 360 trial Court that no plea of acquiescence, waiver or estoppel had been established in the present case. The learned Judges, nevertheless, thought that the question of abandonment of the right and prejudice to the appellant by reason of the delay stood on a different footing. Then after referring to certain conduct on the part of Govindaraju Chettiar and Sundara Ayyar the learned Judges concluded that by reason of the long delay in reviving the Company and in taking proceedings under section 38 of the Indian Companies Act the Mills had been induced to put themselves in a situation in which it became impossible for them to restore the Company to the register in respect of those 5,000 shares and that in view of this conduct, if the applicants were Govindaraju Chettiar and Sundara Ayyar, it would have been a case in which relief would have been refused in the light of the principles which the learned Judges deduced from the judicial decisions referred to by them. Then referring to the decision in Smith, Stone & Knight vs Birmingham Corporation (1) and certain text books the learned Judges took the view that it was too late in the day to adhere to the strict formalism laid down in Salomon 's case (2) and that as the tendency of modern decisions was to lift the veil of corporate personality and disregard the corporate form, the conduct of its only two members had disentitled the company from claiming the relief of rectification. The learned Judges further held that there was no legal basis on which the form of the order could be supported. On reading the judgment of the trial Judge and after hearing the senior advocate appearing for the Mills the learned Judges felt unable to agree that the learned advocate had agreed to the substitution of, the 6,000 out of the unissued shares for the 5,000 forfeited shares. The resilt was that the appeal was allowed and the order of the trial Judge was set aside. The Company by its Official Receiver has now come up before this Court with leave granted by the High Court (1) (2) ; 361 under sections 109 and 110 of the Code of Civil Procedure. The appeal Court, it will be observed, reversed the decision of the trial Judge and decided the appeal against the Company on two grounds only, namely, (1) that the Company had by the conduct of its two members abandoned its right to challenge the forfeiture, and (2) that the form of the order could not be supported as one validly made under section 38 of the Indian Companies Act. The learned AttorneyGeneral, appearing in support of this appeal, has assailed the soundness of both these grounds. The learned Attorney General contends, not without considerable force, that having, in agreement with the trial Coury, held that no plea of acquiescence, waiver or estoppel had been established in this case, the appeal Court should not have allowed the Mills to raise the question of abandonment of right by the Company, inasmuch as no such plea of abandon ment had been raised either in the Mills ' affidavit in opposition to the Company 's application or in the Mills grounds of appeal before the High Court. Apart from this, the appeal Court permitted the Mills to make out a plea of abandonment of right by the Company ,as distinct from the pleas of waiver, acquiescence and estoppel and sought to derive support for this new plea from the well known cases of Prendergast vs Turton(1), Clark & Chapman vs Hart(2) and Jones vs North Vancouver Land and Improvement, Co.(3). A perusal of the relevant facts set out in the several reports and the respective judgments in the above cases will clearly indicate that apart from the fact that some of them related to collieries which were treated on a special footing, those cases were really cases relating to waiver or acquiescence or estoppel. Indeed in Clarke 's case (2) while Lord Chelms ford referred to the decision in Prendergast 's case(1) as a case of abandonment of right, Lord Wensleydale read it as an instance of acquiescence and estoppel. Unilateral act or conduct of a person, (1) ; (3) [1910] A.C. 317. (2) 6 H.L.C. 632; 10 E.R. I443. 362 that is to sky act or conduct of one person which is not relied upon by another person to his detriment, is nothing more than mere waiver, acquiescence or laches, while act or conduct of a person amounting to an abandonment of his right and inducing another person to change his position to his detriment certainly raises the bar of estoppel. Therefore, it is not intelligible how, having held that no plea of waiver, acquiescence or estoppel had been established in this case, the appeal Court could, nevertheless, proceed to give relief to the Mills on the plea of abandonment by the Company of its rights. If the facts on record were not sufficient to sustain the plea of waiver, acquiescence or estoppel, as hold by both the Courts, we are unable to see how a plea of abandonment of right which is an,aggravated, form of waiver, acquiescence or laches and akin to estoppel could be sustained on the self same facts. Further, whatever be the effect of mere waiver, acquiescence or laches on the part of a person on his claim to equitable remedy to enforce his rights under an executory contract, it is quite clear, on the authorities, that mere waiver, acquiescence or laches which does not amount to an abandon ment of his right or to an estoppel against him cannot disentitle that person from claiming relief in equity in respect of his executed and not merely executory interest. See per Lord Chelmsford in Clarke 's case (1) at page 657. Indeed, it has been held in The Garden Gully United Quartz Mining Company vs Hugh McLister(2) that mere laches does not disentitle the holder of shares to equitable relief against an invalid declaration of forfeiture. Sir BarnesPeacook in delivering the judgment of the Privy Council observed at pages 56 67 as follows: There is no evidence sufficient to induce their Lordships to hold that the conduct of the plaintiff did amount to an abandonment of his shares, or of his interest therein, or estop him from averring that he continued to be the proprietor of them. There certainly is no evidence to justify such a conclusion (1) ; 6 H.L.C. 632: (2) L. R.1 App. 39. 363 with regard to his conduct subsequent to the advertisement of the 30th of May, 1869. In this case, as 'In that of Prendergast vs Turton(1), the plaintiff 's interest was executed. In other words, he had a legal interest in his shares and did not require a declaration of trust or the assistance of a Court of Equity to create in him an interest in them. Mere laches would not, therefore, disentitle him to equitable relief:, Clarke and Chapman vs Hart(2). It was upon the ground of abandonment, and not upon that of mare laches, that Prendergast vs Turton(1) was decided. " Two things are thus clear, namely, (1) that abandonment of right is much more than mere waiver, acquiescence or laches and is something akin to estoppel if not estoppel itself, and (2) that mere waiver, acquiescence or laches which is short of abandonment of right or estoppel does not disentitle the holder of shares who has a vested interest in the shares from challenging the validity of the purported forfeiture of those shares. In view of the decision of the Courts below that no case of waiver, acquiescence, laches or estoppel has been established in this case it is impossible to hold that the principles deducible from the judicial decisions relied upon by the appeal Court have disentitled the Company to relief in this case. The matter does not rest even here. Assuming. , but not conceding, that the principle of piercing the veil of corporate personality referred to in Smith, Stone & Knight vs The Birmingham Corporation (3) can at all be applied to the facts of the present case so as to enable the Court to impute the acts or conduct of Govindaraju Chettiar and Sundara Ayyar to the Company, we have yet to inquire whether those acts or conduct do establish such abandonment of rights as would, according to the decisions, disentitle the plaintiff from questioning the validity of the purported declaration of forfeiture. There can be 'no question that the abandonment, if any, must be inferred from acts or conduct of the Company as such ' or, on the above principles, of its two members subsequent to (1) ; (3) (2) 6 H.L.C. 632: 10 E.R. I443. 364 the date of the forfeiture, for it is the right to challenge the forfeiture that is said to have been abandoned. 'In order to give rise to an estoppel against the Company, such acts or conduct amounting to abandonment must be anterior to the Mills ' changing its position to its detriment. The resolution for forfeiture was passed on the 6th September, 1941. The five thousand forfeited shares were allotted to 14 persons on the 16th November, 1941, and it is such ,allotment that made it impossible for the Mill& to give them back to the Company. In order, therefore, to sustain a plea of abandonment of right or estoppel, it must be shown that the Company or either of its two members had done some act and/or had been guilty of some conduct between the 6th September, 1941, and the 16th November, 1941. No such act or conduct during such period has been or can be pointed out. On being pressed advocate for the Mills refers us to the conduct of Sundara Ayyar in opposing O.P. No. 10 'of 1942 filed by the Mills and O.P. No. 11 of 1942 by the Income tax authorities for restoring the Company to the register of companies and it is submitted that such conduct indicates that Sundara Ayyar had accepted the validity of the forfeiture. This was long after the Mills had reallotted the forfeited shares. Further, a perusal of paragraph 9 of the affidavit in opposition filed by Sundara Ayyar in O.P. No. 10 of 1942 will clearly show that he not only did not accept the forfeiture as valid but actually repudiated such forfeiture as wholly beyond the competence of the Board of Directors of the Mills. The reason for opposing the restoration of the Company may well have been that Sundara Ayyar desired, at all cost, to avoid his eventual personal liability as a shareholder and director of the Company. In any case, Sundara Ayyar did make it clear that he challenged the validity of the purported forfeiture of shares by the Mills and in this respect this case falls clearly within the decision in Clarke 's case (1) relied upon by the appeal Court. The only other conduct of Sundara Ayyar relied on by learned advocate for the Mills in (1) ; 6 H.L.C. 632; 365 support of the appeal Court 's decision on this point is that Sundara Ayyar proceeded with his suit against Palaniappa Chettiar even after his suit as well as his appeal had been dismissed as against the Mills. In that suit Sundara. Ayyar sued the Mills as well as Govindaraju Chettiar and the Official Receiver of Salem representing the latter 's estate and Palaniappa Chettiar. In the plaint itself the validity of the forfeiture was challenged. The claim against Palani appa Chettiar was in the alternative and it was founded on the agreement of the 30th June, 1939. The suit was dismissed as against the Mills only on the technical ground that Sundara Ayyar had no locus standi to maintain the suit. The contention of the Company that the forfeiture was invalid and the claim for rectification of the share register of the Mills by restoring the name of the Company cannot possibly have been affected by this decision. Sundara Ayyar 's claim against Palaniappa Chettiar was based on the agreement of 1939 and it was formulated as an alternative personal claim. In view of the clear allegation in the plaint that the forfeiture was invalid and not binding on the Company, the continuation of the suit by Sundara Ayyar to enforce his personal claim against Palaniappa Chettiar cannot be regarded as an abandonment by Sundara Ayyar of the right of the Company. It must not be overlooked that the Company stood dissolved on that date and Sundara Ayyar had no authority to do anything on behalf of the Company. In our opinion there is no evidence of abandonment of the Company 's right to challenge the validity of the purported forfeiture. The second point on which the appeal Court decided the appeal against the Company was that the form of the order made by the trial Court could not be supported as one validly made under section 38 of the Indian Companies Act. It will be recalled that having disposed of all the points of controversy against the Mills and in favour of the Company the trial Judge had to consider the ' form of the order Which could properly be made in favour of the 366 Company. In the summons the Company had asked for rectification of the register by restoring the name of the Company to the register in respect of 5,000 shares numbering 15048 to 20047. It was agreed by learned advocates on both sides before the trial Court that it would, in the circumstances, be impossible to make an order for rectification with respect to those specific shares which, as already stated, had been reallotted to other persons who were not parties to the proceedings. The Mills had also reduced its capital by having the face value of the 84,000 shares which had been issued reduced by repaying to the shareholders Rs. 5 in respect of each of those shares. There were, however, 16,000 unissued shares of Rs. 10 each which were not affected by the reduction. While, therefore, it was clearly impossible for the Court to direct that the Company should be replaced on the register in respect of its original shares, the Court could, under section 38, give notice to the persons to whom the shares had been reallotted or those claiming under them and make them parties to the proceedings and then make an appropriate order for ' rectification and, if necessary, also direct the Mills to pay damages under that section. This being the situation learned advocate for the Mills had to decide upon his course of action. What happened in Court will appear from the following extract from the judgment of the trial Court: " It is agreed by both parties that the proper order will be for the applicant Company to be placed on the register in respect of 5,000 of the unissued rupees 10 shares and I order accordingly. In this case as the parties consent to the matter being disposed of, by allotting to the applicant unissued shares, there can, it seems to me, be no order for payment of the dividends. Counsel for the respondent Company leaves the solution of this difficulty to me. . . . . The suggestion of the applicant Company is that it is prepared to forego any claim to the accrued dividends if it is not required to pay interest on the outstanding call money. This seems to me to be a very 367 reasonable suggestion. . . I direct accordingly that on insertion of the name of the applicant Company as owner of 6,000of the unissued shares the applicant Company shall pay to the respondent company only Rs. 25,000 being the amount of calls in arrears. " The appeal Court, however, went behind this record of the proceedings that took place before the trial Court and heard the learned senior advocate as to what had happened in Court and after hearing the senior advocate for the Mills found itself unable to agree with the contention that the learned advocate for the Mills had agreed to the substitution of 5,000 unissued shares for the shares forfeited. No affidavit of the learned senior advocate was filed before the trial Court for the rectification of what is 'low alleged to have been wrongly recorded by the trial Judge, as suggested by the Privy Council in Madhu Sudan Chowdhri vs Musammat Chandrabati Chowdhrain (1) and other cases referred to in Timmalapalli Virabhadra Rao vs Sokalchand Chunilal & Others (2). While we do not consider it necessary or desirable to lay down any hard and fast rule, we certainly take the view that the course suggested by the Privy Council should ordinarily be taken. It. appears that at the time when the application was made for leave to appeal to the Federal Court an affidavit sworn by G. Vasantha Pai, the junior advocate for the Mills, was filed before the Court dealing with that application. Paragraph 5 of that affidavit runs as follows: "During the trial every question was argued on behalf of the respondent company and no point was given up. This will be clear from the fact that till we reached the penultimate paragraph of the judgment beginning 'It now remains to consider, etc. ' all the issues are dealt with by the learned Judge. The agreement was on the specific form of the order on the basis of his Lordship 's judgment and without prejudice to the respondent company 's rights. What (1) (2) 48 368 was agreed to was "Proper order" on the basis of his Lordship 's judgment which by then had been dictated. The respondent company no more consented to the order that the appellant consented to have his application dismissed when its counsel agreed that it was impossible to make an order in terms of the Judge 's summons. " The appeal Court understood the stand taken by the learned senior advocate as follows: " He seems to have &greed only as an alternative that if all his contentions were overruled and the learned Judge thought that notwithstanding the difficulty in the way of granting the relief for rectification the applicant company should be restored to the register, the only shares available being the 16,000 shares of Rs. 10 each unissued, the applicant company could be recognised as a shareholder in respect of 5,000 out of those shares. . . ." It is quite clear from the judgment of the trial Court, paragraph 5 of the junior advocate 's affidavit and the statement of the learned senior advocate as recorded by the appeal Court that the agreement was solely and simply as to the specific form of the order, without prejudice to the Mills ' right to challenge the correctness of the findings of the trial Court on the material issues. In other words, all that learned advocate for the Mills desired to guard himself against was that the agreement should not preclude the Mills from preferring an appeal against the decision of the learned Judge on the merits. The reservation was as to the right of appeal challenging the findings on the merits and the agreement was only as to the form of the order. This limited agreement certainly implied that the Mills agreed to be bound by the order only if the Mills failed in their appeal on the merits ' In short, the consent covered only the form of the order and nothing else so that if the Mills succeeded in their appeal the order would go, although advocate has agreed to its form but that if the Mills failed in their contention as to the correctness of the findings of the learned trial Court on the 369 different questions on merits it would no longer be open to them to challenge the order only on the ground of the form of the order. In our judgment the Mills cannot attack the form of the order to which their counsel consented. Learned advocate for the Mills has raised the question of limitation. He referred us to articles 48 and 49 of the Limitation Act but did not strongly press his objection founded on those articles. We agree with the trial Court and the Court of appeal that those two articles have no application to this case. A claim for the rectification of the register simpliciter does not necessarily involve a claim for the return of the share scrips and in this case there was, in fact, no prayer for the return of shares or the scrips and, therefore, these two articles can have no application. Learned advocate, however, strongly relies on article 181 of the Limitation Act. That article has, in a long series of decisions of most, if not all, of the High Courts, been held to govern only applications under the Code of Civil Procedure. It may be that there may be divergence of opinion even within the same High Court but the preponderating view undoubtedly is that the article applies only to applications under the Code. The following extract from the judgment of the Judicial Committee in Hansraj Gupta vs Official Liquidators, Dehra Dun Mussoorie Electric Tramway Company Limited (1) is apposite: " It is common ground that the only article in that schedule which could apply to such an application is article 181 : but a series of authorities commencing with Rai Manekbai vs Manekji Kavasji (2) have taken 'the view that article 181 only relates to applications under the Code of Civil Procedure, in which case no period of limitation has been prescribed for the application. But even if article 181 does apply to it, the period of limitation prescribed by that article is three years from the time when the right to apply accrued, which time would be not earlier than the (1) (1933) 60 I.A. 13 at p. 20. (2) 370 date of the winding up order, March 26, 1926. The application of the liquidators was made on March 26, 1928, well within the three years. The result is that from either point of view the application by the liquidators, if otherwise properly made under and within the provisions of section 186 of the Indian Companies Act, is not one which must be dismissed by reason of section 3 of the Indian Limitation Act. It is either an application made within time, or it is an application made for which no period of limitation is prescribed. The case may be a casus omissus. If it be so, then it is for others than their Lordships to remedy the defect. " Learned advocate for the Mills, however, points out that the reason for holding that article 181 was confined to applications under the Code was that the article should be construed ejusdem generis and that, as all the articles in the third division of the schedule to the Limitation Act related to applications under the Code, article 181, which Was the residuary article, must be limited to applications under the Code. That reasoning, it is pointed out, is no longer applicable because of the amendment of the Limitation Act by the introduction of the present articles 158 and 178. These articles are in the third division which governs applications but they do not relate to applications under the Code but to one under the Arbitration Act and, therefore, the old reasoning can no longer hold good. It is urged that it was precisely in view of this altered circumstance that in Asmatali Sharif vs Mujahar Ali Sardar(1) a Special Bench of the Calcutta High Court expressed the opinion that an application for pre emption by a non notified co sharer should be governed by article 181 of the Limitation Act. A perusal of that case, however, will show that the Special Bench did not finally decide that question in that case. In Hurdutrai Jagadish Prasad vs Official Assignee of Calcutta(2) a Division Bench of the Calcutta High Court consisting of Chief Justice Harries and Mr. Justice Mukherjea who had delivered (1) (2) 371 the judgment of the Special Bench clearly expressed the view that article 181 of, the Limitation Act applied only to applications under the Civil Procedure Code and did not apply to an application under section 56 of the Presidency Towns Insolvency Act Mukherjea J. who also delivered the judgment of the Division Bench explained the observations made by him in the Special Bench case by pointing out that the entire procedure for an application under section 26 (F) of the Bengal Tenancy Act was regulated by the Civil Procedure Code and, therefore, an application for pre emption was, as it were, an application made under the Civil Procedure Code. Subsequently in Sarvamangala Dasi vs Paritosh Kumar Das(1) G.N. Das J. who was also a member of the Special Bench in the first ' mentioned case expressed the opinion, while sitting singly, that article 181 was not confined to applications under the Code. His Lordship 's attention does not appear to have been drawn to the case of Hurdutrai Tagadish Prasad(2). It does not appear to us quite convincing, without further argument, that the mere amendment of articles 158 and 178 can ipso facto alter the meaning which, as a result of a long series of judicial decisions of the different High Courts in India, came to be attached to the language used in article 181. This long catena of decisions may well be said to have, as it were, added the words " under the Code " in the first column of that article. If those words had actually been used in that column then a subsequent amendment of articles 158 and 178 certainly would not have affected the meaning of that article. If, however, as a result of judicial construction, those words have come to be read into the first column as if those words actually occurred therein. we are not of opinion, as at present advised, that the subsequent amendment of articles 158 and 178 must necessarily and automatically have the effect of altering the long acquired meaning of article 181 on the sole and simple ground that after the amendment the reason on which the old construction was founded is no longer available. We need (1) A.I.R. 1952 Cal. 689. (2) 372 not, however, on this occasion, pursue the matter further, for we are of the,opinion that even if article 181 does apply to the present application it may still be said to be within time. The period of limitation prescribed by that article is three years from the time when the right to apply accrues. " It is true that a further notice after the shares are forfeited, is not necessary to complete the forfeiture of the shares See Knight 's case(1)], but it is difficult to see how a person whose share is forfeited and whose name is struck out from the register can apply for rectification of the register until he comes to know of the forfeiture. The same terminus a quo is also prescribed in Article 120 of the Limitation Act. In O.R.M.O. M.SP. (Firm) vs Nagappa Chettiar(2) which was a suit to recover trust property from a person who had taken it, with notice of the trust, by a transaction which was a breach of trust, the Privy Council approved and applied the principles of the earlier Indian decisions referred to therein to the case before them and held that the time began to run under article 120 after the plaintiff came to know of the transaction which gave him the right to sue. On the same reasoning we are prepared to extend that principle to the present application under article 181. If article 181 applies then time began to run after the Company came to know of its right to sue. It is not alleged that the Company had any knowledge of the forfeiture between the 5th September, 1941, when the resolution of forfeiture was passed and the 9th September, 1941, when the Company became defunct. After the last mentioned date and up to the 16th February, 1945, the Company stood dissolved and no knowledge or notice can be imputed to the Company during this period. Therefore, the Company must be deemed to have come to know of its cause of action after it came to life again and the present application was certainly made well within three years after that event happened on the 16th February, 1945. If article 181 does not apply then the only article that can (1) (2) I.L.R. 373 apply by analogy is article 120 and the application is also within time. In either view this application cannot be thrown out as barred by limitation. The result, therefore, is that this appeal must succeed. We set aside the judgment and decree of the High Court in appeal and restore the order of the trial Court. The appellant will be entitled to the costs of the appeal in the High Court as well as in this Court. BOSE J. I agree with the conclusions of my learned brothers and also with their reasoning generally but lest it be inferred that I am assenting to a far wider proposition than is actually the case, I deem it advisable to clarify my position about abandonment and waiver. Though the usage of these words in cases of the present kind has the sanction of high authority, they are, in my opinion, inapt and mislead ing in this class of case. In order to appreciate this it will be necessary to hark back to first principles. In the first place, waiver and abandonment are in their primary context unilateral acts. Waiver is the intentional relinquishment of a right or privilege. Abandonment is the voluntary giving up of one 's rights and privileges or interest in property with the intention of never claiming them again. But except where statutory or other limitations intervene, unilateral acts never in themselves effect a change in legal status because it is fundamental that a man cannot by his unilateral action affect the rights and interests of another except on the basis of statutory or other authority. Rights and obligations are normally inter twined and a man cannot by abandonment per se of his rights and interests thereby rid himself of his own obligations or impose them on another. Thus, there can be no abandonment of a tenancy except on statutory grounds (as, for example, in the Central Provinces Tenancy Act, 1920) unless there is acceptance, express or implied, by the other side. It may, for example in a case of tenancy, be to the landlord 's interest to keep the tenancy alive and so also in the case 374 of shares of a company. It may be to the interests of the company and the general body of shareholders to refrain from forfeiture if, for example, the value of unpaid calls exceeds the market value of the shares. Such a position was envisaged in Garden Gully United Quartz Mining Co. vs Hugh McLister(1). So also with waiver. A long catena of illustrative cases will be found collected in B. B. Mitra 's Indian Limitation Act, Thirteenth Edition, pages 447 and 448. This fundamental concept brings about another repercussion. Unless other circumstances intervene, there is a locus paenitentiae in which a unilateral abandonment or waiver can be recalled. It would be otherwise if the unilateral act of abandonment in itself, and without the supervention of other matters, effected a change in legal status. In point of fact, it is otherwise when, as in the statutory example I have quoted, the law intervenes and determines the tenancy. It is, therefore, in my opinion, fundamental that abandonment and waiver do not in themselves unilaterally bring about a change in legal status. Something else must intervene, either a statutory mandate or an act of acceptance, express or implied, by another person, or, as Lord Chelmsford put it in Clarke & Chapman vs Hart(1), acts which are equivalent to an agreement or a licence, or an estoppel in cases where an estoppel can be raised. Next, there is, in my view, a fundamental difference between an executory interest and an executed one. In the former, it is necessary to resort to equitable reliefs to get enforced a right which is not at the date a vested right: cases of specific performance and declaration of a trust are examples, so also a prayer for relief from forfeiture. In cases of this kind, conduct which would disentitle a person to equitable relief is relevant. No hard and fast rule can or should be laid down as to what such conduct should consist of but among the varieties of conduct which Courts have considered sufficient in this class of case is conduct which amounts to laches (1) at 57 (2) (1858) 10 E.R. 1443 at 1452 and 1453. 375 or where there has been a standing by or acquiescence or waiver or abandonment of a right, particularly when this would prejudicially affect third parties. This sort of distinction is brought out by Lord Chelmsford in Clarke & Chapman vs Hart(1). The position is different when the interest is executed and the man has a vested interest in the right, that is to say, when he is the legal owner of the shares with the legal title to them residing in him. This legal title can only be destroyed in certain specified ways. It is in my view fundamental that the legal title to property, whether moveable or immoveable, cannot pass from one person to another except in legally recognised ways, and normally by the observance of certain recognised forms. Confining myself to the present case, one of the ways in which the title to shares can pass is by forfeiture; but in that case an exact procedure has to be followed. A second way is by transfer which imports agreement. There again there is a regular form of procedure which must be gone through. A third is by estoppel, though, when the position is analysed, it will be found that it is not the estoppel as such which brings about the change. The expressions abandonment, waiver and so forth, when used in a case like the present, are only synonyms for estoppel and despite hallowed usage to the contrary, I prefer to call a spade a spade and put the matter in its proper legal pigeon hole and call it by its proper legal name. These other terms are, in my view, loose and inaccurate and tend to confuse, when applied to cases of the present nature. A man who has a vested interest and in whom the legal title lies does not, and cannot, lose that title by mere laches, or mere standing by or even by saying that he has abandoned his right, unless there is something more, namely inducing another party by his words or conduct to believe the truth of that statement and to act upon it to his detriment, that is to say, unless there is an estoppel, pure and simple. It is only in such a case that the right can (1) ; at 1452 and 1453. 376 be lost by what is loosely called abandonment or waiver, but even then it is not the abandonment or waiver as such which deprives him of his title but the estoppel which prevents him from asserting that his interest in the shares has not been legally extinguished, that is to say, which prevents him from asserting that the legal forms which in law bring about the extinguishment of his interest and pass the title which resides in him to another, were not duly observed. Fazl Ali J. and I endeavoured to explain this in Dhiyan Singh vs Jugal Kishore (1). What happens is this. The person estopped is not allowed to deny the existence of facts, namely the actings of the parties and so forth which would in law bring about the change in legal status, namely the extinguishment of his own title and the transfer of it to another, for estoppel is no more than a rule of evidence which prevents a man from challenging the existence or non existence of a fact. Once the facts are ascertained, or by a fiction of law are deemed to exist, then it is those facts which bring about the alteration in legal status; it is not the estoppel as such nor is it the abandonment or waiver per se. I prefer therefore to adhere to what I conceive is the proper legal nomenclature. As I understand it, estoppel was the basis of the decision in Clarke & Chapman vs Hart (2). See Lord Wensleydale 's judgment at page 1458 and the Lord Chancellor 's at page 1453 ; so also. in Garden Gully United Quartz Mining Company vs Hugh McLister (3). That there is no sufficient ground for estoppel in this case is shown by the facts set out in the judgment of my learned brothers. I agree that the appeal must succeed. Appeal allowed. (1) [1952] S.C.R. 478 at 485. (3) 1 App.

In 1948 the Central Government referred a number of cases in which the petitioner was concerned, to the Income tax Inves tigation Commission set up under the relevant provisions of the Taxation on Income (Investigation Commission) Act, 1947. After the Commission had submitted the report under section 8 A(1) of the Act, in which the total tax payable on the undisclosed income upto March 31, 1947, was estimated, the petitioner applied for a settlement of his case by offering to pay the amount of tax in instalments and by agreeing to pay the whole amount immediately in case of default in payment of any of the instalments in time. The Central Government accepted the terms suggested by the petitioner and passed an order on November, 21, 1949, under section 8 A(2) of the Act directing the service of a demand notice on the petitioner and recovery of the tax in accordance with the terms and conditions of the settlement. On December 2, 1949, a notice of demand was issued to the petitioner who, in pursuance thereof, made certain payments. But as the petitioner was unable to make full payment within the stipulated periods, the whole amount outstanding became immediately payable and certain properties belonging to him and his family were attached by the Collector of the district Concerned for the recovery of the amount. On June 8, 1959, the petitioner filed a writ petition tinder article 32 of the Constitution of India challenging the legality of the demand notice dated December 2, 1049, and the subsequent proceedings taken in pursuance of that notice on the ground that after the coming into force of the Constitution of India on January 26, 1950, they were violative of the fundamental right of equal protection of the laws guaranteed under article 14, inasmuch as what he had agreed to pay the Government as a result of the settlement was really a debt, and he had been dealt with differently from other debtors who owed money to the State under a contractual liability. Held, (1) that the proceedings against the petitioner cul minating in the service of the notice of demand against him were all completed before the coming into force of the Constitution and the petitioner cannot challenge those proceedings under 967 article 14 of the Constitution, because it is well settled that the Constitution is prospective and not retrospective; (2) that the true scope and effect of sub section (2) of section 8 A is to enforce the terms of any settlement arrived at in pursuance of sub section (1), which was really income tax which had escaped assessment; (3) that the petitioner belonged not to the larger class of debtors of Government but to a special class which had evaded payment of income tax for which the procedure laid down in section 8 A(2) was one and the same, and that the classification being reasonable having a just relation to the object of the provision, the recovery procedure cannot be challenged as discriminatory under article 14. Suraj Mail Mohta and Co. vs A. V. Visvanatha Sastri and Another, [1955] 1 S.C.R.448, M. CT. Muthiah & two Others vs The Commissioner of Income tax, Madras & Another, ; and Basheshar Nath vs The Commissioner of Income tax, Delhi & Rajasthan and Another, [1959] Supp. 1 S.C.R. 528, distinguished.

Appeal No. 656 of 1966. Appeal by special leave. from the judgment and order dated June 29/30, 1964 of the Gujarat High Court in Special Civil Application No. 589 of 1961. A. K. Sen and N. H. Hingorani, for the appellant. R. Gopalakrishnan, for respondent No. 3. The Judgment of the Court was delivered by Bhargava, J. R. section Ambwaney, respondent No. 3, was employed by the Sindhu Resettlement Corporation Ltd., the appellant. as an Accounts Clerk at Gandhidham on 13th December, 1950 in the pay scale of Rs. 150 10 250 on a salary of Rs. 200 plus 20 per cent as site allowance. This site allowance was discontinued in March, 1952. In the year 1953, the Government of India decided to develop Kandla as a port and a subsidiary company was formed by the appellant under the name of Makenzies Heinrich Bulzer (India) Ltd. in which one of the principal shareholders was the appellant. This Company later came to be known as Sindhu Hotchief (India) Ltd. For convenience, both Makenzies Heinrich, Bulzer (India) Ltd., and Sindhu Hotchief (India) Ltd. shall hereinafter be referred to as "Sindhu Hotchief". This subsidiary Company, Sindhu Hotchief, wanted some trained employees and; amongst others the services of respondent No. 3 were placed at its disposal by the appellant. The case of respondent No., 3 was that he was told orally by the officers of the appellant on 2nd September, 1953 that he was to work in the subsidiary company. Respondent No. 3 was appointed in Sindhu Hotchief by its order dated 5th September,,1953 on a salary of Rs. 240 p.m. as an Accounts Clerk on the conditions of service laid down in that order. It appears that, just about this time, the father of respondent No. 3 died and he was granted leave by the appellant for the period from 2nd September to 17th September, 1953. With effect from 18th September 1953, his services were placed at the ' disposal of Sindhu Hotchief and an order to that effect was issued in writing on behalf of the appellant on 24th September, 1953. Respondent No. 3 worked with Sindhu Hotchief up to 20th February, 1958 'when his ' services were terminated after payment. of retrenchment compensation and all other dues payable to him. On 21st February, 1958, respondent No. 3 went to the office of the, appellant, reported himself for duty and requested that he might, 517 be given posting orders in, the appellant. Corporation. The appellant informed respondent NO. 3 of I its inability, to re employ him on the ground that the post, which he had been occupying in 1953 had been permanently filed up. Thereupon, respondent No. 3 demanded retrenchment compensation ', from the appellant also. This was also refused. His case was taken up by Mazdoor Mahajan Sangh, Gandhidham, Kutch, ' respondent No.2. The Secretary of respondent No. 2 also, wrote a letter to the, management of the appellant, asking for payment of retrenchment com pensation to respondent No. 3 on the ground that the appellant had refused to take him back in its employment. It seems that, thereafter, there were some conciliation proceedings and, subsequently, on the report of the Conciliation Officer, the Government of the State of Gujarat, by its notification dated 15th November, 1960, referred the dispute to the, Industrial Tribunal,, Gujarat, for adjudication. The matter referred for adjudication was described in the notification as follows: "Demand No. 1 Shri R. section Ambwaney should be reinstated in the service of M/s. Sindhu Resettlement Corporation Ltd., and he should be paid his wages from 21st February, 1958. " The Triunal, after hearing the parties, gave its Award on 10th August, 1961, directing reinstatement of respondent No. 3 and payment of back wages from 21st February, 1958. The appellant challenged this award before the High Court of Gujarat by a petition under Articles 226 and 227 of the Constitution, but the petition was dismissed. Consequently, the appellant has come up to this Court in this appeal by special leave. In this appeal, three points have been urged on behalf of the appellant to challenge the orders of the Industrial Tribunal and the High Court. The points are : (1) that respondent No. 3, having been given permanent appointment in Sindhu Hotchief and having obtained retrenchment compensation from that Company, could not claim that he was still holding a post in the appellant Corporation and could not, therefore, claim reinstatement, (2) that the dispute that was raised by respondent No. 3 as well as respondent No. 2 with the management of the appellant was confined to compensation for retrenchment and did not relate to the validity of the retrenchment or reinstatement, so that the Government of Gujarat had no jurisdiction to refer the dispute to the Industrial Tribunal which it did , and (3) that, in any case. since the validity of the retrench of respondent No. 3 by the appellant was not 518 challenged, the, Tribunal committed a manifest error in directing reinstatement instead of awarding retrenchment compensation. After hearing learned counsel for parties, we have come to the conclusion that the first two grounds urged on behalf of the appellant must be 'accepted, while the third does not arise. The lease put forward on behalf of the respondents before ,the Industrial Tribunal was that respondent No. 3 was a permanent employee of the appellant and, when he joined the service of Sindhu Hotchief in the year 1953, he only went there on deputation or transfer, so that he continued to hold a lien on his permanent post in the appellant Corporation. Two facts, no doubt, support this plea. One is that Sindhu Hotchief was only a Subsidiary Company of the appellant, and the other is that, in its order dated 24th September, 1953, the appellant merely stated that, with effect from the 18th September, 1953, the services of res pondent No. 3 were placed at the disposal of Sindhu Hotchief. No specific ;order was passed terminating his services in the appellant Corporation Though this circumstance would raise a presumption that respondent No. 3 did not cease to be an employee 0 the appellant when this order was issued on 24th September 1953, this presumption is rebutted by two circumstances. The first is that respondent No. 3 was appointed in Sindhu Hotchief under the order dated 5th September, 1953, which laid down that in that Company he would be on a probation for a period of three months in the first instance. The probationary period may have to be further extended by any period upto three months. The confirmation of his appointment would be considered at the end of his probationary period and would depend on the efficiency and utility of his services to the Company. Thereafter, respondent No. 3 continued to serve in that Company until 20th February, 1958, i.e. for a, period of about 4 1/2 yars. Clearly, he must have been confirmed in his appointment in that company. Once he was confirmed in Sindhu Hotchief, he could obviously not continue to be an employee of the appellant corporation simultaneously. The High Court did not attach any value to this order of appointment dated 5th September, 1953, issued by Sindhu Hotchief, on the ground that no evidence was tendered before the Tribunal to show that this order was actually served on respondent No. 3. In proceeding on this basis, the High Court clearly fell into an error, because, in this case, when the adjudication of the industrial dispute was, taken up by the Tribunal, all the parties contented themselves with filing documentary evidence and no oral evidence was given by any party. At no stage was it challenged that the documents filed could not be taken into account until proved formally in the manner 'required to be proved in a regular civil proceeding in accordance with the provisions of the Indian Evidence Act. This order of Sindhu Hotchief dated 5th September, was addressed to respondent No. 3 himself and, when there 519 was no challenge on behalf of respondent No. 3 that he did not receive this order, there was no justification for the High Court to hold that this. ,order had not been served on him. In proceedings before the Industrial Tribunal, strict proof of documents in accordance with the provisions of the Indian Evidence Act is not required. Parties having agreed to base their case on the documents filed, this order issued to respondent No. 3 could not be ignored on the ground that no oral evidence had been tendered to prove that respondent No. 3 actually received it. It was in accordance with the conditions of service laid down in, this order that respondent No. 3 was appointed in Sindhu Hotchief and, by joining service there and continuing in that service for 4 1/2 years, respondent No. 3 clearly agreed to work in that Company on these conditions. As we have indicated earlier, one of the conditions was that he would be confirmed at the end of the: probationary period and, once he was confirmed, he would become a permanent employee of Sindhu Hotchief and would cease to be the employee of the appellant. Thus,. though respondent No. 3 did not cease to be an employee of the appellant when his services were first placed at the disposal of Sindhu Hotchief by the appellant witheffect from 18th September, 1953, he ceased to be an employee of the appellant later when he was confirmed in Sindhu Hotchief. The other circumstance that bears out this conclusion is that, at the time of termination of the employment of respondent No. 3 in Sindhu Hotchief, he was given retrenchment compensation which he accepted. In case he had continued to be in the service of the appellant. he would not have been entitled to retrenchment compensation from Sindhu Hotchief and, even if Sindhu Hotchief had any legal liability to contribute towards his retrenchment compensation which might have become ultimately payable to him on his retrenchment from the appellant Corpn., that amount would have been paid by Sindhu Hotchief to the appellant and not to respondent No. 3 himself. It appears that respondent No. 3 very well knew that he had become a permanent employee of Sindhu Hotchief and, consequently, on retrenchment, he accepted the compensation but, thereafter, he seems to have decided to assert his claim to continuance of employment under the appellant. This claim. was also, however, very halfhearted. No doubt, at the first stage on 21st February, 1958, he demanded reinstatement in the appellant Corpn., but very soon thereafter, when that request was refused, he demanded retrenchment compensation and one month 's salary in lieu of notice. This demand was put forward by him in his letter dated 7th March, 1958, wherein he stated that, if the appellant refused to recognise Sindhu Hotchief as a sister concern and did not take him back in its Organisation, where he had a genuine claim of service, the appellant should please pay off his legal claims in respect of retrenchment compensation and one month 's pay in lieu of notice. This position taken up by respondent No. 3 himself thus shows that he was aware that his services under the appellant Corpn. had already 520 come to an end. Learned counsel appearing for the respondents urged that we should not hold that services of respondent No. 3 in teh appellant Corpn. had come to an end when he was absorbed in Sindhu Hotchief, because no retrenchment compensation was given to respondent No. 3 by the appellant Corporation at the stage, when his services ended in that Corporation. The submission ignores the, circumstances that, when respondent No.3 went to Sindhu Hotchief, be did so willingly. There was no compulsion on him to,. go, to that Company. His terms of service with the appellant did not entitle The appellant to transfer his services to the Subsidiary Company and the mere office order placing his services at the disposal of Sindhu Hotchief could not have been made effective unless respondent No. 3 also voluntarily agreed to take service in Sindhu Hotchief. At no stage was it asserted on behalf of respondent No. 3 that he did not go voluntarily or with his consent to Sindhu Hotchief. In case he took the service in Sindhu Hotchief and accepted permanent appointment there willingly, it cannot be held that his services were retrenched by the appellant Corporation. He was not entitled to any retrenchment compensation when he left the service of the appellant willingly. The nonpayment of retrenchment compensation by the appellant at that stage does not, therefore, indicate that the services of respondent No. 3 with the appellant had not come to an end. On the facts of this case, it is clear that the Tribunal committed an error in drawing the legal inference that respondent No. 3 continued to be in the service of the appellant Corporation even after he had received permanent appointment in Sindhu Hotchief. On a correct inference, it is clear that the services of respondent No. 3 under the appellant Corporation had come to an end and, when he was retrenched by Sindhu Hotchief, he could not claim reinstatement in the appellant Corporation. In this connection, Mr. Gopalakrishnan, learned counsel for the respondents, relied on some remarks of the House of Lords in Nokes vs Doncaster Amalgamated Collieries Ltd.(1), where it was held: "Counsel for the appellant argued that a contractual right to personal service was a personal right of the employer and was incapable of being transferred by him to anyone else, and that a duty to serve a specific master could not be part of the property or rights of that master capable of becoming, by transfer, a duty to serve some ,one else. It is, of course indisputable that (apart from statutory provision to the contrary) the benefit of a contract entered into by A to render personal service to X cannot be transferred by X to Y without A 's consent, which is the same thing as saying that, in order to produce the desired result, the old contract between A and X would r have to be terminated by notice or by mutual consent and a. new contract of service entered into by agreement between A and Y." (1) 521 This principle laid down by teh House of Lords is not applicable to the facts of teh case before us,because we have already held that respondent No.3 joined the service of Sindhu Hotchief villingly and with his consent, and it was not a case where he was transferred to Sindhuy Hotchief by the appellant without his consent. This case does not help ,the respondents. The second ground urged on behalf of the appellant is that in this case No. dispute relating relating to reinstatement was ' actually raised either by respondent No. 2 or respondent No. 3 before. the reference was made to the Industrial Tribunal by the Government of Gujarat and,. consequently. that reference itself was , without jurisdiction. When Mr. A. K. Sen, counsel for the. appellant, raised this ground, it Was urged by" Mt. Gopalakrishnan on behalf of the respondents that this ground was being taken for the first time in this Court and had not been raised at any earlier stage, so that it should not be allowed to be taken in this Court. It, however,appears that the question of jurisdiction of the State Government to refer the demand for reinstatement for adjudication to the Tribunal was specifically urged in the High Court and the High Court actually dealt with it in its judgment, dismissing the petition filed on behalf of the appellant. The High Court clearly mentions that the counsel for the appellant contended that the Industrial Tribunal had no jurisdiction as the question referred to it and which it was called upon to adjudicate relating to reinstatement of respondent No. 3 in the service of the Corporation would not fall within the scope of item 3 in the Second Schedule to the . It was further urged that, since the third respondent was neither discharged nor dismissed by the appellant, the question of relief of reinstatement would not arise under that item and, there being no item under which the demand would fall, the State Government had no jurisdiction to refer such a demand for adjudication to the Tribunal. These points urged before the High Court would cover the ground now urged by Mr. Sen before us. It is true that the form in which it was urged before the High Court was slightly different. There, the point raised was that a demand for reinstatement, when there had been retrenchment only and no discharge or dismissal, could not be held to constitute an industrial dispute. On the facts of the case as they appeared from the material before the Tribunal, it is now urged that, in fact, the demand, which was being pressed with the management by both the respondents, was in respect of retrenchment compensation and not reinstatement. The demand for reinstatement seems to have been given up, because the respondents realised that the services of respondent No. 3 had not been terminated by discharge or dismissal, but by retrenchment only, and that retrenchment not being. the result of any unfair labour practice or victimization, respondent No. 3 could only claim retrenchment compensation. In the evidence given before the Tribunal, there were included two letters written by the two respondents containing the demand for retrenchment compensation. 522 We have already referred to one of these letters which was sen on 7th March, 1958 by respondent. No. 3 to the Administrative Officer of the. appellant. The other letter was sent on 10th July 1959 by the General Secretary of respondent No. 2 in which again it was stated that Sindhu Hotchief had paid retrenchment dues to respondent No. 3 in respect of the services he had rendered in than Company, but the appellant Corporation was responsible for his retrenchment dues for the service which had been rendered by respondent No. 3 in the, appellant Corpn. , The prayer was that, as the appellant had refused him re employment, arrangement should be made to pay his retrenchment dues according to section 25F of the . Thus, both the respondents, in their claims put forward before the management of the appellant, requested for payment of retrenchment compensation and did not raise any dispute for reinstatement. Since no such dispute about reinstatement was raised by either of the respondents before the management of the appellant, it is clear that the State Government was not competent to refer a, question of rein statement as 'an industrial dispute for adjudication by the Tribunal. The dispute that the State Government could have referred competently was the dispute relating to payment of retrenchment compensation by the appellant to respondent No. 3 which had been refused. No doubt, the order of the State Government making the reference mentions that the Government had considered the report submitted by the Conciliation Officer under sub section (4) of section 12 of the , in respect of the dispute between the,appellant and workmen employed under it over the demand mentioned in the Schedule appended to that order; and, in the Schedule, the Government mentioned that the dispute was that of reinstatement of respondent No. 3 in the service of the appellant and payment of his wages from 21st February, 1958. It was urged, by Mr. Gopalakrishnan on behalf of the respondents that this Court cannot examine whether the Government, in forming its opinion that an industrial dispute exists, came to its view correctly or incorrectly on the material before it. This proposition is, no doubt, correct; but the aspect that is being examined is entirely different. It may be that the Conciliation Officer reported to the Government that an industrial dispute did exist relating to the reinstatement of respondent No. 3 and payment of wages to him from 21st February, 1958, but when the dispute came up for adjudication before the Tribunal, the evidence produced clearly showed that no such dispute had ever been raised by either respondent with the management of the appellant. If no dispute at all was raised by the respondents with the management, any request sent by them to the Government would only be a demand by them and not an industrial dispute between them and their employer. An industrial dispute, as defined, must be a dispute between employers and employers, employers and workmen, and workmen and workmen. A mere demand to a Government, without a dispute being raised by the workmen with 523 their employer cannot become an industrial dispute Consequently, the material before the Tribunal clearly showed that no such industrial dispute, as was purported to be referred by the State Government to the Tribunal, had ever existed between the appellant Corpn. and the respondents and the State Government in making a reference, obviously committed an error in basing its opinion 'on material which was not relevant to the formation of opinion. The Government had to come to an opinion that an industrial dispute did exist and that opinion could only be formed on the basis that there was a dispute between the appellant and the respondents relating to reinstatement. Such material could not possibly exist when, as early as March and July, 1958, respondent No. 3 and respondent No. 2 respectively had confined their demands to the management to retrenchment compensation only and did not make any demand for reinstatement. On these facts, it is clear that the reference made by the Government was not competent. The only reference that the Government could have made had to be related to payment of retrenchment compensation which was the only subject matter of dispute between the appellant and the respondents. So far as the third ground is concerned, it loses force and (toes not arise in view of our decision relating to the first ground. We have already held, when dealing with the first ground, that the appellant had neither dismissed respondent No. 3, nor had it discharged him from service. There was no question of wrongful dismissal or discharge by the appellant. It was not even a case of retrenchment. because respondent No. 3 had willingly gone to join the service under Sindhu Hotchief. He obviously joined the service in Sindhu Hotchief because of the financial advantages that were to accrue to him. In September, 1953, he was drawing a salary of Rs. 200 P.m. in the scale of Rs. 150 10 250 while serving the appellant. The site allowance of 20 per cent, which he had been receiving earlier, had been discontinued from March, 1952 and he was not getting it at the time when he went to join Sindhu Hotchief, where he was given a start of Rs. 240 in the grade of Rs. 200 20 400. Consequently, in addition to the immediate rise in salary of Rs. 40 P.m., he had the advantage of working in the higher grade, in which, within two years, he exceeded the maximum of the scale in which he had been working with the appellant. He served Sindhu Hotchief for a period of ' about 4 1/2 years and became confirmed there in accordance with the terms and conditions which were offered to him by Sindhu Hotchief. In these circumstances, the respondents cannot ' urge that the services of respondent No. 3 were retrenched by the appellant, either when he went and joined Sindhu Hotchief, or when he wanted to get back to his post with the appellant. His appointment in the service of the appellant having terminated, no question could arise of retrenching him at the stage when he wanted to come back after serving Sindhu Hotchief. His services, 524 were in fact retrenched by his employer Sindhu hotchief and from that Company he received retrenchment compensation. The third ground, therefore, needs consideration The appeal succeeds and is allowed. The award of the Tri bunal is quashed. In the circumstances of this case there will be no order as to costs,, Y.P. Appeal allowed.

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

Civil Appeal No. 1523 of 1988. From the Judgment and order dated 13.4.1988 of the Bombay High Court in W.P. No. 479 of 1988. K.K. Venugopal, A.N. Haksar, section Vazifdar, Raian Karanjawala, Mrs. Manik Karanjawala and Hardeep section Anand for the Appellant. B. Datta, Additional Solicitor General, P. Parmeswaran, S.C. Birala and Ms. A. Subhashini for the Respondents. The Judgement of the court was delivered by VENKATARAMIAH, J. This appeal by special leave is filed against an interim order of injunction issued by the High Court of Bombay, Aurangabad Bench on 13th April, 1988 directing the three respondents; (I) Union of India, (2) Ministry of Information and Broadcasting, Parliament House, New Delhi and (3) State of Maharashtra, not to telecast and show episodes 12 and 13 of a serial entitled 'Honi Anhoni ' pending disposal of Writ Petition No. 479 of 1988 filed by Respondent No. 1, Lokvidayan Sanghatana, a registered social organisation of Pune having its branch at Aurangabad and Respondent No. 2 Mahila Sangharsha Samiti, Aurangabad represented by one of its members Smt. Anagna Patil. The writ petition was in the nature of a public interest litigation. The prayer in the writ petition was that the respondents should be directed not to telecast the serial as such telecasting was not in the public interest. The serial 'Honi Anhoni ' was being telecast by the Doordarshan, which was run by the Union of India, on every Thursday between 9 p.m. and 9.30 p.m. The 12th episode of the said serial was to be telecast on 14th April, 1988 and the 13th episode was to be telecast on 21st April, 1988. By virtue of the interim order passed on 13th April, 1988. episode No. 12 could not be telecast on 14th April, 1988. Aggrieved by the interim order passed by the High Court the appellant, Odyssey Communication Pvt. Ltd., which was the producer of the serial 'Honi Anhoni ' filed the special leave petition before this Court under Article 136 of the Constitution of India out of which this appeal arises. The said petition came up before this Court for consideration on April 2 1, 1988. After hearing the learned counsel for the appellant this Court granted special leave to prefer an appeal against 489 the order passed by the High Court and also stayed the operation of the interim order dated 13th April, 1988 passed by the High Court until further orders and permitted the Doordarshan to telecast the serial in question. In view of the above order the 12th episode of the serial was telecast on the 21st of April, 1988. The appeal was heard on the 28th of April, 1988 and this Court reserved judgment on the appeal. At the end of the hearing of the appeal on 28th April, 1988 the Court expressed that it would set aside the order passed by the High Court against which the appeal had been filed and would give reasons in the course of its judgment. Since the order of stay passed by the Court was allowed to remain in force the 13th episode, which was the last episode of the serial was telecast on the 28th April, 1988. The grounds mentioned in the writ petition in support of the prayer made in it were that in each and every episode telecast in the serial an obscure and mysterious atmosphere was being created due to the way of the presentation of the episodes and that it had created fear in the minds of the common viewers and especially of children as the serial had the effect of confirming blinds faiths, superstitious beliefs in stories of ghosts, rebirth, precognition etc. and of spreading the unscientific way of thinking and blind beliefs. It was further contended that it was the duty of the State not to encourage blind beliefs amongst the public by telecasting such episodes. It was on the basis of these grounds the High Court was requested to grant the interim order of injunction. The appellant was the producer of the said serial, yet the appellant was not made a party to the writ petition. But on its application the appellant was impleaded as a party on 12.4.1988. On 13.4.1988 the High Court passed the impugned order of temporary injunction. The appellant rushed to this Court immediately thereafter with the above said special leave petition. The appellant has stated before us that the said serial and in particular episodes 12 and 13 did not emphasise superstitious beliefs but on the contrary criticised and condemned superstition and blind faith as was ex facie apparent from the scripts of episodes 12 and 13 produced before this Court. It is stated that at the end of both the episodes a doctor and a professor gave a scientific explanation for the unusual occurrences portrayed therein and considered by people as supernatural phenomena. It is alleged that in the 13th episode after a scientific explanation of what had taken place the viewers were told as follows: "All those who without thinking spread blind faith ought to feel ashamed of themselves. We request all of you that whenever any unusual occurrencces takes place or a 490 seemingly imporbable event occurs, before believing in it, to reflect as to whether there is a scientific reason for it or is it purely psychological by nature. If all of us exercise such caution we believe that the malady of blind faith will soon be eradicated by our society. " The appellant further pleaded that the High Court was in error in issuing the order of injunction without giving a reasonable opportunity to it (the producer), which was likely to be affected by the order, to explain that the writ petitioners had no right to move the Court in the circumstances of the case. It can no longer be disputed that the right of a citizen to exhibit films on the Doordarshan subject to the terms and conditions to be imposed by the Doordarshan is a part of the fundamental right of freedom of expression guaranteed under Article 19(1)(a) of the Constitution of India which can be curtailed only under circumstances which are set out in clause (2) of Article 19 of the Constitution of India. The right is similar to the right of a citizen to publish his views through any other media such as newspapers, magazines, advertisement hoardings etc. subject to the terms and conditions of the owners of the media. We hasten to add that what we have observed here does not mean that a citizen has a fundamental right to establish a private boardcasting station, or television center. On this question we reserve our opinion. It has to be decided in an appropriate case. The relevant part of Article 19 of the Constitution reads thus: "19. Protection of certain rights regarding freedom of speech, etc. (1) All citizens shall have the right (a) to freedom of speech and expression; . . . . . . (2) Nothing in sub clause (a) of clause (1) shall affect the operation of any existing law, or prevent the State from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub clause in the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or moral 491 ity, or in relation to contempt of court, defamation or incitement to an offence. . . . . . . . . ." Freedom of expression is a preferred right which is always very zealously guarded by this Court. It was not the case of the petitioners in the Writ Petition that the exhibition of serial 'Honi Anhoni ' was in contravention of any specific law or direction issued by the Government. They had not alleged that the Doordarshan had shown any undue favour to the appellant and the sponsoring institutions resulting in any financial loss to the public exchequer. The objection to the exhibition of the film had, however, been raised by them on the basis that it was likely to spread false or blind beliefs amongst the members of the public. They had not asserted any right conferred on them by any statute or acquired by them under a contract which entitled them to secure an order of temporary injunction against which this appeal is filed. The appellant had denied that the exhibition of the serial was likely to affect prejudicially the well being of the people. The Union of India and the Doordarshan have pleaded that the serial was being telecast after following the prescribed procedure and taking necessary precaution. In such a situation, the High Court should not have immediately proceeded to pass the interim orde of injunction. It was no doubt true that the 12th episode was to be telecast on 14th April, 1988 and the 13th episode was to be telecast on 21st April, 1988. If the petitioners in the writ petition had felt, as they had alleged in the course of the petition, that all the episodes in the serial were offensive they could have approached the High Court as early as possible within the first two or three weeks after the commencement of the exhibition of the serial. But they waited till the exhibition of the 11th episode of the serial was over and filed the petition only in the second week of April, 1988. They had not produced any material apart from their own statements to show that the exhibition of the serial was prima facie prejudicial to the community. The High Court overlooked that the issue of an order of interim injunction in this case would infringe a fundamental right of the producer of the serial. In the absence of any prima facie evidence of grave prejudice that was likely to be caused to the public generally by the exhibition of the serial it was not just and proper to issue an order of temporary injunction. We are not satisfied that the exhibition of the serial in question was likely to endanger public morality. In the circumstances of the case the balance of convenience lay in favour of 492 the rejection of the prayer for interim injunction. What we have stated here is sufficient to dispose of this appeal. The other questions of law which may arise in a case of this nature will have to be dealt with in an appropriate case. We express no opinion on those questions in this case. We are, however, of the opinion that the High Court was in error in the present case in issuing the interim order of injunction against which this appeal is filed. We, therefore, allow this appeal and set aside the interim order of injunction passed by the High Court on the 13th of April, 1988. There is, however, no order as to costs. G.N. Appeal allowed.

The T.V. Serial 'Honi Anhoni ' was being telecast by Doordarshan on every Thursday between 9.00 P.M. and 9.30 P.M. A writ petition was filed by the Respondents stating that the telecast was not in public interest as it had the effect of confirming blind faiths, superstitious beliefs in stories of ghosts, rebirth, precognition etc. and of spreading the unscientific way of thinking and blind beliefs. The High Court issued an interim order of injunction not to telecast and show episodes 12 and 13 of the serial. Aggrieved by the interim order, the appellant, producer of the said serial, had come on appeal by special leave. This Court, while granting special leave stayed the operation of the interim order passed by the High Court. The appellant contended that the said serial and in particular episodes 12 and 13 did not emphasise superstitious beliefs but on the contrary criticised and condemned superstition and blind faith, and at the end of both the episodes a doctor and a professor gave a scientific explanation for the unusual occurrences portrayed therein and considered by people as supernatural phenomenon. It was also submitted that the viewers were told that they should search for scientific reason whenever any unusual occurrence takes place. Allowing the appeal, 487 ^ HELD:1. Freedom of expression is a preferred right which is always very zealously guarded by this Court. It can no longer be disputed that the right of a citizen to exhibit films on the Doordarshan subject to the terms and conditions to be imposed by the Doordarshan is a part of the fundamental right of freedom of expression guaranteed under Article 19(1)(a) of the Constitution of India which can be curtailed only under circumstances which are set out in clause (2) of Article 19 of the Constitution of India. The right is similar to the right of a citizen to publish his views through any other media such as newspaper, magazines, advertisement hoardings etc. subject to the terms and conditions of the owners of the media. [491B; 490C E] 2. The High Court was in error in the present case in issuing the interim order of injunction which is set aside. [492B] 3.1 The objection to the exhibition of the film was that it was likely to spread false or blind beliefs amongst the members of the public. The Respondents had not asserted any right conferred on them by any statute or acquired by them under a contract which entitled them to secure an order of temporary injunction. [491C D] 3.2 As alleged by the Respondents, if all the episodes in the serial were offensive they could have approached the High Court as early as possible within the first two or three weeks after the commencement of the exhibition of the serial. But they waited till the exhibition of the 11th episode of the serial was over and then filed the petition. They had not produced any material apart from their own statements to show that the exhibition of the serial was prima facie prejudicial to the community. [491E G] 3.3 The High Court overlooked that the issue of an order of interim injunction in this case could infringe a fundamental right of the producer of the serial. In the absence of any prima facie evidence of grave prejudice that was likely to be caused to the public generally by the exhibition of the serial it was not just and proper to issue an order of temporary injunction. The exhibition of the serial in question was not likely to endanger public morality. In the circumstances of the case the balance of convenience lay in favour of the rejection of the prayer for interim injunction. [491G H; 492A] [This Court reserved its opinion on the question whether a citizen has a fundamental right to establish a private broadcasting station, or television centre, to be decided in an appropriate case.] [490E] 488

Appeal No. 1630 of 1967. Appeal by special leave from the award dated April 28, 1967, of the Industrial Tribunal, Madras in Industrial Dispute No. 78 of 1966 and Civil Appeal No. 1721 of 1967. Appeal by special leave from the order dated July 14, 1967 of the Additional Industrial Tribunal, Mysore in A.I.D. No. 29 of 1966. E.C. Agarwala and Santosh Gupta, for the appellants (in C.A. No. 1630 of 1967). C.K. Daphtary, Attorney General, G. B. Pai, section K. Dholkia, and O. C. Mathur, for the appellant (in C.A. No. 1721 of 1967). M. K. Ramamurthi and M. V. Goswami, for respondent No. 1. (in C.A. No. 1630 of 1967). H. R. Gokhale, M. K. Ramamurthi, Shyamala Pappu and Vineet Kumar, for the respondents (in C.A. No. 1721 of 1967). The Judgment of the Court was delivered by Shelat, J. In Civil Appeal No. 1630 of 1967, workmen engaged by certain chilies and kirana shops in Madras and who were members of the respondent Union made a demand on December 13, 1965 for bonus for the year 1964 65 equivalent to four months ' wages. Conciliation proceedings having failed, the dispute was referred to the Industrial Tribunal, Madras. In Civil Appeal No. 1721 of 1967, the appellant company is admittedly an establishment in public sector to which sec. 20 of the , 21 of 1965 (hereinafter referred to as the Act) does not apply. In both these cases, the Tribunals held that though the Act did not apply, in the first case by reason of sec.1(3) and in the other by reason of sec.32(x), the employees were entitled to claim bonus and awarded their claims in C.A. No. 1630 of 1967. The appeals by special leave challenge the correctness of the view taken by the Tribunals as to the scope and nature of the Act. The question for decision in both the appeals is whether in view of the non applicability of the Act to establishments, not being factories and which employ less than 20 persons therein as the appellants in appeal No. 1630 of 1967 are, and the exemption of employees in an establishment in public sector though employing more than 20 persons as the appellant company in appeal No. 1721 of 1967 is under sec32(x) of the Act, the employees in both these establishments could claim bonus, dehors the Act. The question depends upon the true view of certain provisions and the scope of the Act. But before we take upon ourselves the burden of construing these, provisions, it is necessary to refer briefly to the history of the question of bonus, the back ground and the circumstances in which the Act was passed. This Is Permissible for the limited purpose of appreciating the mischief Parliament had in mind and the remedy which it wanted to provide for preventing that mischief,and not for the purpose of aiding us in construing the provisions of the Act. 370 As early as 1584, in Heydao 's case(1) it was said that "for the sure and true interpretation of all statutes in general" four things are to be considered: (i) What was the common law before the making of the Act, (ii) What was the mischief and defect for which the common law did not provide, (iii) What remedy the Parliament hath resolved and appointed to cure the disease of the Commonwealth, and (iv) the true reason of the remedy. In Bengal Immunity Company Limited vs The State of Bihar(2) this Court approved the rule in Heydon 's case(1) and in construing article 2865 of the Constitution observed at p. 633 as follows : In order to properly interpret the provisions of that Article it is, therefore, necessary to consider how the matter stood immediately before the, Constitution came into force, what the mischief was for which the old law did not provide and the remedy which has been provided by the Constitution to cure that mischief '. In the Corporation of the City of Nagpur vs Its Employee(3) the question was as to the meaning of the word "industry" in sec 2(14) of the C.P. & Berar Industrial Disputes (Settlement) Act (23 of 1947). This Court said that "if the word were to be construed in its ordinary sense every calling, service, employment of an employee or any business, trade or calling of an employer would be an industry. But such a wide meaning appears to overreach the object for which the Act was passed". The Court, therefore, found it necessary to limit the scope of the said word having regard to the aim, scope and the object of the Act. Relying on the four tests laid down in Heydon 's case(1) the Court considered the fundamental basis of the definition of industry, viz. relationship between employees and employers, the long title and the, preamble of the Act showing the object of passing the Act the historical background for passing it and held that "it is manifest that the Act was introduced as an important step in achieving social justice, to ameliorate the conditions of service of the labour in organised activities than to anything else and therefore the Act was not intended to reach the personal services which do not depend on the employment of labour force". Similarly in R. M. D. Chamarbaugwalla vs The Union of India (4), the question arose whether looking to the general words used in sec 2(d) of the Prize Competitions Act, 42 of 1955 the words 'prize competition ' included not merely competitions of a gambling nature but also those in which success depended to a substantial degree on skill. In construing the said definition, the Court gave a restricted meaning to the words "prize competition" as meaning only competitions as were of a gambling` nature. In doing so, the Court approved the principles of construction stated in the case of the Bengal Immunity Ltd.(1) and held that "in interpreting an enactment the Court should ascertain the intention of the legislature not merely from a literal meaning of the words used but also from such matters as the history of the legislation, its purpose and the mischief it seeks to suppress". For considering the intention of Parliament not merely from the literal meaning of the definition in sec.2(d) but also from the history of the legislation the Court looked into the Bombay Lotteries and Prize Competitions Control and Tax Act, 1948, how it could be and was evaded by the promoters of lotteries by shifting the venue of their business to the neighbouring State of Mysore, the concerted action taken by the adjoining States, the resolutions passed by each of them calling upon Parliament to undertake legislation, the fact of Parliament having passed the law and its preamble reciting the fact of the State legislatures having asked it to pass such a law. Having done that, the Court observed at p. 938 "Having regard to the circumstances under which the resolutions came to be passed, there cannot be any reasonable doubt that the, law which the State legislatures moved Parliament to enact under article 252(1) was one to control and regulate prize competitions of a gambling character. Competitions in which success depended substantially on skill could not have been in the minds of the legislatures which passed those resolutions. Those competitions had not been the subject of any controversy in Court. They had not done any harm to the public and had presented no problems to the States and at no time had there been any legislation directed to regulating them". Though the Court refused to look at the statement of objects and reasons for the, purpose of construing sec 2(d), it held that "having regard to the history of the legislation, the declared object thereof and the wording of the statute" the words had to be, given a restricted meaning. In Central Bank of India vs Their Workmen (2 the Court in construing sec 10(1) (b) of the Banking Companies Act, 10 of 1949, again looked at the legislative history to ascertain Jr the object of passing the Act and the mischief it sought to remedy,but declined to use the statement of objects and reasons to construe the section on the round that the statement could not control the actual words used in the section also State of West Bengal vs Union of India(3). In section Azeez Basha & Ors.vs Union of India(4), the, petitioners challenged the validity of the Aligarh Muslim University (Amendment) Act, 62 of 1951 and the Aligarh Muslim University (Amendment) Act, 19 of 1965 as violating article 30(1) of the Constitution. this Court went into the history of the establishment of the University to ascertain whether it was set up by the Muslim minority and as such entitled to rights under article 30 and held that it was not set up by the minority but in fact established by the Government of India by passing the of Crawford on Statutory Construction (3rd Ed.) pages 482 483]. There is thus sample authority justifying the Court in looking into the history of the legislation, not for the purpose of construing the Act but for the limited purpose of ascertaining the background, the conditions and the circumstances which led to its passing, the mischief it was intended to prevent and the remedy it furnished to prevent such mischief. The, statement of objects and reasons also can be legitimately used for ascertaining the object which the legislature had in mind, though not for construing the Act. What were the conditions prevailing at the time when the Act was passed and what was the object which Parliament had in mind in passing it ? Bonus was originally regarded as a gratuitous payment by an employer to his employees. The practice of paying bonus as an ex gratia payment had its early roots in the textile industry in Bombay and Ahmedabad. In 1917 and 1918 an increase of 10 and 15% of wages was granted as War bonus to the textile workers by the employers. In October, 1920, a Committee appointed by the Bombay Millowners recommended to the member mills payment of bonus equal to one month 's pay. Similarly bonus was declared in 1921 and 1922. It appears that trading conditions in the industry having deteriorated, the mill owners declared in July 1923 that they would be unable to pay bonus for 1923. Thereupon a strike began which became general towards the end of January 1924. In February 1924, a bonus dispute Committee was appointed by the Government of Bombay to consider the nature of, the conditions and the basis of bonus which had been granted to the employees in the textile mills and to declare whether the employees had established any enforceable claim, customary, legal or equitable. The Committee held that they had not established any enforceable claim, customary, legal or equitable, to an annual payment of bonus which could be upheld in a court. The years that followed were years of depression and no major dispute about bonus arose, although bonuses were given on ad hoc basis by a few industrial undertakings. During the Second World War, managements of textile mills paid cash bonus equivalent to a fraction of the surplus profit but this was also voluntary payment to keep labour contented. Disputes for payment of bonus for the years 1948 and 1949 arose in the Bombay textile industry. On the said dispute having been referred to the Industrial Court, that Court expressed the view that since both labour and capital contributed to the profits of the 373 industry both were entitled to a legitimate return out of the profits and evolved a formula for charging certain prior liabilities on the gross profits of the accounting year and awarded a percentage of the balance as bonus. The Industrial Court excluded the mills which had suffered loss from the liability to pay bonus. In appeals against the said awards, the Labour Appellate Tribunal approved broadly the method of computing bonus as a fraction of the surplus profit. According to this formula, which has since been referred to as the Full Bench formula, the surplus available for distribution is to be determined after debiting certain prior charges from gross profits, viz. (1) provision for depreciation (2) reservation for rehabilitation (3) return of 6% on paid up capital, and (4) return on working capital at a rate lower than the one on the paid up capital. In Muir Mills Company vs Suti Mills Mazdoor Union, Kanpur(1), Baroda Borough Municipality vs Its Workmen(2), The Shree Meenakshi Mills Ltd. vs Their Workmen(3) and The State of Mysore vs The Workers of Gold Mines(4) this Court laid down (1) that bonus was not a gratuitous payment nor a deferred wage, and (2) that where wages fall short of the living standard and the industry makes profit part of which is due to the contribution of labour, a claim for bonus may legiti mately be made by the workmen. The Court, however, did not examine the propriety nor the order of priorities as between the several charges and their relative importance nor did it examine the desirability of making any alterations in the said formula. These questions came to be examined for the first time in Associated Cement Companies Ltd. vs Its Workmen(5) where the said formula was generally approved. Since that decision, this Court has accepted in several cases the said formula. The principal feature,,, of the formula are that each year for which bonus is claimed is a self contained unit, that bonus is to be computed on the profits of the establishment during that year, that the gross profits are to be determined after debiting the wages and dearness allowance paid to the employees and other items of expenditure against total receipts as disclosed by the profit and loss account, and that against such gross profits the aforesaid four items are to be deducted as prior charges. The formula was not based on any legal right or liability, its object being only to distribute profits after reasonable allocations for the aforesaid charges. Attempts were thereafter made from time to time to have the said formula revised but they were rejected first in A.C.C. 's case(5) and again in The Ahmedabad Miscellaneous Industrial Workers Union vs The Ahmedabad Electricity Co. Ltd. (6) where it was observed that the plea for revision raised an issue which affected all industries and, therefore, before any change was made all industries and their workmen had (1) ; (2) ; (3) ; (4) ; (5) (6) ; 374 to be heard and their pleas considered. The Court, therefore, suggested that the question of revising the formula should be "comprehensively considered by a high powered Commission". Taking up the aforesaid suggestion, the Government of India appointed a: Commission, by its resolution dated December 6, 1961, the terms of reference whereof were, inter alia, 1. to define the concept of bonus and to consider in relation to industrial employment the question of payment of bonus based on profits and recommend principles for computation of such bonus and methods of payment; 2. to determine what the prior charges should be in different circumstances and how they should be calculated.3. to determine conditions under which bonus payment should be, made unitwise, industrywise and industry cum regionwise; 4. to consider whether there should be, lower limits irrespective of loss in particular establishment and upper limits for distribution in one year and, if so, the manner to carry forward the profits and losses over a prescribed period; and 5.to suggest an appropriate machinery and method for settlement of bonus disputes. After an elaborate enquiry, the Commission made the following amongst other recommendations : 1.That bonus was paid to the workers as share in the prosperity of the establishment and that the basic scheme of the bonus formula should be adhered to viz. determination of bonus as a percentage of gross profits reduced by the following prior charges, viz. normal depreciation allowable under the Indian Income Tax including multiple shifting allowance, income tax and super tax at the current standard rate applicable for the year for which tax is to be calculated but not super profits tax, return on paid up capital raised through preference shares at the actual rate of dividend payable, on other paid up capital at 7% and on reserves used as capital at 4%. The Commission did not recommend provision for rehabilitation. That 60% of the available surplus should be distributed as bonus and excess should be carried forward and taken into account in the next year; the balance of 40% should remain with the establishment into which shou ld merge the saving in tax on bonus and the aggre 375 gate balance thus left to the establishment should be used for payment of gratuity, other necessary reserves, rehabilitation in addition to the provision made by way of depreciation in the prior charges, annual provision re quired for redemption of debentures, etc. That the distinction between the basic wages and dearness allowance for the purpose of arriving at the bonus quantum should be done away with and bonus should be related to wages and dearness allowance taken together; 4. That minimum bonus should be 4% of the total basic wage and dearness allowance paid during the year or Rs. 40 to each employee, whichever is higher, and in the case of children the minimum should be equivalent to 4% of their basic wage and dearness allowance, or Rs. 25 whichever is higher; 5. That the maximum bonus should be equivalent to 20% of the total basic wage and dearness allowance paid during the year; 6. That the bonus formula proposed should be deemed to include bonus to employees drawing a total basic pay and dearness allowance up to Rs. 1600 p.m. regardless of whether they were workmen as defined in the or other corresponding Act provided that quantum of bonus payable to employees drawing total basic pay and allowance over Rs. 750/p.m. should be limited to what it would be if their pay and dearness allowance were Rs. 750 p.m. 7. That the formula should not apply to new establishments until they recouped all early losses including arrears of normal depreciation subject to the time limit of 6 years; and 8. That the scheme should be applied to all bonus matters relating to the accounting year ending on any day in the calendar year 1962 except in those matters in which se ttlements had been reached or decisions had been given. The fact that the Government of India accepted the majority of the Commission 's recommendations is clear from the Statement of objects and reasons attached to Bill No. 49 of 1965 which they sponsored in Parliament. The Statement, inter alia, states that a "tripartite Commission was set up by the Government of India by resolution dated 6th December 1961 to consider in comprehensive manner the question of payment of bonus based on profits to employees employed in establishments and to make recom 37 6 mendations to the Government. The Commission 's report con taining the recommendations was received by the Government on 24th January, 1964. By resolution dated 2nd September, 1964, Government announced acceptance of the Commission 's recommendations subject to a few modifications as were mentioned therein". To implement these recommendations the Payment of Bonus Ordinance, 1965 was promulgated on May 29, 1965. Since the Ordinance was replaced by the present Act published on September 25, 1965, it is unnecessary to examine its provisions. Thus, bonus which was originally a voluntary payment acquired under the Full Bench formula the character of a right to share in the surplus profits enforceable through the machinery of the and other corresponding Acts. Under the Act liability to pay bonus has now become a statutory obligation imposed on the employers. From the history of the legislation it is clear (1) that the Government set up a Commission to consider comprehensively the entire question of bonus in all its aspects; and (2) that the Commission accordingly Considered the concept of bonus, the, method of computation, the machinery for enforcement and a statutory formula in place of the one evolved by industrial adjudication. We proceed next to examine some, of the provisions of the Act and its scheme. The preamble of the Act states that it is to provide for payment of bonus in certain establishments and for matters connected therewith. Section 1(3) provides that it shall apply "save as otherwise provided in the Act" to (a) every factory and (b) every other establishment in which 20 or more persons are employed on any day during the accounting year. We may note that this subsection is in consonance with one of the Commission 's recommendations, viz. that its bonus formula should not be applied to small shops and establishments which are not factories and which employ less than 20 persons. Having made clear that the Act is to apply only to those establishments mentioned in sub. sec.(3), sub. sec.(4) provides that the Act shall have effect in respect of the accounting year 1964 and every subsequent year. "Allocable surplus" under section 2(4) means 67% in cases falling under cl.(a) and 60% in other cases of the available surplus. 2(6) defines 'available surplus ' to mean available surplus as computed under sec defines "establishment in private sector" to mean any estab lishment other than an establishment in public sector. 2(16) defines "establishment in public sector" as meaning (a) a Government company as defined in section 617 of the , and (b) a Corporation in which not less than 40% of it capital is held by Government or the Reserve Bank of India or a Corporation owned by Government or the Reserve Bank of India. "Gross profits" a , defined by sec.2(18) means gross profits cal 377 culated under sec.4 and 5 provide for computation of gross profits and available surplus after deducting therefrom the sums referred to in sec.6 viz., depreciation admissible under 32(1) of the Income Tax Act or the relevant Agricultural Income Tax Act, development rebate or development allowance Admissible under the Income Tax Act and such other sums as are specified in the third Schedule. 7 deals with calculation of direct tax. 8 and 9 deals with eligibility of and disqualification from receiving bonus. 10 to 15 deal with minimum and maxi mum bonus and the provisions for 'set off ' and 'set on '. 18, 19, and 21 to 31 deal with certain procedural and allied matters. 20 deals with certain establishments in public sector to which the Act is made applicable in certain events. 32 exclude from the application of the Act certain categories of employees and certain establishments therein specified. 34 provides for the overriding effect of the Act notwithstanding anything incon sistent therewith contained in any other law for the time being in force or in terms of any award, agreement, settlement or contract of service made before May 29, 1965. 35 saves the provisions of the Coal Mines, Provident Fund and Bonus Schemes Act, 1948 or any scheme made thereunder. 35 empowers an appropriate Government having regard to the financial position and other relevant circumstances of any establishment or class of establishments if it is of opinion that it would not be in public interest to apply all or any of the provisions of the Act thereto, to exempt for such period as may be specified by it such establishment or class of establishments from all or any of the provisions of the Act. 39 provides as follows : "Save as otherwise expressly provided, the provisions of this Act shall be in addition to and not in derogation of the or any corresponding law relating to investigation and settlement of industrial disputes in force in a State". It will be noticed that sec.22 provides that where a dis pute arises between an employer and his employees (1) with respect to the bonus payable under the Act, or (2) with respect to the application of the Act, such a dispute shall be deemed to be an industrial dispute within the meaning of the or any corresponding law relating to investigation and settlement of industrial disputes in force in a State and the provisions of that Act and such law, as the case may be, shall, save as otherwise expressly provided, apply accordingly. An industrial dispute under the would be between a workman as defined in that Act and his employer and the dispute can be an industrial dispute if it is one as defined therein. But the definition of an "employee" under sec.2(13) of this Act is wider than that of a "workman" under the Industrial Disputes 378 Act. A dispute; between an employer and an employee, therefore, may not fall under the and in such a case the Act would not apply and its machinery for investigation and settlement would not be available. That being so, and in order that such machinery for investigation and settlement may be available, sec. 22 has been enacted to create a legal fiction whereunder such disputes are deemed to be industrial disputes under the or any other corresponding law. For the purposes of such disputes the provisions of the or such other law are made applicable. The effect of sec.22 thus is (1) to make the disputes referred to therein industrial disputes within the meaning of the or other corresponding law and (2) having so done to apply the provisions of that Act or other corresponding law for investigation and settlement of such disputes. But the application of sec.22 is limited only to the two types of disputes referred to therein and not to others. Section 39, on theother hand, provides that "save as otherwise expressly provided" the provisions of the Act shall be in addition to and not in derogation of the, or any corresponding law relating to investigation and settlement of industrial disputes in force in a State. Except for providing for recovery of bonus due under a settlement, award, or agreement as an arrear of land revenue as laid down in sec.21, the Act does not provide any machinery for the investigation and settlement of disputes between an employer and an employee. If a dispute, for instance, were to arise as regards the quantum of available surplus, such a dispute not being one falling under sec.22, Parliament had to make a provision for investigation and settlement thereof. Though such a dispute would not be an industrial dispute as defined by the or other corresponding Act in force in a State, sec 39 by providing that the provisions of this Act shall be in addition to and not in derogation of the or such corresponding law makes available the machinery in that Act or the corresponding Act available for investigation and settlement of industrial disputes thereunder for deciding the disputes arising under this Act. As already seen sec 22 artificially makes two kinds of disputes therein referred to industrial disputes and having done so applies the provisions of the and other corresponding law in force for their investigation and settlement. But what about the remaining disputes ? As the Act does not provide any machinery for their investigation and settlement, Parliament by enacting sec.39 has sought to apply the provisions of those Acts for investigation and settlement of the remaining disputes, though such disputes are not industrial disputes as defined in those Acts. Though, the words "in force in a State" after the words "or any corresponding law relating to investigation and settlement of industrial disputed appear to qualify the words "any corresponding law" and not the 379 , the is primarily a law relating to investigation and settlement of industrial disputes and provides machinery therefor. Therefore the distinction there made between that Act and the other laws does not seem to be of much point. It is thus clear that by providing in section 39 that the provisions of this Act shall be in addition to and not in derogation of those Acts, Parliament wanted to avail of those Acts for investigation and settlement of disputes which may arise under this Act. The distinction between sec.22 and sec.39, therefore, is that whereas sec.22 by fiction makes the disputes referred to therein industrial disputes and applies the provisions of the and other corresponding laws for the investigation and settlement thereof, Sec.39 makes available for the rest of the disputes the machinery provided in that Act and other corresponding laws for adjudication of disputes arising under this Act. Therefore, there is no question of a right to bonus under the or other corresponding Acts having been retained or saved by sec. Neither the nor any of the other corresponding laws provides for a right to bonus. Item 5 in Schedule 3 to the deals with jurisdiction of tribunals set up under sections 7, 7A and 7B of that Act, but does not provide for any right to bonus. Such a right is statutorily provided for the first time by this Act. Mr. Ramamurti and Mr. Gokhale for the respondents, however, sought to make the following points : 1.The Act applies only to certain establishments and its preamble and sec.1(3) show to which of them it is expressly made applicable; 2. Under sec.1(3), the Act is made applicable to all factories and establishments in which 20 or more persons are employed except those "otherwise provided in the Act". It means that the Act does not apply (i) to factories and establishments otherwise provided in the Act, and (ii) to establishments which have less than 20 persons employed. The Act, therefore, is not a comprehensive Act but applies only to factories and establishments covered by sec.1(3); 3.There is no categorical provision in the Act depriving the employees of factories and establishments not covered by or otherwise saved in the Act of bonus which they would be entitled to under any other law; 4.That being so, the employees of establishments to which the Act is not made applicable would still be entitled to bonus under a law other than the Act although they are not entitled to the benefit of the Act; 5.Parliament was aware of the fact that employees in establishments other than those to which, the Act aplies were getting bonus under adjudication provided by the and other similar Acts. If it intended to deprive them of such bonus surely it would have expressed so in the Act; in clear terms saves the right to claim bonus under the or any corresponding law by providing that the provisions of this Act shall be in addition to and not in derogation of the provisions of those Acts. It is true that the preamble states that the Act is to provide for payment of bonus to persons employed in certain establishments and sec 1(3) provides that the Act is to apply, save as otherwise provided therein, to factories and every other establishments in which 20 or more persons are employed. Sub sec.(4) of sec. 1 also provides that the Act is to have effect in relation to such factories and establishments from the accounting year commencing on any day in 1964 and every subsequent accounting year. But these provisions do not, for that reason, necessarily mean that the Act was not intended to be a comprehensive and exhaustive law dealing with the entire subject of bonus and the persons to whom it should apply. Even where an Act deals comprehensively with a particular subject matter, the Legislature can surely provide that it shall apply to particular persons or groups of persons or to specified institutions only. Therefore, the fact that the preamble states that the Act shall apply to certain establishments does not necessarily mean that it was not intended to be a comprehensive provision dealing with the subject matter of bonus. While dealing with the subject matter of bonus the Legislature can lay down as a matter of policy that it will exclude from its application certain types of establishments and also provide for exemption of certain other types of establishments even though such establishments would otherwise fall within the scope of the Act. The exclusion of establishments where less than 20 persons are employed in sec.1(3) therefore is not a criterion suggesting that Parliament has not dealt with the subject matter of bonus comprehensively in the Act. As already seen, there was until the enactment of this Act no statute under which payment of bonus was a statutory obligation on the part of ,in employer or a statutory right therefore of an employee. Under the and other corresponding Acts, workmen of industrial establishments as defined therein could raise an industrial dispute and demand by way of bonus a proportionate share in profits and Industrial Tribunals could under those Acts adjudicate such disputes and oblige the employers to pay bonus on the principle that both capital and 381 labour had contributed to the making of the profits and, therefore, both were entitled to a share therein. The right to the payment of bonus and the obligation to pay it arose on principles of equity and fairness in settling such disputes under the machinery provided by the Industrial Acts and not as a statutory right and liability as provided for the first time by the present Act. In providing such statutory liability, Parliament has laid down a statutory formula on which bonus would be calculated irrespective, of whether the establishment in question has during a particular accounting year made profit or not. It can further lay down that the formula it has evolved and the statutory liability it provides in the Act shall apply only to certain establishments and not to all. Since there was no such statutory obligation under any previous Act, there would not be any question of Parliament having to delete either such obligation or right. In such circumstances, since Parliament is providing for such a right and obligation for the first time, there would be no question also of its having to insert in the, Act an express provision of exclusion. In other words, it has not to provide by express words that henceforth no bonus shall be payable under the or other cor responding Acts as those Acts did not confer any statutory right to bonus. It will be noticed that though the confers substantive rights on workmen with regard to lay off, retrenchment compensation, etc., it does not create or confer any such statutory right as to payment to bonus. Bonus was so far the creature of industrial adjudication and was made payable by the employers under the machinery provided under that Act and other corresponding Acts enacted for investigation and settlement of disputes raised thereunder. There was, therefore, no question of Parliament having to delete or modify item 5 in the third Schedule to Industrial 'Disputes Act or any such provision in any cor responding Act or its having to 'exclude any right to bonus thereunder by any categorical exclusion in the present Act. But the argument was that if the Act were to be held as an exhaustive statute dealing with the subject of bonus, three results would follow which could never have been expected much less G intended by Parliament. These results would be : (1) that employees in establishments engaging less than 20 persons would get no bonus at all either under the Act or under industrial adjudication provided for by the and other corresponding Acts. Since such employees were so far getting bonus as a result of industrial adjudication, Parliament could never have intended to deprive them of such benefit; (ii) that employees in public sector Corporations and Companies would get no bonus either under the Act or under the or other corresponding law; and (iii) that such a construction would have 12 Sup CI/68 10 382 the, effect of impliedly repealing and negating the provisions of the and other corresponding laws. Though sec.1(3) excludes an establishment other than a fac tory having less than 20 employees from the application of the Act, all establishments which are factories irrespective of the number of persons employed therein and all establishments which are not factories but are having 20 or more employees are covered by the Act. Therefore, only small establishments having less than 20 employees and which are not factories are excluded. Even in such cases if any establishment were to have 20 or more persons employed therein on any day in any accounting year, the Act would apply to such an establishment. It is, therefore, clear that Parliament by enacting sec.1(3) excluded only petty establishments. We are not impressed by the argument that Parliament in excluding such petty establishments could not have intended that employees therein who were getting bonus under the Full Bench formula should lose that benefit. As aforesaid, Parliament was evolving for the first time a statutory formula in regard to bonus and laying down a legislative policy in regard thereto as to the classes of persons who would be entitled to bonus thereunder. It laid down the definition of an 'employee ' far more wider than the definition of a 'workman ' in the and the other corresponding Acts. If, while doing so, it expressly excluded as a matter of policy certain petty establishments in view of the recommendation of the Commission in that regard, viz., that the application of the Act would lead to harassment of petty proprietors and disharmony between them and their employees, it cannot be said that Parliament did not intend or was not aware of the result of exclusion of employees of such petty establishments. It is true that the construction canvassed on behalf of the appellants leads, as argued by counsel for the respondents, to employees in public sector concerns being deprived of bonus which they would be getting by raising a dispute under the and other corresponding statutes. But such a result occurs in consequence of the exemption of establishments in public sector from the Act, though such establishments but for sec.32(x) would have otherwise fallen within the purview of the Act. It appears to us that the exemption is enacted with a deliberate object, viz., not to subject such establishments to the burden of bonus which are conducted without any profit motive and are run for public benefit. The exemption in sec.32(x) is, however, a limited one, for, under sec. 20 if a public sector establishment were in any accounting year to sell goods produced or manufactured by it in IF competition with an establishment in private sector and the income from such sale is not less than the 20% of its gross income, it would be liable to pay bonus under the Act. Once again it is clear 383 that in exempting public sector establishments, Parliament had a definite policy in mind. This policy becomes all the more discernible when the various other categories of establishments exempted from the Act by sec.32 are examined. An insurer carrying on general insurance business is exempted under cl.(i) in view of certain provisions of the Insurance Act, 1936 and the Insurance (Amendment) Act, 1950. In view of these provisions the Full Bench formula could not be and was not in fact applied at any time to such insurance establish ments. The Life Insurance Corporation of India is exempted under clause (1) because of its being a public sector concern having no Cl.(ii) of sec.32 profit motive and conducted in public interest.exempts shipping companies employing seamen in view of sec. 159(9) of the under which the was inapplicable to such seamen, the disadvantages that Indian Shipping Companies vis a vis foreign companies engaged in shipping would be put to if they were made to pay bonus and the obvious difficulties in applying the Act to such foreign companies engaging Indian seamen. The exemption in respect of stevedore labour contained in cl.(iii) also seems to have been provided for in view of the peculiar nature of employment,, the difficulty of calculating profits according to the normal methods and other such difficulties. The rest of the categories of establishments set out in sec.32 appear to have been exempted on the ground of (a) absence of any profit motive, (b) their being of educational, charitable or public nature, and (c) their being establishments in public sector carried on in public interest. Building contractors appear to have been exempted because of their work being contract job work, the unfeasibility of applying the formula evolved in the Act and the problem of employees of such contractors being more of evolving and enforcing a proper wage structure rather than of payment of bonus to them. It seems to us that if we were to accept the contention that the object of sec.32 was only to exempt the establishments therein enumerated from the application of the bonus formula enacted in the Act, but that the employees of those establishments were left at liberty to claim and get bonus under the machinery provided by the and other corresponding Acts, them very object of enacting sec.32 would be frustrated. Surely, Parliament could not have intended to exempt these establishments from the burden of bonus payable under the Act and yet have left the door open for their employees to raise industrial disputes and , ,get bonus under the Full Bench formula which it has rejected by laying down a different statutory formula in the Act. For instance, is it to be contemplated that though the Act by sec.32 exempts institutions such as the Universities or the Indian Red Cross Society or hospitals, or any of the establishments set out in cl.(ix) of that section, they would still be liable to pay bonus if the employees, 384 of those institutions were to raise a dispute under the and claim bonus in accordance with the Full Bench formula ? The legislature would in that case be giving exemption by one hand and taking it away by the other, thus frustrating the very object of sec. Where, on the other hand, Parliament intended to retain a previous provision of law under which bonus was payable or was being paid it has expressly saved such provision. Thus, under sec.35 the Coal Mines Provident Fund and Bonus Schemes Act, 1946 and any scheme made thereunder are saved. If, therefore, Parliament wanted to retain the right to claim bonus by way of industrial adjudication for those who are either excluded or exempted from the Act it would have made an express saving provision to that effect as it has done for employees in Coal Mines. Besides, the construction suggested on behalf of the respondents, if accepted, would result in certain anomalies. Take two establishments in the same trade or industry, one engaging 20 or more persons and the other less than 20. The Act would be applicable to the former but not to the latter. If the respondents were to be right in their contention the employer in the former case would be liable to, pay bonus at the rates laid down by the Act, i.e. at the rate of 4% minimum and 20% maximum, but in the latter case the Act would not apply and though his establishment is a smaller one, on the basis of the Full Bench formula there would be a possibility of his having to pay bonus at a higher rate than 20%, depending upon the quantum of profit made in that particular accounting year. Section 32(vii) exempts from the applicability of the Act those employees who have entered before May 29, 1965 into an agreement or settlement with their employers for payment of bonus linked with production or productivity in lieu of bonus based on profits and who may enter after that date into such agreement or settlement for the period for which such agreement or settlement is in operation. Can it be said that in cases where there is such an agreement or settlement in operation, though this clause expressly excludes such employees from claiming bonus under the Act during such period, the employees in such cases can still resort to the and claim bonus on the basis of the Full Bench formula ? The answer is obviously in the negative for the object in enacting cl.(vii) is to let the parties work out such an agreement or settlement. It cannot be that despite this position, Parliament intended that those employees had still the option of throwing aside such an agreement or settlement raise a dispute under the and claim bonus under the Full Bench formula. The contention, therefore, that the exemption under sec 32 excludes those employees from claiming bonus under the Act only and not from claiming bonus under the 385 or such other Act is not correct. This conclusion is buttressed by the provisions of sec.36 which empower the appropriate Government to exempt for a specified period an establishment or class of establishments from the operation of the Act, if it is of. the opinion that it is not in public interest to apply all or any of the provisions of the Act to such establishment or class of establishments. Since the appropriate Government can exempt such an establishment or establishments from the operation of the Act on the ground of public interest only, it cannot surely be that Parliament still intended that the employees of such exempted establishment or establishments can claim bonus through industrial adjudication under the or any such corresponding law. We are also not impressed by the contention that the fact that sec.39 provides that the provisions of this Act are in a addition to and not in derogation of the or any other corresponding law shows that Parliament did not wish to do away with the right to payment of bonus altogether to those who cannot either by reason of exclusion or exemption from the Act claim bonus under the Act. Such a construction is fallacious on two ground. Firstly because it assumes wrongly that the or any other law corresponding to it provided for a statutory right to payment of bonus. All that those Acts provided for, apart from rights in respect of lay out, retrenchment etc., a machinery for investigation and settlement of disputes arising between workmen and their employers. It is, therefore, incorrect to say that the right to bonus under this Act is in addition to and not in derogation of any right to bonus under those Acts. Secondly, sec.39 became necessary because the Act does not provide any machinery or procedure for investigation and settlement of disputes which may arise between employers and employees. In the absence of any such provision Parliament intended that the machinery and procedure under those Acts should be made available for the adjudication of disputes arising under or in the operation of the Act. If, for instance, there is a dispute as to the computation of allocable surplus or as to quantum of bonus, or as to whe ther in view of sec.20 an establishment in public sector is liable to pay bonus, such a dispute is to be adjudicated under the machinery provided by the or other corresponding Acts. Considering the history of the legislation, the background and the circumstances in which the Act was enacted, the object of the Act and its scheme, it is not possible to accept the construction suggested on behalf of the respondents that the Act is not an exhaustive Act dealing comprehensively with the subject matter of bonus in all its aspects or that Parliament still left it open to those to whom the Act does not apply by reason of its provisions either as to exclusion or exemption to raise a dispute with regard to bonus 386 through industrial adjudication under the or other corresponding law. We are, therefore, of the view that the construction given to the Act by the Tribunals was not correct and the orders passed by them have to be set aside. The appeals are allowed, but as the question as to the scope of the Act is raised in these appeals for the first time, there will be no order as to costs. V.P.S. Appeals allowed.

The appellants are : (i) an establishment with less than 20 employees and which was not a factory; and (ii) an establishment in the public sector. On the question, whether in view of the non applicability of the , to the two appellants in the first case by reason of exclusion under section 1(3) and in the other by reason of exemption under section 32(x) the employees of the two appellants were entitled to claim bonus dehors the Act. HELD : Considering the history of the legislation, the background and the circumstances in which the Act was enacted the object of the Act and its scheme, it is not possible to accept the construction suggested on behalf of the respondents (employees) that the Act is not an exhaustive Act dealing comprehensively with the subject Matter of bonus in all its aspects, or that Parliament still left it open to those to whom the Act does not apply by reason of exclusion or exemption to raise a dispute with regard to bonus dehors the Act through industrial adjudication under the , or other corresponding laws. (1) The Court is justified in looking into the history of the legislation and the statement of objects and reasons, not for the purpose of construing the Act, but for the limited purpose of ascertaining the background, the conditions and circumstances which led to its passing, the mischief it was intended to prevent and the remedy it furnished to prevent such mischief. [372 B C] Heydon 's case, 76 E.R. 637, Bengal Immunity Co. Ltd. vs State of Bihar, , R. M. D. Chamarbaughwalla vs Union of India, ; , Central Bank of India vs Their Workmen, ; , Corporation, of the City of Nagpur vs Its Employees, ; , State of West Bengal vs Union of India, [1964] 1 S.C.R. 371 and Azeez Basha vs Union of India, ; referred to. Until the enactment of the , payment of bonus was not a statutory obligation on the part of the employer nor was it a statutory right of an employee. It was originally a voluntary payment. Under the Full Bench formula, evolved by the Labour Appellate Tribunal with respect to disputes for payment of bonus in the Bombay Textile Industry, it acquired the character of a right to share in the surplus of profits enforceable through the machinery of the Industrial Dispites Act, 1947, and other corresponding Act. Under that Act, workmen of industrial establishments could raise an industrial dispute and 367 demand by way of bonus a proportionate share in profits on the principle that both capital and labour had contributed to the making of profits and therefore both were entitled to a share therein. As a result of the observations of this Court in Associated Cement Companies Ltd. vs Its Workmen, and in Ahmedabad Miscellaneous Industrial Workers ' Union vs The Ahmedabad Electricty Co., ; , the Government of India appointed a Commission to make recommendations with respect to legislation regarding bonus. The Government accepted the majority of the Commission 's recommendations and sponsored the enactment of the . Under this Act. liability to pay bonus has now become a statutory obligation imposed on employers. In providing such statutory liability Parliament has laid down a statutory formula on which bonus would be savable irrespective of whether the establishment had, during a particular accounting year, made profit or not. Parliament further laid down that the formula it had evolved and the statutory liability it provided, shall apply only to certain establishments and not to all. In such circumstances, Parliament has not to provide by express words that henceforth no bonus shall be payable under the industrial Disputes Act or other corresponding Acts, as those Act never conferred any statutory right to bonus. [373 G H; 375 H; 376 B C; 381 A D] Muir Mills Co. vs Suti Mills Mazdoor Union, Kanpur, ; , Baroada Borough Municipality vs Its Workmen, ; , Shree Meenakshi Mills Ltd. vs Their Workmen ; , State of Mysore vs The Workers of Gold Mines, ; , Associated Cement Companies Ltd. vs Its Workmen, r.[1959] S.C.R. 925 and The Ahmedabad Miscellaneous Industrial Workers ' Union vs The Ahmedabad Electricity Co. Ltd. ; , referred to. (2) The was intended to be a comprehensive and exhaustive law dealing with the entire subject of bonus. The fact that the preamble states that the Act shall apply only to certain establishments and that section 1(3) of the Act excludes establishments where less than 20 persons ape employed, from the application of the Act, does not necessarily mean that Parliament ras not dealt with the subject matter of bonus and the persons to whom it shall apply comprehensively in the Act. Even where an Act deals comprehensively with a particular subject matter, the Legislature can provide that it shall apply to particular persons or group of persons or to specified institutions only, and so, Parliament can lay down as a matter of policy that it will exclude from the application of the Act certain types of establishments and also provide for exemption of certain other types of establishments which would otherwise fall within the scope of the Act. [380 C H; 385 H] (3) Since the Payment of Bonus Art is an exhaustive statute dealing with subject of bonus, one of the consequences is that under section 1(3) of the Act, employees in establishments engaging less than 20 Persons would get no bonus either under this Act or under industrial adjudication provided for by the and other corresponding Acts. Under section 1(3)Parliament has excluded petty establishments with less than 20 employees in view of the recommendations of the Commission in that regard, namely, that the application of the Act to such establishments would lead to harassment of petty proprietors and disharmony between them and their employees. To hold that employees in such establishments would still be entitled to bonus, though not under the Act, would lead to the anomaly that if there are two establishments in the same trade or industry one engaging more than 20 persons and the other engaging less than 20 person, then, in the former case the employer would be 368 liable to pay bonus at the rate laid down in the Act, while in the latter, the employer would be liable to pay bonus on the basis of the Full Bench formula which may be at a higher rate depending upon the quantum of profits in the particular year. [382 C F; 384 C E] (4) Under section 32(x) of the , establishments in the public sector are exempted from the application of the Act. Therefore, employees in public sector concerns would not be entitled to bonus, either under the Act or which they might otherwise have got by raising a dispute under the and other corresponding statutes. The exemption is a limited one and in granting it, Parliament had a definite policy in mind, namely, not to subject such establishments which are conducted without any profit motive and are run for public benefit, to the burden of bonus. To hold that even in these exempted cases, the employer would still be liable to pay bonus if the employees of such institutions were to raise a dispute under the and claim bonus in accordance with the Full Bench formula would also lead to the anomaly that the Legislature would be giving exemption with one hand and taking it away with the other. If Parliament wanted to retain the right to claim bonus by way of industrial adjudication in the case of establishments which are either excluded or exempted from the Act it would have made an express saving provision to that effect as it has done for employees of coal mines. [382 F H; 383 F H; 384 A C] (5) There is no question of a right to bonus under the or other corresponding laws being saved under section 39 of the , because : (a) the or the corresponding laws though they confer substantial rights on a workman with regard to lay off, retrenchment compensation, etc., do not provide for a statutory right to payment of bonus; and [385 C G] (b) the definition of 'employee under section 2(13) of the is wider than that of 'workman ' under the . Therefore, a dispute between an employer and his employees, in relation to bonus may not be an industrial dispute. Section 22 of the , by fiction, makes such disputes industrial disputes and applies the provisions of the . But the does not provide any machinery or procedure for the investigation and settlement of disputes which may arise between employers and employees, such as a dispute as to the computation of allocable surplus, or quantum of bonus or as to whether an establishment in the public sector is liable to pay bonus in view of section 20 of the Act. Therefore, section 39, which provides that the provisions of the are in addition to and not in derogation of the and other corresponding laws, became necessary in order that the machinery of the may be available for adjudication of such disputes under the F377 H; 378 A G; 379 B D]

Appeal No. 408 of 1957. Appeal by Special Leave from the Judgment and Order dated the 28th September, 1955, of the former Bombay High Court in Income tax Reference No. 5 of 1955. Sanat P. Mehta, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellant. A. N. Kripal, R. H. Dhebar and D. Gupta, for the respondent. October 18. The Judgment of the Court was delivered by SHAH J. To the appellant who was a non resident for the purposes of the Indian Income Tax Act, 1922, had accrued in the assessment years 1943 44, 194445, 1946 47 and 1947 48 certain dividend income within the taxable territory of British India, but the appellant did not submit returns of his income for those assessment years. In exercise of his powers under section 34 of the Indian Income Tax Act, 1922, the Income Tax Officer, Bombay City, served upon the appellant notices under section 34 read with s, 22(2) of the Act for assessment of tax in respect of those years. The notice for the year 1943 44 was served on the appellant on March 27, 1952, for the year 1944 45 on February 16, 1953, for the year 1946 47 on April 4, 1951 and for the year 1947 48 on April 2, 1952. The Income Tax Officer completed the assessments in respect of the years 1943 44, 1944 45 and 1947 48 on May 6, 1953 and for the year 1946 47 on March 19, 1952. The orders of assessment were confirmed by the Appellate Assistant Commissioner and by the Income Tax Appellate Tribunal. At the instance of 37 the appellant, the Income Tax Appellate Tribunal drew up a statement of the case under section 66(1) of the Income Tax Act and submitted to the High Court of Judicature at Bombay the following two questions: (I). Whether the notices issued under section 22(2) of the Act read with section 34 of the Act for the assessment years 1943 44, 1944 45, 1946 47 and 1947 48 were served after the period of limitation prescribed by section 34 of the Act? (2) If the answer to Question No. 1 is in the affirmative, whether the assessments for the years in question were invalid in law? The High Court answered the first question in the negative and observed that on that answer, the second question " did not arise ". With special leave under article 136 of the Constitution, this appeal is preferred by the appellant against the order of the High Court. The only question which falls to be determined in this appeal is whether the proceedings for assessment were commenced within the period of limitation prescribed for serving notice of assessment under section 34(1)(a) of the Act. At the material time, by section 34 (1)(a), the Income Tax Officer was invested with power amongst others to serve at any time within eight years from the end of any year of assessment notice of assessment if he had reason to believe that income, profits or gains had escaped assessment by reason of omission or failure on the part of the assessee to make a return of his income under section 22 for that year, or to disclose fully and truly all material facts necessary for his assessment of that year. In those cases where the Income Tax Officer had in consequence of information in his possession reason to believe that income, profits or gains had escaped assessment even though there was no omission or failure as mentioned in el. (a), he could under cl. (b) within four years from the end of the year of assessment serve a notice of assessment. Admittedly, the notices issued by the Income Tax Officer for the years in question were issued within eight years from the end of the years of assessment and if el. (1)(a) of section 34 applied, the assessment was not barred by the law of limitation. 38 But the appellant contended that the notices for assessment were, even though he had not made a return of his income for the years in question, governed not by cl. (1)(a) of section 34, but by cl. (1)(b) of section 34. He contended that being a resident outside the taxable territory in the years of , assessment, a general notice under section 22(1) did not give rise to a liability to submit a return, and his inaction did not amount to omission or failure to submit a return, inviting the applicability of section 34(1)(a). He submitted that omission or failure to make a return can only arise qua a non resident, if no return is filed after service of an individual notice under section 22(2). In other words, the plea is that a notice under section 22(1) imposes an obligation upon persons resident within the taxable territory and not upon non residents, and support for this argument is sought to be obtained from section 1 sub section (2) which extended the Income Tax Act at the material time to British India. The expression " every person whose total income during the previous year exceeded the maximum amount which is not chargeable to income tax " in section 22(1) includes all persons who are liable to pay tax and there is nothing in the section or in its context which exempts non residents from liability to submit a return pursuant to a notice thereunder. The fact that a non resident assessee may not come to know of the general notice issued under section 22(1) is not a ground for not giving effect to the plain words used in the section. In terms, the clause read with r. 18 requires every person who has taxable income to submit his return, and if he fails to do so, under section 34 of the Act the Income Tax Officer may commence proceedings for assessment within the period prescribed by cl. (1)(a). Section 34(1)(b) applies only to those cases where there is no omission or failure to make a return of the income or to make a full and true disclosure of facts material to the assessment. To the appellant though non resident income bad admittedly accrued in the taxable territory and that income exceeded the maximum amount not chargeable to income tax. , The appellant not having submitted a return in pursuance of the notice issued under section 221 the Income Tax 39 Officer was competent under section 34(1)(a) to issue notice at any time within eight years of the end of the year of assessment for assessing him to tax. Once a notice is given by publication in the press and in the prescribed manner under section 22(1), every person whose Th. income exceeds the maximum amount exempt from tax is obliged to submit a return and if he does not do so, it will be deemed that there was omission on his part to a make a return within the meaning of section 34(1)(a). There is no warrant for the submission that section 22(1) applies to residents only and that an obligation to make a return on the part of a nonresident can only arise if a notice under sub section (2) is served. Under sub section (2) it is open to the Income Tax Officer to serve a special notice upon any person requiring him to furnish a return in the prescribed form, but that provision does not derogate from the liability arising under sub section (1) to submit a return. The Income Tax Act extends by section 1(2) to the taxable territory and not beyond; but within that territory, the Income Tax Officer has power to tax income which accrues, arises or is received, and that is not disputed by the appellant. If power to tax be granted, it is difficult to appreciate the ground on which the plea that the general provision imposing liability upon persons receiving taxable income is subject to an unexpressed limitation that it is to apply only to residents and not to non residents. The submission that a person liable to pay tax but resident outside the taxable territory must be served with a special notice under section 22(2) before his inaction in the matter of making a return may be deemed omission within the meaning of section 34(1) is without force. There is no such express provision made by the statute and none can be implied from the context. The High Court was therefore right in holding that the proceedings for assessment were properly commenced within the period of limitation prescribed by section 34(1)(a) from the close of the year of assessment. The appeal fails and is dismissed with costs. Appeal dismissed.

A Munsif appointed one R as a commissioner for seizing the account books of the plaintiff in a suit and to produce them before him. R seized the account books, and while they were still in his possession the appellants offered a bribe to R for being allowed to tamper with them. The appellants were tried and convicted under section 165 A of the Indian Penal Code. The appellants contended that the Munsif had no jurisdiction to appoint a commissioner for seizing account books, that the appointment of R as a commissioner was null and void and that consequently R was not a public servant and the appellants committed no offence in offering him a bribe. The respondent urged that the Munsif had jurisdiction under his inherent powers under section 151, Code of Civil Procedure, to appoint the commissioner and that in any case as R was in actual possession of the situation of a public servant within Explanation 2 to section 21 Of the Indian Penal Code, he would be deemed to be a public servant. Held, that R was not a public servant and the appellants did not commit any offence under section 165 A of the Penal Code by offering him a bribe. The Munsif had no inherent powers to appoint a commissioner to seize account books and his order was null and void. The inherent powers under section 151, Code of Civil Procedure, were with respect to the procedure to be followed by a Court in deciding the cause before it; such powers did not extend over the substantive rights of litigants. A party had full rights over his account books and the Court had no inherent power to forcibly seize his property. Explanation 2 to section 21, Indian Penal Code, applied only to a person actually in possession of a pre existing office of a public servant. In the present case there was no post or office of a commissioner in existence which could be said to have been occupied by R. His appointment being without jurisdiction R could not be deemed to be a public servant. 885

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

The deceased, who was at the material time in the employment of the State of Rajasthan in the Public Department, was required to proceed from his office at Bhilwara to Banswara, in connection with famine relief work undertaken by the department. For that purpose, he boarded a truck owned by the department from Bhilwara on May 19, 1952 with six others. Throughout the journey the radiator of the truck was getting heated frequently and the driver was pouring water into it after every 6 or 7 miles of journey. The truck took nine hours to travel the distance or seventy miles. After having travelled four miles from Peragraph, 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, they did so, The deceased struck against a stone lying by the side of the road and died instantaneously. The widow of the deceased brought a suit for damages against the State of Rajasthan under the provisions of the Act. The plaintiff alleged, inter alia, that it was on account of the negligence of the driver of the truck that a truck which was notroad worthy was put on the road and that it caught fire which led to the death of her husband and that the State was liable for the negligence of its employee in the course of his employment. The plaint also alleged that the deceased 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 resisted the claim denying negligence of the driver and pleading sovereign immunity. The trial Court relied on the maxim res ipsa loquitur, found that in putting the truck on the road the driver was negligent as the truck was not road worthy and since the driver was negligent, it held that 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 the plaintiff. Against this decree the state appealed to the High Court on the evidence on record, the High Court held that the principle of res ipsa loquitur had no, application to the facts of the case. Accordingly, the High Court allowed the appeal. On appeal by special leave to this Court. HELD : (1) Generally speaking an ordinary road worthy vehicle would not catch fire. 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 journey. The vehicle took 9 hours to cover the distance of 70 miles between Chittorgarh and Paragraph The fact that normally a motor vehicle would not catch fire if its mechanism is in order would indicate that there was some defect in it. The Distt. Judge found on the basis of evidence of witnesses that the driver knew about this defective condition of the truck when he started from Bhilwara. [554D F] It is clear that the driver was in 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. these circumstances, the maxim ipsa loquitur is attracted. [514F G] 550 The maxim does not embody many rule of substantive law nor a rule of evidence. It is perhaps not a rule of any kind but simply a caption to an arguments on the evidence. The maxim is only a convenient label to apply to a set of circums tances, in which the plaintiff proves a case so as to call for a rebuttal from the defendant, without having to allege any specific act or omission on the part of the defendant. Its principal function 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. The maxim is based on commonsense and its purpose is to do justice when the facts bearing on causation and on care exercised by the defendant are at the outset unknown to the plaintiff and are or ought to be within the knowledge of the defendant. [k52F 553 C] The plaintiff merely proves a result, not any particular act or omission producing the result. If the result, in circumstances 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 loquacious is said to apply, and the plaintiff will be entitled to succeed unless the defendant by evidence rebuts that probability. Res display loquitur is an immensely important vehicle for importing strict liability into negligence cases.[583 C D, 584 F] Scott. vs London & St. Catherine Docks ; , 601, (1923) section C. (HL) 43, Barkway vs South Wales Transport [1950]1 All E.R. 392, Jones vs Great Western, , referred to. (11)As the law stands today, it is not possible to say that famine relief work is :.it 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. [555 E F] Kasturilal vs State of Uttar Pradesh [1965] 1 S.C,. R. 375, referred to. Quaere : (a) 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; (b) whether there is any rational dividing line between the so called sovereign and proprietary commercial functions for determining the liability of the state. 1555 B C, E] Sensable : The modern sovereign immunity doctrine which is based on the ground that there can be no legal right as against the authority that makes the law on which the right depends, for exempting the sovereign from suit is neither logical nor practical. [555 D E].

vil Appeal No. 1939 (N) of 1972. From the Judgment and Order dated 24.1.1972 of the High Court of Gujarat at Ahmedabad in L.P.A. No. 263 of 1971. V.M. Tarkunde, V.N. Ganpule and P.C. Kapur for the Appellant. Vimal Dave and M.M. Shroff for the Respondent. The Judgment of the Court was delivered by SEN, J. The only question involved in this appeal by special leave from the judgment and order of the High Court of Gujarat dated January 24, 1972 is whether the appellant who was officiating as Superintending Engineer in the Guja rat Service of Engineers, Class I could be retired by the State Government on the date on which he attained the age of 55 years on the ground that he was merely officiating in that post and had not "attained to the rank of a Superin tending Engineer" within the meaning of r. 161(1)(c)(ii)(1) of the Bombay Civil Services Rules, 1959 as applicable to the State of Gujarat. 644 The facts giving rise to the case are as follows. The appellant was an officer of the Bombay Service of Engineers, Class I in the erstwhile State of Bombay and was promoted to the post of Executive Engineer. In July 1965 when the post of Superintending Engineer fell vacant the State Government promoted him to officiate as Superintending Engineer in the Gujarat Service of Engineers, Class I until further orders. On account of his meritorious service as Superintending Engineer the appellant was put in charge of the Minor Irri gation Project Circle. The work undoubtedly is of a highly specialised and skilled nature and officers of merit and proven ability, skill and competence are usually posted there. The appellant did excellent record of service without any blemish and earned encomiums for his meritorious service in his new capacity. In 1966 the Chief Engineer, Public Works Department addressed a letter to the appellant commu nicating the State Government 's appreciation of the valuable work which the appellant and the officers and staff under him had put up during the scarcity relief operations in that year. However, the State Government all of a sudden on September 13, 1967 purported to compulsorily retire him under the first proviso to r. 161(1)(a) w.e.f. December 15, 1967 after giving him three months notice he having attained the age of 55 years on November 12, 1967. Normally, the appellant would have as Superintending Engineer retired on November 12, 1970, the date on which he attained the age of 58 years. He had by then put up 29 years of service and there was no adverse entry in any of his confidential re ports questioning his integrity or his efficiency or ability for retention in service. The appellant accordingly assailed the order of compulsory retirement by a petition in the High Court under article 226 of the Constitution. In contesting his claim, the State Government in its return pleaded that the case of the appellant was governed by r. 161(1)(c) (ii)(1) of the Rules and not by r. 161(1)(a) and reference to a wrong provision would not necessarily invalidate the order, that the appellant had not substan tively attained to the rank of Superintending Engineer before he reached the age of 50 years and therefore the Government could compulsorily retire him at any time after he reached that age. It was asserted that the Government was entitled to review the cases of government servants who were to attain the age of 55 years as per the terms of the circu lar issued by the Government in the General Administrative Department dated October 25, 1963, as amended from time to time, and that in accordance with the procedure laid down the case of the apellant was reviewed before he attained the age of 55 years and it was decided that it was not desirable in the public interest to 645 continue him in government service and that he should be compulsorily retired by giving three months notice. Even otherwise, it was contended that by virtue of the power vested in the Government under the first proviso to r. 161(1)(a) the Government could direct the compulsory retire ment even of a person who had attained the rank of Superin tending Engineer before reaching the age of 50 years and that power was not excluded by reason of r. 161(1) (c)(ii)(1). The learned Single Judge (A.D. Desai, J.) relying upon the decision of a Division Bench in Ishwarlal Kasanji Naik vs State of Gujarat, held that since the appellant had not attained the substantive rank of a Super intending Engineer, he could be made to retire at any time under r. 161(1) (c)(ii)(1) i.e. on the date he attained the age of 55 years or thereafter. He observed that the decision in Ishwarlal Kasanji Naik 's case being that of a Division Bench, the construction placed by the learned Judges on r. 161(1) (c)(ii)(1) were clearly binding on him and that since the appellant was merely holding the post in an officiating capacity he could not be held, according to the view ex pressed in Ishwarlal Kasanji Naik 's case, to have attained the rank of Superintending Engineer, in order to have the benefit of the normal age of superannuation of 58 years. It has been laid down by a Division Bench in Ishwarlal Kasanji Naik 's case that the benefit of exemption from r. 161(1)(c)(ii)(1) could be had only by government servants in the Bombay Service of Engineers, Class I who were in the posts of Superintending Engineers i.e. held the rank of a Superintending Engineer on a regular basis, in a substantive capacity and not in an officiating capacity. The decision is reflected in a laconic sentence: "In order to get the benefit of exemption from the rule [r. 161(1)(c)(ii)(1)] it is necessary that he should have substantively attained the post or the rank of a Superintending Engineer. " We are unable to subscribe to the view expressed by the learned Judges in Ishwarlal Kasanji Naik 's case. The word 'substantive ' does not find place in r. 161(1)(c)(ii)(1) of the Rules. In assailing the correctness of the judgment of the High Court, learned counsel for the appellant contends that the post of Superintending Engineer is a selection post and the appellant was promoted as such in a clear vacancy, and though he was working as a Superintending Engineer in an officiating capacity, he was given the benefit of the re vised pay scale for post of Superintending Engineer and also given 646 two yearly increments. According to him, the word 'rank ' in r. 161 (1)(c)(ii)(1) must in the collocation of the words being preceded by the word 'attained ' mean the status or the grade. It is pointed out that the word 'rank ' is not quali fied by the word 'substantive ' as erroneously assumed in Ishwarlal Kasanji Nailo 's case. He places reliance on the recent judgment of this Court in S.C. Jain vs State of Haryana & Anr., ; where an identical provi sion r. 3.26(c)(1) of the Punjab Civil Services Rules was treated to be a special rule conferring immunity on an Engineer who has attained the rank of Superintending Engi neer in the Public Works Department (Buildings & Roads Branch) on the ground that premature retirement of Executive Engineers promoted to the rank of Superintending Engineer because of their merit and proven ability and competence was clearly not in the, public interest and therefore they must get protection from premature retirement under r. 3.26(c)(1). It is pointed out that even though the appellant was working as a Superintending Engineer, his pension has been fixed by the Government on the basis of the pay scale of Superintending Engineer presumably because he had been promoted to the post in an officiating capacity but in a clear vacancy i.e. had acquired the status or rank of a Superintending Engineer. The contention to the contrary by learned counsel for the respondents based upon an earlier decision of this Court in Union of India vs K.R. Tahiliani & Ant., ; is that the appellant was only officiating as Superin tending Engineer and had no right to the post. Our attention is drawn to the following observations made by the Court: "When a Government servant belonging to a Class I or Class II Service or post on a regular basis has to be retired compulsorily, Rule 56(j) comes to the rescue of the Govern ment. But if he is only a temporary hand, he has no right to the post and can always be reverted to the post, if any, on which he has a lien. Similar is the position of an offici ating hand. Thus, we have rigid and inevitable conclusion that Rule 56(j) is meant to cover only those who are in a post on a regular basis, i.e., in a substantive capacity, and not on an officiating basis only. " The submission therefore is that the benefit of the exemp tion under r. 161(1)(c)(ii)(1) can be had only by a govern ment servant holding the post of a Superintending Engineer on a regular basis i.e. in a substantive capacity. The subsequent decision in S.C. Jain 's case is sought to be distinguished on the ground that the Court there was dealing with 647 the case of a person holding the post of a Superintending Engineer on a regular basis. In order to appreciate the rival contentions, it is necessary to refer to some of the provisions of r. 16 1(1) which deals with the age of superannuation, insorfar as material: "161. (1)(a). Except as otherwise provided in the other clauses of this rule, the date of compulsory retirement of a Government servant other than a Class IV servant is the date on which he attains the age of 58 years. Provided: (i) An appointing authority may after giving three months previous notice in writing re quire a Government servant to retire from the service on the date on which he attains the age of 55 years or on any date thereafter to be specified in the notice." "161. (1)(c) The following rules are applica ble to particular services: (ii)(1) Except as otherwise provided in this sub clause, Government servants in the Bombay Service of Engineers, Class I, must retire on reaching the age of 58 years, and may be required by Government to retire on reaching the age of 50 years if they have not attained to the rank of Superintending Engineer. " Age of superannuation is an incident of government service; it is ' for the benefit of the employee who earns a well earned rest with or without pensionary benefits for the rest of his life. It is common to all permanent civil serv ants; it depends on an event that inevitably happens by passage of time unless the employee dies earlier or resigns from the post. We must give to the different clauses of r. 161(1) which find place in Chapter IX headed "Compulsory Retirement" their plain ordinary meaning in furtherance of the object and purpose with which they have been flamed. Under r. 161(1)(a) compulsory retirement of all government servants is at the age of 58 years which is the general provision. But the same cannot be said of the compulsory retirement before the age of superannuation. It is not an incident of the tenure; it is not conceived in the interests of the employee; it is a mode of 648 terminating the employment at the discretion of the appoint ing authority. The words 'except as otherwise provided in the other clauses of this rule ' appearing in r. 161(1)(a) make the general rule of superannuation at the age of 58 years 1subject to other clauses of that rule. That is to say, the Government is empowered to provide for different ages of compulsory retirement for different classes of government servants. Proviso to r. 161(1)(a) however is the absolute power of the Government to direct the premature retirement of a government servant on the date on which he attains the age of 55 years or at any time thereafter. R. 161(1)(c) is the special rule framed for that purpose. To illustrate, r. 161(1)(c)(i)(1) says that except as otherwise provided in that sub clause, holders of posts of the Chief Judge of the Court of Small Causes, Bombay and the Adminis trator General and Official Trustee, Bombay whether they are recruited directly or are promoted from subordinate posts should ordinarily be retained in service till the age of 60 years, if they continue efficiently upto that age, otherwise they may be required to retire at the age of 55 years or at any point thereafter. This clearly brings out that there are two ages of superannuation depending upon efficiency, integ rity and ability for further retention in service. Similar ly, r. 161(1)(c)(ii)(1) deals with another class of offi cers, namely. government servants in the Bombay Service of Engineers, Class I and similarly provides for two ages of superannuation. The first part of sub cl. (1) adopts the general rule contained in r. 161(1)(c)(ii)(1) for that class of officers as provided in r. 161(1)(a), namely, that they shall retire on the date on which they attain the age of 58 years. The second part however confers power on the Govern ment to retire any such officer on his reaching the age of 50 years. Such power of the Government to direct premature compulsory retirement of these officers is subject to a qualification. The words "if they have not attained to the rank" of Superintending Engineer read in conjunction with the opening words 'except as otherwise provided in this sub clause ' clearly carve out an exception in the case of persons holding the posts of Superintending Engineer. The words 'if they have not attained to the rank ' of Superin tending Engineer in r. 161(1)(c) (ii)(1) are plainly bad English and must be read as 'if they have not attained the rank ' of Superintending Engineer. The word used in that rule is 'rank ' and not 'substantive rank ' and there is no reason why it should not be understood according to its ordinary sense as meaning grade or status, particularly when it is preceded by the words 'have not attained the rank '. The word 'attained ' means acquired or reached. The word 'rank ' has both a narrower as well as a wider meaning. A question may arise as to the purport and effect of these rules. 649 The effect of r. 161(1)(a) which is the general rule dealing with all government servants except with respect to the enumerated categories and of r. 161(1)(c)(ii)(1) which is a special rule dealing with government servants belonging to Bombay Scrvice of Engineers, Class I is the same; the dif ference is only superficial which lies more in clever draft ing than in their content. The Government may terminate the services of a permanent government servant under the first proviso to r. 161 (1)(a) at any time on or after he attains the age of 55 years after giving three months notice i.e. before the normal age of superannuation, by way of compulso ry retirement. It will be noticed that the power of the Government under the first proviso to direct premature retirement does not exist on its satisfaction that it is necessary to do so in the public interest. It is unlike FR 56(j) to that extent. The Government may terminate the services of a government servant belonging to the Bombay Service of Engineers, Class I under r. 161(1)(c)(ii)(1) at the age of 50 years without giving him any notice. Arbi trariness is writ large in both the rules but the rules enable the Government to deprive a permanent civil servant of his office without enquiry. The power of compulsory retirement may be used when the authority exercising this power cannot substantiate the misconduct which may be real cause for taking action. Both violate article 311(2) of the Constitution. Primafacie it appears to us that the first proviso to r. 161(1)(a) was on lines of FR 56(j) and could be sustained on the strength of the decision in Union of India vs Col. J.N. Sinha & Ant., [1971] 1 SCR 791 being based on the ground that the compulsory retirement of a particular government servant was in the public interest but the words 'in the public interest ' are not there in r. 161(1)(c). In Col. J,N. Sinha 's case it was laid down that the appropriate authority has the absolute right to retire a government servant if it is of the opinion that it is in the public interest to do so. The right conferred on the appro priate authority is an absolute one. That power can be exercised subject to the conditions mentioned in the rules. one of which is that the concerned authority must be of the opinion that it is in the public interest to do so. If that authority bona fide forms that opinion, the correctness of that opinion cannot be challenged before Courts. It is however open to an aggrieved party to contend that the requisite opinion has not been formed or the decision is based on collateral grounds or that it is an arbitrary decision. Compulsory retirement involves no civil conse quences. The aforementioned FR 56(j) is not intended for taking any penal action against government servants. That rule merely embodies one of the facts of the "pleasure doctrine" embodied in article 3 10 of the Constitution. It was said: 650 "There is no denying the fact that in all organisations and more so in government organ isations, there is good deal of dead wood. It is in the public interest to chop off the same. Fundamental Rule 56(j) holds the balance between the rights of the individual govern ment servants and the interest of the public. While a minimum service is guaranteed to the government servant, the Government is given power to energize its machinery and make it more efficient by compulsorily retiring those who in its opinion should not be there in public interest. " These considerations do not arise either under the first proviso to r. 161(1)(a) or under sub cl. (1) to r. 161(1)(c)(ii) because the concept of public interest is not there. It seems to us that on a proper construction of r. 161(1)(c)(ii)(1) which is identical to r. 3.26.(c)(1) of the Punjab Civil Services Rules, the word 'rank ' in the colloca tion of the words 'if they have not attained to the rank of Superintending Engineer ' in r. 161(1)(c)(ii)(1) must in its context and setting was to be construed in its wider sense as meaning status or grade, and if so regarded, the second part of that rule must be treated as an exception to the special rule empowering the Government to direct superannua tion of such officers on the date they attain the age of 50 years. This has been the view expressed by the Court in S.C. Jain 's case but we find it difficult to support the conclu sion that the words 'if they have not attained the rank of Superintending Engineer ' in r. 161(1)(c)(ii)(1) confer an immunity on Superintending Engineers from being compulsorily retired at any age below the normal age of superannuation at 58 years. Under the scheme of the Rules, the benefit which the Superintending Engineers enjoy under the second part of r. 161(1)(c)(ii)(1) is necessarily subject to the absolute power of the Government to direct compulsory retirement of such officers on the date they attain the age of 55 years under the first proviso to r. 161(1)(a) or under FR 56(j)(1) on which it is based. Although the words 'in the public interest ' are not there but such power to direct premature compulsory retirement at the age of 55 years can be exer cised subject to the conditions indicated in Col. J.N. Sinha 's case, one of which is that the concerned authority must be of the opinion that it is in the public interest to do so. We are not oblivious of the fact that the construction that we put on the word 'rank ' in r. 161(1)(c)(ii)(1) does not accord with the view expressed by the Court in Tahilia ni 's case that FR 56(j) is meant to 651 cover only those who are in a post on a regular basis, i.e. in a substantive capacity and not on an officiating basis only. proceeds on the principle that the constitutional provision under article 311(2) protecting a government servant from reduction in rank without hearing refers only to a person who is occupying a higher post in a substantive capacity, for which he alone has a legal right to occupy the post. The Court laid down while interpreting FR 56(j) that a person who is occupying a higher post in an officiating capacity has no such right and can be deprived of his post by the competent authority. The facts are not clear from the judgment in Tahiliani 's case. From the passage extracted above, it is clear that the Court laid down that when a government servant belonging to a Class I or Class II serv ice or post on a regular basis has to be retired compulsori ly, the Government can fall back on FR 56(j). It however held that FR 56(j) is meant to cover only those who are in a post on a regular basis i.e. in a substantive capacity and not on an officiating basis only. If that be so, then we are at a loss to understand why a person who has not attained the rank of Superintending Engineer i.e. is merely officiat ing as Superintending Engineer cannot be compulsorily re tired from his substantive post of Executive Engineer if the other requirements of FR 56(j) are fulfilled. We need not dilate on this aspect further inasmuch as the State Govern ment in the return filed before the High Court stated that it only intended and meant to act under the first proviso to r. 161(1)(a) and not under r. 161(1)(c)(ii)(1). It is avert ed in the return that the case of the appellant was reviewed and it was decided to compulsorily retire him on his attain ing the age of 55 years. There is no material placed to show that such compulsory retirement was necessary in the public interest. The appellant has had an unblemished record and there was nothing against him to doubt his integrity, fit ness and competence. In somewhat similar circumstances this Court in H.C. Gargi vs State of Haryana, struck down the order of compulsory retirement under r. 3. 25(d) of the Punjab Civil Services Rules, observing: "The power of compulsory retirement under Rule 3.25 (d) of the Rules can be exercised subject to the conditions mentioned in the rule, one of which is that the concerned authority must be of the opinion that it is in public inter est to do so. The test in such cases is public interest as laid down by this Court in Union of India vs Col. J.M. Sinha. It does not appear that there was any material on the basis of which the State Government could have formed an opinion that it was in public inter est to compulsorily retire the 652 appellant at the age of 57 years. There was really no justification for his compulsory retirement in public interest. " There is no reason for us to take a different view in the facts and circumstances of the present case. The impugned order of compulsory retirement of the appellant purporting to be under the first proviso to r. 16 1(1)(a) of the Rules must therefore be struck down as arbitrary. In the result, the appeal succeeds and is allowed. The impugned order passed by the State Government dated Septem ber 13, 1967 for compulsory retirement of the appellant made under the first proviso to r. 161(1)(a) of the Bombay Civil Services Rules, 1959 is quashed and he shall be deemed to have retired from service on attaining his normal age of superannuation of 58 years on November 12, 1970. We under stand that the pension of the appellant has already been fixed on the pay scale of Superintending Engineer and the effect of this order is confined to payment of the differ ence between salary and pension for three years and to the benefit of the revised pay scale of Superintending Engineer in the matter of computation of pension. P.S.S. Appeal allowed.

Rule 161(1)(a) of the Bombay Civil Services Rules, 1959, as applicable to the State of Gujarat, provides for compul sory retirement of a Government servant other than Class IV, on his attaining the age of 58 years, while proviso (i) thereto empowers the appointing authority to retire a Gov ernment servant on his attaining the age of 55 years or any date thereafter. Rule 161(1)(c)(ii)(1) lays down that except as otherwise provided, Government servants in the Service of Engineers, Class I must retire on reaching the age of 58 years and may be required by Government to retire on reach ing the age of 50 years if they have not attained the rank of Superintending Engineer. The appellant, who was officiating as Superintending Engineer in the Gujarat Service of Engineers, Class I was sought to be compulsorily retired by the State Government under the first proviso to r.161(1)(a) with effect from December 15, 1967, he having attained the age of 55 years on November 12, 1967. He assailed that order by a petition in the High Court under article 226 of the Constitution, in which it was submit ted for the State that the case of the appellant was gov erned by r. 161(1)(c)(ii)(1) of the Rules and not by r. 161(1)(a) and reference to a wrong provision would not necessarily invalidate the order, that the appellant had not substantively attained the rank of Superintending Engineer before he reached the age of 50 years and therefore the Government could compulsorily retire him at any time after he reached that age, that by virtue of the power vested in the Government under the first proviso to r. 161(1)(a) the Government could even otherwise direct the compulsory re tirement of a 641 person who had attained the rank of Superintending Engineer before reaching the age of 50 years and that power was not excluded by reason of r. 161(1)(c)(ii)(1). The High Court held that since the appellant had not attained the substantive rank of a Superintending Engineer he could be made to retire at any time under r. 161(1)(c)(ii)(1), i.e. on the date he attained the age of 55 years or thereafter, that since the appellant was merely holding the post in an officiating capacity he could not be held to have attained the rank of Superintending Engineer, in order to have the benefit of the normal age of superannu ation of 58 years. In the appeal by special leave, it was contended for the appellant that the post of Superintending Engineer was a selection post and the appellant was promoted as such in a clear vacancy, that the word 'rank ' in r. 161(1)(c)(ii)(1) must in collocation of the words being preceded by the word 'attained ' mean the status or the grade, that the word 'rank ' is not qualified by the word 'substantive ' and that he had acquired the status or rank of a Superintending Engineer. Allowing the appeal, HELD: 1. The order of compulsory retirement of the appellant purported to be under the first proviso to r. 161(1)(a) of the Bombay Civil Services Rules, 1959 is struck down as arbitrary, and he shall be deemed to have retired from service on attaining his normal age of superannuation of 58 years. [652BC] 2.1 Under r.161(1)(a) compulsory retirement of all government servants is at the age of 58 years which is the general provision. But the same cannot be said of the com pulsory retirement of a government servant under proviso (i) to that rule on the date on which he attains the not an incident of the tenure. It is not conceived the interests of the employee. It is the mode of terminating his employment at the discretion of the appointing authority. This absolute power of the Government to direct premature retirement does not exist on its satisfaction that it is necessary to do so in the public interest. It is unlike FR 56(j) to that ex tent. [647G 648B, 649BC] 2.2 Rule 161(1)(c)(ii)(1), which is a special rule dealing with Service of Engineers, Class I, provides for two ages of superannuation. The first part adopts the general rule of superannuation, as provided in r. 161(1)(a). The second part, however, confers powers on the Govern 642 ment to terminate the services of such officers at the age of 50 years without giving any notice. The words 'in the public interest ' are not there in r. 161(1)(c). [648B, DE, 649C, E] 2.3 The effect of r. 161(1)(a) and r. 161(1)(c)(ii)(1) is the same. Arbitrariness is writ large in both these rules. They enable the Government to deprive a permanent civil servant of his office without enquiry. The power of compulsory retirement may he used when the authority exer cising this power cannot substantiate the misconduct which may be real cause for taking action. Both violate article 311(2) of the Constitution. [649A, CD] Union of India vs Col. J.N. Sinha & Anr., [1971] 1 SCR 791, referred to. 3.1 The word used in r. 161(1)(c)(ii)(1) is 'rank ' and not 'substantive rank ' and there is no reason why it should not be understood according to its ordinary sense as meaning grade or status, particularly when it is preceded by the words 'have not attained '. The word 'attained ' means ac quired or reached. The word 'rank ' has both a narrower as well as a wider meaning. [648G] 3.2 If the word 'rank ' is so construed in its wider sense in its context and setting in the collocation of words 'if they have not attained the rank of Superintending Engi neer ' as meaning status or grade then the second part of that rule must be treated as an exception to the special rule empowering the Government to direct superannuation of such officers on the date they attained the age of 50 years. [650D] 3.3 In the instant case, the appellant having attained the rank of Superintending Engineer he could not be compul sorily retired by the State Government under r. 161(1)(c)(ii)(1) before the age of superannuation. [643G] S.C. Jain vs State of Haryana & Anr. , ; , referred to. Ishwarlal Kasanji Naik vs State of Gujarat, , overruled. 4.1 The words 'if they have not attained the rank of Superintending Engineer ' in r. 161(1)(c)(ii)(1) do not confer an immunity on these officers from being compulsorily retired at any age below the normal 643 age of superannuation at 58 years. The benefit which the Superintending Engineers enjoy under the second part of that rule is necessarily subject to the absolute power of the Government to direct compulsory retirement of such officers on the date they attain the age of 55 years under the first proviso to r. 161(1)(a) or under FR 56(j)(1), on which it is based. Although the words 'in the public interest ' are not there but such power to direct premature compulsory retire ment at the age of 55 years can be exercised subject to the condition that the concerned authority must be of the opin ion that it is 'in public interest ' to do so. [650E G] 4.2 In the instant case, there was no material placed to show that such compulsory retirement was necessary in the public interest. The appellant has had an unblemished record and there was nothing against him to doubt his integrity, fitness and competence. [651E] H.C. Gargi vs State of Haryana, , referred to. Union of India vs K.R. Tahiliani & Anr., ; , distinguished.

ivil Appeal No. 2763 of 1987. From the Judgment and Order dated 5.2. 1987 of the Karnataka High Court in R.S.A. No. 17/1987. R.B. Datar and P.R. Ramasesh for the Appellant. Dr. Y.S. Chitale and E.M.S.Anam for the Respondent. The Judgment of the Court was delivered by KANIA, J. This is an appeal by special leave against the judgment and order of a learned Single Judge of the Karnata ka High Court in Regular Second Appeal No. 17 of 1987 filed in the said High Court. As we are generally in agreement with the reasoning and conclusion in the judgment of the Karnataka High Court relied upon by the learned Single Judge in the impugned judgment, the appeal can be disposed of shortly. About 250 acres of wooded evergreen land in the district of Coorg was given by a grant to the ancestors of the re spondent over a hundred years ago. The said district was a Scheduled district under the 729 control of the Governor General of India. The terms of the said grant which is very old are not available but there is no dispute that the said land was granted to the ancestors of the respondent. On November 1, 1899 Regulation No. 1 of 1899, called the Coorg Land and Revenue Regulation, 1899 came into force in the district of Coorg. We propose to refer to the said Regulation as the Coorg Regulation. It applied to the entire territories administered by the Chief Commissioner of Coorg. We may at this stage take a brief note of some of the rele vant provisions of the Coorg Regulation as they stood at the time relevant for the purpose of this appeal. The Coorg Regulation was enacted in order to amend and declare the law in force in Coorg in respect of the land and land revenue. Regulation 4 of the Coorg Regulation prescribes the classes of Revenue Officers. One of these is the Chief Commissioner and one other is the Revenue Officer. Chapter VI of the Coorg Regulation deals with the records of rights and annual records. Regulation 29 in this Chapter provides that there shall be a record of rights for every estate. Clause (2) of Regulation 29 states that when it appears to the Chief Commissioner that a record of rights for an estate does not exist or that the existing record of rights for an estate requires special revision, the Chief Commissioner shall by notification direct that a record of rights be made or that the record of rights be specially revised, as the case may be. Regulation 30 inter alia provides that the nature and extent of the interests of the landholders, tenants or assigness of land revenue in the estate shall be stated in the record of rights. Regulation 35 deals with the restric tions on variations of entries in records and, generally speaking, provides that entries in records of rights or annual records cannot be varied except as provided in clauses (a) to (c) 'thereof. Clause (a) of Regulation 35, the only possible relevant clause for the purposes of this appeal, provides that entries can be varied in accordance with the facts admitted of found by inquiry under Regulation 34 of the Coorg Regulation. Regulation 40 provides that any person who is aggrieved as to any right of which he is in possession by an entry in a record of rights can file a declaratory suit to establish his right. Shri Gustav Hallet, Settlement Officer, Coorg made his report by way of propos als for Land Revenue Resettlement of the Province of Coorg, on February 18, 1910 to the Secretary to the Chief Commis sioner of Coorg. The contents of the report shows that it was made after examining the revenue settlements made earli er. Pursuant to the said report a patta was given to the ancestors of the respondent in 1912 granting the aforesaid lands and in that patta there was an endorsement reading "redeemed coffee sagawali malai". The word "sagawali" 730 means cultivation and the word "malai" means "hill". It is common ground that the word "redeemed" used in this entry would show that the price of the standing timber on the said land had been paid by the grantee by the time when the patta was made. It may be mentioned here that in the settlement in Coorg where the land was granted with the endorsement "unredeemed", it meant that the standing timber had not been paid for and the grantee would have to pay for the same if the grantee wanted to cut the trees and remove the timber from the land. In 19 18 it appears that pursuant to an order made by the Commissioner the said entry has been altered to "unredeemed" showing that the trees had not been paid for. For several years no problem arose because it appears that there was no question arose of cutting any trees, but later, in recent years, the respondent applied for permis sion of appellant No. 1 to cut and remove some of the trees from the land granted to the respondent. The said applica tion was rejected on the ground that the seigniorage payable on the value of the timber standing on the land granted had not been paid and hence, before the trees could be cut and the timber removed, seigniorage in respect of the trees would have to be paid. The respondent filed a suit in the Court of Civil Judge, Madakeri for a declaration that the said land granted to him was redeemed in tenure and hence no payment of seigniorage could be demaned in respect of the trees to be cut and removed. In that suit, the respondent inter alia claimed that the alteration of the relevant entry from "redeemed" to "unredeemed" in the record of rights pertaining to the said lands, made pursuant to the order of the Commissioner, was void as the procedure prescribed by law had not been complied with the alteration in the entry not having been directed to be made by an authorised person. The Trial Court decreed the said suit and granted the decla ration. The appellants preferred an appeal against the said decision to the District Court but the said appeal was dismissed. The appellants then preferred a Second Appeal to the High Court of Karnataka which dismissed the same as set out earlier. We find that the question which has arisen in this appeal arose before a Division Bench of the Mysore High Court in State of Mysore vs Kainthaje Thimmanna Enat and Others, It is common ground that the facts in that case are in pari materia with the facts in the present case. It was held by the Division Bench that the presumption that the entries relating to the change of tenure should be taken to have been lawfully and regularly made in the course of the performance of official duties and in due compliance with 731 the procedure enjoined by law could not be drawn in that case. If the order in question for revision of the record of rights had been one that was made in exercise of the power under Regulation 29 of the Coorg Regulation, which is the provision which should have been resorted to for the purpose of preparation and revision of record of rights, the order should have been issued and published by the Chief Commis sioner of Coorg by notification and no such notification or publication of the same in the official gazette had been shown to the Court. The order for correcting the entry was issued by the Commissioner and not by the Chief Commissioner as enjoined by Regulation 29 of the Coorg Regulation and there was no reference on the record to any such notifica tion having been issued under Regulation 29. Moreover, it was not apparent who had made the alteration, altering the word "redeemed" to "unredeemed", in the Jambandi Register. It was further held that under Regulation 39, the presump tion as regards the truth of the entries arises only when the entries in the record of rights have been made in ac cordance with law for the time being in force and if the provisions of the relevant rules had been complied with. In the case before the Division Bench, that presumption could not be drawn, because in the absence of a notification issued by the Chief Commissioner, it was not possible to predicate whether the procedure enjoined by the rules had been followed at that time of effecting the change in the entry. It was held that the suits in question were not barred by section 145 (vi) and (viii) of the Coorg Regula tion as the suits did not question the right of the Govern ment to levy seigniorage nor the liability of the plaintiffs to pay but the plea was that seigniOrage had already been levied and paid. The suits were not barred by time under Article 14 of the Limitation Act, 1908 as no relief was prayed for in the nature of setting aside of an order of a Government Officer but the claim made for a declaration that the impugned order altering the entry was void and non est and hence, liable to be ignored. We agree with these conclu sions which were upheld on appeal by the District Court and the High Court. We would, however, like to give an additional ground which supports the conclusion that the said change in the entry from the word "redeemed" to "unredeemed" was not made according to law. We find from a number of judgments that identical orders changing the word "redeemed" to the word "unredeemed" in the relevant entries have been uniformally made in a large number of cases which would suggest that these changes were made pursuant to a special revision of the record of rights in respect of a number of properties and was not an individual change in a particular entry in the record of rights of a 732 particular plot of land. Under Regulation 29 of the Coorg Regulation, this could have been done only pursuant to a direction or order of the Chief Commissioner but no such order or direction or a notification to that effect appears to be on the record. The result is that the said change must be held to be unauthorised in law void and of no legal effect. In view of what is set out earlier, a detailed discussion regarding this contention is not called for. We may also point out that the same view regarding a similar change of an entry in the record of rights was taken by a learned Single Judge of the Karnataka High Court in Regular Second Appeals Nos. 693 and 694 of 1977. Petitions for special leave being Special Leave Petitions Nos. 38 12 13 of 1985 were preferred by the State of Karnataka against the said decision and the said petitions for special leave were dismissed summarily by this Court on 10th March, 1986. In these circumstances, the only thing which surprises is that the State has again chosen to reagitate the same question before this court probably only because large stakes are involved. In our opinion, there is no merit in the appeal and the same is dismissed with costs. Y. Lal Appeal dismissed.

The appellant is a resident of Tripura State. He assert ed that he belonged to the Laskar community which was in cluded in State records in the Deshi Tripura community and in the former State of Tripura this community had always been treated as Scheduled Tribes, and the members of the community freely enjoyed all the benefits available to members of the Scheduled Tribes until 1976 when the State Government decided to treat members of this community as not belonging to the Scheduled Tribes and issued instructions to the state authorities to implement the Government decision. Being aggrieved the appellant filed a writ petition before the High Court in a representative capacity praying for appropriate directions directing the State Government to continue to treat the appellant and members of Laskar commu nity as belonging to Scheduled Tribes and extend all the benefits available to Scheduled Tribes to this community. In support of his claim the appellant relied upon the two circulars of the erstwhile State of Tripura dated December 1930 and February 1941 as also the census report of the ex state of Tripura, besides the authorities of this Court. The respondent took the plea that Laskar community was never included in the Scheduled Tribes Order and as such there was no question of excluding it from the List. After considering the rival contentions of the parties coupled with the his torical background bearing on the subject, the statement made by the Advocate General that the Memos will be given prospective operation, the High Court dismissed the Writ Petition. Hence this appeal by Special Leave. This appeal initially came up before a two judges Bench for final hear ing when on a statement made by the Counsel for the Union of India that a representation made by the appellant and mem bers of his community for inclusion their caste Laskar, in the Presidential order under Article 342 is being looked into and is being placed before the Parliamentary Committee for review of the position, the Court disposed of the appeal in terms of the assurance 577 given on behalf of the Union. It was specifically stated in the Court 's order that in case the community is not included in the Presidential Order, it would be open to the appellant to take such action as may be available to him in law. Nothing having happened at governmental level, with the consent of the parties, the order disposing of the appeal was recalled and the appeal has thus now come up for hear ing. Dismissing the appeal, this Court, HELD: Reservation has become important in view of the increasing competition in society and that probably had led to the anxiety of the appellant and the people in his commu nity to claim reservation. [586G] In Tripura the Scheduled Tribes within the meaning of the definition given in Article 366 of the Constitution have been 'Jamatia, Noatia, Riang and Tripura/Tripuri/Tippera ' apart from 15 other tribes. It is the case of the appellant that Laskars are a part of the tribe named as 'Tripura, Tripuri and Tippera ' covered by Entry 18. [581D] This Court should not assume jurisdiction and enter into an enquiry to determine whether the three terms indicated in the Presidential Order include Deshi Tripura which covers the Laskar community; but it is appropriate to commend to the authorities concerned that as and when the question is reviewed it should be examined whether the claim of the appellant representing the Laskar community to be included in the scheduled tribes is genuine and should, therefore, be entertained. [586F G] Even if historically this tribe was covered by the general description of Tripura, that by itself may not justify its inclusion in the Order as a Scheduled Tribe. That is an additional feature which has weighed with us in taking our decision not to interfere in the matter. [587C] B. Basavalingappa vs D. Munichinnappa, ; Bhaiyalal vs Harikishan Singh and Ors., ; ; Parsram and Anr. vs Shivchand and Ors. , ; ; Kishorilal Hans vs Raja Ram Singh and Ors., ; ; Dina vs Narayan Singh, and Bhaiya Ram Munda vs Anirudh Patarand Ors., ; , referred to.

Appeals Nos. 148 to 150 of 1960. Appeals by special leave from the judgment and order dated October 31, 1956, of the former Nagpur High Court in Misc. Civil Case No. 184 of 1953. K. N. Rajagopala Sastri and D. Gupta, for the appellants. J. M. Phakar, section N. Andley, J. B. Dadachanji and Bameshwar Nath, for the respondents. March 7. The Judgment of the Court was delivered by HIDAYATULLAH, J. These appeals, by special leave, have been filed by the Commissioner of Income tax, Madhya Pradesh, against the assessee, an individual, by name Seth Khushal Chand Daga. The assessee was a partner in a firm, Messrs. R. B. Bansilal Abirchand of Nagpur. In the year of account ending Diwali, 1941, he received his share of assets and property from this firm, and started business of his own. In the same year, his sources of income were speculation, allowance from Government as treasurer, house property and dividends. The assessee had received some profits from his share in an unregistered firm against which were set off his losses in his individual business, and the Income tax Officer, who made the assessment, determined the loss to be carried forward, at Rs. 53,840. The assessee appealed against the assessment, but did not question the loss which had been determined. For the year, 1942 43, the assessee claimed to reopen the question of the loss to be carried forward, stating that it was Rs. 2,11,760. This contention was not accepted by the Department, and on appeal, by the Tribunal. The contention was, however, raised again by him in the assessments for the years, 194849 and 1949 50. In these years, he had profits from 188 his share in the unregistered firm, Rs. 1,82,773 and Rs. 1,39,922 respectively, against which were set off his losses in his individual business, Rs. 1,18,913 and Rs. 60,589 respectively. The contention of the assessee was that the profits which he had derived. from the unregistered firm could not be set off against the loss in his individual business, as the profits of the unregistered firm had borne tax not in his hands but in those of the firm. This contention was rejected by the Department; but on appeal to the Tribunal, it was accepted. On the Tribunal being moved to make a reference, it referred four questions. Two of those questions dealt with matters also arising out of these assessments, but they have not been mentioned by us in this judgment. The two questions pertaining to these appeals were: "(1) Whether the assessee was competent in law to raise a question with regard to the determination of loss for the assessment year 1941 42 as finally determined in appeal, in the course of proceedings for the assessment year 1942 43 when the loss brought forward from 1941 42 was being set off ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the loss suffered by the assessee from his personal business (including his share of . loss from another firm) cannot be set off under Section 24(1) against his taxed share income from an unregistered firm?" These questions were answered by the High Court against the Commissioner, who has now appealed, with special leave. It was conceded by the learned counsel for the Commissioner that the second question has now been decided by this Court in Seth Jamnadas Daga vs The Commissioner of Income Tax (1), and that the answer must be against the Department. That portion of the case was thus not argued. As regards the first question, the only contention raised was that the loss which had been determined and ordered to be carried forward must be deemed to (1) ; 189 have become final, because no appeal was filed against that determination. But it appears that the procedure laid down by a. 24(3) under which the Income tax Officer has to notify to the assessee by order in writing the amount of the loss as computed by him for the purposes of that section was not followed. No doubt, under section 30 an appeal lies, if the assessee objects to the amount of loss computed and notified under section 24; but inasmuch as the Income tax Officer had not notified the loss computed by him by order in writing, an appeal could not be taken on that point. In our opinion, the assessee was, therefore, entitled to have the loss re determined in a subsequent year. Learned counsel for the Commissioner stated that the Department was not very anxious for the decision, because this particular assessee has had only losses in the years following, and no loss would be occasioned to the Revenue, if the losses brought forward be redetermined. But that is a matter, with which we are not concerned. In our opinion, the judgment of the High Court impugned before us was correct in the circumstances of the case. The appeals fail, and are dismissed with costs. One hearing fee. Appeals dismissed.

The appellant had two money claims against the Maharaja of Mayurbhanj State. From January 1, 1949, the State merged with the Province of Orissa. Clause 9 of the Administration of Mayurbhanj State Order, 1949, promulgated by the Government of Orissa, provided for the issuing of a notification for calling upon all persons having pecuniary claims against the Maharaja to notify the same to an officer authorised in that behalf. After issue of the notification the appellant preferred his two claims before the Claims Officer. The Claims Officer made a report substantially accepting the claims. This report was submitted to the Member (third), Board of Revenue. Without giving the appel lant any hearing the claims were rejected on the ground that they were barred by limitation. The appellant applied for a review and submitted the documents on which he relied but again without giving the appellant a hearing the Board of Revenue declined to review the matter. The appellant contended 206 that there was a breach of the principles of natural justice in the Board of Revenue deciding the matter without giving the appellant a proper hearing. The respondent contended that the rejection of the claims was an act of State, that the new Sovereign State could not be compelled by the courts to accept the liability of the old Ruler, that though the new Sovereign State might make such enquiry as it chose it was not compelled to give a hearing to the appellant. The appellant replied that the act of State was over when the claims were invited and accepted by the Claims Officer. Held, that the rejection of the claims was an act of State and could not be challenged. Unless the new Sovereign, either expressly or impliedly, admitted the claims, the municipal courts had no jurisdiction in the matter. The act of State did not come to an end when Government allowed the claims to be preferred or the Claims Officer made his report. The enquiry was for the benefit of the State and not for conferring rights on the claimants. Till there was an acceptance of the claims by the Government or some officer who could be said to bind the Government, the act of State was still open. Dalmia,Dadri Cement Co. Ltd. vs Commissioner of Income tax, [1959] S.C.R 729 State of Saurashtra vs Mmemon Haji Ismail Haji, ; and Vaje Singh ji joravar Singh vs Secretary of State for India, (1924) L.R. 51 I.A. 357, relied on.

ivil Appeal Nos. 1936 & 1937 of 1990. From the Judgment and Order dated 26.7.1989 of the Delhi High Court in C.W.P. No. 852 of 1989 and 2852 of 1988. S.K.Mehta, Aman Vachhar and Atul Nanda for the Appellants. S.C. Manohanda, Manoj Arora, V.K. Sharma and R.K. Maheshwari for the Respondents. 630 The Judgment of the Court was delivered by RANGANATHAN, J. After hearing counsel for all parties, we grant special leave in these two petitions and proceed to dispose of the appeals finally by this common order as the point involved is a common one. We are dealing with the matter at some length as it raises certain important aspects of the Stamp Act, 1899 and the which are likely to come up for consideration frequently. Shanti Devi, the petitioner in SLP No. 15093 of 1989, was the highest bidder at an auction sale of house property bearing No. A 205, Defence Colony, New Delhi con ducted on 29.2.88 by the Tax Recovery Officer (T.R.O.) for realising the income tax dues of its owner. Her bid was accepted and the sale confirmed on 13.4.1988. On 14.4.1988 a certificate of sale was issued by the T.R.O. to the peti tioner. Under the relevant rules, a copy of the certificate of sale should have been endorsed to the Sub Registrar but it was actually sent to the Sub Registrar on 12.5.1988. The petitioner in SLP No. 138 of 1990 purchased property bearing No. 112 113, Gautam Nagar, Delhi at an auction conducted by the Income tax department. A certificate of sale in their favour was issued on 23.5.1988. A copy of the sale certifi cate was forwarded by the T.R.O. to the Sub Registrar. The purchasers thereafter attempted to get the property registered by the Sub Registrar in their names. The Sub Registrar and the Collector of Stamps did not accede to this request apparently on the ground that this could not be done unless stamp duty was paid on the certificate of sale. On the petitioner 's request, the T.R.O. also addressed a couple of letters to the Sub Registrar and Collector which may be referred to here. With his letter dated 12.5.1988 to the former, the T.R.O. enclosed an extract from the Tax Recovery Inspectors Manual issued by the Income Tax department which reads as follows: "After confirmation of sale of immovable property a certificate in form ITCP 20 will be issued. The original of this sale certificate is liable for stamp duty and a further duty of Rs.4.50 is also chargeable on the copy of the sale certificate to be forwarded to the Sub Registrar. These charges (which may vary from State to State) are to be borne by the auction purchaser. The original sale certificate thus issued will be the title for the property and it has the same value as a sale deed and it does not require registra tion by the purchaser. Thus the auction purchaser is saved expenses of 631 registration etc. This office itself will send a copy of the sale certificate for registration to the concerned Sub Registrar for making necessary entries in his registers." (underlining ours) The Collector of Stamps was addressed directly by the T.R.O. on 29.9.1988 in relation to the Gautam Nagar property. In that letter the T.R.O. stated that he had received legal advice that no stamp duty was payable on the certificate of sale. The attention of the Collector was drawn to the fact that a copy of the sale certificate had been sent to the Sub Registrar as required under Rule 21 of the Income tax (Certificate Proceedings) Rules ITCP rules which runs as follows: "21. Every Tax Recovery Officer granting a certificate of sale to the purchaser of immovable property sold under the second schedule shall send a copy of such certificate to the Registering Officer concerned under the Indian ( 18 of 1908) within the local limits of whose jurisdiction the whole or any part of the immovable property comprised in the certificate is situate. " The Collector was requested to inform the Sub Registrar accordingly to make necessary entries in the registers regarding the auction sale of the above immovable property on the basis of the copy of sale certificate sent to him. Apparently, no further action was taken by the Sub Registrar or Collector in the matter and, hence, each of the petitioners applied to the Delhi High Court under Article 226 of the Constitution. The T.R.O., the Collector, the Sub Registrar, Delhi Administration and the Municipal Corpo ration of Delhi were impleaded as respondents. The petition er prayed for a writ of mandamus or any appropriate writ or order or direction to the respondents to register the cer tificate of sale and mutate the property in the name of the petitioner. The Delhi Administration and the Municipal Corporation were added as parties since they did not respond to the petitioner 's request to effect mutation entries in the Corporation register, presumably on account of the petitioner 's failure to pay the "transfer fees" leviable as additional stamp duty under the Delhi Municipal Act. The writ petition was dismissed at the stage of admission by the Delhi High Court. The learned Judges passed a short order to the following effect: "Under section 29(f), read with Schedule I (Article 18) and section 3 632 of the Stamp Act, the liability to pay the Stamp Duty is of the purchaser, unless there is a specific contract to the contrary in this regard. In this case the auction notice is silent as to who is to pay the Stamp Duty. In other words, it does not create liability for the Government to pay the Stamp Duty. Hence the general provisions of law which are quoted above would be applicable. Dismissed. " Each of the petitioners has thereupon, preferred this spe cial leave petition before this Court. On the above facts, three different and separate ques tions arise for consideration: (1) What is the action to be taken by the SubRegistrar when the copy of a certificate of sale is forwarded to him by the T.R.O.? (2) Is the vendee in a sale by the T.R.O. entitled to ask the T.R.O. to make entries regarding the transfer in his records on the basis of the copy of the certificate of sale sent to him by the T.R.O.? (3) What is the procedure to be followed by the Sub Registrar when the original certificate of sale is produced before him by the vendee? The first of the above questions is directly answered by section 89 of the Indian . This section provides for the procedure to be followed in certain situa tions; in particular, in cases where sales are effected either by courts under the Code of Civil Procedure or by revenue officers in pursuance of a revenue recovery certifi cate. Under section 89(2), every court granting a certificate of sale of immovable property under the Code of Civil Proce dure, 1908, shall send a copy of such certificate to the registering officer within the local limits of whose juris diction the whole or any part of the immovable property comprised in such certificate is situate. Sub section (4) of section 89 makes a similar provision in respect of immovable properties sold by public auction by a revenue officer who issues a certificate of sale in pursuance of the auction. The sub sections further provide that when the copy of the certificate of sale is so received, such "registering offi cer snail file the copy or copies; the case may be, in his Book No. 1. " So far as sales for recovery of income tax are concerned, rule 21 of the ITCP rules, quoted earlier, makes a like provision requiring the concerned T.R.O. to send a copy of :he certificate of sale to the registering officer concerned. A doubt may arise whether the expression revenue officer ' in section 84 (4) of the includes a T.R.O.; and, if not, whether, without an appropriate amend ment of section 89 (2) or (4) of the , the mere framing of a rule by the Central Board of Direct Taxes under the Income tax Act, 1961 will be 633 sufficient to oblige the registration officer to file a copy of the certificate of sale sent to him by the T.R.O. in his Book No. 1. In our opinion, there is no need to read the term 'revenue officer ' in any restricted sense and that it is wide and comprehensive enough to include the T.R.O. who effects a compulsory sale for the recovery of an income tax demand. We are therefore clear that, in the present case, the registration officer has to act in terms of section 89(4) of the Indian read with rule 21 of the ITCP rules. This is to file the copy of the certificate of sale received by him from the T.R.O. in his Book No. 1. This takes us to the second question as to whether filing of a copy of the certificate in Book No. 1 within the meaning of section 89 is tantamount to the registration of the document under the or it is a totally different concept. The registration of a document under the Act is conditional on the fulfilment of several requirements (Ss. 32 to 35). The document has to be presented for regis tration by a person competent to do so. The persons execut ing the document should appear before the Sub Registrar and admit or deny execution of the document. The Sub Registrar may conduct an enquiry, where needed, to satisfy himself as to the proper execution of the document. He will decide to admit the document to registration only if he is satisfied on this. What he has to do once he admits a document to registration is laid down in Ss. 51 to 67. First, he is bound to endorse full particulars and details of the regis tration on the document presented to him and also obtain the signature of every person presenting the document. He should then, without delay copy the entire document in the appro priate book maintained for the purpose (which, in respect of non testamentary instruments relating to immovable property, is Book No. 1). The entries in each book nave to be consecu tively numbered year wise and corresponding entries should be contemporaneously made in current indices to be main tained in every office. The officer should affix his signa tures to the endorsements made in his presence and then endorse a certificate on the document that it is registered together with the registration particulars which shall be signed, sealed and dated by him. The document is then re turned to the person presenting it for registration. The books and indices are available for public inspection and certified copies thereof are to be given to parties applying for them. This, in brief, is the process of registration. On the other hand, the process of filing that is contem plated under the Act is somewhat different though the Act does interchange 634 the two expressions in some places. For instance, section 51(2) itself refers to all documents or memoranda registered under section 89 being entered or filed in Book No. 1. But there appear to be vital differences between the two processes: (i) It is the original of a document that is registered whereas only copies or memoranda are filed; (ii) The executant of a document which is required to be registered, has to present it for registration and go through the attendant and subsequent processes described above. A copy to be filed under section 89 or memoranda that are filed under Ss. 64 to 66 is simply transmitted to the con cerned Sub Registrar for being filed. Apparently, the proce dure of presentation is dispensed with in regard to the latter because they are issued by public authorities dis charging their official duties. (iii) Additional particulars relevant to a document admitted to registration need to be got endorsed thereon from time to time as contemplated in Ss. 58 and 59 but this rule does not apply to a copy or memorandum filed under the Act. (iv) When a document is registered, the entirety of the document has to be copied out into the relevant book and the original document returned to the person who presents the document with necessary endorsements. This requirement is absent in the case of a copy or memorandum which is just filed. (v) Where a document is registered, a certificate of regis tration has to be issued which will be admissible to prove the due registration of the document. There are thus some differences between the two pro ceedures and this aspect has been touched upon in some very early decisions under the Registration Act, 1877: vide, Fatteh Singh vs Daropadi, [1908] Punj. Case No. 142; Siraj un nissa vs Jan Muhammad, ; Masarat un nissa vs Adit Ram, All. 568 (F.B.). Refer ence may also be made to Premier Vegetable P. Ltd. vs State, AIR 1986 M.P. 258. We need not, however, consider for the purposes of this case whether filing and registration mean one and the same thing for all purposes and ' what the legal effect of these differences is. For, though the processes are different, the purchaser at a court or revenue sale is under no disadvantage because of the lack of 635 registration. The certificate of sale itself not being a compulsorily registrable document: vide section 17(2)(xii), the transfer of title in his favour is not vitiated by the non registration of the certificate. The copy of the certificate filed in Book No. 1 contains all the relevant details. These details are reflected in the indices maintained under section 55 which are open to inspection to all persons. (We may point out here that section 55(2) only refers to memoranda filed but it seems clear, particularly in the light of various State amendments, that the index to Book No. 1 should also contain the details of copies of document filed by him). These requirements are sufficient to ensure that any person in tending to purchase or deal with the property is put on notice about the principal contents of the certificate of sale provided he inspects the relevant book and/or index. It is sufficient to say, for the purposes of this case, that all that the Sub Registrar required to do is to file the copy of the certificate in Book No. 1 and no more. He does not have to copy out the certificate or make any other entries in Book No. 1. We now come to the last question and that is whether the certificate of sale is liable to stamp duty and, if so, what the consequences are. The High Court has referred to section 3, section 29(f) and Article 18 of Schedule I to the Stamp Act. This provision applies in the absence of a contract to the con trary. Prima facie, therefore, the view taken by the High Court and there are other decisions also to the same ef fect is correct unless a contract to the contrary can be spelt out. The auction notice did not promise any exemption from stamp duty. The extract quoted earlier from the Depart mental Manual (viz. that both the certificate and copy are liable to stamp duty) also renders it unlikely that any promise was given by the TRO at the time of sale that no stamp duty will be payable. However the T.R.O. 's letter to the Collector referring to the legal advice obtained by him strikes a somewhat inconsistent note. Even if there had been any such mention by the TRO or the auctioneer, the question would arise whether it can be construed as a contract to the contrary binding on the Union for the purposes of section 29(f) of the Stamp Act. Sri Mehta requests that we may not now go into these questions but leave the issue to be decided as and when the petitioners seek to have the certificate of registration registered or introduced in evidence before any court or authority entitled to take evidence which is at present a remote contingency. There are two provisions in the Stamp Act which provide for the adjudication of stamp duty. Under section 31, it is open to the executants of any document, at any stage but within the time limit set out in section 32, to produce a document before the Collector of Stamps and require him to 636 adjudicate on the question whether the document should bear any stamp duty. The Collector thereupon may adjudicate the stamp duty himself or refer the matter to the Chief Control ling Revenue Authority of the State. In turn, it is open to the Chief Controlling Revenue Authority to refer the matter to the High Court for an authoritative decision (Ss. 32 and 56). This procedure could have been followed by the peti tioners if they wished to seek an answer to the question whether the certificate of sale is liable to stamp duty but they have not done it and the time limit under section 32 has run out. The other provision that may become applicable is section 33. Under this section, if any document (and this includes a certificate of sale) is presented to the Registrar for registration and the Registrar is of opinion that it is a document which should bear stamp duty but that it has not been stamped, it is his duty to impound the document and send it on to the Collector of Stamps for necessary adjudi cation (section 38). This contingency has also not happened. The third contingency, also provided for in section 33 is when a party wishes to rely upon the certificate of sale as a piece of evidence before a court or an authority entitled to take evidence. Such court or authority will also have to impound the document and shall not admit the same in evidence unless the stamp duty chargeable and the stipulated penalty are paid. This situation has not arisen so far but may arise at some time in future. It is unnecessary to anticipate the same and decide the issue. We shall therefore leave the issue of stamp duty to be adjudicated upon in the normal course, as and when found necessary, and express no views thereon at this stage. We should, however, like to deal with a contention raised in the grounds that even if the certificate of regis tration is sought to be presented for registration by the petitioners, the Sub Registrar has no jurisdiction to refuse registration on the ground that the document is insuffi ciently stamped. As already pointed out, section 17(2)(xii) of the Registration Act makes it clear that the certificate of sale issued in a court sale or by a revenue officer does not need registration. (Though this provision, like section 89, relates only to a certificate of sale granted to the pur chaser of any property sold by public auction by a civil court or revenue officer, for the same reasons as have been set out earlier, we think that the certificate issued by the TRO is also covered by this provision). It is, therefore, clear that it is not obligatory on the purchaser of property in a tax recovery sale to get the certificate of sale regis tered in order to perfect his title. However, if he presents the original certificate of sale to the Registration Officer for registration, the Registration Officer will have to comply with the relevant statutory provisions in this re gard. However this situation has not arisen as yet 637 and it is unnecessary to anticipate it and decide the point. We therefore do not express any opinion thereon. This leaves for consideration the question in regard to the municipal transfer fee. No details have been placed before us on this issue. The payability of the municipal transfer fee perhaps depends upon the payability of stamp duty but our attention has not been invited to the relevant statutory provisions or their interpretation. The High Court has given no separate finding on this issue. We also express no opinion particularly since we are not expressing any opinion on the question as to whether Stamp Duty is payable on the certificate of sale or not. It will be open to the petitioners to contest this levy in other appropriate pro ceedings. For the above reasons, we are of opinion that these appeals have to be allowed in part. The Sub Registrar is directed to file the copy of the certificate of sale re ceived by him from the T.R.O. in his Book No. 1 as required by section 89(4) of the Act read with rule 21 of the Income tax (Certificate Proceedings) Rules, 1962. The petitioners are entitled to ask for nothing more. We express no opinion on the question as to whether any stamp duty or municipal transfer fees are payable in respect of the original certif icate of sale. The appeals are accordingly disposed of. There will be no order as to costs. N.P.V. Appeals allowed partly.

The appellant, defendant No. 1 in the suit, from which the appeal arises, and the father of defendants 2 to 7, as the highest bidders, obtained a seventeen years ' lease of a salt factory from the Government and the license to manufacture and sell salt under the Madras Salt Act, 1889. They entered into a partnership with the plaintiffs to carry on their business for the period of the lease. On the death of their father, defendants 2 to 7 were admitted into the partnership. The partnership agreement made no provision for the continuation of the partnership on expiry of the lease or for the acquisition of a fresh lease on behalf of the partnership. The lease expired, the license came to an end and the partnership stood automatically dissolved. The Government changed its old policy of granting leases to the highest bidders and adopted one of renewing them in favour of previous lessees in whom they had confidence. The appellant 10 74 and defendants 2 to 7 applied for the renewal of the lease that stood in their names. The plaintiffs also applied for a grant of it to them. No premium was called for and none had to be paid. The Revenue Authorities chose to renew the lease in favour of the appellant and the said defendants f or a further period of 25 years. The plaintiffs filed the suit claiming that the renewal of the lease was an asset of the dissolved partnership. The trial Court found against them but the High Court on appeal reversed that finding. The suit was instituted months before the renewal of the lease and years before the renewal of the license, which alone could enable the licensee to manufacture and sell salt. The Courts below found that the allegation of the plaintiffs that the goodwill and assets of the firm had been utilised for obtaining the renewal of the lease was unfounded, as they had failed to prove that a partnership firmatall existed. It was also found that during the last three years of the existence of the partnership, the parties had fallen apart and lost mutual confidence. The question for decision was whether section 88 of the Indian Trusts Act applied and the renewal of the lease in favour of the appellant and the said defendants for running the salt factory could be treated as an asset of the dissolved partnership between the contesting parties. Held, that in order that a case might be brought within the purview of section 88 of the Indian Trusts Act, it must be shown either that (1) a person had a fiduciary character and was thus in duty bound to protect the interests of others or that (2) he had placed himself in such a position as to render his interest adverse to those of the others and had thereby obtained a pecuniary interest which he must hold for their benefit as well. As in the instant case the fiduciary character of the partners came to an end with the termination of the original lease and of the partnership business along with it, there could no longer be any subsisting interest in a partner which another was bound to protect nor could one partner be said to have availed of his character as a partner when he obtained the fresh lease. Section 88 of the Indian Trusts Act or the illustrations (d) or (e) thereto could, therefore, have no application, nor could section go of the Act, which in terms had no application even if applied, improve the position of the plaintiffs. No question of a constructive trust could also arise under the general law apart from the statute. There is no absolute rule of law or equity in England that renewal of a lease by one partner must necessarily enure to the benefit of all the partners. There is, however, a presumption of fact that there is an equity in favour of the renewal of the lease enuring to the benefit of all the partners. Such a presumption may be rebutted by the facts of a particular case. The Indian law as enacted in the Indian Trusts Act, and particularly sections 88 and go of that Act, is substantially the same. In the instant case, the facts and circumstances amply rebut that presumption. 75 Featherstonhaugh vs Fenwick, ; , Clegg vs Fishwick; , , Clements vs Hall, ; , Clegg vs Edmondson, ; , In Ye Biss, Biss vs Biss, and Griffith vs Owen, [1907] I Ch. 195, G considered.

N: Criminal Appeals Nos. 227 and 228 of 1960. Appeals by special leave from the judgments and orders dated September 16, and AugUst 26, 1960 of the Allahabad High Court in Criminal Misc. Case No. 1519 of 1960. N.C. Chatterjee, D.P. Singh and M.I. Khowaja, for the appellants. C.P. Lal, for the respondent No. 1. October 9, 1963. The Judgment of the Court was delivered by HIDAYATULLAH J. This judgment will govern the disposal of Criminal Appeals Nos. 227 and 228 of 1960. In both these appeals the appellant is one Mohammad Ikram Hussain an Advocate of the Allahabad High Court residing in 49, Zero Road, Allahabad. The second respondent in these appeals is one Mahesh Prashad, a resident of 4, Gujrati Mohalla Allahabad City but who has not appeared in this Court. The other two respondents are the State of U.P. on whose behalf a belated appearance was made by Mr. C.P. Lal, Advocate and the Station House Officer, Kotwalli, Allahabad who was not represented at the hearing. The two appeals are in a sense connected and impugn two orders of the High Court of Allahabad made respectively on August 26, 1960 and September 16, 1960. They were passed in a proceeding initiated by Mahesh under section 491, Criminal Procedure Code and article 226 of the Constitution for a writ, order or direction in the nature of a writ of habeas corpus to release his alleged wife Kaniz Fatima alias Sheela from unlawful detention by the appellant and for delivery of the said Kaniz Fatima to him. The first order was made by the High Court overruling the objections of the appellant, directing him to bring before the Court the said Kaniz Fatima alleged to be held in unlawful confinement. By that order the High Court gave the appellant 10 days ' time to obey the direction. As the direction was not complied with and Kaniz Fatima was not brought 89 into the Court, the High Court passed the second order committing the appellant for contempt and sentencing him to simple imprisonment for 3 months and to pay the costs. The High Court was moved for a certificate but declined it by its Order dated October 14, 1960. The present appeals have been filed by special leave granted by this Court. On July 28, 1960, Mahesh Prashad filed a petition in the High Court of Allahabad against the Station House Officer, Kotwali Allahabad and Ikram Hussain, the appellant. This petition purported to be under section 491, Criminal Procedure Code and article 226 of the Constitution. Mahesh Prashad stated therein that sometime in October 1959 he made the acquaintance of Kaniz Fatima, the daughter of the appellant and a marriage between them took place on December 25, 1959 according to Vedic rites after Kaniz Fatima had embraced Hinduism. Mahesh stated that they used to meet clandestinely and Kaniz Fatima became pregnant. She left home in early June 1960 and went to live with him at his house No. 4, Gujrati Mohalla, Allahabad but on June 23, 1960, the Station House Officer, Kotwali Allahabad searched the house and arrested Mahesh and took away Kaniz Fatima in spite of protests on her part as also on his. Mahesh further stated that he was 23 years of age and that Kaniz Fatima 's age, according to the record of the Allahabad municipality was 21 years and according to the medical examination at Dufferin hospital immediately after she was taken away from his house, 19 years. He further stated mat a prosecution was started against him under sections 363, 366, 368 and 376, Indian Penal Code and that, after he was released on bail on July 15, 1960, he searched for his wife but could not find her and learnt that the appellant was keeping her confined against her wishes at Jaunpur. He asked for a writ for the production of Kaniz Fatima in Court and for her release and swore an affidavit in support of his petition. In answer to the notice which was issued by the High Court on July 29, 1960, the Station House Officer, and the appellant appeared before 90 the High Court and put in their affidavits. Before we deal with those affidavits in detail we shall set down the version of the appellant in regard to the disappearance of Kaniz Fatima. Kaniz Fatima according to the appellant was a student at the Hamidia Girls College, Allahabad, where she had enrolled herself in July 1958. She appeared for the High School Examination of 1959 but was unsuccessful. The result was announced about the 17th June 1960 and on June 20, 1960 Kaniz Fatima disappeared. The appellant then filed a report in the police station house to the following effect: "To The Dy. Superintendent Police, Allahabad. Sir, My daughter Kaniz Fatima alias Sheela, aged about 15 years, medium fair complexion, thin body appeared in the High School Examination of 1960 from Hamidia Girls Inter College. Unfortunately she failed in the examination. She became very despondent. Yesterday, the 20th of June 1960 at about 5 o 'clock in the morning she disappeared from the house and has not returned home tilt this time. I was not in Allahabad yesterday. I hope, she will be traced and restored to me, I shall be obliged. Yours faithfully, Sd/ Mohd. Ikram Hussain, 49, Zero Road, Allahabad. " The police caused a searched to be made at the house of Mahesh on the evening of June 23, 1960 and found Kaniz Fatima in that house. Kaniz Fatima then made a statement to the police which is Annexure 'B ' to the special leave petition No. 882 of 1960 in Criminal Appeal No. 227 of 1960. In that statement Kaniz Fatima stated that she had appeared for the High 91 School Examination from Hamidia College, Allahabad and the result was out on June 17, 1960. As she had failed in the examination she was very depressed and as her parents used to make sarcastic remarks she decided to leave the house and go to her aunt Sardar Begum in Rani Mandi. Accordingly she left in the early hours of the morning but lost her way as she was a Parda girl and had no money even to hire a rickshaw. On the way she met two men Mahesh and Sudama who offered to show her the way to Rani Mandi but instead took her to the house in Gujrati Mohalla from where she was recovered. She alleged that they criminally assaulted her and kept her confined against her will. She gave her age as about 15 years or 16 years but stated that she did not know the age entered in the college register. On the next day another statement of Kaniz Fatima was recorded by the police and it is Annexure 'E ' to the petition above mentioned. By this statement she expressed a desire to live with her father, the appellant, and the police handed her over to the appellant taking from him a 'Sapurdaginama ' (Annexure H) containing an undertaking that he would produce the said Kaniz Fatima whenever required by the police or the Court in connection with the case against Mahesh Prashad and. others. It is thus that the appellant got back his daughter Kaniz Fatima while Mahesh Prashad was arrested and charged with abduction and rape but was released on bail on or about July 15, 1960. On July 28, 1960, he filed this petition for a writ of habeas corpus. We need not concern ourselves with the affidavit of the Station Officer, Kotwali, Allahabad. His position was quite clear. He had handed over the girl to her father after taking a statement from her. The appellant made a return on affidavit supporting it by an affidavit of one Ram Nath. The appellant 's return stated the facts already narrated by us in regard to the disappearance of Kaniz Fatima and her recovery from No. 4, Gujrati Mohalla, Allahabad, He stated further that Kaniz Fatima was not with him, having disappeared for a second time in the circumstances 92 now to be narrated. The appellant stated that Kaniz Fatima was very dejected over what had happened to her and was sent to his brother in law, Syed lqtedar Hussain, 51, Sabzi Mandi, Allahabad and his wife Mst. Shabbiri Begum, the sister of Kaniz Fatima 's mother. This was on July 8, 1960. The appellant and his wife used to go to see Kaniz Fatima at that house which was less than half a mile from their house. On July 20, 1960, Iqtedar Hussain and Shabbiri Begum informed him that Kaniz Fatima had disappeared. He felt very dejected and his son Imdad Hussain and Iqtedar Hussain searched for the girl at the houses of all their relatives in Allahabad and also at Faizabad. The appellant stated that he did not report to the police because of the scandal and humiliation. He expressed his inability to bring the girl. He stated that the allegations about the con. version of Kaniz Fatima, her marriage and pregnancy were entirely false. He contended that no marriage could take place because Mahesh was already married with a wife living. The affidavit of Ram Nath was earlier filed in support of the last allegation. The appellant now filed an affidavit by Iqtedar Hussain in support of his affidavit about the second disappearance of Kaniz Fatima. Mahesh Prashad thereupon filed an affidavit in rejoinder by which he reiterated that he was married to Mst. Ram Rati but alleged that he had divorced her according to the custom of the caste and that Ram Rati had remarried and was living with her husband. He alleged that his marriage with Kaniz Fatima had taken place in the presence of respectable persons of the locality and that the story of the disappearance of Kaniz Fatima was false and she was illegally and improperly being detained against her wish by the appellant. On this material the High Court passed the first order on August 26, 1960. From that order it appears that the High Court did not enter into any question of fact except the age of Kaniz Fatima. The High Court held that if Kaniz Fatima was a minor no 93 habeas corpus application would lie because the father would be the guardian but if Kaniz Fatima was major then the application was competent and Kaniz Fatima was the best person to judge for herself where she would live. The learned Judges were of the opinion that the issue whether Mahesh and Kaniz Fatima were married was not at all relevant. The age of Kaniz Fatima was taken by the learned Judges to be 19 years in view of the result of the medical examination and holding that she was major the learned Judges addressed themselves to what they described as the main question: Whether the appellant had Kaniz Fatima in his control ? In this connection the learned Judges referred to the undertaking given by the appellant to the police to produce Kaniz Fatima whenever required and observed that it was his duty to keep a watch on her movements. Finding that there was no date mentioned in the affidavit regarding her second disappearance they ordered a fresh affidavit to be filed. That affidavit was filed on the 11 th August 1960 and was supported by the affidavit of Iqtedar Hussain of the same date. We have referred to the contents of these documents. The learned Judges pointed out that the appellant 's conduct was somewhat strange because he had neither reported the second disappearance of Kaniz Fatima to the police nor informed the Magistrate in whose Court the criminal case was pending about it. They were of opinion that it was also very unlikely that Kaniz Fatima who had brought such troubles on her head by running away from home would leave the house for the second time without the connivance or aid of someone, and they concluded that person could be none other than her father. They took into consideration that the appellant had denied the fact of marriage and conversion to Hinduism on the basis of personal knowledge when this could only be on information received from Kaniz Fatima and had further sworn an affidavit about the state of mind of Kaniz Fatima immediately before her second disappearance which he could not have known unless he was present personally. Holding, therefore, that 94 Kaniz Fatima was not minor and the petition could be proceeded with, they made an order for the production of Kaniz Fatima in Court. The appellant did not produce the girl in obedience to the direction of the High Court and the second order was passed committing him for contempt and sentencing him as stated already. In these appeals both these orders are challenged. Against the first order it is contended that the High Court was in error in ordering the production of Kaniz Fatima, acting on the affidavits of Mahesh which were patently false. Against the second order, it is contended that it was impossible for the appellant to carry out the Court 's order because Kaniz Fatima was not with him and her whereabouts were not known to him and that the committal for contempt and the punishment imposed were unjustified. Lastly, it was urged that the sentence was too heavy. From what we have stated above it will appear that the action of the Court is questioned on two connected but in essence entirely separate matters. The disobedience of the order of the Court entailing punishment for contempt is a very different matter from the action taken in the habeas corpus petition. The order of commitment for contempt presents no difficulty. Even if the direction was inexpedient, an order had been made for bringing Kaniz Fatima before the Court and it had to be complied with unless the appellant could plead and prove his inability to comply with it. The question whether the Court ought, on the materials present before it, to have called upon the appellant to bring Kaniz Fatima in Court is something which does not enter into the obedience of the order made. A direction given by the High Court in a proceeding for a writ. of habeas corpus for the production of the body of a person has to be carried out and if disobeyed the contemner is punishable by attachment and imprisonment. A valid excuse will, however, be that it is impossible to obey the order. 95 We have heard Mr. N.C. Chatterjee in support of the contention that the appellant did not know the whereabouts of Kaniz Fatima and was unable to comply with the orders of the High Court. We are not satisfied that the appellant could not have brought Kaniz Fatima before the Court. His conduct belies his assertion that he did not know where Kaniz Fatima was. When Kaniz Fatima disappeared for ' the first time the appellant lost no time in making a report to the police and the efficiency of the police was demonstrated by the discovery of Kaniz Fatima within two days. If Kaniz Fatima disappeared a second time the appellant, unless he knew where she had gone, should logically have enlisted the support of the police immediately. There would, of course, be no point in reporting to the police if the whereabouts were to be kept secret because the police might have found Kaniz Fatima thus proving the report to be false. If Kaniz Fatima disappeared in mysterious circumstances it should have occurred to the appellant that perhaps Mahesh and Sudama whom she had charged with abduction and rape might have had a hand in her second disappearance and then what better move was open to the appellant than to go to the police? It is not his ease that he got disgusted and let Kaniz Fatima go her own way. He started a search for her on his own and his son and brother visited the houses of relatives in Allahabad and his son went to Faizabad to make enquiries there. It is clear that, on his own showing, he was anxious to find Kaniz Fatima and spared no efforts to find her but he did not enlist the support of the police. This as stated already was very surprising because on the first occasion the police had found Kaniz Fatima almost at once and restored her to him. The conclusion is inescapable that he avoided the police this time. Again the High Court is right in thinking that Kaniz Fatima who had a harrowing experience would not venture out a second time. Kaniz Fatima had stated that she had got lost when she left the house on the first occasion and that she did not know her way in the town as she had always travelled in 96 a closed rickshaw. It would be very unlikely that she would venture out a second time. It is not suggested that she left the house to do away with herself or to go away on her own. These possibilities have not been canvassed before us. Of the two alternatives which might have suggested themselves namely that she had left the house to go to some relative or was taken away by Mahesh and Sudama, neither came in the way of making a report to the police. But if the appellant knew where Kaniz Fatima had gone and was not anxious that her whereabouts should be discovered the report to the police would not be made. The excuse that the appellant was saving himself from scandal and humiliation cannot appeal to anyone because there was enough of scandal and humiliation already and little could be added to it. The High Court 's conclusion that the appellant was harbouring Kaniz Fatima and keeping her hidden was impeccable. In these circumstances, we are of opinion that when the Court did make an order for the production of Kaniz Fatima even if another court would have taken some other steps it had to be carried out unless it was impossible for the appellant to comply with it. In our opinion the High Court 's commitment for contempt was justified because the High Court rightly reached the conclusion that the appellant having the knowledge of the whereabouts of Kaniz Fatima and having the custody of her through another, was wailfully and deliberately disobeying the direction of the Court. In so far as the offence of contempt is concerned there was a manifest disobedience of the order and the High Court could punish it brevi manu by ordering the appellant to be detained in prison. The High Court 's powers for punishment of contempt have been preserved by the Constitution and they are also inherent in a Court of Record. The learned Judges were perhaps in error in describing it as contempt in facie curiae. That is contempt of a different sort. This was contempt by disobedience of an order of the High Court which is sometimes a civil contempt 97 punishable under the Code of Civil Procedure and sometimes a criminal contempt punishable by imprisonment. The only curbs on the powers of the High Court to punish for contempt of itself are contained in the Contempt of Courts Act which limits the term for which a person can be imprisoned to six months simple imprisonment. The High Court was justified in punishing this contempt. In view of the grossness of the contempt it cannot be said that the punishment of three months simple imprisonment was excessive. We therefore decline to interfere with the order of September 16, 1960. Criminal Appeal No. 227 of 1960 against that order is dismissed. The first order by which Kaniz Fatima was ordered to be brought into Court was questioned on the ground of want of jurisdiction and for irregularity in the exercise of that jurisdiction. The High Court acted with jurisdiction. The writ of habeas corpus issues not only for release from detention by the State but also for release from private detention. At Common Law a writ of habeas corpus was available to the husband for regaining the custody of his wife if she was wrongfully detained by anyone from him without her consent. What amounts to wrongful detention of the wife is, of course, a question for the Court to decide in each case and different circumstances may exist either entitling or disentitling a husband to this remedy. There was also no material irregularity vitiating the order for inexpediency is not the same thing as irregularity and all that has been pointed out is that the High Court acted without sufficient enquiry and deliberation. We shall say something about this because this criticism is perhaps justified. Exigence of the writ at the instance of a husband is very rare in English Law, and in India the writ of habeas corpus is probably never used by a husband to regain his wife and the alternative remedy under section 100 of the Code of Criminal Procedure is always used. Then there is the remedy of a civil suit for restitution of conjugal rights. Husbands take re 1 SCI/64 7 98 course to the latter when the detention does not amount to an offence and to the former if it does. In both these remedies all the issues of fact can be tried and the writ of habeas corpus is probably not demanded in similar cases if issues of fact have first to be established. This is because the writ of habeas corpus is festinum remedium and the power can only be exercised in a clear case. It is of course singularly inappropriate in cases where the petitioner is himself charged with a criminal offence in respect of the very person for whose custody he demands the writ. In the present case the police had before them a report by the appellant that Kaniz Fatima had not returned home and on search the police found her in a house where she normally would not be found unless she went there herself or was carried there against her will. The police arrested Mahesh in the house and examined Kaniz Fatima and her statement was as follows: " . . . . . I had sat for the High School Examination from the Hamidia College, Allahabad this year i.e. 1960. The result was out on the 17th of June 1960. I failed in the examination, I felt much depressed, as it was at my instance that my parents had sent me to study in the school. On my having failed, my parents often passed sarcastic remarks at me. I felt much grieved and made up my mind to leave the house and move away for some time to the house of my aunt (mother 's sister) named Sardar Begum, who was married to Shri Ziarat Hussain and was living at Rani Mandi. Therefore, I left my house for Rani Mandi in the very early hours as I had been to Rani Mandi on the screened rickshaw from my house several times, therefore, I thought that I would find out my way. As I had left the house without the knowledge of my parents, hence I had no money with me even to hire a rickshaw to go to Rani Mandi. I was proceeding for Rani Mandi when I lost the way and when I could not find the way 99 to Rani Mandi even after covering a long distance, these two men Mahesh and Sudama met me in the way. 1 inquired from them about the way. Thereupon Mahesh told me that they would lead me to Rani Mandi. Having pretended to take me to Rani Mandi Mahesh fraudulently took me to that house in Gujrati Mohalla from where I have been recovered. In addition to Mahesh, his companion Sudama was also there. Being pushed in, I was thrust in the house from where I have been recovered. Since then, I have been kept in concealment in that house against my will up to this day. They have committed the bad act with me by force. My age is about 15 or 16 years. 1 don 't know my age in the college register. " Later Kaniz Fatima stated in writing that she wanted to return to the appellant. Kaniz Fatima had described her age as 15 or 16 years and in view of her allegation that she was compelled to sexual intercourse and brought to the house by a trick, offences under sections 363,366 or 368, Indian Penal Code, depending on her age, and section 376, Indian Penal Code were alleged against Mahesh. If Kaniz Fatima was below 18 years of age there would be an offence under section 368, Indian Penal Code at the very least unless she was married to Mahesh because Mahesh admitted that he had sexual intercourse with her. In these circumstances, with a prosecution pending against Mahesh the learned Judges might well have satisfied themselves first about the factum of marriage and the age of the girl with more circumspection. A writ of habeas corpus at the instance of a man to obtain possession of a woman alleged to be his wife does not issue as a matter of course. Though a writ of right, it is not a writ of course especially when a man seeks the assistance of the Court to regain the custody of a woman. Before a Court accedes to this request it must satisfy itself at least prirna facie that the person claiming the writ is in fact the husband and further whether valid marriage between him and the woman could at all have taken place. 100 In the present case Kaniz Fatima was stated to be under the age of 18. There were two certified copies from school registers which showed that on June 20, 1960 she was under 17 years of age. There were also the affidavit of the father stating the date of her birth and the statement of Kaniz Fatima to the police with regard to her own age. These amounted to evidence under the Indian Evidence Act and the entries in the school registers were made ante litem motam. As against this the learned Judges apparently held that Kaniz Fatima was over 18 years of age. They relied upon what was said to have been mentioned in a report of the Doctor who examined Kaniz Fatima, though that report was not before them. Reference to it was made in the affidavits of Mahesh and the Sub Inspector which were both hearsay and not admissible under the Evidence Act in proof of the contents of a document. The primary documentary evidence ought to have been summoned. The High Court thus reached the conclusion about the majority without any evidence before it in support of it and in the face of direct evidence against it. With regard to the marriage, the learned Judges referred to the denial by the appellant on personal knowledge that conversion to Hinduism or marriage had taken place but they did not look into the affidavits of Mahesh himself on the subject. These affidavits create some doubt. Mahesh stated that he first met Kaniz Fatima on the 25th October, 1959 and that they fell in love with each other and decided to marry but "there were hurdles in their way" and marriage with the "consent of their respective parents became impossible". Ram Nath 's affidavit (part of which even Mahesh accepted) showed that Mahesh 's father was dead and his mother had remarried. There would have been very little difficulty with regard to his parents, if there were any. The question of the consent of the parents of Kaniz Fatima never arose. The marriage surprisingly enough was said to have taken place two months after the first meeting and the date mentioned was Dec. 25, 1959. The 101 affidavit of the appellant was that 25th December, 1959 was a holiday and Kaniz Fatima was with him and that no conversion or marriage had taken place that day. The appellant 's affidavit on personal knowledge that no marriage had taken place was therefore a proper affidavit. It could not be stated that he could not swear to such a fact on personal knowledge. The affidavits of Mahesh filed from time to time showed contradictions which apparently went unnoticed. In his first affidavit filed with the petition he stated that Kaniz Fatima and he had decided to get married "secretly" and that the marriage was done without the knowledge of the parents of either party to the marriage and that he and Kaniz Fatima met after marriage "only clandestinely". In another affidavit he stated that the marriage took place "at the residence of the applicant amidst the respectable persons of the Mohalla and the community" which could hardly be called a 'secret ' marriage. In the same affidavit he also stated that since marriage Kaniz Fatima and he "were living together and cohabited in the aforesaid premises" and that it was only "after the lapse of four months" that Kaniz Fatima was taken away from his house. His exact words have been reproduced from his affidavits. This contradiction was pointed out in the affidavits of the appellant but the learned Judges declined to go into it because they were of opinion that the question of marriage and other questions arising therefrom were irrelevant. The learned Judges did not see that even the eligibility of Mahesh to marry Kaniz Fatima was called in question because it was alleged on affidavit that he had a wife already living. Under sections 5 and 11 of the Hindu Marriage Act (XXV of 1955) a second marriage, with a previous married wife living, is null and void. Mahesh admitted that he was previously married but he stated that he had divorced his wife according to the custom of the caste and that his former wife married another person and was living with him. The learned Judges referred to these facts and merely stated that as he was a Kori or Kachhi, divorce was possible but did not try to 102 ascertain whether divorce as alleged had taken place or not. These were some of the circumstances which remained undetermined when the Court ordered the production of the girl in Court. There is no doubt that the proceeding is a discretionary one. Whether the Court feels satisfied with one affidavit or with another is a matter mainly of its opinion and conviction. The learned Judges must have felt impressed by the affidavit of Mahesh, because there was nothing else before them in support of his version. They did not ask him to produce affidavits from the respectable persons of the "Mohalla and community" before whom the marriage and conversion was said to have taken place or even to produce the photograph which he asserted was taken of Kaniz Fatima and himself by a photographer, Inspite of this if they ordered the production of Kaniz Fatima they acted with jurisdiction. Even if some other person may consider the order inexpedient, the order had to be carried out unless it was impossible for the appellant to comply with it. For his refusal to comply with it he has been punished and we need express no sympathy with him but we cannot help expressing a sense of doubt about the truth of some of the statements of Mahesh in his affidavits. In our opinion the writ nisi in this case for the production of Kaniz Fatima should have been preceded by some more enquiry. It is wrong to think that in habeas corpus proceedings the court is prohibited from ordering an inquiry into a fact. All procedure is always open to a Court which is not expressly prohibited and no rule of the Court has laid down that evidence shall not be received, if the Court requires it. No such absolute rule was brought to our notice. It may be that further evidence would have borne 'out what Mahesh stated and then the order could always be passed for the production of Kaniz Fatima; but if the evidence did not bear out what Mahesh alleged then the order which the appellant disobeyed and for which he has to suffer 103 imprisonment would never have been passed. The learned Judges failed to notice that Mahesh 's affidavit was that she was pregnant 'for 6 months and not as they state that she ran away early in June 1960 because she became pregnant. It would be difficult to hide such an advanced pregnancy till June 20, 1960 when she, left the house. It remains to mention that Mahesh made several other wild assertions which he swore on personal knowledge of whom a few are quoted here as illustrations: ". . . . They in fact want to marry the deponent 's wife to some person belonging to their own community and religious order, knowing it full well that the deponent has legally wedded Smt. Kaniz Fatima and both of them were living together as husband and wife." "That the parents of the deponents wife wish to procure abortion of the conception which she is presently carrying and thereby cause criminal mischief to the deponent 's married life and happiness and marry her again to some other person of their caste and community and religious order. " "That the deponent further apprehends that the police of police station Kotwali in league with the parents of the deponent 's wife are detaining her against her wishes, illegally and forcefully with a view to use her for immoral and criminal inter course and purpose. " These statements some of which could not be true to his personal knowledge went without comment. The aftermath may now be mentioned. Mahesh did not appear in this Court. The notice issued by the Supreme Court to Mahesh was returned with the endorsement that he had left the house without leaving an address behind. As a result of these proceedings, we were informed the police dropped the criminal case. The petition for habeas corpus was not renewed or pressed again in the High Court. Mahesh apparently ceased to take any interest in this case, his wife 104 and his child for whose safety he was so solicitous. Mahesh saved himself from penal consequences if his act in any way had amounted to a crime, and the appellant in trying to save his daughter from him overreached himself and suffered penalty under the law. The High Court relied upon certain cases and Mr. N.C. Chatterjee attempted to distinguish them. The cases referred to by Mr. Chatterjee were The Queen vs Barnardo(1), The Queen vs Barnardo(2), and Thomas John Barnardo vs Mary Ford(3). We do not consider it necessary to refer to them because the principles on which a person is released from private detention and custody are well settled and also well known. The High Court can always order the production of the body of a person illegally detained and can punish disobedience of its order by attachment and commitment. There is neither doubt nor complexity in this proposition, once it is held that the disobedience was wailful. We pass no order in the other appeal but we hope that if Mahesh renews the petition, the High Court will put him to strict proof of his allegations regarding the age, the conversion of Kaniz Fatima and his marriage with her and his lack of interest in her welfare for over three years before ordering a second time that Kaniz Fatima be brought into Court. No. 227 of 1960. Dismissed. No. 228 of 1960. No orders passed (1) 23 Q.B.D., p.305. (2) 24 Q.B.D., p.283.

The High Court of Calcutta had separately allotted rooms in the Court premises to the Barristers for use and occupation for their Bar Library Club, to Advocates other than Barristers for their Bar Association and to the Attorneys for their Incorporated Law Society. The petitioners, who were Advocates of the Calcutta High Court and generally practiced on its Original Side and were called to the English Bar, had not read for a period of 12 months in the Chambers of a practising Barrister in England or in Calcutta as required by the rules of the Original bide but applied for becoming members of the Bar Library Club and their applications were refused. Their representation to the Chief Justice was also refused. On their application under article 32 the Constitution this Court issued a Rule against the State of West Bengal and the Chief Justice. The Joint Secretaries of the Bar Library Club were later on added as parties and the Bar Association appeared as intervener. The result of this intervention of the Bar Association was that the petition as it originally stood was broadend into a claim to abolish the exclusiveness of the Bar Library Club in favour of all other Advocates as was indicated in the representation made by the Association to the Chief Justice of Calcutta High Court which to the following effect : 46 We on behalf of the Bar Association humbly represent that no separate space may be allotted to the said group of advocates who call themselves Barristers but who practice in this Court as Advocates and are therefore in no way to be separately treated from the Advocates in general, and this allotment of separate rooms to the Bar Library Club offends against article 14 of the Constitution. We demand justice and pray for redress of our aforesaid grievance so that there should be one Bar Association for all the Advocates practicing in this High Court and the rooms now occupied by Bar Library Club may be allotted to such Bar Association. " While the matter was pending in this Court, the Bar Library Club altered its rules so as to admit all such Advocates as would undertake only to plead and not to act and the Attorney General, appearing on its behalf, gave the assurance that there would be no discrimination, all Advocates who undertook not to act would be eligible for admission to the club. This position was agreed to by the Joint Secretaries representing the Bar Library Club. field: This altered position meant a great improvement on the existing one and no better could be expected in the presents proceeding. Regard being had to the historical growth of the three sections of the Bar in the Calcutta High Court, namely, (1) those who only pleaded, (2) those who both pleaded and acted, and (3) those who only acted, it could not be said that classification was unreasonable or that the grant of separate accommodation to them amounted to a denial of equality before the law. Since the Bar Library Club had agreed to change its rules so as to conform exactly to the first classification, admission to it would be governed by rules which would be common to all lawyers who wanted to plead only and, consequently, there was no reason to interfere with the separate grant of accommodation by the court to the three sections. If the Bar Library Club failed to carry out the undertaking given by it would be the duty of the Chief Justice to frame such rules as were necessary to carry out the purpose for which the accommodation was granted and to see that there was no violation of equality.

Civil Appeal No. 424 1971. Appeal from the Judgment and Order dated the 22 2 1971 of Madras High Court in W.P. No. 3125 of 1970. M. Natesan, and (Mrs). section Gopalakrishanan, for the Appel lant. K.S. Ramamurthi, A. T.M. Sampath, M.M.L. Srivastava and E.C.Agarwala, for Respondent No. 1. The Judgment of the Court was delivered by KRISHNA IYER, J. This appeal, without any merit, deserves to be dismissed without much ado. The few facts of the case are that the appellant and the respondent, both operators Of stage carriages, applied for a permit on an 86 Km. route. Marks were awarded to both under the relevant Motor Vehicles Rules to settle their compara tive merit. The appellant secured 8.79 marks and the re spondent 12.08. The latter thus secured an easy arithmeti cal victory over the former and the sense of the scheme would have ordinarily led to the award of the permit to the respondent. However, the Road Transport Authority preferred the candidate with the lesser marks on the compassionate ground that the rival with the larger marks had already got a permit a couple of months before, on an overlapping route of 53 Km. On appeal, the Appellate Tribunal set aside this award and granted 10 1546 SCI/76 408 the permit to the one who had more merit. This has been affirmed throughout, repelling the challenge by writ peti tion. The aggrieved appellant contends that his permit should not have been set aside, the ground being that the respondent had got an earlier permit on a part of the route. We are not persuaded about this ground being good. Permits cannot be equated with distribution of patron age. We must remember that public interest is at stake when public transport services are operated. The scheme of the statute, viz., the is that he who can serve the travelling public best, is to be chosen as the permit holder. Considerations of grace, charity and compas sion at the expense of public interest are an act of unfairness to the Act. The conclusion, therefore is that the appellant 's claim was rightly rejected and the respond ent 's award was rightly made. We dismiss the appeal but in the circumstances without costs. P.H.P. Appeal dis missed.

The appellant and the respondent applied for a permit of stage carriages. The respondent secured higher marks than the appellant. The Road Transport Authority preferred the appellant on the compassionate ground that the respondent already had another permit on a route which was partly over lapping over the route in question. On an appeal the Appellate Tribunal set aside the order of the Transport Authority and granted the permit to the respondent. Dismissing the appeal, HELD: Permits cannot be equated with distribution of patronage. Public interest is at stake when public trans port services are operated. The scheme of the Motor Vehi cles Act and the Rules is that he who can serve the travel ling public best is to be chosen as the permit holder. Considerations of grace, charity and compassion at the expense of public interest are an act of unfairness to the Act. [408B C]

Appeal No. 304/56. Appeal by special leave from the judgment and order dated July 19, 1954, of the former Travancore. Cochin High Court in Income tax Reference No. 5 of 1952. A. V. Viswanatha Sastri, R. Ganapathy Iyer and G. Gopalakrishnan, for the appellant. K. N. Rajagopal Sastri and D. Gupta, for the respondent. September 1. The Judgment of the Court was delivered by SHAH J. The Commissioner of Income Tax for Mysore, Travancore Cochin and Coorg at Bangalore 60 468 referred under section 8(5) of the Travancore Taxation on Income (Investigation Commission) Act, 1124 (Malayalam Era) hereinafter referred to as the Investigation Act read with section 113 of the Travancore Income Tax Regulation, 1096 (Malayalam Era) hereinafter referred to as the Income Tax Act, the following questions to the High Court of Travancore Cochin: (1) Whether on the facts and in the circumstances of the case, there was any evidence before the commission to come to the conclusion to which it came in its report ? (2) On the facts and in the circumstances of the case was the order C. No. 76 (1) I.T/51 dated 25 10 1951 of the Government of India passed under the provisions of section 8(2) of the Travancore Taxation on Income (Investigation Commission) Act read with section 3 of the of 1950, a legal and valid order ? (3) Whether on the facts and in the circumstances of the case, the order passed by the Income Tax Officer in pursuance of the directions of the Government under section 8(2) of the Travancore Taxation on Income (Investigation Commission) Act, 1124, was a legal and valid order? The High Court answered the three questions in the affirmative. Against the order of the High Court answering the reference, this appeal has been preferred with special leave. The facts which gave rise to the reference are briefly these. The appellants are a firm of merchants carrying on business in yarn in the Districts of Trivandrum, and Nagercoil in the Travancore Cochin State. For the accounting year 1118 M. E. (August 17, 1942 to August 16, 1943), the appellants submitted a return under the Income Tax Act showing a net return of Rs.4,78,5945 0 as assessable income, and they were assessed to income tax and super tax by the Income Tax Officer on that return. In 1124 M. E., the Legislature of Travancore enacted the Investigation Act conferring authority upon the Government of Travancore to constitute a commission to be called an Income Tax Investigation Commission to investigate and, report on all matters 469 relating to taxation on income, with particular reference to the extent to which the existing law relating to, and procedure for, the assessment and collection of such taxation was inadequate to prevent evasion thereof and to investigate in accordance with the pro visions of the Act in cases referred, on or before February 16, 1950, to it under section 5. The Government was authorised after consideration of the report to direct that proceedings be taken under the various Acts including the Income Tax Act, in respect of any period commencing after August 16, 1939. By sub section (4) of section 8, all assessment or reassessment proceedings taken in pursuance of the direction under sub section (2), the findings recorded by the Commission on the case or on the points referred to it were, subject to the provisions of sub sections (5) and (6) to be final. Sub section (5) of section 8 provided for a reference to the High Court on any question of law arising out of any order made by the Commission. The State of Travancore Cochin merged with the Indian Union on March 7, 1949, but the Income Tax Act and the Investigation Act continued to apply to that area notwithstanding the merger. On August 6, 1949, the Government of Travancore Cochin passed an order referring the case of the appellants to the Commission for investigation and report under section 5 of the Investigation Act. On the evidence led before it, the Commission held by its report dated February 1, 1950, that the appellants had in the accounting year 1118 M. E. made a secret profit of Rs. 1,31,750 which was not included in the earlier assessment. The Commission then proceeded to compute the tax payable by the appellants and found that the amount of tax payable by the appellants on their true income was Rs. 1,35,736 8 0 and that they were liable to pay that amount subject to credit for the tax, already paid, The Government of Travancore Cochin by order dated February 14, 1950, accepted the report of the Commission and directed that immediate steps be taken to recover, under the Income Tax Act, from the appellants the tax due according to the findings recorded by the Commission. Pursuant to this direction, the 470 Income Tax Officer, without holding any fresh assessment proceedings, issued on March 15,1950, a demand notice under section 42 of the Income Tax Act for the additional tax imposed on the appellants according to the findings of the Commission and called upon the appellants to pay Rs. 13,337 13 0 as additional tax. The Union Legislature enacted on April 17, 1950, the providing for the extension of certain opium and revenue laws to certain parts of India. By section 2 of that Act, amongst others, the Taxation on Income (Investigation Commission) Act, XXX of 1947 (enacted by the Central Legislature) and all rules and orders made thereunder which were in force immediately before the commencement of Act XXX of 1950, were extended to the rest of India except the State of Jammu and Kashmir, but by section 3, in so far as it is material, it was provided that, " If immediately before the commencement of this Act there is in force in any part B State other than Jammu and Kashmir any law (x x x x) corresponding to the Taxation on Income (Investigation Commission) Act, 1947 (XXX of 1947); that law shall continue to remain in force. with the following modifications, (a) all cases referred to or pending before the State Commission (by whatever name called) in respect of matters relating to taxation on income other than agricultural income, shall stand transferred to the Central Commission for disposal: Provided . . . . . . . (b) . . . . . . . (bb). . . . . . . . (c) Any reference in the State law, by whatever form of words, to the State Government or the State Commission shall, in relation to income other than agricultural income, be construed as a reference to the Central Government or the Central Commission, as the case may be;". Purporting to exercise authority under section 8(2) of the Investigation Act read with section 3, cl. (c), of the , 471 1950, the Government of India, on October 25, 1951, directed that appropriate assessment proceedings under the Income Tax Act be taken against the appellants with a view to assess or reasses the concealed income of Rs. 1,31,750 which had escaped assessment On January 1, 1952, the Commissioner of Income Tax withdrew the notice of demand dated March 15, 1950, and thereafter the Income Tax Officer commenced reassessment proceedings against the appellants and by his order dated March 29, 1952, directed the appellants to pay income tax and super tax on the concealed income. At the instance of the appellants, a reference was made to the High Court of Travancore Cochin under section 8(5) of the Investigation Act and the three questions set out hereinbefore were referred to that court. ID the view of the High Court, there was evidence on which the Commission could arrive at the conclusion recorded by it. Evidently, the High Court was incompetent, in answering the question, to enter upon a review of the evidence in exercise of its advisory jurisdiction; and Mr. Viswanatha Sastri on behalf of the appellants has fairly not attempted to challenge the answer recorded by the High Court on the first question. The Government of India had, on a consideration of the report of the Commission, directed on October 25, 1951, that assessment proceedings be started against the appellants. Section 8(2) of the Investigation Act, in so far as it is material, reads as follows: " After considering the report, our Government shall by order in writing direct that such proceedings as they think fit under the Travancore Income Tax Act, VIII of 1096. shall be taken against the person to whose case the report relates in respect of the income of any period commencing after the last day of Karkadagom, 1124 (August 16, 1939) and upon such a direction being given, such proceedings may be taken and completed under the appropriate law not withstanding the restrictions contained in section 25 of the Travancore Income Tax Act, VIII of 1960. and notwithstanding any lapse of time or any decision to 472 a different effect given in the case by any Income Tax authority or Income Tax Appellate Tribunal ". By section 3 of the , XXXIII of 1950, the Investigation Act continued to remain in force with the modification that reference in the State law to the State Government was in relation to income other than agricultural income, to be construed as a reference to the Central Government. Whatever authority could be exercised by the Travancore Cochin Government before the enactment of the , could therefore, since the application of that Act, be exercised by the Central Government, and the latter Government could direct in respect of a case that proceedings for reassess ment be commenced against a tax payer. The case of the appellants was referred to the Investigation Commission by the Travancore Cochin Government and report was made to that Government by the Commission, and the authority of the Government of Travancore Cochin to take action on the report having been conferred upon the Central Government by section 3(c) of the , the Central Government was primal facie competent to direct that proceedings under the Income Tax Act as may be justifiable be taken against the appellants. But Mr. Viswanatha Sastri appearing on behalf of the appellants contests that view on two grounds: (1) that the Central Government may direct proceedings to be taken under the Income Tax Act only if the report was made by a commission appointed under the Taxation on Income (Investigation Commission) Act,, XXX of 1947, and not on a report made by a commission appointed by the Travancore Cochin State under the Investigation Act, and (2) that the Travancore Cochin Government having once taken action directing recovery of the tax due, it was not competent to the Central Government under section 8(2) of the Investigation Act again to take any action on the report. 473 In our view, there is no force in either of these con tentions. The expression " the report " in section 8(2) refers to the report made under section 8(1) by the members of the Commission appointed by the Travancore Cochin Government under the Investigation Act and on a consideration of that report, the Government of India has, since the enactment of the , power to direct that proceedings for assessment or re assessment be taken under the Income Tax Act. On the plain language used by the Legislature in section 3(c) of the , the contention raised on behalf of the appellants is unsustainable. By order dated February 14, 1950, the Government of Travancore Cochin had accepted the report of the Commission and had directed the Board of Revenue to take necessary action for recovery of the amount of tax due from the appellants, and pursuant to that direction, without holding proceedings for assessment or reassessment, a demand notice was issued by the Income Tax Officer. The order passed by the Government of India on October 25, 1951, is not in any way inconsistent with the order dated February 14, 1950. Both the orders direct that steps be taken for recovery of the amount of income tax due from the appellants But, if as appears evident from section 8(4) of the Investigation Act, liability to pay income tax could arise only on an effective order of assessment, the Income Tax Officer not having assessed the income before the demand notice was issued, the Government of India, was, in our judgment, competent to direct that proceedings be taken for assessing the liability of the appellants to pay tax consistently with the provisions of the Income Tax Act. The order passed by the Government of India on October 25, 1951, may there. fore be regarded as effectuating the earlier order passed by the Travancore Cochin Government on February 14, 1950. In any event, there IN nothing in section 8(2) which justifies the contention that action may be taken thereunder only once. If an unauthorised 474 direction is given under section 8(2), there is nothing in that provision which prevents rectification of that order. By sub section (4) of section 8 of the Investigation Act, the findings recorded by the Commission in cases or points referred to them are made final in all assessment or reassessment proceedings. The Act has, by sub section (2) of section 8 removed the bar of limitation which arose by section 25 of the Income Tax Act. It was competent therefore to the Income Tax Officer to reopen the assessment proceedings notwithstanding any lapse of time and the previous order of assessment did not operate as a bar to such reassessment. The High Court was therefore in our judgment right in recording its answers on the three questions submitted by the Commissioner of Income Tax. In that view, the appeal fails and is dismissed with costs. Appeal dismissed.

Under an agreement dated December 8, 1933, the appellant firm was appointed managing agent of a limited company for a period of thirty years from November 9, 1933. Clause 2 of the agreement provided for the remuneration of the managing agent. Some of the shareholders and directors of the company having felt that the scale of remuneration paid to the managing agent was extraordinarily excessive and unusual, negotiations were started for a reduction of the remuneration, and as a result the appellant and the company entered into a Supplementary Agreement on March 24, 1948, whereby in consideration of the company paying a sum of Rs. 7,50,000 " as compensation for releasing the company from the onerous term as to remuneration ", contained in the original agreement, the managing agent agreed to accept as remuneration as from September i, 1946, for the remaining term of the managing agency ten per cent. of the net annual profits of the company as defined in section 87C, sub section (3) of the Indian Companies Act, 1938 The sum of Rs. 7,50,000 was paid by the company to the appellant in 1947. For the assessment year I948 49 the Income tax Officer treated the aforesaid sum as a revenue receipt in the hands of the appellant and taxed it as such. The appellant claimed that the sum was a payment made by the company whole in discharge of its contingent liability to pay the higher remuneration and it was, therefore, a capital expenditure incurred by the company and received by the appellant as a capital receipt and was, as such, not liable to tax. The income tax authorities maintained (i) that though the payment of Rs. 7,50,000 had been described as compensation, the real object and consideration for the payment was the reduction of remuneration, (2) that it was a lump sum payment in consideration of the variation of the terms of employment and was, therefore, not a capital receipt but was a revenue receipt, and (3) that there was, in fact, no break in service and the payment was made in the course of the continuation of the service and, therefore, represented a revenue receipt of the managing agency business of the appellant. Held, that the sum of Rs. 7,50,000 was paid by the company for securing immunity from the liability to pay higher remuneration to the appellant for the rest of the term of the managing 528 agency and was, therefore, a capital expenditure ; and, so far as the appellant was concerned, it was received as compensation for the deterioration or injury to the managing agency by reason of the release of its rights to get higher remuneration and was, therefore, a capital receipt. The Commissioner of Income tax vs Vazir Sultan and Sons ; Hunter vs Dewhuyst, (1932) 16 Tax Cas. 605 and Glenboig Union Fiyeclay Co. Ltd. vs The Commissioners of Inland Revenue, , relied on. Assam Bengal Cement Co. Ltd. vs Commissioner of Income tax, [1955] i S.C.R. 972 ; The Commissioner of Income tax and Excess Profits Tax vs The South India Pictures Ltd., ; ; The Commissioner of Income tax vs Jairam Valji, and The Commissioner of Income tax vs Shaw Wallace and CO. (1932) L.R. 59 I.A. 206, considered.

ON: Criminal Appeal No. 301 of 1971. (Appeal by Special Leave from the Judgment and Order dated the 15th/l6th June 1971 of the Bombay High Court in Criminal Appeal No. 1405 of 1969). P.H. Parekh and Miss Manju Jatley, for the appellant. H.R. Khanna and M.N. Shroff, for respondent. The Judgment of the Court was delivered by FAZAL ALI, J. Corruption and nepotism is so rampant in our society of to day, and more particularly in the services, that the Indian Penal Code was not considered sufficient to meet this menace, and the Prevention of Cor ruption Act, .1947 (Act II of 1947) hereinafter referred to as 'the Act ' had to be enacted and amended from time to time to stamp out this evil. This is an appeal by special leave 534 directed against the judgment of the Bombay High Court affirming the conviction of the appellant under section 5(1)(d) read with section 5(2) of the Act and the sentence of six months rigorous imprisonment passed by the Special Judge, Bombay. The facts of the present case are more or less undisputed and are the least complicated and, therefore, they fall within a very narrow compass, and by and large we have to examine whether or not the inferences drawn by the High Court from the proved facts are legally correct and lead to only one hypothesis, namely, that the accused is guilty. It may. be necessary to give a resume of the prosecution case before indicating the evidence and the circumstances relied upon by the courts below in convicting the appellant. The appellant was a senior officer in the Army, holding the rank of a Major, and was at the material time the local Purchase Officer, hereinafter to be referred to as LPO, at Ordnance Depot at Talegaon Dabhade, District Poona. Fol lowing the Chinese attack in 1962 an Emergency was declared and the Army required certain engineering tools to be sup plied immediately. The Ordnance Depot, Jabalpur, sent a requisition of engineering tools to the Ordnance Depot at Talegaon Dabhade, Poona. In this connection the Control Officer of the Ordnance Depot wrote a letter to the Group Officer requesting him to despatch the stores immediately. The Group Officer consequently wrote a letter to the appel lant who was the LPO at the relevant time to arrange the supply of stores immediately. The appellant was directed to purchase the stores locally and to deliver them to the Group Officer. The Group Officer also indicated in his letter that the stores requisitioned by him were not available at the Depot at Talegaon. The detailed list of the tools, while is at Ext. 9, was received by the appellant on March 27, 1963. On the same day the Chief Ordance Officer passed an order enabling the LPO to immediately purchase the tools on cash purchase basis. We might pause for a little while in order to explain the nature of the order passed by the Chief Ordnance Officer. It appears that the normal procedure in the Department was that the LPO had to draw cash and then go to the market and purchase the goods against cash. But in view of the Emer gency and the immediate necessity of the tools this proce dure was waived and the appellant was permitted to buy the tools on covering purchase order basis; in other words, the appellant could himself purchase the tools without obtaining the previous sanction of the Chief Ordnance Officer, and on receiving the bills from the supplier and processing the same could get them sanctioned by the Chief Ordnance Officer and then make the payment to the supplier. According to the prosecution the appellant, a day after he received the list, Ext. 9, placed orders with Jayantilal Himatlal Shah, P.W. 2, for supply of the tools. It is not disputed that P.W. 2 was one of the contractors on the approved list of the Depart ment, and still continues to be so. P.W. 2 further assured the appellant that he would make the supply as early as possible, and that .he would do so at moderate rates. P.W. 2 accordingly procured .the articles from Bombay and delivered the same in the Depot by April 6, 1963 along with his bills after which 535 the bills were placed before. the Chief Ordnance Officer and after sanction by him the payment was made to P.W. 2. Apart from engineering tools there was another requisition for the supply of 900 dessert spoons. The appellant first wanted to place this order also with P.W. 2, but he found that his rate was a little higher than the rate which was tendered to the Department sometime before, and, therefore, placed orders with another firm of M/s Devichand Lalchand Gandhi, P.W. 11, and received 900 dessert spoons of stain less steel from them. Sometime in 1964, P.W. 18, an Inspector of Police in the Office of Special Police Establishment, Bombay, received some information regarding the appellant having committed an offence punishable under the Act on the basis of which he recorded the First Information Report on January 25, 1964. Thereafter he obtained the permission of the Special Judi cial Magistrate for investigating the case and eventually submitted a chargesheet against the appellant before the Special Judge, Bombay, on April 28, 1966 as a result of which the appellant was tried, convicted and sentenced by the Special Judge, and his appeal against the said convic tion and sentence before the High Court failed. The gravamen of the allegation against the appellant is that although the supplies were to be made as quickly as possible the appellant made a deliberate departure from the normal procedure which was adopted in the Department, in that he followed the procedure of covering purchase order basis and placed orders with P.W. 2 a,lone without making any enquiries from the local market whether the tools were available there. It was also alleged that by placing orders with P.W. 2 the appellant caused P.W. 2 to earn a profit of 45% and thereby caused wrongful loss to the Army Department. It was further alleged that a number of firms in Poona were prepared to supply the goods required at a much lesser profit of 10 to 15 % and the appellant made no enquiries whatsoever from these firms although some of them were also on the approved list of the Department. On the basis of these circumstances only the prosecution sought the convic tion of the appellant. The appellant pleaded innocence and denied that he had any intention to cause pecuniary benefit to P.W. 2. The appellant submitted that the arti cles were very urgently required and as no time was left he had to act quickly and take immediate decisions. It was for this purpose that the normal procedure was waived and the Chief Ordnance Officer permitted him to adopt the covering purchase order system. As regards the enquiries from the local market, the definite case of the appellant in his statement under section 342 of the Code of Criminal Procedure was that he had in fact made enquiries from a few firms and his enquiries revealed that either the firms did not possess the goods themselves or that they were not dealers in all the goods. He further expressed his ignorance that P.W. 2 made a profit of 45% and pleaded, on the other hand, that he was given to understand by P.W. 2 that the articles would be supplied at moderate rates. The appellant seemed to suggest that as all the articles required were not available in the local market he thought it a prudent act to place orders with a person who was in a position to supply all the tools required at one stretch instead of running from one dealer to another for purchasing goods piecemeal, and as P.W. 2 was prepared to supply all the goods himself and he was also on the 18 1546 SCI/76 536 approved list of dealers the appellant decided to place orders with him. He made no secret of the fact because all the higher officers, including the Chief Ordnance Officer, sanctioned the bills sent by P.W. 2. The Trial Court, after consideration of the evidence and circumstances, found that the appellant had by corrupt means procured pecuniary benefit for P.W. 2 and caused wrongful loss. The High Court in appeal confirmed the finding of the Trial Court. Normally this Court in special leave against a concurrent judgment of the High Court and the Trial Court does not re appraise the evidence, but unfortunately in this case we find that both the courts below have drawn wrong inferences from proved facts and have made a completely wrong approach to the whole case by misplacing the onus of proof which lay on the prosecution on the accused. Both the courts below had proceeded on the footing that it was for the accused and not for the prosecution to prove that the accused made enquiries from the local market or that he knew about the rates, etc. This approach was obviously and manifestly wrong. It is plain that it was for the prosecution to prove the ingredients of section 5(1) (d), which runs thus: "5( 1 ) A public servant is said to commit the offence of criminal misconduced. (a). (b). (c). (d) if lie, by corrupt or illegal means or by otherwise abusing his position as public servant, obtains for himself or for any other persons any valuable thing or pecuniary advan tage . " In other words it was for the prosecution to prove affirma tively that the appellant by corrupt or illegal means or by abusing his position obtained any pecuniary advantage for some other person. In view of the clear defence taken by the appellant it is obvious that it was for the prosecution to prove that the accused made no enquiries, that the accused made a departure from the normal procedure with oblique motive, and that the accused knew that P.W. 2 would make a profit of 45 % whereas others would be satisfied with a profit of 10 15%. The High Court, to begin with, started with the presumption that the accused led no evidence to show that he made any enquiries. We might state at the .risk of repetition that it was not for the accused to prove the prosecution case but it was for the prosecution to disprove what the accused said, namely, that he had made enquiries. The prosecution could prove this fact only by producing satisfactory and convincing evidence to show that the ac cused in fact made no such enquiries and he knew about the margin of profit which other dealers would have made. We shall immediately show that there is no legal evidence to prove this fact. What the courts below have done is to disbelieve the case of the appellant because he led no evidence to show that he made any enquiries regarding the availability of goods or the rates, and therefore the courts presumed that the accused had a dishonest intention. 537 In the case of Narayanan Nambiar vs State of Kerala(1) this Court had the occasion to consider the import and interpretation of the words "corrupt or illegal means" and the word "abuse", as mentioned in section 5 (1) (d). Tiffs Court observed thus: "Let us look at the clause "by otherwise abusing the position of a public servant", for the argument mainly turns upon the said clause. The phraseology is very comprehen sive. It covers acts done "otherwise" than by corrupt or illegal means by an officer abusing his position. The gist of the offence under this clause is that a public officer abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage. "Abuse" means mis use i.e. using his position for something for which it is not intended. That abuse may be by corrupt or illegal means or otherwise than those means. The word 'otherwise ' has wide connotation and if no limitation is placed on it, the words "corrupt ', 'illegal ' and 'otherwise ' mentioned in the clause become surplusage, for on that construction every abuse of position is gathered by the clause. So some limitation will have to be put on that word and that limitation is that it takes colour from the preceding words along with which it appears in the clause, that is to say something savouring of dishonest act on his part . The juxtaposition of the word 'otherwise ' with the words "corrupt or illegal means" and the dishonesty implicit in the word "abuse" indicate the necessity for a dishonest intention on his part to bring him within the meaning of the clause? ' We are satisfied that the judgment of the High Court runs counter to the principles laid down by this Court in the case cited above, and the High Court does not appear to have applied that principle in deciding the truth of the case presented by the prosecution against the appellant. In the instant case it is not alleged that the accused had used any corrupt or illegal means. It has not been shown that the accused himself accepted any illegal gratification or pecuniary benefit nor has it been shown that he violated any statutory rule or order. Thus, even on the prosecution allegation the case of the appellant falls only within the second part of section 5 (1 ) (d), namely, abusing his position as public servant. The abuse of position, as held by this Court, must necessarily be dishonest so that it may be proved that the appellant caused deliberately wrongful loss to the Army by obtaining pecuniary benefit for P.W. 2. After having gone through the evidence referred to by the courts below we think the prosecution has miserably failed to prove this fact. To begin with, the first circum stance relied upon by the High Court is that the accused made a deliberate departure from the usual procedure of purchasing against cash. According to the prosecution, the procedure was that the officer should have drawn cash from the office and then he should have gone to the market 'and purchased the articles and (1) [1963] supp. 2 S.C.R. 724, 730 731. 538 after having made the purchases he would obtain the sanction of the Chief Commanding Officer. This procedure is known as "cash purchase basis". The accused, however, adopted the procedure known as "covering purchase order", i.e., he made the purchases and got the bills sanctioned by the Chief Ordnance Officer. It is not disputed that in the present case, in view of the emergent circumstances the Chief. Ordnance Officer himself had allowed the appellant to make the purchases on the basis of cash purchase and had himself sanctioned the bills tendered by the supplier, P.W. 2. All the bills were paid to P.W. 2 by cheque. It was contended by the State that in the instant ' ease the appel lant had purchased these articles against cash and later on obtained the necessary covering purchase orders. This is not correct because the appellant had merely placed orders with P.W. 2 for supply of goods and it was only after all the goods had been supplied, verified and found correct that the bills were forwarded to the Chief Commanding Officer for sanction. The High Court itself found that Lt. Col. Pun had passed an order directing the appellant as LPO to purchase all the articles against cash immediately. In this connec tion the High Court observed as follows: "Similarly, it is not in dispute that regarding the mode of purchase, Lt. Col. Purl had already passed an order directing the appellant as Local Purchase Officer to pur chase all the articles against cash immediate ly." Even assuming that the appellant purchased the articles against cash he was doing so in compliance with the orders of the Chief Ordnance officer and there was absolutely no reason for the High Court or the Special Judge to have drawn inferences against the appellant for violation of the proce dure when the highest officer of the Depot had sanctioned the procedure which was adopted by the appellant and had in fact authorised him to do so in view of the Emergency. It may be necessary to refer to the evidence of P.W. 2, Lt. Des Raj (P.W. 10) who stated that a covering purchase order is sanctioned only when the Chief Ordnance Officer is satisfied that there are special circumstances which neces sitate the sanction of the purchase order after the stores are purchased. It is not disputed that the Chief Ordnance Officer had issued a covering purchase order in this case. In these circumstances the best person who would have thrown a flood of light on the subject and whose evidence would have clinched the issue whether or not the accused was authorised to depart from the normal procedure was Col. Anand, the Chief Ordnance Officer, who though examined by the Police during investigations was not produced before the Court. In the absence of his evidence there was no legal justification for the court to hold that the accused had departed, from the normal procedure without the authority of the Chief Ordnance Officer, particularly when it is admitted that a covering purchase order was passed by the said Offi cer and the bill was also finally sanctioned by him. In these circumstances, therefore, the entire fabric of the reasoning of the High Court as also that of the Special Judge falls to the ground. Another circumstance on the basis of which the appellant was convicted was the fact that he made no enquiries from the local suppliers, nor did he ascertain the rates. On this question also the High Court, as well as the Special Judge, have misplaced the onus on the accused. 539 To begin with, the accused has categorically stated in his statement under section 342, Cr. P.C., that he had in fact made enquiries and had sent the Supply Clerk and one Deshmukh for getting the rates and find out whether the stores were available. The prosecution could succeed only in the state ment of the accused could be falsified and this could not only be done if the prosecution had examined the Supply Clerk who was sent by the appellant or Deshmukh, both of whom were employees in the Army and in possession and control of the prosecution, and yet none of these persons were examined to falsify the statement of the accused. The High Court, on the Other hand, was in error when it observed that the accused did not produce either the clerk or Deshmukh forgetting that it was not for the accused but for the prosecution to prove that what the appellant had said was false. Furthermore, reliance was placed by the High Court and the Special Judge on the evidence of P.W.s 14, 15 and 16. P.W. 14 does state that his firm was dealing in engineering tools and other articles and that he was on the list of approved contractors of ,Ordnance Depot. He, however, admitted that out of the articles required only 80 to 90 percent wet available with the firm. In cross exami nation, when asked about a particular type of engineering tool the witness was unable to state for what purpose it was used. The witness admitted that he did not maintain any stock register at the shop and the fact that the articles were available was being deposed by him merely on the basis of his memory. Finally, the witness admitted thus: "I had not gone to Talegaon Ordnance Depot to enquire whether any engineering tools were required in the depot. " The High Court seems to think that as this witness 's firm was merely a retailor, therefore there was not necessity to keep a stock register, The witness has nowhere stated that he was a retailer and not a whole saler and, therefore, there was absolutely no basis for the High Court to have conjectured or speculated on this point in order to raise an inference against the appellant. On the other hand, in the absence of any document, register or inventory to show the nature of goods the firm of P.W. 14 was dealing in, it is difficult to accept the ipsi dixit of the witness consisting of his bare statement based on pure memory that the engi neering tools were available six years before the date he was deposing. Such evidence, in our opinion, is absolutely worthless. In fact P.W. 18, the Inspector, has deposed that in the course of his investigations he had seized the ac counts and documents of the local firms, and yet no document was produced by the prosecution to show that P.W. 14 in fact had in his possession engineering goods at the relevant time. Furthermore, the witness positively states that he never went to Talegaon Ordnance Depot to enquire whether any tools were required. It was also not put to the wit ness whether the appellant personally or through one of his employees had approached him regarding the supply of the goods. In these circumstances, therefore, how possibly can an inference be drawn from his evidence that the accused made no enquiries whatsoever when the accused had positively stated that he did. Finally, on the question of rates or margin of profit also, the witness makes 540 only a verbal statement that he would have charged 10 15% which cannot be accepted in the absence of documentary proof of the fact that the firm had sold these articles during the relevant time to various persons and made 10 15% profit only. It is manifest that if the firm was carrying on such a huge business then everything must have been writ ten in the account books which were in possession of the Inspector and yet not produced. In these circumstances, therefore, we are satisfied that the High Court misread the evidence of P.W.14. Reliance was then placed on the evidence of P.W. 15, Mahen drakumar, who is a partner of the firm known as 'C. Ambalal & Co. ' To begin with, he clearly admits that his firm was dealing in hardware, paints, sanitaryware and only files amongst the engineering tools. The witness further states that Out of the articles mentioned in the list, exhibit 9, only files, being items Nos. 75 to 94 and 96 to 99 were available with him and could be supplied by him. He does not say that he was in a position to supply the other engi neering goods also. Again, the witness makes only a verbal statement without any documentary proof that he would have charged 10 12% of profit on the amount spent. It may be pertinent to note here that the appellant in his statement under section 342, has positively asserted that he did make enquiries from the firm of Ambalal. Ambalal was examined by the police but not produced in court and the explanation given was that he was ill. That by itself is not a convinc ing explanation because the prosecution could have asked for adjournment from the court to enable Ambalal to be examined as a witness for he alone could have falsified the statement of the accused whether or not any enquiry was made from him. Finally, this witness himself states: "I do not remember whether I was present when the list, exhibit 9, was shown to Ambalal when his statement was recorded. " The evidence of this witness, therefore, does not exclude the possibility of the accused having made enquiries from Ambalal and the accused has in fact explained in his state ment that no orders could have been placed with this firm because he was only in a position to supply files which formed a very small component of the engineering goods required. In these circumstances, therefore, the evi dence, of P.W. 15 does not falsify the statement of the accused that he made enquiries from this firm but, on the other hand, goes to support it. The High Court has observed that if the appellant had made enquiries from P.W. 15, then he would have undoubtedly remembered this fact. This process of reasoning appears to us to be absolutely perverse. When the witness himself does not remember whether the appellant had made any enquiries in his presence then the natural inference would be that he does not exclude the possibility of the appellant having made an enquiry, and in the absence of the examination of Ambalal it cannot be said that the statement of the accused was false. The next evidence on which reliance was placed was of P.W. 16, Taharbhai. This witness clearly admits that he had no engineering goods in his stock and if an order had been placed he could have 541 supplied them by procuring them from somebody else. In these circumstances he was in the same position as P.W. 2. This witness further admits that out of the list, Ex.9, only files and drills were available, but the stock of these articles was scanty. He again orally says that he would have charged a profit of 15%. This witness admits that he does not remember whether the appellant had come to his shop on March 27, 1963 to enquire about the availability of the goods and the rates of engineering tools. It was sug gested to him that enquiries were made from him by the appellant and he said, that the tools were not available with his firm. The evidence of this witness also suffers from the same infirmities as are to be found in the evidence of P.Ws. 14 and 15. He has not produced the stock register nor any document or accounts or inventories to show that he had all the goods required. His statement further does not exclude the possibility of the accused having made enquires from him, or at any rate does not falsify the statement of the accused. As regards the margin of profit, that is also ipsi dixit without any basis and is not sup ported by his account books. It seems to us that before a presumption against the accused could be raised that he knew that other firms would have charged a much lesser profit than P.W.2, it should have been proved by the production of account books of the firms concerned and their dealings during the relevant time that they had sold similar of identical goods and made only a profit of 10 15%. The verbal statement of the witnesses regarding the margin of profit which they would have made had orders been placed six years back can carry no weight. This is all the evidence on the basis of which infer ences against the appellant have been drawn. After having gone through the evidence we are satisfied that the prose cution has not produced any reliable or conclusive material to prove that the appellant had any dishonest intention in causing pecuniary benefit to P.W. 2. Even assuming that the accused departed from the normal procedure in view of the urgent necessity of the articles it cannot be said that this was done with a corrupt or oblique motive. The appel lant had been asked. by the Jabalpur Depot to supply these articles immediately. The appellant, therefore, had t6 take a quick decision and he was authorised to do so by his Chief. Since P.W. 2 was prepared to supply all the goods in bulk at one stretch the appellant may have thought it better to place the orders with him. May be, that this was an error of judgment or an act of indiscretion, but from that alone an inference of dishonest intention cannot be drawn. Moreover, P.W l0 has clearly stated thus: "I had no reason to doubt the honesty or sincerity of the accused during the period he was serving under me. " This would show that the appellant was really an honest and sincere officer and his antecedents were good. Against this background we should have expected much better and superior evidence to justify inference of the accused having been animated by a dishonest intention in placing orders with P.W. 2. 542 There is yet one more intrinsic circumstance which negatives the guilt of the accused. Although the appellant had given orders with respect to all the articles to P.W. 2, yet when he found that P.W. 2 was charging higher rate for the dessert spoons he did not place orders for the same with him but placed the orders with P.W. 11, who supplied at the rate of Re. 1/ per spoon which was less than the rate at which P.W. 2 was ready to supply. This shows that the appellant did take due care and caution and did not act blindly. There is absolutely no legal evidence on the record to show as to what was the nature of the margin of profit which the firms of P.Ws. 14, 15 and 16 had made if the orders had been placed with them, and in the absence of such an evidence the court would not be justified in holding that the accused abused his position in causing pecuniary bene fit to P.W. 2. The appellant had admitted that if he had known that P.W. 2 would have charged such a high profit he would have been more careful. On the other hand, what appears to us to be most sur prising is that although P.W. 2 was the sole beneficiary of the whole transaction and had, according to the prosecution, made profit of 45% and was, therefore, in the nature of an accomplice, yet he continues to be on the approved list of the departmental suppliers even on the date when he was giving evidence. Such a conduct on the part of the depart ment can only be consistent with the innocence rather than the. guilt of the accused. If the prosecution allegation was true that P.W. 2 through his business influence ob tained the order in his favour, then before the prosecu tion was started against the appellant, P.W. 2 should have been blacklisted. But this was not done. The High Court appears to have been led away by the impression that the appellant had personal relations with P.W. 2. There is, however, no such evidence on record and P.W. 2 himself has categorically stated that his relations with the appellant were purely business relations as he used to visit the office in connection with the supplies off and on. In these circumstances, therefore, if P.W. 2 was not suspected by the prosecution for having received huge pecuniary benefit much less could the blame lie on the appellant. In these circumstances, even if there was some amount of carelessness or negligence on the part of the appellant it is impossible to doubt his bona fides. He acted as a produ ent person and tried to get the supplies as quickly as possible with the result that all the gods required by Jabalpur Depot were supplied within two weeks. A careful analysis of the evidence and the circumstances would, therefore, show that the approach of the High Court was clearly 543 wrong and that the inferences drawn by the High Court were not at all warranted by the circumstances and facts proved in the case. The entire charge against the appellant rested on circumstantial evidence and the prosecution has failed to prove that the circumstances were such as could be ex plained only on one hypothesis, namely, that the accused was guilty. For these reasons, therefore, the appeal is allowed, judgment of the High Court set aside and conviction and sentence imposed on the appellant are hereby quashed, and he is acquitted of the charge framed against him. M.R. Appeal allowed.

The appellant was posted as the Local Purchase Officer at the Army Ordnance Depot in Poona district. In connection with the purchase of some engineering tools, charges were brought against him under section 5(1)(d) read with section 5(2) of the Prevention of Corruption Act, for having procured pecu niary benefit for a certain contractor by corrupt means, thereby causing wrongful loss to the army department. The Trial Court convicted the appellant, and in appeal the High Court confirmed the conviction. The Supreme Court granted him Special Leave to appeal under article 136 of the Constitu tion, and allowing the appeal, HELD: 1. Both the courts below had proceeded on the footing that it was for the accused to prove the ingredients of section 5(1)(d) of the Act. This approach was wrong. It was for the prosecution to prove affirmatively that the appel lant by corrupt or illegal means or by abusing his position obtained any pecuniary advantage for some other person. [536 C D] 2. Normally this Court in special leave against a con current judgment of the High Court and the trial Court does not re appraise the evidence, but here we find that both the courts below have drawn wrong inferences from proved facts and have made a completely wrong approach to the whole case by misplacing the onus of proof which lay on the prosecution on the accused and presuming that the accused had a dishon est intention. [536 B C, H] Narayanan Nambiar vs State of Kerala [1963] Supp. 2 SCR 724; 730 731, referred to.

Appeal No. 620 of 1963. Appeal by special leave from the judgment and decree dated 9, 1961 of the Patna High Court in M.J.C. No. 497 of 1957. N. D. Karkhanis and R. N. Sachthey, for the appellant. Sarjoo Prasad, B. D. Singh and D. Goburdhn", for the respondent. April 28, 1964. The judgment of the Court was delivered by SHAH J. Rani Bhuwaneshwari Kuer hereinafter referred to as `the assesses ' was the proprietor of a seven sixteenth share in an estate known as 'Tekari Raj ', having inherited that estate from her parents. The assesses later acquired by purchase a major portion of the remaining ninesixteenth share in the Raj. The estate held by the assessee was heavily encumbered, and with a view to arrange for liquidation of the debts the assesses executed an indenture of trust dated January 20, 1941, whereby the Tekari Raj and certain zamindari properties owned by the assesses were conveyed to certain named trustees to be field in trust, subject to conditions specified therein. The principal beneficiaries under the deed after payment of the debts were the assesses, her husband and her five sons. 922 By the 23rd clause of the deed it was directed that after making certain payments, the trustees shall divide the sur plus of the net rents, issues and profits thereof in the proportions set out in the clause. The 24th and the 25th clauses dealt with the devolution of the beneficial interest in the event of death of any of the beneficiaries. By the 41st clause it was provided that after the debts and liabilities set out in Sch. 'D ' to the deed were paid off and discharged, the settlor shall be entitled to make a permanent trust of some of the villages demised under the deed for the maintenance and up keep of the Tekari Forts, observance of Durga Puja and other purposes specified therein, and in the event of the settlor dying before payment and discharge of the debts and liabilities set out in Sch. 'D ', and without making any permanent trust for the purposes enumerated, the settlor enjoined the trustees after discharge of the debts mentioned in Sch. 'D ' to set apart property fetching a net income of Rs. 20,000/ to form the corpus of the permanent trust to meet the expenses relating to the repair of the Tekari Forts, celebration of Durga Puja and other purposes specified. By the 42nd clause it was provided that the trust under the deed shall terminate after payment of the debts and liabilities set out in Sch. 'D ' or after the death of the last amongst the sons, whichever event shall last occur, and by the 43rd clause it was provided that if any of the beneficiaries under the deed or their heirs in future shall challenge the Indenture of Re lease and Agreement dated December 6, 1939, executed by the settlor in favour of her husband and the action taken thereunder. the said beneficiary shall on making such objection forfeit his right as a beneficiary under the deed. It was also provided that if there shall be any breach by any of the beneficiaries or of the covenants or conditions and limitations imposed under the deed, he or she shall not be entitled to any money or to any share in the rents, issues or usufruct of the trust property and he or she shall be deemed to have been excluded from the categories of beneficiaries and his or her share of the rents, issues and profits will be dealt with or enjoyed by the settlor in her entire discretion. provided always that the settlor may at any time during her life by any deed revocable or irrevocable revoke or vary either wholly or partly the trust or any provisions of the deed, but not before the payment and discharge of the debts and liabilities as mentioned in Sch. 'D ', and provided further that notwithstanding such revocation of the trust the settlement made under the deed remained good and effective subject to the forfeiture clause set out therein. This deed was modified by a deed of rectification dated December 22, 1941, reciting that with the consent of all persons who were parties to the deed of trust, it was directed 923 that at any time during the lifetime of the assessee the assessee had the power to revoke or vary, either wholly or partly, the trust or any provisions of the deed of trust, but not so as to effect the payment and discharge of the debts and liabilities as mentioned in Sch. 'D ' thereto and the original deed of trust shall be read and construed as if it contained a power vested in the settlor (the assessees) during her life by deed to revoke or vary, either wholly or partly, the trust or any provisions of the said trust, but not so as to effect the payment and discharge of the debts and liabilities as mentioned in Sch. 'D '. Another deed called a deed of amendment was executed by the assessee on January 12, 1942. By this deed paragraphs 22, 32, 33, 35., 36 and 37 of the original deed were cancelled and other paragraphs including paragraphs 23, 24 and 42 were amended and modified and paragraphs 42(a), 44 and 45 were added. By the amendment of paragraph 23 the surplus rents, issues and profits of the trust property were to be divided in seven equal shares and by the amendment made in cl. 24 it was provided that in the event of the death of any of the sons, his share of the rents, issues and profits shall become payable to his heir 'or heirs. By the modifications in paragraph 42 it was provided that the trust under the deed may terminate after payment of the debts and liabilities of the trust that would then be outstanding or after extinguishment of the Thicca leases in favour of the Maharajadhiraj of Darbhanga or in favour of Capt. Maharaj Kumar Gopal Saran Narain Singh of Tekari, whichever event shall occur last. Paragraph 42(a) provided that after the provisions as laid down in para 41 had been carried out and when the last contingency set out in para 42 as modified had arisen, the beneficiaries or the heirs or successors in interest or representatives in interest of such of them as had acquired any right from any of the beneficiaries under the deed shall be entitled .to partition the trust property according to their shares. The material part of paragraph 45 provided: "That the settlement made under these presents shall be permanent, unalterable and irrevocable so far the interest created under these presents are concerned, but each beneficiary shall have full right to make any sort of arrangement about devolution or succession or make such alienation, as he may think fit, about his share, but the trust created under these presents shall be irrevocable so long the debts mentioned above including all the liabilities on the Trust property up to date are not fully paid up or discharged or so long as the Thicca leases in favour of Hon 'ble Maharajadhiraj of Darbhanga or Capt. Maharaj Kumar Gopal 924 Saran Narain Singh remain good and effective whichever event shall happen last". Provided that always para 43 of the Indenture of Trust dated 20th January, 1941, shall hence forth be read subject to this para. In proceedings for assessment for the assessment year 1947 48 the Income tax Officer, Gaya Palamau Circle, Gaya, rejected the contention raised by the assessee that the income under thetrust was taxable in the hands of the trustees under thedeed of settlement and applying the provision of section 16(1)(c)of the Indian Income tax Act, 1922, brought the income ofthe trust to tax as part of the assessee 's income. The order passed by the Income tax Officer was confirmed in appeal to the Appellate Assistant Commissioner, but the Income tax Appellate Tribunal reversed that order. The Tribunal observed that "revocation involved taking back that which was given once, but in the present case there was nothing done by the assessee by which it could be said that she had taken back what she had given by the original deed of trust", and the trust was therefore not a revocable trust as contemplated by section 16 (1) (c) of the Income tax Act. The High Court of Judicature at Patna directed the Income tax Appellate Tribunal under section 66(2) of the Act to state a case and to refer the following questions: (1)Whether the trust created by the assessee is a revocable trust within the meaning of section 16(l)(c) of the Income tax Act? (2)Whether the income from the property which is the subject matter of the settlement mentioned in question (1) can be deemed to be the income of the assessee under section 16 (1) (c) of the Income tax Act? The High Court held that the deed of trust dated January 20, 1941 (as modified by the subsequent deed dated January 12, 1942) was within the meaning of section 16 (1) (c) of the Income tax Act a revocable trust, but not being revocable for six years from the date of its creation, by Virtue of the third proviso to section 16 (1) (c) which controlled not merely the substantive provisions of section 16 (1) (c) but the first proviso to that section as well. the income received by the beneficiaries, (other than the settlor) under the deed of trust was not liable to be included in the income of the assessee. The High Court accordingly directed that the income of the trust property which is the subject matter of the settlement of the trust was, not liable to be assessed to tax under the third proviso to section 925 16(1)(c), but only so long as the power of revocation ranted by the deed was not exercised by the assessee under the terms ,of the deed of trust. The High Court also declared that the assessee was liable to pay tax on the income received by her in the character of a beneficiary out of the trust properties. Against the order passed by the High Court, with special leave, the Commissioner of Income tax, Patna, has appealed to this Court. The principal question which falls to be determined in this appeal is whether by the third proviso to cl. (c) of section 16(1), income received by the beneficiaries other than the assessee is income arising to them by virtue of a settlement which is not revocable for a period exceeding six years, and from which income the assessee derives no benefit direct or indirect. Section 16(1)(c) provides: "(1) In computing the total income of an assessee(a) (b) (c)all income arising to any person by virtue of a settlement or disposition whether revocable or not, and whether effected before or after the commencement of the Indian Income tax (Amendment) Act, 1939, (VII of 1939), from assets remaining the property of the settlor or disponer, shall be deemed to be income of the settlor or disponer, and all income arising to any person by virtue of a revocable transfer of assets shall be deemed to be income of the transferor: Provided that for the purposes of this clause a settlement, disposition or transfer shall be deemed to be revocable if it contains any provisions for the retransfer directly or indirectly of the income or assets to the settlor, "disponer or transferor. or in any way gives the settlor, disponer or transferor a right to reassume power directly or indirectly over the income or assets: Provided further that the expression "settlement or disposition" shall for the purpose of this clause include any disposition, trust, covenant, agreement, or arrangement, and the expression "settlor or disponer" in relation to a settlement or disposition shall include any person by whom the settlement or disposition was made: Provided further that this clause shall not apply to any income arising to any person by virtue of a settlement or disposition which is not revocable for a 926 period exceeding six years or during the lifetime of the person and from which income the settlor. or disponer derives no direct or indirect benefit but that the settlor shall be liable to be assessed on the said income as and when the power to revoke arises to him. " The High Court held that the deed of trust was one in which the assets remained the property of the settlor, but as the trust was not revocable for a period of six years the income received by the beneficiaries (other than the assessee) was not liable to be taxed as the assessee 's income till the power to revokearose in his favour. The point in dispute in this appeal is about the applica bility of the third proviso to section 16(l)(c), which seeks to exempt from the operation of the principal clause income which arises to any person under the deed of settlement executed by the assessee. Two conditions are necessary for the application of the third proviso (i) that the trust should not be revocable for a period exceeding six years or during the lifetime of the beneficiary and (ii) the settlor or disponer should have no direct or indirect benefit from the income given to the beneficiary. Counsel for the Commissioner contended in the first instance that the third proviso to section 16(l)(c) applied to the trust created by the assessee because in fact within six years of the date of its execution the deed was revoked, and that in any event on a true interpretation of the covenants of the, deed of trust it was revocable within six years. The plea that the trust was in fact revoked within six years was never raised before the Revenue authorities, the Tribunal or even the High Court, and is plainly unsustainable. There are, it is true, certain recitals made in the deed dated September 18, 1946, executed by the assessee, which is styled "Deed for further alteration of terms & constitution of trust" by the assessee, that the liabilities referred to in Sch. 'D ' to the deed of trust dated January 20, 1941 had been fully discharged and the beneficiaries had been, receiving the surplus rents, issues and profits according to their respective shares in the same and the settlor had by a deed of trust dated May 28, 1946 conveyed and settled a portion of her seventh share in the rents, issues and profits of the trust properties, as well as in the corpus of Shri Bhubneshwari Hari Haresh Private Trust for meeting certain expenses. But those recitals do not even prima facie indicate that the trust was revoked at any time. We cannot therefore entertain this new ground raised for the. first time in this Court. It may be noticed that whereas under the original cl. 43 of the deed of trust dated January 20, 1941 even though the 927 trust was expressly made revocable, it could not be revoked before payment of the debts and discharge of the liabilities mentioned in Sch. 'D '. By the 45th clause which was added by the deed of amendment dated January 12, 1942, the settle ment made under the deed was declared permanent, unalterable and irrevocable so far as the interest created under the deed of amendment was concerned, and was also to stand irrevocable so long as the debts mentioned in Sch. 'D ' and other liabilities of the trust including all the liabilities on the trust properties were not fully paid up and discharged and so long as the leases in favour of the Maharajadhiraj of Darbhanga or Capt. Maharaj Kumar Gopal Saran Narain Singh remained good and effective, whichever event last happened. It is conceded that the lease in favour of the Maharajadhiraj of Darbhanga was to ensure till 1965 and the lease in favour of Capt. Maharaj Kumar Gopal Saran Narain Singh till 1954. By cl. 45 of the deed of amendment the right of revocation was not exercisable till the Thicca leases in favour of the Maharajadhiraj of Darbhanga and Capt. Mabaraj KumarGopal Saran Narain Singh remained good and effective, and we are unable to hold that the deed of trust was revocable, within six years as provided by section 16(l)(c) of the Act. It was urged on behalf of the Commissioner in the alter native that the third proviso to section 16(l)(c) did not protect the assessee against the application of the substantive part of that clause, because the assessee was deriving under the terms of the deed of trust a direct benefit. There are in the third proviso, two cumulative conditions on the existence of which the exemption from liability to have the income arising from a settlement included in the assessee 's income. The effect of ' the two conditions is that, that part of the income which arises to any person by virtue of the settlement which is not revocable for a period of six years or which is not revocable, during the lifetime of the beneficiary will not be included in the settlor 's income, provided that from the income of such person the settlor derives no benefit direct or indirect. The third proviso to section 16(l)(c) does not operate to exclude the income which the settlor receives as a beneficiary, from liability to income tax: it merely excludes that part of the income which is under the deed of settlement given to another person from liability to tax in the hands of the settlor, if the condi tions prescribed by the third proviso are fulfilled. The contention raised by the Commissioner that if under the deed of trust the settlor has reserved to himself as a beneficiary any part of the income of the property settled, the third proviso will not apply to the deed of trust runs contrary to the plain words of the statute. In terms the third proviso excludes from the operation of the principle clause that part of the income alone which arises to any person under a deed of 928 settlement:it does not remove from its protection the entire deed of trust, if part of the income is not covered by the conditions prescribed or if the settlor has in a part of the income interest direct or indirect. Finally, it was contended that the third proviso only operates in respect of deeds of settlement or disposition which are referred to in cl. (c), but not to deeds of settlement or disposition which by the first proviso are deemed to be revocable in the conditions mentioned by the first proviso. In other words, it is submitted the benefit of the proviso is not available in those cases where the settlement or disposition is deemed by the proviso to be revocable, because it contains a provision for the retransfer directly or indirectly of the income or assets to the settlor, or in any way it gives the settlor, disponer or transferor a right to reassume power directly or indirectly over the income or assets. We are unable to agree with this contention also. By the first proviso, settlements, dispositions or transfers of the character described therein, are deemed revocable for the purpose of the principal clause. The function of proviso I and proviso 11 is plainly explanatory. The second proviso in terms says that the expression "settlement or disposition" is to include any disposition, trust, covenant, agreement, or arrangement, and the expression "settlor or disponer" is to include any person by whom the settlement or disposition was made. Similarly the first proviso states that settlements, dispositions or transfers, if they are of the character described, shall for the purpose of the principal clause be revocable transfers. If that be the true interpretation, and we think it is, it would be impossible to hold that the third proviso does not operate in respect of settlements, dispositions or transfers which are by the first proviso revocable for the purpose of that clause. In a case decided by the Bombay High Court Ramji Keshavji vs Commissioner of Income tax, Bombay(1) Kania, J., in considering the scheme of section 16(l)(c) observed: "The first stage is that when there is a revocable transfer of assets, the income derived from such assets is still to be considered the income of the settlor. The law next specifies by proviso I what would be deemed a revocable transfer, in spite of the deed being apparently irrevocable. The relevant question for that proviso is this: Is this transfer revocable because it fulfils the conditions contained in the proviso? The answer to that question can be only, it is revocable, or it is not. If the answer is in the negative, no further discussion can arise (1) 929 because, on the face of it, the deed is not revocable and, therefore, it does not come under Section 16(1)(c). If, however, the answer to the question is in the affirmative, the deed although ostensibly irrevocable. is deemed to be revocable. and thus becomes a revocable transfer of assets, within the meaning of the substantive provision of Section 16(1)(c). Having reached that stage, the law proceeds to consider further what is found in proviso 3. The scheme appears to be that although in fact, after reading the provisions of Section 16(1)(c) with proviso 1, the transfer is revocable, the law will not still consider the income derived from such a settlement the income of the settlor, provided the settlement is not revocable for a period exceeding six years or during the lifetime of the person for whom the income is settled, and further, from, which income the settlor derives no direct or indirect benefit. " In our view that passage correctly summarises the effect of the third proviso to section 16(1)(c). The High Court was therefore right in holding that by virtue of the third proviso to section 16(1)(c) of the Indian Incometax Act. 1922, the income received by the beneficiaries under the deed of trust other than the assessee could not until the power of revocation arose to the assesssee, be deemed to be the income of the assessee for the purpose of assessment to, income tax. The appeal fails and is dismissed with costs. Appeal dismissed.

The assessee (respondent) owner of an estate known as "Tekari Rai" executed an indenture of trust dated January 20, 1941 whereby the "Tekari Rai" and certain Zamindari properties owned by her were conveyed to certain named trustees to be held in trust, subject to conditions specified therein. This deed was created with a view to liquidate the debts of the Tekari Raj. The beneficiaries under the deed were the settlor, her husband and her five sons. This original deed was modified by a deed of rectification dated December 22, 1941. It was provided in the original cl. 43 of the deed of trust dated January 20, 1941, that the settlor may at any time during her life re voke or vary either wholly or partly the trust or any provi sions of the deed but not before the payment and discharge of certain debts and liabilities. Clause 43 of the original deed was subsequently modified by the 45th clause which was added by the deed of amendment dated January 12, 1942. By cl. 45 of the deed of amendment the right of revocation was not exercisable till the Thica leases in favour of the Maharajadhiraj of Darbhanga and Capt. Maharaj Kumar Gopal Saran Narain Singh remained good and effective. It was the common ground that the lease in favour of the Maharajadhiraj of Darbhanga was to enure till 1965 and the lease in favour of Capt. Maharaj Kumar Gopal Saran Narain Singh till 1954. In assessing the assessee to income tax for the year 1947 48, the Income tax Officer included in her total income the income of the trust. The matter went up to the High Court and the High Court set aside the assessment order passed by the Income tax Officer. The High Court held that a,, the trust was not revocable for a period of six years, the income received by the beneficiaries (other than the assessee) was not liable to be taxed as the assessee 's income till the power to revoke arose in her favour. The appellant obtained special leave against the order passed by the High Court. Hence the appeal. The principal question for consideration before this Court was whether the income received by the beneficiaries other than the assessee could be included in the total income of the assessee under section 16(l)(c) of the Act. Held:(i) In terms the third proviso to section 16 (l)(c) of the Income tax Act excludes from the operation of the principal clause that part of the income alone which arises to any person under a, deed of settlement: it does not remove from its protection the entire deed of trust, if part of the income is not covered by the conditions prescribed or if the settlor has in a part of the income interest direct or indirect. The third proviso does not operate to exclude the income which the settlor receives as a beneficiary from liability to tax. 921 (ii)The third proviso to section 16 (l)(c) of the Act does ope rate in respect of settlements, dispositions, or transfers which are by the first proviso revocable for the purpose of that clause. (iii) Two conditions are necessary for the application of the 3rd proviso to section 16 (l)(c) of the Income tax Act: (i) that the trust should not be revocable for a period exceeding 6 years or during the life time of the beneficiary and (ii) the settlor or disponer should have no direct or indirect benefit from the income given to the beneficiary. The effect of the two conditions is that, that part of the income which arises to any person by virtue of the settlement which is not revocable for a period of six years or which is not revocable during the life time of the beneficiary will not be included in the settlor 's income, provided that from the income of such person the settlor derives no benefit direct or indirect. On the construction of the deed of trust it was held that the deed was not revocable within six years provided by section 16 (1)(c) of the Act. Ramji Keshavji vs Commissioner of Income tax, Bombay, , relied on. (iv)On the facts of this case it was held that by virtue of the third proviso to section 16 (l) (c) of the Act the income re ceived by the beneficiaries under the deed of trust other than the assessee could not until the power of revocation arose to the assessee, be deemed to be the income of the assessee for the purpose of assessment to income tax.

ivil Appeal No. 3388 of 1984. From the Judgment and Order dated 4.4.1989 of the Andhra Pradesh High Court in C.R.P. No. 1450 of 1981. A.K. Sen, C. Sitaramiah, P.A. Chaudhary, K. Jagannatha Rao, P.R. Ramachandra Murthy, Mrs. Anjani, K. Ram Kumar, Y.P. Rao, P.S.R. Murhty, B. Kanta Rao, N.D.B. Raju, R.N. Keshwani, R.F. Nariman, Raj Kumar Gupta, P.C. Kapur, Rajen dra Chaudhary, A. Subba Rao, K.R. Nagaraja, P.K. Rao, A.T.M. Sampath, P.N. Ramalingam, R. Venkatramani, G. Narasimhulu, G.N. Rao and S.K. Sucharita for the Appellants. K. Parasaran, T.V.S.N. Chari, Mrs. B. Sunita Rao, Ms. Manjula Gupta and V. Sekhar for the Respondents. The Judgment of the Court was delivered by KANIA, J. This is a group of matters comprising Civil Appeal No. 3388 of 1984 in this Court and other cases which have been placed before us for hearing along with this appeal. We propose to deal first with Civil Appeal No. 3388 of 1984. This appeal by special leave is directed against a judgment of the Andhra Pradesh High Court in Civil Revision Petition No. 1450 of 1981. The question involved in the appeal before the High Court from which this appeal arises was whether land which has been agreed to be sold by the owner under an agreement of sale and possession of which was delivered in part performance of the agreement .for sale but pursuant to which no conveyance had been executed till the relevant date, could be included both in the holding of the owner vendor as 223 well as the purchaser or whether it was liable to be includ ed only in the holding of the purchaser for the purposes of the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973 (hereinafter referred to as 'the said Act '). There are a number of connected matters where the same question is involved and which have been placed for hearing before us. In some of these cases, a part of the considera tion has been paid and in a few others, the entire consider ation has been paid. It has also been alleged that the possession of the land was transferred to the purchaser pursuant to the agreements of sale referred to. In some of these cases, lands belonging to the owners have been given on lease to tenants who are in possession thereof as les sees. In order to appreciate the controversy arising before us, it is necessary to bear in mind the relevant provisions of the said Act. Before the said Act was enacted, there was in force in Andhra Pradesh an Act entitled Andhra Pradesh (Ceiling on Agricultural Holdings) Act, 1961 which provided for the imposition of a ceiling on holdings of agricultural land. After that Act had been in force for some time, the Central Committee on Land Reforms made certain recommenda tions regarding the fixation of ceiling on agricultural holdings and in line with this proposed policy, the said Act was enacted in 1973 to bring about comprehensive legislation for the imposition of ceiling on agricultural holdings in the State of Andhra Pradesh and with a view to replace the aforesaid Act of 1961 as well as Andhra Pradesh Agricultural Lands (Prohibition of Alienation Act, 1972). The object of the legislation was to take over the lands in excess of the ceiling prescribed and to distribute the same among landless and other deserving persons to subserve the common good. The said Act was included in the Ninth Schedule to the Constitu tion at Item 67 by the Constitution 34th (Amendment) Act and was protected under Article 31 A. The object of the said Act was agrarian reform. Under sub section (c) of section 3 of the said Act 'ceiling area ' is defined as under: "3(c): 'ceiling area ' means the extent of land specified in section 4 or section 4 A to be ceiling area. " It may be mentioned here that the agricultural land was classified into wet land, dry land and so on and appropriate areas were fixed as ceiling in respect of such lands taking into account the nature and yield capacity of the lands in question. Section 3(i) runs as follows: 224 "3(i): 'holding ' means the entire land held by a person (i) as an owner; (ii) as a limited owner; (iii) as an usufructuary mortgagee; (iv) as a tenant; (v) who is in possession by virtue of a mortgage by condi tional sale or through part performance of a contract for the sale of land or otherwise; or in one or more of such capacities; and the expression 'to hold land ' shall be construed accordingly; Explanation: Where the same land is held by one person in one capacity and by another person in any other capacity, such land shall be included in the holding of both such persons. " Section 3(m) provides that "notified date" means the date notified under sub section (3) of section 1 on which the said Act came into force. It may be mentioned that the notified date in respect of the said Act is 1.1.1975. Very briefly stated, under section 4, the ceiling area in the case of a family unit consisting of not more than five members was prescribed as one standard holding. Where the family consisted of more than five members, there was, broadly speaking, a proportionate increase in the ceiling area. Under section 5, the standard holding is fixed taking into account the classification of the land according to the nature of the land. Sub section (1) of section 7 runs as follows: "7(1). Special provision in respect of certain transfers, etc. already made: Where on or after the 24th January, 1971 but before the notified date, any person has transferred whether by way of sale, gift, usufructuary mortgage, exchange, settlement, surrender or in any other manner whatsoever, any land held by him or created a trust of any land held by him, then the burden of proving that such transfer or creation of trust has not been effected in anticipation of, and with a view to avoiding or defeating the objects of any law relating to a reduction in the ceiling on agricultural holdings, shall be on 225 such person, and where he has not so proved, such transfer or creation of trust, shall be disregarded for the purpose of the computation of the ceiling area of such person. " Very briefly stated, sub section (2) of section 7 pro vides inter alia that any alienation made. by way of sale, lease for a period exceeding six years, gift, exchange, usufructuary mortgage or otherwise as set out in the said sub section on or after 2nd May, 1972 and before the noti fied date in contravention of the Andhra Pradesh Agricultur al Land (Prohibition of Alienation) Act, 1972 shall be null and void. The other sub sections also provide that in the various other circumstances set out therein alienations made will be disregarded for purposes of fixation of ceiling. Section 8 provides, in brief, that every person whose holding on the notified date together with any land trans ferred by him on or after 24th January, 1971 exceeds the specified limits, shall within 30 days from the notified date, namely 1.1. 1975 or such extended period as the Gov ernment may notify in that behalf furnish a declaration in respect of his holding to the competent Tribunal. Section 9 deals with determination of the ceiling area by the Tribunal constituted under Section 6. Section 10 deals with the surrender of lands in certain cases. Sub section (5) of the said section provides that it shall be open to the Tribunal to refuse to accept the surrender of any land as contemplated under sub section (1) or deemed surrender of land as contemplated under sub section (4) of the said section in the circumstances set out in sub section (5). Section 11 deals with the vesting of surrendered lands. Section 12 deals with revision and vesting of lands surrendered. The opening part of that section provides that where any land is surrendered or deemed to have been surren dered under the said Act by any usufructuary mortgagee or a tenant, the possession of such land shall, subject to such rules, as may be prescribed, revert to the owner. Sub sec tion (4) of section 12 provides that where any land is surrendered or is deemed to have been surrendered under the said Act by any person in possession by virtue of a mortgage by conditional sale or through a part performance of con tract for sale or otherwise the possession of such land shall subject to such rules as may be prescribed, revert to the owner. Sub section (5 A) make an analogous provision in connection with lands surrendered by limited owners and provides that such surrendered lands shall revert to the person having a vested interest in the remainder. 226 Section 13 makes special provision for the exclusion from the holding of the owner of land belonging to him held by a protected tenant where such land or part thereof stands transferred to the protected tenant under Section 38A of the Andhra Pradesh (Telengana Area) Tenancy and Agricultural Land Act, 1950. Before going into the merits of the contentions urged and considering the proper interpretation to be given to the relevant sections of the said Act, we cannot lose sight of the fact that the said Act is a piece of agrarian legisla tion enacted with a view to achieve a more equitable distri bution of lands for common good and with a view to subserve the objectives enshrined in Article 39 of the Constitution, being one of the Directive Principles embodied in the Con stitution. Provisions of such a legislation have to be interpreted liberally and with a view to furthering the object of the legislation and not with a view to defeat the same in a strict and constricted manner in which a taxing law, for instance, might be interpreted. The main submission of learned counsel for the appel lants is that the expression 'holding ' has been defined in sub section (i) of Section 3 of the said Act, the definition section set out earlier, as meaning the entire land held by a person (emphasis supplied) and that the use of the said word "held" in the definition indicates that the person who is supposed to hold the land, must necessarily be the person in possession of the said land; and hence where, in part performance of an agreement for sale or under a lease, the purchaser or lessee has been put in possession of any land, the owner of the said land cannot any longer be regarded as holding the said land and it cannot be said that the said land is held by him. It was submitted by learned counsel that in view of this context although the Explanation to sub section (i) of section 3 is very widely worded, its meaning cannot be so extended as to cover a case where the owner of the land is no longer in possession of the land and has parted with the possession thereof under an agreement creating a right, legal or equitable, in the land concerned. We find it difficult to accept this contention. Clauses (i) to (v) of subsection (i) of section 3 set out the various capacities in which a person can be said to "hold" land for the purposes of the said Act and among these capacities are "as a usufructuary mortgagee, as a tenant and as one who is in possession by virtue of a mortgage by conditional sale or through part performance of a contract of sale". The very language of sub section (i) of section 3 indicates that land can be held as contemplated in the said sub section by persons in a number of capacities. The Explanation in plain language states that the same land can be held by 227 one person in one capacity and by another person in a dif ferent capacity and provides that such land shall be includ ed in the holdings of both such persons. The Explanation thus clearly contemplates that the same land can be held as contemplated under sub section (i) by one person as the owner and by another person as his lessee or as a person to whom the owner has delivered possession of the land in part performance of an agreement to sell. On a plain reading of the language used in the Explanation, we find it that it is not possible to accept the submission that only where the land is in possession of a person can that land be regarded as held by him. Apart from what we have pointed out earlier we find that the question which arises before us in this appeal is al ready covered by the decision of this Court in State of Andhra Pradesh vs Mohd. Ashrafuddin, ; The facts of the case were that out of the total holding of his land the respondent transferred some land to another person under two unregistered sale deeds pursuant to an agreement for sale and gifted.away some land to his son. In the return submitted by him under the said Act the respondent did not include in his holding the area transferred under the unreg istered sale deeds or the land gifted by him which was in the possession of the purchaser and donee respectively. The Land Reforms Tribunal ignoring the two transfers computed his holding at 1.7692 standard holding and called upon him to surrender land equivalent to 0.7692 standard holding. In revision, the High Court held that the land transferred under the two sale deeds could not be included in the hold ing of the respondent for ascertaining the ceiling area. In coming to this conclusion, the High Court gave the benefit of section 53A of the Transfer of Property Act to the person in possession of the plot pursuant to the contract for sale and treated the land as a part of his holding. On appeal to this court, a Division Bench comprising three learned Judges of this Court reversed the decision of the High Court and held that the High Court was in error in holding that the land in the possession of the transferee cannot be taken to be a part of the holding of the respondent. It was held by this Court that the expression "held" connotes both owner ship as well as possession. In the context of the definition it is not possible to interpret the term "holding" only in the sense of possession. The Explanation to the definition of the term "holding" clearly contemplates that the same land can be the holding of two different persons holding the land in different capacities, (See page 486). The Court went on to state that: "It is by now well settled that a person in possession pursuant to a contract for sale does not get title to the land 228 unless there is a valid document of title in his favour. In the instant case it has already been pointed out that the transferee came into possession in pursuance of an agreement for sale but no valid deed of title was executed in his favour. Therefore, the ownership remained with the respond ent transferor. But even in the absence of a valid deed of title the possession pursuant to an agreement of transfer cannot be said to be illegal and the transferee is entitled to remain in possession" The Court went on to observe that: "There may conceivably be cases where the same land is included in holding of two persons in different capacities and serious prejudice might be caused to one or both of them if they were asked to surrender the excess area. To safe guard the interest of the owners in such a case the legisla ture has made a provision in section 12(4) and (5) of the Act. Even so there might be cases where some prejudice might be caused to some tenure holders. " The Court further observed that: "But if the definition of the term 'holding ' is couched in clear and unambiguous language the court has to accept it as it stands. So construed the same land can be a part of the holding of various persons holding it in different capaci ties. When the terms of the definition are clear and unam biguous there is no question of taking extraneous aid for construing it. " The correctness of this decision has been upheld by this court in Begulla Bapi Raju etc. vs State of Andhra Pradesh etc. etc., 1 at p. 7 17. In that case one of the contentions urged on behalf of the petition ers was that land transferred by the petitioners under various transfer deeds to the outsiders and who came in possession also could not be included in the holding of the petitioners. This argument was negatived by a Bench compris ing three learned Judges of this Court, which followed the decision of this Court in Mohd. Ashrafuddin 's case (supra), and did not accept the plea that the decision in that case required reconsideration. The question raised for our determination in this appeal is 229 directly covered against the appellant by the decisions of this Court in two cases just referred to by us. In these circumstances, even assuming that there is another equally plausible view regarding the construction and the legal effect of section 3(i) of the said Act read with Explana tion, that would not necessarily justify our reconsidering the question which has already been decided by this Court, although the decision was rendered by a Bench comprising only three learned Judges of this Court. In our opinion, unless we find that the decisions in the aforesaid cases are erroneous, it would not be proper on our part to reconsider the same. Apart from this, as we have pointed out earlier, in our view, considering the clear language of section 3(i) of the said Act read with Explanation to that section, the view taken in Mohd. Ashrafuddin 's case (supra) is, with respect, the correct view, and we are inclined to take the same view on the construction and legal effect of that provision. Learned counsel for the appellant sought to place reli ance on the decision of a Division Bench of the Andhra Pradesh High Court in The Authorised Officer (LR), Vijayawa da vs Kalyanam China Venkata Narasayya, [1978] 1 A.P. Law Journal 98. In that case a Division Bench of the Andhra Pradesh High Court took the view that, if the owner of the land has put the transferee in possession of the land in part performance of a contract for sale, such land can be included only in the holding of the transferee and cannot simultaneously be computed in the holding of the transferor as well, for that land is not "held" by him as an "owner". It could be included in the holding of the transferor only as and when the transferee surrenders that land and that land reverts to the transferor as provided under section 12 of the said Act. The Division Bench also took the view that the expression "holding" and the expression "held by a person" occurring in section 3(i) of the said Act must be construed as taking in the idea of actual possession and not merely any right, title or interest in the land devoid of actual possession. In our view, this decision cannot be regarded as laying d,own good law and must be treated as overruled by the decisions of this Court in Mohd. Ashrafud din 's case (supra) and Begulla Bapi Raju 's case (supra). We cannot lose sight of the fact that the said Act is a piece of agrarian reform legislation passed with a view to effec tively fix a ceiling on agricultural holdings and to achieve equitable distribution of surplus land among the landless and the other deserving persons. The plain language of section 3(i) read with Explanation supports the view taken by this Court in Mohd. Ashrafuddin 's case (supra). 1t is true that the Division Bench of the Andhra Pradesh High Court in the aforesaid judgment has given certain examples 230 where the interpretation which has been given in Mohd. Ashrafuddin 's case (supra), might lead to some hardship. That, however, in our opinion, cannot justify restricting the effect of the plain language of the relevant provisions in the manner done by the Division Bench of the Andhra Pradesh High Court. The Explanation to section 3(i) was incorporated in the said Act because the legislature took the view that, but for such a drastic provision, it would not be possible to effectively implement the provisions of the said Act regarding the acquisition of surplus land and distribution of the surplus land to the landless and the other deserving persons. It is a notorious fact that there were a large number of cases where agreements for sale or documents for lease in respect of excess lands were executed by owners of lands in excess Of the ceiling area with a view to defeat the provisions of the said Act. In fact, a perusal of the facts in the cases before us generally lends support to the existence of such a situation. In these circum stances, if the legislature has used language in section 3(i) and the Explanation thereto which, on a plain reading, shows that in case of land covered under an agreement for sale or an agreement of lease, even though the purchaser or the lessee might be in possession of the land, it would be included in the holdings of both of the purchaser as well as the owner or the lessee and the owner, we see no reason to cut down the plain meaning of the language employed in that provision, merely because that it might possibly result in hardship in few cases. Moreover we find that, to some ex tent, the legislature has tried to mitigate this hardship by providing that, if the purchaser under the agreement of sale or the lessee has in his holding land in excess of the ceiling area, such excess would revert to the owner of the land. If the interpretation sought to be put by learned counsel for the appellants, which finds support from the aforementioned decision of the Andhra Pradesh High Court, were correct, we fail to see why such a provision as afore stated for reversion of excess land to the owner should have been made. It was contended by learned counsel for the appellants that if the construction placed on the said provisions by the judgment of the Division Bench of the Andhra Pradesh High Court in the aforesaid judgment was accepted, it is not as if the object of the said legislation would be defeated because where an agreement for sale or agreement of lease cannot be shown to be bona fide, the land would be included in the holding of the owner. This circumstance. however. is of a little avail. Where such agreements for sale or of lease are executed in writing and possession is handed over to the purchaser or the lessee, it would be very difficult to show that the transaction was not bona fide although the agreement might well have been executed really with a 231 view to defeat the provisions of the said Act. We cannot lose sight of the fact that section 3(i) and the Explanation only deals with cases where the transfer of ownership is not complete and the owner does not part completely with his legal interest in the land, so that on the termination of the agreement for sale or agreement of lease without any document being registered, the land would fully revert to the owner. Moreover, in many cases, it was found that the owner of the land himself continued to cultivate the land claiming that he was doing so on behalf of his son who was the lessee or the purchaser under an agreement. In these circumstances, we fail to see any reason to cut down the plain meaning of the provisions of section 3(i) and the Explanation thereto. It was submitted by learned counsel for the appellants that the definition of the word 'holding ' contained in sub section (i) of section 3 was an exhaustive definition and that definition contained in the main section could not be interpreted in the light of the Explanation thereto. It was submitted by him that the meaning of the term 'holding ' and 'held ' in sub section (i) of section 3 could not be governed by the Explanation. In support of the contention, reliance was placed on a decision of this Court in Burmah Shell Oil Storage and Distributing Co. of India Ltd. & Anr. vs The Commercial Tax Officer and Others, at pp. 914 917. In our opinion, this decision is hardly of any assistance in the matter before us. It is well settled that the provisions in an Act have to be read harmoniously and in the light of the context in which they occur. In our opin ion, there can be no quarrel with the reliance being placed on the Explanation in order to understand the meaning of the term "holding" and "held" used in sub section (i) of section 3 of the said Act. Although some other decisions have been referred to us, we do not think any useful purpose would be served by discussing the same in view of what we have ob served earlier, nor would it serve any purpose to refer to the various examples of ownership set out in the American Jurisprudence to which our attention was drawn. In the result, in our opinion, there is no merit in the appeal and the same must fail and is dismissed. Looking to the facts and circumstances of the case, we, however, direct that there will be no order as to costs of the appeal. The other connected Civil Appeals and Special Leave Petitions have all been directed to be tagged with the aforesaid Civil Appeal disposed of by us as they involve the same points as raised in the said 232 Civil Appeal. Following our decision, the said Civil Appeals and the Special Leave Petitions are dismissed but with no order as to costs. In view of the dismissal of all the Appeals and Special Leave Petitions, the Civil Miscellaneous Petitions therein do not survive and all are dismissed with no order as to costs. Interim orders, if any, are vacated. Appeals and P.S. S Petitions dismissed.

A device parcel containing camouflaged live hand grenade exploded in the hands of the addressee resulting in his instantaneous death. The police collected from the scene of incident the typewritten pieces of the paper in which the grenade had been wrapped and sent them to the Central Foren sic Science Laboratory where they succeeded in partially reconstructing the name and address of the deceased. These were then examined by the Head of the Document Division in the said Laboratory with reference to the specimen of typing prints taken from the commercial college where they were alleged to have been got typed. He opined that on balance of similarities and dissimilarities it was reasonable to con clude that the type scripts found on the slip pasted on the wrapper of the parcel had been typed from one, of the ma chines of the college as both the impressions were identi cal. At the trial the prosecution wanted to examine the said expert to prove the fact. This was resisted by the defence on the ground that the evidence of such typewriting expert was inadmissible under section 45 of the Indian Evidence Act as it did not fall within its ambit. The trial court relying on the observations to that effect in Hanumant & Anr. vs State of Madhya Pradesh, [1952] SCR 1091, dismissed the prayer. The High Court dismissed the State 's revision petition in limine. In the appeal by the State it was submitted that the word 'science ' occurring in section 45 of the Evidence Act should be held comprehensive enough to include the opinion of an expert in regard to transcript as well in view of the march of science. Referring the matter to the larger Bench, the Court, HELD: By the march of time, there is rapid development in the 125 field of forensic science and it has become imperative to match the said march of modern vistas of scientific knowl edge. The question in the instant case whether the opinion of an expert in regard to type script would fall within the ambit of section 45 of the Evidence Act should, therefore, be examined in detail and decided by a Large Bench as the judgment in Hanumant 's case was rendered by a Bench of three Judges. [130D, G]

ivil Appeal No. 799 of 1963. Appeal by special leave from the judgment and decree dated March 1, 1961 of the Allahabad High Court in Special Appeal No. 205 of 1958. section P. Varmaa for the appellant. C. B. Agarwala, O. P. Rana and Atiqur Rehman, for the respondents. 337 The Judgment of the Court was delivered by Subba Rao J. This appeal by special leave raises the ques tion of the scope of the retrospective operation of the U.P. Agricultural Income tax (Amendment) Act, 1956 (U.P. Act No. 14 of 1956). The facts are simple and they are as follows: On January 10, 1953, for the assessment year 1952 53, the Additional Collector, Banaras, assessed the appellant to agricultural income tax under the U.P. Agricultural Income tax Act, 1948 (U.P. Act 3 of 1949). On February 9, 1956, U.P. Agricultural Income tax (Amendment) Ordinance, 1956 (2 of 1956) was passed enacting that the word "Collector" shall always be deemed to include Additional Collector. That Ordinance was later replaced by the U.P. Agricultural Income tax (Amendment) Act 14 of 1956. On an application filed by the appellant, the Collector by his order dated May 9, 1956, revoked his earlier order and directed the Additional Collector to proceed to assess the appellant in accordance with law. Thereupon, the Additional Collector resumed proceedings and on June 7, 1956, passed a fresh assessment order imposing a tax of Rs. 42,761 on the appellant, and on July 4, 1956, he issued a notice to the appellant for payment of the tax. On August 7, 1956, the appellant filed a petition under article 226 of the Constitution in the High Court of Judicature at Allahabad for quashing the order of assessment and the notice issued pursuant thereto. The petition was heard, in the first instance, by Tandon J., who dismissed the same with costs. The appeal preferred by the appellant against that order to a Division Bench was also dismissed. Hence the present appeal. Mr. section P. Varma, learned counsel for the appellant contended that (i) the respondent 's right to assess the appellant to tax was barred by limitation and, therefore, the Act could not have the effect of reviving the said right; and (ii) the amount of malikhana could not be in law the subject matter of assessment. The second point was not raised in the High Court. We did not permit the learned counsel to raise the point for the first time before us. The first point turns upon the relevant provisions of Act 3 of 1.949 and Act 14 of 1956. Under Act 3 of 1949 the defi nition of "Collector" did not include "Additional Collector". Act 14 of 1956 received the assent of the Governor on April 17, 1956, and was published in the U.P. Gazette (Extraordinary) 338 dated May 19, 1956. Section 2 of Act 14 of 1956 reads: "In section 2 of the U.P. Agricultural Income Tax Act, 1948 (hereinafter called the Principal Act), for clause (4), the following shall be and be deemed always to have been substituted "(4 a) 'Collector ' shall have the meaning as in the U.P. Land Revenue Act, 1901, and will include an Additional Collector appointed under the said Act. " Section 11 of the Act reads "Where before the commencement of this Act any Court or authority has, in any proceedings under the Principal Act, set aside any assessment made by an Additional Collector or Additional Assistant Collector incharge of a sub division merely on the ground that the assessing authority had no jurisdiction to make the assessment, any party to the proceedings may, at any time within ninety days from the date of commencement of this Act apply to the Court or authority for a review of the proceedings in the light of the provisions of this Act, and the Court or authority to which the application is made shall review the proceedings accordingly and make such order, if any, varying or revising the order previously made, as may be necessary to give effect to the provisions of the Principal Act as amended by sections 2 and 8 of this Act. " A combined reading of the said provisions establishes that if an application for review was filed within the time prescribed, the previous proceedings would be restored and the parties would be relegated to the position which they had occupied before the proceedings were quashed on the ground of want of jurisdiction. In this case proceedings were initiated by the Additional Collector on January 10, 1953, for the purpose of assessing the appellant for the assessment year 1952 53. There was no flaw in the said proceedings except that the Additional Collector was not authorized by Act 3 of 1949, as it then stood, to make the said assessment. The, Collector quashed those proceedings by his order dated November 26, 1955. After the amending Act was passed, within 90 days therefrom the appropriate income tax authority had filed an application before the Collector to review his order. The Collector reviewed the order and 339 set aside the same. The result was that the proceedings before the Additional Collector were restored. As by the amendment the Additional Collector must be deemed to have been the Collector from the inception of the Principal Act itself, the said proceedings must be deemed to have been initiated before the proper authority under the Principal Act. In this view no question of limitation could possibly arise, for the proceedings were initiated in time and must be deemed to have been pending throughout and the fresh assessment was made in the said proceedings. The decisions cited by the learned counsel are really beside the mark. He relied upon the judgments of this Court in section C. Prashar vs Vasantsen(1), and Commissioner of Income tax Bihar vs Lakhmir Singh(2). One of the questions raised in those cases was whether an amending Act revived a remedy which had become barred before the amendment was introduced. That aspect of the question has no relevance to the present enquiry. Here we are dealing with an Act whose constitutionality is not questioned. It has expressly conferred power on the appropriate authority to review its previous order if an application was filed within the time prescribed. When once that power of review was exercised, the proceedings were reopened. In this view, no question of the application of an amending Act to a barred claim would arise. In the result we hold that the order of the High Court is correct and dismiss the appeal with costs. Appeal dismissed. (1) [1964] 1 S.C.R. 29. (2) [1964] 1 S.C.R. 148.

Cash and ornaments worth Rs. 1,06,000 were robbed by dacoits from the Ramnagar branch of the Nainital Bank Ltd., a public limited company carrying on the business of banking. The loss was claimed by the bank as a trading loss for the assessment year 1952 53. The claim was disallowed by the Income tax Officer on the ground that the loss was not incidental to the business. The finding being confirmed by the Appellate Assistant Commissioner and the Incom tax Appellate Tribunal, a reference was made to the High Court of Judicature at Allahabad which held that the loss by dacoity was incidental to the banking business and was, therefore a trading loss which the assessee could claim as a deduction under section 10(1) of the Indian Income tax Act, 1922. Appeal to this Court on behalf of the Revenue, came by way of a certificate under article 133 of the Constitution of India. It was contended on behalf of the appellant that the risk of burglary was not incidental to the business of banking, and the loss in the present case fell on the assessee not as a person carrying on the business of banking but as an owner of funds. HELD : Cash is the stock in trade of a banking company. and its loss is therefore a trading loss. But every loss is not deductible in computing the income of a business unless it is incurred in the carrying out of the operation of the business and is incidental to the operation. Whether in a particular case an item of loss claimed as a deduction under section 10(1) of the Act is incidental to the operation of the assessee 's business or not is a question of fact to be decided on the facts of that case, having regard to the nature of the operations carried on and the nature of the risk involved in carrying them out. The degree of risk or its frequency is not of much relevance but its nexus to the nature of the business is material. [344 A; 349 D E]. It is an integral part of the business of banking that sufficient moneys should be kept in the bank duly guarded to meet the demands of the constituents. Retention of the money in the bank is part of the operation of banking. Retention of money in the bank carries with it the ordinary risk of its being the subject of embezzlement, theft, dacoity or destruction by fire and such other things. Such risk of loss is incidental to the carrying on of the operation of the business of banking. Loss incurred by dacoity in the present case is incidental to the carrying on of the business of banking. [349 F G]. Case law discussed. Motipur Sugar Factory Ltd. vs Commissioner of Income tax, Bihar and Orissa, Charles Moore & Co. (W.A.) Pvt. Ltd. vs Federal Commissioner of Taxation, ; and Gold Band Services Ltd. vs Commissioner of Inland Revenue, , relied on. 341 Badridas Daga vs Commissioner of Income tax [1959] S.C.R. 690 distinguished. Ramaswamy Chettiar vs Commissioner of Income tax, Madras I.L.R. (1930)53 Mad. 904, disapproved.

iminal Appeal No. 213 of 1960. Appeal by special leave from the judgment and order dated March 24, 1960, of the Punjab High Court (Circuit Bench)Delhi in Criminal Appeal Case No. 41 D of 1958. H. L. Anand, and K. Baldev Mehta, for the appellant. V. D. Mahajan and P. D. Menon, for the respondent. November 29. The Judgment of the Court was delivered by 587 SUBBA RAO J. This appeal by Special leave raises the question as to the true meaning of the expression "fraudulently ' in section 464 of the Indian Penal Code. The facts either admitted or found by the courts below may be briefly stated. The appellant is the wife of Siri Chand Kaviraj. On january 20, 1953, she purchased an Austin 10 Horse Power Car with the registration No. DLA. 4796 from Dewan Ram Swarup in the name of her minor daughter Nalini aged about six months at that time. The price for the car was paid by Dr. Vimla. The transfer of the car was notified in the name of Nalini to the Motor Registration Authority. The car at that time was insured against a policy issued by the Bharat Fire & General Insurance Co., Ltd., and the policy was due to expire sometime in April, 1953. On a request made by Dewan Ram Swarup, the said policy was transferred in the name of Nalini. In that connection, Dr. Vimla visited the Insurance Company 's Office and signed the proposal form as Nalini. Subsequently, she also filed two claims on the ground that the car met with accidents. In connection with these claims, she signed the claim forms as Nalini and also the receipts acknowledging the payments of the compensation money as Nalini. On a complaint made by the company alleging fraud on the part of Dr. Vimla and her husband, the police made investigation and prosecuted Dr. Vimla and her husband Siri Chand Kaviraj in the Court of Magistrate 1st Class Delhi. The 'Magistrate committed Dr. Vimla and her husband to Sessions to take their trial under sections 120 B, 419, 467 and 468 of the Indian Penal Code. The learned Sessions judge held that no case had been made out against the accused under any one of those sections and on that finding, acquitted both of them. The State preferred an appeal to the High Court of Punjab and the appeal was disposed of by a Division Bench of that court comprising Falshaw 588 and Chopra,JJ. The learned judges confirmed the acquittal of Siri Chand; but in regard to Dr. Vimla, they confirmed her acquittal under section 419 of the Indian Penal Code, but set aside her acquittal under sections 467 and 468 of the Code and instead, convicted her under the said sections and sentenced her to imprisonment till the rising of the court and to the payment of a fine of Rs. 100/ or in default to under , go simple imprisonment for two weeks. Dr. Vimla has preferred the present appeal by special leave against her conviction and sentence. The facts found may be briefly summarised thus : Dr. Vimla purchased a motor car with her own money in the name of her minor daughter, had the insurance policy transferred in the name of her minor daughter by signing her name and she also received compensation for the claims made by her in regard to the two accidents to the car. The claims were true claims and she received the moneys by signing in ,he claim forms and also in the receipts as Nalini. That is to say, Dr. Vim] a in fact and in substance put through her transactions in connection with the said motor car in the name of her minor daughter. Nalini was in fact either a benamidar for Dr. Vimla or her name was used for luck or other sentimental considerations. On the facts found, neither Dr. Vimla got any advantage either pecuniary or otherwise by signing the name of Nalini in any of the said documents nor the Insurance Company incurred any loss, pecuniary or otherwise, by dealing with Dr. Vimla in the name of Nalini. The Insurance Company would not have acted differently even if the, car stood in the name of Dr. Vimla and she made the claims and received the amounts from the insurance company in her name. On the said facts, the question that arises in this case is whether Dr. vimla was guilty of offences under sections 463 and 464 of the Indian Penal Code. 589 Learned Counsel for the appellant contends that on the facts found, the appellant would not be guilty of forgery as she did not "fraudulently" sign the requisite forms and the receipts in the name of Nalini, as. by so signing, she did not intend to cause injury to the insurance company. In other words, the contention was that a person does not act fraudulently within the meaning of section 464 unless he is not only guilty of deceit but also he intends to cause injury to the person or persons deceived, and as in the present case the appellant had never had the intention to cause injury to the insurance company and as on the facts found no injury had been caused at all to the company, the appellant could not be found guilty under the said sections. Before we consider the decisions cited at the Bar it would be convenient to look at the relevant provisions of the Indian Penal Code. Section 463 : Whoever makes any false document or part of a document with intent to cause damage or injury, to the public or to any person, or to support any claim or title, or to cause any person to part with property or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed, commits forgery. Section 464 : A person is said to make a false document First Which dishonestly or fraudulently makes, signs, seals or executes a document or part of a document, or makes any mark denoting the execution of a document, with the intention of causing it to be believed that such document/or part of a document was made, signed, sealed or executed by or by the authority of a person by whom or by whose authority he knows that it was not made, signed, sealed or executed, or at a time 590 at which he knows that it was not made, signed, scaled or executed; or The definition of "false document" is a part of the definition of "forgery". Both must be read together. If so read, the ingredients of the offence of forgery relevant to the present enquiry are as follows , (1) fraudulently signing a document or a part of a document with an intention of causing it to be believed that such document or part of a document was signed by another or under his authority ; (2) making of such a document with an intention to commit fraud or that fraud may be committed. In the two definitions, both mens rea described in s.464 i. e., "fradulently" and the intention to commit fraud in section 463 have the same meaning. This redundancy has perhaps become necessary as the element of fraud is not the ingredient of other in tentions mentioned in section 463. The idea of deceit is a necessary ingredient of fraud, but it does not exhaust it; an additional element is implicit in the expression. The scope of that something more is the subject of may decisions. We shall consider that question at a later stage in the light of the decisions bearing on the subject. The second thing to be noticed is that in section 464 two adverbs, "dishonestly" and "fraudulently" are used alternatively indicating thereby that one excludes the other. That means they are not tautological and must be given different meanings. Section 24 of the Penal Code defines "dishonestly" thus : "Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing dishonestly". "Fraudulently" is defined in section 25 thus: " A perosn is said to do a thing fraudulently if he does that thing with intent to 591 defrand but not otherwise". The word "defraud" includes an element of deceit. Deceit is not an ingredient of the definition of the word "dishonestly" while it is an important ingredient of the definition of the word "fraudulently". The former involves a pecuniary or economic gain or loss while the latter by construction excludes that element. Further) the juxtaposition of the two expressions " 'dishonestly" and "fraudulently" used in the various sections of the Code indicates their close affinity and therefore the definition of one may give colour to the other. To illustrate, in the definition of "dishonestly", wrongful gain or wrongful loss is the necessary enough. So too, if the expresssion "fraudulently ' were to be held to involve the element of injury to the person or persons deceived, it would be reasonable to assume that the injury should be something other than pecuniary or economic loss. Though almost always an advantage to one causes loss to another and vice versa, it need not necessarily be so. Should we hold that the concept of fraud" would include not only deceit but also some injury to the person deceived, it would be appropriate to hold by analogy drawn from the definition of "dishonestly" that to satisfy the definition of " 'fraudulently" it would be enough if there was a non economic advantage to the deceiver or a non economic loss to the deceived. Both need not co exist. Let us now consider some of the leading text book writers and, decisions to ascertain the meaning of the word "fraudulently". The classic definition of the word "fraudulently" is found in Steplien 's History of the Criminal law of England, Vol. 2, at p. 121 and it reads "I shall not attempt to construct a definition which will meet every case which might 592 be suggested, but there is little danger in saving that whenever the words "fraud" or intent to defraud" or "fraudulently" occur in the definition of a crime two elements at least are essential to the commission of the crime : namely, first, deceit or an intention to deceive or in some cases mere secrecy ; and secondly, either actual injury or possible injury or to a risk of possible 'injury by means of that deceit or secrecy. . . This intent is very seldom the only, or the principal, intention entertained by the fraudulent person, whose principal object in nearly every case is his own advantage. . . . A practically conclusive test of the fraudulent character of a deception for criminal purposes is this : Did the author of the deceit derive any advantage from it which could not have been had if the truth had been known ? If so it is hardly possible that the advantage should not have had an equivalent in loss or risk of loss to someone else, and if so, there was fraud. " It would be seen from this passage that " 'fraud" is made up of two ingredients, deceit and injury. The learned author also realizes that the principal object of every fraudulent person in nearly every case is to derive some advantage though such advantage has a corresponding loss or risk of loss to another. Though the author has not visualized the extremely rare situation of an advantage secured by one without a corresponding loss to another, this idea is persued in later decisions. As regards the nature of this injury, in Kenny 's Outline of Criminal Law, 15th Edn., at p. 333, it is stated that pecuniary detriment is unnecessary. In Haycraft vs Creasy (1) LeBlanc, observed (1) ; 593 "by fraud is meant an intention to deceive; whether it be from any expectation of advantage to the party himself or from the ill will towards the other is immaterial. " This passage for the first time brings out the distinction between an advantage derived by the person who deceives in contrast to the loss incurred by the person deceived. Buckley. J., in Re London & Clobe Finance Corporation Ltd. (1) brings out the ingredients of fraud thus : "To deceive is, I apprehend, to induce a man to believe that a thing is true which is false, and which the person practising the deceit knows or believes to be false. defraud is to deprive by deceit: it is by deceit to induce a man to act to his injury ' More tersely it may be put, that to deceive is by falsehood to induce a state of mind; to defraud is by deceit to induce a course of action." The English decisions have been elaborately considered by the Court of Criminal Appeal in R. vs Welhant (2). In that case, hire purchase finance companies advanced money on a hire purchase form and agreement and on credit sale agreements witnessed by the accused. The form and agreements were forgeries The accused was charged with offences of Uttering forged documents with intent to defraud. It was not proved that he had intended to cause any loss of once to the finance companies. His intention had been by deceit to induce any person who was charged with the duty of seeing that the credit restrictions then current were observed to act in a way in which lie would not act if he had known the true facts, namely, not to prevent the advancing of large sums of money exceeding the limits allowed by law It, the time. The Court held that the said intention amounted to intend to defraud. (1) (1903) 1 ch. 732. (2) , 264, 266. 594 Hilbery, J., speaking for the court, pointed out the distinction between deceit and defraud and came to the conclusion that ,to defraud" is to deprive by deceit." Adverting to the argument that the deprivation must be something of value, i. e. economic loss, the learned judge observed "We have, however, come to the conclusion that this is too narrow at view. While, no doubt, in most cases of an intention to defraud the intention is to cause an economic loss ' there is no reason to introduce any such limitation. Provided that the intention is to cause the person deceived to act to his real detriment, it matters not that lie suffers no economic loss. It is sufficient if the intention is to deprive him of a right or to induce him to do something contrary to what it would have been his duty to do, had lie not been deceived. " On the basis of the said principle it was held that the accused by deceit induced the finance companies to advance moneys contrary to the credit restrictions and that he was guilty of the offence of forgery. This decision is therefore a clear authority for the position that the loss or, the injury caused to the person deceived need not be economic loss. Even a deprivation of a right without any economic consequences would be enough. This decision has not expressed any definite opinion on the question whether a benefit to the accused without a corresponding loss to the person deceived would amount to fraud. But it has incidentally touched upon that aspect. The learned judge again observed. ". . . . . . This the appellant was doing in order that he might benefit by getting further loans. " This may indicate that a benefit derived by the 595 person deceiving another may amount to an act to defraud that other. A full Bench of the Madras High Court , in Kotamraju Venkatrayadu vs Emperor (1) had to consider the case of a person obtaining admission to the matriculation examination of the Madras University as a private candidate producing to the Registrar a certificate purporting to have been signed by the headmaster of it recognized High School that he was of good character land had attained his 20th year. It was found in that case that the candidate had fabricated the signature of the headmaster. The court held that the accused was guilty of forgery. White, C.J., observed : "Intending to defraud means, of course, something more than deceiving." He illustrated this by the following example: "A tells B a lie and B believes him. B is deceived but it does not follow that A intended to defraud B. But, as it seems to me, if A tells B a lie intending that B should do something which A conceives to be to his own benefit or advantage, 'and which, if done, would be to the loss or detriment of B, A intends to defraud B." The learned Chief justice indicated his line of thought, which has some bearing on the question now raised, by the following observations : "I may observe, however, in this connection that by section 24 of the Code a person does a thing dishonestly who ' does it with the intention of causing wrongful gain or wrongful loss. It is not necessary that there should be an intention to cause both. On the analogy of this definition, it might be said that either an intention (1) Mad. 99,96,97. 596 to secure a benefit or advantage on the one hand, or to cause loss or detriment on the other, by means of deceit, is an intent to defraud. " But, he found in that case that both the elements were present. Benson,J., pointed out at p. 114 : "I am of opinion that the act was fraudulent not merely by reason of the advantage which the accused intended to secure for himself ' by means of his ' deceit, but also by reason of the injury which must necessarily result to the University and, through it to the public from such acts if unrepressed. The University is injured, if through the evasion of its byelaws, it is induced to declare that certain persons have fulfilled the conditions prescribed for Matriculation and are entitled to the benefits of Matriculation, when in fact, they have not fulfilled those conditions, for the value of its examinations is, depreciated in the eyes of the public if it is found that the certificate of the University that they have passed its examinations is no longer a guarantee that they have in truth fulfilled the conditions on which alone the University professes to certify them as passed, and to admit them to the benefis of Matriculation. " Boddam, J., agreed with the learned Chief justice and Benson, J. This decision accepts the principle laid down by Stephen, namely, that the intention to defraud is made up of two elements, first an intention to deceive and second, the intention to expose some person either to actual injury or risk of possible injury but the learned judges were also inclined to hold on the analogy of the definition of "dishonestly" in section 24 of the Code that intention to secure a or advantage to the deceiver satisfies the second con dition 597 The Calcutta High Court dealt with this question in Surendra Nath Ghose vs Emperor (1) There, the accused affixed his signature to a kabuliat which was not required by law to be attested by witnesses, after its execution and registration, below the names of the attestings witnesses but without putting a date or alleging actual presence at the time of its execution. The court held that such an act was not fraud within the first clause of section 464. of the Penal Code inasmuch as it was not done dishonestly or fraudulently within the meaning of sections 24 and 25 thereof. Mookerjee, J., defined the words "intention to defraud" thus: "The expression, "intent to defraud" implies conduct coupled with intention to deceive and thereby to injury in other words, "defraud" involves two conceptions, namely, deceit and injury to the person deceived, that is, infringement of some legal right possessed by him, but not necessarily deprivation of property. " This view is in accord with the English decisions and that expressed by the Full Bench of the Madras High Court. This decision does not throw any light on the other question whether advantage to the deceiver without a corresponding loss to the deceived would satisfy the second ingredient of the expression "intent to defraud". A division Bench of the Bombay High Court in Sanjiv Ratnappa vs Emperor (2) had also occasion to consider the scope of the expression "fraudulently" in section 464 of the Penal Code. The court held that for an act to be fraudulent there must be some advantage on the one side with a corresponding loss on the other. Adverting to the argument that an advantage secured by the deceiver would constitute fraud Broomfield, J., observed thus "I think in view of the Bombay decisions to which I have referred we must hold that that (1) Cal. 75, 89 90. (2) A.I.R. 1932 Bom. 545, 550. 598 is an essential ingredient in the definition of forgery. In the great majority of cases, the point is not very material. . . But there many occasionally be a case in which the element of loss or injury is absent and I think the present is such a case. " This decision therefore does not accept the view of White C. J., of the Madras High Court. A Division Bench of the Lahore High Court,, in Emperor vs Abdul had also expressed its view on the meaning of the word "fraudulently." The learned Judges accepted Stephen 's definition but proceeded to observe as follows "It may be noted in this connection that the word " 'injury" as defined in section 44, Penal Code, is very wide as denoting "any harm whatever, illegally caused to any person, in body, mind, reputation or property." The learned judges were willing to assume that in almost every case an advantage to one would result in an injury to the other in the widest sense indicated by section 44 of the Penal Code. The other decided case cited at the Bar accept the necessity for the combination of a deceit by one and injury to other constitute an act to defraud and therefore, it is not necessary to multiply citations. No other decision cited at the Bar throws any light on the further question, namely, whether an advantage secured to the deceiver without a corresponding loss to the deceived would satisfy the second condition laid down by the decisions. To summarize : the expression " 'defraud" inoslves two elements, namely, deceit and injury to the person deceived. injury is something other than (1) A.I.R. 1944 Lah. 380,382. 599 economic loss that is ', deprivation of property, whether movable or immovable, or of money, and it will include any harm whatever caused to any person in body, mind, reputation or such others. In short, it is a non economic or non pecuniary loss. A benefit or advantage to the deceiver will almost always cause loss or detriment to the deceived. Even in those rare cases where there is a benefit or advantage to the deceiver, but no corresponding loss to the deceived, the second condition is satisfied. Now let us apply the said principles to the facts of the present case. Certainly, Dr. Vimla was guilty of deceit, for though her name was Vimla, she signed in all the relevant papers as Nalini and made the insurance company believe that her name was Nalini, but the said , deceit did not either secure to her advantage or cause any non economic loss or injury to the insurance company. The charge does not disclose any such advantage or injury, nor is there any evidence to prove the same. The fact that Dr. Vimla said that the owner of the car who sold it to her suggested that the taking of the sale of the car in the name of Nalini would be useful for income tax purposes is not of any relevance in the present case, for one reason, the said owner did not say so in his evidence and for the other, it was not indicated in the charge or in the evidence. In the charge framed, she was alleged to have defrauded the insurance company and the only evidence given was that if it was disclosed that Nalini was a minor, the insurance company might not have paid the money. But as we have pointed out earlier, the entire transaction was that of Dr. Vimla and it was only put through in the name of her made minor daughter for reasons best known to herself. On the evidence as disclosed, neither was she benefited nor the insurance company incurred loss in any sense of the term. In the result, we allow the appeal and hold that the appellant was not guilty of the offence under 600 sections 467 and 468 of the Indian Penal Code. The conviction and sentence passed on her are set aside. Fine, if paid, is directed to be refunded to the appellant, Appeal allowed.

The appellant was convicted under s.5(1)(d)of the Prevention of Corruption Act, 1947, on the ground that by abusing his position as a public servant he obtained an assignment of Government land in the name of his brother in law without revealing the relationship and by undervaluing the trees standing on the land. The High Court on appeal directed that a statement showing the value of the timber calculated on the basis contended by the appellant may be submitted by either of the parties. The appellant did not file any statement but a statement was filed on behalf of the prosecution. The High Court without giving an opportunity to the appellant to file objections to the correctness of the report and the reliability of the statement filed by the prosecution relied upon the statement to come to the conclusion that there had been an under valuation by the appellant. It was contended that section 5(1) (d) did not apply to the case and that before the High Court there had been a failure of natural justice. Held, that a penal statute must be construed strictly and only such thing,; are offences as come within not merely the letter but also the spirit of the statute. Dyke, vs Elliot, , referred to. Held, further, that considering the object and scope of the Prevention of Corruption Act, 1947, the expression otherwise ' in section 5(1) (d) is employed to bring in every abuse of official position by a public servant. But the juxtaposition of the word otherwise with the words 'corrupt ' or 'illegal means ' and the fact that dishonesty is implicit in the word 'abuse ' indicate the necessity for a dishonest intention as an ingredient of the offence and innocuous acts will not be covered by the said clause. 725 Held, further, that the spirit of the Act which. is in accord with the words used therein is to take in every form of corruption, and the facts in the instant case if established constitute an offence under. vs 5(1)(d). Ram Krishna vs State Of Delhi, ; and Dhaneshwar Narain Saxena vs Delhi Administration, ; , referred to. Held, also that before the High Court, there had been violation of the principles of natural justice and that the matter had to go back to the High Court for the appellant being given an opportunity to meet the material put in by the prosecution before the High Court.

Civil Appeal No. 984 of 1975. Appeal by Special Leave from the judgment and Order dated the 10th February 1975 of the Andhra Pradesh High Court in W.A. No. 752 of 1974. P. Ramachandra Reddy, Advocate General, A.P., P. P. Rao and V. Seetharaman, for the appellant. R. C. Raghavan, G. Vedanta Rao and B. Kanta Rao, for the respondent. The Judgment of the Court was delivered by BHAGWATI, J. The short question that arises for determination, in this appeal is whether a person whose parents belonged to a Scheduled Caste before their conversion to Christianity can on conversion or reconversion to Hinduism, be regarded as a member of the Scheduled Caste so as to be eligible for the benefit of reservation of seats for Scheduled Castes in the matter of a admission to a medical college. The parents of the respondent originally professed Hindu religion and belonged to Madiga caste which is admittedly a caste deemed to be a Scheduled Caste in the State of Andhra Pradesh as specified in Part I of the Schedule to the Constitution (Scheduled Castes) Order, 1950. They were both converted to Christianity at some point of time 1048 which does not appear clearly from the record, but it was the case of the respondent in his Writ Petition that he was born after their conversion. This was also the assumption on which the arguments proceeded before the High Court and before us, too. The counsel or the respondent expressed his readiness to argue the case on the same assumption, namely, that the respondent was born after the conversion of his parents, or, in other words, he was born of Christian parents. It appears that in the State of Andhra Pradesh, for the purpose inter alia of admission to medical college, converts to Christianity are treated as belonging to backward class and, therefore, when the respondent applied for admission to Gandhi Medical College in 1973, he described himself as a member of a backward class. But he did not succeed in getting admission. Thereupon he got himself converted to Hinduism on 20th September, 1973 from Andhra Pradesh Arunchatiya Sangham stating that he had renounced Christianity and embraced Hinduism after going through Suddhi ceremony and he was thereafter "received back into Madiga caste of Hindu fold". On the strength of this certificate, claiming to be a` member of Madiga caste, the respondent applied for admission to Guntur Medical College and on the basis that he was a member of a Scheduled Caste, he was provisionally selected for admission. But subsequently he was informed by the Principal of the Medical College that his selection was cancelled as he was not a Hindu by birth. The Principal apparently relied on Note (b) to clause (C) of rule 2 of the Rules issued by the Government of Andhra Pradesh under GO Rt. No. 1315 dated 4th December, 1973 for admission to the M.B.B.S. Course in Government Medical Colleges for the Academic year 1973 74. This Note was in the following terms: "No candidate other than Hindu including a Sikh can claim to belong to Schedule Castes. No candidates can claim to belong to the Scheduled Caste except by birth. " The respondent thereupon preferred a writ petition in the High Court of Andhra Pradesh challenging the validity of cancellation of his admission on the ground that Note (b), which required that a candidate, in order to be eligible or a seat reserved for Scheduled Caste, should belong to a Scheduled Caste by birth, went beyond the scope of the Constitution (Scheduled Castes) order, 1950 and was, therefore, void and the Principal was not entitled to cancel his admission on the ground that he was not a Hindu or a member of a Scheduled Caste by birth. This ground of challenge was accepted by a Single Judge of the High Court and on appeal, a Division Bench of the High Court also took the same view. In fact, it was conceded before the Division Bench by the learned Government Pleader appearing on behalf of the State that Note (b) was repugnant to the provisions of cl. (3) of the Constitution (Scheduled Castes) order, 1950, since the only requirement of that clause was that in order to be a member of a Scheduled Caste, person should be professing Hindu or Sikh religion and it did not prescribe that he should be a Hindu by birth. The State did not succeed in obtaining leave to appeal from the High Court and hence it preferred a special leave petition to this Court. When the special leave petition came up for hearing, there was no decision of 1049 this Court dealing with the question as to whether a convert or reconvert to Hinduism can become a member of a Scheduled Caste and of so, in what circumstances and hence we granted special leave to the State, on the State agreeing that whatever be the result of the appeal, the admission of the respondent will not be disturbed and that the State will, in any event, pay the costs of the respondent. It may be pointed out that since then a decision on this question has been rendered by a Bench of three judges of this Court to which we shall refer later. It is clear on a plain reading of clause (4) of article 15 that the State has power to make special provision for scheduled Castes and in exercise of this power, the State can reserve seats in a medical college for members of Scheduled Castes without violating article 1 S or cl. (2) of article 29. The expression 'Scheduled Castes ' has a technical meaning given to it by cl. (24) of article 366 and it means "such castes, races or tribes or parts or groups within such castes, races or tribes as are deemed under article 341 to be Scheduled Castes for the purposes of this Constitution. " The President in exercise of the power conferred upon him under article 341 has issued the Constitution (Scheduled Castes) order, 1950. paragraphs (2) and (3) of this; order are material and they read as follows: "2. Subject to the provisions of this order, the castes, races or tribes or parts of or groups within caste or tribes specified in Part I to XIII of the Schedule to this order shall, in relation to the States to which these parts respectively relate, be deemed to be scheduled castes so far as regards members thereof resident in the localities specified in relation to them in those Parts of that Schedule. Notwithstanding anything contained in Paragraph 2, No. person who professes a religion different from the Hindu or the Sikh religion shall be deemed to be a member of a Scheduled Caste. " F The Schedule to this Order in part I sets out the castes, races or tribes or parts of or groups within castes or tribes which shall in the different areas of the State of Andhra Pradesh be deemed to be Scheduled Castes. One of the castes specified there is Madiga caste and that caste must, therefore, be deemed to be a Scheduled Caste. But by reason of c]. (3), a person belonging to Madiga caste would not be deemed to be a member of a Scheduled Caste unless he professes Hindu or Sikh religion at the relevant time. It is not necessary that he should have been born a Hindu or a Sikh. The only thing required is that he should at the material time be professing Hindu or Sikh religion. Now, Note (b) was interpreted by the Principal of the Medical College to require that a candidate, in order to be eligible for a seat reserved for Scheduled Castes, should be a Hindu by birth. This interpretation was plainly erroneous because what Note (b) required was not that a candidate should be a Hindu by birth but that 1050 he should belong to a Scheduled Caste by birth. But even this requirement that a candidate in order to be eligible for a reserved seat should be a member of a Scheduled Caste by birth went beyond the provision in cl. (3) of the Constitution (Scheduled Castes order. 1950 and was rightly condemned as void and no reliance was placed upon it on behalf of the State. The principal argument advanced on behalf of the State was that when the respondent was converted to Hinduism, he did not automatically become a member of the Madiga caste, out it was open to the members of the Madiga caste to accept him within their fold and it was only if he was so accepted, that he could claim to have become a member of the Madiga caste. There was no evidence in the present case, contended the State, showing that the respondent, on his conversion to Hinduism, was accepted as a member of the Madiga caste by the other members of that caste and, therefore, he was not at the time of his application for admission a member of a Scheduled caste Now, before we proceed to consider this contention, it is necessary to point out that there is no absolute rule applicable in all cases that whenever a member of a caste is converted from Hinduism to Christianity, he loses his membership of the caste. This question has been considered by this Court in C. M. Arumugam vs section Rajgopal and it has been pointed out there that ordinarily it is true that on conversion to Christianity, a person would cease to be a member of the caste to which he belongs, but that is not an invariable rule. It would depend on the structure of the caste and its rules and regulations. There are some castes, particularly in South India, where this consequence does not follow on conversion, since such castes comprise both Hindus and Christians. Whether Madiga is a caste which falls within this category is a debatable question. The contention of the respondent in his writ petition was that mere are both Hindus and Christians in Madiga caste and even after conversion to Christianity, his parents continued to belong to Madiga caste and he was, therefore, a member of Madiga caste right from the time of his birth. It is not necessary for the purpose of the present appeal to decide this question. We may assume that, on conversion to Christianity, the parents of the respondent lost their membership of Madiga caste and that the respondent was, therefore, not a Madiga by birth. The question is: could the respondent become a member of Madiga caste on conversion to Hindusim ? That is a question on which considerable light is thrown by the decision of this Court in C. M. Arumugam vs section Rajgopal (supra). The main question which arose for decision in C. M. Arumugamr vs section RaJgopal (supra) was whether section Raigopal, who belonged to Adi Dravida caste before his conversion to Christianity, could, on reconversion to Hinduism once again become a member of the Adi Dravida caste. This Court, after examining the question on principle and referring to the decided cases, pointed out that the consistent view taken in this country since 1886 was that on reconversion to 1051 Hinduism, a person can once again become a member of the caste in which he was born and to which he belonged before conversion to another religion, if the members of the caste accept him as a member. This Court observed that there was no reason, either on principle or on authority, which should compel it to disregard this view which has prevailed for almost a century and lay down a different rule on the subject and concluded that on reconversion to Hinduism, section Rajgopal could once again revert to his Adi Dravida caste, for he was accepted by the other members of the caste. The reasoning on which this decision proceeded is equally applicable in a case where the parents of a person are converted from Hinduism to Christianity and he is born after their conversion and on his subsequently embracing Hinduism, the members of the caste to which the parents belonged prior to their conversion accept him as a member within the fold. It is for the members of the caste to decide whether or not to admit a person within the caste. Since the caste is a social combination of persons governed by its rules and regulations, it may, if its rules and regulations so provide, admit a new member just as it may expel an existing member. The only requirement for admission of a person as a member of the caste is the acceptance of the person by the other members of the caste, for, as pointed out by Krishnaswami Ayyangar, J., in Durgaprasada Rao vs Sudarsanaswami,"in matters affecting the well being or composition of a caste, the caste itself is the supreme judge". (emphasis supplied). It will, therefore, be seen that on conversion to Hinduism, a person born of Christian converts would not become a member of the caste to which his parents belonged prior to their conversion to Christianity, automatically or as a matter of course, but he would become such member, if the other members of the caste accept him as a member and admit him within the fold. This view would have ordinarily required us to find whether, on the material on record, it could be said to have been established by the respondent that, on conversion to Hinduism, he was accepted as a member of Madiga caste by the other members of that caste, for it is only if he was so accepted that he could claim to be a member of a Scheduled Caste. But it is not necessary for us to undertake this inquiry because, as already pointed out, it has been agreed by the State that, whatever be the result of this appeal, the admission of the respondent will not be disturbed. We accordingly dismiss the appeal with costs in favour of the respondent. P.H.P. Appeal dismissed.

The parents of the respondent originally professed Hindu religion and belonged to Madiga caste which is a scheduled caste, in the Andhra Pradesh as specified in the schedule to the Constitution (Scheduled Castes) order, 1950. Respondent 's parents were converted to Christianity and thereafter the respondent was born. The respondent got himself converted to Hinduism renouncing Christianity. Thereafter, he applied for admission to Guntur Medical College on the basis that he was a member of a Scheduled Caste. He was provisionally selected for admission but subsequently was informed by the principal the College that his selection was cancelled as he was not a Hindu by birth. The Principal relied on Note (b) to Clause of rule 2 of the Rules issued by the Government of Andhra Pradesh for admission to the M.B.B.S. course in Government Medical College. The said note provides that no candidate other than Hindu can claim to belong to Scheduled Caste. It further provides that no candidate can belong to Scheduled Caste except by birth. The respondent filed a Writ Petition in the High Court challenging the validity of Note (b) as going beyond the scope of the Constitution (Scheduled Castes) order, 1950. The respondent succeeded before the learned single Judge as well as the Division Bench of the High Court. In fact, it was conceded by the appellant before the High Court that note (b) was repugnant to the said order. Dismissing the appeal by Special Leave, ^ HELD: 1. It is clear on a plain reading of clause 4 of Article 15 that the State has power to make special provision for scheduled castes and in exercise of its power the State can reserve seats in a Medical College for members of Scheduled Castes without violating Article 15 or Article 29(2). Article 366(24) defines Scheduled Castes to mean such castes, races or tribes as are deemed under Article 341 to be scheduled castes. The President in exercise of the powers conferred upon him under Article 341 has issued Constitution (Scheduled Castes) order 1950. Madiga caste is included in the schedule to the said order. The said order itself, however, provides that no person who. professes a religion other than Hindu or Sikh shall be deemed to be a member of a scheduled caste. It, however, does not require that the should have been born a Hindu or a Sikh. The only thing required is that at the material time he should profess Hindu or Sikh religion. The requirement of the note that a candidate in order to be eligible for a reserved seat should be a member of a Scheduled Caste by birth went beyond the said order and was rightly condemned as void. [1049B H, 1050A] 2. There is no absolute rule applicable in all cases that whenever a member of a caste is converted from Hinduism to Christianity he loses his membership of the caste. It would depend upon r the structure of the caste and its rules and regulations. There are some castes, 1047 particularly ill South India, where this consequence does not follow on conversion since such castes comprise both Hindus and Christians. Whether Madiga caste falls in this category is a debatable question. For the purposes of the present appeal it is not necessary to decide the contention of the respondent that there are both Hindus and Christians in Madiga caste and even after conversion to Christianity his parents continued to belong to Madiga caste. [1050 C F] 3. A similar question about the effect of re conversion was decided by this Court in the case of C. R. Arumugam vs section Rajagopal. In that case this Court laid down that there is no reason to hold that a person on reconversion to Hinduism cannot once again become a member of the caste in which he was born and to which he belonged before conversion to another religion. The reasoning on which this decision proceeded is equally applicable will a cause where the parents of a person are converted from Hinduism to Christianity and he is born after their conversion and on his subsequent embraching Hinduism, the members of the caste to which the parents belong prior to their conversion accept him as a member within the fold. It is for the members of the caste to decide whether or not to admit a person within the caste. Since the caste is a social combination of persons governed by its rules and regulations, it may, if its rules and regulations so provide, admit a new member just as it may expel an existing member. The only requirement for admission of a person as a member of the caste is the acceptance of the reason by the other members of the caste. On conversion to Hinduism a person would not become a member of the caste to which his parents belonged prior to their conversion, automatically or as a matter of course but he would become such member if the other members of the caste accept him as a members and admit him within the fold. [1050G, 1051B E] There is nothing on record to show whether the respondent was accepted by Madiga caste. However, it is not necessary to undertake this enquiry because it has been agreed by the appellants that whatever be the result of the appeal, the admission of the respondent would not be disturbed. [1051 FG]

iminal Appeal No. 95 of 1961. Appeal by special leave from the judgment and order dated February 15, 1961, of the Allahabad High Court in Criminal Appeal No. 1597 of 1960. D. section Tewatia and K. B. Mehta, for the appellants. O. P. Rana and C. P. Lal, for the respondents. August 29, 1963. The judgment of the Court was delivered by HIDAYATULLAH J. This is an appeal by special leave against the judgment of the High Court of Allahabad in Criminal Appeal No. 1597 of 1960 decided on February 15, 1961. The appellants are eight in number and they have been convicted under section 325 read with section 149 of the Indian Penal Code and sentenced to three years rigorous imprisonment. They have also been convicted variously under sections 147 & 148, Indian Penal Code and sentenced to smaller terms of imprisonment which need not be mentioned as those sentences are made to run concurrently with the above sentence. They were originally charged under section 302 read with section 149, Indian Penal Code for the murder of one Tikam on January 24, 1960 at about noon in village Nandgaon Police Station Barsana District Mathura. The Session Judge, Mathura, did not think that a case of murder was made out and convicted them of the lesser offence. Their appeal to the High Court was dismis sed and the conviction and sentences were maintained. There was yet another trial at which these eight persons and four others were tried under section 307/149, Indian Penal Code for causing hurt to one Puran with such intention and under such circumstances that if by that act they had caused his death they would have been guilty of murder and also under sections 147 & 148 of the Penal Code for being members of an unlawful assembly, the common object of which was an attempt on Puran 's life. The learned Sessions judge, Mathura held in the second case that the injuries sustained by Puran warranted an 675 offence under section 323, Indian Penal Code. The accused and Puran compounded that offence and all the accused were acquitted. The Sessions judge, however, convicted 11 out of 12 accused under sections 147 & 148, Indian Penal Code and awarded different sentences, according to the weapons possessed by them. One Koka was acquitted because his plea that he was blind from birth was accepted. The 11 accused in the second case appealed to the High Court and were acquitted of the charge of being members of an unlawful assembly. That Judgment of the High Court was delivered on January 31, 1961, in Criminal Appeal No. 1598 of 1960, fifteen days before the confirmation of the conviction and sentences of the eight appellants in this appeal. The facts of the case may now be given. There was enmity between Tikam (deceased) and the appellants and on January 24, 1960, just about noon time Tikam was sitting at the shop of a blacksmith in village Nandgaon. Dulli and Nathi who were examined as P. Ws. 2 & 3 were sitting near him. The appellants who were armed with Ballams, a Pharsa and Lathis arrived on the spot and on seeing Tikam started to assault him. Tikam was severely injured and fell in a ditch adjacent to the road but even after he fell in it the assault was continued by the appellants. He died the same day about five hours later. After assaulting Tikam, these appellants decided to ransack his house and started towards it. On the way they were met by the other four accused and this brought their number to twelve. While they were going to the house of Tikam they saw Puran and decided to beat him. Puran was assaulted and the second case arose out of the assault on him. The learned magistrate who committed the accused to stand their trial before the Court of Sessions framed a common charge in respect of the two incidents but the Sessions judge amended the charge and divided it into two charges namely one connected with the attack on Tikam and the other connected with the attack on Puran. , He also separated the two trials on the two charges. As stated already lie convicted the eight appellants in respect of their assault on Tikam and the same appellants with three others in respect of their assault on Puran. 676 The appeal in the second case was heard first and was allowed by the High Court and the 11 appellants in that appeal including the eight before us were ordered to be acquitted. It was contended before us by Mr. Tewatia that Mr. Justice Sharma who delivered the judgment impugned before us did not allow the appellants a chance to reply to the arguments on behalf of the State and thus denied them a fair hearing. This fact was mentioned in the petition for certificate in the High Court and has been repeated in the petition for special leave. Mr. Justice Sharma had proceeded to deliver judgment as soon as the arguments were over and the judgment was delivered by him on two consecutive days in the presence of the appellants and their counsel. If any such right had been denied to the appellants they should have brought the matter immediately to the notice of the learned Judge and he would have rectified it. It appears that the appellants were hoping for an acquittal in view of the prior acquittal by the learned judge in the companion case and realised too late that their appeal was not accepted. It is for this reason that they do not appear to have raised this issue before the learned Judge when they asked him to certify the appeal and his Order does not show that they made a grievance that the hearing was not fair. In our opinion this point cannot be considered because though. it was mentioned in the petition for certificate it was apparently not pressed before Mr. Justice Sharma. The next contention of the appellants is that the prior acquittal in the second case operates as a bar to the conviction in the present case and the High Court ought to have given the appellants the benefit of the prior ac quittal. Reliance in this connection is placed upon a de cision of the Privy Council in a case from Malaya State reported in Sambasivam vs Public Prosecutor/Federation of Malaya(1) and particularly the following passage from the judgment of Lord Mac Dermott: "The effect of a verdict of acquittal pronounced by a competent court on a lawful charge and after a lawful trial is not completely stated by saying that the person acquitted cannot be tried again for the same offence. at p. 479. 677 To that is must be added that the verdict is binding and conclusive in all subsequent proceedings between the parties to the adjudication. The maximum "Res judicata pro veritate accipitur" is no less applicable to criminal than to civil proceedings. Here, the appellant having been acquitted at the first trial on the charge of having ammunition in his possession, the prosecution was bound to accept the correctness of that verdict and wasprecluded from taking anystep to challenge it at the second trial. And the ap pellant was no less entitled to rely on his acquittal in so far as it might be relevant in his defence. That it was not conclusive of his innocence on the firearm charge is plain, but it undoubtedly reduced in some degree the weight of the case against him, for at the first trial the facts proved in support of one charge were clearly relevant to the other having regard to the circumstances in which the ammunition and revolver were found and the fact that they fitted each other. " The above passage was cited with approval by this Court in Pritam Singh vs State of Punjab(1). The two cited cases were considered and distinguished by this Court in Mohinder Singh vs State of Punjab(2) and Pritam Singh 's case was again distinguished in Gurcharen Singh & anr. vs State of Punjab(1). As pointed out in Mohinder Singh vs State of Punjab(2), the case of the Privy Council involved a confession by an accused in which he admited possession of a firearm and some ammunition which were both offences under the relative law of Malaya State. He was convicted on the basis of that statement on two counts but on appeal was acquitted in respect of the count relating to the possession of ammunition and a fresh trial was ordered in respect of the count relating to the possession of the firearm. In the second trial the confession was again relied upon and he was convicted. The Privy Council set aside the conviction because the confession was incapable of being divided into two parts so as to make separate confessions about the (1) A.I.R. 1956 S.C. 415. (2) Cr. A. No. 140 of 1961, decided on 31 7 63 (Unreported). (3) 678 possession of firearm and about the possession of am munition. Their Lordships held that the confession which was indivisible could not be used at all, in view of the acquittal recorded earlier on the other count. In Pritam Singh 's case(1) the accused made a statement leading to the recovery of a firearm with which he was alleged to have shot one of the victims. He was prosecuted for possession of the firearm and was acquitted but the evidence of the possession of the firearm was used in the murder charge. This was held to be not permissible. As explained in Mohinder Singh 's case(2), the acquittal in respect of the possession of firearm affected the admissibility of the same evidence in connection with the murder case, because the firearm could not at the same time be possessed as well as not possessed by the accussed. The acquittal under the Arms Act,, being proper, affected the evidence of possession in the murder case. In Mohinder Singh 's case(2) as well as in Gurcharan 's(3) case Pritam 's(1) case was distinguished because in those cases, the acquittal under the Arms Act was later than the conviction on the substantive charge. There is nothing in common between the present appeal and the two cases relied upon by the appellants. In this case there is no doubt a prior acquittal but on a charge which was quite different from and independent of the charge in the present case. The assault on Tikam was over when the unlawful assembly formed its now common object namely the assault on Puran. The acquittal proceeded mainly because Puran compounded the offence under section 323 and the High Court did not feel impressed by the evidence about the remaining charges, The charges on which that acquittal took place had nothing whatever to do with the charges on which there is conviction in the present appeal. A plea of autrefois acquit which is statutorily recognised in India under section 403 of the Code of Criminal Procedure arises when a person is tried again for the same offence or on the same facts for any other offence for which a different charge from the one made against him might have been made un (1) A.I.R. 1956 section C. 415. (2) Cr. A. No. 140 of 1961, decided on 31 7 63 (unreported). (3) 679 der section 236 or for which he might have been convicted under section 237. Section 236 provides for a situation where it is doubtful what offence has been committed. When 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, that section permits that 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 or he may be charged in the alternative with having committed some one of such offences. Section 237 enables the Court to convict an accused charged with one offence for a different offence where the facts show that a different offence has been committed. Neither of these provisions is applicable to the present facts because the two offences were distinct and spaced slightly by time and place. The trials were separate as the two incidents were viewed as distinct transactions. Even if the two incidents could be viewed as connected so as to form parts of one transaction it is obvious that the offences were distinct and required different charges. The assault on Tikam in fulfilment of the common object of the unlawful assembly was over when the unlawful assembly proceeded to the house of Tikam to loot it. The new common object to beat Puran was formed at a time when the common object in respect of Tikam had been fully worked out and even if the two incidents could be taken to be connected by unity of time and place (which they were not), the offences were dis tinct and required separate charges. The learned Sessions judge was right in breaking up the single charge framed by the magistrate and ordering separate trials. In this view the prior acquittal cannot create a bar in respect of the conviction herein reached. It was contended by Mr. Tewatia that the earlier judgment involved almost the same evidence and the reasoning of the learned judge in Puran 's case destroys the prosecution case in the present appeal. He attempted to use the earlier judgment to establish this point. In our opinion he cannot be allowed to rely upon the reasoning in the earlier judgment proceeding as it did upon evidence which was separately recorded and separately 680 considered. The eye witnesses in this case are five in number, while in the other case there were only two, but that apart, the earlier judgment can only be relevant if it fulfils the conditions laid down by the Indian Evidence Act in sections 40 43. The earlier judgment is no doubt admissible to show the parties and the decision but it is not admissible for the purpose of relying upon the appreciation of evidence. Since the bar under section 403 Criminal Procedure Code did not operate, the earlier judgment is not relevant for the interpretation of evidence in the present case. Mr. Tewatia attempted to argue on the facts of this case but we did not permit him to do so because this Court, in the absence of special circumstances, does not review for the third time, evidence, which has been accepted in the High Court and the Court below. No such circumstance has been pointed out to us to make us depart from the settled practice. The appeal therefore fails and is dismissed. Appeal dismissed.

The eight appellants variously armed attacked one 'T ' and as a result of the assault 'T ' died. These appellants then proceeded to loot the house of 'T ' and on the way met four others who joined them. They then came across one 'P ' and assaulted him. There was a small gap of time and 'the places of assault were different. The magistrate framed a single charge but the Session Judge framed two charges namely one connected with the attack on 'T ' and the other connected with the attack on 'P '. He also separated the trials on the two charges. The Sessions judge convicted the appellants in both cases. The appeal in the second case i.e. the case relating to assault on 'P ' was heard first by the High Court and the appellants were acquitted of the charges of being members of an unlawful assembly. Later the appeal connected with the assault on 'T ' was heard by the High Court and in that appeal their convictions and sentences were confirmed. The present appeal arises out of the convictions and sentences passed by the High Court. The appellants contended that the prior acquittal in the second case operated as a bar to the conviction in the present case. The appellants relied on a decision of the Privy Council namely Sarnbasivam vs Public Prosecutor Federation of Malaya and of this Court in Pritam Singh vs State of Punjab. Held: (i) There was nothing in common between the present appeal and the aforesaid two cases relied upon by the appellants. In this case the assault on 'T ' was over when the unlawful assembly formed its new common object namely the assault on 'P '. (ii) A plea of autrefois acquit which is statutorily recognised in India under section 403 of the Code of Criminal Procedure arose when a person is tried again for the same offence or on the same facts for any other offence for which a different charge from the one made against him might have been made under section 236 or for which he might have been convicted under section 237. The prior acquittal in the other case did not operate as a bar to the conviction in the present case as the charge in the other case was quite different from and independent of the charge in the present case, and sections 236 and 237 of Code of Criminal Procedure were not applicable to the present facts because the two offences were distinct. Sambasivam vs Public Prosecutor Federation of Malaya, [ , Pritam Singh vs State of Punjab, A.I.R. 1956 S.C. 415, Gurcharan Singh vs State of Punjab, and 674 Mohinder Singh vs State of Punjab, Cr. A. No. 140 of 1961 decided on 31 7 63, explained. (iii) This court, in the absence of special circumstances, does not review for the third time evidence which has been accepted in the High Court and the trial court.

Appeal No. 419 of 1956. Appeal by special leave from the decision dated January 17, 1955, of the Labour Appellate Tribunal, of India, Bombay, in Appeal (Bom.) No. 61 of 1954. N.C. Chatterjee, D. H. Buch and I. N Shroff, for the appellants. R. J. Kolah, B. Narayanaswami, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the respondents. March 10. The Judgment of the Court was delivered by HIDAYATULLAH, J. This is an appeal with the special leave of this Court against a decision dated January 17,1955, of the Labour Appellate Tribunal (hereinafter called the Appellate Tribunal) by which it reversed a decision of the Industrial Court, Bombay, dated January 20, 1954, in a matter referred to the Industrial Court under section 73 of the Bombay Industrial Relations Act, 1946, by the Government of Bombay. The appellant is the Rashtriya Mill Mazdoor Sangh, representing the employees of the cotton textile mills in the city of Greater Bombay. The respondents are the Apollo Mills, Ltd., and other companies owning cotton textile mills specified in the annexure to the Special Leave Petition and the Mill Owners ' Association, Bombay, representing the cotton textile mill industry. The dispute relates to the compensation which the workers claimed for loss of wages and dearness allowances due to the short working or closure of the Textile Mills on certain days during the period between November 1, 195 1, and July 13, 1952. The facts of the case are as follows: In the year 1951 monsoon failed, and caused scarcity of water in the catchment area of the Tata Hydro Electric system, from which the Mills obtained their supply of power. It was, therefore, found necessary to reduce the consumption of electricity, and Government, after consulting the various Mills and also the appellant Sangh, decided that the Mills should work, instead of 233 48 hours, for 40 hours per week during a period of 30 weeks from November 1, 1951. It was also agreed that if the Mills could reduce their consumption of electricity to 5/6th of their normal consumption, then they could work for 48 hours per week as before. Some of the Mills installed their own generators, but many others were compelled to reduce the working time to 40 hours in a week, working at 8 hours per day. As a result, the working of some of the Mills was reduced by one day in the week, and the Mills lost a maximum number of 38 days, some more and some less. One of the Mills (the Ragbuvanshi Mills) remained closed only on one day. The order of the Bombay Government was made under section 6A(1) of the Bombay Electricity (Special Powers) Act, 1946. While this short working continued, the workers claimed their wages and dearness allowances or compensation in lieu thereof. Negotiations followed, but when they did not result in anything to the advantage of the workers, the matter was referred for arbitration to the Industrial Court by the Bombay Government on October 30, 1952, under section 73 of the Bombay Industrial Relations Act, 1946. The Mills raised the objection that the matter was covered by Standing Orders 16 and 17, and inasmuch as the partial closure of the Mills was due to force majeure, they were not liable. They contended that the Industrial Court had thus no jurisdiction, as these Standing Orders were determinative of the relations between the workmen and their employers under section 40(1) of the Bombay Industrial Relations Act, 1946. They also submitted that the orders of the Government issued under the Bombay Electricity (Special Powers) Act, 1946, had to be obeyed and therefore no compensation was payable. They pointed out that the employees were receiving fair wages, and that the Mills were not in a position to bear an additional burden, in view of the fact that they had lost their profits due to short working. They relied upon the decision of the Bombay High Court in Digambar Ramachandra vs Khandesh Mills (1), where it was held that though an arbitrator to whom a dispute (1) 30 234 falling under B. 49A of the Bombay Industrial Disputes Act, 1938, was referred had jurisdiction to decide the disputes within the terms of the Standing Orders framed under section 26 of that Act, he had no jurisdiction to determine the liability of the employers on grounds outside the Standing Orders. The Industrial Court, after hearing the parties, made an award on January 20, 1954, and directed all the respondent Mills to pay to the employees compensation, holding that Standing Orders 16 and 17 were not applicable, and were, therefore, no bar. The Industrial Court held that in view of the provisions of sections 3, 40(2), 42(4), 73 and 78 of the Bombay Industrial Relations Act read with Sch. 111, item 7, and having regard to the decision of the Federal Court in Western India Automobile Association v Industrial Tribunal, Bombay (1), it had jurisdiction to grant compensation. The Industrial Court, therefore, held that on principles of social justice the workers were entitled to compensation, which it assessed at the rate of 50 per cent. of the wages and dearness allowances which the workers would have drawn, if the Mills had worked on the days they remained closed. Against that award, the Mill Owners ' Association and two of the Mills appealed to the Appellate Tribunal, Bombay. All the contentions which were raised before the industrial Court were once again raised before the Appellate Tribunal. Two new contentions were raised, viz., that the claim for compensation was barred under section 1 1 of the Bombay Electricity (Special Powers) Act, 1946, and was also barred by the decision of the Supreme Court in the Muir Mills Co., Ltd. vs Suti Mills Mazdoor Union, Kanpur (2). The Appellate Tribunal by its decision now impugned before us, allowed the appeal, and set aside the award of the Industrial Court, and dismissed the claim of the employees. It held that even if Standing Orders 16 and 17 covered the case, the decision in Digambar Ramachandra 's case (1) could not now be applied because of the provisions of section 40(2) and the addition of Sch. 111, item 7 in the Bombay Industrial Relations Act, which provisions did not find place in the Bombay (1) (2) ; (3) 235 Industrial Disputes Act, 1938, under which the decision of the Bombay High Court was given. The Appellate Tribunal referred to the Federal Court decision cited earlier, and observed that there was no doubt that the award of compensation to workmen equal to half of their wages and dearness allowances was fair and just. The Tribunal, however, felt compelled by the decision of this Court in the Muir Mills case (1) to reject the claim of the workers, and allowed the appeal. In this view of the matter, the Appellate Tribunal did not decide whether section II of the Bombay Electricity (Special Powers) Act, 1946, barred the grant of compensation. The appellant in this case first contended that the Muir Mills case (1) did not apply, and further that if that case was out of the way, then in view of the other findings of the Appellate Tribunal and section 7 of the Industrial Disputes (Appellate Tribunal) Act, 1950, the appeal ought to have failed, since no question of law survived and the Appellate Tribunal was incompetent to reverse the decision. The Mill Owners ' Association, on the other hand" contended that the opinion of the Appellate Tribunal that the Muir Mills case (1) applied, was correct, that section II of the Bombay Electricity (Special Powers) Act barred these proceedings, and that, in view of the fact that the closure was due to force majeure for which the Milks were not responsible, Standing Orders 16 and 17 were determinative of the relations between the parties and the claim for compensation was not entertainable. Other objections raised before the Appellate Tribunal were not pressed before us. We begin first with the question whether section 11 of the Bombay Electricity (Special Powers) Act, 1946 barred the reference. That section reads as follows: " 11 (1). No suit, prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done in pursuance of any order, direction or requirement made or deemed to have been made under section 3, 4, 5, 6, 6A, 6B or 6C." (1) ; 236 The order which was made in this case by the Government of Bombay was under sub section (1) of section 6A, which reads: " 6A(1). Notwithstanding anything contained in any law for the time being in force, or any permission granted under sub section (3) of section 5 or any instrument having effect by virtue of any law, the Provincial Government may with a view to controlling distribution, supply, consumption or use of electrical energy make an order (a)for prohibiting or regulating subject to such conditions as it may specify in the, order, the distribution or supply of electrical energy by a licensee or use of such energy by a consumer for any purpose specified in such order; (b) for determining the order of priority in which,or the period or periods during which, work shall be done by an undertaking to which the supply of electrical energy is made by a licensee. " It was contended by the respondents that sub section (1) of section 11 quoted above barred the remedy of arbitration, because the closure of the Mills was in good faith, and was in pursuance of a direction or order made under section 6A(1). Mr. Kolah referred to the scheme of the Bombay Electricity (Special Powers) Act, and specially to the sections dealing with penalties and offenses and contended that the Mills were helpless and were compelled to close down their esta blishments for part of the time. He claimed that the protection of section 11(1) was available ' to them., and argued that it gave immunity from action of any kind. The present proceedings are for compensation for, the period during which the Mills remained closed. This claim is made by the workers against the Mills. The section which confers immunity bars proceedings &rising from the interference with the supply of electrical energy and its consumption. It is a protection to the supplier of electrical energy against the consumer and vice versa, and protects also those who act to enforce the order. There is no complaint here about the reduction of electricity or even about the closure of the Mills for part of the time. Neither the 237 Mills nor the workers have raised any such contention. Further, the sub section is a protection clause which is usually introduced in an Act, where it gives new or unusual powers, and is designed to give immunity to persons acting under or enforcing it. The ambit of the protection is in relation to the supply and consumption of electricity which alone are curtailed by the order issued under section 6A(1) of the Act. The protection conferred by the first subsection of section 11 does not, therefore, prevent the raising of an industrial dispute resulting in an award for the equitable sharing of loss which had been occasioned to. , both the employers and the employees by the observance of the order. The contention that the Industrial Court had no jurisdiction to hear the reference because the State Government could not make it, was not pressed by the respondents, and nothing need, therefore, be said about it. It was raised in another form, as will appear in the sequel. Both the parties, however, criticised the order of the Appellate Tribunal, the respondents challenging the findings adverse to them. It is now necessary to deal with these contentions. The case of the appellant was that the Appellate Tribunal had no jurisdiction to interfere with the order of the Industrial Court, because the appeal before it did not involve a ',.Substantial question of law and did not fall within any of the eight matters mentioned in section 7(1)(b) of the Industrial Disputes (Appellate Tribunal) Act, 1950, which gave appellate jurisdiction to the Appellate Tribunal. The appellant referred to cases in which it has been held that the Appellate Tribunal could not interfere on facts. It is not necessary to analyse those cases for reasons which we proceed to state. The Industrial Disputes (Appellate Tribunal) Act conferred appellate powers on the Appellate Tribunal, if there was a substantial question of law arising from the award, or the matter fell within eight enumerated subjects. The respondents attempted to bring the matter within cl. (1) of section 7(1)(b) that is to say ' " wages ", which is one of the eight subjects. But there is no question here of wages as such but of 238 compensation. Learned counsel for the respondents also argued that a conclusion drawn without adverting to the evidence involved a question of law and a legal inference from proved facts and an appeal thus lay. He relied upon Anglo Iranian Oil Co. (India) Ltd. vs Petroleum Workers ' Union (1) and Crompton Parkinson (Works) vs Its Workmen (2). It may not be necessary to discuss the matter at length, because even if the subject matter did not fall within any of the eight enumerated topics, there was a substantial question of law involved, inasmuch as it was necessary to decide whether a claim for compensation was not admissible in view of the provisions of the Bombay Industrial Relations Act and the Standing Orders. It has been pointed out already that the failure to continue to employ labour was due to the short supply of electrical energy, and the question is whether in these admitted circumstances, Standing Orders 16 and 17 read with section 40(1) and item 9 of Sch. 1 of the Bombay Industrial Relations Act rendered the employers immune from a claim for compensation for loss of wages and dearness allowances. The respondents claimed that they did, while the appellant maintained that they did not, and referred to sections 40(2), 42(4), 73 and 78(1)(A) and item 7 of Sch. III of the same Act. This is a substantial question of law, and the appeal was thus competent. The crux of the matter is the provisions of Standing Orders 16 and 17, which are to be read with section 40(1) of the Bombay Industrial Relations Act. Standing Orders 16 and 17 read as follows 16.The Company may, at any time or times, in the event of a fire, catastrophe, breakdown of machinery or stoppage of the power supply, epidemic, civil commotion or other cause, beyond the control of the Company, stop any machine or machines or department or departments, wholly or partially for any period or periods, without notice and without compensation in lieu of notice. In the event of a stoppage of any machine or department under this Order during working hours, the operatives affected shall be notified by notices (1) (2) [1959] SUPP. 2 S.C.R. 936. 239 put upon notice boards in the department concerned and at the time keeper 's office, as soon as practicable, when work will be resumed and whether they are to remain or leave the mill. The period of detention in the mill shall not ordinarily exceed one hour after the commencement of the stoppage. If the period of detention does not exceed one hour, operatives so detained shall not be paid for the period of detention. If the period of detention in the mill exceeds one hour, operatives so detained shall be entitled to receive wages for the whole of the time during which they are detained in the mill as a result of the stoppage. In the case of pieceworkers, the average daily earnings for the previous month shall be taken to be the daily wages. 17.Any operative played off Linder Order 16 shall not be considered as dismissed from service, but as temporarily unemployed, and shall not be entitled to wages during such unemployment except to the extent mentioned in Order 16. Whenever practicable a reasonable notice shall be given of resumption of normal work and all operatives playedoff under Order 16, who present themselves for work, when the normal working is resumed, shall have prior right of reinstatement. " The argument of the respondents was two fold: (1) that these two Standing Orders fully covered a closure due to stoppage of power, and (2) that under section 40(1) of the Bombay Industrial Relations Act, 1946, the Standing Orders were determinative of the relations between the employer and the employees in regard to all industrial matters specified in Sch. 1, which contains the following items : " 4. Closure or reopening of a department or a section of a department or the whole of the undertaking" and " 9. Temporary closures of work including playing off and rights and liabilities of employers and employees. . " They also invoked the decision in Digambar Ramachndra 's case (1), and added that the position had not been altered even by the addition of the second sub (1) 240 section to section 40 in the Bombay Industrial Relations Act. We may at this stage read section 40: " 40. (1) Standing orders in respect of an employer and his employees settled under this Chapter and in operation, or where there are no such standing orders, model standing orders, if any, applicable under the provisions of sub section (5) of section 35 shall be determinative of the relations between the employer and his employees in regard to all industrial matters specified in Schedule I. (2)Notwithstanding anything contained in subsection (1) the State Government may refer, or an employee or a representative union may apply in respect of any dispute of the nature referred to in clause (a) of paragraph A of section 78, to a Labour Court. " The respondents contended that only the first subsection applied, and that under Standing Orders 16 and 17 quoted above, no compensation was claimable. The appellant pointed out that the second sub section excluded the first sub section, because of the nonobstructive clause with which it is prefaced and in view of the position of the Industrial Court as the appellate authority from awards of the Labour Court, the former was not also bound by the first sub section or the Standing Orders. There is some force in the contention of the appellant, but, in our opinion, Standing Orders 16 and 17 do not, in terms, apply to a claim for compensation such as is made here. Standing Order 16 speaks of stoppage "without notice and without compensation in lieu of notice. " The compensation which is claimed by the workers in this case is not in lieu of notice, that is to say, for a period equal to that in respect of which notice would have had to be given. That period would be before the date of closure. The Standing Order contemplates those cases in which a notice has to be dispensed with and then no compensation in lieu of notice is payable. There is, however, here a question of quite a different sort, and it is not covered by Standing Order 16, even though the closure was by reason of stoppage of power. Standing Order 17 speaks of "wages", and 41 241 we are not concerned with wages here but with compensation which is not the same thing as wages. In this view of the matter, Standing Orders 16 and 17 cannot be said to cover the present facts, and they are not, therefore, determinative of the relations between the parties. The present dispute was referred to the Industrial Court under section 73(2) of the Bombay Industrial Relations Act, 1946. That section reads as follows:"Notwithstanding anything contained in this Act, the State Government may, at any time, refer an industrial dispute to the arbitration of the Industrial Court, if on a report made by the Labour Officer or otherwise it is satisfied that (2)the dispute is not likely to be settled by other means;". The non obstante clause clearly shows that in spite of the other provisions of the Bombay Industrial Relations Act, an industrial dispute may be referred to the Industrial Court. An industrial dispute as defined in that Act means inter alia any dispute or difference between an employer and employee or between employers and employees, which is connected with an industrial matter, which includes all matters pertaining to non employment of any person. That these workmen were not employed on certain days goes without saying, and thus, there was an industrial dispute concerning their claim for compensation for the period of non employment. Item 9 of Sch. 1 gave the power to frame Standing Orders in relation to temporary closures. The Standing Orders made covered only compensation in lieu of notice and wages for the period of closure, but not compensation for closure. In the view which we have taken of the Standing Orders, it is not necessary to decide whether item 7 of Sch. III relates only to compensation for permanent closure, or whether item 9 of Sch. 1 gave the power to make a Standing Order relating to compensation for temporary closure. It is enough to say that Standing Orders 16 and 17, as they stand, do not cover a case of compensation for closure. 242 The powers of the Industrial Court under section 73 of the Bombay Industrial Relations Act are very wide, inasmuch as the State Government can refer an industrial dispute to it, notwithstanding anything contained in the Act. It was in view of this that the objection to the jurisdiction of the Industrial Court was not pressed. But the argument was advanced in another form to show that Standing Orders 16 and 17 were determinative and did not enable the Industrial Court to decide in any manner except in accordance with those Standing Orders. Reliance was also placed upon Digambar Ramachandra 's case (1), where Chagla, C.J., and Bhagwati, J., decided that the arbitrator was bound by the Standing Orders and could not go outside them. We are of opinion that Standing Orders 16 and 17 do not apply to the present facts for reasons already stated, and we express our dissent from that decision in so far as it held that the Standing Orders covered a case of compensation for closure also. We note further that in the Bombay Industrial Disputes Act, 1938, there was no item similar to the one in Sch. III of the Bombay Industrial Relations Act. In Textile Labour Association, Ahmedabad vs Ahmedabad Millowners ' Association, Ahmedabad (2), Sir H. V. Divatia, Rajadhyaksha, J., and Mr. D. V. Vyas (later, Vyas, J.) correctly held that the Standing Orders did not cover a case of compensation for loss of earnings. The head note adequately summarises the decision, and may be quoted. It reads: " Although the workers are not entitled to demand their wages during the period of stoppage of work as that matter has been (sic) covered by the Standing Orders there is nothing to prevent them from giving any notice of change demanding compensation for the loss of their earnings. It cannot be said that the jurisdiction of the Court is barred by the provisions of Standing Orders Nos. 16 & 17.". No doubt, the reference there was under section 43 of the Bombay Industrial Disputes Act, 1938; but the provisions of section 73 of the Bombay Industrial Relations Act are wide enough to cover a reference on the same topic. We are, therefore, of opinion that the claim (1) (2) 1946 47 Industial Court Reporter 87. 243 for compensation was not barred by Standing Orders 16 and 17 read with a. 40(1) of the Bombay Industrial Relations Act. The respondents further contended that the principle of social justice applied by the Industrial Court and accepted by the Appellate Tribunal could not apply because of the decision of this Court in the Muir Mills case (1). They also contended that the case for bonus was decided along with the present case and both bonus and dearness allowances were increased by the Appellate Tribunal in respect of 38 Mills and even the remaining 15 Mills which had ,suffered loss had given minimum bonus to their workers. They argued that wages were fair and bonus was awarded and dearness allowance was increased, and that the Appellate Tribunal took all this into account in refusing compensation. They submitted that the Mills suffered heavy losses due to short working, and that it was sheer injustice to make them pay wages or compensation for days on which the Mills remined closed and lost their profits through stoppage of normal working. The Muir Mills case (1) was concerned with the award of bonus, which is linked with profits. It was there laid down that inasmuch as the labour employed in an industrial undertaking is ever changing, the award of bonus can only be from the profits to which labour in any particular year contributed and labour cannot claim that profits and reserves of some other years should be used for the purpose of giving them bonus. We are not concerned in this case with the award of bonus as such, and we need not, therefore, make use of the reasons which appealed to this Court in that case. The narrow sphere in which social justice demands that workmen going into forced unemployment should receive compensation is quite different. Social justice is not based on contractual relations and is not to be enforced on the principles of contract of service. It is something outside these principles, and is invoked to do justice without a contract to back it. Mahajan, J. (as he then was), observed in Western India Automobile Association vs Industrial Tribunal, Bombay (2) as follows: (1) ; (2) 244 " Adjudication does not, in our opinion, mean adjudication according to the strict law of master and servant. The award of the Tribunal may contain provisions for settlement of a dispute which no Court could order if it was bound by ordinary law, but the Tribunal is not fettered in any way by these limitations. In Volume 1 of I Labour Disputes and Collective Bargaining ' by Ludwig Teller, it is said at page 536 that industrial arbitration may involve the extension of an existing agreement or the making of a new one, or in general the creation of a, new obligation or modification of old ones, while commercial arbitration generally concerns itself with the interpretation of existing obligations and disputes relating to existing agreements. In our opinion, it is a true statement about the functions of an Industrial Tribunal in labour disputes. " Here, what better measure could have been adopted by the Industrial Court (which is approved by the Appellate Tribunal) than to divide the loss into two parts, one to be borne by the industrial concerns and the other by the workmen ? There is no other basis suggested by the one side or the other. It was contended that the loss to labour went into the consideration of the grant of bonus, and that the two cases were heard together. The Appellate Tribunal says so. But bonus is to come out of profits and is the share of labour in the profits it has helped to earn, to bridge the gap between wages as they are and the living wage. Compensation in the present context is for loss of wages and dearness allowance, and the two cannot be considered together on any principle. There is nothing to show that in spite of the formula which the Appellate Tribunal had evolved for itself, it took into account some other factors quite alien to the said formula. It appears to us that what the Appellate Tribunal really meant to say was that inasmuch as the workers were paid bonus they should not make a grievance if they lost wages on some of the days, because if compensation were paid bonus would have had to be reduced. If that is the meaning, as it obviously is, then the question of compensation was not decided at all. In our opinion, this reasoning was 245 beside the point. It was wholly immaterial whether profits were made or losses were incurred in the year, if the employers continued to retain the labour force so as to be available for the days on which the Mills worked. In our opinion, the Appellate Tribunal after giving a finding that a claim for compensation equal to half the wages and dearness allowances was just and proper, erred in holding that it was not admissible because of the decision of this Court in the Muir Mills case (1). That case had no application to the facts here. The Appellate Tribunal also erred in declining to grant compensation on the ground that since bonus was granted the claim for compensation could not be entertained. The case of badli workers does not appear to have been separately raised, and we see no reason not to award them compensation ; but payment of such compensation will be subject to the same condition, as was imposed by the Industrial Court. In the result, the appeal will be, allowed, the order of the Appellate Tribunal set aside and the order of the Industrial Court restored. The respondents shall bear the costs here and in the Tribunals below. Appeal allowed.

The petitioner company applied to the Chief Controller of Imports and Exports, Government of India, New Delhi, for five import licences and obtained them from the joint Chief Controller of Imports and Exports, Bombay, purporting to grant the same on the authority of the former, and placed orders for goods covered by these licences, some of which actually arrived in Bombay. Before the goods could be cleared, the company received a notice from the Chief Controller stating that whereas there were reasons to believe that these five licences had been obtained by fraud, the Government, in exercise of the power specified in cl. 9 of the Imports Control Order, 1955, proposed to cancel them unless sufficient cause was shown before the Chief Controller. The petitioner company by a telegram requested the Chief Controller to furnish particulars of the alleged fraud and give an opportunity to inspect the relevant papers and documents relied upon by him. By a letter it gave an explanation stating that the petitioners were the victims of foul play by some one bent upon causing damage to them and bringing them in the bad books of the authorities. In that letter the company reserved to itself the right to add to, amend or alter the explanation after it had obtained inspection of the said papers and the particulars of the alleged fraud. The representatives of the company met the Chief Controller as also the Director of Administration of his office and renewed the request for the said particulars and the inspection. No particulars were furnished, nor was inspection allowed, but the Chief Controller told the representatives that the issue of the licences had not been authorised by him and the same had been fraudulently obtained and the Director of Administration told them that the recommendations against which the disputed licences were granted by the joint Controller were not genuine, but the said representatives, instead of denying the fraud alleged, ascribed it to some other party as they had done before. It was contended on behalf of the petitioners that cl. 9(a) of the Imports Control Order, 1955, infringed articles 19(1)(f) and (g) and 31 of the Constitution and that no reasonable opportunity was given to the petitioners of being heard as required by cl. 10 of the Imports Control Order. 409 Held (per Sinha, C.J., Gajendragadkar, Das Gupta and Shah, JJ.), that cl. 9 of the Imports Control Order does not give unbridled authority to cancel a licence nor is there any scope for arbitrary action in this regard in view of the provision of cl. 10 of the Order which amply fulfils the requirement of natural justice. It is not correct to contend that before a licence can be cancelled under cl. 9, it must be shown not merely that fraud was committed but that the licensee was also a party to the fraud. The entire scheme of control and regulation of imports by licences being based on the grant of licences on a correct statement of fact, that basis disappears if the grant is obtained by fraud or misrepresentation, and it is wholly immaterial whether the licensee is or is not a party to such fraud or misrepresentation. The provision for cancellation of a licence under cl. 9, therefore, constitutes. a reasonable restriction on the rights conferred by article 19(1)(f) and (g) of the Constitution and, being imposed by a valid law, cannot contravene article 31. There can be no absolute standard of reasonableness and what constitutes reasonable opportunity of being heard in the peculiar facts and circumstances of each case is a matter to be decided by the Court. The Court has to satisfy itself that the person against whom action was proposed had a fair chance of convincing the authority that the grounds on which such action was proposed were either non existent or did not justify it. So judged, it could not be said that the omission to give the petitioners, in the instant case, who were more concerned to show that the company was not a party to the fraud than that no fraud had at all been committed, further particulars or inspection of the papers amounted to a denial of reasonable opportunity of being heard. Per Subba Rao, J. Judged in the light of well recognised principles, there can be no doubt that the Chief Controller of Imports, acting under cls. 9 and 10 of the Imports Control Order, 1955, performs a quasi judicial function and is bound to follow the principles of natural justice in cancelling a licence. Rex vs Electricity Commissioners, Ex Parte London Electricity joint Committee Co., , Rex vs London County Council, Ex Parte Entertainments Protection Association Ltd., and Province of Bombay vs Khusaldas section Advani, ; , referred to. The language of cl. 10 clearly indicates that when the charge is one of fraud, the affected party is entitled to know the particulars of the alleged fraud and to inspect the documents on which it is based and to a personal hearing. It was impossible, in the facts and circumstances of this case, to hold that the petitioners, who did not admit having committed the fraud and must be assumed to be innocent, were afforded reasonable opportunity of being heard within the meaning of 410 cl. 10 of the Order to prove their innocence. Unless the particulars were given to them and the documents shown to them it was not possible for them to know if any fraud was at all committed and if so by whom. The order of cancellation of the licences was, therefore, arbitrary and must be quashed.

ivil Appeal No. 2659 of 1986. From the Judgment and Order dated 14.6.1985 of the Appellate Authority Delhi in Appeal No. 2 of 1985. Anil Kumar Gupta and B.N. Singhvi for the Appellant. Raja Ram Agarwal, Parveen Kumar and Vivek Gambhir for the Respondents. The Judgment of the Court was delivered by RANGANATH MISRA, J. The short question in this appeal by special leave is whether the appellant workman was entitled to interest on the gratuity due to him under the provisions of the (39 of 1972). Appellant joined service under Respondent No. 1 in April 1944 and was relieved from service on his resignation with,effect from 24.5.2983. The employer did not determine the amount ,of gratuity payable to the appellant as required under Section 7(2) of the Act. On 7.6. 1983, the appellant furnished an application in Form l for payment of gratuity but no action was taken by the employer; then appellant approached the statutory controlling authority for determination of the amount of gratuity and requested that on the sum due interest may be paid. The employer contested the claim both in regard to gratuity as also interest. On 3. 12. , the controlling authority determined the amount of gratuity at Rs. 16,380 and directed the Respondent No. 1 to pay along with compound interest of 9 per cent. Thereupon PG NO 744 Respondent No., 1 challenged the order before he appellate Authority. The appellate Authority affirmed the determination of gratuity but set aside the order for payment of interest. We have beard learned counsel for both parties in regard to payability of interest. Relevant portions of section 7 of the Act, as it stood in 1983, when the cause of action arose, may now be extracted: "7: Determination of the amount of gratuity: (1) A person who is eligible for payment of gratuity under this Act or any person authorised, in writing, to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity. (2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub section (1) has been made or not, determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount of gratuity so determined ; (3)The employer shall arrange to pay the amount of gratuity, within such time as may be prescribed, to the person to whom the gratuity is payable ; (4) (a) If there is any dispute as to the amount of gratuity payable to an employee under this Act or as to the admissibility of any claim of, in relation to, an employee for payment of gratuity, or as to the person entitled to receive the gratuity, the employer shall deposit with the controlling authority such amount as he admits to be payable by him as gratuity. Explanation ' Where there is a dispute with regard to any matter specified in this clause the employee may make an application to the controlling authority for taking such action as is specified in clause (b). (b) . . . . . . . . . . (c) . . . . . . . . . . PG NO 745 (5) . . . . . . . . . ,, (6) . . . . . . . . (7) . . . . . . . . Sec. 8: Recovery of gratuity: If the amount of gratuity payable under this Act is not paid by the employer, within the prescribed time, to the person entitled thereto, the controlling authority shall, on an application made to it in this behalf by the aggrieved person, issue a certificate for that amount to the Collector, who shall recover the same, together with compound interest thereon at the rate of nine per cent per annum, from the date of expiry of the prescribed time, as arrears of land revenue and pay the same to the person entitled thereto. " The provisions of Section 7 have been amended twice, first by Act 25 of 1984 with effect from 1.7.1984 and again by Act 22 of 1987. The 1987 Amendment has substituted sub section (3) and added sub section (3A) in Section 7 to the following effect: "(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable. If the amount of gratuity payable under sub section (3) is not paid by the employer within the period specified in sub section (3), the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time, repayment of long term deposits, as that Government may,by notification specify . . " The controlling authority had directed interest as provided in Section 8 to be paid which the Appellate Authority had vacated. From facts of the case, it is clear that the stage for action under section 8 had not been reached inasmuch the appellant had not applied for recovery of gratuity to the Collector. It is only when the Collector issues a certificate for recovery of the dues as a public demand that interest as provided under Section 8 is admissible. PG NO 746 There was no provision in the Act for payment of interest when the same was quantified by the controlling authority and before the Collector was approached for its realisation. In fact, it is on the acceptance of the position that there was a lacuna in the law that Act 22 of 1987 brought about the incorporation of sub section (3A) in Section 7. That provision has prospective application. Learned counsel for the appellant tried to rely upon the provisions of the Interest Act and the provisions of Section 34 of the Code of Civil Procedure. We do not find any support for the appellant 's stand from either of the provisions. Admittedly, no notice was given demanding interest and the controlling authority is not a court for falling back on Section 34 of the Code. We are satisfied in the facts of the case that the appellant was not entitled to interest on the amount of gratuity found due to him. Since that was the only matter agitated in the appeal with the conclusion indicated, this appeal has to fail and is dismissed. There would be no order for costs. G.N. Appeal dismissed.

A Committee consisting of Goswamy and Wadhwa, JJ. was constituted on 23rd February, 1988 to inquire into certain incidents involving lawyers and police officers, which took place in January, 1988. Pursuant to this Court 's order dated 2.6.88 to reconsider the whole question relating to the order in which the witnesses had to be examined, the Committee issued an order on 29.6.88 on the basis of which notices under Sec. 8B were issued to three other officers, but not to the petitioners. It was directed by the Committee that the petitioners be cross examined at the beginning of the inquiry. On their refusal, the Committee directed the filing of a complaint against them for an offence punishable under Section 178 IPC. Pursuant to the complaints filed on behalf of the Committee, criminal proceedings were initiated against the petitioners before the Metropolitan Magistrate. Against the above directions and complaints by the Committee, the petitioners have approached this Court by way of the present Writ Petitions/Special Leave Petitions. The petitioners submitted that they did not either wish to delay the proceedings or to show disrespect to the Committee, but only wanted to protect their own interest in making the submission before the Committee as per the legal advice given to them. Quashing the orders of the Committee directing the filing of the PG NO 518 PG NO 519 complaints and the criminal proceedings initiated against the petitioners before the Metropolitan Magistrate pursuant to the complaints, this Court, HELD: 1. The Delhi Administration has to examine first all its witnesses as_required by Rule 5(5)(a) of the Commissions of Inquiry (Central) Rules, 1972 framed under the . Even those witnesses who may have filed affidavits already may first be examined in chief before they are cross examined. The question whether a party hair the right of cross examination or not shall be decided by the Committee in accordance with Sec. 8C of the Act. This direction does not apply to those witnesses falling under Sec. 8B of the Act, who have to be examined at the end of the inquiry as opined by the Committee itself. [520F H] 2.1. The petitioners are persons who fall under Sec. 8B of the Act and have to be dealt with accordingly. [522A B] 2.2 If the three persons to whom notices under Sec. 8B have been issued are to be examined even according to the Committee at the end or the inquiry there is no justifiable reason to deny the same treatment to the petitioners who are in the same posit~on as those three persons. The action of the Committee in asking them to be cross examined at the beginning of the inquiry appears to be discriminatory. Mere non issue of notices to them under Sec.8B ought not to make any difference if they otherwise satisfy the conditions mentioned in Sec. The issue of such a notice is not contemplated under Sec. 8B of the Act. It is enough if at any stage the Commission considers it necessary to inquire into the conduct of any person. Such person would thereafter he governed by Sec. 8B of the Act. [522E G] 3. The Committee should not have, in the circumstances of the case, directed the filing of a complaint against either of the petitioners for an offense punishable under Sec. 178 IPC. [523C, D] [For Judgment containing the reasons for this order, please Sec (1989) 1 SCR p. 20.]

Civil Appeal No. 818 of 1978 Appeal by Special Leave from the Judgment and order dated 10 4 1978 of the Punjab and Haryana High Court in Civil Revision No. 458 of 1978 (O & H) G. L. Sanghi, B. Datta, K. K. Manchanda and Ishwar Chand Jain for the Appellant. P. Govindan Nair and N. Sudhakaran for the Respondent. The Judgment of the Court was delivered by KRISHNA IYER, J. The Holmesian homily that the life of the law is not logic but experience directs our humane attention, in this appeal against an order in execution for eviction of an advocate in Chandigarh, affirmed by court after court, to a reading of the textual definition of 'tenant ' [s.2 (i)] in the context of the broad embargo on ejectment of urban dwellings in section 13 of the East Punjab Rent Restriction Act, 1949 (hereinafter referred to as the Act). Chandigarh, a blossom in the desert, has served as the capital of two States; and, with explosive expansion, thanks to the marvellous human resources of Punjab & Haryana, become a crowded, though not yet chaotic, city with chronic accommodation scarcity. Consequently, laissez faire law, in the matter of landlord 's right to evict his tenant, was subject to the act with effect from 4 11 1972. From then on, tenant could be dispossessed except on the ground set out in section 13. But if a landlord had already obtained a decree for eviction earlier to this dateline, was he to be restrained by section 13 which forbade even execution of decrees against tenants, or was he free from the statutory fetters because the defendant had ceased to be a tenant on the passing of the decree, having forfeited his status by the destructive effect of a com promise, as in this case? An advocate, under this Act, belongs to a 'scheduled ' class of tenants whose dwellings enjoy special protection. The appellant advocate tenanted a building belonging to the respondent. The latter sued for possession and the former, with refreshing realism, entered into a compromise and agreed to vacate by a certain date on certain terms regarding rent which do not bear upon the dispute before us, 143 A decree in terms thereof was passed on 9 10 1972. Then came the Act, which by extension of its operation, applied to Chandigarh with effect from 4 11 1972. Had the decree been passed but a few days later, the Act would have admittedly interdicted the eviction because of section 13. Had the decree been made and executed a day before the extension of the Act, the years of litigative procrastination of eviction might have been impossible. These mystic 'might have beens ' are gambles of time which spill beyond our jurisdiction and statutory cognisance. The salvation of the appellant is certain if he be a 'tenant ' within the meaning of the Act. His eviction is certain if the definition of 'tenant ' does not ensconce him in its amplitude. Decisions of peripheral relevance, but of different kernel, have been cited on both sides, and the one which has tilted the scales in the Chandigarh jurisdiction in favour of decree holder landlord is Subudhi 's case. Precedents are law 's device to hold the Present prisoner of the Past and must bind only if squarely covered. Subudhi 's case decided under the Orissa House Rent Control Act, 1958, is not one such. The key word is 'tenant ' and if under the Act the appellant fills the bill definitionally he is immune from eviction when read with section 13. Subudhi (supra) turns on a significantly different definition which cuts down the wide connotation by a tail end qualification. The semantic sweep of section 2 (i) in our Act, by clear contrast takes in a wider group and we have no indication in that judgment whether a provision like section 13 which makes the restriction applicable also to decrees was present in the Act there debated. Therefore, we side step those rulings and go straight to the two provisions and their meaning in the statutory setting. It is too platitudinous to preach and too entrenched to shake, the proposition that rent control legislation in a country of terrible accommodation shortage is a beneficial measure whose construction must be liberal enough to fulfil the statutory purpose and not frustrate it. So construed, the benefit of interpretative doubt belongs to the potential evictee unless the language is plain and provides for eviction. That intendment must, by interpretation, be effectuated. This is the essence of rent control jurisprudence. Section 2(i) reads: "tenant" means any person by whom or on whose account rent is payable for a building or rented land and included a tenant continuing in possession after the termina 144 tion of the tenancy in his favour, but does not include a person placed in occupation of a building or rented land by its tenant, unless with the consent in writing of the land lord, or a person to whom the collection of rent or fees in a public market, cart stand or slaughter house or of rents for shops has been farmed out or leased by a municipal, town or notified area committee: (emphasis added) In this context, we may also read section 13 (1) which is integral to and makes impact upon the meaning of section 2(i) even if there be any marginal obscurity. Eviction of tenants (1) A tenant in possession of a building or rented land shall not be evicted therefrom in execution of a decree passed before or after the commencement of this Act or otherwise and whether before or after the termination of the tenancy, except in accordance with the provisions of this Section, or in pursuance of an order made under section 13 of the Punjab Urban Rent Restriction Act, 1947, at subsequently amended. (emphasis added) The expression 'tenant ' includes 'a tenant continuing in possession after the termination of the tenancy in his favour '. It thus includes, by express provision, a quondam tenant whose nexus with the property is continuance in possession. The fact that a decree or any other process extinguishes the tenancy under the general law of real property does not terminate the status of a tenant under the Act having regard to the carefully drawn inclusive clause. Even here, we may mention by way of contrast that Subudh 's case (supra) related to a statute where the definition in section 2 (5) of that Act expressly included "any per son against whom a suit for ejectment is pending in a court of competent jurisdiction" and more pertinent to the point specially excluded "a person against whom a decree or order for eviction has been made by such a court. " We feel no difficulty in holding that the text, rein forced by the context, especially section 13, convincingly includes ex tenants against whom decrees or eviction might have been passed, whether on compromise or otherwise. The effect of the compromise decree, in counsel 's submission, is that the tenancy has been terminated. No body has a case that the appellant is not continuously in possession. The conclusion is inevitable that he remains a tenant and enjoys immunity under section 13(1). The execution proceedings must, there fore, fail because the statutory road block cannot be removed. Indeed, an application under the Act was filed by the landlord defendant which 145 was dismissed because the ground required by the Act was not made out. We have been told by counsel, and supporting citations have been brought to our notice, that the High Court at Chandigarh has taken the contrary view for some time. It is better to be ultimately right rather than consistency wrong. The interpretation we have given in section 2(i) is strengthened by our conviction that a beneficial statute intended to quieten a burning issue affecting the economics of the human condition in India should be so interpreted as to subserve the social justice purpose and not to subvert it. Even apart from this value vision, the construction we have adopted is sustainable. We have laid down the law on the disputed questions raised before us, but we are not called upon to make any decree pursuant to our decision because, taking the clue from certain observations of the court in the course of the arguments, the parties have come together and reached a fair solution of the problem revolving round the house property. A conflict is best resolved by the parties pursuading themselves to see the ability of continued dispute and enlightened by the law settled the controversy in a manner that promotes the interests of both. We find that both sides in the present case have produced an enlighten settlement and put in the court an agreement to sell the property covered by the appeal by the landlord to the tenant. A copy of the agreement has been put in the record which is annexed as appendix to this Judgment. In this view we dispose of the appeal by formally dismissing it because there is no longer any relief needed in this appeal. ORDER The Judgment having been delivered counsel for the respondent represented that the Agreement, which has been made and appendixed to the Judgment be treated as an undertaking mutually between the parties to the Court. Counsel on both sides have no objection to this course and so we record the Agreement incorporated in the judgment as an undertaking to the Court made by the parties in regard to their respective obligations.

The appellant, an Advocate, tenanted a ' building belonging to tho respondent. The respondent sued the appellant for possession of the premises and by a compromise, the Appellant agreed to vacate the premises by a certain date. A decree in terms thereof was passed. Then the Act came into being which by extension of its operation applied to Chandigrah with effect from 4 11 1972. It was contended that (i) had the decree been passed but a few days later, the Act would have admittedly interdicted the eviction because of Section 13 thereof; and had the decree been made and executed a day before the extension of the Act, the years of litigative procrastination of eviction might have been impossible. The salvation of the appellant is certain if he be a "tenant" within the meaning of the Act and his eviction is certain if the definition of tenant does not cover him in its amplitude and (ii) that the effect of compromise decree is that the tenancy of the appellant has been terminated. Accepting the appeal, ^ HELD: An advocate, under this Act, enjoys special protection. lt is too platitudinous to preach and too entrenched to shake the proposition that rent control legislation in a country of terrible accommodation shortage is a beneficial measure whoso construction must be liberal enough to fulfil the statutory purpose and met frustrate it. So construed, the benefit of interpretative doubt belongs to the potential evictee unless the language is plain and provides for eviction. That intendment must, by interpretation, be effectuated. This is the essence of rent control jurisprudence. [143 E G] The expression 'tenant includes a 'tenant ' continuing in possession after the termination of the tenancy in his favour '. It thus includes, by express provision, a quondam tenant whose nexus with the property is continuance in possession. The fact that a decree or any other process extinguishes the tenancy under the general law of real property does not terminate the status of a tenant under the Act having regard to the carefully drawn inclusive clause. Subudhi 's case ; related to a statute where the definition in section 2(5) of that Act expressly included "any person against whom a suit for ejectment is pending in a court of competent jurisdiction" and more pertinent to the point specially excluded "a person against whom a decree or order for eviction has been made by such a court." [144 E G] (ii) The text, reinforced by the context, especially of section 13, convincingly includes ex tenants against whom decrees for eviction might have been passed, 142 whether on compromise or otherwise. Nobody has a case that the appellant is not continuously in possession. The conclusion is inevitable that he remains tenant and enjoys immunity under section 13 (1) of the Act. The execution proceedings, must therefore fall, because the statutory road block cannot be removed. [A conflict is best resolved by the parties as both sides in the present case have produced an enlightened settlement by an agreement to sell the property in dispute by the respondent to the appellant. [144 G H]

ivil Appeal No. 2873 of 1987. From the Judgment and Order dated 5.8.1987 of the Punjab & Haryana High Court in Civil Revision No. 2209 of 1979. Harbans Lal, S.K. Mehta, Dhruv Mehta and Aman Vachher for the Appellant. Rajinder Sachhar, K.C. Dua and Ms. Manju Chopra for the Respondent. N.S. Das Behl, (Not present) The Judgment of the Court was delivered by 425 RANGANATH MISRA, J. This is a tenant 's appeal by special leave challenging his eviction from a business premises located at Jallandhar. Under a rent note (Exh. A I), the appellant had taken the premises on rent from the respondent landlord. The use to which the premises was intended to be put was running of a cycle and rickshaw repairing shop. As far as relevant, on the allegation that the tenant had put the premises to different use, an application for his eviction was made under section 13(2)(ii)(b) of the East Punjab Urban Rent Restric tion Act, 1949. The Controller found that the appellant had continued the business of repairing of cycles and rickshaws but side by side had for a period of about seven months been selling televisions in the premises but he stopped the same as it was not viable. According to the Controller, this did not constitute user for a purpose other than that for which the premises was leased and he accordingly rejected the peti tion. The appellate authority at the landlord 's instance held that the statutory condition was satisfied and granted eviction. The High Court when moved by the tenant declined to interfere. The short question that arises for consideration is whether there has been a violation of the terms of tenancy by using the premises for a purpose other than that for which the premises had been leased. The tenant did not dispute that he had taken the premises for running a repair shop of cycles and rickshaws. In his statement he said that he had commenced the business of selling the televisions side by side in view of the slump in the cycle and rickshaw repairing business. He also accepted the position that he had not obtained the consent of the landlord when he started the TV business. The landlord has accepted the position that in the rent note it was not written that the respondent would not do any business in the shop in dispute except the cycle or rickshaw repairs. On these facts it has now to be decided as to whether the premises has been used for a purpose other than that for which it had been leased. Reliance was placed on the Full Bench decision of the Punjab High court in Des Raj vs Sham Lal, AIR 1980 P & H 229 where the question for consideration was as to whether when the lease was for the purpose of a shop without anything more specific, user thereof as a godown amounted to change of user. The High Court in course of the discussion in the judgment rightly drew the distinction between resi 426 dential and non residential premises and also classified non residential buildings into known categories like shop, godown, restaurant, cinema, hotel etc. In course of the discussion the Full Bench referred to the decision of this Court in Moti Ram vs State of Madhya Pradesh, ; and came to the conclusion that when the letting out purpose was location of a shop and it .was exclusively used as a godown, it amounted to a change of user. Not much of support is directly available for the resolution of the present dispute from that judgment. Reliance was also placed on a decision of this Court in the case of Mohan Lal vs Jai Bhagwan, ; where the very provision of the East Punjab Act was considered in a case of eviction. The decision of this Court in the case of Maharaj Kishan Kesar vs Milkha Singh, (C.A. No. 1086/64 decided on November 10, 1965) was referred to therein. That again was a decision under the very Act and the dispute related to the allegation of change of user when petrol was sold as an allied business of the avowed purpose of locating the workshop. The Court found. that location of a petrol pump could not be regarded as not being a part of motor workshop business. Rightly, our learned brother Mukharji, J. indicated that the ratio in Maharaj Kishan Kesar 's case did not provide any guideline of general nature. What was said in pars 9 of his judgment is perhaps useful. Our learned Brother quoted the observations of Lord Diplock, J. in Duport Steels Ltd. vs Sirs, and said: "While respectfully agreeing with the said observations of Lord Diplock, that the; Par liament Legislates to remedy and the judiciary interprets them, it has to be borne in mind that the meaning of the expression must be found in the felt necessities of the time. In the background of the purpose of rent legisla tion and inasmuch as in the instant case the change of the user would not cause any mis chief or detriment or impairment of the shop in question and in one sense could be called an allied business in the expanding concept of departmental stores, in our opinion, in this case there was no change of user which at tracted the mischief of section 13(2)(ii)(b). " On that conclusion, the order of eviction was reversed. Letting of a premises can broadly be for residential or commercial purpose. The restriction which is statutorily. provided in section 13(2)(ii)(b) of the Act is obviously one to protect the interests of the landlord .and is intended to restrict the use of the landlord 's premises 427 taken by the tenant under lease. It is akin to the provision contained in section 108(0) of the dealing with the obligations of a lessee. That clause pro vides: 'The lessee may use the property and its products, if. any, as a person of ordinary prudence would use then if they were of his own; but be must not use or permit another to use the property for a purpose other than that for which it was leased . ' A house let for residential purpose would not be available for being used as a shop even without structural alteration. The concept of injury to the premises which forms the foundation of cl. (o) is the main basis for providing cl.(b) in section 13(2)(ii) of the Act as a ground for the tenant 's eviction. The Privy Council in U Po Naing vs Burma Oil Co., AIR 1929 PC 108 adopted the same considera tion. The Kerala High Court has held that premises let out for conducting trade in gold if also used for a wine store would not amount to an act destructive of or permanently injurious to the leased property Simi larly, the Bombay High Court has held that when the lease deed provided for user of the premises for business of fret work and the lessee used the premises for business in plas tic goods, change in the nature of business did not bring about change of user as contemplated in section 108(o) of the The landlord parts with possession of the premises by giving a lease of the property to the tenant for a consider ation. Ordinarily, as long as the interest of the landlord is not prejudiced, a small change in the user would not be actionable. In this case, the premises was let out for running of a repair shop. Along with the repair business, sale of televi sions was temporarily .carried on. We do not think this constituted a change of user within the meaning of section 13(2)(ii)(b) of the Act so as to give a cause of action to the landlord to seek eviction of the tenant. The appeal is allowed and the order of eviction passed by the appellate authority and affirmed by the High Court is vacated and the order of the Controller is restored. Parties are directed to bear their own costs throughout. T.N.A. Appeal allowed.

The appellant had taken the premises on rent from the respondent landlord for running a cycle and rickshaw repair ing shop. In the rent note there was no stipulation that the appellant would not do any business in the shop except the cycle or rickshaw repairs. Along with the repair business the appellant temporarily carried on sale of televisions also in the premises. The landlord filed an application for eviction under section 13(2)(ii)(b) of the East Punjab Urban Rent Restriction Act, 1949 alleging that the tenant had put the premises to different use. The Rent Controller rejected the application by holding that the temporary sale of televisions did not constitute user for a purpose other than that for which the premises was leased. On an appeal filed by the landlord the appellate authority granted eviction by holding that the statutory condition was satisfied. The appeal filed by the tenant against the decision of the appellate authority was dis missed by the High Court. Hence this appeal by the tenant. Allowing the appeal and setting aside the order of eviction, HELD: Letting of a premises can broadly be for residen tial or commercial purpose. The restriction which is statu torily provided in section 13(2)(ii)(b) of the Act is obvi ously one to protect the interests of the landlord and is intended to restrict the use of landlord 's premises taken by the tenant under lease. It is akin to the provision con tained in section 108(o) of the dealing with the obliga 424 tions of a lessee. A house let for residential purpose would not be available for being used as a shop even without structural alteration. The concept of injury to the premises which forms the foundation of clause (o) is the main basis for providing clause (b) in section 13(2)(ii) of the Act as a ground for the tenant 's eviction. [426H, 427A B] The landlord parts with possession of the premises by giving a lease of the property to the tenant for a consider ation. Ordinarily, as long as the interest of the landlord is not prejudiced, a small change in the user would not be actionable. In the instant case, the premises was let out for running of a repair shop. Along with the repair busi ness, sale of televisions was temporarily carried on. This did not constitute a change of user within the meaning of section 13(2)(ii)(b) of the Act so as to give a cause of action to the landlord to seek eviction of the tenant. [427E, F] Mohan Lal vs Jai Bhagwan, ; , applied. Des Raj vs Sham Lal, A.I.R. 1980 P & H 229, held inapplica ble. Moti Ram vs State of Mahdya Pradesh, A.I.R. 1978 S.C. 1594; Maharaj Krishan Kesar vs Milkha Singh, Civil Appeal No. 1086 of 1964 decided on November 10, 1965 (S.C.); Dup port Steel Ltd. vs Sirs, ; U.P. Naing vs Burma Oil Co., A.I.R. 1929 P.C. 108; Raghavan Pillai vs Sainaba Beevi, [1977] Kerala L.T. 417 and Dattatraya vs Gulab Rao, , referred to.

view Petition Nos. 571 586 & 586A of 1985. In Transfer Cases Nos. 52 to 68 of 1982. By Circulation. The Order of the Court was delivered by ORDER We have considered the grounds urged in the Review Petition and since we find no substance in them. the Review Petition are dismissed. PER THAKKAR, J. While it is not agreeable to disagree with the. majority. my conscience commands. and my sense of duty demands. that I should disagree. Disagree with the proposed order dismissing the Review Petitions in limine with the remark that "we find no substance in them", without affording to the Petitioners any opportunity of hearing in the Court to substantiate the grounds urged by them. One of the grounds urged. ground No. 8 in the Petitions, is: "8. That during the course of arguments the parties had proceeded on the assumption that the Hon 'ble Court would 901 decide only the 7 questions framed by the then Hon 'ble Chief Justice and the individual petitions on merits would be dealt with either by the Division Benches of this Hon 'ble Court or by the respective High Courts. It was on this assumption that the parties addressed their arguments and submissions only on those general questions. It is for this reason that written submissions were made only in T.C. No. 55 of 1982 amongst all the Railway matters. None of the Petitioners had been given any opportunity to argue their cases on merits. The judgment under review dismissed all the Transferred Cases and thus all these petitions stand decided on merits also. It is, therefore, necessary that in the interest of justice, the petitioner should be given another opportunity to argue their petitions on merits. This has caused serious prejudice to their cases is apparent from the facts of a few cases reference whereto is made herein after. " It is not possible to say that there is no substance in this ground because no notices have been issued on the Review Petitions and the averments have not been controverted by the other side. So also it is not stated in the majority judgment that the averment is factually untrue. Reference may be made to ground number 9 in Review Petitions Nos. 57 1 to 586A of 1985 which reads as under: ' '9. That it may be submitted 'that the petitioner Shri Narpat Singh had been served with the Office Order identical to the one reproduced in para 3 above and was charged with stoppage of work from 3.2. 1981 and missing from his place of duty and for intimidating and pressurising the loyal employees for not joining duty. The fact is that the petitioner, Narpat Singh is a patient of Asthama and was under the treatment of the Rail way Medical Authorities between December 1980 to 1.2.1981 as outdoor patient. On 2.2. 1981 while on duty as Shed man is DSL/Shed BGKt in shift 6 hours to 14 hours, he developed breathing difficulties and was unable to perform his duties. He obtained sick memo G/92 on 2.2.1981 from GFO/DSL BGKt and while leaving duty proper charge was handed over by the petitioner. He was advised complete rest and sick certifi cate No. 62 of 2.2.1981 for 27 days was submitted. 902 In these circumstances the petitioner could not be treated as on un authorised absence from work from 3.2.1981 when he had obtained G 92 on 2.2.1981 and had sent in his sick certificate and had observed all clue formalities of reporting sick as required under the rules. Had the cases been argued on merits, the petitioner, Narpat Singh would have shown to the Hon 'ble Court as to how he could not be treated on un authorised absence and that the dismissal order has been malafidely issued in a mechanical manner and cannot be substained. " That the matter of Narpat Singh was not argued on its individual merits is correct. Unless the factual averments made in para 9 are shown to be untrue, these may be consid ered adequate to vitiate the impugned order on the ground that it manifests non application of mind and is built on 'no evidence '. This is a good ground to entertain the Review Petition and issue notice to the other side for heating in the Court. In the majority judgment ; (451) paragraph 59 the proposition of law has been enunciat ed that the pleasure under Article 310(1) can be exercised even by an authority specified in the Act or rules made under Article 309 (proviso) in the passage quoted below: "Thus, though trader Article 310(1) the tenure of a govern ment servant is at the pleasure of the President or the Governor, the exercise of such pleasure can be either by the President or the Governor acting with the aid and on the advice of the Council of Ministers or by the authority specified in the Acts made under Article 309 or in rules made under such Acts or made under the proviso to Article 309 and in the case of clause (c) of the second proviso to Article 311 (2), the inquiry is to be dispensed with not on the personal satisfaction of the President or the Governor but on his satisfaction arrived at with the aid and on the advice of the Council of Ministers . " (Emphasis supplied) Serious Constitutional questions, such as the following, arise in this context: When the Constitution advisedly invests powers in regard to the exercise of pleasure on the incumbents of highest executive office can these powers be exercised by any other official, say Divl. Mechani 903 cal Engineer (DME)? By a process of interpretation (and not amendment) can it be so construed that what the President by virtue of Article 310 (1) can do, the DME of the Railway can do by virtue of the same Article? It would virtually amount to amending Article 310 (1) by adding the words "or by any other authority . ". That is to say to rewrite an article in the Constitution. Is this permissible? What is more, the power under Article 310 (1) is exercisable even by the President or the Governor, not on his personal satisfaction, but with the aid and on the advice of the Council of Ministers. Can the same power be exercised by a D.M.E. or any other lower functionary acting on his own, there being no question of his acting with the aid or advice of the council of Ministers? Can the DME who does not even act in the name of the President, surrogate for the President? It is certainly an important Constitutional issue which requires to be examined, but has not been examined, from this perspective though the point was debated. This is another ground to entertain the Review Petition and to issue a notice to the other side for heating in the Court. Another ground for entertaining the Review Petition is this: Will it not be tantamount to speaking in two voices to hold that principles of Natural Justice need not be complied with even in regard to the quantum of punishment to be inflicted on a workman, even though the law declared so far demands that even a black marketeer cannot be black listed without observing the principles of Natural Justice? Is a workman who 'sweats ' for the Nation not entitled to the same treatment as a black marketeer who 'bleeds ' the Nation? 5. An extremely serious and important ground for review also arises in the context of the doctrine enunciated in the following passages ; (522,523), paragraphs 170, 173: "It may be that the railway servants went on these strikes with the object of forcing the Government to meet their demands. Their demands were for their private gain and in their private interest. In seeking to have these demands conceded they caused untold hardship to the public and prejudicially affected public good and public interest and the good and interest of the nation. . . . In the context of an all India strike where a very large, number of railway servants had struck work, the railway services paralysed, loyal workers and superior officers assaulted and intimidated, the country 904 held to ransom, the economy of the country and public inter est and public good prejudicially affected, prompt and immediate action was called for to bring the situation to normal. In these circumstances, it cannot be said that an enquiry was reasonably practicable." The workers certainly have a right to struggle and strive for economic justice in a country the Constitution of which, in the preamble, proclaims it to be a "Sovereign SOCIALIST Secular Democratic Republic". Going on strike in the course of such a struggle cannot be characterized as holding the country to ransom and be frowned upon. Nor can they be condemned as seekers of private gain for endeavouring to remove their economic distress and plight to bring about a just society. And it cannot be said on that account that it is not "reasonably practicable" to hold the inquiry in the case of any workman if there is a country wide general strike by workers. Article 311 (2)(b) was surely not de signed by the Founding Fathers in order to ' enable 'braking ' a strike called in support of workers ' demands for socio economic justice. The issue therefore deserves to be exam ined in the light of this perspective and the Review Peti tions deserve to be admitted. On these grounds and in the light of the other grounds urged in the Review Petitions, the Review Petitions deserve to be heard in the Court. It is therefore directed that the Review Petitions be admitted, notices be issued to the Respondents, and the matters may be placed in the Court for further hearing.

The plaintiff appellant instituted a suit against the respondent on the ground that its inventions entitled "Phytotoxic Compositions" and "Grass Selective Herbicide Compositions" duly patented containing the active ingredient "Butachlor" was infringed by the defendant respondent marketing "Delchor 50" a formulation of "Butachlor" which was alleged to be covered by the plaintiff 's Patent No. 125381. In the written statement, the defendant respondent claimed that the patents were liable to be revoked under s.64(1)(a), (b), (d), (e), (f), (g), (h), (i), (j), (k), (l), and (m) of the . The suit was decreed by the trial Court, but was dismissed by the appellate court. Dismissing the appeal, ^ HELD : 1(i) Under section 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 date of the claim. [128 G H; 129 A] 121 1(ii) 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 the knowledge of the patented product or process either as men of science or men of commerce or consumers. [129 D E] 2. Butachlor which was the common name for CP 53619 was discovered, even prior to 1968 as a Herbicide possessing the property of non toxic 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. Neither Butachlor nor the process of Emulsification was capable of being claimed by the plaintiffs as their exclusive property. [128 C E] In the instant case, the solvent and the emulsifier 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 plaintiffs. The ingredients, the active ingredients 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 discovery was known throughout the world and trying to enfold it in their specification relating to Patent Number 125381. The patent is, therefore, liable to be revoked. [129 F G; 130 A]

ivil Appeal No. 4802 of 1989. From the Judgment and Order dated 7.9.1987 of the Bombay High Court in First Appeal No. 24 of 1986. Anil Dev Singh, C. Ramesh, C.V.S. Rao and P. Parmeshwa ran for the Appellants. S.K. Mehta, Dhruv Mehta, Aman Vachher, Atul Nanda and S.M. Satin for the Respondent. The Judgment of the Court was delivered by K. JAGANNATHA SHETrY, J. Special Leave granted. This case raises yet another variant of a vexed ques tion. Does Section 23(2) of the Land Acquisition Act, 1984 (as amended by Act 68 of 1984) providing for higher solatium proprio rigore apply to award made subsequent to 24 Septem ber 1984 even though the acquisition commenced prior to the said date. The appeal also raises another important question as to the applicability of section 23(IA) providing addi tional amount of compensation to award made in such acquisi tion proceedings. The facts are not in dispute and may be stated as follows: By notification under section 4 of the Land Acquisition Act, 1894 (the 'Act ') published in the Government Gazette on 26 October 1967, the State Government declared its intention to acquire the land belonging to the respondent for estab lishing Naval Air Station Dabolim. On 23 February 1968, notification under section 6 was published in the Gazette. On 5 March 1969 the Land Acquisition Officer declared award determining compensation at the rate of 40 paise per square meter with solatium at 15 per cent. The claimant had sought reference under section 18 of the Act and reference was duly made to the Civil Court (District Judge). On 339 28th May 1985, the Court after investigation of the claim awarded compensation at Rs.3 per square meter. The Court also awarded solatium at 15 per cent and interest at 6 per cent from the date of taking possession till payment of compensation. Not being satisfied, the claimant preferred an appeal to the High Court seeking further enhancement of compensation and also solatium at 30 per cent. This claim was apparently based on the new provisions introduced by the Amending Act 68 of 1984. The High Court accepted the appeal and granted the reliefs in the following terms: "The impugned award dated 28th May, 1986, is modified. The appellant is entitled to the added benefits. In that he shall be entitled to have the compensation at the rate of 12% of the market value from the date of section 4 notification till the date of possession or the date of award, whichever is earlier. The appellant is further entitled to interest at the rate of 9% for the first year from the date of taking over possession and thereafter at the rate of 15% per annum till the date of deposit or payment as the case may be. The appellant shall be entitled to further 15 per cent solatium in addition to the 15 per cent already granted to him. To the extent indicat ed above, the award shall stand modified. " The High Court has thus granted three more reliefs to the claimant: (i) Additional amount at the rate of 12 per cent of the market value from the date of notification under section 4 till the date of taking over possession; (ii) interest at the rare of 9% for the first year from the date of taking possession and 15 per cent for the subsequent years; and (iii) solatium at 30 per cent on the market value. There is no grievance made in this appeal as to the second of the reliefs granted to the claimant. The claimant is entitled to the interest under section 28 of the Act. The challenge is only against the first and the third of the said reliefs. They were evidently given under the amended sections 23(IA) and 23(2) of the Act. We will first take up the question of solatium. On 30 April 1982, the corresponding Bill of the Amending Act 68 of 1984, namely, Land Acquisition (Amendment) Bill 1982, was introduced in Parliament. On 24th September 1984 it became law as the Land Acquisition (Amendment) Act, 68 of 1984, when it received assent of the President. Before the amend ment, Section 23(2) provided solatium at 15 340 per cent on the market value. After amendment by Act 68 of 1984 solatium was raised to 30 per cent on the market val ued. Section 23(2) now reads: "23(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." The question herein is whether the higher solatium is attracted to the present case. Section 23(2) has been given limited retrospectivity by supplying transitional provisions under section 30(2). Section 30(2) reads: "30. Transitional provisions: (1) xxxxxx xxxxxxx xxxxxxxx (2) The provisions of sub section (2) of Section 23 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 any such award under the provisions of the princi pal Act after the 30th day of April, 1982 (the date of introduction of the Land Acquisition (Amendment) Bill, 1984, in the House of the People) and before the commence ment of this Act." The scope of retrospective operation of Section 23(2) was first explained in Kamalajammaniavaru vs Special Land Acquisition Officer, A two Judge Bench held that the award of 30 per cent solatium will apply only where the award appealed against was made by the Collector of Court during the period between 30 April 1982 and 24 September 1984. This decision was rendered on 14 February 1985. Shortly thereafter there was another decision by a three Judge Bench in Bhag Singh vs Union Territory of Chand igarh; , There a contrary view was ex pressed. It was held that even if an award is made by the Collector or Court on or before 30 April, 1982, and an appeal against such award is pending before the High Court or the Supreme Court on 30 April 1982 or is filed subsequent to that date, 30 per cent solatium under section 23(2) should be 341 allowed. In taking that view, Bhag Singh overruled Kamala jammannavaru and approved of the opinion expressed in anoth er three Judge Bench in State of Punjab vs Mohinder Singh, But the recent Constitution Bench in Union of India vs Raghubir Singh, ; has overruled Bhag Singh and Mohinder Singh and reiterated the view ex pressed in Kamalajammanaivaru. Pathak, CJ., speaking for the Court in Raghubir Singh case rounded off his discussion thus (at 782): "We think that what Parliament intends to say is that the benefit of section 30(2) will be available to an award by the Collector or the Court made between the aforesaid two dates or to an appellate order of the High Court or of the Supreme Court which arises out of an award of the Collector or the Court made between the said two dates. The word 'or ' is used with reference to the stage at which the proceeding rests at the time when the benefit under section 30(2) is sought to be extended. If the proceeding has terminated with the award of the Collector or of the Court made between the aforesaid two dates, the benefit of section 30(2) will be applied to such award made between the aforesaid two dates. If the pro ceeding has passed to the stage of appeal before the High Court or Supreme Court, it is at that stage when the benefit of section 30(2) will be applied. But in every case, the award of the Collector or of the Court must have been made between April 30, 1982 and September 24, 1984." In stating thus, the decision has set at rest the con troversy as to entitlement of higher solatium to cases pending as on the date of commencement of the Amending Act. Section 23(2) was held to apply to awards made in between 30 April 1982 and 24 September 1984. Obviously they must be awards in acquisition commenced prior to the said dates. The award may be of the Collector or Court. One or the other must receive thirty per cent solatium on the market value of the land. More important, that the higher solatium could also be given by the High Court or the Supreme Court in appeals against such award. But these decisions do not solve the problem presented here. The award with which we are concerned does not fall within the interregnum i.e. between 30 April 1982 and 24 September 1984. To repeat the facts: The acquisition com menced on 26 October 1967 when the notification under sec tion 4(1) of the Act was published. On 5 March 342 1969 the Collector made the award and on 28 May 1985 the reference court made the award. Both the awards, thus appar ently fall outside the period prescribed under section 30(2). Counsel for the appellant on the aforesaid facts rules out the applicability of section 30(2) in the first place. Secondly, he also ruled out the applicability of section 23(2). The first contention was based on the plain terms of Section 30(2) and the second on the ground that section 23(2) with its isolated splendour is not retrospective in operation. He thus submitted that the claimant 's case could not be saved for higher solatium either under Transitional Provisions or by amended Section 23(2) of the Act and it was gone both ways. This submission reminds us of the words of Shakespeare in the Merchant of Venice, where Luncelot tells Jessica: "Truely then I fear you are damned both by father and mother. When I shun scylla your father, I fail into charybdis your mother. Well, you are gone both ways." (The Merchant of Venice 3.5). The submission that Section 23(2) by itself has no retrospective operation seems to be justified. It is signif icant to note that section 23(2) forms part of a scheme of determining compensation for land acquired under the Act. It provides 30 per cent solatium on the market value of the land in consideration of the compulsory nature of the acqui sition. It thus operates on the market value of the land acquired. The market value of the land is required to be determined at the date of publication of the notification under section 4(1). It cannot be determined with reference to any other date. That has been expressly provided for under section 23(1) of the Act. In the instant case, section 4(1) notification was published on 20 October 1967. The Amending Act 68 of 1984 came into force on 24 September 1984. The amended section 23(2) by itself is not retrospec tive in operation. It can not proprio vigore apply to awards in respect of acquisition proceedings commenced prior to 24 September 1984. If, therefore, section 30(2) does not cover the present case, then amended Section 23(2) has no part to play. This in effect is the result of the plain meaning rule of interpreting Section 30(2) of the Amending Act 68 of 1984. But then, it would seem very odd indeed and anomalous too to exclude the present case from the operation of sec tion 30(2). Section 30(2) is the Transitional 343 Provisions. The purpose of incorporating Transitional Provi sions in any Act or amendment is to clarify as to when and how the operative parts of the enactments are to take ef fect. The Transitional Provisions generally are intended to take care of the events during the period of transition. Mr. Francis Bennion in his book on Statutory Interpretation (14 Edition, p. 442) outlines the purpose of such provisions: "189. Transitional Provisions Where an Act contains substantive, amending or repealing enactments, it commonly also in cludes transitional provisions which regulates the coming into operation of those enactments and modify their effect during the period of transition. Where an Act fails to include such provisions expressly, the Court is required to draw such inferences as to the intended tran sitional arrangements as, in the light of the interpretative criteria, it considers Parlia ment to have intended. " The paramount object in statutory interpretation is to discover what the legislature intended. This intention is primarily to be ascertained from the text of enactment in question. That does not mean the text is to be construed merely as a piece of prose, without reference to its nature or purpose. A statute is neither a literary text nor a devine revelation "Words are certainly not crystals, trans parent and unchanged" as Mr. Justice Holmes has wisely and properly warned. (Town vs Eisher; , , 425, 1918). Learned Hand, J., was equally emphatic when he said. "Stat utes should be construed, not as theorems of Euclid, but with some imagination of the purposes which lie behind them." (Lenigh Valley Coal Co. vs Yensavage, 2 at 553.) Section 30(2) provides that amended provisions of Sec tion 23(2) shall apply, and shall be deemed to have applied, also to, and in relation to, any award made by the collector or Court between 30 April 1982 and 24 September 1984, or to an appellate order therefrom passed by the High Court or Supreme Court. The purpose of these provisions seems to be that the awards made in that interregnum must get higher solatium in as much as to awards made subsequent to 24 September 1984. Perhaps it was thought that awards made after the commencement of the Amending Act 68 of 1984 would be taken care of by the amended Section 23(2). The case like the present one seems to have escaped attention by innocent lack of due care in the drafting. 344 The result would be an obvious anomaly as will be indicated presently. If there is obvious anomaly in the application of law the Court could shape the law to remove the anomaly. If the strict grammatical interpretation gives rise to absurd ity or inconsistency, the Court could discard such interpre tation and adopt an interpretation which will give effect to the purpose of the legislature. That could be done, if necessary even by modification of the language used. [See: Mahadeolal Kanodia vs The Administrator General of West Bengal, The legislators do not always deal with specific controversies which the Court decide. They incorporate general purpose behind the statutory words and it is for the courts to decide specific cases. If a given case is well within the general purpose of the legis lature but not within the literal meaning of the statute, then the court must strike the balance. The criticism that the literal interpretation of Section 30(2), if adhered to would lead to unjust result seems to be justified. Take for example; two acquisition proceedings of two adjacent pieces of land, required for the same public purpose. Let us say that they were initiated on the same day a day sometime prior to 30 April 1982. In one of them the award of the Collector is made on 23 September 1984 and in the other on 25 September 1984. Under the terms of Sec tion 30(2) the benefit of higher solatium is available to the first award and not to the second. Take another example; the proceedings of acquisition initiated, say, in the year 1960 in which award was made on 1 May 1982. Then the amended Section 23(2) shall apply and higher solatium is entitled. But in an acquisition initiated on 23 September 1984, and award made in the year 1989 the higher solatium is ruled out. This is the intrinsic illogicality if the award made after 24 September 1984, is not given higher solatium. Such a construction of Section 30(2) would be vulnerable to attack under Article 14 of the Constitution and it should be avoided. We, therefore, hold that benefit of higher solatium under section 23(2) should be available also to the present case. This would be the only reasonable view to be taken in the circumstances of the case and in the light of the pur pose of Section 30(2). In this view of the matter, the higher solutium allowed by the High Court is kept undis turbed. This takes us to the second question which we have formulated at the beginning of the judgment: Whether the claimant is entitled to additional amount of compensation provided under Section 23(IA) of the Act? This is equally a fundamental question and seemingly not covered by any of the previous decisions of this Court. 345 Section 23(IA) reads as follows: "In addition to the market value of the land, as above provided, the court shall in every case award an amount calculated at the rate of twelve per centum per annum on such market value for the period commencing on and from the date of the publication of the notifica tion under Section 4, sub section (!), in respect of such land to the date of award of the Collector or the date of taking possession of the land, whichever is earlier. Explanation: In computing the period referred to in this sub section any period or periods during which the proceedings for the aquisition of the land were held up on account of any stay or injunction by the order of any court shall be excluded. " The objective words used in this sub section are similar to those that are used in Section 23(2). It enjoins a duty on the Court to award the additional amount at twelve per cent on the market value of the land for the period prescribed thereunder. But this again is a part of the scheme for determining compensation under Section 23(1) of the Act. It also operates on the market value of the land acquired. It is plainly and distinctly prospective in its operation since market value has to be determined as on the date of publica tion of notification under section 4(1). But the legislature has given new starting point for operation of section 23(IA) for certain cases. That will be found from Section 30 sub section l(a) and (b) of the Transitional Provisions. They read as follows: Section 30: Transitional Provisions: (1) The provision of sub section (IA) of Section 23 of the principal Act, as inserted 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 proceeding 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. 346 (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 date of commencement of this Act. " Entitlement of additional amount provided under Section 23(1A) depends upon pendency of acquisition proceedings as on 30 April 1982 or commencement of acquisition proceedings after that date. Section 30 sub section (1)(a) provides that additional amount provided under Section 23(IA) shall be applicable to acquisition proceedings pending before the Collector as on 30 April 1982 in which he has not made the award before that date. If the Collector has made the award before that date then, that additional amount cannot be awarded. Section 30 sub section (1)(b) provides that section 23(l A) shall be applicable to every acquisition proceedings commenced after 30 April 1982 irrespective of the fact whether the Collector has made an award or not before 24 September 1984. The final point to note is that Section 30 sub section (1) does not refer to Court award and the Court award is used only in section 30 sub section (2). In the case before us, on 26 October 1967, the notifica tion under section 4 was issued. On 5 March 1969 the Collec tor made the award. The result is that on 30 April 1982 there was no proceedings pending before the Collector. Therefore, section 30 sub section (1)(a) is not attracted to the case. Since the proceedings for acquisition commenced before 30 April 1982, section 30 sub section (1)(b) is also not applicable to the case. Here, the case is really gone by both ways. It cannot be saved from Scylla or Charybdis. The claimant is, therefore, not entitled to additional amount provided under Section 23( I A). Before we part with the case, it is important that we should refer to two authorities of the High Courts which have taken contrary view. As to the applicability of Section 23(IA) to pending cases, the Karnataka High Court in Special Land Acquisition Officer, Dandeli vs Soma Gopal Gowda, AIR 1986 Karnataka 179 at 183 (FB) has expressed the view that for giving an addi tional amount calculated at the rate of 12 per cent per annum on the market value of the land, no distinction could be made respecting lands acquired before or after the coming into force of the Amending Act. In all pending cases whether on reference or on appeal, the Court is required to apply the provisions of Section '23(1A) in determining compensa tion payable to claimants. For this conclusion the Court relied upon the judgment of this Court in 347 Bhag Singh case. The Bombay High Court in Jaiwant Laxman P. Sardesai etc. vs Government of Goa, Daman and Diu and Ant., AIR 1987 Bom 214 at 217 (FB) has also accepted a similar line of reasoning. In fact the reasons are so much similar, the cases look like twins. Both the High Courts have focussed attention on the terms and phraseology used in Section 30 sub section (1) namely," . . shall apply, and shall be deemed to have applied, also to, and in relation has also been proceedings for acquisition . . ". The conclusion has also been rested on the mandatory words of Section 23(lA). It was said that it enjoins a duty on the court to award the amount in every case and that mandate of the legislature could not be ignored. The decision of this Court in Bhag Singh appears to be the single motive force guiding the approach and reaching the conclusion. But it may be noted that the aforesaid phraseology used in Section 30 sub section (1) is quite similar to that used in Section 30 sub section (2). The scope of those words has already been examined and no more need to be stated in that regard since Bhag Singh has been overruled in Raghubir Singh. The view taken by the High Courts of Karnataka and Bombay therefore, could no longer be cosidered as good law and the said decisions are accordingly overruled. In the result, the appeal is allowed in part. The judg ment of the High Court is modified and the compensation award under Section 23(IA) is deleted. The judgment and decree in other respects are kept undisturbed. ' In the circumstances of the case, we make no order as to costs. Y. Lal Appeal allowed.

This Court rendered a judgment in this case on 31.1.1989 confirming the conviction of both the respondents and reduc ing the sentence of imprisonment from 10 years to 5 years by invoking the proviso to Section 376(2) I.P.C. The petitioner State has sought review of the said judgment. Dismissing the review petitions, this Court, HELD: 1. As per order XL Rule 1 of Supreme Court Rules, 1966, review in criminal proceedings is limited to errors apparent on the face of record. In the instant case, there is no error apparent on the face of the record necessitating review of the judgment. [498F] P.N. Eswara Iyer and Ors. vs Registrar, Supreme Court of India, ; Sow Chandra Kanta and Anr. vs Sheikh Habib; , ; Sheonandan Paswan vs State of Bihar and Ors., , relied on. The very confirmation of the conviction accepting the sole testimony of the victim, rejecting the arguments of the defence counsel, is itself a clear indication that this court was of the view that the character or reputation of the victim has no bearing or relevance either in the matter of adjudging the guilt of the accused or imposing punishment 497 under Section 376 I.P.C. Such factors are wholly alien to the very scope and object of Section 376 and can never serve either as mitigating or extenuating circumstances for impos ing the sub minimum sentence with the aid of the proviso to Section 376(2) of the I.P.C. [499G H] 3. This Court neither characterised the victim, as a woman of questionable character and easy virtue nor made any reference to her character or reputation in any part of the judgment but used the expression "conduct" in the lexigraph ical meaning for the limited purpose of showing as to how she had behaved or conducted herself in not telling any one for about 5 days about the sexual assault perpetrated on her till she was examined on 28.3.1984 by the sub Inspector of Police. The word "conduct" was not used with reference to the character or reputation of the victim. [500B C] 4. This Court is second to none in upholding the decency and dignity of womanhood and this Court has not expressed any view in the judgment that character, reputation or status of a raped victim is a relevant factor for considera tion by the Court while awarding the sentence to a rapist. [500D]

N: Criminal Appeal No. 609 of 1981. Appeal by Special leave from the judgment and Order dated the 22nd July, 1983 of the Allahabad High Court in Criminal Appeal No. 1237 of 1979. O.P. Malhotra and D. Bhandari for the Appellant. V. M. Tarkunde, U.R. Lalit, Dr. B.S. Chauhan and B.B. Singh, for the Respondent. The Judgment of the Court was delivered by THAKKAR, J. A doctor in a Government Hospital was found guilty of demanding and accepting illegal gratification from the father of a patient under his treatment at the Hospital and was convicted for an offence under Section 5 (1) (d) of Prevention of Corruption Act, 1947, and for an offence under Section 161 of Indian Penal Code by the Special Judge, Kanpur. The appeal preferred by the convict, Dr. Ghosh was allowed, and the order of conviction and sentence was set aside by the High Court. The State has called into question the said order of acquittal rendered by the High Court in this appeal by special leave. The High Court allowed the appeal on forming the opinion that Dr. Ghosh (the respondent herein) might have demanded and accepted the amount as and by way of his professional fees inasmuch as a Government doctor was permitted to have private practice of his own as per the relevant rules, though such was not his defence at any stage. Having regard to the facts and circumstances of the case, even the learned counsel for the respondent is unable to support the reasoning which found favour with the High Court. The respondent accused had not offered any such explanation in his statement recorded under Section 313 of the Code of Criminal Procedure. In fact the defence of the respondent before the Sessions Court was that 996 he had never accepted any such amount from PW 3 Babu Lal. It was his case that the story regarding passing of the currency notes was concocted and that he had not accepted any currency notes from PW 3, as alleged by the prosecution. According to him he had been 'framed '. What is more, it is obvious that if the respondent had accepted monetary consideration in respect of a patient being treated at the Government hospital, it could scarcely have been contended that it was a part of permissible private practice and not illegal gratification. The High Court resorted to surmises and conjectures for which there was not the slightest basis, apart from the fact that no such defence was taken and no such plea was ever advanced by the respondent accused. Under the circumstances the decision of the High Court cannot be sustained on the basis of the reasoning which found favour with it. The finding of guilt, recorded by the Sessions Court, will therefore have to be examined afresh on merits, since the High Court has altogether failed to undertake the exercise of scrutinizing and making assessment of the evidence. If only the High Court had performed this function, as usual, and had recorded its finding in regard to the question of reliability and credibility of witnesses, and, after weighing the probabilities, and taking into account the circumstantial evidence, had recorded a finding of fact, as it was expected to do, we would not have been obliged to undertake this function which properly falls within the sphere of the High Court in its capacity as the appellate court. As it is, in the peculiar facts and circumstances of the case, we have no option put to do so here. The prosecution case broadly stated is as under: Respondent was an Orthopaedic Surgeon in the UHM Hospital at Kanpur. He was incharge of the Orthopaedic Department In his capacity as a Government Medical Officer he was allotted an official residence within the campus of the Hospital. As per the then prevailing rules he was permitted consultation practice at his residence in the evening. One Kumari Ramsri, 13 years old daughter of PW 3, Babu Lal, a worker employed in a parachute factory as a packer, was suffering from bone T. B. and was admitted to the UMH Hospital on 18th February 1976. She was referred to the Orthopaedic section on 19th February 1976. She was placed under the treatment of respondent Dr. Ghosh. After about six or seven days respondent asked PW 3 to remove the patient from the hospital saying that she was cured. PW 3 objected saying that the condition of his child had not improved. The respondent asked PW 3 to see 997 him at his residence in the evening. It appears that at the hospital Babu Lal learnt that he would have to pay some money to the respondent, Dr. Ghosh, if he wanted his child to be treated properly. PW 3 therefore paid Rs. 20 to the respondent when he called on him at his residence in the evening as suggested earlier. Thereupon the respondent told PW 3 that his child would be permitted to remain in the hospital for treatment. Even so some seven or eight days later respondent asked PW 3 to remove the child from the hospital. It appears that PW 3 gathered the impression that he would have to pay money to the respondent for obtaining proper treatment at the hospital. PW 3 in this background made a request to the respondent to issue a certificate so that he could get a loan or advance for the medical expenses. The respondent told PW 3 that he would have to pay a sum of Rs. 250 to obtain a certificate to enable him to obtain a loan of Rs. 500. PW 3 refused to accede to the demand. Thereupon the respondent told him to remove the patient from the hospital. In view of what transpired, PW 3 met the respondent on March 13, 1976, and requested him to issue a certificate to enable him to obtain a loan from the factory. The respondent again told him that he would not issue a certificate unless his demand for Rs. 250 was met. PW 3 made entreaties to the respondent but the respondent did not relent. He told him to remove the patient from the hospital. Thereupon PW 3 promised to the respondent that he would make some payment immediately and that the remaining amount would be paid shortly thereafter. PW 3 went back to bring the money. It appears that he felt exasperated and conceived the idea of trapping the respondent at this juncture. He had five currency notes of the denomination of Rs. 10 with him. He noted down the numbers of these notes and carried the sum with him when he again approached the respondent. The respondent accepted the five currency notes but refused to issue a certificate unless the remaining amount of Rs. 200 was paid to him, though PW 3 promised to pay the remaining amount within three or four days. PW 3 was thereupon very much annoyed by the attitude of the respondent and he decided to approach the Vigilance Department. He approached the Vigilance Officer and lodged complaint exhibit KA 8 on March 31, 1976. It appears that he had borrowed Rs. 200 with a view to provide the currency notes for laying a trap. He had carried 20 ten rupee notes with him. In the complaint lodged by him, Exhibit KA 8, he specified the numbers of the 5 ten rupee notes which he had already given to the respondent on the earlier occasion, the numbers of which he had noted down previously. He also specified the numbers of the 20 ten rupee notes provided by 998 him at the time of lodging the complaint. The Superintendent of the Vigilance Department, Shri I.P. Bhatnagar, called his Deputy, Dy. section P. Pandey, and asked him to do the needful in the matter. section P. Pandey asked PW 3 to meet him on April 2, 1976 at 5 30 p. m. in Kaushik Park. Meanwhile, Superintendent Bhatnagar contacted the Director of Vigilance Department and moved the competent authority for the requisite permission. The Commissioner Cum Secretary of the Vigilance Department, Shri Khodaji, granted written permission to lay a trap against respondent Dr. Ghosh. On receiving the sanction Superintendent Bhatnagar directed Dy. section P. Pandey to proceed to lay the trap. It is the prosecution case that thereafter PW 3 contacted Dy. section P. Pandey at Kaushik Park on April 2, 1976 at 5 30 p.m. Two witnesses were called. The currency notes were handed over to PW 1, Inspector Bahadur Singh. Initials were made on the 20 G. C. notes, the notes were treated with Phenophthalin powder and the plan of the trap was explained to PW 3, the public witnesses, and to the members who were to accompany the party. As per the plan, initially, Sham Lall and Thakur Parshad were sent to the consultation room of the respondent on the second floor of his residence. What transpired need not be stated as he has not been examined as a witness. After Sham Lal returned. PW 3, along with PW 2 Constable Bachu Lal, entered the Consultation room. PW 2 was in plain clothes and had posed as the elder brother of PW 3. When both of them entered the Consultation room respondent enquired from PW 3 whether he had brought the money. PW 3 replied in the affirmative. PW 3 then handed over the 20 ten rupee notes which had been treated with powder and the numbers of which had been noted down in the complaint against the respondent. The respondent took these notes in his hands and placed the same in the left front pocket of his bush shirt. Thereafter the respondent took the form on which he was to issue the certificate from P.W. 3 and started filling in the details. The form was a typed one and there were blank spaces which were required to be filled in. The typed portion appeared as under: Certified that Shri/Km.______________________D/o Shri __________________ _______ of ORDANCE PARACHUTE FACTORY, Kanpur has been admitted in the Hospital for the treatment of___________________. He will stay in Hospital for ____________ days. The anticipated expenditure likely to incur is Rs. _________ . Shri________________________ is recommended to draw Medical Advance of Rs.______________________ 999 ________________from_______________________from his employer. Station Kanpur Medical Officer Date: Kanpur The respondent filled in the name of the patient in the first line and mentioned her age (Ramsri, 13) in his own hand by pen. He also mentioned the name of PW 3 (Babu Lal) in the relevant column in the second line. In the fourth line in the blank space he mentioned the name of the disease (T.B. Left Hip). He also mentioned the date of admission in his own hand (18 2 76). Having filled in these blanks he was about to fill up the blank in the fifth line for mentioning the number of days for which the patient was retained in the hospital and to mention the estimated amount of expenditure and to fill up the details in the remaining columns. At this juncture, it is the prosecution case, the members of the raiding party carried out the raid in the wake of a signal given by PW 2 Bachu Lal as per the instructions given at the time of arranging the plan. Since the respondent was interrupted when he was filling up the blanks, he could not complete the form and make his signature. The half filled certificate form, exhibit KA 5, was seized in the presence of the public witnesses. The respondent was asked if he had accepted money from PW 3. The respondent hereupon took out the 20 ten rupee notes from his pocket and handed over the same to Dy. section P. Pandey. The numbers of the currency notes were tallied with the numbers mentioned in complaint, exhibit KA 3, and incorporated in Farad exhibit KA 1. The currency notes were placed in an envelope which was sealed. The hand of the respondent was washed in a cup of solution of Sodium Carbonate in the presence of the witnesses. The solution turned red. The parse of the respondent was searched. The bushshirt put on by the respondent, exhibit KA 22, was also seized and a part of the bush shirt was washed in a solution which thereupon turned red. Thereafter Dy. section P. Pandey made enquiry about the 5 ten rupee notes given by PW 3 on the earlier occasion and carried out the search of the living room of the bungalow which was on the first floor. It is the prosecution case that the respondent provided the key of the almirah which was in the living room and the almirah was opened with that key. Two ten rupees notes were found from that almirah. The numbers of these notes were tallied with two of the five numbers specified in Complaint KA 8. These notes were 1000 also seized and were placed in an envelope which was sealed. Meanwhile, the respondent had fainted. The copy of the Farad prepared at the time of raid was therefore handed over to his wife after obtaining her signature on the Farad in token of the receipt of the copy thereof. Thereafter the investigation was taken over by PW 6 Dy. section P. Tripathi of the Vigilance Establishment, who interrogated the witnesses concerned and recorded the statements in the course of the investigation. The sanction for prosecuting respondent Dr. Ghosh was obtained from the Government of U.P. and the charge sheet against the accused was submitted in due course. At the trial Dr. section P. Pandey could not be examined because he was not alive at the relevant point of time (he was killed in the course of an encounter with dacoits before the trial commenced). Out of the two public witnesses, one, PW 5 Ram Singh, has been examined. The other public witnesses Thakur Prasad has not been examined as his evidence would have been of a repetitive nature. Sham Lal was not examined on the ground that he had been won over by the defence. Apart from complainant, PW 3 Babulal, three of the members of the raiding party viz. PW 1 Bahadur Singh, Inspector Vigilance Department, and PW 2 constable Bachu Lal who had posed as the brother of PW 3 and had accompanied him when he entered the consultation room, were examined at the trial. The defence examined five witnesses. Though the respondent did not himself enter into the witnesses box to give evidence on oath, he was interrogated section 313 of Cr. P.C. He made his oral statement in the court and also submitted a written statement in order to explain the circumstances appearing against him. The learned Special Judge excluded from consideration the evidence of PW 5 Ram Singh in view of the criticism levelled by the defence in regard to his selection. The learned judge however considered the evidence of PW 3 complainant Babulal as reliable. He also relied upon the evidence of PW 1 Inspector Bahadur Singh and PW 2 Constable Bachulal. Taking into account the totality of the evidence including the direct evidence and the circumstantial evidence (which inter alia consisted of the seizure of the incomplete form, KA 5, from the consultation room of the respondent at the time of the raid) and the explanation offered by the respondent in regard to various circumstances appearing against him, the learned Special Judge reached the conclusion that the prosecution had established beyond reasonable doubt that the respondent had demanded and accepted illegal gratification. The learned Special 1001 Judge thereupon convicted the respondent for the offence under Section 161 IPC as also for the offence under Section 5(1) (d) of the Prevention of Corruption Act. He imposed a substantive sentence of Rigorous Imprisonment for two years and imposed a fine of Rs. 5,000 (in default to undergo R.I. for four months). The appeal preferred by the respondent was allowed in the circumstances mentioned earlier in the course of the judgment. For the reasons indicated earlier, the judgment rendered by the High Court is of no assistance and we will have to reach our own conclusion as to whether the learned Special Judge was justified in recording the finning of guilt and convicting the respondent in the aforesaid manner. The learned Special Judge was perfectly justified in making the cautious approach adopted by him in excluding from consideration the evidence of the public witness, PW 5, Ram Singh. We will have also to do likewise and exclude his evidence from consideration to be on the safe side. We will have to examine whether the learned Special Judge was justified in recording the finding of guilt on the basis of the rest of the evidence, and the circumstances appearing against the respondent, taken along with the explanation offered by him. By and large a citizen is somewhat reluctant, rather than anxious, to complain to the Vigilance Department and to have a trap arranged even if illegal gratification is demanded by a Government servant. There are numerous reasons for the reluctance. In the first place, he has to make a number of visits to the office of Vigilance Department and to wait on a number of officers. He has to provide his own currency notes for arranging a trap. He has to comply with several formalities and sign several statements. He has to accompany the officers and participants of the raiding party and play the main role. All the while he has to remain away from his job, work, or avocation. He has to sacrifice his time and effort whilst doing so. Thereafter, he has to attend the court at the time of the trial from day to day. He has to withstand the searching cross examination by the defence counsel as if he himself is guilty of some fault. In the result, a citizen who has been harassed by a Government officer, has to face all these hazards. And if the explanation offered by the accused is accepted by the court, he has to face the humiliation of being considered as a person who tried to falsely implicate a Government servant, not to speak of facing the 1002 wrath of the Government servants of the department concerned, in his future dealings with the department. No one would therefore be too keen or too anxious to face such an ordeal. Ordinarily, it is only when a citizen feels oppressed by a feeling of being wronged and finds the situation to be beyond endurance, that he adopts the course of approaching the Vigilance Department for laying a trap. His evidence cannot therefore be easily or lightly brushed aside. Of course, it cannot be gainsaid that it does not mean that the court should be oblivious of the need for caution and circumspection bearing in mind that one can conceive of cases where an honest or strict Government official may be falsely implicated by a vindictive person to whose demand, for showing favours, or for according a special treatment by giving a go bye to the rules, the official refuses to yield. It is now time to deal with the criticism urged as a matter of course in the context of the police officer leading the raiding party namely that he is an interested witness. This is true, but only to an extent a very limited extent. He is interested in the success of the trap to ensure that a citizen, who complains of harassment by a Government officer making a demand for illegal gratification, is protected and the role of his department in the protection of such citizens is vindicated. Perhaps it can be contended that he is interested in the success of the trap so that his ego is satisfied or that he earns a feather in his cap. At the same time it must be realised that it is not frequently that a police officer, himself being a Government servant, would resort to perjury and concoct evidence in order to rope in an innocent Government servant. In the event of the Government servant concerned refusing to accept the currency notes offered by the complainant, it would not be reasonable to except the police officer to go to the length of concocting a false seizure memo for prosecuting and humiliating him merely in order to save the face of the complainant, thereby compromising his own conscience. The court may therefore, depending on the circumstances of a case, feel safe in accepting the prosecution version on the basis of the oral evidence of the complainant and the police officers even if the trap witnesses turn hostile or are found not to be independent. When therefore besides such evidence there is circumstantial evidence which is consistent with the guilt of the accused and not consistent with his innocence, there should be no difficulty in upholding the prosecution case. The present appears to be a case of that nature. If the circumstantial evidence is of such a 1003 nature that it affords adequate corroboration to the prosecution case, as held by the learned Special Judge, the appeal must succeed. If on the other hand the circumstantial evidence is considered to be inadequate to buttress the oral testimony, the appeal necessarily must fail. Two facts have emerged from the evidence. First, that when the fingers of the accused were dipped in the solution, the liquid turned red, evidencing the presence of phenolpththalein in powder on the fingers of the accused. The second feature of the prosecution case is the seizure of an incomplete form of medical certificate which was half filled in the handwriting of the accused himself. It is not disputed that this document was seized by the Investigating Officer. It is not disputed that the certificate is half filled. A part of it is admittedly filled in the handwriting of the accused himself. It is not disputed that when the blanks in the form were being filled the accused abruptly stopped and did not complete the remaining part of the form. Now, the prosecution version is that illegal gratification was demanded by the accused from the complainant (PW 3, Babulal) for issuing this medical certificate. It is also the prosecution case that when the agreed amount of Rs. 200 was paid to the accused he accepted the currency notes and put the same in the pocket of his bush coat. Thereafter, he started filling the form of medical certificate which was to be issued as and by way of consideration for the illegal gratification paid to him. When he was in the process of preparing this certificate, at the point of time when he had filled it partly, the raiding party arrived upon the pre agreed signal being given. In other words the prosecution case is that it was in these circumstances that a form of medical certificate which was partly filled in by the accused and which was partly incomplete was found on the table of the accused and was seized from his private consultation room. It must be realised that even the most crafty police officer who conspired with the complainant to lay a false case in order to rope in an innocent doctor would not be in a position to obtain a half complete medical certificate partly filled in the handwriting of the accused himself. If the prosecution version is believed, the seizure of the incomplete medical certificate partly filled in by the accused himself leaves no room for doubt that the accusation is true. It is rarely that such a piece of evidence would be available to the prosecution. The fact that the form has been partly filled by the accused himself is admitted in the statement made by him under Section 313 of the Code of Criminal Procedure. It is an undisputed 1004 fact that the medical certificate was being prepared at the request of the complainant by the accused in his own handwriting and that he abruptly stopped midway and left the from half filled and incomplete. The prosecution version pertaining to the circumstances in which this situation arose has already been adverted to. The defence version as to (1) the circumstances in which he started preparing the medical certificate in his own writing and stopped abruptly and (2) the circumstances in which the said half completed certificate happened to fall into the hands of the Investigating Officer, must now be scrutinized with a view to find out whether the version passes the test of probabilities unscathed. And with a view to find out whether the explanation offered by the defence, in order to move away the finger of guilt pointed at him by this incriminating circumstance, is good enough. If the outcome is in favour of the defence, the order of acquittal can be sustained. Not otherwise. This is therefore, one of the crucial circumstances on which, in a way, the entire case turns. Let us now therefore have a close look at the explanation offered by the accused, which may be quoted verbatim for the sake of preciseness: "Once after finishing my round I was returning back. At that time Babulal came to me and told that in the present days of emergency he was not given leave. He requested me to write only this much in the form that his daughter Ram Shri is under my treatment so that he could have leave for attending his daughter. I replied that I will come back after performing an operation. You place the form on table and am also calling for Bed Head Ticket. Having returned from operation theatre I started filling the form and found that the form is incorrect. At that time Babu Lal was not present there. I stopped writing the form and kept the same on the table itself. I can 't say as to how that from reached to the hands of Shri R.N. Pandey. This from is exhibit Ka. 5. Shri R.N. Pandey used to come to Shri B.M. Pandey. " The explanation offered by the respondent does not carry conviction and appears to be highly improbable. The respondent could not have been unaware of the form in which the certificate was to be issued. The from presented to him was a typed form (it has 1005 been reproduced in extenso in the earlier part of the judgment) containing about eight lines with blank spaces which were required to be filled up. He would have immediately realised at a bare glance that it was not the proper form before starting to fill up the form. In any event if he had realised that the form was not a proper form after filling up four gaps, he would have at least conveyed to PW 3 that he could not issue the certificate in that form. It is not even his case that he did so. Besides, there was no point or purpose in keeping the half filled form on his table. Why should he have preserved it at all ? It is inconceivable why he should preserve that half filled form and keep it in his office room on the hospital premises so that it can somehow make its way in the hands of the police. It is also difficult to understand how anyone should know about the existence of this form, steal it, and pass it on to PW 3 or to the police officers so that it could be readily used in order to weave it in the story pertaining to what transpired at the time of the raid. The respondent himself is unable to explain how the half filled form which was lying in his office room in the hospital made its way into the hands of the police officers. Again, it will have to be assumed that the police officers from the very beginning knew that the respondent would not accept the currency notes from the complainant and they would have to 'frame ' him by preparing a Farad in which false recitals regarding seizure of the form were to be incorporated. One does hot come across such co incidences in the ordinary course of life. On probabilities it is well nigh impossible to believe that so many co incidences could have occurred namely, (1) the respondent could not realise that the form was not a correct form till he had filled up the particulars relating to the name of the patient, the date of the admission of the patient (which would have to be ascertained from the record), and the ailment from which the patient was suffering. (2) It is also difficult to visualize that at that point of time on realizing the mistake, instead of tearing 'off ' the form, he would preserve the half completed form, and would go away from the office keeping it on the top of the table, so that some one could conveniently take it away. (3) That such a form should conveniently fall into the hands of somebody inimical to him who could do quick thinking, conceive a design to trap him, and preserve it for future use to implicate him and (4) that such a person would know PW 3 and the police officers and pass it on to them to use it to 'frame ' the respondent. Nobody could have known that such a form would be lying on his table. Even if any member of the staff had found it on the table he would not have realised that 1006 it could be utilised for trapping the respondent through PW 3. It is too much to believe that someone interested in framing the respondent had an easy access to his office room, could enter his office room in the absence of the respondent, and take away such a paper lying on his table. And that such a person would contact PW 3, Babulal, and the police officers, and plant in their mind the idea that this document could be availed of for framing the accused. It does not happen in real life. On the other hand the prosecution version is very natural and probable. The story regarding the demand for Rs. 200 was mentioned in Complaint Ka 14 which was forwarded by the Vigilance Commissioner to the Government for obtaining sanction. The evidence of PW 3, Babulal, and the evidence of PW 2, Police Constable Bachu Lal, who accompanied him goes to show that as soon as the currency notes were handed over by PW 3 to the respondent he started filling up the form. It was at that point of time that the signal was given and the raid materialized. The respondent was caught red handed while actually engaged in filling up the form, now that his demand was met. The form was seized under a Farad and a copy of this Farad was handed over immediately to the wife of the respondent after obtaining her signature on the original Farad in token of having received the copy. This would go to show that there was no room or scope for any manipulation after the police officer left the consultation room of the respondent after the raid. It was but natural for the respondent to start filling up the form as soon as the amount demanded by him was paid. The fact that he had to stop in the midst when he was engaged in completing the form provides a very strong corroboration to the version of PW 2 and PW 3. And when this evidence is weighed in the light of the explanation offered by the respondent, which fails to carry conviction and sounds extremely improbable, the circumstantial evidence provided thereby assumes very great importance. The learned Special Judge was therefore perfectly justified in attaching great importance to this piece of circumstantial evidence. As discussed earlier, it is very difficult to believe that PW 3, a poor mill worker, would go to the length of framing a Medical Officer of the Hospital where his child was taking treatment. On probabilities it is not possible to believe that he would go to the length of securing currency notes to the tune of Rs. 200 to provide the same to the police officers for arranging the trap, and to expose himself to the hazards of becoming a witness in a criminal trial, just in order to rope in the respondent against whom there was no personal enmity. On the other hand it is understandable if he was 1007 exasperated when he felt that his child was being denied proper medical treatment by the doctor who insisted on illegal gratification under one pretext or another. And on account of the strong feeling of injustice it was understandable if he lodged a complaint with the Vigilance Department out of exasperation. The respondent has no other explanation to except and save to the effect that PW 3 must have done it at the instance of one of his ambitious colleagues who was junior to him. This is what the respondent says in his statement in this connection: "Baboo Lal had gone wrongly under this impression that his daughter had not been benefited by the treatment. When she was brought in the hospital her condition was most precarious and was unable to speak. She even was not in a position to tell her grief. The treatment recovered her to this extent that she regained her senses and was able to talk and cry about her pain and grief. Having regained sensibility she started feeling pain and she used to cry. Baboo Lal hardly used to meet me. I could see him in the hospital only once. Whenever I went to check this patient at the time of round Baboo Lal never was there. He never gave me this opportunity to convey him that how much the patient has been benefited and recovered by the treatment. Baboo Lal used to come at evening and used to return back after meeting with doctors. Dr. B. M. Pandey who was my immediate junior used to sit in my office in my absence because we both had a common office. Dr. section P. Bhatnagar Pathologist had checked Kumari Ramsri and his report is present in the file. Dr. B. M. Pandey and Dr. section P. Bhatnagar were close friends. section P. Bhatnagar of Vigilance department is related to I. P. Bhatnagar. Dr. B. M. Pandey and R. D. Pandey Director Vigilance are both residents of Distt. Basti and are collaterals in family. Once Dr. B. M. Pandey had attempted to dislodge me from U. H. M. Hospital and suddenly I got a transfer order. All the ministers, M. L. As and Dy. Ministers who were Pandeys were in the back of Shri B. M. Pandey. My 1008 transfer was stayed by the Court. Meanwhile, Dr. B. M. Pandey was posted in my department. Dr. B. M. Pandey was posted on run way duty. He was (Sic) not (Sic) of beds, but he had raised a dispute regarding allotment of beds. Thereafter Dr. R. Shingal told me that he had been pressurised too much and he allotted ten beds of the Verandh to Dr. B. M. Pandey. But B. M. Pandey was not allotted any bed in the family ward. These beds of family ward remained under me. It might be possible that Baboo Lal usually visited there and had meetings with Dr. Pandey. " So also it is not possible to believe that all the police officers had from the beginning conspired to rope in the respondent by hook or crook and had carried with them the half complete form which was acquired in a fortuitous manner to the consulting room in order to prepare the fictitious Farad at the time of the raid. It is not possible to believe that nothing had transpired at the raid, and yet, an imagined account of the occurrence and the seizure was incorporated in the Farad with a view to falsely implicate the respondent. The explanation of the respondent as to why the police officers should have falsely implicated the respondent is also not convincing. This is what he says: "A person by the name of Nathu had died in police lock up Hahi Police Station. In that case Shri R. K. Shukla and other police officials were involved. A vast enquiry was done in that case. The post mortem of the dead body of Nathu was performed by me. On that day Shri R. N. Pandey met me and presurrised me to give post mortem report to the effect that no reason could be ascertained of causing death. I told him that whatever will be right and truth I would be giving the same in my report. Shri R.N. Pandey told me that enmity with police is not good. About 18 20 police employees were suspended on my report. That case is still pending against the police officials. I had performed the post mortem in Dec. 1974, and the revenge of the same was taken during emergency by Shri R. N. Pandey while having league with Dr. B.M. Pandey by laying a trap on me. Baboo Lal was made a willing stooge." 1009 The incident was a relatively stale one and it is highly improbable that the entire police force would nurse a grievance on this score and wait for such an opportunity. Be it realized that the child of PW 3 was genuinely afflicted with bone T.B. and was a genuine patient at the hospital. The defence version is therefore altogether improbable. The fact that the fingers of the respondent were dipped in the solution and the solution turned into red indicating that the flingers had come in contact with phenolphthalein powder is not disputed by the respondent, but he does not offer any explanation. This all that he says: "Q. No. 11: It has come in the evidence that your fingers, pocket of the shirt from which currency notes were recovered were both separately dipped and washed in the solution of Sodium Carbonate. The colour of the solution turned red. Both the solutions were sealed in separate bottles which are Ext. 24 and Ext. What you have to say in this regard ? Ans: I can 't say of what contents this solution was prepared. When my fingers were got dipped in that solution the colour of the same turned red. My bush shirt had been made to put off by me. In my presence the pocket of the bush shirt was not dipped in the solution. I don 't know whether they had sealed this red solution in bottles or not. " Taking an overall view of the evidence of PW 1, PW 2, PW 3, and the circumstantial evidence, it is not possible to believe that the raid had proved abortive and yet everyone conspired together in order to falsely rope in the respondent. Counsel for the respondent contended that it was not probable that PW 3 would agree to pay Rs. 250 in order to secure a loan of Rs. 500. It must be realised that the amount which was being demanded was in the background of the fact that the complainant felt that his child was not being given proper treatment and unless money was paid to the respondent his child would not get proper treatment. Nor can one be oblivious of the evidence of PW 3 to the effect that he was being asked to remove his child from the hospital even though she had not recovered. Evidently the request for the issuance of the certificate merely provided an opportunity 1010 which was seized upon by the respondent for making PW 3 yield to this demand. Again, the complainant had no option but to agree to give the amount demanded from him or to lay a trap, having regard to the fact that he was feeling that his child would not get proper treatment unless the demand was acceded to. If the complainant was interested in inventing a story nothing could prevent him from inventing the story to the effect that the demand was being made for a smaller amount of say Rs. 50 or so. This circumstance therefore cannot detract from the overall effect of the testimony of PW 3 Baboo Lal and PW 2 Bachu Lal who were present at the time of raid and the clinching circumstance as regards the seizure of the certificate which was admittedly filled in partly by the respondent in his own hand. The evidence of PW 1 and PW 2 as also of PW 3, thus stands fully corroborated by the circumstantial evidence which lends assurance to it. Under the circumstances the finding of guilt and the order of conviction recorded by the learned Special Judge was unexceptionable. The High Court, as we pointed out earlier, set aside this finding under a serious misconception, on an altogether untenable reasoning, which even the counsel for the respondent has not been able to support. Turning to the question of sentence, having regard to the fact that the respondent had to undergo the tension of a pending trial and a pending appeal for six years, and the fact that it will have adverse impact on his employment after 23 years, of service, no useful purpose would be served by imposing a long term of jail sentence. The substantive sentence of two years ' R.I. is, therefore, reduced to one of 6 months ' R.I. The appeal is accordingly allowed, the order of acquittal rendered by the High Court is set aside, and the finding of guilt and the order of conviction recorded by the learned Special Judge is restored, but the sentence is modified to the aforesaid extent. The respondent shall surrender to bail in order to undergo the substantive sentence imposed on him. S.R. Appeal allowed.

The appellants filed a civil suit against the respondents for recovery of certain amount of money and produced some original documents with the plaint. The first respondent filed a complaint against the appellants alleging forgery of his signature on one such document and thereby commission or offences punishable under sections 467 and 471 I.P.C. The appellants objected to maintainability of the criminal action and later moved the High Court for quashing the said proceedings. The appellants contended that in the absence of complaint from the civil court the prosecution was barred in view of section 195 (1)(b)(ii) of the Code of Criminal Procedure. The High Court dismissed tho application and observed that section 463 I.P.C. cannot be construed to include section 467. Allowing the appeal, ^ HELD: The prosecution would not be sustainable. [842 B] Section 195(1)(b)(ii) of the Code of Criminal Procedure provides that no Court shall take cognizance of any offence described in section 463. Of the Penal Code, when such offence is alleged to have been committed in respect of a document produced . in a proceeding in any Court . except on the complaint in writing of that Court. Section 463 of the Penal Code in a sense defines the offence of forgery and the offence which is made punishable under section 467 is in respect of an offence described in section 463. Once it is accepted that section 463 defines forgery and section 467 punishes forgery of a particular category, the provision in section 195(l)(b)(ii) of the Code of Criminal Procedure would immediately be attracted and on the basis that the offence punishable under section 467 of the Penal Code is an offence described in section 463, in the absence of a complaint by the Court the prosecution would not be maintainable. [839 E G, 840 D, E, H, 841 A B] Patel Laljibhal Somabhai vs The State of Gujarat, ; and section L. Goswami vs High Court of Madhya Pradesh ar Jabalpur; , referred to. 837

Civil Appeal No. 812 of 1980 Appeal by special leave from the judgment and order dated the 23rd November, 1979 of the Allahabad High Court in Civil Misc. Writ No 479 of 1978. R.K. Garg, V.J. Francis and S.K. Jain for the Appellant. Shanti Bhushan, R.K Jain, P.R. Jain and Pankaj Kalra for Respondent No. 1. 116 The Judgment of the Court was delivered by FAZAL ALI, J. This appeal by special leave is directed against a judgment dated November 23, 1979 of the Allahabad High Court allowing a writ petition quashing the order of the Rent Control and Eviction officer and remanding the case to him for considering the question afresh in accordance with law and in the light of the observations made by the High Court. The appeal involves a short and simple point but the case appears to have had rather a long and chequered career. Put briefly, the facts of the case fall within a narrow compass so far as the points for decision are concerned. The first respondent, Smt. Rajkumari Jain, inducted Shri Thapalayal as a tenant in the premises in dispute which are situated in the town of Bijnor. The tenant intimated his intention to the Rent Control and Eviction officer to vacate the premises on 25.6.1974 on receipt of the aforesaid application of the tenant a Rent Control Inspector was directed to visit the spot and after visiting the same he reported that the premises in question were likely to fall vacant on 9.6.74. The prescribed authority by its order dated 1.6.74 allotted the premises to the appellant. In fact, the appellant had applied to the authority on 20.5.74 for allotment of the accommodation to him. It appears that these proceedings were taken behind the back of the respondent landlady who was not taken into confidence either by the appellant or by the Rent Control authorities. It was only after the prescribed authority had allotted the premises to the appellant and the respondent landlady came to know of this fact that she moved the prescribed authority for cancellation of the allotment but her prayer was rejected. Thereafter, the landlady filed an appeal before the Additional District Judge, Bijnor which was allowed and the allotment in favour of the appellant was cancelled on the ground that the provisions of section 17(2) of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (hereinafter referred to as the 'Act ') were not complied with. Before narrating further sequence of facts, it may be necessary to examine the relevant provisions of the Act. Section 17(2) of the Act may be extracted thus: "Where a part of a building is in the occupation of the landlord for residential purposes or is released in his favour 117 under clause (b) of sub section (1) of Section to for residential purposes, the allotment of the remaining part thereof under clause (a) of the said sub section (1) shall be made in favour of a person nominated by the landlord " A perusal of this statutory provision would clearly disclose that the object of the Act was that where a tenant inducted by the landlord voluntarily vacates the premises, which are a part of the building occupied by the landlord, an allotment in the vacancy should be made only to a person nominated by the landlord. The dominant purpose to be subserved by the Act is manifestly the question of removing any inconvenience to the landlord by imposing or thrusting on the premises an unpleasant neighbour or a tenant who invades the right of privacy of the landlord. It is obvious that if the tenant has vacated the premises by himself and not at the instance of the landlord, there is no question of the Landlord occupying the said premises because he has got a separate remedy for evicting the tenant on the ground of personal necessity. The statute, however, while empowering the prescribed authority to allot the accommodation, safeguards at least the right of the landlord to have a tenant of his choice. In the instant case, the admitted position seems to be that when the prescribed authority allotted the premises to the appellant, the landlady was not taken into confidence nor was she asked to induct either the appellant or somebody else as the tenant of the premises which were likely to fall vacant or which may have fallen vacant. This was undoubtedly an essential requirement of the provisions of section 17(2) of the Act as extracted above. In these circumstances, there could be no doubt that the order of the prescribed authority allotting the premises to the appellant was completely without jurisdiction and against the plain terms of section 17(2) of the Act. It was in view of this serious legal infirmity that the District Judge allowed the appeal filed by the landlady on 27.1.1976 and cancelled the allotment of the accommodation to the appellant. On 2.2.76 the landlady herself filed an application before the District Magistrate, Bijnor for delivery of possession of the said premises to her but the District Magistrate rejected the application by his order dated 8.3.76 on the ground that as the landlady had not applied for release of the accommodation, she could not be allotted the premises straightaway. On 5.4.76 the District Supply officer, Bijnor directed the counsel for the landlady to nominate a person 118 for allotment of the premises. As against this, the landlady applied for release of the accommodation to her in terms of the provisions of section 16(1) (b) of the Act which runs thus: "16. Allotment and release of vacant building. (1) Subject to the provisions of this Act, the District Magistrate may by order: (a) xx xx (b) release the whole or any part of such building, or any land appurtenant thereto, in favour of the landlord (to be called a release order). " The prayer of the landlady under section 16(1) (b) also appears to have been ignored by the Rent Control authorities and by an order dated 15.4.76, the District Supply officer re allotted the accommodation to the appellant. This led the landlady to file another appeal before the Additional District Judge, Bijnor who by his Order dated 21.9.77 rejected the plea of the landlady, dismissed the appeal and confirmed the order of allotment. The respondent landlady there upon filed a writ petition in the High Court challenged the orders of the District Supply officer as also of the District Judge who had affirmed that order and confirmed the order of allotment in favour of the appellant. The High Court by the impugned order allowed the writ petition and sent the matter back to the Rent Control and Eviction officer to consider the question of allotment afresh in view of the observations Made by the High Court. The appellant then obtained special leave of this Court against the order of the High Court and hence this appeal before us. In support of the appeal, Mr. Shanti Bhushan, learned counsel for the appellant submitted that the High Court had no jurisdiction to interfere with the concurrent finding of fact given by the District Supply officer and the District Judge confirming the allotment in favour of the appellant and that too in a writ jurisdiction. He also submitted that the landlady was not at all in actual physical possession of the premises and had been living outside Bijnor and, there fore, neither the provisions of section 16(1) (b) nor those of section 17(2) of the Act would apply to the facts of the present case. On the other 119 hand, the counsel for the respondent submitted that initially the only question before the Rent Control Authority was whether the allotment should be made to the appellant even though he was not nominated by the landlady under section 17(2) of the Act. It is common ground that the appellant was not a nominee of the landlady and, as discussed above, the District Judge in his first order had quashed the allotment on the ground that the provisions of section 17(2) had not been complied with. It was also argued on behalf of the respondent landlady that the circumstances having changed, she now wanted to stay in Bijnor permanently and as she wanted additional accommodation she had applied to the District Magistrate under section 16(1) (b) for releasing the building in her favour. This application was not at all considered on merits by the District Magistrate or by any court for that matter. If the respondent could succeed in convincing the District Magistrate that a case for release of the entire building was made out, then the question of allotting the premises to the appellant would not have arisen at all. We have gone through the judgment of the High Court in the light of the arguments of the parties and we are inclined to agree with the view taken by the High Court that the mere fact that the lady did not actually reside in the premises which were locked and contained her household effects, it cannot be said that she was not in possession of the premises so as to make section 17(2) inapplicable. Possession by a landlord of his property may assume various forms. A landlord may be serving outside while retaining his possession over a property or a part of the property by either leaving it incharge of a servant or by putting his household effects or things locked up in the premises. Such an occupation also would be full and complete possession in the eye of law. It was further argued by Mr. Shanti Bhushan that the landlady had absolutely no reason to stay in Bijnor because she was staying with her son in some other town. That by itself is hardly a good ground for the landlady who was a widow to sever her connections with her own property. Moreover, we do not want to make any observations on the merits of this matter as the High Court has rightly remanded the case for a fresh decision on all the points involved. So far as the second point is concerned, Viz. , the question of allotment of the premises to the appellant, the High Court was fully 120 justified in quashing the order of the District Supply officer as affirmed by the District Judge because despite several opportunities no attempt had been made to approach the landlady to nominate a tenant. There is no evidence to show that either the prescribed authority or the Rent Control and Eviction officer ever approached the landlady for making a nomination in respect of the premises vacated by the original tenant and she refused to do so. All that the landlady did was to ask for the release of the premises but even if this was refused it was incumbent on the Rent Control authorities to have fulfilled the essential conditions of section 17(2) of the Act before making any allotment in favour of the appellant or for that matter any other person. It was suggested that as the landlady was not living 4 in the premises which were locked up, section 17(2) did not apply. We have already rejected this argument because even occupation of apart of a building by the owner which she may visit off and on is possession in the legal sense of the term and, therefore, it cannot be said that the provision of section 17(2) would not apply and that the Rent Control authorities could make an allotment in favour of any person without giving an opportunity to the landlady or the landlord to exercise her/his privilege of nominating a tenant. We have already pointed out that the object of the Act seems to be to arm the owner with the power of nomination so as to protect him/her from unpleasant tenants or indecent neighbours who may make the life of the owner a hell. Moreover, the conduct displayed by the appellant in this case clearly shows that if he was thrust on the respondent without her being allowed an opportunity to nominate a tenant, it will violate the very spirit and tenor of section 17(2) of the Act. As we are of the opinion that the order of the High Court has to be upheld we refrain from making any further observations on the merits or any aspect of the matter which have to be gone into afresh as directed by the High Court. We find no merit in this appeal which is dismissed with costs quantified at Rs. 1,000/ (Rupees one thousand only.). P.B.R. Appeal dismissed.

The Code of Criminal Procedure, 1973 by section 354(3) provides that when the conviction is for an offence punishable with death, the judgment shall in the case of sentence of death state 'special reasons ' for such sentence. The appellant was charged under section 302 of the Penal Code for having committed the murder of his maternal uncle and his son. The Sessions Judge convicted the appellant for murder and being of the opinion that it was "a terrific double murder" sentenced the appellant to death, The High Court condemned the murders as "cold blooded" and confirmed the conviction and sentence. Allowing the appeal to this Court, limited to the question of sentence. ^ HELD: 1. The sentence of death imposed on the appellant is set aside and he is sentenced to imprisonment for life. [275 F] 2. The reasons given by the Sessions Judge for imposing the death sentence are not 'special reasons ' within the meaning of section 354(3) of the Criminal Procedure Code. It is not certain if he were cognizant of his high responsibility under that provision, that he would have imposed the death sentence. [275 E] 3. It is not understood what is meant by "a terrific murder" as suggested by the Sessions Judge. All murders are terrific and if the fact of the murder being 271 terrific is an adequate reason for imposing the death sentence then every murder shall have to be visited with that sentence. Death sentence will then become the rule, not an exception and section 354(3) would become a dead letter. [272 F G] 4(i). On the question of sentence it is not merely the accused but the whole society which has a stake. [273 B] (ii) After the conviction is recorded, the occasion to apply the provisions of section 235(2) of the Criminal Procedure Code arises. The obligation under this section to hear the accused on the question of sentence is not discharged by putting a formal question to the accused as to what he has to say on the question of sentence. The Judge must make a genuine effort to elicit from the accused all information which will eventually bear on the question of sentence. All admissible evidence is before the Judge but that evidence itself often furnishes a clue to the genesis of the crime and the motivation of the criminal. It is the bounden duty of the Judge to cast aside the formalities of the Court scene and approach the question of sentence from a broad sociological point of view. Questions which the Judge can put to the accused under section 235(2) and the answers which the accused makes are beyond the narrow constraints of the Evidence Act. The Court, while on the question of sentence, is in an altogether different domain in which facts and factors of an entirely different order operate. [273 B; 272 H 273 A; 273 C] In the instant case, the Sessions Judge complied with the form and letter of the obligation which section 235(2) imposes, forgetting the spirit and substance of that obligation. [273 D] 5. It is not possible to appreciate how, after being shot in the chest and receiving the injuries described in the post mortem report, the deceased could have survived for a couple of hours thereafter. There is also no explanation as to why the F.I.R. was not recorded at the Police Station when P.W. 1 went there. It is therefore unsafe to confirm the sentence of death imposed upon the appellant. [273 H. E] 6. It is not the normal function of the High Court to pass judgment on the conduct of lawyers who appear before the lower courts. [275 C] 7. The High Court should have given an opportunity to the two police officers to explain their conduct before making criticism on it. [274 G]

Civil Appeal No. 3066 of 1987. From the Judgment and Order dated 9.7.1986 of the Punjab and Haryana High Court in R.S.A. No. 163 of 1978. Mala Ram Ghana and Dalveer Bhandari for the Appellant. M.S. Gujral and Dr. Meera Aggarwal for the Respondents. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. Special leave granted. The High Court in its judgment and order dated 9th July, 1986, has observed that the question of limitation has been canvassed before the High Court. The High Court expressed the view that there was a lot of conflict between the various High Courts on the interpretation of Article 54 of the Limitation Act which governed the point of limitation. The High Court, however, did not decide this question and expressed the view that due to passage of time prices of lands had gone up sky high and it would be unjust to enforce the agreement of sale entered into. In other words, it appears that without deciding the question whether the claim of the plaintiff was barred by limitation or not, the High Court exercised its discretion in refusing to grant the relief on the ground that there has been good deal of delay and the parties would suffer if specific performance of the agreement was granted. It appears from the facts that in this case the major portion of the agreed price had been paid long time ago and the balance thereof was to be paid at the time of execution of the documents was a sum of Rs. 75 only. It further appears that possession of the premises was with the appellant for all these years in part performance of the agreement. In those circumstances, the principle upon which the High Court refused to exercise its discretion, in our opinion, was not applicable and such discretion was not proper. The High Court exercised discretion on wrong principles. See in this connection Madamsetty Satyanarayana vs G. Yellogi Rao & Two others; , ; Dr. Jiwan Lal & Ors. vs Brij Mohan Mehra & Another, ; and see also the observation in Debendra Nath Mandal vs Sakhilal Kar & Ors., AIR 1950 Calcutta 526 In that view of the matter, we cannot sustain the exercise of discretion in the manner done by the High Court. This, however, does 1101 not decide the matter because the High Court declined to go into the facts and decide the question of limitation on merits, the High Court took the view in exercise of its discretion. Since we are not sustaining the High Court 's exercise of discretion hence the order and the Judgment of the High Court are set aside but the matter is remanded to the High Court for its decision on the merits. The matter should be disposed of by the High Court as early as possible. The appeal is accordingly allowed with no order as to costs. P.S.S. Appeal allowed.

Under section 171 read with section 40 of the United Provinces Tenancy Act, 1939, if a tenant sub lets the land to a 'sub tenant ' and the sub lease continues for more than five years, the 'land holder ' is entitled to eject both the tenant and the sub tanant from the land held by them. How ever, tenants are entitled to retain possession of land for certain periods in terms of provisions of section 295 A of the Act and certain notifications issued by the State Government under section 10 of the Uttar Pradesh Agricultural Tenants (Acquisition of Privileges) (Amendment) and Miscellaneous Provisions Act, 1950, notwithstanding anything contained in any law for the time being in force. The appellant, Hari Shanker, the 'land holder ' of the land in question, filed a suit under section 171 of the United Provinces Tenants Act, 1939 against his 'exproprietory tanant '. Habib, on the ground that he had sub let the land for more than five years to a 'sub tenant ', Ida, in contravention of section 40 of the said Act. The suit was decreed in favour of Hari Shanker and Habib was given the option to apply for ejectment of Ida and resume occupation of the land in terms of the proviso to section 171. on an appeal filed by Ida, the Additional Commissioner set aside the decree and dismissed the suit. Allowing the second appeal filed by Hari Shanker, the Board of Revenue restored the decree of the Trial Court. Ida 's writ petition against that order was dismissed by a Single Judge of the High Court. Meanwhile, Hari Shanker had applied for execution of the decree and the objection filed thereto by Ida was dismissed, though the application for execution itself was still pending. Habib also filed an application against Ida as contemplated by the proviso to section 171 of the Act. Ida 's appeal against the order aforesaid of the Single Judge and the writ petitions filed by Habib and Ida against orders passed in execution proceedings were heard together by the Division Bench of the High Court which allowed them and dismissed the suit of Hari Shanker. 329 Allowing the appeals, ^ HELD: The Division Bench of the High Court mixed up the question of termination of the sub tenancy with the question of recovery of possession. It is common ground that Habib was a "sub tenant" of Hari Shanker in respect of the suit land. He granted a "sub tenancy" to Ida which was from year to year. The "sub tenancy" was created in 1943 and it admittedly continued for a period of more than 5 years. It is not disputed that the said "sub tenancy" was not terminated by Habib in spite of the provisions of section 40 of the United Provinces Tenancy Act, 1939. It may be true that even if the sub tenancy had been terminated Habib might not have been able to recover possession of the suit land from Ida but that does not affect the question of the continuance of the "sub tenancy". As the said "sub tenancy" contravened the provisions of section 40, Hari Shanker was clearly entitled to file a suit as contemplated by section 171 of the said act against Habib as well as Ida on the ground that the tenant Habib has sub let the suit land otherwise than in accordance with the provisions of the said Act, namely, in excess of 5 years. There is, on the record, no defence to that suit which was rightly decreed by the Board of Revenue. [333D H I The question whether Habib is in a position to evict Ida and obtain possession of the suit land is a question which will have to be decided in the application filed by Habib against Ida for the eviction of Ida from the suit land and recovery of possession thereof. Similarly, the question as to whether the appellant, Hari Shanker, has become entitled to execute the decree in the suit to which he is entitled will have to be disposed of in the application filed by Hari Shanker against Habib as well as Ida. All these applications, we understand, are pending before the relevant authorities and they will have to be decided according to law. However, in our opinion, there is no doubt that in the circumstances set out above. Hari Shanker is entitled to the decree which the Board of Revenue passed in his favour and which was upheld by the learned Single Judge. [333H; 334A C]

ivil Appeal No. 1273 of 1979. From the Judgment and Order dated 10.11.1978 of the Gujarat High Court in L.P.A. No. 206 of 1978. T.U. Mehta, G.A. Shah, Mrs. H. Wahi, M.N. Shroff and K.M.M. Khan for the Appellant. S.N. Kacker, Anil Kumar Gupta, Brij Bhushan Sharma and N.P. Mahindra for Respondent No. 1. 1093 V.C. Mahajan, C. Ramesh and Miss A. Subhashini for Respondent No.2. The following Order of the Court was delivered: This appeal by Special leave is against the appellate order of the Division Bench of the Gujarat High Court. Respondent No. 1 was appointed to the Indian Police Service on 4.7. 1969 and has been discharged by the impugned order dated 9.4.1974. After he was appointed by the Union of India he was allotted to the State cadre of Gujarat and the order of discharge has been made on the basis of steps taken by the State of Gujarat. The order of discharge was assailed by filing a writ petition under Article 226 of the Constitu tion. The Single Judge annulled the order. To the Writ petition both the Union of India and the State of Gujarat were party respondents. Against the Single Judge 's decision, two appeals were preferred to the Division Bench. The Divi sion Bench for reasons mostly different from what had been recorded by the learned Single Judge, came to the same conclusion. Before this Court, there is only one appeal by the State of Gujarat and the Union of India has been joined as a respondent. Initially a preliminary objection had been raised regarding the maintainability of the appeal in the absence of any appeal by the Union of India but Mr. Kacker appearing for respondent No. 1 has given up the same. It is, therefore, not necessary to go into that question. The order of discharge read as follows: "Under clause (bb) of Rule 12 of the Indian Police Service (Probation) Rules, 1954, the President hereby discharges Shri A.C. Bhargav, a person appointed to the Indian Police Serv ice, on probation, on the results of the I.A.S. etc. Examination held in 1968, and ,allocated to the service cadre of Gujarat from the said service with effect from the date on which this order is served on the said Shri A.C. Bhargav. " Reference to Rule 12(bb), it was contended on behalf of the respondent, brought into the otherwise innocuous order stigma in sufficient measure warranting a proceeding of the nature contemplated under Article 311(2) of the Constitu tion. It is unnecessary for us to go into that question as in our opinion the view expressed by the High Court is 1094 quite sound. We may refer to the Constitution Bench decision of this Court reported in the case of State of Orissa and Anr. vs Ram Narayan Das, ; wherein this Court considered the order of discharge of a police officer on probation and held that in the case of a probationer obser vation like 'unsatisfactory work and conduct ' would not amount to stigma. The other aspect which has been convassed before us at length is as to whether the respondent should have been treated as a confirmed officer of the cadre at the time the order of discharge was made. Admittedly, the order of dis charge is about five years after the appointment. Rule 3(1) of the Indian Police Service (Probation) Rules, 1954, provides that every person recruited to the service in accordance with Indian Police Service (Appoint ment by Competitive Examination) Regulations, 1955, . shall be appointed to the service on probation for a period of two years. At the relevant time, sub rule (3) of the said Rules provided that the Central Government may, if it so thinks fit in any case or class of cases extend the period of probation. Admittedly, in this case there was no order of extention. It has been contended that no order of extension is necessary to be made as the process of confirmation is not automatic and even if the two year period as provided in Rule 3(1) has expired confirmation would not ipso facto follow and a special order has to be made. Reliance has been placed on a series of decisions of this Court which have held that an order of confirmation has to be made and confirmation would not follow automatically. The position here, however, is somewhat different. While the Probation Rules prescribed an initial period of two years of probation it did not provide any optimum period of probation. Administrative instructions were issued by the Ministry of Home Affairs, Government of India, on 16th March, 1973, indicating the guidelines to be followed in the matter. The relevant portion thereof may be extract ed: ". . (ii) It is not desirable that a member of the service should be kept on probation for years as happens occasionally at present. Save for exceptional reasons, the period of proba 1095 tion should not, therefore, be extended by more than one year and no member of the serv ice should, by convertion, be kept on proba tion for more than double the normal period i.e. four years. Accordingly, a probationer, who does not complete the probationers ' final examination within a period of four years, should ordinarily be discharged from the service. " It is not disputed that the circular of the Home Minis try was with reference to the Indian Police Service (Proba tion) Rules. We have not been shown that these instructions run counter to the rules. It is well settled that within the limits of executive powers under the Constitutional scheme, it is open to the appropriate Government to issue instruc tions to cover the gap where there be any vacuum or lacuna. Since instructions do not run counter to the rules in exist ence, the validity of the instructions cannot be disputed. Reliance has been placed in the courts below on the consti tution Bench Judgment of this Court, and which reported in [ 2968] 1 SCR 111 (Sant Ram Sharma vs State of Rajasthan and anr.) where Ramaswami J. speaking for the Court stated thus: " . . We are unable to accept this argu ment as correct. It is true that there is no specific provision in the Rules laying down the principle of promotion of junior or senior grade officers to selection grade posts. But that does not mean that till statu tory rules are framed in this behalf the Government cannot issue administrative in structions regarding the principles to be followed in promotions of the officers con cerned to selection grade posts. It is true that Government cannot amend or supersede statutory rules by administrative instruc tions, but if the rules are silent on any particular point Government can fill up the gaps and supplement the rules and issue in structions not inconsistent with the rules already framed. We are of the view that the rules read with instructions create a situation as arose for consideration by this Court in the case of State of Punjab vs Dharam Singh, [1968] 3 SCR 1. The Constitution Bench of this Court in that case inter preted the Punjab Educational Service (Provincialised Cadre) Class III Rules and found that there was a maximum limit of three years beyond which the period of probation could not be extended. When an officer appointed initially on proba tion was found to be continuing in service beyond three years without a written order of confirmation, this Court held that it tantamounts to confirmation. In view of what we have stated above we are in argee 1096 ment with the High Court about the combined effect of the rules and instructions. We hold that the respondent stood confirmed in the cadre on the relevant date when he was discharged. For a confirmed officer in the cadre, the Proba tion Rules did not apply and therefore, proceedings in accordance with law, were necessary to terminate service. That exactly was the ratio of the decision in Moti Ram Deka etc. vs General Manager, N.E.F. Railways, Maligaon, Pandu etc. ; , On the analysis indicated above, the net result, therefore, is that the respondent No. 1 had become a confirmed officer of the Gujarat I.P.S. cadre and under rule 12(bb) of the Probation Rules his services could not be brought to an end by the impugned order of discharge. The appeal fails and is dismissed. There will be no order as to costs. N.P.V. Appeal dis missed.

The first respondent was appointed to the Indian Police Service on 4.7.1969 and allotted to the Gujarat State Cadre. He was on probation and there was no order of extention of probation. He was discharged by the impugned order dated 9.4.74. The order of discharge was assailed by the first re spondent. A Single Judge of the High Court annulled the order. Two appeals were preferred by the Union of India and the State to the Division Bench which came to the same conclusion, though for different reasons. The State filed an appeal before this Court, which was resisted by the respondent, contending that reference to Rule 12(bb) of the Indian Police Service (Probation) Rules, 1954 brought into the otherwise innocuous order stigma in sufficient measure warranting a proceeding of the nature contemplated under Article 311(2) of the Constitution of India and that the respondent should have been treated as a confirmed officer of the cadre at the time the order of discharge was made. On behalf of the State it was contended that no order of extension of probation was necessary to be made as the process of confirmation was not automatic and even if the two year period as provided in Rule 3(1) of the Probation Rules had expired, confirmation would not ipso facto follow and a special order had to be made. Dismissing the appeal, this Court, 1092 HELD: 1. The first respondent having become a confirmed officer of the Gujarat IPS cadre, under Rule 12(bb) of the Indian Police Service Rules, 1954 his services could not be brought to an end by an order of discharge since the said Rules had no application for officer confirmed in the cadre. Proceedings in accordance with law were, therefore, neces sary to terminate his service. [1096A C] 2.1 While the Probation Rules prescribed an initial period of two years of probation they did not provide any optimum period of probation. Administrative instructions issued by the Government of India on 16th March, 1973 indi cating the guidelines to be followed in the matter laid down that, save for exceptional reasons, the period of probation should not be extended by more than one year and no member of the service should, by convention, be kept on probation for more than double the normal period i.e. 4 years. [1094F G; 1095A B] 2.2 Within the limits of executive powers under the Constitutional scheme it is open to the apropriate Govern ment to issue instructions to cover the gap where there be any vacuum or lacuna. Since instructions do not run counter to the rules in existence, the validity of the instructions cannot be disputed. [1095C] In the instant case, there was no order of extension and the order of discharge is about five years after the ap pointment. The respondent, therefore, stood confirmed in the cadre on the relevant date when he was discharged. [1096A] Sant Ram Sharma vs State of Rajasthan and Anr., ; ; State of Punjab vs Dharam Singh, ; and Moti Ram Deka etc. vs General Manager, N.E.F. Railways, Maligaon, Pandu etc. ; , , referred to.

Special Leave Petition (Civil) No. 2802 of 1987. 408 From the Judgment and Order dated 24.12. 1986 of the Gujarat High Court in F.A. No. 1379 of 1986. S.K. Dholakia, R.C. Bhatia and P.C. Kapur for the Petition er. C.S. Vaidyanathan for the Respondents. The Order of the Court was delivered by VENKATARAMIAH, J. The question involved in this case is whether a brother of a person who is killed in a motor vehicle accident can claim compensation in a proceeding instituted before a Motor Accidents Claims Tribunal estab lished under the provisions of the (hereinafter referred to as 'the Act '). The High Court of Gujarat has upheld such a claim in this case. This Special Leave Petition is filed against the judgment of the High Court questioning the correctness of the said decision. The brief facts of the case are these. On account of the negligence on the part of the driver of a bus belonging to the petitioner, the Gujarat State Road Transport Corpora tion, Ahmedabad, a boy named Bhanubhai, aged 14 years, was run over by the bus resulting in his untimely death. Ramanb hai and Dineshbhai, who were the brothers of the deceased, instituted a petition before the Motor Accidents Claims Tribunal (Auxiliary), Vadodara, claiming compensation for the death of their brother alleging that they were the heirs and legal representatives of the deceased. The Tribunal awarded a sum of Rs.32,000 as compensation to the claimants and directed the Gujarat State Road Transport Corporation to pay the said amount to the claimants. Against the award of the Tribunal, the Gujarat State Transport Corporation filed an appeal before the High Court of Gujarat under section 110D of the Act. That appeal was dismissed. This Special Leave Petition is filed against the judgment of the High Court. The only point convassed before us in this Special Leave Petition is that the Tribunal and the High Court were in error in awarding compensation in favour of the brothers of the deceased, since in law they were not entitled to any compensation under the provisions of the and in support of the said contention, reliance was placed by the petitioner on the decision of the Madhya Pradesh High Court in Budha vs Union of India and others, A.I.R. 1981 M.P. 151. In the present case the High Court of Gujarat while passing its order has preferred to follow its own decision in Magjibhai 409 Khimji Vira and another vs Chaturbhai Taljabhai and others, A.I.R. 1977 Gujarat 195 in which it had held that all the heirs and legal representatives of the deceased could main tain the claim petition under section 110 A of the Act and had awarded compensation in favour of the nephews of the deceased. On account of the divergence of opinion prevailing in the High Courts on the question involved in this case we have found it necessary to give reasons in support of our decision on this Special Leave Petition. On account of the close association which came to be established between India and Great Britain owing to the British rule which lasted for over two centuries, in the High Courts established in India the English Common Law which was based on principles of justice, equity and good conscience came to be applied wherever they were called upon to award damages or compensation for civil wrongs committed by the defendants in the suits. The application of the English Common Law, however, had to conform to Indian cir cumstances and conditions which necessarily involved a selective application of the English Law in India. "The adoption of the rules of English Law by the Indian Courts" observes M.C. Setalvad in his 'Common Law in India ' (The Hamlyn Lectures, Twelfth Series, Page 53) "was neither automatic nor uncritical. Although they started with a presumption that a rule of English Law would be in accord ance with the principles of justice, equity and good con science, they bore in mind the reservation which was later expressed by the Privy Council in the words 'if found ap plicable to Indian society and circumstances." ' In the course of the application of the principles of the English Law of Torts in India the Indian courts came to recognise and apply the maxim action personalis moritur cum persona a personal action dies with the parties to the cause of ac tion. An action for a tort had to be begun in the joint lifetime of the wrongdoer and the person injured. The devel opment of railways in England, led to a great upsurge in the number of accidents, many of which were fatal. When it was realised that the cause of action for recovery of damages for the death of a person caused by the wrongful act of another person did not survive on the death of the person to his legal representatives in England as a measure of law reform the was passed for compen sating the families of persons killed by accidents. That Act provided that "whensoever the death of a person shall be caused by wrongful act, neglect, or default, and the act, neglect, or default is such as would (if death had not ensued) have entitled the party injured to maintain an action and recover damages in respect thereof, then and in every such case the person who would have been liable if death had not ensued shall be 410 liable to an action for damages, notwithstanding the death of the person injured". The said Act further provided that "every such action shall be for the benefit of the wife, husband, parent, and child of the person whose death shah have been so caused, and shall be brought by and in the name of the executor or administrator of the person deceased; and in every such action the jury may give such damages as they may think proportioned to the injury resulting from such death to the parties respectively for whom and for whose benefit such action shall be brought; and the amount so recovered, after deducting the costs not recovered from the defendant, shall be divided amongst the before mentioned parties in such shares as the jury by their.verdict shall find and direct. " Within a few years after the passing of the said English Fatal Accidents Act, 1846, the Fatal Acci dents Act, 1855 came to be passed on the 27th of March, 1855 in India. This Act contains in all five sections. Its pream ble runs thus: "Whereas no action or suit is now maintainable in any Court against a person who, by his wrongful act, neglect, or default, may have caused the death of another person, and it is often times right and expedient that the wrong doer in such case should be answerable in damages for the injury so caused by him. It is enacted as follows: " Sections 1A and 2 of that Act which are relevant for our present purpose read thus: "1A. Whenever the death of a person shall be caused by wrongful act, neglect, or default, and the act, neglect or default is such as ' would (if death had not ensued) have entitled the party injured to maintain an action and recover damages in respect thereof, the party who would have been liable if death had not ensued, shall be liable to an action or suit for damages, notwithstanding the death of the person injured, and although the death shall have been caused under such circumstances as amount in law to felony or other crime. Every such action or suit shall be for the benefit of the wife, husband, parent and child, if any, of the person whose death shall have been so caused, and shall be brought by and in the name of the executor, administrator or representative of the person deceased; 411 and in every such action, the Court may give such damages as it may think proportioned to the loss resulting from such death to the parties respectively, for whom and for whose benefit such action shall be brought, and the amount so recovered, after deducting all costs and expenses, including the costs not recov ered from the defendant, shall be cleivided amongst the before mentioned parties, or any of them, in such shares as the Court by its judgment or decree shall direct. Provided always that not more than one action or suit shall be brought for and in respect of the same subject matter of com plaint: Provided that in any such action or suit the executor, administrator or represen tative of the deceased may insert a claim for, and recover any pecuniary loss to the estate of the deceased occasioned by such wrongful act, neglect or default, which sum, when recovered, shall be deemed part of the assets of the estate of the deceased." (emphasis added) The comparison between the English Fatal Accidents Act, 1846 and the Indian shows that they are almost identical insofar as the persons for whose benefit action for compensation could be brought on the death of a person, and they are, wife, husband, parent and child of the deceased. The English law was, however, modi fied insofar as the above question was concerned by the Fatal Accidents Act, 1959. Section 1 of that Act provides that the persons for whose benefit and by whom an action may be brought under the Fatal Accidents Act, 1846 shall include any person who is, or is the issue of a brother, sister, uncle or aunt of the deceased person and in deducing any relationship for the purposes of the said Act it further provides that (a) an adopted person should be treated as a child of the person or the persons by whom he was adopted and not of the child of any other person; and subject there to (b) any relationship by affinity should be treated as a relationship by consanguinity, any relationship of the half blood as a relationship of the whole blood and the step child of any person as a child; and (c) an illegitimate person should be treated as a legitimate child of his mother and reputed father. After the above Act was passed in 1959 in England there came to be appointed a Commission, called the Royal Commission on Civil Liberty and Compensation for Personal Injury under the Chairman 412 ship of Lord Pearson in the year 1973 to consider to what extent, in what circumstances and by what means compensation should be payable in respect of personal injury (including ante natal injury) suffered by any person (a) in the course of employment; (b) through the use of a motor vehicle or other means of transport; (c) through the manufacture, supply or use of goods or services; (d) on premises belong ing to or occupied by another or (e) otherwise through the act or omission of another where compensation under the present law is recoverable only on proof of fault or under the rules of strict liability having regard to the cost and other implications of the arrangements for the recovery of compensation, whether by way of compulsory insurance or otherwise. During the period when the Royal Commission was still collecting evidence to prepare its Report the Fatal Accidents Act, 1976 'which was a consolidating Act incorpo rating the provisions of the Fatal Accidents Acts 1846 to 1959 was brought into force on September 1, 1976 in England. The Royal Commission submitted its report in March, 1978. After considering the evidence placed before it on the law prevailing in many of the countries the Pearson Commission recommended as follows: "399. Claims for damages following death may be made under the present law on behalf of the relatives of the deceased and on behalf of his estate. The relatives ' claim for pecuniary Loss. An action may be brought on behalf of certain dependent relatives of the deceased for pecuniary loss (lost dependency) under the Fatal Accidents Acts in England, Wales and Northern Ireland. In Scotland, the equivalent action is for loss of support and funeral expenses under the Damages (Scotland) Act 1976. The entitlement to claim. Claims under the Fatal Accidents Acts may be made on behalf of the deceased 's spouse, parent, grandparent, child, grandchild, broth er, sister, uncle, aunt, and in the case of the last four relatives their issue. Rela tionships by marriage are treated as blood relationships; a legally adopted child is treated as a natural child; and an illegiti mate child is treated as the legitimate child of his mother and reputed father. 'Half ' and 'step ' relationships 413 are treated as full relationships. In Scotland, those entitled to claim damages for loss of support also include all ascendants and descendants; any person accept ed by the deceased as a child of his family (whether or not legally adopted); and a di vorced spouse. The full list, contained in Schedule I to the Damages (Scotland) Act, 1976, is as follows: a. any person who immediately before the deceased 's death was the spouse of the de ceased; b. any person who was a parent or child of the deceased; c. any person not falling within paragraph b above who was accepted by the deceased as a child of his family; d. any person who was an ascendant or descend ant (other than a parent or child) of the deceased; e. any person who was, or was the issue of, a brother, sister, uncle or aunt of the de ceased; and f. any person who, having been a spouse of the deceased, had ceased to be so by virtue of a divorce. We think that there is a good case for extending the present entitlement in England, Wales and Northern Ireland to conform with Scots law. We agree with the Law Commission that a child accepted by the deceased and maintained by him as a 'child of the family ', even though not legally adopted, has at least as good a claim to damages for lost dependency as, say, a step child; and that where a di vorced spouse can demonstrate dependency on the deceased (if, for example, he or she has been awarded maintenance payments) he or she should also be able to claim damages. The inclusion under Scots law of all ascendants and descendants further means that claims by a dependent great grandparent or great grand child can be considered. Although the likeli hood of such claims is in practice remote, we see no reason why they should in principle be excluded. 414 404. We recommend that the relatives entitled to claim damages for lost dependency in Eng land, Wales and Northern Ireland should be the same as those entitled to claim damages for loss of support under the Damages (Scotland) Act, 1976." From the recommendation of the British Royal Commission. which is extracted above, it is seen that the Royal Commis sion recommended that the area of entitlement to damages following death should be expanded so as to include a larger number of relatives. In our country the FataI Accidents Act, 1855 has remained unamended. but we have still to consider the effect of the amendment of the Act, i.e., on the . But, before examining the relevant provisions of the Act it is necessary to refer to the 85th Report of the Law Commission of India on claims for compensation under Chapter VIII of the Act which was submitted as late as May, 1980. The Law Commission of India after taking into consideration the differences of opinion prevailing in the various High Courts on the ques tion of the persons who should be entitled to claim compen sation on the death of a person, recommended that the enti tlement to such compensation should be confined to the spouse, parent and children of the deceased as specified in the overlooking the amendments made in England and other countries by expanding the list of relatives who are entitled to claim compensation on the death of a person. It is surprising that the Law Commission of India recommended that the provisions of the Fatal Acci dents Act, 1855 should be adhered to insofar as the persons who were entitled to claim compensation was concerned. We shall now proceed to consider the effect of the amendment of the Act insofar as the question of compensation payable on the death of a person as a result of a motor vehicle acci dent is concerned. It is submitted that the provisions in Chapter VIII of the Act to which we shall presently refer are merely proce dural in character under which an alternative forum is created for deciding the question of compensation payable in respect of injuries and death caused on account of motor vehicles accidents and that they have not modified in any manner the substantive law governing the said question. In other words it is argued that the principles contained in the Law of Torts, as modified by the , alone would govern the said question even now. In support of the above submission reliance is placed on the decision of this Court in Minu B. Mehta and Another vs Balkrishna Ramchandra Nayan and Another, [1977] 2 S.C.R. 886. In 415 that case that Court affirmed the finding of the High Court that the motor vehicle accident which was the cause of the death in that case had happened on account of the negligence of the driver of the vehicle and hence damages were payable to the claimant therein and at page 894 this Court observed that the said finding was sufficient to conclude the judg ment but the Court felt that it was desirable to deal with the question of law that had been dealt with at considerable length by the High Court as to whether it was incumbent on the claimant to prove negligence on the part of the driver of the motor vehicle before he would be entitled to compen sation. The High Court had in the course of its judgment after upholding that the driver was negligent, observed that having regard to the changed conditions of modern society where a large number of motor vehicles were put on road thus exposing innocent third parties to grave accidents very often resulting in injuries to their lives and limbs, it was necessary in public interest to take the view that proof of negligence was unnecessary on the part of the drivers of the motor vehicles before claiming compensation. The learned Judges of this Court were, however, of the view that the above observation was inconsistent with the law of the land and that no damages could become payable without proof of negligence on the part of the driver of the motor vehicle involved in the accident. They further observed that the provisions of Chapter VIII of the Act were merely procedural and had not altered the substantive law. With great respect it should be observed that the observations of this Court on the above question were in the nature of obiter dicta since as already stated there was no necessity to go into the question whether proof of negligence on the part of the driver of the motor vehicle was necessary or not to claim damages under Chapter VIII of the Act because it had been found both by the High Court and this Court that such negli gence had been infact established. In the case before us, however, it is necessary to examine the provisions of Chap ter VIII of the Act to ascertain whether there has been any modification by necessary implication of the provisions of the insofar as the persons who are entitled to claim compensation on account of motor vehicles accidents, is It is true that Chapter VIII of the Act provides for an alternative forum for realisation of compensation payable on account of motor vehicles accidents but as we shall present ly show it is not correct to say that the said provisions in Chapter VIII of the Act are merely procedural. When the was enacted there were no 416 motor vehicles on the roads in India. Today, thanks to the modern civilization, thousands of motor vehicles are put on the road and the largest number of injuries and deaths are taking place on the roads on account of the motor vehicles accidents. In view of the fast and constantly increasing volume of traffic, the motor vehicles upon the roads may be regarded to some extent as coming within the principle of liability defined in Rylands vs Fletcher, [1868] LR. 3 H.L. 330, 340. From the point of view of the pedestrian the roads of this country have been rendered by the use of the motor vehicles highly dangerous. 'Hit and run ' cases where the drivers of the motor vehicles who have caused the accidents are not known are increasing in number. Where a pedestrian without negligence on his part is injured or killed by a motorist whether negligently or not, he or his legal repre sentatives as the case may be should be entitled to recover damages if the principle of social justice should have any meaning at all. In order to meet to some extent the respon sibility of the society to the deaths and injuries caused in road accidents there has been a continuous agitation through out the world to make the liability for damages arising out of motor vehicles accidents as a liability without fault. In order to meet the above social demand on the recommendation of the Indian Law Commission Chapter VIIA was introduced in the Act. Sections 92 A to 92 E of the Act are to be found in Chapter VIIA. Section 92 E of the Act provides that the provisions of Chapter VIIA shall have effect notwithstanding anything contained in any other provision of the Act or of any other law for the time being in force. Section 92 A of the Act provides that where the death or permanent disable ment of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall, or, as the case may be, the owners of the vehicles shall, jointly and severally, be liable to pay compensation in respect of such death or disablement in accordance with the provisions of the said section. The amount of compensation which is payable thereunder in re spect of the death of any person is a fixed sum of fifteen thousand rupees and the amount of compensation payable under it in respect of the permanent disablement of any person is a fixed sum of seven thousand and five hundred rupees. Sub section (3) of section 92 A of the Act provides that in any claim for compensation under sub section (1) of section 92 A, the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person. It is thus seen that to a limited extent relief has been granted under section 92 A of the Act to the legal representatives of the victims who have died on 417 account of motor vehicles accidents. Now they can claim Rs. 15,000 without proof of any negligence on the part of the owner of the vehicle or of any other person. This part of the Act is clearly a departure from the usual common law principle that a claimant should establish negligence on the part of the owner or driver of the motor vehicle before claiming any compensation for the death or permanent disa blement caused on account of a motor vehicle accident. To that extent the substantive law of the country stands modi fied. The special provisions contained in section 109 A to section 109 C of the Act providing for a scheme for granting relief to victims or the legal representatives of victims of 'hit and run ' motor vehicle accident cases is another novel effort on the part of the Government to remedy the situation created by the modern society which has been responsible for introducing so many fast moving vehicles on roads. Now we shali analyse the provisions of Chapter VIII of the Act which deals with the insurance of motor vehicles against third party risk. Sections 93 to 111 A are in that Chapter. The Act insists that the owner of a motor vehicle should take out an insurance policy to cover third party risk except in some specified cases. Section 102 of the Act provides that notwithstanding anything contained in section 306 of the , the death of a person in whose favour a certificate of insurance has been issued, if it occurs after the happening of an event which has given rise to a claim under the provisions of Chapter VIII of the Act shall not be a bar to the survival of any cause of action arising out of the said event against his estate or against the insurer. The death of an owner of a motor vehicle which is involved in a motor vehicle accident in whose favour a certificate of insurance has been issued is thus no longer a bar to the survival of any cause of action arising out of the said event. Section 110 of the Act provides for the establishment of Claims Tribunals. It provides that a State Government may by notification in the Official Gazette, constitute one or.more Motor Accidents Claims Tribunals for such areas as may be specified in the notification for the purpose of adjudicating upon claims for compensation in respect of accidents involving the death of or bodily injury to, persons arising out of the use of motor vehicles, or damages to any property of a third party so arising, or both. Section 110 F of the Act bars jurisdiction of Civil Courts where any Claims Tribunal has been consti tuted for any area to entertain any question relating to any claim for compensation which may be adjudicated upon by the Claims Tribunal for that area. On the occurrence of any motor vehicles accident, an application for compensation arising out of it can be made before the Claims Tribunal. Section 110~A of the Act which is material for the purpose of this case reads thus: 418 "110 A. Application for compensa tion. (1) An application for compensation arising out of an accident in the nature specified in sub section (1) of section 110 may be made (a) by the person who has sustained the in jury; or (aa) by the owner of the property; or (b) where death has resulted from the acci dent, by all or any of the legal representa tives of the deceased; or (c) by any agent duly authorised by the person injured or all or any of the legal representa tives of the deceased, as the case may be. Provided that, where all the legal representatives of the deceased have not joined in any such application for compensa tion, the application shall be made on behalf of or for the benefit of all the legal repre sentatives of the deceased and the legal representatives who have not so joined shall be impleaded as respondents to the applica tion. (2) Every application under sub section (1) shall be made to the Claims Tribu nal having jurisdiction over the area in which the accident occurred, and shall be in such form and shall contain such particulars as may be prescribed. Provided that where any claim for compensation under section 92A is made in such application, the application shall contain a separate statement to that effect immediately before the signature of the applicant. (3) No application for such compensa tion shall be entertained unless it is made within six months of the occurrence of the accident: Provided that the Claims Tribunal may entertain the application after the expiry of the said period of six months if it is satis fied that the applicant was prevented by sufficient cause from making the application in time. " 419 Clauses (b) and (c) of sub section (1) of section 110 A of the Act provide that an application for compensation arising out of an accident may be made where death has resulted from the accident by all or any of the legal repre sentatives of the deceased or by any agent duly authorised by all or any of the legal representatives of the deceased. The proviso to sub section (1) of section 110 A provides that where all the legal representatives of the deceased have not joined in any such application for compensation, the application shall be made on behalf of or for the bene fit of all the legal representatives of the deceased and the legal representatives who have not so joined shall be im pleaded as respondents to the application. The expression 'legal representative ' has not been defined in the Act. Section 2(11) of the Code of Civil Procedure, 1908 defines 'legal representative ' as a person who in law represents the estate of a deceased person and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representative character the person on whom the estate devolves on the death of the party so suing or sued. The above definition, no doubt, in terms does not apply to a case before the Claims Tribunal but it has to be stated that even in ordinary parlance the said expression is understood almost in the same way in which it is defined in the Code of Civil 'Procedure. A legal repre sentative ordinarily means a person who in law represents the estate of a deceased person or a person on whom the estate devolves on the death of an individual. Clause (b) of sub section (1) of section 110 A of the Act authorises all or any of the legal representatives of the deceased to make an application for compensation before the Claims Tribunal for the death of the deceased on account of a motor vehicle accident and clause (c) of that sub section authorises any agent duly authorised by all or any of the legal representa tives of the deceased to make it. The proviso to sub section (1) of section 110 A of the Act appears to be of some sig nificance. It provides that the application for compensation shall be made on behalf of or for the benefit of all the legal representatives of the deceased. Section 110 A(1) of the Act thus expressly states that (i) an application for compensation may be made by the legal representatives of the deceased or their agent and (ii) that such application shall be made on behalf of or for the benefit of all the legal representatives. Both the persons or person who can make an application for compensation and the persons for whose benefit such application can be made are thus indicated in section 110 A of the Act. This section in a way is a substi tute to the extent indicated above for the provisions of section 1A of the which provides that "every such action or suit shall be for the benefit of the wife, husband, parent and child, if any, of the person whose death shall have 420 been so caused, and shall be brought by and in the name of the executor, administrator or representative of the person deceased. " While the provides that such suit shall be for the benefit of the wife, husband, parent and child of the deceased, section 110 A(1) of the Act says that the application shall be made on behalf of or for the benefit of the legal representatives of the de ceased. A legal representative in a given case need not necessarily be a wife, husband, parent and child. It is further seen from section 110 B of the Act that the Claims Tribunal is authorised to make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid. This provision takes the place of the third para graph of section 1A of the which provides that in every such action, the Court may give such damages as it may think proportioned to the loss resulting from such death to the parties respectively, for whom and for whose benefit such action shall be 'brought. Persons for whose benefit such an application can be made and the manner in which the compensation awarded may be distributed amongst the persons for whose benefit the application is made are dealt with by section 110 A and section 110 B of the Act and to that extent the provisions of the Act do supersede the provisions of the in so far as motor vehicles accidents are concerned. These provisions are not merely procedural provisions. They substantively affect the rights of the parties. As the right of action created by the was "new in its species, new in its quality, new in its principles, in every way new" the right given to the legal representatives under the Act to file an application for compensation for death due to a motor vehicle accident is equally new and an enlarged one. This new right cannot be hedged in by all the limitations of an action under the . New situa tions and new dangers require new strategies and new reme dies. Amongst the High Courts in India there is a cleavage in the opinion as regards the maintainability of action under section 110 A of the Act by persons other than the wife, husband, parent and child of the person who dies on account of a motor vehicle accident. All these cases are considered by the High Court of Gujarat in its decision in Magjibhai Khiraji Vira and another vs Chaturbhai Taljabhai and others (supra). The first set of cases are those which are referred to in paragraph 5 of the above decision which lay down that every claim application for compensation arising out of a fatal accident would be governed by the substantive provi sions of sections 1A and 2 of the 1855 Act and no dependent of the deceased other than the wife, husband, pa 421 rent or child would be entitled to commence an action for damages against the tort tensors. Amongst these cases are P.B. Kader and others vs Thatchamma and others, A.I.R. 1970 Kerala 241 and Dewan Hari Chand and others vs Municipal Corporation of Delhi and another, A.I.R. 1973 Delhi 67. The second group of cases are those referred to in paragraph 6 of the decision of the Gujarat High Court. They are Perumal vs Ellusamy Reddiar, and the Vanguard Insurance Co. Ltd. vs Hanumantha Rao, Pradesh). These cases lay down that while the compensation payable under section 1A of the is restricted to the relatives of the deceased named therein the compensation payable under section 2 thereof may be awarded in favour of the representatives of the deceased who are entitled to succeed to the estate of the deceased. The third group of cases are those referred to in paragraph 7 of the judgment of the Gujarat High Court. They are Mohammed Habibullah and another vs K. Seethammal, A.I.R. 1967 Mad. 123; Veena Kumari Kohli vs Punjab Roadways, and Smt. Ishwar Devi Malik vs Union of India, A.I.R. 1969 Delhi 183 which take the view that a claim for compen sation arising out of the use of a motor vehicle would be exclusively governed by the provisions of sections 110 to 110 F of the Act and bears no connection to claims under the 1855 Act and the Claims Tribunal need not follow the princi ples laid down under the latter Act. Having considered all the three sets of decisions referred to above, Ahmadi, J. who wrote the judgment in Megjibhai Khimji Vira and another vs Chaturbhai Taljabhai and others (supra) came to the conclusion that an application made by the nephews of the deceased who died on account of a motor vehicle accident was clearly maintainable under section 110 A of the Act. We feel that the view taken by the Gujarat High Court is in consonance with the principles of justice, equity and good conscience having regard to the conditions of the Indian society. Every legal representative who suffers on account of the death of a person due to a motor vehicle accident should have a remedy for realisation of compensa tion and that is provided by sections 110 A to 110 F of the Act. These provisions are in consonance with the principles of law of torts that every injury must have a remedy. It is for the Motor Vehicles Accidents Tribunal to determine the compensation which appears to it to be just as provided in section 110 B of the Act and to specify the person or per sons to whom compensation shall be paid. The determination of the compensation payable and its apportionment as re quired by section 110B of the Act amongst the legal repre sentatives for whose 422 benefit an application may be filed under section 110 A of the Act have to be done in accordance with well known prin ciples of law. We should remember that in an Indian family brothers. sisters and brothers ' children and some times foster children live together and they are dependent upon the bread winner of the family and if the bread winner is killed on account of a motor vehicle accident, there is no justification to deny them compensation relying upon the provisions of the which as we have already held has been substantially modified by the provi sions contained in the Act in relation to cases arising out of motor vehicles accidents. We express our approval of the decision in Megjibhai Khimji Vira and another vs Chaturbhai Taljabhai and others, (supra) and hold that the brother of a person who dies in a motor vehicle accident is entitled to maintain a petition under section 110 A of the Act if he is a legal representative of the deceased. We have carefully gone through the decision of the High Court of Madhya Pradesh in Budha vs Union of India and others (supra). We feel that the view taken in that decision is a narrow one and does not give full effect to the object with which sections 110 A and 110 B of the Act were enacted. We over rule the said decision. Before concluding we may add that although the Act was extensively modified after the receipt of the report of the Law Commission, Parliament did not choose to amend section 110 A of the Act by defining the expression 'legal represen tatives ' in relation to claims under Chapter VIII of the Act as 'the spouse, parent and children of the deceased ' as recommended by the Law Commission. The Law Commission had observed in its 85th report that it would be appropriate to assign to the expression 'legal representative ' the same meaning as had been given to the expression 'representative ' for the purposes of the and that would effectively carry out the purpose of social justice underlying Chapter VIII of the Act, to which the was the nearest approximation. This recommendation was made after referring to the divergent views expressed by the various High Courts on the meaning of the expression 'legal representatives ' in section 110 A of the Act. The fact that Parliament declined to take any action on the recommendation of the Law Commission of India suggests that Parliament intended that the expression 'legal representatives ' in section 110 A of the Act should be given a wider meaning and it should not be confined to the spouse, parent and children of the deceased. 423 We, therefore, do not find any ground to interfere with the judgment of the Gujarat High Court against which this Special Leave Petition has been filed. The Special Leave Petition is dismissed. N.P.V. Petition dis missed.

The appellant, Parshotam Lal Dhingra, was appointed to the Indian Railway Service as a Signaller (Telegraphist) in 1924 and was promoted to the post of Chief Controller in 1950, both the posts being in class III Service. On July 2, 1951, he was appointed to officiate in class II Service as Asst. Superintendent Railway Telegraphs. On certain adverse remarks made against him in his Confidential Report for the year ending March 31, 1953, the General Manager on June 21. 1953, remarked as follows "I am disappointed to read these reports. He should revert as a subordinate till he makes good the short coming noticed in this chance of his as an officer. Portions underlined to be communicated to him. " Thereupon the appellant made a representation, but on (I) ; 829 August 19, 1953, the General Manager issued a notice as follows: "Shri Bishambar Nath Chopra, Instructor Railway Training School, Saharnpur, is transferred to Headquarters office and appointed to officiate in Class II service as Assistant Signal and Tele Communication Engineer (Telegraphs) vice Shri Parshotam Lal Dhingra who on relief reverts to Class III T appointment. " Against this order the appellant moved the High Court under article 226 of the Constitution. The single judge who heard the matter held that the order was invalid as the provisions of article 311(2) of the Constitution had not admittedly been complied with. The Division Bench on appeal, however, set aside the order of the Single judge and dismissed the appellant 's writ application. The question for decision was whether the order of the General Manager amounted to a reduction in rank within the meaning of article 311(2) of the Constitution and the appellant was entitled to a reasonable opportunity of showing cause against the order. Held (per Das, C. J., Venkatarama Aiyar, section K. Das, A. K. Sarkar jj., Vivian Bose J., dissenting) that the order of reversion made against the petitioner did not amount to a reduction in rank within the meaning of article 311(2) Of the Constitution and he was not entitled to the protection of that Article. Like article 31O of the Constitution, which makes no distinction between persons holding permanent or temporary posts in the matter of their tenure being dependent on the pleasure of the President or the Governor, article 311 which is in the nature of a proviso to article 310, also makes no distinction between permanent and temporary posts and extends its protection equally to all Government servants holding permanent or temporary posts or officiating in any of them. Laxminarayan Chiranjilal Bhargava vs The Union of India, I.L.R. ; Engineer in Chief, Army Head Quarters vs C. A. Gupta Ram, A.I.R. (1957) Punj. 42 ; State of Punjab vs section Sukhbans Singh, A.I.R. (1957) Punj. 191 and Chironjilal vs Union of India, A.I.R. (1957) Raj. 81, overruled. But the protection of article 31I can be available only where dismissal, removal or reduction in rank is sought to be inflicted by way of punishment and not otherwise. These were the major punishments evolved by the Service Rules and Rules of the Railway Code, and well understood as such, against which protection was sought to be provided by the Rules. These protections were in due course incorporated in section 240 of the Government of India Act, 1935, and reproduced in article 311 of the Constitution, thus qualifying the principle embodied in article 310(1). Venkataraman vs The Union of India, ; , referred to. jayanti Prasad vs The State of Uttar Pradesh, A.I.R. (1951) All. 793 ; Shrinvas Ganesh vs Union of India, A.I.R. (1956) Bom. 455; Jatindra Nath Biszwas vs R. Gupta, A.I.R. (1954) 830 Cal. 383 ; Rabindra Nath Das vs The General Manager, Eastern Railway, ; jatindra Nath Mukherjee vs The Government of the Union of India, ; Ahmad Sheikh vs Ghulam Hassan, A.I.R. (1957) J. & K. 11; Ganesh Balkrishna Deshmukh vs The State of Madhya Bharat, A.I.R. (1956) M.B. 172; D. P. Ragunath vs The State of Coorg, A.I.R. (1957) Mys. 8; M. V. Vichoray vs The State of Madhya Pradesh, A.I.R. (1952) Nag. 288; Kanta Charan Srivastava vs Post Master General, A.I.R. (1955) Pat. 381 and Sebastian vs State, A.I.R. (1955) Tr. CO. 12, approved. One test for determining whether the termination of service was by way of punishment or otherwise is to ascertain whether under the Service Rules, but for such termination, the servant has the right to hold the post. In the three cases of (1) substantive appointment to a permanent post, (2) temporary appointment for a fixed term and (3) a temporary appointment which has ripened into a quasi permanent status under the Temporary Service Rules, where such a right exists, the servant will be entitled to the protection of article 311. Conversely, where no such right can exist, as in the case of a probationary or officiating appointment to a permanent or temporary post or where the service has not ripened into a quasi permanent status, and under the general law the service can be terminated on reasonable notice, the termination of service cannot amount to a punishment and attract the Article. Broadly speaking, article 311(2) can apply to those cases where the Government servant, if in private employment, could maintain an action for wrongful dismissal, removal or reduction in rank. So where the Government has, by contract, express or implied, or under the Rules, the right to terminate the service at any time, such termination, in the manner provided in the contract or under the Rules, cannot attract the provisions of article 311. That does not, however, mean that the termination of service of a servant who has no right to the post can never be a dismissal or removal by way of punishment. Although in such a termination the actual motive of the Government must be wholly irrelevant, where it expressly chooses to penalise the servant for misconduct, negligence, inefficiency or the like by inflicting on him the punishment of dismissal, removal or reduction, the requirements of article 311 must be complied with. Satish Chander Anand vs The Union of India, (1953) S.C.R. 655 Shyam Lal vs The State of Uttar Pradesh, (1955) 1 S.C.R. 26 and Shrinivas Ganesh vs Union of India, L.R. 58 Bom. 673, referred to. A reduction in rank must, similarly, be a punishment if it carries penal consequences with it and the two tests to be applied are (1) whether the servant has a right to the post or the rank or (2) whether evil consequences such as forfeiture of pay or allowances, loss of seniority in his substantive rank, stoppage or postponement of future chances of promotion, follow as a result of the order. Where either of these tests applies, the reduction in 831 rank mast be one within the meaning of article 311 (2) of the Constitution and attract its protection. In the instant case, the appellant was holding an officiating post and had no right under the rules of the Railway Code to continue in it. Under the general law such appointment was terminable at, any time on reasonable notice, and the reduction could not operate ' as a forfeiture of any right. The order of the General Manager visited him with no evil consequences. Consequently, he was not reduced in rank by way of punishment. Per Bose J. While there can be no doubt that article 311 applies to all classes of Government Servants whether permanent, quasipermanent, officiating, temporary or on probation and that the words dismissal, removal and reduction in rank used therein have a special meaning, that Article, properly construed, cannot be confined to the penalties prescribed by the Service Rules. The gist of it is neither the form of the action nor the procedure nor what operated in the mind of the competent authority. The real test is whether evil consequences over and above those that would ensue from a "contractual termination" are likely to ensue. If they are, article 311 is attracted even though such evil consequences are not prescribed as "penalties" under the Rules. Though the conditions of service prescribed by the Rules can be varied unilaterally in some cases because of the "pleasure" of the President, they cannot be ignored as long as they stand, and if they are infringed while in force, article 311 will be attracted in an appropriate case. Satish Chandya Anand vs Union of India, ; and Shyam Lal vs State of Uttar Pradesh, ; , referred to. Nor can the protections afforded by article 311 be nullified by a splitting up of the order. In the present case the General Manager 's remarks in the confidential file, which formed a part of the operative order and was its real foundation, clearly indicated the mischief, that the appellant was not to be promoted to a like post until in the opinion of some competent Officer he had made good his previous short comings. That was an evil consequence, over and above that which would follow from a mere "contractual termination" of his engagement in the higher post, and so was sufficient to attract the protection of article 311.

Appeal No. 182 of 1952. Appeal by special leave from the Judgment and Order dated 2nd August, 1951, of the High Court of Judicature at Nagpur in Miscellaneous Petition No. 187 of 1950 under articles 226 and 227 of the Constitution. N. C. Chatterjee (R. M. Hajarnavis, with him) for the appellant. R. Ganapathy Iyer for the State of Madhya Pradesh. February 23. The Judgment of the Court was delivered by DAS J. On the 28th November, 1947, the appellant Hoosein Kasam Dada (India) Ltd., (hereinafter referred to as the assessee) submited to the Sales Tax Officer, Akola, a Sales Tax return in Form IV for the first quarter. Notice in Form XI calling upon the assessee to produce evidence in support of the said return having been issued by the Sales Tax Officer, the assessee produced his account books. Not being satisfied by the inspection of the account books as to the correctness of the return and being of opinion that the taxable turnover exceeded rupees two lacs the Sales Tax Officer submitted the case to the Assistant Commissioner of Sales Tax, Amravati, for assessment, 989 On the 25th January, 1949, the Assistant Commissioner issued a fresh notice in Form XI under section 11 and fixed the case for disposal on the 5th February, 1949. After various adjournments and proceedings to which it is not necessary to refer, the hearing commenced on the 9th June, 1949, when an agent of the assessee appeared with books of account of the Akola Branch. Eventually after various further proceedings the Assistant Commissioner on the 8th April, 1950, assessed the assessee, to the best of his judgment, in the sum of Rs. 58,657140 and a copy of the order in Form XIV was sent to the assessee. Being aggrieved by the order of assessment the assessee on the 10th May, 1950, preferred an appeal to the Sales Tax Commissioner, Madhya Pradesh, under section 22(l) of the Central Provinces and Berar Sales Tax Act, 1947 (hereinafter referred to as the Act). The appeal not having been accompanied by any proof of the payment of the tax in respect of which the appeal had been preferred, the authorities, after giving the assessee several adjournments, declined to admit the appeal. The assessee moved the Board of Revenue, Madhya Pradesh, by a revision application against the order of the Sales Tax Commissioner contending that his appeal was not governed by the proviso to section 22(l) of the Act as amended on the 25th November, 1949, by the Central Provinces and Berar Sales Tax (Second Amendment) Act (Act LVII of 1949) but was governed by the proviso to section 22(l) of the Act as it stood when the assessment proceedings were started, i.e., before the said amendment. The Board of Revenue took the view that as the order of assessment was made after the amendment of the section and the appeal was filed thereafter such appeal must be governed by the provisions of law as it existed at the time the appeal was actually filed and that the law as it existed before the filing of the appeal could not apply to the case. The assessee thereupon moved the High Court of Madhya Pradesh under articles 226 and 227 of the Constitution of India praying, amongst other things, for a writ of mandamus or an appropriate 128 990 order directing the Sales Tax Commissioner to admit and hear the appeal without demanding payment of the amount of sales tax assessed by the Assistant Commissioner of Sales Tax. The High Court dismissed the application on the 2nd August, 1951. The assessee applied to the High Court for leave to appeal to this Court which was also dismissed by the High Court on the 14th March, 1952. 'The assessee thereupon applied to this Court for special leave to appeal on the 12th May, 1952. This Court granted special leave to appeal, but such leave was, by the order granting such leave, limited to the question of the effect of the amendment to section 22 of the Act on the petitioner 's appeal to the Sales Tax Commissioner, Madhya Pradesh. This Court took the view that the other questions sought to be raised by the assessee would have to be decided by the Sales Tax Commissioner in case the appeal succeeded. The appeal has now come up for final disposal before us and in this appeal we are concerned only with the limited question of the effect of the amendment to section 22 of the Act. Section 22(l) of the Act was originally expressed in the following terms : "22. (1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order: Provided that no appeal against an order of assessment, with or without penalty, shall be entertained by the said authority unless it is satisfied that such amount of tax or penalty or both as the appellant may admit to be due from him, has been paid." The relevant portion of section 22 as amended runs as follows: "22. (1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order: Provided that no appeal against an order of assessment, with or without penalty shall be admitted by the said authority unless such appeal is accompanied by a satisfactory proof of the payment of the tax, with 991 penalty, if any, in respect of which the appeal has been preferred. " It is clear from the language used in the proviso to section 22 (1) as it stood prior to the amendment that an aggrieved assessee had only to pay such amount of tax as he might admit to be due from him, whereas under the proviso to section 22(l) as amended the appeal has to be accompanied by satisfactory proof of payment of the tax in respect of which the appeal had been preferred. The contention of the present assessee is that as the amendment has not been made retrospective its right of appeal under the original section 22(l) remains unaffected and that accordingly as it does not admit anything to be due it was not liable to deposit any sum along with its appeal and the Commissioner was bound to admit its appeal and had no jurisdiction or power to reject it on the ground that it had not been accompanied by any proof of payment of the tax assessed against the appellant as required under the amended proviso and the Board of Revenue and the High Court were in error in not directing the Commissioner to admit the appeal. That the amendment has placed a substantial restriction on the assessee 's right of appeal cannot be disputed, for the amended section requires the payment of the entire assessed amount as a condition precedent to the admission of its appeal. The question is whether the imposition of such a restriction by amendment of the section can affect the assessee 's right of appeal from a decision in proceedings which commenced prior to such amendment and which right of appeal was free from such restriction under the section asit stood at the time of the commencement of the proceedings. The question was answered in the negative by the Judicial Committee in Colonial. Sugar Refining Co., Ltd. vs Irving(1). In that case the Collector of Customs acting under an Act called the Excise Tariff Act, 1902, required the appellants to pay pound 20,100 excise duty on 6,700 tons of sugar. The appellants disputed the claim. So they deposited (1) 992 the money with the Collector and then brought the action by issuing a writ on the 25th October, 1902. A special case having been stated for the opinion of the Supreme Court, that Court on the 4th September, 1903, gave judgment for the Collector. In the meantime the Judiciary Act, 1903, was passed and received Royal assent on the 25th August, 1903, that is to say about 10 days before the judgment was delivered. By section 39(2) of that Act the right of appeal from the Supreme Court to the Privy Council given by the; Order in Council of 1860 was taken away and the only appeal therefrom was directed to lie to the High Court of Australia. The appellants having with the leave of the Supreme Court filed an appeal to the Privy Council the respondents filed a petition taking the preliminary point that no appeal lay to the Privy Council and praying that the appeal be dismissed. in dismissing that application Lord Macnaghten who delivered the judgment of the Privy Council said: "As regards the general principles applicable to the case there was no controversy. On the one hand, it was not disputed that if the matter in question be a matter of procedure only, the petition is well founded. On the other hand, if it be more than a matter of procedure, if it touches a right in existence at the passing of the Act, it was conceded that, in accordance with a long line of authorities extending from the time of Lord Coke to the present day, the appellants would be entitled to succeed. The Judicary Act is not retrospective by express enactment or by necessary intendment. And therefore the only question is, was the appeal to His Majesty in Council a right vested in the appellants at the date of the passing of the Act, or was it a mere matter of procedure ? It seems to their Lordships that the question does not admit of doubt. To deprive a suitor in a pending action of an appeal to a superior tribunal which belonged to him as of right is a very different thing from regulating procedure. In princi ple, their Lordships see no difference between abolishing an appeal altogether and transferring the appeal to a new tribunal. In either case there is an interference 993 with existing rights contrary to the well known general principle that statutes are not to be held to act retrospectively unless a clear intention to that effect is manifested. " The principle of the above decision was applied by Jenkins C.J. in Nana bin Aba vs Sheku bin Andu (1) and by the Privy Council itself in Delhi Cloth and General Mills Co. Ltd. vs Income tax Commissioner, Delhi( '). A Full Bench of the Lahore High Court adopted it in Kirpa Singh vs Rasaldar Ajaipal Singh (3). It was there regarded as settled that the right of appeal was not a mere matter of procedure but was a vested right which inhered in a party from the com mencement of the action in the Court of first instance and such right could not be taken away except by an express provision or by necessary implication. In Sardar Ali vs Dalimuddin (4), the suit out of which the appeal arose was filed in the Munsiff 's Court at Alipore on the 7th October, 1920. The suit having been dismissed on the 17th July, 1924, the plaintiffs appealed to the Court of the District Judge but the appeal was dismissed. The plaintiffs then preferred a second appeal to the High Court on the 4th October, 1926. That second appeal was heard by a Single Judge and was dismissed on the 4th April, 1928. In the meantime Clause 15 of the Letters Patent was amended on the 14th January 1928 so as to provide that no further appeal should lie from the decision of a Single Judge sitting in second appeal unless the Judge certified that the case was a fit one for appeal. In this case the learned Judge who dismissed the second appeal on the 4th April, 1928, declined to give any certificate of fitness. The plaintiffs on the 30th April, 1928, filed an appeal on the strength of clause 15 of the Letters Patent as it stood before the amendment. The contention of the appellants was that the amended clause could not be applied to that appeal, for to do so would be to apply it retrospectively and to impair and indeed to defeat a substantive right which was in existence (1) Bom. (3) A. I. R 1928 Lah. (2) (1927) L.R. 54 I.A. Lah. (4) Cal. 994 prior to the date of the amendment. The apppllants claimed that on the 7th October, 1920, when the suit was filed they had vested in them by the existing law a substantive right to a Letters Patent appeal from the decision of a Single Judge and that an intention to interfere with it, to clog it with a new condition or to impair or imperil it could not be presumed unless it was clearly manifested by express words or necessary intendment. In giving effect to the contentions of the appellants Rankin C.J. observed at p. 518: Now, the reasoning of the Judicial Committee in The Colonial Sugar Refining Company 's case is a conclusive authority to show that rights of appeal are not matters of procedure, and that the right to enter the superior court is for the present purpose deemed to arise to a litigant before any decision has been given by the inferior court. If the latter proposition be accepted, I can see no intermediate point at which to resist the conclusion that the right arises at the date of the suit. " It was held that the new clause could not be given retrospective effect and accordingly the date of pre sentation of the second appeal to the High Court was not the date which determined the applicability of the amended clause of the Letters Patent and that the date of the institution of the suit was the determining factor. As against the last mentioned decision of the Calcutta High Court Sri Ganapathy Aiyar, appearing for the respondent, refers us to the decision of a Bench of the Bombay High Court in the case of Badruddin Abdul Rahim vs Sitaram Vinayak Apte (1), where it was held that the amendment of clause 15 of the Letters Patent operated retrospectively. That case followed an earlier decision of the same High Court in Fram Bomanji vs Hormasji Barjorji (2). The decision in the old case proceeded upon two grounds, namely, (1) that the question was one of procedure and (2) that sec (1) Bom. 753; A.I.R. (1928) Bom. (2) (1866) Bom. H.C. (O.C.J.) 49. 995 tion 2 of the New Letters Patent of 1865 gave retrospective operation to the Letters Patent by making it applicable to all pending suits. In so far as the first ground is concerned it clearly runs counter to the decision of the Privy Council in Colonial Sugar Refining Co. Ltd. vs Irving (supra) and must be taken as overruled as Fawcett J. himself acknowledged at page 756. As regards the second ground it is inapplicable to the case before us and it is not necessary to express any opinion as to the. soundness and validity of that ground. It may be mentioned here that in Shaikh Hasan Abdul Karim vs King Emperor (1) another Bench of the same High Court expressly dissented from the decision in Badruddin Abdul Rahim vs Sitaram Vinayak Apte (supra). The principle laid down in the Colonial Sugar Refining Co. 's case (supra) was followed by a Special Bench of Madras in In re Vasudeva Samiar (2). A Full Bench of the Allahabad High Court in Ram Singha vs Shankar Dayal (3) fell into line and held that the earlier decision on this point of that Court in Zamin Ali Khan vs Genda (4) stood overruled by the Privy Council decision in the Colonial Sugar Refining Co. 's case. A Full Bench of Nagpur High Court in Radhakisan vs Shridar (5 ) has also taken the same view. The Punjab High Court has also adopted the same line in Gordhan Das vs The Governor General in Council (1). The case of Nagendra Nath Bose vs Mon Mohan Singha Roy (7) is indeed very much to the point. In that case the plaintiffs instituted a suit for rent valued at Rs. 1,30615 and obtained a decree. In execution of that decree the defaulting tenure was sold on the 20th November, 1928, for Rs. 1,600. On the 19th December, 1928, an application was made, under Order XXI, rule 90 of the Code of Civil Procedure, by the present petitioner, who was one of the judgment debtors, (1) I.L.R (2) A I.R. ; (3) All. 965; A.I.R. (1928) All. (4) All. 375. (5) A.I.R. (1950) Nag. (6) A.I.R, (1952) Punjab 103 (F.B.), (7) 996 for setting aside the sale. application having been dismissed for default of his appearance the petitioner preferred an appeal to the District Judge of Hoogly who refused to admit the appeal on the ground that the amount recoverable in execution of the decree had not been deposited as required by the proviso to section 174, clause (c), of the Bengal Tenancy Act as amended by an amending Act in 1928. The contention of the petitioner was that the amended provision which came into force on the 21st February, 1929, could not affect the right of appeal from a decision on an application made on the 19th December, 1928, for setting aside the sale. Mitter J. said at page 1011: " We think the contention of the petitioner is wellfounded and must prevail. That a right of appeal is a substantive right cannot now be seriously disputed. It is not a mere matter of procedure. Prior to the amendment of 1928 there was an appeal against an order refusing to set aside a sale (for that is the effect also where the application to set aside the sale is dismissed for default) under the provisions of Order 43, rule (1), of the Code of Civil Procedure. That right was unhampered by any restriction of the kind now imposed by section 174(5), Proviso. The Court was bound to admit the appeal whether appellant deposited the amount recoverable in execution of the decree or not. By requiring such deposit as a condition precedent to the admission of the appeal, a new restriction has been put on the right of appeal, the, admission of which is now hedged in with a condition. There can be no doubt that the right of appeal has been affected by the new provision and in the absence of an express enactment this amendment cannot apply to proceedings pending at the date when the new amendment came into force. It is true that the appeal was filed after the Act came into force, but that circumstance is immaterial for the date to be looked into for this purpose is the date of the original proceeding which eventually culminated in the appeal." 997 The, above decisions quite firmly establish and our decisions in Janardan Reddy vs The State (1) and in Ganpat Rai vs Agarwal Chamber of Commerce Ltd. (2) uphold the principle that a right of appeal is not merely a matter of procedure. It is matter of substantive right. This right of appeal from the decision of an .inferior tribunal to a superior tribunal becomes vested in a party when proceedings are first initiated in, and before a decision is given by, the inferior court. In the language of Jenkins C.J. in Nana bin Aba vs Shaik bin Andu (supra) to disturb an existing right of appeal is not a mere alteration in procedure. Such a vested right cannot be taken away except by express enactment or necessary intendment. An [intention to interfere with or to impair or imperil such a vested right cannot be presumed unless such intention be clearly manifested by express words or necessary implication. Sri Ganapathy Aiyar urges that the language of section 22(1) as amended clearly makes the section ret. rospective. The new proviso, it is pointed out, peremptorily requires the authority not to admit the appeal unless it be accompanied by a satisfactory proof of the payment of the tax in respect of which the appeal is preferred and this duty the authority must discharge at the time the appeal is actually preferred before him. The argument is that after the amendment the authority has no option in the matter and he has no jurisdiction to admit any appeal unless the assessed tax be deposited. It follows, therefore, by necessary implication, according to the learned Advocate, that the amended provision applies to an appeal from an assessment order made before the date of amendment as well as to an appeal from an order made after that date. A similar argument was urged before the Calcutta Special Bench in Sardar Ali vs Dalimuddin (supra), namely, that after the amendment the court had no authority to entertain an appeal without a certificate from the Single Judge. (1) (2) 129 998 Rankin C.J. repelled this argument with the remark at page 520: " Unless the contrary can be shown, the provision which takes away jurisdiction is itself subject to the implied saving of the litigants ' right." In our view the above observation is apposite and applies to the case before us. The true implication of the above observation as of the decisions in the other cases referred to above is that the pre existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment. The fact that the pre existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. As the old law continues to exist for the purpose of supporting the pre existing right of appeal that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right. The argument that the authority has no option or jurisdiction to admit the appeal unless it be accompanied by the deposit of the assessed tax as required by the amended proviso to section 22(1) of the Act overlooks the fact of existence of the old law for the purpose of supporting the pre existing right and really amounts to begging the question. The new proviso is wholly inapplicable in such a situation and the jurisdiction of the authority has to be exercised under the old law which so continues to exist. The argument of Sri Ganapathy lyer on this point, therefore, cannot be accepted. The learned Advocate urges that the requirment as to the deposit of the amount of the assessed costs does not affect the right of appeal itself which still remains intact, but only introduces a new matter of procedure. He contends that this case is quite different from the case of Sardar Ali vs Dalmuddin (supra), for in this case it is entirely in the power of the appellant to deposit the tax if he chooses to do so whereas it was not 999 within the power of the appellant in that case to secure a certificate from the learned Single Judge who disposed of the second appeal. In the first place the onerous condition may in a given case prevent the exercise of the right of appeal, for the assessee may not be in a position to find the necessary money in time. Further this argument cannot prevail in view of the decision of the Calcutta High Court in Nagendra Nath Bose vs Mon Mohan Singha (supra). No cogent argument has been adduced before us to show that that decision is not correct. There can be no doubt that the new requirement "touches" the substantive right of appeal vested in the appellant. Nor can it be overlooked that such a requirement is calculated to interfere with or fetter, if not to impair or imperil, the substantive right. The right that the amended section gives is certainly less than the right which was available before. A provision which is calculated to deprive the appellant of the unfettered right of appeal cannot be regarded as a mere alteration in procedure. Indeed the new requirement cannot be said merely to regulate the exercise of the appellant 's pre existing right but in truth whittles down the right itself and cannot be regarded as a mere rule of procedure. Finally, Sri Ganapathy lyer faintly urges that until actual assessment there can be no 'lis ' and, therefore, no right of appeal can accrue before that event. There are two answers to this plea. Whenever there is a proposition by one party and an opposition to that proposition by another a 'lis ' arises. It may be conceded, though not deciding it, that when the assessee files his return a 'lis ' may not immediately arise, for under section 11 (1) the authority may accept the return as correct and complete. But if the authority is not satisfied as to the correctness of the return and calls for evidence, surely a controversy arises involving a proposition by the assessee and an opposition by the State. The circumstance that the authority who raises the dispute is himself the judge can make no difference, for the authority raises the dispute in the interest of the State and in so acting only represents the State. It 1000 will appear from the dates given above that in this case the 'lis ' in the sense explained above arose before the date of amendment of the section. Further, even if the 'lis ' is to be taken as arising only on the date of assessment, there was a possibility of such a 'lis ' arising as soon as proceedings started with the filing of the return or, at any rate, when the authority called for evidence and started the hearing and the right of appeal must be taken to have been in existence even at those dates. For the purposes of the accrual of the right of appeal the critical and relevant date is the date of initiation of the proceedings and not the decision itself. For all the reasons given above we are of the opinion that the appellant 's appeal should not have been rejected on the ground that it was not accompanied by satisfactory proof of the payment of the assessed tax. As the appellant did not admit that any amount was due by it, it was under the section as it stood previously entitled to file its appeal without depositing any sum of money. We, therefore, allow this appeal and direct that the appeal be admitted by the Commissioner and be decided in accordance with law. The appellant is entitled to the costs of this appeal and we order accordingly. Appeal allowed. Agent for appellant: Rajinder Narain. Agent for respondent: G. H. Rajadhyaksha.

The right of appeal is a matter of substantive right and not merely a matter of procedure, and this right becomes vested in a party when the proceedings are first initiated in, and before a decision is given by, the inferior Court and such a right cannot be taken away except by express enactment or necessary intendment. Section 22(l.) of the Central Provinces and Berar Sales Tax Act, 1947, provided that no appeal against an order of assessment should be entertained by the prescribed authority unless it was satisfied that such amount of tax as the appellant might admit to be due from him, had been paid. This Act was amended on the 25th November, 1949, and section 22(l) as amended provided that no appeal should ])a admitted by the said authority unless such appeal was accompanied by satisfactory proof of the payment of the tax in respect of which the appeal had been preferred. On the 28th of November, 1947, the appellant submitted a return to the Sales Tax Officer, who, finding that the turnover exceeded 2 lacs, submitted the case to the Assistant Commissioner for disposal and the latter made an assessment on the 8th April, 1950. The appellant preferred an appeal on the 10th May, 1950, without depositing the amount of tax in respect of which he had appealed. The Board of Revenue was of opinion that section 22(l.) as amended applied to the case as the assessment was made, and the appeal was preferred, after the amendment came into force, ' and rejected the appeal. Held, (i) that the appellant had a vested right to appeal when the proceedings were initiated, i.e., in 1947, and his right to appeal was governed by the law as it existed on that date ; (ii) that the amendment of 1950 cannot be regarded as a mere alteration in procedure or an alteration regulating the exercise of the right of appeal, but whittled down the right itself, and it had no retrospective effect as the Amendment Act of 1950 did not expressly or by necessary intendment give it retrospective effect, and the 988 appeal could not therefore be rejected for non payment of the tax in respect of which the appeal was preferred. Colonial Sugar Refining Co. Ltd. vs Irving , Nanabin Aba vs Sheku bin Andu (I.L.R. , Delhi Cloth and General Mills Co. Ltd. vs Income tax Commissioner, Delhi (54 I.A. 421), Kirpa Singh vs Rasaldar Ajaipal Singh (A.I.R. 1928 Lab. 627), Sardar Ali vs Dalimuddin (I.L.R. applied. Badraddin Abdul Rahim vs Sitaram Vinayak Apte (I.L.R. disapproved. In re Vasudeva Samiar (A.I.R. 1929 Mad. 381), Ram Singha vs Sankar Dayal (I.L.R. 50 All. 965), Radhakisan vs Sri Dhar (A.I.R. , Gordhan Das vs Governor General in Council (A.I.R. 1950 Punj. 103) and Nagendra Nath Bose vs Monmohan referred to.

Appeal No. 9 of 1958. Appeal by special leave from the judgment and order dated February 24, 1955, of the former Bombay High Court in Income tax Reference No. 50/X of 1954. K. N. Rajagopal Sastri and D. Gupta, for the appellant. R. J. Kolah, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the respondent. August 10. The Judgment of the Court was delivered by SHAH, J. Aktiebolaget Svenska Kullakerfabriken of Gothenburg is a company incorporated under the laws of Sweden, and is engaged in the manufacture of ball bearing equipment. section K. F. Ball Bearing Co., Ltd., which will hereinafter be referred to as " the section K. F." is a company registered under the Indian Companies Act, 1913. By an agreement dated January 1, 1939, the section K. F. was appointed by the Swedish company as its sole selling agent in India. On account ,of the commencement of hostilities in the second world war, a corporation known as the Panrope Corporation was incorporated in the Republic of Panama in 1940, to take over as a war time arrangement the assets and business of that Swedish company. With effect from July 1, 1947, the Panrope Corporation conveyed the property and business to the Swedish company. In the years 1947, 1948, 1949 and 1950 the section K. F. sold in India as the agent 'of the Swedish and Panamian companies which will hereinafter be collectively referred to as the " foreign corporations " the goods manufactured by them. A small quantity of goods was bought by the section K. F. 143 and sold by it in India, but no question arises in this appeal about the liability to pay income tax in respect, of sale of those goods and no reference is made herein in respect of those sales. The Income tax Officer, Companies Circle 11(3), Bombay, exercising powers vested in him by section 43 of the Indian Income tax Act, 1922, having appointed the section K. F. as the statutory agent of the foreign corporations for the assessment year 1948 49, and of the Swedish company for the assessment years 1949 50, 1950 51 and 1951 52, the section K. F. submitted returns of income for these years in the taxable territory on behalf of the foreign corporations. Clauses 13, 22 and 23 of the agreement dated January 1, 1939, between the section K. F. and the Swedish company which are material for the purpose of this appeal are as follows: Clause 13: The Agent shall render before the tenth day of each month a true and detailed statement of the said Products that have been sold by him or his Sub Agents during the preceding month. This statement is to be prepared in accordance with instructions that are to be given by section K. F. and it shall contain the names and addresses of the parties to whom the said Products have been supplied, together with a description of the Products and the prices at which they have been sold. Clause 22: The Agent shall sell the said Products either for cash or on credit. Notwithstanding the fact that permission is hereby granted by section K. F. to the Agent to sell on credit any credit given by the Agent to the buyer of the said Products shall be deemed to have been given by the Agent for his own account and on his own responsibility. If the buyer has not paid the Agent the amount that is owing by the date on which the Agent is to render a statement and make payment to section K. F. for such sales that have been made on credit, the Agent shall nevertheless be liable to effect payment to section K. F. in accordance with the terms and conditions that are defined in this Agreement. Clause 23: The Agent shall pay to section K. F. the 144 net sales value of the said Products that are sold each month, after deduction of the commission that has been agreed upon (cf 20) and the import expenses that have been paid (of. 21). Payment shall be made in Sweden thirty (30) days, at the latest, following the last day of the month in which the sales have been effected. The Income tax Appellate Tribunal has found that for rendering accounts of the net sales and also for making payments according to the terms of el. 13 of the agreement, the section K. F. maintained for the relevant periods a current account in the names of the foreign corporations in respect of goods " received on consignment ". When goods were sold by the section K. F., the account of the principal was credited with the price and the account of the buyers to whom the goods were sold on credit was debited. In a majority of cases of sales, remittances of "sale value" after deducting commission were made after sale of the goods to the buyers but before the sale proceeds were recovered. In a few cases, remittances were made even before the goods were sold, and in the remaining, remittances were made after the sale proceeds were realized from the buyers. The Income tax Officer assessed the foreign corporations under section 4(1)(a) of the Indian Income tax Act for payment of tax on the profits included in the price realized by the section K. F. by sale of goods " received on consignment " without making any distinction between sales in respect of which the remittances were made after recovery of sale proceeds and sales in respect of which remittances were made before reco very of the sale proceeds. The order passed by the Income tax Officer was confirmed by the Appellate Assistant Commissioner and also by the Income tax Appellate Tribunal. At the instance of the section K. F., the following questions were referred to the High Court of Judicature at Bombay under section 66(1) of the Indian Income tax Act, 1922: (1) Whether there was evidence on which the Tribunal could have held that the Panrope Corporation and the non resident company had a business 145 connection in the taxable territories in the years of account ? (2) Whether the profits of the Panrope Corporation and the non resident company in respect of the consignment goods were received in the taxable territories on their behalf ? At the hearing of the reference before the High, Court, counsel for the assessee having conceded that the section K. F. was not a purchaser of the goods " received on consignment " from the foreign corporations, but was their agent for sale of the goods, an answer in the affirmative was recorded on the first question. On the second question, the High Court opined that as the remittances by the section K. F. pursuant to the terms of cl. 23 of the agreement before the sale pro ceeds were realized from the buyers were received by the foreign corporations outside the taxable territory, the same could not be taken into account under section 4(1)(a) of the Indian Income tax Act in assessing the taxable income of the foreign corporations. The High Court observed that the section K. F. was liable to pay tax on behalf of the foreign corporations under section 4(1)(a) only if the taxing authority established that the foreign corporations had received the sale proceeds within the taxable territories; that the sale proceeds were received by the foreign corporations when the section K. F. made remittances under cl. 23 of the agreement, but somewhat inconsistently the High Court observed that the remittances made by the section K. F. before the sale proceeds were realized, were remittances not of sale proceeds, but in discharge of its obligation under el. 23 of the agreement; and that the realizations by the section K. F. from the buyers of the goods subsequent to the remittances were not of sale proceeds on behalf of the foreign corporations but were receipts on its own behalf and in its own right, and in recoupment of the amounts remitted to the foreign corporations. The High Court accordingly answered the second question in the affirmative " to the extent that the remittances were made after the sale proceeds were received by the assessee company". 19 146 We are unable to agree with the reasoning and the ,,conclusion of the High Court. The terms of the agreement make it abundantly clear that the goods " received on consignment " from the foreign corporations were received by the section K. F. as their selling agent and not as purchaser. The goods, it is true, were sold by the section K. F. in its own name and not in the name of the foreign corporations, but the goods were still sold for and on behalf of the foreign corporations and the sale proceeds received by the section K. F. were received not on its own behalf but for and on behalf of its principals. Clauses 9, 12, 13, 14, 17, 18 and 20 of the agreement clearly show that the goods received by the section K. F. continued to remain the property of the foreign cor porations till they were sold to the buyers. In the price received for sale of the goods, the profit of the owner was in truth embedded and that profit was liable to be taxed under section 4(1)(a) of the Indian Income. tax Act if it was received in the taxable territory. It is not disputed that the sale proceeds realized by the section K. F. in the taxable territory as agent of the foreign corporations before remittances under the terms of the agreement were liable to be taxed. Does the circumstance that the section K. F. had in discharge of an obligation undertaken by it made remittances under the terms of the agreement before it realized the price of the goods sold alter the nature of the realizations ? The remittances made by the section K. F. indisputably reached the foreign corporations in respect of all sales outside the taxable territory. But the section K. F. was their agent for sale of the goods, and for receiving the price in the taxable territory. The relation between the section K. F. and the foreign corporations was not altered because before realizing the price from the buyers remittances were made to the foreign corporations. The price of goods sold by the section K. F. whether before or after remittance was realized as the agent of the foreign corporations. If remittance in respect of a sale was made before the price was realized, the section K. F. became entitled to adjust the account and to take credit for the amount paid out of the realization. What the foreign corporations received under remittances 147 made before or after realization of the price was not the sale proceeds in respect of sales, but amounts. due by the section K. F. under an obligation expressly undertaken by it under cl. 23 of the agreement. The price of goods sold by the section K. F. were in all cases received by it within the taxable territory ; and the section K. F. being the agent for sale, and for receiving the price, the income embedded in the sale proceeds must be deemed to be received by the foreign corporations also within the taxable territory. It is the receipt of income which gives rise under section 4(1)(a) of the Indian Income tax Act to liability to pay tax: and the place where the price is received is determinative of the question whether the income is received in the taxable territory. The price for the goods sold was received only when the buyer paid it and not before, and when the price was received by the section K. F., the income was received. The remittances by the section K. F. to the foreign corporations before the price was received did not include income, because income in fact was never received till the price was realized. Again we are unable to agree with the contention of counsel for the section K. F. that there was a contract of suretyship between the foreign corporations and the section K. F. and the receipt by the former of the remittances amounted to receipt of the price of the goods. It is not pretended that there was a tripartite contract and the foreign corporations sold the goods directly to the purchasers in India, the section K. F. having guaranteed payment of the price by the buyers to whom the goods had been sold. The price received by the section K. F. being received within the taxable territory for and on behalf of the foreign corporations in respect of goods sold, we are unable to hold that the realization of the price in which is embedded the profit is not liable to tax under section 4(1)(a) as income received, merely because under an independent obligation, the section K. F. has rendered itself liable to pay the amount equivalent to the price (less commission) even before the price has been realized and has discharged that obligation. In the view taken by us, the second question will be 148 answered in the affirmative in respect of sale of all ,goods where the price has been received by the S.K.F. in the taxable territory, and irrespective of whether the remittance has been made in respect of the goods sold before or after the price was received. The appeal is accordingly allowed to the extent indicated. The appellant will be entitled to his costs in this court and also the costs of the reference in the High Court. Appeal partly allowed.

The appellant was using certain premises in Calcutta for storing rice flour, etc. without taking out any license under section 386(1)(a) of the Calcutta Municipal Act, 1923. The respondent filed a complaint against the appellant for a contravention of section 386(1)(a). The trial Magistrate acquitted the appellant holding that the provisions of section 386(1)(a), neither in terms nor by necessary implication bound the Government whom the appellant represented. In revision, the High Court held that the Government was bound by a statute unless the legislature excluded it expressly or by necessary implication. The High Court declined to follow the decision of the Privy Council in L. R. 73 1. A. 271 that the general principle applicable in England applied to Indian legislation also. Held, that the State was not bound by the provisions of section 386(1)(a) of the Calcutta Municipal Act, 1923, and that the appellant was not liable to be prosecuted for a contravention of this section. Per Sinha, C. J., Imam and Shah, jj. The law applicable to India before the Constitution was as authoritatively laid down by the Privy Council in L. R. 73 I. A. 271. The Constitution has not made any change in the legal position. On the other hand it has clearly indicated that the laws in force before January 26, 1950, shall continue to have validity even in the new set up except in so far as they were in conflict with the express provisions of the Constitution. The rule of interpretation of statutes that the State is not bound by a statute unless it is so provided in express terms or by necessary implication, is still good law. Province of Bombay vs Municipal Corporation of the City of Bombay, (1946) L.R. 73 I. A. 271, applied. Bell vs The Municipal Commissioners for the City of Madras, Mad. 457, disapproved. The Corporation of Calcutta vs Sub Postmaster, Dharmatala Post Office, , United States of America vs 159 United Mine Workers of America; , , United States of America vs Reginald P. Wittek, (1949) 93 L. Ed. 1406, Less Larson vs Domestic and Foreign Commerce Corporation, ; and Roberts vs Abern, (1904) I C. L. R. 406, referred to. There is nothing in the Act to indicate that the State was bound by it by necessary implication, nor is there anything in it to show that if section 386 were not held to apply to the State the law would lose it efficacy or that its working would be hampered in any way. Per Sarkar, J. The rule that the crown is not bound by the provisions of any statute unless it is directly or by necessary implication referred to is really a rule of construction of statutes and is not dependent on royal prerogatives. It has been applied by courts in India all along before the Constitution and there is no reason why it should not be applied to the interpretation of statutes after the Constitution. Attorney General vs Donaldson, ; , Coomber V ' justices of Berks; , , Roberts vs Ahern, (1904) I C.L.R. 406, United States vs United Mine Workers of America; , , United States vs The State of California, ; Bell vs The Municipal Commissioners for the City of Madras, Mad. 457, Mersey Docks vs Cameron, ; and Coomber vs Justice of Berks, , Greig vs University of Edinburgh, (1868) L. R. I H. L. (SC.) 348 and Cooper vs Hawkin section , referred to. Section 386(1)(a) does not bind the Government by necessary implication; the fact that certain provisions of the Act expressly exempt the Government does not raise the necessary implication. Nor would the purposes of the Act be defeated if the Government were not bound by it. Hornsey Urban Council vs Hennel, and Province of Bombay vs Municipal Corporation, Bombay, (1946) L.R. 73 1. A. 271, relied on. Per Wanchoo, J. The rule of construction which is based on the royal prerogative as known to the common law of England cannot be applied to India now when there is no crown in India and when the Common law of England is not applicable. The, proper rule of construction which should be applied now is that the state is bound by a statute unless it is exempted expressly or by necessasy implication. Province of Bombay vs Municipal Corporation of the City of Bombay, (1946) L. R. 73 1. A. 271, not applied. United States of America vs United Mine Workers of America, Etc., , United States of America vs Reginald P. Wittek; , , Jess Larson vs Domestic and Foreign 160 Commerce Corporation; , , H. Snowden Marshall vs People of the State of New York, (192O) 65 L. Ed. 315 and Guaranty Trust Company of New York vs United States of America, ; , referred to. The Calcutta Municipal Act, 1923, does not specifically exempt the State from its provisions, As the State cannot be sentenced to imprisonment it is exempt by necessary implication from all penal provisions providing for sentences of imprisonment or death. Further, where a statute provides for a fine and the fine goes to the State, the State is exempted from the provisions by necessary implication as it could never be the intention that such a prosecution should be launched. The prosecution in the present case is under section 488 which provides for a fine for a breach of section 386, and the fine when imposed and realised goes to the State. Consequently, the State is exempt from the penal provisions of section 488 of the Act by necessary implication.

ivil Appeal No. 1932 of 1982. From the Judgment and Order dated 7.9. 1981 of the Patna High Court in C.R. No. 341 of 1980 (R). M.C. Mahajan, Hemant Sharma and Ms. A. Subhashini for the Appellant. M.P. Jha for the Respondent. The Judgment of the Court was delivered by FATHIMA BEEVI, J. This appeal by special leave is against the judgment dated 7.9.1981 of the High Court of Judicature at Patna, Ranchi Bench, Ranchi in Civil Revision No. 341 of 1981. The short question that falls for consider ation in this appeal is whether the Coal Mines Provident Fund Commissioner is a 'public officer ' as defined in sec tion 2(17) of the Code of Civil Procedure. Section 80 of the Code requires a notice to be issued as prescribed before instituting a suit against a public offi cer in respect of any act purporting to be done by such pubic officer in his official capacity. The respondent herein instituted a suit against the appellant the Coal Mines Provident Fund Commissioner without a notice under section 80 C.P.C. The objection in this behalf was repelled by the trial court 183 and the High Court holding that the Coal Mines Provident Fund Commissioner is not a public officer. According to the appellant the Commissioner is a public officer within the meaning of the term occurring in section 80 of the C.P.C., and, therefore, the suit is incompetent. The term 'public officer ' is defined in section 2(17) of the Code of Civil Procedure. Public Officer means a person falling under any of the descriptions in clauses (a) to (h). It is contended on behalf of the appellant that the Coal Mines Provident Fund Commissioner falls under the descrip tion in clause (h) which reads as under: "(h) Every Officer in the service or pay of the government or remunerated by fees or commission for the performance of any public duty. " It is necessary to refer to the relevant provision in the for the purpose of determining whether the appel lant answers this description. Under section 3, the Central Government may, by notification in the Official Gazette, frame the Coal Mines Provident Fund Scheme for the estab lishment of a provident fund for employees and specify the coal mines to which the said scheme shall apply. The fund shall vest in, and be administered by the Board constituted under section 3A. The Board thus constituted consists of (a) a Chairman appointed by the Central Government; (b) the Coal Mines Provident Fund Commissioner, ex officio; and others specified in the section. The other relevant provisions read thus: "3B. The Board of Trustees constituted under section 3A shall be a body corporate under the name specified in the Notification constituting it, having perpetual succession and a common seal and shall by the said name sue and be sued. 3C. Appointment of Officers: (1) The Central Government shall appoint a Coal Mines Provident Fund Commissioner, who shall be the Chief Executive Officer of the Board and shall be subject to the general control and superintendence of the Board. 184 4. The method of recruitment, salary and allowances, disci pline and other conditions of service of the Coal Mines Provident Fund Commissioner shall be such as may be speci fied by the Central Government and such salary and allow ances shall be paid out of the Fund. " It is thus seen that the Commissioner is an officer appointed by the Central Government as the Chief Executive Officer of the Board. Though subject to the general control of the Board, discipline and the condition of service are such as may be specified by the Central Government. The salary and allowances are paid out of the fund. The Commis sioner may exercise the powers exercisable by the Central Government under the Act or scheme framed thereunder on delegation of such power under section 10C. It will be clear from these provisions that an officer in the service the Government by virtue of his office, is appointed as Commissioner by the Government and he performs public duties. The fact that the Commissioner receives the salary and allowances out of the fund and not from the Government during the tenure as Commissioner would make no difference when the description as an officer in service of the Government is answered. The word 'service ' in section 2 (17)(h) must necessarily mean something more than being merely subject to the orders of Government or control of the Government. To serve means "to perform function; do what is required for". The Commis sioner appointed by Government performs the functions as envisaged in the Act and the scheme thereunder. When he is actually acting in the capacity of Provident Fund Commis sioner, he does not cease to be an officer in the service of the Government. In Liquidator of Society Sangakheda Kalan Co operative Bank, Hoshangabad vs Ayodhyaprasad Shiamlal, , Pollock, J. held that liquidator is a public officer as he is appointed by the Government and discharges public duties. This decision is distinguished in Kuppu Govinda Chettiar vs Uttukottai Co operative Society, AIR 1940 Madras 831 holding that Deputy Registrar acting as Liquidator is not a public officer. The reasoning adopted is that qualiq uidator he is not an officer in the service of the Govern ment. In Vishnu Wasudeo Joshi vs T.L.H. Smith Pearse, AIR 1949 Nagpur 362 it was held that a person who was a member of the Indian 185 Educational Service but whose services were lent to the Rajkumar College, Raipur as principal is a public officer within section 2(17)(h) and did not cease to be in the service of the Crown by reason of deputation. In Commissioner of Wakfs, Bengal vs Shahebzada Mohammed Zahangir Shah, the Court said that the expression "public duty" refers to duty concerning to the affairs or service of the public and the word 'public ' may include any class of the public or any community. In this view, the Commissioner of Wakfs who functions in relation to such public endowments in general was held to perform a public duty and, therefore, a public officer within the meaning of section 80 of the Code. In Kamta Prasad Singh vs The Regional Manager, F.C.I., AIR 1974 Patna 376 the question arose whether the officers of the Food Corporation of India are public officers. The Corporation is a body corporate. The Court held that Govern ment does not include a Corporation and that officers of the Corporation are not in the service of Government and are not public officers. These are cases where the concerned officer did not hold his office in the Corporation by virtue of his being a Government employee. In the present case, the Provi dent Fund Commissioner holds the office of Commissioner on appointment by Government by virtue of his office. His services are temporarily placed at the disposal of the Board. He does not, therefore, cease to be an officer in the service of the Government. The payment of his pay out of the Fund does not alter his status as Government employee. We are, therefore, of the opinion that the courts below have erred in holding that the Coal Mines Provident Fund Commi sioner is not a public officer within the meaning of the term in section 2(17)(h) of the C.P.C. We, accordingly, allow the appeal and remit the case to the trial court for disposal in the light of what has been stated above. G.N. Appeal allowed.

In pursuance of a Housing Scheme the Tamil Nadu Housing Board, Madras had allotted residential plots over the land acquired under the Land Acquisition Act, to different groups of applicants including the low income group on terms and conditions stipulated in the lease deed Exh. B 3 sometime in the year 1963. After a lapse of more than a decade of the allotment, fresh demands were made from the allottees in 1975. Objecting to the same, the respondent herein filed a suit for self and on behalf of all the allottees of low income group settled in the Colony named Ashok Nagar, pray ing for a permanent injunction restraining the Board from enforcing the demand. The defendant Board questioned the very maintainability of the suit in a representative capacity and also pleaded that it was entitled to finally determine the correct prices for the plots after taking into account the final award of the compensation for acquired land and until then the prices were tentative. The trial court negatived the objection to the maintainability of the suit but dismissed it on merits. The first appellate court confirmed the decree. On second appeal, the High Court reversed the finding on merits. The High Court held that it was open to the Board to determine within a reasonable time what portion of the demand included the excess on account of compensation awarded by the courts for acquisition of the land and realize the same after serving fresh demand notices. But since the impugned demand included both the excess amount of compensation as also the additional developmental charges injunction was granted in regard to the entire demand as the two amounts were not separately mentioned. Dismissing the appeal of the Board, this Court, HELD: The provisions of Order 1 of Rule 8 have been included in the Code in the public interest so as to avoid multiplicity of litigation. The condition necessary for application of the provisions is that the 273 persons on whose behalf the suit is being brought must have the same interest. In other words either the interest must be common or they must have a common grievance which they seek to get redressed. [276C D] The Court, while considering whether leave under the Rule should be granted or not, should examine whether there is sufficient community of interest to justify the adoption of the procedure provided under the Rule. [276E] Persons who may be represented in a suit under Order I, Rule 8 need not have the same cause of action. [277F]

Appeal No. 51 of 1964. Appeal by special leave from the judgment and decree dated January 3, 1962 of the Punjab High Court in Regular Second Appeal No. 1958 of 1959. Bishan Narain and Sadhu Singh, for the appellant. J. P. Goyal and Raghunath Singh, for respondents Nos. 1 (a) to 1 (d). The Judgment of the Court was delivered by Bhargava, J. This appeal arises out of a suit brought for possession of some land which was admittedly owned at one time by one Labhu. Labhu died in the year 1917 and, on his death his widow, Smt. Harnam Kaur, who filed the suit as plaintiff, came into possession of the land. She continued in possession of the land until the year 1954 when, on an application made by the collaterals of Labhu, the Naib Tehsildar, by his order dated 26th June, 1954, effected mutation in favour of these collaterals. These collaterals were defendants 1 to 4, Mangal Singh, Amer Singh, Santa Singh and Ishar Singh. These collaterals, on the basis of the order of the Naib Tehsildar, dispossessed Smt. Harnam Kaur. Harnam Kaur 's appeal against the order of the Naib Tehsildar was dismissed by the Collector. The claim of these collaterals was that Smt. Harnam Kaur had entered into karewa marriage with one of these collaterals, Ishar Singh. defendant No. 4 and, consequently, she had lost her right to hold the land of her first husband Labhu. Harnam Kaur denied that she had entered into any karewa marriage with Ishar Singh and, on the basis of this denial, instituted the suit claiming possession of that land. She pleaded that the four defendants had no right to this land and had wrongfully dispossessed her, so that they were mere trespassers. This suit was instituted on 1st March, 1956. After the institution of the suit, the (No. 30 of 1956) hereinafter referred to as "the Act" came into force on 17th June, 1956. The suit was, at that time, pending and it continued to remain pending until the year 1958 when Smt. Harnam Kaur died. Thereupon, Smt. Rattno applied to be substituted as plaintiff in place of Smt. Harnam Kaur as her legal representative. This application was allowed,, though 456 it was opposed by defendants 1 to 3. In the trial of the suit defendants 1 to 3 took the plea that Smt. Harnam Kaur, the original plaintiff, had lost her right to the land because of her karewa marriage with Ishar Singh, defendant No. 4. Defendant No. 4, however, admitted the claim of Smt. Hamarn Kaur in his written statement, denied that he had dispossessed her and also denied the allegation of her karewa marriage with him. In these circumstances, two main questions came up for decision by the trial court. The first question was whether Smt. Hamam Kaur had entered into a karewa marriage with Ishar Singh, defendant No. 4, so as to lose her right to the disputed land as widow of the previous mal e owner, Labhu ? The second question that arose was whether Smt. Rattno, who was substituted as the legal representative of Smt. Hamam Kaur, was entitled to succeed to the property of Smt. Hamam Kaur ? This second question depended on whether Smt. Harnam Kaur had, or had not, become full owner of the land under section 14 of the Act. The trial court held that Smt. Hamam Kaur had contracted karewa marriage with Ishar Singh, defendant No. 4, and had lost her rights. The further finding of the trial court was that Smt. Hamam Kaur had been dispossessed before the Act came into force and, consequently, section 14 of the Act did not apply, with the result that Smt. Rattno could not claim succession to Smt. Hamam Kaur under that provision of law. On these findings, the trial court dismissed the suit. On appeal, the Additional District Judge, Patiala, recorded the finding that Smt. Hamam Kaur had not entered into karewa marriage with Ishar Singh, defendant No. 4, and, further, that section 14 of the Act was applicable to the present case, as the land in suit was possessed by Smt. Harnam Kaur so as to make her full owner of this land under that provision of law. On these findings, the first appellate Court decreed the suit against defendants 1 to 3 with costs in both courts, after making a comment that Ishar Singh , defendant No. 4, was a profoma defendant. Defendants 1 to 3, thereupon, came up in second appeal to the High Court of Punjab and impleaded as respondents Smt. Rattno as well as Ishar Singh. The High Court dismissed the appeal and, thereupon, defendants 1 to 3 have come up to this Court in appeal under special leave granted to them. In this appeal also, defendants 1 to 3 impleaded both Smt. Rattno and Ishar Singh as respondents. During the pendency of this appeal, one of the defendants appellants died and his legal representatives were brought on the record as appellants. Rattno also died and her legal representatives were impleaded as respondents. Further, Ishar Singh,. defendant No. 4, who was a respondent in this appeal, also died. The application to bring his legal representatives on record was dismissed by the order of this Court dated 14th September, 1965 457 in Civil Miscellaneous Petition No. 1589 of 1965. In view of this order, a preliminary objection was raised at the time of hearing of this appeal by learned counsel for the respondents, who had been impleaded as legal representatives of Smt. Rattno, that the appeal had abated on account of the failure of the appellants to implead the legal representatives of Ishar Singh respondent. It, however, appears that, on the pleadings of parties and the nature of the dispute that came to be settled by the lower courts, it cannot be held that this appeal must abate as a whole, or must fail because of its abatement against Ishar Singh on his death. We have already mentioned that, though the plaintiff, Smt. Harnam Kaur, had come forward with the allegation that she had been dispossessed by all the four defendants 1 to 4, Ishar Singh, defendant No. 4, in his written statement, repudiated this claim. He put forward the plea that he had not dispossessed the plaintiff and, further, supported the claim of the plaintiff by pleading that there had been no karewa marriage between them. 'The suit was dismissed by the trial court. It was decreed by the first appellate Court only against defendants 1 to 3, treating Ishar Singh as a profoma defendant. In these circumstances, it is obvious that, when the case came up before the High Court, the dispute was confined between Smt. Rattno, legal representative of the original plaintiff on the one side, and defendants 1 to 3 on the other. Defendants 1 to 3 sought vacation of the decree for possession which had been granted against them in favour of Smt. Rattno. lshar Singh, against whom the suit had not been decreed at all, thus became an unnecessary party. In these circumstances even if Ishar Singh had not been impleaded as respondent in the High Court, the relief claimed by defendants 1 to 3 in that Court against Smt. Rattno could have been granted, without bringing into effect any contradictory decrees. In the appeal in this Court also, in these circumstances, Ishar Singh was an unnecessary party and, consequently, the failure to implead his legal representatives as respondents in the appeal after his death does not affect the right of defendants 1 to 3 to claim the relief for which they have come up to this Court in appeal. The preliminary objection, therefore, fails and is rejected. On merits, we are of the opinion that the decision given by the High Court against the defendant appellants must be upheld. The first appellate Court, which was the final Court for deciding question of fact, clearly recorded a finding that the karewa marriage alleged to have been entered into by the plaintiff, Smt. Harnam Kaur, with Ishar Singh, defendant No. 4, was not proved. That finding of fact was binding on the High Court and was rightly accepted by it. It is no longer open to the appellants to challenge that finding of fact in this Court. On this finding, it has to be held that the rights to the land, to which Smt. Hamam Kaur had succeeded as widow of Labhu, were not lost by her 458 until her death, and that her dispossession by defendants 1 to 3 in the year 1954 was illegal. They had no right to this land in ' preference to Smt. Hamam Kaur. It was, however, urged on behalf of the appellants that, when Smt. Hamam Kaur died, she was not in actual possession of this land. She had been dispossessed in the year 1954 and, at the time of her death in 1958, this suit instituted by her for possession of that land was still pending. In the suit, her own pleading was there that the land was in actual possession of defendants 1 to 3 as trespassers, and, in such circumstances, it should be held that the land was not possessed by Smt. Hamam Kaur at any time after the Act came into force, so that section 14 of the Act never became, applicable and she never became full owner of that land. It may be mentioned that there was no dispute in the High Court, nor was it disputed before us that, if it be held that section 14 of the Act had become applicable and Smt. Hamam Kaur became full owner of this land, her rights would pass on her death to Smt. Rattno and, subsequently, on the latter 's death, to the present respondents in this appeal. The only question for decision in this appeal, therefore, is whether it can be held that this property was possessed by Smt. Harnam Kaur as envisaged by section 14 of the Act, so that she became full owner of this land. Section 14(1) of the Act is as follows "14. (1) 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. Explanation. In this sub section, "property" includes both movable and immovable; "property, acquired" includes both movable and immovable property acquired by a female Hindu by inheritance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner whatsoever, and also any such property held by her as stridhana immediately before the commencement of this Act. " The dispute in the case has arisen, because this section confers the right of full ownership on a Hindu female only in respect of property possessed by her, whether acquired before or after the commencement of the Act; and, in the present case, admittedly, the plaintiff had been dispossessed in the year 1954 and was not able to recover possession from the defendants apppellants until her death in the year 1958. It was urged on behalf of the appellants that, in order to attract the provisions of section 14 (1) of the Act, it must be shown that the female Hindu was either in actual 459 physical possession, or constructive possession of the disputed property. On the other side, it was urged that, even if a female Hindu be, in fact, out of actual possession, the property must be held to be possessed by her, if her ownership rights in that property still exist and, in exercise of those ownership rights, she is capable of obtaining actual possession of it. It appears to us that, on the language used in section 14(1) of the Act, the latter interpretation must be accepted. It is significant that the Legislature begins section 14(1) with the words "any property possessed by a female Hindu" and not "any property in possession of a female Hindu". If the expression used had been "in possession of" instead of "possessed by", the proper interpretation would probably have been to hold that, in order to apply this provision, the property must be such as is either in actual possession of the female Hindu or in her constructive possession. The constructive possession may be through a lessee. mortgagee, licensee, etc. The use of the expression "possessed by" instead of the expression "in possession of ', in our opinion, was intended to enlarge the meaning of this expression. It is commonly known in English language that a property is said to be possessed by a person, if he is its owner, even though he may, for the time being, be out of actual possession or even constructive possession. The expression "possessed by" is quite frequently used in testamentary documents, where the method of expressing the property, which is to pass to the legate, often adopted is to say that "all property I die possessed of shall pass to. . . In such documents, wills, etc., where this language is used, it is clear that whatever rights the testator had in the property would pass to the legate, even though, at the time when the will is executed or when the will becomes effective, the testator might not be in actual, physical or constructive possession of it. The legate will, in such a case, succeed to the right to recover possession of that property in the same manner in which the testator could have done. Stroud in his Judicial Dictionary of Words and Phrases, Vol. 3, at p. 2238, has brought out this aspect when defining the scope of the words "possess" and "Possessed". When dealing with the meaning of the word "possession", Stroud defines " possession" as being in two ways, either actual possession or possession in law. He goes on to say that "actual possession is when a man enters in deed into lands or tenements to him descended, or otherwise. Possession in law is when lands or tenements are descended to a man, and he has not as yet really, actually, and in deed, entered into them. " In Wharton 's Law Lexicon, 14th Edn., at p. 777, the word "possession" is defined as being equivalent to 'the state of owning or having a thing in one 's own hands or power." Thus, three different meanings are given; one is the state of owning, the second is having a thing in one 's own bands, and the third is having a thing in one 's own 460 power. In case where property is in actual physical possession, obviously it would be in one 's own hands. If it is in constructive possession, it would be in one 's own power. Then, there is the third case where there may not be actual, physical or constructive possession and, yet, the person still possesses the right to recover actual physical possession or constructive possession; that would be a case covered by the expression "the state of owning". In fact, elaborating further the meaning of the word "possession ', Wharton goes on to say that "it is either actual, where a person enters into lands or tenements descended or conveyed to him; apparent, which is a species of presumptive title where land descended to the heir of an abator, intruder, or disseisor, who died seised; in law, when lands, etc., have descended to a man, and he has not actuary entered into them, or naked, that is, more possession, without colour of right. " It appears to us that the expression used in section 14(1) of the Act was intended to cover cases of possession in law also, where lands may have descended to a female Hindu and she has not actually entered into them. It would of course, cover the other cases of actual or constructive possession. On the language of section 14(1), therefore, we hold that this prorovision will become applicable to any property which is owned by a female Hindu, even though she is not in actual, physical or constructive possession of that property. Section 14(1) came up for interpretation in various cases before a number of High Courts, and was considered by this Court also in several cases. In none of those cases, however, did the question directly arise as to whether section 14(1) will be applicable, if the female Hindu is out of actual, physical or constructive possession and the property happens to have been wrongfully taken into possession by a trespasser. Most of those cases were cases where the female Hindu had either alienated her rights by a, deed of transfer or had made a gift, and it was only incidentally; that, in some of those cases, comments were made on the question whether section 14(1) of the Act will be attracted or not in cases the female Hindu bad been dispossessed by a trespasser. So far as this Court is concerned, the earliest case is that of Gummalpura Taggina Matada Kotturuswami vs Setra Veeravva and others(1). Dealing with the scope of section 14(1) of the Act in that case, this Court cited from a decision of Viswanatha Sastri, J. in Gaddam Venkavamma vs Gaddam Veerayya (2) , and noticed the fact that in that case it was held that the word "possessed" is used in section 14 in a broad sense and, in the context, possession means the state of owning or having in one 's bands or power. It was also noticed that the learned Judges of the Andhra Pradesh High Court in that case had expressed the view that even if a trespasser were in possession of the land belonging to a female (1) [1959] Supp. 1 S.C.R. 968. (2) A. I.R. 461 owner, it might conceivably be regarded as being in possession of the female owner, provided the trespasser had not perfected his, title. Since in that case this Court was not concerned with a situation where a trespasser had actually dispossessed the female owner, the Court went on to hold: "We do not think that it is necessary in the present case to go to the extent to which the learned Judges went. It is sufficient to say that "possessed" in section 14 is used in a broad sense and, in the context, means the state of owning or having in one 's hand or power. " Thus, in that case decided by this Court, the broad meaning of the word "possessed ' was accepted as even including cases where the state of owning the property exists. Learned counsel for the appellants, when bringing to our notice the views expressed by this Court in that case, also drew our attention to another part of the judgment, where this Court remarked: "Reference to property acquired before the commencement of the Act certainly makes the provisions of the section retrospective, but even in such a case, the property must be possessed by a, female Hindu at the time the Act came into force in order to make the provisions of the section applicable. There is no question in the present case that Veerawa acquired the property of her deceased husband before the commencement of the Act. In order that the provisions of section 14 may apply to the present case, it will have to be further established that the property was possessed by her at the time the Act came into force. " Learned counsel, from these words, tried to draw an inference that this Court had laid down that section 14(1) will only apply to cases where the property was possessed by the Hindu female at the commencement of the Act. We do not think that any such interpretation can be placed on the words used by this Court. Section 14(1) covers any property possessed by a female Hindu, whether acquired before or after the commencement of the Act. On the face of it, property acquired after the commencement of the Act by a female Hindu could not possibly be possessed by her at the commencement of the Act. This Court, when it made the comments relied upon by learned counsel, was, in fact, concerned with a case of a female Hindu, who had acquired the right to the property before the commencement of the Act, but was alleged to be no longer possessed of it because of having adopted a son before the commencement of the Act. It was in these circumstances that the Court in that particular case was concerned with the question whether the female Hindu was possessed of the property in dispute or not at the time the Act came into force. The Court was not laying down any general principle that section 14(1) will not be attracted at all to cases where the female Hindu was not possessed of the property at the date of the commencement of the Act. In fact, there are no words used in section 14(1) which would lead to the interpretation that the property must be possessed by the female Hindu at the date of the 462 commencement of the Act. It appears to us that the relevant date, on which the female Hindu should be possessed of the property in dispute, must be, the date on which the question of applying the provisions of section 14(1) arises. If, on that date, when the provisions of this section are sought to be applied, the property is possessed by a female Hindu, it would be held that she is full owner of it and not merely a limited owner. Such a question may arise in her own life time or may arise subsequently when succession to her property opens on her death. The case before us falls in the second category, because Smt. Harnam Kaur was a limited owner of the property before the commencement of the Act, and the question that has arisen is whether Smt. Rattno was entitled to succeed to her rights in this disputed property on her death which took place in the year 1958 after the commencement of the Act. The next case in which section 14 was considered by this Court was Brahmdeo Singh and Another vs Deomani Missir and Others(1) In that case, the female Hindu, who had succeeded to the property as the widow of her husband, Ramdeo Singh, had transferred the property under two sale deeds. It was held that the sale deeds were not for legal necessity; and the question arose whether, in those circumstances, when the Act came into force, it could be held that the widow was possessed of that property. This Court, after citing the judgment in the case of Gummalapura Taggina Matada Kotturuswami(2) held that the conflict of judicial opinion on this question had already been resolved in that earlier case, where the Court had observed : "The provisions in section 14 of the Act were not intended to benefit alienees who, with their eyes open, purchased the property from a limited owner without justifying necessity before the Act came into force and at a time when the vendor had only a limited interest of a Hindu woman. " The ;Court further dealt with the contention that the possession of the alienees is the possession of the widow herself who is still alive, and held : "We are unable to accept this contention as correct. It is well settled that an alienation made by a widow or other limited heir of property inherited by her, without legal necessity and without the consent of the next reversioners, though not binding on the reversioners, is, nevertheless, binding on her so as to pass her own interest (i.e. life interest) to the alienee. " It was, thus, made clear in that case that the property was held not to be possessed by the widow, because, the alienation made by her being binding on her, she had no longer any legal right left in that property even in the sense of being in the state of owning it. The case, thus, explains why, in cases of alienation or a gift made by a widow, even though that alienation or gift may not be bind (1) Civil Appeal No. 130 of 1960 decided on October 15, 1962. (2) [1959] Supp. 1 S.C.R. 968. 463 ing on a reversioner, the property will not be held to be possessed by the widow, because the alienation or the gift would be binding on her for her life time and she, at least, would not possess any such rights under which she could obtain actual or constructive possession from her transferee or donee. Having completely partted with her legal rights in the property, she could not be said to be possessed of that property any longer. The third case of this Court brought to our notice is that of section section Minna Lal vs section section Rajkumar and Others(1). In that case, a Digamber Jain of the Porwal sect died in 1934 leaving behind his widow, his son and three grand sons. His son died in 1939. In 1952, a son of one of the grandsons filed a suit for partition of the joint family properties, while the widow was still alive. While the suit was still pending, the widow died. Amongst other questions arising in the partition suit, one question that arose was whether the 1/4th share of the widow declared in the preliminary decree was possessed by her and whether, on her death, it descended to her grandsons in accordance with the provisions of sections 15 and 16 of the Act. Dealing with this question, this Court explained the scope of section 14(1) by stating that, by section 14(1), the Legislature sought to convert the interest of a Hindu female which, under the Sastric Hindu law, would have been regarded as a limited interest into an absolute interest. It was held that, by section 14(1), manifestly, it was intended to convert the interest, which a Hindu female has in property, however restricted the nature of that interest under the Sastric Hindu law may be, into absolute estate. It was also noticed that "under the Sastric Hindu law, the share given to a Hindu widow on partition between her sons or her grandsons was in lieu of her right to maintenance, and she was not entitled to claim partition. But the Legislature, by enacting the Hindu Women 's Right to Property Act, 1937, made a significant departure in that branch of the law; the Act gave a Hindu widow the same interest in the property which her husband had at the time of his death, and if the estate was partitioned, she became owner in severalty of her share, subject, of course, to the restrictions on disposition and the peculiar rule of extinction of the estate on death actual or civil. " Applying these principles to the facts of that case, it was remarked : "In the light of the scheme of the Act and its avowed purpose, it would be difficult, without doing violence to the language used in the enactment, to assume that a right declared in property in favour of a person under a decree for partition is not a right to property. If, under a preliminary decree, the right in favour of a Hindu male be regarded as property, the right declared in favour of a Hindu female must also be regarded as property. The High Court was, therefore, in our judgment, in error in holding that the right declared in favour of Khilonabai (1) [1962] Supp. 3 S.C.R. 418. 464 was not possessed by her, nor are we able to agree with the submission of the learned counsel for Rajkumar that it was not property within the meaning of section 14 of the Act. " In that case, it will be noticed that the widow died, while the suit for partition was still pending, and she was not in actual, physical or constructive possession of the property which was held to be possessed by her at the time of her death. Only a preliminary decree declaring her right to the share had been passed. That decree was passed before the Act came into force and the widow died after the Act came into force. On these facts, the Court came to the finding that the disputed property was possessed by the widow; and this finding was given despite the circumstance that she was not in actual possession or constructive possession of the property, but had merely obtained the right to the property under the preliminary decree. The principle laid down in that case, thus, supports the broader meaning given to the expression "possessed by" indicated by us earlier. The last case of this Court brought to our notice is Eramma vs Veerupana and Others(1). That was a converse case in which the female Hindu, in fact, did not possess any legal right or title to the property, though she was actually in physical possession of it. It was held: "The property possessed by a female Hindu, as contemplated in the section, is clearly property to which she has acquired some kind of title, whether before or after the commencement of the Act. It may be noticed that the Explanation to section 14(1) sets out the various modes of acquisition of the property by a female Hindu and indicated that the section applies only to property to which the female Hindu has acquired some kind of title, however restricted the nature of her interest may be. The words "as full owner thereof and not as a limited owner" as given in the last portion of sub section (1) of section 14 clearly suggest that the legislature intended that the limited ownership of a Hindu female should be changed into full ownership. In other words, section 14 (1) of the Act contemplates that a Hindu female who, in the absence of this provision, would have been limited owner of the property, will now become full owner of the same by virtue of this section. The object of the section is to extinguish the estate called "limited estate" or "widow 's estate" in Hindu Law and to make a Hindu woman, who, under the old law, would have been only a limited owner, a full owner of the property with all powers of disposition and to make the estate heritable by her own heirs and not revertible to the heirs of the last male holder. " In the concluding part, it was held : "It follows, therefore, that the section cannot be interpreted so as to validate the illegal possession of a female Hindu and it does not confer any title on a mere trespasser. In other words, the provisions of section 14(1) of the Act cannot be attracted in the case of a Hindu female who is in possession of the property (1) A.I.R. 1966 S.C. 1879. 465 of the last male holder on the date of the commencement of the Act when she is only a trespasser without any right to property. " This case also, thus, clarifies that the expression "possessed by" is not intended to apply to a case of mere possession without title, and that the legislature intended this provision for cases where the Hindu female possesses the right of ownership of the property in question. Even mere physical possession of the property without the right of ownership will not attract the provisions of this section. This case also, thus, supports our view that the expression "possessed by" was used in the sense of connoting state of ownership and, while the Hindu female possesses the rights of ownership, she would become full owner if the other conditions mentioned in the section are fulfilled. The section will, however, not apply at all to cases where the Hindu female may have parted with her rights so as to place herself in a position where she could, in no manner, exercise her rights of ownership in that property any longer. In this view that we have taken, it does not appear to be necessary for us to refer to the decisions of the various High Courts which were cited before us by learned counsel for the appellants. The cases mentioned were : Sansir Patelin and Another vs Satyabatt Naikani and Another(1); Ganesh Mahanta and Others vs Sukria Bewa and Others(2); Harak Singh vs Kailash Singh and Another(3); Ram Gulam Singh and others vs Palakdhari Singh and others(4) ; Nathuni Prasad Singh and Another vs Mst. Kachnar Kuer & Others(5); and Mst. Mukhtiar Kaur vs Mst. Kartar Kaur and Others(4). All these were cases relating to situations where the widow had made some alienation of her rights in the property and none of them was concerned with a case where the female Hindu might have been dispossessed by a trespasser. The reasons given by the High Courts in those cases are, therefore, of no assistance in deciding the applicability of section 14(1) of the Act to a case of the nature before us. On the interpretation of section 14(1) of the Act that we have accepted above, it must be held that the property involved in the present suit was possessed by Smt. Harnam Kaur when she died in the year 1958 and, consequently, Smt. Rattno and, after her, the present respondents must be deemed to have succeeded to those rights. We have already mentioned above that it was not disputed that, if it is held that Smt. Hamam Kaur had become full owner of this property, it would pass on her death to Smt. Rattno. As a result, the decision given by the High Court must be upheld. The appeal is dismissed with costs. G. C. (1) A.I.R. 1958 Orissa 75. (3) A.I.R. 1958 Patna 581. (5) A.I.R. 1965 Patna 160. Appeal dismissed. (2) A.I.R. 1963 Orissa 167. (4) A.T.R. 1961 Patna 60. (6) A.I.R. 1966 Pun.

A Hindu widow in the Punjab came into possession of her husband 's land on his death in 1917. She continued in possession till 1954 when on an application made by certain collaterals of her late husband the Naib Tehsildar effected a mutation in favour of the collaterals. On the basis of the Naib Tehsildar 's order the collaterals dispossessed the widow. She filed a suit for recovery of possession of the land. After the institution of the suit the , came into force. During the pendency of the suit, in 1958, the widow died and her daughter was substituted as legal representative. The defendants pleaded that the widow had lost her right to the land because of her karewa marriage with one of the collateral&,, and that the daughter could not succeed to the land as she was not in possession of the land on the coming into force of the so as to become full owner of the land under section 14 thereof. The trial court dismissed the suit but the first appellate court decreed it, holding that there was no karewa marriage as alleged by the defendants, and that section 14 was applicable to the case. The High Court dismissed the appeal filed by the defendants who came to this court by special leave. HELD : (i) The finding of fact by the first appellate court that there was no karewa marriage was binding on the defendants, and the High Court rightly accepted it. It was not open to the defendants to challenge the finding in this Court. [457H] (ii) The use of the expression "possessed by" instead of the expression "in possession of" in section 14(1) was intended to enlarge the meaning of this expression to cover cases of ion in law. On the language of section 14(1) the provision will become applicable to any property which is owned by a female Hindu even though she is not in actual physical or constructive possession of the property. [459C D; 460D] The section however will not apply to cases where the Hindu female may have parted with her rights so as to place herself in a position where she could in no manner exercise her rights in that property any longer. [465C] On the facts of the case the plaintiff widow had acquired full rights of ownership of the land under s 14 of the . On her death in 1958 the property passed to her daughter. The High. Court, rightly dismissed the defendants, appeal. [465G] Gimmalapura Taggina Matada Kotturuswami vs Setra Veerayya & Ors, [1959] Supp. 1 S.C.R. 968 and Brahmdeo Singh vs Deomani Missir C.A. No. 130/1960 dated 15 10 1962, distinguished. 455 section section Munna Lal vs section section Rajkumar, [1962] Supp. 3 S.C.R. 418 and Eramma vs Veerupana, A.I.R. 1965 S.C. 1879, applied. Gaddam Venkayamma vs Gaddanz Veerayya, A.I.R. 1957 A.P. 280, Sansir Patelin & Anr. vs Satyabati Naikani & Anr. A.I.R. 1958 Orissa 75, Gajesh Mahanta vs Sukria Bewa, A.I.R. 1963 Orissa 167, Hapak Singh vs Kailash Singh & Anr. A.I.R. 1958 Patna 581, Ram Gulam Singh vs Palakdhari Singh, A.I.R. 1961 Patna 60. ' Nathuni Prasad Singh vs Mst. Kachnar Kuer, A.I.R. 1965 Patna 160 and Mst. Mukhtiar Kaur vs Mst. Kartar Kaur & Ors., A.I.R. 1966 Pun. 31, referred to.

Civil Appeal No. 559 of 1960. Appeal by special leave from the judgment and order dated May 1/14, 1957, of the Income Tax Appellate Tribunal of India (Delhi Bench) in I.T.A. No. 2070 of 1956 57. K.N. Rajagopal Sastri and D. Gupta, for the appellant. Radhey Lal Agarwal and P.C. Agarwal for the respondents. 867 1962. January 29. The Judgment of the Court was delivered by HIDAYATULLAH, J. This is an appeal against the order of the Income tax Appellate Tribunal, Delhi Bench, dated May 1/14, 1957, by which the tribunal, reversing the order of the Appellate Assistant Commissioner, held that a loss arising from the sale of certain shares by the respondent Company was a capital loss. Subsequent to the order of the Tribunal impugned here, the Commissioner of Income tax, New Delhi, who is the appellant before us, had moved the Tribunal for a reference to the High Court on certain questions of law said to arise out of the order of the Appellate Tribunal. That application was found to be barred by one day, and since, under the law, the Tribunal had no jurisdiction to extend the time, the application was dismissed. Against the decision of the Tribunal, an application was filed in the High Court under section 66(3) of the Income tax Act; but the High Court dismissed the application, agreeing with the Tribunal that the application to the Tribunal for a reference was barred by time. The Commissioner of Income tax then applied for special leave against the order passed by the Tribunal in the appeal before it, and the present appeal, with special leave, has been filed. Before we examine the merits of the case, we shall deal with a preliminary objection raised on behalf of the respondent that the appeal is incomepetent, in view of the decision of this Court in Chandi Prasad Chokhani vs State of Bihar (1) where it was held that this Court would not entertain an appeal directly from an order of the Tribunal by passing the decision of the High Court, except in very exceptional circumstances. The appellant relies upon the decision of this Court in Baldev Singh vs Commissioner of Income tax (2), and contends 868 that the exceptional circumstances existing in the latter case and adverted to in the former, govern the present case. The facts relating to the filing of the application for reference together with the relevant dates are these: The Tribunal 's order was passed by two learned Members, who signed their respective orders on different dates. The Accountant Member signed his order on May 1, 1957, and the Judicial Member, on May 14, 1957. The notice of the order was sent to the Commissioner of Income tax, New Delhi, and reached his office by registered post on July 15, 1957. It was received by one Motilal Pathak, a clerk in the office of the Commissioner. Motilal 's affidavit shows that, he suddenly fell ill, and had to take casual leave for the day. He returned to the office the next day, and dealt with the notice received from the Tribunal. By a mischance, which is easy to appreciate, the date stamp of the receipt of the papers was affixed on the 16th, and bore that date instead of the real date, viz., the 15th, on which the papers had actually been received. Relying upon the date stamp, everybody took it for granted that limitation would expire on the 60th day, counting time from July 16, 1957. The application was filed on the last day of limitation on that supposition. Actually, the application was barred by a day. The Income tax Tribunal, therefore, dismissed the application on December 4, 1957. The decision of the Tribunal was unsuccessfully challenged before the High Court. It is evident that the decision of the Tribunal was quite correct, and the Tribunal had no option but to dismiss the application, since the law gives no jurisdiction to the Tribunal to extend limitation, as is done under section 5 of the Indian Limitation Act. This Court then granted special leave against the order of the Tribunal passed in the appeal 869 before it, and the question is whether the appeal should be heard or the leave revoked, in view of the decision in Chokhani 's case (1). In Chokhani 's case (1), the attempt was to bypass the decision of the High Court on a question referred to the High Court for decision and also another decision of the High Court that no other point of law arose from the order of the Tribunal. It was held that this Court would not allow the High Court to be by passed, and that an appeal from the decision of the Tribunal in the circumstances was incompetent. A similar view was again expressed in two other cases, viz., Indian Aluminium Co. Ltd. vs Commissioner of Income tax (2) and Kanhaiyalal Lohia vs The Commissioner of Income tax (3). In all the three cases, reliance was placed by the appellants therein upon the decisions of this Court in Dhakeswari Cotton Mills, Ltd. vs Commissioner of Income tax (4) and Baldev Singh vs Commissioner of Income tax (5) It was pointed out in the judgments of this Court that the two cases relied upon were decided on the special circumstances existing there. In the first, there was a question of breach of the principles of natural justice, which could not be raised otherwise than by an appeal with the special leave of this Court. In the second case, it was pointed out that limitation was lost by the party through no fault of his, inasmuch as a letter was unduly delayed in post. In our opinion, in the present case also, special circumstances which justified the grant of special leave in Baldev Singh 's case (5), exist. There was a combination of circumstances which led to the filing of the application a day late, but in circumstances showing that the default was not due to any negligence on the part of the Commissioner of Income tax. The receipt of the notice on July 15 is admitted; but the affixing of the date stamp on the 16th was due to the failure of the 870 clerk to deal with the notice on the 15th because he fell ill and had to leave the office. It is common knowledge that date stamps are altered every day in the office, and this is done mostly by a very junior employee. The affixing of the date stamp on the 16th and the notice consequently bearing that date went unnoticed, and relying upon the date stamp, the appeal was filed, though on the last day of limitation but within time. In these circumstances, it is difficult to say that the Commissioner of Income tax was negligent and the negligence, if any, on the part of the clerk in affixing a wrong date stamp is excusable, if one considers his illness and his absence from the office on the 15th. In our opinion, this case comes within the rule of Baldev Singh 's case (1) and an appeal direct to this Court from the Tribunal 's order is justified by the special circumstances. By this appeal, no decision of the High Court can be said to be bypassed, because the decision of the High Court related to the correctness of the decision of the Tribunal on the question of limitation, which is not a question which is sought to be raised in an indirect way by the present appeal. We, therefore, overrule the preliminary objection. The assessee Company is the National Finance Ltd., New Delhi. It is a public limited Company which was incorporated in 1943. It deals in shares and securities and also as financiers. The present case arises from a deal in 3,000 shares of the Madhusudan Mills Ltd., Bombay, by the assessee Company. In the year of account, May 1, 1949, to April 30, 1950, corresponding to the assessment year, 1951 52, the assessee Company sold these shares suffering a loss of Rs. 5,48,712 8 0, which it claimed as one on the sale of its stock in trade. The Income tax Officer and the Appellate Assistant Commissioner held it to be a capital loss. The 871 Appellate Tribunal, Delhi Bench, reversed the decision, and held in favour of the assessee Company. The only question in this appeal is whether the decision of the Tribunal is right. The assessee Company belongs to a group of Companies controlled by one Lala Yodh Raj Bhalla and certain persons associated with him. It is convenient to describe these persons as the 'Yodh Raj Bhalla group '. These Companies are (1) Jaswant Sugar Mills Ltd., (2) Jaswant Straw Boards Ltd., (3) National Finance Ltd., (4) National Construction and Development Corporation Ltd., (5) Ganesh Finance Corporation Ltd., and (6) Raghunath Investment Trust Ltd. The interrelation of these. Companies is very intimate, and they are practically owned by the 'Yodh Raj Bhalla group '. To understand this, the following analysis of the shareholdings of these Companies must be sufficient: (1) Jaswant Sugar Mills Ltd. 2,00,000 shares (i) Jaswant Straw Board Ltd. 44,845 (ii) National Finance Ltd. 67,390 (iii)National Construction and Development Corporation Ltd. 47,800 _______ 1,60, 035 (i.e. over 80 per cent) (2) Jaswant Straw Board Ltd. 6,176 shares. (i) National Finance Ltd. 4,783 (ii) National Construction and Development Corporation Ltd. 500 _____ __ 5,200 odd (or nearly 84 per cent) 872 (3) National Finance Ltd. (assessee Company) 50,000 shares. Ganesh Finance Corporation Ltd. 48,000 (or over 96 per cent) (4) National Construction and Develop ment Corporation Ltd. 1,30,504 shares. Ganesh Finance Corporation Ltd. 1,30,500 (almost all) (5) Ganesh Finance Corporation Ltd. 50,000 shares. Raghunath Investment Trust Ltd. 49,795 (99.6 per cent of the capital) (6) Raghunath Investment Trust Ltd. 10,000 shares. (i) Mr. Yodh Raj Bhalla 1,500 (ii) Mrs. Bhalla 1,000 (iii) Mr. N. C. Malhotra (brother in law) 1,000 (iv) Mr. Ram Prasad (father in law) 1,000 (v) Mr. Dina Nath (Secretary) 1,000 (vi) National Finance Ltd. 3,499 (vii) Mr. Piyare Lal Saha 1 9,000 (90 per cent). The resulting position may be stated thus: Ganesh Fiance Corporation Ltd. practically owns the assessee Company and National Construction and Development Corporation Ltd., Raghunath Investment Trust Ltd. practically owns the Ganesh Finance Corporation Ltd., and 'Yodh Raj Bhalla group ' practically owns Raghunath Investment Trust Ltd. 873 Jaswant Sugar Mills Ltd. is practically owned by Jaswant Straw Board Ltd., National Finance Ltd., and National Construction and Development Corporation Ltd., and Jaswant Straw Board Ltd., is practically owned by National Finance Ltd., and National Construction and Development Corporation Ltd. Thus, the entire group is owned by a consortium, and there is no doubt about it. The shares of Madhusudan Mills Ltd. were acquired in the following circumstances: In July 1948, Mr. Yodh Raj Bhalla, who was in a position by reason of his holdings in these six Companies to influence decisions of the Board of Directors, arranged to purchase 26,547 shares of the Mills from Messrs. Bhadani Brothers, Ltd., who were the managing agents of the Mills. This block of shares represented about 80 per cent of the total issued capital of the Mills, The purchase was made at Rs. 400 per share, when the price in the market, was about Rs. 250 per share. Out of the remaining shares which were on the market 200 shares were purchased at Rs. 252 8 0 per share, which was then the quoted price. Now, these shares were purchased by Jaswant Sugar Mills Ltd., but the money for the purchase of the shares was obtained by borrowing it from some of the other concerns. These Companies, as has been shown above, were completely under the control of 'Yodh Raj Bhalla group '. The arrangement for the money was as follows: Rs. 14,75,000 borrowed from the assesee Company. Rs. 5,00,000 from National Construction and Development Corporation Ltd. Rs. 55,00,000 from the assessee Company but advanced by Ganesh Finance Corporation Ltd. 874 The shares were registered as follows: 10,500 shares registered in the name of the assessee Company. 5,400 shares in the name of the National Construction and Development Corporation Ltd., and the balance in the names of the nominees of Jaswant Sugar Mills Ltd., which meant, largely, persons belonging to the 'Yodh Raj Bhalla group '. On October 9, 1949, the assessee Company purchased 15,547 shares at Rs. 400 per share from Jaswant Sugar Mills Ltd., and the amount paid by the assessee Company was adjusted towards the purchase price and the balance was paid. On the same day, the remaining 11,000 shares were sold by Jaswant Sugar Mills Ltd. to National Construction and Development Corporation Ltd., at Rs. 400 per share. Thus, on that date Jaswant Sugar Mills Ltd. ceased to have any connection with the present matter. It may be pointed out that on the date on which the two transactions took place, the priceruling in the market was about Rs. 217 8 0. Before Jaswant Sugar Mills Ltd. parted with the shares, they. had appointed a new Board of Directors of the Madhusudan Mills Ltd., and these new Directors also belonged to the same group. The managing agency of Messrs. Bhadani Brothers Ltd. was terminated, and on the same day on which the shares were purchased from these managing agents, the assessee Company was appointed as the purchasing and selling agent of the Mills. The assessee Company made enormous profit from the acquisition of these shares by way of dividend and commission as the purchasing and selling agent. In October and November, 1948 they, however, sold 6,525 shares to Dalmia Cement and Marketing Company Ltd. at Rs. 400 per share. These shares subsequently came back to the same group; but 875 that is not a matter with which we are immediately concerned. On April 7, 1949, 4,500 shares were sold by the assessee Company to the National Investment Trust Ltd. at Rs. 181 per share resulting in a loss of Rs. 8,80,000, and on June 1, 1949, another block of 3,000 shares was sold to the National Investment Trust Ltd., at Rs. 180 per share, resulting in a loss of Rs. 5,86,312. We are not concerned with the loss arising from the first sale which was considered in the assessment year, 1950 51, and in respect of which a reference is pending in the High Court of Punjab. We are concerned with the loss in the second year relating to the assessment year, 1951 52. In that year, the loss on the sale of the shares was sought to be set off against the profits made, and the loss practically cancelled the profits. The shares which were sold by the assessee Company on the two occasioning were sold to one Amrit Bhushan (a relative of Mr. Yodh Raj Bhalla) who sold then the same day to Messrs. National Investment Trust Ltd., at the slender profits of 8 annas per share, which was brokerage. Thus, at the beginning and at the end, though numerous transactions had taken place, the shares continued to be the property of the 'Yodh Raj Bhalla group '. The question is whether the loss on the sale of the shares be set off against the profits in the year in which the sales and profits were respectively made. The assessee Company was assessed for the assessment year, 1950 51, by the Income tax Officer, Meerut. In that year, the loss of Rs. 8,78,062 8 0 arising from the sale of Rs. 4,520 shares of Madhusudan Mills Ltd. was set off against the profits of the assessee Company. The case of the assessee Company for the assessment year, 1951 52, was considered by the Income tax Officer, Central Circle V, New Delhi, to whom the cases of the other Companies above named were also transferred. By looking into the 876 affairs of these Companies, he came to learn, that the shares of the Madhusudan Mills Ltd. were purchased at a price, which was almost double the current market price, by the 'Yodh Raj Bhalla group, and were transferred at the same price to the assessee Company. He found that this was done with a view to removing Messrs. Bhadani Brothers, Ltd. from their managing agency and to securing for the assessee Company the purchasing and selling agency of the Mills. On the date of the purchase from Messrs. Bhadani Brothers, Ltd., Jaswant Sugar Mills Ltd. achieved this purpose in view of their controlling interest. Bhadani Brothers, Ltd. ceased to be the managing agents from that date, and the purchasing and selling agency of the Madhusudan Mills, Ltd. was given to the assessee Company, though it had, on that day, done no more than give a loan to Jaswant Sugar Mills Ltd. In the assessment year, 1951 52, the loss of Rs. 5,86,312 8 0 on the sale of 3,000 shares was, therefore, disallowed holding it to be a capital loss. The order of the Income tax Officer, Central Circle V, New Delhi was confirmed on appeal by the Appellate Assistant Commissioner. On further appeal by the assessee Company, the Income tax Appellate Tribunal, Delhi, reversed the order of the Appellate Assistant Commissioner, and held that the loss was a trading loss. Whether a particular loss is a trading loss or a loss on the capital side undoubtedly depends upon the facts of each case. But it has been held, over and over again, that the question is not one of pure fact, and that a mixed question of fact and law is always involved. The cases to which we shall make a reference presently, have laid down this proposition, and those cases have also indicated how the matter is to be viewed in the context of facts. In Commissioner of Income tax vs Ramnarain Sons Ltd. (1), the Company was a dealer in shares 877 and also carried on the business of acquiring managing agencies of other Companies. The Company the acquired the managing agency of a Textile Mill from Messrs. Sassoon J. David and Co. Ltd., and also agreed as part of the same transaction to buy 2,507 shares of the Mills. 1,507 shares were purchased at Rs. 2,321 8 0 per share, and the remaining 4,000 shares were purchased at Rs. 1,500 per share. These shares were quoted on the market at Rs. 1,610. Later,4,000 shares were sold at a loss of Rs. 1,78,000 This was shown in the books of the Company as a busines loss but was disallowed, as the shares were not held to be the stock in trade of the business of the Company as share dealers. On a reference to the High Court of Bombay, a Divisional Bench upheld the view of the Tribunal. Chagla,C. J., in delivering the judgment of the Court, observed that a managing agency being an asset of an enduring nature, the way to look at the matter was to enquire what was, the primary intention in acquiring the shares. The learned Chief Justice then referred to a judgment of this Court reported in Kishan Prasad & Co. Ltd. vs Commissioner of Income tax (1), where it was observed: "It seems that the object of the assessee Company in buying shares was purely to obtain the managing agency of the third mill which no doubt would have been an asset of an enduring nature and would have brought them profits but there was from the inception no intention whatever on the part of the assessee Company to re sell the shares either at a profit or otherwise deal in them." The learned Chief Justice then considered the argument that a block of shares might have to be bought, if at all, at a higher price, and observed as follows: "A dealer in shares may succeed in getting a large number of shares at a price less than 878 the market price if the seller is in difficulties and wants to get rid of his shares and to get liquid assets. But we have not heard of a dealer in shares purchasing a large number of shares at a higher value than the market value. The other circumstance which is equally strong in this case is that the shares were purchased for the acquisition of the managing agency. Therefore the real object of the assessee company was not to do business in these shares, not to make profit out of these shares, but to acquire a capital asset out of which it would earn managing agency commission and make profit." Messrs. Ramnarain and Sons. Ltd. then appealed to this Court, and the decision of the Bombay High Court was upheld. The Judgment of this Court is reported in Ramnarain Sons (Pr.) Ltd. vs Commissioner of Income tax (1). It was laid down by this Court that in considering whether a transaction was or was not an adventure in the nature of trade, the problem must be approached in the light of the intention of the assessee, having regard to the "legal requirements which are associated with the concept of trade or business". Dealing with the price above the market price which was paid in that case, it was observed: "Even assuming that the appellants acquired the entire block of 2,507 shares from M/s. Sassoon J. David & Co. Ltd. the shares transferred to the names of the directors being held by them merely as nominees of the appellants the price per share was considerably in excess of the prevailing market rate. The only reason for entering into the transaction, which could not otherwise be regarded as a prudent business transaction, was the acquisition of the 879 managing agency. If the purpose of the acquisition of a large block of shares at a price which exceeded the current market price by a million rupees was the acquisition of the managing agency, the inference is inevitable that the intention in purchasing the shares was not to acquire them as part of the trade of the appellants in shares. " The above two decisions are merely the application of a principle of long standing, which has been stated over and over again in the past. In Oriental Investment Co. Ltd. vs Commissioner of Income tax (1), that principle was reiterated, and it was that the object for which a company was formed did not invest the deal with the characteristics of a trade in shares, but that other circumstances along with that fact must be considered to find out the real object of a particular venture. Before we deal with the present case, one other case of this Court may be noticed. In Rajputana Textiles vs Commissioner of Income tax (2), the converse conclusion was reached. There, on the facts and circumstances of the case, it was held that a particular deal in shares was a commercial venture and had all the attributes of an adventure in the nature of trade. In that case, the transaction was not a single or an undivided one with a slump payment, because for the managing agency, Rs. 12,50,000 were paid separately and for the shares, a sum of Rs. 83,98,000 was paid. The two acquisitions being different, the profit on the sale of some of the shares was considered to be a gain on the revenue side. There is no doubt, whatever, that the shares of the Madhusudan Mills Ltd. were acquired at a price considerably higher than the market price. In fact, that the price paid was almost double. Such a deal, from the business point of view, was not prudent, unless the purchaser stood to gain in some 880 other way. It was contended before us that this was a speculative deal in the hope that the price of the shares would firm up when the textile industries would revive. If this was the intention, then it might possibly be argued that the purchasers miscarried in their calculations, and suffered a loss in a business transaction. But, was this the intention of the Directors of Jaswant Sugar Mills Ltd. ? Those who sold the shares were not only in possession of the shares but also of the managing agency of the Madhusudan Mills Ltd., and the intention of the Directors of Jaswant Sugar Mills Ltd. was to remove the sellers from their position as managing agents and to get the entire benefit of such or other agencies for themselves. The assessee Company has urged that might have been the intention of they Jaswant Sugar Mills Ltd. but not of the assessee Company which had, on that day, merely given a loan to Jaswant Sugar Mills Ltd. Curiously enough, however, the immediate benefit of the deal was the acquisition of the selling and purchasing agency of the Mills, and that was obtained not in favour of Jaswant Sugar Mills Ltd. but of the assessee Company, even though on July 15, 1948 (the date of purchase) the assessee Company had obtained registration of 10,5000 shares by way of security in its own name. Why the assessee Company was favoured in this way is not far to seek. It mattered not whether Jaswant Sugar Mills Ltd. acquired that agency or the assessee Company; the benefit thereof went to the same group of persons. The transaction of sale of the shares was also made within three months of their purchase, and the assessee Company not only bought the 10,500 shares which stood in its name but 15,547 shares, which gave the assessee Company a controlling voice in the affairs of the Mills. The assessee Company continued to retain the selling and purchasing agency, which was very profitable. Indeed, on its investment in the first year of Rs. 14 lakhs odd, it 881 made a profit of about Rs. 7 lakhs. The question, therefore, would be whether the assessee company in purchasing the shares merely wished to deal in shares as stock in trade, or was acquiring a capital asset of an enduring nature. This question is not one of fact, pure and simple, hut one of an inference in law from the proved circumstances of the case. The Income tax Officer, in deciding this question against the assessee Company, pointed out numerous circumstances, which showed clearly that this was not a mere purchase of shares as shares by a speculator, who, buying a big block, sometimes pays slightly more than the market rate. Bhadani Brothers Ltd., owned not only the shares but also the managing agency, and it is obvious that they would not part with the shares without charging for the managing agency. The price of Rs. 400 per share was so out of proportion to the market price that it indicated, by itself, the acquisition of something more than the mere shares. According to the Income tax officer, the real intention was to acquire lucrative agencies of the Mills, and this intention, whether it was held by Jaswant Sugar Mills Ltd. Or the assessed Company or both, was of the same body of persons. The Appellate Assistant Commissioner endorsed the view of the Income tax officer; but the Tribunal made a distinction between one Company and another, and that distinction has been pressed upon us by the assessee Company. Relying upon the well known case of Salomon vs Salomon & Co. Ltd.(1), it was argued before us that each company must be viewed as a separate entity, and that the intention of one company could not be attributed to another company, even though the proprietorship of the companies might be same. As a proposition affecting companies, it cannot be gainsaid; but we are not concerned with a theoretical question as to the assesee Company being a separate legal entity, but with the 882 question whether a particular loss made by the assessee Company is a capital or a revenue loss. The two Companies, i. e., jaswant Sugar Mills Ltd. and the assessee Company, were directed by the same set of persons, and the facts show that even though Jaswant Sugar Mills Ltd. temporarily acquire the shares, they conferred all the benefits of the acquisition upon the assessee Company from the very first day. The assessee Company also ultimately came into possession of all the shares along with another Company, which was also directed by the same persons, and Jaswant Sugar Mills Ltd. went out of the picture within three months. In these circumstances, it is easy to see that the interposition of Jaswant Sugar Mills Ltd. was merely a device to secure the benefit of the English case, to which we have referred. It was never intended that Jaswant Sugar Mills Ltd. would hold the shares or the benefits arising from the acquisition of a block of shares, giving to the holder a decisive voice in the affairs of Madhusudan Mills Ltd. That controlling interest was acquired by the `Yodh Raj Bhalla group ' for the benefit of the assessee Company, and it was an acquisition of an interest of an enduring nature. Reference was made, in this connection, to the transactions with the Dalmia Cement and Marketing Co. Ltd. in which the latter paid the same price namely, Rs. 400 per share. Perhaps, the Dalmia Company was after the controlling interest in its own way, and it is significant to note that within a short time, those shares again found their way in the hands of the same group. Similarly, the shares changed hands even within this group through the agency of Amrit Bhushan, no doubt a broker but also a relative of Mr. Yodh Raj Bhalla, who profited only to the extent of 8 annas per share, and bought and sold the shares from one Company to mother on the same day. All this show that the affairs of there Companies were centrally arranged, and the 883 intention was to benefit the assessee Company by the acquisition of a large block of shares at a very much later prices than obtaining in the market, to acquire certain agencies of a profitable character. In our opinion, this transaction must be regarded as one on the capital side. Shares were never treated as part of the stock in trade. They were not sold in the market, but were sold at a loss to another Company belonging to the same group, with the obvious intention of setting off the losses against the profits, thus cancelling the profits, and saving them from taxation. In the result, the appeal is allowed, with costs on the respondent. Appeal allowed.

The respondent was a company dealing in shares and securities and belonged to a group of companies all controlled by the same persons. In the year of account, corresponding to the assessment year 1951 52, the respondent sold the shares relating to Madhusudan Mills Ltd., which it had acquired sometime earlier, suffering a loss for which it claimed a set off against the profits in that year. The Income tax Officer found that the shares in question had been purchased by J, a company belonging to the group, at a price which was almost double the current market price, that it was so done with a view to removing the sellers from their managing agency and to securing for the respondent the purchasing and selling agency of the Mills, and that after the purchase J achieved the purpose in view of its controlling interest and the purchasing and selling agency of the Mills was given to the respondent, though the latter had done no more than give a loan to J. It was also found that soon after the purchase the shares in question came into the possession of the respondent and that when the shares were sold it was not in the market but at a loss to another company belonging to the same group. The Income tax Officer came to the conclusion that in getting the shares the respondent did not deal with them as stock in trade but was acquiring a capital asset of an enduring nature. Accordingly, he disallowed the claim holding the loss to be a a capital loss. The Appellate Tribunal, however, held in favour of the respondent on the view that a distinction must be made between the respondent company and J. The Commissioner of Income tax moved the Tribunal for a reference to the High Court, but it was dismissed on the ground that though it was barred only by one day and there was no negligence on the part of the Commissioner, the Tribunal had no power to extend time. An application to the High Court was also dismissed. The Commissioner of Income tax then applied for and got special leave to appeal against 866 the order passed by the Tribunal. When the appeal came on for hearing in due course the respondent raised an objection that the appeal was not maintainable because no appeal was filed against the order of the High Court, and relied on the decision in Chandi Prasad Chokani vs State of Bihar, ; ^ Held, that the appeal was maintainable because there was no question of by passing the order of the High Court which only related to the correctness of the decision of the Tribunal on the question of limitation which was not the subject of the present appeal. Held, further, that there were special circumstances which justified the grant of special leave. Baldev Singh vs Commissioner of Income tax , applied. Chandi Prasad Chokhani vs State of Bihar ; , distinghuished. Held, also, that, on the facts, the object was to purchase a large block of shares at a much larger price than the market value to acquire certain agencies of a profitable character, that the purchase of the shares by J was merely a device but the controlling interest was acquired by the respondent, and that the transaction must be regarded as one on the capital side. Ramanarain Sons (P.) Ltd. vs Commissioner of Income tax, ; and Oriental Investment Co. Ltd. vs Commissioner of Income tax, ; , applied. Salomon vs Salomon & Co. Ltd. ; , distinguished.

l Appeal Nos. 772 773 of 1972. From the Judgment and Order dated 9th/10th July, 1970 of the Calcutta High Court in I.T.R. No. 158 of 1966. N. A. Palkhivala, Dr. D. Pal, U.K. Khaitan, S.R. Agar wal and Parveen Kumar for the Appellant. V.P. Raman, Addl. General, T.A. Ramachandran and R.N. Sachthey for the Respondents. 764 The Judgment of the Court was delivered by GOSWAMI, J. These two appeals by certificate are from the judgment of the Calcutta High Court since reported in Commissioner Income tax, West Bengal I vs Textile Machinery Corporation( '). The two appeals relate respectively to two assessment years 1958 59 (calendar year 1957) and 1959 60 (calendar year 1958). The matter relates to the claim by the assessee for exemption of tax under section 15C of the Indian Income tax Act, 1922 (briefly the Act). The matter came u13 before the High Court 'on a refer ence under section 66(1) of the Act. The two questions referred to were as follows : "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the Steel Foundry Division was an industrial undertaking to which section 15C of the. Indian Income tax Act, 1922, applied ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the Jute Mill Division set up by the assessee company was an indus trial undertaking to which section 15C of the Indian Incometax Act, 1922, applied ? The facts may briefly be stated: The assessee (the appellant herein) is a heavy engineer ing concern manufacturing boilers, machinery parts, wagons, etc. For the assessment years 1958 59 and 1959 60 the assessee claimed exemption of tax under section 15C of the Act in respect of the profits and gains derived from its Steel Foundry Division and a similar claim for relief under section 15C in respect of its profits and gains derived from its Jute Mill Division for the year 1959 60. The assessee had previously in the earlier years bought from outside the castings manufactured in the Steel Foundry Division which was started in the assessment year 1958 59 and continued thereafter. Again, similarly in the year '1959 60, in addition to the manufacturing of castings in the Steel Foundry Division the assessee started the Jute Mill Division where the parts made out of the raw material supplied by the Boiler Division by machining and forging them were given to the Boiler Division of the assessee. It was found that out of a total sale of Rs.28,23,127/ of steel castings goods worth Rs.18,39,433/ were used in connection with the various Divisions of the company. In respect of the Jute Mill Division, the Incometax Officer found that out of the total sales of Rs.13,03,509/ sales. to the Boiler Division totalled Rs.11,89,812/ and sales to outside the Jute Mill Division totalled only a sum of Rs.1,13,6971/ . The Income tax Officer and the Appellate Assistant Commissioner, on the above facts, held the under takings as expansion and reconstruction of the business already existing and hence the assessee was not entitled (1) 765 to exemption under section 15C of the Act. The Income tax Appellate Tribunal, however, allowed the appeal of the assessee and accepted the claim for exemption under section 15C. According to the Tribunal both the Steel Foundry and the Jute Mill Division of the assessee were new industrial undertakings. The above conclusion was reached on the basis of several facts found by the Tribunal. These arc that the machinery was new, was housed in a separate building and that industrial licences had to be obtained, for manufactur ing the parts in question. According to the Tribunal the existing business of the assessee consisted of manufacturing boilers, wagons, etc. and for that purpose the assessee was purchasing the spare parts, forgings and castings from outside. The Tribunal came to the conclusion that the business of the new industrial undertakings was to manufac ture those very spare parts. Hence the Tribunal concluded that it could not be said that the undertakings were formed out of the existing 'business to come within the mischief of the exclusion clause in section 15C(2)(i). The Tribunal rightly relying upon the Tara Iron and Steel Co. Ltd. and Others vs State of Bihar(1) also held that even though the manufactured products of the new industrial undertakings were mostly used in the assessee 's other business of manu facturing boilers, wagons, etc. the element of profit was there and the extent of the same could be ascertained as the assessee was maintaining separate books of account. In the reference at the instance of the Department the High Court answered both the questions in the negative and against the assessee. The High Court held as follows : "The goods which the steel foundry division and the jute mill division began producing for the assessee were also previous ly used by the assessee in its business, but they were purchased from outside and this purchase from outside was replaced by produc tion or manufacture from within the asses see 's own business. This change of producing one 's own goods systematically used in the existing business instead of buying them from outside would only be a reconstruction of a business already in existence . In so far as they started producing and manufactur ing themselves, the assessee was doing some thing which was only a reconstruction of the business already in existence . . The newness of the machinery of the steel foundry division and the jute mill division could not by itself make them new industrial undertakings. Separate housing of, and separate accounts for, the steel foundry division and jute mill division may be only parts of reconstruction of the same business and did not necessarily indicate a new indus trial undertaking. The grant of a special licence for the steel foundry division did not make it an industrial undertaking to qualify for exemption from tax under section 15C, because the licence was for expansion of the existing industrial undertaking and the licence did not cover the jute mill division". (1) 766 It is, however, admitted before us that both the units were covered by licences. The controversy in these appeals centres round the true construction of section 15C(2)(i) of the Act and in particu lar with regard to the scope and ambit of the expression therein, namely, the reconstruction of business already in existence. Is the High Court right in holding that the two industrial undertakings, namely, the Steel Foundry and the Jute Mill Division, are formed by reconstruction of the business already in existence differing from the con trary conclusion reached by the Tribunal ? Before we proceed further, we will read section 15C as it stood during the material time: "15C. Exemption from tax of newly estab lished industrial undertakings. (1) Save as otherwise hereinafter provided, the tax shall not be payable by an assessee on so much of the profits or gains derived from any industrial undertaking to which this section applies as do not exceed six per cent per annum on the capital employed in the undertaking computed in accordance with such rules as may be made in this behalf by the Central Board of Revenue. (2) This section applies to any industrial undertaking which (i) is not formed by the splitting up, or the reconstruction of, business already in existence or by the transfer to a new business of building, machinery or plant, previously used in any other business; (ii) has begun or begins to manufacture or produce articles in any part of taxable territories at any time within a period of thirteen years from the 1st day of April 1948, or such further period as the Central Govern ment may, by notification in the Official Gazette, specify with reference to any partic ular industrial undertaking; (iii) employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power; Provided that the Central Government may, by notifica tion in the Official Gazette, direct that the exemption conferred by this section shall not apply to any particular industrial undertaking. 767 (3) The profits or gains of an industrial undertaking to which this section applies shall be computed in accordance with the provisions of section 10. (4) The tax Shall not be payable by a shareholder in respect of so much of any dividend paid or deemed to be paid to him by an industrial undertaking as is attributable to that part of the profits or gains on which the tax is not payable under this sec tion. (5) Nothing in this section shall affect the application of section 23A in relation to the profits or gains of an industrial under taking to which this section applies. (6) The provisions of this section shall apply to the assessment for the financial year next following the previous year in which.the assessee begins to manufacture or produce articles and for the four assessments immediately succeeding". We are principally concerned in these appeals with clause (i) of sub section (2) of section 15C and that also only with one part of it, namely, whether the industrial undertakings, Steel Foundry and the Jute Mill Division, are not formed by the reconstruction of the business already in existence. The learned Additional Solicitor General submits that these two undertakings are not entitled to exemption under section 15C(2) as rightly so held by the High Court since they were formed by the reconstruction of the assessee 's business already in existence, namely, the business of heavy engineering. He submits that setting up of a separate unit to do something in the course of pre existing manufacturing process to aid the production of the same article as was being produced by the pre existing industrial undertaking would not amount to starting of a new industrial undertak ing. He further emphasises that production of the articles in the Steel Foundry and in the Jute Mill Division is only ancillary activity to the main business of the assessee and since the articles produced in these two supplemental undertakings help in producing the identical article which has been the end product of the assessee 's main business, section 15C(2) (i) cannot come to the aid of the assessee. According to Mr, Raman these two industrial undertakings cannot be said to be not formed out of the reconstruction of the business already in existence. Section 15C(2)(i) only excludes three categories of industrial undertakings from the benefit of the section without referring to clauses (ii) and (iii) of that sub section and other limiting provisions of the section which are not applicable in the instant case. It is contended by Mr. Palkhivala that acceptance of the Additional Solicitor General 's submission will amount to adding a fourth category of cases in sub section (2)(i), namely, an industrial under 768 taking which is an ancillary undertaking manufacturing certain articles to supplement the principal industrial activity. This, says Mr. Palkhivala, will be adding something to the section. Section 15C is an exemption section. The benefit grant ed under this section is a partial benefit so far as the quantum of the exempted profits of the new industrial under taking as also for a limited period or periods as specified in the section. If the two industrial undertakings, about the existence of which there can be no controversy, as found by the Tribunal, cannot be held to. be formed by the recon struction of the business already in existence, the benefit of section 15C will be available to the assessee. The principal object of section 15C is to encourage setting up of new industrial undertakings by offering tax incentive within a period of 13 years from April 1, 1948. Section 15C provides for a fractional. exemption from tax of profits of a newly established undertaking for five assessment years as speci fied therein. This section was inserted in the Act in 1949 by section 13 of the Taxation Laws (Extensions to Merged States and Amendment) Act, 1949 (Act 67 of 1949) extending the benefit to the actual manufacture or production of arti cles commencing from a prior date, namely, April 1, 1948. After the country had gained independence in 1947 it was most essential to give fillip to trade and industry from all quarters. That seems to be the background for insertion of section 15C. It is also significant that the limit of the number of years for the purpose of claiming exemption has been pro gressively raised from the initial 3 years in 1949 to 6 years in 1953, 7 years in 1954, 13 years in 1956 and 18 years in 1960. The incentive introduced in 1949 has been thus stepped up ever since and the only object is that which we have already mentioned. Under sub section (1) of section 15C the tax shall not be payable by an assessee on profits not exceeding six per cent per annum on the capital employed in the new industrial undertaking from the profits which alone exemption is claimed. Sub section (2) of section 15C has a negative as well as a positive aspect. Negatively, the new industrial undertaking of the assessee should not be formed (1) by the splitting up of the business already in existence, (2) by the reconstruction of business already in existence, or (3) by the transfer to a new business of building, machinery or plant used in a busi ness which was being carried on before April 1, 1948. We agree that it is not possible to exclude any new indus trial undertaking other than the three categories mentioned above. 769 We are concerned in these appeals with the type No. (2) mentioned above. Positively, the new industrial undertaking must produce result, that is to say, it has to manufacture or produce articles at any time within a period of 13 years from April 1, 1948. The further requirement under sub section (2) is with regard to the personnel in the under taking, namely, that ten or more workers have to work in the manufacturing process carried on with the aid of power or twenty or more workers have to carry on work without the aid of power. The above element with regard to the number of workers engaged in the undertaking would go to. show that even small industrial undertakings, newly started, are within the exemption clause, where, for example, twenty workers may complete the industrial process without the aid of power. There is no controversy about the .positive aspects in 'these appeals. Again, the new undertaking must not be substantially the same old existing business. The third excluded category mentioned above significant. Even if a new business is carried on but by piercing the veil of the new business it is found that there is employment of the assets of the old business, the benefit will be not available. From this it clearly follows that substantial investment of new capital is imperative. The words "the capital employed" in the principal clause of section 15C are significant, for fresh capital must be employed in the new undertaking claiming exemption. There must be a new under.taking where substan tial investment of fresh capital must be made in order to enable earning of profits attributable to that new capital. The assessee continues to be the same for the purpose of assessment. It has its existing business already liable to tax. It produced in the two concerned undertakings commodi ties different from those which it has been manufacturing or producing in its existing business. Manufacture of produc tion of articles yielding additional profit attributable to the new outlay of capital in a separate and distinct unit is the heart of the matter, to earn benefit from the exemption of tax liability under section 15C. Sub section (6) of the section also points to the same effect, namely, production of articles. The answer, in every particular case depends upon the peculiar/acts and conditions of the new industrial undertaking on account of which the assessee claims exemp tion under section 15C. No hard and fast rule can be laid down. Trade and industry do not run in earmarked channels and particularly so in view of manifold scientific and technological developments. There is great scope for expan sion of trade and industry. The fact that an assessee by establishment of a new industrial undertaking expands his existing business, which he certainly does, would not, on that score, deprive him of the benefit under section 15C. Every new creation in business is some kind of expan sion and advancement. The true test is no.t whether the new industrial undertaking connotes expansion of the exist ing business of the assessee but whether it is all the same a new and identifiable undertaking separate and distinct from the existing business. No particular decision in one case can lay down an inexorable test to determine whether a given case comes under section 15C or not. In order that the new undertaking can be said to be not formed out of the already existing business, there 770 must be a new emergence of a physically separate industrial unit which may exist on its own as a viable unit. An undertakings is formed out of the existing business if the physical identity with the old unit is preserved. This has not happened here in the case of the two undertakings which are separate and distinct. It is clear that the principal business of the assessee is heavy engineering in the course of which it manufactures boilers, wagons, etc. If an industrial undertaking produce certain machines or parts which are, by themselves, identi fiable units being marketable commodities and the undertak ing can exist even after the cessation of the principal business of the assessee, it cannot be anything but a new and separate industrial undertaking to qualify for appropri ate exemption under section 15C. The principal business of the assessee can be carried on even if the said two addi tional undertakings cease to function. Again, the con verse is also true. The fact that the articles produced by the two undertakings are used by the Boiler Division of the assessee will not weigh against holding that these are new and separate undertakings. On the other hand the fact that a portion of the articles produced in these two new indus trial undertakings had been sold in the open market to others is a circumstance in favour of the assessee that the new industrial units can function on their own. Use of the articles by the assessee is not decisive to deny the benefit of section 15C. Section 15C partially exempts from tax a new industri al unit which is separate physically from the old one, the capital of which and the profits thereon are ascertainable. There is no difficulty to hold that section 15C is applica ble to an absolutely new undertaking for the first time started by an assessee. The cases which give rise to controversy are those where the old business is being car ried on by the assessee and a new activity is launched by him by establishing new plants and machinery by investing substantial funds. The new activity may produce the same commodities of the old business or it may produce some other distinct marketable products, even commodities which may feed the old business. These products may be consumed by the assessee in his old business or may be sold in the open market. One thing is certain that the new undertaking must be an integrated unit by itself wherein articles are pro duced and at least a minimum of ten persons with the aid of power and a minimum of twenty persons without the aid of power have been employed. Such a new industrially recognisa ble unit of an assessee cannot be said to be reconstruction of his old business since there is no transfer of any assets of the old business to the new undertaking which takes place when there is reconstruction of the old busi ness. For the purpose Of section 15C the industrial units set up must be new in the sense that new plants and machin ery are erected for producing either the same commodities or some distinct commodities. In order to deny the benefit of section 15C the new undertaking must be formed by recon struction of the old business. Now in the instant case there is no formation of any industrial undertaking out of the existing business since that can take place only when the assets of the old business are transferred substantially to the new undertaking. There is no such transfer of assets in the two cases with which we are concerned. 771 We will now deal with the question whether the two undertak ings the assessee are formed by reconstruction of the exist ing business. The word 'reconstruction ' is not defined in the Act but has received judicial interpretation. In re South African Supply and Cold Storage Company, Wild vs Same Company(1), Buckley, J. dealing with the meaning of the word 'reconstruction ' in a company matter observed as fol lows : "What does 'reconstruction ' mean ? To my mind it means this. An undertaking of some definite ' kind is being carried on, and the conclusion is arrived at that it is not desirable to kill that undertaking, but that it is desirable to preserve it in some form, and to do so, not by selling it to an outsider who shall carry it on that would be a mere sale but in some altered form to continue the undertaking in Such a manner as that the persons now carrying it on will substantially continue to carry it on. It involves, I think, that substantially the same business shall be carried on and substantially the same persons shall carry it on. But it does not involve that all the assets shall pass to the new company or resuscitated company, or that all the shareholders of the old company shall be shareholders in the new company or resusci tated company. Substantially the business and the persons interested must be the same". This concept of reconstruction was accepted by the Bombay High Court in the Commissioner of Income tax, Bombay City I vs Gaekwar Foam and Rubber Co. Ltd. (1), dealing with section 15C of the Act. While adverting to the passage which we have just quoted the Bombay "Now fully appreciating the distinction which counsel for the Revenue has sought to make between the case of a reconstruction of a company and the case of reconstruction of a business, these observations, as we read them, are equally illuminating in the context of reconstruction of business already in existence in the case of a newly established industrial undertaking". The Delhi High Court also in Commissioner of Income tax vs Gangs Sugar Corpora tion Ltd.(a), accepted the above concept of 'reconstruction ' in the following passage : "We have given the matter our earnest consideration and are of the view that in the reconstruction of business, as in the reconstruction of a company, there is an element of transfer of assets and of some change, however partial or restricted it may be, of ownership of the assets. The transfer, however, need not be of all the assets. It is none the less impera tive that there should be continuity and preservation of the old undertaking though in an altered form. (1) (3) 772 The concept of reconstruction of business would not be attracted when a company which is already running one industrial unit sets up another industrial unit. The new indus trial unit would not lose its separate and independent identity even though it has been set up by a company which is already running an industrial unit before the setting up of the new unit". We endorse the above views with regard to reconstruction of business. Reconstruction of business involves the idea of substan tially the same persons carrying on substantially the same business. It is stated on behalf of the Revenue that the same company in the instant case continues to do the same business of heavy engineering no matter certain spare parts necessary as components to completion of the end product are now manufactured in the business itself. The fact that the assessee is carrying on the general business of heavy engineering will not prevent him from setting up new industrial undertakings and from claiming benefit under section 15C if that section is otherwise applicable. Howev er, in order to be entitled to the benefit under ' section 15C, the following facts have to be established by the assessee. subject always to the time schedule in the section : (1) investment of substantial fresh capi tal in the industrial undertaking set up, (2) employment of requisite labour therein, (3) manufacture or production of articles in the said undertaking, (4) earning of profits clearly attributa ble to the said new undertaking, and (5) above all, a separate and distinct identity of the industrial unit set up. We may add that there is no bar to an assessee carrying on a particular business to set up a new industrial undertaking on account of which exemption of tax under section 15C may be claimed. The legislature has advisedly refrained from inserting a definition of the word 'reconstruction ' in the Act. Indeed, in the infinite variety of instances of restructuring of industry in the course of strides in technology and of other developments, the question has to be left for decision on the peculiar facts of each case. If any undertaking is not formed by reconstruction of the old business that undertaking will not be denied the benefit of section 15C simply because it goes to expand the general business of the assessee on some directions. As in the instant case, once the new industrial undertakings are separate and independent production units ' in the sense that the commodities produced or the results achieved are commercially tangible products and the undertakings can be carried on 773 separately without complete absorption and losing their identity in the old business, they are not to be treated as being formed by reconstruction of the old business. The business of the assessee is of heavy engineering. The two new undertakings are independently producing arti cles which may be of aid to the principal business but yet the undertakings are distinct and not reconstruction out of the existing business of the assessee. Use by the assessee of the articles produced in its existing business or the concept of expansion are not decisive tests in construing section 15C. The High Court is not right in holding the two undertakings as formed by reconstruction of the existing business of the assessee. Several decisions have been cited at the bar before us. We approve of the conclusions in Commissioner of In come tax vs Ganga Sugar Corporation Ltd. (supra); Rajeswari Mills Ltd. vs Commissioner of income tax, Madras(1); Nagar das Bechardas & Brothers P Ltd. vs Commissioner of Income tax Gujarat (2); Commissioner of Income tax, West Bengal I vs Electric Construction and Equipment Company Ltd.(3); Commissioner ofIncome tax vs Hindusthan Motors Limited(4). The decision in Commissioner of Income tax vs Naya Sahitya(5) does not represent the correct legal position and, hence, cannot be approved. We may observe that we are not required to consider in these appeals how profit will be actually calculated in order to determine the quantum of exemption of six per cent of the profit on the capital employed. If difficulties are insurmountable and, therefore, profit cannot be ascer tained, that will be a different question in the course of practical application of the section. That kind of a possi ble difficulty should not weigh in the true construction of section 15C. In the present case the assessee claimed profit and there was no difficulty about ascertainment of the exempted profit as separate books of accounts were kept and the undertakings were at separate places. In view of the foregoing discussion, we are clearly of opinion that the High Court is not right in answering the two questions in the negative and against the assessee. On the other hand. the Tribunal was right in answering the two questions in the affirmative and against the Department. The two questions referred stand answered in the affirma tive. The judgment of the High Court, is, therefore, set aside and the appeals are allowed with costs. P.B.R. Appeals allowed. (1) (2) (3) (4) [1976] Taxation Law Reports.

Section 15C of the Indian Income tax Act 1922, which deals with exemption from tax of newly established industri al undertakings, provides in sub section 2(i) that the section applies, among others, to any industrial undertaking which is not formed by the splitting up, or the reconstruction of business already in existence. The assessee (appellant) was a heavy engineering con cern manufacturing boilers. machinery parts and wagons. In addition, it had started a Steel Foundry Division and a Jute Mill Division. The bulk of the goods produced in both the divisions was used in the various divisions of the assessee company. The assessee 's claim for exemption from tax under section 15C in respect of profits derived from both the companies was rejected by the Income tax Officer and its appeal was rejected by the Appellate Assistant Commissioner on the ground theft the .undertakings were an expansion and recon struction of the existing business. On appeal, the Appellate Tribunal held that although the products manufactured in the two divisions were used in the assessee 's business, the Steel Foundry and the Jute Mill Division were new industrial undertakings, in that the machinery used in them was new, they were housed in separate buildings, were: established under separate licences and that both the new divisions were maintaining separate books of account. On reference, the High Court held that it was a case of reconstruction of the existing business because the goods produced in the two divisions were primarily used in the assessee 's engineering concern. Allowing the appeal. HELD: The Tribunal was right in holding in favour of the assessee. Section 15C is applicable to an absolutely new undertaking for the first time started and in order to deny benefit of the section, the, new undertaking must be formed by reconstruction of the old business. [768 B C] 1. (a) In order to be entitled to the benefit of section 15C, the assessee has to establish: (1) the investment of substantial fresh capital in the industrial undertaking; (2) employment of the requisite labour therein (3) manufacture or production of articles in the under taking; (4) earning of profits 'clearly attributable to the new undertaking; and (5) separate and distinct indentity of the industrial unit set up. (b) Once the new industrial undertakings are separate and independent production units in the sense that the commodities produced or the results achieved are commercial ly tangible products and the undertakings can be carried on separately without complete absorption and losing their identity in the old business, they are not to be treated as being formed by reconstruction of the old business. [772 H, 773 A] 763 (c) The object of the section is to encourage the setting up of new industrial undertakings by offering tax incentives within a certain period. Sub section (2) has a negative as well as a positive aspect. Negatively, a new undertakings should not be formed by splitting up of the business already in existence and by the reconstruction of business already in existence; and positively, a new undertaking must produce results, that is to say, it has to manufacture or produce articles at any time within the stipulated period. The new undertaking must not be substan tially the same as the existing business. The words "the capital .employed" are significant, for, fresh capital must be employed in the undertaking claiming exemption. Manufac ture or production of articles yielding additional profits attributable to the new outlay of capital in a separate and distinct unit is the heart of the matter to earn the benefit from the exemption of tax liability under section 15C. The fact that by establishing a new industrial undertaking the asses see expands its existing business would not deprive it of the benefit under section 15C. If an industrial undertaking produces certain machines or parts which are identifiable units being marketable commodities and the undertaking can exist even after the cessation of the principal business of the assessee, it cannot be anything but a new and separate industrial undertaking to qualify for appropriate exemption under section 15C. [769 E H, 770A] In the instant case, the principal business of the assessee can be carried on even if the two additional undertakings cease to function. The fact that a portion the articles produced in the new undertakings had been sold in the open market to others is a circumstance in favour of the assessee that the new industrial units can function on their own. Use of the articles by the assessee is not decisive 10 deny the benefit of section 15C. There was no 'formation of any indus trial undertaking out of the existing business since that can take place only when the assets of the old business are transferred substantially to the new undertaking. there ,ins no difficulty about ascertainment of the exempted profit as separate books of accounts were kept and the undertakings were at separate places. [770 B D. G H] The High Court was not right in holding that the two undertakings were formed by reconstruction of the existing business of the assessee. [773 B C] 2. Reconstruction involves that substantially the same business shall be carried on and substantially the same persons shall carry it on. But it does not involve that all the assets shall pass to the new company or resus citated company, or that all the shareholders of the old company shall be shareholders in the new company. Substan tially the business and the person interested must be the same. [771 C D] South African Supply and Cold Storage Company Wild vs Same Company, , followed. Commissioner of Income tax Bombay City 1 vs Gackwar Foam and Rubber Co. Ltd. , Commissioner of Income tax vs Ganga Sugar Corporation Ltd. , Rajeswari Mills Ltd. vs Commissioner of Income tax Madras, , Nagardas Bechardas & Brothers P. Ltd. vs Commis sioner Income tax Gujarat, , Commissioner of Income tax. West Bengal I vs Electric Construction and Equipment Company Ltd. and Commissioner of Income tax vs Hindustan Motors Limited, [1976] Taxation Law Reports 821, approved. Commissioner of Income tax vs Naya Sahitya , not approved.

Appeal No. 1868 of 1968. Appeal from the Judgment and Decree dated the 21st February 1968 of the Judicial Commissioner 's Court at Goa, Daman and Diu in Appeal No. 3370 of 1964. S.V. Gupte, Naunit Lal and (Miss) Lalita Kohli for the Appellant. V.C. Mahajan and R.N. Sachthey for Respondents. The Judgment of the Court was delivered by BEG, J. The Plaintiff appellant Timblo Irmaos Ltd., (hereinafter referred to as 'the Company ') had sued Jorge Anibal Matos Sequeira and his wife (hereinafter referred to as Sequeiras ') for recovery Rs. 2,82,141/ claimed under a contract of 23rd January, 1954, and a sum of Rs. 1,14,700/ , claimed under another contract of 4th February, 1954. The Sequeiras counter claimed Rs. 3 lakhs as price of 8000 tons of iron ore supplied to the Company; and pleaded that a sum of Rs. 1,13,000/ , advanced by the Company to the Se queiras was to be adjusted after final determination of the amount due as price, of goods sold and supplied. The Sequeiras are holders of a mining concession. They, it was alleged, had entered into the two contracts, one of 23rd January, 1954, through their attorney, Ramesh Jethalal Thakker (hereinafter referred to as Thakker Junior), for supplying 8000 tons of iron ore, altered in some respects, by a later agreement, and the other of 4th February, 1954, alleged to be binding on the Sequeiras although entered into through Jethalal C. Thakker (hereinafter referred to as 'Thakker Senior '), the.father of R.J. Thakker. The most important clause in the contract of 23rd January, 1954, was that iron ore should be loaded in a ship 'Mary K ' at Marmagoa, and that the loading must be done at the rate of 500 tons per 'weather working day" of 24 hours. Under the contract, the rate of demurrage for not loading the ship in time was to be paid at the rate of US $ 800.00 per day an pro rata for each fraction of a day. The buyer company was to pay what was called "despatch money" at half the rate of demurrage for time saved in loading. The payment was to be in the Portuguese Indian rupees at the exchange rate of Rs. 4.76 per US $. The buyers had also to make an initial payment of Rs. 55,000/ as soon, as delivery by load ing began. The buyers were also to establish a Letter of Credit, before 27th January, 1954, in favour of 453 the sellers, the Sequeiras, for the full value of the iron ore after deducting Rs. 55,000/ paid initially, and Rs. 1/4 per gross ton awaiting final settlement by presentation within ten days, at the bank named in the agreement, by presentation of the certificate of weight issued by the Master of the vessel. Certificates of the quality and specifications and of final weighment were to be sent by the buyers after the vessel 's arrival at the port of dis charge. The second agreement of 4th February, 1954, relates to loading of 6000 to 9000 tons of iron ore of given quality and specifications in the ship 'Mary K ' at the minimum rate of 500 tons per day commencing delivery within 24 hours of the buyer notifying the requirements to the seller. It also contained other stipulations similar to those of the first one. The important point to note about this agreement is that it is signed by Jethalal C. Thakker as the attorney of his son Ramesh Jethalal Thakker. It appears that the clause relating to initial payment was changed so that the sellers, Sequeiras, were paid Rs. 1,13,000/ between 25th January, 1954, and 22nd July, 1954. It also appears that there was delay in delivery for which the plaintiff claimed demurrage. There were also complaints about alleged departure by the seller from the specifica tions agreed upon. The Sequeiras, the sellers, had it seems, also applied for an interim injunction so that the ship 's loading capacity may be checked. Under orders of the Court, an inspection of the ship was made and a report was submitted by an expert on 15th March, 1954, after the deter mination of its loading capacity so that the ship could finally sail only on 16th March, 1954. The Margao Comarca Court, where the claim and the counter claims were filed, held that the seller 's attorney, Thakker Junior, who had received Rs. 1,13,000/ , which had to be deducted from the price of the iron ore supplied, was not duly authorised by the power of attorney executed by the Sequeiras to sell. The Court did not find enough material to reach a definite conclusion about the quantity of ore supplied and left that to be determined in execution pro ceedings. It, however, held the first contract to be binding between the parties as it had been ratified by the seller and acted upon by the buyer. But, the second contract was held to be not binding upon the Sequeiras as Thakker (Jun ior) was found to have been given only a limited authority so that he could not constitute his father his attorney for the purpose of executing the second agreement. The Trial Court accepted the basis of the counter claim of the Sequei ras and found that the company had committed breaches of contract but left the quantum of damages to be determined in execution proceedings. The decree of the Trial Court was substantially affirmed in appeal. Nevertheless, the Additional Judicial Commission er Goa, Daman & Diu, had modified the decree, the appellant company has come up to this Court in appeal as of right. Two questions arise for determination before us. The first is whether the second contract of 5th February, 1954, was duly covered by the authority conferred by the Sequeiras upon their attorney, Ramesh Jethalal Thakker, or not. The second 454 relates to the amount of demurrage, if any, payable by the Sequeiras, the defendants respondents, to the plaintiff appellant. On the first question, the Judicial Commissioner concen trated on the dictionary meaning of the word "exploitation" used in the power attorney executed by the Sequeiras in favour of Thackker Junior. The learned Judicial Commissioner took the meaning of the word from Chambers ' 20th Century Dictionary which gave: "the act of successfully applying industry to any job, as the working of mines, etc; the act of using for selfish purposes". The learned Judicial Com missioner also referred to the inability of learned Counsel for the company to cite a wider meaning from the Oxford Dictionary which the learned Counsel had carried with him to the Court. The Judicial Commissioner then ruled: "Hence, I see no escape from the conclu sion that on the basis of the power of attor ney given by Sequeira to Ramesh the latter could not have entered into any agreement for sale of ore extracted from the mine belonging to Sequeira on his behalf. Consequently, Sequeira is not bound by the agreement dated 4th of February, 1954". As already mentioned by us, the first con.tract of 23rd January, 1954, was held to be binding despite this finding because the parties had acted upon it and dealt with each other on the basis that such a contract existed. We think that this background can be taken into account as indicating what the parties themselves understood about the manner in which the words used in the power of attorney dated 17th January, 1953, executed by Sequeiras in favour.of Thackker Junior was related to the actual facts or dealings between or by the parties. Moreover, the power of attorney had to be read as a whole in the light of the purpose for which it was meant. As it is not lengthy, we reproduce its operative part. It reads: "Jorge Anibal de Matos Sequeira, mar ried, major of age, businessman, landlord, residing in Panglm, whose identity was war ranted by witnesses, said in the presence of the same witnesses that by the present letter of attorney he appoints and constitutes his attorney Mr. Ramesh Jethalal, Bachelor, major of age, businessman, from Bombay, residing at present in Bicholim and conters on him the power to represent him, to make applications, allegations, and to defend his right in any public offices or Banks, to draw up and sign applications, papers, documents and corre spondence; specially those tending to acquire petrol, gunpowder, train, transport vehicles, machines, furniture (alfaias) and other in struments used in mining industry, apply for and obtain licences for importation and expo ration, to give import and export orders, even temporary, sign applications, suits and only other things necessary, attach and withdraw documents, make declaration. even under oath and in general any powers necessary for the exploitation of the mine named Pale Dongor situate at Pale for the concession of which the said Siqueira applied and which he is going to obtain to impugn, object, 455 protect and prefer appeals upto the higher Courts, notify and accept notifications and summons in terms of Sec. 35 and 37 of the C.P.C., to use all judicial powers without any limitation, to subrogate these powers to some one else. This was said and contracted. The witnesses were Bablo Panduronga Catcar ad Xec Adam Xecoli, both married landlords, major of age from Bicholim who sign below". Apparently, practice and custom have some bearing on these transactions in Goa. It is this reason that, although the power of Attorney was executed by Mr. Sequeira, yet, his wife was impleaded, according to the practice in Goa, and no objection was raised either on the ground that she was wrongly impleaded or that the power of attorney was vitiated on the ground that it was executed only by her husband. In any case, the subsequent agreement of 23rd January, 1954, which was held to have been acted upon, and the similar agreement of 5th February, 1954, of which also the defend ants were bound to have and did have full knowledge, were never repudiated by Sequeiras, before the filing of the suit before us. Indeed, the agreement of 5th February, 1954, appears to be a sequal to the first agreement of 23rd January, 1954. We do not think that the two could be really separated in the way in which the Judicial Commissioner thought that they could be by holding that the one was acted upon whereas the other was not. In any case, the second was the result of and a part of the same series of dealings between the parties. We do not however propose forest our findings on the ground that the parties are bound by the second agreement due to some kind of estoppel. We think that the terms of the power of attorney also justify the meaning which the parties themselves appear to have given to this power of attorney that is to say, a power to conduct business on behalf of the Sequeiras in such a way as to include sales on behalf of Sequeiras. We think that perhaps the most important factor in interpreting a power of attorney is the purpose for which it is executed. It is evident that the purpose for which it is executed must appear primarily from the terms of the power of attorney itself, and, it is only if there is an unresolved problem left by the language of the document, that we need consider the manner in which the words used could be related to the facts and circumstances of the case or the nature or course of dealings. We think that the rule of construction embodied in proviso 6 to Section 92 of the Evidence Act, which enables the Court to examine the facts and surrounding circumstances to which the language of the document may be related, is applicable here, because we think that the words of the document, taken by themselves, are not so clear in their meanings as the learned Judicial Commissioner thought they were. As we have already mentioned, the learned Judicial Commissioner chose to concentrate on the single word "ex ploitation" torn out of its context. The word "exploita tion" taken by itself, could have been used to describe and confer only such general powers as may be 13 1546 SCI/76 458 them. If the word 'negotiate ' had stood alone, its meaning might have been doubtful, though, when applied to a bill of 'exchange or ordi nary promissory note, it would probably be generally understood to mean to sell or dis count, and not to pledge it. Here it does not stand alone, and, looking at the words with which it is coupled, their Lordships are of opinion that it cannot have the effect which the appellant gives to it, and, for the same reason, 'dispose of ' cannot have that effect". We think that this case also bears out the mode of construc tion adopted by us. We were then referred to O.A.P.R.M.,A.R. Adaikappa Chettiar vs Thomas Cook & Son (Bankers) Ltd.,(1) where the well known principle of ejusdem generis was applied to hold that general words following words conferring specifically enumerated powers "cannot be construed so as to enlarge the restricted power there mentioned". In this case, the purpose of the general power was subordinated to the specif ic powers given which determined the object of the power of attorney. There is no deviation in this case from the general rules of construction set out above by us. We have indicated above that implied powers cannot go beyond the scope of the general object of the power but must necessari ly be subordinated to it. In fact, in a case like the one before us, where a general power of representation in ' various business transactions is mentioned first and then specific instances of it are given, the converse rule, which is often specifically stated in statutory provisions (the rules of construction of statutes and documents being large ly common), applies. That rule is that specific instances do not derrogate from the width of the .general power ini tially conferred. To such a case the ejusdem generis rule cannot be applied. The mode of construing a document and the rules to be applied to extract its meaning correctly depend upon not only upon the nature and object but also upon the frame, provisions, and language of the document. In cases of uncertainty, the rule embodied in proviso 2 to Section 92 of the Evidence Act, which is applicable to contracts, can be invoked. Thus, the ultimate decision, on such a matter, turns upon the particular and peculiar facts of each case. Coming now to the second question, we find that the findings of fact recorded by the Judicial Commissioner are unexceptionable. Firstly, it was found that, although, under the contract, the defendants respondents could load iron ore at any time during 24 hours, which included the night, yet, the defendants were prevented from doing so owing to the failure of the plaintiff to provide either sufficient light ing or enough winches to enable due performance of the contract. Secondly, it was admitted that the appellant never opened a Letter of Credit with the named bank by 27 January, 1954, as promised by it. Thirdly, the delay in loading was held to be due to the fault of the company. The Judicial Commissioner rightly concluded that the company had not discharged its own part of the contract so that it could not claim (1) 459 demurrage or damages. Indeed, it was found that the company did not have to pay any demurrage at all to the shippers for delayed departure. Learned Counsel for the appellant relied strongly on the following terms in the contract of 23rd January, 1954: "Demurrage (if any) in loading payable by Seller at the rate of US $ 800.00 per running day fraction of day pro rata. Buyers to pay despatch money at half the demurrage rate for all time saved in loading. Payment either way in Portuguese Indian rupee currency at the rate of exchange of Rs. 476/ for US $ 100.00. " The contention was that this created an absolute liability to pay for delay in loading irrespective of whether the company had to pay the shippers any demurrage. It was urged that the liability was upon the seller irrespective of whether such payment had to be made to the shipping company or not. We think that the demurrage could not be claimed when the delay in loading was due to the default of the respondents themselves. It is apparent that the basis upon which the agreement to pay demurrage rested was that the appellant will afford proper facilities for loading. When the appellant itself had committed breaches of its obliga tions, it is difficult to see how the respondents could be made responsible for the delay in loading. We think that the Judicial Commissioner had rightly disallowed this part of the claim. In the result, we partly allow this appeal, set aside the finding of the Judicial Commissioner as regards the binding nature of the contract dated 5th February, 1954. We hold that this document embodied the terms of an agreement which was legally binding on both sides before us. The case will now go back to the Trial Court for determination of the liabilities of the parties to each other for alleged breaches of contract except to the extent to which the findings negative the claim to demurrage and the admitted payment of Rs. 1,13,000/by the appellant to the defendants which will have to be taken into account. The parties will bear their own costs. P.H.P. Appeal allowed in part 462 Ltd., Calcutta vs Commissioner of Excess Profits Tax, West Bengal(1) wherein the High Court held .that when a party at whose instance the reference had been made under section 66(1) of the Indian Income tax Act, 1922 does not appear at the hearing of the reference, the High Court is not bound to answer the question referred to it and should not do so. It is urged by Mr. Manchanda that the above decision has been followed by some of the other High Courts. As against that Mr. Desai on behalf of the appellant has urged that the correctness of those decisions is open to question in view of the decision of this Court in the case of Commissioner of Income tax, Madras vs section Chenniappa Mudaliar(1). It was held by this Court in that case that an appeal filed by the assessee before the Tribunal under section 33 of the Act should be disposed of on merits and should not be dismissed in default because of non appearance of the appellant. The Court in this context referred to section 33(4) of the Act and particularly the word "therein" used in that sub sec tion. It is urged by Mr. Desai that as the Tribunal is bound to dispose of the appeal on merits even though a party is not present, likewise the High Court when a question of law is referred to it, should dispose of the reference on merits and answer the question referred to it. In our opinion, it is not essential to express an opinion about this aspect of the matter, because we are of the opinion that the High Court was not functus Officio in entertaining the application which had been filed on behalf of the appel lant for re hearing the reference and disposing of the matter on merits. A party or its counsel may be prevented from appearing at the hearing of a reference for a variety of reasons. In case such a party shows, subsequent to the order made by the High Court, declining to answer the reference, that there was sufficient reason for its nonappearance, the High Court, in our opinion, has the inherent power to recall its earlier order and dispose of the reference on merits. We find it difficult to subscribe to the view that whatever might be the ground for non appearance of a party, the High Court having once passed an order declining to answer the question referred to it because of the non appearance of that party, is functus officio or helpless and cannot pass an order for disposing of the reference on merits. The High Court in suitable cases has, as already mentioned, inherent power to recall the order made in the absence of the party and to dispose of the reference on merits. There is nothing in any of the provisions of the Act which, either expressly or by necessary implication, stands in the way of the High Court from passing an order for disposal of the reference on merits. The courts have power, in the absence of any ex press or implied prohibition, to pass an order as may be necessary for the ends of justice or to prevent the abuse of the process of the court. To hold otherwise would result in quite a number of cases in gross miscarriage of justice. Suppose, for instance, a party proceeds towards the High Court to be present at the time the reference is to be taken up for hearing and on the way meets with an accident. Suppose, further, in such an (1) (2) 463 event the High Court passes an order declining to answer the question referred to it because of the absence of the person who meets with an accident. To hold that in such a case the High Court cannot recall the said order and pass an order for the disposal of the reference on merits, even though full facts are brought to the notice of the High Court, would result in obvious miscarriage of justice. It is to meet such situations that courts can exercise in appropriate cases inherent power. In exercising inherent power, the courts cannot override the express provisions of law. Where however, as in the present case, there is no express or implied prohibition to recalling an earlier order made because of the absence of the party and to directing the disposal of the reference on merits, the courts, in our opinion, should not be loath to exercise such power provided the party concerned approaches the court with due diligence and shows sufficient cause for its non appearance on the date of hearing. Our attention had been invited to the decision of the Alla habad High Court in Roop Narain Ramchandra (P) Ltd. vs Commissioner of Income tax, U.p.(1) wherein the High Court held that it has no power to recall an order returning a reference unanswered. For the reasons stated above, we are unable to agree with the view taken by the Allahabad High Court in that decision. The facts brought out in the appli cation flied on behalf of the appellant show, in our opin ion, that there was sufficient cause for the non appearance on behalf of the appellant on the date of hear ing as well as for the non filing of the paper books within time. It also cannot be said that there was lack of dili gence on the part of the appellant in approaching of the High Court for recalling it 's earlier order and for dispos ing of the reference on merits. We accordingly accept the appeal, set aside the order of the High Court and remand the case to it for answering the questions referred to it on merits. Looking to all the circumstances, We make no order as to costs. M.R. Appeal al lowed. (1) 466 The Judgment of the Court was delivered by BHAGWATI, J. There is a house bearing No. 10 A situ ate at Khuldabagh in the city of Allahabad belonging to respondent No. 3. This house consists of a ground floor and a first floor. There are two tenements on the ground floor and two tenements on the first floor. Each of the two tene ments in the first floor is in the possession of a tenant. The tenement on the northern side of the ground floor is in the possession of respondent No. 3, while the tenement on the southern side is in the possession of the appellant as a tenant since the last over 35 years. The appellant pays rent of Rs. 4/ per month in respect of the tenement in his occupation. Respondent No. 3, after determining the tenan cy of the appellant, made an application before the Rent Control and Eviction Officer, Allahabad under section 3 of the U.P. Rent Control & Eviction Act, 1947 for permission to file a suit to eject the appellant on the ground that she bona fide required the rented premises in the possession of the appellant for her use and occupation. The Rent Control & Eviction Officer, on a consideration of the evidence led before him, came to the conclusion that the need of respond ent No. 3 for the rented premises was not bona fide and genuine and on this view, he rejected the application of respondent No. 3 by an order dated 23rd February, 1972. Respondent No. 3 preferred a revision application against the decision of the Rent Control and Eviction Officer to the Commissioner and, on the coming into force of the U.P. Urban Buildings (Regulation of Letting, Rent & Eviction) Act, 1972 (U.P. Act No. 13 of 1972), this revision application came to be transferred to the District Court under section 43 (m) of that Act and it was numbered as Civil Appeal No. 245 of 1972. The District Judge by an order dated 12th January, 1973 agreed with the view taken by the Rent Control and Eviction Officer and dismissed the appeal. However, within a short time thereafter, respondent No. 3 undaunted by her failure, filed an application before the Prescribed Authority on 18th January, 1974 under section 21(1) of U.P. Act No. 13 of 1972 claiming release of the rented premises in her favour on the ground that she bona fide required them for occupation by herself and the members of her family for residential purposes. The Prescribed Authority held that Explanation (iv) to section 21(1) of U.P. Act No. 13 of 1972 was attracted in the present case, since the ground floor of house No. 10 A constitute a build ing, a part of which was under tenancy of the appellant and the remaining part was in the occupation of respondent No. 3 for residential purposes, and hence it must be held to be conclusively established that the rented premises were bona fide required by respondent No. 3. The Prescribed Au thority also went into the question of comparative hardship of the appellant and respondent No. 3 and observed that greater hardship would be caused to respondent No. 3 by refusal of her application than what would be caused to the appellant by granting it. On this view, the Prescribed Authority allowed the application of respondent No. 3 and released the rented premises in her favour. The appellant being aggrieved by the order passed by the Prescribed Authority prefered an appeal to the District Court, Allahabad. The 467 District Court agreed with the view taken by the Prescribed Authority that Explanation (iv) to section 21(1) of U.P. Act No. 13 of 1972 was applicable to the facts of the present case and "that fact conclusively proved that the building was bona fide required" by respondent No. 3. But on the question of greater hardship, the District Court disagreed with the conclusion reached by the Prescribed Authority and held that the appellant was likely to suffer greater hard ship by granting the application than what respondent No. 3 would suffer by its refusal. The District Court accordingly allowed the appeal and rejected the application of respond ent No. 3 for release of rented premises. This led to the filing of a writ petition by respondent No. 3 in the High Court of Allahabad challenging the legali ty of the order rejecting her application. Respondent No. 3 contended that since her bona fide requirement of the rented premises was established by reason of applicability of Explanation (iv) to section 21 (1) of U.P. Act No. 13 of 1972, the question of comparative hardship was immaterial and the District Court was in error in throwing out her application on the ground that greater hardship would be caused to the appellant by granting her application than what would be caused to her by refusing it. The High Court while dealing with this contention observed that the Pre scribed Authority had recorded a finding of fact that "the accommodation on the ground floor constituted one building" and "the respondent was in possession of a part of the building and the land lady was in occupation of the remain ing part of the building for the residential purposes" and this finding of fact reached by the prescribed Authority was confirmed by the District court and in view of this finding which the High Court a apparently thought it could not disturb, the High Court proceeded on the basis that Expla nation (iv) to section 21 (1) of U.P. Act No. 13 of 1972 was applicable in the present case. But the High Court went on to point out that once it was held that Explanation (iv) to section 21(1) of the U.P. Act No. 13 of 1972 was attracted, there could be no question of examining comparative hard ship, for in such a case greater hardship of the tenant would be an irrelevant consideration. The High Court on this view allowed the writ petition, set aside the order of the District Court and allowed the application of respondent No. 3 for release of the rented premises but gave two months ' time to the appellant to vacate the same. The appel lant being dissatisfied with this order passed by the High Court preferred the present appeal with special leave ob tained from this Court. Now, it may be pointed out straight away that if Explanation (iv) to section 21(1) of U.P. Act No. 13 of 1972 is applica ble in the present case, the question of comparing the relative hardship of the appellant and respondent No. 3 would not arise and respondent No. 3 would straight away be entitled to an order of eviction as soon as she shows that the conditions specified in the Explanation are satisfied. Section 21 (1), as it stood at the material time with the retrospective amendment introduced by the U.P. Urban Build ings (Regulation of Letting, Rent & Eviction) (Amendment) Act, 1976 being U.P. Act 470 accommodation which is the subject matter of tenancy. The question thus is: what is the sense in which the word 'buil ding ' is used when it occurs for the second time in the Explanation. The context clearly indicates that the word 'building ' is there used to denote a unit, of which the accommodation under tenancy constitutes a part and the remaining part is in the occupation of the land, lord for residential purposes. The accommodation under tenancy and the accommodation in the occupation of the landlord together go to make up the 'building '. The use of the word 'part ' is a clear pointer that the 'building ', of which the accommoda tion under tenancy and the accommodation in the occupation of the landlord are parts, must be a unit. Where a super structure consists of two or more tenements and each tene ment is an independent unit distinct and separate from the other, the Explanation would be of no application, because each tenement would be a unit and not part of a unit. It is only where there is a unit of accommodation out of which a part is under tenancy and the remaining part is in the occupation of the landlord, that the Explanation, would be attracted. To determine the applicability of the Explana tion, the question to be asked would be whether the accommo dation under tenancy and the accommodation in the occupation of the landlord together constitute one unit of accommoda tion ? The object of the Legislature clearly was that where there is a single unit of accommodation, of which a part has been let out to a tenant, the landlord who is in occupation of the remaining part should be entitled to recover posses sion of the part let out to the tenant. It could never have been intended by the Legislature that where a super struc ture consists of two independent and separate units of accommodation one of which is let out to a tenant and the other is in the occupation of the landlord, the landlord should, without any proof of bona fide requirement, be entitled to recover possession of the tenement let out to the tenant. It is difficult to see what social object or purpose the legislation could have had in view in conferring such a right on the landlord. Such a provision would be plainly contrary to the aim and objective of the legisla tion. On the other hand, if we read the Explanation to be applicable only to those cases where a single unit of accom modation is divided by letting out a part to a tenant so that the landlord, who is in occupation of the remaining part, is given the right to evict the tenant and secure for himself possession of the whole unit, it would not unduly restrict or narrow down the protection against eviction afforded to the tenant. This construction would be more consistent with the policy and intendment of the legislation which is to protect the possession of the tenant, unless the landlord establishes his bona fide requirement of the accom modation under tenancy. We may point out that Mr. Justice Hari Swarup has also taken the same view in a well consid ered judgment in Chuntwo Lal vs Addl. District fudge. Alla habad(1) and that decision has our approval. Since the question as to the applicability of Explana tion (iv) on the facts of the present case has not been considered by the High Court as well as the lower courts on the basis of the aforesaid construction of the Explanation, we must set aside the judgment of the High Court as also the order of the District Court and remand the case to the District Court with a direction to dispose it of in the light 471 of the interpretation placed by us on the Explanation, It was contended before us on behalf of the appellant that since Explanation (iv) has been omitted by U.P. Act No. 28 of 1976, respondent No. 3 was no longer entitled to take advantage of it and her claim for possession must fail. But the answer given by respondent No. 3 to this contention was that the omission of Explanation (iv) was prospective and not retrospective and since Explanation (iv) was in force at the date when respondent No. 3 filed her applica tion for release, she had a vested right to obtain release of the rented premises in her favour by virtue Explanation (iv) and that vested right was not taken away by the pro spective omission of Explanation (iv) and hence she was entitled to rely on it despite its omission by U.P. Act No. 28 of 1976. We have not pronounced on these rival conten tions since we think it would be better to leave it to the District Court to decide which contention is correct. If the District Court finds that by reason of the omission of Explanation (iv) by U.P. Act No. 28 of 1976 respondent No. 3 is no .longer entitled to rely on it to sustain her claim for release of the rented premises in her favour, it will be unnecessary for the District Court to examine the further question as to whether Explanation (iv) is attracted on the facts of the present case, If, on the other hand, District Court finds that the omission of Explanation (iv) by U.P. Act No. 28 of 1976 being prospective and not retrospective, respondent No. 3 is entitled to avail of that Explanation, the District Court will proceed to decide whether the two tenements or the .around floor constituted one single unit of accommodation so as to attract the applicability of Explanation (iv) and for this purpose, the District Court may, if it so thinks necessary, either take further evidence itself or require further evidence to be taken by the Pre scribed Authority. If the District Court finds that the case is covered by Explanation (iv), there would be no ques tion of examining comparative hardship of the appellant and respondent No. 3, and respondent No. 3 would straight away be entitled to an order of release of the rented premises in her favour. On the other hand, if the District Court comes to the conclusion that by reason of the omission of Explanation (iv) of the U.P. Act No. 28 of 1976 respondent No. 3 is not entitled to rely on it or that Explanation (iv) is not applicable on the facts of the present case, the application of respondent No. 3 would fail, since it has already been found by the District Court and we do not ' propose to disturb this finding that the appellant would suffer greater hardship by granting of the application than what would be suffered by respondent No. 3 if the application were to be refused. We accordingly remand the matter to the District Court with no order as to costs. P.H.P. Appeal allowed.

The appellant was convicted by the Sessions Court under section 302, IPC, and sentenced to death. On the date of the judgment his advocate was not present. The trial court did not give the accused an opportunity to be. heard in regard to the sentence as required by section 235(2), Cr.P.C., 1973. The appellant also did not insist on his right to be heard. The conviction and sentence. were, confirmed by the High Court. Even in the High Court the accused did not complain that the trial court had committed a breach of section 235(2). On the question whether the sentence is vitiated because of the violation .of section 235(2), HELD: The matter should be remanded to. the trial court for giving an opportunity to the appellant on the question of sentence. Per Bhagwati, J: (1) Under section 235(1) the court must, in the first instance, deliver a judgment convicting or acquit ting the accused. If the accused is acquitted, no further question arises. If the accused is convicted, at that stage, he must be given an opportunity to be heard in regard to the sentence, and it is only after hearing him that the court can pass sentence. [232 D E] (2) Section 235(2) is a new provision in consonance with the modern trends in penology and sentencing procedures. Sentencing is an important stage in the process of adminis tration of criminal justice, and should not be consigned to a subsidiary position. Many factors have to be considered before a proper sentence is passed such as the nature of the offence; the circumstances extenuating or aggravating of the offence; the prior criminal record, if any, of the offender; his age; his record of employment; his background with reference to education; home life. sobriety and social adjustment; his emotional and mental condition; the pros pects for his rehabilitation; the possibility of his return to a normal life in the community; the possibility of treat ment or training Of the offender; the possibility that the sentence may Serve as a deterrent to crime by the offender or by others and the current community need, if any for such a deterrent in respect to the particular type of of fence. The material relating to these factors may be placed before the court by means of affidavits. The hearing contem plated by section 235(2) is not confined merely to hearing oral submissions, but .it is also intended to give an opportunity to the prosecution and the accused to place. before the court facts and material relating to the various factors bearing on the question of sentence, and if they are con tested by the other side, then to produce evidence for the purpose of establishing those factors. Otherwise, the hearing would be devoid of meaning and content. The Court must however be vigilant to see that this hearing on the question of sentence is not abused and turned into an in strument for unduly protracting 1he proceedings. [232 E; G A B] Ediga Anammo vs State of Andhra Pradesh ; referred to. (3) If the trial court had, instead of sentencing the appellant to death, imposed on him the sentence of the imprisonment, he would not be, aggrieved by the breach of section 235(2 ), because, even after hearing the appellant, the. trial court could not have passed a more favourable sen tence. But the trial court imposed death sentence and the possibility cannot be ruled out that if the 230 appellant has been given an opportunity to produce material and make submissions on the question of sentence, he might have been able to persuade, the trial court to impose the lesser penalty. [235 D E] (4) Since the section is a new provision it is quite possible that many lawyers and judges might be unaware of it. In the present case obviously the trial court as well as the appellant 's advocate in the High Court were aware of it. No inference can, therefore, be drawn against the appellant that he had nothing to say from his omission to raise this point in the High Court. [236 A] (5)(a) Non compliance with the requirement of the sec tion cannot be described as a mere irregularity curable under section 465. It amounts to by_passing an important stage of the trial so that the trial cannot be said to be that contemplated by the Code. Such deviation constitutes diso bedience of an express provision of the Code as to the mode of trial and hence cannot be regarded as a mere irregulari ty. [236 H] Subramania Iyer vs King Emperor (1901) 28 I.A. 257 referred to. (b) The; violation goes to the root of the matter and the resulting illegality is of such a character that it vitiates the sentence. [237 B] Pulukuri Kotayya vs King Emperor, (1947) 74 I.A. 65 and Magga vs State of Rajasthan, ; referred to. (c) When no opportunity has been given to the appellant in regard to the sentence to be imposed on him, failure of justice must be regarded as implicit and section 465 cannot have any application. [137 B] Per Fazal Ali J. (1) The 48th Report of the Law Commis sion and the statement of objects and reasons of the 1973 Code of Criminal Procedure show that section 235(2) is a very salutary provision. It contains one of the cardinal fea tures of natural justice, namely, that the accused must be given an opportunity to make a representation against the sentence proposed to be imposed on him. It seeks to achieve a socio econonmic purpose and is aimed at attaining the ideal principle of proper sentencing in a rational and progressive society. Section 235 is split up into two inte gral parts, (a) the stage which culminates in the passing of the judgment of conviction or acquittal; and (b) the stage which, on conviction, results in imposition of sentence on the accused. Both these parts are absolutely fundamental and non compliance with any of the provisions would undoubt edly vitiate the final order passed by the Court. Section 235(2) enjoins on the Court to stay its hands after passing a judgment oF conviction and hear the accused on the ques tion of sentence before passing sentence. [238 H; 239 E; C] (2) There may lye a number of circumstances of which the Court may not be aware but which may be taken into consider ation by the court while awarding the sentence, particularly a sentence of death. The accused must be given an opportu nity of making his representation and placing such materials which have a bearing on the question of sentence. Parlia ment has not intended that the accused should adopt dilatory tactics under the cover of this new provision but contem plated that a short and simple opportunity has to be given to the accused to place materials bearing on the question of sentence, if necessary by leading evidence, before the .Court, and a consequent opportunity to the prosecution to rebut those materials. The Court must be vigilant to exercise proper control over the proceedings so that the trial is not unavoidably or unnecessarily delayed. [240 F G] (3) Non compliance with the section is not a mere irreg ularity which can be cured by section 465 of the Code. It is an illegality which vitiates the sentence. Having regard to the object and the setting in which the new provision was in serted, there can be no doubt that it is one of the most fundamental parts of criminal procedure and non compliance thereof will ex facie vitiate the order. 231 Even if it be regarded as an irregularity the prejudice caused to the accused would be inherent and implicit because of the infraction of the rules of natural justice which have been incorporated in this provision, since the accused has been completely deprived of an opportunity to represent to the Court regarding the proposed sentence and this manifest ly results in a serious failure of justice. [240 B C] [Both the learned Judges indicated that there must be a system of training judges in the application of socio eco nomic laws and in modern methods and techniques of decision making and sentencing procedures]

N: Criminal Appeal No. 605 of 1981. Appeal by special leave from the Judgment and Order dated the 8th April, 1980 of the Ahmedabad High Court in Criminal Appeal No. 218 of 1978 with Crl. Appeal No. 603 of 1978. M.C. Bhandare, T. Sridharan, Mrs. section Bhandare and Miss C.K. Sauhantia for the Appellant. Miss Maya Rao for Respondent No. 1. J.L. Jain and R.N. Poddar for Respondent No. 2. The Judgment of the Court was delivered by MISRA, J. In this appeal by special leave the narrow question that this Court proposes to examine is whether the High Court was right in holding that churning of the curd of which a sample was taken, if done with hand, was done in a proper manner so as to make the sample homogeneous and representative. The few relevant facts are that Shri G.A. Parikh Food Inspector attached to Baroda Municipal Corporation visited the shop of the respondent No.1 accused Madanlal Ramlal Sharma on September 4, 1976 around 7.20 a.m. He purchased curd from a container having 2 1/2 Kg of curd for the purpose of analysis. There was a board hanging on the outer side of the container that 11 the curd is prepared from cow 's milk. The Food Inspector purchased 600 grams of curd and after churning the curd, he divided it in three equal parts and prepared three separate samples, each kept in a separate bottle. After various formalities including obtaining the sanction for prosecuting the respondent accused. a complaint was filed in the Court of the learned Judicial Magistrate, First Class (Municipality) at Baroda. In the course of trial at the request of the accused the third sample was sent to the Central Food Laboratory for analysis and report. It may also be mentioned that the Food Inspector himself had sent one sample to the public analyst attached to the laboratory set up by the Municipal Corporation, for analysis of article of food. The report of the public analyst shows that the sample of curd contained 3% milk fat and 11.7% milk solid non fat. On the other hand, the report of the Central Food Laboratory, Calcutta (exhibit 15) shows that milk fat was 2.95% and milk solid non fat 10.8%. It was opined that the sample of curd was adulterated. The learned Magistrate held that the curd in question was prepared out of cow 's milk, that it did not conform to the prescribed standard and reached the conclusion that the prosecution case was established beyond a shadow of reasonable doubt. Consequently, the learned Magistrate convicted the first respondent accused for an offence under section 7 (1) read with section 16 (1)(a)(1) of the and sentenced him to suffer rigorous imprisonment for four months and to pay fine of Rs. 500 in default to suffer further rigorous imprisonment for two months. The first respondent accused preferred Criminal Appeal No.46 of 1977 in the Court of Sessions at Baroda. The learned Additional Sessions Judge who heard the appeal, inter alia, held that proper churning of the sample having not been done, the sample cannot be said to be homogeneous and representative of the curd in question so as to arrive at a proper conclusion on analysis of the sample and on the short ground acquitted the accused. Two appeals were preferred against the judgment of the learned Sessions Judge. Criminal Appeal No. 218 of 1978 was preferred by the State of Gujarat and Criminal Appeal No. 603 of 1978 was preferred by the complainant Food Inspector. A division Bench of the Gujarat High Court disposed of both the appeals by a common judgment. The High Court affirmed the 12 acquittal observing that 'the conclusion is inescapable that the prosecution has failed to prove that the churning was done in a proper manner so as to make the entire curd one and all the samples would be identical in themselves. ' Hence this appeal by special leave by the complainant Food Inspector. The sample of curd was taken on September 4, 1976. Six years have passed and two courts have concurred in acquitting the accused, namely, the Sessions Judge and the High Court. We are, therefore, reluctant to interfere with the order of acquittal. But the learned counsel Mr. M. C. Bhandare for the appellant, Food Inspector and the learned counsel Mr. Nain appearing for the State of Gujarat second respondent supporting the appellant, urged that irregularity in churning the curd before sampling the same in bottles, as found by the High Court, if allowed to remain unquestioned, it would have an adverse effect on a large number of pending cases. We are, therefore, only inclined to examine the legal submission and we may make it absolutely clear that we are disinclined to interfere after six years in what is found to be marginal adulteration by the learned Magistrate so as to send the respondent to jail, though we must make it abundantly clear that we do not look upon with equanimity on offences under the because these offences have the deleterious effect playing havoc with the health and well being of a large segment of the Society. But the acquittal by two courts and delay of six years and coupled with the finding that there was marginal adulteration would certainly be a disincentive to interfere with the Order. It is indisputable that curd is an article of food. Rule 22 of the Prevention of Food Adulteration Rules, 1955 (Rules for short) provides that in the case of curd, a quantity of 200 grams has to be sent to the public analyst/Director of Central Food Laboratory for analysis. The Standard for cow 's milk for Gujarat as prescribed under the Rules is that it must contain 3.5% milk fat and 8.5% milk solids non fat. Further provision is that the curd obtained from any kind of milk shall have the same content as the milk fat and milk solids non fat as the milk from which it is prepared. Section 13 (3) of the Act, provides that the certificate issued by the Director of Central Food Laboratory under section 2 B shall supersede the report given by the public analyst under 13 sub section (1). The report of Central Food Laboratory shows that the sample contained 2.9% of milk fat. Therefore, the conclusion that the sample of curd was adulterated is unquestionable. The learned Sessions Judge found that after purchasing the curd in order to make the sample homogeneous and representative, churning was not done as required and therefore the sample was not both homogeneous and representative and therefore the accused could not be said to have sold or stored for sale adulterated curd. While affirming this conclusion the High Court has observed that the evidence of exhibit 49 Devsibhai Ramjibhai, a defence witness and the statement of the accused recorded under section 248 (2) Cr. P.C. would show that the churning was not done by an instrument but the complainant had done it with his hand and thereafter curd was divided into three parts and three sample bottles were filled. The High Court then observed that on this point Devsibhai Ramjibhai had not been cross examined. The High Court while proceeding to appreciable the evidence of Devsibhai Ramjibhai accepted it in preference to the other evidence of the complainant who had stated that the churning was done with a spoon. Then comes the observation of the High Court which clinches the matter. It reads as under: "But fortunately for the prosecution when the spoon aspect becomes doubtful, and when the defence version clearly found by us on record is that the allegation is that the churning was done by means of hand alone, it was quite necessary for the prosecution to challenge this version of the defence which has been given by the defence witness on oath. In the absence of that, unfortunately, we have come to the conclusion that the prosecution has failed to prove that the churning was done in a proper manner so as to make the entire curd one and all the samples would be identical in themselves. " The High Court held that on this short ground alone the acquittal must be affirmed. With respect, we find it very difficult to subscribe to the view taken by the High Court. Rule 14 provides that sample of food for the purpose of analysis shall be taken in clean dry bottles or jars or in other suitable containers which shall 14 be closed sufficiently, tight to prevent leakage, evaporation, or in the case of dry substance, entrance of moisture and shall be carefully sealed. Rule 15 provides for labelling and addressing the bottles. Rule 16 provides for packing and sealing the samples. Rule 20 enables the Food Inspector to add prescribed preservative to the sample. Rule 22 prescribes quantity necessary for analysis. It may be recalled that section 11 prescribes procedure to be followed by Food Inspector, Our attention was not drawn to any provision in the Act or the Rules making it obligatory that churning should be done with some machine so as to make a sample homogeneous and representative sample. We are conscious of the fact that in milk and milk preparations including curd, it is distinctly possible that the fat settles on the top and in order to find out whether the milk or its preparation such as curd has prescribed content, the sample must be homogeneous and representative so that the analysis can furnish reliable proof of nature and content of the article of food under analysis. For this purpose churning is one of the methods of making the sample homogeneous and representative. But having said this, there is nothing in the Act or the Rules which prescribes that churning must be done by some instrument, and that churning done by hand would not provide a homogeneous and representative sample. Commonsense dictates that articles of food like milk and curd when churned with hand would properly mix up from top to bottom. More so when the quantity is either 600 grams which was the quantity purchased or 2 1/2 kgs. which was the quantity in the container. There was evidence that the churning was done by spoon. But even if the High Court found that evidence unreliable and evidence of defence witness Devsibhai Ramjibhai so much, reliable that it was prepared to act upon it disagreeing with the other evidence, the evidence of Devsibhai Ramjibhal was that churning was done with hand, and he did not say that the churning was not effective. We therefore find it difficult to subscribe to the view of the High Court that the churning is required to be done by some instrument or that the churning done by hand would not meet with the requirements of making a sample homogeneous and representative. There has to be a finding that the churning done with hand was not adequate. There is no such finding. We are, therefore, of the 15 opinion that the High Court was not justified in confirming the acquittal on this ground. Having made the position in law clear, as we understand it, we decline to set aside the acquittal. Subject to above observation the appeal is dismissed. H.L.C. Appeal dismissed.

The appellant, a Factory Inspector, visited the complainant 's factory and demanded an illegal gratification of Rs. 150/ on the threat of entangling him in some legal proceedings. The complainant, who was not inclined to give the bribe, made a written complaint to the Deputy Superintendent of Police, Anti Corruption Department (Dy SP) requesting for suitable action. A trap was arranged by smearing 15 currency notes of the denomination of Rs. 10/ each with phenolphthalein powder and, on the direction of the Dy SP, two motbirs were requested to accompany the raiding party and to watch what happens. The motbirs went along with the complainant to the residence of the appellant and witnessed the acceptance of the money given to him by the complainant, the subsequent search for the recovery of the currency notes from the appellant, the dipping of his hands in sodium carbonate solution and the consequent change in the colour of the hands into pink. By the time the case came up for trial, the complainant was dead. In the absence of the evidence of the complainant, the trial Judge noted that the first demand of the bribe at the factory of the complainant had not been proved. He, however, held that the evidence of the two motbirs was reliable and was amply corroborated by the recovery of the currency notes as well as the presence of phenolphthalein powder on the hands of the appellant. The trial Judge convicted and sentenced the appellant under section 161, I.P.C. and section 5(1)(d) read with section 5(2) of the Prevention of Corruption Act, 1947. The High Court which examined the evidence of the motbirs agreed with the findings recorded by the trial Court and dismissed the appeal filed by the appellant. One of the contentions urged on behalf of the appellant was that once the complainant was not available to give evidence not only of the first demand but also on the payment of bribe pursuant to the demand, the evidence of the two motbirs had assumed considerable importance and it was unwise and dangerous to place implicit reliance on their testimony to convict the appellant 570 as (i) both the motbirs were petty clerks and (ii) by virtue of their service, they were likely to be under police influence. Dismissing the appeal, ^ HELD: Truth is neither the monopoly nor the preserve of the affluent or of highly placed persons. In a country where renunciation is worshipped and the grandeur and wild display of wealth frowned upon, it would be the travesty of truth if persons coming from humble origin and belonging to office wise, wealth wise lower strata of society are to be disbelieved or rejected as unworthy of belief solely on the ground of their humble position in society. [577 F] Khairati Lal vs The State, (1965) 1 Delhi Law Times, 362 overruled. In the instant case it is factually not correct to say that both the motbirs are petty clerks: one was serving as a clerk in a nationalised bank and the other was a teacher in a middle school. The testimony of the motbirs which had been accepted as wholly reliable by the trial Judge and the High Court cannot be rejected on the sole ground that they are petty clerks. [577 E: 578 A B] It may be that officers of Anti Corruption Department have jurisdiction to investigate lapses on the part of clerks in nationalised banks. It is not clear whether the motbir who was a teacher was a government employee or the school itself was a government school. It may be that the school was receiving grant but if all institutions which receive grant from government are styled as government departments and have to be treated as falling under the police influence then the net will have to be spread so wide as not to exclude anyone as independent of police influence. There is no justification in the submission that the two motbirs were persons not likely to be independent of police influence. [578 D E] Raghbir Singh vs State of Punjab, AIR 1976 S.C. 91, distinguished.

Appeal No. 147 of 1951. Appeal from the Judgment and Decree dated September 4, 1946, of the late Chief Court of Oudh (now the High Court of Judicature at Allahabad, Lucknow Bench) (Misra and Wallford JJ.) in First Civil Appeal No. 139 of 1941, arising out of the Judgment,and Decree dated October 23, 1941, of the Court of the Civil Judge, Bahraich, in Regular Suit No. I of 1941. 234 Onkar Nath Srivastava for the appellant. Bishan Singh for the respondent. November 7. The Judgment of the Court was delivered by MUKHERJEA J. This appeal is on behalf of the plaintiff and is directed against a judgment and decree of the Chief Court of Avadh dated September 4, 1946, affirming, on appeal, those of the Civil Judge, Bahraich, passed in Regular Suit No. 1 of 1941. To appreciate the controversy between the parties to this appeal it would be necessary to state a few facts. One Raja Bisheshwar Bux Singh, the father of the plaintiff and of the defendant 's husband, was a taluqdar of Oudh, and the estate known as Gangwat Estate, to which he succeeded in 1925 on the death of the widow of the last holder, is one to which the Oudh Estates Act (I of,1869) applies. Raja Bisheshwar died on 16th October, 1930, leaving behind him two sons, the elder of whom, Bajrang Bahadur, is the plaintiff in the present litigation, while the younger, whose name was Dhuj Singh, has died since then, being survived by his widow Bakhtraj Kuer. who is the defendant in the suit. Shortly before his death Raja Bisheshwar executed a will dated 11th September, 1929, by which five properties, described in lists A and B attached to the plaint, were bequeathed to Dhuj Singh, the younger son, by way of making provisions for the maintenance of the said son and his heirs. On the death of Raja Bisheshwar,the estatement to the plaintiff as his eldest son under the provisions of the Oudh Estates Act and Dhuj Singh got only he five properties mentioned above under the terms of his father 's will. Dhuj Singh had no issue of his own and on his death in 1940 disputes arose in respect of these properties between the plaintiff on the one land and Dhuj Singh 's widow on the other. The plaintiff succeeded at first in having his name mutated as owner of these properties in the revenue records in place of his deceased brother, but the appellate 235 revenue authority ultimately set aside this order and directed mutation to be made in the name of the defendant. The plaintiff thereupon commenced the suit out of which this appeal arises, praying for declaration of his title to the five properties mentioned above on the allegation that they vested in him on the death of Dhuj Singh and that the defendant could not) in law, assert any right to, the same. It may be stated here that four out of these five properties have been described in list A to the plaint and there is no dispute that they are taluqdari properties. The fifth item is set out in list B and admittedly this property is not taluqdari in its character. Besides lists A and B there is a third list, viz., Catached to the plaint, which mentions two other properties as being in possession of the defendant and in the plaint a claim was made on behalf of the plaintiff in respect to these properties as well, although they were not covered by the will of Bisheshwar. This claim, however, was abandoned in course of the trial and we are not concerned with it in the present appeal. The plaintiff really rested his case on a two fold ground. It was averred in the first place that Dhuj Singh hadonly a life interest in the properties bequeathed to him by Bisheshwar and on the termination of his life interest, the property vested in the plaintiff as the heir of the late Raja. In the alternative the case put forward was that even if Dhuj Singh had an absolute interest created in his favour under the terms of his father 's will, the plaintiff was entitled to succeed to the taluqdari properties at any rate, under the provision of section 14(b) read with section 22 (5) of the Oudh Estates Act. The defendant in her written statement resisted the plaintiff 's claim primarily on the ground that Bisheshwar Bux Singh, as the full owner of the properties, was competent to dispose of them in any way he liked and under his will it was the defendant and not the plaintiff in whom the properties vested after the death of Dhuj Singh. The contention, in . substance, was that the will created a life estate for Dhuj 236 Singh followed by a devise in favour of the widow as his personal heir. The decision of the point in dispute between the parties thus hinges on the proper construction of the will left by Bisheshwar. The trial court after an elaborate consideration of the different portions of the will, viewed in the light of surrounding circumstances, came to the conclusion that Dhuj Singh got a life interest in the devised properties but there were similar life estates created in favour of his personal heirs in succession, the ultimate remainder being given to the holder of the estate when the line of personal heirs would become extinct. The defendant, therefore, was held entitled to the suit properties so long as she was alive and in that view the plaintiff 's suit was dismissed. Against this decision, the plaintiff took an appeal to the Chief Court of Avadh and the Chief Court affirmed the decision of the trial judge and dismissed the appeal. The plaintiff has now come, up to this court on the strength of a certificate granted by the High Court of Allahabad with which the Chief Court of Avadh was amalgamated sometime after the disposal of this case. The learned counsel appearing for the appellant first of all drew our attention to the provisions contained in certain sections of the Oudh Estates Act and it was urged by him on the basis of these provisions that as Dhuj Singh, who got the suit properties under the will of his father, the late. Taluqdar, came within the category of persons enumerated in clause (1) of section 13 A, Oudh Estates Act, he could, under section 14 of the Act, hold the properties subject to the same conditions and the same rules of succession as were applicable to the, taluqdari himself. In these circumstances, it is said that the provisions of section 22 (5) of the Act would be attracted to the facts of this case and the plaintiff, as the brother of Dhuj Siugh, would be entitled to succeed to the properties of the latter in preference to his widow. The argument formulated in this way does not I appear to us to be helpful to the appellant. Section. 11 237 of the Oudh Estates Act confers very wide powers of disposition upon a taluqdar and he is competent under the section "to transfer the whole or any portion of his estate, or of his right and interest therein, during his lifetime, by sale, exchange, mortgage, lease or gift, and to bequeath by his will to any person the whole or any portion of such estate, and interest. " Sections 13 and 13 A make certain special provisions in cases of transfers by way of gift and bequest in favour of certain specified persons and lay down the formalities which are to be complied with in such cases. Section 14 then provides that "if any taluqdar or grantee, or his heir or legatee, shall heretofore have transferred or bequeathed, or if any taluqdar:or grantee, or his heir or legatee shall hereafter transfer or bequeath the whole or any portion of his estate (a) . . . (b) to any of the persons mentioned in clauses (1) and (2) of section. 13 A, the transferee or legatee and his heirs and legatees shall have same rights and powers in regard to the property to which he or they may have become entitled under or by virtue of such transfer or bequest, and shall hold the same subject to the same conditions and to the same rules of succession as the transferor or testator. " It is true that Dhuj Singh being a younger son of the testator came within the purview of clause (1) of section 13 A of the Oudh Estates Act and if he became full owner of the properties under the will of his father, succession to such properties after his death would certainly be regulated by the special rules of succession laid down in the Oudh Estates Act, and not by the ordinary law of inheritance. But section 14 would have no application if the disposition by the will did not make Dhuj Singh an absolute owner of the properties and he was given only an interest for life which was followed by subsequent interests created in favour of 31 238 It cannot also be contended that a taluqdar governed by the Oudh Estates Act cannot convey anything less than his absolute proprietary right in a property by transfer inter vivos or by will, or that 'it is not competent for him to create any limited interest or future estate. Apart from the plenary provision contained in section 11, section 12 of the Act which makes the rule against perpetuity applicable to transfers made by a taluqdar, furnishes a clear indication that the Act does not interdict the creation of future; estates and limitations provided they do not trans gress the perpetuity rule. The questions, therefore, which require consideration in this case are really two in number. The first is whether Dhuj Singh got an absolute estate or an estate for life in the properties given to, him by the will of Raja Bisheshwar? If he got an absolute estate, the contention of the appellant should undoubtedly prevail with regard to the taluqdari properties specified in list A of the plaint. If, on the other hand,, the interest was one which was to inure only for the period of his life, the further question would arise as to whether any subsequent interest was validly created by the will in favour of the widow on the strength of which she can resist the plaintiff 's claim. If the life estate was created in favour of Dhuj Singh alone, obviously the plaintiff as the heir of the grantor would be entitled to come in as reversioner after his death . The answers to both the questions would have to be given on a proper construction of the will left by Raja Bisheshwar. The will has been rightly described by the trial judge as a most inartistic document with no pretension to any precision of language, and apparently it was drawn up by a man who was not acquainted with legal phraseology. The Civil Judge himself made a translation of the document, dividing its contents into several paragraphs and this was found useful and convenient by the learned Judges of the Chief Court. The material portions of the will, as translated by the trial judge, may be set out as follows: 239 "As I have become sufficiently old and no reliance can be placed on life, by God 's grace I have got two sons namely, Bajrang Bahadur Singh, the elder, and Dhuj Singh the younger. After my death the elder son would according to rule, become the Raja, the younger one is simply entitled to maintenance. Consequently with a view that after my death the younger son and his heirs and successors, generation after generation, may not feel any trouble and that there may not be any quarrel between them. I have decided after a full consideration that I should execute a will in favour of Dhuj Singh with respect to the villages detailed below. So that after my death Dhuj Singh may remain in possession of those villages as an absolute owner with the reservation that he will have no right of transfer. If God forbid, Dhuj Singh may not be living a the time of my death, his son or whoever may be his male heir or widow may remain in possession of the said villages on payment of the Government revenue as an absolute owner. The liability for the land revenue of the said villages will be with Dhuj Singh and his heirs and successors; the estate will have no concern with it. Although Dhuj Singh and his heirs are not given: the power of transfer, they will exercise all other rights of absolute ownership that is to say, the result is that the proprietor of the estate or my other heirs and successors will not eject Dhuj Singh or his heirs or successors in any way. Of course if Dhuj Singh or his heirs become ever heirless then the said villages will not escheat to the Government but will revert and form part of the estate. Hence with the soundness of my mind without any force or pressure and after having fully under , stood and also having thought it proper I execute this will in favour of Dhuj Singh, my own ;on, with the above mentioned terms. " 240 The learned counsel for the appellant naturally lays stress upon the words "absolute owner " (Malik kamil) and " 'generation after generation? ' (naslan bad naslan) used in reference to the interest which Dhuj Singh was to, take under the will. These words, it cannot be, disputed, are descriptive of a heritable and alienable estate in the donee, and they connote full proprietary rights unless there is something in the context or in the surrounding circumstances which indicate that absolute rights were not intended to, be conferred. In all such cases the true intention of the testor has to be gathered not by attaching importance to isolated expressions but by reading the will as a whole with all its provisions and ignoring none of them as redundant or contradictory. "The object of the testator in executing the will clearly set out in the preamble to the document and in spite of the somewhat clumsy drafting that object to have been kept in view by the testator throughout, in making the provisions. The language and tenor of the document leave no doubt in OUT minds that the dominant intention of the testator was to make provision not for Dhuj Singh alone but for the benefit of his heirs and successors, " generation after generation " as the expression has been used. The expression " heirs" in this context obviously means and refers to the personal heirs of Dhuj Singh determined according to the, general law of inheritance and not the successors to the estate under the special provisions of the Oudh Estates Act, for paragraph 6 of the will mentioned above is expressly intended to protect the personal heirs of Dhuj Singh from eviction from the properties in question by the future holders of the estate. Thus the beneficiaries under the will are Dhuj Singh himself and his heirs in succession and to each such heir or set of heirs the rights of malik are given but without any power of alienation. On the total, extinction of this line of heirs the properties affected by the will are to revert to the estate. As it was the intention of the testator that the properties should 241 remain intact till the line of Dhuj Singh was exhausted and each successor was to enjoy and hold the properties without any power of alienation, obviously what the testator wanted was to create a series of life estates one after another, the ultimate reversion being given to the parent estate when there was a complete failure of heirs. To what extent such intention could be, given effect to by law is another matter and that we shall consider presently. But it can be said without hesitation that it was not the intention of the testator to confer anything but a life estate upon Dhuj Singh in respect of the properties covered by the will. The clause in the will imposing total restraint on alienation is also a pointer in the same direction. In cases where the intention of the testator is to grant an absolute estate, an attempt to reduce the powers of the owner by imposing restraint on alienation would certainly be repelled on the ground 'of repugnancy; but where the restrictions are the primary things which the testator desires and they are consistent with the whole tenor of the Will, it is a material circumstance to be relied upon for displacing the presumption of absolute ownership implied in the use of the word "malik". We hold, therefore, that the courts below were right in holding that Dhuj Singh had only a life interest in the properties under the terms of his father 's will. Of course this by itself gives no comfort to the defendant; she has to establish, in order that she may be able to resist the plaintiff 's claim, that the will created an independent interest in her favour following the death of Dhuj Singh. As we have said already, the testator did intend to create successive life estates in favour of the successive heirs of Dhuj Singh. This, it is contended by the Appellant is not permissible in law and he relies on the case of Tagore vs Tagore(1). It is quite true that no interest could be created in favour of an unborn person but when the gift is made to a class or series of persons, some of (1) 18 Weekly Report 359. 242 whom are in existence and some are not, it does not fail in its entirety; it is valid with regard to the persons who are in existence at the time of the testator 's death and is invalid as to the rest. The Widow, who is the next heir of Dhuj Singh, was in existence when the testator died and the life interest created in her favour should certainly take effect. She thus acquired under the will an interest in the suit properties after the death of her husband, commensurate with the period of her own natural life and the plaintiff consequently has no present right to, possession. The result, therefore, is that the appeal fails and is dismissed with costs. Appeal dismissed. Agent for the appellant Rajinder Narain.

Under Mahomedan law a person who has charge of the person or property of a minor without being his legal guardian, i.e., a de facto guardian, has no power to convey to another any right or interest in immoveable property which the transferee can enforce against the minor. The question whether the transaction has resulted in a benefit to the minor is immaterial in such cases. Where disputes arose relating to succession to the estate of a deceased Mahomedan between his 3 sons, one of whom was a minor, and other relations, and a deed of settle ment embodying an agreement in regard to the distribution of the properties belonging to the estate was executed by and between the parties, the eldest son acting as guardian for and on behalf of the minor son: Held, that the deed was not binding on the minor son as his brother was not his legal guardian; as the deed was void it cannot be held as valid merely because it embodied a family arrangement; and the deed was void not only qua the minor, but with regard to all the parties including those who were sui juris. Imambandi vs Mutsaddi [1918] 45 I.A.73 relied on Mohemed Keramatullah Miah vs Keramatulla (A.I.R. Ameer Hassan vs Md. Ejay Hussain (A.I.R. 1929 Oudh 134) commented upon. 1134 Under Mahomedan law if there was no insurmountable obstacle to a marriage and the man and woman had cohabited with each other continously and for a prolonged period/he presumption of lawful marriage would arise and it would be sufficient to establish a lawful marriage between them. Khaja Hidayut Oollah vs Rat Jan Khanam (1844, 3 Moo I.A. 295) referred to.

vil Appeal Nos. 4 125 28 of 1986. From the Judgment and Order dated 3.1. 1986 of the Allahabad High Court in Writ Petition No. 422 of 1981, 5900, 4207 and 5899 of 1985. With Special Leave Petition (Civil) No. 3371 of 1982. From the Judgment and Order dated 22.4.1981 of the High Court of Delhi in Civil Writ Petition No. 823 of 1981. S.S. Sharma for the Appellants in C.A. Nos. 4 125 28 of 1986. Soli J. Sorabjee and Mrs. Madhu Sikri for the Petition ers in S.L.P No. 3371 of 1982. S.N. Kacker and R.B. Mehrotra for Respondent No. 1 in C.A. No. 4 125 of 1986. S.P. Gupta and R.B. Mehrotra for Respondent Nos. 2 to 26 in C.A. No. 4 125 of 1986. Shanti Bhushan and R.P. Kapur for the Respondents in S.L.P. No. 337 1 of 1982. The Judgment of the Court was delivered by DUTT, J. In these appeals by special leave and in the Special Leave Petition the dispute relates to the seniority of erstwhile Officers Grade II and the Probationary/Trainee Officers in the Grade I of the State Bank of India. In the lower level, the State Bank of India had two categories of officers, namely, Officers Grade I and Offi cers Grade II; the function of the former was managerial and that of the latter supervisory. The conditions of service of these two categories of officers were, admit 121 tedly, governed by the State Bank of India (Supervising Staff) Service Rules, hereinafter referred to as 'the 1975 Rules '. The 1975 Rules were not framed under the rule making power of the Government, as conferred by section 49 of the , but under section 43 of the Act, sub section(1) of which provides that the State Bank may appoint such number of officers, advisers and employees as it considers necessary or desirable for the efficient per formance of its functions, and determine the terms and conditions of their appointment and service. Sub section (2) of section 43 provides that the officers, advisers and employees of the State Bank shall exercise such powers and perform such duties as may, by general special order, be entrusted or delegated to them by the Central Board. Although the Officers Grade I were superior in 'rank to the Officers Grade II, there was little difference in the pay scales of these two categories of officers. The duties, which were to be performed by Officers Grade I and Officers Grade II, were also similar in nature. Indeed, with the expansion of the: banking activities, a large number of Officers Grade II were required, to perform managerial duties which normally were performed by Officers Grade I. The Officers ' Federation of the State Bank of India compris ing both Officers Grade I and Grade II had been demanding the abolition of the distinction between these two Grades. The Bank, however, had been successfully resisting the demand made by the Officers ' Federation from time to time. The Federation had, at one time started taking resort to agitational method in order to force the Bank to abolish the theoretical distinction between Officers Grade I and Offi cers Grade II. In the mean time, another external factor had crept into the situation. The Government had appointed a Committee, known as Pillai Committee, for considering a question of standardisation of pay and allowances of the officers staff in the nationalised Banks. After the Pillai Committee had submitted its report, the Government declared its intention to apply the recommendations of the Pillai Committee to the State Bank of India as well. According to the recommenda tions of the Pillai Committee, there should not be any distinction between Officers Grade I and Grade II. The Committee recommended four Grades for officers and had provided for only one scale at the junior management level. Four Grades of officers are as follows: 1. Top Executive Grade. 122 2. Senior Management Grade. Middle Management Grade. Junior Management Grade. After proposals and counter proposals between the Executive Committee of the Central Board of the State Bank of India and the Officers ' Federation, the Committee agreed to do away with the distinction between Officers Grade I and Grade II, who would be placed in a new cadre, called Junior Management Grade, having a scale of pay being Scale I Rs. 700 40 900 50 1100 EB 1200 60 1800. It was further agreed that the Officers Grade II would be junior to the existing Officers Grade I and the seniority list would be prepared accordingly. After the said agreement was reached between the Execu tive Committee of the Central Board of the State Bank of India and the Officers ' Federation, the Central Board, in exercise of the powers conferred by sub section (1) of section 43 of the , passed an order, called State Bank of India Officers (Determination of Terms and Conditions of Service) Order, 1979, for short 'the Order ', determining certain terms and conditions of service of officers in the Bank. Some of the provisions of the Order which are relevant for our purpose are extracted below: "1.(1)This order may be called State Bank of India Officers (Determination of Terms and Conditions of Service) Order, 1979. (2) This order shall come into force on the 1st day of October 1979. (1) This order shall apply to the existing officers of the Bank and 'to the officers of the Bank who are appointed or promoted to any of the grades mentioned in paragraph 4 and to such other employees of the Bank to whom it may be made applicable by the Central Board or the Executive Committee or the competent authority to the extent and subject to such conditions as it may decide. (2) It shall not apply, except to the extent specified by the Central Board or the Executive Committee or the 123 competent authority, to an officer during his tenure of service outside India or to employ ees engaged in any country outside India and serving there. In this order, unless there is anything repugnant to the subject or context (a) "Appointed Date" means the 1st October 1979; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (h) "Existing Officers" means all officers in the service of the Bank immediately prior to the appointed date and to whom any of the following sets of Rules as amended or as deemed to have been amended by appropriate resolutions of the Central Board or the Execu tive Committee are applicable, namely: (i) Rules governing the service of Officers in the Imperial Bank of India; (ii) Rules governing the service of Assistants in the Imperial Bank of India; and (iii) State Bank of India (Supervising Staff) Service Rules; 4. (1) There shall be the following four grades for officers with the scales of pay specified against each of the grades: (A) Top Executive Grade: Special Scale Rs.3500 (fixed) Scale VII Rs. 3250 125 3500 Scale VI Rs.3000 125 3250 124 (B) Senior Management Grade: Scale V Rs .2500 100 3000 Scale IV A Rs.2300 100 2600 Scale IV Rs. 2000 100 2400 (C) Middle Management Grade: Scale III Rs. 1800 75 2250 Scale II Rs. 1200 70 1550 75 2000 (D) Junior Management Grade: Scale Rs.700 40 900 50 1100 EB 1200 60 1800 (2) Notwithstanding anything con tained in subparagraph (1), a Probationary Officer and a Trainee Officer shall, on ap pointment, be placed at the stage of Rs.860 in Scale I in the Junior Management Grade. . . . . . . . . . . . . . . . . . 7. Subject to the provisions of paragraph 6, existing officers serving in the grades and scales of pay mentioned in column 1 of the table given in Schedule I to this order shall be placed as on the appointed date in the grade and scale specified there against in column 2 of the said schedule. Provided that any difficulties or anomalies arising out of the above placement shall be referred to a committee of such persons as the Chairman of the Bank may ap point and the decision of that committee in this regard shall be final. (1) Every existing officer placed in any of the new grades and scales of pay in accordance with paragraph 7, shall be fitted at such stage in the new scale of pay corre sponding to the existing grade and scale as specified in Schedule II to this order. 125 (2) Subject to sub paragraph (3), on being so fitted in the new scale of pay, such officer shall be eligible to draw the next increment , if any, in such new scale on the first day of the month in which he would have been eligible to draw increment in terms of the provisions in this behalf prior to the appointed date. (3) Where two or more officers having different seniority in the scales of pay immediately before the appointed date are fitted at the same stage in the new scale of pay, different months may be fixed for the eligibility of such officers for the next increment in the new scale of pay. (4) The mere fact that on the ap pointed date an officer happens to be posted in a post categorised as that of a grade or scale higher than the one in which he is placed in accordance with the provision of paragraph 7 will not by itself entitle that officer to any higher placement or fitment. " The Order was actually made and published on 19th Decem ber, 1979. but in view of paragraph 1(2) it came into force on the first day of October, 1979. Under paragraph 2(1), it is inter alia provided that the Order shall apply to the existing officers of the Bank and to such employees of the Bank to whom it may be made applicable. Under paragraph 3(h), the expression "existing officers" has been defined as meaning all officers in the service of the Bank, immediately prior to the appointed date, that is to say, October 1, 1979. Thus, it follows prima facie that the Order will apply only to the existing officers, that is, the officers who were in the service of the Bank immediately prior to the appointed date, which is October 1, 1979. It is not disputed that no Order has been passed by the Central Board or the Executive Committee or the competent authority directing the application of the Order to employees of the Bank other than the existing officers, as provided in paragraph 2(1). Before the Order was made and published on December 19, 1979, certain Probationary Officers and Trainee Officers were appointed by the Bank in Grade I on October 30 and October 31, 1979. These Probationary/Trainee Officers, being Officers in Grade I were, on the dates they were appointed, superior in rank to the Officers Grade II. These Probation ary/Trainee Officers were fitted to the Junior Management Grade: Scale I, after the Order was passed ereat 126 ing such a Grade at Rs.960 p.m. with effect from 30/31 10 1979. These Probationary/Trainee Officers, however, claimed that they were seniors to the erstwhile Officers Grade II and that they should be placed above such Officers Grade II in the seniority list. As the Bank had refused the claim of these Probationary/Trainee Officers, to seniority over the erstwhile Officers Grade II in the Junior Management Grade, some of them filed writ petitions before the Allahabad High Court and some before the Delhi High Court. The Bank, howev er, opposed the writ petitions and contended that as they were not the existing officers, that is to say, employees of the Bank on October 1, 1979, which is the appointed date, they could not be given the seniority over the erstwhile Grade II Officers, who were the existing officers within the meaning of the expression under paragraph 3(h) of the Order. The Allahabad High Court has taken the view that the expression "existing officers" has to be read as including the Probationary Officers and Trainee Officers, otherwise a repugnancy between the definition of "existing officers" and the provisions of paragraphs 7 and 8 of the Order will arise. Further, it has been held that the notional date of the coming into force of the Order, namely, 1 10 1979, is only to protect the emoluments of the officers and nothing else. In that view of the matter, the Allahabad High Court directed the Bank to prepare the seniority list of its officers in the light of the observations made in the judg ment. Although it was not specifically directed that the Probationary/Trainee Officers should be placed above the officers in the erstwhile Grade II in the seniority list, yet that would follow from the findings made by the High Court. On the other hand, the Delhi High Court took a contrary view and dismissed the writ petitions. Though according to the Allahabad High Court, the Probationary/Trainee Officers should be placed above the erstwhile officers in the Grade II, according to the Delhi High Court they would be placed below the Officers in the Grade II. Hence, these Appeals by the State Bank of India and the Special Leave Petition by the Probationary/Trainee Officers. Mr. Kacker, learned counsel appearing on behalf of the Probationary/Trainee Officers, has urged that the Allahabad High Court was justified in holding that the writ petition ers appointed as Probationary/Trainee Officers on 30/31 10 1979, should be considered as the existing officers within the meaning of paragraph 3(h) of the Order. It is submitted by him that the Bank itself had treated them as 127 existing officers. In support of that contention, the learned counsel has drawn our attention to the fact that the Bank had fitted the Probationary/Trainee Officers appointed on 30/31 10 1979 to the Junior Management Grade: Scale I at Rs.960 p.m. Such fitment, according to the learned counsel, was made under paragraphs 7 and 8 of the Order. Paragraph 7 provides for the placement of existing officers on the appointed date in the corresponding grades and scales. It lays down, inter alia, that the existing officers shall be placed as on the appointed date in the grade and scale specified in column 2 of Schedule I. Item No. 9 of column 2 specifies the Junior Management Grade: Scale I. Paragraph 8(1) provides that every existing officer placed in any of the new grades and scales of pay in accord ance with paragraph 7, shall be fitted at such stage in the new scale of pay corresponding to the existing grade and scale as specified in Schedule II to the Order. It appears that by a circular dated June 24, 1980, the following direc tions were given by the Chief General Manager, State Bank of India: "Officers who were promoted on or after the 1st October 1979 but upto 31st December 1979, should be first fitted in the old scale in terms of the then existing formula and there after their basic pay should be refixed in the new scale for Junior Management Grade Scale I in accordance with the table given below: Basic pay in the Basic pay in the Basic pay in the old clerical scale old officer 's scale junior manageme nt G.S.I on the date of promotion Upto 350 500 950 370 540 1000 390 540 1000 420 580 1200 450 620 1200 480 665 1260 515 710 1320 550 755 1380 The basic pay of Probationary Officers and Trainee Officers who were appointed during the period 1st October 1979 to 3 1st December 1979, will also be fixed on the same basis. " 128 It is submitted on behalf of the Probationary/Trainee Officers that it is clear from the said circular that they were also treated as existing officers, otherwise they could not be given the same benefit as the other existing officers of the Bank. The existing officers, as defined in paragraph 3(h), means all officers in the service of the Bank immediately prior to the appointed date. Admittedly, the Probationary/Trainee Officers were not in the service of the Bank immediately prior to the appointed date, that is, October 1, 1979. They cannot, therefore, be held to be the existing officers in the face of the definition of the expression in paragraph 3(h) of the Order. It is difficult to accept the contention of the Proba tionary/ Trainee Officers that they were treated by the Bank as existing officers merely because they were fitted to the Junior Management Grade: Scale I and given a higher start at Rs.960 p.m. It is incorrect to say that when an employee is fitted to a particular scale of pay of another cadre, he does not become a member of that cadre. In the instant case, the Probationary/Trainee Officers were placed in the corre sponding scales of pay in the Junior Management Grade for the purpose of fitment in the new scales of pay. Indeed, as stated already, they were fitted to the Junior Management Grade: Scale I at Rs.960 p.m. It may be that such fitment has been made by the Bank following the principles as laid down in paragraphs 7 and 8 of the Order, presumably with a view to removing any disparity between Officers Grade I and Officers Grade II in the Junior Management Grade, but it will be difficult to accept the contention made on behalf of the Probationary/Trainee Officers that they were treated as existing officers and such fitment was made under paragraphs 7 'and 8 of the Order. The Probationary/Trainee Officers appointed on 30/31 10 1979, that is, after 1 10 1979, the appointed date, are not existing officers within the meaning of paragraph 3(h) of the Order and the Bank could not treat them as such for the purpose of fitment or giving a higher scale of pay. We are unable to subscribe to the view of the Allahabad High Court that unless the expression "existing officers" is read as including the Probationary/Trainee Officers, there will be a repugnancy between the definition of existing officers, as contained in paragraph 3(h), and the provisions of paragraphs 7 and 8 of the Order. This view of the Allaha bad High Court proceeds on the assumption that the Proba tionary/Trainee Officers having been given the benefit of extra emoluments by fitting them in the Junior Management Grade: Scale I, 129 they were treated as existing officers. In our opinion, if the Probationary/Trainee Officers are treated as existing officers. it will be doing violence to the provisions of paragraph 3(h). We do not think that the definition of the expression "existing officers", as given in paragraph 3(h) is, in any way, repugnant to the provisions of paragraphs 7 and 8 of the Order. On the contrary, it is quite in harmony with the said provisions and also the other provisions of the Order. There is no ambiguity in the definition of "existing officers" and in regard to paragraphs 7 and 8 of the Order there is no repugnancy of the definition to the subject or context. Repugnancy of the definition of any term may arise only if such definition does not agree with the subject or context of a particular provision. But, surely, any action not in conformity with the provision of the definition clause will not render the definition of a term repugnant to the subject or context of any provision of the statute containing the term. We are also unable to accept the convention of Mr. Kacker that the definition of "exist ing officers" is only illustrative and not exhaustive and that such narrow definition does not fit in everywhere. The definition does not give any illustration whatsoever, and it is wrong to submit that the definition is illustrative. On the contrary, the definition trader paragraph 3(h) is quite specific and points to only one class of officers, that is, the officers who were in the service of the Bank immediately prior to the appointed date and to whom any of the rules, as mentioned in that paragraph, are applicable. In our view, therefore, the Probationary/ Trainee Officers appointed on 30/31 10 1979, that is, after the appointed date, are not existing officers. In this connection, we may notice the argument of Mr. Gupta, learned counsel appearing on behalf of some of the Probationary/ Trainee Officers, that the merger of Officers Grade II and Grade I into the Junior Management Grade was only for the purpose of fitment in the higher scale of pay and not for the purpose of seniority. It has been already stated that it was the demand of the Officers ' Federation, representing both Officers Grade I and Officers Grade II, that the distinction between these two Grades should be abolished in every. respect and, ultimately, it was agreed that they would be placed in one grade, that is, the Junior Management Grade, having a higher scale of pay, subject to this that the Officers Grade I will be above the Officers Grade II in the seniority list. It appears from the Circular No. 9 issued by the Officers ' Federation, that the Pillai Committee 's recommendations would be implemented in the State Bank Group from October 1, 1979. Thus, it was agreed by the Officers ' Federation that a scheme, namely, the merger of Officers Grade I and Officers Grade II into 130 Junior Management Grade would take place with effect from October 1, 1979 and that has been exactly given effect to by the Order under which the existing Officers, that is, the officers who were in the employment of the Bank immediately prior to October 1, 1979, would be placed in the new Junior Management Grade and to Scale I, as contained in Schedule I to the Order. In paragraph 2(1) of the Order, provision has been made for the application of the Order to other offi cers. Thus, it is clear that all the officers of the Bank in the lower level before the Probationary or Trainee Officers were appointed on 30/31 10 1979 agreed that they would merge into a new Grade and Officers Grade I would be senior to the Officers Grade II. This was the result of the recommenda tions of the Pillai Committee suggesting that there should be one grade for the Officers Grade I and II in the lower level. It may be that Pillai Committee did not make any recommendation with regard to seniority, but when two grades of officers are merged into a new grade, the question of inter se seniority will automatically arise and it will be the duty of the employer to fix the seniority. Indeed, paragraph 18 of the Order lays down the principles for computing the seniority of the officers of the Bank. But, under paragraph 18(5) of the Order, the seniority among the existing officers will remain the same. In other words, the Officers Grade I will remain seniors to Officers Grade II. Another contention that has been made by Mr. Gupta for the Probationary Trainee Officers is that these officers have to undergo tests which are more stringent than the tests to be undergone by the Grade II Officers and, as such, the Probationary/Trainee Officers, though they were appoint ed on 30/31 10 1979, should not be placed under the Officers Grade II in the seniority list. This, in our opinion, is an argument in despair. The question is not whether the Proba tionary/ Trainee Officers have to undergo more stringent tests than the tests to be undergone by the Grade II Offi cers, but the question is whether the Probationary Trainee Officers are existing officers or not, that is to say, whether they were in the employment of the Bank immediately prior to October I, 1979. As the Probationary/Trainee Offi cers are not existing officers, they cannot claim seniority over the Officers Grade II, who are existing officers. It is next contended that the Bank had no authority to give retrospective operation to the Order with effect from October 1, 1979, inasmuch as section 43 of the under which the Order has been passed, does not authorise the Bank to pass any such Order with retrospective effect. It is now well settled that unless the 131 statute, under which the rules are flamed by the rule making authority, does not specifically authorise the making of rules with retrospective effect, such authority cannot frame any rule with retrospective effect. (See Cannanore Spinning and Weaving Mills Ltd. vs Collector of Customs and Central Excise, Cochin & Ors., ; ; Income Tax Officer, Alleppey vs M.C. Ponnoose & Ors., ; ; Hukam Chand etc. vs Union of India & Ors. , ; and Regional Transport Officer, Chittoor, & Ors. vs Associated Transport Madras (P) Ltd. & Ors., ; Mr. Shanti Bhushan, learned counsel appearing on behalf of the State Bank of India, however, submits that the im pugned Order has not been made retrospective, as contended on behalf of the Probationary/Trainee Officers. All that has been done by the Order is that the Officers Grade I and Grade II have been merged into one category, namely, Junior Management Grade with effect from October 1, 1979. These Officers were already employees of the Bank before October 1, 1979 and, as such, they are existing officers within the meaning of paragraph 3(h) of the Order. Further, it is submitted by him that the Bank after considering the injus tice done 'to the Officers Grade II numbering about 15,000, sought to remove the same by abolishing the distinction between Officers Grade I and Officers Grade II in terms of the recommendations of the Pillai Committee by the impugned Order with effect from October 1, 1979. It may be that there was some delay in publishing the decision of the Bank, that is, the Order, but it cannot be said that the Order is retrospective in operation. Mr. Shanti Bhushan points out that in V.T. Khanzode & Ors. vs Reserve Bank of India & Anr., this Court upheld the decision of the Reserve Bank of India as regards the introduction of common seniority, inter group and mobility amongst different grades of officers belonging to Group I, Group II and Group III with retrospective effect from May 22, 1974. In that case, officers belonging to Group I urged that the scheme should be brought into effect from January 1, 1976, while those belonging to Groups II and III wanted the scheme to be brought into effect from January 1, 1970. The Central Board of the Reserve Bank struck a balance by choosing the date May 22, 1974. Chandrachud, C.J. delivering the judgment of the Court held that it was the best solution in the peculiar circumstances of the case and that in order to rectify the imbalances and anomalies caused by the compartmental wise and group wise seniority, it was necessary to give retrospective effect to the combined seniority list. Further, it has been 132 observed by the learned Chief Justice that no scheme govern ing service matter can be fool proof and some section or the other of employees is bound to feel aggrieved on the score of its expectations being falsified or remaining to be fulfilled. Mr. Shanti Bhushan has also placed reliance upon the observation of Sabyasachi Mukharji, J., in Reserve Bank of India vs C.N. Sahasranaman, [1986] Suppl. SCC 143. It has been observed by Mukharji, J that whether there has been denial of equality or any constitutional right infringed or not cannot be published where interests of large number of people are concerned, in judged the abstract. Further, it has been observed that in service jurisprudence there cannot be any service rule which would satisfy each and every employee and its constitutionality has to be judged by considering whether it is fair, reasonable and does justice to the majority of the employees. Relying upon the above two decisions of this Court, it is submitted on behalf of the State Bank of India that in the instant case also a large number of employees, particu larly the Officers Grade II numbering about 15,000, have been benefitted. Indeed, justice has been done to these 15,000 employees as agreed to by the Officers ' Federation of the Bank comprising both Officers Grade I and Officers Grade II. Counsel submits that existing officers have been given the benefit of the Junior Management Grade: Scale I with effect from 1.10.1979. So, the Order was also given effect to from that date, which is the appointed date. It is sub mitted that the Order has been given effect to from 1 10 1979 in the interest of a large number of employees of the Bank. The Probationary/Trainee Officers, who are only 900 in number and appointed on 30/31 10 1979, have no locus standi to challenge the Order or the merger of Officers Grade I and Officers Grade II in one cadre, namely, Junior Management Grade, as per the recommendations of the Pillai Committee. It is not disputed that negotiations had been going on between the Bank and the Officers ' Federation as to how and in what manner the recommendations of the Pillai Committee accepted by the Government would be given effect to. Ulti mately, it was decided that the recommendations would be given effect to from 1 10 1979 by merging the two categories of officers who were in the employment of the Bank, immedi ately prior to 1 10 1979 into one category, namely, the Junior Management Grade. Although the Order was actually published on December 19, 1979, the officers of the Bank, who were there on or before October 1, 1979, were aware of the fact that the Order would be given effect to from Octo ber 1, 1979, as agreed to between 133 the Bank and the Officer 's Federation. The appointed date is relevant for the purpose of applicability of the Order to the officers, who had been there in the service of the Bank immediately prior to the appointed date. Mr. Soli Sorabjee, learned counsel appearing on behalf of the petitioners in the Special Leave Petition No. 337 1 of 1982, has drawn our attention to a telex message which has been communicated to all the petitioners instructing them to complete their formalities and to join the duty well before October 31, 1979 in their own interest. Telegrams were also sent to the petitioners to the following effect: "Reference to your selection as Probationary Officer and our communications to you for immediate completion of necessary formalities. We reiterate that the Pillai Committee 's recommendations are likely to be implemented shortly. If you join after implementation thereof, you shall be governed by the revised terms of service and salary scales. You are advised in your own interest to complete the remaining formalities viz., (1) acceptance of our offer by 20th October, 1979 and be ready to join duty around 25th idem at the place to be intimated to you after completion of for malities, failing which the risk of change in the salary structure and other conditions will be yours. " From the telex and telegraph messages, it is contended that they show that the Bank had decided to give effect to the Order with effect from 30/31 10 1979. We are unable to accept this contention. There is no indication in the telex or telegram that the Order will be given effect to from October 30/31, 1979. The telegram really mentions that if the petitioners join after implementation of the recommenda tions of the Pillai Committee, they will be governed by the revised terms of service and salary scales. Indeed, it has been already noticed that after the appointment of the Probationary/Trainee Officers on 30/31 10 1979, they were fitted to the Junior Management Grade: Scale I and given a higher start at Rs.960 p.m. The telex and the telegram to which our attention has been drawn, do not seem to be of any consequence to the Probationary/Trainee Officers and does not at all support their contention that the Order was intended to be given effect to from 30/31 10 1979. It is next contended by the learned counsel. appearing on behalf of the Probationary/Trainee Officers, that the impugned Order takes 134 away the vested fight of seniority of the Probationary/Trainee Officers with retrospective effect. In elaboration of the contention, it is pointed out that on the day these Probationary/Trainee Officers were appointed, namely, on October 30/31 10 1979, they were admittedly seniors to the Officers Grade II. This seniority of the Probationary/Trainee Officers has been taken away by giving retrospective operation to the Order. It is submitted that the Bank has no authority to take away the vested right of seniority of the Probationary/Trainee Officers with retro spective effect. On the other hand, it is contended by Mr. Shanti Bhushan, learned counsel appearing on behalf of the State Bank of India, that there is no question of vested right to seniority. Seniority is relevant only for the purpose of promotion. A right to be considered for promotion is a vested right, but a mere chance of promotion is not such a right. It is submitted that the right of the Proba tionary/Trainee Officers to be considered for promotion has not been affected in the least by the Order, nor have their chances of promotion been affected. Moreover, no order has been passed under paragraph 2(1) of the Order applying the same to the Probationary/Trainee Officers. These Officers are outside the purview of the Junior Management Grade and, as such, they are precluded from challenging the seniority of the erstwhile Officers Grade II, now placed in a com pletely different category. In other words, it is the con tention of the State Bank of India that the Probationary/Trainee Officers, who have been appointed on 30/31 10 1979 as Officers Grade I, cannot challenge any benefit that is conferred on the officers of a different cadre, namely, the Junior Management Grade. It is not necessary for us to decide whether there is any vested right to seniority or not. The Probationary/Trainee Officers have not been brought within the purview of the new cadre, that is, the Junior Management Grade. Indeed, it is the complaint of the learned counsel, appearing on behalf of these Officers, that they have been totally ignored by the Order inasmuch as no provision has been made about them in the Order. We have already noticed that it was the contention of the Officers ' Federation that there should not be any distinction in the status of Offi cers Grade I and Officers Grade II. It was urged that such distinction should be abolished and both these categories of officers should be placed in one category so that they have the same status and position. The State Bank of India ac cepted the demand of the Officers ' Federation and the dis tinction has been removed. In these circumstances, it is apparent that the Probationary/ Trainee Officers being Officers Grade I, are of the same status and position as the Officers Grade II. Admittedly, the erstwhile Officers 135 Grade II were appointed much earlier than the Probationary/Trainee Officers, who were the writ petitioners in the High Courts. Although they had to perform almost the same duty and there was no difference between their posi tions, they had to suffer an artificial distinction and placed below the Officers Grade I, who were considered to be superior in rank to the Officers Grade II. After the Bank had decided that both these two categories of officers were same in status and position and such decision having been implemented, we are afraid, it is difficult to accept the contention made on behalf of the Probationary/Trainee Offi cers that they should be considered senior to the erstwhile Officers Grade II. Moreover, there is some force in the contention made on behalf of the Bank that as the Probationary/Trainee Officers are not in the Junior Management Grade which is a different cadre, they have no locus standi to challenge any benefit conferred on the officers of the Junior Management Grade comprising erstwhile Officers Grade I and Officers Grade II, as were in the employment of the Bank prior to October 1, 1979. It is submitted by Mr. Shanti Bhushan that the Proba tionary/ Trainee Officers, with whom we are concerned, have not been prejudiced in the least by the Order having come into force on and from October 1, 1979. The learned counsel has categorically stated before us that all these officers will be included in the Junior Management Grade and an order in that regard will be passed under paragraph 2(1) of the Order. It is pointed out by him that everybody will be considered for promotion from the Junior Management Grade to the Middle Management Grade. Thus, even though the Proba tionary/Trainee Officers are placed below the erstwhile Officers Grade II, they will be allowed to appear at the written test, one of the modes prescribed for promotion, along with others including the erstwhile Officers Grade II, provided they complete six years of service in Grade I. Apart from this, the Probationary/Trainee Officers have been fitted to the higher scale of pay in the Scale I of the Junior Management Grade, although they have not been formal ly included in that Grade. In these circumstances, it cannot be said that the Probationary/Trainee Officers have been prejudiced by the Order. We are sure that the Bank will take immediate steps for applying the order to the Probationary/Trainee Officers. No other point has been urged on behalf of the parties. For the reasons aforesaid, the judgment of the Allahabad High Court is set aside and the Civil Appeals are allowed. The judgment of 136 the Delhi High Court is affirmed and the Special Leave Petition is dismissed. All the Writ Petitions filed by the Probationary/Trainee Officers are also dismissed. There will, however, be no order as to costs in any of these Appeals or in the Special Leave Petition. P.S.S. Appeals allowed & Petition dismissed.

The respondents, manufacturers of P.V.C. Conveyor Belt ing, contended before the Customs, Excise and Gold (Control) Tribunal that for purposes of excise duty under the Central Excise Tariff this item fell under Item 68. The Revenue submitted that the commodity was governed by Item 22. The Tribunal recorded a finding of fact that P.V.C. compounding was done simultaneously with the weaving of the fabric from yarn and held that this item should be governed by the residuary Entry 68 for the purposes of excise duty. Dismissing the appeals by the Revenue, the Court, HELD: It is accepted that yarn is woven into fabric. Item 19 deals with cotton fabrics while Item 22 deals with man made fabrics. The Tribunal recorded a finding that P.V.C. compounding was done simultaneously with the weaving of the fabric from yarn, which clearly indicated that the process of manufacture was conversion from yarn to fabric as also the application of the P.V.C. Compound carried on at the same point. [1228F; 1227FG] In view of the higher percentage of P.V.C. Compound in the commodity, it becomes difficult to treat the ultimate goods as manmade fabrics for holding that it is covered by Item 22. Upon this analysis, the Tribunal was correct in holding that the goods were not covered by Item 22 and, therefore, the residuary Item 68 applied. [ 1228G ]

t Petition No. 4998 of 1983 IN CRIMINAL WRIT PETITION NO. 6607 Of 1981 Under Article 32 of the Constitution of India Kapil Sibal, A.C. and Ms. Madhu Singh for the petitioner S.C. Maheshwari, G.D. Gupta and R.N. Poddar for the Respondents. The Judgment of the Court was delivered by BHAGWATI, J. The short question that arises for consideration in this writ petition is whether in a case where First Information Report is lodged and after completion of investigation initiated on the basis of the First Information Report, the police submits a report that no offence appears to have been committed, the Magistrate can accept the report and drop the proceeding without issuing notice to the first informant or to the injured or in case the incident has resulted in death, to the relatives of the deceased. It is not necessary to state the facts giving rise to this writ petition, because so far as this writ petition is concerned, we have already directed by our order dated 28th November, 1983 that before any final order is passed on the report of the Central Bureau of 1: Investigation by the Chief Metropolitan Magistrate, the petitioner who is the father of the unfortunate Gurinder Kaur should be heard. Gurinder Kaur died as a result of burns received by her and allegedly she was burnt by her husband and his parents on account of failure to satisfy their demand for dowry. The circumstances in which Gurinder Kaur met with her unnatural death were investigated by the Central Bureau of Investigation and a report was filed by the Central Bureau of Investigation in the court of the Chief Metropolitan Magistrate on 11th August, 1982 stating that in their opinion in respect of the unnatural death of Gurinder Kaur no offence appeared to have been committed. The petitioner was however not aware that such a report had been submitted by the Central Bureau of Investigation and he, therefore, brought an application for initiating proceedings for contempt against the Central Bureau of Investigation on the ground that the Central Bureau of Investigation had not completed their investigation and submitted their report within the period stipulated by the Court by its earlier order dated 6th May, 1983. lt was in reply to this application for initiation of contempt proceedings that 945 the Central Bureau of Investigation intimated that they had already filed their report in the Court of the Chief Metropolitan Magistrate on 11th August, 1982 and the report was pending consideration by the Chief Metropolitan Magistrate. When this fact was brought to our notice we immediately passed an order dated 28th November, 1983 directing that the petitione !should be heard before any final order was passed on the report. There was no objection on the part of the respondents to the making of this order, but since the question whether in cases of this kind, the first informant or any relative of the deceased or any other aggrieved person is entitled to be heard at the time of consideration of the report by the Magistrate and whether the Magistrate is bound to issue notice to any such person, is a question of general importance which is likely to arise frequently in criminal proceedings, we thought that it would be desirable to finally settle this question so as to afford guidance to the courts of magistrates all over the country and we accordingly proceeded to hear the arguments on both sides in regard to this question. It is necessary to refer to a few provisions of the Code of Criminal procedure, 1973 in order to arrive at a proper determination of this question. Chapter XII of the Code of Criminal Procedure, 1973 deals with information to the police and their powers to investigate. Sub section (1) of Section 154 provides that every information relating to the commission of a congizable offence, if given orally to an officer in charge of a police station, shall be reduced in writing by him or under his direction and be read over to the informant and every such information, whether given in writing or reduced to writing, shall be signed by the person giving it and sub section (2) of that section requires that a copy of P such information shall be given forthwith, free of cost, to the informant. Section 156 sub section (1) vests in the officer in charge of a police station the power to investigate any cognizable case without the order of a magistrate and sub section (3) of that section authorises the magistrate empowered under Section 190 to order an investigation as mentioned in sub section (1) of that section. Section 157 sub section (1) lays down that if, from information received or otherwise an officer in charge of a police station has reason to suspect the commission of an offence which he is empowered under Section 156 to investigate, he shall forthwith send a report of the same to a Magistrate empowered to take cognizance of such offence 946 upon a police report and shall 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. But there are of the First Information Report lodged by him. No sooner he lodges the First Information Report, a copy of it has to be supplied to him, free of cost, under sub section (2) of Section 154. If, two provisos to this sub section. Proviso (b) enacts that if it appears to the officer in charge of a police station that there is no sufficient ground for entering on an investigation, he shall not investigate the case, but in such a case, sub section (2) of Section 157 requires that the officer shall forthwith notify to the informant the fact that he will not investigate the case or cause it to be investigated. What the officer in charge of a police station is required to do on completion of the investigation is set out in section 173. Sub section (2)(i) of Section 173 provides that as soon as investigation is completed, the officer in charge of a police station shall forward to the magistrate empowered to take cognizance of the offence on a police report, a report in the form prescribed by the State Government setting out various particulars including whether, in the opinion of the officer, as offence appears to have been committed and if so, by whom. Sub section (2)(ii) of Section 173 states that the officer shall also communicate, in such manner as may be prescribed by the State Government, the action taken by him to the person, if any, by whom the information relating to the commission of the offence was first given. Section 190 sub section (1) then proceeds to enact that 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 or (b) upon a police report of such facts or (c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed. We are concerned in this case only with clause (b), because the question we are examining here is whether the magistrate is bound to issue notice to the first informant or to the injured or to any relative of the deceased when he is considering the police report submitted under section 173 sub section (2). It will be seen from the provisions to which we have referred in the preceding paragraph that when an informant lodges the First Information Report with the officer in charge of a police 947 station he does not fade away with the lodging of the First Information Report. He is very much concerned with what action is initiated by the officer in charge of the police station on the basis of the First Information Report lodged by him. On sooner he lodges the First Information Report, a copy of it has to be supplied him, free of cost, under sub section (2) of Section 154. notwithstanding the First Information Report, the officer in charge of a police station decides not to investigate the case on the view that there is no sufficient ground for entering on an investigation, he is required under sub section (2) of Section 157 to notify to the informant the fact that he is not going to investigate the case because it to be investigated. Then again, the officer in charge of a police station is obligated under sub section(2)(ii) of Section 173 to communicate the action taken by him to the informant and the report forwarded by him to the magistrate under sub section (2)(i) has therefore to be supplied by him to the informant. The question immediately arises as to why action taken by the officer in charge of a police station on the First Information Report is required to be communicated and the report forwarded to the Magistrate under sub section (2)(i) of Section 173 required to be supplied to the informant. Obviously, the reason is that the informant who sets the machinery of investigation into motion by filing the First Information Report must know what is the result of the investigation initiated on the basis of the First Information Report. The informant having taken the initiative in lodging the First Information Report with a view to initiating investigation by the police for the purpose of ascertaining whether any offence has been committed and, if so, by whom, is vitally interested in the result of the investigation and hence the law requires that the action taken by the officer in charge of a police station on the First Information Report should be communicated to him and the report forwarded by such officer to the Magistrate under sub section (2)(i) of Section 173 should also be supplied to him. Now, when the report forwarded by the officer in charge of a police station to the Magistrate under sub section (2)(i) of Section 173 comes up for consideration by the Magistrate, one of two different situations may arise. The report may conclude that an offence appears to have been committed by a particular person or persons and in such a case, the Magistrate may do one of three things: (1) he may accept the report and take cognizance of the offence and issue process or (2) he may disagree with the report and 948 drop the proceeding or (3) he may direct further investigation under sub section (3) of Section 156 and require the police to make a further report. The report may on the other hand state that, in the opinion of the police, no offence apppears to have been committed and where such a report has been made, the Magistrate again has an option to adopt one of three courses: (1) he may accept the report and drop the proceeding or (2) he may disagree with the report and taking the view that there is sufficient ground for proceeding further, take cognizance of the offence and issue process or (3) he may direct further investigation to be made by the police under sub section (3) of Section 156. Where, in either of these two situations, the Magistrate decides to take cognizance of the offence and to issue process, the informant is not prejudicially affected nor is the injured or in case of death, any relative of the deceased aggrieved, because cognizance of the offence is taken by the Magistrate and it is decided by the Magistrate that the case shall proceed. But if the Magistrate decides that there is no sufficient ground for proceeding further and drops the proceeding or takes the view that though there is sufficient ground for proceeding against some, there is no sufficient ground for proceeding against others mentioned in the First Information Report, the informant would certainly be prejudiced because the First Information Report lodged by him would have failed of its purpose, wholly or in part. Moreover, when the interest of the informant in prompt and effective action being taken on the First Information Report lodged by him is clearly recognised by the provisions contained in sub section (2) of Section 154, sub section (2) of Section 157 and sub section (2)(ii) of Section 173, it must be presumed that the informant would equally be interested in seeing that the Magistrate takes cognizance of the offence and issues process, because that would be culmination of the First Information Report lodged by him. There can, therefore, be no doubt that when, on a consideration of the report made by the officer in charge of a police station under sub section (2)(i) of Section 173, the Magistrate is not inclined to take cognizance of the offence and issue process, the informant must be given an opportunity of being heard so that he can make his submissions to persuade the Magistrate to take cognizance of the offence and issue process. We are accordingly of the view that in a case where the magistrate to whom a report is forwarded under sub section (2)(i) of Section 173 decides not to take cognizance of the offence and to drop the proceeding or takes the 949 view that there is no sufficient ground for proceeding against some of the persons mentioned in the First Information Report, the magistrate must give notice to the informant and provide him an opportunity to be heard at the time of consideration of the report. It was urged before us on behalf of the respondents that if in such a case notice is required to be given to the informant, it might result in unnecessary delay on account of the difficulty of effecting service of the notice on the informant. But we do not think this can be regarded as a valid objection against the view we are taking, because in any case the action taken by the police on the First Information Report has to be communicated to the informant and a copy of the report has to be supplied to him under sub section (2) (i) of Section 173 if that be so, we do not see any reason why it should be difficult to serve notice of the consideration of the report on the informant. Moreover, in any event, the difficulty of service of notice on the informant connot possibly provide any justification for depriving the informant of the opportunity of being heard at the time when the report is considered by the Magistrate. The position may however, be a little different when we consider the question whether the injured person or a relative of the deceased, who is not the informant, is entitled to notice when the report comes up for consideration by the Magistrate. We connot spell out either from the provisions of the Code of Criminal procedure, 1973 or from the principles of natural justice, any obligation on the Magistrate to issue notice lo the injured person or to a relative of the deceased for providing such person an opportunity to be heard at the time of consideration of the report, unless such person is the informant who has lodged the First Information Report. But even if such person is not entitled to notice from the Magistrate, he can appear before the Magistrate and make his submissions when the report is considered by the Magistrate for the purpose of deciding what action he should take on the report. The injured person or any relative of the deceased, though not entitled to notice from the Magistrate, has locus to appear before the Magistrate at that time of consideration of the report, if he otherwise comes to know that the report is going to be considered by the Magistrate and if he wants to make his submissions in regard to the report, the Magistrate is bound to hear him. We may also observe that even though the Magistrate is not bound to give notice of the hearing fixed for consideration of the report 950 to the injured person or to any relative of the deceased, he may, in the exercise of his discretion, if he so thinks fit, give such notice to the injured person or to any particular relative of or relatives the deceased, but not giving of such notice will not have any invalidating effect on the order which may be made by the Magistrate on a consideration of the report. This is our view in regard to the question which has arisen for consideration before us. Since the question is one of general importance, we would direct that copies of this judgment shall be sent to the High Courts in all the States so that the High Courts may in their turn circulate this judgment amongst the Magistrates within their respective jurisdictions.

In a criminal case where First Information Report is lodged and the police submits a report after completion of investigation initiated on the basis of such FIR that no offence appears to have been committed, on the question whether in cases of this kind, the first informant or any relative of the dec eased or any other aggrieved person is entitled to be heard at the time of consideration of the Report by the Magistrate and whether the Magistrate is bound to issue notice to any such person, the Court, ^ HELD: I . When the report forwarded by the Officer in charge of a police station to the Magistrate under sub section (2) (i) of section 173 comes up for consideration by the Magistrate, one of two different situations may arise. The report may conclude that an offence appears to have been committed by a particular person or persons and in such a case, the Magistrate may do one of three things: (1) he may accept the report and take cognizance of the offence and issue process or (2) he may disagree with the report and drop the proceeding or (3) he may direct further investigation under sub section (3) of section 156 and require the police to make a further report. The report may on the other hand state that, in the opinion of the police, no offence appears to have been committed and where such a report has been made, the Magistrate again has an option to adopt one of three courses: (1) he may accept the report and drop the proceeding or (2) he may disagree with the report and taking the view that there is sufficient ground for proceeding further, take cognizance of the offence and issue process or (3) he may direct further investigation to be made by the police under sub section (3) of section 156. Where, in either of these two situations, the Magistrate decides to take cognizance of the offence and to issue process, the 943 informant is not prejudicially affected nor is the injured or in case of death, any relative of the deceased aggrieved, because cognizance of the offence is taken by the Magistrate and it is decided by the Magistrate that the case shall proceed. But if the Magistrate decides that there is no sufficient ground for proceeding further and drops the proceedings or takes the view that though there is sufficient ground for proceeding against others mentioned in the First Information Report, the informant would certainly be prejudiced because the First Information Report lodged by him would have failed of its purpose; wholly or in part. Moreover, when the interest of the informant in prompt and effective action being taken on the First Information Report lodged by him is clearly recognised by the provisions contained in sub section (2) of section 154, subsection (2) of section 157 and sub section (2) (ii) of section 173, it must be presumed that the informant would equally be interested in seeing that the Magistrate takes cognizance of the offence and issues process, because that would be culmination of the First Information Report lodged by him. The Court is accordingly of the view that in a case where the Magistrate to whom a report is forwarded under sub section (2) (i) of section 173 decides not to take cognizance of the offence and to drop the proceedings or takes the view that there is no sufficient ground for proceeding against some of the persons mentioned in the First Information Report, the Magistrate must give notice to the informant and provide him an opportunity of being heard at the time of consideration of the report, and the difficulty of service of notice on the informant cannot possibly provide any justification for depriving the informant of the opportunity of being heard at the time when the report is considered by the Magistrate.[947G H; 948, 949A C] 2. This Court cannot spell out either from the provisions of the Code of Criminal procedure, 1973 or from the principles of natural justice, any obligation on the Magistrate to issue notice to the injured person or to a relative of the deceased for providing such person an opportunity to be heard at the time of consideration of the report, unless such person is the informant who has lodged the First Information Report. But even if such person ii not entitled to notice from the Magistrate, he can appear before the Magistrate and make his submissions when the report is considered by the Magistrate for the purpose of deciding what action he should take on the report. The injured person or any relative of the deceased, though not entitled to notice from the Magistrate, has locus to appear before the Magistrate at the time of consideration of the report, if he otherwise comes to know that the report is going to be considered by the Magistrate and if he wants to make his submissions in regard to the report, the Magistrate is bound to hear him. [949E G] Observation: Even though the Magistrate is not bound to give notice of the hearing fixed for consideration of the report to the injured person or to any relative of the deceased, he may, in the exercise of his discretion, if he so thinks fit, give such notice to the injured person or to any particular relative or relatives of the deceased, but not giving of such notice will not have any invalidating effect on the order which may be made by the Magistrate on a consideration of the report.[949H. 950A] 944

Civil Appeal Nos. 4799 4800 of 1992. From the Judgments dated 4.3.1992 and 8.4.1992 in Madras High Court in W.P. No. 246/92 and W.A. No. 349 of 1992. G. Ramaswamy Attorney General, K. Sankaran, A. Rangananthan and A.V. Rangam for the Appellants. M.K. Ramamurthi, M.A. Krishnmoorthy, M.A. Chinnaswamy, H. Subramaniam and Ms. C. Ramamurthi for the Respondents. Rajendra Sachhar, Ambrish Kumar and M.D. Pandey for the Inter vener. The Order of the Court was delivered: Intervention application is allowed. Leave granted. Civil Appeal No. 4799 of 1992. The controversy in this case is in a narrow compass. The appellant Bank issued Staff Circular No. 42 containing an understanding reached with the Bank staff union laying down the policy for promotion of clerks to the post of Head Clerks. Clause 1(d) of the said circular states as follows: Employees who decline to accept Head Clerk 's post at a Branch Office outside their place of service, i.e., outside their city, will again be offered the appointment only when a vacancy arises at any one of the offices within that city, provided that at the material time there is no other senior employees at that office who had earlier declined a posting outside his Branch, as a Head Clerk in which case the senior most employee will first be offered the appointment. Also, if an employee declines to accept the post of a Head Clerk at an office within the same city, his case for appointment as Head Clerk will be considered only when a vacancy arises at his office, in the order of his seniority. His case cannot be considered for a vacancy at any of the other offices in the city. It will be apparent from the above provision of the said clause that those employees who decline to accept the Head Clerk 's post at a branch office which is outside the city in which they work will have a further option. Such employees would be offered the post of Head Clerk again but only when a vacancy arises at any one of the Bank 's offices within that city. This is of course subject to the condition that at the material time, there is no other senior employee who had similarly declined the post outside his branch office, in which case, the senior most would have the first choice. The further provision of this rule and with which we are concerned in the present case is as follows. If an employee declines to accept the post of Head Clerk at an office within the same city his case for appointment as Head Clerk would be considered only when a vacancy arises at his office. This is also subject to the condition that there is no senior employee similarly situated at the material time. If the third and the final offer for the post of Head Clerk is declined, there is a permanent debarment of the promotion. One more thing necessary to be stated before we come to the facts of the present case is that the appellant Bank has a local Head Office at Madras. In 1972, it was split into two the local Head Office and Madras Main Branch. In 1976 77, there was a further splitting up of the local Head Office and the Main Branch and ultimately in 1979, the Madras Local Head Office was divided into following six offices as part of the same Head Office: "(i) Local Head Office (ii) Madras Main Branch (iii) Overseas Branch (iv) Regional Office, which is called Zonal Office (v) The Commercial Branch (vi) Siruthozhil Branch" 4. There is no dispute that as far as the Clerks and the Head Clerks in all the six parts of the same local Head Office are concerned, a common seniority list is maintained. The effect of the aforesaid arrangements for the purposes of the clause 1(d) is that "the employees" in the said clause means the employees in all the said six parts of the local Head Office. In other words, if a vacancy for a Head Clerk occurred at any of the said six offices, it was considered to be a vacancy in one office, viz. ,the local Head Office of which the other five offices were only parts. It appears that respondent Parthasarathy was working as a clerk in the Madras Regional Office (now called Zonal Office) which is, as will be clear from above, a part of the Local Head Office itself. On 21st August, 1973, he was offered the post of Head Clerk at Deva Kottain which is outside Madras city. This offer was declined by him. On 1st July, 1980, he was offered the post of Head Clerk in the Sowkarpet branch office in the same city which was less than 2 kms, from his Regional office where he was working. He declined the said offer too. He was then entitled to be considered for posting as Head Clerk only in his office which meant in any of the six parts of the local Head Office, that being the third and the final offer that could be made to him. The third offer was made to him for the post of Head Clerk at the Overseas branch, and that being part of the same local Head Office, he was bound to accept it. However, he declined the third and the final offer also, and issued a lawyer 's notice to the Bank contending that the Overseas branch was different from the Regional office where he was working and, therefore, the offer given to him was contrary to the said clause 1(d). The allegations made in the notice were of course denied by the bank. On 6th September, 1983, one A. Nizamuddin who was working as Head Clerk in the Regional office passed away and that post became vacant. On 24th September, 1983, the respondent filed a writ petition before the High Court for quashing the third and the final offer made to him on 4th August 1983, and for a direction for posting him in the Regional office where the vacancy had occurred. The High Court took the view that the third offer made was not for the post of the Head Clerk in the same office where the respondent was working and, therefore, his refusal to accept the post did not exhaust the third option and he was entitled to the vacancy created by Nizamuddin 's death in the Regional office where the respondent was working. We are afraid this interpretation is incorrect in view of the position explained above with regard to the local Head Office which was split into six different offices which together constituted one unit. The respondent, when he was offered the third option in the Overseas branch, was offered the post in the same office where he was working, the Regional office being as much a part of the Head Office as the Overseas branch. By refusing to accept the said third and the final offer, the respondent had clearly exhausted all his three options and had become permanently debarred from seeking promotion to the post of Head Clerk. We, however, do not interfere with the appointment of the respondent to the post of Head Clerk in the Regional office in the facts and circumstances of the case which show that a fortuitous appointment had arisen within almost a month of his refusal to accept the offer. This, however, will not be treated as a precedent nor does it affect the interpretation that we have placed on the clause 1(d) as above. Civil Appeal No. 4800 of 1992 In this case also, the respondent Sampath was working as a Clerk in Madras Regional Office. The first offer of the post of Head Clerk was made to him on 6th August, 1973 at Mudukulathur branch which is in Madras city. This was declined by him. On 12th May, 1980, he was given the second offer for the post of Head Clerk at Air Force Station branch, Tambaram which was in Madras city. The third and final offer was made to him on 4th August, 1983 to the post of Head Clerk in the Stationery department of the Madras Local Head Office. There is no dispute that Stationery department of the Local Head Offfice and the Regional Office form part of one unit, viz., Madras Local Head Office. The respondent declined this offer as well, and on 23rd January, 1984 filed a writ petition in the High Court for quashing the third offer and for posting him in his office, viz., Regional Office as the Head Clerk. The learned Single Judge of the High Court quashed the order making the third offer and allowed the petition following the earlier decision in Parthasarathy 's case with which we have dealt with earlier. The Division Bench of the High Court also confirmed the order. For the reasons we have given in C.A.No. 4799 of 1992, we are unable to accept the interpretation given by the High Court on clause 1(d) of Staff Circular No. 42. However, if in the present case, the respondent has already been accommodated in the post of Head Clerk in the Regional Office itself, we do not intend to interfere with the same. It is nonetheless made clear that it is the interpretation that we have placed on the said clause that will prevail and not the interpretation placed by the High Court. With these observations, the appeals are allowed only to the extent that the interpretation placed by the appellant Bank on clause l(d) of the Staff Circular No. 42 is correct and the decision of the High Court on the point is incorrect. There will be no order as to costs.

A large number of doctors employed in the State Health Services of the appellant State were leaving India for higher studies, after obtaining leave for a couple of years, and thereafter, they were neither returning to India, nor were sending any further applications for extension of leave. This was causing considerable hardship to the public. As this trend persisted, the state authorities wanted to take appropriate corrective steps. Since the absentee doctors had not informed the department of their addresses, personal service of notice on such doctors could not be effected. A general notice was published and press communique was issued in newspapers in India and abroad calling upon them to offer their explanations for remaining absent from service for more than five years, within the specified time and indicating that on their failure to do so, the services of 320 doctors would be terminated with the concurrence of the State Public Service Commission and the approval of the State Cabinet. Services of doctors were, accordingly, terminated. The respondent filed a Public Interest Litigation before the High Court stating that the particular doctor was unwell and was in need of financial help. The services of this doctor had also been terminated along with others. The details as to how she was taken ill and admitted in a hospital outside the country and then brought back to India for further treatment in the State, were given. The High Court directed the appellants to pay the post retirement benefits to the medical officer doctor concerned. Earlier the High Court had also directed payment of Rs.2,000 to the respondent writ petitioner as relief to the doctor concerned. Allowing the appeal of the State, this Court, HELD: 1.1. It is not known how the respondent writ petitioner became so interested in the beneficiary, who was being taken care of in the hospital and receiving attention of eminent doctors, and who had atleast a brother with whom she was staying for sometime. The respondent writ petitioner could not tell about the other family members and relations of the beneficiary or how and why in this background the respondent chose the beneficiary for showering her benevolence in preference over the far more needy old and sick persons who are, unfortunately, in large number in the appellant State. The judgment under challenge also does not indicate any reason. [360 B D] 1.2. Since there is no reason at all in the order under challenge or in the writ petitioner which may justify the relief granted in the present case, the writ petition should have been dismissed. [360 H; 361 A] 1.3. There is also no reason to accede to the request made on behalf of the respondent that the cheque for Rs. 2000, mentioned in the first paragraph of the High Court 's orders, drawn in the name of the beneficiary, may be directed to be drawn in the name of the respondent writ petitioner for the beneficiary 's fingers had since become stiff and hence the cheque could not be encashed. There is no suggestion to the effect that the beneficiary has no relation of her own, who can look after her needs. [361 B] 2. There is no doubt that the State should strive to promote the welfare of its people so that at least the bare necessities of life are met and the needy and the sick are properly looked after. This can be done only by adopting a welfare scheme in the interest of the general public; and since the resources of the State are not unlimited, the State is not expected, in absence of relevant reasons, to choose an individual for special treatment at the cost of the others. Ordinarily, therefore, it is desirable for the State authorities to take up the individual cases coming to their notice and do their best in accordance with the policy decision of general application. This will ensure equal treatment to all of course in accordance with the individual needs. Unless all relevant materials are placed by an applicant, it will be onerous task for the Court to take upon itself to determine the extent of help a particular individual has to get. The circumstance that a particular person is smart enough to approach the Court or is so fortunate to get somebody to do that on his or her behalf, cannot be a valid ground to divert the State funds to his or her advantage at the cost to corresponding disadvantage to others. A judicial process should not be allowed to be used for the satisfaction of an individual 's whims, pious, though, they may apparently look. [360 E, F, G]

minal Appeal No. 152 of 1962. 710 Appeal by special leave from the judgment and order dated April 4, 1962 of the Rajasthan High Court in D. D. Criminal Appeal No. 505 of 1961. section K. Kapur, section Murthy, B. N. Kirpal and K. K. lain, for the appellant. H. R. Khanna and B. R. G. K. Achar for P. D. Menon, for the respondent. August 29, 1963. The judgment of the Court was delivered by DAS GUPTA J. This appeal by special leave is against a conviction and sentence under section 167(81) of the . The appellant was acquitted by the trial court, but on appeal by the State of Rajasthan, the Rajasthan High Court set aside the order of acquittal and convicted the appellant under section 167(81) of the , and sentenced him to rigorous unprisonment for one year. The prosecution case was that on receipt of some information that gold smuggled from Pakistan was being carried, Lal Singh, Sub Inspector of the Check post of Barmer, followed the appellant into a railway train at Luni railway station, and in the running train between the stations of Kerla and Pali, searched appellant 's person and found that he was carrying 286 tolas of gold in a pouli under his trousers. In the reasonable belief that these were smuggled goods, Lal Singh seized the gold. The gold that was seized consisted of six blocks bearing marks "999", N. M. Rothschild & Sons, 22 bars bearing marks '999 ', 3 small pieces of gold and one pair of murkies. Lal Singh seized the gold after preparing a seizure list in the presence of witnesses and later produced the appellant along with the gold before the Superintendent, Land Customs, Barmer. By an order of the Collector of Customs, New Delhi, dated July 19,1957, this gold was confiscated and a fine of Rs. 10,000 was imposed on the appellant. Criminal proceedings were afterwards instituted against the appellant on the allegation that he had committed an offence under section 167(81) of the . The prosecution claimed that under section 178 A of the , the burden of proving that gold was not smuggled lay on the accused. Even apart from that, the prosecution claimed, it was clear that the gold had been smuggled. It was alleged that the appellant had carried 711 the gold knowingly with intent to evade the regulations prohibiting the import of gold Into India. The main defence of the accused, who pleaded not guilty, was that no gold was recovered from him. The trial court held that the prosecution had failed to establish the recovery of gold from the accused. It further accepted the defence contention that Lai Singh had no authority to search the appellant and seize the gold at the place where the seizure was alleged to have been made. According to the learned Magistrate, the seizure, if any, had not been made under the and so had not been made under "the Act" within the meaning of section 178 A, and there was no question of the accused having to prove that the gold was not smuggled. On the evidence adduced by the prosecution, he was not convinced that it was smuggled gold. Accordingly, he acquitted the accused. The High Court came to contrary findings on all these points. It held that the evidence of Lal Singh as regards the seizure should be believed and that the seizure of the gold from the accused had been proved satisfactorily. It was also of the opinion that Lal Singh had authority to seize the gold at the place where the seizure was made, and that section 178 A of the applied. In the opinion of the High Court, the accused had failed to prove that the gold was not smuggled and that under the provisions of section 178 A as also on the evidence in the case, the gold had been established to be smuggled gold. All the ingredients of the offence, according to the High Court, had been proved, and therefore, the accused was convicted and sentenced as mentioned above. Three points were raised before us by Mr. section K. Kapur in support of the appeal. The first was that the High Court was not justified in disturbing the trial court 's finding that the seizure of the gold from the accused had not been proved. The second point urged was that the High Court had fallen into an error in thinking that Lal Singh had authority to seize the gold at the place where the seizure was made. The third contention was that in any case even if section 178 A applied and it was found that the gold was smuggled, the prosecution had failed to prove the necessary mens rea in the accused that was necessary to constitute the offence. 712 On the question of seizure of gold from the accused, the prosecution relied on the testimony of Lal Singh himself. Lal Singh gave a detailed account as to how he followed the accused into the train at Luni station and in the running train conducted the search of his person in the presence of witnesses and recovered from his possession from a pouli tied beneath his trousers the gold identified in court as exhibit P.M. 1 32. The seizure Memo. which he claimed to have prepared at the time of the seizure was marked Exh. This document mentions the names of three persons as search witnesses. None of these was examined by the prosecution. The third name mentioned in Exh. P. 3 is Pukh Raj son of Awasthi Mal, aged about 22 years, resident of Ajit. The defence examined a Pukh Raj who gave his father 's name as Basti Mal and who was resident of Ajit, and stated that he was the only Pukh Raj in that village. The High Court seems to have doubted the indentity of Pukh Raj examined as defence witness as the Pukh Raj mentioned in the seizure list. This finding has been attacked by Mr. Kapur as un justified. Whether or not the Pukh Raj examined as defence witness is the same as the person whose name is mentioned in the seizure list, is not, however, of much consequence; for the fact remains that the prosecution has not got the evidence of any of the witnesses in whose presence the search and seizure are said to have been made, to support Lal Singh 's evidence. The learned Magistrate gave this failure of the prosecution to examine the witnesses as the main reason for his inability to accept Lal Singh 's testimony. The High Court has accepted Lal Singh 's testimony, but unfortunately the judgment does not indicate that the learned judges of the High Court took into consideration this fact that the search witnesses had not been examined. We have, therefore, thought it necessary to examine the evidence for ourselves to see whether the seizure as alleged by the prosecution has been proved. Lal Singh 's evidence on the point has already been mentioned. It has to be noticed that the defence witness No. 2, Poonam Chand, has also spoken about the search. His evidence is that police conducted search in the compartment when the train was enroute from Luni to Pali, and that "the police took search of the 713 accused Hukma present before the court and of two or three more persons named Kesrimal and Tarachand". The witness added no gold was recovered from: the possession of the accused Hukma Ram, but admitted that in the same compartment a purse was recovered. It has to be noticed that when Lal Singh was examined, no suggestion was made to him in cross examination that any other person had been searched in the compartment. It is not unreasonable to think, therefore, that when Poonam Chand is speaking of search in the com partment of Hukma and the find of a purse there though stopping short of saying what was recovered from it, his evidence unwittingly supports the story given by Lal Singh about the search and the recovery of the gold. It does not stand to reason that if two other persons bad been searched and gold had been found within one of them, this appellant, a pointsman in the Railway, should be falsely implicated and the person from whom the recovery of gold was made, should have been allowed; to, escape. The accused suggested in his statement that Lal Singh was inimically disposed towards him because on one occasion Lai Singh had asked him to serve water and he had not done it at once. There was no suggestion about this incident to Lai Singh in his cross examination, and we are convinced that this is: entirely false. On a consideration of Lal Singh 's evidence along with the evidence of appellant 's own witness, Poonam Chand we are convinced that the story of recovery of gold from the accused is true. The reason why the three witnesses mentioned in the seizure list have not come forward to support the prosecution case is, in, our poinion, not that the story of search and seizure as given by Lal Singh is not true, but that these witnesses have been gained over. This brings us to Mr. Kapur 's main contention, namely, that Lal Singh was not a Customs Officer for the place where the seizure was made, and so the seizure was not under the , taken with the provisions of the . The answer to this contention depends on the construction of the notification appointing Customs Officers for the areas adjoning the frontier between West Pakistan and India. The notification as it stands after an amendment in 1956, runs 46 2 section C. India/64 714 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 Frontiers 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." Asking us to give a restricted meaning to the word "adjoining" in the notification, Mr. Kapur has suggested that this notification gave authority to the Customs Officers only for the areas within a few miles from the border, He contended next that even if this be not accepted, the notification on a reasonable interpretation gave authority only to the officers of the Districts mentioned in the Schedule to function as Customs Officers in those Districts and nowhere else. The trial court appears to have accepted this construction, and as admittedly the place of seizure was not in any of the District mentioned in the Schedule, it held that Lal Singh was not authorized to search the accused or to seize the gold. The High Court, on the contrary, has taken the view that each of the officers mentioned in the Schedule has been appointed a Customs Officer for the entire area which has "jurisdiction of the Collector of Land Customs, Delhi". In our opinion, this is the correct and only possible construction. Section 3 of the authorizes the Central Government to appoint by notification in the official gazette one person to be the Collector of Land Customs for any area adjoining a foreign frontier and specified in the notification. The section also authorizes 715 the Central Government to appoint by a similar notification such other persons as it thinks fit to be Customs Officers for the same area. "Foreign frontier" has been defined in section 2, cl. (e) of the Act as the frontier separating any foreign territory from any part of India. "Land Customs area" has been defined in cl. (g) of the same section as any area adjoining a foreign frontier for which a Collector of Land Customs has been appointed under section 3. From the definition of foreign frontier in cl. (e), it is clear that an area adjoining the frontiers separating any foreign territory from any part of India, is within these words. What, then is meant by the word 'adjoining '? According to Mr. Kapur, only a few miles near the frontier can be considered to be adjoining the frontier. We can see no justification for such a restricted construction of the word " adjoining". It is true that the village next to the frontier adjoins the frontier. It is equally correct, however, to describe the entire District nearest the frontier as adjoining the frontier ; and we can see nothing wrong in the entire State of Rajasthan adjoining the West Pakistan Frontier. It appears to us that the Central Government treated the whole compact block consisting of the State of Punjab, State of Jammu & Kashmir and State of Rajasthan and Himachal Pradesh and Delhi as one area ad joining the West Pakistan frontier, and for this one area it appointed a Collector of Land Customs. This appears clear from the order appointing the Collector of Central Excise, Delhi, to be the Collector of Land Customs (Notification No. 2L Customs, dated 25th January, 1958), taken with Rule 2(ii) A (i) of the Central Excise Rules, according to which Collector means "in the State of Punjab, Jammu and Kashmir and Rajasthan and in the Union Territories of Himachal Pradesh and Delhi, the Collector of Central Excise, Delhi". In other words, the jurisdiction of the Collector of Central Excise, Delhi, is not only over Delhi, but also it extends to the States of Punjab, Jammu & Kashmir and Rajasthan and the Union Territories of Himachal Pradesh and Delhi. It was for this entire area that the collector of Central Excise, Delhi was appointed Collector of Land Customs. The resultant position, therefore, is that for this entire area of Punjab, Jammu and Kashmir, Rajasthan, Himachal and Delhi, one person has been ap 716 pointed Collector of Customs. When, therefore, the Central Government proceeded next to appoint Land Customs Officers and stated that certain officers as specified in the schedule were appointed Land Customs Officers "for the areas adjoining the land customs frontiers separating West Pakistan from India", and added the words that they were to be Land Customs Officers "within the jurisdiction of the Collector of Land Customs, Delhi," it appears to us to be quite clear that every officer mentioned in the Schedule would be a Customs Officer not for any particular District mentioned in the Schedule but for the whole areas which forms the Jurisdiction of the Collector of Land Customs, Delhi and is the area adjoining the West Pakistan frontier for which a Collector of Land Customs has already been ap pointed under section 3. We find no justification for reading into the Schedule any indication of the area where the officers will operate. The Schedule purports to mention the different officers of different districts who arc appointed Land Customs Officers not for those particular Districts but for the entire area. Any other reading of the words used in the main body of the notification would be not only against the plain meaning of the words used but is likely to defeat the object for which Land Customs Officers are appointed. We have, therefore, come to the conclusion that the construction put by the High Court on the notification is right, and Lai Singh, being an officer in the District of Barmer which is mentioned in the Schedule, was 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. There remains for consideration the last point raised by the learned counsel, namely, that even if Lal Singh had authority to seize at the place where the seizure was made and section 178 A of the applied, the prosecution had still to prove by further evidence that the accused had the mens rea necessary to constitute the offence. Learned counsel rightly pointed that while section 178 A has the result of placing the burden of proof that the gold was not smug gled on the accused, it is of no assistance to the prose cution to prove that the accused was carrying the gold 717 knowingly to evade the prohibition which was for the time being in force with respect to the import of gold into India. Once, however, it is found, as it must be found in this case, in consequence of the provisions of section 178 A (the accused has not tried to discharge the burden that lay on him that the gold was not smuggled) that he was carrying smuggled gold, the circumstances under which the gold was discovered, the manner in which he was carrying the gold, the considerable quantity of the gold that was being carried and the form in which gold was being carried, namely, blocks and bars in which the major portion of the gold was found, all these circumstances establish beyond a shadow of doubt that accused was carrying the gold knowingly and with the intention of evading the prohibition that was in force with respect to the import of gold into the country. Mr. Kapur tried to argue that when gold is carried by persons, they often carry it in this manner in a pouli concealed under trousers. That may well be so. Here, however, there is an additional circumstance that a pointsman of the Railway, not expected to have so much gold in his possession, was carrying the gold which was, as already mentioned in six bloks and 22 bars apart from some small pieces and one pair of murkees. The total quantity was as much as 286 tolas and 11 annas, that is, about three kilograms. When all these circumstances are taken together, it is not possible to accept learned counsel 's suggestion that he might be carrying the gold innocently having purchased it from somebody. In our opinion, the High Court has rightly held that all the ingredients of the offence under section 167(81) of the have been established. It may be mentioned that it has not been disputed before us that if we believe the story of the recovery of the gold from the appellant, the circumstances are sufficient to establish that Lal Singh seized the gold in the reasonable belief that these were smuggled goods. In the view we have taken in this matter, it is unnecesary to consider the further argument raised by Mr. H. R. Khanna, who apperaed for the State that even apart from section 178 A, the guilt of accused could be held to be proved by the confession made by him before the Deputy Superintendent, Land Customs, corroborated as it 718 is by the recovery of the gold from him. All the points raised in the appeal on behalf of the appellant fail, and the appeal is, accordingly, dismissed. Appeal dismissed.

Where an application is made under section 10(1)(a) of the , for a decree for judicial separation on the ground of desertion, the legal burden is upon the petitioning spouse to establish by convincing evidence beyond any reasonable doubt that the respondent intentionally forsook and abandoned him or her without reasonable cause. The petitioner must also prove that there was desertion throughout the statutory period and there was no bona fide attempt on the respondent 's part to return to the matrimonial home and that the petitioner did not by his or her action by word or conduct provide a just cause to the other spouse to desist from, making any attempt at reconciliation or resuming cohabitation; but where, however, on the facts it is clear that the conduct of the deserted spouse has had no such effect on the mind of the deserting spouse there is no rule of law that desertion ter minates by reason of the conduct of the deserted spouse. 332 An offer to return to the matrimonial home after sometime, though desertion had started, if genuine and sincere and represented his or her true feelings and intention, would bring to an end the desertion because thereafter the animus deserendi would be ' lacking, though the factum of separation might continue; but on the other hand, if the offer was not sincere and there was in reality no intention to return, the mere fact that letters were written expressing such an intention would not interrupt the desertion from continuing. Bipin Chander laisinghbhai Shah vs Prabhawati, ; , Dunn vs Dunn, and Brewer vs Brewer , relied on. The parties were married in 1946 at Hyderabad in Sind (now in Pakistan) and a child, a son, was born in 1947. The married life of the couple was not as harmonious as it should have been and it soon transpired that much of the trouble arose out of the fact that while the appellant and his parents appear to have been of an orthodox and conservative outlook and bent of mind the respondent and her parents apparently did not set much store by orthodoxy and were liberal and modern. As a result of the partition in 1947 the parties had to leave Sind. The appellant and his parents stayed in a house in Bombay, while the respondent 's parents went to Poona. The appellant 's complaint was that the respondent was frequently going away to her parent 's house. On February 26, 1954, the respondent left ' the appellant 's house and went to Poona. The evidence was conflicting as to whether she obtained the permission of the appellant 'before going to Poona, but the facts showed that after that date the respondent did not go back to the appellant 's house. The appellant along with a friend, Dr. Lulla, went to Poona with a view to bring back the respondent. The evidence as to what transpired at the interview with the respondent was somewhat conflicting, and the appellant 's case was that the respondent intimated to him her fixed determination not to go back to him. On July 7, 1954, the respondent along with her father went abroad to the Far Eastern countries, for the purpose of recouping her health, according to her. Before going abroad the respondent had to go Bombay for getting the passport and going through the formalities; and while there she was staying in a house very near the appellant 's but she did not visit him nor see their child. On learning that the respondent had gone abroad without intimation to him he cabled to her asking her to come back immediately but the respondent did not do so as required by the appellant. There was some correspondence ' about the matter and the respondent continued to say in her letters that she would soon come back to his place. By his letter dated April 1, 1955, the appellant used strong language passing severe strictures against her conduct &id in her continuing to be abroad without obeying his instructions. The respondent replied by letter dated April 12, 1955, saying: "As soon as my. 333 health has completely improved I shall, of course come back to you and to our son. " After this there was no further correspondence between the, parties. In April, 1956, the respondent returned to India but she did not go to the appellant 's home nor did meet him. On September 20, 1956, the appellant filed the present petition praying for judicial separation under section 10(1)(a) of the . The respondent 's defenses to the petition, inter alia, were that she never left the appellant 's matrimonial home with the intention of breaking it and that, in any case, the appellant charged her falsely with immorality in his letter dated April 1, 1955, and so she was justified in living separately. Held (Subba Rao, J. Dissenting), (1) that on the facts the respondent left the appellant 's matrimonial home On February 26,1954, with the intention of permanently, breaking it up, and thatsuch desertion continued during the requisite period of two years. (2) that the appellant 's letter of April 1, 1955, did not con stitute an interruption of the respondent 's desertion by its being a just cause for her to remain away from the matrimonial home; and (3) that, in consequence, the appellant was entitled to a decree for judicial separation under section 10(1)(a) of the . Per Subba Rao, I. (1) Where a spouse seeks judicial separation on the ground of desertion a heavy burden lies on him or her to prove four essential conditions, namely (1) the factum of separation, (2) animus deserendi, (3) absence of his or her consent, and (4) absence of his or her conduct giving reasonable cause to the deserting spouse to leave the matrimonial home. The offence of desertion must be proved beyond any reasonable doubt and as a rule of prudence the evidence of the petitioner shall be corroborated. (2) The expression "includes the wilful neglect" in the explanation to section 10(1) of the , does not enlarge the scope of the word desertion so as to take in by definition the conscious neglect on the part of that offending spouse without the requisite animus deserendi; it does not introduce a new concept in Indian law, but is only an affirmation of the doctrine of constructive desertion in English law. The ingredients of desertion as well as constructive desertion are the same, though in one case there is actual abandonment and in the other there is expulsive conduct. The said doctrine is not rigid but elastic and without doing violence to the principles governing it, it can be applied to the peculiar situations that arise in an Indian society and home. (3) Sections 9 and 10 of the Act deal with different subjects and section 9 does not throw any light on the construction of the expression "without reasonable cause" in the explanation to section 10. Whether there was a reasonable cause or not in a given case could 334 be decided only on the evidence and the peculiar circumstances of that case. (4) In the present case, the evidence was clear that the respondent left her matrimonial home with the permission of her husband and his parents and that it was not possible to infer from the evidence given by Dr. Lulla that the respondent decided to abandon the appellant. The letters demonstrated beyond any reasonable doubt that the wife did not demonstrated beyond band with the requisite animus, but on the other hand, showed her willingness to go over to Bombay as soon as she regained her health. In view of the false allegations made by the appellant in his letter dated April 1, 1954, in which he charged the respondent with unchastity and leading a fast and reckless life, from that date the desertion, if any, on the part of the respondent came to an end and from that date the appellant was guilty of desertion.

Tax Reference Case No. 4 of 1978. Tax Reference Under Section 257 of the Income Tax Act, 1961 made by the Income Tax Appellate Tribunal, Bombay (Bench 'C '). D. V. Patel, T. A. Ramachandran & Miss A. Subhashini for the Appellant. The Judgment of the Court was delivered by PATHAKJ, J. The Judgment of the Court was delivered by PATHAKJ. J. In this tax reference made under section 257 of the income Tax Act, 1961, we are called upon to express our opinion on the following question of law: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming the order of the Appellate Assistant Commissioner that the loss suffered by the assessee was not a loss incurred in a speculative transaction within the meaning of Sec. 43 (5) of the Income tax Act, 1961 ?" The assessee, M/s Shantilal Pvt. Ltd., Bombay, is a private limited company. In the assessment proceedings for the assessment year 1971 72 it claimed a sum of Rs. 1,50,000 paid by it as damages to M/s Medical Service Centre as a business loss. During the previous year relevant to the said assessment year the assessee had contracted to sell 200 Kilograms of Folic Acid USP at the rate of Rs. 440 per Kilogram to M/s. Medical Service Centre and the delivery was to be effected on or before November 1, 1969, within about three months of the date of entering into the contract. The 472 case of the assessee is that as the price of the commodity rose very sharply to as high as Rs. 2,000 per Kilogram during the period when the delivery was to be effected, the assessee was unable to fulfil the contract, giving rise to a dispute in regard to the payment of compensation between the parties. The dispute was referred to arbitration and by an award dated August 25,1970 the arbitrator directed the assessee to pay Rs. 1,50,000 as compensation to M/s. Medical Service Centre. A consent decree in terms of the award was made by the High Court. In the assessment proceedings, the Income Tax officer rejected the claim of the assessee that the payment of compensation was a business loss. He found that the transaction was a speculative transactions as defined by Sub section (5) of section 43. Income Tax Act, 1961. The Appellate Assistant Commissioner allowed the assessee 's appeal on the view that the payment made by it represented a settlement of damages on breach of the contract, which was distinct from a settlement of the contract. Accordingly, he found that the loss must be regarded as a business loss and not as a speculation loss. The Income Tax officer 's appeal was dismissed by the Income Tax Appellate Tribunal by its order dated February 18, 1976. The Commissioner of Income Tax applied in reference for a decision on the question of law set out earlier, and in view of an apparent conflict between different High Courts on the point the Tribunal has made this reference. There is no doubt that the arbitration award granting compensation to M/s. Medical Service Centre proceeds on the footing that there was a breach of contract. The Tribunal took the view that the award of damages for breach of a contract did not bring the transaction within the definition of "speculative transaction" set forth in sub section (5) of section 43, Income Tax Act, 1961. In this, the Tribunal found support in the view expressed by the Calcutta High Court in Commissioner of Income Tax, West Bengal vs Pioneer Trading Company Private Ltd.,(1) Daulatram Rawatmull vs Commissioner of Income Tax (Central), Calcutta(2) and by the Mysore High Court in Bhandari Rajmal Kushalroj vs Commissioner of Income tax, Mysore,(9) which they preferred to the view expressed by the Madras High Court in R. Chinnaswami Chettiar vs Commissioner of Income 473 Tax, Madras.,(1) P.L. KN. Meenakshi Achi vs Commissioner of Income Tax, Madras(a) and A. Muthukumara Pillai vs Commis sioner of Income Tax, Madras.(3) on cereful consideration of the matter we are of opinion that the Tribunal is right. Sub section (5) of section 43 defines "speculative transaction" to mean: "a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips . " Is a contract for purchase or sale of any commodity settled when no actual delivery or transfer of the commodity is effected, and instead compensation is awarded under and arbitration award as damages for breach of the contract ? A contract can be said to be settled if instead of effecting the delivery or transfer of the commodity envisaged by the contract the promisee, in terms of section 63 of the Contract Act, accepts instead of it any satisfaction which he thinks fit. It is quite another matter where instead of such acceptance the parties raise a dispute an d no agreement can be reached for a discharge of the contract. There is a breach of the contract and by virtue of section 73 of the Contract Act the party suffering by such breach becomes entitled to receive from the party who broke the contract compensation for any loss or damage caused to him thereby. There is no reason why the sense conveyed by the law relating to contracts should not be imported into the definition of "speculative transaction". The award of damages for breach of a contract is not the same thing as a party to the contract accepting satisfaction of the contract otherwise than in accordance with the original terms thereof. It may be that in a general sense the layman would understand that the contract must be regarded as settled when damages are paid by way of compensation for its breach. What is really settled by the award of such damages and their acceptance by the aggrieved party is the dispute between the parties. The law, however, speaks of a settlement of the contract, and a contract is settled when it is either performed or the promisee dispenses with or remits, wholly or in part, the performance of the promise made to him or accepts instead of it any satisfaction which he thinks fit. We are concerned with the sense of the law, and it is 474 that sense which must prevail in sub section (5) of section 43. Accordingly, we hold that a transaction cannot be described as a "speculative transaction" within the meaning of sub section (5) of section 43, Income Tax Act, 1961 where there is a breach of the contract and on a dispute between the parties damages are awarded as compensation by an arbitration award. We are unable to endorse the view to the contrary taken by the Madras High Court in R. Chinnaswami Chettiar(supra) and approve of the view taken by the Calcutta High Court in Pioneer Trading Company Private Ltd. (supra) and by the Mysore High Court in Bhandari Rajmal Kushalra; (supra). The decisions of the Madras High Court in P. L. K. N. Meenakshi Achi (supra) and A. Muthukumara Pillai (supra) are not apposite and are not concerned with the point before us. Our attention was invited by learned counsel for the Revenue to the decision of this Court in Devenport o. P. Ltd. vs Commissioner of Income Tax, West Bengal II(1) but this point did not arise there either. Accordingly, we answer the question referred in the affirmative, in favour of the assessee and against the Revenue. There is no order as to costs. H.S.K. Question answered in affirmative.

The respondent assessee claimed that a sum of Rs. 1,50,000 paid by them as compensation for being unable to fulfil a contract was a business loss. The Income tax officer rejected the claim on the ground that the transaction was a speculative transaction as defined by sub section (5) of section 43 of the Income tax Act, 1961. The Appellate Assistant Commissioner held that the loss was a business loss and not a speculative loss on the view that the payment made represented a settlement of damages on breach of the contract, which was distinct from a settlement of the contract. The Income Tax Appellate Tribunal confirmed the order of the Appellate Assistant Commissioner. On the request of the Commissioner of Income tax the Appellate Tribunal has referred the question whether the loss suffered by the assessee was not a loss in a speculative transaction within the meaning of section 43(5) of the Income tax Act, 1961. Answering the question in the affirmative, ^ HELD: A transaction cannot be described as a "speculative trans action" within the meaning of sub section (5) of section 43 where there is a breach of the contract and on a dispute between the parties damages are awarded as compensation by an arbitration award. [474 A B] Sub section (5) of section 43 speaks of the settlement of a contract. A contract can be said to be settled if instead of effecting the delivery or transfer of the commodity envisaged by the contract the promisee, in terms of section 63 of the Contract Act, accepts instead of it any satisfaction which he thinks fit. It is quite another matter where instead of such acceptance the parties raise a dispute and no agreement can be reached for a discharge of the contract. There is a breach of the contract and by virtue of section 73 of the Contract Act the party suffering by such breach becomes entitled to receive from the party who broke the contract compensation for any loss or damage caused to him thereby. There is no reason why the sense conveyed by the law relating to contracts should not be imported into the definition of "speculative transaction" What 471 is really settled by the award of such damages and their acceptance by the aggrieved party is the dispute between the parties. [473 A, C G] Commissioner of Income Tax, West Bengal vs Pioneer Trading Company Private Ltd., ; Bhandari Rajmal Kushiraj vs Commissioner of Income Tax, Mysore, approved. R. Chinnaswami Chettiar vs Commissioner of Income Tax, Madras, overruled. P.L. KN. Meenakshi Achi vs Commissioner of Income Tax, Madras, ; A. Muthukumara Pillai vs Commissioner of Income Tax, Madras, and Devenport & Co. P. Ltd. vs Commissioner of Income Tax, West Bengal 11, not relevant to the point raised.

N: Criminal Appeal No. 26 of 1950. On appeal by special leave from the judgment and order dated the 13th November, 1950, of the High Court of Judi cature at Bombay (Bavdekar and Dixit JJ.) in Criminal Appeal No. 712 of 1950, arising out of judgment dated the 14th August, 1950, of the Court of the Sessions Judge, South Satara, SangIi, in Criminal Appeal No. 85 of 1950 and Crimi nal Case No. 614 of 1950. C.K. Daphtary, Solicitor General of India (G. N. Joshi, with him) for the appellant. B. Somayya (B. K.V. Naidu, with him)for the respondent. 1952. May 27. Fazl Ali and Bose JJ. delivered Judgment as follows: FAZL ALI J. I agree that the acquittal of the respond ent should not be disturbed, and I also agree generally with the reasoning of my brother, Bose. The question whether turmeric is foodstuff is not entirely free from difficulty. In one sense, everything which enters into the composition of food so as to make it palatable may be described as 'foodstuff ', but that word is commonly used with reference only to those articles which are eaten for their nutritive value and which form the principal ingredients of cooked or uncooked meal, such as wheat, rice, meat, fish, milk, bread, butter, etc. It seems to me desirable that the Act ShoUld be amended so as to expressly include 879 within the definition of the somewhat elastic expression "foodstuff" turmeric and such other condiments as the Legis lature intends to be treated as ' such for achieving the objects in its view. BOSE J. The question in this case is whether turmeric is a "foodstuff" within the meaning of clause 3 of the Spices (Forward Contracts Prohibition) Order, 1944, read with section 2 (a) of the Essential Supplies (Temporary Powers) Act, 1946, (Act XXIV of 1946). The respondent was charged with having contravened clause 3 of the Order of 1944 because he entered into a forward contract in turmeric at Sangli on the 18th of March, 1950, in contravention of clause 3 of the Order. He was convicted by the trial Court and sentenced to three months ' simple imprisonment together with a fine of Rs. 1,000 and in default, a further three months. But he was acquitted on appeal by the Sessions Court. An appeal to the High Court against the acquittal failed. The State of Bombay appeals here but makes it plain that it does not want to take any further steps against the respondent in this matter but merely wants to have the question of law decided as a test case as the judgment of the Bombay High Court will have far reaching effects in the State of Bombay. It will be necessary to trace the history of this legis lation. In the year 1944 the then Central Government of India promulgated the Spices (Forward Contracts 'Prohibi tion) Order, 1944, under Rule 81 (2) of the Defence of India Rules. Clauses 2 and 3 read together prohibited forward contracts in any of the "spices" specified in the first column of the schedule to that Order. Among the articles listed in the schedule was turmeric. The conviction is under that Order and it is admitted that if that Order is still valid the conviction would be good. The Defence of India Act was due to expire on the 30th of September, 1946, and with it the Spices Order of 1944. But before it expired an Ordinance called 114 880 the Essential Supplies (Temporary Powers) Ordinance of 1946 was issued. This was Ordinance No. XVII of 1946. The object of the Ordinance, as set out in the preamble, was to provide for the control of what it called "essential commod ities". It defined this to mean, among other things, "foodstuffs", and by a further definition "foodstuffs" was defined to include edible oilseeds and oils. Neither spices in general nor turmeric in particular were mentioned. Section 5 of this Ordinance embodied a saving clause which saved certain Orders which would otherwise have expired along with the Defence of India Rules. The section ran as follows: "Any order . made . under rule 81 (2) of the Defence of India Rules, in respect of any matters specified in section 3, which was in force immediately before the commencement of this Ordinance, shall, notwithstanding the expiration of the said Rules continue in force so far as consistent with th.is Ordinance and be deemed to be an order made under section 3. " The Ordinance was later replaced by the Act with which we are now concerned, the Essential Supplies (Temporary Powers) Act, 1946, (Act XXIV of 1946). The Act merely repro duces the language of the Ordinance in all material particu lars and it is conceded that if the matter falls under the Ordinance it will also fall under the Act. The appellant 's contention is that turmeric is a food stuff, therefore the Order of 1944 is saved. The respond ent 's contention is that turmeric is not a foodstuff. He contends that the Order of 1944 was limited to spices and. that turmeric was included in the term by reason of a spe cial definition which specifically included it; and as the Act of 1946 and the Ordinance are limited to "foodstUffs" the Order of 1944 dealing with turmeric was not saved. The question therefore is, is turmeric a "foodstuff"? Much learned judicial thought has been expended upon this problem what is and what is not food and what is and what is not a foodstuff; and the only conclusion I can draw from a careful consideration of all 881 the available material is that the term "foodstuff" is ambiguous. In one sense it has a narrow meaning and is limited to articles which are eaten as food for purposes of nutrition and nourishment and so would exclude condiments and spices such as yeast, salt, pepper, baking powder and turmeric. In a wider sense, it includes everything that goes into the preparation of food proper (as understood in the narrow sense) to make it more palatable and digestible. In my opinion, the problem posed cannot be answered in the abstract and must be viewed in relation to its. background and context. But before I dilate on this, I will examine the dictionary meaning of the words. The Oxford English Dictionary defines "foodstuff" as follows: "that which is taken into the system to maintain life and growth and to supply waste of tissue. " In Webster 's International Dictionary "food" is defined as: "nutritive material absorbed or taken into the body of an organism which serves for purposes growth, work or repair and for the maintenance of the vital processes. " Then follows this explanation: "Animals differ greatly from plants in their nutritive processes and require in addition to certain inorganic substances (water, salts etc.) and organic substances of unknown composition (vitamins) not ordinarily classed as foods (though absolutely indispensable to life and contained in greater or less quantities in the substances eaten) complex organic substances which fall into three principal groups, Proteins, Carbohydrates and Fats. Next is given a special definition for legal purposes, namely "As used in laws prohibiting adulteration etc. , 'food ' is generally held to mean any article used as food or drink by man, whether simple, mixed or compound, including ad juncts such as condiments etc., and often excluding drugs and natural water. " 882 The definition given of "foodstuff" is 1. Anything used as food. Any substance of food value as protein, fat etc. entering into the composition of a food. " It will be seen from these definitions that "foodstuff" has no special meaning of its own. It merely carries us back to the definition of "food" because "foodstuff" is anything which is used as "food" So far as "food" is concerned, it can be used in a wide as well as a narrow sense and, in my opinion, much must depend upon the context and background. Even in a popular sense, when one asks another, "Have you had your food ? ", one means the composite preparations which normally go to constitute a meal curry and rice, sweetmeats, pudding, cooked vegetables and so forth. One does not usually think separately of the different preparations which enter into their making, of the various condiments and spices and vitamins, any more than one would think of separating in his mind the purely nutritive elements of what is eaten from their non nutritive adjuncts. So also, looked at from another point of view, the var ious adjuncts of what I may term food proper which enter into its preparation for human consumption in order to make it palatable and nutritive, can hardly be separated from the purely nutritive elements if the effect of their absence would be to render the particular commodity in its finished state unsavoury and indigestible to a whole class of persons whose stomachs are accustomed to a more spicely prepared product. The proof of the pudding is, as it were, in the eating, and ii the effect of eating what would otherwise be palatable and digestible and therefore nutritive is to bring on indigestion to a stomach unaccustomed to to such unspiced fare, the answer must, I think, be that however nutritive a product may be in one form it can scarcely be classed as nutritive if the only result of eating it is to produce the opposite effect; and if the essence of the definition is the nutritive element, then the commodity in question must cease 883 to befood, within the strict meaning of the definition, to that particular class of persons, without the addition of the spices which make it nutritive." Put more colloquially, "one man 's food is another man 's poison. " I refer to this not for the sake of splitting hairs but to show the unde sirability of such a mode of approach. The problem must, 1 think, be solved in a commonsense way. I will now refer to the cases which were cited before us. In The San Jose, Cometa and Salerno(1) sausage skins the envelope in which sausage meat is usually con tained were held to be foodstuffs. But this was a case of conditional contraband captured during the war in pursuance of a war time measure, and the decision was given in accord ance with international law. This does not appear from the judgment but is plain from an earlier judgment of the same learned President on which his later decision was based. The earlier judgment is reported in The Kim(2). He explains there at page 27 that the law of contraband is based on "the right of a belligerent to prevent certain goods from reach ing the country of the enemy for his military use," and he states, also at page 27, that "International law, in order to be adequate well as just, must have regard to the circumstances the times, including the circumstances arising out the particular situation of the war, or the condition the parties engaged in it." One of the changing circumstances he felt he had to take into consideration is set out at page 29: "The reason for drawing a distinction between foodstuffs intended for the civil population and those for the armed forces or enemy Government disappears when the distinction between the civil population and the armed forces itself disappears. Experience shows that the power to requisition will be used to the fullest extent in order to make sure that the wants of the military are supplied, and however much goods may be im ported for civil use it is by the military that (1) (2) , 884 they will be consumed if military exigencies require it, especially now that the German Government have taken control of all the foodstuffs in the country. " It is understandable that viewed against a background like that, the word "foodstuffs" would be construed in its wider sense in order to give full effect to the object behind the law, namely the safety and preservation of the State. It is also perhaps relevant to note that the term which was under consideration in those cases occurred in a war time measure, namely a Proclamation promulgated on the 4th of August, 1914, the day on which the first world war started. There is authority for the view that war time measures, which often have to be enacted hastily to meet a grave pressing national emergency in which the very existence of the State is at stake, should be construed more liberally. in favour of the Crown or the State than peace time legisla tion. The only assistance I can derive from this case is that the term "foodstuffs" is wide enough to cover matter which would not normally fall within the definition of what I have called food proper. I do not think it is helpful in deciding whether the wider or the narrower definition should be employed here because the circumstances and background are so different. The next case to which I will refer is James vs Jones(1). That was a case of baking powder and it was held that baking powder is an article of food within the meaning of the English Sale of Food and Drugs Act, 1875. Now it has to be observed here that the object of that Act was to prevent the adulteration of food with ingredients which are injurious to health. It is evident that the definition would have to be wide so as to include not only foodstuffs strict ly so called but also ingredients which ultimately enter into its preparation, otherwise the purpose of the legisla tion, which was to conserve the health of the British peo ple, would have been defeated. (1) 885 Next comes a case relating to tea in which a narrower view was taken: Hinde vs Allmond(1). The question there was whether tea was an "article of food" within the meaning of an Order designed to prohibit the hoarding of food, namely the Food Hoarding Order of 1917. The learned Judges held it was not. But here it is necessary to note the background and at any rate some of the reasons given for the decision. The prosecution there was directed against an ordinary housewife who had in her possession a quantity of tea which exceeded the quantity required for ordinary use and con sumption in her household. The Food Hoarding Order did not specify tea or indeed any other article. It merely prohib ited generally the hoarding of any "article of food" by requiring that no person should have in his possession or under his control at any one time more than the quantity required for use and consumption in his household or estab lishment. Shearman J. said that he rested his judgment on the "commonsense interpretation of the word 'food ' in the Order, apart from its meaning in any other statute" and said : "I agree with my brother Darling that if it had been intended to include tea as food, it ought to have been expressly so provided in the Order." Darling J. explained what he meant in this case in a later decision, Sainsbury vs Saunders(2), and said that there was nothing to prevent the Food Controller from saying that a person should not have, for example, so much wine in his possession, provided he did not simply call it "food" and provided also that he let a person who was to be pun ished know what it was that he was not to do. I think it is clear that the learned Judges were influ enced in their judgment by the fact that the Order in the earlier case was one which affected the ordinary run of householders and housewives who would not have lawyers at their elbows to advise them regarding their day to day marketing. In the circumstances, they decided that the word should be given (1) (2) 886 its ordinary and popular meaning, otherwise many inno cent householders, who had no intention of breaking the law, would be trapped; and this seems to be the ratio decidendi in the decision of the Bombay High Court in Hublal Kamtapra sad vs Goel Bros. & Co. Ltd. (Appeal No. 14 of 1950) which is the decision virtually, though not directly, under appeal here, though the learned Judges also take into consideration two further facts, namely that the law should be construed in favour of the freedom of contracts and a penal enactment in favour of the subject. The English decision about tea just cited is to be contrasted with another decision, also about tea, given a few months later in the same year: Sainsbury vs Saunders(1). Two of the Judges, Darling and Avory, JJ. were parties to the earlier decision; Salter J. was not. He held that though tea had been held in the earlier case not to be a "food" for the purpose of the Food Hoarding Order of 1917, it was a "food" within the meaning of the expressions used in certain Defence of the Realm Regulations read with the New Ministries and Secretaries Act of ,1916 which empowered the Food Controller to regulate "the food supply of the country" and the "supply and consumption and production of food." Avory J. also considered that tea was an article of food for the purposes of these laws though Darling J. pre ferred to adhere to his earlier view. All three Judges also held that the provisions were wide enough to enable the Food Controller to hit at articles which were not food at all, such as sacks and tin containers (Darling J.) so long as he was able by these means even indirectly to regulate the supply of "food", but that portion of the decision does not concern us here because the laws they were interpreting were more widely phrased. Now the comparison of one Act with another is dangerous, especially when the Act used for comparison is an English Act and a war time measure, and I have no intention of falling into that error. I am concerned here with the Act before me and must (1) 887 interpret its provisions uninfluenced by expressions, howev er similar, used in other Acts. I have referred to the cases discussed above, not for purposes of comparison but to show that the terms "food" and "foodstuffs" can be used in both a wide and a narrow sense and that the circumstances and background can alone determine which is proper in any given case. Turning to the Act with which we are concerned, it will be necessary again to advert to its history. Rule 81 (2) was wide and all embracing and the Order of 1944 clearly fell within its ambit. It is also relevant to note that one of the purposes of the Order, as disclosed in its preamble, was to "maintain supplies essential to the life of the communi ty. " As turmeric was specifically included with certain other spices, it is clear that turmeric was then considered to be a commodity essential to the life of the community, that is to say. it was considered an essential commodity and not merely a luxury which at a time of austerity could be dispensed with. Then, when we turn to the Ordinance and the Act of 1946, we find from the preamble that the legislature considered that it was still necessary "to provide for the continuance . of powers to control the production, supply and distribution of, and trade and commerce in, foodstuffs. "Section 3 (1) of the Act continues this theme: "The Central Government, so far as it appears to it to be necessary or expedient for maintaining or increasing supplies of any essential commodity, or for securing their equitable distribution and availability at fair prices, may by notified order provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. " The Ordinance is in the same terms. Now I have no doubt that had the Central Government re promulgated the Order of 1944 in 1946 after the passing of either the Ordinance of the Act of 1946, the Order would have been good. As we have seen, turmeric falls within the wider definition of "food" 1142 888 and "foodstuffs" given in a dictionary of international standing as well as in several English decisions. It is, I think, as much a "foodstuff", in its wider meaning, as sausage, skins and baking powder and tea. In the face of all that I. would find it difficult to hold that an article like turmeric cannot fall within the wider meaning of the term "foodstuffs". Had the Order of 1944 not specified turmeric and had it merely prohibited forward contracts in "foodstuffs" I would have held, in line with the earlier tea case, that that is not a proper way of penalising a man for trading in an article which would not ordinarily be consid ered as a foodstuff. But in the face of the order of 1944, which specifically includes turmeric, no one can complain that his attention was not drawn to the prohibition of trading in this particular commodity and if, in spite of that, he chooses to disregard the Order and test its validi ty in a court of law, he can hardly complain that he was trapped or taken unawares; whatever he may have thought he was at any rate placed on his guard. As I see it, the test here is whether the Order of 1944 would have been a good order had it been repromulgated after the Ordinance of 1946. In my opinion, it would, and from that it follows that it is saved by the saving clauses of the Ordinance and the Act. I have already set out section 5 of the Ordinance. In my opinion, the Order of 1944 falls within its purview, and ii it is saved by that, it is equally saved by section 17 (2) of the Act. The section is in these terms: "Any order . . deemed to be made under the said Ordinance and in force immediately before the commencement of this Act shall continue in force and be deemed to be an order made under this Act. " In my opinion, the conviction was good and the High Court was wrong in setting it aside, but though the matter has no relevance here because of the undertaking given by the learned Solicitor General not to proceed against the respondent any further in this matter, I think it right to observe that. the attitude of 889 the learned English Judges in the first tea case would not be without relevance on the question of sentence in many, cases of this kind. There can, I think, be no doubt that businessmen who are not lawyers might well be misled into thinking that the Ordinance and the Act did not intend to keep the Order of 1944 alive because the Order related to certain specified spices while the Ordinance and the Act changed the nomenclature and limited themselves to "food stuffs", a term which, on a narrow view, would not include condiments and spices. However, these observations are not relevant here because we are not asked to restore either the conviction or the sentence. In view of that, there will be no further order and the acquittal will be left as it ' stands.

The State of Travancore Cochin merged with Indian Union on March 7, 1949, but the Travancore Income tax Regulation, VIII of 1096 (Malayalam Era) and the Travancore Taxation on Income (Investigation Commission) Act, II24 (Malayalam Era), continued to apply to that area not withstanding the merger. On August 6, 1949, the Travancore Cochin Government passed an order referring the case of the appellants to the com mission constituted under the 'Travancore Taxation on Income (Investigation Commission) Act, 1124 M. E. The investigation commission held by its report that the appellants had made a secret profit in the accounting year 1118 M. E., which was not included in the income tax return submitted by the appellants earlier. The Travancore Cochin Government accepted the report and directed recovery of the tax due by its order dated February 14, 1950. The Income tax Officer without holding any fresh assessment proceedings, issued a demand notice. The Union Legislature enacted the Opium and Revenue Laws (Extension of Application) Act (33 of 1950) providing for extension of certain opium and revenue laws to certain parts of India. In exercise of the authority under section 8(2) of the said Travancore Investigation Act, read with section 3, cl. (c), of the Opium and Revenue Laws (Extension of Application) Act, the Government of India, on October 25, 1951, directed that appropriate assessment proceedings under the Travancore Income tax Act be taken against the appellants with a view to assess or reassess the concealed income which bad escaped assessment. The Commissioner of Income tax withdrew the earlier notice of demand and thereafter the Income tax Officer after reassessment proceedings directed the appellants to pay income tax and super tax on the concealed income. The said orders of the Government of India and of the 467 Income tax Officer were questioned by the appellants and the matter was referred by the Commissioner of Income tax to the High Court. The High Court held that the orders in question were valid orders. The appellant appealed with special leave. Held, that the Government of India had the powers under section 3(c) of the , to direct proceedings for assessment or reassessment under the Travancore Income tax Regulation after consideration of the report made by the Travancore Investigation Commission. The order passed by the Government of India on February 14, 1950, was not inconsistent with the order passed by the Travancore Cochin Government. Liability to pay income tax would arise only on an effective order of assessment. No such order having been passed by the Income tax Officer in the instant case, there could be no doubt as to the competency of the Government of India to direct proceedings for assessment. There is nothing in section 8(2) of the Travancore Taxation on Income (Investigation Commission) Act which states that action may be taken thereunder only once, and if an unauthorised direction is given thereunder there is nothing which prevents rectification of that order. By sub section (4) 'of section 8 of the Travancore Taxation on Income (Investigation Commission) Act the findings by the Investigation Commission are final in all assessment or reassessment proceedings. Section 8(2) of the Act removed the bar of limitation which arose by section 25 of the Income tax Act. Consequently, it was competent to the Income tax Officer to reopen the assessment proceedings notwithstanding any lapse of time and the previous order of assessment did not operate as a bar to such re. assessment.

Appeal No. 231 of 1954. Appeal by special leave from the judgment and order dated August 17, 1953, of the Railway Rates Tribunal at Madras in Complaint Case No. 5 of 1952. section C. Isaacs and R. C. Prasad, for the appellant. H. N. Sanyal, Additional Solicitor General of India, H. J. Umrigar and R. H. Dhebar, for the respondents. March 24. The Judgment of the Court was delivered by GAJENDRAGADKAR J. This is an appeal by special( leave against the order passed by the Railway Rates Tribunal, hereinafter called the tribunal, at Madras dismissing the appellant 's complaint under section 41 of the Indian Railways Act (9 of 1890), to be described hereinafter as the Act. The appellant, Raigarh Jute Mills Ltd., is a limited company owning jute mills which are ,situated in Raigarh in Madhya Pradesh. For the production of jute goods, the appellant has to bring raw material, viz., jute from many railway booking stations outside the State of Madhya Pradesh and there is no other means of transport except by rail both for bringing jute to the mills and for carrying the finished products to ports for export to foreign countries. In its complaint, the appellant has alleged that the railway administration had contravened the provisions of section 28 of the Act and also that the charges levied by the railway administration for the freight of the appellant 's goods were unreasonable and excessive. According to the appellant, the Assam Railway (now North Eastern Railway) offered special rates for jute from certain stations in its zone to Kanpur and the basis of these rates was cheaper than that of the rates charged between Raigarh and some other stations on the East Indian Railway and the Bengal Nagpur Railway (now the Eastern Railway). Both the Eastern Railway and the 238 North Eastern Railway are State Railways and as such it was not open to either of them to mete out differential treatment. The appellant further contended that the other jute ' mills in West Bengal and Madras had facilities for direct shipment of their goods without carriage by rail to the ports, whereas, in the case of the appellant, the railways charged freight up and down in respect of the entire traffic of the appellant ; inevitably the prices of the products of the. appellant could not be brought down to the competitive level for the purposes of export out of, or sale in, India. The appellant annexed to its complaint table,, of goods rates of the two railways and urged that the unusual increase in the rates charged to the appellant was telling very heavily on the appellant as compared to other mills. According to the appellant, ' the freight rates should be on the basis prevailing in the year 1949 as the market had gone down to the level existing in that year. The appellant 's complaint therefore prayed that, since the prevailing rates were unreasonable and excessive, the tribunal should issue directions for the introduction of fair and reasonable rates. When the complaint was first filed, both the East Indian Railway with its headquarters at Calcutta and the Bengal Nagpur Railway with its headquarters at Kidderpore were impleaded as respondents. Subsequently, the railways were reorganized and the complaint was then suitably amended with the result that the Eastern Railway with its headquarters at Calcutta was substituted for both the original respondents. Later on, the Union of India was impleaded as respondent 2 to the complaint. Both the respondents denied. the allegations made in the complaint. It was alleged on their behalf that the existing tariff rates for the movement of jute were reasonable and not excessive. It was also alleged by the respondents that, beyond drawing attention to special rates which applied to traffic from certain stations on the Assam Railway section of the NorthEastern Railway to Kanpur, the appellant had not submitted concrete evidence, facts or figures to make out even a prima facie case that the prevailing tariff 239 rates for jute were unreasonable. The respondents ' case was that the fact that the appellant 's mill was situated far away from the port and as such had to incur additional cost had, no relevance or bearing on the case made out in the complaint and the same cannot be treated as a ground for consideration of any special rates. The Union of India has specifically ' raised the additional plea that even after reorganization the two railways in question were separate entities and were working in the different regions having more or less divergent local conditions, and so they did not constitute one railway administration within the meaning of the Act and section 28 was therefore inapplicable. On these contentions four principal issues were framed by the tribunal. All the three members of the tribunal found that the freight rates for the transport of jute to Kanpur from certain stations in the Katihar section of the North Eastern Railway were lower than those for its transport to Raigarh. In fact this position was conceded before the tribunal. On the question as to whether the disparity in the said rates amounted to " undue " preference under section 28 of the Act, the members of the tribunal took different views. The President Mr. Lokur and Mr. Roy, member, were of the opinion that the two railways constituted one railway administration. They thought that it was just and equitable to hold that, although a railway administration may mean a manager, yet in this case it also meant the Government. They were, however, not satisfied that the disparity in the rates justified the appellant 's complaint about " undue " preference. That is why they rejected the appellant 's grievance that the railway administration had contravened the provisions of section 28 of the Act. Mr. Subbarao, the third member of the tribunal, was inclined to take the view that, though the final control of both the railways may be with the Government or its representative, viz., the Railway Board, the actual management of the different zones was with the respective managers, and so the two railways in question cannot be said to constitute one railway administration. Proceeding to deal 240 with the appellant 's complaint on this basis, Mr. Subbarao rejected its argument of " undue " preference on the ground that section 28 was inapplicable in the present case. In the result, the issue about " undue " preference was held against the appellant by all the. members of the tribunal. In regard to the appellant 's case that the increase in the freight for the transport of jute to Raigarh was unreasonable and excessive, the President Mr. Lokur and Mr. Sabbarao found that the plea had not been proved by any evidence. On the other hand, Mr. Roy made a finding in favour of the appellant and held that the rates in question were shown to be unreasonable and excessive. Since the majority decision, however, was against the appellant on this point, the appellant 's complaint was dismissed. It is against this order of the tribunal dismissing its complaint that the appellant has come to this Court in appeal by special leave. Before dealing with the merits of the contentions raised by the appellant, it would be convenient to refer briefly to the provisions of the Act in regard to the constitution of the tribunal as they were in operation at the material time. Section 26 bars jurisdiction of ordinary courts in regard to acts or omissions of the railway administration specified in the section. Section 34 deals with the constitution of the Railway Rates Tribunal. According to this section, the tribunial consists of a President and two other members appointed by the Central Government. The tribunal had to decide the complaint filed before it with the aid of a panel of assessors as prescribed under section 35 of the Act. Section 46 lays down that the decision of the tribunal shall be by the majority of the members sitting and shall be final. It is obvious that this provision about the finality of the tribunal 's decision cannot affect this Court 's jurisd iction under article 136 of the Constitution. Let us now set out the material provisions of the Act on which the appellant 's complaint is founded. Section 28 provides: " A railway administration shall not make or give any undue or unreasonable preference or advantage to, 241 or in favour of, any particular person or railway administration, or any particular description of traffic, in any respect whatsoever, or subject any particular person or railway administration or any particular description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever." A breach of the provisions of section 28 by the railway ' administration may give rise to a complaint under section 41 (1) (a). This section provides for complaints against a railway administration on five different grounds enumerated in cls. (a) to (e) and it requires that the tribunal to which such complaints may be made shall hear and decide them in accordance with the provisions of ch. In the present case, we are concerned with cls. (a), (b) and (c) of section 41, sub section Clause (a) covers cases of alleged contravention of the provisions of section 28; el. (b) deals with cases where it is alleged that the administration is charging station to station rates or wagon load rates which are unreasonable; and cl. (c) deals with cases where the railway administration is levying charges which are unreasonable. Then section 41, sub section (2) (i) lays down that, as soon as it is shown that the railway administration charges one trader or class of traders or the traders of any local area lower rates for the same or similar goods than it charges to other traders or class of traders or to the traders in another local area, the burden of proving that such lower charge does not amount to " undue" preference shall lie on the railway administration; and section 41 (2) (ii) lays down that, in deciding the question of " undue " preference, the tribunal may, in addition to any other considerations affecting the case, take into consideration whether such lower charge is necessary in the interest of the public. The decision of the questions raised by the appellant before us will depend upon the scope and the effect of the provisions contained in sections 28 and 41 of the Act. Section 28 is obviously based on the principle that the power derived from the monopoly of railway carriage must be used in a fair and just manner in respect of all persons and all descriptions of traffic 31 242 passing over the railway area. In other words, equal charges should normally be levied against persons or goods of the same or similar kinds passing over the same or similar area of the railway lines and under the same or similar circumstances; but this rule does not mean that, if the railway administration charges unequal rates in respect of the same or similar class of goods traveling over the same or similar areas, the inequality of rates necessarily attracts the provisions of section 28. All cases of unequal rates cannot necessarily be treated as cases of preference because the very concept of preference postulates competition between the person or traffic receiving preference and the person or traffic suffering prejudice in consequence. It is only as between competitors in the same trade that a complaint of preference can be made by one in reference to the other. If there is no such competition then no complaint of preference can be made even though the charges levied against similar goods may not be equal. It may be possible to assume that there is competition between similar commodities put on the market in the same area for domestic consumption; but no such competition can be assumed between traffic of goods for export and traffic of similar goods for home consumption. It is only when goods or persons can be said to be _pari passu that a question of preference arises and so it is where the competition between two persons or classes of goods is either admitted or proved that the question of the application of section 28 would ever arise. Then again, even as between competing goods or persons, it would not be enough to prove mere preference to attract the provisions of section 28, for theoretically every case of preference may not necessarily be a case of " undue " preference. It is only when the tribunal is satisfied that the railway administration has shown " undue " preference in favour of a particular class of goods that a complaint can be successfully entertained under section 41 (1) (a). The position under section 28 thus appears to be clear. Whoever complains against the railway administration that the provisions of section 28 have been contravened must establish that 243 there has been preference between himself and his goods on the one hand and his competitor and his goods on the other; and where it appears to the tribunal that such preference is " undue " preference, the complainant would be entitled to adequate relief under section 41 (1) (a) of the Act. It is true that, while enquiring into the complaint ' made under section 41, as soon as the complainant shows inequality of rates and proves that the competing goods are charged less than his own, the onus shifts on to the railway administration to prove that such lower charge does not amount to " undue " preference. The initial burden to prove preference is on the complainant; but when the said burden is discharged by the proof of unequal rates as between the complainant and his competitor, it is for the railway administration to prove that the preference is not " undue ". In the absence of satisfactory evidence adduced by the railway administration in justification of unequal rates, the tribunal may hold that the unequal rates complained against by the complainant amounts to " undue " preference. If, on the other hand, the railway administration leads evidence to show justification for the inequality of the rates, then notwithstanding the existence of unequal rates, the tribunal need not necessarily find that the administration has contravened the provisions of section 28, because it is only where " undue " preference by the administration is shown that it can be said to have contravened the said section. In considering the question as to whether the alleged preference amounts to " undue " preference or not, the tribunal may also be entitled to consider whether the lower charge levied by the administration in respect of the competing class of goods was necessary in the interest of the public. That is the result of the provisions of section 41, sub section (2)(i) and (ii). In this connection we may refer to some of the English decisions to which our attention was invited. In Lever Brothers, Limited vs Midland Railway Company (1), it was held that the railway was not called upon to justify the disparity of rates on which the (1) (1909) XIII Railway and Canal Traffic Cases, 301. 244 complaint by Lever Brothers, Limited, was based because the applicants had failed to establish that Messrs. J. W. & Sons, Limited, in respect of whom the lower rate was charged, were the competitors of the applicants. Referring to the fact that the rates charged to the two respective companies were different, Vaughan Williams L. J. observed that he did not think that the difference in rates itself constituted any undue preference by the Midland Railway Company of Watsons as competitors of Levers. One of the reasons why the complaint made by Lever Brothers, Limited, failed was that it was not shown that Messrs. J. W. & Sons, Limited, were competitors of Lever Brothers ' Limited, and that eliminated the application of section 27 (1) of the Railway and Canal Traffic Act of 1888. Similarly in Lancashire Patent Fuel Company Limited vs London and North Western Railway Company (1), it was held that no competition existed between coal carried for shipment, and that carried for the trader and so the application made on the ground of undue preference was incompetent. It was proved in this case that the applicant 's slack was carried by the railway companies at a higher rate than that for slack carried for shipment; but the complaint based on this unequal charges was rejected on the ground that " it cannot be said that the slack carried by the railway companies for the applicants ever comes into competition with the slack which is carried by the railway companies for ordinary shipment ". On the other hand, in The Nitshill and Lesmahagow Coal Company vs The Caledonian Railway Company (2), it was held that the railway administration had shown undue preference because it was proved that the goods unequally charged were commercially and substantially of the same description and there was competition between them. Whether or not the goods were commercially and substantially of the same description was the point in issue between the parties; but the complainant 's case was accepted and it was found that, on the whole, the two articles (1) (1904) XII Railway and Canal Traffic Cases, 77, 79. (2) (1874) 11 Railway and Canal Traffic Cases, 39, 45. 245 were substantially of the same description " and cannot but be regarded as competitive and that there ought not to be any difference in the rates at which they are carried ". This decision shows that if unequal rates are charged for the carriage of similar or same goods travelling over similar or same areas, then the, inference as to " undue " preference can be drawn unless the preference alleged is otherwise shown to be justified by valid reasons. In Denaby Main Colliery Company vs Manchester, Sheffield, and Lincolnshire Railway Company (1), the Earl of Selborne, in his speech, observed that he did not think it possible to hold (looking at the context in which the material words stand) that " the mere fact of inequality in the rate of charge when unequal distances are traversed can constitute a preference inconsistent with them ". It may be pointed out incidentally that the provisions of section 2 of the Railway and Canal Traffic Act, 1854 (17 & 18 Vict. c. 31) are substantially similar to the provisions of section 28 in our Act. Thus it is clear on these authorities that a complaint made under section 41(1)(a) can succeed only if it is shown that preference has been shown by the railway administration to the complainant 's competitor and the administration has failed to adduce evidence in justification of the said preference. It will now be necessary to consider the merits of the appellant 's case in the light of this legal position. The application made by the appellant does not in terms allege any "undue" preference at all. Mr. Isaacs, for the appellant, conceded that the application had not been happily worded; but his comment was that the pleadings of both the parties are far from satisfactory. That no doubt is true; but if the appellant wanted to make out a case against the railway administration under section 41(1)(a), it was necessary that he should have set up a specific case of "undue" preference. The application does allege that the mills at Kanpur are able to carry raw jute at a lower rate but there is no allegation that between the goods of the Kanpur mills and the goods (1) ,114. 246 of the appellant there is any competition in the market. On the other hand, the application refers to the advantage enjoyed by the jute mills in West Bengal and ' Madras over the appellant. Reading the complaint filed by the appellant as a whole, it would .appear that the complaint by necessary implication refers to the competition between the goods of West Bengal and Madras mills on the one hand and the ap pellant 's goods on the other. The appellant no doubt also avers that the rate charged for the transport of the goods are unreasonable and excessive but that is another part of the complaint which we will consider separately. It would, therefore, be difficult to accept Mr. Isaaes argument that the appellant 's complaint should be read as including an allegation about competition between the appellant and the Kanpur mills. If no such allegation has been made by the appellant in his complaint, it would not be fair to criticise the respondents for not denying the existence, of any such competition. But apart from this technical difficulty, the appellant cannot even refer to any evidence on which it would be possible to base a conclusion as to the competition between the goods produced by the Kanpur mills and the appellant 's goods. Mr. Isaacs has taken us through the evidence of Amritlal Bannerjee, Mustafi and Paul; but we have not been able to see any statement made by any of these witnesses which would show that there was a competition between the two sets of goods. On the other hand, such meagre evidence as is available on the record would seem to suggest that the goods produced by the Kanpur mills are sent to local markets for domestic consumption and do not enter the field of competition with the appellant 's goods at all. That presumably is the reason why the appellant could not allege any competition between its goods and the goods of the Kanpur mills and none of the witnesses could speak to it. Mr. Isaacs was thus constrained to refer to the statement (R 18) filed by the respondents for the purposes of showing that the appellant 's goods travelled to some centres in India which may be covered by the goods of the Kanpur 247 mills. In our opinion, this is an argument of desperation and it cannot help the appellant. One of the questions which was apparently raised before the tribunal was in respect of the volume of traffic and it is in connection with this particular part of the dispute that relevant statements were prepared by the respondents and filed before the tribunal. It would, we think, be unreasonable to make use of some of the statements contained in these documents for the purpose of deciding whether the appellant 's goods and the goods produced by the Kanpur mills enter into competition in the markets in India. If the appellant had attempted to lead evidence on this point the respondents would naturally have had an opportunity to rebut that evidence. It is too late now to make out a case of this alleged competition and seek to prove it by stray statements contained in the document filed by the respondents before the tribunal for a wholly different purpose. That being the position of the evidence on the record we have no difficulty in accepting the view of the tribunal that competition between the goods of the Kanpur mills and the appellant 's goods has not been alleged or proved in the present proceedings. If that be the true position, then the mere fact that the goods of the Kanpur mills are transported at more favourable rates would not attract the provisions of section 28 of the Act. The next question which remains to be considered is whether the appellant has proved that the rates charged by the administration in respect of the goods transported by the appellant are per se unreasonable. On this point the appellant has led no evidence at all. In its complaint it has no doubt averred that there has been an undue increase in the freight charges but no allegation is made as to why and how the, actual charges are unreasonable. It appears that the appellant is under a disadvantage because its mills are situated at Raigarh in Madhya Pradesh far away from the shipping centres of transport and the competing mills in West Bengal and Madras are very near the export centres: but the fact that by its geographical location the appellant has to incur, additional 248 expenses of transport would not be relevant in considering the reasonableness of the freight charges. It is common ground that the freight charges are levied at the same rate by the railway administration in respect of either raw jute or jute products against all the mills. There is no inequality of rates so far as the mills in this zone are concerned. The appellant appears, to have argued before the tribunal that the rates of freight leviable by the railway administration should have some relation to the costs incurred by the appellant in producing the jute goods as well as the commodity prices prevailing in the market. This argument has been rejected by the tribunal and we think rightly. It seems to us clear that the costs incurred by the appellant which are partly due to the appellant 's geographical position can have no relevance whatever in determining the reasonableness or otherwise of the railway freight charged by the railway administration. Nor can the railway freight move up and down with the rise and fall of the commodity prices. In dealing with the question about the reasonableness of the railway freight, it would naturally be relevant to consider mainly the working costs of the railway administration and other material circumstances. When a complaint is made against the railway administration under section 41(1)(b) or (c), the onus to prove the alleged unreasonableness of the freight rests on the complainant and if the complainant makes no effort to discharge this onus his plea that the rates are unreasonable must inevitably fail. It appears that Mr. Roy, one of the members of the tribunal, was inclined to take the view that the special rates given to the Kanpur mills in Katihar area should be regarded as normal and reasonable rates; and since the rates charged to the appellant were higher than the said rates, he held that the rates charged against the appellant are unreasonable per se. In our opinion, this view is entirely erroneous. The rates charged to the Kanpur mills are admittedly special rates. Whether or not these concessional or special rates should have been granted to the Kanpur mills is a matter with which the present enquiry is 249 not concerned. There may be reasons to justify the said concessional rates; but it is plain that the special or concessional rates charged by the railway administration in another zone cannot be treated as the sole basis for determining what rates should be charged by the railway. administration in other zones, and so we do not see how the appellant can successfully challenge the majority finding of the tribunal that the rates charged against the appellant 's goods are not shown to be unreasonable per se. In the result we must hold that the tribunal was justified in rejecting the complaint made by the appellant. The appeal therefore fails and must be dismissed with costs. Before we part with this case, we would like to mention two points which were sought to be argued before us by the learned Additional Solicitor General on behalf of the respondents. He challenged the correctness of the majority view of the tribunal that the two railways operating in two different zones in question constituted one railway administration within the meaning of section 3, sub section Alternatively, he argued that, even if the two railways were held to constitute one railway administration and that the disparity in charges amounted to the granting of " undue " preference to the Kanpur mills, section 46 of the Act was a complete answer to the complaint under section 41(1)(a). Since we have held in favour of the respondents on the points urged before us by Mr. Isaacs on behalf of the appellant, we do not propose to deal with the merits of these contentions. Appeal dismissed.

The appellant company owned jute mills situated in Raigarh in the State of Madhya Pradesh, and it had to bring raw material from many railway booking stations outside the State as there was no other means of transport both for bringing jute to the mills and for carrying the finished products to ports for export to foreign countries; the jute mills in West Bengal and Madras had facilities for direct shipment of their goods without carriage by rail to the ports, and so the prices of the products of the appellant could not be brought down to the competitive level for the purposes of export out of, or sale in, India. The appellant filed a complaint before the Railway Rates Tribunal under section 41 of the Indian Railways Act, 1890, on the allegations that the Railway administration had contravened the provisions of section 28 of the Act in that it had offered special rates for certain stations in its zone to Kanpur which were cheaper than those that were charged between Raigarh and some other railway stations, and that the charges levied for the freight of the appellant 's goods were unreasonable and excessive. The Tribunal found that competition between the goods of the Kanpur mills and the appellant 's goods had not been alleged or proved in the present case Held, that the mere fact that the goods of the Kanpur mills are transported at more favourable rates would not attract the provisions of section 28 of the Act, unless there is competition between the goods of the Kanpur mills and the appellant 's goods, and undue preference has been shown by the railway administration to the appellant 's competitor. Nitshill and Lesmahagow Coal Company vs The Caladonian Railway Company, (1874) 11 Railway and Canal Traffic Cases, 39, Denaby Main Colliery Company vs Manchester, Sheffield and Lincolnshire Railway Company, , Lancashire Patent Fuel Company Limited vs London and North Western Railway Company, (1904) XII Railway and Canal Traffic Cases, 77 and Lever Brothers, Limited vs Midland Railway Company, (1909) XIII Railway and Canal Traffic Cases, 301, relied on. Held, further, that in considering the question as to the reasonableness of the railway freight the relevant factors would mainly be the working costs of the railway administration and 237 other material circumstances, and neither the geographical location of the appellant on account of which it has to incur additional expenses of transport, nor the cost incurred in producing the jute goods nor the commodity prices prevailing in the market, have any relevance.

Criminal Appeal No. 63 of 1957. Appeal from the judgment and order dated March 2, 1956, of the Bombay High Court in Cr. A. No. 1258 of 1955. H. R. Khanna and R. H. Dhebar, for the appellant. N. section Bindra, for the respondents (Amicus curiae). December 9. The following Judgment of the Court was delivered by AYYANGAR, J. This appeal on a certificate under article 134(1) of the Constitution granted by the High Court of Bombay, principally raises for consideration the application and scope of article 20(2) of the Constitution and s.26 of the . 109 The facts necessary for the appreciation of the points involved in this appeal are few and may be briefly stated. The two respondents section L. Apte and Miss Dwarkabai Bhat were respectively the Managing Director, and the Managing Director of the Women 's department, of an insurance Company by name 'The Long Life Insurance Company ' which had its headquarters at Poona. A power of attorney had been executed by the company in favour of the first respondent in June, 1942, under which he was vested with the power, control and possession inter alia of the moneys belonging to the company with a view to have them invested in proper securities. The second respondent as Manaaing Director also acted under another power of attorney executed by the company in her favour in or about June, 1942, and by virtue thereof she was assisting the first respondent in main taining the accounts of the company. While the respondents were thus functioning, an audit conducted in 1952 disclosed that considerable sums of money amounting to over Rs. 55,000 were shown as cash balances with the first respondent. Further enquiries made by the Directors showed that moneys aggregating to over Rs. 95,000 had from time to time been withdrawn from the company by the first respondent with the assistance and sanction of the second respondent, professedly for the expenses of the company. Among the papers of the company was a voucher dated August 9, 1952, evidencing the withdrawal of this amount by the first respondent and signed by him and this also bore the signature of the second respondent in token of her sanction. The respondents, however, could furnish no proper account of the legitimate expenses of the company for which the amount was purported to be taken. Both the respondents were thereupon prosecuted for an offence under section 409 of the Indian Penal Code and also for an offence under section 105 of the Indian Insurance Act in Criminal Case 82 of 1953. The learned Magistrate convicted and sentenced both the respondents for both the offences with which they were charged. The respondents thereupon filed 110 appeals to the Court of the Sessions Judge, Poona and the learned Sessions Judge, by his order dated May 3, 1954, while confirming the conviction and sentence on the respondents under section 409 of the Indian Penal Code set aside their conviction under section 105 of the Indian Insurance Act. The reason for the latter order was the finding of the learned Sessions Judge that the sanction required by section 107 of the Indian Insurance Act which was a prerequisite for the initiation of the prosecution under section 105 had not been obtained before the complaint in respect thereof had beed filed. The conviction and sentence under section 409 of the Indian Penal Code which had been affirmed by the Sessions Judge in both the cases have now become final. Subsequetly the Insurance Company obtained the sanction of the Advocate General of Bombay under section 107 of the Indian Insurance Act and filed a complaint in the Court of the Judicial Magistrate, Poona, on January 18, 1955, against the two respondents charging each of them with an offence under section 105 of the Indian Insurance Act. The Magistrate took the case on file and directed the issue of process. Thereupon the two respondents made an application before the Magistrate on March 22, 1955, praying that the complaint against them may be dismissed as being barred by section 403(1) of the Criminal Procedure Code, by reason of their previous conviction by the Magistrate for the same offence under the Insurance Act and their acquittal in respect thereof by the Sessions Judge, pleading in addition that when the conviction by the Magistrate stood, they had even undergone a portion of the sentence imposed. The learned Magistrate overruled this plea on the ground that the acquittal of the respondents was not on the merits of the case, but for lack of sanction under section 107 of the Indian Insurance Act which rendered the Magistrate without jurisdiction to entertain the complaint. The trial was then proceeded with and evidence was led. But finally the Magistrate acquitted the respondents on the ground that article 20(2) of the Constitution and section 26 of the were a bar to their 111 conviction and punishment. The State of Bombay thereupon filed an appeal to the High Court under section 417 of the Criminal Procedure Code. The appeal was dismissed by the learned Judges who however granted a certificate on the strength of which this appeal has been preferred. As the prosecution against the respondents under section 105 of the Insurance Act has been held to be barred by reason of the provisions contained in article 20(2) of the Constitution and section 26 of the , it would be convenient to set out these provisions before entering on a discussion of their content and scope. Article 20(2) of the Constitution runs: "No person shall be prosecuted and punished for the same offence more than once. " Section 26 of the enacts: "Where an act or omission constitutes an offence under two or more enactments, then the offender shall be liable to be prosecuted and punished under either or any of those enactments, but shall not be liable to be punished twice for the same offence." As the application of these two provisions is conditioned by the identity of the two offences which form the subject of the prosecution or prosecutions, we might as well reproduce the relevant provisions constituting the two offences, viz., section 409 of the Indian Penal Code and section 105 of the Indian Insurance Act: "409. Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine. " Criminal breach of trust referred to in the section is defined in section 405 of the Indian Penal Code in these terms: "405. Whoever, being in any manner entrusted 112 with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged. or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits 'criminal breach of trust '. " The offence created by the Indian Insurance Act is as follows: "105. (1) 'Any director, managing agent, manager or other officer or employee of an insurer who wrongfully obtains possession of any property of the insurer or having any such property in his possession wrongfully withholds it or wilfully applies it to purposes other than those expressed or authorised by this Act shall on the complaint of the Controller made after giving the insurer not less than fifteen days ' notice of his intention, or, on the complaint of the insurer or any member or any policy holder thereof, be punishable with fine which may extend to one thousand rupees and may be ordered by the Court trying the offence to deliver up or refund within a time to be fixed by the Court any such property improperly obtained or wrong fully withheld or wilfully misapplied and in default to Buffer imprisonment for a period not exceeding two years. (2)This section shall apply in respect of a provident society as defined in Part III as it applied in respect of an insurer." Before addressing ourselves to the arguments urged before as by the Yearned Counsel for the appellant State it is necessary to set out one matter merely to put it aside. The entire argument on behalf of the State before the High Court proceeded on denying that the order of a Criminal Court passed under section 105 of the Indian Insurance Act directing the accused to "deliver up or refund. any such property improperly withheld or wilfully misapplied" was a "punish ment" within either article 20(2) of the Constitution or 113 section 26 of the . The learned Judges of the High Court rejected this contention. Though learned Counsel for the appellant originally submitted that he was contesting this conclusion of the High, Court, he did not address us any argument under that head and we do not therefore find it necessary to dwell on this point any further, but shall proceed on the basis that a direction by the Magistrate to replace the moneys of the insurer with a penalty of imprisonment in default of compliance therewith was a "punishment" within article 20(2) of the Constitution and section 26 of the . Turning to the main points urged before us, we may premise the discussion by stating that it was not disputed before us by learned Counsel for the State, as it was not disputed before the learned Judges of the High Court, that the allegations to be found in the original complaint in Criminal Case 82 of 1953 on which the conviction under section 409 of the Indian Penal Code was obtained were similar to the allegations to be found in the complaint under section 105 of the Indian Insurance Act. It should, however, be mentioned that there was not any complete identity in the statement of facts which set out the acts and omissions on the part of the respondents which were alleged to constitute the two offences section 409 of the Indian Penal Code and section 105 of the Insurance Act. For instance, in the complaint which has given rise to this appeal, the crucial paragraphs detailing the allegations are 12 and 13 of the complaint which run: "12. The company submits that the accused has thus wrongfully obtained possession of Rs. 95,000 or having that property in his possession wrongfully withheld it or wilfully applied it to purposes other than those expressed or authorised by the , and committed an offence on the 9th August, 1952, under Sectionof the ." "13. The company through their Solicitorscalled upon the accused to explain his conduct within7 15 114 days from the receipt of the letter. The accused has failed and neglected to reply to the said letters. " It is obvious that on these allegations alone the offence of criminal breach of trust could not be established as they lack any reference to any entrustment or to the dishonest intent which are the main ingredients of the offence of criminal breach of trust. But to this point about the difference in the ingredients of the two offences we shall revert a little later. Even assuming that the allegations to be found in the two complaints were identical, the question, however, remains whether to attract the ban imposed by either article 20(2) of the Constitution or section 26 of the General ClausesAct on a second punishment, it is sufficient that the allegations in the two complaints are substantiallythe same or whether it is necessary further that theingredients which constitute the two offences should be identical. We shall first take up for consideration article 20(2) of the Constitution whose terms we shall repeat: "20. (2) No person shall be prosecuted and punished for the same offence more than once. " To operate as a bar the second prosecution and the consequential punishment thereunder, must be for "the same offence". The crucial requirement therefore for attracting the Article is that the offences are the same, i.e., they should be identical. If, however, the two offences are distinct, then notwithstanding that the allegations of facts in the two complaints might be substantially similar, the benefit of the ban cannot be invoked. It is, therefore, necessary to analyse and compare not the allegations in the two complaints but the ingredients of the two offences and see whether their identity is made out. It would be seen from a comparison of section 105 of the and a. 405 of Indian Penal Code (a. 409 of the Indian Penal Code being only an aggravated form of the same offence) that though some of the necessary ingredients are common they differ in the following: (1)Whereas under a. 405 of the Indian Penal Code the accused must be "entrusted" with property or with "dominion over that property", under section 105 of 115 the the entrustment or dominion over property is unnecessary it is sufficient if the manager, director, etc. "obtains possession" of the property. (2)The offence of criminal breach of trust (section 405 of the Indian Penal Code) is not committed unless the act of misappropriation or conversion or "the disposition in violation of the law or contract", is done with a dishonest intention, but section 105 of the postulates no intention and punishes as an offence the mere withholding of the property whatever be the intent with which the same is done, and the act of application of the property of an insurer to purposes other than those authorised by the Act is similarly without reference to any intent with which such application or misapplication is made. In these circumstances it does not seem possible to say that the offence of criminal breach of trust under the Indian Penal Code is the "same offence" for which the respondents were prosecuted on the complaint of the company charging them with an offence under section 105 of the . This aspect of the matter based on the two offences being distinct in their ingredients, content and scope was not presented to the learned Judges of the High Court, possibly because the decisions of this Court construing and explaining the scope of article 20(2) were rendered later. In Om Prakash Gupta vs State of U.P. (1) the accused, a clerk of a municipality had been convicted of an offence under section 409 of the Indian Penal Code for having misappropriated sums of money received by him in his capacity as a servant of the local authority and the conviction had been affirmed on appeal, by the Sessions Judge and in revision by the High Court. The plea raised by the accused before this Court, in which the matter was brought by an appeal with special leave, was that section 409 of the Indian Penal Code had been repealed by implication by the enactment of sub sections (1) (c) and (2) of section 5 of the Prevention of Corruption Act because the latter dealt with an offence of substantially the same type. This Court repelled that contention. It (1) ; 116 analysed the ingredients of the two offences and after pointing out the difference in the crucial elements which constituted the offences under the two provisions, held that there was no repeal of section 409 of the 'Indian Penal Code implied by the constitution of a new offence under the terms of the Prevention of Corruption Act. It was the application of this decision and the ratio underlying it in the context of article 20(2) ,of the Constitution that is of relevance to the present appeal. The occasion for this arose in State of Madhya Pradesh vs Veereshwar Rao Agnihotry (1). The res pondent was a tax collector under a municipality and was prosecuted for offences among others under section 409 of the Indian Penal Code and s 5(2) of the Prevention of Corruption Act for misappropriation of sums 'entrusted to him as such tax collector. By virtue of the provision contained in section 7 of the Criminal Law Amendment Act, XLVI of 1952, the case was transferred to a Special Judge who was appointed by the State Government after the prosecution was commenced before a Magistrate. The Special Judge found the accused guilty of the offence under section 409 of the Indian Penal Code and convicted him to three years ' rigorous imprisonment but as regards the charge under section 5(2) of the Prevention of Corruption Act, he acquitted the accused on the ground of certain procedural non compliance with the rules as to investigation prescribed by the latter enactment. The respondent appealed to the High Court against this conviction and sentence under section 409 of the Indian Penal Code and there urged that by reason of his acquittal in res pect of the offence under section 5(2) of the Prevention of Corruption Act, his conviction under section 409 of the Indian, Penal Code could not also be maintained, the same being barred by article 20(2) of the Constitution. The High Court of Madhya Bharat accepted this argument and allowed the appeal and the State challenged the correctness of this decision by an appeal to this Court. Allowing the appeal of the State, Govinda Menon, J., delivering the judgment of the Court observed: (1)[1957] S.C.R. 868: 117 "This Court has recently held in Om Prakash Gupta vs The State of U.P. that the offence of criminal misconduct punishable under section 5(2) of the Prevention of Corruption Act, 11 of 1947, is not identical in essence, import and content with an offence under section 409 of the Indian Penal Code In view of the above pronouncement, the view taken by the learned Judge of the, High Court that the two offences are one and the same, is wrong, and if that is so, there can be no objection to a trial and conviction under section 409 of the Indian Penal Code, even if the respondent has been acquitted of an offence under section 5(2) of the Prevention of Corruption Act, II of 1947 The High Court also relied on article 20 of the Constitution for the order of acquittal but that Article cannot apply because the res pondent was not prosecuted after he had already been tried and acquitted for the same offence in an earlier trial and, therefore, the well known maxim "Nemo debet bis vexari, si constat curiae quod sit pro una et eadem causa" (No man shall be twice punished, if it appears to the court that it is for one and the same cause) embodied in article 20 cannot apply" Before leaving this part of the case we might also point out that a similar view of the scope of the rule as to double jeopardy has always been taken by the Courts in America. The words of the Vth Amendment where this rule is to be found in the American Constitution are: "Nor shall any person be subject, for the same offence, to be twice put in jeopardy of life or limb." and it will be noticed that there as well, the ban is confined to a second prosecution and punishment for the same offence. Willoughby after referring to the words quoted in the Fifth Amendment says: "Cases may occur in which the same act ma y render the actor guilty of two distinct offences; In such cases the accused cannot plead the trial and acquittal, or the conviction and punishment for one offence in bar to a conviction for the other"(1). In Albrecht vs (1)Constitution of the United States, Vol. II. p. 1158. , 118 United States (1) Brandeis, J., speaking for a unanimous Court said: "There is a claim of violation of the Vth Amendment by the imposition of double punishment. This contention rests upon the following facts. Of the nine, counts in the information four charged illegal possession of liquor, four illegal sale and one maintaining a common nuisance. The contention is that there was double punishment because the liquor which the defendants were convicted for having sold is the same that they were convicted for having possessed. But possessing and selling are distinct offences. One may obviously possess without selling; and one may sell and cause to be delivered a thing of which he has never had possession; or one may have possession and later sell, as appears to have been done in this case. The fact that the person sells the liquor which he possessed does not render the possession and the sale necessarily a single offence. There is nothing in the Constitution which prevents Congress from punishing separately each step leading to the consummation of a transaction which it has power to prohibit and punishing also the completed transaction. " If, therefore, the offences were distinct there is no question of the rule as to double jeopardy as embodied in article 20(2) of the Constitution being applicable. The next point to be considered is as regards the scope of section 26 of the . Though section 26 in its opening words refers to "the act or omission constituting an offence under two or more enactments", the emphasis is not on the facts alleged in the two complaints but rather on the ingredients which constitute the two offences with which a person is charged. This is made clear by the concluding portion of the section which refers to "shall not be liable to be punished twice for the same offence,". If the offences are not the same but are distinct, the ban imposed by this provision also cannot be invoked. It therefore follows that in the present case as the respondents are not being sought to be punished for "the (1) (1927) 273 TT.S. I: ; 119 same offence" twice but for two distinct offences con stituted or made up of different ingredients the bar of the provision is inapplicable. In passing, it may be pointed out that the construction we have placed on article 20(2) of the Constitution and section 26 of the is precisely in line with the terms of section 403(2) of the Criminal Procedure Code which runs: "403. (2) A person acquitted or convicted of any offence may be afterwards tried for any distinct offence for which a separate charge might have been made against him on the former trial under section 235, sub section (1). " It would be noticed that it is because of this provision that the respondents before us were originally charged before the Magistrate in Criminal Case 82 of 1953 with offences under section 409 of the Indian Penal Code as well as section 105 of the Indian . The respondents in this case did not appear in this Court and as the appeal had to be heard ex parte Mr. N. section Bindra was requested to appear as amicus curiae to assist the Court at the hearing of the appeal. We express our thanks to him for the assistance he rendered. The appeal is accordingly allowed and the judgment and the order of the High Court is set aside and the case will go back to the Judicial Magistrate, Fourth Court, Poona, for being proceeded with according to law. Appeal allowed. Case remanded.

By section 312 of the , "Any assignment of his office made after the commencement of this Act by any direc tor of a company shall be void. " 42 330 The managing director of a private company, empowered by the terms of the agreement between him and the company and the articles thereof to appoint, by deed or by will, any person to be the managing director in his place and stead, died leaving a will whereby he appointed one of the appellants the managing director in his place from the date of his death. The High Court took the view that the word 'assignment ' in the section included 'appointment ' and as such the appointment in question was void. Held, that section 312 of the , cannot be interpreted in such a way as to bring it into conflict with section 255 of the Act since its language does not compel such an interpretation. The word 'assignment ' in that section does not mean appointment and the section is intended to render a transfer of his office by a director void and not an appointment by him of his successor. Section 255 of the Act, which expressly permits directors to be appointed otherwise than by the company, shows that, sub ject to the limit as to numbers prescribed by it, a director, authorised by the articles of the company, can appoint another to take his office when rendered vacant by his resignation or death or on expiry of his term of office. The proviso to section 86B of the old Act cannot lend any support to the argument that the word 'assignment ' in section 312 of the new Act includes 'appointment '. The Guardians of the Poor of the West Derby Union vs The Metropolitan Life Assurance Society, , referred to.

Appeal No. 1041 of 1963. Appeal by special leave from the judgment and order, dated September 2, 1963, of the Punjab High Court (Circuit Bench) at Delhi in L.P.A. No. 119 D of 1963. S.T. Desai, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant. H.N. Sanyal, Solicitor General of India and B. P. Maheshwari, for the respondent. 183 January 9, 1964. The Judgment of the Court was delivered by HIDAYATULLAH J. This is an appeal by special leave against the order of the High Court, Punjab, dated August 14, 1963, by which an order of the Rent Controller under section 15(1) of the Delhi Rent Control Act, 1958, directing the appellant to deposit back rents at Rs. 300 per month from 1st July, 1957, was confirmed. The High Court granted the appellant one month 's time from the date of its own order, as the original time had already run out. The appellant is an advocate, who is practising at Delhi. He is occupying No. 43, Prithvi Raj Road, New Delhi as a tenant, and his landlord Seth Kirori Mal Luhariwala is the respondent in this appeal. The tenancy commenced on July 28, 1957, and the memorandum of tenancy, dated July 1, 1957, produced in the case, shows that the premises were taken on a monthly tent of Rs. 300. The memorandum also contains other terms which need not be mentioned here, because they are not relevant to the present appeal. It appears that Seth Kirori Mal was in arrears in payment of his income tax, and a sum of Rs. 39,00,000 was outstanding from him. On October 31, 1957, the Income tax Officer Central Circle, New Delhi, to whom all cases of Seth Kirori Mal were transferred, issued a notice to the appellant under section 46(5A) of the Indian Income fax Act directing him to deposit with the Income tax Officer all sums due by way of rent as also future rents. The appellant sent no reply to this notice. He had, however,on September 29, 1957, addressed a letter to the respondent Seth Kirori Mal. The reply of Kirori Mal, dated October 15, 1957, figured in the arguments a great deal, and as it is brief, it may be quoted here: "From TO Dated Faigarh, the 15th October, 1957, 184 Dear Sir, With reference to letter No. M 17 58, dated 29th September, 1957, 1 am to write that you may please adjust six months rent of 43, Prithviraj Road, New Delhi, i.e., Rs. 1800 (rent from 1 10 57 to 31 3 1958) towards your professional fee in part payment thereof. The balance of your fee will be paid later at the time of final settlement. Yours faithfully, (Sd.) Paluram Dhanania, For Kirorimal Luhariwala. Kirori Mal also sent a receipt, dated October 16, 1957, or the amount, and is item 23 in the record. Kirori Mal had litigation in Calcutta. He had brought a suit against four defendants, claiming the present property as his "absolute" and "exclusive self acquired property". The case was pending in the High Court and on May 1, 1.958, an order was made appointing one Chakravarti as a Receiver of the properties including No. 43, Prithvi Raj Road. Chakravarti also sent a notice on July 8, 1958, to the appellant demanding rent already due and also as and when due. To this notice, the appellant sent a reply on July 19, 1958. He referred to the payment of rent by adjustment towards fees for the period 1st October, 1957 to 31st March, 1958, which was the subject of the letter above. He stated that as regards rent after 1st April, 1958, he had no objection to pay the amount to the Receiver or any other claimant but regretted that it was not possible for him to make the payment because of the notice served upon him by the Income tax Officer. He asked the Receiver to get the notice withdrawn, and stated that he would be glad to remit the amount of rent to him when that was done. He also raised the question of certain other expenses which he had incurred in connection with the house which he claimed he was entitled to deduct from the rent and informed that a few repairs were, required in the house. A second letter was sent by the Official Receiver on September 5. 1959, making another demand. In his reply, dated September 14, 1959, to this letter, the appellant raised the 185 question that a sum of Rs. 23,500 was payable to him for _professional services rendered by him to Seth Kirori Mal. He stated: "You will therefore appreciate that I am entitled to adjust the rent payable against the fees due to me and the amount due to me will absorb the rent for a little over six years. Even before this Seth Kirori Mal had paid me a sum of Rs. 1800 by way of adjustment of rent towards my professional fees due. You will, therefore, kindly agree that the rent payable is adjustable against the professional fee due to me. " With this letter, he enclosed a copy of a statement of fees amounting to Rs. 23,500 which he had submitted to his ,client on February 4, 1959. The Official Receiver then in formed the appellant that the party concerned had denied the claim for fees as absolutely false, and observed in his letter that the professional fees should be the subject of some other proceeding but the rent should be paid with,out delay. He enquired if the amount of rent had been paid 'to the Income tax department in response to the notice. In his reply to this letter, on July 5, 1960, the appellant for the first time stated that there was an agreement between him and Seth Kirori Mal to adjust the rent towards his professional fees until the fees were fully paid. He offered to reduce the fees if Seth Kirori Mal had any objection, but stated that till the professional fees were recouped, no rent could be considered to be due from him. On November 25, 1960, Seth Kirori Mal applied to the High Court at Calcutta for directions to the Official Receiver to take appropriate proceedings to realise the arrears of rent from the appellant, and on December 19, 1960, the High Court appointed Seth Kirori Mal receiver in the case. Seth Kirori Mal then served a notice on December 23, 1960, on the appellant to pay the arrears of rent. To this notice, the appellant sent a detailed reply which, in substance, has been his defence in the proceedings before the Rent Controller, from which the present appeal has arisen. 186 On January 4, 1961, Seth Kirori Mal made an application under section 14 of the Delhi Rent Control Act before the Rent Controller, Delhi. In his written statement in reply to that application, the appellant pleaded that Seth Kirori Mal had no right to recover rent from him, inasmuch as a. notice under section 46(5A) of the Indian Income tax Act had. been issued by the Income tax Officer, Central Circle V, New Delhi. He pleaded that the property was in the custody of the Court, and that inasmuch as a receiver had been appointed, Kirori Mal had no locus stands to maintain the petition denying at the same time that Kirori Mal had informed him that he had been appointed a receiver of the property. The appellant also contended that under the Rent Control Act, a receiver had no right to act on behalf of the landlord. He referred to the alleged agreement by which fees were, to be recouped from rent as and when it fell due, pointing out that on an earlier occasion a sum of Rs. 1800 was allowed to be adjusted towards fees. Some other please were raised, but it is not necessary to refer to them because they were not raised before us. The notice to quit which the appellant alleged was not issued to him was filed in the Court of the Controller on May 17, 1961. The appellant was ordered to inspect it and to be ready for his statement as to the correctness of the notice. On the next date, a statement of the appellant was recorded and he denied the notice and also its receipt. The case was then set down for arguments and after hearing the arguments, the Rent Controller passed his order on July 22, 1961. The Rent Controller held that there was no proof on the file to show that the respondent had any right to make an adjustment of the rent against his professional dues. He held that the rent was not paid after March 31. With regard to the plea that a notice under section 46(5A) of the Income tax Act, 1922, had been issued. the Rent Controller observed that the amount, if deposited in his court, would not be paid to Kirori Mal unless he produced a clearance certificate from the Income tax Department. The Rent Controller also said that if in the enquiry to be subsequently made, the tenant proved that the amount of fees had to be recouped from rent. the amount would not be paid to Kirori Mal. 187 Against the decision of the Rent Controller, the appellant filed an appeal before the Rent Control Tribunal. The Rent Control Tribunal affirmed the decision of the Controller, observing that the plea taken by him that his professional fees were to come out of rent was an after thought and there was no evidence to prove that there was such an agreement between the parties. On other matters, the Tribunal expressed its agreement with the Rent Controller. The appellant then appealed to the High Court of Punjab. The High Court upheld the orders so far made and pointed out that in the letter dated July 19, 1958, to the Receiver, the appellant had not mentioned the agreement. The High Court hi ,Id that the order made under section 15(1) of the Act was proper, because it was an admitted fact that rent had not been paid to anybody from April 1, 1958. The High Court endorsed the view of the Tribunals below that the notice of the Income tax Officer did not come in the way of making the deposit of the rent in the office of the Rent Controller, because the amount was not to be paid to anyone till the Rent Controller had decided who was entitled to receive it. The appeal was therefore dismissed. In this court, emphasis is laid upon the letter of October 15, 1957, by Kirori Mal in which there was an adjustment of Rs. 1800 towards fees. It was contended that there was an oral agreement to use the rent to pay the professional fees. The letter itself does not show that there was any such agreement. In fact it shows the contrary where it says: "The balance of your fees will be paid later at the time of final settlement. " This shows that the appellant was not entitled to retain the rent in his hands, and the Tribunals below were justified in saying that the plea about the so called agreement was an after thought, because till September 14, 1959, the appel lant had not mentioned such an agreement. We are also satisfied that the plea was a mere device to retain the money and to avoid paying the rent. It must be remembered that there were as many as four claimants, viz., the Income tax Officer, the Receiver and Kirori Mal in person and Kirori 188 Mal as Receiver, but the appellant avoided each of these in turn by pointing to the others, and in this way continued to occupy the premises without payment of any rent. It was contended however as a matter of law that a proper opportunity ought to have been given to the appellant to prove his plea by leading evidence before ordering that the rent be deposited. Mr. section T. Desai contended that under section 15(1) of the Delhi Rent Control Act, an order for deposit of arrears of rent can only be made after the tenant has been given an opportunity of being heard, because if the tenant makes a payment or deposit as required of him, the landlord is entitled to take the amount of the deposit and the Controller can award such costs as he may deem fit to the landlord and the case comes to an end. By way of contrast, he pointed out that the case proceeds if the tenant fails to make the payment or deposit as required of him. In other words, it was contended that an order under section 15(1) for deposit of rent should only be made at the end of the case and not at an interlocutory stage. Mr. Desai contended that the present order was made at an interlocutory stage and it was wrong, because if the tenant deposited the money, there would be no further hearing and his plea that there was an agreement between the parties that the rent as and when it fell due should be set off against the professional fees, would remain untried. In our opinion, this reading is not permissible. Section 15 (omitting such parts as are unnecessary for the present purpose) reads as follows: Section 15. (1) In every proceeding for the recovery of possession of any premises on the ground specified in clause (a) of the proviso to subsection (1) of section 14, the Controller shall, after giving the parties an opportunity of being heard, the an order directing the tenant to pay to the landlord or deposit with the Controller within one month of the date of the order, an amount calculated at the rate of rent at which it was last paid for the period for which the arrears of the rent were legally recoverable from the ten 189 ant including the period subsequent thereto up to the end of the month previous to that in which payment or deposit is made and to conti nue to pay or deposit month by month, by the fifteenth of each succeeding month, a sum equivalent to the rent at that rate. (3) If, in any proceeding referred to in subsection (1) or sub section 2), there is any dispute as to the amount of rent payable by the tenant, the Controller shall, within fifteen days of the date of the first hearing of the proceeding, fix an interim rent in relation to the premises to be paid or deposited in accordance with the provisions of sub section (1) or subsection (2), as the case may be, until the standard rent in relation thereto is fixed having regard to the provisions of this Act, and the amount of arrears, if any, calculated on the basis of the standard rent shall be paid or deposited by the tenant within next month of the date on which the standard rent is fixed or such further time as the Controller may allow in this behalf. (6) If a tenant makes payment or deposit as required by sub section (1) or sub section (3), no order shall be made for the recovery of possession on the ground of default in the payment of rent by the tenant but the Controller may allow such costs as he may deem fit to the. landlord. (7) If a tenant fails to make payment or deposit as required by this section the Controller may order the defence against eviction to be struck out and proceed with the hearing of the application. " It will be noticed that sub section (3) also contemplates 190 payment of interim rent determined by the Controller before the entire dispute is settled. Sub section (6) puts the case under sub section (1) and sub section (3) on the same footing and makes no distinction between them. It is also possible to visualise cases in which the tenant may deposit the amount of rent under protest and claim that his defence be tried. It is not that even on the deposit of the arrears of rent in these circumstances the case would come to an end. The latter part of sub section (1) further shows that not only the arrears have to be deposited but rent as it falls due has to be deposited month by month by the 15th of each succeeding month. This also shows that the order under sub section (1) is not a final order but is preliminary to the trial of the case and is made only where the rent has in fact not been paid. For the purpose of an interim order it was not necessary that there should have been a full trial. The Rent Controller had the affidavit of the appellant and he could judge whether in the circumstances of the case, an interim order ought or ought not to be made. He came to the conclusion that the rent was not paid and the plea that it was being withheld under an agreement was an afterthought and not true. The High Court and the Rent Control Tribunal have agreed with this view of the Rent Controller and the conclusion appears to us to be sound. Once such a conclusion is reached, it is quite manifest that the order was made after affording an opportunity to the appellant to be heard. No doubt, the appellant is entitled to lead oral evidence in regard to the agreement he alleges, but for that he will have an opportunity hereafter. At the moment, he is being asked to deposit the arrears in court, which admittedly are outstanding. Mr. Desai next contended that the notice under section 46(5A) amounted to a garnishee order and the appellant could not, while the notice stood, make any payment without incurring personal liability. There was no question of a personal liability because the Rent Controller had stated in his order that the amount would not be paid to anyone till the clearance certificate was obtained from the Income tax Department. The Rent Controller had informed the income tax authorities and the appellant ran no risk in depositing the arrears of rent in the circumstances. 191 It was contended that the notice under section 46(5A) amounted to an attachment of the rent in the hands of the appellant and reference was made to the provisions of section 46 sub section 5A para 5. The argument overlooks the next para which provides: "Where a person to whom a notice under this subsection is sent objects to it on the ground that the sum demanded or any part thereof is not due to the assessee or that he does not hold any money for or on account of the assessee, then, nothing contained in this section shall be deemed to require such person to pay any such sum or part thereof, as the case may be, to the Income tax Officer. " If there was an agreement between the parties and Kirori Mal was indebted for such a large amount, the appellant could have objected on the ground that he did not hold any money for or on account of the assessee and then he would not have been required to pay any sum to the Income tax ,Officer. The appellant did nothing in the matter except to deny the payment to everyone. He paid nothing to the Income tax Officer, declined to deposit the money before the Rent Controller and refused to recognise the demands by the Receiver and his landlord. In other words, be was trying to take full advantage of the law, when lie could have informed the Income tax Officer about his own position and paid the money to the Rent Controller subject to its being paid to the Income tax Department. Reference was made in this connection to a decision of the Calcutta High Court reported in Nalinakhya Bysack and another vs Shyam Sunder Halder and others(1) in which Harries C. J. observed that before making an ,order for the deposit of the rent, a full enquiry should be made. That was a case in which the tenant had pleaded that there was an agreement between him and the landlord that any amount spent on repairs would be set off against the rent. Harries C.J. held that without ascertaining the (1) A.I.R, (1952) Cal. 192 truth of the plea that a large sum had been, spent on repairs, an order to deposit the entire arrears of rent ought not to have been made. It is quite clear that the facts there were entirely different. Payment by the landlord for repairs was a part of the tenancy agreement and rent under that tenancycould not be calculated without advertence to every term of the agreement of tenancy. Here the special agreement which is pleaded is outside the tenancy agreement and the allegation about the special agreement has been held to bean after thought and false. It is therefore difficult to apply the ruling to the present circumstances. The appeal is wholly devoid of merit and it is dismissed with costs. By the consent of parties, a period of two months from the date of hearing (20 12 1963) was granted to the appellant to deposit the arrears of rent from 1st. April, 1958, in the Court of the Rent Controller.

The respondent made an application against the appellant under section 14 of the Delhi Rent Control Act. In reply the appellant pleaded 182 that the respondent had no right to recover rent from him as a notice under section 46(5A) of the Indian Income tax Act had been issued by the Income tax Officer, that the respondent had no locus standi as the property was in the custody of the Court and a receiver had been appointed and that his professional fees were agreed and be adjusted towards the rent dues. The Rent Controller recorded the statement of the appellant and after hearing arguments directed the appellant under section 15(1) of the Delhi Rent Control Act, 1958 to deposit back rents at Rs. 300/ per month. On appeal the decision of the Rent Controller was affirmed, and a further appeal to the High Court also failed. The appellant contended that the order under section 15(1) for deposit of rent could only be made at the end of the case and not at an interlocutory stage. Held:(i) that the order under sub section (1) of section 15 is not a final order but is preliminary to the trial of the case and is made only wherer the rent has in fact not been paid. For the purpose of an interim order it was not necessary that there should have been a fun trial and, that this was clear from the latter part of sub section (1) of section 15 because under it not only the arrears have to be deposited but rent as it falls due has to be deposited month by month by the 15th of each succeeding month. Nalinakhya Bysack and Anr. vs Shyam Sunder Halder, A.I.R. , distinguished. (ii)The notice under section 46(5A) of the Income tax Act did not amount to a garnishee order and the appellant could make payment to the rent controller without incurring personal liability because the rent controller had stated in his order that the amount would not be paid to any one till a clearance certificate was obtained from the Income tax Department.

Appeal No. 614 of 1961. APpeal by special leave from the judgment and decree dated December 22, 1959, of the Andhra Pradesh High Court, Hyderabad in Second Appeal No. 428 of 1959. A. V. Viswanatha Sastri and T.V.R. Tatachari, for the appellants. A.Ranganadham Chetty and P. D. Menon, for the respondent No. 1. 1962. September 26. S.K. DAs. J. This is an appeal by special leave and the short question for decision is the true scope and effect of section 4 of the Madras Irrigation Tanks (Improvement) Act, 1949 (Mad. XIX of 1949), hereinafter referred to as the Act. The section is in these terms : "No Court shall entertain any suit or appli cation for the issue of an injunction to restrain 310 the exercise of any powers conferred on the Government by section 3. " The courts below have dismissed the suit brought by the appellants, holding on a preliminary issue that section 4 aforesaid applies and the suit cannot be entertained. The question before us is, whether this finding is correct. We must first state the relevant facts. The appellants were the plaintiffs in the first court. They brought the suit in a representative capacity on behalf of the roots of several villages whose lands are irrigated by what is locally known as the "Gudur anicut system". There is a stream or small river known as Venkatagiri river which flows west to east and then takes a turn to the south. It passes by or near villages Chennur, Gudur, etc. The case of the appellants was that from time immemorial their lands were irrigated from four tanks; three of the tanks received their supply of water from the Venkatagiri river through a channel emanating from the Gudur anicut at a place called Ananthamadugu. The fourth tank also received its supply of water from the 'same river through a channel emanating from near the "Pumbaleru anicut" further down the river. In addition, a separate channel from the "Pumbaleru anicut" directly irrigated about Ac. 600 00 of land. It was stated that on the whole, about Ac. 4000 00 of the land of the appellants were irrigated in the manner indicated above under the "Gudur anicut system". The ryots of Chennur" a village situate higher up the river, had also a tank for irrigating their lands. These ryots made several attempts to secure a portion of the water of Venkatagiri river by having an anicut constructed over the river at a place called Gollapalli, about one mile up the river, in order to get supply of water to Chennur tank by means of a supply channel emanating from near the place of the proposed Gollapalli anicut. These attempts failed in 1929 1930. But they renewed their attempts 311 and in 1935, the Madras Government passed an order (G. O. No. 2241/1 dated October 16, 1935) directing the construction of an anicut at Gollapalli for supply of water to the Chennur tank with certain safeguards to ensure that the supply to the "Gudur anicut system" was not adversely affected and to utilise only the excess water going to waste during the flood season for the Chennur tank. The appellants objected to the scheme of G.O. No. 2241/1 dated October 16 1935 and the matter was further investigated by Government. Finally, G.O. No. 1161 dated May 6, 1939, was issued modifying the earlier order in some respects. In pursuance of that order, a masonry anicut known as the Chennur anicut was constructed in 1944, the details whereof were stated in exhibit A 6 and summarised in paragraph 11 of the plaint. With those details we are not at present concerned, except merely to state that the anicut consisted of two portions : a 'free ' portion 61 feet long on the west and a 'fixed ' portion about 11. 4 feet long, the free portion to be kept fully planked only when the river was in flood with a view to divert surplus water to Chennur tank and was not to be planked until the Gudur anicut was "surplusing". The appellants alleged that the Chennur ryots did not stick to the arrangements made as a result of G. O No. 1161 dated May 6, 1939, but renewed their attempts for getting a larger supply of water from Venkatagiri river and the appellants came to know that behind their back and without notice to them, the State Government passed another order in 1952 in which they directed (i) the extension of the Chennur anicut by another 46 feet. , (ii) removal of the dam stones and planks altogether and the construction of a permanent masonry wall over the crest of the anicut to the entire length of 175 feet, (iii) raising the height of the wall by 3 feet more, and (iv) installation of three vents with screw gearing shutters for the flow of water down the Chennur anicut. The appellants alleged that this would seriously affect their accustomed right to the supply of water from 312 Venkatagiri river under the "Gudur anicut system" and practically deprive them of water during the low supply and spring periods. They, therefore, prayed for a decree (a) declaring that the defendant has no right in the circumstances stated above to alter or extend or add to the Chennur anicut over Venkatagiri river at Gollapalli in any manner whatsoever; (b) for costs of the suit ; and (c) and for such other and further reliefs as in the circumstances the court may deem fit and proper in the circumstances. They specifically said in the plaint that it was not necessary to ask for a permanent injunction "as the defendant (meaning the State of Andhra Pradesh) was bound and certain to give effect to the declaration granted by the court". At first, the State of Andhra Pradesh was the only defendant. Certain other defendants, presumably ryots of Chennur, were made parties defendants on a later date. We have given above a summary of the case of the appellants as alleged in the plaint. A written statement was filed by the State of Andhra Pradesh, as also by the 4th defendant, in which it was averred that the proposed alterations to the Chennur anicut would not injuriously affect the rights of the appellants and certain details were given as to the flow of water in the river at different times. As we are no deciding this case on merits, we are not proposing to enter into those details. By a supplemental written statement the defendant State, respondent before us, took the plea that section 4 of the Act was a bar to the entertainment of the suit. This plea was taken up for trial as a preliminary issue. The trial court held in favour of the State. An appeal to the District 313 judge failed and so also a Second Appeal to the High Court. The points which have been urged on behalf of the appellants are these : (1)The provisions of section 3 (1) of the Act are restricted to effecting improvements to a tank as defined in s.2 (d), and such improvement covers, for example, raising the height or increasing the width of the band, or lengthening the wear, or extending the bed of the tat*; it may even extend to improving the supply channel but does not go any further ; the State Government in proposing the alterations in the Chennur anicut arc proposing to do something which is in excess of the powers given by section 3 (1) and, therefore, section 4 does not bar the entertainment of the suit of the appellants. (2)On any view, section 4 bars the entertainment of a suit for the issue of an injunction to restrain the exercise of powers conferred on the Government by section 3 (1); the present suit is not a suit for injunction and the appellants have specifically said that they do not ask for an injunction; therefore, section 4 is no bar. (3)The State Government did not purport to act under section 3 (1) when they passed G. O. Ms. 53 F. and A (F.P.) dated February 15, 1952, and as they did not issue a notice as required by r. 5 of the Madras Irrigation Tanks (Improvement) Rules, 1050, the action proposed to be taken by them cannot come under section 3 (1); therefore, section 4 does not apply. (4)Section 3 (1) is ultra vires the Constitution and section 4 must fall within s.3. We shall now proceed to consider these points one by one. Earlier in this judgment, we have read section 4 of the Act. That section is closely connected 314 with sub section (1) of s._3 and we may now set out that sub section. "section 3 (1) Notwithstanding anything contained in any other law for the time being in force, the Government shall have power to raise the full tank level of any tank or to take any other measures for increasing its capacity or efficiency, wherever it may be situated and whether in a ryotwari, zamindari, inamdari or other area. " It will be useful if we briefly refer here to the preamble and some of the other provisions of the Act in order to show what is the object or purpose of the Act. The long title of the Act shows that it is an Act "to empower the State Government to increase the capacity and efficiency of irrigation tanks in the State of Madras. " The preamble also states : "Whereas it is expedient to empower the State Government to increase the capacity and effi ciency of irrigation tanks in the State of Madras;. " Section 2(d) of the Act defines a tank to mean an irrigation tank in the State of Madras. Then come ss.3 and 4 which we have already quoted. Section 5 deals with the payment of compensation where, in consequence of anything done in pursuance of section 3, the owner of any land or property sustains loss or damage including any diminution of the supply of water to any land or any tank or other source from which water is supplied. The compensation is to be determined in the manner laid down in s.5. Section 6 provides for an appeal against the Order of the Collector under section 5 to the Subordinate Judge 's court having jurisdic tion over the area in which the land or property for the damage to which compensation is to be paid is situated. Section 7 deals with the power to make rules and one of the rules, viz., rule 5 of the Madras Irrigation Tanks (Improvement) Rules, 1950, made in pursuance of that power will be considered by us later. 315 Very briefly put, the object of the Act is to increase the capacity and efficiency of irrigation tanks in the State of Madras and section 3 (1) gives the State Government power to take measures for the purpose of increasing the capacity or efficiency of irrigation tanks, whether the irrigation tanks be situated in a ryotwari, zamindari, inamdari or other area. Obviously, the purpose is to increase facilities for irrigation of agricultural lands from irrigation tanks. Now,, there is no dispute before us that the Chennur tank as well as the four tanks from which the appellants get a supply of water for irrigating their lands are irrigation tanks within the meaning of the Act. The controversy before us has centered round the expression "to take any other measures for increasing its capacity or efficiency. " The expression "its capacity or efficiency" undoubtedly means the capacity or efficiency of the irrigation tank in ques tion which, in this case, is the Chennur tank. The word 'capacity ' in its ordinary dictionary sense means "holding power" or "receiving power" and must, we think, depend on the cubic content of the tank. Learned counsel for the respondent State has conceded before us that the proposed alterations in the Chennur anicut do not increase the capacity of the Chennur tank. He has however very strongly contended that the proposed alterations in the Chennur anicut will increase the efficiency of the Chennur tank by making a larger supply of water available within the holding power of the tank. He has also contended that there is no reason why a narrow interpretation should be put on section 3 (1) so as to restrict the improvement measures to the width, breadth or depth of the tank or its supply channel only. He has submitted that if by the proposed 'alterations in the Chennur anicut there is a, larger supply of water to the Chennur tank through its supply channel, then the measures which 'the State Government are proposing to take are undoubtedly measures 'for increasing the efficiency of 'the Chennur tank. Learned counsel for the appellants, 316 on the other hand, has submitted that the word `efficiency ' read in the context of the definition clause in section 2 (d), means only efficiency in the distribution of water from the tank itself. The same contentions were urged in the High Court also and, dealing with these contentions, the learned Chief justice said : ""The efficiency of a tank depends in a large measure upon the quantity of Water that is available for irrigation purpose. Without sufficient volume of water, a tank could not fulfill the purpose for which it was dug. Therefore, it should have sufficient quantity of water to maintain 'its efficiency '. To construe it in the manner suggested by the counsel for the appellants is to deprive these words of a part of their content. " We are in agreement with the view thus expressed by the learned Chief justice. Learned counsel for the appellants has submitted that the Chennur tank and its supply channel only can be the objects of improvement measures by the State Government, but not the Chennur anicut on the Venkatagiri river. We are unable to agree and see no reason why such a narrow construction should be put on sub section (1) of section 3. The supply channel to the Chennur tank takes off water from the Venkatagiri river and it starts from near the Chennur anicut. It is obvious that if the supply channel does not supply sufficient water to the tank, then the tank loses its efficiency. If the supply of water is increased, then the efficiency of the tank is also increased. The proposed alterations in the Chennur anicut are intended to increase the volume of water which will go through the supply channel to the Chennur tank and in that sense, the measures proposed to be taken are measures to improve the efficiency of the Chennur tank. A question was mooted before us as to how far the State Government can go up the river in order to improve the Chennur tank. Perhaps, the answer to that question is that 317 the improvement measures proposed to be taken must have a direct and proximate relation to the tank, the efficiency of which is ' to be increased. The State Government cannot go up the river to a distance of several miles and take measures which have no direct or proximate relation to the tank in question. In the case before us, however, the supply channel to the Chennur tank emanates from the very place where the Chennur anicut has been made. Obviously, therefore, the Chennur anicut is meant for the purpose of feeding the supply channel to the Chennur tank. The connection is both direct and proximate. We are, therefore, of the opinion that the view concurrently taken by the courts below is the correct view and the measures which the State Government are proposing to take in the matter of improving the Chennur anicut are measures which come within section 3 (1) of the Act. The first contention urged on behalf of the appellants must therefore be overruled. counsel for the appellants wished to read from the speeches made by some of the members of the State legislature and the answers given by the Minister piloting the Bill, in order to show that section 3 (1) was not intended to cover alterations to an 'anicut '. It is, however, well settled and this court has so ruled in more than one decision, that legislative proceedings cannot be referred to for the purpose of construing an Act or its provisions, though such proceedings may be relevant for the proper understanding of circumstances under which the legislation was passed and the reasons which necessitated it. Learned counsel for the appellants has also referred to the provisions of the Madras Irrigation Works (Repairs, Improvement and Construction) Act, 1943 (Mad. XVII of 1943) and submitted that those provisions authorised the Government to repair or improve irrigation works or construct new irrigation works. This contention was also considered by the learned Chief Justice, and he 318 rightly pointed out that the scope of the two statutes was different : one dealt with private irrigation works and the other with improvement of irrigation tanks situate in a ryotwari, zamindari, inamdari, or other area and furthermore, the proposed alterations in the Chennur 'anicut ' would not amount to improvement of any irrigation work within the scope of the 1943 Act. We proceed now to a consideration of the second point. Here again, we think that the courts below are right. It is indeed true that the appellants did not formally ask for an injunction; but , in effect, what they asked for was a declaration which they said the State Government must obey and. would be thus restrained from exercising the powers conferred on it by section 3 (1). We agree with the courts below that having regard to the pleadings and the reliefs asked for, the suit was in reality a suit for restraining the State Government from exercising its powers under section 3, though framed in such a manner as to give the appearance of a suit for mere declaration. In our opinion, it would be a circumvention of section 4 to entertain a suit of this nature. Under section 42 of the Specific Relief Act, any person entitled to any right as to any property may institute a suit against a person denying such right, and the court may, in its discretion, make therein a declaration that he is so entitled; but no court shall make a declaration which would be futile, assuming that by reason of section 4 of the Act the appellants are prohibited by law from asking for an injunction. If, on the contrary, the State Government be bound by the declaration asked for (if granted by the Court) as is pleaded by the appellants, then the effect would be to restrain the State Government from exercising its powers under section 3(1) of the Act. If that be the true nature of the reliefs asked for by the appellants, section 4 would undoubtedly apply and the entertainment of the suit would be barred under that section. Learned counsel for the 319 respondents suggested an alternative submission for our consideration. He attempted to construe section 4 in such a way as would, in his view, bar even a suit for declaration against the State Government. This construction introduced into the section a number of words which do not occur there and dissected 'the section in a way not warranted by the plain words used therein. We have come to the conclusion that the somewhat novel reconstruction of section 4 attempted by learned counsel for the respondent State does not merit any further examination and we prefer to rest our decision as to the second point on the finding concurrently arrived at by the courts below. As to the third point, it may be disposed of on a very short ground. The High Court has rightly pointed out that the order dated February 15, 1952, (exhibit B 1) was based on the communication of the Board of Revenue dated April 8, 1950 (exhibit B 10) and that communication states clearly enough that Government was advised that it could take action under section 3 (1) of the Act. Obviously., therefore, it is not correct to say that Government did not purport to exercise its powers under section 3(1) as the order (exhibit B 1) did not mention it. If the entire proceeding is considered, it is clear that Government was purporting to act under the powers given to it by section 3 (1). Rule 5 of the Madras Irrigation Tanks (Improvement) Rules, 1950 states: " 'A notice specifying the nature of the improvement to be effected under section 3 and the probable cost thereof, according to the technical plan and estimate, shall, in all cases, be polished or caused to be published by the Collector of the district. The notice shall be in form B. Such publication shall be (1) in the District Gazette; 320 (2) by affixture at the site of the proposed work; (3) by affixture in the village Chavadi in the village or villages where the lands under ayacut of the tank and the lands proposed to be benefitted under the work are situated; and (4) by beat of tom tom in the said village or villages. " The argument based on this rule is that the notice required by it in not having been published, it must be held that the State Government. did not purport to act under section 3; secondly, the rule being mandatory in nature, failure to publish the notice as required by the, rule invalidates the order of the State Government dated February 15, 1952, (exhibit B 1). We are unable to accept either of these two contentions as correct. We have already pointed out earlier that exhibit B 10 on which exhibit B 1 is based, shows that the State Government was proposing to exercise its powers under section 3 (1) and asked the Board of Revenue "to get suitable rules and regulations made. " Secondly, the High Court rightly pointed out that the proposed action had not been taken when the appellants filed their suit and there was still time for the State Government to publish the notice under r. 5. In this view of the matter, it is unnecessary to determine at this stage whether r.5 is mandatory or merely directory, and we do not think that non publication of the notice in the circumstances can stand in the way of the application of section 4 of the Act. As to the fourth and last point, it is sufficient to point out that the validity of section 3(1) was not challenged in any of the courts below and in an appeal by special leave, counsel for the appellants cannot be allowed to take a point which was not urged before. 321 For the reasons given above, we would dismiss this appeal with costs. We may, however, point out that Narasimham, J., in the course of his judgment made some observations regarding the merits of the claim of the appellants which were not justified and may prejudice the appellants in subsequent proceedings. The learned judge said that it was not correct to say that the appellants would suffer diminution of water supply by reason of the proposed alterations in the Chennur anicut; and furthermore that the proposed measures would augment the supply of water to both Chennur ryots and Gudur ryots. Perhaps, the learned judge forgot that he was not dealing with the case on merits. The only point before him was whether section 4 barred the entertainment of the suit. We must therefore say that the learned Judge 's observations on the merits of the claim of either party were premature and not necessary for determination of the only issue which was before the court. Appeal dismissed.

The respondent, a firm consisting of four partners, was registered under the Indian Income tax Act, 1922. For the assessment year 1946 47 it claimed to set off a sum of Rs. 1,05,641, as its share of the loss in respect of certain transactions said to have been carried on in the name of D by another partnership between it and D, which was not registered. The income tax authorities rejected the claim and the Appellate Tribunal agreed with their decision on the grounds (1) that it being admitted that the ankdas were in the name of D, there was no satisfactory evidence that the assessee did business in the joint account, and (2) that, in any case, the assessee could not claim the set off as the loss was suffered by an unregistered firm. 610 On a reference, the High Court held (1) that there was no legal admissible evidence to justify the Tribunal 's finding that the transactions in question were not those of the assessee, and (2) that the assessee firm could claim a set off in respect of the share of loss in the unregistered firm "if the income tax authorities did not proceed to determine the losses of the unregistered firm and did not bring it to tax as permitted by section 23 (5) (b). " Held, that the High Court erred in its view that the asses see firm could claim a set off in respect of the loss incurred in the unregistered firm. Held, further (per Kapur and Hidayatullah,. JJ.) : (1) that if under section 66 of the Indian Income tax Act, 1922, a finding given by the Appellate Tribunal is to be considered final, it is necessary that the reasons for reaching it should be stated by the Tribunal with sufficient fullness to inform all concerned what they are. (2) that there could not be a partnership between D and the registered firm. If there was a partnership it was between D and the four partners of the assessee firm in their individual capacity, and under the provisions of section 24 of the Act the loss of Rs. 1,05,641 could not be set off against the profits of the registered firm. Per Sarkar, J. In view of the decision in Dulichand Laksh minarayan vs The Commissioner of Income tax, Nagpur, [1956] section C R. 154, that a firm as such is not entitled to enter into partnership with another firm or individuals, the assessee firm could not in law enter into partnership with D, and the questions answered by the High Court did not really arise in the present case.

iminal Appeal No.30 of 1970. Appeal by special leave from the judgment and order dated June 19, 1969 of the Judicial Commissioner 's Court, Goa, Daman and Diu in Criminal Revision Application 23 of 1968. M. C. Chagla, E. C. Agarwala and section R. Agarwal, for the appellant. V. A. Seyid Muhammad and section P. Nayar, for the respondents. The Judgment of the Court was delivered by Sikri, J. This appeal by special leave is from the judgment and order of the Judicial Commissioner, Goa, Daman & Diu, allowing the revision application under section 435 of the Indian Code of Criminal Procedure filed by the State. The only point involved in this appeal is whether the order passed by the Lt. Governor dated November 6, 1963, was invalid. This order reads as under : "ORDER GAD 74 63 25007 In exercise of the powers conferred by the Goa, Daman and Diu (Administration) Removal of Difficulties Order, 1962 and notwithstanding anything to the contrary contained in any law for the time being in force in this Territory, the Lieutenant Governor makes the following order : All criminal proceedings in relation to offenses committed prior to the date of coming into force of the Criminal Procedure Code shall be carried on under the law in force in the Territory before that date. By order and in the name of the Lieutenant Governor of Goa, Daman and Diu." Before dealing with the question of the validity of this order it is necessary to give a few facts. On December 20, 1961, Goa, Daman and Diu became part of the territory of India. The residence of the appellant was raided on June 25, 1963, and 72 bars of gold were seized. On November 1, 1963, the Goa, Daman and Diu (Laws) Regulation, 1962 (Regulation No. XII of 1962) hereinafter referred to as the Regulation was promulgated by the President and published in the Gazette on November 22, 1962. The effect of section 3 of the Regulation, read with the Schedule, was inter alia to extend the provisions of the Code of Criminal Procedure, 1898, to Goa, Daman and Diu. 716 Section 3 (2) of the Regulation enabled the Lt. Governor to fix the date of coming into force of the Act in Goa, Daman and Diu. It appears that by notification dated September 24, 1963, the date of the coming into force of the Indian Penal Code and the Code of Criminal Procedure was changed from October 1, 1963, to November 1, 1963. Accordingly, it is the latter date on which the Code of Criminal Procedure came into force in Goa, Daman and Diu. Section 7 of the Regulation provides: "Until the relevant provisions of the Code of Criminal Procedure, 1898, are brought into force in Goa, Daman and Diu, all offenses under any Act shall be investigated, inquired into, tried and otherwise dealt with according to the provisions of the corresponding law in force in Goa, Daman and Diu." The effect of section 7, as is clear from the section, was that offenses committed prior to the coming into force of the Criminal Procedure Code were to be investigated, inquired into, etc., under the provisions of the corresponding law in force in Goa, Daman and Diu. Section 8 of the Regulation provides "If any difficulty arises in giving effect in Goa, Daman and Diu, to the provisions of any Act extended by this Regulation to that Union territory, the Central Government may, by order in the Official Gazette, make such provisions or give such directions as appear to it to be necessary for the removal of the difficulty. " it appears that some difficulties were experienced by the Lt. Governor and he purported to pass the impugned order which we have set out above. It will be noticed that the impugned order does not refer to section 8 of the Regulation but refers instead, to Goa, Daman and Diu (Administration) Removal of Difficulties Order, 1962. We have seen this Order and it is common ground that this Order did not enable the Lt. Governor to pass the impugned order. On April 20, 1966, a complaint was filed against the appel lant in the Court of Judicial Magistrate 1st Class, Margao, under the Defence of India Rules. The prosecution was challenged on various grounds but these grounds failed before the Judicial Magistrate. The order of the Judicial Magistrate is not on the record. A revision was filed to the Sessions Judge, who first discussed the question of jurisdiction. He held that by virtue of 717 the impugned order the procedure to be followed in the case is one laid down by the Portuguese Criminal Procedure Code and not by the (Indian) Code of Criminal Procedure, 1898. On a revision filed by the State, the learned Judicial Com missioner came to the conclusion that the impugned order was ultra vires. He agreed with the Government pleader that the impugned order was not in conformity with the 19612 Order [Goa, Daman and Diu (Administration) Removal of Difficulties Order] passed by the Central Government. It is common ground that if a power subsists and the Lt. Governor call justify the impugned order under any law, the appellant is not debarred from relying on that law. It seems to us that section 8 of the Regulation clearly authorised the Lt. Governor to pass the impugned order. The learned counsel for the State says that the word "diffi culty" in section 8 of the Regulation has to be interpreted in a very narrow sense and in this connection relies on the following observations of Hidayatullah, I., as he then was, in Jalan Trading Co. (Private) Ltd. vs Mill Mazdoor Union( '): "The order, of course, would be passed within the four comers of the parliamentary legislation and would only apply the Act to concrete cases as the courts do when they consider the application of an Act. " He says that there was no concrete case arising in this case and, therefore, the impugned order cannot be justified by reference to section 8 of the Regulation. But Hidayatullah, J., was in minority and Shah, J., speaking for the majority, proceeded on the basis that the section under consideration authorised the Government to determine for itself what the purposes of the Act were and to make provisions for removal of doubts or difficulties. Shah, J., did not give any limited, meaning to the word "difficulty" in that case. We may mention here that neither the appellant nor the res pondent has urged before us that section 8 of the Regulation itself is invalid. It seems to us that difficulty was bound to arise in giving effect to the Code of Criminal Procedure because, this Code contemplates investigation and trial under the Code. If investigations had been done under the Portuguese Criminal Procedure Code, unless there was some clear provision to deem that investigation as investigation under the Code of Criminal Procedure, fresh (1) ; ,59. 718 investigations under the Code of Criminal Procedure would have to be undertaken. Be that as it may, whatever the difficulties which impelled the Lt. Governor to act, he was competent to make provisions to remove the difficulties. We may mention that although section 8 of the Regulation enables the Central Government to remove the difficulty, by reading the definition of the "Central Government ' in the General Clauses Act, the Administrator of Goa, Daman and Diu is en titled to exercise the powers of the Central Government, and the Lt. Governor is the Administrator of Goa, Daman and Diu. We are accordingly of the opinion that the impugned order is valid and the prosecution must be conducted in accordance with its provisions. in the result the appeal is allowed, the judgment and order of the Judicial Commissioner set aside and that of the learned Sessions Judge restored. V.P.S. Appeal allowed.

Under section 3(2) of the Goa, Daman and Diu (Laws) Regulation, 1962. November 1, 1963, was the date fixed for coming into force of the Indian Po" Code and the Indian Code of Criminal Procedure in Goa, Daman and Diu. Under section 8 of the Regulation if any difficulty arises in giving effect in Goa, Daman and Diu, to any Act extended to that territory the Central Government may make provision for the removal of the difficulty. As some difficulties were experienced regarding the law relating to criminal procedure the Lt. Governor, on November 6. passed an Order, not under section 8 of the Regulation, but in Purported exercise of the powers conferred by the Goa, Daman and Diu (Administration) Removal of Difficulties Order, 1962, to the effect that all criminal proceedings in relation to offenses committed prior to the date of coming into force of the Indian Criminal Procedure Code shall be carried on under the law in force in the territory before that date. On June 25, 1963, some bars of gold were seized from the residence of the appellant and a complaint was filed against him, in 1966. On the question of the procedure to be followed, the Judicial Commissioner, in revision, held that the Order of November 6, 1963 was ultra vires the Goa, Daman and Diu (Administration) Removal of Difficulties Order, 1962, and held that the procedure laid down in the Indian Criminal Procedure Code should be followed. in appeal this Court, HELD:(1) 'Me Goa, Daman and Diu (Administration) Removal of Difficulties Order, 1962, does not enable the Lt. Governor to Pass the Order dated November 6, 1963. But section 8 of the 1962 Regulation autborised him to pass the Order. If the power subsists, and the Lt. Governor could justify the order under any law, the parties are not debarred from relying on it. [717 B D] (2) Section 8 of the Regulation authorises the Government to make provision for removal of difficulties. The word 'difficulty ' is not to be construed in the narrow sense of a difficulty with respect to a concrete case. [1717 F] Majority opinion in Jalan Trading Co. (P) Ltd. vs Mill Afazdoor Union, ; , 59, followed. (3) Under the definition of 'Central Government ' in the General clause% Act, the Lt. Governor, as the Administrator of Goa, Daman and Diu is entitled to exercise the powers of the Central Government, [178 B C] 715 (4) Therefore, the procedure to be followed in the present case is the one laid down by the Portuguese Criminal Procedure Code and not by the Indian Code of Criminal Procedure. [718 C]

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

On the 29th of December, 1947, petitioner No. 1 executed a lease to C (a company) of certain properties consisting of lands and buildings comprised in the estate belonging to him. Subsequently, in 1949 he executed a deed of settlement whereby he transferred the properties to three trustees, namely, himself and petitioners 2 and 3. Bihar Land Reforms Act, 1950 (Bihar Act XXX of 1950) came into force on the 25th of September, 1950, and on the 3rd of November, 1951, the State of Bihar issued a notification under section 3(1) of the Act declaring that the estate of petitioner No. 1 had passed to and become vested in the State. A notice under section 4(h) of the Act was issued by the Collector to C and on the 4th of March, 1954, the State Government issued a notification under s.3(1) purporting to vest in the State the properties in question. It was contended for the petitioners that the buildings standing on the land comprised in the notified estate did not vest in the State, on the ground (1) that the estate of the petitioner No. 1 did not vest in the State under section 3 of the Act but by virtue of the provisions of section 4, (2) that the definition of "estate" in the Act speaks of land only and not of any building on it, (3) that on the date of vesting, the buildings were not used as office or cutchery for the collection of rent of the notified estate within the meaning of section 4(a), and (4) that section 4(h) is ultra vires the Constitution as it imposes an unreasonable restriction on the fundamental right of the petitioners to realise rent from the company. Held, that (1) whether the estate of petitioner No. I vested in the State by reason of the publication of the notification under section 3 or by virtue of the provisions of section 4 was of little consequence as in either case a vesting took place; (2) although in the definition of "estate" the word land is used and there is no mention of the word building, the provisions of sections 4, 5 and 7 show the intention of the legislature to include some 989 thing more than merely the land of a notified estate as vesting in the State. Under section 4(a), buildings of a certain description and other things vest in the State absolutely on the publication of a notification under section 3. Under sections 5 and 7, the buildings mentioned therein are deemed to be settled by the State with the intermediary and this could only be an the supposition that the buildings vested in the State, the intermediary being a settlee under the State; (3) sections 4(a) and 4(h) must be read together. Under section 4(h), the use to which the building was put previous to its transfer after the first day of January, 1946, and not thereafter was what the Collector was concerned with and not to what use it had been put after its transfer after the first day of January, 1946. If a transfer was made after the first day of January, 1946 of a building comprised in the notified estate which was used immediately previous to the date of transfer primarily as office or cutchery for the collection of rent of such estate the transfer would be liable to be annulled under section 4(h) and the building would vest absolutely in the State on the publication of the notification and the provisions of section 4(a) must be read accordingly; and (4) the Collector 's powers under section 4(h), wide as they are, are not quite so absolute or arbitrary as suggested. section 4(h) is a part of a validly enacted law of acquisition of estates and is an integral part of the machinery by which acquisition of an estate takes place. The Act or section 4(h) of it imposing any unreasonable restriction on the fundamental right of the petitioners, therefore, does not &rise. The Act including section 4(h) of it, is protected by article 31 A of the Constitution.

vil Miscellaneous Peti tion No. 25533 of 1986. IN THE MATTER OF T.V. CHOUDHARY, A MEMBER OF 148 THE INDIAN ADMINISTRATIVE SERVICE (UNDER SUSPENSION) WITH Special Leave Petition No. 14045 of 1985. From the Judgment and Order dated 18.10.1985 of the Andhra Pradesh High Court in W.P. No. 891 of 1985. P.P. Rao, Mrs. Shyamla Pappu, B. Kanta Rao, Ms. Malini Poduval, B. Parthasarthi, Mrs. Indra Sawhney and B.B. Sawh ney for the Petitioner. Dr. Y.S. Chitale, T.V.S.N. Chaff, Ms. Vrinda Grover and Ms. Sunila Monigude for the Respondents. The Judgment of the Court was delivered by SEN, J. This is an application made by one T.V. Choud hary, a Member of the Indian Administrative Service, under suspension, for recalling the Court 's orders dated May 5, 1986 and August 11, 1986 passed in Special Leave Petition No. 14045 of 1985. We shall first deal with the Special Leave Petition of E.S. Reddi, a member of the Indian Administrative Service belonging to Andhra Pradesh cadre and who worked as the Vice Chairman cum Managing Director of the Andhra Pradesh Mining Corporation. It is directed against a judgment of the Division Bench of the High Court dated October 18, 1985 reversing the judgment and order of a learned Single Judge dated September 2, 1985 and dismissing his petition under article 226 of the Constitution. By the writ petition, the petitioner had called in question the validity of an order of the State Government of Andhra Pradesh dated February 11, 1985 placing him under suspension under sub r. (1) of r. 13 of the Andhra Pradesh Civil Services (Classification, Con trol & Appeal) Rules, 1963. The main grievance of the peti tioner before the High Court was that the impugned order of suspension was wholly mala fide, arbitrary and irrational and violative of article 14 of the Constitution as there was no justification for the differential treatment meted out to him while the applicant T.V. Choudhary, also a member of the Indian Administrative Service, who worked in various capaci ties viz. as General Manager, Functional Director, Member, Board of Directors and Vice Chairman cure Managing Director and 149 was involved in the commission of the alleged irregulari ties, had merely been transferred from the Corporation and posted as Managing Director, Andhra Pradesh State Textile Development Corporation. That objection of his was sustained before the learned Single Judge who by his judgment dated September 2, 1985 quashed the impugned order of suspension. The Division Bench however by the judgment under appeal has reversed that judgment and dismissed the writ petition holding that the findings arrived at by the learned Single Judge are not warranted by the material on record. Civil Miscellaneous Petition No. 255 10/86 is filed by R. Parthasarthy, a member of the Indian Administrative Service who was Vice Chairman cum Managing Director of the Corporation for the period from March 1979 to October 1979 and was working as the Commissioner of Commercial Taxes, while Civil Miscellaneous Petition No. 25533/86 is by T.V. Choudhary, also a member of the Indian Administrative Serv ice and who was working as the Managing Director of the Andhra Pradesh State Textile Development Corporation. These two applications are for recalling the Court 's orders dated May 5, 1986 and August 11, 1986 on the ground that they prejudicially affect the applicants. The matter relates to defalcation of a huge amount of Rs. 1.50 crores by certain officers of the State Government whose services were placed on deputation with the Corporation. Admittedly, the Anti Corruption Bureau, Andhra Pradesh has registered a case against these officers for having committed alleged offences punishable under section 120B read with section 420 of the Indian Penal Code and section 5(1)(d) of the Prevention of Corruption Act, 1947 as its preliminary report revealed a prima facie case against them. On December 12, 1985 the Court issued notice on the Special Leave Petition. It appeared from the counter affida vit filed by the State Government that the Anti Corruption Bureau had finalised the investigation and the Director General had submitted his report dated March 25, 1986 which was under consideration of the Government. It also appeared that the State Government of Andhra Pradesh had addressed letters dated May 2, 1984 for sanction of the Central Gov ernment under section 6(1)(a) of Prevention of Corruption Act, 1947 for the prosecution of R. Parthasarthy and of the State Government of Maharashtra for the prosecution of P. Abraham, I.A.S. as he is borne on the Maharashtra cadre and was on deputation to the Andhra Pradesh. In compliance with the Court 's order, the State Government placed before us the letter of the State Government dated May 2, 1984 150 as also the report of the Director General, Anti Corruption Bureau, Andhra Pradesh dated May 25, 1986. After hearing the parties on May 5, 1986, we made the following order: "In compliance to this Court 's order, Shri P. Ram Reddy, learned counsel for the State Government places before us the letter of the State Government dated May 2, 1984 as also the report of the Director General, Anti corrup tion Bureau, Andhra Pradesh dated March 25, 1986. It appears from the letter that sanction of the Central Government is necessary under section 6(1)(a) of the Prevention of Corruption Act, 1947 for the prosecution of R. Partha sarthy, IAS and that of the State Government of Maharashtra for the prosecution of P. Abraham we have perused the report of the Director General and it cannot be said that the charges levelled against the petitioner are groundless. It is somewhat surprising that the petitioner alone should have been placed under suspension by the State Government pending contemplated departmental enquiry under r. 13 of the A.P. Civil Services (Clas sification, Control & Appeal) Rules, 1963 and not the other two officers T.V. Choudhary and S.M. Rao Choudhary, the then Managing Director who it appears are equally culpable. The matter is adjourned till after vacation to enable the State Government to obtain the requisite sanction from the Central Government for the prosecution of R. Partha sarthy and that of the State Government of Maharashtra for the prosecution of P. Abraham under section 6(1)(a) of the Act. Shri P. Ram Reddy learned counsel for the State Government shall in the meanwhile convey to the State Govern ment the concern expressed by this Court that the petitioner alone could have been placed under suspension and not the other officers who are alleged to be co accused. We are afraid, if the State Government does not pass any order placing the other officers under suspension it may become necessary for the Court to revoke the suspension of the peti tioner at the next hearing. " When the matter came up after vacation on August 18, 1986 it had to be adjourned with a direction that the State Government should in the meanwhile pass necessary orders for suspension of the delinquent officers. In anticipation of action by the State Government, the 151 two applicants R. Parthasarthy and T.V. Choudhary moved applications on September 2 and September 3, 1986 for re calling the directions made on May 5, 1986 and August 11, 1986. The applications were listed for directions on Septem ber 5, 1986. On motion being made by learned counsel appear ing for the applicants, it was directed that the applica tions be placed for heating on September 9, 1986. The State Government in the meanwhile on September 6, 1986 passed orders for suspension of P. Parthasarthy and T.V. Choudhary under r. 13(1) of the Rules. We were apprised of this fact when the applications came up for heating on September 9, 1986 that the State Government had already placed them under suspension. In the special leave petition, the only contention of the petitioner E.S. Reddi was that the action of the State Government in making selective suspension suffered from the vice of arbitrariness and offended against article 14 of the Constitution inasmuch as persons like the applicant T.V. Choudhary who were equally culpable have merely been trans ferred while he has been singled out and placed under sus pension under sub r. (1) of r. 13 of the Rules without any rational basis and that such arbitrary action of the State Government was tantamount to denial of equal treatment to persons similarly placed. In view of the subsequent order passed by the State Government on September 6, 1986 placing other officers including the applicant .T.V. Choudhary under suspension under r. 13(1) of the Rules pending their prose cution, the special leave petition has become infructuous. It is accordingly dismissed. That takes us to C.M.P. Nos. 25510/86 and 25533/86 filed by R. Parthasarthy and T.V. Choudhary respectively. We impressed upon the learned counsel appearing for them that the proper course for the applicants was to move the Govern ment by way of appeal and/or representation against their suspension and not by these applications for recalling the Court 's orders. After the matter was heard at a considerable length, Smt. Shyamala Pappu, learned counsel appearing for R. Parthasarthy very properly prayed for leave to withdraw C.M.P. NO. 255 10/86 as the applicant had already made a representation to the State Government. She prayed that a direction be made requiring the Government to consider the representation at an early date. Dr. Y.S. Chitale, learned counsel appearing for the State Government fairly agreed that the said representation would be considered by the Government on merits. Turning next to C.M.P. No. 25533/86. We must strongly depre 152 cate the conduct of the applicant T.V. Choudhary, a member of the Indian Administrative Service and working as Managing Director of the Andhra Pradesh State Taxtile Development Corporation, to have made reckless allegations and cast aspersions on the Court. After denying his complicity, the applicant T.V. Choudhary goes on to assert: "The Order of this Hon 'ble Court directing the Government to suspend the other delinquent officers is made without affording an opportu nity to the Applicant and presumably without considering the relevant provisions of law, case law and the parameters of judicial power and the necessity to observe the principles of natural justice. It is submitted that the Order of this Hon 'ble Court dated 11th August 1986 is illegal, insofar as it directed the Government to suspend the applicant and others, in view of the fact that the Government has exercised its discretion and transferred the applicant taking into consideration the recommendation of the Anti corruption Bureau. It is well settled that a Court of law cannot compel a statutory authority to exercise its statutory discretion in a particular manner. The legis lative will in conferring discretion in an essentially administrative function cannot be interfered with by Courts. " To say the least, the averments are highly objectionable. It was expected that the applicant, who is a very senior member of the Indian Administrative Service, should have shown greater responsibility before making such unfounded allega tions and uncalled for aspersions. On a motion being made on September 5, 1986 by Shri P.P. Rao, learned counsel for the applicant, it was directed that the application shall be listed for hearing on September 9, 1986. At the same time, we drew the attention of the learned counsel to the improper and objectionable averments made by the applicant. We were given the impression that the application had been settled by the learned counsel without noticing the offending aver ments. We wish we could have rested content with concluding the judgment with the operative portion of our conclusions on the merits of the case but we find with a sense of anguish and heaviness of heart that we have to express our disap proval of the manner in which the arguments were advanced before us on behalf of the applicant T.V. Choudhary. 153 Not only were the arguments advanced with undue vehemence and unwarranted passion, reflecting identification of inter est beyond established conventions but were of degrees not usual of enlightened senior counsel to adopt. The majesty of law and the dignity of courts cannot be maintained unless there is mutual respect between the Bench and the Bar and the counsel act in full realisation of their duty to the Court alongside their duty to their clients and have the grace to reconcile themselves when their pleas and arguments do not find acceptance with the Court. It is needless for us to say that neither rhetoric nor tempestuous arguments can constitute the sine qua non for persuasive arguments. By virtue of the pre eminence which senior counsel enjoy in the profession, they not only carry greater responsibili ties but they also act as a model to the junior members of the profession. A senior counsel more or less occupied a position akin to a Queen 's counsel in England next after the Attorney General and the Solicitor General. It is an honour and privilege conferred on advocates of standing and experi ence by the Chief Justice and the Judges of this Court. They thus become leading counsel and take precedence on all counsel not having that rank. A senior counsel though he cannot draw up pleadings of the party, can nevertheless be engaged "to settle" i.e. to put the pleadings into "proper and satisfactory form" and hence a senior counsel settling pleadings has a more onerous responsibility as otherwise the blame for improper pleadings will be laid at his doors. Lord Reid in Rondel vs Worsley, ; has succinctly set out the conflicting nature of the duties a counsel has to perform in his own inimitable manner as follows: "Every counsel has a duty to his client fear lessly to raise every issue, advance every argument, and ask every question, however distasteful, which he thinks will help his client 's case. As an officer of the court concerned in the administration of justice, he has an overriding duty to the court, to the standards of his profession, and to the pub lic, which may and often does lead to a con flict with his client 's wishes or with what the client thinks are his personal interests. Counsel must not mislead the court, he must not lend himself to casting aspersions on the other party or witnesses for which there is no sufficient basis in the information in his possession, he must not withhold authorities or documents which may tell against his cli ents but which 154 the law or the standards of his profession require him to produce. By so acting he may well incur the displeasure or worse of his client so that if the case is lost, his client would or might seek legal redress if that were open to him. " Again as Lord Denning, M.R. in Rondel vs W, would say 'he (the counsel) has time and again to choose between his duty to his client and his duty to the Court. This is a conflict often difficult to resolve; and he should not be under pressure to decide it wrongly. When a barrister or an advocate puts his first duty to the Court, he has nothing to fear '. In the words of Lord Denning: "It is a mistake to suppose that he is the mouthpiece of his client to say what he wants: . . He must disregard the most specific instructions of his client, if they conflict with his duty to the court. The code which requires a barrister to do all this is not a code of law. It is a code of honour. If he breaks it, he is offending against the rules of the profession and is subject to its discipline. " We are constrained to give expression to our views with a feeling of remorse to remind the counsel of that sense of detachment and non identification they are expected to maintain with the causes espoused by them and not with a view to belittle the profession or cast aspersions on coun sel. After bestowing our dispassionate consideration of the matter we found ourselves left with no other alternative but to dismiss the application made by T.V. Choudhary which was clearly misconceived and we direct the applicant to pay Rs.5,000 as costs to the State Government in view of the disapprobation his case and conduct has warranted. H.L.C. Petitions dismissed.

An officer involved in a defalcation case who was sus pended, challenged the order of suspension under article 14 of the Constitution on the ground that another officer similar ly situate had merely been transferred. The order was quashed by a Single Judge of the High Court, but, on appeal, his judgment was reversed by the Division Bench. The matter came up before the Court by way of a Special Leave Petition. The counter affidavit filed by the State Government indicated that it had initiated action to prosecute two other officers involved in the case. When the Special Leave Petition came up for hearing, the Court made an interim order directing the counsel to convey to the State Govern ment the Court 's concern at the petitioner alone having been placed under suspension and, indicating that if the State Government did not pass any order placing the other offi cers, who, on a perusal of the investigation report, ap peared to be equally culpable, under suspension, it may become necessary lot the Court to revoke the suspension of the Special Leave Petitioner at the next hearing. When the matter came up again, it had to be adjourned by the Court with another interim order directing the State Government to pass necessary orders for suspension of all the delinquent officers. In anticipation of action by the State Government, two other officers involved in the case filed applications praying for recall of the two interim orders aforesaid. However, the two officers in question were also placed under suspension before the matter finally came up for hearing. The Court impressed upon counsel appearing for the applicants who had prayed for recall of the interim orders that the proper course for them was to move the State Gov ernment by way of appeal and/or representation against their suspension. While counsel for one of the applicants accepted that suggestion and ,withdrew the application, counsel for the other applicant did not do so. The latter applicant had, 147 in his application, made certain reckless allegations and cast aspersions on the Court. The counsel appearing for him gave the impression that the application had been settled by him without noticing the offending averments but went on to advance arguments with undue vehemence and unwarranted passion. The Court, while dismissing the Special Leave Petition as infructuous and expressing disapproval of the manner in which arguments had been advanced on behalf of one of the applicants. HELD: By virtue of the pre eminence which 'Senior Coun sel ' enjoy in the profession, they not only carry greater responsibilities but they also act as a model to the junior members of the profession. A senior counsel more or less occupies a position akin to a Queen 's counsel in England next after the Attorney General and the Solicitor General. It is an honour and privilege conferred on Advocates of standing and experience by the Chief Justice and the Judges of this Court. They thus become leading counsel and take precedence on all counsel not having that rank. A senior counsel though he cannot draw up pleadings of the party, can nevertheless be engaged "to settle" i.e. to put the plead ings into "proper and satisfactory form" and hence a senior counsel settling pleadings has a more onerous responsibility as otherwise the blame for improper pleadings will be laid at his doors. [153C E] In this case, not only were the arguments advanced with undue vehemence and unwarranted passion, reflecting identi fication of interests beyond established conventions but were of degrees not usual of enlightened senior counsel to adopt. The majesty of law and the dignity of Courts cannot be maintained unless there is mutual respect between the Bench and the Bar and the counsel act in full realisation of their duty to the Court alongside their duty to their cli ents and have the grace to reconcile themselves when their pleas and arguments do not find acceptance with the Court. Neither rhetoric nor tempestuous arguments can constitute the sine qua non for persuasive arguments. [153A C] Rondel vs W, and Rondel vs Worsley, ; , referred to.

iminal Appeals Nos. 60 and 63 of 1965. Appeals from the judgment and order dated November 20, 1963 of the Gujarat High Court in Criminal Appeals Nos. 957 and 796 of 1963 respectively. Urmila Kapur and section P. Nayar, for the appellant. The respondent did not appear. The Judgment of the Court was delivered by Dua, J. These two criminal appeals (Nos. 60 and 63 of 1965) with certificate raise a common question and are, therefore, being disposed of by a common judgment. The Gujarat High Court also recorded the main judgment only in Criminal Appeal No. 60 of 1965. The question which arises for determination is whether, several accused persons jointly tried have been acquitted by the trial Court, the state can ' prefer one appeal against the acquittal of all of them. The High court held such a joint appeal not to be maintainable under Cr. P.C. and so holding rejected the appeal by the State without going into the merits. The Division Bench of the ,High Court speaking through Raju, J. recorded a very lengthily order though the reasoning in support of the non maintainability of the joint appeal is confined to a couple of pages only. The High Court in its order referred to ss 258, 410, 417, 419 and 423 of the Code and came to the conclusion that the scheme of Chapter XXXI of the Code as disclosed by these sections and particularly by section 419 is against the maintainability of a joint appeal by the State against an order acquitting several accused persons tried jointly. Section 419 was construed by the High Court to contain a bar against a joint appeal. The major portion of the impugned order dealt with the question of binding character of the Full Bench decision of that High Court since reported as Lalu Jela vs State of Gujarat(1) on the Division Bench hearing the present appeals. After a lengthy ,discussion the Division Bench came to the conclusion that the Full Bench decision holding a joint appeal to be maintainable in law was not binding on it. On the view that we propose to take on the question of main tainability of a joint appeal against a common order acquitting (1) A.I.R. 1962 Guj. 877 several accused persons tried jointly, we do not consider it necessary to embark on a lengthy discussion on the question of binding charter of decisions of Full Benches and of Division Benches on future Benches of co ordinate jurisdiction of the same High Court. We may only make a passing reference to the decisions of this Court cited at the bar in support of such binding character. In Mahadeolal Ranodia vs The Administrator General of West Bengal(1), this Court observed as follows : "We have noticed with some regret that when the earlier decision of two judges of the same High Court in Beorajan 's an 's case was cited before the learned judges who heard the present appeal they took on themselves to say that the previous decision was wrong, instead of following the usual procedure in case of difference of opinion with an earlier decision, of referring the question to a lar ger Bench. Judicial decorum no less than legal propriety forms the basis of judicial procedure. If one thing is more necessary in law than any other thing, it is the quality of certainty. That quality would totally disappear if judges of co ordinate jurisdiction in a High Court start overruling one another 's decision. If one Division Bench of a High Court is unable to distinguish a previous decision of another Division bench and holding the view that the earlier decision is wrong itself gives effect to that view, the result would be utter confusion. " Other decisions cited containing similar observations are : jai Kaur and others vs Sher Singh etc. (2 ) and Atma Ram vs State of Punjab and others(3). We are aware of a still more recent decision of this Court in Jaisri Sahu vs Rai Dewan (4) in which re Ference is made to a Privy Council decision in Budha Singh vs Laltu Singh(5). The question of competency of a joint appeal by several per sons convicted by one order at a joint trial was referred for authoritative decision to a Full Bench of the Gujarat High Court in Lalu Jela 's case(6). The argument before the Full Bench was that r. 6 in Chapter XXVI of the Bombay High Court Appellate Side Rules (which are applicable to the proceedings in Gujarat High Court) was inconsistent with Chapter XXXI of the Code of Criminal Procedure, with the result that a joint appeal to the High Court by several persons convicted at a joint trial was not maintainable. The Full Bench on an exhaustive discussion held such (1) [1960]3.S.C.R. 78 (2) (3) (4) (5) I.L.R , 37 All, 604 (P.C.). (6) A.I.R. 1962 Guj. 125. 878 an appeal to be competent and did not consider r. 6 to be inconsistent with Chapter XXXI of the Code. The decision of this Court in Rabari Ghela Jadav. State of Bombay(1) was explained and distinguished. If we agree with the principle accepted in the Full Bench decision then the present appeals would on the reasoning of that decision seem prima facie to possess merit and in the absence of some other cogent reason to the contrary the appeals would have to succeed. Chapter XXVI of the Bombay High Court Appellate Side Rules, 1960 deals with "criminal business" and r. 6 is in the following words "Joint appeal or application by persons affected by the same judgment. All persons aggrieved,by a judgment or an order passed in a criminal case, may join in one appeal or application for revision, and one copy of the judgment or order complained of shall be sufficient." This rule, of course, does not in terms cover the case of an appeal by the State against several accused persons jointly tried and acquitted by the trial Court by a common order, but if an appeal by persons jointly tried and convicted is competent, then on principle it is difficult to negative the maintainability of one appeal by the State against a common order acquitting several persons tried jointly. This rule deals with a matter of procedure and not of Substantive rights and seems to be based on sound commonsense. Procedure has been described to be a hand maid and not a mistress of law, intended to subserve and facilitate the cause of justice and not to govern or obstruct it. Like all rules of procedure, this rule demands a construction which would promote this cause. So construed a joint appeal, in compliance of this rule must be sustained. The power to frame this rule is specifically conferred on the High Court by section 554(2)(c) Cr. P.C. and r. 6 does not seem to us to be inconsistent with any provisions of the said Code. Holding this rule to be valid, in agreement with the decision of the Full Bench, the competency of a joint appeal by several accused persons convicted at one trial must be upheld. On the same reasoning a joint appeal by the State against several accuses. persons acquitted at a joint trial has also to be held not to be contrary to any provision of the Code and therefore not legally prohibited. Section 419 of the Code on which the High Court seems to have relied in support of the non maintainability of a joint appeal by the State, lays down inter alia that every appeal shall be made in the form of a petition in writing presented by the appellant (1) A.I.R, 1960 S.C. 748. 879 or his pleader and every such petition shall, unless the court otherwise directs, be accompanied by a copy of the judgment or order appealed against. This section does not seem to us to prohibit a joint appeal by the State against more than one accused persons. The contrary view taken by the, High Court on the construction of this section is clearly unacceptable. Section 417 which provides for an appeal in a case of acquittal empowers the State Government to direct the public prosecutor in any case to present an appeal from an order of acquittal. This section also does not suggest any bar or prohibition against presentation of a joint appeal against several accused persons acquitted in a case. On the other hand, it provides for an appeal in a case, and not against an accused person, who has, been acquitted. The plain reading of this sections therefore. , seems to be wide enough to permit a joint appeal. Sections 258, 410 and 423 of the Code also do not seem to indicate any bar as is suggested by the order of the High Court. This Court in Rabari Ghela Jadav 's case(1), on the basis of which the judgment of the High Court mainly proceeds, merely lays down that the Appellate Court hearing an appeal cannot admit it only on a question of sentence and that such a restricted order of admission being invalid, the appellant would be entitled to insist that his appeal should be heard on the merits. This decision, in Our opinion, does not militate against the maintainability of a joint appeal. The Full Bench decision of the Gujarat High Court rightly distinguished and explained this decision. As observed earlier, once we accept the Full, Bench to lay down the correct rule of law, then there cannot be much difficult in upholding the maintainability of a joint appeal by the State against several accused persons acquitted at a joint trial. There being no legal bar (at least we are aware of none either in the Cr. P.C. or elsewhere), such an appeal cannot be held to suffer from any serious legal infirmity. And then the matter being one of mere form it calls for a liberal approach requiring the appeal to be heard on the merits. To hold it to be unmaintainable on this ground would defeat the larger cause of justice. Unfortunately, we did not have the advantage of arguments on behalf of the respondents because they were unrepresented, but on considering the scheme of the relevant provisions of the Code of Criminal Procedure, we are of the view that the High Court was wrong in holding the joint appeal not to be maintainable and in summarily rejecting the same. We accordingly allow the appeal, set aside the order of the High court and remit the case back to it for decision of the appeal on the merits. G.C. Appeal allowed. (1) A.I.R. 1960 S.C. 748.

The respondents were tried jointly and acquitted by a common judgment. State of Gujarat filed a Joint appeal against their acquittal in. the High Court. Rule 6 of the Bombay High Court Appellate Side Rules, 1960 (which were applicable to the proceedings in the Gujarat High Court) provided for joint appeals by persons aggrieved by a common judgment or order. There was however no, rule specifically providing for similar joint appeals by the State. A Division Bench of the High Court dismissed the joint appeal by the State against the respondents on the ground that such an appeal was not maintainable. The Division Bench held that the decision by a Full Beach of the High Court in Lalu lela 's case in which a contrary view had been taken was not binding on the Division Bench. In appeal to this Court against the judgment of the Division Bench. HELD : (i) The Division Bench was in error in not treating as binding the earlier decision of a Full Bench of the same court on the same question. 1877 A F] Mahadeolal Kanodia vs The Administrator General of West Bengal, ; , Jai Kaur & Ors. vs Sher Singh etc. , Atma Ram vs State of Punjab & Ors. , Jaisri Sahu vs Rai Dewan, [19621 2 S.C.R. 559 and Budha Singh vs Laltu Singh, I.L.R. 37 All. 604 (P.C.), applied. (ii) Rule 6 of the Bombay High Court Appellate Side Rules does not in terms cover the case of an appeal by the State against several accused persons jointly tried and acquitted by the trial court by a common order, but if an appeal by persons jointly tried and convicted is competent, then on principle it is difficult to negative the maintainability of one appeal by the State against a common order acquitting several persons tried jointly. Like all rules of procedure this rule demands a construction which would ' promote the cause of justice and not obstruct it. (878 D F] A joint appeal by the State against several accused persons acquitted at a joint trial is not contrary to any provision of the Code of Criminal Procedure and is therefore not legally prohibited. Sections 258, 410, 417, 419 or 423 of the Code do not indicate any bar as was suggested by the order of the High Court. Indeed the plain reading of section 417 which pro%ides for an appeal in a case and not against an accused person, seems to be wide enough to permit ,A joint appeal. The matter being one of mere form it calls for a liberal approach requiting the appeal to be beard on its merits. The order of the High Court must accordingly be set aside. [878 G H; 879 C F] 876 Rabari Ghela jadav V. State of Bombay, A.I.R. 1960 S.C. 748, ,explained. Lalu Jela. vs State of Gujarat, A.I.R. 1962 Guj. 125, approved.

Nos. 2132 and 2133 of 1970. Appeal by certificate from the judgment and order dated June 22, 1965 of the Calcutta High Court in I.T. Reference No. 36 of 1961. Sukumar Mitra J. L. Hathi, T. A. Ramachandran, K. L. Hathi and P. C. Kapur, for the appellant. V. section Desai, R. N. Sachthey and B. D. Sharma, for the res pondent. The Judgment of the Court was delivered by Grover, J. These appeals have been brought by certificate from a judgment of the Calcutta High Court in two Income tax References. It is most unfortunate that the statement of the case contains certain omissions and errors and does not appear to have been drafted with the usual care with which such statements are drawn. The assesses Guzdar Kajora Coal Mines Ltd. which was incorporated on July 4, 1945 purchased by a deed of convey ance dated April 3, 1966 executed by the liquidators of Guzdar 744 Kajora Colliery Co. Ltd. all the colliery lands, hereditaments and premises, mines, minerals, powers and privileges and all ,other hereditaments together with the machinery thereon belonging to the latter company. It was stipulated in the deed of ,conveyance that the sale was to be effective from July 1, 1945. The consideration for the transfer was Rs. 6 lacs and was allocated as follows : "(a) the value of the machinery plants stores including stock of goods grains coals at the pithead and other movable properties appertaining to the said colliery the property in which is capable of passing by delivery being . Rs. 3,50,000/ . (b) the value of the buildings and structures be longing to the said colliery being Rs. 1,50,000/ . (c) the value of the rest of the properties appertaining, to the said colliery not capable of being passed by delivery being Rs. 1,00,000/ " Soon after the assessee company came into existence it took over the business from the vendor company and claimed depre ciation for the assessment year 1946 47 on the basis of, the figures the comparative statement of which is given in the statement of the case. This statement contains the written down value as per the assessment record of the vendor company the valuation of the assets as per the balance sheet of the vendor company and the valuation by the assessee company as per balance sheet as on December 30, 1945. The Income tax Officer 'allowed depreciation on the basis of those figures. This state of affairs continued till the assessment year 1952 53 when the Income tax Officer again allowed depreciation on the old basis. Before, the Appellate Assistant Commissioner the assessee raised a ground ,that the Income tax Officer should. have worked ,out the depreciation figures on the basis of balance sheet valuation of the assets as per the audited accounts submitted by the assessee and as claimed in the return. With regard to the assessment year 1953 54 the same position was taken up. The assessee appealed to the Income tax Appellate Tribunal, having failed in its contentions before the Appellate Assistant Commissioner. It was contended before the Appellate Tribunal by the assessee that although it had paid a sum of Rs. 6 lacs as consideration for the transfer of the mines the value taken by the department for the purpose of determining depreciation Was much lower. It was pointed out that the purchase had been made after obtaining, the 745 opinion of an expert and the assessee was being subjected to great hardship depreciation being determined only on the old written down value of the assets and not on the basis of the original cost of acquisition. The Appellate Tribunal was of the view that substantial injustice would result to the assessee if the depreciation continued to be allowed on the old basis if the case of the assessee had any substance. It was felt that a proper investigation as to the value paid by the assessee in taking over the old company was necessary. The matter was remanded to the Income tax Officer to hold an inquiry after giving an opportunity to the assessee to place all the available material in support of its claim. With regard to the assessment year 1953 54 also the case was remanded with similar directions. The Income tax Officer made a report on July 6, 1960. According to his findings some of the Directors and Shareholders of the two companies were the same and they were connected in many ways. Furthermore the valuation of the depreciable assets and the consumable stores had been written up whereas the valuation of the non depreciable assets like mines etc. had been written down. As regards the report of the expert A. N. Mitter dated September 1, 1945 he was unable to contact him in spite of making an effort to do so. The report made by the second expert section N. Mullick dated October 19, 1955 and January 30, 1957 together with the clarification made by him on November 20, 1959 were considered by him. He also examined 8. N. Mullick under section 37 of the Indian Income tax Act, 1922, hereinafter called the 'Act '. He came to the conclusion that the vendor had been making good profits but no provision had been made for the goodwill of the company in the business and if such a provision had been made it would have worked out at Rs. 2,56,960/ having regard to the profits made for the preceding four years. He made an allocation of Rs. 6 lacs as follows "(1) Good will Rs. 2,56,960/ (2) Mines and development as per balance sheet of M/s. Guzdar Gajore Colliery Co. Ltd. as at 30 6 45. Rs.2,48,323/ (3) Stores and stock Rs.60,744/ and worked out the value of other depreciable assets at Rs. 33,973/ " Before the Appellate Tribunal the remand report of the Income tax Officer was assailed on behalf of the assessee on various grounds. The Tribunal observed that when the assessments for the years 1946 47 and 1947 48 were made the assessee 13 Ll52SupCI/73 746 chose to give the valuation in its balance sheet on a certain basis which was accepted and no appeal was taken to the higher authorities and although the rule of estoppel could not be applied but "acquiscence of the assessee shows which way the wind blew". When a settled thing was sought to be reopened the Income tax Officer had a right to see whether there was any Justification for the "radical departure from the settled practice". It was held that the Income tax Officer was to go behind the valuation. As regards the goodwill the contention raised on behalf of the assessee was that the same was included in the item of one lakh mentioned in the sale deed. According to the report of Mr. Mullick it was included in the item of Rs. 3,50,006. This is what the Tribunal proceeded to observe: "It seems to us, the simple truth of the matter is that the figure of Rs. 3,50,000/ , Rs. 1,50,000/ and Rs. 1,00,000/ were arbitrarily put. and there was no clear cut or understandable break up of valuation (?) clause 3 of the break up in the deed of 3rd April 1946, which talks of the value of the rest of the properties appertaining to the said colliery not capable of being passed by delivery being valued at Rs. 1,00,000/shows that these properties which had I not been in clause 1 and 2 were comprised in this and it seems too much to say that good will is included in this. it would be more true to say that good will was thought of or conceived of but not provided for in the break up of valuation". The appeals were consequently dismissed. The, assessee moved the Tribunal for referring certain questions of law to the Tribunal. The following question was framed by the Tribunal and referred to the High Court : "Whether on the facts and in the circumstances of the case the Income tax Officer was competent to go beyond the conveyance and fix a valuation of the assets on his own ?" The High Court was of the view that the Income tax Officer was competent to make a fresh computation as to the value of the assets of the assessee if the facts and circumstances of a particular case justified following such a course. Even on the question of valuation of the good will it was observed " Further, it should be remembered that although the Income tax Officer has made the valuation of the goodwill by working out the normally accepted method of taking the profits of the four preceding years, this 747 method of calculation or this normal practice has not been challenged by the assessee. The revenue has. examined all the relevant facts of the case including the reports of Mr. Mitter and Mr. Mullick and the Tribunal has agreed with those findings of facts and we do not think that we can interfere with those findings". The answer to the question referred was given in the affirmative. Learned counsel for the assessee has assailed the decision of the High Court on a number of grounds. It has been urged inter alia that the High Court had not kept in view the general and well established principle that the statement with regard to valuation contained in a formal document should be prima facie accepted as cornet. There can be no justification, it has been pointed out, for any court or Tribunal "to rip up a transaction not impeached as dishonest and not proved to be such, merely because the company may have paid an extravagant price for their property". A great deal of emphasis has been laid on behalf of the assessee on the report submitted by the experts justifying the valuation given in the deed of conveyance. In the absence of fraud, collusion, inflation or false transaction made with an ulterior purpose the Income tax authorities, it is said, were precluded from going behind the agreement of purchase in determining the purchase price fixing their own valuation. The other point canvassed on behalf of the assessee is that good will was not included in the valuation given in the deed of conveyance nor was it ever intended that any good will of the business should be sold by the vendor company. This contention, however, appears to run counter to What was argued before the High Court and the Tribunal nor can it be said to be covered by the question which was referred. On the case as put before the Appellate Tribunal and the. High Court and the question referred with regard to the two assessment years in question we are unable to see any such error or infirmity that would Justify interference by us in these appeals. _ It has been strenuously urged on behalf of the assessee that since the decision of the Tribunal or the High Court could not operate as res judicata for other assessment years with regard to which assessments are still pending, the assessee would be entitled to raise all the points which are relevant with regard to the question of valuation for the purpose of determining depreciation. We have been pressed to indicate broadly the principles for future guidance as it will be open to the assessee to raise all the points relevant for the purpose of determination of the amount of depreciation allowance in the assessments which are still pending and have not been finally disposed of. 748 Section 10(2) (vi) of the Act, to the extent it is material is as follows "(2) Such profits or gains shall be computed after making the following allowances, namely: (vi) in respect of depreciation of such buildings machinery, plant or furniture being the property of the assessee, a sum equivalent, where the assets are ships other than ships ordinarily plying on inland waters, to such percentage on the original cost thereof to the assessce as may in any case or class of cases be prescribed and in any other case, to such percentage on the written down value thereof as may in any case ,or class of cases be prescribed; Provided that (a). . (b). . (c) The aggregate of all allowances in res pect of depreciation made under this clause and clause (vi a) or under any Act repealed hereby, or under the Indian Income tax Act, 1886 (II of 1886), shall, in no case exceed the original cost to the assessee of the buildings, machinery, plant or furniture, as the case may be;" Keeping in view sub section (5) of section 10 of the Act, the original actual cost to the assessee of the asset with regard to which depreciation allowance is claimed has to be ascertained for the purpose inter alia of finding out the written down value in case of assets other than ocean going ships. For the purpose of getting the benefit of clause (c) of the proviso to sub section (2)(vi) also the original cost has also to be ascertained. The Privy Council laid down in Commissioner of Income tax, Madras vs The Buckingham and Carnatic Co., Ltd. Madras(1), that the word "assessee" in section 10(2)(vi) of the Act refers to the person who owns the assets and who is being assessed and depreciation allowance has to be based on the original cost of such property to such person. This principle was laid down in a case where the assessee had acquired the business of another assessee and it was emphasised that the original cost to be consi dered was the original cost to the person who was being actually assessed and not the original cost of those assets to the previous (1) 749 owner of the business. Reference was made to the above decision of the Privy Council in the judgment of this Court in Jogta Coal Co. Ltd. vs Commissioner of Income tax West Bengal(1) and it was observed "We do not think that there is any doubt on the wording of the section or on the interpretation that has been put upon those words that the cost to be calculated for the purpose of depreciation allowance is the cost to the assessee and not to the person who makes the sale. . Now the original cost of a particular asset is a question of fact which has to be determined on the evidence or the material produced before or available to the Income tax authorities. Any document or formal deed mentioning the consideration or the cost paid for the purchase of an asset by an assessee would be a piece if evidence and prima facie the statements or figures given therein would show how much the cost of the asset to the assessee is. But if circumstances exist showing that a fictitious price has been put on the asset or there is fraud or collusion between the vendor and the vendee and there has been inflation or deflation of value for ulterior purposes it is open to the Income tax authorities to refuse to accept the price mentioned in the deed or alleged by the assessee and to ascertain what the actual cost was: See Pindi Kashmir Transport Co. Ltd. vs Commissioner of Income tax Lahore (2 ) and Kalooram Govindram vs Commissioner of Income tax Madhya Pradesh, Nagpur and Bhandara(3). In this view ' of the matter it is open to the Income tax authorities to determine and to the assessee to show. whether the good will of the business is or is not included in the consideration or the price paid for the acquisition of the asset. In other words even if it is not expressly mentioned that goodwill has been sold it can be shown and ascertained by evidence whether the same has been purchased or not by the assessee. The expression "good will" has been considered and explained by this Court in section C. Cambatta & Co. P. Ltd. vs Commissioner Excess Profits Tax, Bombay(4) and nothing more need be said about it. The principles stated by us are by no means exhaustive and are mainly illustrative. Keeping in view the facts of the present case we may make it clear that if circumstances exist for going behind the valuation as 'also the allocation given in the deed of conveyance it was and is open to the Income tax authorities to determine the valuation as well as the allocation between depreciable and non depreciable assets. (1) (2) (3) (4) 750 The present appeals, however, must fail for the reasons stated earlier and are hereby dismissed. We make no order as to costs in this Court. V.P.S. Appeal dismissed.

The fact that the High Court, in a reference under section 374 of the Code of Criminal Procedure, has to appraise the evidence for itself and has to arrive at its own independent conclusion would not prevent this Court from interfering with the order of the High Court if the High Court reverses the judgment of the trial court on grounds which are manifestly fallacious and untenable. This Court in an appeal under article 136 of the Constitution does not normally reappraise the evidence and interfere with the assessment of that evidence by the High Court. Where, however, this Court finds that grave injustice has been done by the High Court in interfering with the decision of the trial court on grounds which are plainly untenable and the view taken by the High Court is clearly unreasonable on the evidence on record this Court would not stay its hand. There are, however, certain cardinal rules which have always to be kept in view in appeals against acquittal. Firstly, there is a presumption of innocence in favour of the accused which has to be kept in mind especially when the accused has been acquitted by the Court below , Secondly, if two views of the matter are possible a view favourable to the accused should be taken; thirdly, in case of acquittal by the trial judge the appellate court should take into account the fact that the trial judge had the advantage of looking at the demeanour of witnesses; and fourthly, the accused is entitled to the benefit of doubt. The doubt should, however, be reasonable and should be such as a rational thinking man will reasonably, honestly and conscientiously entertain and not the doubt of a timid mind which fights shy though unwittingly it may be or is afraid of the logical consequences, if that benefit was not, given. To put it differently, it is "not the doubt of a vacillating mind that has not the moral courage to decide but shelters itself in a vain and idle scepticism,,. [69H 70E] Himachal Pradesh Administration vs Shri Om Prakash, Cr. Appeal No. 67 of 1969 decided on December 7, 1971, referred to.

iminal Appeal No. 65 of 1958. Appeal by special leave from the judgment and order dated April 11, 1956, of the Calcutta High Court in Criminal Revision No. 1584 of 1955. N. C. Chatterjee, Arun Kumar Dutta and D. N. Mukherjee, for the appellant. K.B. Bagchi and S.N. Mukherjee, for the respondents. January 16. The Judgment of the Court was delivered by SINHA, C.J. This appeal by special leave is directed against the judgment and order of the High Court of Judicature at Calcutta, dated April 11, 1956, whereby the appellant 's claim of absolute privilege as a member of the Bengal Legislative Assembly was rejected and the prosecution launched against him under section 500, Indian Penal Code, was allowed to proceed. The facts of this case are not in doubt or dispute and may shortly be stated as follows. The appellant is a citizen of India and an elected member of the West Bengal Legislative Assembly. He is also a medical practitioner at Ghatal in the Midnapore District of West Bengal. In January, 1954, the appellant gave notice of his intention to ask certain questions in the Assembly. Those questions were disallowed in accordance with the rules of procedure for the conduct of business of the Assembly. In February, 1954, the appellant was informed that the questions proposed by him had been disallowed. The appellant published 488 the questions that had been disallowed in a local journal called Janamat, in its issue of February 28, 1955. In July, 1955, the first respondent, whose conduct formed the subject matter of the questions and who was then functioning as a Sub divisional Magistrate, filed a complaint against the appellant and two others, the editor, and the printer and publisher respectively of the journal aforesaid. The petition of complaint alleged that the appellant had made and published scandalous imputations against him intending them to be read by members of the public, that those imputations were false and unfounded and had been made with the definite intention of harming or with the knowledge or having reason to believe that they would harm the reputation of the complainant and that the complainant felt greatly aggrieved and harmed in mind and reputation. He also alleged that being a Government servant, the, complainant had to obtain the necessary permission from the Government for instituting legal proceedings for the vindication of his character as a public servant and that accounted for the delay in filing the petition of complaint. The petition of complaint charged the appellant with an offence under section 500 of the Indian Penal Code and the second and third accused, who have been cited as respondents 2 and 3 in this Court, under section 501 of the Indian Penal Code. After several adjournments, the petitioner raised, by way of preliminary objection to the .criminal prosecution, the question of his absolute privilege and immunity from prosecution under the provision of the Constitution. The learned Magistrate by his order dated October II,, 1955, overruled the objection and held that the privilege claimed by the accused was not an unqualified one. He relied on a judgment of the Calcutta High Court in the case of Dr. Suresh Chandra Banerjee vs Punit Goala (1) in support of his conclusion that the first accused before him, now appellant, was not entitled to the privilege and immunity claimed by him. Thereafter, the appellant moved the High Court under article 228 of the Constitution for having the case withdrawn to the (1) High Court for determination of the constitutional question raised by him by way of defence, but that, application was dismissed by a Bench of the High ' Court on November 9, 1955, presumably on the ground that the. case did not involve any substantial question of law as; to the interpretation of the Constitution. Not daunted by the adverse order aforesaid of the Bench of the High Court, the petitioner again moved the High Court and obtained a rule on several grounds including the question of the proceedings being barred by the provisions of article 194 of the Constitution. The learned Single Judge, who dealt with the case on this occasion, noticed the position that strictly speaking the constitutional question could not be allowed to be reagitated in view of the Bench decision aforesaid. But the learned Judge all the same dealt with the points raised by the appellant including the question arising under article 194 of the Cotistitution. The learned Judge dismissed the application holding that a member of the Legislative Assembly had no absolute privilege in respect of the questions sought to be asked by him, which had been disallowed but he had published them all the same. It was also pointed out that the questions had never been asked in the House and that, therefore, could not be said to form part of the proceedings of the House. He further held that the publication in the journal at the instance of the appellant could by no means be said to have been under the authority of the House. The appellant moved the learned Judge for a certificate under article 132(1) of the Constitution, but that application was also refused on the ground that the case did not involve any substantial question of law as respects the interpretation of the Constitution. The appellant then moved this Court and obtained special leave to appeal from the judgment of the High Court refusing the claim of privilege. He also obtained stay of fur. ther proceedings in the Court of the Magistrate. The hearing of the appeal was ordered to be expedited That order was passed on October 1, 1956, but notwithstanding the order of expedition, the case came to be heard only four years later, 490 In this Court, it has been contended on behalf of the appellant that the learned Judge below had erred in his interpretation of the provisions of article 194 of the Constitution and that on a proper construction ' of; those provisions it should have been held (1) that questions sought to be asked by a member of a Legislative Assembly, even though disallowed by the Speaker, formed part of the proceedings of the House, and, as such, their publication would not attract the provisions of the Indian Penal Code; (2) the provisions of article 194 should be liberally construed in favour of persons like elected members of the Assembly who are rendering public service not only by making speeches and asking questions in the Assembly, but also by publishing them in the public press with a view to apprising the country and, particularly the constituency of what had been happening in the House. In other words, it Was claimed that there was an absolute privilege in favour of a member and that, therefore, he could not be prosecuted for having published the questions he sought to put, but had been disallowed by the Speaker. Do the provisions of article 194 of the Constitution lend any support to the contentions aforesaid raised on behalf of the appellant? The first clause of article 194 does not call for any comment in, this case because no question as regards freedom of speech in the Legislature of a State has been raised. Clause (2) of the Article has, firstly, laid down a bar against any proceedings, civil or criminal against any" member of a Legislature of a State in respect of anything said or any vote given by him in the Legislature or any Com mittee thereof; and secondly, that no person shall be liable in a civil or criminal proceeding in respect of the publication of any report, paper, votes or proceedings under the authority of a House of such a Legislature. It is not contended that the publication complained against in this case was under the authority of the Legislative Assembly of West Bengal. So the second part of the second clause of; article 194 cannot be pressed in aid of the appellants contention. As regards the first part of the second clause, can it be said that the publication, which forms the subject matter of the 491 prosecution in,, this case, can come within the purview of ', anything said or any vote given " by a member of. the Legislative Assembly? The answer must be in the ' negative. It is, therefore, manifest that el. (2) of article 194 is equally of no assistance to the appellant. Naturally, therefore, reliance was placed in the course of arguments in this Court on the provisions of cl. (3) of article 194. Does the publication of a disallowed question by a member of an Assembly come within the powers, privileges and immunities of the members of the House ? The answer to this question depends upon finding out what are the powers, privileges. and immunities of the members of the House of Commons of the Parliament of the United Kingdom at the commencement of the Constitution. This Court in the case of M. section M. Sharma vs Shri Sri Krishna Sinha (1) has considered in great detail those immunities with respect to the publication of a portion of a speech which was directed by the Speaker to be expunged from the proceedings of the House. This Court has held that the publication of such a portion of the proceedings is not within the privilege attaching to the publication of a faithful report of the proceedings of a House of the State Legislature. That case was not concerned with the penal law of the country. In that case the Court was concerned with ascertaining the powers of the Assembly to punish for contempt of the House with reference to the privileges and immunities of a House of the Legislature of a State. Hence, that decision does not assist us in determining the present controversy. If we turn to the legal position in England with reference to the House of Commons, it is clear that the immunity of a member of the House of Commons is in respect of the speeches made by him in Parliament, but it does not extend to the publication of the debate outside Parliament. If a member of a House of Commons ' _publishes his speech made in the House separately from the rest of the proceedings in the House, he will be liable for defamation if his speech contains matters defamatory of any person. In the celebrated case of R. vs Lord Abingdon (2),,Lord Kenyon had decided that a speech which had been made in (1) [1959] Suppl. 1 S.C.R. 806, (2) ; 170 E.R.337, 492 the House of Lords was not privileged if published separately from the rest of the debate. In May Parliamentary Practice, 16th Edition, by Lord Campion, occur the following statements in respect of the two well known cases of Abingdon (1) and Creevey, Journal of the House of Commons (1912 13) 704: "Abingdon 's case, (1). An information was filed against Lord Abingdon for a libel. He had accused his attorney of improper professional conduct,, in a: speech delivered in the House of Lords, which he afterwards published in several newspapers at his own expense. Lord Abingdon pleaded his own case in the Court of King 's Bench, and contended that he had a right to print what he had, by the Law of Parliament, a right to speak; but Lord Kenyon said that a member of Parliament had certainly a, right to publish his speech, but that speech should not be made a vehicle of slander against any individual; if it was, it was a libel. The Court gave judgment that his lordship should be imprisoned for three months, pay a fine of pound 100, and find, security for his good behaviour. Creevey 's case (2), 1813. Creevey, a member of the House of Commons, had made a charge against an individual in the House, and incorrect reports of his speech having appeared in several newspapers, Mr. Creevey sent a correct report to the editor of a newspaper, with a request that he would publish it. Upon an information filed against him, the jury found the defendant guilty of libel, and the King 's Bench refused an application for a new, trial (See Lord Ellenborough 's judgment in Rex vs Creevey (2)). Mr. Creevey, who had been fined pound 100, complained to the House of the proceedings of the King 's Bench; but the House refused to admit that they were a breach of privilege. " It is clear on a reference to the law in England in respect of the privileges and immunities of the House of Commons that there is no absolute privilege attaching to the publication of extracts from proceedings in the House of Commons. So far as a member of the House of Commons is concerned, he has an absolute privilege (1) (1794) Esp. 226; M, &section 2 73; 493 in respect of what he has spoken within the four walls of the House, but there is only a qualified privilege in his favour even in respect of what he has himself said, in the House, if he causes the same to be published in the public press. The case of publication of proceedings of Parliament, not under the authority of the House, stands on the same footing as the publication of proceedings in courts of justice. That was made clear by Cockburn, C.J. in the case of Wason vs Walter (1). Explaining why the publication of a single speech in the proceedings in the House would not be absolutely privileged, the learned Chief Justice observed: " It is to be observed that the analogy between the case of reports of proceedings of courts of justice and those of proceedings in Parliament being complete, all the limitations placed on the one to prevent injustice to individuals will necessarily attach on the other; a garbled or partial report, or of detached parts of proceedings, published with intent to injure individuals, will equally be disentitled to protection. So long as Parliament does not crystallise the legal position by its own legislation, the privileges, powers and immunities of a House of a State Legislature or Parliament or of its members are the same as those of the House of Commons, as stated above. In the present case the appellant sought to put certain questions bearing upon the conduct of the complainant, the first respondent, in this case. According to r. 27 of the Assembly Procedural Rules, certain conditions have to be fulfilled in order that a question may be admissible. Amongst other requirements of the rule, one of the conditions is that it must not contain any imputation or imply a charge of a personal character. Rule 29 of those rules authorises the Speaker to decide on the admissibility of a question with reference to the provisions of the rules and lays down that the Speaker " shall disallow any question when, in his opinion, it is an abuse of the right of questioning, or is in contravention of those provisions. " In view of the conclusion we have already reached, namely, that there is no absolute privilege, even in favour of a member of the Legislature, in respect of a publication not of the entire 63 (1) , 94. proceedings, but of extracts from them, it is not necessary for us to decide the question whether disallowed questions can be said to form part of the proceedings of a House of Legislature. In this connection, it is also relevant to note that we are concerned in this case with a criminal prosecution for defamation. The law of defamation has been dealt with in sections 499 and 500 of the Indian Penal Code. Section 499 contains a number of exceptions. Those specified exceptions lay down what is not defamation. The fourth exception says that it is not defamation to publish a substantially true report of the proceedings of a court of justice, but does not make any such concession in respect of proceedings of a House of Legislature or Parliament. The question naturally arises how far the rule in Wason 's case (1) can be applied to criminal prosecutions in India, but as this aspect of the controversy was not canvassed at the Bar, we need not say anything about it, as it is not necessary for the decision of this case. The legal position is undisputed that unless the appellant can make out an absolute privilege, in his own favour, in respect of the publication which is the subject matter of the charge in this case, the prosecution against him cannot be quashed. As we have held, that he has no such absolute privilege, in agreement with the High Court, he must take his trial and enter upon his defence, such as he may have. As the evidence pro and con has not been recorded in full, the arguments at the Bar had naturally to be confined to the purely legal question of the absolute privilege claimed. It need hardly be added that we do not express any opinion on the merits of the controversy which will now be gone into by the learned Magistrate before whom the case has been pending all these years. For the reasons given above, it must be held that there is no merit in this appeal. It is accordingly dismissed. The pending prosecution, which has been held up for so long, it is expected,, will now be proceeded with without any avoidable delay. Appeal dismissed.

The respondent was a registered firm carrying on business as commission agents, and for the purpose of income tax it was treated as the agent of a non resident principal doing business outside India. Under section 42(1) of the Indian Income tax Act the respondent was deemed to be the assessee and had to pay Rs. 3,78,49r as income tax on behalf of the non resident principal. After allowing for the amounts lying with the respondentfirm the account of the non resident principal showed a debit balance of RS. 3,20,162. The respondent treated this amount as a bad debt and claimed it as a deductible loss. The Incometax Officer and the Appellate Assistant Commissioner disallowed the respondent 's claim but the Income Tax Appellate Tribunal held it to be an allowable deduction being a bad debt incurred as a result of the respondent 's business activities with the nonresident principal. The High Court treating the amount as a deductible business loss incurred by the respondent affirmed the decision of the Income tax Tribunal. On appeal by the Commissioner of Income tax, Held, that the respondent was not entitled to the reduction claimed by it. The liability to pay imposed upon it under section 42(2) of the Income tax Act did not arise directly from the carrying on of the business nor was it incidental to the business. The loss was not a commercial loss incurred in the respondentfirm 's own business but it arose out of the business of another person and that was not a permissible deduction within section io(1) or section 10(2)(Xi) of the Act. Gresham Life Assurance Society vs Styles, L.), referred to. Commissioner of Income tax vs Sir section M. Chitnavis, (1932) L. R 59 I. A. 290, followed. Badridas Daga vs Commissioner of Income tax, [1959] S.C.R. 690 and Curtis vs I. and G. Oldfield, Ltd., (1925) 9 T. C. 319, discussed. Lord 's Dairy Farm Ltd. vs Commissioner of Income tax, Bom bay, , Calcutta Co., Ltd. vs Commissioner of Income tax, and C.I.R. vs Hagart and Burn Murdoch; ; , not applicable '. 120 950

N: Criminal Appeal No. 313 of 1978. Appeal by Special Leave from the Judgment and Order dated 22 3 78 of the Punjab and Haryana High Court in Criminal Appeal No. 189/75. A. section Sohal and section K. Jain for the Appellant. Hardev Singh for the Respondent. The Judgment of the Court was delivered by KRISHNA IYER, J. Every litigative appeal has a docket number but beneath the paper lurks a human factor, often forgotten in the forensic pugilists but now and then brought to the fore, as in this criminal appeal limited to the issue of appropriate sentence. Surely, 'the law must keep its promises. ' Justice Holmes expressed the obvious when he said this, but the breach of promise by the law on delivering criminal justice is daily experience, from police arrest to prison trauma. The focus in this case is on the sentencing alternatives in the Criminal Procedure Code; and the grievance pressed by counsel, when traditional grounds on the merits failed, was that the compassion of section 360 professionally suffering benign neglect, be kindled and he be released. Enacted law is guilty of inaction, because its obscure presence on the statute book escapes the vigilance of the Bar. Where even the court ignores what is vital to the little man the guarantee of 1136 sentencing legality becomes a casualty. This case is an instance in point. Now the brief story which enlivens the 'sentencing ' submissions. Four villagers of rural Punjab, of whom the appellant is one, set upon Arjan Singh, a small official, while on his way back home. The sound and fury of the attack with sticks brought out the ill starred, innocent Srimati Rakhi, Arjan Singh 's brother 's wife. Her daughter too came to the spot attracted by the fracas. Arjan Singh received blows, being the angry target of the assailants. But poor Rakhi, who came in accidentally, was hit on the head with a takua by Jagir Singh, one of the accused. She eventually died; and her daughter and Arjan Singh were hurt by the beating. Four persons were charged by the police with offences under section 302, 324 and 323 I.P.C. including constructive liability under section 34. Two of them were acquitted by the trial court and the other two were convicted but appealed to the High Court. The man who dealt the fatal cut was Jagir Singh. His conviction under section 302 I.P.C. and award of life imprisonment by the Sessions Court was converted into one under section 304 Part 1, I.P.C. with a consequential reduction of sentence to seven years ' rigorous imprisonment. His conviction on certain other counts was maintained but we are not concerned with him at all, since the appellant in this Court is the other accused Dilbag Singh. His role was lesser and related to causing simple injury to Arjan Singh for which he was sentenced to rigorous imprisonment for one year and a fine of Rs. 200/ . He was held vicariously guilty under sections 324/34 I.P.C. and awarded two years ' rigorous imprisonment and a fine of Rs. 1000/ . In addition he was convicted under section 323 I.P.C. for causing hurt to the daughter of the deceased and on this count punished with R.I. for one year together with a fine of Rs. 200/ . Having declined leave on the question of guilt, we confine our attention to the contentions on the sentence. We proceed on the footing of the facts found and ask ourselves whether any basic flaw in sentencing technology affords appellate intervention and re designing of reformatory treatment in the conspectus of circumstances present in the case. The courts in our country consult the punitive tariffs prescribed in the Penal Code, consult the prison period awarded in practice for such offences and with marginal variations mechanise the process. Judged by that test, conviction under section 324 I.P.C. read with section 34 plus substantive guilt under section 323 I.P.C. is visited with two years for the former and one year R.I. especially when the incident has ended in death. But penal humanitarianism, strategies of non institutional rehabilitation and 1137 a complex of other considerations in making an offender a non offender have revolutionized the judicial repertory in re socializing the criminal. The sentence hearing for which the Criminal Procedure Code, 1973 provides in section 248(2) and section 235(2) has hardly received the serious concern of the Courts despite the International Probation Year and therapeutic accent in penological literature. 'If the criminal law as a whole is the Cinderella of jurisprudence, then the law of sentencing is Cinderella 's illegitimate baby '. Pre sentence investigation reports, bestowal of intelligent care on the choice between institutional and non institutional disposition and habitual neglect of new avenues open to the court have constrained us to grant leave in the case so that guidelines may be laid down and probation and community oriented methods lying in the legal limbs may be re activated. Our prisons are overcrowded, our prisoners are subjected to iatrogenic incarceration, our penal drills are self defeatingly callous to correctional measures and our jail budgets bulge without countervailing community benefits because the Bench and the Bar have dismissed as below judicial visibility such patterns as probation, conditional release. The time has come for Courts to abandon the Monroe Doctrine towards penology and concern itself with innovative sentences. But this involves careful study of the convict and his potentiality for reform, not guess work nor insensitive assessments. Therefore, we directed, right at the start, the Chief Probation Officer, Punjab, to make a report to this Court "as to the social circumstances and other relevant factors bearing on the consideration of eligibility of the petitioner to probation." That report has been received and its contents indicate competent advertence to pertinent criteria which we may briefly sum up. The appellant is 32 years old. His behavioral attitude is stated to be "obedient and law respecting in nature". The officer goes on to state that the prisoner 's character is fairly good, that he is upright, alert and interested in rural games. Of course, he seems to be wrestler of the locality which is good if it is practised as a game but dangerous if he exercises his muscles on other people 's flesh. More importantly are the social influences that bear upon restraint and good behaviour. He is a petty farmer who left school in his teens, has ten acres of land belonging to the joint family of himself and five brothers and the mother. Being a cultivator and living in the joint family circumstances the officer finds no adverse remarks against him in the locality. On the other hand, the report refers to his great respect for the former Sarpanch of the village. His family circumstances evoke commiseration because his father is dead having been murdered in 1960. His mother is alive 1138 and has to be maintained by himself and his two brothers who are truck drivers and the third a jawan. He has his own nuclear family to maintain with a young wife and four children. A pitiable factor is that his elder daughter is paralytic from birth. His social position shows that he belongs to a lower middle class family, lives by agriculture, loves his mother and brothers and has earned the good will of his neighbours who think that the occurrence was induced by an irritating land issue and temporary intoxication. A Sense of remorse has overcome him according to the Probation Officer who says that he is a first offender and not a recidivist. It is a painful fact, as noted in the report that this criminal case has cost him a tidy sum, loss of prestige and even family separation. In the unrefined English of the Probation Officer we may summarise his assessment of the offender: "It was met of an accident as offender client Dilbagh Singh seems to be law abiding and God fearing. His one weakness is wine and that is the route cause of the present diviation, otherwise on the whole offender 's behaviour is normal and adjustable. The offender is in curable stage as crime has not gone deep into him. He can be adjustable amicably within his normal and natural environmental factors. The client can easily be reformed as he is neither professional criminal nor exhibits any tendency to future deviation. " The social milieu, the domestic responsibilities, the respect for the former Sarpanch he shows, the general goodwill he commands are plus points. The tragic fact of his father 's murder and the running misfortune of his young daughter 's paralysed limbs are sour facets of his life. The circumstance that he is gainfully employed as agriculturist and his brothers, though in diverse occupations, remain joint family members, are hopeful factors. The aggressive episode which led to his conviction was induced by the company of his cousin who serves a seven year sentence and the inebriation due to drinking habit. This simple villager responsible and gentle, sad and burdened, repentant and drained of his little wealth by the criminal case, has a long way to go in life being in his early thirtys. The drinks vice was the minus point. Many a peaceable person, on slight irritation, suffers bellicose switch over under alcoholic consumption. How does judicial discretion operate in this skew of circumstances? To jail him is mechanical farewell to the finer sentencing sensitivity of the judge of salvaging a redeemable man by non institutionalised treatment. The human consequences of the confinement process here will 1139 be no good to society and much injury to the miserable family and, above all, hardening a young man into bad behaviour, with prestige punctured, family injured, and society ill served. Nor was the crime such, so far as his part was involved, as to deserve long deterrent incarceration. Our prison system, until humane and purposeful reforms pervades, surely injures, never improves. Prison justice has promises to keep, and ethological changes geared to curative goals are still alien from dress and bed, refusal of frequent parole and insistence of mechanical chores, bonded labour, nocturnal tensions, and no scheme to reform and many traditions to repress such is the zoological institutional realism and rehabilitative bankruptcy which inflict social and financial costs upon the State.(1) It is wasted sadism to lug this man into counter productive imprisonment for one year. Long years ago, Franklin D. Roosevelt, in a forward looking speech on John Day, said: "If the criminal 's past history gives good reason to believe that he is not of the naturally criminal type, that he is capable of real reform and of becoming a useful citizen, there is no doubt that probation, viewed from the selfish standpoint of protection to society alone, is the most efficient method that we have. And yet it is the least understood, the least developed, the least appreciated of all our efforts to rid society of the criminal. "(2) The appellant has served a substantial part of his sentence in jail because of judicial innocence of the normae in the area of non institutional disposition. It is easy to imprison, hard to individualise punishment. Sentencing legality is violated when the judge shirks. And the Bar is often alien to correctional alternatives and concentrates its ammunition on culpability and extenuatory scaling down of imprisonment. The observations of the United States Supreme Court in Williams vs New York ; , 249) lay the right stress on pre sentence reports: "have been given a high value by conscientious judges who want to sentence persons on the best available information rather than on guess work and inadequate infor 1140 mation. To deprive sentencing judges of this kind of information would undermine modern penological procedural policies that have been cautiously adopted throughout the nation after careful consideration and experimentation." Judge F. Rayan Duffy has written: "If the judge has before him a complete and accurate pre sentence investigation report which sets forth the conditions, circumstances, background, and surroundings of the defendant, and the circumstances underlying the offense which has been committed, the judge can then impose sentence with greater assurance that he has adopted the proper course. He can do so with much greater peace of mind. "(1) The purpose of section 360 of the Code is precisely this; the goal of section 235(2) is just this. And yet, the exacting art is more honoured in the breach than in the observance if we many wrongly use a Shakespearean passage to drive home our point. We stress the legal position so that subordinate courts may not treat conviction as the terminal point but the end of one chapter. We are mindful of the complexity and remove the impression that easy resort to section 360 is right. No; it is wrong. Two quotes set the record straight. "Imprisonment is the appropriate sentence when the offender must be isolated from the community in order to protect society or if he can learn to readjust his attitudes and patterns of behaviour only in a closely controlled environment. "(2) "The consequences of a sentence are of the highest order. If too short or of the wrong type, it can deprive the law of its effectiveness and result in the premature release of a dangerous criminal. If too severe or improperly conceived, it can reinforce the criminal tendencies of the defendant and lead to a new offence by one who otherwise might not have offended so seriously again. The decision which is presented at sentencing is also enormously complex. It properly is concerned, and often predominantly, with the future which can be predicted for the particular offender. But any single valued approach to sentencing is misdirected. A sentence which is not in some 1141 fashion limited in accordance with the particular offence can lead to a system of incomparable brutality. Per contra, a sentence or pattern of sentence which fails to take due account of the gravity of the offence can seriously undermine respect for law. "(1) In this case, after perusal of the report of the Probation Officer, counsel for the State, Sri Hardev Singh, with fair candour and shared correctness, consented to a release of the prisoner under section 360. We agree. But one fact needs emphasis. The close nexus between violence and alcohol is a call to the State in every criminal investigation to identify the role of alcohol in the commission of the offence and in every prisoner 's treatment to provide for anti alcoholic therapy. To fail here is vicarious guilt of the State to Society. We direct release of the appellant forthwith. He will enter into a bond before the trial court together with Shri Dilbag Singh S/o Babu Singh as surety in the amount of Rs. 1000/ within two weeks of his release to keep the peace, be of good behaviour, to abjure alcohol and not to commit offence for a period of three years and to appear and receive sentence, if called upon in the meantime. The appeal is allowed with this direction which is the Q.E.D. of sentencing justice. V.D.K. Appeal allowed.

In the case of a trial before a court of session, under section 235(2) Criminal Procedure Code "if the accused is convicted, the Judge shall, unless he proceeds in accordance with the provisions of section 360, hear the accused on the question of sentence, and then pass sentence on him according to law." Similarly, in the case of trial of warrant cases by Magistrates, under section 248 (2) of the Code, "where the Magistrate finds the accused guilty, but does not proceed in accordance with the provisions of section 325 or section 360, he shall after hearing the accused on the question of sentence, pass sentence upon him according to law. " Section 361 of the Code mandates that "where in any case, the court could have dealt with: (a) an accused person under section 360 or under the provisions of the (Act XX of 1958) or; (b) a youthful offender under the (Act LX of 1960) or any other law for the time being in force for the treatment, training or rehabilitation of youthful offenders, but has not done so, it shall record in its judgment, the special reasons for not having done so." Thus, under the Criminal Procedure Code, 1973, recourse to the provisions of section 360 is a must. In a trial against four persons charged by the Police with offences under sections 302, 324, 323 IPC, including constructive liability under section 34, two were, acquitted by the trial court and two were convicted. The appellant was sentenced to rigorous imprisonment for one year and a fine of Rs. 200/ for causing simple injury to one Arjan Singh. He was held vicariously guilty under sections 324/34 IPC and awarded two years rigorous imprisonment and a fine of Rs. 1000/ . In addition he was convicted under section 323 IPC, for causing hurt to the daughter of the deceased and on this count punished with R.I. for one year together with a fine of Rs. 200/ . Releasing the appellant on probation, the Court ^ HELD: 1. Enacted law is guilty of inaction; because its obscure presence on the statute book escapes the vigilance of the Bar. Where even the Court ignores what is vital to the little man the guarantee of sentencing legality becomes a casualty. [1135H, 1136A] 1135 2. To jail an accused is mechanical farewell to the finer sentencing sensitivity of the Judge of salvaging a redeemable man by non institutionalised treatment. If the judge has before him a complete and accurate pre sentence investigation report which sets forth the conditions, circumstances, background, and surrounding of the accused and the circumstances underlying the offence which has been committed, the judge could then impose sentence with greater assurance that he has adopted the proper course. The purpose of section 360 of the Code is precisely this and the goal of section 235(2) is just this. [1138H, 1140B C] 3. Sentencing legality is violated when the judge shirks. And the Bar is often alien to correctional alternatives and concentrates its ammunition on culpability and extenuatory scaling down of imprisonment. [1189F] 4. Calling pre sentence investigation reports, bestowal of intelligent care on the choice between institutional and non institutional disposition like probation, conditional release and such community methods must form part of innovative sentences. But this should be based on careful study of the convict and his potentiality for reform; not guess work, nor insensitive assessments. [1137B E] Williams vs New York, ; , 249; quoted with approval.

os. 102,105 to 110 of 1956. Petitions under Article 32 of the Constitution for writs in the nature of Habeas Corpus. N. C. Chatterjee, Sadhan Chandra Gupta and janardhan Sharma; for petitioners in Petitions Nos. 102, 105 to 108 of 1956. Sadhan Chandra Gupta and Janardhan Sharma, for petitioners in Petitions Nos. 109 and 110 of 1956. C.K.Daphtary, SoliCitor General for India, Porus A. Mehta and R. H Dhebar, for respondents in Petitions Nos. 102 and 105 of 1956. Porus A. Mehta and R. H. Dhebar, for respondents in Petitions Nos. 106 to 110 of 1956. September 17. The Judgment of the Court was delivered by VENKATARAMA AYYAR J. These are petitions filed under article 32 of the Constitution for the issue of writs in the nature of habeas corpus. They arise on the same facts and raise the same questions. On 13 1 1956 the Commissioner of Police, Bombay, passed orders under section 3(2) of the IV of 1950 (hereinafter referred to as the Act), directing the detention of the present petitioners, and pursuant thereto, they were actually arrested on 16 1 1956. The grounds on which the orders were made were formulated on 19 1 1956, and communicated to the petitioners the next day. On 21 1 1956 the Commissioner reported the fact of the order and the grounds therefor to the State Govern 655 ment, which approved of the same on 231 1956. The contention of the petitioners before us is that when the Commissioner passed the orders for detention on 13 1 1956, it was his duty under section 3(3) to report that fact forthwith to the State Government and as be did not do so until 21 1 1956, he had acted in contravention of the statute, and that the detention was therefore illegal. That raises the question as to what "forthwith" in section 3 (3) of the Act signifies, and whether on the facts the report was made "forthwith", within the meaning of that word in that sub section. The word "forthwith", it has been observed, is of elastic import. In its literal sense, it might be construed as meaning that the act to be performed forth;with in relation to another should follow it automatically without any interval of time, or, as held in some of the American. authorities, should be performed at one and the same time as the other. But even in America, the preponderance of judicial opinion does not favour this construction. In Corpus Juris, Volume 26, page 998 the position is thus stated: "Although the term has received a strict conStruction, ordinarily it is not to be strictly construed, but should receive a liberal or reasonable construction . Some regard must be had to the nature of the act or thing to be performed and the circumstances of the case". In England, there is a long catena of decisions interpreting the word "forthwith" occurring in statutes, rules and contracts, and their trend has been to construe it liberally. As early as 1767, discussing the meaning of the word 'immediately ' and the word "forthwith" his been held to have the same significance Lord Hardwicke observed in Rex vs Francis "But then the word immediately, is strongly insisted on, as, a word which excludes all mesne acts and time; and therefore, that this taking away the money must necessarily be 'in the presence of Cox. (1) Cun. 165; ; , 1183. 656 But all the nine Judges held this word immediately, to be of so loose a signification, and not to imply necessarily, that the money was taken away in Cox 's presence. For this word does neither in its use and application, nor in its grammatical construction, exclude all mesne acts or time But it is more necessary and proper in this case, to consider the signification of this word in the legal, way. And it is plain, that in this acceptation, it is not understood to exclude mesne acts or time And on the Statute Hue and Cry, 27 Eliz. c. 13, section 11, where ' the words with as much convenient speed as may be, are made use of, all the precedents have expressed these words, by the word immediate, as may be seen in the books. The last case which I shall mention on this point, is that of the writs of habeas corpus, issuing out of this Court, which are most frequently made returnable immediately; and in this case the word is never understood either to exclude mesne acts or time, but only means, with convenient speed In Beg. vs The Justices of Worcester(1), where the question was as to the meaning of the word "forthwith" in section 50 of 6 Will. IV, Coleridge, J. observed: "I agree that this word 'forthwith ' is not to receive a strict construction like the word 'immediately ',, so that whatever follows, must be done immediately after that which has been done before. By referring to section 50, it seems that whatever is to be done under it, ought to be done without any unreasonable delay. I think that the word 'forthwith ' there used, must be considered as having that meaning ' The meaning of the word "immediately" came up for consideration in Thompson vs Gibson(2). Holding that it was not to be construed literally, Lord Abinger C. B. observed: "If they" (acts of Parliament) "could be construed literally, consistently with common sense and justice, undoubtedly they ought; and if I could see, (1) [1889] 7 Dowl. 789 791: 54 R.R. 902 (903). (2) (1841] 8 M. & NV. 282 ; ,1047. 657 upon this act of, Parliament, that it was the intention of the legislature that not a single moment 's interval should take place before the granting of the certificate, I should think myself bound to defer to that declared intention. But it is admitted that this cannot be its interpretation; we are therefore to see how, consistently with common sense and the principles of justice, the words 'immediately afterwards ' are to be construed. If they do not mean that it is to be done the very instant afterwards,do they mean within ten minutes, or a quarter of an hour, afterwards? I think we should interpret them to mean, within such reason able time as will exclude the danger of intervening facts operating upon the mind of the Judge, so as to disturb the impression made upon it by the evidence in the cause". In agreeing with this opinion, Alderson, B. expressly approved of the decision of Lord Hardwicke in Rex vs Francis(1). This construction of the word 'immediately ' was adopted in Page vs Pearce(), Lord Abinger C. B. observing: "It has already been decided, and necessarily so, that the words 'immediately afterwards 'in the statute, cannot be construed literally; and if you abandon the literal construction of the words, what can you substitute but 'within a reasonable time? '. " In The Queen vs The Justice 3 of Berkshire(3), where the point was as to the meaning of "forthwith" in section 52 of 35 & 36 Vict., Chapter 94, Cockburn C. J. observed: "The question is substantially one of fact. It is impossible to lay down any bard and fast rule as to what is the meaning of the word 'immediately ', in all cases. The words 'forthwith ' and 'immediately ' have the same meaning. They are stronger than the expression within a reasonable time ', and imply prompt, vigorous action, without any delay, and whether there has been such action is a question of fact, having regard to the circumstances of the particular case". (1) dun. 165: ; , 1188. (2) ; (678): (1212). (3) (471). 658 The same construction. has been put on the word "forthwith " occurring in contracts. In Hudson and others vs Hill and others(1) which was a case of charterparty, it was observed at page 280: " Forthwith ' means without unreasonable delay. The difference between undertaking to do something 'forthwith ' and kithin a specified time is familiar to everyone conversant with law. To do a thing 'forthwith ' is to do it as soon as is reasonably convenient". In Reg. vs Price(2), it was held by the Privy Council that the word "forthwith" in a bail bond meant within a reasonable time from the service of notice. On these authorities, it may be taken, an act which is to be done forthwith must be held to have been so done, when it is done with all reasonable despatch and without avoidable delay. But it is argued by Mr. N. C. Chatterjee that the view taken in the above decisions as to the meaning of the word "forthwith" has been abandoned in the later decisions, and that under the law as it stands, when an act has to be performed forthwith in relation to another, what has to be decided is not whether it was done within a reasonable time, but whether it was done so closely upon the other as to form together one continuous act. He relied in support of this opinion on the decision in Be Muscovitch(3), affirming that in Re Muscovitch(1). That was a decision on rule 132 of the Bankruptcy Rules which provided that "Upon entering an appeal, a copy of the notice of appeal shall forthwith be sent by the appellant to the registrar of the court appealed from". The facts were that the appeal was lodged in time on 25 10 1938 but the notice was served on 28 10 1938, and it was found that there was "no satisfactory reason or no reason at all, why there was any delay in the matter" (Re Muscovitch(4)). On that, it was held that the requisition that "the notice shall forthwith be sent" was not satisfied. This is authority only for the position that when an Act is done after an interval of time and there is no explanation forthcoming for (1) (280). (2) ; 8 Moore P.C. 208: (3) (4) , 659 the delay, it cannot be held to have been done "forthwith". That is made clear by Sir Wilfrid Greene M. R. in the following passage in Re Muscovitch(1) at page 139: "Having regard to the construction which was put upon the word 'forthwith ' which is peremptory, and. admits of no interval of time between the entry of the appeal and the sending of the notice save such as may be imposed by circumstances, which cannot be avoided, I find it impossible in the present case to say that the notice was sent forthwith within the meaning of the rule". Reliance is also placed for the petitioners on the decision in Ex parte Lamb: In re Southam(2), which was followed in Re Muscovitch(1). There, construing the word "forthwith" in rule 144 of the Bankruptcy Rules, 1870, which corresponds to rule 132, which was the subject of interpretation in Re Muscovitch(1), Jessel M. R. observed at page 173: "Ithink that the word 'forthwith ' must be construed according to the circumstances in which it is used Where, as in Hyde vs Watt8(3), there is a covenant to insure a man 's life, there must of necessity be some delay, for the act could not be done in a moment. But where an act which is required to be done 'forthwith ' can be done without delay, it ought to be so done". In that case also, the learned Judges found that the delay was not explained. And the observation of Lush L. J. in the same case was that "the word 'forthwith ' has not a fixed and an absolute meaning; it must be construed with reference to the objects of the rule and the circumstances of the case". There is nothing in the decisions in Re Muscovitch(1) and Ex parte Lamb: In re Southam(2) which can be considered as marking a departure from the construction put on the word "forthwith" in the earlier authorities that it meant only that the act should be performed with reasonable speed and expedition, and that any delay in the matter should be satisfactorily explained. (1) (2) (3) ; 660 It is argued for the petitioners that even if the con. struction put on the word "forthwith" in the above decisions is accepted as correct, it must, in any event, yield to any contrary intention expressed in the statute, and that the provisions of the Act afforded clear indication of such an intention. It is co intended that the legislature while providing in section 7 that the grounds should be communicated to the detenu "as soon as may be" has enacted that the report under section 3(3) should be sent "forth with", that the use of two different expressions in the two sections is a clear indication that they do not mean the same thing, that as the words "as soon as may be" import that the act might be performed in a reasonable time, the word "forthwith" which is more peremptory must be construed as excluding it. The decisions in Emperor vs Phuchai(1) and in K. U. Kulkarni vs Ganpat Teli(2) were quoted in support of the position that when two different expressions are used in different parts of the same clause or section, they should be construed as used in different senses. We agree that "forthwith" in section 3(3) cannot mean the same thing as "as soon as may be" in section 7, and that the former is more peremptory than the latter. The difference between the two expressions lies, in our opinion, in this that while under section 7 the time that is allowed to the authority to send the communication to the detenu is what is reasonably convenient, under section 3(3) what is allowed is only the period during which he could not, without any fault of his own, send the report. Under section 7 the question is whether the time taken for communicating the grounds is reasonably requisite. Under section 3(3) it is whether the report has been sent at the earliest point of time possible, and when there is an inter val of time between the date of the order and the date of the report, what has to be con sidered is whether the delay in sending the report could have been avoided. (1) I.L.R. 50 All. 909: A.I.R. 1929 All. (2) I.L.R. [1942] Bom. 287: A.I.R. 1942 Bom. 661 It was contended that as section 7 required that the communication should be made not later than 5 days from the date of the order, and as section 3(3) was more peremptory than section 7 in that it required that the report should be made forthwith, the period allowable under section 3(3) could not exceed 5 days, and that as in these cases the reports were sent 8 days later, they could not be held to have been sent forthwith. This argument mixes up two different matters contained in section 7. The period of 5 days provided therein is an absolute one and is independent of the period which is permissible under the expression "as soon as may be", which must, by its very nature, be indefinite depending on the facts and circumstances of the case. It will be as erroneous to read 5 days into the period allowable under the expression "as soon as may be" as to read the 12 days within which the State has to approve the order under section 3(3) into the period which is allowable under the expression "forthwith". The result then is that the report sent by the Commissioner to the State on 21 1 1956 could be held to have been sent "forthwith" as required by section 3(3), only if the authority could satisfy us that, in spite of all diligence, it was not in a position to send the report during the period from 13th to 21st January 1956. We must now examine the facts from the above standpoint. The Commissioner of Police has filed an affidavit explaining why the reports were not sent till 21,st January 1956, though the orders themselves had been made as early as 13th January 1956. Ever since the publication of the proposal to form a State of Maharashtra without the city of Bombay, there ,had been considerable agitation for the establishment of a Samyuktha Maharashtra with the city of Bombay included in it. An action committee had been set up on 15 11 1955 for the purpose, and there had been hartal and morchas resulting in outbursts of lawlessness and violence and in the burning of a police chowki. The final decision on the question was expected to be taken and announced in the middle of January 1956, and the atmosphere was highly sur charged. It was in this situation that the Commis 662 sioner decided to take action under section 3(2) of the Act against the leading spirits of the movement, and passed the present orders for detention against the petitioners on 13 1 1956. In his affidavit the Commissioner states that he decided first "to locate the persons against whom orders of detention were made by me on the 13th January 1956 and after having done so, to arrest all of them simultaneously so that none of them may go underground or abscond or evade execution of the detention orders". Then the affidavit goes on to state: "It was not possible for me to send the report earlier as the situation in the City of Greater Bombay was tense, pregnant with danger on the 13th January 1956, and continued to be so till 16th January 1956, and actual rioting occurred during that night and those riots continued till 22nd January 1956. I and my staff were kept extremely busy all throughout in maintaining law and order and simultaneously taking steps to round up miscreants. In this unusual and tense situation, it was not possible to make a report earlier than the day on which it was made". We see no reason for not accepting these statements. What happened on the 16th and the following days are now matters of history. The great city of bombay was convulsed in disorders, which are among the worst that this country has witnessed. The Bombay police had a most difficult task to perform in securing life and property, and the authorities must have been working at high pressure in maintaining law and order. It is obvious that the Commissioner was not sleeping over the orders which he had passed or lounging supinely over them. The delay such as it is due, to causes not of his making, but to causes to which the activities of the petitioners very largely contributed. We have no hesitation in accepting the affidavit, and we bold that the delay in sending the report could not have been avoided by the Commissioner and that when they were sent by him, they were sent "forthwith" within the meaning of section 3(3) of the Act. 663 Mr. section C. Gupta put forward some special contentions on behalf of the petitioners in C.M.Ps. 109 and 110 of 1956. He contended that as the order originally made against the petitioner in C.M.P. No. 109 of 1956 was that he should be detained in Arthur Road Prison, Bombay the subsequent order of the Commissioner by which he was detained in Nasik Prison was without jurisdiction. It is clear from the affidavit of the Commissioner that the petitioner was not ordered to be detained in Arthur Road Prison but in Nasik Road Central Prison, and that he was kept temporarily in Arthur Road Prison, pending arrangements to transport him to Nasik. It was next contended that the materials on which the orders of detention were made and set out in the communications addressed to the petitioners all related to their past activities, and that they could not constitute grounds for detention in future. This contention is clearly unsound. What a person is likely to do in future can only be a matter of inference from various circumstances, and his past record will be valuable, and often the only, record on which it could be made. It was finally contended that what was alleged against the petitioners was only that they advocated hartal, and that was not a ground for making an order of detention. But the charge in these cases was that the petitioners instigated hartal bringing about a complete stoppage of work, business and transport with a view to promote lawlessness and disorder, and that is a ground on which an order could be made under section 3(2). All the contentions urged by the petitioners therefore fail, and these petitions must be dismissed.

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

Civil Appeal No. 1157 of 1974. Appeal by special leave from the judgment and order dated the 20th June, 1973 of the Andhra Pradesh High Court in Writ Appeal No. 411 of 1973. F.S. Nariman and P. P. Rao, for the appellant. A. Subba Rao, for respondents Nos. 1 10, 12 31, 33 and 36. The Judgment of the Court was delivered by CHANDRACHUD, J. The Andhra Pradesh Municipalities Act. VI of 1965, (hereinafter called "the Act") came into force on April 2, 1965. Section 3(1)(a) of the Act empowers the State Government to constitute a local area as a municipality. Section 3(1)(b) empowers the Government, by notification in the Gazette "to declare its intention to include within a municipality any local area in the vicinity thereof and defined in such notification". Section 3(1)(c) confers power on the Government to exclude from a municipality any local area comprised therein and defined in such notification. Under section 3(2), any resident of a local area or taxpayer of a municipality, in respect of which a notification under section 3(1) is published, may, if he desires to object to anything therein contained, submit his objection in writing to the Government within six weeks from the 546 publication of the notification and the Government is under an obligation to take all such objections into consideration. Under section 3(3) after the expiry of the aforesaid period o six weeks and on considering the objections, the Government may by notification in the Gazette declare to be a municipality or include in or exclude from a municipality, the local area or any portion thereof. By section 3(4), the provisions of the Act come into force in or cease to apply to and municipality or part thereof, as the case may be, on the date of publication of notification under sub section (3) if such date is the first day of April, or in any other case, on the first day of April immediately succeeding the 'date of publication of such notification. Respondents 1 to 36 are residents of two villages called Ramakrishnapuram and Sriharipuram. Prior to the year 1966, the area comprised in these villages was not included within the municipal limits of the Visakhapatnam Municipality. Most of these respondents own properties situated within the limits of the two villages but they were not assessed to property tax under the Andhra Pradesh (Andhra Area) District Municipalities Act 1920 which was in force until the introduction of the Act. They used to pay taxes to the village Panchayat. In exercise of the powers conferred by the corresponding provision of the District Municipalities Act, 1920, namely section 4(1)(c), the Government of Andhra Pradesh declared its intention to include within the limits of Visakhapatnam Municipality the local area comprised in the villages of Ramakrishnapuram and Sriharipuram. The district Municipalities Act, 1920 was repealed by section 391(1) of the Act which, as stated earlier, came into force on April 2, 1965. On March 24, 1966 the Government of Andhra Pradesh acting in the exercise or powers conferred by section 3(3) of the Act issued a notification including within the limits of the Visakhapatnam Municipality the area comprised in the villages of Ramakrishnapuram and Sriharipuram with effect from April 1, 1966. on March 24, 1970 and June 10, 1970 the Municipal Council declared its intention to levy property tax in the areas newly included within the municipal limits. After considering the objections, the Council passed a resolution on August 28, 1970 confirming the levy of property tax on buildings and lands situated within the municipal limits, with effect from October 1, 1970. However, the municipality issued notices to respondents 1 to 36 demanding property tax from them not from October 1, 1970 but from April 1, 1966, that is to say, with effect from the date when the villages of Ramakrishnapuram and Sriharipuram were included within the municipal limits. These notices would appear to have been issued on the supposition that taxes leviable under the District Municipalities Act, 1920 could be levied under clause 12, Schedule IX of the Act, unless the Government directed otherwise. On January 24, 1971 respondents 1 to 36 filed writ petition 442 of 1971 in the High Court of Andhra Pradesh against the State of 547 Andhra Pradesh and the Visakhapatnam Municipality asking for a declaration that the levy of property tax on their properties for the period prior to October 1, 1970 was illegal. The writ petition was dismissed by a learned Single Judge on the view that it was competent to the municipality, under the District Municipalities Act 1920, to levy property tax on properties situated in the newly included areas from April 1, 1966 to October 1, 1970. Respondents 1 to 36 filed writ appeal 411 of 1972 against the decision on the Single Judge, which was allowed by a Division Bench of the High Court by its judgment dated June 13, 1972. lt held that the provisions contained in clause 12 of Schedule IX had no application and that it was incompetent to the municipality to impose the property tax on the newly included areas without following the procedure prescribed by sections 81 and 83 of the Act. The correctness of that view is challenged by the Visakhapatnam Municipality in this appeal by special leave. The State of Andhra Pradesh is respondent No. 37 to the appeal. The circumstance that whereas the preliminary notification declaring the intention of the State Government to include new areas within the municipal limits was issued under the District Municipalities Act 1920, the final notification confirming that intention was issued under the Act presents no difficulty. In so far as relevant, Schedule IX clause 13 of the Act, read with clause 1, provides that any action taken under the District Municipalities Act, 1920 by any authority before the commencement of the Act shall, unless inconsistent with the Act be deemed to have been taken by the authority competent to take such action under the Act. The preliminary notification, though issued under section 4(1) (c) of the 1920 Act must therefore be deemed to have been issued under section 3(1)(b) of the Act. The inclusion of the villages of Ramakrishnapuram and Sriharipuram within the limits of the Visakhapatnam Municipality is accordingly in order. The true question for our consideration is whether the property tax which could lawfully be levied under the District Municipalities Act, 1920 can be levied, after the repeal of that Act, on properties situated in the areas included within the municipal limits after the constitution of the municipality. Section 391(1) of the Act expressly appeals the District Municipalities Act, 1920 from which it must follow that ordinarily, no action can be taken under the Act of 1920 after April 1,1966 when the repeal became effective on the coming into force of the Act. But counsel for the appellant municipality contends that clause 12 of Schedule IX of the Act keeps the repealed enactments alive for tax purposes and therefore the municipality has authority to impose the property tax under the Act of 1920, notwithstanding its repeal by the Act. Schedule IX appears under the title "Transitional Provisions" and clause 12 thereof reads thus: 548 "12. Continuance of existing taxes, etc. Any tax, cess or fee which was being lawfully levied by or on behalf of any council at the commencement of this Act and which may be lawfully levied under this Act, shall, notwithstanding any change in the method or manner of assessment or levy of such tax, cess or fee, continue to be levied by or on behalf of the council for the year in which this Act is brought into . force, and unless the Government by general or special order otherwise direct, for subsequent years also. " This provision cannot justify the imposition of tax under the repealed Act of 1920 on properties situated in the newly included areas. In the first place, as the very title of Schedule IX shows, the provisions contained in the Schedule are of a transitional nature. They are intended to apply during the period of transition following upon the repeal of old municipal laws and the introduction of the new law. Some time must necessarily elapse before a municipality can act under the new law but taxes have all the same to the imposed and collected during the interregnum. The object of clause 12 of Schedule IX is to authorise the levy of taxes which, on the commencement of the Act, were levied under the repealed laws. The material date for this purpose is the date of the commencement of the Act, namely April 1, 1966 and the legality of the exercise of the power conferred by clause 12 is to be judged in reference to that date. In other words, if any tax, cess or fee was being lawfully levied by or on behalf of any council on April 1, 1966 and if it can be lawfully levied under the Act, it can continue to be levied notwithstanding any change in the method or manner of assessment or levy of such tax, cess or fee. On April 1, 1966 no tax at all was being levied by or on behalf of any council on properties situated in Ramakrishnapuram and Sriharipuram and therefore the appellant municipality had no occasion or power to direct that the property tax may "continue to be levied" on those properties. "Continuance of existing taxes", after the commencement of the Act being the theme of clause 12 and since the property tax was not levied by or on behalf of any council at the commencement of the Act on the properties situated in the two villages, clause 12 has no application. Imposition of certain kinds of taxes is an obligatory function of municipal councils, under the Act. Section 81(1)(a) provides that every council shall, by resolution, levy a property tax, a profession tax, a tax on carriages and carts and a tax on animals. under. section 81(2) a resolution of a council determining to levy tax shall specify the rate at which and the date from which the tax shall be levied. The first proviso to this sub section requires that "before passing a resolution imposing a tax for the first time" or increasing the rate of an existing tax, the council shall publish a notice in the prescribed manner declaring the requisite intention The council has further to invite objections and it is under an obligation to consider the objections received within the stipulated time. By section 83, when a council determines, subject to the provisions of section 81, to levy any tax for the first time or at a new rate, the Secretary shall forthwith publish a 549 notification in the prescribed manner specifying the rate at which, the date from which and the period of levy, it any, for which, such tax shall be levied. Section 83 is thus expressly subject to section 81 and under the latter provision no tax can be imposed "for the first time" unless the procedure prescribed therein is followed. Since the procedure prescribed by the first proviso to section 81(2) was not followed in regard to the period prior to October 1, 1970 the levy of property tax on the properties of respondents 1 to 36 for that period is without the authority of law and consequently illegal. It was urged on behalf of The appellant that the first proviso to section 81(2) would apply only when a tax was imposed for the first time ' and since appellant was levying properly tax long before its imposition on the properties of respondents 1 to 36, it was unnecessary to follow the procedure prescribed by the proviso. It is not possible to accept this submission. The Municipality might have been levying property tax since long on properties situated within its limits but until April 1, 1966 the villages of Rarmakrishnapuram and Shriharipuram were outside those limits. Qua the areas newly included within the municipal limits, the tax was being imposed for the first time and therefore it was incumbent on the Municipality to follow the procedure prescribed by the first proviso to section 81(2). Residents and taxpayers of those areas, like respondents 1 to 36, never had an opportunity to object to the imposition of the tax and that valuable opportunity cannot be denied to them. It is obligatory upon the Municipality not only to invite objections to the proposed tax but also to consider the objections received by it within the specified period. Such period has to be reasonable, not being less than one month. The policy of the law is to afford to those likely to be affected by the imposition of the tax a reasonable opportunity to object to the proposed levy. According to the appellant, the residents of Ramakrishnapuram and Sriharipuram had an opportunity to object to the imposition of the tax when the State Government issued a notification under section 3(1)(b) of the Act declaring its intention to include the two villages within the limits of the municipality. It is not possible to accept this submission either. When the State Government issues a notification under any of the clauses of section 3(1), any resident of the local area concerned or any tax payer of the municipality can "object to anything therein contained" meaning thereby, anything contained in the notification. A notification issued under section 3 (1) (b) contains only the declaration of the Government 's intention "to include within a municipality any local area in the vicinity thereof and defined in such notification". The right of objection would therefore be limited to the question whether a particular area should, as proposed, be included within the municipal limits. It would be premature at that stage to offer objections to the imposition of any tax because it is only after the final Notification is issued under section 3(3) that the question would at all arise as regards the imposition of a tax on the newly included areas. A notification under section 3(3) has to be followed by a 550 resolution under section 81(1) if the municipality wants to impose a tax, and for the resolution to be effective, the procedure prescribed by the first proviso to section 81(2) has to be followed. The appellant municipality short circuited this mandatory procedure and thereby deprived respondents 1 to 36 of the valuable right of objecting to the imposition of the tax. Finally, relying on section 3(4) of the Act, learned counsel for the appellant contended that the inclusion of the two villages within the municipal area attracts of its own force every provision of the Act with effect from the date on which the final notification is published by the Government under section 3(3). This argument is said to find support in a decision of this Court in Atlas Cycle Industries Ltd. vs State of Haryana & Anr.(1). Far from supporting the argument, we consider that the decision shows how a provision like the one contained in Section 3(4) cannot have the effect contended for by the "appellant in the Atlas Cycle case, section 5(4) of the Punjab Municipality Act. 1911 provided that when any local area was included in a municipality, "this Act and. . . all rules, bye laws, orders, directions and powers made, issued or conferred under this Act and in force throughout the whole municipality at the time, shall apply to such areas". The industrial area within which the factory of the Atlas Cycle was situated was by a notification included within the municipality of Sonepat. The municipality thereafter purported to impose octroi duty on the goods manufactured, by the company without following the procedure corresponding to that prescribed by sections 81 and 83 of the Act. It was held by this Court that since section 5(4) of the Punjab Act did not, significantly, refer to notifications and since section 62(10) of the Punjab Act spoke of "notification" for the imposition of taxes, it was not competent to the municipality to levy and collect octroi from the company on the strength merely of the provision contained in section 5(4) of the Punjab Act. Tn the instant case, what section 3(4) provides is that once a notification including any area within a municipality is published under section 3(3), "The provisions of this Act shall come into force into . . any municipality or part thereof. .on the date of publication of the notification under sub section (3), if such date is the first day of April, or in any other case, on the first day of April immediately succeeding the date of publication of such notification". by section 3(4), once a notification is issued under section 3(3), all the provisions of the Act come into force. That means that sections 81 and 83, which are a part of the act, would also apply to the entire Municipal area. It would then be obligatory for the municipality to follow the procedure prescribed in these sections. Taxes can be imposed under the Act only by passing appropriate resolutions under section 81. Section 3(4) does not provide that on the inclusion of a new area within a municipality, the resolutions passed by the municipal council before such inclusion will automatically apply to the new area. Plainly, such could not be the intention of the legislature in (1) ; 551 view of the importance which it has attached to the right of the citizens to object to the imposition of a proposed tax. Though, therefore, by reason of section 3(4) the provisions of the Act would apply to the new areas included within a municipality, it is not competent to the municipality to take resourse to the resolution passed for imposing tax on the old areas for the purpose of levying taxes on new areas. The procedure prescribed by section 81 and 83 must be followed if a tax is proposed to be levied on the new areas. For these reasons we confirm the judgment rendered by the Division Bench of the High Court and dismiss this appeal with costs. V.P.S. Appeal dismissed.

Under section 4(1)(c) of the District Municipalities Act, 1920, the State Government declared its intention to include within the limits of the appellant municipality the local areas comprised in two villages. 'The 1920 Act was repealed by the Andhra Pradesh Municipalities Act, 1965 which came into force on April 2, 1965. Section 3(1)(b) of the 1965 Act corresponds to section 4(1)(c) of the repealed Act. Under s.3(3), the Government may include within a municipality a local area after considering any objections submitted by the residents of the local are: Under section 3(4) the provisions of the 1965 Act come into force in that area on the first April, if that is the date of the notification under sub section (3) and in any other cases the first day of April immediately succeeding. The State Government, in exercise of its power under section 3(3) of the 1965 Act, issued the notification in March 1966 including within the limits of the appellant municipality the areas comprised in the two villages with effect from April 1, 1966. In 1971, the Municipal Council after considering objections, passed a resolution for levying property tax on land and buildings in the two villages with effect from October 1, 1970, but, The municipality issued notices to the respondents, who were residents of those two villages, demanding the property tax from them from April 1, 1966 the date of inclusion of the villages. The respondents thereupon challenged the levy and the High Court upheld the challenge. In appeal to this Court, it was contended that the appellant municipality was entitled to demand the tax even from April 1, 1966, under cl. 12 of Schedule 9 of the 1965 Act. This clause provided that any tax which was being lawfully levied by the municipal council at the commencement of the 1965 Act and which may be lawfully levied under that Act shall continue to be levied by the council unless the Government by general or special order directs otherwise. Dismissing the appeal to this Court, ^ HELD :(1) The inclusion of the two villages within the limits of the appellant municipality is in order, because, under cl. 13 of Schedule 9 of the 1965 Act the notification issued under section 4(1) of the 1920 Act must be deemed to have been issued under section 3 (1) of the 1965 Act. [547 D F] (2) However, clause 12 of Schedule 9 cannot justify the imposition of the tax under the repealed Act of 1920, from April 1, 1966, on property situate in the newly included areas. [548 B C] (a) The clause is of a transitional nature and its object is to authorise the levy of taxes which, at the commencement of the 1965 Act were levied under the repealed law. That is, in the present case, if any tax etc. was being lawfully levied by the appellant on April 1, 1966, (which was the date of commencement of the Act in the two villages) and if it can be lawfully levied under the 1965 Act, it can continue to be levied. But on April 1, 1966, no tax at all. was being levied by or on behalf of the appellant on the property situate in the two villages included within the municipality on that date. Therefore, the appellant had no occasion or power to direct that a property tax may continue to be levied on those properties, and hence cl. 12 has no application. [548 C E] (b) It cannot be urged that because the appellant was levying property tax on property situate within its limits (other than the 2 villages) the property tax was not being levied for the first time. Qua the two villages newly 545 included in the municipal limits, the tax was being imposed for the first time, and therefore, it was incumbent upon the municipality to follow the procedure prescribed by the first proviso to section 81(2), because, the residents of these areas had no opportunity to object lo the imposition of tax or for the municipality to invite objections and consider them. [549 C E] (3) The first proviso to section 81 requires that before passing a resolution imposing a tax for the first time the council shall publish a notice, invite objections and consider the objections received within the stipulated time. Since the procedure was not followed in regard to the period prior to October 1, 1970 the levy of property tax on the properties of the respondents for that period is without authority of law and consequently illegal. By section 83 when a council determines to levy any tax for the first time or at a new rate the Secretary shall forthwith publish a notification in the prescribed manner specifying the rate and the date from which the tax shall be levied. Section 83 is expressly subject to section 81 and under the latter provision no tax can be imposed for the first time unless the procedure prescribed therein is followed [548G 549 B] (4) When the State Government issued the notification declaring its intention to include the two villages within the limits of the municipality the residents had an opportunity to object, not to the imposition of the tax but only to "any thing contained therein", meaning anything contained in the notification, that is to the inclusion within the municipality. The question of imposition of a tax within the included areas, arises only after the final notification under section 3(3) followed by a resolution under section 81 (1) . [547F 550 B] (5) It could not also be contended that mere inclusion of two villages with in the municipal area automatically attracts the tax. On the contrary, what section . (4) provides is that once a notification including any area within a municipality is published under section 3(3), the provisions of the Act, that is, sections 81 and 83, shall come into force in that area from the first day of April, and hence, the procedure prescribed therein will have to be followed.[550 F H] Atlas Cycle Industries Ltd. vs State of Haryana & Anr. ; , explained.

ivil Appeal Nos. 8623 24 of 1983. From the Judgment and order dated 3.6.1983 of the High Court of Pun jab and Haryana in Writ Petition No. 1794 of 1980. P.P. Rao and P.D. Sharma for the Appellant. S.K. Bagga, C.M. Nayar, Mrs. Manik Karanjawala, R. Karanjawala and Mrs. Meenakshi Arora for the Respondents. The Judgment of the Court was delivered by RANGANATH MISRA, J. These appeals are by special leave and are directed against two separate judgments of the Punjab and Haryana High Court. The first one is against the decision of the High Court in a writ application for quo warranto filed by respondents 2 to 4 while the second one is against the dismissal of a writ petition filed by the appellant before the High Court challenging his reversion. The short facts are that the appellant was appointed as a Professor of Ayurvedic Medicines under the Punjab Government. Later, he was appointed as Deputy Director from which post he was further 366 promoted as Director. By order dated 21.1().1981 he was reverted to the post of Deputy Director. On 3 1st October, 1987, the appellant has superannuated. The respondent Nos. 2, 3 and 4, once upon a time students of the appellant came before the High Court asking for a writ of quo warranto challenging the appellant 's appointment as Director on promotion on the plea that he did not possess the qualification prescribed by the Punjab Ayurvedic Department (Class I and Class Il) Rules, 1963. Rule 6 of these Rules prescribes: "No person shall be appointed to the service, unless he possesses such qualifications, if any, as are shown in col umn 4 of Appendix 'A '. " In Appendix 'A ' there is only one post under Class I that being the post of Director of Ayurved. The requisite qualifications for that post as provided in Appendix 'A ' are the following: "(1) A degree (5 years or more of regular course) in Ayurvedic system of medicine of a Medical Board or Faculty of Indian Medicine recognised by the Government. (2) Doctor of Science in Ayurvedic Medicine (Post Graduate) of any recognised University. (3) Must have worked as an organisor in some Ayurvedic Institution of repute such as Government Ayurvedic Department in any State for a period of at least ten years. (4) Has conducted original research in Ayurvedic Therapy. (5) Must be an Ayurvedic Physician of at least 15 years standing. " Challenge in the High Court was on the ground that the appellant did not possess the prescribed qualifications under Items l and 2. The writ petition was filed soon after the appellant was promoted to the post of Director, and during the pendency of the writ petition the order of reversion as referred to above had been passed. The appellant opposed the writ application by contending that he 367 possesses the requisite qualifications and, inter alia, averred in the return made to rule that the petitioners before the High Court were his students and on account of ill motive, they had filed the application challenging the appointment of the appellant as Director. The State Government initially supported the appellant but later took a different stand. The High Court has found that the appellant possessed the second qualification, namely, that he had obtained the Doctor of Science Degree in Ayurvedic as prescribed. In regard to the first qualification, the High Court found that the appellant had a Degree in Ayurvedic system of Medicine from a recognised Institution and the degree that the appellant possesses has been duly recognised by the Government of Punjab, hut it found that the appellant had not studied in regular course for five years to obtain the degree and, therefore, came to the conclusion that the requisite qualification was not possessed by the appellant. Accordingly, it allowed the writ petition and came to hold that the appellant was not qualified to hold the post of Director. When the question of challenge to the reversion came for consideration in the connected writ petition, the High Court took the view that since the appellant did not possess the first qualification, he was not entitled to the post of Director and was not entitled to challenge the reversion to the post of Deputy Director. We shall first deal with the appeal arising out of the quo warranto proceedings. The first qualification which we have referred to above appears to be a common qualification for almost all the ranks covered by Appendix 'A ', namely, that a degree should have been obtained after five or more years of regular course having been gone through. No dispute has been raised to the appellant 's appointment as Deputy Director. Learned counsel appearing for the respondents who had petitioned the High Court pointed out with reference to the correspondence with the State Public Service Commission that in regard to the qualification for the post of Deputy Director, a degree or diploma was considered sufficient. The State Public Service Commission had raised objection to the Government 's proposal of fixing the degree qualification by pointing out that since a degree after studying for five or more years of regular course was the requirement for the higher post of Director, a lesser qualification should be prescribed for the post of Deputy Director and accordingly the alternates had been adopted. When we pointed out to her that for the post of Assistant Director it cannot be disputed that Deputy Director 's is a superior post the requirement was five years or more of regular course in Ayurvedic with a diploma, there was really no answer. We would accordingly hold that the High Court should have looked into this 368 aspect to find out what exactly was the requirement. In view of the fact that there was no challenge to the appointment of the appellant to the post of Deputy Director and the first item of the qualification is the same for the Director as also the Assistant Director and as Deputy Director, the appellant held a post between the two, we are not impressed by the stand of the respondents that the appellant was not possessed of the requisite qualification. There is no dispute that the appellanthad been serving as Professor for several years. The requisite qualification for that post as per Appendix 'A ', as far as relevant is: "A Degree (five years regular course) in Ayurvedic system of Medicine of a recognised university, or of a board of Indian System of Medicine established by law or from any Ayurvedic College recognised by Government." As far as this qualification goes, there is indeed no difference in the case of a Professor and that of Director. In giving appointment to the appellant as Professor, it must follow that Government were satisfied that appellant had the requisite qualification. There is material on record to show that in regard to the degree obtainable on completion of the five year course, the appellant had read as a regular student for three years in the first instance and for the remaining two years he was directly under a qualified Professor though it was not study in a regular institution. After reading for five years he has obtained the degree which has been from a recognised University. In the circumstances, it has become difficult to agree with the reasons given by the High Court for its conclusion that the appellant was not having the requisite qualification prescribed under the Rules. Mr. Rao, counsel for the appellant relied upon a decision of this Court in Satesman (Private) Ltd. vs H.R. Deb & Ors., ; at page 621 of the Reports, Hidaytullah, CJ. speaking for the Constitution Bench indicated: "The High Court in a quo warranto proceeding should be slow to pronounce upon the matter unless there is a clear infringement of the law" It the circumstances which we have narrated, it is indeed difficult to hold that the appellant did not have the requisite qualification. Ayurveda is the traditional method of medical attention preva 369 lent in this country. Modern science and people associated with the medical faculties of the modern age have gradually accepted the position that Ayurveda provided a fully developed medical process. In the post medieval India the system had suffered a set back but in recent years, the Ayurved system has been revived. In the post independence period, the system has been accepted as a regular course of study and recognised as a system of therapy. The High Court should have given due consideration to the background and the history of the matter. There is clear material that the petitioners before the High Court were the once upon a time students of the appellant. Ordinarily one would expect obligations, piety and reverence in the conduct of the writ petitioners towards the appellant. This expectation would be more justified in the traditional system of Ayurved culture. Surprisingly that seems to have been totally wanting. The appellant has, on the other hand, alleged that the writ petition was the outcome of malice and ill will. The High Court did not appropriately advert to this aspect. We are of the view that in the facts of this case, the reasonable conclusion to reach should have been that the writ petitioners had failed to establish that the appellant did not possess the requisite qualification. The appeal has, therefore, to be a11owed, the judgment of the High Court has to be set aside and the writ petition has to be dismissed with costs. Now we come to the appeal challenging the reversion. The writ petition has been dismissed on the sole ground that the appellant was not possessed of the requisite qualification and, therefore, was not entitled to continue as Director. Now that we have reversed the finding of the High Court on that score, the judgment of the High Court cannot be sustained. Reversion as admitted by the State Government in its counter in the High Court was grounded upon non possession of the requisite qualification With our finding in the connected appeal. the order of the High Court cannot be sustained. Nor can the order of reversion be. The other appeal too is allowed with costs. The appellant shall be treated to have been regularly appointed as Director and shall be treated to have retired in the post of Director the order of reversion notwithstanding. He shall be entitled to all the benefits prescribed for the post of Director from the date he came to the post till he retired. All his dues shall be paid to him within three months from today. Consolidated hearing fee of Rs.5,000 is allowed to the appellant and this shall be paid by the respondent State alone. P.S.S. Appeals allowed.

% The daily rated Vaccinators/lmmunisors working under the Delhi Municipal Corporation for more than eight years sought regularisation of their services and payment of wages at par with regularly appointed incumbents doing the same kind of work. On a reference the Industrial Tribunal took the view that the workmen concerned were not entitled to be regularised. Allowing the appeal by special leave, ^ HELD: The Vaccinators/lmmunisors involved in the appeal are entitled to be regularised. [176G] There was no justification for the respondent Corporation extracting the same amount of work from the workmen concerned on payment of daily wages at rates lower than the minimum salary which was being paid to other workmen who have been recruited regularly even though the workmen involved in the case have been working for a number of years. [176C D] The respondent Corporation to pay them wages at the rate equivalent to the minimum pay in the pay scale of regularly employed Vaccinators/lmmunisors without any increments with effect from the date of reference. They are also entitled to the corresponding dearness allowance. [176F] The respondent Corporation to prepare a scheme on a rational basis for absorbing as far as possible the workmen involved in the case 175 as regular Vaccinators/lmmunisors within six months. Process of absorption to be completed within eight months. Arrears of salary and allowance to be paid within four months. 1 5 [176G H] Daily Rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch vs Union of India & Ors., and U.P. Income tax Department Contingent Paid Staff Welfare Association vs Union of India & Ors. ,(W.P. No. 1870 of 1986), followed.

No. 1547 of 1975. (Appeal by Special Leave from the Judgment and Order dated the 24 1 1974 of the Kerala High Court in O.P. No. 5566/72) Y.S. Chitale, A. section Nambiar, for the appellant. K, T. Harindranath, K.R. Nambiar, for respondents Nos. 1 3 and 4. T.S. Krishnamoorthy Iyer, N. Sudhakaran, for respond ents Nos. 5 & 6. The Judgment of the Court was delivered by KAILASAM, J. This appeal is by special leave granted by this Court against the judgment of the High Court of Kerala in O.P. No. 5566 of 1972 by respondents 4 to 8 and 13 before the High Court. The respondents herein filed the writ petition for the issue of the Writ of Certiorari calling for records relating to exhibit P 10, GO Rt. No. 3386/69/DD dated 23rd October, and exhibit P15 and quash the same and to issue a writ of mandamus directing the respondents 1 and 2 who are the State of Kerala represented by the Chief Secretary, Government of Kerala, and the Director of Panchayats to forbear the implementation of exhibit P12 and further direct them to implement exhibit P 8 grading 3 list or in the, alterna tive to issue a writ of mandamus directing the State of Kerala to consider and dispose of exhibit P13 and similar repre sentations by respondents 3 and 4 on merits. It was also prayed that a writ of certiorari quashing exhibit P17 in so far as it related to the petitioners and respondents 3 to 18 in the writ petition be issued and also to issue a writ of mandamus compelling the respondents 1 and 2, State of Kerala and the Director of Panchayats, to assign the writ petition ers the appropriate ranks in the cadre of Executive Officers in the Panchayat Services. The High Court allowed the writ petition and set aside the list exhibit P17, the order exhibit P12 and the order exhibit P15 dismissing the appeal petition exhibit P14and directed that a fresh list be prepared in accordance with the principles laid down in exhibit P16 in the light of the judgment of the High Court. Aggrieved by the decision of the High Court the appellants have preferred this appeal. The writ petition was contested by 18 respondents. Respondents 3 to 10 were Panchayat executive officers of the Malabar area functioning under the Madras Village Panchayat Act, 1951, on 31st December, 1961. Respondents 11 to 18 were Panchayat Officers functioning as such on 31st Decem ber, 1961 under the Travancore Cochin Panchayats Act, 1950. The Kerala Panchayats Act, of 1960 received the assent of the Governor on 8th December, 1960, and was pub lished in Kerala Gazette Extraordinary No. 119 dated 9th December, 1960. It is common ground that the respondents became Government servants on and from 1st January, 1962. 689 On 15th May, 1961, under exhibit P1 the Government passed an order that all Panchayat Officers/executive officers who continue to hold their appointments at the time when the Act came into force will De absorbed as Panchayat executive officers in the new Panchayats. The same order provided that the staff of the Malabar District Board shall be ab sorbed as Panchayat executive officers in suitable grades according to their qualifications, grades and suitability. In December, 1961, 17 Panchayat officers were to be appointed on a scale of pay higher than the scale applicable to the Panchayat executive officers. The Public Service Commission selected 17 Panchayat executive officers who were on the scale of pay Rs. 80 150 and drew up a list on 27th December, 1961. They were appointed as Panchayat Inspectors under exhibit P8 on 28th December, 1961. To fill up these vacancies 17 of the Panchayat executive officers who were in Grade H on the scale of pay Rs. 40 120, the respond ents 3 to 18 were appointed. The 5 appellants before us were appointed as executive officers on the grade I Rs. 80 250 as and from 1st January, 1962. The respondents who were the petitioners in the writ petition were integrated in the service. The Government passed orders laying down the principles of integration of the District Board employees and the Panchayat executive officers and Panchayat Officers. The impugned orders under the writ petition are exhibit P10, exhibit PI2 and exhibit P15. It is also prayed that exhibit P17 may be quashed. The Government in exhibit P10 came to the conclusion that the vacancies on the advice of the Public Service Commission and the appointment of those that had been advised on 28th December. 1961, arose only on the dates enumerated in the order exhibit P10 com mencing from 30th December, 1961, and ending with 2nd Janu ary, 1962 and that the appointment can only be on occurrence of the vacancies. We do not see on what basis exhibit P10 could be challenged. exhibit P10 refers to G.O. MS No. 93/62 dated 13th February, 1962. By the G.O. of 1962, 16 respond ents in the writ petition were promoted as executive offi cers Grade I on the advice of the Public Service Commission. The promotion of the respondents in the writ petition having been ordered as early as 13th February, 1962, without chal lenging that order a subsequent order which determined the date of their commencement service cannot be challenged. In fact, the respondents were appointed to the higher posts on 28th December, 1961, and they took charge on 30th December, 1961, 31st December, 1961, 1st January, 1962 and 2nd Janu ary, 1962. The respondents in this petition were integrated into the service only on 1st January, 1962. Their position in the service was to be determined by the Government later. If the respondents were aggrieved at the posting to the higher post of the present appellants and others they ought to have even challenged promotion which was made on 1st January, 1962. Not having questioned the legality of the promotion or the G.O. of 1962 it is 'too late for them to question the validity of the G.O. of 1969 filing a writ petition in the year 1972. Apart from this insurmountable objection even on merits the respondents have no claim. The Government passed exhibit R1 dated 31st January, 1965, laying down the principles of integration of the District 690 Board employees and the Panchayat executing officers and Panchayat Officers. It provided that the integration must be based on functional parity. exhibit P12 is a G.O. dated 5th May, 1970 The G.O. refers to the earlier G. O. dated 13th February, 1962, and 24th June, 1969, and states that the names of the 17 executive officers, the appellants and others, are given rank under executive officers Grade I as on 6th January, 1962. The gradation list is P 17 dated 22nd July, 1972. After referring to the earlier G. O. the Director of Panchayats approved a final gradation list of Executive Officers of Panchayats as on 6th January, 1962. The appellants are ranked as 58, 59, 60, 61, 62 etc. The respondents made representations against exhibit P12 but these representations were not accepted and a list exhibit P8 was drawn up. The respondents again objected to the list and subsequently exhibit P12 was prepared. Objections(P14) were raised to exhibit P12 but they were rejected by order exhibit P15 and final list exhibit P17 was published in accordance with the suggestions made in exhibit P12. The contention on behalf of the respondents is that the order under exhibit P12 is against the position taken by the Government in exhibit P10) and Pl0(a) and the Director had no authority to prepare a list in contravention of Exs. P10 and Pl0(a). exhibit P12 was challenged on the ground that it is not in accordance with exhibit P 16 which settled the principles to govern the integration. It was therefore submitted that exhibit P12 and P17 must be quashed. Strong reliance was placed on the order of the Government dated 15th May, 1961, which while it provided that Panchayat Officers Executive Officers who continue to hold their appointments at the time when the Act comes into force will be absorbed as Panchayat Executive Officers in the new Panchayats, secured the right of the staff of the District Board by providing that the staff of the Malabar District Board shall be absorbed as Panchayat Executive Officers in suitable Grades according to their qualifications, grades and suitability. On the basis of the principle of integration above cited it was submitted that if the vacancies in which the appellants and other Panchayat Executive Officers were absorbed arose after 1st January, 1962, the respondents would be entitled to be integrated along with the Panchayat Executive Officers and as they were drawing the same pay they ought to have been given an equal ranking. We have already pointed out that these appoint ments were made before 31st December, 1961, and as such the respondents cannot have any claim. The appointments of the appellants and other Panchayat Executive Officers were made before 31st December, 1961, and as the integration was to take effect from 1st January, 1962, they cannot have any grievance. Further, it will be seen from 6.0. MS.97/67/A & RDD dated 18th March, 1967, which refers to absorption of various categories of staff of the defunct Malabar District Board in the Department of Local Bodies, it is stated in Paragraph 3 that while 9 U.D. Clerks will be equated to the posts of Panchayat Executive Officers, 2nd Grade, 21 Lower Division Clerks and 8 Revenue Inspectors and 4 clerical attenders will be equated to the posts of the Panchayat Executive Officers 3rd grade. It is stated that respond ents 1 to 4 come under this category and are only 3rd Grade Executive Officers. It will thus be seen that the respond ents were not equated with the appellants and other Pan chayat Executive Officers when they were integrated from the District Board service. 691 The persons similarly situated as the respondents herein who were integrated from the District Board services filed writ petitions before the High Court impleading the present appellants challenging the gradation and failed in their attempt. The earliest petition is in O.P. No. 1431 of 19 '70. Justice Isaac who heard the petition observed that the petitioners came in the integrated service as 3rd Grade Executive Officers and were promoted to 2nd Grade with effect from 6th February, 1968, while respondents 3 to 10 (some of whom are appellants before us) have been promoted as early as 16th February, 1962, as 1st grade officers. The learned Judge further observed, "Even ignoring this, respondents 3 to 10 were I Grade Executive Officers from 16 2 1962, while the Petitioner has become even II Grade Executive Officer only with effect from 6 2 1966. " As the petitioner before the learned Judge was holding a post much inferior to the posts held by respond ents 3 to 10 from 1st February, 1962, onwards, he dismissed the petition being devoid of any merit on 24th May, 1972. Another writ petition No. O.P. No. 6423 filed by one of the persons integrated from the District Board Services, against the present appellants and others was also dismissed by Justice Isaac on 27th June, 1973. A writ appeal filed against the order of Justice Isaac in O.P. No 1431 of 1970 was summarily dismissed by the Bench of the Kerala High Court. While the earlier judgments were all decided against the respondents, the Kerala High Court in the judgment under appeal took a different view. The decision under appeal proceeds on the basis that a regrettable mistake crept into the judgment in O.P. No. 1431 of 1970 and the earlier deci sion proceeded on the basis that there was a III Grade mentioned in G.O. 814 dated 17th November, 1962. The High Court was of the view that there was a III Grade under the G.O. above referred to the earlier decision missed the fact that these Grades were not applicable on 1st January, 1962. Though G.O. 814 of 1962 was ,not placed before us we are not sure whether there was any mistake in the earlier judgment for the G.O. MS 97/67 dated 18th March, 1967, refers to persons being transferred from the Malabar District Board as Panchayat Executive Officers III Grade. Be that as it may we are satisfied that the respondents are not entitled to the reliefs prayed for by them in the writ petitions. As the appellants were promoted to a higher post before the respondents were integrated into the Government service on 1st January, 1962. Further throughout the appellants have been treated as occupying a higher post and respondents much lower post. Though the promotion of the appellants was before 1st January, 1962, and was confirmed by various orders of the Government the respondents herein did not choose to challenge the orders till the year, 1974. In the circumstances, we are satisfied that the order of the Kerala High Court has to be set aside and the appeal is allowed with costs. P.B.R. Appeal allowed.

Under the scheme which culminated in the promulgation of the Central Secretariat Clerical Service Rules, 1962 (effective from 1 5 1954), it was provided that those offi cers who were otherwise eligible for confirmation in the services at the initial constitution should also pass a typewriting test to be held by the Union Public Service Commission within a period of two years from 1 5 1956. The names of the petitioners who had not passed the typewriting test did not figure in the gradation list dated 7 2 1972 prepared for making promotions to the next grade of Assist ants. The petitioners challenged the orders on several grounds, namely, (i) The principle of seniority contained in the Ministry of Home Affairs ' O.M. dated 22 6 1949 as inter preted by this Court in ; had not been ap plied to them; (ii) The impugned list was formulated in an arbitrary fashion; (iii) Their seniority must date back to their dates of promotion as Upper Division Clerks; and (iv) Rule 17 of Central Secretariat Clerical Service Rules, 1962 being inconsistent with O.M. dated 22 6 1949 and 22 2 1959 violates Articles 14 and 16 of the Constitution. The re spondent raised three objections to the petitioners ' case in their returns, namely, (i) There was a reasonable criterion for the difference made between the case of the petitioners and those placed on the impugned list of 7 2 1972 who are above the petitioners because they have passed the pre scribed typewriting test so that Articles 14 and 16 of the Constitution could not be said to have been violated in this case whateverelse may have been infringed; (ii) The peti tioners not having assailed the order of confirmation of the scheme on 1 5 1958 prescribing a reasonable ground for distinction between the class of cases in which typewriting tests have been passed to which the contesting respond ents in the impugned list below and the class of the peti tioners which had not passed the test. the petitioners could not challenge the impugned scheme of 1972 at all; (iii) A number of persons have been promoted and put above the petitioners since 1962 acting under the scheme providing the typewriting test so that there was inordinate delay in filing the petition under article 32 of the Constitution. Dismissing the petition, the Court, HELD: (1) The alleged violation of the rule of seniority according to length of service was not decisive even ac cording to the Ministry of Home Affairs O.M. dated 22 6 1949. This memorandum shows that it was only directory laying down a general rule of seniority which was presumably subject to other exceptional factors which could also be taken into account. [666 A] P.C. Sethi & Ors. vs Union of India & Ors. [1975] 3 S.C.R. 21, followed. (2) A rule prescribing a typing test cannot be said to be unconnected with the duties of clerks who desire a promo tion to the next grade. A discrimination made on such a ground could not violate Articles 14 and 16 of the Constitu tion whateverelse it may be said to violate. [668 E] (3) A violation of statutory or other kind of rule in a particular case cannot amount to a violation of Articles 14 and 16 of the Constitution. There may also be cases in which a rule made is ultra vires for unreasonableness or 665 an any other ground and should not be deemed to exist. In such_ a case, if the rule is enforced it may on the facts of the particular case amount to a violation of Articles 14 and 16 of the Constitution also. The petitioners case is not such a case at all. [668 E F] (4) The principles laid down by this Court in Joginder Nath and Ors. vs Union of India & Ors. and in Amrit Lal Berry vs Collector of Central Excise ; , apply to the petitioners case regarding laches on their part. [669 C El

Appeal Nos. 282 & 283 of 1959. Appeals by special leave from the judgment and decree dated December 18, 1956, of the Bombay High Court at Bombay in Second Appeals Nos. 233 and 185 of 1955 respectively. G. section Pathak, O. C. Mathur, J. B. Dadachanji and Ravinder Narain, for the appellants. section G. Patwardhan and K, R. Choudhri, for the respondents. May 2. The Judgment of the Court was delivered by SINHA, C.J. These two appeals, by special leave, directed against the judgment and decree of a single Judge of the Bombay High Court, raise a common question of law, and have. therefore, been heard together. This judgment will govern both the cases. The appellants were plaintiff landlords, 710 and the respondents were tenants in possession of certain lands which were situate in the erstwhile State of Baroda before it became part of the State of Bombay, by merger. The Bombay Tenancy and Agricultural Lands Act (Bombay Act LXVII of 1948) which hereinafter will he referred to as the Act was extended to Baroda on August 1, 1949. The suits out of which these appeals arise had been instituted by the appellants on the basis that the tenants respondents had become trespassers on the service of notice in March 1950, with effect from the beginning of the new agricultural section in May 1951. As the defendants did not comply with the terms of the notice and continued in possession of the lands, to which they had been inducted, the landlords instituted suits for possession in the Civil Court. The Trial Courts and the Court of Appeal decreed the suits for possession. But on second appeal by the tenants, the learned Single Judge. who heard the second appeals, allowed the appeals and dismissed the suits with costs throughout. It is not disputed that if the provisions of the Act were applicable to the tenancies in question, the plaintiffs ' suits for possession must fail, because these were instituted in the Civil Courts, which have Jurisdiction to try the suits only if the dependents were trespassers. It is equally clear that if the tenants could take advantage of the provisions of the Act, any suit for possession against a tenant would lie in the Revenue Courts and not in the Civil Courts. But reliance was placed upon the notification issued by the Bombay Government on April 24, 1951, to the following effect : "In exercise of the powers conferred by clause (d) of sub section (1) of Section 88 of the Bombay Tenancy and Agricultural Lands Act, 1948 (Bombay LXVII of 1948) the Government of Bombay is pleased to specify the area 711 within the limits of the Municipal Borough of Baroda City and within the distance of two miles of the limits of the said Borough, as being reserved for Urban, non agricultural or industrial development". The learned Judge of the High Court, in disagreement with the Courts below,, held that under provisions of section 3A(1) of the Bombay Tenancy Act, 1939, as amended, a tenant would be deemed to be a protected tenant from August 1, 1950, ' and that vested right could not be affected by the notification aforesaid, issued by the Government under section 88 (1)(d) which had the effect of putting the lands in question out of the operation of the Act. In other words, the learned Judge held the notification had no retrospective effect so as to take away the protection afforded to the tenants by a. 3A, aforesaid. The learned counsel for the appellants contended. in the first instance, that the notification, set out above, under section 88 (1)(d) operated with effect from December 28, 1948, when the Act came into force. In this connection, reliance was placed upon the decision of this Court, pronounced by me sitting in a Division Court, in the case of Sakharam vs Manikchand Motichand Shah, (1) in these words : "The provisions of a. 88 are entirely pro spective. They apply to lands of the descrip tion contained in cls. (a) to (d) of section 88(1) from the date on which the Act came into operation, that is to say, from December 28, 1948. They are not intended in any sense to be of a confiscatory character. They do not show an intention to take away what had already accrued to tenants acquiring the status of 'protected tenants". 712 It is necessary, therefore, to make some observations explaining the real position. In that case, the question then in controversy had particular reference to section 88(1)(c), which is the only provision quoted at page 2 of the blue print of the judgment. That case had nothing to do with el. (d) of section 88(1). In that case, the lands in dispute lay within two miles of the limits of Poona Municipality. It is clear, therefore, that the inclusion of el. (d) of section 88(1) was a slip and certainly was not relevant for consideration in that case. The provisions of section 88(1) are as follows : "Nothing in the foregoing provisions of this Act shall apply: (a) to lands held on lease from the Govern ment a local authority or a co operative society; (b) to lands held on lease for the benefit of an industrial or commercial undertaking; (c) to any area within the limits of Greater Bombay and within the limits of the Municipal boroughs of Poona City and Suburban, Ahmedabad, Sholapur, Surat and Hubli and within a distance of two miles of the limit,% of such boroughs; or (d) to any area which the State Government may, from time to time, by notification in tile Official Gazette, specify as being reserved for urban non agricultural or industrial development. It will be noticed that cls. (a), (b) and (c) of section 88(1) apply to things as they were at the date of the enactment, whereas el. (d) only authorised the State Government to specify certainareas as being reserved for urban non agricultural or industrial development, by notification in the Official Gazette, 713 from time to time. Under cls. (a) to (c) of a. 88(1) it is specifically provided that the Act, from its inception did not apply to certain areas then identified; whereas el. (d) has reference to the future. Hence, the State Government could take out of the operation of the Act such areas as it would deem should come within the description of urban non agricultural or for industrial development. Clause (d), therefore, would come into operation only upon such a notification being issued by the State Government. The portion of the judgment, quoted above, itself makes it clear that the provisions of section 88 were never intended to divest vested interests. To that extent the decision of this Court is really against the appellants. It is clear that the appellants cannot take advantage of what was a mere slip in so far as cl. (d) was added to the other clauses of s.88(1), when that clause really and did not fall to be considered with reference to the controversy in that case. In other words, this Court never intended in its judgment in Sakharam 's case`e(1) to lay down that the provisions of cl.(d) of s.88 (1) aforesaid were only prospective and had no retrospective operation. Unlike cls. (a), (b) and (c) of s.88(1), which this Court held to be clearly prospective, those of cl.(d) would in the context have retrospective operation in the sense that it would apply to land which could be covered by the notification to be issued by the Government from time to time so as to take those lands out of the operation of the Act of 1948, granting the protec tion. So far as cls. (a), (b) and (e) are concerned, the Act of 1948 would not apply at all to lands covered by them. But that would not take away the rights conferred by the earlier Act of 1939 which was being repealed by the Act of 1948. This is made clear by the provision in s.89(2) which preserves existing rights under the repealed Act. Sakharam 's case, (1) was about the effect of cl. (c) on (1) ; 714 the existing rights under the Act of 1939 and it was in that connection that this Court observed that s.88 was prospective. But el. (d) is about the future and unless it has the limited retrospective effect indicated earlier it will be rendered completely nugatory. The intention of the legislature obviously was to take away all the benefits arising out of the Act of 1948 (but not those arising from the Act of 1939) as soon as the notification was made under el. This is the only way to harmonise the other provisions of the 1948 Act, conferring certain benefits on tenants with the provisions in el. (d) which is meant to foster urban and industrial development. The observations of the High Court to the contrary are, therefore, not correct. But the matter does not rest there. The notification of April 24, 1951, was cancelled by the State Government by the following notification dated January 12, 1953 "Revenue Department, Bombay Castle, 12th, January, 1953. Bombay Tenancy and Agricultural Landis Act, 1948. No.9361/49 : In exercise of the powers conferred by clause (d) of sub section (1) of Section 88 of the Bombay Tenancy and Agri cultural Lands Act, 1948 (Bombay LXVII of 1948). The Government of Bombay is pleased to cancel Government Notification in the Revenue Department No.9361/49 dated the 24th/25th April, 1951". It would thus appear that when the matter was still pending in the Court of Appeal, the judgment of the lower Appellate Court being dated September 27, 1954, the notification cancelling the previous notification was issued. The suit had, therefore, to be decided on the basis that there was no notification in existence under s.88(1)(d), which could take the disputed lands out of the operation 715 of the Act. This matter was brought to the notice of the learned Assistant Judge, who took the view that though, on the merger of Baroda with Bombay in 1949, the defendants had the protection of the Act, that protection had been taken away by the first notification ' which was cancelled by the second. That Court was of the opinion that though the Appellate Court was entitled to take notice of the subsequent events, the suit had to be determined as on the state of facts in existence on the date of the suit, and not as they existed during the pendency of the appeal. In that view of the matter, the learned Appellate Court held that the tenants defendants could not take advantage of the provisions of the Act, and could not resist the suit for possession. In our opinion, that was a mistaken view of the legal position. When the judgment of the lower Appellate Court was rendered, the position in fact and law was that there was no notification under cl.(d) of s.88(1) in operation so as to make the land in question immune from the benefits conferred by the Tenancy Law. In other words, the tenents could claim the protection afforded by the law against eviction on the ground that the term of the lease had expired. But it was argued on behalf of the appellants that the subsequent notification, cancelling the first one, could not take away the rights which had accrued to them as a result of the first notification. In our opinion, this argument is without any force. If the landlords had obtained an effective decree and had succeeded in ejecting the tenants as a result of that decree, which may have become final between the parties, that decree may not have been re opened and the execution taken thereunder may not have been recalled. But it was during the pendency of the suit at the appellate stage that the second notification was issued canceling the first. Hence, the Court was bound to 716 apply the, law as it was found on the date of its judgment. Hence, there is no question of taking away any vested rights in the landlords. It does not appear that the second notification, canceling the first notification, had been brought to the notice of the learned Single Judge, who heard and decided the second appeal in the High Court. At any rate, there is no reference to the second notification. Be that as it may, in our opinion, the learned Judge came to the right conclusion in holding that the tenants could not be ejected, though for wrong reasons. The appeals are accordingly dismissed, but there would be no order as to costs in this Court, in view of the fact that the respondents had not brought the second notification cancelling the first to the pointed attention of the High Court. Appeal dismissed.

The Government of India under section 24 of the , ordered an enquiry into the disaster in the respondent 's colliery. The Court of inquiry submitted its reporto 476 September 26, 1955, and found inter alia that the accident was due to the negligence on the part of the management and therefore ordered the owners to pay the expenses of the en quiry as provided by r. 22 of the Mines Rules, 1955. The amount of the expenses to be paid were, however, not quanti fied in the report. At the request of Chief Inspector, Mines, the judge of the Court of Inquiry after due notice to the parties concerned quantified the expenses by his order dated September 7, 1956. The respondents petitioned under article 226 of the Constitution challenging the order quantifying the expenses on three grounds (1) the Court of Inquiry became functus officio after it had 'submitted its report and therefore the judge had no power left to pass the order quantifying the expenses. If the said order was to be treated as review of the order awarding expenses it would still be void as there was no power of review in the Court of Inquiry (3) When the order quantifying the expense was passed the two assessor were not present and were not associated with the enquiry therefore, the judge could not pass the order alone. The High Court allowed the writ petition adding that it was not interfering with the order relating to expenses made by the judge in his report dated September 26, 1955. Held, that when an order to pay expenses is passed without quantifying the amount in a report by a Court of Inquiry, it necessarily carries with it the implication that the person appointed to hold the enquiry would quantify the expenses later in materials being placed before him as otherwise such an order would be rendered completely nugatory. Where no time was fixed within which the report had to be made by the Court of enquiry it cannot be said that the period for which the Court of enquiry was appointed necessarily came to an, end with the submitting of the report and this Court of Inquiry became functus officio. Held, further, that when the report itself contained the order for payment for expenses, the later order is merely a quantification of the earlier order and would be on a par with what happens everyday in courts which pass decrees with costs. When giving judgment, courts do not quantify cost in the judgment. Therefore the order dated September 7, 1956, cannot be treated as a review or any variation of the order pawed in the report of September 26, 1955, which the judge had no powers to pass. Held, also, that it was open to the judge of the Court of inquiry to quantify the expenses and that it was not necessary that at that stage the assessors should be associated with him. Under section 24(1) of the Act$ the enquiry is held by a competent 477 person for the purpose, and assessors are appointed to assist the person to hold the enquiry and the assessors need not be associated with him in all orders which are in 'the nature of ministerial order and quantification of expenses must be treated as an order of a ministerial nature.

iminal Appeal No. 97 of 1957. Appeal by special leave from the judgment and order dated November 20,1956, of the Andhra Pradesh High Court at Hyderabad in Criminal Confirmation Case No. 18 of 1956 and Criminal Appeal No. 240 of 1956 arising out of the judgment and order dated April 25, 1956, of the Court of the Sessions Judge at Karimnagar in Criminal Case No. 9/8 of 1956. R. C. Prasad, for the appellant. R. H. Dhebar and T. M. Sen, for the respondent. July 15. The Judgment of the Court was delivered by SINHA J. The main question for determination in this appeal by special leave is whether and, if so, how far non compliance with the provisions of sections 173(4) and 207A(3) of the Code of Criminal Procedure, has affected the legality of the proceedings and the trial resulting in the conviction of the appellant. The appellant was tried by the learned Sessions Judge of Karimnagar in what used to be the State of Hyderabad (now part of the State of Andhra Pradesh), under section 302 of the Indian Penal Code, for the murder of his brother Baga Rao, and sentenced to death. The conviction and the sentence were affirmed by the High Court of Judicature of Andhra Pradesh, at Hyderabad, on appeal and on a reference by the learned Sessions Judge. Along with the appellant, three other persons, named Lingarao, the appellant 's brother, Narsingrao, the nephew of the appellant and son of Lingarao 285 aforesaid, and Mahboob Ali, said to be a close friend of the other accused, were also tried under section 302, read with sections 34 and 109 of the Indian Penal Code, and convicted and sentenced to imprisonment for life. Their appeals also were heard along with the appeal preferred by the appellant and by a common judgment, the High Court dismissed all the appeals and confirmed the convictions and sentences passed against all the four accused persons. This appeal concerns only Narayan Rao who has been sentenced to death by the courts below. The facts of the case are short and simple. The murdered man Baga Rao, who was an excise contractor, had separated from his other brothers aforesaid, and had partitioned the family lands. There were differences amongst the brothers which had led to arbitration proceedings a few months earlier, which did not satisfy Baga Rao. On the Saturday previous to the Monday, December 26, 1955, which was the day of the occurrence, there was a quarrel between Baga Rao on one side and Lingarao and Narsingrao on the other in the field said to belong to Baga Rao. The parties reside in village Kollamaddi taluk Sircilla, district Karimnagar. At about 7 a.m. "on the morning of December 26, 1955, Baga Rao had been proceeding from his village towards Nirmal side. The accused, who appears to have been lying in wait for Baga Rao, came running from behind and the appellant fell upon Baga Rao with his knife. The other accused persons caught hold of Baga Rao and the appellant inflicted several injuries on his person with his knife (M.O. 13). At first, Baga Rao got himself released from the grip of Narsingrao but the latter chased him and overtook him. All the accused overpowered him by catching hold of the different parts of his body, and the appellant stabbed him in the regions of the neck, abdomen, thigh and other parts of his body, the fatal injuries being in the neck and the abdomen. At the time of the occurrence, P.W. 1, father 's brother of the appellant, who also was proceeding towards Nirmal, saw most of the occurrence and then, out of fear, hid himself in a hut nearby. P.W. 2 a boy of about 12 286 years a student of 4th standard in a Government school, was also proceeding in that direction that morning, and saw the whole occurrence from beginning to end from a short distance of a few yards. This young boy claimed the murdered Baga Rao as his maternal uncle, stating that his mother is the sister of Baga Rao. But the wife of the murdered man, P.W. 6, stated in cross examination that P.W. 2 Ramchander Rao is distantly related to her husband and that he is not the son of her husband 's sister. The father of the murdered man, Chatriah, aged about 85 years, who has been examined as defence witness No. 1, disclaimed all relationship with the said P.W. 2, but stated that he is related to Dharmiah, P.W. 1, who is no other than his full brother. Chatriah, the father, had been examined to support the defence suggestion that it was P.W. 1, Dharmiah Rao and his son who got Baga Rao murdered and falsely implicated the accused persons. That evidence has naturally not been accepted by the courts below because such a case was never sought to be made out at any previous stage of the proceedings until his examination in court. D.W. 2 who claims to be the son in law of P.W. 1, was examined only to prove that there had been a rivalry between P.W. I and the accused persons for the purchase of some land. His evidence was rejected as vague and of no relevance. The case against the appellant, as also against other accused persons not before this Court, rested mainly on the evidence of Dharmiah P.W. I and Ramchander Rao, P.W. 2, who figure as the eye witnesses. Besides their testimony, there is the evidence of the recovery of the blood stained garments from the houses of the accused persons and the blood stained knife found near the dead body, and identified in court as belonging to the appellant, which were all found by the chemical examiner, to have stains of human blood. The courts below have relied upon the evidence of the eye witnesses, corroborated by the incriminating circumstances aforesaid, and have agreed in convicting and sentencing the accused as stated above. 287 We have been taken through the evidence in this case and after having heard counsel for the appellant, we do not see any reasons to differ from the courts below in their estimate of the evidence adduced by the prosecution in support of the case against the appellant. Hence, in our opinion, there is no ground for interference with the conclusions of the courts below on the merits of the case. It now remains to consider the question of law which has been seriously pressed upon us. It has been argued, as was admitted by the learned Government Advocate before the High Court, that the provisions of sections 173(4) and 207A(3) of the Code of Criminal Procedure, have not been complied with, and that, as a necessary consequence of those omissions, the entire proceedings and the trial are vitiated. It is convenient at this stage to set out the course, in some respects rather unusual, of the proceedings before the police and the committing magistrate as also at the trial before the learned Sessions Judge. When P. W. 1 aforesaid informed Gopal Rao (P. W. 8) Police Patel about the occurrence, he drew up the first information report at about 11 a.m., on December 26. All the four accused were named as the culprits in the first information report. He issued that report to the station house, Gambhiraopet, about 5 miles from the place of occurrence. The Sub Inspector of police, P.W. 11, proceeded to the spot and prepared the inquest report. He found the throat of the deceased cut, besides other injuries on the left side of the stomach and right thigh and three wounds on the left hand. Two panchas, Lachmayya and Ramayya (P.W. 10), were called by the police officer and in their presence and under their signatures, he entered a long note as to what the panchas saw on the spot, and then follows the substance of the statements of the eye witnesses, P.Ws. 1 and 2, aforesaid. This record of the statements of the two eye witnesses, aforesaid, made the same day when the occurrence took place, has been made to serve the double purpose of what the police officer and the panchas aforesaid saw and heard at the spot, as also the record of the substance of the 288 two main witnesses for the prosecution before the investigating police officer. The post mortem report, made the next day, December 27, corroborated the nature of the injuries stated above, and added that the incised wound across the lower part of the neck, had cut the vital organs like trachea, oesophagus and the jugular vein. The prosecution also proved, as exhibit P 5, the panchnama prepared the same day and signed not only by the panchas but purporting to have been signed also by the accused persons. This document is a record which is a complete confession of the crime from the beginning to the end by all the accused persons. This was highly irregular, but fortunately, it was not a jury trial and has not, therefore, done much harm to the accused persons, but certainly the provisions of the Evidence Act and of the Code of Criminal Procedure have not been observed. On January 10 and 11, 1956, the learned Munsiff Magistrate recorded the full length statements of Ramchander Rao as P.W. 1, and of Dharmiah Rao, P.W. 2, under section 164 of the Code of Criminal Procedure. Apparently, the police, apprehending that those two persons were related to three out of the four accused, took the precaution of having their statement so recorded. The police report under section 173 of Criminal Procedure Code was made by the investigating police officer on January 11, 1956, and was placed before the Munsiff Magistrate on January 12. It gives a very complete statement of the prosecution case and the names and full description 'of the witnesses to be examined in support of the prosecution case. The learned Munsiff Magistrate appears to have examined the investigating police officer as P.W. 1, and the two eye witnesses, Dharmiah and Ramchander Rao, as P.Ws. 2 and 3, and the medical officer as P.W. 4, on or about February 15, 1956. The record of the statement of the medical officer appears in the paper book, but the evidence of the other three witnesses does not appear in the paper book. On February 16,1956, the learned Munsiff Magistrate put very detailed questions to each one of the accused persons and placed the evidence of all the witnesses examined by him in detail, to the 289 accused persons who have denied their complicity in the crime and who alleged enmity with the two eyewitnesses aforesaid. The committal order, if any, is not before us. The learned Munsiff Magistrate framed a charge for murder under section 302, against the appellant, and ' for participation in the crime, against the other three accused, under section 302, read with sections 34 and 109 of Indian Penal Code. He again put a number of questions to each one of the accused persons as to what they had to say against the charges framed and as to what they had to say in their defence. It does not appear that before the learned Munsiff Magistrate who was holding his inquiries under section 207A(3) and (4), any grievance was made that the provisions of section 173(4) had not been complied with by the police officer in charge of the investigation. Nor does it appear that any request was made, to call upon the police officer concerned, to furnish to the accused, copies referred to in sub section (4) of section 173 of the Code. There is no indication in the record that even when the accused persons were placed on their trial before the learned Sessions Judge, any such grievance or any such request was made to that court. The cross examination of the eye witnesses aforesaid has been done at some length, and there are also references to the record made by the police officer during the investigation. It was only after the conviction and sentences of the accused persons by the learned Sessions Judge, when the appeals were preferred to the High Court, that the ground is raised, for the first time, in the memoranda of appeal in these terms: "The lower court has lost sight of the fact that the mandatory provisions of sections 173, 207A and other sections of the Code of Criminal Procedure have not been complied with, and this fact has caused a complete failure of justice." The High Court, while dealing with this ground of appeal, has observed that the learned Government Advocate, while conceding that the committing court had not complied with the provisions of those sections, had urged that the omission was not sufficient to 37 290 vitiate the trial unless the accused succeeded in showing that they had been prejudiced in their defence. They further observed that when the accused got the copies in the Sessions Court before the recording of the statement of the witnesses, it could not be said that the accused had been so prejudiced. The High Court finds, as a fact, that the accused got the necessary copies of the depositions of the witnesses in the Sessions Court before the statements of the prosecution witnesses were recorded by that court. The High Court also remarked that it was not denied that the copies were supplied a day earlier, but that there was nothing to show that the accused made any grievance that the time at their disposal was too short to enable them to cross examine the prosecution witnesses, or that they prayed for an adjournment of the case in order to enable them to effectively cross examine those witnesses. In view of these considerations, the High Court held that the accused had failed to show any prejudice. Before us, no attempt was made to show that the non compliance with the provisions of sections 173(4) and 207A(3) had caused any prejudice to the accused. The learned counsel for the appellant sought to argue that the omission had the effect of vitiating the entire proceedings ending in the trial of the accused, and that, therefore, ipso facto, a fresh trial became necessary irrespective of whether or not the accused had shown any prejudice. In other words, he contended that these illegalities rendered the proceedings null and void and that the Court need not stop to consider the question of prejudice. Section 173, sub section (4), of the Code of Criminal Procedure was amended by the Code of Criminal Procedure Amendment Act, 26 of 1955, by adding the following: "(4) After forwarding a report under this section, the officer in charge of the police station shall, before the commencement of the inquiry or trial, furnish or cause to be furnished to the accused, free of cost, a copy of the report forwarded under sub section (1) and of the first information report recorded under section 154 and of all other documents or relevant extracts 291 thereof, on which the prosecution proposes to rely, including the statements and confessions, if any, recorded under section 164 and the statements recorded under sub section (3) of section 161 of all the persons whom the prosecution proposes to examine as its witnesses. (5)Notwithstanding anything contained in subsection (4), if the police officer is of opinion that any part of any statement recorded under sub section (3) of section 161 is not relevant to the subject matter of the inquiry or trial or that its disclosure to the accused is not essential in the interests of justice and is inexpedient in the public interests, he shall exclude such part from the copy of the statement furnished to the accused and, in such a, case, he shall make a report to the Magistrate starting his reasons for excluding such part : Provided that at the commencement of the inquiry or trial, the Magistrate shall, after perusing the part so excluded and considering the report of the police, officer, pass such orders as he thinks fit and if he so directs, a copy of the part so excluded or such portion thereof, as he thinks proper, shall be furnished to the accused. " In order to simplify commitment proceedings preceding the trial of accused persons by a court of Session,s. 207A was added by way of amendment of the Code at the same time. In the added section 207A, sub sections 3 and 4, which are material portions of that section, are in these terms : " (3) At the commencement of the inquiry, the Magistrate shall, when the accused appears or is brought before him, satisfy himself that the documents referred to in section 173 have been furnished to the accused and if he finds that the accused has not been furnished with such documents or any of them, he shall cause the same to be so furnished. (4)The Magistrate shall then proceed to take the evidence of such persons, if any, as may be produced by the prosecution as witnesses to the actual commission of the offence alleged; and if the Magistrate is of opinion that it is necessary in the interests of justice 292 to take the evidence of any one or more of the other witnesses for the prosecution, he may take such evidence also. " It will thus appear that in cases exclusively triable by a court of Session, it is the duty of the magistrate, while holding a preliminary inquiry, to satisfy himself that the documents referred in s.173 have been furnished to the accused and if he found that the police officer concerned had not carried out his duty in that behalf, the magistrate should see to it that is done. After the accused have been furnished with the necessary documents, it is now required to record evidence of only such witnesses for the prosecution as had witnessed the actual commission of the offence charged against the accused and of such other witnesses as he may consider necessary in the interests of justice. From what has been said above, it is clear that the Munsiff Magistrate did record the evidence as required by sub section (4) of section 207A. But it has been found by the High Court, on the admission of the Government Advocate, that the provisions of sub section 3 of section 207A had not been complied with. It is not clear as to whether all the documents contemplated by section 173(4), quoted above, had not been furnished to the accused or documents other than the statements of witnesses had not been so supplied. The judgment of the High Court would appear to indicate the latter, but we shall proceed on the assumption that there was, an entire omission to carry out the provisions of subs. (4) of section 173, read with sub section 3 of section 207A. Does such an omission necessarily render the entire proceedings and the trial null and void; or is it only an irregularity curable with reference of the provisions of section 537 (a) of the Code ? In other words, are the provisions of section 173(4), read with section 207A(3) mandatory or only directory ? There is no doubt that those provisions have been introduced by the amending Act of 1955, in order to simplify the procedure in respect of inquiries leading upto a Sessions trial, and at the same time to safeguard the interests of accused persons by enjoining upon police officers concerned and magistrates, before whom such proceedings are brought, to 293 see that all the documents, necessary to give the accused persons all the information for the proper conduct of their defence, are furnished. It has rightly been contended on behalf of the appellant that it was the duty of the magistrate to see that the provisions aforesaid of the Code have been fully complied with. Magistrates, therefore, have to be circumspect, while conducting such proceedings, to see to it that accused persons are not handicapped in their defence by any omission on the part of police officers concerned, to supply the necessary copies. But we are not prepared to hold that non compliance with those provisions has, necessarily, the result of vitiating those proceedings and subsequent trial. The word "shall" occurring both in sub section (4) of section 173 and sub section (3) of section 207A is not mandatory but only directory, because an omission by a police officer, to fully comply with the provisions of section 173, should not be allowed to have such a far reaching effect as to render the proceedings including the trial before the court of Session wholly ineffective. Instead of simplifying the procedure, as was intended by the amending Act, as indicated above, the result contended for on behalf of the appellant, will, necessarily, result in re opening the proceedings and trials which may have been concluded long ago. Such a result will be neither conducive to expeditious justice nor in the interest of accused persons themselves. Certainly, if it is shown, in a particular case, on behalf of the accused persons that the omission on the part of police officers concerned or of the magistrate before whom the committal proceedings had fended, has caused prejudice to the accused, in the interest of justice, the court may reopen the proceedings by insisting upon full compliance with the provisions of the Code. In our opinion, the omission complained of in the instant case should not have a more farreaching effect than the omission to carry out the provisions of section 162 or section 360 of the Code. Courts in India, before such matters were taken to their Lord. ships of the Judicial Committee of the Privy Council, had taken conflicting views on the scope of section 537 of the Code in curing such omissions as aforesaid. In the 294 case of Abdul Rahman vs The King Emperor(1), their Lordships of the Judicial Committee had to consider the effect of non compliance with the provisions of section 360 of the Code. After considering the relevant provisions of the Code, their Lordships came to the conclusion that it was a mere irregularity which could be cured by the provisions of section 537. In the case of Pulukuri Kotayya and others vs King Emperor (2), the Judicial Committee had to consider the effect of breach of the statutory provisions of section 162 of the Code. The following observations of their Lordships, at pages 75 76, are a complete answer to the arguments advanced on behalf of the appellant before us, and we respectfully adopt them: " When a trial is conducted in a, manner different from that prescribed by the Code (as in N. A. Subramania Iyer 's case (3)), the trial is bad, and no question of curing an irregularity arises; but if the trial is conducted substantially in the manner prescribed by the Code, but some irregularity occurs in the course of such conduct, the irregularity can be cured under section 537, and none the less so because the irregularity involves, as must nearly always be the case, a breach of one or more of the very comprehensive provisions of the Code. The distinction drawn in many of the cases in India between an illegality and an irregularity is one of degree rather than of kind. This view finds support in the decision of their Lordships ' Board in Abdul Rahman vs The King Emperor (1), where failure to comply with section 360 of the Code of Criminal Procedure was held to be cured by sections 535 and 537. The present case falls under section 537, and their Lordships hold the trial valid notwithstand ing the breach of section 162. " In the instant case, the facts as stated above are extremely simple. It was a case of a day light murder by four persons acting in concert and way laying the deceased when lie was out on business that morning. Two persons, more or less related to three of the accused (1)(1929) L.R. 55 I.A. 96. (2)(1947) L.R. 74 I.A. 65, 75 76. (3) (1901) L.R. 28 I.A. 257. 295 persons, gave evidence as eye witnesses to the occurrence. Their statements were recorded by the police in some detail in the inquest report itself on the very day of the occurrence. There was not much scope for variations in their statements during police investigation and those before the court. It was a simple case of either believing or disbelieving those two eye witnesses. As already indicated, all the four accused persons including the appellant were named at the earliest opportunity in the first information report which was lodged without any avoidable delay within a few hours after the occurrence. Both the courts below have preferred to rely upon the testimony of the two eye witnesses, corroborated by the circumstantial evidence referred to above. They have rejected the defence suggestions supported as they are by the two defence witnesses, one of whom is a common ancestor of three of the four accused persons. It has not been argued, and there is no scope for the argument, that the accused persons have been prejudiced in any way in their defence. They had to meet a straightforward case which they failed to do. After carefully considering the arguments advanced on behalf of the appellant, we have come to the conclusion that the proceedings and the trial have not been vitiated by the admitted non compliance with the provisions aforesaid of the Code, and that the irregularity is curable by reference to section 537 of the Code, as no case of prejudice has been made out. This Court, in the case of Gurbachan Singh vs The State of Punjab (1), was inclined to take a similar view of the provisions aforesaid of the Code, though it ultimately held that those provisions did not apply to the case then before them. The appeal is accordingly dismissed. Appeal dismissed. (1) Criminal Appeal No. 48 of 1957, decided on April 24, 1957.

Certain goods which are essential for the manufacturing process in the appellant 's mill were detained by the Excise Authorities for non payment of Central Excise Duty and consequently there was a disruption in the functioning of the appellant 's mill compelling the appellant to stop the working of the mill for the period from March 24, 1964 to June 10, 1964. The Respondent Sangh demanded that the employees who were affected by the said closure should be paid their wages for the aforesaid period. As the said demand was not accepted by the appellant, the respondent filed an application before the First Labour Court, praying for the payment of full closure compensation to the affected employees. The Labour Court held the appellant liable to pay closure compensation to the employees affected by the closure of the mill for the aforesaid period at the rate of 50% of the basic wages and dearness allowance. The Industrial Court partly allowing the appeal of the appellant, directed the appellant to pay closure compensation to the employees affected by the closure for the period from March 24,1964 to June 10, 1964 at the rate of 50 per cent of their basic wages and dearness allowance and further directed that where the employees had been sick and enjoyed sickness benefits for all the days or had been on privilege leave or enjoyed leave with wages for all the days or secured alternative employment for any period during the closure, such employees would 420 not be entitled to any closure compensation for such days, but in respect of such days half of the wages payable to Badli workmen in lieu of the said three categories of workmen would be paid to the Badli workmen equitably. In appeal to this Court, it was contended on behalf of the appellant that as the closure had been made in accordance with the provisions of the Standing orders 16 and 17 due to circumstances beyond the control of the appellant, the appellant is not liable to pay any compensation to its employees for the period of closure including payment to the Badli workmen. Allowing the appeal in part, ^ HELD: (1) The order of the Industrial Court in so far as it directs payment of compensation to the Badli workmen is set aside and, except that, the rest of the order of the Industrial Court is affirmed. [427F G] 2.(i) Sub section (4) of Sec. 42 read with the provision of section 78(1)(a)(iii) of the Bombay Industrial Relations Act 1946, makes it manifestly clear that an employee is entitled to challenge the refusal by the company to pay compensation of the closure and claim such compensation before the Labour Court whether or not such closure was due to circumstances beyond the control of the company, as enumerated in Standing order 16. The Respondent Sangh therefore, was entitled to make the application before the Labour Court claiming compensation for the period of closure even though such closure was made in accordance with the provisions of the Standing orders 16 and 17.[425E H] 2.(ii) The Standing order 16 provides that such closure can be made without notice and no compensation would be required to be paid in lieu of notice. It is clear from Standing order 16 that it does not contemplate that when there has been a closure on account of some unavoidable circumstances, no compensation is required to be paid to the employees. Therefore, the order of the Industrial Court directing payment of compensation to the employees of the appellant for the above period of closure is upheld. [426A C] 3. Badli workmen get work only in the absence, temporary or otherwise, of regular employees, and that they do not have any guaranteed right of employment. Their names are not borne on the muster rolls of the establishment concerned. Indeed a Badli workman 421 has no right to claim employment in place of any absentee employee. In A any particular case, if there be some jobs to be performed and the employee concerned is absent, the Company may take in a Badli workman for the purpose. Badli workmen are really casual employees without any right to be employed. Therefore, the Badli employees could not be said to have been deprived of any work to which they had no right and, consequently, they are not entitled to any compensation for the closure. It may be that the Company may not have to pay closure compensation to the three categories of employees as mentioned by the Industrial Court, but that does not mean that the company has to pay compensation to the Badli workmen in place of these categories of employees. [426D Il] Rashtriya Mill Mazdoor Sangh vs Appollo Mill Ltd., []960] 3 SCR 231 distinguished.

minal Appeal No. 51 of 1967. Appeal by special leave from the judgment and order dated October 3, 1966 of the Bombay High Court, Nagpur Bench in Criminal Revision Application No. 168 of 1966. R. K. Garg, section C. Agarwala, G. V. Kalikar, section K. Dhingra and M. section Gupta, for the appellants. W. section Barlingay and A. G. Ratnaparkhi, for respondent No. 1. H. R. Khanna and section P. Nayar, for respondent No. 2. The Judgment of the Court was delivered by Shah, J. The Nagpur District Land Development Bank Ltd. is registered as a society under the Maharashtra Co oPerative Societies Act, 1960. 'One Narayan Tanbaji Murkute applied for membership of the Bank as a "non borrowing member". At a meeting of the Bank held on June 30, 1964, the application of Murkute and of 94 others were granted and they were enrolled as members. But in the list of members entitled to take part in the General Meeting dated June 30, 1964 the names of Murkute and others were not included. Murkute and others then applied to the Registrar Co operative Societies for an order declaring that they were entitled to participate in the election of office bearers and for an injunction restraining the President and the Secretary from holding the 187 annual General Meeting. The Registrar referred the dispute for adjudication under section 93 of the Maharashtra Co operative Societies Act, 1960, to H. V. Kulkarni, his nominee. The nominee decided the dispute on May 7, 1965 and held that Murkute and other applicants were members of the Bank. In the proceeding before the nominee certain documents including the minutes book of the Bank were produced. It is claimed by Murkute that those 'books were fabricated by the President and the Secretary with a view to make it appear that Murkute and other persons were never elected members of the Bank. On August 7, 1965, Murkute filed a complaint in the Court of the Judicial Magistrate, First Class, Nagpur, charging the President and Secretary of the Bank with committing offences under sections 465 and 471 I.P. Code. It was alleged in the complaint that the two accused had dishonestly and fraudulently introduced a clause in Resolution No. 3 appearing in the minutes book with the intention of causing it to be believed that the clause was part of the original. Resolution passed by the Board of Directors in the meeting held on June 30, 1964, whereas it was known to them that at that meeting no such clause was passed. The two accused raised an objection that the Magistrate had no jurisdiction to take cognizance of the complaint without the previous sanction of the Registrar of Co operative Societies under section 148(3) of the Maharashtra Co operative Societies Act, 1960. The Trial Magistrate rejected the contention. The order was confirmed by the Court of Session and the High Court of Bombay. In this Court counsel for the accused raised two contentions that (1) that, the nominee of the Registrar appointed under section 95 of the Maharashtra Co operative Societies Act, 1960, was a "court" within the meaning of section 195 Code of Criminal Procedure, and a complaint for offences under sections 465 and 471 I.P. Code alleged to have been committed by a party to any proceeding in respect of a document produced or given in evidence in such proceeding, cannot be entertained except on a complaint in writing of such court, or of a court to which it is subordinate; and (2) that offences charged in the complaint fell within the description of the offence under section 146(p) of the Maharashtra Co operative Societies Act, 1960, and without the sanction of the Registrar the complaint was not maintainable. Section 195 Code of Criminal Procedure insofar as it is relevant provides : "(1) No Court shall take cognizance(a) (a) (b) 188 (c) of any offence described in section 463 or punishable under section 471 . when such offence is alleged to have been committed by a party to any proceeding in any Court in respect of a document produced or given in evidence in such proceeding, except on the complaint in writing of such court, or of some other Court to which such Court is subordinate. (2) In clauses (b) and (c) of sub section '(1), the term "Court" includes a Civil, Revenue or Criminal Court, but does not include a Registrar or Sub Registrar under the Indian Registration Act, 1877." Murkute complained that the President and the Secretary of the Bank who were parties to the proceeding before the nominee of the Registrar had committed offences under sections 465 & 471 I.P. Code in respect of documents produced or given in evidence at the trial. If the Registrar 's nominee is a Court within the meaning of section 195 Code of Criminal Procedure the Magistrate could not take cognizance except on the complaint in writing by the Registrar 's nominee or of some court to which he was subordinate. To determine whether the Registrar 's nominee is a court, it is necessary to refer to the relevant provisions of the Maharashtra Co operative Societies Act, 1960, relating to the functions of the nominee and the powers with which he is invested, counsel for the appellants urges that by the Maharashtra Co operative Societies Act the power of the Civil Court to entertain disputes with regard to certain matters concerning cooperative societies is expressly excluded from the jurisdiction of the Civil Court, and the Registrar or his nominee is alone competent to determine those questions; thereby the Registrar and his nominee are invested with the judicial power of the State and they are on that account "courts" within the meaning of section 195 of the Code of Criminal Procedure. Section 2(2) of the Maharashtra Co operative Societies Act, 1960, defines "arbitrator" as meaning "a person appointed under this Act to decide disputes referred to him by the Registrar and includes the Registrar 's nominee or board of nominees. " Section 91 and the following sections which occur in Ch. IX relate to disputes and arbitration. By section 91, insofar as it is material, it is provided : "(1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the constitution, election of the office bearers, conduct of general meetings, management or business of a society shall be referred by any of the parties to the dispute. . . to the Registrar, if both the parties hereto are one or other of the following 189 (a) (b) a member, past member or a person claiming through a member, past member or a deceased member of a society, or a society which is a member of the society. (c) (d) (e) (2) When any question arises whether for the purpose of the foregoing subsections matter referred to, for decision is a dispute or not, the question shall be considered by the Registrar, whose decision shall be final. (3) Save as otherwise provided under sub section (3) of section 93 no Court shall have jurisdiction to entertain any suit or other proceedings in respect of any dispute referred to in sub section (1). " Section 93 provides : "(1) If the Registrar is satisfied that any matter referred to him or brought to his notice is a dispute within the meaning of section 91, the Registrar shall, subject to the rules, decide the dispute himself, or refer it for disposal to a nominee, or a board of nominees, appointed by the Registrar. (2) Where any dispute is referred under the foregoing sub section, for decision to the Registrar 's nominee or board of nominees, the Registrar may at any time, for reasons to be recorded in writing withdraw such dispute from his nominee or board of nominees, and may decide the dispute himself, or refer it again for decision to any other nominee, or board of nominees, appointed by him. (3) Notwithstanding anything contained in section 91 the Registrar may, if he thinks fit, suspend proceedings in regard to any dispute, if the question at issue between a society and a claimant or between different claimants, is one involving complicated questions of law and fact, until the question has been tried by a regular suit instituted by one of the parties or by the society. If any such suit is not instituted within two months from the Registrar 's order suspending proceedings, the Registrar shall take action as is provided in subsection 190 Section 94 provides for the procedure of settlement of disputes and power of the Registrar, his nominee or the board of nominees. It provides, insofar as it is material : "(1) The Registrar, or his nominee or board of nominees, hearing a dispute under the last preceding section shall hear the dispute in the manner prescribed, and shall have power to summon and enforce attendance of witnesses including the parties interested or any of them and to compel them to give evidence on oath, affirmation or affidavit and to compel the production of documents by the same means and as far as possible in the same manner, as is provided in the case of a Civil Court by the Code of Civil Procedure, 1908. (2) Except with the permission of the Registrar or his nominee or board of nominees, as the case may be, no party shall be represented at the hearing of a dispute by a legal practitioner. " Sub section (3) of section 94 authorises the Registrar, his nominee or the board of nominees to join or substitute new parties. Section 95 authorises the Registrar or his nominee or board of nominees to pass an order of attachment and other interlocutory orders. Section 96 provides "When a dispute is referred to arbitration the Registrar or his nominee or board of nominees may, after giving a reasonable opportunity to the parties to the dispute to be heard, make an award on the dispute, on the expenses incurred by the parties to the dispute in connection with the proceedings, and fees and expenses payable to the Registrar or his nominee or, as the case may be, board of nominees. Such an award shall not be invalid merely on the ground that it was made after the expiry of the period fixed for deciding the dispute by the Registrar and shall, subject to appeal or review of revision, be binding on the parties to the dispute. " Section 97 provides "Any party aggrieved by any decision of the Registrar or his nominee or board of nominees under the last preceding section, or an order passed under section 95 may,. . . appeal to the Tribunal. Section 98 provides that every order passed by the Registrar or his nominee or board of nominees or in appeal therefrom shall, it not carried out, on a certificate signed by the Registrar, be deemed to be a decree of a civil court, and shall be executed in 191 the same manner as a decree of such court or be executed according to the law and under the rules for the time being in force for the recovery of arrears of land revenue. By section 99 a private transfer or delivery of, or encumbrance or charge on, property made or created after the issue of the certificate of the Registrar under section 98 shall be null and void as against the society on whose application the certificate was issued. Jurisdiction of the Civil Court by section 91(3) to entertain a suit in respect of any dispute referred to in sub section (1) of section 91 is expressly excluded and the dispute is required by law to be referred to the Registrar or his nominee. Against the decision of the Registrar 's nominee an appeal lies under section 97 and the order made for payment of money is enforceable as a decree of the Civil Court. The Registrar or his nominee called upon to decide the dispute are bound to hear it in the manner prescribed and they have power to summon and enforce attendance of witnesses and to compel them to give evidence on oath, affirmation or affidavit and to compel production of documents. The effect of these provisions, according to counsel for the Appellants, is that the judicial power of the State to deal with and dispose of disputes of a civil nature which fall within the description of section 91(1) is vested in the Registrar 's nominee and he is on that account made a "court" within the normal connotation of the term. Section 195(2) of the Code of Criminal Procedure enacts that the term "court" includes a Civil, Revenue or Criminal Court, but does not include a Registrar or Sub Registrar under the Indian Registration Act, 1877. The expression "court" is not restricted to courts, Civil, Revenue or Criminal; it includes other tribunals. The expression "court" is not defined in the Code of Criminal Procedure. Under section 3 of the Indian Evidence Act "Court" is defined as including "all Judges and Magistrates, and all persons, except arbitrators, legally authorised to take evidence". But this definition is devised for the purpose of the Evidence Act and will riot necessarily apply to the Code of Criminal Procedure. The expression "Court of Justice" is defined in the Indian Penal Code by section 20 as denoting "a Judge who is empowered by law to act judicially as a body, when such Judge or body of Judges is acting judicially". That again is not a definition of the expression "Court" as used in the Code of Criminal Procedure. The expression "Court" in ordinary parlance is a generic expression and in the context in which it occurs may mean a "body or organization" invested with power, authority or dignity. In Halsbury 's Laws of England, 3rd Edn., Vol. 9, article 809 at p. 342 it is stated : "Originally the term "court" meant, among other meanings, the Sovereign 's place; it has acquired the 192 meaning of the place where justice is administered and, further, has come to mean the persons who exercise judicial functions under authority derived ' either immediately or mediately from the Sovereign. All tribunals, however, are not courts, in the sense in which the term is here employed, namely, to denote such tribunals, as exercise jurisdiction over persons by reasons of the sanction of the law, and not merely by reason of voluntary submission to their jurisdiction, Thus, arbitrators, committees of clubs, and the like, although they may be tribunals exercising judicial functions, are not "Courts" in this sense of that term. On the other hand, a tribunal may be a court "in the strict sense of the term although the chief part of its duties is not judicial. Parliament is a court. Its duties are mainly deliberative and legislative : the judicial duties are only part of its functions. " In article 810 it is stated "In determining whether a tribunal is a judicial body the facts that it has been appointed by a nonjudicial authority, that it has no power to administer an oath, that the chairman has a casting vote, and that third parties have power to intervene are immaterial, especially if the statute setting it up prescribes a penalty for making false statements ; elements to be considered are (1) the requirement for a public hearing, subject to a power to exclude the public in a proper case, and (2) a provision that a member of the tribunal shall not take part in any decision in which he is personally interested, or unless he has been present throughout the proceedings. A tribunal is not necessarily a court in the strict sense of exercising judicial power because (1) it gives a final decision; (2) hears witnesses on oath; (3) two or more contending parties appear before it between whom it has to decide; (4) it gives decisions which effect the rights of subjects; (5) there is an appeal to a court; and (6) it is a body to which a matter is referred by another body. Many bodies are not courts, although they have to decide questions, and in so doing have to act judicially, in the sense that the proceedings must be conducted with fairness and impartiality, such as the former assessment committees, the former court of referees which was constituted under the Unemployment Insurance Acts, the blenchers of the Inns of Court when considering the conduct of one of their members, the 193 Disciplinary Committee of the General Medical. Council when considering questions affecting the conduct of a medical man, a trade union when exercising disciplinary jurisdiction over its members, or the chief officer of a force exercising discipline over members of the force. " A body required to act judicially in the sense that its proceedings must be conducted with fairness and impartiality may not therefore necessarily be regarded as a court. Counsel for the appellants however invited our attention to a number of decisions in support of his contention that wherever there is a dispute which is required to be resolved by a body invested with power by statute and the body has to act judicially it must be regarded as a court within the meaning of section 195 of the Code of Criminal Procedure. Counsel asserted that every quasi judicial authority is a court within the meaning of section 195 (2) of the Code of Criminal Procedure. The contention is inconsistent with a large body of authority of this Court to which we will presently refer. By section 195 of the Code of Criminal Procedure, it is enacted that certain offences amounting to contempt of lawful authority of public servants i.e. offences falling under sections 172 to 188 I.P; Code, offences against public justice under sections 193, 194, 195, 196, 199, 200, 205, 206, 207, 208, 209, 210, 211 and 228, when such offences are alleged to have been committed in or in relation to, any proceeding in any Court, and offences described in section 463 or punishable under sections 471, 475 or 476, when such offences are alleged to have been committed by a party to any proceeding in any Court in respect of a document produced or given in evidence in such proceeding, cannot be taken cognizance of by any court, except in the first class of cases on a complaint in writing of the public servant concerned, and in the second and third class of cases on the complaint in writing of such Court or some other Court to which it is subordinate. An offence ordinarily signifies a public wrong : it is an act or omission which is a crime against society : it may therefore be brought to the notice of the Court by any person, even if he is not personally aggrieved by the act or omission. To that rule there are certain exceptions which are specified in sections 195, 196, 197, 198, 198A of the Code of Criminal Procedure and other special statutes. Authority of courts to entertain complaints in respect of the offences so specified is barred in view of the special nature of the offence which vitally affect individuals only or public bodies and in the larger interest of society it is deemed expedient to exempt them from the general rule. 194 The nominee of the Registrar acting under section 96 performs the functions substantially of an arbitrator to whom a dispute is ,referred for adjudication. The Registrar may appoint a single nominee or a board of nominees and may at any time, for reasons to be recorded in writing, withdraw such dispute from the nominee or 'board of nominees, and may decide the dispute himself, or refer it again for decision to another nominee, or board of nominees, appointed by him. Under sub section (3) of section 93 it is open to the Registrar to suspend proceedings in regard to any dispute, if the question at issue between a society and a claimant or between different claimants, is one involving complicated questions of law or fact. The jurisdiction of the nominee or board of nominees arises by reason not of investment by statute, but by appointment made by the Registrar who exercises control over the proceeding. The nominee therefore derives his authority from his appointment by the Registrar : the Registrar is entitled to withdraw his authority; and the Registrar may fix the time within which a dispute shall be disposed of : his adjudication is again called an award. The nominee is even entitled to make a provision for the 'expenses payable to the Registrar or to himself. It is true that the procedure of the nominee is assimilated to the procedure followed in the trial of a Civil proceeding. The nominee has the power to summon witnesses, to compel them to produce documents and he is required to hear the dispute in the manner prescribed by the Code of Civil Procedure. Thereby he is required to act judicially i.e. fairly and impartially : but the obligation to act judicially will not necessarily make him a court within the meaning of section 195 of the Code. The position of a nominee of the Registrar is analogous to that of an arbitrator designated under a statutory arbitration to which the provisions of section 47 of the , apply. The authorities to which our attention was invited by counsel for the appellants may now be considered. It may be sufficient here to observe that the tests laid down by this Court in certain cases to be presently noticed make many of the cases relied upon of doubtful authority. In Thadi Subbi Reddi vs Emperor(1) it was held by a single Judge of the Madras High Court that the Registrar before whom a Co operative Society files its suit, or its claim for enforcing a bond, is a "Court" within the meaning of section 195 of the Code of Criminal Procedure, for the Registrar to whom a dispute touching a debt due to a society by a member is referred has power to administer oaths, to require the attendance of all parties concerned and of witnesses, and to require the production of all books and documents relating to the matter in dispute, and the Registrar is required to give a decision in writing, and when it is given the decision may be enforced on application to the Civil Court having jurisdiction as if it were a decree of the Court. 2 00 deface, or secrete or attempts to secrete any document which is or purports to be a will, or an authority to adopt a son, or any valuable security, or mischief in respect of such document. section 477A penalises falsification of accounts by a clerk, officer or servant or by a person employed in the capacity of a clerk, officer or servant. The offence of forgery and its allied offences may be committed if a false document is made with intent to cause damage or injury to public or any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed, (section 463). In order to attract section 463 I.P. Code there must therefore, be making of a false document with the intention mentioned in that section. By 464 it is provided : "A person is said to make a false document First. Who dishonestly or fraudulently makes, signs, seals or executes a document or part of a document, or ,,makes any mark denoting the execution of a document, with the intention of causing it to be believed that such document or part of a document was made, signed, sealed or executed by or by the authority of a person by whom or by whose authority he knows that it was not made, signed, sealed or executed, or at a time at which he knows that it was not made, signed, sealed or ,executed; or Secondly Who, without lawful authority, dishonestly or fraudulently, by cancellation or otherwise, alters a, document in any material part thereof, after it has been made or executed either by himself or by any other person, whether such person be living or dead at the time of such alteration; or Thirdly Who dishonestly or fraudulently causes any person to sign, seal, execute or alter a document, knowing that such person by reason of unsoundness of mind or intoxication cannot, or that by reason of deception practised upon him, he does not know the contents of the document or the nature of the alteration." Making of a false document by a person in all the three clauses must be done dishonestly or fraudulently and with the necessary intention or knowledge contemplated by the three clauses. Section 146 of the Maharashtra Co operative Societies Act, 1960, does not make any such intention as is referred to in sections 463 and 464 I.P. Code an ingredient of the offence: it also renders a person who is merely privy to the destruction, mutilation, alteration, falsification or secreting or to the making of any false or 201 fraudulent entry in any register, book of account or document belonging to the society liable to be punished. under section 146 (p) The offence may be committed under section 146 only by an officer or member past or present of the society. Even destruction or secreting of a document or security is penalised under section 146 of the Act. We are unable to accept the contention that these two sections section 146(p) of the Maharashtra Co operative Societies Act and section 465 P. Code, are intended to deal with the same offence. It is true that certain acts may fall within both the sections. For instance, tampering with or altering or falsifying any, register, book of account or security, or making any false or fraudulent, entry in the register, book of account or document belonging to the society, may when done with the requisite intention mention ed in section 464 read with section 463 I.P. Code be also an offence under section 146(p) of the Maharashtra Co operative Societies Act. But that, in our judgment, is not a ground for holding 'that section 465 I.P. Code and the related offences were intended to be pro tanto repealed by the enactment of section 146(p) of the Maharashtra Cooperative Societies Act. When the Indian Penal Code seeks to impose in respect of offences under As, 477 imprisonment which may extend to imprisonment for life, or with imprisonment upto a period of seven years for an offence under section 477A it would be difficult to hold that when committed by an officer or a member of a society the maximum punishment which can be imposed by virtue of section 146(p) would be three years rigorous imprisonment only. This Court in Om Prakash Gupta vs State of Uttar Pradesh(1) held that the offences under section 409 I.P. Code and section 5(1)(c) of the Prevention of Corruption Act, are distinct and separate offences and section 409 I.P. Code is not repealed by section 5(1) (c) of the Prevention of Corruption Act. In a recent judgment of this Court in T. section Balliah vs T. section Rengachari(2) we had occasion to consider whether section 177 I.P. Code was repealed by section 52 of the Indian Income tax Act. It was pointed out that in considering the problem the Court must consider the true meaning and effect, of the two Acts, and unless there is repugnancy or inconsistency between the two enactments or that the two enactments cannot stand together they must be treated as cumulative. It is clear from a perusal of section 146 (p) of the Maharashtra Co operative Societies Act, 1960, and sections 463 and 464 I.P. Code. that they are two distinct offences which are capable of being (1) [1957] S.C.R.423. 7 Sup C 1/69 14 (2) ; 202 Committed with different intentions by different sets of persons and it, could not be contemplated that the Legislature of the State of Maharashtra intended to repeal pro tanto the provisions of section 465 I.P. Code by enactment of section 146 of the Maharashtra Co operative Societies Act. It is unnecesary in the circumstances to consider the question whether the Maharashtra State Legislature was competent to repeal the provisions of section 465 I.P. Code. The law relating to Co operative Societies may be enacted in exercise of the power under List II Entry 32 of the Seventh Schedule to the Constitution, but if section 146 is directly intended to trench upon a provision ,of the Indian Penal Code falling within List 11 Entry 1, sanction of the President under article 254(2) would apparently be necessary. Both the contentions raised by counsel for the appellants fail. The appeal is dismissed. G.C. Appeal dismissed.

Section 18(1) of the Bombay Rents,. ,. . Control Act 1947 provides; " If any landlord either himself or through any person acting or Purporting to act on his behalf. . receives any fine, premium or other like sum or deposit or any consideration, other than 159 the standard rent in respect of the grant, renewal or continuance of a lease of any premises such landlord or in the manner indicated by the section. Held, that the words " renewal or continuance of a lease clearly suggest that there must be a renewal or continuance of a subsisting lease. They would not cover an executory contract to grant a lease. Giving the words " in respect of " their widest meaning, viz., relating to " or " with reference to " it is plain that this relationship must be predicated of the grant, renewal or continuance of a lease and unless a lease comes into existence simultaneously or near about the time that the money is received it cannot be said that the receipt was " in respect of " the grant of a lease. The relationship of landlord and tenant does not come into existence till a lease comes into existence, in other words, there is no relationship of landlord and tenant until there is a demise of the property which is capable of being taken possession of. The section does not make the intention punishable, it makes an act punishable which is related to the existence of a lease. It does not make receipt of money on an executory contract punishable. London and North EasterN Railway Co. vs Berriman (1946 A.C.278, 295) referred to.

ivil Appeal No. 1524 of 1982. From the Judgment and Order dated 5.9.1977 of the Hima chal Pradesh High Court in F.A.O. No. 8 of 1975. A.B. Rohtagi, Mrs. Urmila Kapoor, Miss section Janani and Naresh K. Sharma for the Appellant. Miss A. Subhashini for the Respondents. The Judgment of the Court was delivered by RANGANATHAN, J. The appellant Vishwanath Sood undertook the construction of a Farmers ' Community Centre Building at Thanedhar by an agreement entered into with the Union of India and the State of Himachal Pradesh dated 20.6.1968. Certain disputes arose between the parties to the agreement and in terms of clause 25 of the agreement, they were re ferred to a sole arbitrator. The contractor submitted a claim of Rs. 1,28,000 while the respondents also submitted a counter claim. By an award dated 20.3.1972, the abritrator awarded an amount of Rs.31,932 to the contractor and a sum of Rs.21,504 to the respondents. The award was filed in the court. The contractor filed an application in the court for modification or correction of the award in respect of three items of his claim ( 1, 8 and 9) and item No. 1 of the respondent 's counter claim. The Department also filed its objections to the award and prayed that a sum of Rs.8,080.29 should be awarded in favour of the Department or the award remitted to arbitrator. The 292 learned single Judge dismissed the objections of the re spondents. So far as the appellant 's prayers were concerned, he allowed the same only in respect of item 1 of the re spondent 's counter claim. He held that the arbitrator was not justified in granting to the Government a sum of Rs.20,000 against the contractor. Both the contractor and the respondents preferred appeals to the Division Bench. The Bench reversed the order of the learned single Judge. It set aside the order of the learned single Judge in so far as the sum of Rs.20,000 was deleted thereby from the award of the arbitrator. The award was restored to its original terms and the contractor was held entitled to interest at 6 per cent on the amount found due to him after adjusting the sum awarded by the arbitrator in favour of the Government against the sum awarded in favour of the contractor. The contractor has preferred this appeal by special leave from the order of the Division Bench of the High Court. Learned counsel for the appellant pressed the conten tions in respect of the four items to which he had objected before the learned single Judge and the Division Bench. Three of these items pertain to the claims put forward by the contractor which were rejected by the arbitrator and held by the courts to have been rightly rejected. The first claim (item No. 1) made by the contractor was of a sum of Rs. 12,720 which, according to him, was the loss incurred by him by reason of the Department 's delay in handing over the site to him for executing the contract. The learned single Judge discussed this aspect of the matter at length. He observed that, on this point, there was, on the one hand, oral evidence adduced on behalf of the Department while there was only the bare denial of the contractor on the other. He pointed out that the arbitrator had fully consid ered the matter and that it was not open to the court to re assess the evidence and that there was no error apparent on the face of the record. The second claim (item No. 8) was for a sum of Rs.6,172 being the amount kept as security with the respondent. In respect of this item also the learned single Judge discussed the evidence which showed that the security amount had been properly adjusted by the Department which had been constrained to take up the work departmental ly at the cost and risk of the contractor. He held that this was an aspect which had been considered by the arbitrator and a proper conclusion arrived at. The third claim put forward by the petitioner (item No. 9) was for a sum of Rs.30,000, claimed as compensation for an amount spent by the contractor for the purchase of a truck for this work. The learned single Judge here again pointed out that no material had been placed before 293 the arbitrator by the contractor to show that he was enti tled to the amount and that, in any event, having regard to the fact that the work was executed by the Department at the cost and risk of the contractor, there was no question of the contractor preferring any claim in respect of this item. The above three claims of the petitioner were also rejected by the Division Bench which pointed out that the award made by the arbitrator was not a speaking award and that the face of the award did not show any error. We do not think that so far as these claims are concerned, that the appellant has any arguable case at all. As pointed out by the Division Bench of the High Court, the award was a non speaking award. The arbitrator had considered the materials placed before him and had arrived at his conclusions. The award does not on the face of it disclose any error, much less any error of law, which needs to be set fight. We therefore, hold that the High Court was justified in affirming the award so far as the rejection of these three claims is concerned. The position in regard to the counter claim of the respondents which was allowed by the arbitrator and the Division Bench stands on a different footing. The respond ents ' claim before the arbitrator was that they were enti tled to receive from the contractor "Rs.24,000 on account of payment of 10 per cent compensation on the tendered amount for not executing the work in accordance with the terms and conditions of the agreement". As against this claim the arbitrator awarded the respondents a sum of Rs.20,000. The learned single Judge took the view that having regard to clause 2 of the contract (pertaining to the claim by the respondent) read with clause 25 it was clear that any com pensation under clause 2 could be adjudicated upon only by the superintending Engineer or the Development Commissioner and that it was not open to the arbitrator to have entered upon a reference in regard to this claim at all. In order to appreciate the finding of the learned single Judge it will be useful to set out clauses 2 and 25 of the conditions of contract on which his decision was based: "Clause 2: Compensation for delay: The time allowed for carrying out the work as entered in the tender shall be strictly observed by the contractor and shall be deemed to be the essence of the contract on the part of the contractor and shall be reckoned from the fifteenth day after the date on which the order to commence the work is issued to the contractor. The work shah throughout the stipulated period of the contract be proceeded with all due diligence and the contractor shall pay as compensation an amount 294 equal to one per cent, or such smaller amount as the Superintending Engineer (whose decision in writing shall be final) may decide on the amount of the estimated cost of the whole work as shown in the tender for every day that the work remains uncommenced, or unfinished, after proper dates. And further, to ensure good progress during the execution of the work, the contractor shall be bound in all cases in which the time allowed for any work exceeds, one month (save for special jobs to complete one eighth of the whole of the work before one fourth of the whole time allowed under the contract has elapsed; three eighth of the work, before one half of such time has elapsed, and threefourth of the work, before three fourth of such time has elapsed. However, for special jobs if a time schedule has been submitted by the Contractor and the same has been accepted by the Engineer in charge, the contractor shall comply with the said time schedule. In the event of the con tractor failing to comply with this condition, he shall be liable to pay as compensation an amount equal to one per cent or such smaller amount as the Superintending Engineer (whose decision in writing shall be final) may decide on the said estimated cost of the whole work for every day that the due quantity of work remains incomplete; provided always that the entire amount of compensation to be paid under the provisions of this clause shall not exceed ten per cent, on the estimated cost of the work as shown in the tender." "Clause 25: Settlement of disputes by Arbitra tion: Except where otherwise provided in the contract, all questions and disputes relating to the meaning of the specifications, designs drawings and instructions hereinbefore men tioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, matter or thing whatsoever, in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instruction, order, or these condi tions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitra tion of the person appointed by the Chief Engineer, Himachal Pradesh Public Works De partment . . " 295 The Division Bench did not agree with the view of the learned single Judge. It pointed out that, while in the ordinary course, the rate of compensation payable by the contractor is one per cent of the amount of the estimated cost of the whole work, under clause 2, the Superintending Engineer is authorised to depart from this figure and deter mine the compensation at a smaller amount if there are any extenuating circumstances in favour of the contractor. The question however was whether the compensation determined under clause 2 is excluded from the scope of arbitration under clause 25. The Division Bench answered this question in the negative. It pointed out that the sine qua non of clause 2 was that the contractor should have been guilty of delay in commencing the work or in completing it but the clause did not specify either the authority or the procedure for determining whether the contractor is responsible for the default. Observing that there can be a serious dispute in a particular case as to the person who is responsible for the delay, the Bench took the view that the determination of this dispute cannot be excluded from the scope of clause 25. The Bench observed that inasmuch as a bona fide dispute can be raised by the contractor in regard to his liability to compensation under clause 2 and no machinery is provided in clause 2 for the resolution of that dispute, there is ample justification for holding that resort can be had to arbitra tion under clause 25. The statement in clause 2 that the decision of the Superintending Engineer is final, according to the Bench, merely constituted a declaration that no officer in the Department could disturb his quantification. But this finality cannot be construed as extending to ex clude the jurisdiction of the arbitrator under clause 25. On this view of the matter, the Division Bench found itself unable to agree with the learned single Judge that the arbitrator had traveled outside his jurisdiction in awarding a sum of Rs.20,000 as compensation to the Government against the contractor for the delay in executing the work. It will be seen from the narration above that so far as this item was concerned, both parties proceeded on the footing that the claim of the Government was a claim under clause 2 and that the arbitrator had awarded the sum only in terms of clause 2. This is also borne out by the fact that the claim of the Department was based on a percentage of the total cost of the work and the restriction of the claim to 10% also appears to have been the result of the proviso to clause 2. The award, therefore, on a fair reading of it, contains a grant by the arbitrator of compensation to the Government in terms of clause 2. It is therefore open to the parties to urge before this Court, as they did before the High Court also, that, on a proper construction of clauses 2 and 25, 296 this award was not justified. It is in this respect that this counter claim of the Department stands on a different footing from the earlier claims of the contractor which have been rejected and which, we have held above, have been rightly rejected. Learned counsel for the appellants contends that the terms of clause 2 clearly envisage the determination of the amount of compensation for the delay in the execution of the work only by the Superintending Engineer and specifically mentions that the decision of the Superintending Engineer in writing shah be final. The opening words of clause 25: "Except where otherwise provided in the contract" clearly take out of the purview of clause 25 any dispute in respect of a claim under clause 2. He submitted that the clause authorised only the Superintending Engineer to go into the question whether there is any delay or not and the reasons therefore and to determine the rate at which compensation should be charged from the contractor. If the Engineer in charge levies a compensation under clause 2, the contractor can apply to the Superintending Engineer. If the Superin tending Engineer finds that there was no fault on the part of the contractor at all he could waive the compensation under clause 2 and that cannot be challenged by the Depart ment before the arbitrator. Per contra, where the Superin tending Engineer confirms that there has been a delay for which compensation should be charged, it will not be open to the contractor to challenge the conclusion before the arbi trator. Learned counsel also submitted that even if clause 25 were to be held applicable, the question of submitting a dispute in this regard to the arbitrator could only arise if there had been a determination and a dispute under clause 2. Clause 2 envisages that the Engineer in charge should, in appropriate cases, levy a compensation at the rate specified in that clause. If he did, it was open to the contractor to dispute the same and approach the Superintending Engineer to reduce or waive the compensation for any reason whatsoever. Or, it may be that, even where the Engineer in charge levied no compensation, the Superintending Engineer could, either on his own motion or on being moved by the department, after considering the facts charge a compensation with the quantum of which the department may not be satisfied in which event a dispute could arise. But in the present case neither the Engineer in charge nor the Superintending Engineer had determined any liability at all under clause 2. There was no compensation levied against which there was any protest by the contractor, and there was no matter submitted to the Superintending Engineer for determination. In these circum stances, the submission of the learned counsel for the appellant is that there was no dispute at all between the parties on 297 the question of compensation and that a dispute cannot be said to arise merely because a counter claim is for the first time put forward by the Department before the arbitra tor. On the other hand, the learned counsel for the Depart ment contended that clause 2 is in the nature of a penal clause which automatically takes effect irrespective of any default. He described it as an "agreed penalty" clause. He stated that the clause made the contractor liable for the penalty prescribed therein whenever there was a delay in the completion of the contract, whatsoever might have been the reason therefore, the question as to whether the contractor was at default or not being totally immaterial. The Depart ment was, therefore, entitled to automatically deduct from the bills payable to the petitioner the compensation or penalty at the rate mentioned in clause 2 or such reduced amount as may be determined in a particular case by the Superintending Engineer and that if the contractor objected to this deduction that would give rise to a dispute which can be the subject matter of arbitration under clause 25. He therefore submitted that the Division Bench has rightly construed the terms of the contract and confirmed the award made by the arbitrator. We have gone through the judgment of the Division Bench of the High Court and we have also considered the arguments advanced on both sides. With great respect, we find our selves unable to agree with the interpretation placed by the Division Bench on the terms of the contract. Clause 2 of the contract makes the time specified for the performance of the contract a matter of essence and emphasises the need on the part of the contractor to scrupulously adhere to the time schedule approved by the Engineer in charge. With a view to compel the contractor to adhere to this time schedule, this clause provides a kind of penalty in the form of a compensa tion to the Department for default in adhering to the time schedule. The clause envisages an amount of compensation calculated as a percentage of the estimated cost of the whole work on the basis of the number of days for which the work remains uncommenced or unfinished to the prescribed extent on the relevant dates. We do not agree with the counsel for the respondent that this is in the nature of an automatic levy to be made by the Engineer in charge based on the number of days of delay and the estimated amount of work. Firstly, the reference in the clause to the require ment that the work shall throughout the stipulated period of the contract be proceeded with due diligence and the refer ence in the latter part of the clause that the compensation has to be paid "in the event of the contractor failing to comply with" the prescribed time 298 schedule make it clear that the levy of compensation is conditioned on some default or negligence on the part of the contractor. Secondly, while the clause fixes the rate of compensation at 1 per cent for every day of default it takes care to prescribe the maximum compensation of 10 per cent on this ground and it also provides for a discretion to the Superintending Engineer to reduce the rate of penalty from 1 per cent. Though the clause does not specifically say so, it is clear that any moderation that may be done by the Super intending Engineer would depend upon the circumstances, the nature and period of default and the degree of negligence or default that could be attributed to the contractor. This means that the Superintending Engineer, in determining the rate of compensation chargeable, will have to go into all the aspects and determine whether there is any negligence on the part of the contractor or not. Where there has been no negligence on the part of the contractor or where on account of various extraneous circumstances referred to by the Division Bench such as vis major or default on the part of the Government or some other unexpected circumstance which does not justify penalising the contractor, the Superintend ing Engineer will be entitled and bound to reduce or even waive the compensation. It is true that the clause does not in terms provide for any notice to the contractor by the Superintending Engineer. But it will be appreciated that in practice the amount of compensation will be initially levied by the Engineer in charge and the Superintending Engineer comes into the picture only as some sort of revisional or appellate authority to whom the contractor appeals for redress. As we see it, clause 2 contains a complete machin ery for determination of the compensation which can be claimed by the Government on the ground of delay on the part of the contractor in completing the contract as per the time schedule agreed to between the parties. The decision of the Superintending Engineer, it seems to us, is in the nature of a considered decision which he has to arrive at after con sidering the various mitigating circumstances that may be pleaded by the contractor or his plea that he is not liable to pay compensation at all under this clause. In our opinion the question regarding the amount of compensation leviable under clause 2 has to be decided only by the Superintending Engineer and no one else. The Division Bench has construed the expression in clause 2 in parenthesis that "the Superintending Engineer 's decision shall be final" as referring only to a finality qua the department; in other words, that it only constitutes a declaration that no officer in the department can determine the quantification and that the quantum of compensation levied by the Superintending Engineer shall not be 299 changed without the approval of the Government. After refer ring to certain judicial decisions regarding the meaning of the word "final" in various statutes, the Division Bench concluded that the finality cannot be construed as excluding the jurisdiction of the arbitrator under clause 25. We are unable to accept this view. Clause 25 which is the arbitra tion clause starts with an opening phrase excluding certain matters and disputes from arbitration and these are matters or disputes in respect of which provision has been made elsewhere or otherwise in the contract. These words in our opinion can have reference only to provisions such as the one in parenthesis in clause 2 by which certain types of determinations are left to the administrative authorities concerned. If that be not so, the words "except where other wise provided in the contract" would become meaningless. We are therefore inclined to hold that the opening part of clause 25 clearly excludes matters like those mentioned in clause 2 in respect of which any dispute is left to be decided by a higher official of the Department. Our conclu sion, therefore, is that the question of awarding compensa tion under clause 2 is outside the purview of the arbitrator and that the compensation, determined under clause 2 either by the Engineer in charge or on further reference by the Superintending Engineer will not be capable of being called in question before the arbitrator. We may confess that we had some hesitation in coming to this conclusion. As pointed out by the Division Bench, the question of any negligence or default on the part of the contractor has many facets and to say that such an important aspect of the contract cannot be settled by arbitration but should be left to one of the contracting parties might appear to have far reaching effects. In fact, although the contractor in this case might object to the process of arbitration because it has gone against him, contractors generally might very well prefer to have the question of such compensation decided by the arbitrator rather than by the Superintending Engineer. But we should like to make it clear that our decision regarding non arbitrability is only on the question of any compensation which the Government might claim in terms of clause 2 of the contract. We have already pointed out that this is a penalty clause introduced under the contract to ensure that the time schedule is strictly adhered to. It is something which the Engineer incharge enforces from time to time when he finds that the contractor is being recalcitrant, in order to ensure speedy and proper observance of the terms of the contract. This is not an undefined power. The amount of compensation is strictly limited to a maximum of 10% and with a wide margin of discretion to the Superintending Engineer, who might not only reduce the percentage but who, we think, can even reduce it 300 to nil, if the circumstances so warrant. It is this power that is kept outside the scope of arbitration. We would like to clarify that this decision of ours will not have any application to the claims, if any, for loss or damage which it may be open to the Government to lay against the contrac tor, not in terms of clause 2 but under the general law or under the Contract Act. As we have pointed out at the very outset so far as this case is concerned the claim of the Government has obviously proceeded in terms of clause 2 and that is the way in which both the learned single Judge as well as the Division Bench have also approached the ques tion. Reading clauses 2 and 25 together we think that the conclusion is irresistible that the amount of compensation chargeable under clause 2 is a matter which has to be adju dicated in accordance with that clause and which cannot be referred to arbitration under clause 25. As stated earlier, an alternative ground was urged by the learned counsel for the appellant that, no penalty under clause 2 having been imposed by the respondents in the first instance, no dispute had at all arisen which could have been referred to arbitration. This point was not taken before the High Court and the relevant facts are not on record. That apart, in the view we have taken, it is unnecessary to express any opinion on this argument and we refrain from doing so. For the reasons above mentioned, we restore the judgment of the learned single Judge. In the result, the amount of compensation of Rs.20,000 awarded by the arbitrator in favour of the Government will stand deleted. The amount of interest payable to the contractor, if any, will be worked out on the basis of the award as modified by us above. The appeal is allowed. We however make no order as to costs in the circumstances of the case. N.V.K. Appeal allowed.

On the basis of a vigilance enquiry against Kailash Nath, respondent, pertaining to the purchase of sign boards by him while working as Executive Engineer in the State Public Works Department, a First Information Report was lodged against him in August 1985. The respondent challenged the F.I.R. in the High Court on the ground that the same having been lodged about three years after his retirement in October 1982 and about six years after the event of purchase in 1979. was in the teeth of proviso (3) to Rule 2.2(b) of the Punjab Civil Service Rules, Volume II, which provided that no judicial proceedings if not instituted while the officer was in service, shall be instituted in respect of a cause of action which arose or an event which took place more than four years before such institution. The same ground was taken by Mangal Singh Minhas, respondent, when a challan was filed against him. The High Court, relying on its earlier decision, quashed the First Information Report and the challan. Dismissing the State appeal against Kailash Nath and allowing it against Mangal Singh Minhas, this Court, HELD: (1) Any rule framed under Article 309 has to be confined to recruitment and conditions of service of persons mentioned therein.[916E] (2) The expression "conditions of service" means all those conditions which regulate the holding of a post by a person right from the time of his appointment till his retirement and even beyond it,in matters like pension etc. PG NO 911 PG NO 912 (3) Rule 2.2. is in Chapter II of the Punjab Civil Service Rules which deals with ordinary pension. There can be no manner of doubt that making provision with regard to pension falls within the purview of "conditions of service". [918D] (4) Whether or not a government servant should be prosecuted for an offence committed by him obviously cannot be treated to be something pertaining to conditions of service. [917D] (5) Even on a plain reading of Rule 2.2, it is apparent that the intention of framing the said rule was not to grant immunity from prosecution to a government servant, if the conditions mentioned therein are satisfied. [918C] (6) Making a provision that a government servant, even if he is guilty of grave misconduct or negligence which constitutes an offencepunishable either under the Penal Code or Prevention of Corruption Act or an analogous law should be granted immunity from such prosecution after the lapse of a particular period so as to provide incentive for efficient work would not only be against public policy but would also be counter productive. [917D E] (7) On the face of it, the government servants cannot constitute a class by themselves so as to bring their case within the purview of reasonable classification, if the purpose of granting immunity from prosecution is ensuring peace of mind in old age. [918B] (8) Even if in a given case a proviso may amount to a substantive provision, making of such a substantive provision, will have to be within the framework of Article 309. If a rule containing an absolute or general embargo on prosecution of a government servant after his retirement for grave misconduct or negligence during the course of his service does not fall within the purview of laying down conditions of service under Article 309, such a provision cannot in the purported exercise of power under Article 309 be made by either incorporating it in the substantive clause of a rule or in the proviso thereto. [919C D] (9) Even if on first impression Rule 2.2 may appear to be placing an embargo on prosecution it has to be interpreted by taking recourse to the well settled rule of reading down a provision so as to bring it within the framework of its source of power, without, of course frustrating the purpose for which such provision was made. This purpose can be achieved if the said proviso by adopting the rule of reading down is interpreted to mean that even if PG NO 913 a government servant is prosecuted and punished in judicial proceedings instituted in respect of cause of action which arose or an event which took place more than four years before such institution the government will not be entitled to exercise the right conferred on it by the substantive provision contained in clause (b) with regard to pension of such a government servant. The word "such" in the beginning of the third proviso also supports this interpretation. [919D H;920A] (10) By applying the role of interpretation with regard to a beneficent legislation, a benefit never intended to be conferred cannot be conferred. [923D] (11) It is always open to quash a prosecution on the ground of unexplained unconscionable delay in investigation and prosecution on the facts of a given case. In this view of the matter. the appeal against Kailash Nath is dismissed whereas the appeals against Mangal Singh Minhas are allowed. [924F] Des Raj Singhal vs State of Punjab, ; State of Madhya Pradesh & Ors. vs Shardul Singh, ; I.N. Subba Reddy vs Andhra University, ; ; M/s. Ram Narain Sons Ltd. vs Asstt. Commissioner of Sales Tax and Others, ; ; Abdul Jabar Butt vs State of Jammu & Kashmir, ; ; Ishverlal Thanorelal Almaule vs Motibhai Nagjibhai [1966] 1 SCR 367; P.P. Venkatavardan vs The State of Tamil Nadu by the Deputy Superintendent of Police, Vigilance and Anti corruption Vellore, [1979] 23 MLJ (Crl.) 275; State of Punjab vs Charan Singh, ; ; Madhashwardhari Singh and Another vs State of Bihar, AIR (1986) Patna (Vol.73) page 324, referred to.

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

The appellants were in possession of certain agricultur al lands as tenants. Rev. Rutar Ford Padri and Vandru Padri were their landlords who had left the country long ago. But it was alleged that the land was purchased for the benefit of American Baptist Formation Society and the respondents claim to be the Property Association of the Baptist Churches (Pvt.) Ltd. ( "The Association"). The land stood transferred to the Association as per order made by the Madras High Court in company petition. The Association thus claimed to be the owner and also in defacto possession of the lands. In 1975 the Association issued notice u,s 19(2) of the Act terminating the appellant 's tenancy on May 31, 1975. The appellants received the said notice but did not send any reply. Thereafter the Association moved the Tehsildar u/ss 19(2) read with 28(1) of the Act for the symbolic possession of the lands from the appellants. Before the Tehsildar, appellants denied all the allegations and asserted that they were protected tenants. On Nov., 1977 Tehsildar made an order accepting the contentions of the Association holding that the appellants had no right since their tenancy stood terminated. Appellants appeal was also dismissed by the Joint Collector, Warrangal. The appellants then approached the High Court by way of revision petition u/s 91 of the Act. The High Court dismissed the revision. Thereafter appellants came up before the Supreme Court by way of Spe cial Leave to appeal. Accepting the appeal, this Court, HELD: That the contentions of the Association that it is in 473 defacto possession and entitled to symbolic possession is unavailable and indeed unacceptable. Firstly, there can not be any dispute in this case about the protected tenancy rights of the appellants. The revenue documents like Panani patrika and final record of Agricultural tenancy clearly establish that the appellants were recognised as protected tenants. Secondly, it was not the case of the Association that Rev. Rutar Ford Padri and Vandru Padri first offered the land to the appellants before they transferred the same to the Association. The Court also observed that the Associ ation cannot be permitted to take advantage of its high handedness. It is an exploitation of the exploited. It is an oppression of the oppressed. The Court cannot countenance it. [482F G; 483B] Reversing the impugned orders the Court directed the Tehsildar to put the appellants in possession of the agri cultural land in question within one month and ordered that the Association must pay the costs of the appellants quanti fied at Rs.20,000. [483C D]

Appeal No. 1106 of 1964. Appeal by special leave from the judgment and order dated the October 31, 1961 of the Madras High Court in Tax Case No. 67 of 1958. A. V. Viswanatha Sastri, R. Venkataraman and R. Gopala krishnan, for the appellant. section T. Desai, Gopal Singh, B. R. G. K. Achar and R. N. Sachthey, for the respondent. 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 Judicature at Madras answering the following question of law in favour of the respondent : "Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the sum of rupees 84,633/ expended by the assessee in obtaining the loan or any part thereof is an allowable expenditure ?" The facts and circumstances of the case as stated by the Tribunal in the statement of the case are as follows : The appellant, India Cements Limited, Madras, hereinafter referred to as the assessee, is a public limited company. The question arises in respect of the assessment year 1950 51, accounting period April 1, 1949 to March 31, 1950. During the accounting year it obtained a loan of 40 lakhs of rupees from the Industrial Finance Corporation of India. This loan was secured by a charge on the fixed assets of the company. Since Mr. section T. Desai, the learned counsel for the respondent, has disputed some facts as stated by the Appellant Tribunal, it would be convenient to give these facts in the words of the Appellate Tribunal. It is stated in the statement of the case that "the proceeds of this loan was utilised to pay off a prior debt of 25 lakhs due to Messrs A. F. Harvey Limited and Madurai Mills, Limited. It cannot be stated definitely how the balance of 15 lakhs was used but the directors, while reporting on the accounts for the year ended 946 31 3 1949 on 4 10 1949 stated that that was utilised towards working funds. " The expenditure of Rs. 84,633/ in connection with this loan was made up of thefollowing items : Stamps 60,02300 Registration Fee 16,,06700 Charges for certified copy of the mortgage deed 2800 Indemnity deed by Essen and Company, Limited 1500 Vakil 's fee for drafting deed 7,50000 Legal fees 1,00000 Total Rs. 84,633 0 0 The assessee did not charge this expenditure in the profits and loss account for that year. It was shown in the Balance Sheet as mortgage loan expenses. It continued to be so shown till March 31, 1952. In the accounts for March 31, 1953 this was written off by appropriation against the profits of that year. The Income Tax Officer refused to allow the deduction of Rs. 84,633/ . He observed "As per the information furnished by the auditors, Rs. 25 lakhs of the loan was to be paid to Messrs A. F. Harvey, Limited, and Mathurai Mills, Limited in, discharge of the amount borrowed from them and utilised on the capital assets of the company. Though in the Company 's books the amount of Rs. 84,633 was not charged to revenue but capitalised and carried forward in the Balance Sheet, for purposes of income tax, the Company 's auditors claim the same as an admissible item of revenue expenditure." He held that the expenditure was incurred in obtaining capital and should be distinguished from interest on borrowed capital which was alone admissible as a deduction under section 10 (2) (iii). According to him, section 10 (2) (xi) specifically excludes from consideration any item of capital expenditure. He further held that the case was not distinguishable from the decision in The Nagpur Electric Light and Power Co. vs Commissioner of Income tax, Central Provinces(1). The Appellate Assistant Commissioner agreed with the Income Tax Officer. The Appellate Tribunal distinguished the case of Nagpur Electric Light and Power Co. (1) 947 vs Commissioner of Income Tax(1) on the ground that in the Nagpur Electric Light(1) case money was expended for obtaining capital. It observed as follows "Here we find the position to be different. A study of the balance sheets of the company as at 31 3 1949 discloses the fact that the paid up capital was sufficient to cover the entire capital outlay of the company and that the further borrowal of Rs. 25 lakhs was for aug menting the working. funds of the company. It appears to us that even at that early stage the money was borrowed and used not for capital purposes but for augmenting the working funds of the company. We, therefore, consider that the whole of the mortgage loan was used firstly to discharge the loan of Rs. 25 lakhs and the balance for working funds and, as such, the whole of the amount was purely for the purposes of augmenting the working capital of the company and that it could not be stated that it was used for capital purposes. In this view of the matter, we hold that the money expended in obtaining the loan is an allowable expenditure." The High Court, after noticing the findings of the Income Tax Officer and the Tribunal preferred the findings of fact made by the Income Tax Officer. It observed "At this stage, we may point out that the conclusion reached by the Tribunal that the money was borrowed only for working expenses and not for capital investment proceeded on an inference based upon the balance sheet. The Tribunal did not investigate how the sum of Rs. 25 lakhs earlier borrowed from A. H. Harvey and Madurai Mills Ltd. was actually utilised. Though in the order of the Income tax Officer it is found stated that that amount was utilised on the capital assets of the company and that statement was based on the authority of the information furnished by the auditors of the assessee, the Tribunal either overlooked or ignored this circumstance. In the face of the statement so recorded by the Income tax Officer, the Tribunal does not appear to have been justified in relying upon inferences in ascertaining whether the earlier borrowal was on capital or revenue account." (1)6 I.T.C. 28. 948 The High Court after reviewing various cases, observed : "If we ask for what purpose the expenditure in the present case was incurred, the only answer must be that it was incurred for the purpose of bringing into existence an asset in the shape of borrowing these Rs. 40 lakhs. The further question would then be whether this asset or advantage was not for the enduring benefit of the business and whether the expenditure incurred was one which was incurred once and for all. The answer to both questions would again be in the affirmative. It is true that the borrowed money has to be repaid and it cannot be an enduring advantage in the sense that the money becomes part of the assets of the company for all time to come. But, it certainly is an advantage which the company derives from the duration of the loan and undoubtedly it could not have been for any purpose other than an advantage to the business that the borrowing was made. That it is not enduring in the sense that the borrowing has to be repaid after a short or long period, as it were, cannot affect the conclusion that it was nevertheless an asset or an advantage that was secured. Viewed in the light of the tests adumbrated in the above decision Assam Bengal Cement Co. Ltd. vs Commissioner of Income Tax(1) it seems to us that the expenditure must be regarded as capital expenditure. As the facts of the case which we have set out earlier indicate, there can be no doubt that at least to the extent of Rs. 25 lakhs that amount was expended for purposes of a capital nature, clearly in order to bring into existence capital assets. We have also pointed out that though it was vaguely stated by the Tribunal that the other sum of Rs. 15 lakhs was utilised as working funds, there seems to be no material whatsoever before the Tribunal to justify its coming to that conclusion." The learned counsel for the assessee company, Mr. A, V. Viswanatha Sastri, urges that the expenditure is admissible as a deduction under section 10(2) (xv) of the Act. He says that the High Court erred in holding that the expenditure was made to acquire any asset or advantage of an enduring nature within the test laid down by Viscount Cave and approved by this Court in Assam, Bengal Cement Co. Ltd. vs Commissioner of Income Tax(1). He (1) 949 further says that what was secured by the expenditure was a loan and in India money expended in raising a loan, whether by means of a debenture or a mortgage and whether you call it a loan capital or not, is not an expenditure in the nature of capital expenditure. He further submits that the expenditure was expended wholly and exclusively for the purpose of the business of the company. The learned counsel for the revenue, Mr. section T. Desai, supports the reasoning of the High Court. He says that the High Court was right in preferring the findings of the Income Tax Officer on the ground that there was no material for the finding made by the Appellate Tribunal and the finding was based on surmises and material evidence was ignored. He says that the High Court in a reference is entitled to ignore any findings of fact made by the Appellate Tribunal if those findings are vitiated. In the alternative, he says that the question referred is wide enough to include the question whether there was any material for the finding of the Appellate Tribunal. On the merits he contends that expenditure takes the colour from the thing on which the expenditure is made. If the money is spent to obtain capital then the expenditure assumes the nature of capital expenditure, but if the money is spent to obtain raw materials then the expenditure takes the colour of revenue expenditure. He further says that the borrowed money is an enduring asset and any expenditure made to obtain this money falls within the test laid down by Viscount Cave and approved by this Court. A number of cases have been referred to during the hearing of the case by both the counsel but we do not propose to refer to all of them. We must start first with the cases decided by this Court and see what principles have been laid down for distinguishing revenue expenditure from expenditure in the nature of capital expenditure, and especially those cases which dealt with similar problems. We will first consider State of Madras V. G. J. Ceolho(1). This was not a case arising under the Indian Income Tax Act but under the Madras Plantations Agricultural Income Tax Act, 1955, in which a section exactly similar to section 10 (2) (xv) existed. In brief, the facts in that case were that the assessee had borrowed money for the purpose of purchasing the plantations and he claimed that in computing his agricultural income from these plantations the entire interest paid by him on moneys borrowed for the purpose of purchasing the plantation should be deducted as expenditure, under section 5(e) of the Act. In (1) [1964]8 S.C.R. 60 1 ; 950 the Madras Act there was no provision similar to section 10(2) (iii) of the Act and thus interest was not expressly deductible as an allowance. This Court applied the test formulated by Viscount ,Cave, L. C., in Atherton vs British Insulated and Helsby Cables Ltd.(1) and approved by the Court in Assam Bengal Cement Co. Ltd. vs Commissioner of Income Tax(1), and held that the payment of interest was a revenue expenditure. It observed that "no new asset is acquired with it; no enduring benefit is obtained. Expenditure incurred was part of circulating or floating capital of the assessee. In ordinary commercial practice payment of interest would not be termed as capital expenditure. " This Court further held that the expenditure was for the purpose of business. Mr. Desai tried to distinguish that case on the ground that what was at issue was interest on loan and not expenditure incurred for ,obtaining the loan. In our opinion, there is no justification for drawing this distinction in India. As observed by Lord Atkinson in Scottish North American Trust vs Farmer(1) "the interest is, in truth, money paid for the use or hire of an instrument of their trade as much as is the rent paid for their office or the hire paid for a typewriting machine. It is an outgoing by means of which the Company procured the use of the thing by which it makes a profit, and like any similar outgoing should be deducted from the receipts, to ascertain the taxable profits and gains which the Company earns. Were it otherwise they might be taxed on assumed profits when, in fact, they made a loss. " It will be remembered that there was no section like section 10(2) (iii) of the Act in the English Income Tax Act. On the other hand, there were certain rules prohibiting the deduction in respect of "any capital withdrawn from, or any sum employed or intended to be employed as capital in such trade. " or "any interest which might have been made if any such sums as aforesaid had been laid out at interest." Lord Atkinson first held in that case that the express prohibitions did not apply to the facts of the case and then proceeded to discuss general principles. These observations show that where there is no express prohibition, an outgoing, by means of which an assessee procures the use of a thing by which it makes a profit, is deductible from the receipts of the business to ascertain taxable income. On the facts of this case, the money secured by the loan was the thing for the use of which this expenditure was made. In principle, apart from any statutory provisions, we see no distinction between interest in respect of a loan and an expenditure incurred for obtaining the loan. (1) (2)[1955] 1 S.C.R. 972 : (3)5 T.C. 693 at 707. 951 Mr. Desai urges that these observations of Lord Atkinson should be limited to a case where temporary borrowings are made. It is true that the House of Lords. was dealing with the case of a company and the moneys that were borrowed were of a temporary character. But this fact was only relied on to hold that the moneys secured were not 'capital ' within rule 3 of First Case, section 100 (5 and 6 Vic. 35) of the Income Tax Act, 1842, for Lord Atkinson observed at p. 706; ". it appears to me, simply, amounts to this that the word "capital" must, in this rule, be held to bear a wholly artificial meaning differing altogether from the ordinary signification, though there be no context in the clause requiring that there should be given to it a meaning different from that which it bears in ordinary commercial transactions." He then referred to the decision in Bryon vs The Metropolitan Saloon Omnibus Company(1) to show that the borrowing by a joint stock company of money by the issue of debentures does not amount to an increasing of the capital of the company. In Bombay Steam Navigation Co. Ltd. vs Commissioner of Income Tax(2), this Court again examined the question of distinguishing between capital expenditure and revenue expenditure. This Court first held that on the facts of the case, cl. (iii) of section 10(2) did not apply, because the assessee in that case had agreed to pay the balance of consideration due by the purchaser and this did not, in truth, give rise to a loan. Then Shah, J., observed : "Whether a particular expenditure is revenue expenditure incurred for the purpose of business must be determined on a consideration of all the facts and circumstances, and by the application of principles of commercial trading. The question must 'be viewed in the larger context of business necessity or expediency. If the outgoing or expenditure is so related to the carrying on or conduct of the business, that it may be regarded as an integral part of the profit earing process and not for acquisition of an asset or a right of a permanent character, the possession of which is a condition of the carrying on of the business, the expenditure may be regarded as revenue expenditure: ' (1) 3 D.G. and J. 123. (2) ; : L8Sup. Cl/63 14 952 We will now briefly deal with relevant decisions of the High Courts. The first case referred is In re Tata Iron and Steel Company Ltd.(1) In that case, the Tata Iron and Steel Co. Ltd. had incurred an expenditure of Rs. 28 lakhs as underwriting commission paid to underwriters on an issue of 7 lakhs preference shares of Rs. 100/ each and the company claimed to deduct this amount as expenses under section 9 (2) (ix) of the Indian Income Tax Act (VII of 1918). Macleod, C.J., observed: "If it is admitted that the cost of raising the original capital cannot be deducted from profit after the first year, it is dffficult to see how the cost of raising additional capital can be treated in a different way. Expenses incurred in raising capital are expenses of exactly the same character whether the capital is raised at the flotation of the company or thereafter : The Texas Land and Mortgage Company vs William Holtham (2)". He further observed that "as long as the law allows preliminary expenses and goodwill to be treated as assets, although of an intangible nature, the money so spent is in the nature of capital expenditure just as much as money spent in the purchase of land and machinery." The Chief Justice accordingly held that Rs. 28 lakhs could not be treated as expenditure (not in the nature of capital expenditure) solely incurred for the purpose of earning the profits of the company 's business. Shah, J., also came to the same conclusion, and he thought that the ratio decidendi in Texas Land and Mortgage Company vs William Holtham (2 ) and the principles underlying the decision in Royal Insurance Company vs Watson(1) lent support to this conclusion. At this stage it would be convenient to consider the Case of Texas Land and Mortgage Company vs William Holtham (2) relied on in this decision. We have already mentioned that the statute law in England is different from the law in India and the observations of the learned Judges in the English cases must be appreciated in the light of the background of the English Income Tax Act. In this case a mortgage company had raised money by the issue of debentures and debenture stock and incurred expenses for the issue of mortgage and placing of such debentures and debenture stock. The Company claimed to deduct these expenses but the High Court held that the expenses could not be deducted under Schedule D of the English Income Tax Act as trading ex (1) (3) ; (2) 953 penses. Mathew, J., gave the following reasons for disallowing the claim: "The amount paid in order to raise the money on debentures, comes off the 'amount advanced upon the debentures, and, therefore, is so much paid for the cost of getting it, but there cannot be one law for a company having sufficient money to carry on all its operations and another which is content to pay for the accommodation. This appears to me to be entirely concluded by the decision of yesterday. (Anglo Continental Guano Works vs Bell(1)". In the course of arguments, Cave J., had remarked "It is only so much capital. A man wants to raise pound 1 00,000 of capital, and in order to do that he has to pay pound 4,000. That makes the capital pound 96,000. That is all. " In reply to the argument of Finlay, Q.C., that "the capital of the, company, properly so called, is the share capital" Cave, J. remarked : "To the extent that you borrow you increase the capital of the company." In our opinion, if one keeps in mind the background of the English Income Tax Act, the observations reproduced above have no relevance to cases arising under the Indian Income Tax Act. In face of rule 3, Case 1, section 100 (5 & 6 Vict. 35) prohibiting the deduction of any expenditure in respect of any sum employed or intended to be employed as capital, Mathew and Cave, JJ. were only concerned with the question whether the amount secured by debentures and the amount obtained by the issue of debentures and debenture stock could be called capital employed or intended to be employed within the meaning of this rule. Rightly or wrongly, the English Courts have held that the amount obtained by the issue of debentures is capital employed within the meaning of the rule, but this does not give us any guidance in interpreting the words 'capital expenditure ' occurring in section 10 (2) (xv) of the Act. In our opinion, the Bombay High Court was wrong in relying on Texas Land and Mortgage Company vs William Holtham(2). But we do not say that the Tata Iron and Steel (1) (2) 954 Co. (1) case was wrongly decided. Obtaining capital by issue of shares is different from obtaining loan by debentures. In Nagpur Electric & Light Co. vs Commissioner of Income Tax(1), the Court of the Judicial Commissioner, Nagpur, held that expenses for raising debenture loan required for changing the system of supplying current from D.C. to A.C. and for discharging a prior loan was not allowable as deduction of the company 's assessable income. The Judicial Commissioner followed the case of Texas Land and Mortgage Company vs William Holtham(3) and In re Tata Iron and Steel Company Ltd.(1). After referring to these two cases, the only additional reason given was that "apart from authority it seems to us to stand to reason that money expended in obtaining capital must be treated as capital expendiure." With great respect we must hold that this case was wrongly decided. The Kerala High Court in Western India Plywood Ltd. vs Commissioner of Income Tax, Madras(4)held that the expenditure incurred by the company a capital expenditure and was 10(2)(xv). The High Court Trust Company vs Jackson(5) Du#(1) and some other cases Madras(4) held that the expenditure raise a loan by debenture was therefore not deductible under section relying on European investment and Ascot Gas Water Heaters vs drew a distinction between the borrowing of capital and securing merely temporary or day to day accommodation or banking or trading facilities. According to the High Court, the expenses for borrowing capital could not be treated as revenue expenditure. This distinction may be valid in English Law but we are unable to appreciate how the distinction is valid under the Indian Income Tax Act. As the decision is mainly based on this distinction and relies inter alia on In re Tata Iron and Steel Co. Ltd.(") and Nagpur Electric and Light Co. vs Commissioner of Income Tax (2 we must with respect hold that the case was wrongly decided. In Vizagapatnam Sugars and Refinery Ltd. vs Commissioner of Income Tax(") the Andhra Pradesh High Court relying on Texas Land and Mortgage Company V. William Holtham(3) and the decision in Western India Plywood Ltd. vs C.I.T., Madras(4) held that on the facts and circumstances of that case, brokerage and commission of four annas on every maund of sugar paid by (2) (3) (1) (4) (5) (6) (7) 955 the assessee company was not revenue expenditure but capital expenditure. In our opinion, the derision, as far as the brokerage was concerned, was wrong, but we do not say anything in this case with respect to the decision as far as the commission on sale of goods was concerned. The Calcutta High Court examined the question in great detail in Sri Annapurna Cotton Mills Ltd. vs Commissioner of Income Tax(1), Bachawat, J., held that the loan of Rs. 10 lakhs obtained by the company was an asset or advantage for the enduring benefit of the business of the assessee. He placed reliance on a number of cases,some of which we have already considered. But we are unable to agree that a loan obtained can be treated as an asset or advantage for the enduring benefit of the business of the assessee. A loan is a liability and has to be repaid and, in our opinion, it is erroneous to consider a liability as an asset or an advantage within the test laid down by Viscount Cave and approved and applied by this Court in many cases. Sinha, J., after referring to a number of cases, felt that the raising of capital by issue of debentures was a recognised mode of raising capital and he felt that the decided cases had laid down the proposition that borrowing money by the issue of debentures was an acquisition of capital asset and that any commission or expenditure incurred in respect thereof was of a capital nature and not to be considered as in the nature of revenue. He was impressed by the fact that not a single case to the contrary was brought to his notice. But we have to decide the case on principle, and with respect it seems to us that he erred in treating the loan as equivalent to capital for the purpose of section 10(2) (xv) of the Act. In section F. Engineer vs Commissioner of income Tax (2) the Bombay High Court held that the expenditure incurred for raising loan for the carrying on of a business cannot in all cases be regarded as an expenditure of a capital nature. On the facts of the case they held that as construction and sale of the building was the sole business of the firm and the building was its stock intrade, and the loan was raised and used wholly for the purpose of acquiring this stock in trade and not for obtaining any fixed assets or raising any initial capital or for expansion of the assessee 's business, the expenditure incurred for the raising of loan was not an expenditure of capital nature but revenue expenditure. Although the conclusion of the High Court was correct, we are not able to agree with the principle that the nature of the expenditure incurred in raising a loan would depend upon the nature and purpose of (1) (2) 956 the loan. A loan may be intended to be used for the purchase of raw material when it is negotiated, but the company may after raising the loan change its mind and spend it on securing capital assets. Is the purpose at the time the loan is negotiated to be taken into consideration or the purpose for which it is actually used ? Further suppose that in the accounting year the purpose is to borrow and buy raw material but in the assessment year the company finds it unnecessary to buy raw material and spends it on capital assets. Will the income tax officer decide the case with reference to what happened in the accounting year or what happened in the assessment year ? In our opinion, it was rightly held by the Nagpur Judicial Commissioner in Nagpur Electric Light and Power Co. vs Commissioner of Income Tax(1) that the purpose for which the new loan was required was irrelevant to the consideration of the question whether the expenditure for obtaining the loan was revenue expenditure or capital expenditure. To summarise this part of the case, we are of the opinion that (a) the loan obtained is not an asset or advantage of an enduring nature; (b) that the expenditure was made for securing the use of money for a certain period , and (c) that it is irrelevant to consider the object with which the loan was obtained. Consequently, in the circumstances of the case, the expenditure was revenue expenditure within section 10(2)(xv). The last contention of Mr. Desai is that even if it is revenue expenditure, it was not laid out wholly and exclusively for the purpose of business. Subba Rao, J., reviewed the case law in Commissioner of Income Tax vs Malayalam Plantation(1) and observed as follows : "The expression "for the purpose of the business" is wider in scope than the expression "for the purpose of earning profits. " Its range is wide : it may take in not only the day to day running of a business but also the rationalisation of its administration and modernization of its machinery; it may include measures for the preservation of the business and for the protection of its assets and property from expropriation, coercive process or assertion of hostile tide; it may also comprehend pay ment of statutory dues and taxes imposed as a precondition to commence or for carrying on of a business; it may comprehend many other acts incidental to the carrying on of a business." (1) (2) ; 957 Mr. Desai says that the act of borrowing money in this case was not 'incidental to the carrying on of a business. We are unable to accept this contention. In Eastern Investments Ltd. vs Commissioner of Income Tax(") this Court held that the Eastern Investments Ltd., an investment company, when it borrowed money on debentures, the interest paid by it was incurred solely for the purpose of making or earning such income, profits or gains within the purview of section 12(2) of the Indian Income Tax Act. It held on a review of the facts that the transaction was voluntarily entered into in order indirectly to facilitate the running of the business of the company and was made on the ground of commercial expediency. This case, in our opinion, directly covers the present case, although Mr. Desai suggests that the case of an investment company stands on a different footing from the case of a manufacturing company. In some respects, their position may be different but in determining the question whether raising money is incidental to a business or not, we cannot discern any difference between an investment company and a manufacturing company. We may mention that in that case this Court was not considering whether the expenditure was in the nature of a capital expenditure or not, because it was agreed all through that the expenditure was not in the nature of capital expenditure, and the only question which this Court dealt with was whether the expenditure was incurred solely for the purpose of making or earning income, profits or gains. The case of Dharamvir Dhir vs Commissioner of Income Tax(1) also supports the conclusion we have arrived at on this part of the case. It was held in that case that the payment of interest and a sum equivalent to 11/16th of the profits of the business of the assessee in pursuance of an agreement for obtaining loan from the lender were in a commercial sense expenditure wholly and exclusively laid out for the purpose of the assessees business and they were, therefore, deductible revenue expenditure. Before we conclude we must deal with the point raised by Mr. Sastri that the High Court erred in law in preferring the findings of the Income Tax Officer to that of the Appellate Tribunal. It is not necessary to decide this question but it seems to us that in a reference the High Court must accept the findings of fact made by the Appellate Tribunal and it is for the person who has applied for a reference to challenge those findings first by an application under section 66(1). If he has. failed to file an application under (1) (2) ; : 958 S.66(1) expressly raising the question about the validity of the findings of fact, he is not entitled to urge before the High Court that the findings are vitiated for one reason or the other. To conclude we hold that the expenditure of Rs. 84,633/ was not in the nature of capital expenditure and was laid out or expended wholly and exclusively for the purpose of the assessee 's business. The answer to the question referred, therefore, must be in the affirmative. The appeal is allowed, the judgment of the High Court set aside and the question referred answered in the affirmative. The appellant will have its costs incurred here and in the High Court. Appeal allowed.

In the years prior to 1950 the respondent company with headquarters in the erstwhile state of Indore was assessed to tax under the Indore Industrial Rules, 1927 and also under the Indian Income tax Act, 1922 in so far as its income fell within sections 4(1) (a) and 4(1)(c) read with section 42 of the Act. Depreciation had been allowed to it under the Indore Industrial Rules as well as the Indian Act. The written down value of its assets for the purpose of 1950 51 and subsequent assessments had to be determined under the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950 which laid down in the proviso to paragraph 2 that .where in respect of any asset, depreciation has been allowed for any year, both in the assessment made in the Part B State and in the taxable territories, the greater of the two sums allowed shall only be taken into account. " The Income tax Officer found that up to and including the year 1944 the sum allowed as depreciation under the Indian Income tax Act was larger and therefore in computing written down value as on 1 1 49 he took the sum allowed as depreciation under the Indian Act up to the end of 1944 and under the Indore Industrial Rules after that date. In the assessments made for the period up to the end of 1944 the respondent company had been treated as a non resident and its taxable income under the Indian Income tax Act had been worked out under Rule 33 of the Indian Income tax Act, 1922 as a fraction of its total world income. In determining the total world income the depreciation claimable under the Indian Act had been allowed, and it was the full amount of this depreciation allowed against the total world income that the Income tax Officer took into account in determining the written down value of the respondent company 's assets for the purpose of the 1950 51 assessment. The respondent company claimed that as only a fraction of the total world income had been treated as taxable income, therefore only a fraction of the depreciation allowed against the world income should be taken as having been 'actually allowed ' in the terms of paragraph 2 of the Removal of Difficulties Order. The Income tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal having rejected this plea the matter went in reference to the High Court. That Court took the view contended for by the respondent viz. that only the proportionate amount of depreciation which was attributable to the taxable income could be taken into account. The Revenue appealed to this Court It was urged on behalf of the appellant that depreciation was allowed in respect of the use of the assets in the business, that the allowance did not depend on the assessable income, and that the High Court, therefore went wrong in striking a proportion on the basis of a part of the income 926 actually assessed under the Indian Income tax Act. The different expressions used in various parts of paragraph 2 of the Removal of Difficulties Order came for consideration. HELD : Per Subba Rao and Sikri, JJ. (i) The word "assessment" used in the proviso to paragraph 2 has been given a very wide meaning in decided cases. It means sometimes 'the computation of income ', sometimes the determination of the amount of tax payable; and some,times the procedure laid down in the Act for imposing liability upon the tax payer. The proviso used the word 'assessment ' both with reference to Part B States and also with reference to the taxable territories. But in the present case the different shades of meaning of the said word were not relevant. For the purpose of computing the written down value, the amount of depreciation allowed for the purpose of the assessment only was relevant. [931 G H; 932 A] (ii)The key to the understanding of paragraph 2 is the expression "allowed '. The expression 'actually allowed ' in the main paragraph, 'allowed ' in the proviso, and 'taken into account ' in the Explanation mean the same thing. What the Income tax Officer has to take into consideration in computing the written down value is the depreciation actually allowed under the Income tax Act or the laws obtaining in Part B States and adopt the greater of the two sums so allowed under that head. The determination of the depreciation actually allowed under the Income tax Act for the years up to and including 1944 must depend on the provisions of that Act. [932 B] (iii)Under the Income tax Act depreciation allowance is in respect of such assets as are used in the business and shall be calculated on the written down value, which means, in the case of assets acquired in the previous year, the actual cost to the assessee, and in the case of assets acquired before the previous year, the actual cost to the assessee less all depreciation actually allowed to him under the Act. The allowance towards depreciation is conditioned an the user of the assets, wholly or in part., during the accounting year and thus contributing to the earning of the income. Though it is not unrelated to the profits it does not depend upon the increase or decrease in the earning capacity of the assets, but is only linked up with physical depreciation in their value. Even so only amount of depreciation actually allowed can be deducted from the original cost of the assets to ascertain the written down value. De hors such an allowance. , it has no significance in income tax law. [932 F H;933 A B] (iv) During the years up to and including 1944 the assessee was taxed as a nonresident on the income which fell under section 4(1)(a) or unders. 4(1)(c), read with section 42 of the Indian Income tax Act. The assessee was only assessed during the said years in respect of that part of its profits which could be said to be attributable to the sale proceeds or goods received in British India or in regard to which contract , were signed in British India. Such income was brought to tax in terms of r. 33 of the Indian Income tax Rules, 1922. The method adopted was that the amount of income for the purpose of Indian Income tax was calculated on an amount which bore the same proportion to the total profits of the business as the receipts accruing or arising in India bore to the total receipts, of the business. By applying the formula in r. 33 the Income tax Officer had actually allowed only a fraction of the amount towards depreciation allowable in assessing the world income of the assessee. The mere fact that in the matter of calculation the total amount of depreciation was first deducted from the world income and thereafter the proportion was struck in terms of r. 33 does not amount to an actual allowance of the entire depreciation in ascertaining the tax 927 able income accrued in India. The Income tax Officer could have adopted a different method by first ascertaining the gross income accrued in India and then deducting from it the allowance under the Act proportionate to the said income. Whatever method was adopted only a fraction of the total depreciation was actually allowed in ascertaining the taxable income in India. The view taken by the High Court was therefore correct. [933 B H] Hakumchand Mills Ltd. vs Commissioner of Income (Central) Bombay, , endorsed. Per Shah, J. (dissenting) Under section 10 of the Income tax Act taxable profits or gains earned by an assessee under the head 'business ' after making appropriate allowances under Subs. (2) have to be computed. One of such allowances is depreciation in respect of the assets used for the purpose of business. But depreciation determined according to the rules merely enters into the computation of taxable profits, whether the assessee is a resident or a non resident. In the assessment of a company the same rates of tax apply under the Income tax Act, whether the company is resident or non resident. If the company is resident under section 4A(c) its entire world income would be chargeable, subject of course to special exemptions like those provided in section 14(2)(c) : if it is nonresident only a slice of the income would be chargeable. Under the scheme of the Indian Income tax Act depreciation like any other allowance has to be allowed in computing the total profit; after the total profit is determined depreciation does not survive as a separate head of allowance. A part only of the total profit of a company determined in the manner prescribed by section 10, may be taxable. But total profit being determined after depreciation is allowed, between the taxable profits which may be a fraction of total profits and depreciation there is no definable relation. Therefore it is wrong to presume that the depreciation allowed in the taxable territories which is to be taken into account under the proviso to paragraph 2 of the Removal of Difficulties Order is a fraction of the depreciation considered for computing total profits. [940 E H; 941 A D] The fact that income was computed under r. 33 made no difference. In the ascertainment of total profits either for the purposes of assessment in the ordinary manner when the income of the assessee is determined or when a fraction is to be adopted for the purpose of the second method contemplated by section 33, there is no scope for assuming that only a fraction of the depreciation is actually allowed. Depreciation is deducted only once and for all, and it is deducted in determining the total profits of the business. [942B D] There is therefore no warrant either in section 10(2)(vi) or in paragraph 2 of the Removal of Difficulties Order or in r. 33 framed under the Indian Income tax Act for the view that the depreciation allowed is a fraction of the total depreciation of the business. [942 H]

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

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

Appeals Nos. 688 and 689 of 1968. Appeals by special leave from the judgment and order dated April 17, 1963 of the Bombay High Court in Misc. Petitions Nos. 229 and 230 of 1962. Sukumar Mitra, S.K.Aiyar, R.N. Sachthey and B.D. Sharma, for the appellant (in both the appeals ). M.C. Chagla, B. Datta and P.C. Bhartari, for the respondent in both the appeals ). The Judgment of the Court was delivered by Ramaswsmi, J. The respondent is a limited company incorporated under the Indian Companies Act, 1913 and carries on business of manufacturing and selling diesel trucks and bus chassis locomotives and other heavy engineering products. The respondent manufactures diesel trucks and bus chessis in collaboration with the German firm "Daimler Benz A.G." The business of manufacturing locomotives is carried on by the respondent in collaboration with the German firm "Krauss Maffei A.G." For each of the assessment years from 1955 56 to 1961 62, the Income Tax Officer issued a notice to the respondent under section 43 of the Indian Income Tax Act, 1922 (hereinafter called the "Act ') intimating that he intended treating the respondent as the Agents of the two German firms. In pursuance of the notices the Income Tax Officer actually passed orders under section 43 of the Act treating the respondent as agent of the said two German firms. For the assessment year 1962 63 no notice under section 43 'of the Act had been issued or served upon the respondent by the Income Tax Officer and no order under that section had been passed treating the respondent as the agent of the two German firms. On September 8, 1961, the respondent received from the Income Tax Officer notices of demand under section 29 of the Act together with an order under section 18A(i) calling upon the respondent to make advance payment of the tax for the assessment year 1962 63 as agent of the said two German firms. The tax demanded was Rs. 90,833.29 in the case of Krauss A.G. and Rs. 6,32,629.62 in the case of Daimler A.G. By its reply dated September 22, 1961, the respondent denied its liability to make advance payment of tax. The respondent also made a represen 23 tation to the Commissioner of Income Tax but on April 16, 1962 the respondent received a communication from the Commissioner rejecting its representation. The respondent thereupon flied two petitions m the Bombay High Court challenging the action of the Income Tax Officer demanding advance tax and asking for the grant of a writ in the nature of certiorari to quash the notices of demand under section 29 of the Act. By its judgment dated April 17/18, 1963, the High Court allowed the petitions and granted a writ quashing the notices of demand issued to the respondent and restraining the Income Tax Officer from taking any further steps or proceedings in the enforcement of the said notices. These appeals are brought by special leave to this Court on behalf of the Income Tax Officer, Companies Circle, Bombay, hereinafter called the 'appellant '. Sections 18A, 42 and 43 of the Act, as they stood at the material time, are to the following effect: "18A. (1)(a) In the case of income in respect of which provision is not made under section 18 for deduction of income tax at the time of payment, the Income tax officer may, on or after the 1st day of April in any financial year, by order in writing, require an assessee to pay quarterly to the credit of the Central Government on the 15th day of June, 15th day of September, 15th day of December and 15th day of March in that year, respectively, an amount equal to one quarter of the income tax and super tax payable on so much of such income as is included in his total income of the latest previous year in respect of which he has been assessed, if that total income exceeded the maximum amount not chargeable to tax in his case by two thousand five hundred rupees. Such income tax and super tax shall be calculated at the rates in force for the financial year in which he is required to pay the tax, and shall bear to the total amount of income tax and super tax so calculated on the said. ' total income the same proportion as the amount of such inclusions bears to his total income or, in cases where under the provisions of sub section (1 ) of section 17 both income tax and super tax or super tax are chargeable with reference to the total world income, shall bear to the total amount of income tax and super tax which would have been payable on his total world income of the said previous year had it been his total income the same proportion as the amount of such inclusions bears to his total world income: 24 Provided that, where the previous year of the assessee in respect of any source of income ends after the 31st day of December and before the 30th day of April, the order in writing issued by the Income tax Officer requiring the payment of income tax and super tax on that source of income shall substitute for the four quarterly payments hereinbefore specified, three payments of equal amount to be made on the 15th day of September, the 15th day of December and the 15th day of March, respectively: (b) If the notice of demand issued under section 29 in pursuance of the order under clause (a) of this sub section is served after any of the dates on which the instalments specified therein are payable, the tax shall be payable in equal instalments on each of such of those dates as fall after the date of the service of the notice or demand, or in one sum on the 15th day of March if the notice is served after the 15th day of December. (2) If any assessee who is required to pay tax by an order under sub section (1 ) estimates at any time before the last instalment is due that the part of his income to which that sub section applies. for the period which would be the previous year for an assessment for the year next following is less than the income on which he is required to pay tax and accordingly wishes to pay an amount less than the amount which he is so required to. pay, he may send to the Income tax Officer an esti mate of the tax payable by him calculated in the manner laid down in sub section (1 ) on that part of his income 1 for such period, and shall pay such amount as accords with his estimate in equal instalments on such of the dates specified in sub section (1)(a) as have not expired or in one sum if only the last of such dates has not expired: (3) Any person who has not hitherto been assessed shall, before the 15th day of March in each financial year, if his total income of the period which would be the previous year for an assessment for the financial year next following is likely to exceed the maximum amount not chargeable to tax in his case by two thousand five hundred rupees, send to the Income tax Officer an estimate of the tax payable by him on that part of his 25 income to which the provisions of section 18 do not apply of the said previous year calculated in the manner laid down in sub section ( 1 ), and shall pay the. amount, on such of the dates specified in that sub section as have not expired, by instalments which may be revised according to the proviso to sub section (2). ' "42. (1 ) All income, profits or gains accruing or arising, whether directly or indirectly, through or from any business connection in the taxable territories, or through or from any property in the taxable territories, or through or from any asset or source of income in the taxable territories, or through or from any money lent at interest and brought into the taxable territories in cash or in kind or through or from the sale, exchange or transfer of a capital asset in the taxable territories, shall be deemed to be income accruing or arising within the taxable territories, and where the person entitled to the income, profits or gains is not resident in the taxable territories, shall be chargeable to income tax either in his name or in the name of his agent, and in, the latter case such agent shall be deemed to be, for all the purposes of this Act, the assessee in respect of such income tax: Provided that where the person entitled to the income, profits or gains is not resident in the taxable territories, the income tax so chargeable may be recovered by deduction under any of the provisions of section 18 and that any arrears of tax may be recovered also in accordance with the provisions of this Act from any assets of the non resident person which are, or may at any time come, within the taxable territories. : Provided further that any such agent, or any person who apprehends that he may be assessed as such an agent, may retain out of any money payable by him to such non resident person a sum equal to his estimated liability under this sub section, and in the event of any disagreement between the non resident person and such agent or person as to the amount to be so retained, such agent or person may secure from the Income tax Officer a certificate stating the amount to be so retained pending final settlement .of the liability, and the certificate so obtained shah be his warrant for retaining that amount: L2Sup CI/69 33 26 "43. Any person employed by or on behalf of a person residing out of the taxable territories, or having any business connection with such person, or through whom such person is in the receipt of any income, profits or gains upon whom the Income tax Officer has caused a notice to be served of his intention of treating him as the agent of the non resident person shall, for all the purposes of this Act, be deemed to be such agent: Provided that where transactions are carried on in the ordinary course of business through a broker in the taxable territories in such circumstances that the broker does not in respect of such transactions deal directly with or on behalf of a non resident principal but deals with or through a non resident broker who is carrying on such transactions in the ordinary course of his business and not as a principal such first mentioned broker shall not be deemed to be an agent under this section in respect of such transactions: Provided further that no person shall be deemed to be the agent of a non resident person, unless he has had an opportunity of being heard by the Income tax Officer as to his liability. Explanation. A person, whether residing in or out of the taxable territories, who. acquires, after the 28th day of February, 1947, whether by sale, exchange or transfer, a capital asset in the taxable territories from a person residing out of the taxable territories shall, for the purposes of charging to tax the capital gain arising from such sale, exchange or transfer, be deemed to have a business connection, within the meaning of this section, with such person residing out of the taxable territories. " On behalf of the appellant Mr. Sukumar Mitra addressed the argument that an appointment made under section 43 of the Act was good for all purposes of the Act and therefore also for the purpose of section 18A of the Act. It was said that under s.18A, advance payment of tax is liable to be made in the current financial year that the assessment year 1961 62 is the same as the financial year 1961 62 and that for the said financial year in which the advance payment of tax was called to be made by the respondent, there was already an appointment of the respondent as the statutory agents of the non resident firms, the advance payment of tax was rightly demanded from the respondent. The appointment of the respondent under section 43 of the Act was made on October 21, 1961 and the notices of demand in the present case were issued 27 on November 2/3, 1961 and therefore subsequent to the said appointment. It was therefore contended that the advance payment of tax was properly demanded from the respondent and the respondent could not challenge the notices issued to it. In our opinion, there is no warrant or justification for the argument advanced on behalf of the appellant. The liability imposed upon a person by his appointment as a statutory agent under section 43 of the Act is. only in respect of the liability for the assessment year for which the appointment is made. The appointment of the respondent for the assessment year 1961 62 was in respect of the liability of the non resident firms. for the income of the previous year for the said assessment year 1961 62. Having regard to the scheme of the Act, the assessment for each year is self contained and the vicarious liability imposed by an appointment under section 43 of the Act only extends to the liability for the assessment of the year for which the appointment is made and cannot extend to the liability for any other assessment. Nor can the expression "for all purposes" used in section 43 of the Act extend the liability to any other assessment excepting the liability for the assessment year for which the appointment is made. The expression "for all purposes", in our opinion, only indicates that when an appointment is made for a particular assessment year it is good for all purposes as far as that assessment is concerned i.e., for all purposes for imposing tax liability, determining the quantum of the liability and for recovering it. The liability sought to be imposed under section 18A of the Act is not in respect of the income tax for the assessment year for which the appointment is made but for a subsequent assessment year. For the recovery of income tax of the said subsequent year unless there is a fresh appointment of the respondent under section 43 of the Act as a statutory agent, no such liability can be imposed on the respondent by the Income Tax authorities. It is true, as Mr. Sukumar Mitra contends that advance tax which is required to be paid under section 18A is charged during the financial year. But it must be remembered that it is charged not in respect of the previous year for which the financial year is the proper assessment year but it is charged for the tax liability of the subsequent year. In the present case, it is admitted that there was no appointment of the respondent under section 43 of the Act as statutory agent of the two German firms for the assessment year 1962 63. No notice was served upon the respondent under section 43 of the Act intimating to the respondent that the appellant intended, ' to treat it as the agent of the non resident German firms for the assessment year 1962 63. No opportunity was given to the respondent to be heard in the matter, nor was any formal order passed under section 43 of the Act by the appellant treating the respondent as the agent of the non resident German firms for the assessment year 1962 63. Although a person may fail in a particular year to resist the. claim that he is an agent, circumstances may 28 alter in the next year and he may be able to resist the claim then. Hence notice shall have to be given by the Income tax Officer for each assessment year to appoint a person as agent. It follows therefore that the respondent could not be treated as an agent of the two German firms for the assessment year 1962 63 and advance tax could not be demanded under section 18A of the Act for that assessment year treating the respondent as such statutory agent. We are accordingly of the opinion that the notices of demand issued by the appellant to the respondent dated September 5, 1961 were illegal and ultra rites and rightly quashed by the High Court by the grant of a writ in the nature of certiorari under article 226 of the Constitution. For the reasons expressed we hold that these appeals fail and are accordingly dismissed with costs there will be one set of hearing fee. Y.P. Appeals dismissed.

The election of the appellant to the Madhya Pradesh Legislative Assembly from Khategaon constituency was challenged on two grounds: (1) That the nomination paper of one of the contesting candidates was wrongly rejected by the Returning Officer; and (2) that there was a violation of section 123 of the Representation of the People Act, 1951, in that the appellant and his election agent made speeches, wherein they stated, that Congress had not abolished cow slaughter in India and that to vote for the Congress therefore was to commit the sin of gohatya. The trial Judge of the High Court allowed the petition on both the grounds. In appeal to this Court under section 116 A the Act, HELD: (1) The candidate whose nomination paper was rejected was not registered as a voter in the Electoral Roll relating to Khategaon constituency but to a different constituency. Under section 33(5) of the Act, he had to produce before the Returning Officer at the time of scrutiny, a copy of the Electoral Roll of that constituency, or of the relevant part thereof, or a certified copy of the relevant entry in such Roll, or should have filed any of those documents earlier with his nomination paper. He did not do any of these but instead, filed with his nomination paper a certificate giving only a gist of an entry from the Electoral Roll of the other constituency, and that too from an officer who was not proved to have the authority to issue a certified copy of the Electoral Roll. The provisions of the section were thus not complied with and the Court had no power to dispense with the requirement. Therefore, the rejection of the nomination paper of the candidate, by the Returning Officer, was justified and the trial Judge erred in holding that it was wrongly rejected [501 F H; 502 A E] (2) By stating that if the voters voted for congress they would be committing the sin of gohatya, the appellant and his agent attempted to induce the voters to believe that they would become objects of divine displeasure or spiritual censure and thus committed an election offence under section 123 of the Act. [506 G; 507 B] Since the witnesses who spoke about the speeches were believed by the trial Judge not on the probabilities of the case, but, on his observation of their demeanour this Court would be slow to depart from the trial Judge 's assessment of the evidence. According to that evidence, the voters were reminded that they would be committing the sin of gohatya. Since the cow is venerated in this Country and it is also beleved that gohatya is one of the cardinal sins, such a reminder would be equivalent to reminding them that they would be objects of divine displeasure of spiritual censure. The case therefore fell within section 123(2)(ii) and the 500 trial Judge was right in holding that the election of the returned candidate should be set aside. [505 D E; 506 H]

IMINAL Appeal No. 95 of 1957. Appeal by special leave from the judgment and order dated December 16, 1955, of the Allahabad High Court in Criminal Revision No. 1403 of 1953, arising out of the Judgment and order dated August 6, 1953, of the Court of the Additional Sessions Judge at Meerut in Criminal Appeal No. 225 of 1953. H. J. Umrigar and K. L. Mehta, for the appellant. G. C. Mathur, C. P. Lal and G. N. Dikshit, for the respondent. April 23. The Judgment of the Court was delivered by IMAM, J. The appellant was convicted under section 5(2) of the Prevention of Corruption Act and under section 161 of the Indian Penal Code and sentenced to one year 's rigorous imprisonment on each count. The sentences were made to run concurrently. On the facts found by the courts below the appellant accepted Rs. 20/ as illegal gratification from one Malekchand who had applied for allotment of a house. The appellant was employed at that time as a clerk in the office of the District Relief and Rehabilitation Office, Meerut. The aforesaid sum of money was accepted by the appellant as bribe with a view to getting a house allotted to Malekchand. There can be 98 778 no question that, on the facts found, the appellant was guilty both under section 5(2) of the Prevention of Corruption Act and under section 161 of the Indian Penal Code. The first point taken was that the investigation had taken place by a police officer below the rank of Deputy Superintendent of Police. Consequently, the investigation had taken place in contravention of the provisions of the Prevention of Corruption Act. The conviction of the appellant was therefore vitiated. This point was taken before the Additional Sessions Judge who had heard the appeal of the appellant against his conviction. The Additional Sessions Judge referred to a decision of the Calcutta High Court which supported the submission made on behalf of the appellant. He also referred to a decision of the Allahabad High Court to the contrary effect. He followed, as he was bound to follow, the decision of the Allahabad High Court. The decision of this Court in the case of H. N. Rishbud and Inder Singh vs The State of Delhi (1) does not support the submission made by Mr. Umrigar on behalf of the appellant. He, however, referred to a passage in the aforesaid cited decision at page 1164 to the effect that where a breach of a mandatory provision is brought to the knowledge of the court at a sufficiently early stage, the court, while not declining cognizance, would have to take the necessary steps to get the illegality cured and the defect rectified by ordering such investigation as the circumstances of the case may call for. It has not been shown to ' our satisfaction that the attention of the trial court was drawn at an early stage to any breach of the provisions of the Prevention of Corruption Act. There had been an enquiry before commitment to the Sessions. It is clear that during these proceedings before commitment no objection was raised that the investigation had taken place by a police officer below the rank of Deputy Superintendent of Police in contravention of the provisions of the Prevention of Corruption Act. The decision of this Court was given on December 14, 1954, and the High Court judgment in the present case was delivered on (1) ; , 1164. 779 December 16, 1955. No point was taken before the High Court to the effect that the investigation had been made by an officer below the rank of Deputy Superintendent of Police in contravention of the provisions of the Prevention of Corruption Act. Such an objection should have been taken if the appellant was prepared to establish before the High Court that the objection had been taken at a sufficiently early stage and that in view of the decision of this Court in the case cited the trial court ought not have proceeded with the trial unless the defect had been removed. The decision of this Court in the case cited is clear, however, that generally a conviction is not vitiated because there had not been strict compliance with the provisions of the Prevention of Corruption Act in the matter of investigation by a police officer. As to whether the objection was taken at a sufficiently early stage is a question of fact and ought to have been raised in the High Court as the decision of this Court in the case cited had been delivered something like a year before. As this point in this form was not raised before the High Court we cannot allow it to be raised at this stage. It was next contended that the Assistant Sessions Judge who tried the case had no jurisdiction to try the case as it was triable by a Special Judge only. It is clear, however, that the case had been committed to the Court of Session before the Criminal Law (Amendment) Act, 1952, came into force. Under section 10 of this Act all cases pending before the Court of a Magistrate were transferred to the Court of a Special Judge. Section 10 did not purport to transfer cases, pending in the Court of Session at the commencement of the Act, to the Court of the Special Judge. In the case of Asgarali Nazarali Singaporewalla vs The .State(1), this Court observed "The cases which were pending before the courts of sessions did not require to be so transferred because they would be tried by the procedure obtaining in the courts of sessions and nothing further required to be done." It seems clear to us, therefore, that the Assistant Sessions Judge had jurisdiction to try the case as the same had been (1)[1957] S.C.R. 678, 686. 780 pending in the court of Session when the Act came into force. The third contention raised was that the courts below had not correctly appreciated the nature, extent and the quantum of proof required for raising the presumption under section 4 of the Prevention of Corruption Act. The High Court 's judgment does not show that that Court in any way raised any presumption under section 4 against the appellant. The following passage from the High Court 's judgment would make this clear: " It was next contended that the evidence on the record does not satisfactorily prove that the sum of Rs.20 was received by the applicant as illegal gratification. The finding on this point is a finding of fact. I have gone through the judgment of both the courts below and I see no satisfactory reason to disagree with the concurrent finding of both the courts on this point. There is ample evidence on behalf of the prosecution to the conclusion that the sum of Rs. 20 was paid by Malekchand to the applicant on his demand in order to secure the allotment of a house. There does not appear any satisfactory reason why Malekchand should have paid Rs. 20 to the applicant to procure wheat for him. " There is, therefore, no question of any presumption being raised against the appellant. On the contrary, his defence that he had taken the sum of Rs. 20 from Malekchand to purchase wheat for him was disbelieved and Malekchand 's evidence that he had taken this money in order to secure an allotment of a house for Malekchand was accepted. There appears to be no substance in the point raised. It was next urged that the matter of sentence may be considered. The incident took place in 1951 and the appellant has been on bail and it would not be desirable to send him back to jail. The sentence of one year 's imprisonment for corruption by a public servant cannot, however, be considered as unduly severe. The appeal is accordingly dismissed. Appeal dismissed.

The appellant was committed to the Court of Session for trial of offences under section 5(2) Prevention of Corruption Act, 1947 and section 161 Indian Penal Code. Shortly thereafter, the Criminal Law (Amendment) Act, 1952 came into force. An Assistant Sessions judge tried the appellant and convicted him of the offences charged. The appellant contended that the trial was vitiated as the investigation had been made by a police officer below the rank of Deputy Superintendent of Police and that the Assistant Sessions judge had no jurisdiction to try the case as it was triable by a Special Judge. Held that, the Assistant Sessions judge had jurisdiction to 777 try the case. Section 10 of the Criminal Law (Amendment) Act, 1952 transferred only cases pending before Magistrates to Special judges but did not transfer cases which had been committed to Court of Session before the Act came into force. Asgarali Nazarali Singaporewalla vs The State, [1957] S.C.R. 678, relied on. Held further that, the conviction was not vitiated by the investigation having been made by an officer below the rank of a Deputy Superintendent of Police. If the matter had been urged before the Courts at an early stage it would have had to take steps to get the illegality cured by ordering fresh investigations. But the appellant could not be permitted to raise the questions whether the objection regarding investigation had been taken at the earliest stage as the question had not been raised in the Courts below. H.N. Rishbud vs The State of Delhi, , relied on.

Criminal Appeal No. 287 of 1986. From the Judgment and order dated 26.4.1985 of the Allahabad High Court in Crl. Appeal No. 1938 of 1977. D.P. Singh, N.P. Midha and Mrs. Rani Chhabra for the Appellant. Prithvi Raj and D. Bhandari for the Respondent. The Judgment of the Court was delivered by SEN, J. This appeal by special leave directed against the judgment of the Allahabad High Court dated April 26, 1985 upholding the judgment and sentence passed by the learned Additional Sessions Judge, Kanpur dated July 11, 1977 raises the question whether the appellant was a child as defined in section 2(4) of the U.P. Children Act, 1952 and therefore was entitled to the benefit of section 29 of the Act. The point was not taken in the High Court nor was there any such plea 1056 raised during the trial. This was a case of triple murder. The appellant along with his ten companions was convicted by the learned Additional Sessions Judge under section 302 read with section 149 of the Indian Penal Code, 1860 for having committed the murders of the deceased Basdeo, Anant Ram and Mahabir in furtherance of the common object of the unlawful assembly and they were each sentenced to undergo rigorous imprison ment for life. The Court has granted special leave to the appellant Vinod Kumar alone and dismissed the special leave petitions filed by the other accused. In this appeal, the appellant sought special leave mainly on two grounds, namely: (1) The High Court was not justified in dismissing the appeals before it without hear ing learned counsel appearing for the accused on the ground that the Court was satisfied that the appeals ought to be allowed. And (2) The trial of the appellant Vinod Kumar and the sentence of imprisonment for life awarded upon his conviction under section 302 were vitiated in view of the deci sions of this Court in Jayendra & Anr. vs State of U. P., ; Umesh Chandra vs State of Rajasthan, ; and Gopi Nath Ghosh vs State of West Ben gal, [1984] I SCR 803 as the appellant at the time of the incident was not even 14 years of age, his date of birth being April 18, 1959, and was a 'child ' as defined in section 2(4) of the Act and he ought to have been tried by the special court as required under section 29 and his trial by the Court of Sessions was bad in law. We have heard Shri Dharam Pal Singh, learned counsel for the appellant at quite some length. It was stated that the only question raised at the stage of grant of special leave, which again was the solitary point urged by him before us, was that the appellant was a child within the meaning of section 2(4) of the Act at the time of the occurrence and therefore entitled to the benefit of section 29. The learned counsel made a statement at the bar that the other point was not pressed at the hearing of the special leave petitions, namely, that the High Court did not give a hearing to the appellant and the other accused. Normally, it would seem unnecessary to state the facts of the case in detail as they may not be germane to the issue now sought to be raised, namely, that the High Court was not justified in dismissing the appeal preferred by the accused without giving them a hearing. But in the facts and circumstances of the present case, we think it necessary to do so. The facts brought out in the prosecution case clearly show that the appellant not only led the assault but also played a prominent role which resulted in the gruesome triple murder and it is incredible 1057 that he was a child at the time of the incident. The inci dent which led to the triple murder appears to be calculat ed, preplanned and ruthlessly executed. Briefly stated, the facts disclosed by the evidence of the prosecution are that there were two rival factions in village Pania Mau, one led by the deceased Basdeo to which the other dead persons Anant Ram and Mahabir belonged, and the other of which the appellant Vinod Kumar and his ten companions were members, and the relations between them were extremely strained. It appears from the prosecution evidence that this ghastly incident took place on the morning of August 20, 1973 on the banks of a tank lying on the western outskirts of the village abadi which is used by the village people for purposes of bathing and washing their clothes. At about 11.30 a.m. the three deceased Basdeo, Anant Ram and Mahabir had gone to the tank for taking bath and washing their clothes. One of the eye witnesses Kumari Shashi Kala, PW 3, sister of the deceased Basdeo had also gone there for similar purposes. She was at the southern burj of the tank, deceased Basdeo was on the northern burj, deceased Mahabir and Anant Ram were on the steps of the ghat on the eastern bank. The appellant Vinod Kumar along with his companions suddenly appeared at the ghat armed with deadly weapons like gun, pistol, sword, kanta, lathi etc. and they opened an assault on the three dead persons. The accused almost simul taneously opened fire with his gun at the deceased Basdeo and the appellant Vinod Kumar with his pistol at the de ceased Mahabir. Basdeo on receiving gun shot injuries jumped into the tank to swim across and take to safety. The de ceased Mahabir was also injured by gun fire and tried to escape but fell down on receiving another gun shot fired by the accused Hanuman. When he fell down, the accused Shiv Prasad and Ranjit Singh repeatedly hit him with their sword and kanta resulting in his instantaneous death. The deceased Anant Ram was also assaulted by the accused Roop Ram and Gopal with their sword and kanta and he died on the spot as a result of the injuries received by him. The appellant Vinod Kumar and the accused Hanuman then rushed to the western bank of the tank and opened fire at the fleeing Basdeo and on being hit he fell down in the field of Deo Karan. By that time all the accused reached the spot and there he was again assaulted by the appellant and his com panions and his head was chopped off the trunk. Thereafter, the appellant and his companions made good their escape and the accused Roop Ram carried the decapitated head of the deceased Basdeo. The appellant abjured his guilt and complained that he had been 1058 falsely implicated due to previous animosity. His only plea in defence at the trial as well as in the High Court was one of alibi. It was alleged that he was a student of Intermedi ate class in C.A.V. Inter College, Allahabad and on the date of the occurrence i.e. on August 20, 1973 he was actually attending his classes in the college. He tendered in evi dence the college attendance register and also examined Virendra Kumar Mehta, DW 1, a Lecturer in Physics in the college in support of his plea of alibi. The learned Additional Sessions Judge and the High Court have during the course of their carefully written judgments marshalled the entire evidence and come to the conclusion that the guilt of the appellant and the other accused was proved by the prosecution beyond all reasonable doubt. The High Court on a consideration of the evidence has come to the conclusion that there was no reason to disbelieve the unimpeachable testimony of PW 3 Kumari Shashi Kala, sister of the deceased Basdeo as well as the testimony of the three other eyewitnesses, PW 1 Ram Shanker, PW 2 Ram Swarup, brother 01 ' the deceased Mahabir and PW 6 Prayag Narain, who were undoubtedly present at the place of the incident, and have given a graphic description of the entire incident. It observed that though these witnesses were subjected to close cross examination, the defence had failed to impeach their credibility as truthful witnesses. The evidence of these witnesses clearly brings out that it was the appellant who led the sault which resulted in the triple murder of Basdeo, Anant Ram and Mahabir. As to the plea of alibi raised by the appellant, both the learned Additional Sessions Judge and the High Court have recorded a finding that he has failed to substantiate that plea. The crude attempt to establish the plea of alibi by production of the college attendance register and the examination of Virendra Kumar Mehta, DW 1 has failed. The High Court agreeing with the learned Additional Sessions Judge has come to the conclusion that the entries in the college attendance register were forged and has passed strictures against this witness that he being a person in a responsible position, should have appeared as a witness for the defence and had not cared to uphold the dignity of his position, and by giving suborned evidence has tried to thwart the course of justice not only by his evidence but also by interpolating the college attendance register. From the narration of the facts it is incredible that the appellant was only a child within the meaning of section 2(4) of the Act i.e. below the 1059 age of 16 years at the time of the occurrence, which is nothing but a complete afterthought. Undeferred by the fact that the appellant had failed to establish the false plea of alibi by the production of the forged college attendance register and taking cue from the various decisions of this Court as reported in Satto & Ors. vs State of U.P., ; ; Jayendra & Anr. vs State of U.P., Umesh Chandra vs State of Rajasthan and Gopi Nath Ghosh vs State of West Bengal (supra) displaying the Court 's deep concern and solicitude about the treatment of juvenile offenders, the appellant is emboldened to come forward with this belated plea that he was a child within the meaning of section 2(4) of the Act and therefore the trial was vitiated by reason of section 29. However, before we deal with the question on merits we would like to advert to unseemly features in this case. The case presents a feature which is rather disturbing. In the first place, there are false averments made in the special leave petition in order to present a distorted picture of the hearing of the appeals in the High Court. Secondly, there are wild and unfounded allegations made against the learned Judges in an attempt to destroy their credibility and create doubt about the correctness of the judgment appealed from. As to the first aspect, the legal advisors of the appellant and the other accused have gone to the extent of making out an entirely false case, namely, .that the High Court did not give a hearing to them. Merely because the learned counsel disdained from raising the point at the stage of grant of special leave, does not imply that we should not take notice of the facts alleged. We shall indeed be failing in our duty if we do not comment upon the conduct of the appellant and the other accused and their legal advisors in trying to create prejudice against the High Court. It is averred in paragraph 13 of the special leave petition that the appeals were taken up for hearing on April, 1, 1985 at 3.15 p.m. and that day only the names of the accused, weapons, sections and sentences, date and time of the occurrence etc. were given out when the Court rose for the day at 3.45 p.m. It is then averred in para 14 that on the next day i.e. on the 2nd, the appeals could not be taken up. They were taken up on the 3rd at 2.10 p.m. when the case was called out when Shri Chandra Shekhar Saran and Shri P.C. Chaturvedi, the two senior counsel along with Sarvashri Dharam Pal Singh, G.S. Chaturvedi and A.K. Sachan appeared. It is alleged that when the case was called out and Shri Chandra Shekhar Saran wanted to argue the appeals, the learned Judges said that they had seen the case and they did not want to hear the appellants but wanted to hear the State counsel. At this point, it is said that Shri P.C. Chaturvedi pointed out the age of the appellant Vinod Kumar and thereupon one 1060 of the Judges (Honable Mr. Justice X who delivered the judgment) observed that since they wanted to allow the appeals, therefore, they did not want to hear the appellants and if need be. they would call upon them later. It is then alleged that the Court called upon the State as to how it supported the judgment as two of the four eye witnesses had been disbelieved by the learned Additional Sessions Judge and the remaining two witnesses were partisan witnesses, one of whom being PW 3 Kumari Shashi Kala, who was a young girl of 15 years and would not go to the tank alone at that time. It is further alleged that after the prosecution had placed the evidence of PW 2 Ram Swarup, the Court was not satisfied and reserved the judgment. At this stage, it is said, Shri P.C. Chaturvedi again tried to point out the age of the appellant but Mr. Justice X observed that when the veracity of the two eyewitnesses was doubtful there remained no need to proceed further. The Court rose at 3.45 p.m. The allega tions in paras 14 to 17 are that the Judges gave an impres sion at the conclusion of the hearing on April 3, 1985 that the appeals would result in an acquittal while they pro nounced the judgment on the 28th dismissing the appeals and it is then averred in para 17 that this decision came as a shock to the counsel appearing for the accused. There is nothing on record to substantiate these allegations apart from the letter written by Shri Dharam Pal Singh to the counsel in this Court to file the special leave petition to which we shall presently refer. In view of the conduct of the appellant and the other accused and their legal advisors we are not prepared to act on the assertion in the letter written by Shri Dharam Pal Singh. If there was any truth in this assertion, it was expected that the learned Judges would have made a mention of the fact that a contention was advanced on behalf of the appellant that he was a child within the meaning of section 2(4) of the Act for whatever it was worth. We feel deeply concerned that the appellant and the other accused do not rest themselves by making this false assertion that they were not heard by the High Court but they have gone further and made wholly wild and unfounded allegations against the learned Judges casting serious aspersions on them. They have brought into existence certain correspondence in an attempt to create prejudice against the learned Judges. We fail to see the propriety of placing copies of these two letters unless it was with a view to create doubts and suspicion about the integrity of the learned Judges. It shows that the appellant and his legal advisors can go to any extent to secure a reversal of the judgment of the High Court upholding the conviction of the appellant for having committed offences of murder punishable under section 302 read with section 149 of the Indian Penal Code. First is a letter 1061 dated April 23, 1985 i.e. just three days before the deliv ery of the judgment, said to have been written by Shri K.L. Grover to the accused Ram Gopal Sachan. We understand that Shri Grover is comparatively a senior counsel practicing in the High Court at Allahabad. The letter of Shri Grover appears to be written in response to a letter written by the accused dated April 20, 1985 seeking his assistance. Shri Grover naturally expressed his resentment and displeasure that the accused should have written a letter of this nature to him asking that he should try to influence the learned Judges. It is in these terms: .lm "I was surprised and sorry after reading it. Neither I am a Counsel in Criminal Nos. 1937 and 1938 of 1977 Hanuman and others and Vinod and others, nor I know any of them and I have no connection with these cases. You have written about Shri D.P. Singh, Advocate. He is a good counsel but your assertions are baseless. I do not take part in any unscrupu lous thing. This is correct that Hon 'ble X is my friend but he is a Judge and I am an advocate. Decisions are not sold in the High Court. Hon 'ble X is like all other Judges of the High Court very honest Judge. Either you have written false thing or you have been cheated by some body. Kindly do not correspond with me in this connection. " The other is a letter dated May 24, 1985 addressed by Shri Dharam Pal Singh to the counsel in this Court instruct ing him to file the special leave petition, saying that as a counsel his "conscience was shocked", narrating that at the hearing the learned Judges gave the impression that this was a case which deserved acquittal and they would like to hear the prosecution counsel and thereafter, if necessary, they would hear the accused. In the letter he asserts that on this the senior counsel Shri Chandra Shekhar Saran did not address the Court, but Shri P.C. Chaturvedi told the Court that the appellant was a child upon which one of the learned Judges observed that since they were allowing the appeal, it was not necessary to go into the question. He then goes on to say that he and the other counsel were shocked by the judgment delivered by the learned Judges dismissing the appeals. He also adverts to Shri Grover 's letter and men tions that he had taken the accused Ram Gopal Sachan to Shri Grover 's place and enquired about the letter since the accused denied that he had written any such letter. Accord ing to his version Shri Grover declined to give them the letter as he did not want to get involved in any controversy and he then adds: 1062 "As counsel, we owe a duty to our client and all of us appearing on behalf of the accused feel that we have failed therein and our conscience is in distress." He then concludes by saying: "We do not know whether all these facts should be placed before the Hon 'ble Supreme Court and this decision we leave in your hands. But we do request you to Kindly see that the hearing which we could not get for these accused (having a case for acquit tal) do get an opportunity of placing their case before the Court. " perusal of these letters would tend to show that there was an attempt to blackmail the learned Judges. We cannot but deprecate the conduct of the appellant and the other accused in making such wild allegations about the propriety and conduct of the learned Judges. We have no doubt in our mind that the allegations are totally false and untrue. It is pertinent to observe that Shri Dharam Pal Singh has chosen not to file any affidavit in support of the asser tions made by him in his letter. The learned counsel who drafted the special leave petitions should have shown great er circumspection before casting such serious aspersions on the High Court. We are not prepared to believe that it was mentioned before the learned Judges at the hearing of the appeals that the appellant was a child within the meaning of section 2(4) of the Act when this fact is not borne out by the judgment and there is nothing on record to substantiate the allegation. In the facts and circumstances of this particular case, we are not prepared to countenance the argument that the appellant was a child within the meaning of section 2(4) of the Act. After the grant of special leave, the appellant apart from his own affidavit, filed two affidavits of his father Sri Narain Sachan and an affidavit by Shri Jitendra Prasad Singh, Advocate, brother of Dharam Pal Singh. He has also placed on record copies of certain documents, namely (1) extracts of the kutumo register in Form 'A ' of Pania Mau Gaon Sabha issued by the Village Panchayat Officer, Nyaya Panchayat, Dev Rahat. (2) Certificate of the High School Examination, 1973 issued by the Secretary of Madhyamik Shiksha Parishad, Uttar Pradesh. (3) Entry from the elector al roll relating to U.P. State Legislative Assembly Constit uency No. 275, Allahabad, Mohalla Buxi Khurd. (4) Statement of the appellant recorded by the learned Additional Sessions Judge under section 3 13 of the Code of Criminal Procedure, 1973. We have gone through these 1063 affidavits and other documents and we are not prepared to act on them. At the hearing we asked the learned counsel to produce the original documents. We are satisfied that the documents are of doubtful authenticity and it would be unsafe to rely upon such documents. Such documents can always be brought into existence. We would refer to the statement of the appellant recorded by the learned Addition al Sessions Judge on June 4, 1975 wherein the appellant stated his age to be 17 years. Beneath the statement, there is an endorsement in ink: "The age of 17 years appears to be correct". We are left to guess who made this endorsement. Even assuming that the endorsement was made by the learned Additional Sessions Judge, that was only an estimate of age and does not necessarily show that the appellant was a child within the meaning of section 2(4) of the Act at the time of occurrence. In view of the earlier attempt made by the appellant and his legal advisors to substantiate the false plea of alibi by production of forged attendance register and the tendering of evidence of Virendra Kumar Mehta, DW 1 against whom the High Court has passed strictures for sub orning himself in an attempt to thwart the course of jus tice, it is quite evident that the appellant and his legal advisors would go to any extent in creating evidence to support the false plea now taken. In conclusion, we cannot but once again deprecate the growing tendency on the part of the unsuccessful litigants to impute unworthy motives to Judges and this has become not uncommon these days. We frown upon the practice of making such baseless imputations against Judges and time has come for this Court to take serious notice of this unhealthy trend before it becomes a growing menace and an unmitigated evil. We feel that the members of the bar equally share this responsibility and should ensure that uncalled for asper sions are not cast on the Judges. Such a course, of action on their part would enhance the prestige of the Court and the legal profession. For these reasons, the appeal must fail and is dismissed, P.S.S Appeal dis missed.

The appellant a student of intermediate class, was alleged to have led the attack on the rival faction along with his accomplices armed with deadly weapons like gun, pistol, sword, kanta, lathi etc. resulting in triple murder. He was also alleged to have opened fire with his gun at the deceased. The trial court disbelieved his plea of alibi, that on the date of occurrence he was actually attending his classes in college, in support of which he tendered in evidence the attendance register and also examined DW 1, the lecturer in college, and he was convicted under section 302 read with section 149 of the Indian Penal Code, 1860. The High Court in appeal affirmed the conviction. Agree ing with the trial court it reached the conclusion that the entries in the college attendance register were forged and passed strictures against the witness. In the appeal before this Court by special leave the appellant came forward with the belated plea that he was a child below the age of 16 years within the meaning of section 2(4) of the U.P. Children Act, 1952 and therefore, the trial was vitiated by reason of section 29 of the Act. It was contended that in spite of repeated requests of his counsel he was not heard by the High Court Judges on the point. While making this frivolous assertion the accused also made wild allega tions in an attempt to 1054 destroy the credibility of the Judges and create doubt about the correctness of the judgment appealed from. To substanti ate the allegation he and his legal advisors brought into existence certain correspondence. In support of his age he filed affidavits of his father and the advocate. In addi tion. he also placed on record copies of extract of the kutumo register of the Gaon Sabha, certificate of High School examination, entry from the electoral roll, and endorsement in ink below his statement recorded unders section 313 of the Code of Criminal Procedure, 1973. Dismissing the appeal, the Court HELD: 1.1 The appellant was not a child within the meaning ors. 2(4) of the U.P. Children Act, 1952 at the time of occurrence and, therefore, was not entitled to the bene fit of section 29 of the Act. [1062F; 1055G H] 1.2 The affidavits and the copies of documents placed on record, after the grant of the special leave extract of the kutumo register of the Gaon Sabha, certificate of High School Examination and entry from the electoral roll, in support of appellant 's age are all of doubtful authenticity and it would be unsafe to rely upon them. Such documents can always be brought into existence. So is the endorsement in ink below the statement of the appellant recorded by the trial court under section 313 of the Code of Criminal Procedure 1973, to the effect that "the age of 17 years appears to be correct". Even assuming that the endorsement was made by the trial court, that was only an estimate of age and does not necessarily show that the appellant was a child within the meaning of section 2(4) of the Act at the time of occurrence. [1062F; 1063C] 1.3 The attempt made by the appellant and his legal advisors earlier to substantiate the false plea of alibi by production of forged attendance register, and the tendering of evidence of DW 1, against whom the High Court has passed strictures for suborning himself in an attempt to thwart the course of justice, makes it evident that the appellant and his legal advisors would go to any extent in creating evi dence to support the false plea now taken. [1063CD] The |acts brought out in the prosecution case clearly show that the incident which led to the triple murder was calculated, preplanned and ruthlessly executed, and that the appellant not only led the assault but also played a promi nent role in it. It is incredible that he was a child below the age of 16 years at that time. [1056H; 1057A] 2. There is nothing on record to substantiate the allegation that 1055 the appellant was not heard by the High Court on the ques tion of his age. If there was any truth in that assertion it was expected that the learned Judges would have made a mention of the fact that a contention was advanced on his behalf that he was a child within the meaning of section 2(4) of the Act, for whatever it was worth. [1060DE] 3.1 The appellant and the other accused have gone fur ther and made wholly wild and unfounded allegations against the Judges of the High Court casting serious aspersions on them. They have brought into existence certain correspond ence in an attempt to create prejudice against them. The propriety of placing copies of the correspondence on record cannot be seen unless it was with a view to create doubts and suspicion about the integrity of the Judges. It shows that the appellant and his legal advisors can go to any extent to secure a reversal of the judgment of the High Court. [1060FG] 3.2 The practice of making baseless imputations on the part of unsuccessful litigants against Judges is most un healthy and this Court takes serious notice of this evil. The members of the bar equally share this responsibility and should ensure that such uncalled for aspersions are not cast on the Judges. The counsel who drafted the special leave petition should have shown greater circumspection. [1063E; 1062D]

Appeals Nos. 711 713 of 1962. Appeals by special leave from the judgments and order dated May 27, 25, 1960, of the Assam High Court in Civil Rule Nos. 3 and 25 of 1960 respectively and December 15, 1959 of the Allahabad High Court in Special Appeal No. 502 of 1958. CIVIL APPEAL No. 614 OF 1962. Appeal by special leave from the order dated April 6, 1961 of the Punjab High Court in Letters Patent Appeal No. 81/1961. CIVIL APPEALS Nos. 837 To 839 of 1963. Appeals from the judgment and order date January 18, 1963 of the Assam High Court in Civil Rule 386 to 388 of 1961. B.C. Ghose and P.K. Chatterjee, for the appellants (in C. A. Nos. 711 to 713/1962). I.M. Lall and V.D. Mahajan, for the appellant (in C.A. Nos. 714 of 1962). S.V. Gupte, Additional Solicitor General, Naunit Lal and R.H. Dhebar, for the respondents (in C.A. Nos. 711 714/1962). C.K. Daphtary, Attorney General, R. Ganapathy Iyar and R.H. Dhebar, for the appellants (in C.A. Nos. 837 839/1963). B.C. Ghosh and P.K. Chatterjee, for the respondents (in C.A. Nos. 837 839/1963). R.K. Garg, M.K. Ramamurthi, S.C. Agarwal and D.P. Singh, for the intervener (in C.A. No. 711/ 1962.) 689 R.K. Garg and P.K. Chatterjee, for the intervener ,(in C.A. Nos. 837 839./1963). December 5, 1963. The Judgment of P.B. Gajendragadkar, K. N. Wanchoo, M. Hidayatullah and N. Rajagopala lyyangar, JJ. was delivered by Gajendragadkar J. K. Subba Rao, and K.C. Das Gupta JJ. delivered separate Opinion section J.C. Shah J. delivered a dissenting Opinion. GAJENDRAGADKAR J. These two groups of appeals have been placed before us for hearing together, because they raise a common question of law in regard to the Constitutional validity of Rules 148(3) and 149(3) contained in the Indian Railway Establishment Code, Vol. (hereafter called the Code). The first group consists of four appeals. C.A. Nos. 711 & 712 of 1962 arise from two petitions filed by the appellants Moti Ram Deka and Sudhir Kumar Das respectively in the Assam High Court. Deka was a peon employed by the North East Frontier Railway, whereas Das was a confirmed clerk. They alleged that purporting to exercise its power under Rule 148 of the Code, the respondent, the General Manager North East Frontier ' Railway, terminated their ser vices and according to them, the said termination was illegal inasmuch as the Rule under which the impugned orders of termination had been passed, was invalid. This plea has been rejected by the Assam High Court and the writ petitions filed by the two appellants have been dismissed. It is against these orders of dismissal that they have come to this Court by special leave. Civil Appeal No. 713 of 1962 arises out of a petition filed by the appellant Priya Gupta who was an Assistant Electrical Foreman employed by the North Eastern Railway, Gorakhpur. His services having been terminated by the respondent General Manager of the said Railway, he moved the Allahabad High Court under article 226 of the Constitution and challenged the validity of the order terminating his services on the ground that Rule 148 of the Code was invalid. The appellant 's plea has been rejected 1/SCI/64 44 690 by the said High Court both by the learned single Judge who heard his petition in the first instance and by the Division Bench which heard his Letters Patent Appeal. That is how the appellant has come to this Court by special leave. Civil Appeal No. 714/1962 arises out of a writ petition filed by Tirath Ram Lakhanpal who was a Class A Guard employed by the Northern Railway, New Delhi. His services were terminated by the Respondent General Manager of the said Railway r under Rule 148 of the Code and his writ petition to quash the said order has been dismissed by the Punjab High Court. The learned single Judge who heard this writ petition rejected the pleas raised by the appellant, and the Division Bench which the appellant moved by way of Letters Patent Appeal summarily dismissed his Appeal. It is this dismissal of his Letters Patent Appeal which has brought the appellant to this Court by Special Leave. That is how this group of four appeals raises a common question about the validity of Rule 148. The next group consists of three appeals which challenge the decision of the Assam High Court holding that the orders of dismissal passed by appellant No. 2, the General Manager, North East Frontier Railway, against the three respective respondents S.B. Tewari, Parimal Gupta and Prem Chand Thakur, under Rule 149 of the Code, were invalid. These three respondents had moved the Assam High Court for quashing the impugned orders terminating their services, and the writ petitions having been heard by a special Bench of the said High Court consisting of three learned Judges, the majority opinion was that the impugned orders were orders of dismissal and as such, were outside the purview of Rule 149. According to this view, though Rule 149 may not be invalid, the impugned orders were bad because as orders of dismissal they were not justified by Rule: 149. The minority view was that Rule 149 itself is invalid, and so, the impugned orders were automatically invalid. In the result, the three writ petitions 691 filed by the three respondents respectively were allowed. That is why the Union of India and the General Manager, N.E.F. Railway, appellants 1 & 2 respectively, have come to this Court with a certificate granted by the Assam High Court,. and they challenge the correctness of both the majority and the minority views. Thus, in these three appeals, the question about the validity of Rule 149 falls to be considered. The first group of four appeals was first heard by a Constitution Bench of five Judges for some time. At the hearing before the said Bench, the learned Addl. Solicitor General conceded that the question about the validity of Rule 148 had not been directly considered by this Court on any occasion, and so, it could not be said that it was covered by any previous decision. After the hearing of the arguments before the said Bench had made some progress, the learned Addl. Solicitor General suggested that he was strongly relying on certain observations made in the previous decisions of this Court and his argument was going to be that the said observations are consistent with his contention that Rule 148 is valid and in fact, they would logically lead to that inference. That is why the Bench took the view that it would be appropriate if a larger Bench is constituted to hear the said group of appeals, and so, the matter was referred to the learned Chief Justice for his directions. Thereafter, the learned Chief Justice ordered that the said group should be heard by a larger Bench of seven Judges of this Court. At that time, direction was also issued that the second group of three appeals which raised the question about the validity of Rule 149 should be placed for hearing along with the first group. In fact, the learned counsel appearing for both the parties in the said group themselves thought that it would be appropriate if the two groups of appeals are heard together. That is how the two groups of appeals have come for disposal before a larger Bench; and so, the main question which we have to consider is whether Rule 148(3), and Rule 149(3) which has superseded it are valid. The contention of the 692 railway employees concerned is that these Rules contravene the Constitutional safeguard guaranteed to civil servants by article 311(2). It is common ground that if it is held that the Constitutional guarantee prescribed by article 311(12) is violated by the Rules, they would be invalid; on the other hand the Union of India and the Railway Administration contend that the said Rules do not contravene article 311(2), but are wholly consistent with it. At this stage, it would be. convenient to refer r to the two Rules. Rule 148 deals with the termination of service and periods of notice. Rule 148(1) deals with temporary railway servants; R. 148(2) deals with apprentices, and R. 148(3) deals with other (non pensionable) railway servants. It is with R. 148(3) that we are concerned in the present appeals. It reads thus: "(3) Other (non pensionable) railway servants:The service of other (non pensionable) railway servants shall be liable to termination on notice on either side for the periods shown below. Such notice is not however required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of Clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity." "Note: The appointing authorities are empower ed to reduce or waive, at their discretion, the stipulated period of notice to be given by an employee, but the reason justifying their action should be recorded. This power cannot be re delegated. " Then follow the respective periods for which notice has to be given. It is unnecessary to refer to these periods. We may incidentally cite Rule 148(4) as well which reads thus: 693 "In lieu of the notice prescribed in this rule, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice. " It is thus clear that R. 148(3) empowers the appropriate authority to terminate the services of other nonpensionable railway servants after giving them notice for the specified period, or paying them their salary for the said period in lieu of notice under R. 148(4). The non pensionable services were brought to an end in November, 1957 and an option was given to the non pensionable servants either to opt for pension. able service or to continue on their previous terms and conditions of service. Thereafter, Rule 149 was framed in place of R. 148. Rule 149(1) & (2) like Rule 148(1) & (2) deal with the temporary railway servants and apprentices respectively. Rule 149(3) deals with other railway servants; it reads thus: "Other railway servants: The services of other railway servants shall be liable to termination on notice on either side for the periods shown below. Such notice is not however, required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity" The Rule then specifies the different periods for which notice has to be given in regard to the different categories of servants, It is unnecessary to refer to these periods. Then follow sub rule (4). The same may be conveniently set out at this place: "(4) In lieu of the notice prescribed in this rule, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice. Note: The appointing authorites are empowered to reduce or waive, at their discretion, the stipulated period of notice to be given by an employee, but the reason justifying their action should be recorded. This power cannot be re delegated. " Just as under ' Rule 148(3) the services of the railway employees to which it applied could be terminated after giving them notice for the period specified, so under R. 149(3) termination of services of the employees concerned can be brought about by serving them with a notice for the requisite period, or paying them their salary for the said period in lieu of notice under R. 149(4). Rule 149(3) applies to all servants other than temporary servants and apprentices. The distinction between pensionable and non pensionable servants no longer prevails. The question which we have to consider in the present appeals is whether the termination,of services of a permanent railway servant under Rule 148(3) or Rule 149(3)amounts to his removal under article 311(2) of the Constitution. If it does,the impugned Rules are invalid; if it does not, the said Rules are valid. That takes us to the question as to the true scope and effect of the provisions contained in Art.311(2),and the decision of this question naturally involves the construction of article 311(2) read in the light of Articles 309 and 310. In considering this point, if may be useful to refer very briefly to the genesis of these provisions and their legislative background. In this connection, it would be enough for our purpose if we begin with the Government of India Act, 1833. Section 74 of the said Act made the tenure of all Services under the East India Company subject to His Majesty 's pleasure. These servants were also made subject to the pleasure of the Court of Directors with a proviso which excepted from the said rule those who had been appointed directly by His Majesty. In due course, when the Crown took over the government of this country by the Government of India Act, 1858, section 3 conferred on the Secretary of 695 State all powers which has till then vested in the Court of Directors, while the powers in relation to the servants of the Company which had till then vested in the Director were, by section 37, delegated to the Secretary of State. This position continued until we reach the Government of India Act, 1915. This Act repealed all the earlier Parliamentary legislation and was in the nature of a consolidating Act. There was, however a saving clause contained in section 130 of the said Act which preserved the earlier tenures of servants and continued the rules and regulations applicable to them. Section 96B of this Act which was enacted in 1919 brought about a change in the constitutional position of the civil servants. ' Section 96B(1) in substance, provided that "subject to the provisions of this Act and the rules made thereunder, every person in the civil service of the Crown in India holds office during His Majesty 's pleasures and it added that no person in that service may be dismissed by any authority subordinate to that by which he was appointed. It also empowered the Secretary of State in Council to reinstate any person in that service who had been dismissed, except so far as the Secretary of State in Council may, by rules, provide to the contrary. Section 96B(2) conferred power on the Secretary of State in Council to make rules for regulating the classification of the Civil Services in India, the method of recruitment, the conditions of service, pay and allowances and discipline and conduct while sub section (4) declared that all service rules then in force had been duly made and confirmed the same. In 1935, the Government of India Act 1935 was passed and section 96B( 1) was reproduced in subsection (1) and (2) of section 240, and a new sub section was added as sections (3). By this new sub section, protection was given to the civil servant by providing that he shall not be dismissed or reduced in rank until he had be en given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. The definition contained in section 277 of the said 596 act shows that the expression "dismissal" included removal from service. That continued to be the position until the Constitution was adopted in 1950. The Constitution has dealt with this topic in Articles 309, 310 and 311. Art.310 deals with the tenure of office of persons serving the Union or a State, and provides that such office is held during the pleasure of the President if the post is under the Union, or during the pleasure of the Governor if the post is under a State. The doctrine of pleasure is thus embodied by article 310(1). article 310(2) deals with cases of persons appointed under contract, and it provides that if the President or the Governor deems it necessary in order to secure the services of a person having special qualifications, he may appoint him under a special contract and the said contract may provide for the payment to him of compensation if before the expiration of an agreed period, that post is abolished or he is, for reasons not connected with any misconduct on his part, required to vacate: that post. it is significant that article 310(1) begins with a clause "except as expressly provided by this Constitution" '. In other words,if there are any other provisions in the Constitution which impinge upon it, the provisions of article 310(1) must be read subject to them. The exceptions thus contemplated may be illustrated by ,reference to Articles 124, 148, 218 and 324. Another exception is also provided by article 31 1. In other words, article 311 has to be read as a proviso to article 310, and so, there can be no doubt that the pleasure contemplated by article 310(1) must be exercised subject to the limitations prescribed by article 31 1. article 309 provides that subject to the provisions of the constitution, Acts of the appropriate Legislative may regulate the recruitment, and conditions of service of persons appointed, to public services and posts in connection with the affairs of the Union or of any State. This clearly means that the appropriate Legislature may pass Acts in respect of the terms and conditions of service of persons appointed to public 697 services and posts, but that must be subject to the provisions of the constitution which inevitably brings in article 310(1). The proviso to article 309 makes it clear that it would be competent for the President or such person as he may direct in the case of services and posts in connection with the affairs of the Union, and for the Governor of a State or such person as he may. direct in the case of services and posts in connection with the affairs of the State, to make rules regulating the recruitment, and prescribing the conditions of service of persons respectively appointed to services and posts under the Union or the State The pleasure of the President or the Governor mentioned in article 310(1) can thus be exercised by such person as the President or the Governor may respectively direct in that behalf, and the pleasure thus exercised has to be exercised in accordance with the rules made in that behalf. These rules, and indeed the exercise of the powers conferred on the delegate must be subject to article 310, and so article 309 cannot impair or affect the pleasure of the President or the Governor therein specified. There is thus no doubt that article 309 has to be read subject to Articles 310 and 31 1, and article 310 has to be read subject to Art 311. It is significant that the provisions contained in article 311 are not subject to any other provision of the Constitution. Within the field covered by them they are absolute and paramount. What then is the effect of the provisions contained in article 311(2)? article 311(2) reads thus: "No such person as aforesaid shall be dis missed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action propo sed to be taken in regard to him. " We are not concerned with the cases covered by the proviso to this article in the present appeals. It may be taken to be settled by the decisions of this Court that since article 311 makes no distinction between permanent and temporary posts, its protection must be held to extend to all government servants holding 698 permanent or temporary posts or officiating in any of them. The protection afforded by article 311(2) is limited to the imposition of three major penalties contemplated by the service Rules, viz., dismissal, removal or reduction in rank. It is true that the consequences of dismissal are more serious than those of removal and in that sense, there is a technical distinction between the two; but in the context, dismissal, removal and reduction in rank which are specified by article 311 (2) represent actions taken by way of penalty. In regard to temporary servants, or servants on probation, every case of termination of service may not amount to removal. In cases falling under these categories, the terms of contract or service rules may provide for the termination of the services on notice of a specified period, or on payment of salary for the said period, and if in exercise of the power thus conferred on the employer, the services of a temporary or probationary servant are terminated, it may not necessarily amount to removal. In every such case, courts examine the substance of the matter, and if it is shown that the termination of services is no more than discharge simpliciter effected by virtue of the contract or the relevant rules, article 311(2) may not be applicable to such a case. If, however, the termination of a temporary servant 's services in substance represents a penalty imposed on him or punitive action taken against him, then such termination would amount to removal and article 311(2) would be attracted. Similar would be the position in regard to the reduction in rank of an officiating servant. This aspect of the matter has been considered by this Court in several recent decisions, vide Jagdish Mitter vs Union of India(1) State of Bihar vs Gopi Kishore ' Prasad(2) State of Orissa & Anr. vs Ram Narayan Das(3) section Sukhbans Singh vs The State of Punjab(4) and Madan Gopal vs The State of Punjab & Qrs. (5) (1) A. 1. R. (3) ; (2) ; (4) ; (5) [1963] 3 section C. R. 716. 699 This branch of the law must, therefore, be taken to be well settled. In regard to servants holding substantively a permanent post who may conveniently be describe hereafter as permanent servants, it is similarly wellsettled that if they are compulsorily retired under the relevant service rules, such compulsory retirement does not amount to removal under article 311 (2). Similarly, there can be no doubt that the retire ment of a permanent servant on his attaining the age of superannuation does not amount to his removal within the meaning of article 311(2). The question which arises for our decision in the present appeals is: if the service of a permanent civil servant is terminated otherwise than by operation of the rule of superannuation, or the rule of compulsory retirement does such termination amount to removal under article 311(2) or not ? It is on the aspect of the question that the controversy between the parties arises before us. Before dealing with this problem, it is necessary to refer to the relevant. Railway Rules themselves Speaking historically, it appears that even while the affairs of the country were in charge of the East India Company, there used to be some regulations which were substantially in the nature of administrative instructions in regard to the conditions of service of the Company 's employees. These regulations were continued by section 130(c) of the Government of India Act, 1915 which provided, inter alia that the repeal shall not affect the tenure of office, conditions of service, terms of remuneration or right to pension of any officer appointed before the commencement of this Act. Section 96B(2) which was inserted in the said Act in 1919, however, provided that the said regulations could be modified or superseded by rules framed by the Secretary of State. In due course, the Secretary of State framed certain rules The first batch of rules was framed in December 1920. They applied to all officers in the All India Provincial as well as Subordinate Services and governed 700 even officers holding special posts. The Local Government had a limited power in respect of officers in the All India Services under their employment and this power was confined to imposing on them punishments of censure, reduction, withholding of promotion and suspension (vide Rule 10); in the case of Provincial Services, however, the powers of the Local Government were plenary They could not only impose the penalties to which we have just referred, but also remove or dismiss them (vide Rule 13). It appears that Rule 14 prescribed the procedure which had to be followed in imposing the penalty of dismissal, removal or reduction; and so, it may be said that for the first time these three major punishments were collated together and a special procedure prescribed in that behalf. No definition of removal was, however, prescribed. Incidentally, we may refer to Rule XX which is included in the group of rules relating to appeals. Under this rule, an appeal would not lie against; (1) the discharge of a person appointed on probation before the end of his probation, and (2) the dismissal and removal of a person appointed by an authority in India to hold a temporary appointment. It would be permissible to point out that this provision would show that the termination of the services of a person permanently employed would not have fallen within the ambit of this rule. The Rules thus framed in 1920 were amended from time to time and were re issued in June, 1924. It appears that subsequent to 1924, fresh rules were made under the Governors Provinces Civil Services (Control and Appeal) Rules and Governors Provinces Civil Services (Delegation) Rules of 1926 which were published in March, 1926. Then followed the Rules framed by the Secretary of State in 1930. These Rules were in force when the Government of India Act, 1935 was enacted, and they continue in force even now by reason of Article 313. We ought to add that these Rules superseded all the earlier rules and constitute an exhaustive code as regards disciplinary matters. Rule 3(b) of these rules excluded the 701 Railway Servants from the application of said rules, and that furnishes the historical background why separate Fundamental Rules for Railway corresponding to the Fundamental Rules in other public services, came to be framed. Before we proceed to the relevant Railway Rule we may incidentally mention Rule 49 of the Rules framed by the Secretary of State in 1930. This provides that penalties may, for good and sufficient reason and as hereinafter provided, be imposed upon members of the services comprised in any of the clauses (1) to (5) specified in Rule 14. These penalties. number seven in all. Amongst them are mentioned reduction to a lower post, dismissal and removal. Then follows an explanation which is useful for our purpose. Before quoting that explanation it may be. pointed out that the said explanation which was originally introduced under Rule 49, was subsequently amended once in 1948, then in 1950 lastly in 1955 when explanation No. 2 was added Thus amended, the two explanations read as follows: "Explanation 1 The termination of employment (a) of a person appointed on probation during or at the end of the period of probation, in accordance with the terms of the appointment and the rules governing the probationary service; or (b) of a temporary Government servant appointed otherwise than under contract, in accordance with rule 5 of the Central Civil Services (Temporary Service) Rules, 1949; or (c) of a person engaged under a contract, does not amount to removal or dismissal within the meaning of this rule or of rule 55. Explanation II: Stopping a Government Servant at an efficiency bar in the time scale of his pay on the ground of his unfitness to cross the bar does not amount to withholding of increments or promotions within the meaning of this rule. " 702 Looking at clauses (a), (b) and (c) of Explanation 1, it would be apparent that these clauses deal with persons appointed on probation, or appointed as temporary servants, or engaged on a contract, and the effect of the said explanation is that the termination of the services of such persons does not amount to removal or dismissal within the meaning of Rule 49 or Rule 55. In other words, R. 49 read along with explanation 1, would,prima facie, inferentially support the contention that in regard to a permanent civil servant, the termination of his services otherwise than under the rule of superannuation or compulsory retirement would amount to removal. Let us then consider the relevant Railway Fundamental Rules which have a bearing on the point with which we are concerned. Paragraph 2003 of the Code, Vol. 11 which corresponds to Fundamental Rule 9 contains definitions. Fundamental Rule 9(14) defines a lien as meaning the title of a Railway servant to hold substantively, either immediately or on the termination of a period or periods of absence, a permanent post, including a tenure post, to which he has been appointed substantively. An officiating servant is defined by F.R. 9(19) as one who performs the duties of a post on which another person holds a lien, or when a competent authority appoints him to officiate in a vacant post on which no other railway servant holds a lien. There is a proviso to this definition which is not relevant for our purpose. That takes us to the definition of a permanent post which under F.R. 9(22) means a post carrying a definite rate of pay sanctioned without limit of time. A, temporary post, on the other hand, means under F.R. 9 (29) a post carrying a definite rate of pay sanctioned for a limited time, and a tenure post means under F. R. 9 (30) a permanent post which an individual railway servant may not hold for more than a limited period. It is thus clear that as a result of the relevant definitions, a permanent post carries a definite ate of pay without a limit of time and a servant who substantively holds a permanent post has 703 a title to hold the post to which he is substantively appointed, and that, in terms, means that a permanent servant has a right to hold the post until, of course he reaches the age of superannuation, or until he is compulsorily retired under the relevant rule. It is in the light of this position that we must now proceed to examine the question as to whether the termination of the permanent servant 's services either under Rule 148(3) or R. 149(3) amounts to his removal or not. On this point, two extreme contentions have been raised before us by the parties The learned Addl. Solicitor General contends that in dealing with the present controversy, we must bear in mind the doctrine of pleasure which has been enshrined in article 310(1). He argues that every civil servant holds his office during the pleasure the President or the Governor. It is true that in the present cases, we are dealing with rules framed under the proviso to article 309 and in that sense, the question of pleasure on which so much stress is laid by the learned Addl. Solicitor General may not directly arise; but it must be conceded that the point raised for our decision may have some impact on the doctrine of pleasure, and so it needs to be examined. The argument is that all civil service is strictly speaking precarious in character. There is no guarantee of any security of tenure, because the pleasure of the President or the Governor can be exercised at any time against the civil servant. It is true that this pleasure would not be exercised capriciously, unjustly or unfairly, but the existence of the doctrine of pleasure inevitably imposes a stamp of precarious character on the tenure enjoyed by the civil servant, and so it is urged whether Rule 148 or R. 149 is made or not, it would be open to the President or the Governor to terminate the services of any civil servant to whose case article 110(1) applies. The learned Addl. Solicitor General has also impressed upon us the necessity to construe article 310(1) and article 311 in such a manner that the pleasure contemplated by article 310(1) does not become illusory or is not completely obliterated. He, therefore, suggests that article 311(2) which is in the nature of a proviso or an exception to article 310(1) must be strictly construed and in all cases falling outside the scope of the said provision, the pleasure of the President or the Governor must be allowed to rule supreme. On the other hand, it has been urged by the learned counsel appearing for the railway servants concerned before us that the pleasure of the President is controlled by article 311 and if the argument of the learned Addl. Solicitor General is accepted and full scope given to the exercise of the said pleasure, article 311 itself would become otiose. It is urged that the employment in civil service can be terminated only after complying with article 311 and any rule which violates the guarantee provided by the said Article would be invalid. In fact, the argument on the other side is that the word "removal" should receive a much wider denotation than has been accepted by this Court in its decisions bearing on the point, and that all terminations of services in respect of all categories of public servants should be held to constitute removal within article 311(2). We are inclined to hold that the two extreme contentions raised by both the parties must be rejected. There is no doubt that the pleasure of the President on which the learned Addl. Solicitor General so strongly relies has lost some of its majesty and power, because it is clearly controlled by the provisions of article 31 1, and so, the field that is covered by article 311 on a fair and reasonable construction of the re levant words used in that article, would be excluded from the operation of the absolute doctrine of pleasure. The pleasure of the President would still be there, but it has to be exercised in accordance with the requirements of article 311. Besides, as this Court has held in the State of Bihar vs Abdul Majid(1), the rule of English Law pithily expressed in the latin phrase "duranto bene placito" ("during pleasure") has not been fully adopted either (1) ; , 799. 705 by section 240 of the Government of India Act, 1935, or by article 3 1 0(1). To the extent to which that rule has been modified by the relevant provisions of: section 240 of the Government of India Act, 1935, or article 311 the Government servants are entitled to relief like any other person under the ordinary law and that relief must be regulated by the Code of Civil Procedure. It is mainly on the basis of this principle that this Court refused to apply the doctrine against abdul Majid that a civil servant cannot maintain suit against a State or against the Crown for the recovery of arrears of salary due to him. Thus, the extreme contention based on the doctrine of pleasure enshrined in article 310(1) cannot be sustained. Similarly, we do not think it would be possible to accept the argument that the word "removal" in article 311(2) should receive the widest interpretation. Apart from the fact that the said provision is in the nature of a proviso to article 3 1 0(1) and must, therefore, be strictly construed, the point raised by the contention is concluded by the decisions of this Court and we propose to deal with the present appeals on the basis that the word " removal" like the two other words "dismissal" and "reduction in rank" used in article 311(2) refer to cases of major penalties which were specified by the relevant service rules. Therefore, the true position is that Articles 310 and 311 must no doubt be read together, but once the true scope and effect of article 311 is determined, the scope and effect of article 310(1) must be limited in the sense that in regard to cases falling under article 311(2) the pleasure mentioned in article 310(1) must be exercised in accordance with the requirements of article 311. It is then urged by the learned Addl. Solicitor General that article 310 does not permit of the concept of tenure during good behaviour. According to him, in spite of the rule of superannuation, the services of a civil servant can be terminated by the President exercising his pleasure at any time. The rule of superannuation on this contention merely gives an indication to the civil servant as to the length of time 1/SCI/64 45 706 he may expect to serve, but it gives him no right to continue during the whole of the said period. In fact, the learned Addl. Solicitor General did not disguise the 'act that according to his argument Whether or not a rule of superannuation is framed and whether or not Rule 148 or R. 149 is issued, the President 's pleasure can, be exercised independently of these Rules and the action taken by the President in exercise of his pleasure cannot be "questioned under article 311(2). Alternatively,_ he contends that if article 311(2) is read in a very general and wide sense, even the rule as to the age of superannuation may be questioned as being invalid, because it does put an end to the service of a civil servant. We are not impressed by this argument. We will no doubt have to decide what cases of termination of services of permanent civil servants amount to removal; but once that question is determined, wherever it is shown that a permanent civil servant is removed from his service, article 311(2) will apply and article 310(1) cannot be invoked independently with the object of justifying the contravention of the provisions of article 311(2). In regard to the age of superannuation, it may be said prima facie that rules of superannuation which are prescribed in respect of public services in all modem States are based on considerations of life expectation, mental capacity of the civil servants having regard to the climatic conditions under which they work, and the nature of the work they do. They are not fixed on any ad hoc basis and do not involve the exercise of any discretion. They apply uniformly to all public servants falling under the category in respect of which they are framed. Therefore, no analogy can be suggested between the rule of superannuation and .Rule 148(3) or Rule 149(3). Besides., nobody has questioned the validity of the rule of superannuation, and so, it would be fruitless and idle to consider whether such a rule can be challenged at all. Reverting then to the nature of the right which a permanent servant has under the relevant Railway Rules, what is the true position? A person Who 707 substantively holds a permanent post has a right to continue in service, subject, of course, to the rule of superannuation and the rule as to compulsory retirement. If for any other reason that right is invaded and he is asked to leave his service, the termination of his service must inevitably mean the defeat of his right to continue in service and as such, it is, in the nature of a penalty and amounts to removal. In other words, termination of the services of a permanent servant otherwise than on the ground of superannuation or compulsory retirement, must per se amount to his removal, and so, if by R. 148(3) or IC. 149(3) such a termination is brought about, the Rule clearly contravenes article 311(2) and must be held to be invalid. It is common ground that neither of the two Rules contemplates an enquiry and in none of the cases before us has the procedure prescribed by article 311(2) been followed. We appreciate the argument urged by the learned Addl. Solicitor General about the pleasure of the President and its significance; but since the pleasure has to be exercised subject to the provisions of article 31 1, there would be no escape from the conclusion that in respect of cases falling under article 311(2), the procedure prescribed by the said Article must be complied with and the exercise of pleasure regulated accordingly. In this connection, it is necessary to emphasise that the rule making authority contemplated by article 309 cannot be validly exercised so as to curtail or affect the rights guaranteed to public servants under article 311(1). article 311(1) is intended to afford a sense of security to public servants who are substantively appointed to a permanent post and one of the principal benefits which they are entitled to expect is the benefit of pension after rendering public service for the period prescribed by the Rules. It would, we think, not be legitimate to contend that the right to earn a pension to which a servant substantively appointed to a permanent post is entitled can be curtailed by Rules framed under article 309 so as to make the said right either ineffective or illusory. Once the scope of article 311(1) and (2) is duly determined, it must be held that no Rule 708 framed under article 309 can trespass on the rights guaranteed by article 311. This position is of basic importance and must be borne in mind in dealing with the controversy in the present appeals. At this stage, we ought to add that in a modern democratic State the efficiency and incorruptibility of public administration is of such importance that it is essential to afford to civil servants adequate protection against capricious action from their superior authority. If a permanent civil servant is guilty of misconduct, he should no doubt be proceeded against promptly under the relevant disciplinary rules, subject, of course, to the safeguard prescribed by article 311(2); but in regard to honest, straightforward and efficient permanent civil servants, it is of utmost importance even from the point of view of the State that they should enjoy a sense of security which alone can make them independent and truly efficient. In our opinion, the sword of Damocles hanging over the heads of permanent railway servants in the form of R. 148(3) or R. 149(3) would inevitably create a sense of insecurity in the minds of such servants and would invest appropriate authorities with very wide powers which may conceivably be abused. In this connection, no distinction can be made between pensionable and non pensionable service. Even if a person is holding a post which does not carry any pension, he has a right to continue in service until he reaches the age of superannuation and the said right is a very valuable right. That is why the invasion of this right must inevitably mean that the termination of his service is, in substance, and in law, removal from service. It appears that after Rule 149 was brought into force in 1957, another provision has been made by Rule 321 which seems to contemplate the award of some kind of pension to the employees whose services are terminated under Rule 149(3). But it is significant that the application of R. 149(3) does not require, as normal rules of compulsory retirement do "that the power conferred by the said Rule can be exercised in respect of servants who have 709 put in a prescribed minimum period of service. Therefore, the fact that some kind of proportionate pension is awardable to railway servants whose services are terminated under R. 149(3) would not assimilate the cases dealt with under the ' said Rule to cases of compulsory retirement. As we Will presently point out, cases of compulsory retirement which have been considered by this Court were all cases where the rule as to compulsory retirement came into operation before the age of superannuation was reached and after a Prescribed minimum period of service had been put in by the servant. It is true that the termination of service authorised by R. 148(3) or R. 149(3) contemplates the right to terminate on either side. For all practical purposes, the right conferred on the servant to terminate his services after giving due notice to the employer does not mean much in the present position of unemployment in this country; but apart from it, the fact that a servant has been given a corresponding right cannot detract from the position that the right which is conferred on the railway authorities by the impugned Rules is inconsistent with article 311(2), and so, it ha to be struck down in spite of the fact that a simila right is given to the servant concerned. It has, however, been urged that the railway servants who entered service with the full knowledge of these Rules cannot be allowed to complain that the Rules contravene article 311 and are, therefore invalid. It appears that under Rule 144 (which was originally Rule 143), it was obligatory on railway servants to execute a contract in terms of the re levant Railway Rules. That is how the argument based on the contract and its binding character arise If a person while entering service executes a contract containing the relevant Rule in that behalf with open eyes, how can he be heard to challenge the validity of the said Rule, or the said contract? In our opinion this approach may be relevant in dealing with purely commercial cases governed by rules of contract but it is wholly inappropriate in dealing with a case 710 where the contract or the Rule is alleged to violate a constitutional guarantee afforded by article 311(2); land even as to commercial transactions, it is wellknown that if the contract is void, as for instance, under section 23 of the Indian Contract Act, the plea that it was executed by the party would be of no avail. In any case, we do not think that the argument of contract and its binding character can have validity in dealing with the question about the constitutionality of the impugned Rules. Let us then test this argument by reference to the provisions of article 311(1). article 311(1) provides that no person to whom the said article applies shall be dismissed or removed by an authority subordinate to that by which he was appointed. Can it be suggested that the Railway Administration can enter into a contract with its employees by which authority to dismiss or remove the employees can be delegated to persons other than those contemplated by article 311 (1)? The answer to this question is obviously in the negative, and the same answer must be given to the conten tion that as a result of the contract which embodies the impugned Rules, the termination of the railway servant 's services would not attract the provisions of article 311(2), though, in law, it amounts to removal. If the said termination does not amount to removal, then, of course, article 311(2) would be inapplicable and the challenge to the validity of the impugned Rules would fail; but if the termination in question amounts to a removal, the challenge to the validity of the impugned Rules must succeed notwithstanding the fact that the Rule has been included in a contract signed by the railway servant. There is one more point which still remains to be considered and that is the point of construction. The learned Add1. Solicitor General argued that in construing the impugned Rule 148(3) as well as R. 149(3), we ought to take into account the fact that the Rule as amended has been so framed as to avoid conflict with, or non compliance of, the provisions of article 311(2), and so, he suggests that we should 711 adopt that interpretation of the Rule which would be consistent with article 311(2). The argument is that the termination of services permissible under the impugned Rules really proceeds on administrative grounds or considerations of exigencies of service. If, for instance, the post held by a permanent servant is abolished, or the whole of the cadre to which the post belonged is brought to an end and the railway servant 's services are terminated in consequence, that cannot amount to his removal because the termination of his services is not based on any consi deration personal to the servant. In support ' of this argument, the Addl. Solicitor General wants us to test the provision contained in the latter portion of the impugned Rules. We are not impressed by this argument. What the latter portion of the impugned Rules provides is that in case a railway servant is dealt with under that portion, no notice need be served on him. The first part of the Rules can reason ably and legitimately take in all cases and may be used even in respect of cases falling under the latter category, provided, of course, notice for the specified period or salary in lieu of such notice is give to the railway servant. There is no doubt that on a fair construction, the impugned Rules authorise the Railway Administration to terminate the services of all the permanent servants to, whom the Rules apply merely on giving notice for the specified period, or on payment of salary in lieu thereof, and that clearly amounts to the removal of the servant in question, we are satisfied that the impugned Rules are invalid in as much as they are inconsistent with the provision contained in article 311(2). The termination of the permanent servants" tenure Which is authorised the said Rules is no more and no less than, their removal from service, and so, article 311(2) must come into play in respect of such cases, 'That being so. the Rule which does not require compliance with the procedure prescribed by article 311(2) must be struck down as invalid. It is now necessary to examine some of the cases on which the learned Addl. Solicitor General has 712 relied. In fact, as we have already indicated, his main argument was that some of the observations made in some of the decisions to which we will presently refer support his contention and logically lead to the conclusion that the impugned Rules are valid. That naturally makes it necessary for us to examine the said cases very carefully. In Satish Chandra Anand vs The Union of India(1), this Court was dealing with the case of a person who had been employed by the Government of India on a five year contract in the Resettlement and Employment Directorate of the Ministry of Labour. When his contract was due to expire, a new offer was made to him to continue him in service in his post temporarily for the period of the Resettlement and Employment Organization on the condition that he would be governed by the Central Civil Services (Temporary Service) Rules, 1949. The relevant rule in that behalf authorised the termination of the contract on either side by one month 's notice. Subsequently, his services were terminated after giving him one month 's notice. He challenged the validity of the said order, but did not succeed for the reason that neither article 14 nor article 16 on which he relied really applied. This Court held that it is competent to the State to enter into contracts of temporary employment subject to the term that the contract would be terminated on one month 's notice on either side. Such a contract was not inconsistent with article 311(2). This case, therefore, is of no assistance in the present appeals. In Gopal Krishna Potnay vs Union of India & Anr. (2) a permanent railway employee who was discharged from service after one month notice brought a suit challenging the validity of the order terminating his services. The point about the validity of the Rule was not agitated before the Court. Questions which were raised for the decision of the Court were, inter alia, whether the agreement in question lad been executed by the servant and whether the (1) ; (2) A.I.R. 1954 S.C. 632. 713 termination of his services amounted to a discharge or not. In that connection, reference was made to Rules 1504 and 1505 and it was held that the conduct of the parties showed that the termination of the servant 's services was not more than a discharge in terms of the agreement. This case again is of no assistance. That takes us to the decision in the case of Shyam Lal vs The State of U.P. and the Union of India(1) Shyam Lal 's services were terminated under article 465 A of the Civil Service Regulations and Note I appended thereto. Shyam Lal alleged that his compulsory retirement offended the provisions of article 311(2) on the ground that compulsory retirement was in substance removal from service. This Court considered the scheme of the relevant Rule and held that compulsory retirement did not amount to removal within the meaning of article 311(2). In dealing with this question, this Court observed that removal was almost synonymous with dismissal and that in the case of removal as in the case of dismissal, some ground personal to the servant which was blameworthy was involved. There was a stigma attached to the servant who was removed and it involved a loss of benefit already earned by him. It is in the light of these tests that this Court held that compulsory retirement did not amount to removal. It is true that in dealing with the argument about the loss of benefit, this Court observed that a distinction must be made between the loss of benefit already earned and the loss of prospect of earning something more, and it proceeded to add that in the first case, it is a present and certain loss and is certainly a punishment, but the loss of future prospect is too uncertain, for the officer may die of be otherwise incapacitated from serving a day long and cannot, therefore, be regarded in the eye of law as a punishment. It appears that in dealing with the point, the attention of the Court was drawn to Rule 49 of the Civil Services (Classification, Control and Appeal) Rules, and presumably the explanation (1) ; 713 termination of his services amounted to a discharge or not. In that connection, reference was made to Rules 1504 and 1505 and it was held that the conduct of the parties showed that the termination of the servant 's services was not more than a discharge in terms of the agreement. This case again is of no assistance. That takes us to the decision in the case of Shyam Lal vs The State of U.P. and the Union of India( ) Shyam Lal 's services were terminated under article 465 A of the Civil Service Regulations and Note I appended thereto. Shyam Lal alleged that his compulsory retirement offended the provisions of article 311(2) on the ground that compulsory retirement was in substance removal from service. This Court considered the scheme of the relevant Rule and held that compulsory retirement did not amount to removal within the meaning of article 311(2). In dealing with this question, this Court observed that removal was almost synonymous with dismissal and that in the case of removal as in the case of dismissal, some ground personal to the servant which was blameworthy was involved. There was a stigma attached to the servant who was removed and it involved a loss of benefit already earned by him. It is in the light of these tests that this Court held that compulsory retirement did no amount to removal. It is true that in dealing with th argument about the loss of benefit, this Court observe that a distinction must be made between the loss of benefit already earned and the loss of prospect of earning something more, and it preceded to add that in the first case, it is a present and certain loss and is certainly a punishment, but the loss of future prospect is too uncertain, for the officer may die or be otherwise incapacitated from serving a day longer and cannot, therefore, be regarded in the eye of the law as a punishment. It appears that in dealing with the point, the attention of the Court was drawn to Rule 49 of the Civil Services (Classification, Control and Appeal) Rules, and presumably the explanation (1) ; 714 to the said Rule to which we have already referred, was taken into account in rejecting the argument a that a loss of future service cannot be said to be a relevant factor in determining the question as to whether compulsory retirement is removal or not. The judgment does not show that the invasion of the right which a permanent servant has, to remain in service until he reaches the age of superannuation, was pressed before the Court, and naturally the same has not been examined. Confining itself to the special features of compulsory retirement which was effected under article 465 A and Note I appended thereto, the Court came to the conclusion that compulsory retirement was not removal, We may add that subsequent decisions show that the same view has been taken in respect of compulsory retirement throughout and so, that branch of the law must be held to be concluded by the series of decisions to which we shall presently refer. We would, however, like to make it clear that the observation made in the judgment that every termination of service does not amount to dismissal or removal should, in the context, be confined to the case of compulsory retirement and should not be read as a decision of the question with which we are directly concerned in the present appeals. That problem did not arise before the Court in that case, was not argued before it, and cannot,therefore, be deemed to have been decided by this decision. Then we have a batch of four decisions reported in 1958 which are relevant for our purpose. In Hartwell Prescott Singh vs The Uttar Pradesh Government & Ors.(1) a civil servant held a post in a temporary capacity in the Subordinate Agriculture Service, Uttar Pradesh, and was shown in the gradation list as on probation. He was later appointed with the approval of the Public Service Commission of the United Provinces to officiate in Class II of the said Service. After about 10 years, he was reverted to his original temporary appointment and his services were there after terminated under Rule 25(4) of the Subordinate 1) ; 715 Agriculture Service Rules. Dealing with the said civil servant 's objection that the termination of his services contravened article 311(2), this Court held that reversion from a temporary post held by a person does not per se amount to reduction in rank. To decide whether the reversion is a reduction in rank, the post held must be of a substantive rank and further it must be established that the order of reversion was by way of penalty. As we have already discussed, the cases of temporary servants, probationers and servants holding posts in officiating capacities stand on a different footing and the principles applicable to them are now firmly established and need not detain us. The next decision in the same volume is the State of Bombay vs Saubhagchand M. Doshi(1). This was a case of compulsory retirement under Rule 165 A of the Bombay Civil Services Rules as amended by the Saurashtra Government. In I so far as, this case dealt with the compulsory retirement of a civil servant,, it is unnecessary to consider the Rule in question or the facts relating to the compulsory retirement of the civil servant. It is of interest to note that in dealing with the question as to whether compulsory retirement amounted to removal or not the tests which were applied were in regard to the loss of benefit already accrued and stigma attached to the civil servant. It is, however, significant that in considering the objection based on the contravention of article 311(2), Venkatarama Aiyar J. took the precaution of adding that "questions of the said character could arise only when the rules fix both an age of superannuation and an age for compulsory 'retirement and the services of a civil servant are terminated between these two points of time. But where there is no rule fixing the age of compulsory retirement, or if there is one and the servant is retired before the age prescribed therein, then that can be regarded only as dismissal or removal within article 311 (2). " It would be noticed that the rule providing (1) 716 for compulsory retirement was upheld on the ground that such compulsory retirement does not amount to ,removal under article 311(2) because it was another mode of retirement and it could be enforced only between the period of age of superannuation prescribed and after the minimum period of service indicated in the rule had been put in. If, however, no such minimum period is prescribed by the rule of compulsory retirement, that according to the judgment, would violate article 311(2) and though the termination of a servant 's services may be described as compulsory retirement, it would amount to dismissal or removal within the meaning of article 311(2). With respect, we think that this statement correctly represents the true position in law. The third case in the said volume is the case of parshotam Lal Dhingra vs Union of India.(1) In this case, Das C.J. who spoke for the Bench considered comprehensively the scope and effect of the relevant constitutional provisions, service rules and their impact on the question as to whether reversion of Dhingra offended the provisions of article 311(2). Dhingra was appointed as a Signaller in 1924 and promoted to the post of Chief Controller in 1950. Both these posts were in Class III Service. In 1951, he was appointed to officiate in Class 11 Service as Asstt. Superintendent, Railway Telegraphs. On certain adverse remarks having been made against him, he was reverted as a subordinate till he made good the short comings. Then, Dhingra made a representation. This was followed by a notice issued by the General Manager reverting him to Class III appointment. It was this order of reversion which was challenged by Dhingra by a writ petition. It would thus be seen that the point with which the Court was directly concerned was whether the reversion of an officiating officer to his permanent post constituted reduction in rank or removal under article 311(2). The decision of this question was somewhat complicated by the fact that certain defects were noticed in the work of Dhingra (1) ; 717 and the argument was that his reversion was in the nature of a penalty, and so, it should be treated as reduction under article 311(2). This Court rejected Dhingra 's contention and held that the reversion of an officiating officer to his substantive post did not attract the provisions of article 311(2). Though the decision of the question which directly arose before this Court thus lay within a very narrow compass, it appears that the matter was elaborately argued before the Court and the learned Chief Justice has exhaustively considered all the points raised by the parties. For our present purpose, it is unnecessary to summaries the reasons given by the learned Chief Justice for holding that the reversion of Dhingra did not amount to reduction in rank. The only point which has to be considered by us is whether the observations made in the course of this judgment in regard to permanent servants assist the learned Addl. Solicitor General and if they do, what is their effect? Broadly stated, this decision widened the scope of article 311 by including within its purview not only permanent servants, but temporary servants and servants holding officiating posts also. The decision further held that dismissal, removal and reduction represent the three major penalties contemplated by the relevant service rules and it is only where the. impugned orders partake of the character of one or the other of the said penalties that article 311(2) can be invoked. In the course of his judgment the learned Chief Justice has referred to Rule 49 and the explanation attached thereto. The explanation to the Rule clearly shows that it refers to persons appointed on probation, or persons holding temporary appointments and contractual posts. It is in the light of this explanation that the learned Chief Justice proceeded to examine the contention raised by Dhingra that his reversion amounted to reduction in rank and so, it became necessary to examine whether any loss of benefit already accrued had been incurred or any stigma had been attached to the servant before he was reverted. It is in that connection that the Court also held that though a kind of enquiry may have 718 been held and the short comings in the work of Dhingra may have weighed in the mind of the authority who reverted him, the said motive could not alter the character of reversion which was not reduction within the meaning of article 311(2). All those points have been considered and decided and so far as the temporary servants probationers, or contractual servants are concerned, they are no longer in doubt. In regard to permanent servants, the learned Chief Justice has made some observations which it is now necessary to consider very carefully. "The appointment of a government servant to a permanent post," observed the learned C.J., "may be substantive or on probation or on an officiating basis. A substantive appointment to a permanent post in public service confers normally on the servant so appointed a substantive right to the post and he becomes entitled to hold a lien on the post. "(p. 841) On the same subject, the learned C.J has later added that "in the absence of any special contract, the substantive appointment to a permanent post gives the servant so appointed a right to hold the post until, under the rules, he attains the age of superannuation or is compulsorily retired after having put in the prescribed number of years ' service, or the post is abolished and his service cannot be terminated except by way of punishment for misconduct, negligence, inefficiency or any other disqualification found against him on proper enquiry after due notice to him." (p. 843). Reading these two observations together, there can be no doubt that with the exception of appointments held under special contract, the Court took the view that wherever a civil servant was appointed to a permanent post substantively, he had a right to hold that post until he reached the age of superannuation or was compulsorily retired, or the post was abolished. In all other cases, if the services of the said servant were terminated, they would have to be in conformity with the provisions of article 311(2), because termination in such cases amounts to removal. The two statements of the law to which we have just 719 referred do not leave any room for doubt on this point. Later during the course of the judgment, learned C.J. proceeded to examine Rule 49 and the explanations added to it, and then reverting to the question of permanent servants once again, he observed that "it has already been said that where a person is appointed substantively to a permanent 'post in Government service, he normally acquires a right to hold the post until under the rules, he attains the age of superannuation or is compulsorily retired and in the absence of a contract, express or implied or a service rule, he cannot be turned out of his post unless the post itself is abolished or unless he is guilty of misconduct, negligence, inefficiency or other disqualifications and appropriate proceedings are taken under the service rules read with article 311(2). Termination of service of such a servant so appointed must per se be a punishment, for it operates as a forfeiture of the servant 's rights and brings about a premature end of his employment." (pp. 857 58). With respect we ought to point out that though the learned C. J at this place purports to reproduce what had already been stated in the judgment, he has made two significant additions because in the present statement he refers to a contract or service rules which may permit the authority to terminate the services of a permanent servant without taking the case under article 311(2), though such termination may not amount to ordinary or compulsory retirement. The absence of contract, express or implied, or a service rule, which has been introduced in the present statement are not to be found in the earlier statements to which we have already referred, and addition of these two Clauses apparently is due to the fact that the learned C.J. considered Rule 49 and the explanations attached thereto and brought them into the discussion of a permanent servant, and that, we venture to think is not strictly correct. As we have already seen Explanation No. 1 to R. 49 is confined to the through categories of officers specified by it in its clauses (a) 720 (b) and (c), and it has no relevance or application to the cases of permanent servants. Similarly, the same statement is repeated with the observation "as already stated, if the servant has got a right to continue in the post, then, unless ,the contract of employment or the rules provide to the contrary, his services cannot be terminated otherwise than for misconduct, negligence, inefficiency or other good and sufficient cause. A termination of the service of such a servant on such grounds must be a punishment and, therefore, a dismissal or removal within article 31 1, for it operates as a forfeiture of his right and he is visited with the evil consequences of loss of pay and allowances." (p. 862). With respect, we wish to make the same comment about this statement which we have already made about the statement just cited. In this connection, it may be relevant to add that in the paragraph where this statement occurs, the learned C.J. was summing up the position and the cases there considered are cases of Satish Chandra Anand, (1) and Shyam Lal(2). These two cases were concerned with the termination of a temporary servant 's services and the compulsory retirement of a permanent servant respectively, and strictly speaking, they do not justify the broader proposition enunciated at the end of the paragraph. At the conclusion of his judgment, the learned C.J. has observed that "in every case, the Court has to apply the two tests mentioned above, namely, (1) whether the servant had a right to the post or the rank or (2) whether he has been visited with evil consequences of the kind hereinbefore referred to." (p. 863) It would be noticed that the two tests are not cumulative, but are alternative, so that if the first test is satisfied, termination of a permanent servant 's services would amount to removal because his right to the post has been prematurely invaded. The learned C.J. himself makes it clear by adding (1) ; (2) ; 721. that if the case satisfies either of the two tests, the it must be held that the servant had been punished and the termination of his services must be held to be wrongful and in violation of the constitutional rights of the servant. It would thus be noticed that the first test would be applicable to the cases of permanent servants, whereas the second test would be relevant in the cases of temporary servants, probationers and the like. Therefore, we do not think the learned Addl. Solicitor General is justified in contending that all the observations made in the course of this judgment in regard to permanent servant considered together support his contention. Besides if we may say so, with respect, these observations are in the nature of obiter dicta and the learned Add1 Solicitor General cannot rely solely upon them for the purpose of showing that R. 148(3) or R. 149(3) should be held to be valid as a result of the said observations. The last decision on this point rendered by this Court in 1958 (vide P. Balakotaiah vs The Union of India & Others(1) dealt with the case of Balakotaiah who was a permanent railway servant and whose services had been terminated for reasons of national security under section 3 of the Railway Services (Safe guarding of National Security) Rules, 1949.It appears that in this case, Balakotaiah who challenged the order terminating his services before the High Court of Nagpur, failed because the High Court held that the said order was justified under Rule 148(3) of the Railway Rules. In his appeal before this Court, it was urged on his behalf that the High Court was in error in sustaining the impugned order under the said Rule when the Union of India had not attempted to rely on the said Rule, and the impugned order did not purport to have been passed under it. The argument was that the impugned order had been passed under R. 3 of the Security Rules and the High Court should have considered the matter by reference to the said Rule and not to R. 148(3). This plea was (1) ; 1/SCI/64 46 722 upheld by this Court, and so, Balakotaiah 's challenge to the validity of the impugned order was examined by reference to security rule 3. The scheme of the relevant Security Rules was then considered by this Court and it was held that the said Rules did not contravene either article 14 or article 19(1)(c) of the Constitution as contended by the appellant. Having held that the impugned rule was not unconstitutional, this Court proceeded to examine the further contention that the procedure prescribed by the said rules for hearing of the charges does not satisfy the requirement of article 311 and as such, the said Rules are invalid. Rules, 3, 4 and 5 of the Security Rules which dealt with this point do contemplate some kind of an enquiry at which an opportunity is given to the railway servant concerned to show cause against the action proposed to be taken against him. Rule 7 also provides that a person who is compulsorily retired or whose service is terminated under Rule 3, shall be entitled to such compensation, pension, gratuity and/or Provident Fund benefits as would have been admissible to him under the Rules applicable to his service if he had been discharged from service due to the abolition of his post without any alternative suitable employment being provided. The contention was that the nature of the enquiry contem plated by the relevant Rules did not satisfy the re quirements of article 311(2), and so, the Rules should be struck down as being invalid and the order terminating the services of Balakotaiah should therefore, be held to be invalid. This argument was rejected by this Court, and relying upon the earlier decisions in the cases of Satish Chandra Anand(1), Shyam Lal(2) Saubhagchand M. Doshi(3) and Parshotam Lal Dhingra (4) it was held that the order terminating the services of the railway, employee which can be (1) ; (3) ; (2) ; (4) ; 723 passed under R. 3 is not an order of dismissal or removal, and so, article 311(2) is inapplicable. On that view, the validity of R. 3 was sustained. In recording its conclusion on this point, this Court observed that the order terminating the services under R. 3 stands on the same footing as an order of discharge under Rule 148 and it is neither one of dismissal nor of removal within the meaning of Art 311. Naturally, the learned Addl. Solicitor General relies on this statement of the law. In appreciating the effect of this observation, it is necessary to bear in mind that in the earlier portion of the Judgment, this Court has specifically referred to the argument that the Security Rules had an independent operation of their own quite apart from Rule 148, and has observed that the Court did not desire to express any final opinion on that question "as Mr. Ganapathy Iyer is willing that the validity of the orders in question might be determined on the footing that they were passed under R. 3 of the Security Rules without reference to R. 148. That renders it necessary to decide whether the Security Rules are unconstitutional as contended by the appellant. " It would thus be noticed that having upheld the contention of the appellant Balakotaiah that the High Court was in error in referring to and relying upon R. 148(3) for the purpose of sustaining the impugned order terminating his services, this Court had naturally no occasion to consider the validity, the effect or the applicability of the said Rule to the case before it, and so, the attention of the Court centered round the question as to whether the relevant security rule was valid and whether it justified the order passed against the appellant. In dealing with this aspect of the matter, this Court no doubt came to the conclusion that the termination of Balakotaiah 's services under R. 3 did not amount to his removal or dismissal; but since no argument was urged before the Court in respect of R. 148(3), the reference to the said Rule made by the judgment is purely in the nature of an obiter, and so, we are not prepared to 724 read that statement as a decision that R. 148(3) is valid. To read the said statement in that manner would be to ignore the fact that this Court had reversed the conclusion of the High Court that the impugned order was valid under R. 148(3) specifically on the ground that case had not been made out by the Union of India and should not have been adopted by the High Court. It is thus clear that as, the case was argued before this Court and considered, R. 148(3) was outside the controversy between the parties. That is why it would be unreasonable to rely on the reference to R. 148 in the statement made in the judgment on which the learned Addl. Solicitor General relies. There is another aspect of this question to which we may incidentally refer before we part with this case. We have already quoted the observation of Veinkatarama Aiyar J.; in the case of Subhagchand M. Doshi (1) to the ' effect that if compulsory retirement is permitted by any service rule without fixing the minimum period of service after which the Rule can be invoked, termination of the services of a permanent civil servant by the application of such a Rule would be dismissal or removal under article 311(2), and we have indicated that we regard that statement as correctly representing the true legal position in the matter. It appears that when this Court decided the case of Balakotaiah, this aspect of the matter 'was not argued before the Court and the observation to which we have just referred was not brought to its notice. One more case which still remains to be considered in this context is the decision in Dalip Singh vs The State of Punjab (2). In this case, Dalip Singh was compulsorily retired from service by the Rajpramukh of Pepsu exercising his power under Rule 278 of the Patiala State Regulations, 1931. In the quit from which the appeal before this Court arose he alleged that the order of retirement passed against him amoun (1) ; (2) 725 ted to his dismissal, and so, he claimed to recover Rs. 26,699 13 0 on that basis. The validity of R. 278 was not put in issue in the proceedings at any stage. The only point raised, 'was that the said Rule was not applicable to his case, and it was urged that in the circumstances, the order was an ' order of dismissal. This Court. held that R. 278 applied to the case, And so, the preliminary objection against the applicability of the Rule was rejected. Dealing with the main contention raised before this Court that the compulsory retirement of Dalip Singh was removal from service within the meaning of article 311(2), this Court applied the tests laid down in the case of Shyam Lal(1) and Saubhagchand Doshi(2) and held that the said retirement did not amount to removal. Dalip Singh had not lost the benefit which he earned and though considerations of alleged misconduct or inefficiency may have weighed with the Government in compulsorily retiring him that did not affect the character of the order;in fact full pension had been paid to the officer, and so, it was held that the order of retirement is clearly not by way of punishment. At the end of this judgment, this Court added that the observations made in the case of Doshi(2) which we have already cited, should not be read as laying down the law that retirement under R. 278 would be invalid for the reason that a minimum period of service had not been prescribed before the said Rule could be enforced against the civil servant. It would be recalled that in the case of Doshi(2) Venkatarama Aiyar J. had observed that if the two periods are not prescribed one for superannuation and the other for enforcing the rule of compulsory retirement, compulsory retirement of the officer would amount to dismissal or removal under article 311(2). In Dalip Singh 's case (2), it was stated that the said observation should not be taken to have laid down any rule of universal application in that behalf. The (1) (1955] 1 S.C.R. 26 (2) (1958] 1 S.C.R. (3) 726 learned Addl. Solicitor General has naturally relied on these observations. It is however, necessary to point out that the said observations were made on the assumption that the Patiala Rules did not lay down any minimum period of service which had to be put in by civil servant 'before he could be compulsorily retired under Rule 278. We have already seen that the validity of R. 278 was not challenged before the Court in Dalip Singh 's case; besides, we have now been referred to the relevant Patiala Rules, and it appears that the combined operation of Rules 53, 54, 125, 236, 239, 240, 243 and 278 would tend to show that no officer ,could have been compulsorily retired under R. 278 unless he had put in at least 12 years ' service. We are referring to this aspect of the matter for the purpose of showing that the assumption made by this Court in making the observations to which we have just referred may not be well founded in fact. Apart from that, we think that if any Rule permits the appropriate authority to retire compulsorily a civil servant without imposing a limitation in that behalf that such civil servant should have put in a minimum period of service, that Rule would be invalid and the so called retirement ordered under the said Rule would amount to removal of the civil servant within the meaning of article 311(2). At this stage, we ought to make it clear that in the present appeals, we are not called upon to consider whether a rule of compulsory retirement would be valid, if, having fixed a proper age of superannuation,, it permits a permanent servant to be retired at a very early stage of his career. We have referred to the decisions dealing with cases of compulsory retirement only for the purpose of ascertaining the effect of the obiter observations made in some of those decisions in relation to the question with which we are directly concerned. The question raised by the orders of compulsory retirement so far as it is covered by the said decisions must be deemed to be concluded. Our conclusion, therefore, is that rules 127 148(3) and 149(3) which permit the termination of a permanent railway servant 's services in the manner provided by them, are invalid because the termination of services which the said Rules authorise is removal of the said railway permanent servant and it contravenes the constitutional safeguard provided by article 311(2). After this Court pronounced its decision in the case of Shyam Lal(1) the question about the validity of Rule 148(3) has been considered by several High Courts and it must be conceded that with the exception of two decisions of the Calcutta High Court in Union of India vs Someswar Banerjee(2) and Fakir Chandra Chiki vs section Chakravarti & Ors(3) which have held that R. 1709 and R. 148(3) of the Railway Rules are respectively invalid, the consensus of judicial opinion is in favour of the contention raised by the learned Add1. Solicitor General. These decision have held that R. 148(3) is constitutionally valid (vide Biswanath Singh vs District Traffic Supdt. , N.E Railway, Sonepur(4), The Union of India vs Askaran (5) Hardwari Lal vs General Manager, North Eastern Railway, Gorakhpur(6) and Anr., Kishan Prasad vs The Union of India (7) and D.S. Srinath vs General Manager Southern Railway, Madras(8). In fairness, we ought to add that all these decisions proceeded on the basis that the observations made by this Court either in the case of Shyam Lal (1) or in the case of Dhingra(9) in respect of permanent servants amounted to a decision on that point and were, therefore, binding on the High Courts. Some decisions purport to adopt the said observations and extend them logically in dealing with the question about the validity of Rule 148(3). With respect, we must hold that these decisions do not correctly represent the true legal position in regard to the character of R. 148(3). (1) ; (3) A.I.R. 1954 Cal. (5) A.I.R. 1957 Rajastban 836. (7) A.I.R. 1960 Cal. (2) A.I.R. 1954 Cal. (4) A.I.R. 1956 Patna 221 (6) A.I.R. 1959 All. 439. (8) A.I.R. 1962 Mad 379. (9) ; 728 There is still one more point which must be considered and that is the challenge to the validity of Rules 148(3) and 149(3 on the ground that they contravene article 14 of the Constitution. The pleadings on this part of the case filed by both the parties are not very satisfactory; but as to the broad features '.of the Rules on which the challenge rests, there is no serious dispute. We have already seen the Rules; it is urged that they purport to give no guidance to the authority which would operate the said Rules. No principle is laid down which should guide the decision of the authority in exercising its power under the said Rules. Discretion is left in the authority completely unguided in the matter and the Rules are so worded that the power conferred by them can be capriciously exercised without offending the Rules. It is also not disputed by the learned Addl. Solicitor General that no other branch of public services either under the States or under the Union contains any rule which corresponds to the impugned Rules. Therefore, basing themselves on these two features of the impugned Rules it is argued by the Railway employees before us that the Rules offend article 14. In support of the first argument, it is suggested that though the impugned Rule may not in terms enact a discriminatory rule and in that sense may not patently infringe article 14, it may, nevertheless, contravene the said article if it is so framed as to enable an unequal or discriminatory treatment to be meted out to persons or things similarly situated; and in support of this point, reliance is placed on the decision of this Court in Jyoti Pershad vs The Administrator for the Union Territory of Delhi(1). Such a result, it is said, would inevitably follow where the rule vests a discretion in an authority as an executive officer and does not lay down any policy and fails to disclose any tangible, intelligible, or rational purpose which the power conferred by it is intended to serve. (1) ; at P. 137. 729 On the other hand, the Addl. Solicitor General has contended that the very purpose of the Rule gives guidance to the appropriate authority exercising its power under it; in exercising the said power the appropriate authority will have to take into account all the relevant circumstances in regard to the nature and quality of the work of the railway servant in question and will have to decide whether there are circumstances which require that the services of the said servant should be terminated. In dealing with such a question, it is plain that the appropriate authority would naturally have regard for consideration of public interest and the interest of the Railway Administration. Therefore, it is suggested that the Rule cannot be struck down on the ground that it confers absolute, unguided and uncanalised power on the appropriate authority. Since we have come to the conclusion that the second attack made against the validity of the Rule under article 14 ought to be sustained we do not propose to express any opinion on this part of the controversy between the parties. The other aspect of the matter arises from the fact that no other branch of public service contains such a rule for its civil servants. The true scope and effect of article 14 has been considered by this Court on several occasions. It may, however, be sufficient to refer to the decision of this Court in Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolker & Ors.(1) After examining the Article and the relevant decisions of this Court bearing on it, Das C.J. who spoke for the Court stated the position in the form of propositions, (a) to (f). Propositions (a) and are relevant for our purpose. "The decisions of this Court establish," said Das C.J., "(a) that a law may be constitutional even though it relates to a single individual if, on account of some special circumstances or: reasons applicable to him and not applicable to others, that single individual may be treated as a class by himself; and (f) that while good faith and knowledge of the existing conditions on the part (1) ; at P. 297. 730 of a legislature are to be presumed, if there is nothing on the face of the law or the surrounding circumstances brought to the notice of the court on Which the classification may reasonably be regarded as based, the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminating legislation. " Applying these two principles, it is difficult to understand on what ground employment by the Railways alone can be said to constitute a class by itself for the purpose of framing the impugned Rules. If considerations of administrative efficiency or exigencies of service justify the making of such a rule, why should such a Rule not have been framed in the Posts & Telegraph Department to take only one instance. The learned Additional Solicitor Generaf frankly conceded that the ' affidavits filed by the Railway Administration or the Union of India afforded no material on which the framing of the Rule only in respect of one sector of public service can be justified. We appreciate the argument that the nature of services rendered by employees in different sectors of public service may differ and the terms and conditions governing employment in all public sectors may not necessarily be the same or uniform; but in regard to the question of terminating the services of a civil servant after serving him with a notice for a specified period, we are unable to see how the Railways can be regarded as constituting a separate and distinct class by reference to which the impugned Rule can be justified in the light of article 14. If there is any rational connection between the making of such a Rule and the object intended to be achieved by it, that connection would clearly be in existence in several other sectors of public service. What has happened is that a provision like R. 148(3) pr R. 149(3) was first made by the Railway Companies when employment with the Railways was a purely commercial matter governed by the ordinary rules of contract. After the Railways were taken over by the State, that position has essen 731 tially altered, and so, the validity of the Rule is now exposed to the challenge under article 14. Therefore we are satisfied that the challenge to the validity of the impugned Rules on the ground that they contravene article 14 must also succeed. There is one more point which we ought to mention before we part with these appeals. In dealing with the validity of R. 149, Nayudu J. of the Assam High Court who has delivered the minority judgment in the case of Shyam Behari Tewari & Ors V. Union of India & Anr.(1), has observed that the Rule would be invalid for the additional reason that it purports to give power to the Railway Administration to terminate the services of any person in permanent employment in railway service on notice at the sweetwill and pleasure of the Railway Administration Such a power, said the learned Judge, can only be exercised by the President in the instant cases where the service is under the Union and not by any other whereas the Rule in question purports to give that power to the Railway Administration. In support of this conclusion, the learned Judge has relied on the observations made in the majority judgment delivered by this Court in The State of Uttar Pradesh and ors (2) vs Babu Ram Upadhya. We ought to point out that the learned Judge has misconstrued the effect of the observations on which he relies. What the said Judgment has held is that while article 310 provides for a tenure at pleasure of the President or the Governor, article 309 enables the legislature or the executive as the case may be, to make any law or rule in regard inter alia, to conditions of service without impinging upon the overriding power recognised under article 310. In other words, in exercising the power conferred by article 309, the extent of the pleasure recognised by article 310 cannot be affected, or impaired In fact, while stating the conclusions in the form of propositions, the said judgment has observed that the Parliament or the Legislature can make a law regulating the conditions of service without affecting (1) A.I.R. 1963 Assam 94 (2) 732 the powers of the President or the Governor under article 310 read with article 311. It has also been stated at the same place that the power to dismiss a public servant at pleasure is outside the scope of article 154 and, therefore, cannot be delegated by the Governor to a subordinate officer and can be exercised by him only in the manner prescribed by the Constitution. In the context, it would be clear that this latter observation is not intended to lay down that a law cannot be made under article 309 or a Rule cannot be framed under the proviso to the said Article prescribing the procedure by which, and the authority by whom, the said pleasure can be exercised. This observation which is mentioned as proposition number (2) must be read along with the subsequent propositions specified as (3), (4), (5) & (6). The only point made is that whatever is done under article 309 must be subject to the pleasure prescribed by article 310. Naidu J. was, therefore, in error in holding that the majority decision of this Court in the case of Babu Ram Upadhya(1) supported his broad and unqualified conclusion that R. 149(3) was invalid for the sole reason that the power to terminate the services had been delegated to the Railway Administration. In the result, the four appeals in the first group succeed and are allowed. The writ petitions filed by the four appellants in the three High Courts are granted and orders directed to be issued in terms of the prayers made by them. The appellants would be entitled to their costs from the respondents. The three appeals in the second group fail and are dismissed with costs. One set of hearing fees in each group. SUBBA RAO J I agree that the impugned rules infringe both article 14 and article 311(2) of the Constitution and are, therefore, void. On 1 article 14, 1 have nothing more to say. But on the impact of the said rules on article 311 of the Constitution, I would prefer to give my own reasons. The short but difficult question is whether 148 of the Indian Railway Establishment Code, (1) ; 733 Vol. 1 (1951) and r. 149 of the revised edition of the said Code of the year 1959 replacing r. 148 of the Code of 1951 edition impinge upon the constitutional safeguard given to a person holding a civil post under the Union Government under article 311(2) of the Constitution. While article 311(2) of the Constitution prohibits the State from dismissing or removing or reducing in rank a civil servant until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him, rr. 148 and 149 of the said Code in effect enable the Government to terminate his services after issuing the prescribed notice thereunder ' Prima facie the said rules are in conflict with article 311(2) of the Constitution. Broadly stated, the contention of the State is that a Union civil servant holds his office during the pleasure, of the President, that article 311 is not really a limitation on the exercise,of that pleasure, that it only prescribes safeguards against the imposition on him of three unmerited specified penalties, viz., dismissal, removal and reduction in rank, and that the termination of his services for a reason other than misconduct personal to the civil servant is not comprehended by any of the said penalties. The further argument is that the "doctrine of pleasure" implies that a civil servant has no right to an office even in a case where he has a substantive lien on a post and that in any event he has none when there is a specific rule that his services can be terminated after the prescribed notice. This Bench of seven Judges has been constituted to steer clear of conflicting observations, if any, found in the judgments of this Court and to arrive at a conclusion of its own unhampered by such observations. I would, therefore, proceed to consider the relevant provisions in accordance with the natural tenor of the expressions used therein and then to scrutinize whether any of my conclusions would be in conflict with any of the decisions of this Court. At the outset I must make it clear that I propose to confine my discussion only to the question of termi 734 nation of services of a permanent civil servant. None of the observations I may make is intended to have any bearing on the question of termination of the services of other categories of servants. As the argument of the learned Additional Soli citor General is based upon the doctrine of pleasure, it would be convenient at the outset to ascertain the precise scope of the doctrine in the context of the Indian Constitution. Article 309 is subject to the provisions of the Constitution and, therefore, is subject to article 310 thereof Article 311 imposes two limitations on the doctrine of pleasure declared in article 310. The gist of the said provisions is this: Under article 309 of the Constitution the appropriate Legislature may regulate the recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or any State; and until provision in that behalf is made, the President or such person as he may direct may make rules regulating the recruitment and conditions of service of persons appointed to the said services and posts in connection with the affairs of the Union. In its ordinary meaning the expression "conditions of service" takes in also the tenure of a civil servant. Under article 310, such a civil servant holds office during the pleasure of the President; but article 311 imposes two conditions to be satisfied before a civil servant can be dismissed, or removed or reduced in rank, namely, (i) he shall not be dismissed, removed or reduced in rank by an authority subordinate to that by which he was appointed, and (ii) he shall be given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. A combined reading of these provisions indicates that the rules made under article 309 are subject to the doctrine of pleasure; and that the doctrine of pleasure is itself subject to two limitations imposed thereon under article 31 1. This tenure at pleasure is a concept borrowed from English law, though it has been modified to suit the Indian conditions. 735 The English law on the doctrine of tenure at pleasure has now become fairly crystallized. Under the English law, all servants of the Crown. hold office during the pleasure of the Crown. The right to dismiss at pleasure is an implied term in every contract of employment under the Crown. This doctrine is not based upon any prerogative of the Crown but on public policy. If the terms of appointment definitely prescribe a tenure for good behavior or expressly provide for a power to determine for a cause, such an implication of a power to dismiss at pleasure is excluded, and an Act of Parliament can abrogate or amend the said doctrine of public policy in the same way as it can do in respect of any other part of common law. (see The State of U.P. vs Babu Ram Upadhya (1). Section 96 B of the Government of India Act, 1915, for the first time in 1919, by an amendment, statutorily recognized this doctrine, but it was made subject to a condition that no person in the service might be dismissed by an authority subordinate to that by which he was appointed. Section 240 of the Government of India Act, 1935, imposed another limitation, namely, that a reasonable opportunity of showing cause against the action proposed to be taken in regard to a person must be given to him. But neither of the two Acts empowered the appropriate Legislature to make a law abolishing or amending the said doctrine. The Constitution of India practically incorporated the provisions of section 240 and section 241 of the Government of India Act, 1935, in articles 309 and 310. The English doctrine has been enlarged in one direction and restricted in another: while Parliament has no power to deprive the President of his pleasure, the said pleasure is made subject to two limitations embodied in article 311. The English concept is considerably modified to suit the conditions of our country. It is, therefore, not correct to say that article 311 is not a limitation on the power of the President to terminate the services of a Union civil servant at his pleasure. To accept the argument that the (1) ; , 696. 736 relevant expression in article 311 shall be so construed as to give full sway to the doctrine is to ignore the limitations on that doctrine. Both article 310 and article 311 shall be read together and, if so read, it is manifest that the said doctrine is subject to the said two conditions. What is the scope of the relevant words, "dismissed" and "removed ' in article 311 of the Constitution? The general rule of interpretation which is common to statutory provisions as well as to constitutional provisions is to find out the expressed intention of the makers of the said provisions from the words of the provisions themselves. It is also equally well settled that, without doing violence to the language used, a constitutional provision shall receive a fair, liberal and progressive construction, so that its true objects might be promoted. Article 311 uses two well known expressions, "dismissed" and "removed". The Article does not, expressly or by necessary implication, indicate that the dismissal or removal of a Government servant must be of a particular category. As the said Article gives protection and safeguard to a Government servant who will otherwise be at the mercy of the Government, the said words shall ordi narily be given a liberal or at any rate their natural meaning, unless the said Article or other Articles of the Constitution, expressly or by necessary implication, restrict their meaning. I do not see any indication anywhere in the Constitution which compels the Court to reduce the scope of the protection. The dictionary meaning, of the word "dismiss" is "to let go; to relieve from duty". The word " remove ' " means "to discharge, to get rid off, to dismiss". In their ordinary parlance, therefore, the said words mean nothing more or less than the termination of a person 's office. The effect of dismissal or removal of one from his office is to discharge him from that office. In that sense, the said words comprehend every termination of the services of a Government servant. Article 311(2) in effect lays down that before the services of a Government servant are so terminated, 737 he must be given a reasonable opportunity of showing cause against such a termination. There is no justification for placing any limitation on the said expressions, such as that the dismissal or removal should have been the result of an enquiry in regard to the Government servant 's misconduct. The attempt to imply the said limitation is neither warranted by the expressions used in the Article or by the reason given, namely, that otherwise there would be no point in giving him an opportunity to defend himself If this argument the correct, it would lead to an extraordinary result, namely, that a Government servant who has been guilty of misconduct would be entitled to a "reasonable opportunity" whereas an honest Government servant could be dismissed without any such protection. In one sense the conduct of a party may be relevant to punishment; ordinarily punishment is meted out for misconduct, and if there is no misconduct there could not be punishment. Punishment is, therefore, correlated to misconduct, both in its positive and negative aspects. That is to say punishment could be sustained if there was misconduct and could not be meted out if there was no misconduct. Reasonable opportunity given to a Government servant enables him to establish that he does not deserve the punishment, because he has not been guilty of misconduct. That apart, a Government servant may be removed or dismissed for many other reasons, such as retrenchment, abolition of post, compulsory retirement and others. If an opportunity is given to a Government servant to show cause against the proposed action, he may plead and establish that either there was no genuine retrenchment or abolition of posts or that others should go before him. Now let me see whether the history of this constitutional provision countenances any such limitation on the meaning of the said expressions. As we have already noticed, the concept of tenure at pleasure was first introduced in the Government of India Act, 1919. Under section 96 B of that Act, 1/SCI/64 47 738 "(1) Subject to the provisions of this Act and of rules made thereunder, every person in the civil service of the Crown in Ind ia holds office during His Majesty 's pleasure, and may be employed in any manner required by a proper authority within the scope of his duty, but no person in that service may be dismissed by any authority subordinate to that by which he was appointed. " It will be seen that under this section the said concept was introduced subject to a condition; it may also be noticed that the section used only one word "dismissed". In England, under that doctrine, services of a Government servant, whether he is a permanent or a temporary servant, can be terminated without any cause whether he is guilty of misconduct or not. Therefore, when the word "dismissed" is used in section 96 B of the Act in the context of the exercise of His Majesty 's pleasure, that word must have been used in the natural meaning it bears, i.e. terminated. But that section was subject to the provisions of the rules 'made under that Act. In exercise of the power conferred under the Act on the Secretary of State for India in Council, he framed certain rules in December 1920 and with subsequent modifications they were published on May 27, 1930. The said rules were designated as the Civil Services (Classification, Control and Appeal) Rules. Rule 49 of those Rules provided for certain penalties and cl. (6) thereof dealt with "Removal from the civil service of the Crown, which does not disqualify from future employment", and cl. (7) provided for dismissal from the civil service of the Crown, "which ordinarily disqualified from future employment". The explanation to that rule read thus: The termination of employment: (a) of a person appointed on probation during or at the end of the period of probation, in accordance with the terms of the appointment and the rules governing the probationary service; or 739 (b) of a temporary Government servant appointed otherwise than under contract, in accordance with rule 5 of the Central Civil Services (Temporary Service) Rules, 1949; or (c) of a person engaged under a contract, in accordance with the terms of his contract does not amount to removal or dismissal within the meaning of this rule or of rule 55. " The explanation makes it clear that the three specified categories of termination covered by the explanation would amount to dismissal or removal but for the explanation. That is to say, the expression "termination" is synonymous with the term "dismissal" or "removal". Rule 55 of the Rules provided a machinery for dismissing or removing or reducing in rank a Government servant; he should be given thereunder an adequate opportunity to defend himself. Then came the Government of India Act, 1935. In section 240 thereof, the expression used was "dismissed" and that term, in the context of the exercise of His Majesty 's pleasure, could have meant only "termination" of services, though in view of the explanation to r. 49 of the Rules quoted above, the three specified categories of termination mentioned in the explanation might, by construction, be excluded from the natural meaning of the word "dismissal". Then we come to article 311 of the Constitution, which with certain modifications incorporated the provisions of section 240 of the Government of India Act, 1935. It introduced the expression "removed" in addition to the word "dismissed" presumably inspired by rr. 49 and 55 of the Rules. The natural meaning of the said terms takes in every act of termination of service; but, if construed with the help of r. 49 of the Rules, their meaning may be cut down by excluding the three categories of termination covered by the explanation in the manner prescribed therein. If the termination was otherwise than that prescribed therein, it would still be dismissal or removal. If so, the history of the constitutional provisions may 740 lead to the conclusion that though the words "dismissed" and "removed" are words of widest connotation, namely "termination" of service of any category held under the Union, they were used in the limited sense they bear in r. 49 of the Rules, that is to say termination of employment excluding the three categories mentioned in the explanation. So far the words "removed" and "dismissed" are concerned, r. 49 shows that there is no appreciable difference between the two except in the matter of future employment; and article 31 1, presumably, copied the two words from r. 49. Therefore, whether the natural and dictionary meanings of the words "dismissal" and "removal" were adopted or the limited meanings given to those words by r. 49 were accepted, the result, so far as a permanent employee was concerned, would be the same, namely that in the case of termination of services of a Government servant outside the three categories mentioned in the explanation, it would be dismissal or removal within the meaning of article 311 of the Constitution with the difference that in the former the dismissed servant would not be disqualified from future employment and in the latter ordinarily he would be disqualified from such employment. If so, it follows that if the services of a permanent Government servant, which fall outside the three categories mentioned in the explanation, were terminated, he would be entitled to protection under article 311(2) of the Constitution. With this background let me now scrutinise the leading judgment of this Court on the subject, namely, Parshotam Lai Dhingra vs Union of India (1). That was a case of reversion of a Government servant who was officiating in Class 11 Service as Assistant Superintendent, Railway Telegraphs, to his substantive post in Class III Service. This Court, speaking through Das C.J., gave an exhaustive treatment to the scope of article 311(2) of the Constitution, parti (1)[1958] S.C.R. 828. 741 cularly with reference to the meaning of the expressions "dismissed", "removed" or "reduced in rank" found therein. A careful reading of the judgment shows that this Court has heavily relied upon r. 49 of the Civil Services (Classification, Control and Appeal) Rules, and its explanation, and attempted to give a legal basis for the said provisions. On that basis, having considered the different aspects of the problem, the Court has laid down the following two tests at p. 863, to ascertain whether a person is dismissed or removed within the meaning of article 311 of the Constitution; (1) Whether the servant had a right to the post or the rank or (2) whether he has been visited with evil consequences of the kind hereinbefore reference to i.e., loss of pay and allowances, loss of his seniority in his substantive rank or the stoppage or postponement of his future chances of promotion If an officer had a right to a post or rank and if the termination of his services deprived him of that right the said termination would be dismissal or removal as punishment. So too, if the termination had the effect of the officer being visited with evil consequences then whatever may be the phraseology used for putting an end to his services, it would be dismissal as punishment. The motive operating on the mind of the authority concerned or the machinery evolved or the method adopted to put an end to his services are not relevant in considering the question whether he was dismissed, if he had a right to the office or if he had been visted with evil consequences, though the said circumstances may have some relevance as other decisions of this Court disclose, in ascertaining whether he was discharged with a stigma attached to him. While conceding that this decision does not in terms specifically lay down that even in the case of a person holding a permanent post, if there was an appropriate term in the conditions of service that his services could be terminated by notice, article 311 of the Constitution would not be attracted, it is contended that raison d 'etre of the decision and some passages therein lead to that conclusion. Some of the passages relied upon may be extracted: 742 At pp. 857 858: "It has already been said that where a person is appointed substantively to a permanent post in Government service, he normally acquires a right to hold the post until under the rules, he attains the age of superannuation o r is com pulsorily retired and in the absence of a contract express or implied, or a service rule he cannot be turned out of his post unless he is guilty of misconduct, negligence, inefficiency or other disqualifications and appropriate proceedings are taken under the service rules read with article 311(2). " At p. 862: "As already stated if the servant has got a right to continue in the post, then, unless the contract of employment or the rules provide to the contrary, his services cannot be terminated otherwise than for misconduct, negligence, inefficiency or other good and sufficient cause. " These passages certainly lend support to the argument of the learned counsel, but the qualifying clauses on which reliance is placed are only incidental observations. The main principles relevant to the present enquiry were laid down by the Court clearly and precisely at p. 860, thus: "Shortly put, the principle is that when a servant has right to a post or to a rank either under the terms of the contract of employment; express or implied, or under the rules governing the conditions of his service, the termination of the service of such a servant or his reduction to a lower post is by itself and prima facie a punishment, for it operates as a forfeiture of his right to hold that post or that rank and to get the emoluments and other benefits attached thereto." The following observation further pinpoints the principle; "One test for determining whether the termi nation of the service of a government servant 743 is by way of punishment is to ascertain whether the servant, but for such termination, had the right to hold the post." This decision, therefore, clearly lays down, without any ambiguity, that if a person has a right to hold office under the service rules or under a contract the termination of his services would attract Art 311 of the Constitution. It also lays down that a person holding a substantive lien on a permanent post has a right to such office. It does not say, expressly or by necessary implication, that even if a person is deprived of such a right, it will not be punishment unless it is inflicted for misconduct in the manner prescribed by the service rules. Learned Additional Solicitor General further relied upon the decisions of this Court holding that a rule empowering the Government to compulsorily retire a permanent Government servant before that age of superannuation did not violate article 311 of the Constitution and contended that, on parity of reasoning, the impugned rules should likewise be valid. It was asked, with considerable force, what relevant distinction there could be between the said two categories of rules in the context of the question whether the termination of services was dismissal or not within the meaning of article 311 of the Constitution? In the case of a Government servant, the argument proceeded, in either case he was deprived of his title to office and, therefore, both cases were equally covered by the principle laid down in Dhingra 's case(1). This argument certainly deserves serious consideration. The relevant rules pertaining to compulsory retirement of a permanent Government servant considered by this Court in the various decisions relied upon by learned counsel may now be noticed. In Shyam Lal 's case (2) which is the sheet anchor of the appellants ' argument, the rule under consideration was Note 1 to article 465 A of the Civil Services Regulations. The said Note read: (1) ; (2) ; 744 "Government retains an absolute right to retire any officer after he has completed twenty five years qualifying service without giving any reasons, and no claim to special compensation on this account will be ' entertained. This right will not be exercised except when it is in the public interest to dispense with the further services of an officer. " The rule considered in The State of Bombay vs Saubhagchand M. Doshi (1) was r. 165 A of the Bombay Civil Services Rules, applicable to the State of Saurashtra, and it read: "Government retains an absolute right to re tire any Government servant after he has com pleted 25 years qualifying service or 50 years of age, whatever the service, without giving any reason, and no claim to special compensation on this account will be entertained. This right will not be exercised except when it is in the public interest to dispense with the further services of a Government servant such as on account of inefficiency or dishonesty. " Rule 3 of the Railway Services (Safeguarding of National Security) Rules, 1949, was under consideration in Balakotaiah vs The Union of India(2) and it read: "A member of the Railway Service who, in the opinion of the competent authority is engaged in or is reasonably suspected to be engaged in subversive activities, or is associated with others in subversive activities in such manner as to raise doubts about his reliability, may be compulsorily retired from service, or have his service terminated by the competent authority after he has been given due notice or pay in lieu of such notice in accordance with the terms of his service agreement: Provided that a member of the Railway Service shall not be retired or have his service so terminated unless the competent authority is satisfied that his retention in public service is prejudicial to national security, and unless, (1) ; (2) ; 745 where the competent authority is the Head of a Department, the prior approval of the Governor General has been obtained." In Union of India vs Jeewan Ram(1) this Court had to consider sub rr. (3) and (4) of r. 148 of the Indian Railway Establishment Code, Vol. 1. The rule which was under scrutiny in Dalip Singh vs The State Punjab(2) was r. 278 of the Patiala State Regulations, which read: "For all classes of pensions the person who desires to obtain the pension is required to submit his application before any pension is granted to him. The State reserves to itself the right to retire any of its employees on pension on political or on other reasons. " The cases of Shyam Lal and Doshi were decided before Dhingra 's case and the cases of Dalip Singh and Balakotaiah, after Dhingra 'section In all the cases, under the relevant rules the age of superannuation was fixed but the order of compulsory retirement was made before the Government servant reached the age of superannuation. The rule in Shyam Lal 's case ex facie declares that the right will not be exercised except when it is in the public interest to dispensed with the further services of an officer indicating thereby that the compulsory retirement is imposed as punishment for some sort of dereliction of duty on his part and, therefore, the termination of service under that rule necessarily carries a stigma with it. The rule in Doshi 's case(3) iS more emphatic than that in Shyam Lal 's case: the rule in Doshi 's case elaborate what is implicit in the rule considered in Shyam Lal 's case and declares that the right there under shall be exercised by the Government only in the case of inefficiency or dishonesty of the Government servant Rule 3 of the Railway Services (Safeguarding of National Security) Rules considered in Balakotaiah case (4) expressly says that the order of compulsory retirement will be made for misconduct defined therein. (1) A.I.R. 1958 section C. 905. (2) (3) ; (4) 746 The rule in Dalip Singh 's case(1) gives a very wide power to the State to retire any of its employees on pension on political or other reasons before the age of superannuation. In short the rules dealt with in the first three decisions expressly conferred an absolute power on the appropriate authority to terminate the services of a Government servant for misconduct, and the rule in the fourth decision went further and enabled the appropriate authority to dismiss the servant for any reason. It may also be noticed that in Doshi 's cases(2) this Court expressed the view that "when there is no rule fixing the age of compulsory retirement or if there is one and the servant is retired before the age prescribed therein, then that can be regarded only as dismissal or removal within article 311(2) of the Constitution". The emphasis appears to be more on the existence of a rule of compulsory retirement than on the character of the termination itself. But this reservation was not accepted by the Court in Dalip Singh 's case(1), that is to say, the emphasis is shifted to the existence of a rule of termination detracting from the permanency of the post. Pausing here a moment, I ask myself the question whether these decisions can be reconciled with the aforesaid principles laid down in Dhingra 's case(3). In Dhingra 's case this Court held that a termination of the services of a Government servant, who has substantive lien on a permanent post, that is to say a title to his office, is dismissal or removal within the meaning of article 311(2) of the Constitution. In the aforesaid three decisions the Government servant concerned had substantive lien on a permanent post, but he was compulsorily retired before the age of superannuation depriving him of his title to the post. it is neither the phraseology used in respect of nor the nomenclature given to the act of termination of service that is material but the legal effect of the action taken that is decisive in considering the question whether a Government servant is dismissed or not. Whether the services of a permanent Government servant are (1) (3) ; (2) ; 747 terminated by giving him 15 days ' notice or whether his services are dispensed with before the age of superannuation by way of compulsory retirement under or outside a rule of compulsory retirement, the termination deprives him of his title to the permanent post. If in the former case it amounts to dismissal, in the latter case it must be equally so. I would, prefer the principle laid down in Dhingra 's case (1) in the matter of termination of the services of a permanent Government servant to that laid down in the said other decisions. Rule 148 of the Railway Establishment Code, Vol. 1, was considered both in Balakotaiah 's case (2) and in Jeewan Ram 's case(3): in the former, though there were some observations in support of the appellants ' contention, the question of construction of the rule was expressly left open, and in the latter though the Government servant concerned was discharged under that rule, the decision proceeded on the basis that he was expressly removed for misconduct. A number of decisions of the High Courts are cited. I have gone through them carefully. I am not referring to them in detail, as, though some of the judgments contain instructive discussion on though subject, they practically extended the principle of Shyam Lal 's case(4) and held that the termination of service, such as under r. 148(3), was not dismissal within the meaning of article 311 of the constitution As, in my view, Shyam Lal 's case must yield to Dhingra 's case, a further discussion of the said decisions is not called for. The effect of the two rules is the same; the difference is only superficial, which lies more in clever drafting than in their content. Take for instance the following two rules: (i) the Government may terminate the services of a permanent Government servant at any time, or after a specified period but before the normal superannuation age, by way of compulsory retirement; and (ii) the Government may terminate (1) ; (3) A. 1. R. (2) ; (4) ; 748 the services of a permanent civil servant by giving him 15 days ' notice. Arbitrariness is writ large on both the rules: both the rules enable the Government to deprive a permanent civil servant of his office without enquiry. Both violate article 311(2) of the Constitution. Both must be bad or none at all. The following principles emerge from the aforesaid discussion. A title to an office must be distinguished from the mode of its termination. It a person has title to an office, 'he will continue to have it till he is dismissed or removed therefrom. Terms of statutory rules may provide for conferment of a title to an office and also for the mode of terminating it. If under such rules a person acquires title to an office, whatever mode of termination is prescribed, whatever phraseology is used to describe it, the termination is neither more nor less than a dismissal or removal from service; and that situation inevitably attracts the provisions of article 311 of the Constitution. The argument that the mode of termination prescribed derogates from the title that otherwise would have been conferred on the employee mixes up two clear concepts of conferment of title and the mode of its deprivation. Article 311 is a constitu tional protection given to Government servants, who have title to office, against arbitrary and summary dismissal. It follows that Government cannot by rule evade the provisions of the said Article. The parties cannot also contract themselves out of the constitutional provision. Once that principle is accepted the cases dealing with compulsory retirement before the age of superannuation cannot also fall outside the scope of article 311 of the Constitution. Age of superannuation is common to all permanent civil servants: it depends upon an event that inevitably happens by passage of time, unless the employee dies earlier or resigns from the post. It does not depend on the discretion of the employer or the employee; it is for the benefit of the employee who earns a well earned rest with or without pensionary benefits for the rest of his life; it has, by custom and by convention, become 749 an inextricable incident of Government service; and it is an incident of a permanent post. Notwithstanding the rule fixing an age of superannuation, a person appointed to such a post acquires title to it. The same cannot be said of a compulsory retirement before the age of superannuation. It is not an incident of the tenure; it does not work automatically it is not conceived in the interest of the employee it is a mode of terminating his employment at the discretion of the appointing authority. In effect whatever may be the phraseology used in terminating the services of a Government employee, it is punishment imposed on him, for it not only destroys his title but also inevitably carries with it a stigma such a. termination is only dismissal or removal within the meaning of article 311 of the Constitution. I would, therefore, with greatest respect, follow the principle laid down in Dhingra 's case(1) in respect of permanent servants in preference to that accepted by Shyam Lal 's case(2) and the subsequent decisions following it. Now let me turn to the relevant rules of the Indian Railway Establishment Code, hereinafter called that Code. The Code is in two volumes. The first volume embodies all rules governing the service conditions of railway servants with the exception of those rules which correspond to the Fundamental Rules, Supplementary Rules, Pension Rules and the Civil Service Regulations applicable generally to all civil servants under the Government of India. The excepted rules are included in Vol. 11 of the Code. Fundamental Rules embodied in Vol. 11 of the Code describe, inter alia the cadre strength, the different posts in the cadre and the nature of the appointments made in respect of such posts. Broadly the posts are divided as permanent, officiating, temporary and for definite periods. Rule 2003 (14) defines lien to mean th title of a railway servant to hold substantively either immediately or on the termination of a period or periods of absence, a permanent post, including a tenure post, to which he has been appointed substan (1) ; (2) 750 tively. Under r. 2006, "Unless in any case it be otherwise provided in these Rules, a railway servant. on substantive appointment to any permanent post acquires a lien on that post and ceases to hold any lien previously acquired on any other post". Under r. 2009, "A railway servant 's lien on a post may, in no circumstances, be terminated, even with his consent, if the result will be to leave him without a lien or a suspended lien upon a permanent post. " Rule 2042 provides that the pay and allowances of a railway servant who is removed or dismissed from service ceases from the date of the order of removal or dismissal. Rule 2046, under the heading "Compulsory Retirement", fixes the age of superannuation for different categories of service. These rules clearly lay down that a. railway servant on a substantive appointment to a permanent post acquires a lien on that post and he does not lose it till he attains the age of superannuation or is dismissed or removed in the manner prescribed; that is, he acquires a title to hold substantively a permanent post. It is not of much relevance to give any particular nomenclature to that post. It may not be a life tenure. It may not also be a permanent post in the literal sense of the term, but it confers a title to that post with all the advantages appertaining to that post and ordinarily it comes to an end only on the incumbent attaining the age of superannuation, with or without pensionary benefits. Briefly stated, the aforesaid Fundamental Rules embodied in Vol. 11 of the Code create offices of stability and security which for all practical purposes are permanent posts. If so, the termination of services of such a servant can only be dismissal or removal, for he will be deprived of his title to the said office. If that was the legal position, for the reasons already given, the said r. 148(3) And r. 149, conferring a power on the appointing authority to remove such a permanent servant on notice would infringe the constitutional protection given to a Government servant under article 311 of the Constitution. A permanent post and such rules cannot stand together: the latter must inevitably yield to the former. 751 I therefore, hold that r. 148(3) and r. 149 of the Railway Establishment Code, being violative of the provisions of articles 14 and 311 of the Constitution are void and unenforceable. In the result, I agree that Civil Appeals Nos 711 to 713 of 1962 and Civil Appeal No. 714 of 196 should be allowed with costs and that Civil Appeal Nos. 837 to 839 of 1963 should be dismissed wit costs. DAS GUPTA J. The principal question raised in the four appeals which have been numbered 711 to 714 of 1962 is as regards the validity of Rule 148 (3) of the Indian Railway Establishment Code in respect of certain non pensionable railway servants that their services shall be liable to termination on notice for the period as prescribed therein. The appellants all railway employees whose services had been terminated on notice in accordance with the above provision and who have failed to obtain relief against the orders of termination challenge the validity of this provision on two grounds. Their first contention is that this Rule in providing for termination of service on mere notice contravenes the provisions of Art 311(2) of the Constitution; secondly, it is contended that the Rule violates article 14 of the Constitution It will be necessary to examine these two grounds separately. Is the termination as provided for in the above provision, in Rule 148 (3) 'removal ' or 'dismissal within the meaning of article 311(2) of the Constitution? That is the question that falls to be answered for deciding the first grounds. To answer this against we have to determine first the connotation of the two words 'removal ' and 'dismissal ' as used in article 311(2). In my opinion, this matter is completely covered by numerous decisions of this Court. Before turning to the decisions however it will be convenient to examine the matter in the context in which article 311 (2) appears in the Constitution and also the historical background of the protection afforded thereby. For this purpose it is necessary first to consider the three Articles of the Constitu 752 tion, viz., articles 309, 310 and 311. They are in these words: "309. Subject to the provisions of this Con stitution, Acts of the appropriate Legislature may regulate the recruitment, and conditions of service of persons appointed, to public services and posts in connection with the affairs of the Union or of any State : Provided that it shall be a competent for the President or such persons as he may direct in the case of services and posts in connection with the affairs of the Union and for the Governor or Rajpramukh of a State or such person as he may direct in the case of services and posts in connection with the affairs of the State, to make rules regulating the recruitment and the conditions of service of persons appointed to such services and posts until provisions in that behalf is made by or under an Act of the appropriate Legislature under this Article, and any rules so made shall have effect, subject to the provisions of any such Act. (1) Except as expressly provided by this Constitution every person who is a member of a defence service or of a civil service of the Union or of an all India service or holds and post connected with defence or any civil post under the Union, holds office during the pleasure of the President, and every person who is a member of a civil service of a State or holds any civil post under a State holds office during the pleasure of the Governor or, as the case may be, the Raj pramukh of the State. (2) Notwithstanding that a person holding a civil post under the Union or a State holds office during the pleasure of the President or, as the case may be, of the Governor or Rajpramukh of the State, any contract under which a person, not being a member of a defence service or of an all India service or of civil service of, the 753 Union or a State, is appointed under this Constitution to hold such a post may, if the President or the Governor or the Rajpramukh as the case may be, deems it necessary in order to secure the services of a perso n having special qualifications, provide for the payment to him of compensation, if before the expiration of an agreed period that post is abolished or he is, for reasons not connected with any misconduct on his part, required to vacate that post. (1) No person who is a member of a civil service of the Union or an all India service or a civil service of a State or holds a civil. post under the Union or a State shall be dismissed or removed by an authority subordinate to that by which he was appointed. (2) No such person as aforesaid shall be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. Provided that this clause shall not apply (a) where a person is dismissed or removed or reduced in rank on the ground of conduct which has led to his conviction on a criminal charge; (b) where an authority empowered to dismiss or remove a person or to reduce him in rank is satisfied that for some reason, to be recorded by that authority in writing it is not reasonably practicable to give to that person an opportunity of showing cause; or (c) where the President or Governor or Rajpramukh, as the case may be, is satisfied that in the interest of the security of the State it is not expedient to give to that person such an opportunity. (3) If any question arises whether it is reasonably practicable to give to any person an opportunity of showing cause under clause (2), the decision thereon of the authority empowered 1/SCI/64 49 754 to dismiss or remove such person or to reduce him in rank, as the case may be, shall be final. " It has to be noticed that both Articles 309 and 310 are subject to article 31 1. In other words, if any rule is made under article 309 as regards the conditions of service of a government servant in the matter of his dismissal or removal or reduction in rank it has to comply with the requirements of article 31 1. Again, before any order dismissing or removing or reducing a government servant in rank is made by the President or the Governor in exercise of his pleasure, the President or the Governor has to comply with the require ments of article 311(2) of the Constitution. Under article 310 all servants of the State hold office at pleasure of the President or the Governor as the case may be. That by itself means that the officer has no right to be heard before his services are terminated. To this article 311 provides an exception in the case of removal or dismissal. It is easy to see that if every termination of service amounted to dismissal or removal the resultant position will be that every officer would have the right to be heard before any action could be taken under article 310. That would leave no field in which article 310 could operate. This by itself is sufficient to show that not all kinds of termination of service were intended to come within article 311. Reading Articles 310 and 311 together it will be reasonable to understand them to say that the officer will have the right to be heard before his services were terminated by dismissal or removal but in all other cases of termination of his service he will not have any such right. I have therefore no hesitation in rejecting the extreme proposition urged on behalf of the appellants that the words dismissal or removal in article 311 include every kind of termination of service. This brings us to the question : what kinds of termination of service come within the words dismissal or removal and what kinds are not. Taking the second Dart of the question first, it is not difficult to mention at least two kinds of termination which 755 cannot reasonably be included within the words dismissal or removal. Take for instance the case where a government servant resigns his post but the resignation is not under the rules effective before it has been accepted by his superiors. Here termination results only when the superior officer accepts the resignation. It may be correct to say that thereby he terminates the service. But it could not reasonably be said that the superior officer has removed the servant from service or dismissed him from service. Such removal or dismissal was not necessary at all because of the resignation. Take again the case of a servant who has been appointed to an office for a period of three years. When the three year period ends he is asked to go. There is termination of service. But nobody would said that the superior officer by asking him to go at the end of the period had dismissed him or removed him from service. The real question however is not so much as what in common parlance would be understood to be the dismissal or removal but what the Constitution intended by these words. In this connection it will be helpful to examine the use of the words dismissal and removal in the earlier Constitution Acts. The Charter Act of 1793 mentions in section 36 that nothing in this Act contained shall extend, or be construed to extend to preclude or take away the power of the Court of Directors of the said Company from removing or recalling any of the officers or servants of the said Company, but that the said Court shall and may at all times have full liberty , to remove, recall, or dismiss any of such officers or servants, at their will and pleasure in the like manner as if this Act had not been passed Section 35 made it lawful to and for the King 's Majesty his heirs and successors, by any writing or instrument under him or their sign manual, countersigned by the President of the Board of Commissioners for the affairs of India, to remove or recall any person or person holding any office, employment, or commission, civil or military, under the said United Company 756 in India for the time being. In the Charter Act of 1833, similar provisions were enacted in sections 74 and 75. Section 74 make it lawful "for His Majesty by any Writing under His Sign Manual,countersigned by the President of the said Board of Commissioners, to remove or dismiss any person holding any office, employment or commission, civil or military, under the said Company in India, and to vacate any Appointment or Commission of any person to any such office or employment. " Section 75 ran thus: "Provided always, and be it enacted, that nothing in this Act contained shall take away the Power of the said Court of Directors to remove or dismiss any of the officers or servants of the said Company but that the said Court shall and may at all Times have full Liberty to remove or dismiss any of such officers or servants at their will and pleasure. . When the Act of 1,858 transferred the government of India to Her Majesty the Queen of England section 38 of the Act provided that. "Any writing under the Royal Sign Manual removing or dismissing any person holding any office employment or commission, civil or military in India, of which, if this Act had not been passed, a copy would have been required to be transmitted or delivered within eight days after being signed by Her Majesty to the Chairman or Deputy Chairman of the Court of Directors, shall, in lieu thereof, be communicated within the time aforesaid to the Secretary of State in Council. " It seems to me that in making these statutory provisions as regards dismissal or removal of public servants the British Parliament had in mind those servants only who had acquired such a right to the post under their conditions of service that but for such statutory provisions their dismissal or removal would have been unlawful. If their service was terminable by the ordinary law of the land there 757 would have been no need in section 36 of the 1793 Act or section 75 of the 1833 Act to speak of the right of the Court of Directors of the Company to remove or dismiss the Company 's officers or servants at their will and pleasure. It is clear that by these provisions the British Parliament was emphasizing the right of the Court of Directors of the Company to remove, or dismiss such servants whose services would not have been terminable under the ordinary law of master and servant. It is also legitimate to read the provisions making it lawful for the King of England to remove or dismiss the Company 's servants (s). 35 in the Charter Act of 1793 and section 75 of the Charter Act of 1833) as intended to terminate the service of the same class of servants, viz., those whose services were not terminable under the ordinary law of the land. In the light of this legislative history, the words removal and dismissal in section 38 :of the Act of 1858 and thereafter in the Government of India Act, 1915 (Section 95 and section 96B ) cannot but be read also to mean termination of service of such servants only who would not have been liable to termination under the ordinary law of master and servant. In other words, only those servants who by their terms and conditions of their appointment to the service bad acquired a right to continue for a particular period which could not under the ordinary law be put an end to were intended to get the benefit of these provisions as regards dismissal or removal. By the time the Government of India Act. , 1935, came to be enacted by Parliament rules had been framed by the Secretary of State in Council under section 96B of the Government of India Act, in which these words, removal and dismissal, were used. Among the rules framed under this section in 1924 was Rule XIII, which was in these words: "Without prejudice to the provisions of any law for the time being in force, the Local Government may for good and sufficient reasons: (1) Censure (2) Withhold promotion from 758 (3) Reduce to a lower post (4) Suspend (5) Remove, or (6) Dismiss any officer holding a post in a provincial or subordinate service or a special appointment. " In the fresh set of rules framed in 1930 Rule 49 took the place of Rule XIII of the earlier Rules and was in these words: "R. 49. The following penalties may, for good and sufficient reason and as hereinafter provided, be imposed upon members of the services comprised in any of the classes (1) to (5) specified in Rule XIV namely: (i) Censure, (ii) withholding of increments or promotion (iii) reduction to a lower post or time scale, or to a lower stage in a time scale, (iv) recovery from pay of the whole or part of any pecuniary loss caused to Government by negligence or breach of orders (v) suspension, (vi) removal from the civil service of the crown, which does not disqualify from future employment, (vii) dismissal from the civil service of the crown, which ordinarily disqualifies from future employment. Explanation The discharge (a) of a person appointed on probation, during the period of probation, (b) of a person appointed otherwise than under contract to hold a temporary appointment, on the expiration of the period of the appointment, 759 (c) of a person engaged under contract, in accordance with the terms of his contract, does not amount to removal or dismissal within the meaning of this Rule. " These Rules show that the Secretary of State in Council considered removal and dismissal from the service of the Crown only as penalties. Explanation to Rule 49 of the 1930 Rules also shows that discharge from service of a person who had not acquired a right to the post was not considered to be removal or dismissal. When the British Parliament made special provision in the Government of India Act, 1935 as regards removal or dismissal of persons in the civil service of the Crown it had before it not only the history of these words removal and dismissal in the Charter Act 1793, Charter Act of 1833, Government of India Act, 1858, the Government of India Act, 1915 but also these Rules framed by the Secretary of State in Council. It is reasonable to think therefore that in making these special provisions in the 1935 Act the British Parliament proceeded on the basis that only terminations of service by way of punishment which could not have been inflicted under the ordinary law of master and servant would come within these words removal and dismissal. Primarily such terminations by way of punishment could be made only in respect of those servants who had not acquired a right to continue in service. It might however be said that even where there was no such right and termination could have been effected therefore under the ordinary law of contract between master and servant any termination which carried with it loss of benefits already acquired, say, forfeiture of pension or of provident fund was also contemplated to come within these words. Termination in no other case could be said to be by way of punishment and in the light of the previous history of the use of the words removal and dismissal in connection with the civil servants of the crown it appears to be abundantly clear that 760 in the Government of India Act, 1935 the words removal and dismissal were not intended to include such other terminations. When the Constitution was framed the provisions as regards removal and dismissal as contained in section 240 of the Government of India Act were embodied 'in articles 310 and 311 with practically little change. Nothing has been shown to us to indicate that the Constitution makers could have meant by these words removal and dismissal in article 31 1, anything different from what the British Parliament had intended to include under those words in the Government of India Act, 1935. The above consideration of the context an previous legislative history leads to the conclusion that the words 'removal ' or 'dismissal ' in article 311 meant only such terminations of service where the servant had acquired a right to continue in the post which right was cut short by the termination and such other terminations even where there was no such right, as resulted in loss of acquired benefits. Turning now to the decided cases we find that the question now under consideration was fully discussed in this Court 's decision in Parshotam Lal Dhingra vs Union of India(1). After an exhaustive discussion of appointments of Government servants to a permanent or temporary post, substantively or on probation or on an officiating basis, and numerous rules of service in connection with such appointments, Das C.J. speaking for the majority of the Court recorded the conclusion thus: "It follows therefore that if the termination of service is sought to be brought about otherwise than by way of punishment, then the government servant whose service is so terminated cannot claim the protection of article 311(2). " The learned Chief Justice went on to say: "The foregoing conclusion however does not solve the entire problem, for it has yet to (1) 761 be ascertained as to when an order for the termination of service is inflicted as and by way of punishment and when it is not. It has already been said that where a person is appointed substantively to a permanent post in Government service, he normally acquires a right to hold the post until under the rules, he attains the age of superannuation or is compulsorily retired, and in the absence of a contract express or implied or a service rule, he cannot be turned out of his post unless the post itself is abolished or unless he is guilty of misconduct, negligence, inefficiency or other disqualifications and appropriate proceedings are taken under the service rules read with article 311(2). Termination of service of such a servant so appointed must per se be a punishment, for it operates as a forfeiture of the servant 's rights and brings abo ut a pre mature end of his employment. Again, where a person is appointed to a temporary post for a fixed term of say five years his service can not, in the absence of a contract or a service rule permitting its premature termination be terminated before the expiry of that period unless he has been guilty of some misconduct, negligence inefficiency or other disqualifications and appropriate proceedings are taken under the rules read with article 311(2). The premature termination of the service of a servant so appointed will prima facie be a dismissal or removal from service by way of punishment and so within the purview of article 311(2). At page 862, the learned Chief Justice again observed: In short, if the termination of service is founded on the right flowing from contract or the service rules then, prima facie, the termination is not a punishment and carries with it no evil consequences and so article 311 is not attracted But even if the Government has, by contract or under the rules, the right to terminate the 762 employment without going through the procedure prescribed for inflicting the punishment of dismissal, or removal or reducing in rank, the Government may nevertheless, choose to punish the servant and if the termination of service is sought to be founded on misconduct, negligence, inefficiency or other disqualification, then it is a punishment and the requirements of article 311 must be complied with. " At page 863, the learned Chief Justice observed thus: "Thus if the order entails or provides for the forfeiture of his pay or allowances or the loss of his seniority in his substantive rank or the stoppage or postponement of his future chances of Promotion, then that circumstance may indicate that although in form the government had purported to exercise its right to terminate the employment or to reduce the servant to a lower rank under the terms of the contract of employment or under the rules, in truth and, reality the Government has terminated the employment as and by way of penalty. " Several years before this the question : what is meant by the words 'removal ' or 'dismissal. ' had been considered by this Court in Shyam Lal vs The State of Uttar Pradesh(1). Shyam Lai, the appellant, had been ordered to retire compulsorily under the provisions of article 465A of the Civil Service Regulations. On behalf of the appellant it was urged inter alia that this order was invalid as the provisions of article 311(2) of the Constitution had not been complied with. In deciding that the compulsory retirement did not amount to dismissal or removal within the meaning of article 311(2) of the Constitution the Court laid down that (1) every termination of service does not amount to removal or dismissal and (2) that dismissal or removal is a punishment imposed on an officer as a penalty which involves loss of benefit already earned (1) ; It was pointed out that on compulsory retirement an officer would not suffer any diminution of the accrued benefit and though in a wide sense the officer might consider himself punished by the deprivation of the chance of serving and getting his pay till he attains the age of superannuation and thereafter to get an enhanced pension, there is clearly a distinction between the loss of benefit already earned and the loss of prospect of earning something more; where the officer did not lose the benefit already earned the same was not dismissal or removal. At page 42 of the Report the Court said: "Finally, Rule 49 of the Civil Service (Classification, Control and Appeal) Rules clearly indicates that dismissal or removal is a punishment. This is imposed on an officer as a penalty It involves loss of benefit already earned. " In Doshi 's Case( ) the Court had to consider an order of compulsory retirement made under Ruled 165A of the Bombay Civil Service Rules as amended by the Saurashtra Government which gave the Government an absolute right to retire any government servant after he had completed 25 years of qualifying service or 50 years of age whatever his service without giving any reason. It was held that such an order was not 'removal ' or 'dismissal ' under article 311 of the Constitution. Speaking for the Court Venkatarama Aiyar J. said: "Now the policy underlying article 311(2) is that when it is proposed to take action against a servant by way of punishment and that will entail forfeiture of benefits already earned by him, he should be heard and given an opportunity to show cause against the order. But that consideration can have no application where the order is not one of punishment and results in no loss of benefits already accrued, and in such a case there is no reason why the terms of employment and the rules of service should not (1) ; 764 be given effect to. Thus, the real criterion for deciding whether an order terminating the services of a servant is one of dismissal or removal is to ascertain whether it involves any loss or benefits previously earned. Applying this test, an order under R. 165A cannot be held to be one of dismissal or removal, as it does not entail forfeiture of the proportionate pension due for past services. " Hartwell 's Case I was one of termination of a temporary servant under the U.P. Subordinate Agricultural Service, who for some time served in a temporary capacity in the U.P. Agricultural Service. He was first reverted to his original appointment in the Subordinate Agricultural Service by an order dated May 3, 1954 and later a notice dated September 13, 1954 was served on him terminating his services in the Subordinate Agricultural Service. The notice purported to be under Rule 25 Cl. 4 of the Subordinate Agricultural Service Rules. The Court held that the termination of the appellant 's services under this rule did not amount to dismissal or removal within the meaning. of article 311 as it was in accordance with the terms of the conditions of service applicable to the appellant. Imam J. speaking for the Court observed: "In principle, we cannot see any clear distinction between the termination of the services of a person under the terms of a contract governing him and the termination of his services in accordance with the terms of his conditions of service. The order complained against did not contravene the provisions of article 311 and was therefore a valid order." The proposition that it is not every termination of service of an employee that falls within the operation of article 31 1 and that it is only when the order is by way of punishment that it is one of dismissal or removal was reaffirmed by this Court in Balakotich vs The Union of India (3 ). Reaffirming also the criteria indicated in Dhingar 's Case(3) as to what amounted (1) ; (2) ; (3) 765 to punishment for the purpose of article 311, Venkatarama Aiyar J. speaking for the Court observed: "The question as to what would amount to punishment for the purposes of article 311 was also fully considered in Parshotam Lal Dhingra 'section Case(1) It was therein held that if a person had a right to continue in office either under the service rules or under a special agreement, a premature termination of his service would result in loss of benefits already earned and accrued, that would also be punishment. " Proceeding to apply this proposition to the facts of the case before it the Court said: "In the present case, the terms of employment provide for the services being terminated on a proper notice, and so, no question of pre mature termination arises. Rule 7 of the Security Rules preserves the rights of the employee to all the benefits of pension, gratuities and the like, to which they would be entitled under the rules. Thus, there is no forfeiture of benefits already acquired. It was stated for the appellants that a person who was discharged under the rules was not eligible for reemployment, and that was punishment. But the appellants are unable to point to any rule imposing that disability. The order terminating services under R. 3 of the Security Rules stands on the same footing as an order of discharge under R. 148, and it is neither one of dismissal nor of removal within the meaning of article 311. " The law as thus settled by this Court was again applied in Dalip Singh vs State of Punjab. (2) Dalip Singh who had been Inspector General of Police, PEPSU, was compulsorily retired from service by the Rajpramukh by an order dated August 18, 1950 which ran as follows "His Highness the Rajpramukh is pleased to retire from service Sardar Dalip Singh, Inspector (1) (2) 766 General of Police, PEPSU, (on leave) for ad ministrative reasons with effect from the 18th August, 1950. " The appellant brought his suit asking for a declaration that the order by which he was removed from the post of Inspector General of Police was unconstitutional, illegal, void, ultra vires and inoperative. Among the grounds on which this declaration was sought was that the compulsory retirement of the appellant which had been made under Regulation 278 of the Patiala State Regulations, was removal from service within the meaning of article 31 1 of the Constitution. Admittedly the requirements of article 311(2) had not been complied with in this case and so the question had to be decided whether such a retirement was removal or dismissal within the meaning of article 31 1. The question was answered by this Court in the negative for the reasons that the order did not amount to punishment because though an enquiry had been held against him the charges or imputations against him had not been made the condition of the exercise of the power of retirement and further because the officer was not losing the benefits he had already earned, as full pension was ordered to be paid. To emphasis the point that where compulsory retirement was in accordance with the rules of service it could not ordinarily be said to be by way of punishment, the Court pointed out that where a rule of service provided for compulsory retirement at any age whatsoever irrespective of the length of service put in, a retirement understand a rule would not be regarded as dismissal or removal. An observation in Doshi 's Case(1) which might appear to indicate otherwise was not followed it being pointed out that in Doshi 's Case this matter did not fall to be considered. Under Rule 278 he State reserved to itself the right to retire any of its employees on pension on political or on other reasons. It did not mention any particular age for retirement under this Rule. Care was taken in this case to mention that if the rule would result in loss (1) ; 767 of pension already earned, the termination would amount to removal or dismissal. It is thus clear both on principle and on authority that the words removal and dismissal in article 311 of the Constitution mean and include only those terminations of service, where a servant had acquired a right to continue in the post on the basis of terms and conditions of service, and such other terminations, where though there were no such right, the order has resulted in loss of accrued benefits; and that terminations of service which did not satisfy either of these two tests do not come within any of these words. Applying these tests to the termination of service under the provision of Rule 148 (3) of the Railway Code that "the service of other (non pensionable) railway servants shall be liable to termination on notice on either side. " I am of opinion that neither of these is satisfied. There is no doubt that this Rule applies not only to temporary railway servants but also to those railway servants who have been substantively appointed to permanent posts in the railways. A "permanent post", under the Fundamental Rules applicable to the railways means a post carrying a definite rate of pay sanctioned without limit of time. On substantive appointment the government servant has a lien on such post, i.e., the right to hold it substantively The right however is limited by all the terms and conditions of service. One of such conditions is in the provision in the Rule for compulsory retirement Rule 2046 of the Railway Code which corresponds to Fundamental Rule 56 provides that generally the date of compulsory retirement of a railway servant, other than a ministerial servant, is the date on which he attains the age of 55 years. He may be retained in service after the date of compulsory retirement with the sanction of the competent authority on public grounds, which must be recorded in writing, but he must not be retained after the age of 60 years except in very special circumstances. Clause 2 of Rule 2046 provides the rule of compulsory retirement for ministerial servants. Those government servants 768 who have entered government service on or after the 1st April, 1938, and those who being in government service on the 31st March, 1938 did not hold a lien or a suspended lien on a permanent post on that date, shall ordinarily be required to retire at the age of 55 years, but if he continues to be efficient, should ordinarily be retained in service upto the age of 60 years but that he must not be retained after that age except in very special circumstances, which must be recorded in writing, and with the sanction of the competent authority. These rules have been modified from time to time but generally speaking a rule has always existed fixing the age beyond which a railway servant will not be allowed to be retained in service. If such a rule of compulsory retirement had not existed, the servant would have had the right to continue in the service till his death. The rule however limits that right, by providing in effect that the service would be terminated at a certain age. Rule 148(3) is just another rule, limiting the servant 's right to continue in ' service. It is as much a condition of service as Rule 2046 and in deciding the nature and extent of the right of a railway servant to whom Rule 148(3) applies to continue in service, Rule 148(3) is of as much importance as Rule 2046. A railway servant to whom Rule 148(3) applies has two limitations put on his right to continue (1) termination on attaining a certain age and (2) termination on service of a notice under Rule 148(3). Where the service is terminated by the order of retirement under Rule 2046, the termination is of a service where the servant has not the right to continue. So, it is not 'removal ' or 'dismissal '. Equally clearly and for the same reason, when the service is terminated by notice under Rule 148(3), the termination is not &removal ' or 'dismissal '. It has not been suggested that the second test of loss of accrued benefits is satisfied in terminations under Rule 148(3). If in any particular instance the order of termination entails loss of accrued benefits that will happen not because of anything in R. 148(3) 169 but for some extraneous action. Where that happens it will be right to consider such terminations as removal or dismissal. But that consideration is foreign to the provisions of Rule 148(3). 1 have therefore come to the conclusion that the first ground raised by the appellants in challenging the validity of Rule 148(3). , viz., that it contravenes the provisions of article 311 of the Constitution must be rejected. It is necessary now to consider the second ground urged by the appellants, viz., that Rule 148(3) contravenes article 14 of the Constitution. Two contentions are urged in support of this ground. First, it is urged that the Rule gives no guidance to the authority who would take action on it as regards the principle to be followed in exercising the power. Secondly, it is urged that the Rule discriminates between railway servants and other public servants. In my opinion, there is considerable force in the first contention. Classifying the statutes which may come up for consideration on a question of its validity under article 14 of the Constitution in Ram Krishna Dalmia vs Justice S.R. Tendolkar & Ors. "I this Court observed under the third class of such statutes thus: "A statute may not make any classification of the persons or things for the purpose of applying its provisions but may leave it to the discretion of the Government to select and classify persons or things to whom its provisions are to apply. In determining the question of the validity or otherwise of such a statute the Court will not strike down the law out of hand only because no classification appears on its face or because a discretion is given to the Government to make the selection or classification but will go on to examine and ascertain if the statute has laid down any principle or policy for the guidance of the exercise of discretion by the government in the matter of the selection or classification." (1) ; 1/SCI/64 49 770 Applying the principle laid down in the above case to the present rule 1 find on scrutiny of the Rule that it does not lay down any principle or policy for guiding the exercise of discretion by the authority who will terminate the service in the matter of selection or classification. Arbitrary and uncontrolled power is left in the authority to select at its will any person against whom action will be taken. The Rule thus enables the authority concerned to discriminate between two railway servants to both of whom Rule 148(3) equally applied by taking action in one case and not taking it in the other. In the absence of any guiding principle in the exercise of the discretion by the authority the Rule has therefore to be struck down as contravening the requirements of article 14 of the Constitution. It is unnecessary for me to consider the other contention as mentioned above, which has been urged in support of this ground. My conclusion therefore is that though the provisions of Rule 148(3) in respect of certain non pensionable railway servants that their services shall be liable to termination on notice for the period prescribed therein does not contravene article 311(2) of the Constitution, it contravenes article 14 of the Constitution and consequently is void. I would accordingly allow with costs the four appeals (C.A. Nos. 711 713/62 and C.A. No. 714/62) set aside the order of the High Court and order that appropriate writs be issued in favour of the appellant as prayed for. The other three appeals (C.A. Nos. 837 839 of 1963) challenge the decision of the Assam High Court in favour of three railway servants whose services had been terminated under Rule 149 of the Railway Code, that these terminations were invalid. Rule 149(3) is in practically the same terms as Rule 148(3) and provides for the termination of certain railway servants on notice on either side for the period prescribed. As, however, before November 1957 non 771 pensionable service had been brought to an end, and option was given to non pensionable servants either to opt for pensionable service or to continue under their previous terms and conditions of service, Rule 149(3) mentions permanent railway servants generally without any reference to their being nonpensionable. The validity of his Rule was attacked on behalf of railway servants on the same ground as have been considered with regard to Rule 148(3). For the reasons already given when discussing Rule 148(3) I am of opinion that Rule 149(3) does not contravene article 311(2) of the Constitution but contravenes article 14 of the Constitution. The terminations of service under Rule 149(3) of the Railway Code were therefore rightly held by the High Court to be invalid. I would accordingly dismiss these appeals with costs. SHAH J. Except as expressly provided by the Constitution, every member of the defence services or of a civil service of the Union or an all India service holds office during the pleasure of the President and every member of a civil service of a State holds office during the pleasure of the Governor of the State: article 310(1). This is the normal tenure of office of persons serving the Union or the State. The doctrine of holding office at pleasure applies even to a person with special qualifications employed under a contract, with the reservation that compensation may be paid to such person if before the expiry of the agreed period the office is abolished, or for reasons not connected with misconduct on his part, he is required to vacate that post: article 310(2). The power to terminate at pleasure vested by the Constitution in the President or the Governor, as the case may be, is not liable to be restricted by any enactment of the Parliament or the State Legislature: it may be exercised only in the manner prescribed by the Constitution and being outside the scope of articles 53 and 154 of the Constitution cannot be delegated : State of Uttar Pradesh vs Babu Ram Upadhya(1) It is open to the (1) ; 772 Parliament and the State Legislatures to enact Acts subject to the provisions of the Constitution to regulate recruitment and conditions of services and posts in connection with the affairs of the Union or a State (article 309), and until such legislation is enacted, it may be observed that the Union Parliament has not enacted any general legislation governing public servants employed by the Union the President or the Governor or such person as may be directed in that behalf may make rules regulating the recruitment and conditions of service of persons appointed to such services and posts, and the rules so made by the President or the Governor shall have effect, subject to the provisions of any such Acts. The power of the President or the Governor under article 310 (which is wholly independent of the power conferred by the rules or legislation under article 309), and the power conferred by legislation enacted or rules made or continued by virtue of article 309 are subject to certain restrictions contained in articles 311 & 314. Article 314 grants certain special protections to members appointed by the Secretary of State or the Secretary of State in Council to a civil service of the Crown in India and who continue on and after the commencement of the Constitution to serve under the Government of India or a State. Article 311 provides, subject to the proviso to cl. (2), two safeguards to all public servants who are members of the civil service of the Union or an all India service or a civil service of a State who hold civil posts under the Union or the States. These safeguards are "(1) that such members of the service shall not be dismissed or removed by an authority subordinate to that by which he was appointed; and (2) that he shall not be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him." 773 The proviso to cl. (2) of article 311 excludes three specific classes of cases from the protection of the second guarantee. Guarantees under article 311 are, except to the extent specifically provided, absolute and are not subject to the exercise of power, legislative or executive. Accordingly the pleasure of the President or of the Governor cannot be exercised in a manner inconsistent with cl. (2) of article 311. Article 310 must therefore be read subject to article 311(2), and the rules made or legislation enacted under article 309 must also be read subject to article 31 1. It must be emphasized that the guarantees protect all servants, whether appointed to substantive posts, or employed temporarily or on probation, or for limited duration under contracts, but they do not encompass all penalties or terminations of employment. The guarantee under cl. (1) is against dismissal or removal by an authority subordinate to that by which the public servant was appointed, and under cl. (2) against dismissal, removal or reduction in rank without being afforded a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. The guarantee under cl. (2) does not affect the investment of power to dismiss, remove or reduce in rank a member of the civil service; it merely places restrictions upon the exercise of the power. Temporary servants on probation, officiating servants and even those holding posts under contracts all have the protection of article 31 1. But the consequences of mere determination of employment in the very nature of things must vary according to the conditions or terms of employment. Mere determination of employment of temporary servants, or probationers, and of servants whose tenure is governed by contracts, will not ordinarily amount to dismissal or removal, for, dismissal or removal according to the rules implies determination as a disciplinary measure. The appellants in appeals Nos. 711 to 714 of 1962 are public servants employed in the Railways under the management of the Government of India 774 and were governed by the rules made under article 309, and their services were terminated in purported exercise of powers under Rule 148(3). Rule 148, the validity of which is challenged by the appellants in these appeals, was originally framed in 1951 in exercise of the authority conferred by article 309, and was later modified so as. to exclude from its operation determination of employment operating as dismissal or removal as a disciplinary measure. The first clause deals with a temporary railway servant who holds no lien on a permanent post under the Union. Such a person need be given no notice of termination of employment, if the termination is due to the expiry of sanction to the post, or of the officiating vacancy or is due to mental or physical incapacity, or where it amounts to removal or dismissal as a disciplinary measure. Clause (2) deals with apprentices. Clause (3) deals with (non pensionable) railway servants, who are substantively appointed to permanent posts. Clauses (3) & (4) provide: "(3) Other (non pensionable) railway servants The service of other (non pensionable) railway servants shall be liable to termination on notice on either side for the periods shown below. Such notice is not however required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity: (a) Probationary officers and officers on probation other than those in the Medical Department 3 months ' notice (b) Officers on probation in the Medical Department `month 's notice (c) Permanent Gazetted Officers 6 months ' notice (d) Permanent Non gazetted employees `month 's notice. 775 "(4) In lieu ' of the notice prescribed in this rule, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice. " In this group of appeals (Nos. 711 714 of 1962) the principal question raised by the appellants is that the third clause of Rule 148 is invalid. The clause declares that the service of any railway servant who holds non pensionable employment is liable to be terminated on notice on either side of the periods set out in the Rule, but notice terminating employment by the Railway Administration is not a condition of dismissal or removal or of retirement on attaining the age of superannuation and of termination of service due to mental or physical incapacity. The clause prescribes the mode of determination of employment of non pensionable railway servants by notice and proceeds to state that in the specified cases no notice for termination of employment by the Railway Administration shall be necessary. It, ' however, does not follow that in the excepted classes of cases of the right of the Railway Administration to terminate employment is absolute or unrestricted: it is merely intended to be enacted by cl. (3) that notice will be necessary where on compliance with other appropriate conditions, there is retirement on attaining the age of superannuation, or determination of employment in compliance with the provisions of the Constitution, or for mental or physical incapacity. Clause (3) of Rule 148 is impugned by the appellants on two principal grounds: (1) that it is inconsistent with the protection which is guaranteed to all public servants by article 311(2); and (2) that it contravenes the fundamental freedom under article 14 of the Constitution in that certain classes of railway servants are selected for special prejudicial treatment when no such conditions of service are applicable in any other public employment and that in 776 any event an arbitrary power is conferred upon the authority competent in that behalf under the rules to terminate employment without any principle to guide him. Under the first head it is urged that termination by ,.notice of employment of non pensionable servants under Rule 148(3) being removal from service, in the absence of rules prescribing machinery for affording a reasonable opportunity of showing cause against the action proposed to be taken in regard to such employees, the Rule infringes the constitutional guarantee under article 311 and is void. This plea assumes that every termination of employment by notice under Rule 148(3) amounts to removal. But on the plain text of cl. (3) it is evident that the right to determine employ ment by notice cannot be exercised in the excepted cases and since dismissal or removal as a disciplinary measure falls within those excepted cases, the President has, by framing cl. (3) of Rule 148, clearly 1 expressed the intention that determination of employment which amounts to dismissal or removal cannot be effected by notice. In terms the clause makes a distinction between determination of employment by notice and determination of employment as a disciplinary measure, retirement on superannuation, and termination for reasons of physical or mental incapacity: it does not confer authority upon the Railway Administration to terminate employment of a public servant holding a substantive post, as a disciplinary measure. The Rule is framed under article 309, and undoubtedly makes the tenure of a public servant appointed even substantively to hold a permanent post precarious. Ordinarily a railway servant appointed substantively to a permanent post would, under the rules governing employment, continue in service till he attains the age of superannuation but that tenure is made subject to compulsory retirement after he attains the prescribed age if the railway servant belongs to certain specified classes: vide Rule 2046(2) & (3) of the Railway Code, 1958, and to discharge from employment under Rule 148(3) if his service is non pensionable. Inci 777 dents relating to termination of employment on superannuation, on orders of compulsory retirement and on discharge from service under Rule 148(3) are parts. of an organic scheme of rules governing the tenure of office of railway servants which also includes provisions relating to dismissal, removal or reduction in rank as a disciplinary measure. By being appointed to a post a railway servant becomes entitled to the pay and allowances, increments subject to efficiencybar, leave, gratuity, pension etc. These are also incidents of employment of the same character as the incident of determination of employment by compulsory retirement, discharge by notice and dismissal or removal. In considering what the expression "dismissed or removed" used in article 311 means, a brief review of the relevant legislative history dealing with the tenure of office of civil servants in the employment of the Government of India may be useful. It is sufficient to note that since the earliest time all persons holding office civil or military under the East India Company were liable to be removed at the pleasure of the King of England: see section 35 Charter Act 1793 (33 Geo. III Ch. 2): and 74 Charter Act 1833 (3 & 4 will IV Ch. 85). These provisions however did not take away the power of the Court of Directors to remove or dismiss any of its officers or servants not appointed by the Crown in England. The same tenure of service prevailed after the British Crown took over the governance of India, the power to make regulations in relation to appointments and admission to services and matters connected therewith being vested in the Secretary of State in Council: section 37 Govern ment of India Act 1858 (21 & 22 Vict. Ch. 106). For the first time under the Government of India Act, 1919 (9 & 10 Geo. V. Ch. 101) some protection was conferred upon the civil servants. By the first clause of section 96 B the tenure of office of every employee under the civil service of the Crown was during pleasure of His Majesty, but dismissal from service by an authority subordinate to that by which the officer 678 was appointed was prohibited. The power of the Secretary of State for India in Council to make rules regulating classification of civil services, method of recruitment, conditions of service, pay, allowances, discipline and conduct was reaffirmed. This was followed by sections 240 to 243 of the Government of India Act, 1935 (26 Geo. V. & 1 Ed. 8 Ch. 2) which made detailed provisions relating to the tenure of office of persons employed in civil capacities, recruitment and conditions of service and rules to be made in that behalf including rules applicable to railway, custom, postal and telegraph services, and special provisions relating to the police. By section 240, a guarantee against dismissal without being afforded an opportunity of showing cause to persons employed in civil capacities was provided. By cl. (1) except as provided by the Act, every member of a civil service held office during His Majesty 's pleasure: by cl. (2) it was enacted that "no such person shall be dismissed from service, by any authority subordinate to that by which he was appointed" and by cl. (3) it was enacted that "No such person as aforesaid shall be dismissed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him". This was the guarantee of protection conferred by the Government of India Act 1935 upon members of the civil services and has since been affirmed by the Constitution in article 311 in almost the same terms the slight verbal alteration substituting "dismissed or removed" for "dismissed" having made no variation in the content of the guarantee. In 1930 Rules were promulgated by the Secretary of State for India in Council under. 96 B(2) of the Government of India Act, 1919,called the Classification, Control and Appeal Rules. These Rules did not in terms apply to railway servants, who were governed by a set of rules published as the Railway Establishment Code, but these were for all practical purposes in terms similar to the Civil Services (Classification, Control and Appeal) Rules, which may be called 'the General Rules '. Under cl. 49 of the General Rules penalties which could be imposed 679 upon civil servants were enumerated and cl. 55 provided that no order of dismissal, removal or reduction shall be passed upon a civil servant unless he has been informed in writing of the grounds on which it is proposed to take action and he has been afforded adequate opportunity of showing cause against the action proposed to be taken. These Rules remained in force after the Government of India Act, 1935, was brought into operation. Even after the Constitution was brought into force, the rules continued to remain in operation till 1955, when a new set of rules were promulgated, but thereby in Rules 49 & 55 no substantial variation was made It is clear that, under the scheme of rules governing the employment of civil servants which obtained prior to the Constitution dismissal. or removal had acquired a definite connotation, and when the Constitution makers adopted the scheme of protection of public servants in the same form in which it prevailed earlier, an intention to attribute to the expression "dismissed and removed" the same content may be assumed in the absence of any expressed intention to the contrary. Since the constitutional guarantee of protection to public servants is couched in the same terms, the expression "removal" in the Service Rules having the same meaning as "dismissal" i.e., determination of employment as a disciplinary measure for misconduct, subject to the slight variation that an employee removed from service is not disqualified from future employment in public service, whereas a dismissed employee is so disqualified, it may reasonably be held that in the context of this development under the Constitution the expression "dismissed or removed" has not acquired a wider signification to include all terminations of public employment, whatever be the cause. Apart from the historical evolution of the guarantee, there is inherent indication in the constitutional provisions that it was not the intention of the Constitution makers to include in the expression "dismissed or removed" all terminations of employ 780 ment. Guarantee of reasonable opportunity of showing cause against the action proposed to be taken in regard to a public servant, would, be wholly inappropriate in cases of superannuation, expiry of the contractual priod of employment, expiry of the priod of probation or temporary employment, and resignations. It would be futile in such cases to provide for "showing cause". The use of the expression "action proposed to be taken in regard to him" also suggests that termination of employment is of the nature of penal action. There is yet another ground which must be taken into account. For nearly two centuries prior to the Constitution tenure of public servants has been expressly declared to be during the pleasure of the British Crown and that tenure has been repeated in the Constitution in article 310(1) with appropriate variations entrusting the power to the President or the Governor, as the case may be. Vitality of this declaration is emphasized in cl. (2) of article 310 so as to enable the President or the Governor to terminate even contractual employments at their respective pleasure. If the Constitution makers intended that every termination of employment amounted to dismissal or removal within article 311, the provision of article 310, solemnly declaring that members of the services civil and defence hold office during the pleasure of the President is reduced to a meaningless formula having no practical content. The argument that it continues to apply to probationers and temporary employees ignores the plain words of the Constitution, beside unduly minimising the content of the guarantee in article 311 which protects all public servants temporary, probationers, contractual as well as those holding substantive posts. There is also a consistent body of authority which has taken the view that the expression "dismissed or removed" within the meaning of article 311 of the Constitution involves determination of employment as a disciplinary measure that is termination of employment on some ground personal to the officer concerned, such as incapacity or imputation 781 of charge against him which renders it inexpedient undesirable that he should continue in public employment: Satish Chandra Anand vs Union of India(1) Shyam Lal vs State of Uttar Pradesh & The Union of India(2); and Parshotam Lal Dhingra vs Union of India (3). In considering whether termination of employment of a. public servant amounts to dismissal or removal, the primary test settled by a uniform course of authority is: does the termination amount to punishment of the public servant, i.e., has it the effect of depriving the public servant concerned of the right which he has already acquired as a public servant, or does it involve evil consequences such as forfeiture of pay or allowances or other benefits which by the rules governing the tenure he has earned, or impute a stigma? A public servant appointed substantively to a post normally acquires a right to hold the post until he attains the age of superannuation, and in the absence of a contract or service rules governing the tenure, discharge from service would deprive him of the right he has to the post. Such deprivation of rights already accrued, or involving evil consequences, must in all cases amount to dismissal or removal, for, it amounts to imposing. punishment. But mere termination of the right to hold a post not as a discip linary measure, but according to the contract or rules governing his appointment and tenure, cannot be so regarded, because the rules which govern his right to the post make determination in the manner provided inherent in the right. By appointment to an office a public servant does not acquire a right to hold it for his natural life time or even during good behaviour His right to hold it is during the pleasure of the President or the Governor, according as his employment is under the Union or the State: the right is also subject to the contract or rules governing the employ ment. Rules framed under article 309 relating to super annuation, to compulsory retirement on attaining (1) ; (2) (1955] 1 S.C.R. (3) ; 782 a certain age, or completing a specified period of service, or to determination of employment of temporary or quasi permanent servants, or those on probation, form conditions of service, and govern the tenure, and it is difficult to perceive any distinction between those conditions of service, and the condition which expressly provides for determination of employment otherwise than as a matter of disciplinary measure. The title of a railway servant holding a non pensionable office is subject to the condition of determination by notice under Rule 148(3) which as the clause expressly provides is not according to its terms exercisable as a disciplinary measure. It cannot be assumed that on acquisition of the office, a railway servant becomes entitled to a right to the post free from the conditions attaching thereto by the rules governing his employment. He is liable to ' vacate the office on superannuation, on compulsory retirement, on notice of determination, and on dismissal or removal alike, i.e., on the supervention of the prescribed conditions determination of employment of the prescribed class results, and not otherwise. Terminations resulting from causes other than dismissal or removal are solely governed by the rules, but in the matter of dismissal or removal, beside the conditions prescribed by the appropriate rules, the overriding provisions of the Constitution must be complied with. Under the Indian Railway Establishment Code, Vol. 11, "lien" is defined in Rule 2003(14) as meaning the title of a railway servant to hold substantively, either immediately or on the termination of a priod or periods of absence, a permanent post, including a tenure post to which he has been appointed substantively. Evidently lien is the title which the railway servant has to a post, and a public servant appointed substantively must always till he is superannuated have lien on a specific post. On substantive promotion his lien would attach to another post, his earlier lien being superseded. While a railway servant appoin 783 ted to another post substantively must have a lien to that post, it cannot be assumed that his lien continues to attach to any particular post. The lien is however subject to the rules: it does not in any manner confer a right to hold a post indefinitely. Counsel for the appellants contended that all the appellants in this group of appeals were permanent employees, and even superannuation did not put an end to employment, since under the rules the superannuated employees had a right to pension. it is impossible to hold that a superannuated employee continues to remain employed. His employment is at an end: he is under no obligation to serve and earns no remuneration. The pension is but a payment made by the State for services already rendered and not in lieu of services being rendered, or which the public servant may be called upon to render There can therefore be no distinction in principle between termination of employment of the employee attaining the prescribed age of superannuation, and termination of services in the manner prescribed by the rules, by notice, or by an order of compulsory retirement. In all cases employment comes to an end Though the causes which result in termination are different, the effect is the same, viz., the public servant ceases to be employed. The argument that on being appointed to a public service, the employee acquires right to continue in employment, proceeds upon a misconception of the nature of appointment to a public post. Appointment to a public post is always subject to the pleasure of the President, the exercise of such pleasure being restricted in the manner provided by the Constitution A person appointed substantively to a post does not acquire a right to hold the post till he dies, he acquires thereby merely a right to hold the post subject to the rules i.e., so long as under the rules the employment is not terminated. If the employment is validly terminated, the right to hold the post is determined even apart from the exercise of the pleasure of the President or the Governor. There is in truth no permanent 784 appointment of a public servant under the Union or the State. Nor is the appointment to a public post during good behaviour, i.e., a public servant cannot claim to continue in office so long as he is of a good behaviour. Such a concept of the tenure of a public servant 's office is inconsistent with articles 309 and 310 of the Constitution. It may be recalled that the guarantee under article 311 protects a public servant against dismissal or removal or reduction in rank as a disciplinary measure. But if the determination of service does not amount to dismissal or removal as a disciplinary measure, there is nothing in the Constitution which prohibits such determination provided it is consistent with article 309 of the Constitution. The tenure of office is subject to article 310, prescribed by article 309 that is the governing code. The rules cannot undoubtedly provide for dismissal or removal otherwise than in a manner consistent with article 311. Nor can an authority acting under the rules validly terminate an appointment to a post in a manner contrary to the Constitution or the rules. Article 311 however covers only a part of the field governing the tenure of employment and in substance provides for a procedure for exercising the right to determine employment in certain specified classes of cases. To hold that this determination of employment must in all cases, whatever may be the source or the power in the exercise of which it is determined, is to attribute to it a more exalted effect than is warranted by the scheme of the Constitution disclosed by articles 309 and 310. The view which I have expressed is consistent with an overwhelming body of uniform authority dealing with different classes of cases in this Court, and we are asked to ignore the principle derived from that body of authority not on the ground of any demonstrable error but on the sole ground of a possible misuse of the powers entrusted to the Railway Administration and that was, as I understood, practically the only argument advanced at the Bar to justify a 785 departure from the settled course of authority. But in considering whether cl. (3) of Rule 148 infringes, the constitutional guarantee under article 311(2), the Court will not assume that in exercising the power to determine employment the authority competent in that. behalf may not act honestly. The presumption always is that the high officials in whom the power is vested Will perform the duties of their office honestly. A mere possibility that the power may in some cases be misused or abused, will not per se induce the Court to deny validity to the entrustment of the power. The impact of article 311 upon Rule 148(3), must be adjudged in the light of action which may be taken bona fide under the Rule. If in a given case the order is not bona fide, and is intended to camouflage an order of removal from service as a disciplinary measure, the protection of article 311(2) would undoubtedly be attracted, for such an order cannot be regarded as made in exercise of authority conferred by Rule 148(3). But the Court will not adjudge the rule invalid on the assumption that the rule may possibly be abused and may be made a cloak for imposing a punishment on a public servant or that the provision might be utilised for a collateral purpose. I will briefly refer to some of the illustrative decisions of this Court. In Satish Chandra Anand 's case(1) discharge from service by notice of a public servant employed under a contract for the duration of the Resettlement and Employment Organisation of the Union was held not to attract the protection of article 311 of the Constitution. The public servant in Satish Chandra Anand 's case(1) was continued in service after expiry of the period of his original employment, under a contract for the duration of the Organisation on condition that he was to be governed by the Central Civil Services (Temporary Service) Rules, 1949, which provided, inter alia, for termination of the contract by a month 's notice on either side. This Court held that to termination of his service (1) ; 1/SCI/64 50 786 by notice according to the 'rules governing his employment, article 311 had no application. In the view of the court the case was not of dismissal or removal from service, because the State has power to enter into contracts of temporary employment and impose special terms not inconsistent with the Constitution, and those who chose to accept the terms and entered into the contract were bound by them, even as the State was bound. This was a case of a premature termination of a contractual employment in exercise of a power reserved by Rules. The view expressed in Satish Chandra Anand 's case(1) was approved in Parshotam Lal Dhingra 's case(2) . Several cases dealing with termination of employment of temporary employees or employees on probation have since arisen, and it has consistently been held that mere termination of employment of these employees not on the ground of any misconduct did not amount to dismissal or removal within the meaning of article 311. In Hartwell Prescott Singh vs The Uttar Pradesh Government and others(3) an order discharging a temporary employee from service by giving him a month 's notice as prescribed by Rule 25(4) of the U.P. Subordinate Agriculture Service Rules, by which he was governed, was held not to amount to dismissal or removal within the meaning of article 31 1. It was observed in that case that in principle there was no distinction between the termination of service under the "terms of a contract" and that in accordance with the "terms of conditions of service". In Parshotam Lal Dhingra 's case (2), Das, C.J., who entered upon an exhaustive review of the Rules governing service conditions of public servants of different classes (and with him all other members of the Bench except Bose J., agreed) observed at p. 842: ". in the case of an appointment to permanent post in a Government service on (1) [19531 S.C.R. 6 5. (2) ; (3) [19581 section C. R. 509. 787 probation or on an officiating basis, the servant so appointed does not acquire any substantive right to the post and consequently cannot complain, any more than a private servant employed on probation or on an officiating basis can do, if his service is terminated at any time. Likewise an appointment to a temporary post in a Govern ment service may be substantive or on probation or on an officiating basis. Here also, in the absence of any special stipulation or any specific service rule, the servant so appointed acquires no right to the post and his service can be terminate d at any time except in one case, namely when the appointment to a temporary post is for a definite period. " In The State of Bihar vs Gopi Kishore Prasad(1) Sinha C.J., speaking for the Court summarised certain propositions governing the tenure of temporary public servants of which the following two are material: "(1) Appointment to a post on probation gives to the person so appointed no right to the post and his service may be terminated, without any taking recourse to the proceedings laid down in the relevant rules for dismissing a public servant or removing him from service. (2) The termination of employment of a person holding a post on probation without any enquiry whatsoever cannot be said to deprive him of any right to a post and is, therefore, no punishment. " In The State of Orissa and another vs Ram Narayan das (2) this Court held that a probationer may be discharged in the manner provided by Rule 55 B of the Civil Services (Classification, Control and Appeal) Rules, and to such discharge from service article 311(2) did not apply, for mere termination of employment does not carry with it any evil consequences and an order discharging a public servant, even if he is a (1) ; (2) ; 788 probationer, on the result of an enquiry on charges of misconduct, negligence, inefficiency or other dis qualification, may appropriately be regarded as one by way of punishment, but an order discharging a probationer after an enquiry to ascertain whether he was fit to be confirmed, is not of that nature. In section Sukhbans Singh vs The State of Punjab(1) it was held that the protection of article 311 is available only where dismissal, removal or reduction in rank is sought to be inflicted by way of punishment, and one of the tests for ascertaining whether the termination of service was by way of punishment is whether under the Service Rules, but for such termination, the servant has the right to hold the post. The same view. was expressed in Union Territory, Tripura vs Gopal Chandra Datta(2) and in Ranendra Chandra Bannerjee vs The Union of India(3). Two cases on the other side of the line, which emphasize the distinction between a mere order of discharge of a temporary servant, and an order dismissing a public servant as a disciplinary measure may be noticed. In Madan Gopal vs The State of Punjab and others(4), this Court pointed out that where the employment of a temporary government servant, even though liable to be terminated by notice of one month without assigning any reason, is not so terminated, and the appointing authority holds an enquiry into his alleged misconduct, the termination of service is by way of punishment, because it casts a stigma on his competence and thus affects his career. In such a case the public servant is entitled to the protection of article 311(2) of the Con stitution. In Jagdish Mitter vs The Union of India (5) it was held that an order discharging a temporary servant from employment b notice after recording that he was "found undesirable to be retained in Government service" was one casting a stigma, and (1) ; (2) [1963] Supp. 1 S.C.R. 266. (3) ; (4) [1963] 3 S.C.R. 716. (5) A. I. R. 789 was therefore an order of dismissal attracting the application of article 311 (2) of the Constitution. There is still another class of cases which illustrate the rule that termination of employment otherwise as a disciplinary measure does not amount to dismissal or removal. This Court has held that rules providing for compulsorily retiring public servants holding posts substantively are valid, and that termination of employment consequent upon such compulsory retirement does not amount to dismissal or removal from service so as to attract the protection of article 311(2). In Shyam Lal 's case(1) challenge to the validity of termination of employment of a member of the Indian Service of Engineers compulsorily retired after be completed service for 25 years was discountenanced by this Court on the ground that compulsory retirement under the Civil Services (Classification, Control and Appeal) Rules, after a public servant had served for 25 years, did not amount to dismissal or removal within the meaning of article 311 of the Constitution. It was observed that the word "removal" used synonymously with the term "dismissal" generally implied that the officer was regarded as in some manner blameworthy or deficient, the action of removal being founded on some ground personal to the officer involving leveling of some imputation or charge against him. But there was no such element of charge or imputation in the case of compulsory retirement which did not involve any stigma or implication of misbehavior or incapacity, for, by the compulsory retirement the person concerned did not lose any benefit he had earned and loss of future prospects of earning could not be taken into account in considering whether the order of compulsory retirement amounted to imposing punishment. In The State of Bombay vs Subhagchand M. Doshi(2) it was held that Rule 165 A of the Bombay Civil Services (Conduct, Discipline and Appeal) Rules adopted by the State of Saurashtra, subject to amendment, authorising the State Government to compulsorily (1) ; (2) ; 790 retire any public servant who had completed 25 years of qualifying service or had attained the age of 50 'years, without giving any reason was not violative of article 311(2) of the Constitution, as the order made under Rule 165 A was not one of dismissal or removal. Venkatarama Aiyar, J., observed at p. 579 (obiter as was pointed out in a later case): "It should be added that questions of the above character could arise only when the rules fix both an age of superannuation and an age for compulsory retirement and the services of a civil servant are terminated between these two points of time. But where there is no rule fixing the age of compulsory retirement, or if there is one and the servant is retired before the age prescribed therein, then that can be reregistration only as dismissal or removal within article 311(2)." In P. Balakottaiah vs The Union of India and others(1) an order for compulsory retirement under Rule 3 of the Railway Services (Safeguarding of National Security) Rules, 1949, was challenged as contravening article 311(2). The public servants concerned in those appeals were railway servants and their services were terminated on the ground that the General Manager of the Railways had reason to believe that they were guilty of "subversive activities". Notices were issued to them under section 3 of the Rules to show cause against certain charges. The Committee of Advisers enquired into the charges and the explanations furnished by the public servants found the charges true. The General Manager acting on the report of the Committee terminated the services of the railway servants concerned giving them a month 's salary in lieu of notice. It was held by this Court that it is not every termination of the services of an employee that falls within the operation of article 311, and that it is only when the order is by way of punishment that it is one of dismissal or removal under that Article. It was further observed at p. 1065: (1) ; 791 "In the present case, the terms of employment provide for the services being terminated on a proper notice, and so, no question of prema ture termination arises. Rule 7 of the Security Rules preserves the rights of the employees to all the benefits of ' pension, gratuities and the like, to which they would be entitled under the rules. Thus, there is no forfeiture of benefits already acquired. The order terminating the services under R. 3 of the Security Rules stands on the same footing as an order of discharge under R. 148, and it is neither one of dismissal nor of removal within the meaning of article 311. " The Court in that case appeared to express the opinion, though it was not necessary for deciding the case, that an order of discharge under Rule 148(3) was neither one of dismissal nor removal within the meaning of article 311(2). In Parshotam Lal Dhingra 's case (1) the Court also considered the question whether an order of compulsory retirement of a public servant under the appropriate rules governing him amounts to dismissal or removal from service. At p. 861, Das C.J., speaking for the majority of the Court observed: " . every termination of service is not dismissal, removal or reduction in rank. A termination of service brought about by the exercise of a contractual right is not per se dismissal or removal, Likewise the termination of service by compul sory retirement in terms of a specific rule regulating the conditions of service is not tantamount to the infliction of a punishment and does not attract article 311(2), as has also been held by this Court in Shyam Lal vs The State of Uttar Pradesh. In either of the two above mentioned cases the termination of the service did not carry with it the penal consequences of loss of pay, or allowances under r. 52 of the Fundamental Rules." (1) ; 792 .lm0 In a still more recent case Dalip Singh vs State of Punjab(1) it was held by this Court that an order of compulsory retirement of a public servant for administrative reasons under R. 278 of the Patiala State Regulations which Regulations did not fix the minimum age or length of service after which an order of compulsory retirement could be made,was not one of dismissal or removal from service within the meaning of article 311(2) of the Constitution, because retirement under a Service Rule which provided for compulsory retirement at any age irrespective of the length of service put in, cannot necessarily be regarded as dismissal or removal within the meaning of article 311, and the observations (hereinbefore quoted) made by Venkatarama Aiyar, J., in Saubhagchand Doshi 's case(2) were for the purposes of deciding that case obiter, and that it was not a general rule that an order of compulsory retirement not amounting to dismissal or removal can take place only under a rule fixing the age of compulsory retirement. These decisions which examine diverse facets of the tenure of employment of public servants, establish beyond doubt that mere determination of employment of a public servant whether he be a temporary employee, a probationer, a contractual appointee or sub stantively holding a permanent post will not attract the provisions of article 311 (2) of the Constitution, unless the determination is imposed as a matter of punishment. All these decisions weave a clear pattern of employment of public servants who are governed by Rules providing for premature determination of employment. Such determination of service, founded on a right flowing from contract or the service rules, is not punishment and carries with it no evil consequences. It does not deprive the public servant of his right to the post, it does not forfeit benefits already acquired., and casts no stigma upon him. A railway employee who has accepted employment on the conditions contained in the rules cannot after having obtained employment, claim that the (1) ; 88 (4) ; (2) [1958] S.C.R. 1052. 793 conditions which were offered to him and which he accepted, are not binding upon him. The sole exception to that rule is in cases where the condition prescribed by contract or statutory regulations is void as inconsistent with the constitutional safeguard, the exception being founded not on any right in the public servant to elect, but on the invalidity of the covenant or regulation. If the principle of the binding nature of the rules as condition of employment is valid, I am unable to see any distinction between cases of termination of employment resulting from attaining the age of superannuation or from orders of compulsory retirement, terminating contracts, terminating temporary employment, or employments on probation, and orders terminating employment after notice under Rule 148(3). If Rule 165 A of the Bombay Civil Services (Classification, Control and Appeal) Rules, as amended, which fell to be considered in Saubh Chand Doshi 's case (1) was not invalid, if Rule of the Railway Services (Safeguarding of National Security) Rules, 1949, which fell to be considered in P. Balakottaiah 's case(2) was not invalid, if Rule 278 of the Patiala State Regulations which fell to be considered in Dalip Singli 's case (3) was not invalid, if Rule 5(a) of the Central Government Services (Temporary Service) Rules, 1949, which fell to be considered in Satish Chandra Anand 's case (4) was also not invalid, it is difficult to appreciate any ground either of logic or of law on which the vice of invalidity as infringing article 311(2) may be attributed to Rule 148(3). The termination of employment under Rule 148(3) does not involve the public servant concerned in loss of any right which he has already acquired, it does not amount to loss of a post to which he is entitled under the terms of his employment, because the right to the post is necessarily circumscribed by the conditions of employment which include Rule 148(3) and does not cast any stigma upon him. In the result I am unable to agree that (1) ; (2) ; (3) (4) (1953] S.C.R. 655. 794 Rule 148(3) was invalid as infringing the guarantee of constitutional protection under article 311(2). In appeals Nos. 837 839 of 1963 the question as to the validity of the Rule 149(3) falls to be determined. That Rule was substituted for the original Rule 148(3) some time in year 1959. Rule 149 deals, by its first clause, with temporary railway servants and cl. (2) deals with apprentices. We are not concerned in these appeals either with temporary railway servants or with apprentices. In this Rule cl. (3) deals with the other railway servants. It provides: "The service of other railway servants shall be liable to termination on notice on either side for the periods shown below. Such notice is not, however, required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation and termination of service due to mental or phvsical incapacity. The Rule then proceeds to set out the different periods for which notice may be given terminating employment. Clause (4) of the Rule provides for payment in lieu of notice. Rule 149(3) makes a departure from Rule 148(3). The latter Rule applied only to members of the non pensionable service, whereas Rule 149(3) applies to all members of the railway service holding substantive appointments, and brings within its fold all employees even those who have entered employ ment before the date on which the Rule was framed. But if by the terms of his appointment a railway servant who was not governed by Rule 148(3) is brought within Rule 149(3) so as to make his employment precarious by exposing him to liability to termination of employment, different considerations may apply. For reasons which I have already set out the conditions of service validly made under article 309 of the Constitution and in existence on the date when a public servant enters service would be binding upon him. There is nothing in Rule 149(3) which renders determination of employment in the 795 manner provided therein per se inconsistent with article 311. But exercise of the power by the Railway Administration to determine employment of persons who were otherwise not subject to the new condition of service would, in my judgment, amount to imposing a penalty of dismissal or removal. Therefore termination of services of a person who held appointment to a substantive post and was entitled under the previous rules to continue until he attained the age of superannuation, or till compulsory retirement, Rule 149(3) made applicable to him after he entered service would per se amount to dismissal or removal and it would be inconsistent with article 311. This is not because the Rule is invalid, but because it would expose the public servant concerned to forfeiture, by amendment of the rules which were in existence at the time when he entered service, o rights which he had already acquired. The alternative ground of invalidity that the rule infringes the fundamental right of equal protection of the laws under article 14 of the Constitution may now be considered. This ground was set up under two broad heads. (1) There is no other public employment under the Government of India in which conditions similar to these contained in Rule 148(3) or Rule 149(3) exist, and therefore discrimination between public servants employed in Railways and public servants employed in other branches of public undertakings or Administrative Services without any rational basis to support it, infringing the equal protection of laws guaranteed by article 14 of the Constitution, results. The argument posed in this form does not appear to have been raised before the High Court and no investigation has been made whether similar conditions of service do or do not exist in other public employments. In any event, employment in the Railways is in a vitally important establishment of the Union in which the employees are entrusted with 796 valuable equipment and a large measure of confidence has to be reposed in them and on the due discharge of the duties the safety of the public and the efficient functioning of the governmental duties depend. Not only the travelling public, but the Union and the States have in a considerable measure to depend upon rail transport for the functioning of the governmental machinery and its welfare activities. It would be possible even for one or a few employees of the Railway to paralyse communications and movement of essential supplies leading to disorder and confusion. The Railway service has therefore a special responsibility in the smooth functioning of our body politic and a doctrinaire approach to equality of conditions of service in different branches of public employment, irrespective of the nature of the duties performed, irrespective of the possibility of harm to the community which misguided members or units may be capable of doing, and irrespective of the necessity to entrust special powers to terminate employment in deserving cases may not be permitted. If for the purpose of ensuring the interests and safety of the public and the State, the President has reserved to the Railway Administration power to terminate employment under the Railways, it cannot be assumed that such vesting of authority singles out the railway servants for a special or discriminatory treatment so as to expose the Rule which authorises termination of employment to the liability to be struck off as infringing article 14. Article 14 undeniably forbids class legislation, but it does not forbid reasonable classification for the purpose of legislation. Legislation satisfying the test of classification founded on an intelligible differential distinguishing persons, objects or things grouped together from others left out of the. group, such differentia having a rational relation to the object sought to be achieved by the statute, has consistently been regarded as not open to challenge on the ground of infringing the equality clause of the constitution. The special conditions in which the Railways have to operate and the interests 797 of the nation which they serve justify the classification, assuming the argument of classification to be factually correct. It need hardly be pointed out that the basis of classification need not be expressly mentioned by the impugned statute: it may be gathered from the surrounding circumstances known to or brought to the notice of the Court. (2) Rules 148(3) and Rule 149(3) are so framed as to lead to discriminatory treatment of Railway servants, because by the exercise of the arbitrary and uncontrolled power thereby conferred, exercise of which is not to be tested by any objective standard, service of any public servant falling within the classes to which they apply may be terminated Conferment of such a power leads to denial of the equal protection of the laws. Rule 148(3 ) as it stood applied only to non pensionable services and not to pensionable services, and Rule 149(3) applies to all railway servants holding posts pensionable and non pensionable. In dealing with a similar argument in Satish Chandra Anand 's case(1) in the context of termination of employment of a servant employed on a contract for the duration of an Organisation but whose tenure was governed by the Central Civil Services (Temporary Service) Rules, 1949, Bose, J., observed at p. 659: "There was no compulsion on the petitioner to enter into the contract he did. He was as free under the law as any other p erson to accept or to reject the offer which was made to him. Having accepted, he still has open to him all the right and remedies available to other persons similarly situated to enforce any rights under his contract which have been denied to him, assuming there are any, and to pursue in the ordinary courts of the land such remedies for a breach as are open to him to exactly the same extent as other persons similarly situated. He has not been discriminated against and he has not been denied the protection (1) ; 798 of any laws which others similarly situated could claim. " These observations in my judgment would, with appropriate variations, be applicable in considering the validity of Rules 148(3) & 149(3). In adjudging 'whether there is by the impugned rules a denial of the equal protection of the laws, no rational ground of distinction can be found between an employee who is but for the rule for termination of em ployment by notice, by the contract entitled to continue in employment for a specified duration, and one who is appointed to a substantive post till superannuation. In one case the employment is. for a period defined or definable, in the other there is employment till superannuation, and in both cases liable to be terminated by notice. If with his eyes open, a candidate for employment accepts a post permanent or temporary, tenure of which is governed by Rules, he cannot after accepting the post seek to avoid the onerous terms of employment. This is not to say that acceptance of covenants or rules which are inconsistent with the Constitution is binding upon the public servant by virtue of his employment. Such covenants or rules which in law be regarded as void, would not affect the tenure of his office. The law which applies to railway servants falling within the class to which Rules 148(3) and 149(3) apply is the same. There are no different laws applicable to members of the same class. The applicability of the law is also not governed by different considerations. It is open to the appointing authority to terminate appointment of any person who falls within the class. There is therefore neither denial of equality before the law, nor denial of equal protection of the laws. All persons in non pensionable services were subject to Rule 148(3). There was no discrimination between them: the same law which protected other servants in the same group non pensionable servants protected the appellants in appeals Nos. 711 714 of 1962, and also provided for determination of their employment. 799 The Rule, it is true, does not expressly provide for guidance to the authority exercising the power conferred by Rule 148, but on that account the Rule, cannot be said to confer an arbitrary power and be unreasonable, or be in its operation unequal. The power is exercisable by the appointing authority who normally is, if not the General Manager, a senior officer of the Railways. In considering the validity of an order of determination of employment under Rule 148, an assumption that the power may be exer cised mala fide and on that ground discrimination may be practised is wholly out of place. Because of the absence of specific directions in Rule 148 governing the exercise of authority conferred thereby, the power to terminate employment cannot be regarded as an arbitrary power exercisable at the sweet will of the authority, when having regard to the nature of the employment and the service to be rendered, the importance of the efficient functioning of the rail transport in the scheme of our public economy, and the status of the authority invested with the exercise of the power, it may reasonably be assumed that the exercise of the power would appropriately be exercised for the protection of public interest on grounds of administrative convenience. Power to exercise discretion is not necessarily to be assumed to be a power to discriminate unlawfully, and possibility of abuse of power will not invalidate the conferment of power. Conferment of power has necessarily to be coupled with the duty to exercise it bona fide and for effectuating the purpose and policy underlying the rules which provide for the exercise of the power. If in the scheme of the rules, a clear policy relating to the circumstances in which the power is to be exercised is discernible, the conferment of power must be regarded as made in furtherance of the scheme, and is not open to attack as infringing the equality clause. It may be remembered that the rules relating to termination of employment of temporary servants and those on probation, and even those relating to compulsory retirement generally do not lay down any specific directions governing the exercise of the powers 800 conferred thereby. The reason is obvious: the appointing authority must in all these cases be left with discretion to determine employment having regard to the exigencies of the service, suitability of the employee for absorption or continuance in the cadre, and the larger interests of the public being served by retaining the public servant concerned in service. In my view Rule 148(3) cannot, therefore, be regarded as invalid either as infringing article 311(2) of the Constitution or as infringing article 14 of the Constitution. For the same reasons Rule 149(3) cannot also be regarded as invalid. But the orders imposing upon the public servants determination of employment in exercise of the powers under Rule 149(3) made applicable to them when prior to the date on which the Rule was framed they were not applicable to them would be void as infringing article 311(2) of the constitution As, however, on this part of the case there has been no investigation by the High Court, I would remand appeals Nos. 837 839 of 1963 to the High Court and dismiss appeals Nos. 711 714 of 1962. ORDER BY COURT In accordance with the opinion of the majority Civil Appeals Nos. 711 713 of 1962 and Civil Appeal No. 714 of 1962 are allowed with costs. The writ petitions filed by the four appellants in the three High Courts are granted and Orders directed to be issued in terms of the prayers made by them. Civil Appeals Nos. 837 839 of 1963 are dismissed with costs. One set of hearing fees in each group.

Moti Ram Deka was a peon employed by the North East Frontier Railway and Sudhir Kumar Das was a confirmed clerk. General Manager, North East Frontier Railway, terminated th services under R. 148(3) of Indian Railway Establishment Co Vol. They challenged the termination of their services but th writ petitions were rejected by the Assam High Court and t came to this court by special leave. Priya Gupta was an Assistant Electrical Foreman in North Eastern Railway. His services were terminated under R. 148. His writ petition and Letters Patent Appeal challenging termination of his services having been rejected by Allahabad High Court, he came to this Court by special leave. Tirath Ram Lakhanpal was a Guard employed by the Northen Railway. His services were terminated under R. 148. His writ petition and Letters Patent Appeal were dismissed by Punjab High Court and he came to this court by special leave. S.B. Tewari, Parimal Gupta and Prem Chand Thakur employed in the. North Eastern Frontier Railway. Their service were terminated under R. 149. Their writ petitions challenging termination of their services were accepted by the Assam High Court and Union of India came to this Court after getting a certificate of fitness from the Assam High Court. The only question involved was the constitutional validity or otherwise of Rules 148(3) and 149(3) of the Indian Railway Establishment Code on the ground that they violated articles 14 and 311(2) of Constitution of India. Held: By majority by Gajendragadkar, Wanchoo, Hidaya tullah, Ayyangar, Subba Rao and Das Gupta JJ.(Shah J. dissenting) 684 that Rules 148(3) and 149(3) of Indian Railway Establishment Code were invalid. Per Gajendragadkar, Wanchoo, Hidayatullah and Ayyangar, jj. Rules 148(3) and 149(3) are invalid inasmuch as they are inconsistent with the provisions of articles 311(2). The termination of the services of a permanent servant which is authorised by those rules, is no more and no less than his removal from service and hence article 311(2) must come into play in respect of such cases. The rule which does not require compliance with the procedure prescribed under article 311(2) must be struck down as invalid. A person who substantively holds a permanent post has a right to continue in service, subject to the rules of superannuation and compulsory retirement. If for any other reason that right is invaded and he is asked to leave his service, the termination of his service must inevitably mean the defeat of his right to continue in service and as such it is in the nature of a penalty and amounts to removal. In other words, termination of the services of a permanent servant otherwise than on ground of superannuation or compulsory retirement, must per se amount to his removal and if by R. 148(3) or R. 149(3), such a termination is brought about, the rule clearly contravenes article 311(2) and must be held to be invalid. Rules 148(3) and 149(3) contravene article 14 of the Constitu tion. It is difficult to understand on what ground employment by the Railways alone can be said to constitute a class by itself for the purposes of framing the impugned rules. If considerations of administrative efficiency or exigencies of service justify the making of such a rule, such rules should have been framed in other departments also. The pleasure of the President has lost some of its majesty and power as it is controlled by the provisions of article 311. Rules of superannuation are based on considerations of life expectation, mental capacity of civil servants having regard to climatic conditions under which they work and the nature of the work they do. They are not fixed on any ad hoc basis and do not involve the exercise of any discretion. They apply uniformly to all public servants falling under the category in respect of which they are framed. There can be no analogy between the rule of superannuation and rules 148(3) and 149(3) of the Code. If any rule permits the appropriate authority to retire compulsorily a civil servant without imposing a limitation in that behalf that such civil servant should have put in a minimum period of service, that rule would be invalid and the so called retirement ordered under the said rule would amount to removal of the civil servant within the meaning of article 311(2). 685 Where a rule is alleged to violate the constitutional guarantee afforded by article 311(2), the argument of contract between the parties and its binding character is wholly inappropriate. Per Subba Rao, J. Rules 148(3) and 149(3) which confer a power on the appointing authority to remove a permanent servant on notice, infringe the constitutional protection guaranteed a Government servant under articles 14 and 311 of the Constitution A permanent post and rules such as 148(3) and 149(3) cannot stand together and the latter must inevitably yield to the former. It is neither the phraseology nor the nomenclature given to the act of termination of service that is material but the legal effect of the action taken that is decisive in considering the question whether a Government servant is dismissed or not. Whether the services of a permanent Government servant are terminated by giving him 15 day 's notice or whether his services are dispensed with before the age of superannuation by way of compulsory retirement under or outside a rule of compulsory retirement, the termination deprives him of his title to the permanent post. If in the former case it amounts to dismissal,in the latter case,it must be equally so. In both cases, article 311(2) is attracted. Compulsory retirement before age of superannuation is not an incident of tenure. It does not work automatically. It is not conceived in the interest of the employee. It is a mode of terminating his employment at the discretion of the appointing authority. As a matter of fact, whatever the language used in that connection, it is a punishment imposed on him. It not only destroys his title but also inevitably carries with it a stigma and hence such a termination is dismissal or removal within the meaning of article 311. A title to an office must be distinguished from the mode of its termination. If a person has title to an office, he will continued to have it till he is dismissed or removed from there. Terms of statutory rules may provide for conferment of a title to an office and also for the mode of protecting it. If under such rules, a person acquires title to an office, whatever mode of termination is prescribed and whatever phraseology is used to describe it, the termination is neither more nor less than a dismissal or removal from service and that inevitably attracts the provisions of article 311 of the Constitution. The argument that the mode of termination prescribed derogates from the title that otherwise would have been conferred on the employee mixes up two clear concepts of conferment of title and the mode of its deprivation. Article 311 is a constitutional protection given to Government servants, who have title to office against their arbitrary and summary dismissal. Government cannot by rule evade the provisions of article 311. Parties also cannot contract themselves out of the constitutional provision Per Das Gupta, J. Rule 148(3) does not contravene Art 311(2). A railway servant to whom R. 148(3) applied has two 686 limitations put on his right to continue in service, viz., termination on attaining a certain age and termination of service on a notice under R. 148(3). Where service is terminated by order of retirement under R. 2046, the termination is of a service where the servant has no right to continue and it is not removal or dismissal. Likewise when service is terminated by notice under R. 148(3) that termination is not removal or dismissal. The words 'removal ' and 'dismissal ' in article 311 mean and include only those terminations of service where a servant has acquired a right to continue in the post on the basis of terms and conditions of service and such other terminations where though there is no such right, the order has resulted in loss of accrued benefits. Terminations of service which do not satisfy either of these two tests do not come within any of these words. Both articles 309 and 310 are subject to article 311. If any rule is made under article 309 as regards conditions of service of a Government servant in the matter of his dismissal or removal or reduction in rank, it has to comply with the requirements of article 31 1. Before an order dismissing or removing or reducing a Government servant in rank is made by President or Governor in exercise of his pleasure, President or Governor has to comply with the requirements of 311(2). Under Art 310, all servants of the State hold office during the pleasure of the President or Governor as the case may be. That means that the officer has no right to be heard before his services are terminated. Article 311 provides an exception in the case of removal or dismissal. However, R. 148(3) contravenes article 14 as it does not give any guidance for exercise of discretion by the authority concerned and hence is invalid. Per Shah, J.Rules 148(3) and 149(3) do not infringe Art.311(2) or article 14of the Constitution. There is neither logic nor law in support of the contention that r. 148(3) contravenes article 311(2). The termination of employment under r. 148(3)does not involve the public servant concerned in loss of any right which he has already acquired. It does not amount to loss of a post to which he is entitled under the terms of his employment because the right to a post is necessarily circumscribed by the conditions of employment which include r. 148(3). It also does not cast any stigma upon him. Mere determination of employment, of a public servant, whether he is a temporary employee, a probationer, a contractual appointee or appointed substantively to hold a permanent post, will not attract the provisions of article 311(2) unless the determination is imposed as a matter of punishment. A railway servant who has accepted employment on the conditions contained in the rules, cannot after having obtained employment, claim that the conditions which were offered to him and which he accepted, are not binding upon him. The sole exception to that rule is in cases where the 687 condition prescribed by contract or statutory regulations is void as inconsistent with the constitutional safeguard. This exception is founded not on any right in the public servant to elect, but on t invalidity of the covenant or regulation. There is no distinction between cases of termination of employment resulting from attaining the age of superannuation or from orders of compulsory retirement terminating temporary employment or employment on probation and orders terminating employment after notice under R. 148(3) An appointment to a public post is always subject to th pleasure of the President, the exercise of such pleasure being restricted in the manner provided by the Constitution. A person appointed substantively to a post does not acquire a right t hold the post till he dies. He acquires merely a right t hold the post subject to the rules. If employment is validly terminated, the right to hold the post is determined even apart from th exercise of the pleasure of the President or the Governor. public servant cannot claim to remain in office so long as he is of good behavior. Such a concept of the tenure of a public servant 's post is inconsistent with articles 309 and 310 of the Constitution. Rules 148(3) and 149(3) do not infringe article 14 of the Constitution. article 14 forbids class legislation but it does not forbid reasonable classification for the purpose of legislation. special conditions in which the railways have to operate and t interests of the nation which they serve, justify the classification If for the purpose of ensuring the interests and safety of the public and the State, the President has reserved to the Railway Administration power to terminate employment under the Railways, it cannot be assumed that such vesting of authority singles out the railway servants for a special or discriminatory treatment so as to expose the rule which authorises termination of employment to the liability to be struck off as infringing article 14. It is true that R. 148(3) does not expressly provide for guidance to the authority exercising the power conferred by it, but on that account, the rule cannot be said to confer an arbitrary power and be unreasonable or be in its operation unequal. The power exercisable by the appointing authority who normally is if not the General Manager, a Senior Officer of the Railways. In considering the validity of an order of determination of employment under r. 148, an assumption that the power may be exercised mala fide and on that ground discrimination may be practiced, is wholly out of place. Because of the absence of specific directions in R. 148, governing the exercise of authority conferred the by the power to terminate employment cannot be regarded as an arbitrary power exercisable at the sweet will of the authority when having regard to the nature of the employment and the service to be rendered, importance of the efficient functioning of the rail transport in the interest of national economy and the 688 status of the authority invested with the exercise of power, it may reasonably be assumed that the exercise of the power would appropriately be exercised for the protection of public interest or on grounds of administrative convenience. Power to exercise discretion is not necessarily to be assumed to be a power to discriminate unlawfully and possibility of abuse of power will not invalidate the conferment of power. Case law referred to.

N: Criminal Appeal No. 516 of 1983. Appeal by Special leave from the Judgment and Order dated the 4th November, 1980 of the Punjab and Haryana High Court in Criminal Revision No. 652 of 1980. V.M. Tarkunde, P.H. Parekh and Ms. Pinki Mishra for the Appellant. Harbans Lal and N.D. Garg for the Respondent. The Judgment of the Court was delivered by 178 DESAI, J. : Appellant Shri Vishwa Mitter, a dealer in beedies and cigarettes as also the constituted attorney of M/s. Mangalore Ganesh Beedies Works, Mysore filed a complaint in the Court of Sub Divisional Magistrate, Ist Class, Pathankot on December 6, 1977 complaining of commission of offences by the four respondents impleaded as accused under Sections 78 and 79 of the ( 'Act ' for short) and Sec. 420 IPC. It was alleged in the complaint that the principals of the complainant M/s. Mangalore Ganesh Beedies Works, Mysore are the registered owners of four trade marks in respect of beedies manufactured by them. The name under which beedies manufactured by the principals of the complainant are sold in the market is 'Mangalore Ganesh Beedies ' having a registered trade mark in the wrapper being pink colour wrapper containing the motif of Lord Ganesha and the numeral '501 '. One additional registered trade mark used by the manufacturers of the beedies is the 'Ganesh Beedies ' wrapped in a wrapper as mentioned above and bearing a multy colour seal label containing the numeral '501 ' at its centre. The owners of the registered trade mark came to know that respondent No. 4 M/s Shri Ganesh Beedi Works, Chakradhapur, Bihar were guilty of infringing the trade mark by using a wrapper and seal label identical with or deceptively similar to the registered trade mark and the principals of the complainant filed a suit complaining of infringement and passing off against the 4th respondent. There was a prayer for perpetual injunction in the suit. The suit ended in a decree in favour of the owners of the registered trade mark. Somewhere in August 1977, the complainant who is a dealer in the beedies manufactured by the owners of the registered trade mark came to know that the 4th respondent was selling beedies of inferior quality after wrapping them in a wrapper and using the trade mark deceptively similar to that of the registered trade mark. A complaint thereupon was filed which led to the seizure of some goods. Subsequently, the complainant came to know that the 4th respondent in league with the 2nd and 3rd respondents were storing for sale and selling beedies of inferior quality wrapped in deceptively similar wrapper and were thereby infringing the registered trade mark despite the injunction of the Court. It was alleged that respondents Nos. 1 to 3 knowing of the registered trade mark in favour of the principals of the complainant were storing for sale and selling beedies of inferior quality manufactured by the 4th respondent and wrapped in wrappers falsifying the registered trade mark and thereby it was alleged that respondents committed offences under Sections 78 and 79 of the and Sec. 420 of the I.P.C. 179 On this complaint being filed after a preliminary enquiry, the learned Magistrate directed process to be issued to the accused. The accused moved revision petition in the High Court of Punjab and Haryana at Chandigarh with a request to quash the proceedings. The learned Single Judge of the High Court accepted the revision petition on the narrow ground that the order issuing the process is not a speaking order and directed the learned Magistrate to consider the question of issuing process afresh. When the matter came back to the learned Magistrate, he after hearing the parties held that no case was made out for issuing the process and proceeded to dismiss the complaint. The reasons which impelled the learned Magistrate to reach the aforementioned conclusion may better be extracted in his own words: "That complainant who has filed the present complaint is not the Holder of the Trade Marks which is said to have been impugned by the accused, in collaboration with each other. He is only a sub dealer of M/s Mangalore Ganesh Beedies Works, Vinoba Road Mysore, and there must be hundred and thousand dealers of this firm, like him. It is only M/s Mangalore Ganesh Beedies Works, who are holders of the Trade Mark and it is only they who are competent to file the complaint against the accused. The complainant has got no any cause of action, because the trade mark which is impugned by the accused does not belong to him, but belongs to M/s Ganesh Beedies Works, Mysore, Karnataka State. As no trade mark of the complainant has been violated by the accused as he is only a sub dealer and not holding any trade mark. I find no reason absolutely to issue the process and the complaint is hereby dismissed. " The complainant moved the High Court of Punjab and Haryana in Revision Petition No. 652 of 1980, which was dismissed in limine. Hence this appeal by special leave. The reasons which appealed to the learned Magistrate to come to the conclusion that the complaint filed by the complainant cannot be entertained because he is not registered owner of the trade mark is clearly erroneous Sec. 4 of the Code of Criminal Procedure, 1973 provides for trial of offences under the Indian Penal Code and other laws. Sub 180 Sec. (1) of Sec. 4 deals with offences under the Indian Penal Code. Sub sec. (2) of Sec. 4 provides that all offences under any other law (other than offences under the Indian Penal Code) shall be investigated, inquired into, tried and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences. Fasciculus of sections included in Chapter XIV of the Criminal Procedure Code set out conditions requisite for initiation of proceedings. 190 provides for cognizance of offences by Magistrates which inter alia provides that subject to the provisions of Chapter XIV, an 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;. Sec. 190 thus confers power on any Magistrate to take cognizance of any offence upon receiving a complaint of facts which constitute such offence. It does not speak of any particular qualification for the complainant. Generally speaking, anyone can put the criminal law in motion unless there is a specific provision to the contrary. This is specifically indicated by the provision of sub sec. (2) of Sec. 4 which provides that all offences under any other law meaning thereby law other than the Indian Penal Code shall be investigated, inquired into, tried, and otherwise dealt with according to the provisions in the Code of Criminal Procedure, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences. It would follow as a necessary corollary that unless in any statute other than the Code of Criminal Procedure which prescribes an offence and simultaneously specifies the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences, the provisions of the Code of Criminal Procedure shall apply in respect of such offences and they shall be investigated, inquired into, tried and otherwise dealt with according to the provisions of the Code of Criminal Procedure. One such provision in the Code of Criminal Procedure in Sec. 190 which empowers any Magistrate of the class specified therein to take cognizance of any offence upon receiving a complaint of facts which constitutes such offence. If after taking cognizance of an offence it is permissible under Sec. 192, such Magistrate may make over the case to other Magistrate therein specified. Therefore, from a combined reading of Sec. 4(2) with Sec. 190 of the Code of Criminal 181 Procedure, it transpires that upon a complaint filed by a person setting out facts therein which constitutes the offence before a Magistrate specified in Sec. 190 the Magistrate will be competent to take cognizance of the offence irrespective of the qualifications or eligibility of the complainant to file the complaint. It must, however, be conceded that where a provision to the contrary is made in any statute, which may indicate the qualification or eligibility of a complainant to file the complaint, the Magistrate before taking cognizance is entitled and has power to inquire whether the complainant satisfies the eligibility criteria. One illustration would indicate what can be a provision to the contrary as contemplated by sub sec. (2) of Sec. 4 of the Code of Criminal Procedure. 195(1) provides that no Court shall take cognizance of any offence set out therein except on the complaint in writing of the public servant concerned or of some other public servant to whom he is administratively subordinate. Similarly sub sec. (2) of Sec. 195 provides that no Court shall take cognizance of any of the offences specified therein except on the complaint in writing to that Court, or to some other Court to which that Court is subordinate. 198 provides that no Court shall take cognizance of an offence punishable under Chapter XX of the Indian Penal Code, except upon a complaint made by some person aggrieved by the offence. 199 provides that no Court shall take cognizance of an offence punishable under Chapter XXI of the Indian Penal Code, except upon a complaint made by some person aggrieved by the offence. Sec. 20 of the provides that no prosecution for an offence under the , not being an offence under Section 14 or Section 14 A, shall be instituted except by, or with the written consent of the Central Government or the State Government or a person authorised in this behalf, by general or special order, by the Central Government or the State Government. Section 621 of the provides that no Court shall take cognizance of any offence against the (other than an offence with respect to which proceedings are instituted under section 545), which is alleged to have been committed by any company or any officer thereof, except on the complaint in writing of the Registrar, or of a shareholder of the company, or of a person authorised by the Central Government in that behalf. It is not necessary to multiply the illustration. It is thus crystal clear that anyone can set the criminal law in motion by filing a complaint of facts constituting an offence before 182 a Magistrate entitled to take cognizance under Sec. 190 and unless any statutory provision prescribes any special qualification or eligibility criteria for putting the criminal law in motion, no Court can decline to take cognizance on the sole ground that the complainant was not competent to file the complaint. 190 of the Code of Criminal Procedure clearly indicates that the qualification of the complainant to file a complaint is not relevant. But where any special statute prescribes offences and makes any special provision for taking cognizance of such offences under the statute, the complainant requesting the Magistrate to take cognizance of the offence must satisfy the eligibility criterion prescribed by the statute. Even with regard to offences under the Indian Penal Code, ordinarily, anyone can set the criminal law in motion but the various provisions in Chapter XIV prescribe the qualification of the complainant which would enable him or her to file a complaint in respect of specified offences and no Court can take cognizance of such offence unless the complainant satisfies the eligibility criterion, but in the absence of any such specification, no Court can throw out the complaint or decline to take the cognizance on the sole ground that the complainant was not competent to file the complaint. Section 89 of the provides that no Court shall take cognizance of an offence under Section 81, Section 82 or Section 83 except on a complaint in writing made by the Registrar or any officer authorised by him in writing. This provision manifests the legislative intention that in respect of the three specified offences punishable under Sections 81, 82 and 83, the Registrar alone is competent to file the complaint. This would simultaneously show that in respect of other offences under the , the provision contained in Sec. 190 of the Code of Criminal Procedure read with sub sec. (2) of Sec. 4 would permit anyone to file the complaint. The indication to the contrary as envisaged by sub sec. 2 of Sec. 4 of the Code of Criminal Procedure is to be found in Sec. 89 and that section does not prescribe any particular eligibility criterion or qualification for filing a complaint for contravention of Sections 78 and 79 of the . Therefore, the learned Magistrate was in error in rejecting the complaint on the sole ground that the complainant was not entitled to file the complaint. Even otherwise in the absence of a specific qualification, if the person complaining has a subsisting interest in the protection of the registered trade mark, his complaint cannot be rejected on the 183 ground that he had no cause of action nor sufficient subsisting interest to file the complaint. M/s Mangalore Ganesh Beedies Works, a partnership firm is the registered owner of trade marks, falsification and infringement of which is complained by the present complainant, who is not only a dealer in these beedies manufactured and sold by the registered owner of the trade marks, but he is also the constituted attorney of the owners of the registered trade mark. To say that the owner of the registered trade mark can alone file the complaint is contrary to the provisions of the statute and commonsense and reason. Therefore, the order of the learned Magistrate dismissing the complaint at the threshold on the ground that the present appellant has no cause of action to file the complaint is utterly unsustainable and must be quashed and set aside. Surprisingly, the High Court dismissed the revision petition of the complainant in limine which order is equally unsustainable and must be set aside. This appeal is accordingly allowed and order of the learned Magistrate dismissing the complaint and refusing to issue process dated February 20, 1980 and the order of the High Court rejecting the revision petition in limine dated November 4, 1980 are set aside and the matter is remanded to the learned Magistrate to proceed further according to law in the light of the observations made in this judgment. H.L.C. Appeal allowed.

While deciding a writ petition relating to the dispute regarding performance of religious rights, practices and observances by members of Shia sect on a plot of land in a mohalla, the Court permanently restrained the Sunni community of that mohalla by an injunction from interfering with the exercise of such rights of Shia community. However, the Court found that in an earlier litigation the Sunni community had been given the liberty to read Fathia over the grave of Maulana Hakim Badruddin only found to be existing in the plot and that the other two graves had come up contrary to the Court 's injunction in the earlier litigation. Notwithstanding the above decision the members of Shia community apprehended breach of peace and disturbance of public order and the Court had to give directions on each occasion with a view to ensure that all the ceremonies went off smoothly. The Court, with a view to find some permanent solution to this perennial conflict between the two sects, appointed a committee to go into the question, inter alia, whether the two other graves now found in that plot could be shifted to some other convenient place. The Chairman of the Committee opined that the suggestion to shift the two graves located on the northern side of the plot to the south of the grave of Maulana Hakim Badruddin was quite feasible as there was sufficient space in the suggested area and that such shifting of the two graves will totally separate the places of worship of Shias and Sunnis. The petitioners (Shias) filed the present petition for issuance of directions to implement the above suggestion. Allowing the petition, HELD: The suggestion to shift the two graves cannot be regarded as irreligious or destructive of any fundamental rights of the Sunnis. [69G; 71E] Articles 25 and 26 of the Constitution undoubtedly guarantee (a) to all persons freedom of conscience and free profession, practice and propagation of religion and (b) to every religious denomination or any section thereof freedom to manage its own affairs in matters of religion but both these fundamental rights have been expressly made "subject to public order, morality and 65 health". The impugned suggestion was mooted by the Court and has now been found to be feasible by the Chairman of the Committee in the larger interest of the society for the purpose of maintaining public order on every occasion of the performance of their religious ceremonies and functions by members of both the sects. Over several years in the past experience has shown that such performance of their religious ceremonies and functions was and has been invariably accompanied by ugly incidents of violence, damage or destruction to life and property putting public order in great jeopardy or that the performance by members of both the sects was required to be prohibited by orders under section 144 Cr. The latter course benefits neither and obviously members of neither community could be permitted to exercise their fundamental rights under articles 25 and 26 so as to put public order in jeopardy. [69 H, 70 A D] The religious rights of every person and every religious denomination are subject to "public order", the maintenance whereof is paramount in the larger interest of the society. The ecclesiastical edict or right not to disturb an interred corpse is not absolute as will be clear from sec. 176(3) of Criminal Procedure Code which permits its exhumation for the purpose of crime detection and this provision is applicable to all irrespective of the personal law governing the dead. The edict clearly implies that it may become necessary to shift graves in certain situations and exigencies of public order would surely provide the requisite situation, especially as the fundamental rights under Articles 25 and 26 expressly made subject to public order. [71 B D] The impugned suggestion merely seeks to shift those two graves from their present location to the southern side of the grave of Moulana Hakim Badruddin and if taken in proper spirit it would in a sense amount to respecting the sentiments of the Sunni Muslims, for, after placing them to the south of the grave of Maulana Hakim Baddruddin, the Chaddar functions and recitation of Fathia could be undertaken by them at all the three graves instead of only at the grave of Maulana Hakim Badruddin. [70 F H] The main decision rendered by this Court and the directions issued by it have to be implemented and removal of any impediment or obstruction in that behalf cannot be said to be beyond the powers or jurisdiction of this Court and since the acceptance and implementation of the impugned suggestion of the Chairman of the committee would facilitate the carrying out of the main judgment of this Court the issuance of directions sought by the petitioners would obviously fall within the scope of the present proceedings. [71 F G]

2 of 1960. Petition under Article 32 of the Constitution of India for the enforcement of Fundamental Rights. A. V. Viswanatha Sastry and B. B. L. Iyengar, for the petitioner. G. section Pathak, R. Gopalakrishnan and T. M. Sen, for the respondents. C. K. Daphtary, Solicitor General of India and B.R.L. Iyengar, for the Intervener (D. R. Karigowda). April 28. The Judgment of the Court was delivered by SHAH, J. The petitioners pray for a writ quashing a scheme approved under section 68D(2) of the , by the Government of the State of 744 Mysore and for a writ restraining the respondents, i.e., the State of Mysore, the General Manager, the Mysore Government Road Transport Department and the Regional Transport Authority, Bangalore, from taking action pursuant to the scheme. The petitioners are operators of Stage carriages on certain routes in the sector popularly known as " Anekal area " in the Bangalore District. On January 13, 1959, the General Manager, Mysore Government Road Transport Department, who will hereinafter be referred to as the 2nd respondent, pub lished a scheme in exercise of the powers conferred by section 68C of the , for the exclusion of private operators on certain routes and reservation of those routes for the State transport undertaking in the Anekal area. The Chief Minister of the Mysore State gave the operators affected by the scheme an opportunity of making oral representations and on perusing the written objections and considering the oral representations, approved the scheme as framed by the 2nd respondent. On April 23, 1959, the scheme was published in the Mysore State Government gazette ' On June 23, 1959, renewal applications submitted by petitioners 1 to 3 for permits to ply Stage carriages on certain routes covered by the scheme were rejected by the Transport Authority and the 2nd respondent was given permanent permits operative as from June 24, 1959, for plying buses on those routes. In Writ Petition No. 463 of 1959 challenging the validity of the permanent permits granted to the 2nd respondent, the High Court of Mysore held that the issue of permits to the 2nd respondent before the expiry of six weeks from the date Of the application was illegal. To petitioners 1 to 3 and certain other operators renewal permits operative till March 31, 1961, were thereafter issued by the third respondent. The 2nd respondent applied for fresh permits in pursuance of the scheme approved on April 15, 1959, for plying Stage carriages on routes specified in the scheme and notices thereof returnable on January 5, 1960, were served upon the operators likely to be affected thereby. On January 4, 1960, the five petitioners 745 applied to this court under article 32 of the Constitution for quashing the scheme and for incidental reliefs. The petitioners claim that they have a fundamental right to carry on the business of plying stage carriages and the scheme framed by the 2nd respondent and approved by the State of Mysore unlawfully deprives them of their fundamental right to carry on the business of plying stage carriages in the Anekal area. The diverse grounds on which the writ is claimed by the petitioners need not be Bet out, because, at the hearing of the petition, counsel for the petitioners has restricted his argument to the following four heads: (1) that the scheme violates the equal protection clause of the Constitution, because only fourteen out of a total of thirty one routes on which stage carriages were plied for public transport in the Anekal area were covered by the scheme and that even from among the operators on the fourteen routes notified, two operators were left out, thereby making a flagrant discrimination between the operators even on those fourteen routes; (2) that by Chapter IVA of the , Parliament had merely attempted to regulate the procedure for entry by the States into the business of motor transport in the State, and in the absence of legislation expressly undertaken by the State of Mysore in that behalf, that State was incompetent to enter into the arena of motor transport business to the exclusion of private operators; (3)that the Chief Minister who heard the objections to the scheme was biased against the petitioners and that in any event, the objections raised by the operators were not considered judicially; and (4) that the Chief Minister did not give " genuine consideration " to the objections raised by the operators to the scheme in the light of the conditions prescribed by the Legislature. Re. 1: In column 1 of the scheme " part of Bangalore District, viz,, Bangalore North, Bangalore South, Anekal and Hosakote Taluks " is set out as the area in relation to which the scheme is approved; and in 746 column 3, " the routes (with their starting points, termini, intermediate stations and route length) in which the State transport undertaking will introduce its services to the exclusion of private operators " are those set out in statement 1 appended to the scheme. Statement 1 sets out the description of fourteen routes with their intermediate points, route length, number of buses to be operated and the maximum number of trips to be performed on each route. By column 4 " the number of existing stage carriages on each route with the number of trips and the names of their opera tors " are described " as in statement 2 appended ". Statement 2 sets out the names and places of business of fifty six operators together with the routes operated and the numbers of the stage carriages and trips made by those operators. In the Anekal area, there are thirty one routes, which are served by stage carriages operated by private operators, and by the approval of the scheme, only fourteen of those routes are covered by the scheme ' Section 68C, in so far as it is material, provides that a State transport undertaking, if it is of opinion that it is necessary in the public interest that road transport services in relation to any area or route or portion thereof should be run and operated by itself, whether to the exclusion, complete or partial, of other persons or otherwise, it may prepare a scheme giving particulars of the nature of the services proposed to be rendered, the area or route proposed to be covered and other particulars respecting thereto as may be prescribed. Section 68D(1) provides for inviting objections by persons affected by the scheme. Sub section 2 of section 68D authorises the State Government after considering the objections and giving an opportunity to the objectors to approve or modify the scheme; and by sub section 3, the scheme as approved or modified and published by the State Government in the official gazette shall " become final and shall be called the approved scheme and the area or route to which it relates shall be called the notified area or notified route. " Counsel for the petitioners contended that exercising powers under section 68C, the State transport undertaking may prepare a scheme in respect of an 747 area or a number of routes in that area, but not a scheme for an area which is to apply to some only and not to, all routes on which public transport vehicles in the area operate. In this case, it is unnecessary to decide whether it is open to a State transport undertaking under a scheme framed for a notified area to limit its application to some only of the routes, because on a true reading of the scheme, it is amply clear that the scheme was approved in relation to fourteen notified routes and not in relation to a notified area. ,, The approved scheme is in the form prescribed by the rules, and in the form prescribed, by column 1, the area in relation to which the scheme is approved is required to be set out. But a scheme under section 68C must be one in relation to an area or any route or portion thereof wherein the transport service is to be undertaken by the State transport under taking to the exclusion, either complete or partial, of other operators. Column 1 of the approved scheme undoubtedly describes the area in relation to which the scheme is approved, but by the designation of the area, in the scheme, an intention to exclude either wholly or partially the operators of stage carriages from that area is not evinced either expressly or by implication. By column 3, the scheme expressly directs that the State transport undertaking will introduce its service to the exclusion of private operators on the specified routes. The scheme must therefore be regarded as one for the fourteen notified routes and not in relation to the area described in column 1. Counsel for the petitioners submitted that an order passed on October 22, 1959, by the 3rd respondent the Regional Transport Authority rejecting applications for permits for one of the fourteen routes to an applicant, indicated that in the opinion of the third, respondent, the scheme related to a notified area and not to notified routes. The order states that. " an approved scheme for the exclusive operation in the notified area of Bangalore District " by the second respondent " has come into existence after the notification of the route Bangalore to Nallur, and the major, portion of the route applied for lie in the notified area and as such it was not desirable, to grant any permit 748 to operators to pass through notified area in the intraState route. " The third respondent may have in considering the application assumed that the scheme related to a notified area, but the true interpretation of the scheme cannot be adjudged in the light of that assumption. The other document relied upon is a statement of objections filed by the second respondent on October 24, 1959, resisting the application for stage carriage permits to a private operator on the route Siddalaghatta Bangalore via Nallur. In para. 4 of the statement, it was submitted that " the existing notification dated October 15, 1959, came under the notified area of the department" of the second respondent " and that would overlap certain services of the department". But because in making his defence, the second respondent has referred to the scheme as dealing with " the notified area", the scheme will not necessarily be hold to be one in relation to the notified area. The argument that among the operators on the fourteen routes, two have been selected for special treatment and on that account, the scheme is discriminatory, has, in our judgment, no substance. It is averred in para. 13 of the petition that two persons, Chikkaveerappa operating on route Chikkathirupathi to Bangalore via Surjapur, Domsandra and Agara and Krishna Rao operating on route Bangalore to Chik kathirupathi via Agara and Surjapur are not amongst those who are excluded from operating their vehicles on the notified routes. In the affidavit filed by the State and the second respondent, it is submitted that the plea of the petitioners that the two persons operating stage carriages on specified routes were not amongst those to be excluded is incorrect, and that those two persons had been notified by the Secretary of the third respondent that they were " likely to be affected on giving effect to the approved scheme. " Undoubtedly, route item No. 2 in statement 1 to the scheme is " Bangalore to Surjapur or any portion thereof " and the route operates via Agara and Domsandra, but the record does not disclose that the two named persons are, in plying their stage carriages, entitled to operate on the route specified with right to stop at the named places for picking up passengers. 749 It is not clear on the averments made in the petition that the route on which the stage carriages of the two named persons ply are identical; even if the routes on which the stage carriages of these two operators ply overlap the notified route, in the absence of any evidence to show that they had the right to pick up passengers en route, the discrimination alleged cannot be deemed to have been made out. Re. 2: Article 298 of the Constitution as amended by the Constitution (Seventh Amendment) Act, 1956. recognises the executive power of the Union and of each State as extending to the carrying on of any trade or business. That power of the Union is subject in so, far as the trade or business is not one in respect of which Parliament may make laws, to legislation by the State and the power of each State, in so far as the trade or business is not one with respect to which the State Legislature may make laws, is subject to legislation by Parliament. Like ordinary citizens, the Union and the State Governments may carry on any trade or business subject to restrictions which may be imposed by the Legislatures competent to legislate in respect of the particular trade or business. Under Article 19(6) of the Constitution as amended by the First Amendment Act, 1951, nothing in sub cl. (g) of cl. (1) of article 19 is to affect the operation of any existing law in so far as it related to, or prevent the State from making any law relating to the carrying on by the State or by a Corporation owned or controlled by the State of any industry or business, whether to the exclusion, complete or partial, of citizens or otherwise. The State may therefore carry on any trade or business, and legislation relating to the carrying on of trade or business by ,the State, is not liable to be called in question on the ground that it infringes the fundamental freedom of citizens under article 19(1)(g). The Motor Vehicles Act.1939, was enacted by the Central Legislative Assembly in exercise of its power under the Government of India Act, 1935, to legislate in respect of mechanically 'propelled vehicles. Chapter IVA containing sections 68A to 681 was incorporated into that Act by the Parliament by Act 100 of 1956 whereby special provisions 97 750 relating to the conduct of transport undertakings by the States or Corporations owned or controlled by the State were made. Section 68A defines the expression " State transport undertaking " as meaning among others an undertaking for providing transport service carried on by the Central Government or a State Government or any Road Transport Corporation established under Act 44 of 1950. By section 68B, the provisions of that chapter and the rules and orders made thereunder are to override Chapter IV and other laws in force. Section 68C authorises the State transport undertaking to prepare and publish a scheme of road transport services of a State transport undertaking. Section 68D deals with the lodging of objections to the scheme framed under the preceding section, the of those objections and the publication of the final scheme approved or modified by the State Government. Section 68F deals with the issue of permits to State transport undertakings in respect of a notified area or notified route and provides that the Regional Transport Authority shall issue such permits to the State transport undertaking notwithstanding anything contained in Chapter IV. It also enables the Regional Transport Authority, for giving effect to the approved scheme, to refuse to entertain any application for the renewal of any other permit, to cancel any existing permit, to modify the terms of any existing permit so as to render the permit ineffective beyond a specified date, to reduce the number of vehicles authorised to be used under the permit and to curtail the area or route covered by the permit. Section 68G sets out the principles and method of determining compensation to persons whose existing permits are cancelled. By Chapter IVA, the State transport undertaking which is either a department of the State or a corporation owned or controlled by the State on the approval of a scheme, is entitled, consistently with the scheme, to exclusive right to, carry on motor transport business. The Regional Transport Authority is, bound to grant permit for the routes covered by the,, scheme to the State transport undertaking if that authority applies for the same and the Regional Transport Authority is 751 also bound in giving effect to the approved scheme, to modify the terms of existing permits and to refuse to entertain applications for renewal of permits of private operators. Chapter IVA is not merely regulatory of the procedure for carrying on business of road transport by the State; it enables the State transport undertaking, subject to the provisions of the scheme, to exclude private operators and to acquire a monopoly, partial or complete, in carrying on transport business, in a notified area or on notified routes. The authority of the Parliament to enact laws granting monopolies to the State Government to conduct the business of road transport is not open to serious challenge. Entry No. 21 of List III of the Seventh Schedule authorises the Union Parliament and the State Legislatures concurrently to enact laws in respect of commercial and industrial monopolies, combines and trusts. The argument of the petitioners that the authority conferred by entry No. 21 in List III is restricted to legislation to control of monopolies and not to grant or creation of commercial or industrial monopolies has little substance. The expression " commercial and industrial monopolies " is wide enough to include grant or monopolies to the State and Citizens as well as control of monopolies, The expression used in a constitutional enactment conferring legislative powers must be construed not in any narrow or restricted sense but in a sense beneficial to the widest possible amplitude of its powers: Navinchandra Mafatlal vs The Commissioner of Income tax, Bombay City(1), The United Provinces vs Atiqua Begum(2). Entry No. 26 of List II of the Seventh Schedule which invests the States with exclusive authority to legislate in respect of trade and commerce within the State, subject. to the provisions of entry No. 33 of List III, does not derogate from the authority conferred by entry 21 of List III concurrently to the Parliament and the State Legislatures, to grant or create by law commercial or industrial monopolies. The amplitude of the powers under the entry in the concurrent list expressly dealing with commercial and industrial monopolies cannot be presumed to be restricted by the (1) [1955] 1 S.C.R. 829, 836. (2) 752 generality of the expression " trade and commerce in the State List. If the argument of the petitioners and the intervener that legislation relating to monopoly in respect of trade and industry is within the exclusive competence of the State be accepted, the Union Parliament cannot legislate to create monopolies in the Union Government in respect of any commercial or trading venture even though power to carry on any trade or business under a monopoly is reserved to the Union by the combined operation of article 298, and the law which is protected from the attack that it infringes the fundamental freedom to carry on business by article 19(6). We are therefore of the view that Chapter IVA could competently be enacted by the Parliament under entry No. 21 read with entry No. 35 of the Concurrent List. The plea sought to be founded on the phraseology, used in article 19(6) that the State intending to carry on trade or business must itself enact the law authorising it to carry on trade or business is equally devoid of force. The expression " the State " as defined in article 12 is inclusive of the Government and Parliament of India and the Government and the Legislature of each of the States. Under entry No. 21 of the Concurrent List, the Parliament being competent to legislate for creating, commercial or trading monopolies, there is, nothing in the Constitution which deprives it of the power to create a commercial or trading monopoly in the Constituent States. Article 19(6) is a mere saving provision: its function is not to create a power but to, immunise from attack the exercise of legislative power falling within its ambit. The right of the State to carry on trade or business to the exclusion of others does not &rise by virtue of article 19(6). The right of the State to carry on trade or business is recognised by article 298; authority to exclude competitors in the field of such trade or business is conferred on the State by entrusting power to enact laws under entry 21 of List III of the Seventh Schedule,, and the exercise of that power in the context of fundamental rights is secured from attack by article 19(6), In any event, the expression " law " as, defined in article 13(3)(a) includes any ordinance, order, bye law, 753 rule, regulation, notification custom, etc., and the scheme framed under section 68C may properly be regarded as " law " within the meaning of article 19(6) made by the State excluding private operators from notified routes or notified areas, and immune from the attack that it infringes the fundamental right guaranteed by article 19(1)(g). Be.3: The plea that the Chief Minister who approved the scheme under section, 68D was biased has no substance. Section 68D of the undoubtedly imposes a duty on the State Government to act judicially in considering the objections and in approving or modifying the scheme proposed by the transports undertaking. Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation and another(1). It is also true that the Government on whom the duty to decide the dispute rests, is substantially a party to the dispute but if the Government or the authority to whom the power is delegated acts judicially in approving or modifying the scheme, the approval or modification is not open to challenge on a presumption of bias. The Minister or the officer of the Government who is invested with the power to hear objections to the scheme is acting in his official capacity and unless there is reliable evidence to show. that he is biased, his decision will not be liable to be called in question, merely because he is, a limb of the Government. The Chief Minister of the State has filed an affidavit in this case stating that the contention of the petitioners that he was " biased in favour of the scheme was baseless he has also stated that he heard such objections and representation& as were made before him and he had given the fullest opportunity to the objectors to submit their objections individually. The Chief Minister has given. detailed reasons for approving the scheme and has dealt with such of the objections as he says were urged before him. In the last para. of the reasones given, it is stated that the Government have heard all the arguments advanced on behalf of the operators and " after: giving full consideration to them, the Government have come to (1959) Supp. 1 S.C.R.319 754 the conclusion that the scheme is necessary in the interest of the public and is accordingly approved subject to the modifications that it shall come into force on May 1, 1959 ". In the absence of any evidence controverting these averments, the plea of bias must fail. 4: The argument that the Chief Minister did not give genuine consideration " to the objections raised by operators to the scheme in the light of the conditions prescribed has no force. The order of the Chief Minister discusses the questions of law as well as questions of fact. There is no specific reference in the order to certain objections which were raised in the reply filed by the objectors, but we are, on that account, unable to hold that the Chief Minister did not consider those objections. The guarantee conferred by section 68D of the upon persons likely to be affected by the intended scheme is & guarantee of an opportunity to put forth their objections. and to make representations to the State Government against the acceptance of the scheme. This opportunity of making representations and of being heard in support thereof may be regarded as real only if in the consideration of the objections, there is a judicial approach. But the Legislature does not contemplate an appeal to this Court against the order passed by the State Government approving or modifying the scheme. Provided the authority invested with the power to consider the objections gives an opportunity to the objectors to be heard in the matter and deals with the objections in the light of the object intended to be secured by the scheme, the ultimate order passed by that authority is not open to challenge either on the ground that another view may possibly have been taken on the objections or that detailed reasons have not been given for upholding or rejecting the contentions raised by the objectors. In the view taken by us, the contentions raised by the petitioners fail and the petition is therefore dismissed with costs. Petition dismissed.

These petitions by the holder of Kavalappara Sthanam, his wife, daughters and soil challenged the constitutional validity of the Madras Marumakkathayam (Removal of Doubts) Act, 1955 passed by the Madras Legislature soon after the Privy Council had declared the properties in possession of the Sthanee to be Sthanam properties in which the members of the tarwad had not interest. Section 2 Of the Act, which contained the substantive provision, was as follows: " 2. Notwithstanding any decision of Court, any sthanam in respect of which: (a) there is or had been at any time an intermingling of the properties of the sthanam and the properties of the tarwad, or (b) the members of the tarwad have been receiving main. tenance from the properties purporting to be sthanam properties as of right, or in pursuance of a custom or otherwise, or (c)there had at any time been a vacancy caused by there being, no male member of the tarwad eligible to succeed to the Sthanam, 888 shall be deemed to be and shall be deemed always to have been a Marumakkathayam tarwad and the properties appertaining to such a sthanam shall be deemed to be and shall be deemed always to have been properties belonging to the tarwad to which .he provisions of the Madras Marumakkathayam Act, 1932 (Mad. XXII of 1933), shall apply. " The question for decision was whether the impugned Act infringed the fundamental rights of the petitioners guaranteed by articles 4, 19(1)(f) and 31 of the Constitution. Held (per Sinha, C. J., Subba Rao and Shah, JJ.) that the three tests laid down by the Act were contrary to the well settled principles of Marumakkathayam Law with regard to which there could be no scope for doubt and as such not only not germane but extraneous to the object it sought to achieve. They were a device to deprive the sthanam of its properties and vest them in the tarwad and as such directly hit by article 19(1)(f) and could not be saved by article 19(5). Assuming that the Sthanam properties were held in janmam right and as such were estates within the meaning of article 31A, the impugned Act was immune from challenge. That Article, properly construed, envisages agrarian reform and provides for the acquisition, extinguishment or modification of proprietary and various other kinds of subordinate rights in a tenure called the estate solely for that purpose and must be limited to it. Although it may not be permissible to refer to the statement of objects and reasons of its amendment for purposes of construction, it can be referred to for the limited purpose of ascertaining the conditions prevailing at the time and purpose underlying the amendment. Aswini Kumar Ghose vs Arabinda Bose, [19531 S.C.R. 1, con sidered. There is no substance in the argument that since the impugned Act seeks to regulate the rights of the Sthanee and the junior members of the tarwad inter se it falls within by cl. (2)(b) of article 31A. That clause has to be read with cl. (1)(a) of the Article and since the impugned Act does not contemplate any agrarian reform or seek to regulate the rights inter se between landlords and tenants or modify or extinguish any of the rights appertaining janmam right, leaving all its characteristics intact, it does not come within the purview of article 31A of the Constitution. Sri Ram Ram Narain vs State of Bombay, [1959] SUPP. 1 S.C.R. 489, and Atma Ram vs State of Punjab, [1959] SUPP. 1 S.C.R. 748, referred to. Fundamental rights have a transcendental position in the Constitution and before an Article embodying a fundamental right can be construed to exclude another every attempt should be made to harmonize them and not until it is found impossible to do so, can one be made to yield to the other. Barring such exceptional cases, any law that infringes any of the fundamental rights must be void. 889 The word 'law ' in article 31(1) must mean a valid law, and such a law must satisfy two tests, (1) that the legislature must be competent to enact it and (2) that it must not infringe any fundamental rights. A law that deprives a citizen of his property must, therefore, be invalid if it infringes article 19(1)(f) of the Constitution. Deep Chand vs State Of U. P., [1959] SUPP. (2) S.C.R. 8, and Basheshway Nath vs Commissioner of Income tax, Delhi, [1959] Supp. 1 S.C.R. 528, referred to. Article 31 Of the Constitution, since its amendment by the Constitution (Fourth Amendment) Act, 1955, is no longer a selfcontained Article providing for a subject different from that dealt with by article 19, but deals with two different subjects, CIS. (2) and (2A) dealing with acquisition and requisition and cl. (1) with deprivation of property by authority of law, and can no longer be construed on the analogy of article 2 1 so as to exclude the operation of article 19. The State of West Bengal vs Subodh Gopal Bose, [1954] S.C.R. 587, A. K. Gopalan vs The State of Madras, ; , referred to. State of Bombay vs Bhanji Munji and Any., [1955] 1 S.C.R. 777, held inapplicable. Nor does article 31(1) deal with police power. Although such power, as understood in America, is no arbitrary power divorced from social control and public good, there can be no need of importing such a doctrine into the Indian Constitution. The word 'law ' used by article 31(1) indicates its limitation and refers back to article 19 and any law made under article 31(1) can be sustained only if the restrictions it imposes are reasonable and in the interest of the general public. The Constitution does not confer on the Indian Parliament the same power which the Parliament of England possesses and while it does contemplate a welfare State, that has to be brought about within its frame work of the Constitution itself. The correct approach should, therefore, be first to ascertain the fundamental right and then to see whether the law infringes that right. If ex facie it does so, it has to stand the test of article 19(5). In certain circumstances, however, deprivation of fundamental right to property may also amount to a reasonable restriction under the Article. Narendra Kumar vs The Union of India, [196O] 2 S.C.R. 375, referred to. Individual proprietary rights being ordinarily inviolable unless a clear case is made out for restricting them, there must be a harmonious balancing between the fundamental rights declared by article 19(1) and social control permitted by article 19(5). It is implicit in the nature of restrictions that no inflexible standard can be laid down and each case must be decided on its own facts. But the restrictions must not be arbitrary and must have a reasonable relation to the object sought to be achieved and shall be in the interest of the general public. 890 State of Madras vs V. G. Rao, ; , Henry Webster vs Peter Cooper, ; , and The Citizens ' Savings and Loan Association and Cleaveland, Ohio vs Topeka City, ; , referred to. Although the redress of a real and genuine grievance of a section of the community may be in public interest, it is impossible to hold that the impugned legislation was either justified or in such public interest. Iswari Prosad vs N. R. Sen, A.I.R. 1952 Cal. 273, held in applicable. Marumakkathayam Law is a body of customs and usages that have received judicial recognition, and is fundamentally different from Hindu Law, being a matriarchal system. The family, called tarwad, consists of all the descendants of one common ancestor. It consists of a mother and her male and female children and the children of those female children and so on. Only the senior most male member can attain the sthanam, which is a position of dignity with specific properties attached to it. When he does so and becomes the Sthanee he ceases to have any interest in the tarwad properties. Occasionally a female member also becomes the Sthanee. Like a Hindu widow or an impartible estate holder the Sthanee has an absolute interest in the income of the Sthanam properties or acquisitions therefrom. A member of the tarwad has no right to maintenance from out of the Sthanam properties nor can such property be converted into tarwad property by the grant of such maintenance by custom or otherwise or intermingling of the Sthanam properties with the tarwad properties by the Sthanee. His position approximates to that of a member separated from a Hindu family and there can be no scope for the application of the doctrine of blending. Like the Sthanee who ceases to have any present proprietary interest in the tarwad, the members of the tarwad also can have no present proprietary interest in the sthanam property. They continue to be blood relations with a contingent right of succession to each others ' property that is no more than a spies successions. The right of a subsequently born male member of the tarwad to succeed to the Sthanam and its property is judicially recognised. Case law reviewed. Per Imam and Sarkar, JJ. The impugned Act is protected by article 31A and is not open to question in the ground that it violates articles 14, 19(1)(f) and 31(1) Of the Constitution. There is no basis for the contention that article 31(1)(a) contemplates a law relating to agrarian reform only. The Article makes no mention of any such reform and there can be no doubt that under it a janmam right may be acquired, extinguished or modified whether the land held in such right is agricultural or not. It is not permissible to refer to the objects and reasons stated in the Bills, by which the Acts amending article 31A of the Constitution were introduced, for the construction of the statute and, therefore, the word 'law ' in article 31A(1) cannot be read in relation to sub cl. (a) only as a law intended to achieve agrarian 891 reform on the basis of the supposed object of the Legislature in enacting article 31A. Aswini Kumar Ghose vs Arabinda Bose, ; referred to. It is not correct to say that the impugned Act does not effect any modification of janmam rights and therefore it does not come within article 31A. When the Article speaks of modification of janmam rights, it does not speak of such rights in the abstract but contemplates the modification of such rights held by a person. It would be as much modification of janmam rights, if such rights held by one person are directed to be held by a number of persons jointly, as when the incidents of such rights are altered. Sri Ram Ram Narain Medhi vs The State of Bombay, [1959] Supp. 1 S.C.R. 489, and Atma Ram vs State of Punjab, [1959] Supp. 1 S.C.R. 748, relied on. It is not correct to say that the Legislature in giving the provisions of the impugned Act retrospective operation or in providing that they should prevail notwithstanding any decision of the court to the contrary, was acting judicially and not in a legislative capacity and that the Act was on that ground invalid. The rule obtaining in America that legislative action cannot retract on past controversies and reverse decisions of courts and the relevant American decisions can have no application in India. Piare Dusadh 's case, , referred to.

Civil Appeals Nos. 1910 to 1912 and 2112 of 1968, and 1102 to 1105 of 1971. Appeals by certificate/special leave from the judgments and orders dated July 28, 1967, March 29, 1968, May 24, 1968 of the Calcutta High Court in Income tax References Nos. 170 of 1963. 40 of 1965 and 4 of 1967. V. section Desai, N. R. Khaitan, B. P. Maheshwari and Krishna Sen. for the appellants (in all the appeals). I B. Sen, K. section Suri, R. N. Sachthey and B. D. Sharma, for the respondent (in C.As. 1910 to 1912 of 1968, and 1102 to 1104 of 1971). B. D. Sharma, for the respondent (in C.As. 2112 of 1968 and 1105 of 1971). The Judgment of the Court was delivered by Grover, J. These appeals from judgments of the Calcutta High Court in Income tax References involve a common question. We shall refer to the facts in the batch of appeals of Jaipuria Samla Amalgamated Collieries Ltd. The assessee is a public limited company incorporated under the Indian Companies Act 1913. It carried on the business of raising coal from coal mines and selling the same to its constituents. It had taken on lease several coal mines from the owners of the coal bearing lands. As lessee of the mines the assessee incurred liability for payment of (i) Road and Public Works cess under the Bengal Cess Act of 1880; (ii) Education cess levied under the Bengal (Rural) Primary Education Act, 1930. , The amounts payable by the assessee on account of the aforesaid, cesses were claimed by it as deduction under section 10 of the Income tax Act, 1922, hereinafter referred to as the "Act", in the computation of ,.its profits. The income tax authorities disallowed that claim relying on section 10 (4) of the Act. The assessee went up, in appeal to the 512 Appellate Tribunal which agreed with the orders of the departmental authorities. The questions which were submitted by the Tribunal with the statement of the case relating to the assessment years 1954 55, 1955 56 were as follows : "(1) Whether, on the facts and in the circumstances of the case, the Road, the Public Works and the Education Cesses were levied either on the profits or gains of the business or were assessed at a proportion of or otherwise on the basis of any such profits within the meaning of section 10(4) of the Income tax Act, 1922 ? (2) Whether, on the facts and in the circumstances of the case, the amounts provided for or paid by the assessee company, as Road and Public Works Cess and the Education Cess was allowable as a deduction under section 10 (2) (ix) or 10 (2) (xv) of the Indian Income tax Act, 1922, read with section 10(4) of the said Act ?" , The High Court answered the questions against the assessee. The assessee filed appeals to this Court after obtaining a certificate of fitness but the same was found defective owing to want of any reasons or grounds in the order granting the certificate. Instead of getting the matters remitted to the High Court for giving reasons petitions for special leave were filed before us and leave was granted. We have heard the appeals by special leave on the printed record of the appeals by certificate. It may be mentioned that this position obtains in all the appeals by certificate before us. Section 10(1) of the Act provides that tax shall be payable by an assessee under the head "profits and gains of business, profession or vocation" in respect of the profits and gains of any business profession or vocation carried on by him. Sub section (2) says that such profits or gains shall be computed after making the allowances set out therein. Clauses (ix) and (xv) of this subsection are as follows : "(ix) any sums paid on account of land revenue, local rates or municipal taxes in respect of such part of the premises as is used for the purpose of the business, profession or vocation." "(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 (4) of section 10 to the extent It is material is in the following terms : 513 (4) Nothing in clause (ix) or clause (xv) of subsection (2) shall be deemed to authorise the allowance of any sum paid on account of any cess, rate or tax levied on the profits or gains of any business, profession or vocation or assessed at a proportion of or otherwise on the basis of any such profits or gains The essential question that has to be determined is whether the cesses levied under the aforesaid Bengal Acts fell within the mischief of section 10(4) of the Act. It is common ground that these cesses are not levied on the profits or gains of any business, profession or vocation but it has been claimed on ' behalf of the Revenue and that contention was accepted throughout that the cesses are assessed on the basis of such profits or gains and therefore they would be covered by the said provision. According to the preamble to the Bengal Cess Act 1880, the road and works cesses were levied on immovable property interalia to provide for the construction and maintenance of roads and other works of public utility. Under section 5 all immovable property with certain exceptions was to be liable to the payment of road cess and public works cess. Section 6 laid down that these cesses were to be assessed on the. annual value of lands and until provision to the contrary was made by the Parliament on the annual not profits from mines, quarries, tramways, railways and other immovable property on such rates as were to be determined in the manner prescribed. Under section 72 the Collector of the district had to serve a notice upon the owner etc. of every mine, quarry and immovable property requiring him to lodge a return of the net annual profits of such property cal culated on the average of the annual net profits thereof for the last three years for which accounts had been made up. Section 75 provided for a contingency where a return was not furnished within the prescribed period. The Collector in that case or if he found that the return made, was untrue or incorrect was to proceed to ascertain and determine by such ways or means as seemed expedient the annual net profits of such property calculated as aforesaid. If the Collector was unable to ascertain the annual net profits he could ascertain and determine the value of the property and thereupon determine 6% of such value to be the annual net profits thereon (section 76). The scheme of the Bengal (Rural) Primary Education Act 1930 may next be referred to. The preamble to that Act was as follows: "Whereas it is expedient to make better provision for the progressive expansion and for the management and control of primary education in rural. areas in Bengal so as to make it available to all children and with a view to make it compulsory within ten years 514 According to section 29 all immovable property on which the road and public works cesses were assessed were to be liable to the payment of primary education cess. The rates on which the education cess was to be levied varied according as the property ,consisted of mines and quarries or of tramways, railways and other immovable property. As regards mines and quarries it was to be levied at the rate of three and a half piece on each rupee of annual net profits. Now it is quite clear that the aforesaid cesses would be allowable deductions either under clause (ix) or clause (xv) of sub section (2) of section 10 unless they fell within section 10(4). We have already referred to the provisions of both Acts under which the cesses are levied which show that their assessment is not made at a proportion of the profits of the assessee 's business. What has to be determined is whether the assessment of the cesses is made on the basis of any such profits. The words "profits and gains of any business, profession or vocation" which are employed in section 10(4) can 'in the context, have reference only to profits or gains as determined under section 10 and cannot cover the net profits or gains arrived at or determined in a manner other than that provided by s.10 The whole purpose of enacting sub section (4) of section IO appears to be to exclude from the permissible deductions under clauses (ix) and (xv) of sub section (2) such cess, rate or tax which is levied on the profits or gains of any business, profession or vocation or is., assessed at a proportion of or on the basis of such profits or gains. In other words sub section (4) was meant to exclude a tax or a cess ' or rate the assessment of which would follow the determina tion or assessment of profits or gains of any business, profession or vocation in accordance with the provisions of section 10 of the Act. The road cess and public works cess are to be assessed on the annual net profits under sections 72 to 76 of the Cess Act 1880. The net annual profits have to be calculated on the average of the net profits for the last three years of the mine or the quarry and if the annual net profits of the property cannot be ascertained in the aforesaid manner then it is left to the Collector to determine the value of the property first in such manner as he considers expedient and determine 6 per cent on that value which would be deemed to be the annual net profits: The Cess Act of 1930 follows the same pattern so far as the ascertainment of annual net profits is concerned. These profits arrived at according to the provisions of the two Cess Acts can by no stretch of reasoning be equated to the profits which are determined under section 10 of the Act. It is not possible to see, therefore, how section 10(4) could be applicable at all in the present case. Thus on the language of the provisions both of the Act and the two Cess Acts the applicability of section 10(4) cannot be attracted. But even according to the decided cases 515 such cesses cannot fall within section 10(4). The Privy Council in Commissioner of Income tax, Bengal vs Gurupada Dutta & Others(1) had to consider whether the rate imposed under the provisions of the Bengal Village Self Government Act 1919 on a person occupying a building and using the same for the purpose of business was an allowable deduction in computing the profits of the business under section 10 of the Act. Their Lordships laid down the law in the following words : . "It will be noted that, in the absence of the necessary powers and machinery, which are not provided by the Act, the estimate of the annual income from business can only proceed on a rough guess, which is in no way comparable with the ascertainment of profits and gains under the Income tax Act, an d, in the opinion of their Lordships, the inclusion of this element of business income as part of the "circumstances" of the assessee with a view to the imposition of the union rate does not fall within sub section (4) of Section 10 of the Income tax Act. It is conceded that the union rate is not "levied on the profits or gains", which clearly implies an ascertainment of such profits and gains, and the words " assessed. . on the basis of any such profits or gains" in the later part of the sub section must also be so limited. No such ascertainment of the profits and gains of the business can be undertaken for the purposes of the union rate. ,, The main argument for the Crown, therefore fails. " In our judgment this decision is quite apposite and fully covers the points under consideration. It has been followed by the Allahabad High Court in Simbholi Sugar Mills Ltd. vs Commi ssioner of Income tax, U.p. & V.p.(2) in which the question related to the deductibility of tax payable under the U.P. District Boards Act 1922 which was imposed on persons assessed according to their circumstances and property. Similarly in Commissioner of Income tax, Delhi and Rajasthan vs Banarsi Dass & Sons(3), the Punjab High Court held that a tax imposed under the U.P. District Boards Act on circumstances and property could be legitimately claimed as an allowance and the above decision of the Privy Council was followed. In the Income tax Act 1961, section 28 relates to the income which shall be chargeable to income tax under the head "profits and gains of business or profession '. Section 30(b) (ii) is equivalent to cl. (ix) of section 10(2) of the Act, Section 40 (a) (ii) corresponds to section 10 (4) of the Act. It is significant that in spite of the decision of the Privy Council in (1) (3) (2) 516 Gurupada Dutta 's case(1) the Parliament did not make any change in the language of the provisions corresponding to section 10(4). It can, therefore, legitimately be said that the view of the Privy Council with regard to the true scope and ambit of section 10(4) of the Act was accepted. We are unable to concur in the reasoning or the conclusion of the Calcutta High Court in Commissioner of Income tax, West Bengal, vs West Bengal Mining Co.(2) in which it was held that the two cesses being related to profits would attract section 10(4) of the Act. In the result Civil Appeals Nos. 1102 to 1105 of 1971 which are by special leave are allowed and the answers returned by the High Court are discharged. The questions referred shall stand answered in favour of the assessees and against the Revenue. The assessee shall be entitled to their costs in this Court. Civil Appeals Nos. 1910 to 1912 of 1968 and 2112 of 1968 in which the certificates are defective and have to be revoked shall stand dismissed. G.C. Ordered accordingly.

The petitioner was a Deputy Inspector of Schools and a member of the Education department of the respondent State. On September 2, 1953, the Director of Public Instruction passed an order directing a censure to be recorded in the character roll of the petitioner. On March 5, 1960, he was reverted to the Lower Division of the Subordinate Educational Service, as a result of an inquiry into certain charges. He filed a suit challenging the two orders. On August 5, 1961, the Munsiff passed an order restraining the respondent from enforcing the order dated March 5, 1960. On April 3, 1962, the temporary injunction was vacated by the Subordinate Judge. On April 11, 1963, the suit was decreed and the respondent was prohibited from enforcing the order dated March 5, 1960. This decree was set aside in appeal by the Subordinate Judge on June 24, 1964, and the petitioner 's second appeal was dismissed by the High Court on February 11, 1965. On August 5, 1966, the Director of Public Instruction passed an order that the petitioner 'having not been on his duties for more than five years since March 1, 1960 has ceased to be in Government employ since March 2, 1965 under r. 76 of the Bihar Service Code. ' The petitioner having completed 58 years of age addressed a letter to the Director of Public Instruction on July 18, 1967 requesting him to arrange for the payment of her. pension, and on June 12, 1968 the Director of Public Instruction passed orders stating that under r. 46 of the Bihar Pension Rules he was not entitled to any pension. The petitioner filed the present writ petition under article 32 challenging the various orders. HELD: (1) No relief could be granted in respect of the orders dated September 2, 1953 and March 5, 1960, as, (a) they were already covered by the decision of the High Court in second appeal. (b) no relief could be granted with respect to an order passed as early as 1953; and (c) the orders did not infringe any fundamental rights of the petitioner. [652G H 653A B] (2) The order dated August 5, 1966, declaring, under r. 76 of the Service Code that the petitioner had ceased to be in Government service should be set aside. [653 A B] (a) The essential requirement for taking action under the said rule is that the government servant should have been continuously absent from duty for over five years. Under this rule it is immaterial whether absence from duty by the government servant was with or without leave so long as it is established that he was absent from duty for a continuous period for over five years. Admittedly the petitioner, in the present case, was on duty till March 10, 1960 and he ceased to attend to his duty only from March 635 11, 1960. Therefore, the order stating that he 'ceased to be in government employ on March 2, 1965, was on the face of it erroneous. ' [643C D, E; 644A C] (b) Assuming that the order should be read that the petitioner was not on his duty continuously for more than five years from March 11, 1960 till August 5, 1966 the date of the order even then, the order would be illegal. From August 5, 1961, the date of temporary injunction granted by the Munsiff till April 3, 1962, when that order was vacated by the Subordinate Judge, the Department did not allow the petitioner to join duty in the senior post in spite of several letters written by him. Again on April 11, 1963 when the Munsiff granted a decree in favour of the petitioner, the respondent did not obtain any stay order from the appellate court, and so, the decree of the trial court was in full force till it was set aside in appeal on June 24, 1964. During that period, that is, from April 11, 1963 to June 24, 1964 the petitioner wrote several letters requesting the respondent to permit him to join duty in the senior grade, but the respondent did not permit him to do so. Therefore, there was no question of the petitioner being continuously absent from service for over 5 years during the period referred to when he was willing but the respondent did not allow him to serve, and hence, r. 76 of the Service Code was not applicable. [644E F; 645A D,G; 646D H; 647A B,E F] (c) Even if the r. 76 was applicable and it was a question of automatic termination of service, article 311 applies to such cases also. According to the respondents a continuous absence from duty for over five years apart from resulting in the forfeiture of the office also amounts to misconduct under r. 46 of the Pension Rules disentitling the office to receive pension. The respondent did not give an opportunity to the petitioner to show cause against the order proposed. Hence there was violation of article 311. [647GH ; 648D E] Jai Shankar vs State of Rajasthan, ; , followed. (3) The order dated June 12, 1968 stating that under r. 46 of the Pension Rules the petitioner was not entitled to any pension should also be set aside. [649C] Payment of pension under the rules does not depend upon the discretion of the State Government but is governed by the rules and a government servant, coming within those rules is entitled to claim pension. Under r. 46 a Government servant dismissed or removed for misconduct, insolvency or inefficiency is not eligible for pension. In the present case it was contended that the petitioner 's absence for over five years, amounted to misconduct and inefficiency in service. But when the order dated August 5, 1966 has been held to be illegal then the order dated June 12, 1968 based upon it also falls to the ground. [649B C;D H;65OA B] (4) The grant of pension does not depend upon any order. It is only for the purpose of quantifying the amount having regard to the service and other allied matters that it may be necessary for the authorities to pass an order to that effect, but the right to receive pension flows to an officer not because of any such order but by virtue of the rules. The right of the petitioner to receive pension is property under article 31(1) and by a mere executive order the State had no power to withhold it. Similarly, the said claim is also property under article 19(1) (f). It, therefore follows, that the order dated June 12, 1968 denying the petitioner the right to receive pension affected his fundamental right and as such the writ petition was maintainable. [650G H; 652B C, D F] K. R. Erry vs State of Punjab, I.L.R. [1967] Punjab & Haryana 279, (F.B) approved. 636 (5) The bar against the Civil Court entertaining any suit relating to the matters under the Pension Act does not stand in the way of a writ of mandamus being issued to the State to properly consider the claim of the petitioner for payment of pension according to law.

438 of 1955. Petition under Article 32 of the Constitution of India for enforcement of Fundamental Rights. H. J. Umrigar and N. H. Hingorani, for the petitioner. Porus A. Mehta, B. Ganapati Iyer and R. H. Dhebar, for the respondents. May 16. The Judgment of the Court was delivered by SARKAR J. By a notification dated March 16, 1953, the Government of India gave general permission to all persons to import into India from certain countries any goods of any of the descriptions specified in the schedule annexed to the notification. Among the goods specified in the Schedule were the following: Iron and steel chains of all sorts assessable under item 63 (28) of the Indian Customs Tariff, excluding chains for automobiles and cycles whether cut to length or in rolls. 1153 The petitioner is an importer of goods. He states that relying on the notification mentioned above he placed an order with a company in Japan sometime in August, 1953, for the supply of certain goods called in the trade, Zip Chains. The goods arrived in the port of Calcutta in due course and the petitioner 's bank paid the price of the goods amounting to Rs. 11,051 4 0. Before the goods could be cleared from the port of Calcutta, the petitioner received a communication from the Assistant Collector of Customs for Appraisement, Calcutta, dated November 19, 1953, in which it was stated that it had been found that the petitioner did not possess valid import licence for the goods and requiring him to show cause why the goods should not be confiscated and action taken against the petitioner under section 167, item 8, of the . The communication also enquired if the petitioner wanted to be heard in person. The petitioner submitted in answer a written explanation stating that the Zip Chains imported by him were chains of the kind free import of which had been permitted by the notification of March 16, 1953, and therefore no licence to import them was necessary. He was thereafter again asked by the Customs authorities whether he wanted a personal hearing to which he replied that he did not. Thereafter on December 25, 1953, the Collector of Customs made an order confiscating the goods and imposing a penalty of Rs. 1,000 on the petitioner. This order bore an endorsement that it had been despatched to the petitioner on February 1, 1954. It reached him on February 3, 1954. The order stated that an appeal would lie against it to the Central Board of Revenue, New Delhi, within three months from the date of its despatch as noted on it. The petitioner preferred an appeal and posted the memorandum of appeal on May 4, 1954. The memorandum reached the Central Board of Revenue on May 6, 1954, and was dismissed on the ground that it had been preferred after the expiry of the time limited for the purpose. The petitioner then made an application to the Government of India for revision of the order of the Central Board of Revenue but this application was 148 1154 rejected. The petitioner thereafter applied to the High Court of Punjab under article 226 of the Constitution for an appropriate writ to quash the order confiscating his goods and imposing the fine on him but this application too was dismissed. The petitioner has now applied to this Court under article 32 of the Constitution challenging the validity of the order made against him. Learned counsel for the petitioner did not challenge the decision of the Customs authorities that the goods were not covered by the notification of March 16, 1953. He conceded that he could not do so in this application. Nor did he challenge the Customs authorities ' power to confiscate the goods. Learned counsel however challenged the order of confiscation because it did not give the petitioner an option to pay a fine in lieu of confiscation. This contention was based on section 183 of the which provides as follows: Whenever confiscation is authorised by this Act, the officer adjudging it shall give the owner of the goods an option to pay in lieu of confiscation such fine as the officer thinks fit. This section undoubtedly requires an option to pay a fine in lieu of confiscation, to be given and this was not done. A difficulty however is caused in the way of this argument by section 3 of the Imports and Exports (Control) Act, 1947. The relevant portion of section 3 is set out below: 3. (1) The Central Government may, by order published in the official Gazette, make provision for prohibiting, restricting or otherwise controlling, in all cases or in specified classes of cases, and subject to such exceptions, if any, as may be made by or under the order, (a) the import, export, carriage coastwise or shipment as ships ' stores of goods of any specified description ; (b). . . . . . (2) All goods to which any order under subsection (1) applies shall be deemed to be goods of which the import or export has been prohibited or restricted under section 19 of the (VIII 1155 of 1878), and all the provisions of that Act &hall have effect accordingly, except that section 183 thereof shall have effect as if for the word "shall" therein the word "may" were substituted. It is admitted that the Imports and Exports (Control) Act applies to the goods with which we are concerned and in this case the action that was taken was by virtue of this Act. That being so, section 183 of the became applicable because of the Imports and Exports (Control) Act and it could hence be applied only as modified by the latter Act. So applied the section did not make it obligatory on the Customsauthorities when ordering confiscation, 'to give an option to the owner to pay a fine in lieu of confiscation but gave them a discretion whether to do so or not. The order of confiscation was not therefore bad even though it had not given the petitioner an option to pay a fine in lieu of confiscation. Learned Counsel for the petitioner then contended that the portion of section 3(2) of the Act of 1947 which read "except that section 183 thereof shall have effect as if for the word " shall " therein the word " may " were, substituted ", left an uncontrolled discretion in the Customs authorities to give or not to give an option to pay a fine in lieu of compensation and consequently offended article 14 of the Constitution. He therefore said that this portion of the section should be struck out of it. He said that after the offending portion was deleted from section 3(2) of the Act of 1947 it would require section 183 of the to be applied without any modification at all and therefore it would be obligatory on the Customs authorities when making an order of confiscation to give an option to the petitioner to pay a fine in lieu of compensation even where the Act of 1947 applied. Learned counsel said that as this had not been done, the order of confiscation made in this case was bad. This argument is based on the contention that a portion of section 3(2) of the Act of 1947 offends article 14 and has therefore to be deleted. This contention is wrong. By its own force no part of section 3(2) purports to give any discretion to the Customs authorities at all. There 1156 is nothing in it therefore to offend article 14. The only effect of section 3(2) is to apply the to certain cases. It is impossible to say that a statute which only makes another statute applicable to certain cases, offends article 14. Such a statute has obviously nothing to do with article 14. It is true that section 3(2) of the Act of 1947 makes section 183 of the applicable with a modification. It was said that section 183 so modified offends article 14. Assume that section 183 as modified infringes article 14. What then? Clearly on this assumption section 183 as modified becomes ultra vires and illegal and it goes out of the statute book. But that does not affect the question before us at all. It does not make the order of confiscation without an option to pay a fine in lieu thereof bad. The confiscation is not made under section 183. It is made under another section of the , namely, section 167, item 8, which so far as is relevant is in these terms: 167. The offences mentioned in the first column of the following schedule shall be punishable to the extent mentioned in the third column of the same with reference to such offences respectively: Sections of the Act to Penalties Offences Wich offence has reference 8, If any goods, thei 8 & 19 Such goods shall importation or expor be liable to con tatipn of which is for fication; and any the time being prohi such offence shall bited or restricted by be liable to a pe or under Chapter IV of nalty not exceed this Act, be imported ing theree times into or exported from the value of the Indiacontrary to such goods, or not exc prohibition or restric eeding one thousa tion. nd rupees. Chapter IV of the contains section 19. It has to be remembered that section 3(2) of the Act of 1947 states that all goods to which any order under sub.s. (1) applies shall be deemed to be goods of which the import has been prohibited under section 19 of the . Admittedly sub section (1) of section 3 of the Act of 1947 applies to the goods with which this case is concerned. Under section 3(2) of the Act of 1947 the import 1157 of these goods is to be deemed to have been prohibited under section 19 of the . It follows that action under section 167, item 8, of the can be taken in respect of these goods and they can be confiscated and the person concerned in the illegal import made liable to a penalty. Resort to section 183 of the is not necessary to justify the order of confiscation made in this case at all. Indeed section 183 does not authorise confiscation. It assumes a confiscation authorised by other provisions of the and provides that on a confiscation being adjudged, an option to pay a fine in lieu of it shall be given. It cannot therefore be said, even on the assump tion that learned counsel was right in his contention that section 183 as modified offends article 14 that the order of confiscation is bad. As to whether the contention of learned counsel is right or not we decide nothing as it is not necessary to do so. It was then contended that the effect of article 14 of the Constitution on section 183 of the , as modified by the Act of 1947, was not to make the entire section 183 illegal but to invalidate the amendment in it as it was this amendment alone which offended article 14, so that section 183 as it stands in the had to be applied to this case and therefore again it was obligatory on the Customs authorities to give an option to the petitioner to pay a fine in lieu of confiscation. To accept this argument we would have to say that section 3(2) of the Act of 1947 itself offends article 14, and it cannot modify section 183 of the as it purports to do. We are unable to say this. In order to say that a statutory provision offends article 14, we have to examine that provision. We have here two statutory provisions. One is section 3(2) of the Act of 1947 and that does not offend article 14. The reasons for this view we have stated earlier. The other is section 183 of the as modified by the Act of 1947. As so modified we have for the present purpose assumed that it offends article 14. If it does it goes out as a whole. It is not really a statutory provision in two parts with regard to which it might have been possible to say that one part offends article 14 1158 while the other part does not. Section 183 with or without the modification really contains one statutory provision and therefore it must go out of the statute book as a whole or not at all. This contention on behalf of the petitioner must therefore fail. Learned counsel said that section 183 was bad also for the reason that it left it to the uncontrolled discretion of the Customs authorities to decide the quantum of the ' fine to be imposed in lieu of confiscation. On the facts of this case, it is an academic argument. Even if it was right the entire section 183 would have to be ignored but that would not have the effect of making the order of confiscation passed in, this case invalid. All that the petitioner is concerned with is to show that the order of confiscation was bad. The present argument does not touch that point and therefore it is not necessary to consider it at all. Another similar argument was that section 167, item 8, of the itself offended article 14 in that it left to the uncontrolled discretion of the Customs authorities to decide the amount of the penalty to be imposed. The section makes it clear that the maximum penalty that might be imposed under it is Rs. 1,000. The discretion that the section gives must be exercised within the limit so fixed. This is not an uncontrolled or unreasonable discretion. Furthermore, the discretion is vested in high Customs officers and there are appeals from their order. The imposition of the fine is really a quasijudicial act and the test of the quantum of it is in the gravity of the offence. The object of the Act is to prevent unauthorised importation of goods and the discretion has to be exercised with that object in view. Learned counsel then contended that the order of confiscation had been made mala fide. It was said that it had been passed ex parte. This is not correct for the petitioner had been asked before the order was made whether he wanted a personal hearing and he had stated in reply that he did not and had ample confidence in the authorities. It is not therefore open to the petitioner to contend that he had no opportunity of being heard before the order against him was 1159 passed. He had been given an opportunity and had not availed himself of it. It was also stated that in deciding not to give the petitioner an option to pay a fine in lieu of confiscation the Customs authority had gone into certain other transactions without giving any notice to the petitioner that this would be done. It was said that the petitioner was not given an opportunity of being heard in respect of these transactions. The notice which the Customs authorities gave to the petitioner to show cause why the goods should not be confiscated also informed him necessarily that an order for confiscation might be made without an option to pay a fine in lieu of confiscation being given and therefore it was his fault if he did not appear at the hearing and showed cause why the order of confiscation should not be absolute but should give him an option to pay a fine. It was also said that he had been deprived of the option because of the differences that existed between him and the Public Relations Officer of the Customs Department in Calcutta. This point of view was sought to be supported by citing the cases of two other persons who had imported similar goods at or about the same time, and who had been given the option. The facts of these other cases were however substantially different. There was nothing to show in these that goods had been imported in deliberate violation of the order of the Government while in the case of the petitioner there are materials on which such a view could be formed. It appears that the petitioner as the Manager of a firm called Federal Clearing Agency had received a communication from the Customs authorities on July 30, 1953, that Zip Chains were not covered by the notification of March 16, 1953, and within a fortnight of that communication he had placed the orders for identical goods which he now claims to be within the notification. It was not unreasonable for the Customs authorities to think that the petitioner had deliberately imported the goods in breach of the order of the Government and without specific licence for that purpose, and on that ground to think it proper not to give him the option. This would be so even if it was 1160 assumed that in the dispute with the Public Relations Officer the petitioner was in the right. It was then stated that the petitioner had not been given personal hearing of the appeal that he preferred to the Central Board of Revenue and the application in revision to the Government. But there is no rule of natural justice that at every stage a person is entitled to a personal hearing. Furthermore, the appeal was out of time. The memorandum of appeal to the Central Board of Revenue was posted on May 4, 1954. The time to file the appeal, however, expired on May 1, 1954, so that even if the date of the posting is taken as the date of the appeal the petitioner was out of time. The petitioner states that he received the order of confiscation on February 3, 1954. Even so, on May 4, 1954, he would not be within time. The memorandum of appeal however was received by the Central Board of Revenue on May 6, 1954. That must be taken to be the date when the appeal was filed, and that being so the appeal must be taken to have been filed clearly out of time. The petitioner stated that the Customs authorities wrongfully and maliciously procured his arrest on May 1, 1954, and he obtained his release on May 2, 1954. It was suggested that this arrest was procured in order to prevent him from filing his appeal in time. This contention is entirely idle. Admittedly, the petitioner had time from February 3, 1954, till May 1, 1954, to file his appeal but he did not take advantage of this long period. He waited till the end for filing the appeal. There is nothing to show that the arrest was wrongful or that at the date of the arrest the Customs authorities had any knowledge that the petitioner had not filed his appeal. The contentions that the order complained of was malafide or that the appeal had not been filed out of time are entirely untenable. The result is that this application fails and it is dismissed with costs. Petition dismissed.

The appellant Pratibha Rani, the estranged wife of the first respondent Suraj Kumar, filed a criminal complaint against her husband, his father, his three brothers and a brother in law in the court of the Additional Chief Judicial Magistrate, Ludhiana, alleging; (i) that she was married to the first respondent at Ludhiana on 4 2. 1972 according to Hindu rites and customs; (ii) that the aforesaid persons, namely, father, brothers and brother in law of the first respondent attended the marriage and demanded dowry from the appellants ' parents as consideration for the marriage; (iii) that the dowry articles mentioned in the list worth Rs 60,000 in the form of gold ornaments, clothes and other valuables were given and entrusted to the respondents and four others at Ludhiana at the time of 'doli ' on 5. 2. 1972 in the presence of Kapur Chand Jain and six others; (iv) that all the six respondents, from the time of marriage started teasing, harassing and beating her and they kept her without even food to extract more money from her parents; (v) that they turned out the appellant with her children in the beginnings of 1977 (vi) that after a great deal of persuasion and intervention by Panchayatdars, respondent No. I came 192 to Ludhiana and took her to his house, after giving an undertaking in writing on 21. 6. 1977 not to misbehave with and not to maltreat the appellant and her children; (vii) that after some time all the respondents in the Complaint not only started again maltreating the appellant and misbehaving with her, but also brought the appellant at 4.30 a.m. On 11.12.80 and left her near Kailash Cinema Chowk, (viii) that the articles (the stridhana) mentioned in the list appended to the complaint were never given by the respondents to the appellant for her use but were retained by them illegally and with the dishonest intention of causing wrongful gain to themselves and wrongful loss to the appellant y (ix) that when the appellants ' husband and his brother, Vishwinder Kumar, respondent 1 and 5 in the complaint, came to Ludhiana on 10 2.81 to attend the proceedings started by the appellant under section 125 Criminal Penal Code her parents persuaded them to return the articles entrusted to them at the time of the marriage but they flatly refused to comply with that demand; (x) that the articles have not been returned in spite of service of notice dated 17.12.81 on the first respondent; (xi) that the respondents in the complaint have dishonestly, thus, converted the articles belonging to the appellant for their use in violation of the instructions of the appellants ' parents given at the time of the marriage to give the articles for the appellants ' use and that (xii) they individually and jointly committed the offences under sections 405 and 406 Indian Penal Code. Thereupon respondent No. 1 filed Criminal Misc. Application No. 4876 of 1981 in the Punjab and Haryana High Court under section 482 of the Code of Criminal Procedure for quashing the criminal proceedings and the complaint taken on file by the Additional Chief Judicial Magistrate, Ludhiana under section 406 IPC and his order summoning them. A Learned Single Judge of the High Court relying strongly upon the observations made by a Full Bench of that High Court in Vinod Kumar Sethi & Ors. vs State of Punjab & Ors. reported in allowed the petition and quashed the proceedings arising out of the appellants ' complaint, observing that the allegations in the appellants ' complaint are similar to the one in that case and therefore, fully covered by the ratio in that decision. Hence the appeal by special leave. Allowing the appeal, the Court, ^ HELD; (Per E.lzal Ali, J.) (on behalf of Sabyasachi Mukharji, J. and himself) 1.1 The stridhan property of a married woman cannot acquire the character of a joint property of both the spouses as soon as she enters her matrimonial home so as to eliminate the application of section 406 IPC. The position of stridhan of a Hindu married woman 's property during coverture is absolutely clear and unambiguous; she is the absolute owner of such property and can deal with it in any manner she likes She may spend the whole of it or give it away at her own pleasure by gift or will without any reference to her husband. The entrustment to the husband of the stridhan property is just like something which the wife keeps in a bank and can withdraw any amount when ever she likes without any hitch or hindrance. Ordinarily, the husband has no right or interest in it with the sole exception that in times of extreme distress, as 193 in famine, illness or the like, the husband can utilize it but he is morally bound to restore it or its value when he is able to do so. This right is purely personal to the husband and the property so received by him in marriage cannot be proceeded against even in execution of a decree for debt. [206F; 201D E] Suraj Kumar & Anr. vs Pratibha Rani, Criminal Misc. Petition No. 4876 of 1981 Punjab & Haryana High Court reversed. Vinod Kumar Sethi & Ors. vs State of Punjab & Anr. ; Surinder Mohan vs Smt Kiran Saini, 1977 Chandigarh Law Reporter 212; Kailash Vati vs Ayodhya Parkash, ILR (1977) 1 Punjab & Haryana 642 (FB) overruled. 1.2 A perusal of the allegations made in the complaint undoubtedly makes out a positive case of the accused having dishonestly misappropriated the articles handed over to the n in a fiduciary capacity. To characterise such an entrustment as a joint custody or property given to the husband and the parents is wholly unintelligible. A perusal of the list reveals that so far as the jewellery and clothes, blouses, nighties and gowns are concerned they could be used only by the wife and were her stridhan. By no stretch of imagination could it be said that the [ornaments and sarees and other articles mentioned above could also be used by the husband. If, therefore, despite demands these articles were refused to be returned to the wife by the husband and his parents, it amounted to an offence of criminal breach of trust. All the ingredients of an offence under section 405 IPC were pleaded and a prima facie case for summoning the accused was made out. In such circumstances, the complaint should have been given an opportunity by the High Court to prove her case rather than quashing the complaint. Such an exercise of jurisdiction by the High Court under section 482 Cr. P. is totally unwarranted by law. [203A; 204B D; 203B C] 2.1 Criminal law and matrimonial home are not strangers. Crimes committed in matrimonial home are as much punishable as anywhere else. The mere factum of the husband and wife living together does not entitle either of them to commit a breach of criminal law and if one does then he/she will be liable for all the consequences of such breach. In the case of stridhan properly also, the title of which always remains with the wife though possession of the same may sometimes be with the husband or other members of his family, if the husband or any other member of his family commits such an offence, they will be liable to punishment for the offence of criminal breach of trust under sections 405 and 406 IPC. Just as a newly married woman living in the same house and under the same roof cannot be expected to keep her personal property or belongings like jewellery, clothing, etc. under her own lock and key thus showing a spirit of distrust to the husband at the very behest, a husband cannot be permitted to cast his covetous eyes on the absolute and personal property of his wife merely because it is kept in his custody, thereby reducing the custody to a legal farce. On the other hand, even if the personal property of the wife is jointly kept it would be deemed to be expressly or impleedly kept in the custody of the husband and i f he dishonestly misappropriates or refuses 194 to return the same, he is certainly guilty of criminal breach of trust, and there can be no escape from this legal consequence. [207E G; 208B Cl 2.2 It is an anathema to suppose that when a civil remedy is available, a criminal prosecution is completely barred. The two remedies are under civil law and the other under criminal law are not mutually exclusive but coextensive and essentially differ in their content and consequences. Therefore, it cannot be said that, if the husband dishonestly misappropriates the stridhan property of his wife though kept in his custody, that would not par prosecution under section 406 IPC or render the ingredients of section 405 IPC nugatory or abortive. To say that because the stridhan of a married woman is kept in the custody of her husband no action against him can be taken as no offence is committed is to override and distort the real intent of law. [208E F] 3.1 Neither section 27 of the nor section 14 of the Hindu Succession Act, go to the extent of providing that the claim of a woman on the basis of stridhan is completely abolished, or that a remedy under the criminal law for breach of trust is taken away. All that the two sections, provide is that if the husband refuses to return the stridhan property of his wife, it will be open to the wife to recover the same by a properly constituted suit. [204G H; 205A] 3.2 Section 27 of the merely provides for an alternate remedy and does not touch or affect in any way the criminal liability of the husband in case it is proved that he has dishonestly misappropriated the stridhan of his wife. It cannot also be spelt out from any textbook or the sastric law of the Hindus that these two Acts take away the stridhan right of a woman at the most these Acts merely modify the concept of stridhan. [205C D] Bhai Sher Jang Singh & Anr. vs Smt. Virinder Kaur, approved. Surinder Mohan vs Smt. Kiran Saini, 1977 Chandigarh Law Reporter 212 over ruled. 4.1 It is neither appropriate nor apposite to import the concept of partner ship of husband and wife for the simple reason that the concept of partnership is entirely different from that of the husbands ' keeping the stridhan in his custody. From the definition of the partnership in section 4 of the Indian Partnership Act, it is manifest that in a partnership the wife must by some clear and specific act indicate that the stridhan which has been entrusted to the husband is to be used for a partnership business and the losses of the firm, if any, would have to be shared by both. A pure and simple act of entrustment of the stridhan to the husband does not attract any of the essential ingredients of a partnership as defined in the Partnership Act. When the essential conditions of a partnership do not exist. the mere factum of entrustment of stridhan would not constitute any co ownership or legal partnership, There is also no 195 question of the wife, constituting herself a partner with her husband merely by allowing him to keep the article or money in his custody. Further, in this case, there is, neither any pleading nor any allegation that after her marriage, the appellant transferred all her properties to her husband for carrying on a partnership business in accordance with the provisions of the Partnership Act. Therefore, a criminal prosecution under section 406 IPC is maintainable. [209E; 210B C; G; 211C D] Vinod Kumar Sethi & Ors. vs State of Punjab & Anr. ; Surinder Mohan etc. V. Smt. Kiran Saini, 1977 Chandigarh Law Reporter 212; Kailash Vati vs Ayodhya Parkash, ILR (1973) 1 Punjab & Haryana, P 612; Kailash Nath Agarwal & Ors. vs Prem Pal Agarwal & Anr. case No. 676 of 1981 connected with Crl. case No. 2753 of 1981 decided on 22.12.83 Allahabad High Court overruled. In the instant case, however, there is neither any allegation nor anything in the complaint to show that when the wife entered her matrimonial home she had entrusted property to her husband so as to make him part owner of the same. Therefore, the question Or the husband having dominion over the property does not at all arise. In fact the wife has nothing to do With the partnership, if any and the husband is a pure and simple custodian of the property and cannot use the Same for any purposed without her consent. [210E F] The concept of stridhan property of a married woman becoming joint property of both the spouses as soon as she enters her matrimonial home and continues to be so until she remains there or even if there is a break in the matrimonial alliance, is in direct contravention of Hindu law of Sadayika which has been administered since more than a century by High Court, Privy Council and also the Supreme Court. [212C D] 4.2 The Full Bench decision in Vinod Kumar 's case would not only render the provisions of section 406 IPC inapplicable and nugatory even if the husband has the audacity or the importunity of refusing to return the stridhan of his wife, but also be in direct contravention of a long course of decisions of Supreme Court on the ingredients of section 405 IPC. [212A B] By a pure and simple figment of the fertile imaginations, the Judges in the Vinod Kamat 's case seem to have rewritten the law of criminal breach of trust contained in sections 405 and 406 IPC so as to carve out an imaginary exception to the application of the Penal Code more tragic consequence of the view taken by the High Court is that even if there is a break in the matrimonial alliance and the wife wants her husband to return her exclusive property and he refuses lo return even then the provisions of section 406 IPC would not apply. It is an extreme travesty of justice for a court to say that whenever a married demands her stridhan property from her husband she should be driven to the dilatory process of a civil court and her husband would be debarred from being prosecuted by a criminal court. By a strange and ingenious process of holding that such an act of a husband does not attract the provisions of the 196 Penal Code, as the property being joint there is no question of the husband being a trustee or holding the same in a fiduciary capacity. Such a view is not only contradictory but what the High Court has said before regarding the applicability of section 27 of the and the nature of stridhan is also neither in consonance with logic and reason nor with the express provisions of the Penal Code and seems to be inspired by a spirit of male chauvinism so as to exclude the husband from criminal liability merely because his wife has refused to live in her matrimonial home. The High Court, functioning in a civilised and socialistic society such as ours cannot play such a havoc with judicial interpretation of an important branch of law. The High Court cannot make a complete volte face by holding that these very properties after marriage become joint property of both the spouses. The High Court has not realised that the theory or philosophy of matrimonial home propounded by it stands directly contradicted by its own observations. [212D H; 213A; H; 214A] 4.3 The fundamental core of the offence of criminal breach of trust is that a property must be entrusted and the dominion of the property should be given to the trustee. In the present case, all these conditions, even according to the findings of the High Court though not its conclusions are clearly established. [217C] Chelloor Manaklal Narayan Ittiravi Nambudiri vs State of Travancore; AIR 1953 SC478; Jaswantrai Manilal Akhaney vs State of Bombay; , ; State of Gujarat vs Jaswantlal Nathalal ; ; Sushil Kumar Gupta vs Joy Shankar Bhattacharjee; , ; Superintendent [4] SCC 230 referred to. Harihar Prasad Dubey v Tulsi Das Mundhra & Ors. AIR 1949 Calcutta 207; Akharbhai Nasarali vs Md. Hussain Bhai AIR 1961 MP 37; Basudeb Patra vs Kana. Lal Haldar, AIR 1949 Calcutta 207, Bhai Sher Jang Singh and Anr. vs Smt. Virinder Kaur, 1979 Crl. L J. 493; Avtar Singh and Anr vs Kirpal Kaur, Crl. No. 2144 of 1979 and Cr l Misc. No. 2145 of 1979 approved. Vinod Kumar Sethi & Ors. v State of Punjab and Anr. ATR 1982 Punjab 372; Surinder Mohan etc. vs Smt. Kiran Saini, 1977 Chandigarh Law Reporter 212; Kailash Nath Agarwal & Ors vs Prem Pal Agarwal & Anr. Case No. 676 of 1981 connected with Crl. case No. 2753 of 1981, Allahabad High Court: Kailash Vati vs Ayodhya Parkash, ILR (1977) 1 Punjab d: Haryana 642 overruled. For the purpose of exercising its power under section 482 Cr. PC to quash a First Information Report or a complaint the High Court would have to proceed entirely on the basis of the allegations made in the complaint or the documents accompanying the same per se. It has no jurisdiction to examine the correctness or otherwise of the allegations. In case no offence is committed on the allegation and the ingredients of section 405 and 406 IPC are not made out, the High Court would be justified in quashing the proceedings. In the present case, the allegations are both clear, specific and unambiguous and 197 therefore, the complaint should have been given a chance to prove her case. It is, of course open to the accused at the trial to take whatever defences that were open to him or her but that stage had not yet come and therefore, the High Court was totally ill advised to speculate on the merits of the case at that stage and quash the proceedings. Since all the facts stated in the complaint constituted an offence under section 406 IPC, the appellant cannot be denied the right to prove her case at the trial by pre empting it the very behest by the order passed by the High Court. [223D H; 224D E ] Vinod Kumar Sethi & Ors. vs State of Punjab & Anr, , over led. L.V. Jadhav vs Shakarrao Abasaheb Pawar & Ors. AIR 1983 SC 1219; Smt. Nagawa vs Veeranna Shivalingappa Konjalgi & ors. [1976] Supp. SCR 123 applied. OBSERVATION (It is surprising to find that so deeply drowned and inherently engrossed are some of the High Courts in the concept of matrimonial home qua the stridhan property of a married woman that they simply refuse to believe that such properties are meant for the exclusive use of the wife and could also be legally entrusted to the husband or his relations. Thus, if the husband or his relations misappropriate the same and refuse to hand it over to the wife and convert them to their own use and even though these facts arc clearly alleged in a complaint for an offence under section 405/406 IPC, some courts take the view that the complaint is not maintainable. Thus even when clear and specific allegations are made in the complaint that such properties were entrusted to the husband, they refuse to believe these hard facts and brush them aside on the ground that they are vague, and completely shut their eyes to the fact that the husband could also be guilty under section 405/406 IPC in view of the clear allegations made in the complaint. In other words, the High Courts simply refuse to believe that there can be any such entrustment and even if it is so, no offence is committed. Such an approach amounts to a serious distortion of the criminal law, resulting in perpetrating grave and substantial miscarriage of justice to the wife at the hands of the High Courts. The Supreme Court cannot continuance such a wrong and perverse approach.) [224G H, 225A C] Per A. Varadarajan, J. (dissenting) 1.1 In the absence of a separate agreement and specific entrustment by the wife to the husband and or his relations and vice versa of the property of the husband to the wife and or her relation, it would not be possible to draw an inference of entrustment of custody or dominion over the property of one spouse to the other and his or her relations so as to attract the stringent provisions of section 406 IPC. The offence of criminal break of trust is cognizable and non bailable and punishable with imprisonment for a term of three years or with fine or with both. In the absence of such a separate agreement for specific entrustment of the property of either spouse the appropriate remedy would appear to be by way of a civil suit where there is scope for the parties to the marriage coming together at the instance of relations, elders and well wishers and patching up their differences. [241G H; 242A] 198 1.2 Entertaining complaints of the irate wife or husband against the husband or wife without even an allegation of a specific and separate agreement constituting entrustment of the property of the wife of the husband would have disastrous effects and consequences on the peace and harmony which ought to prevail in matrimonial homes. [242B]

vil Appeal Nos. 80 & 81 of 1975. From the Judgment and Order dated 26/27.8.1974 of the Gujarat High Court in I.T. Reference Nos. 7 and 29 of 1973. S.C. Patel for the Appellant. Dr. V. Gauri Shanker and Ms. A. Subhashini for the Respondent. The Judgment of the Court was delivered by PATHAK, CJ. The appellant is an assessee who derives income 867 from various sources, including income from the Shrimati Arundhati Balkrishna Trust, Ahmedabad. In assessment pro ceedings for the assessment year 1964 65 the Income Tax Officer found that a sum of Rs. 10,880 had been debited to the interest account maintained in the books of the Ahmeda bad Trust as interest paid to the Harivallabhadas Kalidas Estate Account. Upon further scrutiny, he discovered that substantial debits totalling Rs.2,19,804 included withdraw als from the Estate Account by the Ahmedabad Trust on ac count of the personal expenses of the assessee. After taking into consideration earlier withdrawals from the Estate Account by the Ahmedabad Trust for the purpose of investment and making adjustments for deposits during the year, the Income Tax Officer concluded that the net withdrawals from the Estate Account for personal expenditure were Rs.3,10,806 He held that the proportionate interest of Rs.6,199 out of the total interest of Rs. 10,880 paid by the Ahmedabad Trust to the Estate Account was referable to such withdrawals, and. therefore constituted an inadmissible deduction. Similarly, for the assessment year 1966 67 the Income Tax Officer found that a sum of Rs.25,496 had been shown in the books of account of the Ahmedabad Trust for the relevant previous year as interest paid to the Estate Ac count. He held that of this sum, an amount of Rs.12,833 was referable to withdrawals for purposes other than investment, and accordingly he disallowed the claim of interest to that extent. The assessee appealed to the Appellate Assistant Com missioner of Income Tax, and failing there he proceeded in second appeal to the Income Tax Appellate Tribunal, claiming that the entire amount of interest should have been allowed as a deduction for each year. An additional question raised in respect of the assessment year 1964 65 related to the point whether the assessee was liable to tax on the net income only received by her from the Trust or the income determined in accordance with the provisions of the Income Tax Act in the case of the Trust. The Appellate Tribunal dismissed the appeals of the assessee. At the instance of the assessee the Appellate Tribunal referred the following questions of law to the High Court of Gujarat in respect of the assessment year 1964 65: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was fight in not holding that out of the interest payment of Rs.10,880, Rs.6,199 was not an admissible deduction against the income from other sources? 868 (2) Whether, on the facts and in the circumstances of the case, the income includible in the total income of the assessee is income determinable as per provisions of the Income Tax, 1961 in the case of the Trust or the income receivable by the assessee from the said trust?" The question referred to the High Court for assessment year 1966 67 was: "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that out of the interest payment of Rs.25,496, Rs. 12,833 was not an admissible deduction against the income from other sources?" The High Court held that the question relating to the disallowance of part of the interest for the two assessment years was rightly decided against the assessee and in favour of the Revenue. On the second question in the reference for the assessment year 1964 65, the High Court held that the income includible in the total income of the assessee was income determinable in accordance with the provisions of the Income Tax Act in the case of the Trust and not the income actually received or receivable by the assessee from the Trust or according to the entries in the books of accounts of the Trust. In the result that question was also answered against the assessee and in favour of the Revenue. In regard to the question arising in each of the assess ment years 1964 65 and 1966 67 relating to the disallowance of part of the interest claimed as a deduction by the asses see, the High Court relied on the view taken by it earlier in Shrimati Padmavati Jaykrishna vs Commissioner of Income Tax., The judgment of the High Court was considered in appeal by this Court in Padmavati Jaikr ishna vs Addl. Commissioner of Income Tax, Gujarat, and this Court affirmed the view taken by the High Court. For the reasons which found favour with this Court in that case, we must answer the question in the two appeals before us against the assessee and in favour of the Revenue. Turning to the additional question referred to the High Court fo r the assessment year 1964 65, it seems to us clear that what is assessable in the hands of the assessee must be the income of the Trust received by it on behalf of the asses see. It is apparent from section 161(1) of the 869 Income Tax Act, 1961 that a representative assessee, that is to say a trustee, as regards the income in respect of which he is representative assessee, is subject to the same du ties, responsibilities and liabilities as if the income were income received by or accruing to or in favour of him bene ficially, and he is liable to assessment in his own name in respect of that income; but any such assessment is deemed to be made upon him in his representative capacity only, and the tax is levied upon and recovered from him in like manner and to the same extent as it would be leviable upon and recoverable from the person represented by him. And section 166 of the. Act clarifies that the provisions relating to the liability of a representative assessee will not prevent either the direct assessment of the person on whose behalf or for whose benefit income is receivable, or the recovery from such person of the tax payable in respect of such income. The Income Tax Officer has the option to proceed either against the trustee or against the beneficiary, but in either case the income to be assessed must be in the same figure. What the trustee receives as the income pertaining to the beneficiary is received by him under an obligation to pass on that income to the beneficiary. However, in most cases administration charges and expenses have to be met out of the Trust 's income and it is only the net income which reaches ' the beneficiary. If the income had to pass directly to the beneficiary and not under trust through a trustee the beneficiary would have equally to meet those outgoings, leaving a net income in his hands which for the purposes of the Income Tax Act would have been computed after reducing the gross income by the deductions admissible under the Act. It seems to us clear that it is not the income shown in the books of account of the Ahmedabad Trust actually paid to the assessee after deduction of the outgoings from the income received in the hands of the Ahmedabad Trust, but the real income of the Ahmedabad Trust has to be included in the total income of the assessee after taking into consideration the different items of permissible deductions in relation to that income. We are of opinion that the High Court is right in the view which it has taken. In the result, the appeals fail and are dismissed with costs. H.L.C. Appeals dismissed.

By an ex parte order made in the writ petition on 9 th September, 1988, the Court prohibited respondent No. 2, t he management of the Sri Rani Satiji 's Mandir, from performi ng Chunri ceremony within the temple and directed the enti re collection of money to be separately accounted for a nd deposited into a nationalised bank. In this miscellaneous petition, the management soug ht vacation of the ad interim order and lot a direction to t he authorities not to interfere in the matter of collection of money as also articles of gold and silver of deities. Disposing of the miscellaneous petition, the Court, Ordered: 1. The restraint imposed on holding the Chunri ceremo ny within the temple should continue without any variatio n. [68G H] 2.1 Pending disposal of the writ .petition, the temp le complex has to be maintained. Therefore, out of the inco me earned maintenance expenses must be met. [69A] 2.2 If out of the income of this institution any contr i bution was being made to sustain some social institutions of utility, the support should not die out. [69B C] 2.3 The respondent No. 2 is free to move the Distri ct Magistrate in regard to these two aspects and in case t he latter is satisfied that appropriate funds should be r e leased out of the deposits in the bank for 67 one or both of the above said purposes, he would be free to make an appropriate order in respect thereof.

Special Leave Petition (Civil) Nos. 12 12A of 1988. From the Judgment and order dated 18.12.1987 of the Andhra Pradesh High Court in W.A. Nos. 1649 and 1650 of 1987 P.N. Lekhi, M.K. Garg and Lokesh Kumar for the Petitioner. Kuldeep Singh, Additional Solicitor General and Mrs. A. Subhashini for the Respondents. The following order of the Court was delivered: O R D E R In response to the queries made by this Court by its order dated January 8, 1988 Shri Kuldeep Singh, learned Additional Solicitor General has furnished the relevant information as under: (1) In the matter of the age of Shri Justice K. Bhaskaran, Chief Justice of the Andhra Pradesh High Court, the advice and comments of the Chief Justice of India were sought in terms of Articles 217(3) of the Constitution of India. The files containing all the relevant papers were referred to the Chief Justice of India on 28th September, 1987. (2) The Chief Justice of India on 29th December, 1987 desired to have an opinion as to the effect of the judgment pronounced by the Andhra Pradesh High Court concerning the matter of the age of the Chief Justice Bhaskaran. The opinion was made available to the Chief Justice of India on 6th January, 1988. The Chief Justice of India on 11th January, 1988 indicated further course of action in the matter. The file has been resubmitted to 730 the Chief Justice of India on 16th January, 1988 for his further advice. (3) A view in the matter will be taken by the President of India after the advice of the Chief Justice of India is made available. In view of the foregoing, it is clear that the President of India in compliance with Article 217(3) of the Constitution of India has referred the question as to the age of Shri K. Bhaskaran, the Chief Justice of the Andhra Pradesh High Court to the Chief Justice of India for his opinion. That being so, no writ of mandamus can lie. The President of India as a constitutional functionary has discharged his duties under Article 217(3) of the Constitution and the decision must rest on the advice of the Chief Justice of India and not the Council of Ministers. As laid down in the Union of India vs Jyoti Prakash Mitter,. [1971] 3 SCR at 503 & 504, the matter as to the age of the Chief Justice or a sitting Judge of a High Court is a judicial function of the President of India, which has to be discharged in accordance with the special provisions made under Article 217(3) of the Constitution. Such a question as to the age of the Chief Justice or a Judge under Article 217(3) of the Constitution is beyond the reach of the Council of Ministers under Article 74 of the Constitution. J.C. Shah, C.J., speaking for the Constitution Bench has laid down the law in these words: It is necessary to observe that the President in whose name all executive functions of the Union are performed is by article 217(3) invested with judicial power of great significance which has bearing on the independence of the Judges of the Higher Courts. The President is by article 74 of the Constitution the Constitutional head who acts on the advice of the Council of Ministers. " The question as to the age of Shri K. Bhaskaran, the Chief Justice of the Andhra Pradesh High Court must, therefore, be decided by the President of India on the advice of the Chief Justice of India as enjoined by Article 217(3) of the Constitution in the light of the principles laid down by this Court in Jyoti Prakash Mitter 's, case. The High Court, in our considered opinion, should have thrown out the petition under article 226 of the Constitution at the very threshold because the President of India was seized with the question under Article 217(3) of the Constitution. Indeed, it appears from the judgment of the 731 High court that when the learned counsel for the Union of India A informed the Court that the President of India is seized with the question, the counsel for the appellant conceded that the writ of quo warranto is not maintainable. The special leave petitions are accordingly dismissed. G.N. Petitions dismissed.

% The appellant raised the question as regards the determination of age of the Chief Justice of Andhra Pradesh High Court, in these Special Leave Petitions filed against the Judgment and order of the Andhra Pradesh High Court dismissing in limine the Writ Appeals against the order of dismissal of the Writ Petitions by a Single Judge of the High Court. ln the course of the proceedings, this Court, on January 8, 1988, made certain queries to which the Additional Solicitor General furnished information broadly on the following lines: That a view in the matter will be taken by the President of India after the advice of Chief Justice of India is made available, and that all relevant files have been submitted to the Chief Justice of India along with the opinion as to the effect of the judgment pronounced by the Andhra Pradesh High Court. In view of the information made available, this Court dismissed the Special Leave Petitions and, ^ HELD: 1. The matter as to the age of the retired Chief Justice or a sitting Judge of a High Court is a judicial function of the President of India, which has to be discharged in accordance with the special provisions made under Article 2l7(3) of the Constitution. [730C D] 2. Such a question as to the age of the Chief Justice or a Judge, under Article 217(3) of the Constitution, is beyond the reach of the Council of Ministers under Article 74 of the Constitution. [730D E] Union of India vs Jyoti Prakosh Mitter, [ 197 l ] 3 SCR 483, followed. 729 3. Since the President of India, in compliance with Article 2l7(3), has referred the question as to the age of Shri K. Bhaskaran, Chief Justice of Andhra Pradesh High Court, to the Chief Justice of India for his opinion, no Writ of Mandamus can lie. [730B] 4. The President of India as a constitutional functionary has discharged his duties under Article 217(3) and the decision must rest on the advice of the Chief Justice of India and not the Council of Ministers. [730C]

ivil Appeal No. 13 of 1958. Appeal by special leave from the judgment and order dated June 29, 1954, of the former Nagpur High Court in Misc. Civil Case No. 219 of 1952. R. Ganapathy Iyer and D. Gupta, for the appellant. M. C. Setalvad, Attorney General for India, K. G. Chondke, J. B. Dadachanji and K. K. Raizada, for the respondents. I. N. Shroff, for the Intervener (State of Madhya Pradesh). April 21. The Judgment of the Court was delivered by DAS, C. J. This is an appeal by special leave, against the order of the High Court of Judicature at Nagpur dated June 29, 1954, answering against the 704 appellant certain questions referred to it by the Board of Revenue under section 23(1) of the Central Provinces & Berar Sales Tax Act, 1947 (hereinafter referred to as "the Act"). The reference arose out of an order of assessment made on the respondent for ' payment of sales tax for the period June 1, 1947, to November 12, 1947, on a taxable turnover of Rs. 30,067 9 0. The facts leading up to the present appeal may shortly be stated as follows. The respondent deals in matchwood called " sawar " (Bombay Malabaricum). His place of business is situate at Chanda in the erstwhile Central Provinces. In January 1948 the respondent entered into an agreement with the Western India Match Co. Ltd., which is popularly known and will hereinafter be referred to as " WIMCO " for the supply of a minimum quantity of 2,500 tons of sawar logs during the season 1947 48. This agreement is evidenced by WIMCO 's letter dated January 7, 1948, accepting and confirming it. Unfortunately that letter, although a part of the record, has not been printed in the Paper Book. It is common ground, however, that the agreement of sale was subject to the conditions appearing in a formal contract in writing dated March 2, 1945, which is said to have been renewed from year to year. It appears that prior to the execution of the last mentioned contract there was another contract between the respondent and WIMCO which was dated October 18, 1940. Evidently that contract was superseded by the later one of March 2, 1945, the terms and conditions whereof were renewed year after year. It is, therefore, not easily intelligible why both the contracts were filed before the Sales Tax authorities and actually mentioned in the first question that was referred to the Hight Court. Both the contracts have been printed in the Paper Book and reference has been made to some of the terms of both of them in the course of the arguments before us. The reason for referring to the terms of the ,earlier contract is presumably to emphasise the variation in the language used in the corresponding provisions of the later contract as indicative of a definite change in the intention of the parties. It is, therefore, 705 as well that the relevant clauses of both the contracts should be set out here for properly following the arguments advanced on both sides. Reference may first be made to the earlier contract dated October 18, 1940. Clause I sets out the specifications, that is to say, the dimensions and quality of the logs to be delivered under the contract which need not be reproduced here. The other material clauses, omitting the unnecessary portions thereof, may now be set out: " 2. The Contractor agrees that any logs supplied by him which do not conform with the specification herein shall not be accepted or paid for by the company and he the contractor undertakes to remove all logs so rejected at his own expense from the Company 's premises within fifteen days after date of notice to him or his representative from the Company so to remove such logs. Should the Contractor fail to i.e. move such logs from the Company 's premises within the period stipulated it is hereby mutually agreed that such failure shall be construed as being the Contractor 's consent to relinquish all claims whatsoever to such rejected logs, and the Contractor agrees to such logs thereupon becoming the property of the company and that the contractor shall have no claim whatsoever upon the company for payment either in respect of the supply by him of such rejected logs or arising out of the disposal by the Company of such logs." " 3. The said goods shall be delivered at Ambernath in the quantities and at the times hereinafter mentioned, i.e., " 4. The goods to be supplied under this Contract shall be despatched by the Contractor from Railway Stations on the B.N.R. and G.I.P.R. Sections between the following Stations : " 5. Measurements: The goods under this contract shall be measured under the supervision of the 89 706 Company 's Factory Manager at Ambernath on arrival of the goods at the Factory in accordance with the following stipulations: The Contractor agrees to. accept the decision of the Company 's Factory Manager at Ambernath as final and binding. " The prices of the logs to be supplied are set out in cl. 6 of the contract as "F.O.R. Ambernath ". We now pass on to the later contract of March 2, 1945. Clause 1 sets out the specifications of the logs to be supplied under the contract in exactly the same language as in el. I of the earlier contract. The other material clauses, again omitting the unnecessary portions, are as follows: " 2. The contractor agrees that any logs supplied by him which, on arrival at Ambernath, are found in the opinion of the Company 's Factory Manager not to conform with the specifications herein shall not be accepted or paid for by the Company, notwithstanding the fact that such logs may have been accepted by the Company 's representatives before being railed to Ambernath. " It may be mentioned here that Ambernath is a place situate in the erstwhile province of Bombay and outside the Central Provinces. The goods to be supplied under this contract shall be despatched by the Contractor from railway stations on the B. N. Railway, N. section Railway and G. 1. P. Railway sections between the following stations. It is unnecessary to set out the names of the stations which, it may, however, be stated, are all in the erstwhile Central Provinces. Clause 6 provides: "6. Measurements: The goods under this contract shall be measured under the supervision of the Company 's representative in accordance with the following stipulations: 707 The contractor agrees to accept the decision of the Company 's Factory Manager at Ambernath as final and binding. " The prices of the logs to be supplied under the contract are specified as " F.O.R. Ambernath " in cl. 7 which concludes with the following sentence: " The money so due and payable shall be paid by the Company to the Contractor when the measurements of the goods have been completed under the supervision of the Company 's representative." Pursuant to the agreement between the respondent and WIMCO, the former loaded diverse quantities of Sawar logs on railway wagons and despatched the same by railway from Chanda or other railway stations in the Central Provinces to Ambernath in the erstwhile province of Bombay and outside the Central Provinces. It is not disputed that on many occasions the representative of WIMCO was present at the railway station when the logs were sorted out and loaded into the wagons. The statement of the case submitted along with the reference under section 23(1) of the Act is silent on the point as to whether the railway receipts were made out with WIMCO as the consignee; but it is abundantly clear from the order of the Assistant Commissioner, Sales Tax, which is part of the record and it has not been disputed before us that " the railway receipt which is a document of title according to section 2(4) of the Indian is taken in the name of the consignee. " The course of dealings between the parties also appears to be that, on arrival of the logs at Ambernath, the consignee buyer WIMCO, paid the railway freight and the logs were inspected and measured by WIMCO 's Factory Manager and the prices, calculated at the agreed rates, were paid to the respondent 's agent at Bombay. There is no doubt that the price of the logs supplied by the respondent to WIMCO under the agreement and accepted by the latter during the period in question amounted to Rs. 30,067 9 0. The question for our 708 decision is whether the respondent is liable to pay any sales tax under the Act. It will be convenient at this stage to refer to the relevant provisions of law applicable to the facts of this case. Section 4 of that Act is the charging section. According to this section safes tax is payable " on all sales effected after the commencement of the Act." " Sale " is defined by section 2(g) of the Act. At the relevant period, that section, omitting Explanation 1, which is not material for our purpose, ran as follows: " 'Sale ' with all its grammatical variations and cognate expressions means any transfer of property in goods for cash or deferred payment or other valuable consideration, including a transfer of property in goods made in course of the execution of a contract, but does not include a mortgage, hypothecation, charge or pledge. . . . . . . . . . . Explanation II: Notwithstanding anything to the contrary in the Indian , the sale of any goods which are actually in the Central Provinces and Berar at the time when the contract of sale as defined in that Act in respect thereof is made, shall, wherever the said contract of sale is made, be deemed for the purpose of this Act to have taken place in the Central Provinces and Berar. " The Act being a piece of legislation enacted by the legislature of the erstwhile Province of Central Provinces and Berar, its operation is limited to the territories of that province. Therefore, the question arises: Does the sum of Rs. 30,067 9 0 represent the prices of logs sold by the respondent within the Central Provinces ? Sale being the transfer of property in the goods agreed to be sold, we have to enquire if the property in the goods which fetched the sale proceeds on which the sales tax is sought to be levied was transferred in the Central Provinces as contemplated in the main definition or if those goods were actually in the Central Provinces at the time when the contract for sale as defined in the in respect thereof was made as required by Explanation II set 709 out above. This takes us to the . Section 4 of the is expressed in the words following: "4. Sale and agreement to sell: (I) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part owner and another. (2) A contract of sale may be absolute or conditional. (3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell. (4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred. " There can be no doubt that the agreement pursuant to which the logs were supplied by the respondent to WIMCO was an agreement to sell within the meaning of the above section. There is also no controversy between the parties that at the date when this agreement was entered into, the logs were unascertained goods. The question is: When did that agreement to sell unascertained goods become a sale and where did such sale take place ? In other words, when and where did the property in those goods pass from the respondent to WIMCO ? The transfer of property in the goods as between the seller and buyer is dealt with in Ch. III of the . Section 18 of the runs thus : " 18. Goods must be ascertained: Where there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained. " Passing over sections 19 to 22 which (except as to sub section (3) of section 19) apparently apply to contracts for the sale of 710 specific or ascertained goods, we come to section 23 which provides : " 23. Sale of unascertained goods and appropriation : (I) Where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be expressed or implied, and may be given either before or after the appropriation is made. (2) Delivery to carrier: Where, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract. " Reference may next be made to section 33 and section 39(1). Section 33 says: " 33. Delivery : Delivery of goods sold may be made by doing anything which the parties agreed shall be treated as delivery or which has the effect of putting the goods in the possession of the buyer or of any person authorised to hold them on his behalf" Section 39(1) runs as follows: " 39. Delivery to carrier or wharfinger: (1) Where, in pursuance of a contract of sale, the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer, or delivery of the goods to wharfinger, for safe custody, is prima facie deemed to be delivery of the goods to the buyer. " Keeping the provisions of the above quoted sections of the two Acts in view, we have to decide when and where the property in the logs passed from the respondent to WIMCO. The Assistant Commissioner of Sales Tax assessed the respondent to a tax of Rs. 939 10 0 and imposed on the respondent a penalty of Rs. 100 under section 25 of 711 the Act for not having submitted its return in contravention of r. 19 of the Central Provinces and Berar Sales Tax Rules. The Assistant Commissioner took the view that the loading of the logs into the wagons at railway stations within the Central Provinces and the taking out of the railway receipts in the name of the consignee, WIMCO, and the delivery of the same to WIMCO, had the effect of putting the latter in pos session of the goods as laid down in section 39(1) of the Indian and he accordingly held that the sale of the goods took place at Chanda and other railway stations in the Central Provinces and that the assessee was, consequently, liable to pay the sales tax under the Act. The respondent preferred an appeal to the Sales Tax Commissioner who upheld the Assistant Commissioner 's order of assessment as well as of the penalty. He laid greater emphasis on Explanation II to section 2(g) of the Act as over riding the provisions of the Indian in respect of the transfer of property in the logs and held that as the ' logs were in the Central Provinces at the date when the contract for sale was made, the transfer in them must be deemed to have taken place there under that Explanation. He also agreed with the Assistant Commissioner that the delivery of the logs to the railway company and the sending of the documents of title to WIMCO had, under section 39(1) of the , the effect of putting WIMCO in possession of the logs. The respondent preferred what in form appeared to be a second appeal to the Board of Revenue. As, however, there could be no second appeal under section 22(4) of the Act, the Board treated the memorandum of appeal as an application for revision under sub section 5 of section 22 of the Act read with r. 57. Both the members of the, Board of Revenue came to the same conclusion, namely, that the sales were liable to assessment under the Act, but the reasonings adopted by them were somewhat different. Shri Shrivastava, a member of the Board of Revenue, took the view that as soon as logs answering the description agreed upon were brought to the railhead at Chanda and sorted out and 712 loaded in the wagons in the presence of WIMCO 's re presentatives, there was an implied contract of sale of specific and ascertained goods, as evidenced by the conduct of parties and the property in each consignment passed immediately from the respondent to WIMCO at the railway station in the Central Provinces where such implied contracts were made. The Chairman of the Board of Revenue, however, took the view that the contract of sale was made outside the Central Provinces, namely, in Bombay and that, under the , the property in the logs passed to WIMCO in Ambernath outside the province but that as the logs were in the Central Provinces, either in the form of logs or in the form immediately preceding, namely, trees standing on the land which had been impliedly agreed to be severed from the land before actual sale, Explanation II to section 2(g) of the Act applied and the sale must, accordingly, be deemed to have taken place within the Central Provinces and, must, therefore, be liable to sales tax under the Act. The Board rejected the application but remitted the penalty. On the application of the respondent under section 23(1) of the Act, the Board of Revenue submitted to the High Court a statement of case raising the following questions: " (1) Did the agreements of the kind on record the one dated 18 10 40 and the other dated 2 3 45constitute contracts of sale either express or implied in respect of sawar wood supplied by the assessee to WIMCO? (2) If the answer to question No. I be in the affirmative, did the contracts relate to specific or ascertained goods or to unascertained or future goods? (3) Did the property in the goods pass to WIMCO by consignment simpliciter at different railway stations within this province, or did it pass at Ambernath when the goods were approved as provided in the contract ? (4) Was reliance on the definition of I goods ' contained in section 2(7) of the in order in applying Explanation II to section 2(g) of the Sales Tax 713 Act in cases, where the goods sold were in the form of trees standing on the land in this province at the time of the contract of sale?" In its judgment dated June 29, 1954, the High Court took the view that the sales in question did not take place in the Central Provinces and Berar and consequently were not " sales " within the meaning of the Act and, therefore, not liable to tax. It gave the following answers to the above questions: " Our answers to the questions referred for decision are : (1) The agreement in question was an express agreement to sell sawar logs to WIMCO. There was neither an express nor an implied contract each time goods were railed. (2) The contract was not for delivery of specific goods but of unascertained or future goods by description. (3) The property in the goods did not pass to the buyer by the delivery to the railway for carriage. It passed at Ambernath where the goods were appropriated by the buyer to the contract with the assent of the seller. (4) The word ' goods ' in the definition of I sale in the Sales Tax Act must be interpreted according to its definition in section 2(d) of the Act and not according to the definition in section 2(7) of the . The standing sawar trees are not goods within the meaning of the former Act. " The effect of the answers being to nullify the assessment order, the Commissioner of Sales Tax has come up on appeal before us after obtaining special leave of this Court. The answers to the first two questions have not been questioned before us. The main arguments have centred round the answers to questions 3 and 4. The answer to question 3 turned on the construction placed by the High Court on section 23 of the . After quoting section 23, the High Court observed as follows: " After sorting the logs with the assent of the buyer 's representative, the applicant appropriated the 90 714 logs to the contract by railing them to the buyer 's destination at Ambernath. The statement of the case is silent on the point whether the railway receipts were made out with the Company as the consignee. The assent of the representative was provisional and was not binding on the Company. Under the agreement it did not agree to unconditionally appropriate the logs to the contract as soon as they were delivered to the railway with the assent of its representative for carriage to Ambernath. It had expressly reserved its right to reject the goods on examination at Ambernath. The agreement therefore was that the buyer should, with the assent of the seller, appropriate the goods to the contract at Ambernath. The appropriation under section 23 was not complete till the goods reached Ambernath and were appropriated by the Company to the contract. The appropriation of the goods by the applicant at the railheads was conditional on their acceptance by the buyer at Ambernath. There is nothing in the statement of the case to show that the logs were not so appropriated. Therefore, the property in the logs passed to the buyer at Amber nath." The learned counsel for the department appearing in support of this appeal contends that property in the logs passed from the respondents to WIMCO under section 23 when sawar logs were brought to the railway station and loaded in the wagon and the railway receipts taken in the name of WIMCO were forwarded to the latter. There was an unconditional appropriation of the goods to the contract by the respondent. There was, according to learned counsel, assent on the part of WIMCO to this appropriation in two ways, namely, (a) expressly given by its representative who was present at the railway station, and (b) impliedly given by WIMCO by having agreed in advance that the goods should be despatched by rail from the stations mentioned in cl. 4 of the agreement, all of which were situate in the Central Provinces. There is no doubt and indeed it has been categorically conceded by learned counsel for the department that the contract was for sale of unascertained goods and consequently the property in them could 715 not, under section 18, pass unless and until the goods were ascertained. His contention is that logs of the contract quality and description having been unconditionally appropriated by the respondent to the contract without reserving to itself any right of disposal and WIMCO having expressly through its representative or impliedly by the very terms of the contract assented to such appropriation, property in them passed under section 23 from the respondent to WIMCO at the railway stations within the Central Provinces as soon as the sawar logs were loaded on the wagons and the railway receipts were taken out in the name of WIMCO. It is said that so far as the respondent is concerned it unconditionally appropriated the logs to the contract. Seeing that they were actually accepted by WIMCO on their arrival at Ambernath it is quite clear that the logs were of the contract quality and description. The only question, according to learned counsel for the department therefore, is whether there was assent of WIMCO to such appropriation. It has been found as a fact that WIMCO 's representative was not present on all occasions when sawar logs used to be loaded on the railway wagons. There is no evidence that he was actually present when these particular sawar logs, with the sale proceeds of which we are concerned, were put into the wagons. Nor is there an iota of evidence that the representative of WIMCO had any authority to. bind WIMCO by any assent. In view of these difficulties, learned counsel for the department did not press the case of express assent of the representative of WIMCO and concentrated on the case of implied assent. It is quite clear from the language of section 23 itself, that the appropriation may be by the seller with the assent of the buyer or by the buyer with the assent of the seller, that assent to representation may be express or implied and that it may be given after the appropriation or in advance before such appropriation. Learned counsel for the department lays strong emphasis on the provision of cl. 4 in the contract that the sawar logs should be despatched by rail from certain stations within the Central Provinces and contends that delivery by the seller of sawar logs of the contract quality and 716 description to the railways in terms of the contract without the reservation of any right of disposal has the effect of passing the property therein to WIMCO at the railway stations in the Central Provinces under section 23 as well as of constituting delivery of them at the railway stations under sections 33 and 39(1). The argument is prima facie sound unless there be some other provision in the contract to negative this conclusion, e. g., that the logs must be carried to Ambernath and delivered there (See The Badische Anilin and Soda Fabrik vs The Basle Chemical Works, Bindschedler (1)). Learned counsel for the department does not urge that if the matter had to be decided on the terms of the earlier contract dated October 18, 1940, he could properly say that there was nothing in the contract negativing the idea of the passing of property in the logs within the Central Provinces. The cumulative effect of the provisions of el. 2 that the property in the rejected logs would ' pass to WIMCO upon the failure of the respondent to remove the same after rejection, of el. 3 that the goods shall be delivered at Ambernath in the presence of WIMCO 's Factory Manager and of el. 6 providing that the prices will be " F.O.R. Ambernath " clearly militate against the theory of passing of property immediately on the goods being loaded into the wagons. While not contesting this, learned counsel for the department urges that there is no such contrary intention indicated in the later contract of March 2, 1945, which really governs the case. We are unable to accept this distinction as of any substance. It is true that in this later contract cl. 2 is differently worded and there is no express provision that the goods should be delivered at Ambernath. There are, nevertheless, several other provisions in the later contract indicating that property in the logs loaded in the wagon will not pass to WIMCO until after the goods arrive at Ambernath and are inspected, measured and accepted by WIMCO 's Factory Manager. Clause 2 of the later contract quite clearly reserves the right of WIMCO to examine the goods on arrival and to reject the same if they are found, in the opinion of its Factory Manager, not to (1) , 717 conform with the specifications. This reservation, which is made notwithstanding the fact that the logs may have been accepted by its representative before they were railed to Ambernath, clearly indicates that the so called acceptance by the representative was not final but was entirely tentative and subject to approval of the logs by WIMCO 's Factory Manager at Ambernath after their arrival. This circumstance certainly militates against the property in them having already 'passed to WIMCO at the railway stations in the Central Provinces. The provisions of cl. 6 that the goods shall be measured under the supervision of WIMCO 's representative, the decision of its Factory Manager at Ambernath being binding on the respondent and of el. 7 that the prices shall be " F.O.R. Ambernath " and shall be payable after such measurement of the logs by WIMCO 's representative further reinforce the conclusion that the intention of the parties was that property in the goods shall not pass until the logs arrive at Ambernath and are there inspected, measured and accepted by WIMCO. In our judgment the prima facie case of what might have been the appropriation of the logs by the respondent by loading on the wagons logs of the contract quality and description with the assent of WIMCO given in .advance by the terms of el. 4 is effectively displaced by the provisions of cls. 2, 6 and 7 of the later contract which clearly indicate a contrary intention. On a proper construction of the contract as a whole the intention of the parties clearly was that the respondent would send the logs by rail from the different stations in the Central Provinces to Ambernath where WIMCO 's Factory Manager would inspect, measure and accept the same if in his opinion they were of the description and quality agreed upon. In other words the respondent sent the logs and left it to WIMCO to appropriate to the contract such of them as they accepted as of contract quality and description. The respondent, therefore, gave in advance its assent to WIMCO 's appropriation of the goods at Ambernath. Therefore, the decision of the High Court cannot be assailed but must be accepted as well founded in fact and in law. Learned counsel for the department then falls back 718 upon the Argument founded on Explanation II to section 2(g) and 'argues, somewhat halfheartedly, that notwithstanding the provisions of the regarding the passing of property in the goods the sale under consideration must be deemed, in the light of that Explanation, to have taken place within the Central Provinces. The question of the constitutional validity of that Explanation was not raised in the High Court and indeed, in view of the decision of this Court in Poppatlal Shah vs State of Madras (1) and other ' cases, cannot now be raised and we must proceed on the footing that Explanation 11 did not transgress the legislative competency of the Legislature which enacted the same. It will be noticed that Explanation II can apply only if the goods " in respect of " which the contract of sale is entered into are, at the date of such contract, actually in the Central Provinces. Learned counsel for the department urges that the logs delivered must have been in existence in the Central Provinces either in the shape of ';logs or in the shape of standing timber. There is no evidence that at the date when the agreement for sale was made, the particular logs delivered thereunder were in the Central Provinces in the shape of logs at all. Learned counsel says that, at any rate, they must have been in existence there in the shape of standing timber. Apart from anything else,, the agreement here was riot " in respect of " any standing timber and there was no provision in the agreement as between the respondent and WIMCO for severance of the standing timber before sale under that agreement. In order to attract Explanation II the goods, in respect of which the contract of sale is made, must, at the date of the contract be in existence in the Central Provinces, that is to say, that the goods must at the date of the contract be there in the form in which they are agreed to be sold. There is not an iota of evidence on that point. In our judgment, there is no force in this alternative argument. The result, therefore, is that this appeal is dismissed with costs. Appeal dismissed.

The respondent company was a dealer in matchwood called sawar " and his place of business was situate in Chanda in the erstwhile Central Provinces. Pursuant to an agreement between the respondent and a match factory, the former loaded diverse quantities of " sawar " logs on railway wagons and despatched the same by rail from Chanda and other railway stations in the Central Provinces to Ambernath, a town in the erstwhile Province of Bombay. Under cl. 4 Of the agreement the goods to be supplied under the contract shall be despatched by the contractor from certain railway stations within the Central Provinces, while cl. 2 reserved the right of the consignee to examine the goods on arrival at. Ambernath and to reject the same if they, were found, in the opinion of the factory manager, not to conform with the specifications. Clause 6 provided that the goods shall be measured under the supervision of the factory 's repre sentative, the decision of the factory manager at Ambernath being binding on the contractor, and by cl. 7 the prices of the goods shall be " F. O.R. Ambernath ". The course of dealings between the parties was that on arrival of the logs at Ambernath the logs were inspected and measured by the factory manager and the prices, calculated at the agreed rates, were paid to the respondent 's agent at Bombay. The question was as to when and where the property in the logs passed from the respondent to the consignee and whether the respondent was liable to pay sales tax under the provisions of the Central Provinces and Berar Sales Tax Act, 1947. At the date when the agreement was entered into, the logs were unascertained goods. There was also no evidence that at that date the particular logs delivered thereunder were in the Central Provinces in the shape of logs at all. The sales tax department levied the tax on the respondent on the grounds, inter alia, that (1) the property in the logs passed from the respondent to the factory consignee under section 23 Of the Indian , when the logs were loaded in the wagons at railway stations within the Central Provinces and the railway 703 receipts taken in the name of the factory were forwarded to the latter, and that (2) in any case, as the logs were in the Central Provinces at the date when the contract for sale was made, the transfer in them must be deemed to have taken place there under Explanation II to section 2(g) Of the Central Provinces and Berar Sales Tax Act, 1947. Held : (1) that on a proper construction of the contract as a whole the intention of the parties was that the respondent would send the logs by rail from the different stations in the Central Provinces to Ambernath where the factory manager would inspect, measure and accept the same if in his opinion they were of the description and quality agreed upon. Conse quently, as the respondent sent the logs and left it to the factory to appropriate to the contract such of them as they accepted as of contract quality and description, the property in the logs did not pass to the buyer by the mere delivery to the railway for carriage but passed only at Ambernath when the logs were appropriated by the factory with the assent of the seller within the meaning of section 23 of the Indian . (2) that Explanation II to section 2(g) of the Central Provinces because under the Explanation the goods, in respect of which the contract of sale is made, must, at the date of the contract be in existence in the Central Provinces, that is to say, that the goods must at the date of the contract be there in the form in which they are agreed to be sold and there was no evidence, in the present case, for this.

Criminal Appeal No. 538 of 1983. From the Judgment and Order dated 6.4.1982 of the Andhra Pradesh High Court in Crl. A. No. 469 of 1981. G. Narasimhulu for the Appellants. T.V.S.N. Chari, Ms. Suruchi Aggarwal and Ms. Manjula Gupta for the Respondent. The Judgment of the Court was delivered by KULDIP SINGH, J. Nethala Pothuraju, Nethala Dhananjaya, Nethala Remudu and four others (hereinafter referred to as 'A 1 to A 7 ') were tried for the offences under Sections 147, 148, 323, 379 and 302 read with Section 149 I.P.C. on the allegations that they caused the death of Madda Laksha mandas of village Ramaraogudem on November 1, 1980 near the Tobacco garden of A 1. The Trial Court acquitted A 7 of all the charges A 1 to A 6 were, however, found guilty for the offences punishable under Sections 148 and 302 read with section 149 I.P.C. They were sentenced to imprisonment for life. On appeal, the High Court confirmed the conviction and sentence of A 1 to A 3. The conviction and sentence of A 4 to A 6 was set aside by the High Court and they were acquit ted on the following reasoning: . . . We feel that it would be safe to accept the evidence of P.Ws. 1 and 2 to the extent it is corroborated by the evidence 6 of P.W.3 in so far as the presence and partic ipation of the accused in the attack on the deceased is concerned. Accepting the evidence of P.W.3 we hold that the identity of A 1 to A 3 in the unlawful assembly consisting of A 1. to A 3 and some other unidentified persons is satisfactorily established. The manner in which the attack was made on the deceased can only lead to one inference namely that the common object of the unlawful assembly was to kill the deceased. We accordingly confirm the conviction and sentence of A 1 to A 3 under Sections 148 and 302 read with 149 I.P.C. We set aside the conviction and sentence of A 4 to A 6 under Sections 148 and 302 read with 149 I.P.C. and acquit them." This Court granted leave to appeal on the limited ques tion of applicability of Section 149 I.P.C. The learned counsel for the appellants has contended that after the acquittal of four accused persons by the courts below the conviction of the appellants under Section 148 and on applying 149 I.P.C. cannot be sustained. It is argued that the appellants, being three in number, could not have formed an unlawful assembly within the definition of Section 141 I.P.C. In our view, there is force in the contention of the learned counsel for the appellants. The appellants being only three in number, there was no question of their forming an unlawful assembly within the meaning of Section 141 I.P.C. It is not the prosecution case that apart from the seven accused persons there were some other unidentified persons who were involved in the crime. The High Court clearly fell into error in confirming the conviction and sentence of the appellants under Sections 148 and on apply ing 149 I.P.C. on the ground that they formed an unlawful assembly alongwith some unidentified persons. The prosecu tion case from the very beginning was that A1 to A7, the named persons, formed the Unlawful assembly. A 4 to A 7 having been acquitted, the remaining three appellants cannot be convicted under Sections 148 and on applying 149 I.P.C. We, therefore, set aside the conviction of the appellants under the said sections. The question still remains as to whether the appellants can be convieted under Section 302 read with Section 34 I.P.C. Both Sections 149 and 34 I.P.C. deal with a combina tion of persons who become liable to be punished as sharers in the commission of offences. The non applicability of Section i49 I.P.C. is, therefore, no bar in convicting the appellants under 7 Section 302 read with section 34 I.P.C. if the evidence discloses commission of an offence in furtherance of the common intention of them all. PW 1, the wife of the deceased, PW 2, the daughter of the deceased and PW 3, an adjoining land owner, are the three eye witnesses to the occurrence. It is in evidence that the complainant and the accused belonged to opposite factions and there was long standing enmity between the parties. During the last 30 years, there had been murders and rioting between the two factions. The deceased Madda Lakshamandas was undergoing life imprisonment for the murder of one of the persons belonging to the group of the accused. He had come on parole. On the day of occurrence at about 7.00 A.M. when he was passing near the field of A 1 he was attacked by the accused party. According to the eye witness es, A 1 and A 3 were armed with spears, A 2, A 4, A 5 and A 6 with knives and A 7 was armed with a stick. All of them way laid the deceased and dragged him into the Tobacco garden of A 1. It is in evidence that all the accused indis criminately inflicted injuries on the deceased with their respective weapons. When the deceased fell down the ac cused kept on giving him spear, knife and stick blows. The deceased was crying for water and when his daughter brought water A 2 caught hold of her and pushed her aside. She was also given beating by fists. Thereafter, A 1 left the spear and took a stick and gave beating to the deceased on his heals and chest and A 3 chopped of the fingers of left hand of the deceased with the knife. A 2 further gave blows to the deceased on his head. The deceased died instantaneously on the spot. Thereafter, at the asking of A 1, A 2 and A 3 dragged the dead body from the field of A 1 and placed the same on the road. There were as many as 18 injuries on the person of the deceased. Seven of those were deep penetrating wounds, 8 lacerated wounds and remaining were abrasions. The injuries caused fracture on the right perietal bone result ing in the opening of the skull. The fourth rib was broken and there was an injury to the lung. There were injuries all over the body. Keeping in view the manner of attack as disclosed by the eye witnesses and the number and nature of injuries, we have no hesitation in holding that the appellants made the mur derous attack on the deceased and caused his instantaneous death. We are satisfied that the appellants acted in fur therance of their common intention of murdering the de ceased. We, therefore, hold the appellants guilty under Section 302 read with Section 34 I.P.C. 8 Accordingly, we convert the conviction of the appellants to one under Section 302 read with section 34 I.P.C. and keep them sentenced to fife imprisonment. Appellants A 1 and A 3 are on bail under orders of this Court. We cancel the bail order. These appellants shall surrender to their bail bonds to undergo the sentence of imprisonment. T.N.A Appeal disposed of.

In the Application under Article 32 of the Constitution by 55 persons claiming the benefit of the scheme of pension for Freedom Fighters, the petitioners contended that they had joined the Arya Samaj movement in the late 1930s within the erstwhile Nizam 's State of Hyderabad and were convicted under different provisions of the criminal law and sentenced to various terms of imprisonment; that the Arya Samaj move ment had been equated with the freedom struggle and the benefit of the pension scheme was admissible to those who had participated in the movement. The respondents while not disputing the assertion of the petitioners that the Union of India has accepted the Arya Samaj movement to be a part of the freedom struggle, has disputed the entitlement of pension in the case of most of the petitioners. Allowing the petition, this Court, HELD: 1. Freedom Fighters ' Pension Scheme of 1972 which was renamed as "Swatantrata Sainik Samman Pension Scheme 1980" indicates: "A person who has suffered a minimum im prisonment for six months in the mainland jails before independence in the struggle for independence is eligible to be admitted to the benefits of the pension. " Each of the petitioners had been convicted and was ordered to suffer imprisonment of more than six months. While they were under going sentence, without their praying for any 'emission, a general amnesty was declared by the then Nizam on his birth day and the sentence was reduced and the petitioners were set free. [118 E F,D] 2. In the facts of the case it would be appropriate to hold that each of the petitioners satisfied the condition for earning the benefit of pension and the fact that while undergoing sentence which was for a period beyond 117 six months remission had been granted and they were let off earlier would not take away their right to earn pension. [118F] Duli Chand & Ors. vs Union of India & Ors. ,W.P.No. 1190/89, dated, July 16, 1991 by the Supreme Court of India, followed.

Civil Appeals Nos. 258 259 of 59 and 404 of 60. Appeals by special leave from the judgment and orders dated July 2, 1956, January 9, 1957 and June 16,1958 of the Bombay High Court in Special Civil Applications Nos. 1471, 1527 and 2990 of 56 and 1431 of 1958 respectively. V.M. Limaye, V.L. Narasimha Moorthy, E. Udayaratnam and S.S. Shukla, for the appellants. B.C. Kamble and A.G. Ratnaparkhi, for respondents Nos. 1 and 3 (in C. section No. 258/59). S.G. Patwardhan, B.C. Kamble and A.G. Ratnaparkhi, for respondent No. 1 ( in C. A. No. 259/59) and the respondent in (C.A. No. 404 of 60). Rameshwar Nath, for the respondent (in C.A. No. 9 of 60). December 1. The Judgment of the Court was delivered by SARKAR, J. These four appeals are by landlords whose applications to the authorities under the Bombay Tenancy and Agricultural Lands Act, 1948 for possession of the lands held by their tenants, on the grounds had that the tenancy had been terminated by due notices on the tenants ' failure to pay rents for three years, were dismissed. 741 These authorities refused in three of these cases to make an order for possession either because the tenants had paid up all rent which had fallen in arrear or because the authorities thought it proper on the facts of the case to give them time to pay up. They felt that the tenants were entitled to relief against forfeiture on equitable principles. In the fourth case, which is covered by Civil Appeal No. 259 of 1959, it was held that there had not been on the facts of the case, default in payment of rent for three years and, therefore the tenant was entitled to statutory relief against eviction under section 25(1) of the Act which we shall later set out. The High Court at Bombay by a summary order, without stating any reasons, refused to interfere when moved under article 227 of the Constitution. The landlords have therefore filed these appeals with leave of this Court. We shall now deal with the first three cases and later take up the fourth case. In these three cases relief was granted to the tenants on the basis of certain observation of the High Court at Bombay in Sitaram Vithal Chitnis vs Gundu Satyappa Dhade, Special Civil Application No. 1695 of 1955, unreported, which we quote here: "Every court of equity will be extremely reluctant to enforce an order of ejectment against a tenant when the only ground on which the landlord seeks ejectment is failure to pay rent. Therefore, if the tenant is willing to pay all arrears of rent, in our opinion, it would be inequitable to turn these tenants out when they are prepared to make good the arrears of rent. " With great respect to the learned Judges of the High Court, we are unable to assent to the proposition so broadly put. We now set out the relevant provisions of the Act. 742 section 5 (1) No tenancy of any land shall be for a period of less than ten years: Provided that at the end of the said period and thereafter at the end of each period of ten years in succession, the tenancy shall, subject to the provisions of sub secs. (2) and (3), be deemed to be renewed for a further period of ten years on the same terms and conditions notwithstanding any agreement to the contrary. (2) x x x x x x x x x x x x x x x x x x x x x x (3) Notwithstanding anything contained in sub sec. (1): (a) every tenancy shall, subject to the provisions of sections 24 and 25, be liable to be terminated at any time on any of the grounds mentioned in section 14. x x x x x x x x x x x x x x x x x x x x x x x x section 14(1) Notwithstanding any agreement, usage, decree, or order of a court of law, the tenancy of any land held by a tenant shall not be terminated unless such tenant: (a)(1) has failed to pay in any year, with in fifteen days from the day fixed. the rent of such land for that year. x x x x x x x x x x x x x x x x Provided that no tenancy of any land held by a tenant shall be terminated on any of the grounds mentioned in this sub section unless the landlord gives three months ' notice in writing intimating the tenant his decision to terminate the tenancy and ground for such termination. 743 section 25(1)Where any tenancy of any land held by any tenant is terminated for non payment of rent and the landlord files any proceeding to eject the tenant, the Mamlatdar shall call upon the tenant to tender to the landlord the rent in arrears together with the costs of the proceeding within fifteen days from the date of order, and if the tenant complies with such order, the Mamlatdar shall, in lieu of making an order for ejectment, pass an order that the tenancy had not been terminated, and thereupon the tenant shall hold the land as if the tenancy had not been terminated: Provided that if the Mamlatdar is satisfied that in consequence of total or partial failure of crops or similar calamity the tenant has been unable to pay the rent due, the Mamlatdar may, for reasons to be recorded in writing, direct that the arrears of rent together with the costs of the proceedings if awarded, shall be paid within one year from the date of the order and that if before the expiry of the said period, the tenant fails to pay the said arrears of rent and costs, the tenancy shall be deemed to be terminated and the tenant shall be liable to be evicted. (2) Nothing in this section shall apply to any tenant whose tenancy is terminated for non payment of rent if he has failed for any three years to pay rent within the period specified in section 14. section 29(1) A tenant or an agricultural labourer or an artisan entitled to possession of any land or dwelling house under any of the provisions of this Act may apply in writing for such possession to the Mamlatdar. x x x x x x x x x x x x x x x x x x x x x x x x 744 (2) No landlord shall obtain possession of any land or dwelling house held by a tenant except under an order of the Mamlatdar. For obtaining such order he shall make an application in the prescribed form and within a period of two years from the date on which the right to obtain possession of the land or dwelling house, as the case may be, is deemed to have accrued to him. (3) On receipt of such application under sub section (1) or (2) the Mamlatdar shall, after holding an enquiry, pass such order thereon as he deems fit. We are not concerned in these three cases with section 24 mentioned in section 5(3)(a). The "date fixed" mentioned in section 14(1)(a)(i) is it may be stated the 20th of March of each year. It is not in dispute in these cases that the tenants were in default in paying rents for three years within section 14(1)(a)(i) and due notices had been served by the landlords terminating the tenancies as required by the proviso to section 14(1). By section 5, therefore, a tenancy under the Act is made to have indefinite duration being renewable for ten years at the end of every ten years and the landlord cannot put an end to the tenancy except under the provisions of the Act, one of which is section 14. This is irrespective of any contract between the parties. Under section 14 on the default in payment of a year 's rent occurring, the landlord may, if he so chooses, bring the tenancy to end by giving the prescribed notice. If the tenancy is terminated, the tenant has, of course, no right to hold the land. The landlord would then be entitled to recover possession of the land from him. In view however of section 29(2), the landlord cannot do so except by an application made to a Mamlatdar for the purpose. Now when such an application is made in case where the tenant has been in default for not 745 more than two years, section 25(1) would have to be applied and the Mamlatdar would have to give the tenant a chance to pay up and thereby annul the termination of the tenancy brought about under section 14. In these three cases there is no controversy that the tenancies have been terminated under section 14. There is also no dispute that the tenants are not entitled to be relieved against that termination under sub section (1) of section 25 because of the provisions of sub sec. (2) of that section, as in these cases the rent had not been paid for three years. They however claim relief on the principle on which equity grants relief against forfeiture of tenancies. The authorities under the Act have granted them the relief by applying this equitable principle. In our opinion, the authorities were clearly in error in thinking that they could grant relief in these cases on equitable principles. In equity relief may be granted to a tenant who has incurred a forfeiture under the terms of the tenancy, that is, his contract with the landlord. Here, that is not the position. The tenancies have been terminated in these cases under a statutory provision. In the circumstances that have happened, the landlords have in our opinion acquired a statutory right to the possession of the lands and, therefore, to eject the tenants, the reasons for which view we shall discuss in some detail later. In such a case, no relief can be granted to the tenants on equitable principles. Equity does not operate to annul a statute. This appears to us to be well established but we may refer to white and Tudors Leading Cases in Equity (9th ed.) p. 238, where it is stated, "Although, in cases of contract between parties, equity will often relieve against penalties and forfeitures, where compensation can be granted, relief can never be given against the provisions of a statute. " 746 The order of the authorities taking away the landlords ' statutory right to possession by application of rules of equity cannot be supported. It was then said that section 29(3) gives ample power to the authorities to refuse to make an order for possession in the landlord 's favour if the tenant pays up the arrears and the justice of the case requires that the tenant should not be deprived of the land. That sub section no doubt says that the Mamlatdar "shall. pass such order thereon as he deems fit". We are however wholly unable to agree that this provision warrants the making of any order that the authority concerned thinks in his individual opinion that the justice of the case requires. We may here refer to R. vs Boteler where a statute which conferred power upon Justices to issue a distress warrant "if they shall think fit" was considered. In that case the Justices had refused to issue the distress warrant. Cockburn C. J. observed, "They went upon the ground that the introduction of this extra parochial place into the union was a thing unjust in itself; in other words, that the operation of the act of parliament was unjust. I think, therefore it amounts virtually to saying, 'We know that we ought upon all other grounds to issue the warrant, but we will take upon ourselves to say that the law is unjust, and we will not carry out the law '. That is not such an exercise of discretion as this Court will hold, in accordance with the authorities cited, to be one upon which it will act. The Justices must not omit or decline to discharge a duty according to law. " We think that is what the authorities in the three cases before us have done. They have 747 refused to carry out the Act because they felt that it worked hardship. They have refused to give to the landlords the relief which the Act said they should have. Now, we feel no doubt that the Act provided that a tenant should be granted relief only in a case where he had not been in arrears with his rents for more than two years; in other words, if he had been in arrears for more than two years he was not to be given any relief against ejectment and the landlord would be entitled to an order for possession. First, we have to point out that the tenancy having been terminated in terms of the statute, the statute would necessarily create a right in the landlord to obtain possession of the demised premises. The tenancy having been terminated, the tenant is not entitled to remain in possession and the only person who would then be entitled to possession would be the landlord. The statute having provided for the termination of the tenancy would by necessary implication create a right in the landlord to recover possession. The statute recognises this right by providing by section 29(2) for its enforcement by an application to the Mamlatdar. Indeed, section 29(2) itself mentions this right expressly for it says that the application shall be made within two years from the date on which "the right to obtain possession of the land" accrued to the landlord. We repeat that this is a statutory right because it is the statute which fixes the term of the tenancy and also provides for its termination; it is not a contractual right which may be made subject to an equitable relief. We turn now to section 25. Under sub section (1) of this section the tenant has a right to an order continuing the tenancy inspite of its termination by notice under section 14 for non payment of rent. Sub section (2) however provides that sub section (1) shall not be available to a tenant if he has failed for any three years to pay rent. The result is that the statute itself 748 provides for relief to a tenant where such a termination has taken place and prescribes the conditions on which relief would be available. It would follow that the statute indicates that the tenant would not have the relief in any other circumstances. The result of this would inevitably be that the statute confers a right on the landlord to recover possession where the right under section 25(1) is not available to the tenant, which right he can enforce in the manner indicated. That being so, section 29 (3) cannot be read as conferring on the authorities a power to annul this intendment of the Act. The words "in lieu of making an order for ejectment" in sub section (1) of section 25 support the view that the Act intends that except in the circumstances mentioned in it, the landlord is entitled as of right to get an order for possession from the Mamlatdar. This view is further strengthened by the proviso to section 25 (1) which says that if the default in payment of rent had been caused by failure of crops or similar reasons, the Mamlatdar may give the tenant a year 's time to pay up and shall then provide in the order to be made by him that on the tenant 's failure to pay within that year, "the tenancy shall be deemed to be terminated and the tenant shall be liable to be evicted". In such a case the Mamlatdar could not by virtue of his supposed powers under section 29(3) give further relief if the tenant failed to pay as directed, for the Act makes it incumbent on him to pass the conditional order of ejectment. There, of course, is possession for the Act to have treated the cases under sub section (1) and the proviso to it, differently. This again is another reason for saying that the Act provides that apart from the circumstances mentioned in sub section (1) of section 25 and the proviso to it, the landlord has on a termination of the tenancy, a right to obtain an order for possession in his favour. It would be anomalous if the general words in s 29 (3) were to be construed as conferring power on the authorities to deprive him 749 of the right which the other provisions in the Act give him. We think, therefore, that section 29 (3) only confers power to make an order in terms of the statute, an order which would give effect to a right which the Act has elsewhere conferred. The words "as he deems fit" do not bestow a power to make any order on considerations dehors the statute which the authorities consider best according to their notions of justice. Obviously, the provision has been framed in general terms because it covers a variety of cases, namely, applications by landlords and tenants in different circumstances, each of which circumstances may call for a different order under the Act. One other argument under a similar head as dealt with previously, was that the tenants were entitled to relief against forfeiture under section 114 of the Transfer of Property Act. Section 3 of the Act provides that "the provisions of Chapter 5 of the shall in so far as they are not inconsistent with the provisions of this Act, apply to the tenancies and leases of land to which this Act applies". The present contention of the tenents is based on this section. It may be pointed out that ch. 5 of the includes sections 114 and 117. The last mentioned section provides that nothing in ch. 5 shall apply to leases for agriculture purposes except in so far as the State Government by notification declare them to be applicable. No such notification had been issued by the State Government. Therefore, the landlords contend, section 114 does not apply to the present leases which are for agricultural purposes and the tenants are not entitled to relief under it. It does not seem to us necessary to decide the question so raised. In our view, the provisions in section 114 of the are inconsistent with the provisions of the Bombay and cannot, 750 therefore, under section 3 of the latter Act govern the tenancies to which it applies. We have earlier stated that the Bombay Act clearly intended that relief against termination of tendency for non payment of rent would be given only in the cases mentioned in section 25(1) and in no others. Under section 114 of the relief may be given in other circumstances. Therefore, the provisions of this section are inconsistent with the provisions of the Bombay Act. For this reason we do not think that the tenants in the cases before us are entitled to claim any relief under section 114 of the . We think, therefore, that the tenants were not entitled to the relief which the authorities below granted them. Before we pass on to the other appeal raising a different question, we have to refer to the case of Raghuvir Vyasaraya Acharya vs Gobind Mogre Bandekar were it had been held by Chagla C.J., that section 29 (3) justifies an order granting relief to the tenant and refusing to make an order for possession in favour of the landlord even where the tenant has not paid rent for more than two years. We think that this case was wrongly decided. Chagla C.J., held that section 25 did not confer any substantive right on the landlord to obtain possession and that section 29(3) conferred on the Mamlatdar a discretion to pass any proper order that he thought fit. We think, for the reasons earlier stated, that on both these matters the learned Chief Justices was in error. We repeat that under the Act the landlord gets a right to obtain possession of the demised premises on the termination of the tenancy under section 14 and that section 25 as also section 29 clearly recognises that right. We turn now to the remaining appeal, namely Civil Appeal No. 259 of 1959. The question raised here is whether for the purposes of section 25(2) a tenant 751 is to be considered as having failed to pay rent for any year in respect of which he had been granted relief under section 25(1). The Revenue Tribunal, following a decision of the High Court at Bombay in Special Civil Application No. 2073 of 1955, unreported, held that where a landlord made an application for possession of the demised land on the failure of the tenant to pay rent for a year within the time prescribed in section 14, and the Mamlatdar granted relief to the tenant under section 25(1), the default was merged in the order of the Mamlatdar and could not thereafter be relied upon for the purposes of section 25(2). We did not have the original judgment of the High Court placed before us and are not aware of the reasons which persuaded it to the view that it took. In our opinion, that view is clearly incorrect, Section 25(2) says that nothing in section 25 which of course only means sub section (1) of that section shall apply to any tenant whose tenancy is terminated for non payment of rent if he has failed for any three years to pay rent within the period specified in section 14. We are unable to appreciate the contention that when a tenant has been granted relief under section 25(1) in respect of any year 's default, the default merged in the order granting relief and deceased to be a default. How can the default for the year merge in an order? No doubt relief has been given against the consequence of the default for the year, but that does not wipe out the default itself; it only prevents the termination of the tenancy, if any, consequent thereon, becoming effective. Inspite of the relief granted under section 25(1), the tenant remains a tenant who made default in paying rent for the year within the period specified in section 14 and that is the tenant mentioned in section 25(2). We find nothing in section 25(2) to justify the view that in such a case the year of default cannot be taken into account in computing the 752 three years there mentioned. It is of some significance to point out that section 25(2) does not require three successive years of default but it is satisfied where the tenant has been in default for any three years. If the interpretation put by the High Court were to be accepted, then a landlord wishing to recover possession of his land would have to wait till the tenant has committed default for three years, for if he took steps earlier and relief was granted to the tenant, he would not be able to recover possession after two more years of default by the tenant. We see no justification for thinking that the Act intended to put so much difficulty in the way of landlords. We, therefore, come to the conclusion that these appeals must succeed. We set aside the orders of the High Court in the cases in which that Court had been moved and of the Revenue Tribunal and other authorities under the Bombay Act refusing to make an order for possession in favour of the landlords. We direct that the respondent tenants make over possession of the lands held by them to their respective landlords. The appellants will be entitled to costs throughout. Appeals allowed.

By section 3 of the , the appropriate Government is authorised to fix minimum rates of wages for employees in the Scheduled employments and section 5 lays down the procedure for fixing and revising such minimum wages. The State Government published a notification dated June 11, 1958, fixing minimum rates of wages in respect of employments in bidi making in the Vidarbha region. Clauses 1 and 2 of the notification prescribed the minimum rates district wise and provided for higher rates for making bidis known as 'Hatnakhun ' in all the districts. Clauses 3 to 7 dealt with disputes between the employers and the employees as to how bad bidis were to be discarded and in what proportion and as to the payment for such discarded bidis. The appellant contended that cls. 3 to 7 of the notification were ultra vires: ^ Held, that cls. 3 to 7 of the Notification were outside the purview of the powers conferred upon the State Government 382 by section 5 of the Act and were ultra vires. The provisions of the Act empowered the Government only to fix minimum wages; they did not authorise it to make rules for resolving the disputes regarding the rejection of bad bidis and regarding the payments to be made for the rejected bidis. The Act empowered the Government to fix the remuneration payable to an employee if the other terms of the contract were observed; it did not authorise the Government to vary the other terms. Under the contract the employer was entitled to decide which bidis to discard, and to retain such bidis and to pay only for such bidis as were accepted by him. Clauses 3 to 7 of the notification purported to modify these terms in material particulars and this was not within the power conferred by the Act upon the Government. Nor could these clauses be justified on the basis of implied powers. The doctrine of implied powers could only be invoked when it was found that a duty was imposed or a power conferred on an authority buy a statute and it was further found that the duty could not be discharged or the powers could not be exercised at all unless some auxiliary or incidental power was assumed to exist. Even if cls. I and 2 would become ineffective without cls. 3 to 7 being there that would not be a proper basis for invoking the doctrine of implied powers. The definition of 'wages ' in section 2(h) of the Act postulated the binding character of the other terms of the contract and brought within the purview of the Act only the term relating to wages. By implication the very basic concept of wages could not be ignored. By sections 20 and 21 the Act makes specific provision for the settlement of claims in regard to payment of minimum wages and as such no powers could be implied in the Government to set up a separate machinery to settle such disputes. Further no power could be implied to make cls. 1 and 2 of the notification effective: such power could only be implied if it was necessary to make section 5 of the Act itself effective. Michael Fenton and James Fraser vs Jhon Stephen Hompton, (1957 59) 117 R. R. 21, referred to.

riminal Appeal No. 50 of 1957. Appeal by special leave from the judgment and order dated January 27, 1956, of the Rajasthan High Court at Jodhpur in Criminal Appeal No. 119 of 1954 arising out of the judgment and order dated March 23, 1954, of the Court of the Sessions Judge at Ganganagar in Original Criminal Case No. 74 of 1953. Mohan Behari Lal, for the appellant. Kan Singh and T. M. Sen, for the respondent. 1957 April 2. The Judgment of the Court was delivered by KAPUR J. Bhagwandas and Netram are two brothers who along with Mt. Rameshwari, a daughter 855 of the former, were tried by the Sessions Judge of Ganganagar for an offence under section 302 of the Indian Penal Code but were acquitted. On appeal to the High Court of Rajasthan, the order of acquittal of Bhagwandas and Netram was reversed and they were convicted under s.302 read with section 34 and sentenced to transportation for life. The order as to Mt. Rameshwari was affirmed and she was acquitted. The convicted persons have obtained Special Leave to appeal under article 136 of the Constitution. he appeal is founded on two grounds: (1) that there was no evidence against the appellants sufficient to warrant a conviction and (2) that there were no compelling reasons for reversal of the judgment of acquittal. According to the prosecution the canal after a temporary ' closure restarted flowing on May 5, 1953. And although it was not his turn of water the deceased Shivlal was allowed to take the water to irrigate his fields. On May 6 the canal was flowing to its full capacity and Shivlal was to take his turn of water which was of 6 hours duration from 8 a.m. to 2 p.m. but he watered his lands from 8 a.m. to 10 30 a.m. because the village diggi (pond) which was empty had to be filled up. Mirab Ram Karan P. W. 1 with the consent of Shivlal diverted the water for the purpose of filling up the diggi, promising him (Shivlal) to. get him the rest of his turn of water, i.e., for 3 1/2 hours after the diggi had been filled up. The diggi was filled up by 1 p.m. on the 7th. Shivlal then wanted to divert the water into his field but Bhagwandas prevented him from doing so claiming the turn to be his. According to Ram Karan Mirab P. W. I the turn of Bhagwandas was after Surta whose turn was next to that of Shivlal. As Shivlal was prevented from taking his turn of water he started walking towards the village saying that he would go and speak to Mirab. Bhagwandas thereupon shouted that " the enemy was going " and hit Shivlal on the head with a kassi. Netram then hit Shivlal with lathi as a result of which he fell down and then both beat Shivlal, and 856 Mt. Rameshwari also, it was alleged, joined in this beating with a wooden handle of a kassi. This occurrence was witnessed by Hazari P. W. 3 who was grazing his camels in the field of Surta. He went up to the place where the beating was going on and shouted to the assailants who " went away " leaving their kassi behind. Hazari found Shivlal seriously injured and unconscious. He sprinkled some water on his face which revived Shivlal and the latter asked Hazari to take him to the Thana but Hazari helped him to walk up to the Khala (threshing floor) of Hukma which was at a short distance from that place. Hazari P. W. 3 has stated that he left Shivlal with Jora, Jagmal, Bhogar, Begaram and Binja, and on their asking him he (Hazari) told them what he had seen. Shivlal was then taken to Raisinghnagar by Bhaggu and Jagmal on a she camel to the shop of Gyani ham P. W. 4. There Shivlal told Gyani Ram also that Bhagwandas, Netram and Rameshwari had assaulted him because of the water ' dispute and also asked Gyani Ram to send for his son Ram Pratap and his Artya (Commission Agent) Ishardas. Ram Pratap came at about 6 p. m. Shivlal repeated the story to him and was then taken to the hospital by Jagmal, Bhaggu and others. At the hospital he was treated by the doctor P. W. I I but died the following day (8th) at 8 15 a. m. The First Information Report was based on a written report exhibit P 1 by Ram Pratap s/o Shivlal. It was recorded on May 7 at about 7 30 p. m. The prosecution supported their case by the evidence of two eye witnesses, dying declarations made to 3 persons and on the recovery of the kassi. They produced two eye witnesses Begaram P. W. 2 and Hazari P. W. 3. The dying declarations were made to three persons first to Jora P. W. 7, later to Gyaniram P. W. 4 at his shop and lastly to Ram Pratap P. W. 5 who arrived at the shop at 6 p. m. If the dying declaration was made to this witness it must have been at that time. According to the doctor 's evidence Shivlal was unconscious when he was brought to the hospital at 5 p. m, He had 15 injuries on his body, out of which 857 injury No. 1 was with a sharp edged weapon and injury No. 2 with a blunt weapon and both these injuries were grievous and were " individually and collectively fatal sufficient to cause death. " The learned Sessions Judge disbelieved the whole evidence and acquitted the accused. He was of the opinion that the evidence produced by the prosecution was not " free from suspicion and not sufficient to convict them ". Begaram P. W. 2 was disbelieved both by the Sessions Judge and the High Court. The learned Sessions Judge described Hazari as a " facile fluent liar " but his testimony was accepted by the High Court. Both courts rejected the statement of Ram Pratap but the statements of Gyaniram and Jora were accepted by the High Court although they were rejected by the Sessions Judge. The High Court has relied upon the testimony of one eye witness Hazari P. W. 3 and two witnesses before whom Shivlal is alleged to have made two dying declarations. There are apparent contradictions between the testimony of Hazari and Bega. The learned High Court Judges disposed of this by saying that Bega 's presence "on the spot is open to grave doubts. As such it is, in our opinion, not proper to contradict the statement of a man who was present on the spot by using the statement of another man who was in all probability not there." The learned Judges have made the following significant observation in regard to Hazari: " It seems to us that Hazari had said this because the prosecution was producing Bega, and he must have been asked to say that Bega was also present. So far as the story of Hazari about the incident itself is concerned, nothing has been brought out in his cross examination to throw doubts on this part of his statement. " They also pointed out, but attached no importance, to other contradictions in the statements of Hazari made before the trial court and before the Police. If as observed by the learned Judges of the High Court, Hazari had mentioned the presence of Bega merely I 858 because the latter was to be produced as a prosecution witness and because he (Hazari) had been asked to mention it, then it would detract so materially from his reliability that it would be dangerous to accept his testimony as being of any great value which is still more diminished by the finding as to the innocence of Mt. Rameshwari. ' The other piece of evidence which the prosecution relied upon was the two dying declarations made by Shivlal to Gyaniram P. W. 4 and Jora P. W. 7. Besides the infirmities which the testimony of these two witnesses (Gyaniram P. W. 4 and Jora P. W. 1) suffered from due to material contradictions in their respective statements made at various stages of the case and which have been pointed out by the learned Sessions Judge who said about Gyaniram: " In such a state of affairs I refuse to put any weight and value to the statement of Gyaniram. . . . their evidence cannot be a sure foundation for maintaining the conviction if the statement of Hazari the sole eye witness is disregarded, as it must be disregarded in this case; because ordinarily a dying declaration of the kind which the prosecution has relied upon is by itself insufficient for sustaining a conviction on a charge of murder. The learned Sessions Judge was of the opinion that the evidence of the doctor P. W. II made the story that Shivlal could walk for a little distance upto the Khala of Hukma or was able to talk so as to make a dying declaration, improbable. But the learned Judges of the High Court disposed of this matter by saying that the doctor was comparatively young and that his statement was not in accord with the opinion expressed in books on Medical Jurisprudence by authors like Modi and Lyon. But it cannot be said that the opinions of these authors were given in regard to circumstances exactly similar to those which arose in the case now before us nor is this a satisfactory way of disposing of the evidence of an expert unless, the passages which are sought to discredit his opinion are put to him. This Court in Sundarlal vs The State of Madhya Pradesh (1) disapproved of Judges drawing (1) A.I.R. 1954 section C. 28 859 conclusions adverse to the accused by relying upon such passages in the absence of their being put to medical witnesses. The learned Judges of the High Court were, therefore, in error in accepting the testimony of these witnesses in support of the correctness of the two dying declarations nor could the statement of the deceased alleged to have been made in the circumstances of this case be considered sufficient to support the conviction of the accused. The recovery of the kassi is a wholly neutral circumstance because it has not been proved that it belonged to Bhagwandas. Although this Court will not interfere with the findings of the High Court because its conclusions on the evidence as to the guilt or innocence of the accused differ from that of the High Court, yet where the evidence is such that no Tribunal could legitimately infer from it that the accused is guilty this court would set aside the conviction. The Judicial Committee of the Privy Council in Stephen Seneviratne vs The King (1) in setting aside an order of conviction said : ". . there are here no grounds on the evidence, taken as a whole, upon which any Tribunal could properly, as a matter of legitimate inference, arrive at a conclusion that the appellant was guilty. . In our view the evidence in the present case is of such quality and no legitimate inference of guilt of the accused could properly be drawn. The second point on which the judgment of the High Court is assailed is the lack of compelling reasons for setting aside the judgment of acquittal. This court has held that the High Court should not set aside an acquittal unless there are " substantial and compelling " reasons for doing so. Surajpal Singh vs State(1) Ajmer Singh vs The State of Punjab (3) Aher Raja Khima vs The State of Saurastra (4). The judgment of the High Court does not disclose any such reasons justifying interference with the findings of the trial Court. (1) A.I.R. 1936 P.C. 289, 299. (2) ; , 201. (3) ; , 423, (4) ; 860 We would, therefore, allow this appeal, set aside the judgment of the Rajasthan High Court, restore that of the Sessions Judge and order the acquittal of the accused. Appeal allowed.

The Provident Fund Inspector filed complaints against the appellants Directors and Factory Manager and respondent No.2 Company charging them with non payment of employers contribution under the Employees ' Provident Fund and Family Pension Fund Act, 19 of 1952, alleging that the accused did not pay the employers contribution to the Fund from February 1970 to June 1971. At the commencement of the trial, the accused filed applications contending that since the limitation prescribed by section 468 of the Code of Criminal Procedure, 1973 had expired before the filing of the complaints, the Court had no jurisdiction to take cognizance of the complaints. These applications were rejected by the Judicial Magistrate on the ground that the offences of which the accused were charged are 'continuing offences ' and therefore, no question of limitation could arise. This order was upheld by the High Court in the revision applications filed by the appellants. In the appeals to this Court filed by the Directors of the Company it was contended that the offence of non payment of the employers contribution can be committed once and for all on the expiry of fifteen days after the close of every month and, therefore, prosecution for that offence must be launched within the period of limitation provided in section 468 of the Code. 627 Dismissing the appeals, ^ HELD 1. The offence of which the appellants are charged, namely non payment of the employer 's contribution to the Provident Fund before the due date, is a 'continuing offence ' and, therefore, the period of limitation prescribed by section 468 of the Code cannot have any application. The offence which is alleged against the appellants will be governed by section 472 of the Code, according to which, a fresh period of limitation begins to run at every moment of the time during which the offence continues. [636 D E] 2. The concept of 'continuing offence ' does not wipe out the original guilt. It keeps the contravention alive, day by day. [636 D] S.V. Lachwani vs Kanchanlal C. Parikh and others, , over ruled. Courts when confronted with provisions which lay down a rule of limitation governing prosecutions, in cases of this nature will give due weight and consideration to the provisions contained in section 473 of the Code. That section is in the nature of an overriding provision according to which, notwithstanding anything contained in the provisions of Chapter XXXVI of the Code, any Court may take cognizance of an offence after the expiry of the period of limitation if, inter alia, it is satisfied that it is necessary to do so in the interest of justice. [636 F G] 4. The expression 'continuing offence ' is not defined in the Code but that is because expressions which do not have a fixed connotation or static import are difficult to define. The question whether a particular offence is a 'continuing offence ' must necessarily depend upon the language of the statute which creates that offence, the nature of the offence and, above all, the purpose which is intended to be achieved by constituting the particular act as an offence. [632 E, 635E] State of Bihar vs Deokaran Nanshi, [1973]1 SCR 1004, explained. The offence of which the appellants is charged is the failure to pay the employers contribution before the due date. Considering the object and purpose of this provision, which is to ensure the welfare of workers, it is impossible to hold that the offence is not of a continuing nature. The appellants were unquestionably liable to pay their contribution to the Provident Fund before the due date and it was within their power to pay as soon after the due date had expired as they willed. The late payment could not have absolved them of their original guilt but it would have snapped the recurrence. Each day that they failed to comply with the obligation to pay their contribution to the Fund, they committed a fresh offence.[635 F G] 628 6. To hold that the employer who has not paid his contribution or the contribution of the employees to the Provident Fund can successfully evade the penal consequences of his act by pleading the law of limitation, would be putting an incredible premium on lack of concern for the welfare of workers. Such offences must be regarded as continuing offences to which the law of limitation cannot apply. [635 G 636 A]

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

The appellants were charged with offences under section 143/402, 186 and 353, Indian Penal Code for having obstructed and assaulted two public servant in the discharge of their public duty of executing the decree of a Civil Court. They were acquitted by the trial Court, but on appeal, the High Court convicted them under section 353, acquitted them under sections 143/402 and held that the prosecution under section 186 was barred by a. 195, Criminal Procedure Code, which requires a complaint in writing by the public servant before a court could take cognizance of the offence. In appeal to this Court, it was contended that the prosecution under section 353, Indian Penal Code, was also barred by section 195 Criminal Procedure Code. HELD : Sections 186 and 353, Indian Penal Code, relate to two distinct offences and section 353 is not referred to in section 195 Cr. P.C. Section 195, Criminal Procedure Code, does not bar the trial of an accused person for a distinct offence disclosed by the same set of facts, but which is not within the ambit of that section, when there is no camouflage or evasion to circumvent the Section. Therefore the trial of the appellants for the distinct offence under section 353 was not barred though it was based practically on the same facts as for the prosecution under section 186, and the High Court was justified, on the evidence, in interfering with the order of acquittal passed by the trial Court in regard to that charge. [640 E, G; 641 E] Sanwat Singh vs State of Rajasthan ; and Agarwal and Kulkarni vs State of Maharashtra, ; , followed. Basir ul Huk V. State of West Bengal ; and Hori Ram Singh vs The Crown, , referred to.

ivil Appeal No. 830 of 1988. 275 From the Judgment and Order Dated 7.12.1987 of the Allahabad High Court in Civil Misc. No. Nil 1987. A.K. Ganguli and Sunil Kumar Jain for the Appellant. Gopal Subramanium and Ashok K. Srivastava for the Re spondents. The Judgment of the Court was delivered by RANGANATHAN, J. The petitioner is a concern engaged in the business of manufacture of electric motors, pump sets and their parts. It applied for exemption from sales tax in respect of the goods manufactured by it in terms of a noti fication issued by the State Government on 30.9.1982 under section 4A of the Uttar Pradesh Sales Tax Act, 1948 (herein after called the 'Act '). This application was rejected by a Division Level Committee by an order dated 9.2. 1987 and a further review application was also dismissed on 27.10.1987. Thereupon the appellant filed a writ petition which was also rejected by the High Court by a short order dated 7.12.1987. Aggrieved by this denial of the exemption, which it claims it is entitled to, the appellant has preferred this appeal. Section 4A of the Act reads as under: "4 A. Exemption from sales tax of certain goods for specified period (1) Notwithstanding anything co tained in section 3 or section 3 A, where the State Government is of the opinion that it is necessary so to do for increasing the produc tion of any goods or for promoting the devel opment of in any districts or parts of dis tricts in particular, it may on application or otherwise, by notification, declare that the turnover of sales in respect of such goods by the manufacturer thereof shall, during such period not exceeding seven years from the date of starting production by such manufacturer, and subject to such conditions as may be specified, be exempt from sales tax or be liable to tax at such reduced rate as it may fix. (2)It shall be lawful for the State Government to specify in the notification under sub section (1) that the 276 exemption from, or reduction in, the rate of tax shall be admissible (a) generally in respect of all such goods manufactured subsequent to the date of such notification; or (b) in respect of such of those goods only as are manufactured in a new unit, the date of starting production whereof fails on or after the first day of October, 1982; or (c) only if the manufacturer had not discon tinued production of such goods for a period exceeding six months at a stretch in any assessment year. Explanation For the purposes of this section (i) 'new unit ' means a factory or workshop using machinery, accessories or components not already used or acquired for use in any other factory or workshop in India but does not include any factory or workshop established on the site of an existing factory or workshop manufacturing the same goods or any addition to or extension of an existing factory or workshop; and (ii) 'date of starting production ' means the date on which any raw material required for use in the manufacture or packing of the specified goods is purchased for the first time or the date of installation of power connection, where needed, whichever is later. In pursuance of the above section, the State Government published a scheme for the grant of exemption from sales tax to certain industrial units in the State. The scheme, ac cording to its introduction, had been introduced "in order to encourage capital investment and establishment of new industrial units in the State". It granted exemption to the industrial units established in certain areas of the State during the period from 1.10.1982 to 31.3.1985 and producing certain categories of goods. It is not necessary to refer in detail to the provisions of the scheme or other conditions of exemption. It is sufficient to say that this exemption was conferred only on units established on or after 1.10.1982 but before 31.3.1985. The scheme also makes it clear that though it referred to units "established" this really is a reference to the date of commencement of produc tion by the industrial 277 unit. This is also in accord with the terms of the statute and in particular sub section (2) of 4A. The appellant 's claim to exemption has been rejected on a very short ground, namely, that it had not commenced production after 1.10.1982. In the application filed by the appellant for exemption the appellant had mentioned that the date of actual com mencement of use of electricity for production was the 4th of December, 1982, which was also the actual date of com mencement of production. The appellant also claimed that upto 30.9.1984 it had produced and sold electric motor parts for Rs.2,70,590. The General Managers of the District Indus trial Centers at Deoband and Saharanpur and the Assistant Engineer of the Industrial State of Roorkee endorsed the following recommendation on the application: " . . I have checked with the use of power and other sources that the unit started actual production from 4.12.1982 and the production made is self manufactured and is within the prescribed production capacity. 1 am fully satisfied with the facts produced by the Unit and I recommend that this unit is eligible to get exemption from sales tax/inter state sales tax . with effect from date of production commencement for 5 6 7 years under section 4 A of the Sales Tax Act vide G.O. No. 8244 Bha/18 11 231(A)Bha/39, dated 30.9.82. " The difficulty in the appellant 's way appears to have been created by a certificate which had been produced by it before the Division Level Committee along with its applica tion. This purported to be a certificate by a firm known as Krishna Trading Co. (in which the proprietor of the appel lant was a partner). This certificate dated 4.12. 1981 reads as follows: "It is certified that the Trial Production of Kupla Bhatti was made today is 4.12.1981 expenses for which were incurred by our compa ny by purchasing raw material for its own ex penses under the agreement dated 15.5.1981 entered into. M/s Janta Machine Tools was assured by the company to supply very soon all the remaining machines and installing them and making its trial production at its own ex penses. " The Division Level Committee, while rejecting the applica tion 278 dated 9.2.1987, essentially gave only one reason for the rejection. It was stated that the date of the alleged trial production was really the date of commencement of production and this fell prior to 1.10.1982. As stated earlier the assessee preferred a review appli cation pointing out that the trial production could not be treated as commencement of actual production. This review application was disposed of on 27.10.1987. In its order the Committee observed: "On joint inquiry into the reality of your unit being conducted by the General Manager and sales tax officer of Deoband Industries Department they have reported that Shri Suresh Datt Sharma the proprietor of M/s Janta Ma chine Tools is partner of one third share in M/s Krishna Trading Company also. No purchase of raw material was declared by M/s Krishna Trading Company in the year 198 1 82, and therefore, the certificate of trial production issued by M/s Krishna Trading Company on 4.12. 1981 is baseless and untrue. In joint inquiry report it is also clear that your unit has purchased from M/s Krishna Trading Company Kupla etc. of Rs.69,000 on 21.5.81, whereas M/s Krishna Trading Company have declared sale of Rs. 13,035 only in 198 1 82 as per file of the Sales Tax Department. In the joint inquiry Report it is also mentioned that your unit got electricity on 21.11.1982 and on inquiry the unit informed that the trial production was done with the help of a generator. Your unit could not give any certificate for purchasing or hiring a generator and now it has declared to have hired the generator for 4 5 hours from M/s Mitra Industries Deoband. In the inquiry report it is also made clear that a unit cannot use a generator of other unit without prior permission of the electricity depart ment. xx xx xx On the above discussion it is concluded that the unit in question wants to (get) illegal benefit of exemption from sales tax by produc ing wrong facts. The trial production done by M/s. Krishna Trading Company on 4.12. 1981 is proved to have been done by the unit in ques tion itself and not by them. Thus, the unit was established before l. 10.82. The unit established before 1.10.82 is therefore not entitled to exemption from sales tax. " 279 In our opinion, the rejection of the assessee 's applica tion proceeds on a total misconception of the facts. The conclusion of the Division Level Committee is that produc tion was commenced by the appellant on 4.12.81 but this conclusion is based on no evidence. It is true that the appellant produced a certificate showing that some produc tion was done on 4.12. 1981 but the appellant 's case was that this was merely a trial production. It is not quite clear whether the District Level Committee completely doubts any trial production having taken place at all, or whether its conclusion is that there was a trial production, on 4.12.1981. If its conclusion is the former one, it does not affect the appellant 's claim. Assuming that the Committee has come to the conclusion that the production on 4.12.81 was conducted not by M/s Krishna Trading Company but by the appellant itself, the fact still remains that what had happened on that date was only trial production. The mere fact that a certificate by M/s Krishna Trading is disbe lieved cannot lead to the conclusion that the assessee had produced goods on 4.12.81. If one is to go by the definition contained in the explanation to section 4A for determining when the production started, one has to concentrate on the date of purchase of raw materials or on the date on which the electricity was brought into use for commercial produc tion. The appellant 's claim that it had manufactured goods by 30.9.1984 is not denied. Production had, therefore, commenced before 31.3. There is no suggestion by the Department or the Committee, and there is no material to show that the appellant had purchased raw materials suffi cient to carry out normal commercial production at any time prior to 1.10.82. It is an admitted fact that the assessee was able to obtain electricity for use for commercial pro duction only in November 1982. This lends support to the appellant 's contention that the production could not have been effected by the assessee prior to that date. In fact, this is a point on which emphasis is laid in the order dated 27.10.1987. That being so, there is no iota of evidence or material on the basis of which the appellant 's claim that it had started production in December 1982 could have been rejected. On the other hand, the recommendation and endorse ment of the General Manager, District Industries Centre, which has been extracted earlier, also supports the appel lant 's contention that it had started production on 4.12.1982 and this report was given after verifying the actual position on the spot. For the reasons above mentioned we are of the opinion that the denial of the exemption to the appellant under the notification dated 30.9.82 was not justified. The rejection of the appellant 's application in this regard is quashed and the appellant is declared entitled to the 280 exemption in terms of the notification. We should not be understood, however, to have expressed any opinion as to the amount of exemption available to the appellant under the notification. That will be a matter for consideration of the authorities in respect of each of the years concerned in respect of which the claim is made for exemption. The appeal stands allowed, but in the circumstances, we make no order as to costs. G.N. Appeal allowed.

The State Government in pursuance of Section 4A of the Act formulated and published a scheme for grant of exemption from Sales Tax, to encourage capital investment and estab lishment of new industrial units which were established during the period from 1.10.1982 to 31.3.1985 and producing certain categories of goods. Though the scheme referred to units established, it actually referred to the date of commencement of production. The appellant, a concern engaged in the business of electric motors, pump sets and their parts, applied for the exemption. The appellant claimed that the date of actual commencement of use of electricity for production was 4th December, 1982 and that was the actual date of commencement of production. The same was endorsed by the General Manag ers, District Industrial Centers and the Assistant Engineer concerned, while recommending the application. But the difficulty had arisen on account of a certificate attached to the application for exemption. It was given by a firm which had entered into an agreement with the appellant for supply of machines and installation. According to the cer tificate, trial production commenced on 4.12.1981. The Division Level Committee, before which the application was filed, rejected it, saying that the date of trial production was really the date of commencement of production and it fell prior to 1.10.1982. The appellant preferred a review claiming that trial production could not be treated as commencement of actual production. The review application was also dismissed and it was held that the unit was estab lished before 1.10.1982 and, therefore, was not entitled to the exemption. Thereafter, the appellant filed a writ peti tion before the High Court. It was rejected. 274 Claiming that it is entitled to the exemption, the appellant has preferred this appeal, by special leave. Allowing the appeal, HELD: 1.1 The appellant is entitled to the exemption, in terms of the notification dated 30.9.1982. The rejection of the application for exemption proceeds on a total misconcep tion of facts. The conclusion that production was commenced on 4.12.1981 is not based on any evidence. It does not affect the appellant 's claim even if there was any doubt about the trial production having taken place at all. Wheth er trial was conducted by the other firm or the appellant itself, the fact remains that only trial production took place on 4.12.1981. The mere fact that the certificate is disbelieved cannot lead to the conclusion that the appellant had produced the goods on 4.12.1981. [279A D] 1.2 To go by Section 4A of the Act to determine the date of commencement of production, the date of purchase of raw material or the date on which electricity was brought into use would be relevant. The appellant 's claim that it had manufactured goods by 30.9.1984 is not denied. Production had, therefore, commenced before 31.3.1985. There is no suggestion by the Department or the Committee, and there is no material to show that the appellant had purchased raw materials sufficient to carry out normal commercial produc tion at any time prior to 1.10.1982. It is an admitted fact that the assessee was able to obtain electricity for use for commercial production only in November 1982. This lends support to the appellant 's contention that the production could not have been effected by the assessee prior to that date. In fact, this is a point on which emphasis is laid. That being so, there is no iota of evidence or material on the basis of which the appellant 's claim that it had started production in December 1982 could have been rejected. On the other hand, the recommendation and endorsement of the Gener al Manager, District Industries Centre also supports the appellant 's contention that it had started production on 4.12.1982 and this report was given after verifying the actual position on the spot. [279D G] 2. As regards the amount of exemption available to the appellant, it is a matter for consideration of the authori ties in respect of each of the years concerned in respect of which the claim is made for exemption. [280B]

Appeal No. 203 of 1956. Appeal by special leave from the orders dated January 25, 1955, of the Madras High Court in C.M.P. No. 9335 of 1954 and section R. No. 55247 of 1953. K. section Krishnaswamy Iyengar, R. Ganapathy Iyer and G. Gopalakrishnan, for the appellant. C. K. Daphtary, Solicitor General of India and M. section K. Sastri, for the respondent. Venkatakrishnan and T. M. Sen, for the intervener. November 28. The following Judgment of the Court was delivered by GAJENDRAGADKAR J. This is a plaintiff 's appeal by special leave against the order passed by a Division Bench of the Madras High Court on January 25, 1955, 1023 calling upon him to pay court fees on the valuation of Rs. 15,00,000 both on his plaint and on his memorandum of appeal and it raises some interesting questions of law under the provisions of the Court Fees Act (which will be described hereafter as the Act). The appellant bad filed Civil Suit No. 311 of 1951 on the Original Side of the Madras High Court. In this suit be had claimed partition of the joint family, properties and an account in respect of the joint family assets managed by the respondent. The appellant is the son of Subbiah Chettiar. His case was that Subbiah had been adopted by Lakshmi Achi in 1922. Lakshmi Achi was the widow of the undivided paternal uncle of the respondent. As a result of his adoption Subbiah became a coparcener in his adoptive family and, as Subbiah 's son, the appellant claimed to have a share in the joint family properties and in the assets of the joint family and that was the basis on which a claim for partition and accounts was made by the appellant in his suit. In the plaint it had been alleged that Subbiah had filed a suit for partition of his share and had obtained a decree in the trial court. The respondent had taken an appeal against the said decree in the High Court. Pending the appeal the dispute was settled amicably between the parties and in consideration of payment of a specified sum and delivery of possession of certain sites Subbiah agreed to release all his claims and those of his son, the present appellant, in respect of the properties then in suit. According to the appellant, this compromise transaction did not bind the appellant and so he claimed to recover his share ignoring the said transaction between his father and the respondent. The plaint filed by the appellant valued the claim for accounts at Rs. 1,000 under section 7(iv)(f) of the Act and a court fee of Rs. 112 7 0 was paid on the said amount on an ad valorem basis. In regard to the relief for partition the fixed court fee of Rs. 100 was paid by the appellant under article 17 B (Madras) of Schedule II of the Act. For the purposes of jurisdiction, however, the appel lant gave Rs. 15,00,000 as the value of his share. 130 1024 It appears that the Registry, on examining the plaint, was inclined to take the view that the plaint should have borne court fee under section 7(v) in respect of the claim for partition. Since the appellant did not accept this view the matter was referred to the Master of the Court who was the taxing officer under the Madras High Court Fees Rules, 1933. The Master felt that the issue raised by the Registry was of some importance and so, in his turn, he referred the dispute to the Judge sitting on the Original Side under section 5 of the Act. This reference was decided by the Chamber Judge Krishnaswamy Naidu J. on October 18, 1951. The learned judge held that the appellant was not bound to set aside the prior compromise decree between his father and the respondent and that the plaint was governed by article 17 B of Schedule 11. Accordingly the court fee paid by the appellant in respect of his claim for partition was held to be in order. In due course the respondent was served and he filed a written statement raising several contentions against the appellant 's claim for partition and accounts. One of the points raised by the respondent was that the compromise and the release deed executed by the appellant 's father and the decree that was subsequently passed between the parties were fair and bona fide transactions and, since they amounted to a settlement of the disputed claim by the appellant 's father, the plaintiff was bound by them. Ramaswamy Gounder J. who heard the suit tried the respondent 's contention about the binding character of the compromise decree as a preliminary issue. The learned judge held that there was a fair and bona fide settlement of the dispute by the appellant 's father acting as the manager of his branch and so the appellant was bound by the compromise decree. In the result, the appellant 's suit was dismissed on September 22, 1953. Against this decree the appellant presented his memorandum of appeal on December 1, 1953. This memorandum bore the same court fees as the plaint. On examining the memorandum of appeal the Registry again raised the question about the sufficiency of 1025 fees paid by the appellant. The Registry took the view that the appellant should have paid court fees under section 7(v) of the Act in respect of his claim for partition as the appellant 's claim in substance was a claim for recovery of possession based on title within the meaning of section 7(v). The matter was then referred to the Master; but, in his turn, the Master again made a reference to the Taxation Judge under section 12(2) of the Act. Thereupon the learned Chief Justice constituted a Bench of two judges to deal with this reference. The learned judges who heard the reference did not think it necessary to consider whether section 12 of the Act was applicable to the present appeal. They dealt with the reference as made under section 5 of the Act. The appellant urged before the Division Bench that the order passed by Krishnaswami Naidu J. was final since it was an order passed under section 5 of the Act. The learned judges did not accept this contention. They held that the record did not show that Krishnaswamy Naidu J. had been nominated by the Chief Justice to. hear the reference under section 5 either by a general or a special order and so no finality could be claimed for the said order under section 5 of the Act. On the merits the learned judges agreed with the view taken by Krishnaswamy Naidu J., and held that section 7(v) of the Act was not applicable to the appellant 's claim for partition. According to the learned judges, neither was article 17 B of Schedule II applicable. They held that the provisions of section 7(iv)(b) of the Act applied. That is why the appellant was directed to mention his value for the relief of partition under the said section. It may be mentioned at this stage that this order became necessary because in the plaint the plaintiff had not specifically mentioned the value for the relief of partition claimed by him. He had merely stated that for the relief of partition claimed by him he was paying a court fee of Rs. 100 in accordance with Schedule II, article 17 B. All that he had done in the plaint was to value his total claim for jurisdiction at Rs. 15,00,000. In compliance with this order the appellant valued 1026 his relief to enforce his right to share in the joint family properties in suit at Rs. 50,000, paid the deficit court fee Rs. 1,662 7 0 and re presented his memorandum of appeal in court on May 7, 1954. That, however, was not the end of the present dispute in respect of court fees. The Registry raised another objection this time. According to the Registry, since the appellant had valued his relief in the suit for purposes of jurisdiction at Rs. 15,00,000, it was not open to him to value his relief on the memorandum of appeal under section 7(iv)(b) without an amendment of the valuation made in the plaint. Since the appellant did not accept this view of the Registry, the matter was again placed before the court for orders. The appellant then offered to file an application for formal amendment of his plaint by substituting Rs. 50,000, in place of Rs. 15,00,000, for the jurisdictional value of his relief Accordingly the appellant made an application on October 18,1954. This application was opposed both by the respondent and the Assistant Government Pleader on behalf of the State. The learned judges who heard this application took the view that if the appellant had given the value in the first instance for purposes of jurisdiction he was precluded from giving a different value at a later stage. Accordingly it was held that Rs. 15,00,000, which had been mentioned in the plaint as the value of the appellant 's claim for jurisdictional purposes should be treated as the value given by the appellant also for the purposes of court fees under section 7(iv)(b) of the Act. The result was that the application made by the appellant for a formal amendment of the valuation made in the plaint was rejected. The learned judges also purported to exercise their jurisdiction under section 12(2) of the Act and directed that the appellant should pay deficit court fees on the basis of Rs. 15,00,000 not only on his memorandum of appeal but also on his plaint. It is this order which has given rise to the present appeal. The first point which Shri Krishnaswamy Ayyangar has raised before us on behalf of the appellant is that the order passed by the learned Chamber Judge on 1027 October 18, 1951, is final under section 5 of the Act. By this order the learned Chamber Judge had held that the plaint filed in the present suit did not attract the provisions of section 7(v) of the Act and that the proper court fee to be paid was determined by article 17 B of Schedule II of the Act. Since the appellant had paid the fixed court fee of Rs. 100, under this latter provision, no objection could be taken on the ground that sufficient court fee had not been paid. If this order bad really been passed under section 5 of the Act it would undoubtedly be final. Section 5 of the Act provides for procedure in case of difference as to necessity of court fee. In cases where a difference arises between an officer whose duty it is to see that any fee is paid under Chapter III and a suitor as to the necessity of paying the fee or the amount thereof, it has to be referred to the taxing officer whose decision thereon shall be final. This section further provides that if the taxing officer, to whom such difference is referred by the office, is of opinion that the point raised is one of general importance, he can refer the said point to the final decision of the Chief Justice of the High Court or such judge of the High Court as the Chief Justice shall appoint either generally or specially in this behalf; and it is clear that if the Chief Justice or any other judge appointed in that behalf by the Chief Justice decides the matter in question, his decision shall be final. Unfortunately, however, in the present. case it has been found by the Division Bench that dealt with this matter subsequently that a search of the record did not show any general or special order which would have justified the exercise of jurisdiction under section 5 by Krishnaswamy Naidu J. No doubt Shri Krishnaswamy Ayyangar stated before us that the practice in the Madras High Court always was to refer disputes as to proper court fees arising between suitors on the Original Side and the Registry to the Chamber Judge and it was always assumed, says Shri Ayyangar, that the Chamber Judge on the Original Side was appointed generally to deal with such disputes. It is difficult for us to make any such assumption in dealing with the present suit. Unless we are satisfied 1028 from the record that Krishnaswamy Naidu J., bad, at the material time, been appointed either generally or specially to act under section 5, it would be difficult to accede to the argument that the order passed by him in the present proceedings is final. It is frankly conceded that the record does not show any general or special order as contemplated by section 5. That is why we must hold that the learned judges of the Division Bench were right in refusing to attach finality to the order passed by Krishnaswamy Naidu J. It is then urged by Shri Krishnaswamy Ayyangar that the learned judges were in error in purporting to exercise their jurisdiction under section 12(2) of the Act when they directed the appellant to pay additional court fees on the plaint on the basis of the valuation of Rs. 15,00,000. His contention is that section 12 does not apply to the appeals arising from judgments and decrees passed in suits on the Original Side of the Madras High Court. It is perfectly true that the question about the levy of fees in High Courts on their Original Sides is governed by section 3 of the Act and, if the matter had to be decided solely by reference to the Act, it would not be possible to apply any of the provisions contained in Chapter III of the Act either to the suits filed on the Original Side of the Madras High Court or to the appeals arising from judgments and decrees in such suits. But it is common ground that, on the plaints filed on the Original Side of the Madras High Court, court fees are leviable under the relevant provisions contained in Chapter III of the Act and the levy of these fees is authorised by O. 11, r. I of the High Court Fees Rules, 1933. It is, therefore, necessary to inquire what provisions of the Act have been extended to the suits filed on the Original Side. The authority and jurisdiction of the Madras High Court in enacting r. I of O. 11 are not in dispute. What is in dispute before us is the effect of the said rule. The appellant 's case is that the said rule merely contemplates the levy of certain specified court fees as indicated in the provisions of the Act which are expressly made applicable to the Original Side. No other provision of the Act, according to the appellant, 1029 can be said to have been extended and so the learned judges were in error in purporting to exercise their jurisdiction under section 12(2). We are not satisfied that this argument is well founded. Order II, r. I reads thus: " O. II, r. 1 of Madras High Court Fees Rules, 1933: Order II. The fees and commissions set out in Appendix II hereto shall be charged by the Registrar, Sheriff, The Reserve Bank of India and the Imperial Bank of India, as the case may be, upon the several documents, matters and transactions therein specified as chargeable. The commission chargeable to Government shall be charged by the Reserve Bank of India and credited to Government. *(To other documents including Memoranda of appeals the Registrar shall apply so far as may be the law for the time being in force relating to court fees, as regards the scale of such fees, the manner of levy of such fees, the refund of such fees and in every other respect, in the manner and to the extent that it is applicable to similar documents filed in original proceedings in a District Court and in appeals from decrees and orders of a District Court). *Added by R. 0. C. No. 2219 of 1949. " It cannot be disputed that as a result of this rule, section 7(iv) (a), (b), (c), (d), (e) and (f) of the Act along with the proviso as well as article 17 B of Schedule II of the Act applied to suits filed on the Original Side of the High Court. The latter portion of the order which has been added in 1949 obviously makes applicable to the suits and appeals on the Original Side of the High Court provisions of the Act as regards the scale of fees, the manner of their levy and the refund of fees. It also makes the relevant provisions of the Act applicable in "every other respect". The words "in every other respect" in the context clearly indicate that section 12 which confers upon the appellate court authority or jurisdiction to examine the question about the 1030 sufficiency or otherwise of the court fees paid not only on the memorandum of appellant but also on the plaint in the suit which comes before the court of appeal is obviously intended to apply. It would indeed be illogical to apply the relevant provisions of the Act for the levy of court fees on plaints and memoranda of appeal and not to confer jurisdiction on the appropriate court to examine the sufficiency or otherwise of the court fees paid in that behalf. The power to entertain claims for refund of court fees has been specifically mentioned. A claim for refund can be validly made, for instance in a case where excess court fee has been paid. That is why the provisions of sections 13, 14 and 15 had to be applied in terms. If a litigant is entitled to make a claim for refund of court fees in cases governed by the relevant provisions of the Act, there appears to be no reason why it should not be open to the court to entertain the question about inadequate payment of court fees. Logically, if excess court fees paid should and can be refunded in these proceedings, inadequate or insufficient court fees paid can and should be dealt with on that footing and orders passed to pay the deficit court fees in such cases. It is matters of this kind that are clearly covered by the expression "in every other respect" to which we have just referred. We, therefore, hold that the learned judges below were justified in assuming jurisdiction under sub sections (1) and (2) of section 12. Section 12 consists of two parts. Sub section (1) provides that the question about the proper payment of court fees on the plaint or memorandum of appeal shall be decided by the court in which such plaint or memorandum of appeal is filed. It also lays down that such decision is final between the parties to the suit. Sub section (2) confers upon the court of appeal, reference, or revision, jurisdiction to deal with the question of adequacy of court fee paid on the plaint whenever the suit in which such plaint has been filed comes before it and if the court is satisfied that proper court fees have not been paid then it can pass an order requiring the party to pay so much additional fee as would have been payable if the question had been rightly decided 1031 in the first instance. Since the decision of Krishnaswamy Naidu J. cannot attract the finality mentioned in, section 5 of the Act, it was open to the Division Bench to consider the correctness of the view taken by the learned Chamber Judge; and as they were satisfied that the plaint did not fall under article 17 B of Schedule II, they were entitled to pass appropriate orders under section 12(1) and (2). The appellant, however, contends that the learned judges were in error in directing him to pay court fees on the basis of the value of Rs. 15,00,000 both on his plaint and on his memorandum of appeal because he argues that this decision is inconsistent with the earlier order that the proper court fees to be paid on the memorandum of appeal had to be determined under section 7(iv)(b) of the Act. This order has been passed by the Division Bench under section 5 of the Act and it is final between the parties. This order gives the appellant leave to value his claim for the relief of partition and be exercised his option by valuing it at Rs. 50,000. The valuation thus made by the appellant in respect of the value of his relief of partition for the payment of court fees should and must be taken to be the valuation even for the purposes of jurisdiction and it is on this valuation alone that the appellant can be justly called upon to pay court fees both on the plaint and on the memorandum of appeal. The learned judges were, therefore, in error in not allowing the appellant leave to make amendment in the plaint so as to bring the plaint in conformity with the provisions of section 7, sub section (iv) of the Act. That in brief is the appellant 's case. On the other hand, on behalf of the IntervenerAdvocate General of Madras as well as on behalf of the respondent, it was sought to be urged before us that both the plaint and the memorandum of appeal ought to be valued for the purposes of payment of court fees under section 7(v) of the Act. It is conceded that the question of court fees must be considered in the light of the allegations made in the plaint and its decision cannot be influenced either by the pleas in the 131 1032 written statement or by the final decision of the suit on the merits. The argument, however, is that if all the material allegations contained in the plaint are fairly construed and taken as a whole it would appear that the plaintiff has been ousted from the enjoyment of the properties in suit and his claim for partition in substance is a claim for possession of . the suit properties and as such falls within the provisions of a. 7, sub section (v) of the Act. The question about proper court fees leviable on plaints in which Hindu plaintiffs make claims for partition under varying circumstances has given rise to several conflicting decisions in the High Courts of India. We are, however, not called upon to consider the point as to whether section 7(v) would apply to the present suit or whether the present suit would fall under section 7(iv)(b). In our opinion, the decision of the Division Bench of the Madras High Court that the memorandum of appeal should be taxed for the purposes of court fee under section 7(iv)(b) of the Act is final under the provisions of s.5 of the Act and it cannot be reopened at this stage. It may be that when the Division Bench of the Madras High Court considered this matter under reference made by the Master under section 5, the respondent was not heard. Normally the dispute between the litigant and the Registry in respect of court fees arises at the initial stage of the presentation of the plaint or the appeal and the defendant or the respondent is usually not interested in such a dispute unless the question of payment of court fees involves also the question of jurisdiction of the court either to try the suit or to entertain the appeal. There is no doubt that the question about the adequacy of the court fees leviable on the appellant 's memorandum of appeal was properly referred by the Master to the learned Chief Justice of the Madras High Court and has been decided by the Division Bench of the said High Court in pursuance of the requisite order made by the Chief Justice in that behalf. In such a case, the decision reached by the Division Bench must be held to be final under section 5 of the Act. That is why we have not allowed the merits of this order to be questioned in the present 1033 appeal. We must, therefore, deal with the appellant 's contention on the basis that the court fees on his memorandum of appeal must be levied under section 7(iv) (b) of the Act. The question which still remains to be considered is whether the Division Bench was justified in directing the appellant to pay court fees both on the plaint and on the memorandum of appeal on the basis of the( valuation for Rs. 15,00,000. In our opinion, the appellant is justified in contending that this order is erroneous in law. Section 7, sub section (iv)(b) deals with suits to enforce the right to share in any property on the ground that it is joint family property and the amount of fees payable on plaints in such suits is "according to the amount at which the relief sought is valued in the plaint or memorandum of appeal. " Section 7 further provides that in all suits falling under section 7(iv) the plaintiff shall state the amount at which the value of the relief is sought. If the scheme laid down for the computation of fees payable in suits covered by the several sub sections of section 7 is considered, it would be clear that, in respect of suits falling under sub section (iv), a departure has been made and liberty has been given to the plaintiff to value his claim for the purposes of court fees. The theoretical basis of this provision appears to be that in cases in which the plaintiff is given the option to value his claim, it is really difficult to value the claim with any precision or definiteness. Take for instance the claim for partition where the plaintiff seeks to enforce his right to share in any property on the ground that it is joint family property. The basis of the claim is that the property in respect of which a share is claimed is joint family property. In other words, it is property in which the plaintiff has an undivided share. What the plaintiff purports to do by making a claim for partition is to ask the court to give him certain specified properties separately and absolutely on his own account for his share in lieu of his undivided share in the whole property. Now it would be clear that the conversion of the plaintiff 's alleged undivided share in the joint family property into his separate 1034 share cannot be easily valued in terms of rupees with any precision or definiteness. That is why legislature has left it to the option of the plaintiff to value his claim for the payment of court fees. It really means that in suits falling under section 7 (iv)(b) the amount stated by the plaintiff as the value of his claim for partition has ordinarily to be accepted by the court in computing the court fees payable in respect of the said relief. In the circumstances of this case it is unnecessary to consider whether, under the provisions of this section, the plaintiff has been given an absolute right or option to place any valuation whatever on his relief. What would be the value for the purpose of jurisdiction in such suits is another question which often arises for decision. This question has to be decided by reading section 7 (iv) of the Act along with section 8 of the Suits Valuation Act. This latter section provides that, where in any suits other than those referred to in Court Fees Act section 7, para. 5, 6 and 9 and para. 10 cl. (d), court fees are payable ad valorem under the Act, the value determinable for the computation of court fees and the value for the purposes of jurisdiction shall be the same. In other words, so far as suits falling under section 7, sub section (iv) of the Act are concerned, section 8 of the Suits Valuation Act provides that the value as determinable for the computation of court fees and the value for the purposes of jurisdiction shall be the same. There can be little doubt that the effect of the provisions of section 8 is to make the value for the purpose of jurisdiction dependent upon the value as determinable for computation of court fees and that is natural enough. The computation of court fees in suits falling under section 7 (iv) of the Act depends upon the valuation that the plaintiff makes in respect of his claim. Once the plaintiff exercises his option and values his claim for the purpose of court fees, that determines the value for jurisdiction. The value for court fees and the value for jurisdiction must no doubt be the same in such cases; but it is the value for court fees stated by the plaintiff that is of primary importance. It is from this value that the value for jurisdication must be determined. The result is that it is the amount at 1035 which the plaintiff has valued the relief sought for the purposes of court fees that determines the value for jurisdiction in the suit and not vice versa. Incidentally we may point out that according to the appellant it was really not necessary in the present case to mention Rs. 15,00,000 as the valuation for the purposes of jurisdiction since on plaints filed on the Original Side of the Madras High Court prior to 1953 there was no need to make any jurisdictional valuation. The plaintiffs failure to state the amount at which he values the relief sought is often due to the fact that in suits for partition the plaintiff attempts to obtain the benefit of article 17 B of Schedule II in the matter of payment of court fees. Where the plaintiff seeks to pay the fixed court fee as required by the said article, he and his advisers are apt to take the view that it is unnecessary to state the amount for which relief is sought to be claimed for the purposes of court fees and the valuation for jurisdiction purposes alone is, therefore, mentioned. Often enough, it turns out that the plaint does not strictly attract the provisions of article 17 B of Schedule II and that the court fee has to be paid either under section 7(iv)(b) or under section 7(v) of the Act. If the court comes to the conclusion that the case falls under section 7(iv)(b) or section 7(iv)(c) ordinarily liberty should be given to the plaintiff to amend his plaint and set out specifically the amount at which he seeks to value his claim for the payment of court fees. It would not be reasonable or proper in such a case to hold the plaintiff bound by the valuation made by him for the purposes of jurisdiction and to infer that the said valuation should be also taken as the valuation for the payment of court fees. In this connection we may point out that this is the view taken by the Full Bench decision of the Lahore High Court in Karam Ilahi vs Muhammad Bashir (1). As we have already indicated section 8 of the Suits Valuation Act postulates that the plaintiff should first value his claim for the purpose of court fee and it provides for the determination of the value for jurisdiction on the basis of such claim. In our opinion, therefore, the learned judges (1) A.I.R. (1949) Lah. 1036 of the Madras High Court were in error in holding that the valuation for jurisdiction showed in the plaint should be taken to be the valuation for the payment of court fees on the plaint as well as the memorandum of appeal. In view of their prior decision that the present case fell under section 7(iv)(b), they should have allowed the appellant to amend his valuation for the payment of court fees not only on the memorandum of appeal but also on the plaint. We must accordingly set aside the order under appeal and direct that the plaintiff should be allowed to state the amount of Rs. 50,000 at which he values the relief sought by him for the purpose of section 7(iv)(b) of the Act. Shri Krishnaswamy Ayyangar has orally requested us to give him liberty to make the appropriate amendment in his plaint and we have granted his request. In the result the appeal would be allowed and the appellant directed to pay additional court fees on his plaint on the basis of the valuation of Rs. 50,000 within two months from today. Since the appellant has already paid adequate court fees on his memorandum of appeal, no further order need be passed in that behalf. There will be no order as to costs. Appeal allowed.

% The respondent, a partnership firm, carried on business termed as a "Scheme for Investment". The Registrar of Firms, Societies and Chits, the appellant, holding the view that the investment scheme of the respondent company fell within the prohibited category of prize chits as defined in section 2(e) of the Prize Chits and Money Circulation Scheme (Banking) Act, 1978, seized all the documents of the company and directed the concerned banks not to have accounts in relation thereto. The respondent challenged the action of the appellant by a writ petition in the High Court. The High Court allowed the Writ Petition, quashing the orders of the appellant. The appellant appealed to this Court by special leave. Allowing the appeal, the Court, ^ HELD: The prize chit, by a simple definition, includes a scheme by which a person in whatever name collects moneys from individuals for the purpose of giving prizes and refunding the balance with or without premium after the expiry of a specified period. The reach and range of the definition of 'Prize Chit ' is sweeping. The participation of any person in such chit or scheme has been prohibited, the object being that people should not be attracted to invest their moneys in the hope of getting prizes or gifts. [468A B, Cl There is no doubt that the scheme of the company is primarily for the benefit of the promoter or the company at the cost of the subscribers. Section 2(e) of the Act was intended to cover all such arrangements or schemes. It is emphasized that the Act was intended to ban all kinds of prize chits where people part with their money and risk the chance of 457 getting prizes and gifts, and to protect the people from exploitation. A Any scheme or arrangement in which a person agrees to lose or is make to part with a portion of his payment against the chance of getting any prize or gift, should be considered as prize chit: falling within the inclusive definition under Section 2(e). The scheme of the company is nothing but prize Chit as defined under Section 2(e) of the Act. The conclusion of the High Court is patently erroneous and is unsustainable both on facts and law. The action of the Registrar, appellant, upheld. [473E H;; 473A B] OBSERVATION: The Registrar of the firms will, while taking action against the persons or firms under the Act, take care to see that the members of the scheme are not denied, their contributions or prises which they are legitimately entitled to, if the prize chit is allowed to be run for the full term. [473B C] Srinivasa Enterprises and others vs Union of India etc.; , at 804 and Reserve Bank of India vs Peerless General Insurance and investment Co. Ltd., A.I.R. referred to.

Appeal No. 950 of 1972. (From the Judgment and Order dated the 5 7 1971 of the Calcutta High Court in Appeal No. 130/71). N.R. Khaitan, A.T. Patra and Praveen Kumar, for the appel lant. 126 Lal Narain Sinha, Sol. General, S.N. Prasad and Girish Chandra not present for respondents. The Judgment of the Court was delivered by BHAGWATI, J. The appellant ,owns a jute mill situate at Rajgunj, Railway Station Andul, District Howrah in the State of West Bengal and among other jute products, it manufac tures jute carpet backing cloth at its jute nUll. The appellant exported diverse quantities of jutecarpet backing cloth manufactured by it to various countries during the period 13th July 1966 to 30th November 1966. There was a Tax Credit certificate Scheme framed by the Central Gov ernment under Section 280 ZE read with Section 200 ZC of the Income 'tax Act 1962. The Scheme was called the Tax Credit Certificate (Exports) Scheme 1965. The Scheme pro vided for grant of Tax Credit Certificate in respect of certain categories of goods or merchandise specified in column 2 which were exported to destinations specified in column 4 and the dates of export of which fell after 28th February 1965, for an amount calculated at the rates speci fied in column 3 of the Table attached to the Scheme. Jute carpet backing cloth was covered by Item 1 in column 2 of the Table which specified "goods made of jute not otherwise specified". If the Scheme had remained unamended, the appellant would have been entitled to tax credit certifi cates in respect of the exports made by it of jute carpet backing material, but a notification was issued by the Central Government on 6th June, 1966 in exercise of the powers conferred by Section 280 ZE read with Section 200 ZC, whereby paragraph 3 of the Scheme which .provided for grant of tax credit certificates was amended by re numbering that paragraph as sub paragraph (1) and adding a sub paragraph (2) to the following g effect: "No certificate shall be granted under sub paragraph (1) in respect of any sale proceeds referred to in that sub paragraph or part of such sale proceeds, received after the 5th day of June 1966 in India in according with the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the rules made thereunder". This amendment had the effect of disentitling an ex porter to taxcredit certificate in respect of goods or merchandise exported by him in all cases where sale proceeds or part thereof were received in India after 5th June, 1966. The necessity for making this amendment in the Scheme arose on account of devaluation of the Indian rupee which was made by the Central Government, as it was felt that in view of the devaluation it was not necessary to give any further incentive for export. But it was 'soon realised that this amendment of the Scheme might work hardship in those cases where goods or ' merchandise were exported before 5th June 1966 on the faith of the Scheme but for some reason or the other, the sale proceeds were not received until after that date and, therefore, a second notification dated 8th Au gust, 1966 was issued by the Central Government further. amending the scheme in exercise of the powers conferred under Section 280 ZE read with Section 280 ZC by deleting sub paragraph (2) and instead, adding a proviso which pro vided for grant of tax credit certify 127 cate in respect of goods or merchandise exported on or before 5th June 1966 even if the said proceeds were re ceived after that date and declared that in ease of goods exported after 5th June 1966 the ' rate specified in column 3 of the Table shall be deemed to be nil and no certificate shall be granted in respect of such goods or merchandise. The exports of jute carpet backing cloth made by the appel lant were admittedly after 5th June, 1966 and hence both the notifications adversely affected the appellant by disentitling it to tax credit certificates in respect of these exports. The appellant, therefore, filed a Writ Petition in the High Court of Calcutta for a writ of manda mus for quashing and setting aside both the Notifications and directing the Central Government to consider the appli cation of the appellant for tax credit certificates in respect of the exports without taking into account the two Notifications. Though there were several grounds on which the validity of these two Notifications was challenged in the Writ Petition before the High Court, only one ground was pressed before us on behalf of the appellant and we shall, therefore, refer only to that ground. That ground was that both the Notifications were outside the power conferred on the Central Government under Seetion 260 ZE read with Section 280 ZC, since the Central Government had no power under these Sections to make a scheme providing that no tax credit certificate shaft be granted in case of any goods or merchandise at all. This ground found favour with the single Judge of the High Court but on appeal under clause 15 of the Letters Patent, a Division Bench of the High Court took a different view and negatived the chal lenge. Since the writ petition was dismissed by the Division Bench, the appellant preferred the present appeal after obtaining a certificate of fitness from the High Court. The Indian Income Tax Act 1922 as originally enacted, did not contain the fasciculus of Sections under Chapter XXII providing for grant of tax credit certificates. This Chapter comprising Sections 280 ZC and 280 ZE was inserted by the Finance Act 1965 with effect from lst April 1965 with a view to providing incentive for export purpose of which Section 280 ZC and 280 ZE are material, reads as follows : "280 ZC. (1) Subject to the provisions of this Section, a person who exports any goods or merchandise out of India after the 28th day of February. 1965 and receives the sale proceeds thereon in India in according with the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the rules made there under shall be granted a tax credit certifi cate for an amount calculated at a rate not exceeding fifteen per cent, on the amount of such sale proceeds. (2) The goods or merchandise in respect of which a tax credit certificate shall be granted under sub section (1) (including the destination of their export) and the rate at which the amount of such certificate shall be calculated shall be such as ,may be specified in the Scheme: Provided that different rates may be specified in respect of different goods or merchandise. 128 (3) In specifying the goods or merchan dise (including the destination of their export) and the rates, the Central Government shall have regard to the following factors, namely: (a) the cost of manufacture or production of such goods or merchandise and prices of similar goods in the foreign markets;. (b) the need to develop foreign markets for such goods or merchandise; (c) the need to earn foreign exchange; (d) any other relevant factor". Section 280 ZE conferred power on the Central Government to frame one or more scheme or schemes to be called tax credit Certificate scheme or schemes in the following words: "(1) The Central Government shaH, by notification in the Official Gazette, frame one or more scheme or schemes to be called tax credit certificate scheme or schemes in rela tion to tax credit certificates to be grant ed under this Chapter. (2) A scheme framed under sub section (1) may provide for : (a) the form and manner in which, and the authority to which, applications for the grant of tax credit certificates shall be made; (b) the form in which, and the intervals at which and the authority by which, such cer tificates shall be issued; (c) the verification of any information or particulars furnished, or contained in any application made, by or on behalf of any person entitled to tax credit certificates; (d) the determination of the rights and obligations of a person to whom such certifi cate has been granted and the circumstances in which any right in or title to the said certificate may be transferred to. or devolve on any other person by succession or otherwise; (e) the determination of the rights and obligation of persons who jointly subscribe to an eligible issue of capital; (f) the determination of the rights and obligation of persons who subscribe to an eligible Issue of capital, on behalf, or for the benefit, of any other person; 129 (g) the appointment of any officer. of Government or of the Reserve Bank of India to exercise any rights or perform any duties in connection with the grant of the said certifi cates; (h) the goods or merchandise and the rate or rates for the purposes of section 280 ZC and section 280 ZD and the destination of the export of such goods or merchandise for the purposes of section 280 ZC; (i) any other matter which may be neces sary or proper for the effective implementa tion of the provisions of this Chapter or the scheme. (3)The Central Government may, by noti fication in the Official Gazette, and to, amend, vary or rescind any scheme made under this section". It was in exercise of the power conferred on the Central Government under Section, 280 ZE read with section 280 ZC that the Central Government made the Tax Credit Certificate (Exports) Scheme, 1965. The first Notification dated 6th June 1966 amended paragraph 3 of the Scheme by providing that no tax credit certificate shall be granted in respect of exports where the sale proceeds were received after 5th June, 1966. This provision was. relaxed by ' the second Notification dated 8th August 1966 by providing that in case of exports made on or before 5th June 1966 tax credit cer tificate shall be granted according to the provisions of the Scheme even if the Sale proceeds were received after that date, but in respect of exports made after 5th June, 1966, the rate specified in column 3 of Table A shall be nil and no tax credit certificate shall be granted in respect of such exports. The argument urged on behalf of the appellant was that it was not competent to the Central Government to provide in the Scheme framed under Section 280 ZE read with Section 280 ZC that no tax credit certificate shah be granted in respect of exports of any goods or merchandise. The only power, which, according to the appellant, the Central Government had under these two. Sections, was to frame a scheme speci fying some goods or merchandise the export of which would entitle an exporter to tax credit certificate. The appel lant conceded that the Central Government was. not bound to specify any particular category of goods or merchandise in the Scheme framed by it but the limited contention was that some goods or merchandise must be specified in the Scheme and since in the present case the Scheme as amended provid ed that tax credit certificates shall not be granted in respect of exports of any goods or merchandise, the two Notifications making this amendment in the Scheme were ultra vires the power of the Central Government under Sections 280 ZE and 280 ZC. This contention, though it found favour with the single Judge of the Calcutta High Court who heard the Writ Petition in the first 130 instance, is in our opinion wholly without force and cannot be sustained. A mere look at the scheme of the provisions of Section 280 ZC and 280 ZE is sufficient to expose the invalidity of this contention. Sub section (1) of Section 280 ZC undoubtedly provides that a person who exports any goods or merchandise out of India after 28th February 1965 and receives the sale proceeds thereof in India in accordance with the Foreign Exchange Regulation Act, 1947 and the rules made thereunder, shall be granted a tax credit certificate for an amount calculated at a rate not exceeding 15 per cent of the amount of such sale proceeds. But this fight conferred on an exporter is subject to the other provisions of Section ZC and these other provisions include sub sections (2) & (3). Sub sec tion (2) provides in so many terms that the goods or merch andise in respect of which a tax credit certificate shall be granted under sub section (1) and the rate at which the amount of such certificate shall be calculated, shall be such as may be specified in the Scheme. It is, thus, left to the Scheme to be framed by the Central Government to specify the goods or merchandise in respect of which an exporter, shall be entitled to tax credit certificate as also the rate at which the amount of such certificate shall be calculated. It is. not in respect of every category of goods or merchandise that an exporter can claim to be enti tled to tax credit certificate but it is only in ' respect of such goods or merchandise as are specified in the Scheme. The policy and the principle which would guide the Central Government in selecting the goods or merchandise for this purpose are set out in sub section (3) which provides that in specifying the goods or merchandise as also the rates, the Central Government shall have regard to the various factors set out in that sub section. These are the factors which would influence the choice of the Central Government in selecting the goods or merchandise for the purpose of grant of tax credit certificate and also in determining the rates at which tax credit certificate should be given. Sec tion 280 ZE, sub section (1) confers power on the Central Government to frame one or more Schemes in relation to tax credit certificate to be granted under Section 280 ZC and under sub section (2), such scheme or schemes may provide inter alia for the goods or merchandise and the rate or rates for the purposes of Section 280 ZC. We fail to see how any obligation can be spelt out from these provisions re quiring the Central Government to frame a scheme specifying the goods or merchandise in respecter of which tax credit certificate shall be granted. It would indeed be absurd to suggest that the Central Government is under an obligation to make a scheme and the requirement of the statute would be satisfied so long as the Central requirement specifies some goods or merchandise in the Scheme. There is no reason why the Central Government should not be entitled to say that having regard to the factors set out in sub section (3) of section 280 ZC it does not think it desirable that tax credit certificate should be granted in respect of any goods or merchandise for the time being Sub section (3) of Section 280 ZC confers power on the Central Government in so many terms to rescind a Scheme made by it ,and that also supports the view that the Central Government may keeping in view the factors set out in sub section (3) of Section 280 ZC, 131 decline to make a scheme or provide in the scheme that there shall be no goods or merchandise in respect of which tax credit certificate shall be granted. In the circumstances we think that the Division Bench of the High Court was right in holding that the Central Government was entitled to issue the two impugned Notifications directing that no tax credit certificates shall be granted in respect of goods or merchandise exported on or after 5th June, 1966. We accordingly dismiss the appeal with costs. S.R. Appeal dismissed.

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

Appeal No. 488 of 1975. (Appeal by Special Leave from the Judgment and Order dated 24 9 1973 of the Calcutta High Court in Appeal from Original Order & No. 335/73). 172 Hardayal Hardy, for appellant No. 1. K. Sen, S.K. Mehta, M. Qamaruddin and P.N. Puri, for respondent No. 2. S.C. Manchanda, P.L. Juneja and S.P. Nayar, for respondents. The Judgment of the Court was delivered by GUPTA, J. The first appellant, performing Right Society Limited, (hereinafter called the Society) is a company incorporated under the (English) Companies Acts, 1908 and 1913, having its registered office at Copyright House, 33 Margaret Street, Cavendish Square, London a company limited by guarantee and having no share capital. The Society is an association of composers, authors and publishers of copy right musical works established to grant permission for the performing right in such works. 'Performing right ' means the right of performing in public, broadcasting and causing to be transmitted to subscribers to a diffusion service, in all parts of the world. The members of the Society are required to assign to the Society the performing right in their works, and the Society exercises and enforces on their behalf all rights and remedies in respect of any exploita tion of such works. The Society collects royalties for the issue of licences granting such permission and distributes the royalties to the members of the society, namely, the composers, authors, music publishers and other persons having an interest in the copyright in proportion to the extent to which a member 's work is publicly performed or broadcast after a pro rata deduction of the expenses. Arti cle 43 of, the Articles of Association of the Society pro vides that the business and operations of the Society shall be conducted and managed by a General Council, and Article 48 authorises the General Council to apply the receipts also for certain other purposes. Article 48 reads as follows: "48. The General Council may, before making any distri bution among the Members: (a) Apply out of the receipts such sums as it thinks proper or has agreed to contribute as : (i) Gratuities, donations, pensions and emolu ments to any Member or ex Member of the Society or any person at any time in the employment of the Society, or engaged in any business acquired by the Society, and the 'wives, widows, families and dependants of any such person; (ii) Contributions to any benevolent, pension or similar fund which may be established for the benefit of Members, ex Members or employees of the Society or their wives, widows, families or depend ants . (b) Set aside out of the receipts such sums as it thinks proper as subscriptions, donations, loans, gifts other payments for any of the purposes for which powers is given by paragraphs (iii) and (iv) of Clause 3(f) of the Memorandum of Association, provided 173 that without the assent of the Society in General Meeting the aggregate of all such payment shall not in any one year exceed the sum of one thousand pounds and four thousand pounds 'under the provi sions of those paragraphs respectively. (c) Set aside out of the receipts such sums as it thinks proper as a reserve fund to meet contingen cies, or for future distribution, or for repairing, improving and maintaining any of the property or premises of the Society and for such other purposes as the General Council shall in its absolute dis cretion think necessary or conducive to the inter ests of the Society, and may invest for the several sums so set aside in such investments as it may think fit, and from time to time deal with or vary such investments and dispose of all or any part thereof for the benefit of the Society, and may divide the reserve fund into such special funds as it thinks fit, and employ the reserve fund or any part thereof for the general purposes of the Socie ty, and that without being bound to keep the same separate from the other assets. " On December 13, 1953 the Society entered into an agreement with the President of India owning and controlling broadcasting stations in India and organizing and conducting the same under the name of All India Radio (hereinafter referred to as the licensee) whereby the Society granted to the licen see the authority, (a) to broadcast from the licen see 's sound broadcasting stations in India all musical works included in the repertoire of the Society, and (b) to utilize, solely, for the pur pose of sound broadcasting as aforesaid, any origi nating performance of such musical works, irrespec tive of the source of such performance and the means whereby the such performance is conveyed to the point of broadcast transmission from the licen see 's stations. The agreement was executed in England. It may be stated here that previous to this agreement the parties had entered into a similar agreement in the year 1940. The agreement of 1953 states that the licence granted thereby "shall be deemed to have come into force on April 1, 1949 and shall continue from year to year until determined by either party giving to the other three calendar months ' notice in writing to expire on March 31 in any year". The agreement provides that the licensee shall send to the Society at its registered office in London, the lists of all musical works broadcast in each week during the term of the licence from each of the licensee 's main stations (Delhi, Bombay, Calcutta and Madras) and the external services, and requires the licen see to furnish a return after the first day of April every year during the period of licence, stating the agreegate number of hours occupied during the period ended on the previous 31st March, in broadcasting Western music from each of the licensee 's main and external Service Stations. The agreement further provides that for the rights granted, the licensee will pay to the Society annually a sum calculated at the rate of 2 (Two pounds) per hour of broadcasting Western music from each of the licensee 's 174 main and external Service Stations and that such annual payments must be made to the Society in London. The second appellant, M/s. Natsin India Private Limited is a private limited company incorporated under the (Indian) Companies .Act having its office at 26, Chowringhee Road, Calcutta. The second appellant was appointed by the Society to be its lawful attorney in India by virtue of a power of attorney granted by the Society to the, second appellant in July, 1967. As agent in India for the Society, the second appellant realises on its behalf royalties from cinema houses and other sources where music over which the Society has copyright is played in this country, and has, inter alia, the power to commence and prosecute suits and other proceedings, engage lawyers, and sign plaints, petitions etc. Prior to July, 1967 the Society, a non resident company, used to file its returns of income before the Income tax Officer, Madras, through its former agent in India, M/s. Vernon and Company of Madras. The royalties or fees realised from the licensee were not included in its returns for the assessment years 1947 48 to 1950 51. Later, the .Income tax Officer, Madras, issued notices under section 34(1) of the Income Tax Act, 1922 and assessed the said income after deducting the proportionate administrative ex penses. The appeals taken by Vernon and Company against the supplementary assessment orders for the aforesaid years were dismissed by the Appellate Assistant Commissioner, Madras. The matter rested there and the Society had been paying tax on its income in India including the income from royal ties. received from the licensee without objection until the assessment year 1967 68 for which the accounting year ended December 31, 1966. In the said assessment year also the Income tax Officer, Companies Circle L(II), Madras by his order dated October 23, 1963 assessed the total income of the Society treating the income arising out of the agreement with the licensee as chargeable as was being done all these years. Against this order of assessment, the Society through the second appel lant made a revisional application under section 264 of the Income Tax Act, 1961 (hereinafter re ferred to as the Act) to the Commissioner of In come tax, West Bengal, where the Society 's income tax file had been transferred in the meantime. The Additional Commissioner of Income tax who dealt with the application dismissed the same by his order dated July 18, 1970. The Society then moved a writ petition before the Calcutta High Court chal lenging the order of the Additional Commissioner of Income tax. A rule nisi was issued on the petition by a learned Judge of the High CoUrt but ultimately the rule was discharged and the petition was dis missed. On appeal by the Society, a Division Bench of the High Court affirmed the view taken by the learned single Judge and dismissed the appeal on September 24, 1973. In this appeal by special leave the appellants question the correctness of that decision and challenge the order of assessment on two grounds: (1 ) the agreement between the Society and the Licensee having been executed in England and the royalties being also payable in England, the income out of this agreement is not liable to be taxed in India; 175 (2) the Society being under an obligation to distribute the income to its members, the royalties realised are not really the income of the Society. The first point seems to be covered by the provi sions of section 5(2) (b) of the Act. Section 5(2) reads as follows: "5. Scope of total income: (1) x x x (2) Subject to the provisions of this Act, the total income of any previous year of a person who is a non resident includes all income from whatever source derived which (a) is received or is deemed to be received in India in such year by or on behalf of such person; or (b) accrues or arises or is deemed to accrue or arise t0 him in India during such year. Explanation 1 . Income accruing or arising outside India shall not be deemed to be received in India within the meaning of this section by reason only of the fact that it is taken into account in a balance sheet prepared in India. Explanation 2. For the removal of doubts, it is hereby declared that income which has been included in the total income of a person on the basis that it has accrued or arisen or is deemed to have accrued or arisen to him shall not again be so included on the basis that it is received or deemed to be received by him in India . " The Society is a non resident company, and though it receives the income out of the agreement execut ed not in India but in England, the income undoubt edly accrues or arises in India. On behalf of the appellants it was contended that the source of income was really the agreement which was entered into in England. We do not think that the question as to the source of the income is relevant because subsection (2) of section 5 provides that all income "from whatever source derived" is to be included in the total income of the non resident assessee if the income accrues or arises in India during the relevant year. Reference was also made to section 9 of the Act which enumerates the in comes that shag be "deemed to accrue or arise in India" though actually accruing elsewhere, to establish that the income in question could not be deemed to accrue or arise in India. But the income in this case has in fact accrued in India and no question arises whether it should be "deemed" to accrue or arise in India. 'Whether a certain income accrued or arose in India within the meaning of section 5(2) is a question of fact "which should be looked at and decided in the light of commonsense and plain thinking" as the Calcutta High Court considering a similar question under section 4(1) 176 of the Income Tax Act, 1922 observed.(1) In the case before us the High Court and the income tax authorities considered it a hard matter of fact that the income derived from broadcast of copyright music from the stations of All India Radio arose in India. In our opinion this was the correct view to take and we find no reason to differ from it. The next question is whether the income from the royalties was the Society 's own income. It was Contended on the authority of Raja Bejoy Singh Dudhuria vs Commissioner ofIncome Tax, Bengal,(") that the obligation to disburse the sum among its members diverted the income from the Society to the members, and it could not be called the income of the Society. In Bejoy Singh Dudhuria 's case there was a decree of the court charging the appellant 's whole resources with a specific payment to his step mother, the Privy Council held that the decree had to that extent diverted his income from him and directed it to his step mother, and that to that extent what he received for her was not his income. But where payments are made by the assessee after he has received the income as his, the position is different. This was pointed out by the Judicial Committee in a later case, P.C. Mullick and another (Executors)v. Commissioner of Income tax, Bengal,(1) where the executors in accordance with the directions in the will had paid Rs. 5,537/ to the person who performed the testator 's addya Sradh, and another sum of Rs. 1,25,000/ for pro bate duty out of the income of the estate. It was held that this was not a case in which a portion of the income was by an overriding title diverted from person who would otherwise have received it as in Bejoy Singh Dudhuria 's case but it was "simply a case in which the executors having received the whole income of the estate apply a portion in a particular way pursuant to the directions of their testator, in whose shoes they stand". The true test for the application of the rule of diversion of income by an overriding title has been explained by this Court in Commissioner l,come tax, Bombay City vs Sitaldas Tirathdas(4) "In our opinion, the true test is whether the amount sought to be deducted, in truth, never reached the assessee as his income. Obligations, no doubt, there are in ever), case, but it is the nature of the obligation which is the decisive fact. There is a difference between an amount which a person iS obliged to apply out of his income and an amount which by the nature of the obligation .cannot be said to be a part of the income of the assessee. Where by the obligation income is diverted before it reaches the assessee, it is deductible; but where the income is required to be applied to discharge an obligation after such income reaches the assessee, the same consequence, in law, does not follow. It is the first kind of payment which can truly be excused and not the second. The second payment is merely an obligation to pay another (1) In the matter of V. G. Every. (1937) 5 I.T.R. 216 (Coskello J.) (2) (3) (4) (pp. 374 375). 177 a portion of one 's own income, which has been received and is since applied. The first is a case in which the income never reaches the assessee, who even if he were to collect it, does so, not as part of his income, but for and on behalf of the person to whom it is payable. " On the facts of the present case it is clear that the royalties payable by the licensee under the agreement are realised by the Society as its income; Article 48 of the Society 's Articles of Association puts the matter beyond doubt. Out of the receipts are deducted the expenses and also such other sums as in the discretion of the General Council should be set aside for the purposes men tioned in Article 48. This is a case where the assessee having received the income applies it in a particular way; it is not a case of diversion of income by an overriding charge. The appeal is accordingly dismissed. There will be no order as to costs. P.B.R. Appeal dismissed.

The appellant was a member of the Subordinate Judicial Service of the State. On receipt of certain allegations the High Court made a preliminary enquiry and the State Govern ment suspended him from service. After the final enquiry the High Court recommended to the State Government to remove him from service. The State Public Service Commission, on reference by the Government, stated that he should be exon erated. On the basis of this recommendation, the Governor ordered the appellant 's reinstatement; but the High Court did not give him a posting on the view that the order of the Governor was illegal because of consultation with the Serv ice Commission and in accepting its advice, disregarding the High Court 's own recommendation. The High Court, therefore, suggested to the Government to review its order of rein statement, but the Government did not take any action. The appellant then filed a writ petition in the High Court challenging its refusal to give him a posting. In the mean time the Governor compulsorily retired the appellant from service on his attaining 55 years of age. Dismissing the writ petition the High Court held that the Governor 's order ;reinstating the appellant was void and non est because: (i) it was not passed in accordance with the provisions of article 235 of the Constitution and (ii) the Government could not have consulted the Public Service Commission which was an extraneous body. In appeal to this Court it was contended for the appellant that (i) the Governor was not bound by the recom mendation of the High Court; (ii) the Governor was entitled under article 320(3)(c) to consult the Public Service Commis sion on the question arising out of a disciplinary proceed ing; and (iii) since the appellant was later compulsorily retired, the order of suspension merged with the order of reinstatement, and since no other order of suspension was passed thereafter, he was entitled to full salary upto the date of his compulsory retirement. Dismissing the appeal, HELD: (1)(a) Articles 233 to 237 relating to the subor dinate judiciary are specially carved out and placed in the safe niche of a separate chapter. For the first time in the country 's history appeared in the Constitution of India the concept of control over subordinate courts to vest in the High Courts. But the appointing authority of a Subordinate Judge under article 235 as well as under the Appointment Rules, is the Governor. The High Court, in making its recommenda tion to the Governor for passing the order of removal, had rightly conceded the authority of the Governor. Ordinarily and as a matter of graceful routine, recommendations of the High Court are and should always be accepted by the Gover nor. This is ordinarily so and should be in practice the rule as a matter of healthy convention. But it will not be correct always to insist that the Governor has no authority even under extraordinary circumstances to send the matter for reconsideration. (b) The quality of exclusive control of the High Court is not whittled down by the constitutional device of all orders being issued in the name of the Governor as the head of the State administration. When, therefore. the High Court, exercising disciplinary control, over the subordinate judiciary found, after a proper enquiry, that a certain officer was guilty of gross misconduct and was unworthy to be retained in judicial service and, therefore, recommended to the Governor his removal or dismissal, it is difficult to conceive how and under what circumstances such a recommenda tion could be rejected by the Governor acting with the aid and advice of ministers or, of one of them. [434 G H] The State of West Bengal vs Nripendra Nath Bagchi ; ; and State of Haryana vs Inder Prakash Anand H.C.S., and others [1976] Supp. S.C.R. 603. referred to. (c) Whenever in an extraordinary ease, the Governor feels, for certain reasons, that he is unable to accept the High Court 's recommendations, these reasons will be communicated to the High Court to enable it to reconsider the matter. There is no warrant for introducing another extraneous body between the Governor and the High Court in the matter of disposal of a disciplinary proceeding against a judicial officer. The Governor could not have passed any order on the advice of the Public Service Commission in this case. The advice should be of no other authority than the High Court in the matter of judicial officers. This is the plain impli cation of Article 235. There is no room for any outside body between the Governor and the High Court. In relying upon the advice of the Commission the Governor took alien considerations into account and acted erroneously in passing the order of reinstatement. [435 B, E F] Consultation with the Public Service Commission after receipt of the recommendation of the High Court for removal of the officer was not warranted by the provisions of article 235. Under the Constitution the High Court is the sole custodian over the discipline of judicial officers. [435 D] (2) (a) Just as the High Court staff are not serving under the Government of the State, the judicial officers are also not under the State Government. They hold posts in connection with the affairs of the State but are entirely under the jurisdiction of the High Court for the purpose of control and discipline. article 320(3)(c) is entirely out of place so far as the High Court is concerned dealing with judicial officers. D] Pradvat Kumar Bose vs The Hon 'ble the Chief Justice of Calcutta High Court ; and The High Court, Calcutta vs Amal Kumar Roy [1963]1 SCR 437 distinguished and held inapplicable. (b) The Governor cannot pass any order without reference to the High Court and except on its recommendation. The matter should not be considered from the angle of supremacy between one organ over the other. Solution must be found in harmony and not in cold war between the two organs. [437 A B] (3) The character of the order of dismissal and that of the order of reinstatement in a departmental enquiry is absolutely different. Suspension is a step to dismissal and may culminate in dismissal. When an officer is suspended no work is taken from him but he does not cease to be in serv ice. When he is dismissed the link with the service is snapped and naturally the order of suspension merges in dismissal. When, however, a suspended officer is reinstated an order which is different in content and quality from that of suspension takes effect. The suspended officer, on rein statement, goes back to service. A further order may have to be passed by the authority as to in what manner the period of suspension will be treated. That will be there fore a distinct and separate proceeding apart from the earlier departmental proceeding in which the order of rein statement was passed. If the order of reinstatement is set aside the officer is bound to revert to his immediate ante rior status of suspension in the absence of any order in that behalf from the Court. [438 A C] In the instant case since the order of reinstatement stood quashed, the appellant would have the status of a suspended officer on the date of his compulsory retirement. It is not for this Court to say whether he would be entitled to his 427 full salary while on suspension. Since the officer had already retired, it is not necessary for the Governor to consider the recommendation of the High Court for the pur pose of his removal. [438 E F]

l Appeals Nos. 1545 1546 of 1972. Appeals by Special Leave from the Judgment and Order dated the 4 8 1971 of the Gujarat High Court in S.C.A. Nos. 972 and 1527 of 1970 respectively. 826 V.P. Raman, Addl. Gen., S.N. Prasad .and Girish Chandra, for the Appellant in CA 1182/72 and CAS.1545 46/72. V.M. Tarkunde, V. N. Ganpule, (Miss) M Tarkunde and P.C. Kapoor for Respondents in C.A. 1182/72. V.N. Ganpule, A.K. Srivastava and Vineet Kumar for RR. No. 1 in C.As. 1545 46/72. The Judgment of the Court was delivered by CHANDRACHUD, J. Under the power conferred by Section 3 of the Essential Supplies (Temporary Powers) Act, 1946, the Central Government issued an Order called "The Cotton Tex tiles (Control) Order, 1948". Clause 20 of that Order, as amended, reads thus : "20(1) The Textile Commissioner may from time to time issue directions in writing to any manufacturer or class of manufacturers or the manufacturers generally regarding the classes or specifications of cloth or yarn, and the maximum or the minimum quantities thereof, which they shall or shall not pro duce during such periods as may be specified in the directions, and they shall comply with such directions. 20(2) In the exercise of the powers conferred upon him by sub clause (1) the Textile Commissioner shah have regard to the capacity of the producer to produce cloth and yarn of different descriptions or specifica tions and to the needs of the general pub lic. " The question for our determination in these appeals is whether, if the Textile Commissioner decides to issue appro priate directions to any manufacturer or class of manufac turers, it is obligatory upon him to specify therein the period for which the directions will remain in operation. As hold by this Court in State of Uttar Pradesh vs Jogendra Singh,(1) it is well settled that the word "may" is capable of meaning "must" or "shall" in the light of the context and that where a discretion is conferred upon a public authority coupled with an obligation, the word "may" which denotes discretion should be construed to mean a command. Considering the purpose of the relevant empower ment and its impact on those who are likely to be affected by the exercise of the power, we are clear that the power conferred on the Textile Commissioner to issue directions is coupled with the duty to specify the particular period for which the directions shall be operative. Directions of the kind envisaged by clause 20 are influenced and justified by exigencies which render it imperative that the directions be reviewed from time to time. That becomes feasible only if the directions as limited expressly to a determinate period of" (1) ; at 202. 827 (Chandrachud, J.) time at the end of which a fresh review of facts and circum stances becomes obligatory. There is a fear that a direc tion not limited in point of time may continue to operate even after it has outlived its utility for the reason merely that the need to review it is not clearly perceived. Be sides, the manufacturers must know, in order that they may organize their business in their own interest as well as in the interest of the community at large, as to how long any particular embargo is going to be operative. Accordingly, we affirm the judgment of the High Court though on the ground only that the impugned Notification in so far as it prohibits the printing of any border or heading on sarees etc. for an indefinite period is ultra vires clause 20 of the Cotton Textiles (Control) Order, 1948, since the aforesaid clause casts an obligation or a duty upon the Textile Commissioner to specify the period during which the prohibition shall remain in force. We express no opinion on the other points, including Point No. 6 urged before the High Court for its consideration. The appeals are accordingly dismissed. The appellants will pay one set of costs of these appeals to the respond ents. S.R. Appeals dis missed.

Clause 20 of the Cotton Textiles (Control) Order, 1948 empowers the Textile Commissioner, having regard to the capacity of the producer to produce cloth and yarn of dif ferent description or specification and to the needs of the general public, to issue from time to time such directions in writing to any manufacturer or manufacturers generally regarding the class or specifications of cloth or yarn and the maximum or the minimum quantities thereof which they shall or shall not produce during such periods as may be specified m the directions. The respondents ' challenge to the vires of the notifi cation issued by the appellant which prohibited the printing of any border or heading on sarees etc. for an indefinite period was accepted by the Gujarat High Court. Dismissing the appeals by special leave, the Court, HELD: (1 ) The impugned notification in so far as it prohibits the printing of any border and heading on sarees etc., for an indefinite period is ultra vires clause 20 of the Cotton Textiles (Control) Order 1948 since the aforesaid clause casts an obligation or a duty upon the Textile Com missioner to specify the period during which the prohibition shall remain in force. [827 B C] (2) It is well settled that the word "may" is capable of meaning "must" or "shall" in the light of the context and that where a discretion is conferred upon a public authority coupled with an obligation the word "may" which denotes discretion should be construed to mean a command. Consid ering the purpose of the relevant empowerment and its impact on those who are likely to be affected by the exercise of the power, it is clear that the power conferred on the Textile Commissioner in the Cotton Textile (Control) Order 1948 to issue directions is coupled with a duty to specify the particular period for which the directions shall be operative. [826 F G] State of Uttar Pradesh vs Jogendra Singh ; (a) 202, principles reiterated.

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

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

ivil Appeal No. 3087 of 1991. From the Judgment and Order dated 23.11. 1990 of the Delhi High Court in F.A.O. (O.S.) 123 of 1989. Kapil Sibal, D.D. Thakur, Ms. Lira Goswamy, A.K. Mahajan, A.S. Chandhoik, Ms. Meera Chibar and Dinesh Agnani for the appearing parties. 414 The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J. We grant special leave and proceed to dispose of the appeal. The General Electric Technical Services Company (`GET SCO ') had entered into a contract with Indian Airlines which included, inter alia, the construction and fabrication of air craft testing centre/engine repair centre in Delhi. The GETSCO in turn entered into a contract with M/s Punj Sons (P) Ltd. respondent 1 for getting that work done for Indian Airlines. As per the contract respondent I was required to provide performance bond equal to 30 per cent of the total value of contract price which was to be split up into two performance bonds partly to be released on completion of the project, and the balance upon the expiration of the warran ty. The respondent I was also required to furnish a bank guarantee to secure the mobilisation advance of 25 per cent of the contract value. On 28 October, 1986 respondent 1 furnished the bank guarantee to secure the mobilisation advance of Rs. 1,86,00,000. The guarantee was furnished by Hongkong & Shanghai Bank ( 'the Bank ') respondent 2. Respondent I instead of furnishing the two performance bonds, as agreed upon, wrote a letter dated 3 September, 1987, as follows: ". . Sub: Jet Engine Test & Repair Centre at Palam Finance September 3, 1987 Dear Sir, In terms of above contract we have to submit two separate Bonds for Mobilisation advance & performance guarantee & 25% and 30% of the Contract value. Bank Guarantee for mobilisation advance has already been submit ted and we have not to submit the Performance Bonds for 30% of the Contract value. Since the amount of Performance Bond shall be progres sively utilised over the contract period, in order to reduce Bank charges and marginal money, we would like to suggest alternative proposals to meet with your requirements: 415 AA. We propose to submit performance guaran tees for 30% of the contract value duly signed by two directors in their personal capacity and countersigned by Punj Sons (Pvt) Ltd. This Performance bond shall include identical terms & conditions, as desired in your format. Similar Bond has already been accepted by M/s Hindustan Petroleum Corporation Ltd. Bombay for their Bombay Pune Pipeline Project valued at Rs.7.05 crores. Alternatively, we would suggest submission of a Composite Bank gurantee where amount vacated by Mobilisation advance shall be utilised by Performance Bank Guarantee amount. This Guarantee shall at any time be valid for equivalent to 30% of the contract value, to cover unrecovered mobilisation advance and Performance Guarantee amount of the work certified. We have submitted similar Bonds to a number of our customers to their entire satis faction. May we request you to look into the above arrangement and allow us to submit the above Bond or Composite Bank Guarantee under this Contract. Thanking you and assuring you of our best services at all times. " GETSCO has accepted the revised proposal contained in the aforesaid letter. Consequently, on 25 January 1988, the Bank furnished a composite bank guarantee for Rs.2, 12,25,000. Out of this composite bank guarantee 15 per cent being Rs. 1,06,12,500 would remain in force until 30 June, 1988 and the balance 15 per cent would remain valid till final acceptance certificate i.e. till 30 June 1989. It seems respondent 1 failed to complete the project within the stipulated time as per contractual specifications despite repeated opportunities to rectify defects and defi ciencies prior to August 1988 and thereafter. GETSCO termi nated respondent 1 's right to continue the project and wrote a letter dated 17 April 1989 to the Bank seeking encashment of the bank guarantee dated 25 January 1988 for Rs. 1,06, 12,500. On the same day the bank issued a cashier 's order No. 2605 for Rs. 1,06, 12,500 in favour of GETSCO. On 18 April 1989 the respondent 1 filed a suit for injunction against GETSCO and the Bank in the High Court and obtained an ex parte injunction at the residence 416 of learned Single Judge restraining the Bank and GETSCO from encashing the bank guarantee. On 11 July 1989 the ex parte injunction was vacated. On the same day respondent 1 preferred an appeal to the Division Bench of the High Court and obtained stay of encashment of he bank guarantee. On 23 November 1990, the Division Bench allowed the appeal, set aside the order of learned Single Judge and stayed the encashment of the bank guarantee till the disposal of the respondent 's suit. It seems to us that the Division Bench of the High Court has misconstrued the terms of the bank guarantee and the rights and liabilities of the parties thereunder. The first bank guarantee dated 28 October, 1986 is in these terms: "1. In consideration of General Electric Technical Services co. Inc. Cincinnati, Ohio, U.S.A. C/o M/s P.L. Jaitly & co. IE/12, Jhandewalan Extension, New Delhi (hereinafter called the owner) having agreed to grant mobilisation advance of Rs.18,600,000 [Rs. Eighteen million six hundred thousand only] to M/s Punj Sons Pvt. Ltd., Industrial Area, Kalkaji, New Delhi 110019 (hereinafter called Contractor) under the terms and conditions of Tender No. HB 040 I made by and between, owner and Contractor for Indian Airlines Jet Engine Repair and Test Facilities Phase II Construc tion being undertaken at the Indira Gandhi International Airport, New Delhi (here in called the Agreement) on the production of Bank Guarantee for Rs.18,600,000 [Rupees eighteen million six hundred thousand only] we, Hongkong & Shanghai Banking Corporation, 28 Kasturba Gandhi Marg, New Delhi 110001 (hereinafter called Bank) do hereby undertake to pay to the Owner an amount not exceeding Rs. 18,600,000 [Rs. eighteen million six hundred thousand only], against any loss or damage caused to or suffered or would be caused to or suffered by the owner by reason of any breach by the Contractor of the terms and conditions contained in the Agreement. We, the Bank do hereby undertake to pay the amount due and payable under this Guarantee with demur, merely on demand from the owner stating that the amount claimed is due by way of loss or damage caused to or would be caused to or suffered by the owner by reason of any breach 417 by the Contractor of any of the terms or conditions contained in the Agreement or by reason of the Contractor 's failure to perform the Agreement. Any such demand made on the Bank shall be conclusive, as regards the amount due and payable by the Bank under this Guarantee. However, our liability under this Guarantee shall be restricted to an amount not exceeding Rs.18,600,000 [Rupees eighteen million six hundred thousand only]. We, the Bank further agree that the Guaran tee herein contained shall remain in force and effect during the period that would be taken for the performance of the Agreement and that it shall continue to be enforceable till all the due of the owner under or by virtue of the Agreement have been fully paid and its claims satisfied or discharged or till the owner certifies that the terms and conditions of the Agreement have been tully and properly carried out by the Contractor and accordingly dis charges the Guarantee. Unless a demand or claim under this Guarantee is made on us in writing on or before the date (named in the Agreement as the end of the warrant/mainte nance period) we shall be discharged from all liability under this Guarantee thereafter. We, the Bank further agree with the Owner that the owner shall have the fullest liberty without our consent and without affecting in any manner our obligations hereunder to vary any of the terms and conditions of the Agree ment or to extend time of performance by the Contractor from time to time or to postpone for any time or from time to time any of the powers exercisable by the owner against the Contractor and to forbear or enforce any of the terms and conditions relating to the Agreement and we shall not be relieved from our liability by reason of any such variation, or extension being granted by the owner or any indulgence by the owner to the Contractor or by any such matter or thing whatsoever which under the law relating to sureties would but for this provision have effect of so relieving us. We, the Bank lastly undertake not to revoke this Guarantee during its currency except with the previous consent of the owner in writing. 418 Notwithstanding anything stated above, our liability under this Guarantee is restricted to a sum of Rs. 18,600,000 [Rs. eighteen million six hundred thousand only]. Our Guar antee shall remain in force until the (date named in the Agreement as the end of the warrant/maintenance period). Unless a demand is lodged with us on or before that date 13 day of February 1988, all your rights under the said guarantee shall be forfeited and we shall be relieved and discharged from all liabilities thereafter. " The relevant terms of the second composite bank guarantee dated 25 January 1988 are as follows: "Bank Guarantee No. 86 NDH 918 dt. 28.10.1986 for Rs. 1,86,00,000 favouring M/s General Electric & Technical Services Co. Inc. Under the instructions from our clients M/s Punj Sons (Pvt) Ltd. M 13, Connaught Place, New Delhi 110001, we hereby enhance the value of the above Bank Guarantee upto Rs.21,225,000 [Rupees twenty one million two hundred twenty five thousand only] being 30% of the revised Lumpsum Contract value of Rs.70,750,000 [Rupees seventy million seven hundred fifty thousand only]. This Bank Guarantee shall act 'Composite Bank Guarantee ' for Mobilisation Advance and Performance Bond where in Bank Guarantee, to the extent of amounts of Mobilisation Advance so recovered, shall be utilised towards Two Performance Bonds of 15% of the Contract value each valid upto 30th June, 1988 and 30th June, 1989, respectively. All the other terms and conditions of the original Guarantee will remain unchanged. We, the Hongkong & Shanghai Banking Corpora tion, 28, Kastruba Gandhi Marg, New Delhi 110001, hereby undertakes not to revoke the Guarantee during the currency except with the previous consent of the General Electric 419 and Technical Services Company Inc. Notwithstanding, anything contained herein before our liability under this Guarantee is restricted to Rs.21,225,000 [Rupees Twenty One Million Two Hundred Twenty five thousand only] and the recovery of Mobilisation advance from Running Bills Account will be in accordance with the contract, the Guarantee against such amounts of Mobilisation Advance as so recov ered shall be treated towards performance Guarantee with the intent that after recovery of Mobilisation Advance in full, the Guarantee shall operate against the full value of Per formance Bond. Out of the said guarantee amount, the Bank Guarantee amount of Rs.10,612,500 [Rupees ten million six hundred twelve thousand & five hundred only] being the 15% of lumpsum value of the contract shall remain in force till the completion of the Project i.e. upto 30th June 1988 and the Bank Guarantee for the balance amount i.e. Rs.10,612,500 [Rupees ten million six hundred twelve thousand five hundred only] being 15% amount shall remain in force till final ac ceptance certificate till 30th June, 1989. NOTWITHSTANDING anything contained hereinbe fore our liability under this Guarantee will be restricted to Rs.21,225,000 [Rupees twenty one million two hundred twenty five thousands only] until 30th June 1988 and will automati cally stand reduced from Rs.21,225,000 to Rs.10,612,500 (Rupees ten million six hundred twelve thousand and five hundred only) on 30th June, 1988 without further reference to you. Our liability will continue only to the extent of the balance amount of Rs.10,612,500 [Rupees ten million six hundred twelve thousand and five hundred only] after 30th June, 1988 and will be conditional upon a claim being filed with us in writing on or before 30th June 1989. Thereafter our liability under this guarantee shall stand extinguished and we shall be relieved and discharged from all liabilities thereunder. " The second bank guarantee with which we are concerned makes a reference to the first guarantee. It states that the guarantee is a composite bank guarantee for mobilisation of advance and performance bond. It further states that all the other terms and conditions of 420 the original Guarantee will remain unchanged. The liability of the Bank shall automatically reduce from Rs.2,12,25,000 to Rs. 1,06, 12,500 on 30 June 1988, which will continue even after 30 June, 1988 and will be condi tional upon a claim being filed with the Bank in writing on or before 30 June 1989. In the first guarantee, the Bank has undertaken to pay to GETSCO the amount guaranteed without any demur merely on demand stating that the amount is due by way of loss or damage caused to or would be caused to or suffered by GETSCO by reason of any breach committed by the respondent on any of the terms or conditions contained in the agreement or by reason of respondent 's failure to per form the agreement. It is also provided that any such demand by GETSCO made on the Bank shall be conclusive as regards the amount due and payable by the Bank under the guarantee. The GETSCO has only sought to enforce the bank guarantee for the balance amount of Rs. 1,06, 12,500 on a complaint that respondent 1, has failed to perform the contract as per the terms and conditions. The Bank has undertaken to pay this sum of money and it is a commitment of the Bank. The Bank must honour its commitment when demand is made. Indeed, the Bank was prepared to pay and has in fact issued the Cash ier 's order as per demand from GETSCO, but the Court has directed the Bank not to pay under the guarantee. The question is whether the Court was justified in restraining the Bank from paying to GETSCO under the bank guarantee at the instance of respondent 1. The law as to the contractual obligations under the bank guarantee has been well settled in a catenae of cases. Almost all such cases have been considered in a recent judgment of this Court in U.P. Cooperative Federation Ltd. vs Singh Consultants and Engineers (P) Ltd., wherein Sabyasachi Mukherji, J., as he then was, observed (at 189) 'that in order to restrain the operation either of irrevocable letter of credit or of confirmed letter of credit or of bank guar antee, there should be serious dispute and there should be good prima facie case of fraud and special equities in the form of preventing irretrievable injustice between the parties. Otherwise, the very purpose of bank guarantees would be negatived and the fabric of trading operations will get jeopardised '. It was further observed that the Bank must honour the bank guarantee free from interference by the Courts. Otherwise, trust in commerce internal and interna tional would be irreparably damaged. It is only in excep tional cases that is to say in case of fraud or in case of irretrievable injustice, the Court should interfere. In the concurring opinion one of us (K. Jagannatha Shetty, J.) has observed that whether it is a 421 traditional bond or performance guarantee, the obligation of the Bank appears to be the same. If the documentary credits are irrevocable and independent, the Bank must pay when demand is made. Since the Bank pledges its own credit in volving its reputation, it has no defence except in the case of fraud. The Bank 's obligations of course should not be extended to protest the unscrupulous party, that is, the party who is responsible for the fraud. But the banker must be sure of his ground before declining to pay. The nature of the fraud that the courts talk about is fraud of an "egre gious nature as to vitiate the entire underlying transac tion". It is fraud of the beneficiary, not the fraud of somebody else. The High Court has observed that failure on the part of GETSCO to make a reference to mobilisation advance in the letter seeking encashment of the bank guarantee would be tantamount to suppression of material facts, in the sense that the mobilisation advance was, under the contract to be recovered from the running bills. It was further observed that disclosure of such facts would have put the bank to further inquiry as to what was the amount covered by those bills and what was the corresponding amount of the mobilisa tion advance and to what extent the amount covered by the bank guarantee remained payable. In any event, the High Court said, that GETSCO could not demand full amount of the bank guarantee on 17 April 1989. It seems to us that the High Court has misconstrued the terms of the bank guarantee and the nature of the inter se rights of the parties under the contract. The mobilisation advance is required to be recovered by GETSCO from the running bills submitted by the respondent. If the full mobilisation advance has not been recovered, it would be to the advantage of the respondent. Secondly, the Bank is not concerned with the outstanding amount payable by GETSCO under the running bills. The right to recover the amount under the running bills has no rele vance to the liability of the Bank under the guarantee. The liability of the Bank remained intact irrespective of the recovery of mobilisation advance or the non payment under the running bills. The failure on the part of GETSCO to specify the remaining mobilisation advance in the letter for encashment of bank guarantee is of little consequence to the liability of the Bank under the guarantee. The demand by GETSCO is under the Bank guarantee and as per the terms thereof. The Bank has to pay and the Bank was willing to pay as per the undertaking. The Bank cannot be interdicted by the Court at the instance of respondent 1 in the absence of fraud or special equities in the form of preventing irre trievable injustice between the parties. 422 The High Court in the absence of prima facie case on such matters has committed an error in restraining the Bank from honouring its commitment under the bank guarantee. In the result, we allow the appeal, set aside the im pugned judgment and order of the High Court. The appellant is entitled to costs in this Court. S.L.P. (Civil) No. of 1991 (In CC 13 153/91) Since we have set aside the order of the Division Bench of the High Court this Special Leave Petition does not survive and is accordingly dismissed. No costs. V.P.R. Appeal allowed.

The appellant, an Advocate practising in the High Court was earlier working in the Defence Accounts Department, on re employment, after retiring from the Army. He had filed a Writ Petition before the High Court, claiming certain benefits like pension, gratuity, pay and allowances etc., pertaining to the service rendered by him in the Defence Accounts Department and the Army. The High Court dismissed the Writ Petition. It also dismissed the appellant 's review application. This Court also dismissed his Special Leave Petition against the High Court 's order. Thereafter, the appellant, moved a Contempt Petition under Section 16 of the making some serious allegations against the two Judges of the High Court, who dismissed his Writ Petition and also the Review Petition. A Division Bench of the High Court summarily dismissed the contempt petition. 865 Meanwhile, the Registry of the High Court examined the allegations made in the affidavit filed by the appellant under Rule 5 of the Rules regarding contempts framed by the High Court. A Division Bench of the High Court, before which the matter was placed on the order of the Chief Justice, took cognizance of the criminal contempt and directed issue of notice to the appellant directing him to show cause as to why he should not be punished for contempt of Court. The appellant filed his reply raising certain preliminary objections, contending that the notice was bad for the reasons that (1) the Section of the Act under which cognizance had been taken was not specifically mentioned; (2) the notice did not show sufficient cause as to why the words and expressions used in the offending portions marked had been construed as contemptuous (3) the procedure followed by the High Court was contrary to the rules framed by it; and (4) no consent of the Advocate General had been obtained, and prayed for discharge of the rule of contempt. Meanwhile, on the basis of the High Court 's Order, the appellant inspected the Court records relating to this matter, and thereafter, he was also informed that the proceedings were under the provisions of Article 215 of the Constitution of India. After examining the remarks made by the appellant in his contempt petition the High Court rejected the objections of the appellant/contemner and held that the contemner was guilty of criminal contempt of not only scandalising the Court and lowering its authority but also substantially interfering with the due course of justice. Taking note of the defiant attitude of the contemner who even did not think it necessary to apologise but tried to justify the aspersions, the High Court sentenced the contemner to suffer simple imprisonment for two months. In the appeal before this Court, the contemner who appeared before the Court in person, contended that the order of the High Court should be set aside on the ground of procedural irregularities in that (1) that the offending remarks had not been communicated to him as per Rules 5 and 9 framed by the High Court; (2) that the cognizance of the criminal contempt had not been taken in conformity with Section 15 of the Act; (3) that the procedure, after cognizance as prescribed under Section 17 of the Act had not been followed; and (4) that Article 215 of the Constitution of India did not prescribe any procedure to be followed. He 866 also contended that he had not been given a fair and full hearing and that the Judges had browbeaten and unjustly convicted him ignoring the well settled principle that every person had an inalienable right of making fair criticism, and that the order in question was pre conceived and pre judged one. In his written statement also he made certain remarks about the Judges of the High Court, in attempting to justify his action which had led to the initiation of proceedings for contempt of Court before the High Court. Dismissing the appeal, this Court, HELD: 1.1 The power conferred upon the Supreme Court and the High Court, being Courts of Record under Articles 129 and 215 of the Constitution respectively, is an inherent power and the jurisdiction vested is a special one not derived from any other statute, but derived only from Articles 129 and 215 of the Constitution of India. Therefore, the constitutionally vested right cannot be either abridged by any legislation including or abrogated or cut down. Nor can they be controlled or limited by any statute or by any provision of the Code of Criminal Procedure or any Rules. The special feature of the procedure to be followed in a contempt proceeding being summary procedure, which is recognised not only in India but also abroad, the caution that has to be observed in exercising this inherent power by summary procedure is that the power should be used sparingly, that the procedure to be followed should be fair and that the contemner should be made aware of the charge against him and given a reasonable opportunity to defend himself. [883B D] Sukhdev Singh Sodhi vs The Chief Justice and Judges of the PEPSU High Court, ; ; R.L. Kapur vs State of Madras, ; ; Delhi Judicial Service Association vs State of Gujarat, ; ; section Mulgaokar; , ; Brahma Prakash Sharma and Others vs The State of Uttar Pradesh, ; and D.N. Taneja vs Bhajan Lal, ; relied on. Hira Lal Dixit vs State of U.P., ; ; Advocate General, Bihar vs M.P. Khair Industries, ; ; Ashram M. Jain vs A.T. Gupta, and M.B. Sanghi vs High Court of Punjab and 867 Haryana; , , referred to. State of Bombay vs P. 1958 Bom. Law Reporter, (60) Page 873, referred to. Clements and the Republic Costa Rica vs Erlanger, page 383, Ex parte Terry, ; , 307; , 80 (1888); Matsusow vs United Sates, ; , 339 (5th Cir.) 1956; Sukhdev Singh Sodhi, C.K. Daphtary; Re Abdool vs Mahtab, (1867) 8 WR Cr. 32 page 33; at 40; Andre Paul vs Attorney General, AIR 1936 PC 141, Attorney General vs Butterworth, (1963) 1 Q.B. 696; Reg. vs Odham 's Press Ltd. Ex parte A.G., (1957) 1 Q.B. 73; Morris, vs The Crown Office, , 1081, Offutt vs U.S., ; Jennison vs Baker, 1006, referred to. Belchamber 's Practice of the Civil Court, 1884 Ed. P. 241; Contempt of Court. By Oswald and Halbury 's Law of England (4th Edition) by Lord Hailsham page 3, referred to. 1.2. In the instant case, the offending criticism and the scandalising allegations made by the appellant/contemner are most fatal and dangerous obstruction of justice shaking the confidence of the public in the administration of justice and calling for a more rapid and immediate punitive action. These calculated contemptuous remarks and the sweeping allegations are derogatory in character, not only to the dignity of the Judges and casting aspersions on their conduct in the discharge of their judicial functions but also wounds the dignity of the Court. It is highly painful to note that the appellant/contemner who is none other than an Advocate practising in the same highest Court of the State after having failed to wrench a decision in his favour in his own cause which he prosecuted as party in person has escalatingly scandalised the Court by making libellous allegations which are scurrilous, highly offensive, vicious, intimidatory, malacious and beyond condonable limit. Even a cursory reading of the remarks made against the Judge of the High Court unambiguously show that the potentially prejudicial utterances and the outrageous allegations rumbustiously and invectively made by the contemner with malicious design of attempting to impair the administration of justice have struck a blow on the judiciary and also seriously sullied the image, dignity and high esteem which the office of the Judge of the High Court carried with it and thus impeded the course of justice by fouling its source 868 and stream. The incident in question is a flagrant onslaught on the independence of the judiciary, destructive of the orderly administration of justice and a challenge to the supremacy of the Rule of Law. The maxim "Salus populi suprema lex", that is, "the welfare of the people is the supreme law" adequately enunciates the idea of law. This can be achieved only when justice is administered lawfully, judicially, without fear or favour and without being hampered and thwarted, and this cannot be effective unless respect for it is fostered and maintained. [888E H,889A C] 1.3.To punish an Advocate for Contempt of Court, no doubt, must be regarded as an extreme measure, but to preserve the proceedings of the Courts from the being deflected or interfered with, and to keep the streams of justice pure, serene and undefiled, it becomes the duty of the Court, though painful, to punish the contemner in order to preserve its dignity. No one can claim immunity from the operation of the law of contempt, if his act or conduct in relation to Court or Court proceedings interferes with or is calculated to obstruct the due course of justice. In view of the heinous type of scandalising the Court, the finding of the High Court that the appellant/contemner has made himself guilty of criminal contempt is confirmed. [889D E] 1.4 As regards the sentence, it is clear from the order of the High Court that the appellant had adopted a defiant attitude and tried to justify the aspersions made by him even without thinking it necessary to apologise. Before this Court also, the appellant has neither expressed any contrition nor has he any repentance for the vicious allegations made against the Judges of the High Court. But, on the other hand, he has exhibited a dogged determination to pursue the matter, come what may. A reading of his memorandum of grounds and the written and signed arguments show that he was ventured into another bout of allegations against the High Court Judges and persisted in his campaign of vilification. His conduct in this Court has aggravated rather than mitigating his offence. [889F H] 1.5. Therefore, having regard to the sentencing policy that punishment should be commensurate with the gravity of the offence, the sentence of 2 months ' imprisonment in no way calls for interference and is accordingly confirmed. [890A]

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

Before June 27, 1973, a Section Officer in the Tamil Nadu Secretariat used to be a non Gazetted officer. The Government by order G.O. Ms. No. 1616, Public (Services J) dated June 13, 1973 made the post of a Superintendent of the Secretariat a Gazetted post and re designated it as Section Officer, and by Government order No. 1782, Public (Services J.), dated June 27, 1973, provided that in all matters relating to appointments, transfers, postings punishments and drawl of pay, they continued to be treated as non gazetted Government servants until further orders The respondent was recruited as a Clerk in the Indian Army in the year 1943 and after demobilization was appointed in the Revenue Secretariat of the State Government (Appellant) from March 1948. He was promoted as Section Officer in April 1969 and he continued in the post till March 2, 1976 when he was compulsorily retired from service under Fundamental Rule 56(d). The respondent challenged his compulsory retirement in the High Court contending that the procedure set out in G.O. No. 761 dated March 19, 1973, envisaged that the Review Committee that had to consider the cases of Gazetted Government officers in the Secretariat should be headed by the Chief Secretary and not by the Departmental Secretary and since the Committee which reviewed his case was headed by a Departmental Secretary, the violation had vitiated the retirement order. The High Court accepted this contention and quashed the retirement order In the appeal to this Court it was contended on behalf of the appellant that though under G. O. No. 1782 Public (Service J) dated June 27, 1973, all Superintendents or Section officers were given the status of Gazetted Officers in matters like appointments, transfer and posting they continued to be treated as non gazetted officers and that the constitution of the Review Committee headed by a Departmental Secretary was valid. It was also contended that in the aforesaid order, the word 'appointments ' includes compulsory 'retirements ', also. On the respondent 's behalf it was submitted that the word 'appointments ' in the order dated June 27, 1973 cannot be construed to include 'retirements ' from or 'terminations ' of service, for if that had been the intention there would not have been no difficulty in adding the word 'retirements ' or terminations ' along 472 with the words 'appointments, transfers, postings and punishments ' in the Government order and consequently a restricted interpretation should be placed on this expression. Allowing the appeal, ^ HELD: 1. The order of the High Court is set aside and the order or the respondent 's compulsory retirement upheld. [475 H] 2. Unless a contrary intention appears from the context, a power to appoint should include a power to terminate the appointment including termination by compulsory retirement in accordance with the terms and conditions of service. This fundamental principle underlies Section 16 of the General Clauses Act. [474 H 475 A] 3. The power to terminate the appointment by compulsory retirement or otherwise is a necessary adjunct of the power of appointment and is exercised as an incident to or consequences of that power. Nothing in the Government Order No. 1782, dated June 27, 1973, militates against this rule of construction. [475 B] 4. The "decision ' of the Review Committee had no force proprio vigore. The 'decisions ' were mere recommendations which did not, and could not, have a peremptory effect. The ultimate power to accept or not to accept the recommendations of the Review Committee and to take an effective and definitive decision vests in the Government. Even if there was some irregularity in the constitution of the Review Committee, that could not by itself, have the effect of vitiating the order of the respondent 's compulsory retirement. [475E F] In the instant case it was not the respondent alone (from the category of Section Officers) whose case was reviewed by the Review Committee in question. The cases of all the Section officers of the Secretariat, were reviewed by the same committee. The respondent had therefore not been singled out for a differential treatment. [475G]

Appeal No. 100 of 1.959. Appeal from the judgment and order dated February 11, 1957, of the Bombay High Court in Income tax Reference No. 53 of 1956. R. J. Kolah, Dwarkadas, section N. Andley; J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellants. K. N. Rajagopal Sastri and D. Gupta, for the respondent. May 3. The Judgment of the Court was delivered by S.K. DAS, J. This is an appeal on a certificate granted by the High Court of Bombay, under section 66A (2) of the Indian Income tax Act, 1922. The short facts are these. The Cotton Agents Limited, Bombay, are a limited liability company registered under the Indian Companies Act and will be called the assessee Company in this judgment. It held a substantial number of shares of the New Swadeshi Mills of Ahmedabad, Ltd. (hereinafter called the Mills Company). Messrs. Shivnarayan Surajmal Nemani (called the Nemani group) also held a block of shares of the Mills Company along with its managing agency. The assessment year was 1946 47, and the year ending with Diwali, 1945 (October 18, 1944, to November 4, 1945) was the accounting year. Sometime in 1944 some differences arose between the assessee Company and the Nemani group; these differences were referred to one Govindram Seksaria, who decided that the Nemani group should sell its block of shares to the assessee Company at an agreed price, It was further decided 813 that a sum of Rs. 5,00,000 be paid by the assessee Company to the Nemani group as the price of the, managing agency rights. This arrangement was approved by the share holders of the Mills Company by a resolution dated January 4, 1945, and came into effect immediately. The agreement further was that the assessee Company would come in as managing agents of the Mills Company in place of the Nemani group and would be entitled to the emoluments of the managing agents as from April 1, 1944. The managing agency commission from April 1, 1944, to December 31, 1944, amounted to Rs. 2,20,433 and from January 1, 1945, to March 31, 1945, to Rs. 67,959. The case of the assessee Company was that for the assessment year 1946 47 it was liable to pay tax only on the commission of Rs. 67,959 which it had earned by working as managing agent of the Mills Company and it was not liable to pay tax on the sum of Rs. 2,20,433. This contention of the assessee Company was not accepted by the departmental taxing authorities; but the Tribunal decided in its favour. The assessee Company 's case before the Tribunal was that as the managing agency commission was based on the sales, the com mission accrued to the managing agents as and when the sales were made and furthermore the sum of Rs. 5,00,000 paid by the assessee Company to the retiring managing agents included the purchase price of the managing agency commission which had accrued in the hands of the retiring agents. The Tribunal expressed the view that on a true construction of the relevant managing agency agreement, the 31 per cent. commission on sales made when the Nemani group was the managing agent accrued to that group and not to the assessee Company and thus a debt was created in favour of the Nemani group on every sale during its period of managing agency and only the payment of the debt was deferred till the accounts of the Mills Company were passed at a general meeting; therefore, the commission prior to the close of the year 1944 was assessable in the hands of the Nemani group and thereafter in the hands of the assessee Company. The Department, however, contended that the whole 106 814 of the managing agency commission accrued to the assessee. Thereupon, at the instance of the Department, the Tribunal referred the following question of law to the High Court for decision : " Whether on the facts and circumstances of the case the managing agency commission at 3 1/2 on sales made by the New Swadeshi Mills of Ahmedabad Ltd., between April 1, 1944, and December 31, 1944, accrued to Shivnarayan Surajmal Nemani, or to the assessee ?" The High Court held that the matter was concluded by the decision of this Court in E. D.Sassoon and Company Ltd. vs Commissioner of Income tax, Bombay City (1). With reference to the argument of learned counsel for the assessee Company that the commission was payable on the sale proceeds and not on the profits as in Sassoon 's case (1), it said: " We would have given serious thought to this aspect of the matter but for the view we take that the decision of the Supreme Court with regard to the question of creation of the debt and with regard to the serving by the managing agents for a term of one year being a condition precedent for their being entitled to receive payment, is indistinguishable on the facts of this case. We may point out that here as in the Sassoon 's case (1) the commission of 31 per cent. is to be earned in any year, and also by clause 3 of the agreement the commission is to become due to the managing agents at the end of each financial year. Therefore, till the end of the financial year there is no debt whatsoever created in favour of the managing agents and also their right to receive payment depends upon their having served for a whole year. Under the circumstances we must hold, following the decision of the Supreme Court, that the assessees are liable to pay tax on the whole of the commission as the commission accrued due on March 31, 1945, and they became entitled to receive it at the end of the year. We do not agree with the view of the Tribunal that according to the agreement of the managing agents the debt was (1) ; 815 created in favour of the agents when the goods were sold by the company and that the payment was deferred to a date after the accounts having been passed by the shareholders in the general meeting of the company. In no view of the case can it be said that the debt was created in favour of the agents when the goods were sold ". The answer to the question really depends on a construction of the relevant terms of the managing agency agreement dated March 15, 1925, entered into between the Mills Company and the Nemani group. Before we proceed to a consideration of those terms it is necessary to state that the Department has assessed the Nemani group also to tax in respect of the commission for the period April 1, 1944, to December 31, 1944. That circumstance has, however, no bearing on the question of construction and learned counsel for the Department has stated before us that there is no intention to tax two parties for the same income and if the tax has been realised from both for the same income, it will have to be refunded to one of the two parties after the decision of this Court. We are not considering in this case the validity or otherwise of what are known as protective or precautionary assessments, and nothing said in this judgment has any bearing on that question. We go at once to the Managing Agency Agreement dated March 15, 1925. Under that agreement the managing agents were appointed for a period of fifty. one years, but with liberty to them to resign the appointment and retire from the agency at any time by twelve calendar months ' notice in writing, such notice to expire at the end of any financial year of the Mills Company. Then came cls. (2) and (3) of the agreement, which are material and must be quoted so far as they are necessary for our purpose: ", (2) The remuneration of the Agents as such Agents of the Company as aforesaid shall be as follows: A commission at the rate of three and a half per cent. on the gross proceeds of all sales of the yarn, cloth, waste and other articles manufactured 816 by the Company earned in any year or other period for which the accounts of the Company are made up and laid before the General Meeting." Provided, etc., (it is unnecessary to quote the proviso). " (3) The said commission shall become due to the Managing Agents at the end of each financial year or other period for which the accounts of the Company are to be laid before the General Meeting and shall be payable and paid immediately after such accounts have been passed by the General Meeting". Clauses (6) to (11) recited the rights and duties of the managing agents, one of such rights being to retain, reimburse and pay themselves " all sums due to the agents for commission ". Clauses (13) and (14) dealt with the right to assign the remuneration and the managing agency, and said inter alia that " it shall be lawful for the agents to assign this agreement and the benefit thereof and their rights and privileges, etc., to any person or firm or company having authority by its constitution to become bound by the obligations undertaken by the agents. . . . . and the Company shall be bound to recognise the person, firm or company aforesaid as the agents of the Company". It is unnecessary to read the other clauses of the managing agency agreement, The controversy before us hinges really on the scope and effect of clauses (2) and (3), read in the context of the agreement as a whole. On behalf of the assessee Company the argument is that under el. (2) the managing agency remuneration accrued at the rate of 31 per cent. on the gross proceeds of all sales; the word " all " is emphasised, and it is argued that the remuneration accrued as each sale took place, the totality of sales giving the gross sale proceeds. It is argued that embedded in each sale was the managing agency commission of the assessee Company. It is further suggested on behalf of the assessee Company that though cl. (3) uses the word " due ", it merely indicated the time of payment and not that of accrual. 817 We do not think that this reading of the two clauses is correct. In our view, cl. (3) is the accrual clause;( it shows that the commission became due at the end of each financial year or other period for which the accounts of the Mills Company were to be laid before the General Meeting. Significantly enough, the clause consists of two parts; one part says when the commission becomes due and the other says when it is to be payable and paid. In very clear terms, the clause says that the commission becomes due normally at the end of the financial year, but is payable after the accounts have been passed by the General Meeting. Let us contrast el. (3) with cl. Clause (2) states how the remuneration has to be calculated. It says in effect that the remuneration has to be calculated at the rate of 3 1/2 per cent. on the gross proceeds of all sales, etc., earned in any year or other period for which the accounts of the Mills Company are made up. Putting the two clauses side by side, the conclusion at which we have arrived is that in their true scope and effect cl. (3) determines the time of accrual of the managing agency remuneration and cl. (2) determines the rate at which the remuneration is to be calculated; and as to the time of payment, that is determined by the second part of cl. This view of the managing agency agreement of March 15, 1925, concludes the appeal. If the remuneration accrued at the end of the financial year, then undoubtedly it accrued in the hands of the assessee Company. It remains now to refer briefly to some of the decisions cited at the Bar. As to the decision in Sassoon 's case(1) it is pointed out that the commission there payable by way of remuneration was a percentage on the net profits and this, it is argued for the assessee Company, distinguishes that decision from the present case. Indeed, it is true that in Sassoon 's case (1) the remuneration was fixed at a percentage on the net profits, but the real point of the decision was as to when the remuneration accrued. On this point the majority of learned Judges said: (1) ; 818 " It is clear therefore that income may accrue to an assessee without the actual receipt of the same. If the assessee acquires a right to receive the income, the income can be said to have accrued to him though it may be received later on its being ascertained. The basic conception is that he must have acquired a right to receive the income. There must be a debt owed to him by somebody. There must be as is otherwise expressed debitum in presenti, solvendum in futuro: see W. section Try Ltd. vs Johnson(1) and Webb vs Stenton (2). Unless and until there is created in favour of the assessee a debt due by somebody it cannot be said that he had acquired a right to receive the income or that income has accrued to him". It has been argued before us that the decision requires reconsideration because it failed to make a further distinction, a distinction which it is stated arises in law, between the right to receive payment and the creation of a debt. We consider it unnecessary to consider such a distinction, if any such exists, in the present case. On our view of the managing agency agreement, the commission of the managing agents became due at the end of the financial year and that is when it accrued; and there were neither any debt created nor any right to receive payment when each transaction of sale took place. We were also addressed at some length on the further question whether managing agency is service and if so, whether it must be for one full year or whether apportionment is permissible. These questions do not fall for decision in the present case and we express no opinion thereon. We have proceeded in this case on the footing that the managing agency work of the assessee Company constituted business within the rule of the decision in Lakshminarayan Ram Gopal and Sons Ltd. vs The Government of Hyderabad (3) and on that footing we have decided the question of accrual. In Commissioners of Inland Revenue vs Gardner Mountain & D 'Ambrumenil Ltd. (4), on which learned counsel for the appellant placed reliance, the facts were quite (1) , 539. (2) , 522,527. (3) ; (4) 819 different and on a true construction of the agreements there, it was held that the commission payable under certain under writers ' agreements arose in the year in which the policies were underwritten. That decision proceeded on a construction of the agreements there considered; and it is no authority for construing other agreements of a different character. Learned counsel for the appellant relied on Turner Morrison & Co. Ltd. vs Commissioner of Income tax, West Bengal(1) for his contention that in the sale proceeds of each transaction of sale were embedded the income, profits or gains to be earned by the managing agents and, therefore, the accrual took place on each transaction, of sale. The observations at page 160 of the report on which reliance was placed were made in a different context, namely, in the context of the place of receipt of income in relation to the provisions of section 4(1)(a) of the Income tax Act. Learned counsel for the respondent has pointed out to us that the observations of Lord Justice Fry in Colquhoun vs Brooks (2) were not very accurately reproduced in Rogers Pyatt Shellac and Co. vs Secretary of State for India (3). He submitted that Lord Justice Fry did not say that the words " accrual " or " arising " represented a stage anterior to the point of time when the income becomes receivable and connote a character of the income which is more or less inchoate. He has argued that there is nothing inchoate about the income when it arises or accrues. We consider it unnecessary to embark on a discussion as to how far the aforesaid observations require consideration by us. It is enough to say that on the view which we have taken of the relevant clauses of the managing agency agreement, no income arose or accrued on the sale proceeds at the time of each transaction of sale; the income accrued at the end of the financial year at the rate of 31 per cent. on the gross proceeds of all sales of yarn, cloth, waste, etc., earned in any one year. In that view of the matter, the High Court correctly answered the question. The appeal fails and is dismissed with costs. Appeal dismissed. (1) (2) , 59. (3) , 372.

The appellant, who was employed in the Punjab Police, was found while working as a Police Censor to have detained certain letters illegally and later to have made use of copies and photographs of the them for blackmail. He was consequently reverted to his substantive post of head constable on January 14, 1944. Thereafter an enquiry was started against him by the Superintendent of Police and eventually he was dismissed from service on January 25, 1944. His representations to higher authorities having failed he instituted a suit challenging the legality of the order of dismissal on the grounds, inter alia, (1) that section 240(3) of the Government of India Act, 1935, had not been complied with, and (2) that as the appellant was alleged to have committed a criminal offence the Superintendent of Police could not hold a departmental enquiry in respect of such allegations in view of SS. 29 and 35 of the . Held : (1) that section 243 of the Government of India Act, 1935, 65 which was a special provision with regard to the subordinate ranks of police forces in India, excluded the operation of section 24G(3) of the Act to the appellant, who was, therefore, governed by the conditions of service as provided under the Police Regulations, and that the substance of section 240(3) which was brought into the Police Regulations in September 1946 long after the appellant had been dismissed was not applicable to him. Accordingly, he was not entitled to the second notice, under section 240(3), giving him a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. North West Frontier Province vs Suraj Narain Anand and High Commissioner for India and High Commis sioner for Pakistan vs I. M. Lal, , referred to. (2) that the provisions of the , relating to offences committed by a police officer above the rank of a constable do not bar a departmental enquiry in respect of a matter where it is also possible to prosecute such an officer under that Act.

: Criminal Appeal No. 10 of 1979. Appeal by Special Leave from the Judgment and Order dated 12 10 1978 of the Madhya Pradesh High Court in Criminal Revision No. 336 of 1978. 622 D. N. Mukherjee and N. R. Choudhary for the Appellant. Dalveer Bhandari for Respondent No. 1. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. On the report of the Station House Officer, Manak Chowk, Ratlam, that there was a dispute between Mathuralal and Bhanwarlal concerning a house situated in Kambalpatti, Ghas Bazar, Ratlam, which was likely to cause a breach of the peace, the Sub Divisional Magistrate, Ratlam, passed a preliminary order under Section 145(1) of the Code of Criminal Procedure 1973, on Ist March, 1978. On 2nd March, 1978, the learned Magistrate attached the subject of dispute under Section 146(1) Criminal Procedure Code considering the case to be one of emergency. Thereafter, when the learned Magistrate wanted to proceed with the enquiry under Section 145 Criminal Procedure Code, an objection was raised by Mathuralal that such an enquiry was incompetent once the subject of the dispute had been attached under Section 146 Criminal Procedure Code. The objection was overruled by the learned Magistrate. Successive Revisions taken before the Sessions Judge and the High Court having borne no fruit, Mathuralal has filed the present appeal by special leave of this Court. The High Court, we may mention here, thought that the matter was concluded against the appellant by the decision of this Court in Chandu Naik & Ors. vs Sitaram B. Naik & Anr.(1) Shri Mukherji, learned counsel for the appellant urged that under Section 146 of the Criminal Procedure Code of 1973, an attachment of the subject of dispute could be effected in three situations: (i) if the Magistrate at any time after making the order under Section 145(1) considered the case to be one of emergency, or (ii) if he decided that none of the parties was then in such possession as was referred to in Section 145, or (iii) if he was unable to satisfy himself as to which of them was then in such possession of the subject of dispute. The attachment so effected, regardless of the situation consequent upon which it was effected, was to subsist until a competent Court determined the rights of the parties with regard to the person entitled to possession. This, he urged, clearly indicated that after an attachment was effected it was the Civil Court and not the Magistrate that was to have further jurisdiction in the matter. He contrasted the provisions of Section 146(1) of the present code with the provisions of Section 146(1) and the third proviso to Section 145(4) of the Criminal Procedure Code of 1898 as amended by Act 26 of 1955. He drew our 623 attention to the circumstance that the third proviso to Section 145(4) of the old Code empowered the Magistrate, if he considered the case one of emergency, to attach the subject of dispute pending his decision under that Section, while Section 146(1) of the previous Code empowered the Magistrate to attach the subject of dispute if the Magistrate was of the opinion that none of the parties was then in possession or if the Magistrate was unable to decide as to which of them was in such possession and thereafter to refer to the Civil Court for decision the question whether any and which of the parties was in possession of the subject of dispute. Therefore, he said, under the previous Code, in the case of attachment because of emergency the Magistrate was himself competent to decide the question of possession and in the other two cases he was to refer the dispute to the Civil Court, whereas, under the present Code, in all the three situations the Magistrate was to leave the matter for adjudication by the Civil Court. Thus, the submission of Shri Mukherji was that while under the previous Code it was permissible to attach the subject of dispute pending enquiry by the Magistrate as contemplated by Section 145, such attachment pending decision by the Magistrate was not permissible under the provisions of the present Code. According to him so soon as the Magistrate effected an attachment he had nothing further to do except await the decision or the directions of the Civil Court. Though at first blush there appeared to be force in the submissions of Shri Mukherji, a closer scrutiny of the provisions of Sections 145 and 146 exposes their unsoundness. It may perhaps be desirable, at this stage to extract the provisions of Sections 145 and 146, to the extent that they are relevant, in the Code of 1898 before it was amended in 1955, in the Code of 1898 after it was amended in 1955 and in the Code of 1973: 624 (a) 145 (1) Whenever a District Magistrate, Sub divisional Magistrate or Magistrate of the first class is satisfied from a police report or other information that a dispute likely to cause a breach of the peace exists concerning any land or water or the boundaries thereof, within the local limits of his jurisdiction, he shall make an order in writing, stating the grounds of his being so satisfied, and requiring the parties concerned in such dispute to attend his Court in person or by pleader, within time to be fixed by such Magistrate, and to put in written statements of their respective claims as respects the fact of actual possession of the subject of dispute. (2). . (3) A copy of the order shall be served in manner provided by this Code for the service of a summons upon such person or persons as the Magistrate may direct, and at least one copy shall be (b) 145 (1) Whenever a District Magistrate, Sub divisional Magistrate or Magistrate of the first class is satisfied from a police report or other information that a dispute likely to cause a breach of the peace exists concerning any land or water or the boundaries thereof, within the local limits of his jurisdiction, he shall make an order in writing, stating the grounds of his being so satisfied, and requiring the parties concerned in such dispute to attend Court in person or by pleader, within a time to be fixed by such Magistrate and to put in written statements of their respective claims as respects the fact of actual possession of the subject of dispute and further requiring them to put in such documents, or to adduce, by putting in affidavits, the evidence of such persons, as they rely upon in support of such claims. (2). . (3) A copy of the order shall be served in manner provided by this Code for the service of a summons upon such person or persons as the Magistrate may direct, and at least one copy shall be (c) 145 (1) Whenever an Executive Magistrate is satisfied from a report of a police officer or upon other information that a dispute likely to cause a breach of the peace exists concerning any land or water or the boundaries thereof, within his local jurisdiction, he shall make an order in writing, stating the grounds of his being so satisfied, and requiring the parties concerned in such dispute to attend his Court in person or by pleader, on a specified date and time, and to put in written statements of their respective claims as respects the fact of actual possession of the subject of dispute. (2). . (3) A copy of the order shall be served in manner provided by this Code for the service of a summons upon such person or persons as the Magistrate may direct, and at least one copy shall be 625 published by being affixed to some conspicuous place at or near the subject of dispute. (4) The Magistrate shall then, without reference to the merits or the claims of any of such parties to a right to possess the subject of dispute, peruse the statements so put in, hear the parties, receive all such evidence as may be produced by them, respectively, consider the effect of such evidence, take such further evidence (if any) as he thinks necessary, and, if possible, decide whether any and which of the parties was at the date of the order before mentioned in such possession of the said subject: Provided that. . Provided also that, if the Magistrate considers the case one of emergency, he may at any time attach the subject of dispute, pending his decision under this section. (5) Nothing in this section shall preclude any party so required to attend, or any other person interested, from showing that no such dispute as aforesaid exists published by being affixed to some conspicuous place at or near the subject of dispute. (4) The Magistrate shall then, without reference to the merits or the claims of any of such parties to a right to possess the subject of dispute, peruse the statements, documents and affidavits, if any, so put in, hear the parties and conclude the inquiry, as far as may be practicable, within a period of two months from the date of the appearance of the parties before him and, if possible, decide the question whether any and which of the parties was at the date of the order before mentioned in such possession of the said subject: Provided that. . Provided further that. . Provided also that, if the Magistrate considers the case one of emergency, he may at any time attach the subject of dispute, pending his decision under this section. (5) Nothing in this section shall preclude any party so required to attend, or any other person interested, from showing that no such dispute as aforesaid exists published by being affixed to some conspicuous place at or near the subject of dispute. (4) The Magistrate shall then, without reference to the merits or the claims of any of such parties to a right to possess the subject of dispute, peruse the statements so put in, hear the parties, receive all such evidence as may be produced by them, take such further evidence, if any, as he thinks necessary, and, if possible, decide whether any and which of the parties was, at the date of the order made by him under sub section (1), in possession of the subject of dispute: Provided that. . (5) Nothing in this section shall preclude any party so required to attend, or any other person interested, from showing that no such dispute as aforesaid exists 626 (a) or has existed; and in such case the Magistrate shall cancel his said order, and all further proceedings thereon shall be stayed, but, subject to such cancellation, the order of the Magistrate under sub section (1) shall be final. (6) If the Magistrate decides that one of the parties was or should under the first proviso to sub section (4) be treated as being in such possession of the said subject, he shall issue an order declaring such party to be entitled to possession thereof until evicted therefrom in due course of law, and forbidding all disturbance of such possession until such eviction and when he proceeds under the first proviso to sub section (4), may restore to possession the party forcibly and wrongfully dispossessed. (7). . (8). . (9). . (10). . (146) (1) If the Magistrate descides that none of the parties was then in such possession, or is unable to satisfy himself (b) or has existed; and in such case the Magistrate shall cancel his said order, and all further proceedings thereon shall be stayed, but, subject to such cancellation, the order of the Magistrate under sub section (1) shall be final. (6) If the Magistrate decides that one of the parties was or should under the 2nd proviso to sub section (4) be treated as being in such possession of the said subject, he shall issue an order declaring such party to be entitled to possession thereof until elected therefrom in due course of law, and forbidding all disturbance of such possession until such eviction and when he proceeds under the second proviso to sub section (4), may restore to possession the party forcibly and wrongfully dispossessed. (7). . (8). . (9). . (10). . (146) (1) If the Magistrate is of opinion that none of the parties was then in such possession, of the subject of dispute, he (c) or has existed; and in such case the Magistrate shall cancel his said order, and all further proceedings thereon shall be stayed, but, subject to such cancellation, the order of the Magistrate under sub section (1) shall be final. (6) (a) If the Magistrate decides that one of the parties was or should under the proviso to sub section (4) be treated as being in such possession of the said subject, he shall issue an order declaring such party to be entitled to possession thereof until evicted therefrom in due course of law, and forbidding all disturbance of such possession until such eviction and when he proceeds under the first proviso to sub section (4), may restore to possession the party forcibly and wrongfully dispossessed. (b). . (7). . (8). . (9). . (10). . (146) (1) If the Magistrate at any time after making the order under sub section (1) of Section 145 considers the case to be 627 as to which of them was then in such possession of the subject of dispute, he may attach it until a competent Court has determined the rights of the parties thereto, or the person entitled to possession thereof: Provided that the District Magistrate or the Magistrate who has attached the subject of dispute may withdraw the attachment at any time, if he is satisfied that there is no longer any likelihood of a breach of the peace in regard to the subject of dispute. (2) When the Magistrate attaches the subject of dispute, he may, if he thinks fit and if no receiver of the property, the subject of dispute, has been appointed by any Civil Court appoint a receiver thereof, may attach it, and draw up a statement of the facts of the case and forward the record of the proceeding to a Civil Court of competent jurisdiction to decide the question whether any and which of the parties was in possession of the subject of dispute at the date of the order as explained in sub section (4) of section 145; and he shall direct the parties to appear before the Civil Court on a date to be fixed by him: Provided that the District Magistrate or the Magistrate who has attached the subject of dispute may withdraw the attachment at any time, if he is satisfied that there is no longer any likelihood of a breach of the peace in regard to the subject of dispute. (1A). . (1B). . (1C). . (1D). . (1E). . (2) When the Magistrate attaches the subject of dispute, he may, if he thinks fit and if no receiver of the property, the subject of dispute, has been appointed by any Civil Court appoint a receiver thereof, one of emergency, or if he decides that none of the parties was then in such possession as is referred to in section 145, or if he is unable to satisfy himself as to which of them was then in such possession of the subject of dispute until a competent court has determined the rights of the parties thereto with regard to the person entitled to the possession thereof : Provided that such Magistrate may withdraw the attachment at any time if he is satisfied that there is no longer any likelihood of breach of the peace with regard to the subject of dispute. (2) When the Magistrate attaches the subject of dispute he may, if no receiver in relation to such subject of dispute, has been appointed by any Civil Court, make such arrangements as he considers proper for 628 (a) who subject to the control of the Magistrate, shall have all the powers of a receiver appointed under the Code of Civil Procedure. Provided that, in the event of a receiver of the property, the subject of dispute, being subsequently appointed by any Civil Court, possession shall be made over to him by the receiver appointed by the Magistrate, who shall thereupon be discharge. (b) who subject to the control of the Magistrate, shall have all the powers of a receiver appointed under the Code of Civil Procedure. Provided that, in the event of a receiver of the property, the subject of dispute, being subsequently appointed by any Civil Court, possession shall be made over to him by the receiver appointed by the Magistrate, who shall thereupon be discharge. (c) looking after the property or if he thinks fit, appoint a receiver thereof, who shall have, subject to the control of the Magistrate all the powers of a receiver appointed under the Code of Civil Procedure, 1908 (5 of 1908): Provided that in the event of a receiver being subsequently appointed in relation to the subject of dispute by any Civil Court, the Magistrate (a) shall order the receiver appointed by him to hand over the possession of the subject of dispute to the receiver appointed by the Civil Court and shall thereafter discharge the receiver appointed by him; (b) may make such other incidental or consequential orders as may be just. 629 Quite obviously, Sections 145 and 146 of the Criminal Procedure Code together constitute a scheme for the resolution of a situation where there is a likelihood of a breach of the peace because of a dispute concerning any land or water or their boundaries. If Section 146 is torn out of its setting and read independently of Section 145, it is capable of being construed to mean that once an attachment is effected in any of the three situations mentioned therein, the dispute can only be resolved by a competent Court and not by the Magistrate effecting the attachment. But Section 146 cannot be so separated from Section 145. It can only be read in the context of Section 145. Contextual construction must surely prevail over isolationist construction. Otherwise, it may mislead. That is one of the first principles of construction. Let us therefore look at Section 145 and consider Section 146 in that context. Section 145 contemplates, first, the satisfaction of the Magistrate that a dispute likely to cause a breach of the peace exists concerning any land or water or their boundaries, and, next, the issuance of an order, known to lawyers practising in the Criminal Courts as a preliminary order, stating the grounds of his satisfaction and requiring the parties concerned to attend his Court and to put in written statements of their respective claims as regards the fact of actual possession of the subject of dispute. A preliminary order is considered so basic to a proceeding under Section 145 that a failure to draw up a preliminary order has been held by several High Courts to vitiate all the subsequent proceedings. It is by making a preliminary order that the Magistrate assumes jurisdiction to proceed under Sections 145 and 146. In fact, the first of the situations in which an attachment may be effected under Section 146 of the 1973 Code has to be "at any time after making the order under sub section (1) of Section 145" while the other two situations have, necessarily, to be at the final stage of the proceeding initiated by the preliminary order. Now, the preliminary order is required to enjoin the parties not only to appear before the Magistrate on a specified date but also to put in their written statements. Sub section (3) of Section 145 prescribes the mode of service of the preliminary order on the parties. Sub section (4) casts a duty on the Magistrate to peruse the written statements of the parties, to receive the evidence adduced by them, to take further evidence if necessary and, if possible, to decide which of the parties was in possession on the date of the preliminary order. If the Magistrate decides that one of the parties was in possession he is to make a final order in the manner provided by sub section (6). Provision for the two situations where the Magistrate is unable to decide which of the parties was in possession or where he is of the view that neither of them was in possession is made in Section 146 630 under which he may attach the subject of dispute until the determination of the rights of parties by a competent Court. The scheme of Sections 145 and 146 is that the Magistrate, on being satisfied about the existence of a dispute likely to cause a breach of the peace, issues a preliminary order stating the grounds of his satisfaction and calling upon the parties to appear before him and submit their written statements. Then he proceeds to peruse the statements, to receive and to take evidence and to decide which of the parties was in possession on the date of the preliminary order. On the other hand if he is unable to decide who was in such possession or if he is of the view that none of the parties was in such possession he may say so. If he decides that one of the parties was in possession, he declares the possession of such party. In the other two situations he attaches the property. Thus a proceeding begun with a preliminary order must be followed up by an enquiry and end with the Magistrate deciding in one of three ways and making consequential orders. There is no half way house, there is no question of stopping in the middle and leaving the parties to go to the Civil Court. Proceeding may however be stopped at any time if one or other of the parties satisfies the magistrate that there has never been or there is no longer any dispute likely to cause a breach of the peace. If there is no dispute likely to cause a breach of the peace, the foundation for the jurisdiction of the magistrate disappears. The magistrate then cancels the preliminary order. This is provided by Section 145 sub section (5). Except for the reason that there is no dispute likely to cause a breach of the peace and as provided by Section 145(5), a proceeding initiated by a preliminary order under Section 145(1) must run its full course. Now, in a case of emergency, a magistrate may attach the property, at any time after making the preliminary order. This is the first of the situations provided in Section 146(1) in which an attachment may be effected. There is no express stipulation in Section 146 that the jurisdiction of the magistrate ends with the attachment. Nor is it implied. Far from it. The obligation to proceed with the enquiry as prescribed by Section 145 sub section 4 is against any such implication. Suppose a magistrate draws up a preliminary order under section 145(1) and immediately follows it up with an attachment under Section 146(1), the whole exercise of stating the grounds of his satisfaction and calling upon the parties to appear before him and submit their written statements becomes futile if he is to have no further jurisdiction in the matter. And yet he cannot make an order of attachment under Section 146(1) on the ground of emergency without first making a preliminary order in the manner prescribed by Section 145(1). There is no reason why we should adopt a construction which will lead to 631 such inevitable contradictions. We mentioned a little earlier that the only provision for stopping the proceeding and cancelling the preliminary order is to be found in Section 145(5) and it can only be on the ground that there is no longer any dispute likely to cause a breach of the peace. An emergency is the basis of attachment under the first limb of Section 146(1) and if there is an emergency, no one can say that there is no dispute likely to cause a breach of the peace. Let us examine if a comparative study of the provisions as they stood, before 1955 and after 1955 under the old Code and as they now stand under the 1973 Code lead us to a conclusion other than that indicated in the preceding paragraph. From the comparative table of the provisions, it is seen that there were two principal changes made by the 1955 amendment. The first was that the preliminary order was also to require the parties to put in documents and the affidavits of such persons as they intended to rely upon in support of their claims. The magistrate was to decide the case on a consideration of the written statements the documents and the affidavits put in by the parties and after hearing them. The position earlier was that the parties had the right to adduce evidence and the magistrate could take further evidence if he so desired. The second change was that in the two situations where he was unable to satisfy himself as to which of the parties was in possession or where he decided that none of the parties was in possession, after attaching the property, the magistrate was himself to refer the dispute to the Civil Court instead of leaving it to the parties to go to the Civil Court. He was to obtain the finding of the Civil Court and thereafter conclude the proceeding under Section 145 Criminal Procedure Code in conformity with the decision of the Civil Court. The revised procedure introduced by the 1955 amendment was not found to work satisfactorily and, therefore, it was, apparently, thought desirable to revert to the old procedure. The provisions of Sections 145 and 146 of the 1973 Code are substantially the same as the corresponding provisions before the 1955 amendment. The only noticeable change is that the second proviso to Section 145(4) (as it stood before the 1955 amendment) has now been transposed to Section 146 but without the words "pending his decision under this Section" and with the words "at any time after making the order under Section 145(1)" super added. The change, clearly, is in the interests of convenient draftsmanship. All situations in which an attachment may be made are now mentioned together in Section 146. The words "pending his decision under this section" have apparently been omitted as unnecessary since Section 145 provides how the proceeding initiated by a preliminary order must pro 632 ceed and end and therefore an attachment made 'at any time after making under Section 145(1) ' can only continue until the termination of the proceeding. At the termination of the proceeding, if he finds one of the parties was in possession as stipulated, the magistrate must make an order as provided in Section 145(6) and withdraw the attachment as provided in Section 146(1) since there can be no dispute likely to cause a breach of the peace once an order in terms of Section 145(6) is made. In our view, it is wrong to hold that the magistrate 's Jurisdiction ends as soon as an attachment is made on the ground of emergency. A large number of cases decided by several High Courts some taking one view and the other a different view were read to us. We do not consider it necessary to refer to them except to acknowledge that we derived considerable assistance from the judgment of Lahiri, J., in Kshetra Mohan Sarkar vs Paran Chandra Mandal(1), in arriving at our conclusion. We may also add that the question now at issue did not arise for consideration in Chandu Naik & Ors. vs Sitaram B. Naik & Anr. (supra). What was decided there was that a proceeding under Section 145 Criminal Procedure Code did not abate because of Section 8 of the Maharashtra Vacant Land (Prohibition of unauthorised Occupation and Summary Eviction) Act, 1975. In the result the appeal is dismissed. P.B.R. Appeal dismissed.

The Kerala Building Tax Act, 1975 passed by the State Legislature under Entry 49 of List II (Taxes on lands and buildings) is imposed as a non recurring tax on buildings, constructed on or after April 1, 1973, the "capital value" of which exceeds Rs. 20,000/ . The term "capital value" is defined to mean the value arrived at by multiplying the 'annual value" of a building by sixteen. "Annual value" means the gross annual rent on which the building may, at the time of completion, be expected to let from month to month or from year to year. Section 6 provides that the annual value of a building shall be the annual value fixed for that building in the assessment books of the local authority (which includes a Municipal Corporation or a municipality and so on) within whose area the building is situate. Section 6(4) provides that in determining the annual value of a building regard must be had to the location of the building, the nature and quality of the structure of the building, the capability of the building and so on. An assessee objecting to the assessment of building tax assessed or denying the liability may appeal to the Appellate Authority under section 11. But no appeal lies unless the building tax due has been paid. Although no appeal lies from the decision of the Appellate Authority, provision is made for reference to the District Court on a question of law and the District Collector is given power to revise the order of the Appellate Authority and the Government has the power of revision against the order of the District Collector. Jurisdiction of Civil Court is barred by, section 27 of the Act. The High Court, having upheld the validity of the Act, the appellants in their appeals impugned the view of the High Court. It was contended on behalf of the appellants that (1) the tax levied on buildings being a tax on the capital value of the assets falls within the scope of entry 86 of List I of the Seventh Schedule and, therefore, is beyond the legislative competence of the State Legislature; (2) the Act was unconstitutional in that it imposed a tax on buildings retrospectively (over a period of 2 years of its enactment); (3) it was not merely a tax on buildings but a tax on the buildings, and lands of those buildings; (4) the method of determining the capital value of a building on the basis of its annual value is hypothetical and arbitrary and is, therefore, unconstitutional. ^ HELD: 1 There is no force in the argument that the State Legislature was not competent to impose a tax on the buildings under entry 49 of List II. [818 B] (a) Article 366(28) defines tax to include imposition of any tax whether general, local or special. The word "tax" in its widest sense includes all money 805 raised by taxation and includes tax levied both by the Central and State Legislatures as well as rates and charges levied by local authorities [815 D E] (b) The term "assets" referred to in entry 86 of List I means "Property in general, all that one owns. " If a tax is levied on "all that one owns" or his total assets, it would fall within the purview of entry 86 and therefore would be outside the legislative competence of the State Legislature. On the other hand, if a tax is directly imposed on "buildings" it will bear direct relation to the buildings owned by the assessee. Though the building owned by an assessee is a component of his total assets, the tax under entry 86 will not bear any direct or definable relation to his building. A tax on "buildings" is, therefore, a direct tax on buildings as such. It is not a personal tax without reference to any particular property. [815 H, 816 A B] (c) A tax has two elements: the person, thing or activity on which it is imposed and the amount of the tax. The amount of tax may be measured in many ways. There is a distinction between the subject matter of a tax and the standard by which the amount of tax is measured. Thus a building may be the subject matter of a tax like wealth tax (entry 86 List I) or it may also be the subject of a direct tax under entry 49 of List II. The two taxes being separate and distinct, the do not over lap each other. Therefore the tax imposed in the instant case is well within the competence of the legislature. [816 E Fl Sudhir Chandra Nawn vs Wealth Tax officer Calcutta & Ors., ; ; Assistant Commissioner of Urban Land Tax and ors. vs The Buckingham and Carnatic Co. Ltd., Etc., ; referred to. (d) It is settled law that the quantum of tax levied by the taxing statute and the conditions subject to which it is levied are matters within the competence of the legislature and so long as the tax is not confiscatory or extortionate the reasonableness of the tax cannot be questioned in a court of law. [828 D E] Rai Ramkrishan & Ors. vs The State of Bihar, ; ; Kunnathat Thathunni Moopil Nair vs The State of Kerala & Anr., ; referred 2(a). The Act is not retrospective in the strictly technical sense of the term. A statute is deemed to be retrospective, when it takes away or impairs any vested right acquired under existing laws or creates a new obligation in respect F ' of the transactions or considerations already past. The Act, though passed in April 1975, had imposed a tax on buildings with retrospective effect from April 1973. By so doing it has not taken away or impaired any vested right of the owner of the building acquired under any existing law. Absence of an earlier taxing statute cannot be said to create a "vested right" under any existing law. Nor has any new obligation or disability been attached in respect of any earlier tax transaction. If the language of the enactment shows that the legislature thought it expedient to authorise the making of retrospective rates, it can fix the period as to which the rate may be retrospectively made. [828 D H] Bradford Union vs Wilts, ; The Tata Iron & Steel Co Ltd. vs The State of Bihar, ; referred to. (b) The choice of the legislature to impose a tax on buildings with effect from April 1, 1973 cannot be said to be discriminatory. The choice of a date as a basis for classification cannot be dubbed as arbitrary even if no particular reason is forthcoming unless it is shown that it was capricious or whimsical 15 625SCI/79 806 Similarly unless it is shown that the fixing of the date is very wide of the reasonable mark the decision of the legislature must be accepted. [819 C D] In the instant case, after the 1961 Act was struck down by this Court in 1968 the Government declared its intention to introduce a fresh Bill so as to bring a new Act into force from April 1970. After its introduction in the Assembly it was referred to a Select Committee which recommended that the Act should be brought into force from April 1, 1973. Two ordinances giving effect to the provisions of the draft Bill were promulgated and eventually the Bill became an Act in April, 1975. These facts would not show that the choice of the date of April 1, 1973 was unreasonable or that it was wide of the reasonable mark. [819 E G] 3(a). What entry 49 of List II permits is the levy of "taxes on lands and buildings. " It is permissible Under this entry to levy a tax either on lands as well as buildings, or on lands, or on buildings, if the legislature decides to impose a tax only on buildings, the tax would be imposed on all that goes to make or constitute a building. [820 B C] (b) The word "building" means "that which is built; a structure. edifice;" The natural and ordinary meaning of a "building" is, a "a fabric of which it is composed, the ground upon which its walls stand and the ground embraced within those walls. " Entry 49 includes the side of the building as its component part. [820 C D] (c) The definition of the term "building" in the Act makes it clear that a house, outhouse, garage or any other structure cannot be erected without the ground on which it is to stand. The expression "building" includes the fabric of which it is composed, the ground upon which its walls stand and the ground within those walls because the ground would not have a separate existence, apart from the building. The ground referred to in Entry 49 List II would not be the subject matter of a separate tax, apart from the tax on the building standing on it. That being so there is no occasion to tax the site separately or to ascertain its value and add it to the value of the fabric. [820 F G] (d) This is also the position in the case of appurtenances. An appurtenance belongs to the building concerned and has no existence of its own. An appurtenance, it its true sense, is an integrated part of the building to which it belongs. [826 F G] (e) In the matter of fixing the annual value of the building under section 6 regard must be had to the "location of the building" and the "value of the land on which the building constructed", but it does not bear on the annual value of the ground of the building which does not have an existence of its own apart from the building. It is therefore futile to contend that as factors (a) and (f) of sub section 4 of section 6 refer to the location of the building and the value of the land, the law recognises the separate existence or entity of the ground on which the buildings stands, so that the tax imposed under it is a tax both on lands and buildings and both entities should be separately recognised and determined, and taxed as such [821 C E] 4(a) When the State Legislature had decided to impose a tax, it was open to it to decide how best to levy it. One of the usual modes of levying tax is to make provision for determining the "rate", or annual value of the building. Rateable value is the same as the net annual value of the building. But 807 if the Legislature decides to levy a tax on buildings once for all or, as a "non recurring tax on buildings, it has to go beyond the annual value, and work out the capital value which could be done on the basis of capital cost of construction of the building or its market value or on the basis of rent arrived at by what is known as "higgling of the market" multiplying it by a number which would best serve the purpose of determining the value of the building and then to specify the rate of tax on it. [822 C F] (b) If the Legislature chose to adopt the annual value as the basis for working out the capital value it cannot be blamed for it because besides other advantages it is readily available from the records of local authorities and is a quite simple and reliable basis to work upon. [828 B C] (c) The various methods of properly valuation are the various facets to a difficult problem and no one method is perfect or final or above criticism. The multiple of sixteen adopted cannot be said to suffer from any constitutional or legal infirmity. [830 G H] (d) The capital value of a building is not merely the cost of its bricks and mortar. It may be difficult to provide a ready or convenient basis of taxation. There can be no objection if the Legislature decides to levy the annual value of a building and prescribes a uniform formula for determining its capital value. The four well accepted methods for arriving at the annual value of the building, are: (I) The "competitive or comparative method ' '; (2) the 'profits basis"; (3) the "contractor 's method"; and (4) the "unit method". These four methods can be applied either singly or in combination. [823 B E] (e) The fundamental object of each of these methods is to find out the rent which the tenant might reasonably be expected to pay for a building. It is the expectation which is to be reasonable and not necessarily the rent tor the reasonable expectation would exclude any so called black market rent. But there is no rule of law as to the method of valuation to be adopted for determining the annual value of a building. If the Legislature selects the method of determining the annual value on the basis of rent, that is the best evidence of value. If it has been fixed by the higgling of the market there is neither reason nor authority for holding that it is hypothetical or arbitrary. [823 G H, 824 A B] (f) The provisions of the Act, taken together, contain the entire scheme for the levy and collection of the building tax on the capital value of building. The expression "capital value" is not the cost of construction of the building or its market value as wealth but is only a working expression which, roughly stated, is the taxable value of the building. The State Legislature was quite competent to select that as the basis for assessing the building tax. [824 D E] (g) There is no inherent illegality if the gross income of the property were to be capitalised for the purpose of determining the value of the property. firstly, because there is nothing to prevent the Legislature from making the expected gross annual rent and thereby the annual value of a building from being the unit for multiplication by sixteen for arriving at its capital value for charging tax under section 5. Secondly, by virtue of section 6 the annual value forms the basis for determining the capital value of the building for the purposes of the Act. However what is really taken as the annual value under the determining in section 2(a) is not the gross annual rent but the net rent after allowing for the 808 cost of its repairs etc. It is not therefore factually correct to say that the annual value of the buildings in the State is determined on the basis of their gross annual rent without any deduction on account of repairs. Nor is it correct to say that the determination of the capital value was arbitrary as it was arrived at by multiplying the gross annual rent by sixteen. The gross value of a building is often made the datum point by statute and there is nothing unusual or illegal about it particularly when there are statutable deductions from it. [825 C H] (h) Section 6(1) accepts the annual value of a building in the books of the local authorities as correct. But that would not justify the argument that doing so is illegal or unreasonable as long as it can be shown that what is entered in the assessment books of the local authorities has been arrived at in accordance with a satisfactory procedure laid down for it in the statutes concerned. If the procedure prescribed in that Act is unexceptionable, there is nothing illegal or unconstitutional if another taxing statute provides that the annual value fixed by it shall be accepted as correct and would From the basis for the calculation of any other tax permissible under another statute. such cases there is no necessity for providing another machinery in the other Act and Rules. Moreover sections 9 to 16 of the Act contain the procedure and the machinery for the assessment of the building tax on the returns filed under sections 7 and 8. These provisions are adequate in all respects and are not open to challenge. [831 F H, 832 A B] 5. (a) The argument that the capital value of a building is bound to differ according to its location, amenities and appurtenances etc. and that ascertainment of the capital value by multiplying the annual value by sixteen is discriminatory and violative of article 14, loses sight of the fact that the Legislature has defined the annual value to mean the annual rent at which a building may be expected to let. [833 H, 834 A B] (b) A building in an important locality with attractive appurtenance is expected to fetch a higher rent than a building without those advantages. The definition capital value provides for the levy of a higher building tax on buildings on which such levy would be justified, because the incidence of the levy would depend on the capacity of the building to fetch the rent. [834 B C] 6. There is no force in the argument that when section 29 says that in fixing the fair rent of a building under section S of the Rent Control Act, the rent control court would not take into consideration the building tax payable under the Act and that this makes the provision extortionate because it prevents the owner from passing on the liability to the tenant. The tax being a non recurring tax, the question of passing it on to the tenant by splitting it up in proportion to the number of years of the tenancy cannot arise. There is no provision in the Rent Control Act under which a building tax could be taken into consideration in fixing the fair rent. [834 D F] 7. Section 18 which provides that tax may be paid in certain prescribed number of instalments and the proviso to section 11(1) which deals with appeals should be read harmoniously. If an assessee is entitled to pay the building tax in instalments, he would not be disentitled to file an appeal if he has paid those instalments as and when they fell due. [834 G Hl 809

Appeal No. 475 of 1960. Appeal by special leave from the Award dated March 31, 1960, of the Industrial Tribunal, Bombay, in Reference (I. T.) No. 227 of 1959. M. C. Setalvad, Attorney General for India, G. B. Pal and J. B. Dadachanji, for the appellant. I. N. Shroff, for the respondents. December 15. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. This appeal by special leave arises from an industrial dispute between the appellant, the Alembic Chemical Works Co. Ltd., and the respondents, its workmen. The said dispute related to a single demand made by the respondents with regard to leave. This demand consisted of three parts, (a) one month 's privilege leave with full salary and dearness allowance on completion of eleven months service in a year with a right to accumulate upto six months, (b) one month 's sick leave with full salary and dearness allowance for each year of service with right to accumulate for the entire period of service, and (c) every workman should be entitled to take leave in proportion to the number of days he is in service of the company at the time of his application for the same. This dispute was referred by the Government of Bombay for adjudication before the Industrial Tribunal under section 10(1)(d) of the XIV of 1947. The Tribunal considered the contentions raised by the appellant against the respondents ' demands, took into account awards or agreements between employers and their employees in comparable concerns and made its award. In regard to privilege leave the Tribunal has ordered that leave should be granted to the staff members covered by the reference as follows: Privilege leave upto 3 . 16 days as at present completed years of service per year. Up to 9 completed years. 22 days per year. And thereafter . One month for every 11 months of service. 299 The award allows accumulation of privilege leave upto three years. As regards sick leave, the Tribunal has ordered that the appellant should give its staff covered by the present award 15 days sick leave in a year with full pay and dearness allowance with a right to accumulate upto 45 days. It has also directed that no medical certificate should be demanded if sick leave for three days or less is asked for. In regard to the third item of demand concerning leave in proportion the Tribunal has made appropriate direction which it is unnecessary to set out for the purpose of this appeal. Before the Tribunal the main contention raised by the appellant was in regard to the propriety and reasonableness of the demand and in regard to the practice prevailing in comparable concerns. Before this Court, however, the provision made by the award in regard to privilege leave has been attacked mainly on the ground that the Tribunal had no jurisdiction to make such an award having regard to the provisions of section 79 of the (63 of 1948) (hereafter called the Act). It is urged that section 79 of the Act has made exhaustive and self contained provisions with regard to the granting of annual leave with wages to the employees to whom the said Act applies, and the effect of section 79 is to introduce standardisation in the matter of leave; which means neither the employer voluntarily, nor an Industrial Tribunal by its award, can add to the leave prescribed by the, said section. In the matter of leave section 79 is a complete code, and no additions to the said leave can be made either by a contract or by an award. It is common ground that the respondents are governed by the pro visions of the Act. This point was not raised before the Tribunal, but since it is a point of law which arises on admitted facts we have permitted the learned Attorney General to argue it before us. The Act was first enacted in 1934 as Act 25 of 1934. Since then it has been amended from time to time. Its main object is to consolidate and amend the law regulating labour in factories. For the purpose of determining which concerns and which employees 300 would be governed by the Act section 2(m) and (1) define "factory" and "worker" respectively. Even a broad view of the scheme of the Act and a perusal of its provisions would clearly indicate that the Act is a beneficent measure and its policy is to make reasonable provisions for the preservation of health of the workmen, their safety and their welfare. With that object in view, the Act has made provisions for the regulation of working hours of adults, has regulated the employment of young persons, and has also provided for annual leave with wages to the workmen. The amendments made in the relevant provisions of the Act from time to time indicate that the Act has been pursuing its beneficent policy slowly but steadily and is attempting to provide for the workmen better and larger amenities in their employment. It is in the light of this obvious policy and object of the Act that we have to decide the question raised before us by the appellant. Section 79(1) occurs in Chapter VIII which deals with annual leave with wages. It provides thus: "79. Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed during the subsequent calendar year, leave with wages for a number of days calculated at the rate of (i). if an adult, one day for every twenty days of work performed by him during the previous calendar year; (ii). if a child, one day for every fifteen days of work performed by him during the previous calendar year. Explanation 1 For the purpose of this sub section (a) any days of lay off, by agreement or contract or as permissible under the standing orders; (b) in the case of a female worker, maternity leave for any number of days not exceeding twelve weeks; and (c). the leave earned in the year prior to that in which the leave is enjoyed; shall be deemed to be days on which the worker 301 has worked in a factory for the computation of the period of 240 days or more, but he shall not earn, leave for these days. " This section has 11 other sub sections which deal with different aspects and make relevant provisions in regard to annual leave with wages. It is not disputed that the award purports to make provisions for privilege leave in excess of the annual leave sanctioned by section 79. Can the Industrial Tribunal direct the appellant to provide such additional privilege leave to its employees?; in other words, does section 79 purport to standardise annual leave with wages so that no departure from the said standard is permissible either way? The appellant 's contention is that except for pre existing awards, agreements, contracts or except for pre existing law no departure from the standardised provision is permissible after section 79 was enacted. This argument raises the question of construing section 79 in the light of the other relevant provisions of the Act. It may be conceded that the provisions made by section 79 are elaborate, and in that sense may be treated as self contained and exhaustive. It is also clear that section 79(1) does not use the expression "not more than or not less than" as it might have done if the intention of the Legislature was to make its provisions correspond either to the minimum or the maximum leave claimable by the employees; but even so, when section 79(1) provides that every worker shall be allowed leave as therein prescribed, the provision prima facie sound,% like a provision for the minimum rather than for the maximum leave which may be awarded to the worker. If the intention of the Legislature was to make the leave permissible under section 79(1) the maximum to which a workman would be entitled, it would have used definite and appropriate language in that behalf. We are, therefore, inclined to think that even on a plain construction of section 79(1) it would be difficult to accede to the argument that it prescribes standardised leave which inevitably would mean the maximum permissible until section 79(1) itself is 302 Even on the basis that section 79(1) is capable of the construction sought to be placed on it by the appellant, the question would still remain whether the Raid construction should be preferred to the alternative construction which, as we have just indicated, is reasonably possible. The answer to this question must be in the negative for two reasons; first, having regard,to the obvious policy and object of the Act, if section 79(1) is capable of two constructions that construction should be preferred which furthers the policy of the Act and is more beneficial to the employees in whose interest the Act has been passed. It is well settled that in construing the provisions of a welfare legislation courts should adopt what is sometimes described as a beneficent rule of construction; but, apart from this general consideration about the policy and object of the Act, sections 78 and 84 occurring in the same Chapter as section 79 clearly indicate that section 79(1) is not intended to standardise leave provisions as contended by the appellant, and that is the second reason why the appellant 's argument cannot be accepted. Let us then consider the provisions of Bs. 78 and 84. Section 78(1) provides that the provisions of Chapter VIII shall not operate to the prejudice of any right to which a worker may be entitled under any other law, or under the terms of any award, agreement or contract of service. There is a proviso to this sub section which lays down that when such award, agreement or contract of service provides for longer annual leave with wages than provided in this Chapter the worker shall be entitled only to such longer annual leave. Section 78(2) exempts specified workers from the operation of Chapter VIII. The first difficulty which this section raises against appellant 's argument is that it undoubtedly recognises exceptions to the leave prescribed by section 79(1). It is well known that standardisation of conditions of service in industrial adjudication generally does not recognise or permit exceptions; if the hours of work are standardised, for instance, or the wage structure is standardised, it is intended to make hours of work and wages uniform in the whose industry brought 303 under the working of standardisation Standardisation thus inevitably means levelling up of those whose terms and conditions of service were less favourable than the standardised ones, and levelling down those of such others whose terms and conditions were more favourable than the standardised ones. That being so, if section 79(1) intended to standardise annual leave with wages it would normally not have made provisions in regard to exceptions as section 78(1) obviously does. Besides, the scope and extent of the exceptions recognised by section 78(1) are decisively against the appellant 's construction of section 79(1). The learned Attorney General has strenuously contended that the saving provision of section 78(1) applies only to existing law and existing awards, agreements or contracts of service; in other words, his argument is that the Legislature has deliberately decided to except pre existing arrangements and in that sense it is a departure from the usual concept of standardisation. In our opinion, the assumption that section 78(1) is confined to existing arrangements is plainly inconsistent with a fair and reasonable construction of the said provision. When s.78(1) refers to any other law it could not have been intended that it is only to existing laws that the reference is made and that the idea underlying the provision was that no law can be passed in future which would grant more generous leave to the employees. Such a restriction on the legislative activities of the appropriate Legislatures cannot obviously have been intended. If the reference to law is not confined only to existing law there is no reason why reference to any award, agreement or contract of service should be similarly circumscribed or limited. We feel no difficulty in holding that what section 78(1) protects are laws, awards, agreements or contracts of service which were then existing or which would come into existence later; that is to say section 78(1) does not affect preexisting arrangements and does not also prohibit future arrangements which would be more generous than section 79(1). A law may be passed making more generous provisions, or agreements or contracts may 304 be entered into or awards made with the same result. If that be the true position section 78(1) clearly negatives the theory that section 79(1) provides for standardisation of annual leave with wages. The provisions of section 84 would also lead to the same result. Section 84 provides that where the State Government is satisfied that the leave rules applicable to workers in a factory provide benefits which in its opinion are not less favourable than those for which Chapter VIII makes provision it may by written order exempt the factory from all or any of the provisions of Chapter VIII subject to such conditions as may be specified in the order. Now, the power to exempt factories has to be exercised having regard to the effect of the totality of the benefits which may be afforded to the workers by their respective factories. This power to exempt also necessarily postulates the existence of better amenities than those guaranteed by Chapter VIII, and that means that if a factory provides better leave amenities to its employees, the State Government may in the interest of the employees exempt the factory from the operation of this Chapter. The scope of section 84, like the scope of section 78, cannot be limited only to the more favourable benefits which may be existing at the date when the Act was passed. What is true about the existing benefits would be equally true about the benefits which may be granted by an employer to the employees in future. Let us illustrate what the con sequence would be if the appellant 's argument is accepted. Take the case of an employer who has been exempted under section 84 on the ground that the benefits of leave conferred by him on his employees are more favourable to them. In such a case, the employer may make his benefits still more favourable after exemption is accorded to him; but an employer who has already not provided more favourable benefits would be effectively precluded from making any such provisions in future. It is difficult to imagine that such a consequence could have been intended by the provisions of this welfare legislation. 305 The history of the amendments made in the relevant provisions of the Act also indicates that the Act has been gradually making more liberal provisions in ' the interest of workmen to whom it applies. In the original Act as it was passed (25 of 1934) section 34 provided for weekly holiday but no provision was made for holidays with pay. When the said Act was amended by Act 3 of 1945, section 49A which is equivalent to present section 78(1) without the proviso was inserted; and section 49B provided, inter alia, that every worker who has completed a period of twelve months continuous service in a factory shall be allowed during the subsequent period of twelve months holidays for a period of ten days. That is how provision for holidays came to be made. By the ; 'amending Act 63 of 1948, section 78 with the present proviso was enacted; and section 79 made a provision for annual leave with wages. While making provision for annual leave with wages the section then prescribed a minimum of ten days; subsequently, by amending Act 25 of 1954, section 79 as it stands at present was enacted; and in section 78 the word "annual" has been added to qualify leave in the proviso. We have thus briefly referred to some changes made in the Act from time to time in order to show that subsequent amendments have sought to make the provisions more liberal. There is one more point which may incidentally be mentioned whilst we are considering the amendments made in the Act from time to time. Section 49A which broadly corresponds to section 78 of the present Act saved other laws and terms of any award, agreement or contract of service just as section 78(1) does. Now, if the said section is construed on the lines which the appellant wants us to construe section 78(1) it would only be arrangements existing at the date when the said amending Act came into force on January 1, 1946, that would be protected and saved, and nothing that happened either by way of legislation or by way of awards or contracts subsequent to the said date would attract the provisions of the said section 49A or section 78 which subsequently took its place. This obviously is not 39 306 intended by the Legislature which incidentally shows that section 78(1) cannot be confined to existing arrangements or laws, but takes within its sweep future laws, agreements, contracts or awards. Therefore, the challenge to the validity of the award based on the assumption that section 79(1) provides for standardised award of annual leave with wages fails. Then it is urged that the provision made by the award for privilege leave introduces discrimination between the clerical staff covered by the present reference and operatives covered by the earlier awards made by the same Tribunal. We were told that operatives had made a similar claim for privilege leave before the same Tribunal, and the said claim had been rejected. The argument is that the provision for privilege leave made by the present award would create discontent amongst the operatives to whom similar leave has been denied, and that would disturb industrial peace. We are not impressed by this argument. It is not seriously disputed that a distinction has generally been made between operatives who do manual work and clerical and other staff; in fact the appellant 's standing orders themselves make different relevant provisions for the two categories of its employees. It is also not disputed that in practice such distinction is made by comparable concerns, and awards based on the same distinction are generally made in respect of the two separate categories of employees. We are, therefore, unable to appreciate the argument that in granting privilege leave to the present staff the Tribunal has either overlooked its earlier award or has made a decision which suffers from the vice of discrimination. The practice prevailing in comparable concerns and the trend of awards both seem to show that a distinction is generally made between the two categories of employees, and since the said distinction is perfectly justifiable no question of discrimination can arise. It is then argued that making liberal provisions for privilege leave and sick leave are really opposed to the modern trend in industrial thought, and so such liberal awards should be discouraged and corrected. 307 There is no doubt that when industrial adjudication seeks to do social justice it cannot ignore the needs of national economy; and so in considering matters of leave, either in the form of privilege leave or sick leave, the Tribunals should not ignore the consideration that unduly generous or liberal leave provisions would affect production and obviously production of essential commodities is in the interest of not only the employers and the employees but also of the general community; but it is difficult for us to accept the argument that we should make suitable modifications in the provisions made by the award in regard to privilege leave or sick leave. These are matters primarily for the Industrial Tribunal to consider and decide. The Tribunal is more familiar with the trend prevailing in comparable concerns, and unless it appears that the impugned provisions cannot be sustained on any reasonable ground or that they mark a violent departure from the prevailing practice or trend, we would be reluctant to interfere with the decision of the Tribunal. After all, in deciding what ,would be a reasonable provision for privilege leave or sick leave, the Tribunal has to take into account all relevant factors and come to its own decision. As we have already indicated, in making the present award the Tribunal has considered previous decisions which were relevant and prevailing agreements in comparable concerns. We have carefully considered the criticism made by the learned Attorney General against the provisions contained in the award, but we are not satisfied that a case has been made out for interference in an appeal under article 136. The result is the appeal fails and is dismissed with costs. Appeal dismissed.

Two officers of the appellant were assaulted by the workmen. In this connection the appellant served notices on eight workmen calling upon them to explain their conduct and to show cause why they should not be dismissed. In their explanations the workmen denied the charges. Thereupon a proper enquiry was held according to the Standing Orders, as a result of which the charges were found proved against the workmen and the appellant dismissed the workmen and asked them to take their final dues together with one month 's pay in lieu of notice. As a dispute in respect of bonus was pending before the Industrial Tribunal, the appellant made applications to it under section 6E(2) of the U. P. , for approval of the dismissal of the workmen. The Tribunal refused to accord its approval and directed the appellant to reinstate the workmen from the date of suspension and to pay full wages for the period of unemployment. The appellant contended that the Tribunal acted beyond its jurisdiction and assumed powers of an appellate Court over the decision of the appellant. Held, that the Tribunal had assumed jurisdiction not vested in it by assuming powers of an appellate Court and its refusal to accord approval was patently erroneous in law. The requirement of obtaining approval under section 6E(2)(b) of the U. P. Act (or section 33(2) Of the Central Act) in cases of dismissal or discharge for misconduct not connected with a pending dispute as distinguished from the requirement of obtaining previous permission under section 6E(1) of '.the U. P. Act (or section 33(1) of the Central Act) in cases of misconduct connected with a pending dispute indicated that the ban imposed by section 6E(2) was not as rigid or rigorous as that imposed by section 6E(1). The jurisdiction to give or withhold permission was Prima facie wider than the jurisdiction to give or withhold approval. Where the employer had held a proper domestic enquiry and had dismissed the workmen as a result of such enquiry, all that the Tribunal could do was to enquire: (i) whether the Standing Orders justified the dismissal, (ii) whether the enquiry had been held as provided by the Standing Orders, (iii) whether wages for one month had been paid and (iv) whether an application for approval had been made as prescribed. In the present case all these conditions were 205 satisfied but the Tribunal lost sight of its limitations and assumed powers of an appellate Court entitled to go into question of fact. The Punjab National Bank Ltd. vs Its Workmen, [1960] S.C.R. 806, referred to. Quaere: Whether the application for approval under section 6E(2)(b) of the U. P. Act or under section 33(2)(b) of the Central Act could be made after the order of dismissal had been passed or whether it had to be made before passing such an order. Note: Section 6E of the U.,P. is identical in terms with section 33 of the Central .

minal Appeal No. 248 of 1960. Appeal by special leave from the judgment and order dated October 31, 1960, of the Rajasthan High Court in D. B. Criminal Appeal No. 290 of 1960 and D. B, Criminal Murder Reference No 7 of 1960. 591 R. L. Anand, C. L. Sareen and B. L. Kohli, for the appellants. S.K. Kapur and T. M. Sen, for the respondent 1961. September. The Judgment of the Court was delivered by WANCHOO, J. This is an appeal by special leave from the judgment of the Rajasthan High Court. It arises out of an incident in which Bhimsen was murdered on May 8, 1959 at Mandi Pili Bangan shortly before 3 P.m. The prosecution story briefly was, that there was bad blood between Ramratan appellant and the members of the family of Bhimsen on account of panchayat elections in which they had supported rival candidates. Another cause for. enmity was that some time before the occurrences Ramratan appellant was prosecuted under section 307 of the Indian Penal Code and Bhimsen was cited as a prosecution witness in that case and Ramratan did not like that. Bhimsen and his father brought some gram for sale on the night between May 7/8, 1959, to Pili Bangan. Bhimsen returned to the village to bring more grain and came back at about10/11 A.M. on the 8th on his tractor trolly along with his brother Ram Partap. The gram was to be sold 'through Roopram and was stacked in front of his shop in the mandi. Ram Partap was apparently not interested in the sale; and had wandered away leaving his father Jawanaram and his brother Bhimsen at the shop. Shortly before 3 p.m. while the gram was being weighed by Lekhram weighman, the three appellants and two others (namely, Moman and Ramsingh) came up there armed with ,guns. Ramratan shouted that the enemy should not be allowed to escape as Bhimsen was trying to enter the shop of Roopram to save himself on seeing these persons. Before, however, Bhimsen could enter the shop of Roopram, Ramratan came in between and fired at him from a distance 592 about 5 feet. Bhimsen got injured and fell down and died soon after. Jawanaram raised his hands and asked the assailants not to kill Bhimsen but Hansraj appellant fired at him causing a wound on his left hand,. which resulted in a compound fracture. Maniram also fired at. Jawanaram but he dropped on the ground and pellets hit Lekhram weighman who was standing behind Jawanaram. Thereafter all the assailants ran away. Roopram had shut up his shop when the incident took place and he only came out When everything was over. Jawanaram asked him to send telegram to police station Suratgarh and told him the names of the five assailants. Thereafter jawanaram started for the police outpost in Pili Bangan to make a report; but Ramsingh constable met him on the way at a short distance from the shop of Roopram. Thereupon Jawanaram made a report (exhibit P 1) to Ramsingh then and there. While this report was being recorded, Ram Partap also turned up. After the report had been recorded, Jawanaram was sent to the hospital where his injuries were examined at 3 30 P.m. Ramsingh constable went to the spot after recording the report and found the dead body of Bhimsen lying in front of Roopram 's shop It appears that head constable gone outside and returned at 5 P.M. and started investigation thereafter. The Sub inspector arrived on the scene at about 6 p.m. and took over the investigation and. completed it. Thereafter the three appellants and two others who have been acquitted by the Sessions Judge were prosecuted for this murder. The case of the appellants was that they had not committed this offence and that they had been implicated on account of enmity They examined no evidence in defence. The main prosecution evidence consisted of the statements of Jawanaram, his son Ram Partap, Roopram and Lekhram as to what happened at the spot. Jawanaram related the whole story as given above, Ram Partap said that he had come near 593 the spot on seeing the assailants going that way and hid himself at some distance and saw the incident from there. Roopram 's statement was that he shut up his shop as soon as he heard some noise outside and did not see the assailants. When he came out, however, he was told by Jawanaram the names of the five assailants and saw Bhimsen lying dead. He had also heard three reports of gunshots from inside his shop. He saw Jawanaram and Lekhram were also there injured and Jawanaram went away shortly after for making the report. Sometime thereafter the police came to the spot and started investigation. Lekhram stated that he was there weighing the gram. Four or five persons armed with guns came there and shouted and fired two or three times with the result that Bhimsen, Jawanaram and he were injured and Bhimsen died immediately. But he was unable to say whether the five persons in the dock were the assailants. Because of certain answers that he gave in cross examination this witness was treated as hostile by the prosecution. The Sessions Judge relied on the statement of Jawanaram and convicted the three appellants. He however, gave the benefit of doubt to the other two assailants and acquitted them. He did not rely on the statement of Ram Partap as he was of the view that Ram Partap did not arrive in the Mandi till about 6 P.m. He also did not rely on the statement of Lekhram, which in any case was useless in so far as the connection of the appellants with the crime was concerned. As to Roopram he held that his statement that Jawanaram had told him the names of the assailants immediately after the incident was over when he came out of his shop could not be used as corroborate on of the statement of Jawanaram under section 157 of the Indian Evidence Act, as Jawanaram had not said in his statement in Court that he had told Roopram the names of the five assailants He was also doubtful whether the report (exhibit P 1) was 594 recorded at 3 P.m. and thought that it might have been recorded any time up to 6 P.m. But even so he placed full reliance on the evidence of Jawanaram only and convicted the three appellants, sentencing Ramratan to death and the other two to imprisonment for life. This was followed by an appeal to the High Court by the convicted persons. The Sessions Judge also made a reference for the confirmation of the sentence of death passed on Pamratan. The High Court dismissed the appeal. It also accepted the evidence of Jawanaram in the main. The High Court was further of opinion that Ram Partap was in Pili Bagan when the incident took place having come there with his brother Bhimsen at about10/11 A.M.; but the High Court did not think it fit to rely on his evidence as to the actual incident, for it thought that he had not been able to see it properly from where he said he was hiding. Further the High Court did not consider the evidence of Lekhram of much value as if, did not connect the appellants with the crime. But the High Court was of the opinion that Roopram 's statement that Jawanaram had told him immediately after the occurrence the names of the five assailants was admissible in evidence and could be used to corroborate the statement of Jawanaram. The High Court thought that this statement of Roopram was admissible under section 6 as well as under a. 157 of the Evidence Act. The High Court therefore upheld the conviction on the evidence of Jawanaram corroborated as it was by the evidence of Roopram. The High Court having refused to grant a certificate, the appellants applied to this Court for special leave which was granted; and that is how the matter has come up before us. Two main contentions have been urged before, us on behalf of the appellants. In the first place, it is urged that the High Court was not right in the view that the statement of Roopram was 595 admissible under section 6 and section 157 of the Indian Evidence Act and went to corroborate the statement of Jawanaram. Secondly, it is urged that once the statement of Roopram is ruled out as inadmissible there is only the statement of Jawanaram left to connect the appellants with the crime and in the circumstances of this case that solitary evidence should 'De held insufficient to bring home the guilt to the appellants. The first question therefore that arises in the appeal is whether the statement of Roopram to the effect that Jawanaram told him immediately after the incident, when he came out of his shop that the appellants and two others were responsible for the murder of Bhimsen and the injuries to Lekhram and himself, is admissible, either under section 6 or under section 157 of the Indian Evidence Act. We (lo riot think it necessary to consider whether this statement of Roopram is admissible under section 6 of the Evidence Act and shall confine ourselves to the question. whether it can be admitted under section 157 as corroboration of Jawanaram 's state ment. Learned counsclfor the appellants in this connection relies on Mt. Misri vs Emperor (1), and Nazar Singh vs The State (2) which support him and lay down that unless the witness to be corroborated says in his statement in court that be, had told certain things immediately after the incident to another person, that other person cannot give evidence and say that the witness bad told him certain things immediately after the incident. The argument is that the corroboration that is envisaged by section 157 is of the statement of the witness in court that he had told certain things to the person corroborating the witness 's statement, and if the witness did not say in court that he had told certain things to that person, that person cannot state that the witness had told him certain things immediately after the incident and (1) A.I.R. 1934 Sind 100, (2) A.I.R. 1931 Pepsu 66. 596 thus corroborate him. We are of opinion that this contention is incorrect. Section 157 is in these terms: ",In order to corroborate the testimony of a witness, any former statement made by such witness relating to the same fact, or at about the time when the fact took place, or before any authority legally competent to investigate the fact, may be proved. " It is clear that there are only two things which are essential for this section to apply. The first is that a witness should have Riven testimony with respect to some fact. The second is that he should have made a statement earlier with respect to the same fact at or about the time when the fact took place or before any authority legally competent to investigate the fact. If these two things are present, the former statement can be proved to corroborate the testimony of the witness in court. The former statement may be in writing or may be made orally to some person at or about the time when the fact took place, if it is made orally to some person at or about the time when the fact took place, that person would be competent to depose to the former statement and corroborate the testimony of the witness in court. There is nothing in section 157 which requires that before the corroborating witness deposes to the former statement the witness to be corroborated must also say in his testimony in court that he had made that former statement to the witness who is corroborating him. It is true that often it does happen that the witness to be corroborated says that he had made a former statement about the fact to some person and then that person steps into the witness box and says that the witness to be corroborated had made a statement to him about the fact at or about the time ",hen the fa ct took place. But in our opinion it is not necessary in view of the words of section 157 that in order to make corroborating evidence admissible, the witness to be corroborated must also say in his evidence that he had made such 597 and such statement to the witness who is to corroborate him, at or about the time when the fact took place. As we have said already what section 157 requires is that the witness to be corroborated must give evidence in court of some fact. If that is done, his testimony in court relating to that fact can be corroborated under section 157 by any former statement made by him relating to the same fact, and it is not necessary that the witness to be corroborated should also say in his statement in court that he made some statement at or about the time when the fact took place to such and such person. The words of section 157 are in our opinion clear and require only two things indicated by us above in order to make the former statement admissible as corroboration. We are therefore of opinion that the Sind and Pepsu cases were wrongly decided. Now let us see what happend in this case. Jawanaram was examined in court and stated about a certain fact (namely, that the assailants of Bhimsen, Lekhram and himself were five persons whom he named). The testimony of Jawanaram to be corroborated is his statement in court with respect to the fact that five persons attacked Bhimsen, Lekhram and himself. Section 157 makes his former statement with respect to the same fact admissible provided that the statement was made at or about the time when the fact took place or before any legal authority competent to investigate the fact. In this case we are concerned with the first of the two conditions necessary, namely, whether he had made that former statement relating to the same fact. at or about the time when the fact took place. The former statement which can be used as corroboration must be about the fact namely that Jawanaram had seen five persons attacking Bhimsen, Lekhram and himself and must have been made at or about the time when the fact took place i. e., when the attack was made. Now Roopram says that Jawanaram 598 had made the statement immediately after the incident was over that five persons including the three appellants had attacked Bhimsen, Lekhram and himself. This was therefore a former statement of Jawanaram at or about the time when the fact took place, namely, the attack by five persons on Bhim sen and others. This former statement can be proved by the person to whom it was made and can be used as corroboration of the evidence of Jawanaram. It was not necessary before the statement of Roopram as to what he heard from Jawanaram can be admissible for Jawanaram also to say in his testimony in court that he bad told Roopram immediately after the incident the names of the five assailants of Bhimsen and others. The former statement which can be used as corrobo ration is the, statement at or about the time the fact took place about which evidence has been given in court by the witness to be corroborated. Section 157 does not contemplate that before the; former statement can be proved in corroboration, the witness to be corroborated must also say in his testimony that he had made the, former statement. Of course if the witness to be corroborated also says in his testimony that he had made the former statement to someone that would add to the weight of the evidence of the person who gives evidence in corroboration, just as if the witness to be corroborated says in his evidence that he had made no former statement to anybody that may make the statement of any witness appearing as corroborating witness as to the former statement of little value. But in order to make the former statement admissible under section 157 it is not necessary that the witness to be corroborated must also, besides making the former statement at or about the time the fact took place, say in court in his testimony that he had made the former statement. We are therefore of opinion that even though Jawanaram did not say in his statement in court that he had told Roopram the names of the five assailants, Roopram 's 599 evidence that Jawanaram had made such a statement would be admissible under section 157 in corroboration of Jawanaram 's testimony as to the fact that five persons had attacked Bhimsen and others. As to the value to be attached to this corroboration in the present case, it is enough to say that Roopram is an independent witness and even though Jawanaram may not have said in evidence that he had told the names of the assailants to Roopram (perhaps by inadvertence as the High Court seems to think), we agree with the High Court in accepting the statement of Roopram that Jawanaram had immediately named the five persons who had attacked Bhimsen, Lekhram and himself. Thus the statement of Roopram corroborates the statement of Jawanaram in two ways : firstly, that there was an incident in front of his shop in which Bhimsen was murdered and Jawanaram and Lekhram were injured, arid secondly, proves the former statement of Jawanaram as to the persons who took part in the incident, thus corroborating his statement in court under s.157. This is not therefore a case where there is no corroboration of the testimony of Jawanaram, even if he were the solitary witness of the incident itself. As to the second point, namely, that we should not accept the solitary testimony of Jawanaram in the circumstances of this case, learned counsclrelies on Vemireddy Satyanarayan Reddy vs The State of Hyderabad (1). In that case there was the solitary testimony of one witness and it was urged that he was an accomplice. This Court hold that he was not an accomplice but remarked that "we would still want corroboration on material particulars in this particular case, as he is the only witness to the crime and as it would be unsafe to hang four people on his sole testimony unless we feclconvinced that he is speaking the truth. " The reason why this Court said so in that (1) ; 600 case was that though the witness was not an accomplice his position was considered somewhat analogous to that of an accomplice though not exactly the same. It was in those circumstances that this Court said that corroboration in material particulars would be required in the circumstances of that case. We are of opinion that those observations cannot be divorced from the context of that case. In the present case Jawanaram is neither an accomplice nor anything analogous to an accomplice; he is an ordinary witness who was undoubtedly present at the time the incident took place. '.rho case of such a solitary witness was considered by this Court in Vadivelu Thevar vs The State of Madras (1) and after referring to the earlier case it was held that as a general rule a court may act on the testimony of a single witness, though uncorroborated. It was further held that unless corroboration is insisted upon by statute, courts should not insist on corroboration except in cages where the nature of the testimony of the single witness itself requires as a rule of prudence, that corroboration should be insisted upon, and that the question whether corroboration of the testimony of a single witness was or was not necessary, must depend upon facts and circumstances of each case. These are the general principles which we have to apply in the case of the testimony of a single witness, like Jawanaram. But as we have held that in the present case there is corroboration of Jawanaram 's statement by his former statement deposed to by Roopram, it is not a case of altogether uncorroborated testimony of a single witness. In any case the evidence of Jawanaram has been considered by both the Sessions Judge and the High Court, and the Sessions Judge was prepared to convict the appellants on the sole testimony of Jawanaram while the High Court has also accepted that testimony, though it has added that it is corroborated by the statement of Roopram. In (1) ; 601 the circumstances when the evidence of Jawanaram has been accepted by both the courts, with or without corroboration, we see no reason to disagree with the conclusion of the two courts as to the value of Jawanaram 's evidence. The criticism made against the acceptance of the evidence of Jawanaram has been considered by the two courts and in spite of that criticism the two courts have come to the conclusion that the evidence of Jawanaram is reliable. We agree with the estimate of that evidence by the two courts and hold that Jawanaram 's evidence can be relied on in the circumstances of this case. Two main points are urged in this connection to shake the testimony of Jawanaram. It is said that Jawanaram has introduced Ram Partap in the first information report and that the Sessions Judge at any rate did not believe that Ram Partap was in Pill Bangan before 6 P.m. though the High Court held otherwise. Secondly, it is said that Jawanaram did not make the first report at about 3 P. M. and the Sessions Judge at any rate held that the report could have been made at any time upto 6 P.m. though the High Court held otherwise. We have been taken through the evidence in this connection and we agree with the High Court that even though Ram Partap might not have actually seen the incident he had definitely come to Pili Bangan at about II A.M. with his brother Bhimsen. There is the evidence of Ram Singh constable who says that Ram Partap came there when the report (exhibit P 1) was being written at about 3 P.m., which is supported by the fact that Ram Partap 's presence is mentioned in the report. The defence relied on a statement in the inquest report (Ex. P 4) in which it is mentioned at the end that Ram Partap son of Jawanaram also arrived during the course of the completion of the inquest report and was sent along with the corpse. This means that Ram Partap was not present when the inquest proceedings began and arrived there when they 602 were coming to an end. From this it cannot be inferred that Ram Partap was not in Pili Bangan at all before 6 P.m. There. is ample evidence, which the High Court has rightly believed, to show that Ram Partap had come to Pili Bangan at about 10 or 11 A. M. The other criticism with respect to the time when the report (exhibit P.1) was made is also in our opinion unjustified and the High Court was right in the view it took in that connection. There is no doubt that Jawanaram reached the hospital at 3 30 P.m. as deposed to by Dr. Sudershan Singh and that he was sent by the police. It is obvious therefore that Jawanaram had contacted the police before 3 30 P.m. It stands to reason that if he had contacted the police before 3 30 P.m. be must have made a report of the incident also and that is what exactly Ram Singh constable deposes. We agree with the High Court that in the circumstances there is no reason to disbelieve the statement of Ram Singh constable. The Sessions Judge was doubtful of the evidence of Ram Singh because he was of the view that documentary evidence from the police outpost at Pili Bangan had not been produced in support of Ram Singh 's statement. Ram Singh was asked about it and stated that though exhibit P 1 did not bear the despatch number as it was not sent to the outpost at all, he must have made entries in the diary of the outpost about his starting from there and his return and also about the occurrence, though he did not remember about it. After this statement of Ram Singh, the Sessions Judge was not right in disbelieving him because of the non production of the entries from the outpost. It would have been better if the prosecution had produced those entries ; but even if the prosecution rested upon the oral testimony of Ram Singh, the Sessions Judge could and should himself have sent for those entries, if he was inclined to disbelieve the oral testimony of Ram Singh constable who appears 603 to be a reliable witness. In the circumstances we are of opinion that the view of the High Court that the report was written at 3 P. m. as stated by Ram Singh constable is correct. The evidence of Jawanaram therefore cannot be rejected on these two grounds. Lastly it was urged that Jawanaram bad named five assailants and at least two have been acquitted, and that shows that Jawanaram is not wholly reliable. It is enough to point out that the Sessions Judge gave the benefit of doubt so far as two accused persons were concerned. He did not hold that Jawanaram 's evidence was false with respect to those two persons. Apparently those two persons did not take any active part in the incident and that may have led the Sessions Judge to give them the benefit of doubt; that is, however, no reason for disbelieving the testimony of Jawana ram. We are therefore of opinion that the two courts below were right in relying on Jawanaram. His evidence is corroborated undoubtedly by other witnesses to the extent that the incident did take place at the shop of Roopram; his statement that the three appellants and two others were the assailants is corroborated by his former statement made immediately after the incident was over and deposed to by Roopram. In the circumstances we are of opinion that the appellants have been rightly convicted. Two of the appellants (namely, Maniram and Hansraj) have been sentenced to imprisonment for life while Ramratan has been sentenced to death. The reason why Ramratan has been sentenced to death is that he was the man who shot Bhimsen. He was also the leader of this group and the enmity was directly between him and the members of the family of Jawanaram. We agree with the High Court that there are no extenuating 604 circumstances which would justify the reduction of sentence of death passed on Ramratan. The appeal therefore fails and is hereby dismissed. Appeal dismissed.

The appellant obtained a preliminary and then a final mort gage decree against the respondent and thereafter a personal decree for the debt remaining due to him 'after sale of the property mortgaged. The appellant applied for execution of the personal decree and thereupon the respondent sued for relief under section 36 of the Bengal Money lenders Act, 1940, by reopening the personal decree. In the suit relief for reopening the preliminary decree and final decree was not claimed. The personal decree was reopened in that suit and an instalment decree for a smaller amount passed instead, which was ultimately upheld by the High Court. The respondent failed to pay the instalments and the appellant applied for executing the decree. The respondent then filed another suit under section 36 of the Act for reopening the preliminary and final decrees. The Subordinate judge dismissed the suit holding that it wag barred as res judicata and the District judge on appeal affirmed that decision. But the 881 High Court in second appeal reversed those decisions and directed the preliminary and the final decrees be reopened and remanded the case to the trial court for passing a fresh preliminary decree. Hence this appeal with special leave. Held (per Kapur and Shah, JJ.), that section 36 of the Bengal Money lenders Act, 1940, contemplated the filing of one and not successive suits for the reopening of transactions including decrees and obtaining relief under the Act. If in such a suit, the borrower failed to seek the entire relief he was entitled to and abandoned his right to a part of the relief, he would be precluded from seeking that relief in another suit. The principle underlying r. 2 of 0. 2 of the Code of Civil Procedure as also the principle of res judicata applied to a suit under section 36 of the Act. Per Hidayatullah, J. When the respondent moved the executing court under section 36 of the Act he had not filed a suit but only an application. It was the duty of the court thereunder to give him full relief although he might not have asked for it. If the court failed in its duty and he filed a suit no question of waiver or constructive res judicata could at all arise. This was made clear by the non obstante words of sub sections (1) and (6) Of section 36 and the question that arose under the section was not s? much of the right of a party as of the duty of the court to give entire relief under the Act. The remedies enjoined by the Act were not exclusive of one another, either expressly or by necessary intendment, and were intended to give the widest possible relief to the borrowers. jadhunath Roy vs Kshitish Chandra Achariya Choudhury (1949) L.R. 76 I.A. I79 and joy Chand Lal Babu vs Kamalaksha Choudhury, (1949) L.R. 76 I.A. 131, referred to. Since the Act required that the decrees passed against the respondent had to be reopened, no provision of the Code of Civil Procedure or of equity could bar the suit, the former being expressly excluded and the latter made inapplicable by the substantive provisions of the Act.

Appeal No. 1116 of 1965. Appeal from the order dated August 26, 1964 of the Punjab High Court in Civil Writ No. 498 D of 1964. M.C. Chagla, Sardar Bahaclur, Ajit Prasad Jain, Vishnu B. Saharya ,and Yougindra Kaushalani, for the appellant. V.A. Seyid Muhammad and S.P. Nayar, for the respondents. 862 The Judgment of the Court was delivered by Sikri, J. The appellant, Durga Prashad, filed a petition under article 226 of the Constitution against the respondents. The High Court of Punjab, Circuit Bench, Delhi, dismissed the petition in limine. Thereupon the appellant applied for a certificate under article 133 (1)(a) of the Constitution. The High Court gave this certificate on the ground that the value of the subject matter directly involved in the petition exceeds Rs. 20,000/ . In our opinion this appeal must fail on the ground that the petition under article 226 of the Constitution was filed after great delay. The relevant facts are as under. The appellant was carrying on business of export and import, and exported goods of the value of Rs. 8,10,325/ , F.O.B. value Rs. 8,03,530.45, during the period August 25, 1958, to September 29, 1958. On November 12, 1958, the appellant applied for an import licence for art silk yarn of the f.o.b. value of Rs. 8,03,530.45 nP under the Export Promotion Scheme. The Export Promotion Scheme was discontinued with effect from March 6, 1959. On October 9, 1959, import licence of the value of Rs. 3,27,841/ only was issued to the appellant by the Joint Chief Controller of Imports and Exports, Bombay. His appeal against this order was rejected by the Joint Chief Controller on March 4, 1960. It is alleged by the appellant that he was not given a hearing. The appellant filed a second appeal to the Chief Controller of Imports and Exports, and this was dismissed on April 22, 1961. Here again it is alleged that no ' hearing was given to the appellant. He filed a representation against the order dated April 22, 1961, and on that representation a supplementary import licence for import of art silk yarn of the value of Rs. 30,000/ was issued to the appellant. This exhausted all the remedies he had under para 85 of the order relating to the Export Promotion Scheme, but he instead of filing a writ chose to wait. The appellant apparently approached the Minister of International Trade by letter dated April 6, 1964 this is the letter referred to in the letter of the Private Secretary to the Minister of International Trade and the Private Secretary, vide his letter dated April 16, 1964, wrote to him saying that his letter had been passed on to the Chief Controller of Imports and Exports, New Delhi, and if so desired the appellant may see him in the matter. Apparently the Chief Controller invited him and on June 22, 1964, he was informed that no further licence would be issued to him. On August 24, 1964, the appellant filed the petition above mentioned in the High Court. No explanation has been given in the petition for the delay in filing the petition and it has not been explained what the appellant was doing between March 863 5, 1962, when the supplementary licence was issued, and April 6, 1964. It is well settled that the relief under article 226 is discretionary, and one ground for refusing relief under article 226 is that the petitioner has filed the petition after delay for which there is no satisfactory explanation. Gajendragadkar, C.J., speaking for the Constitution Bench, n Smt. Narayani Debi Khaitan vs The State of Bihar(1), observed. "It is well settled that under article 226, the power of the High Court to issue an appropriate writ is discretionary. There can be no doubt that if a citizen moves the High Court under article 226 and contends that his fundamental rights have been contravened by any executive action, the High Court would naturally like to give relief to him; but even in such a case, if the petitioner has been guilty of laches, and there are other relevant circumstances which indicate that it would be inappropriate for the High Court to exercise its high prerogative jurisdiction in favour of the petitioner, ends of justice may require that the High Court should refuse to issue a writ. There can be little doubt that if it is shown that a party moving the High Court under article 226 for a writ is, in substance, claiming a relief which under the law of limitation was barred at the time when the writ petition was filed, the High Court would refuse to grant any relief in its writ jurisdiction. No hard and fast rule can be laid down as to when the High Court should refuse to exercise its jurisdiction in favour of a party who moves it after considerable delay and is otherwise guilty of laches. That is a matter which must be left to the discretion of the High Court and like all matters left to the discretion of the Court, in this matter too discretion must be exercised judiciously and reasonably. " Relying on the judgment of this Court in Maharashtra State Road Transport Corporation vs Shri Balwant Regular Motor service, Amravati(2) the learned counsel for the appellant contends hat the delay should not debar him from seeking relief because he respondents have not suffered in any manner because of the delay. In this case Ramaswami, J., speaking for the Court, referred to an earlier decision in Moon Mills vs Industrial Court(a). (1) C.A. No. 140 of 1964; judgment dated September 22, 1964. (2) ; (3) A.I.R. 1967 S.C. 1450, 53, 54. Sup CI/69 4 864 In that case Ramaswami, J.,. speaking for the Court, observed: "It is true that the issue of a writ of certiorari is largely a matter of sound discretion. It is also true 'that the writ will not be granted if there is such negligence or omission on the part of the applicant to assert his right as, taken in conjunction with the lapse of time and other circumstances, causes prejudice to the adverse party. The principle is to a great extent, though not identical with, similar to the exercise of discretion in the Court of Chancery. " It would be noticed that Ramaswami, J., had first examined the question of delay and came to a finding that in fact there was n delay. Ramaswami, J., observed: "On behalf of the respondent Mr. B. Sen, however, pointed out that the conduct of the appellant does not entitle it to the grant of a writ, because it has been guilty of acquiescence or delay. It was pointed out that the award of Mr. What was given on April 25, 1958, but an application to the High Court for grant of a writ was made long after on November 16, 1959. We do not think there is any substance in this argument, because the second respondent had made an application, dated August 19, 1958 to the Labour Court for enforcement of the award and the appellant had contested that application by a Written Statement, dated September 15, 1958. The Labour Court allowed the application on August 4, 1959 and the appellant had preferred an appeal to the Industrial Court on August 31, 1959. The decision of the industrial Court was given on October 24, 1959 and after the appeal was dismissed the appellant moved the High Court for grant of a writ on November 16, 1959. " The appellant in this case had claimed a mandamus or direction to the respondents to issue to the appellant import licence for art silk yarn of the value of Rs. 8,03,530.45. It is well know that the exchange position of this country and the policy of Government regarding International trade varies from year t year and it would be rather odd for this Court to direct that a Import licence be granted in the year 1968 in respect of allege,, default committed by the Government in 1959 or 1962. In these matters it is essential that persons who are aggrieved by order of the Government should approach the High Court after exhausting the remedies provided by law, rule or order with utmost expedition. 865 The learned counsel for the appellant contends that this matter involved fundamental rights and this Court at least should not refuse to give relief on the ground of delay. But we are exercising our jurisdiction not under article 32 but under article 226, and as observed. by Gajendragadkar, C.J., in the passage extracted above, even in the case of alleged breach of fundamental rights the matter must be left to the discretion of the High Court. In the result the appeal fails. Parties will bear their own costs. Y.P. Appeal dismissed.

By a notification dated August 4. 1947 issued under section 12(1) of the ' Foreign Exchange Regulation. Act, 1947 and the, Foreign Exchange Regulation Rules, 1952, and amended thereunder, the Central Government prohibited the export to countries mentioned in its Schedule. of goods, except by post. unless a declaration supported by such evidence as may be prescribed is furnished by the exporter to the prescribed authority that the amount representing the full export value of the goods has been paid or would be paid within the prescribed period. In 1957, the respondents shipped goods after furnishing to the prescribed authority, namely, the Collector of Customs a declaration in the statutory form prescribed under the Foreign Exchange Regulation Rules, and the Collector of Customs passed the, goods for shipment. In 1965, the Dy. Collector of Customs issued a notice to the respondents calling upon them to show cause why a penalty under section 167(8) of the , should not be imposed, on the basis that the respondents under valued the goods deliberately, that they gave in the prescribed form false particulars supported by false evidence, that there was a failure to repatriate large amounts of foreign exchange contrary to the requirements of section 12(2) and r. 5, that section 12(1) of the Foreign Exchange Regulation Act and Rules required a declaration of the actual amount representing the full export value and a mere declaration of any value would not be sufficient compliance with the provisions, that under the circumstances by virtue of section 23 A of the Foreign Exchange Regulation Act, the exportation constituted an offence. under section 167(8) of the . the respondents thereupon. filed a writ petition contending that the declaration to the Collector of Customs was sufficient compliance with the statutory provisions and that the Collector having passed the consignments for shipment, had no further jurisdiction to take proceedings against them. A single Judge of the High Court dismissed the petitions, but on appeal, the Divisional Bench allowed the petitions. In 'appeal to this Court. HELD: Per Bachawat and Hegde, JJ. On the facts set out in the show cause notice the respondents could not be held to have contravened section 12(1). (1) The regulations contained in the Act are enacted in the economic and financial interest of the country. Therefore, the rigour and sanctity of the regulations should be maintained but at the same time it should not be forgotten that section 12(1) is a penal section, and in interpreting it. it is not competent to the Court to stretch its language in order to carry out the intention of the ' Legislature. [752 E] 728 Tolaram Rehumal vs State of Bombay ; , 164, followed; Re. H.P.C. Production Ltd. [1962] Ch. Dn. 466, 473, ,red London & North Eastern Ry. Co. vs Beriman, , 295, applied. (2) Neither section 12(1) nor any other provision of the Act empowers the rule making authority to add to the restrictions imposed by the section, and for finding out the restrictions imposed by the section one can only look at that section. The only restriction placed by section 12(1) read with the notification dated August 4, 1947 is that no one should export any goods from this country without furnishing the declaration mentioned in s.12(1). The items of information called for in the prescribed form cannot be considered as restrictions imposed by section 12(1). They are merely information called for the proper exercise of the powers under the Act. In fact many of them do not relate to the restrictions imposed if the section. [751 C F] (3) So far as goods sold to the foreign buyer are concerned it is possible for the exporter to know the, exact export value, but that would not be the position when the goods are sent on consignment basis, and, in such a case the: exporter can give only an estimated value. If every declaration which does not state accurately the full export value of the goods exported is held to be, a contravention of section 12(1) then all exports on consignment basis must be held to contravene the restriction imposed by section 12(1), but, the Legislature could not have intended that minor mistakes in giving the full export value should be punished under section 23A. Therefore, the declarations given in the present case do satisfy the requirements of section 12(1) though they did not correctly furnish all the information asked for in the form, and hence, there was no contravention of the section. [751 H 752 D] (4) The main purpose of section 12(1) is to get a declaration from the exporter that he has either brought or will bring back the amount representing the full export value of the goods. The scheme of the Act is that so far as customs authorities are concerned all that they have to see is that no goods are exported without furnishing the declaration prescribed under section 12(1). Once that stage is passed the rest of the matter is left in the hands of the Reserve Bank and the Director of Enforcement under sections 12(5) and (6). [752 B, 754 F] (5) Before a case can be held to fall within the scope of sections 23A and 167(8) of the , could be invoked, it must be shown that there has been a contravention of the restrictions imposed by section 12(1); but the language of section 12(1) does not permit the interpretation that the Legislature intended that the offences complained in these proceedings should be punishable under section 23A. The contravention complained of in this case are really contraventions of section 12(2) and r. 5 and they are punishable, the former, under section 23 and the latter. under sections 22 and 23. [751 B C, G] Per Sikri, J. dissenting. On the facts alleged by the Customs authorities no case for the issue of a writ to the authorities had been made out. (1) The Act was enacted in the interests of national economy. Since a deliberate large. scale contravention of its provisions would have serious effects, it should be construed so as to make it workable. No subject can insist on an interpretation which will have the effect of sabotaging the national economy. [739 H 740 A] 729 (2) As section 12(1) itself does not impose any restrictions and contemplates rules being made on: (a) evidence which is to support declaration; (b) authority to which the declaration is to be furnished; and (c) the manner of payment; the restrictions imposed by rules which are deferrable to the section must be treated as restrictions imposed by the section. [740 H] Wellingdale vs Norris [1909] 1 K.B. '57, 64, Wicks vs Director of Public Prosecution, [1947] 1 All E.R. 205, 206, R. vs Wicks, , 53t and Rathbone vs Bumlock, , applied. Dr. Indramani Payarelal Gupta vs W.R. Nathu, ; , 737, distinguished. U.S.v. George R. Eaton; , and Singer vs U.S. 89 L.Ed.258, 290. referred to. (3) Even in a case where the amount has not been received, there must be declaration of some actual figure, which, according to the declaration represents the 'full export value ' It may be an estimate if the goods have not been sold before the export, but a figure must be indicated. The requirement of supporting evidence and r. 5(2)(ii) requiring the statement of the invoice value in the declaration indicate that an actual figure has to be mentioned. SeCtion 12(1) and the notification impose a conditional prohibition an on exporter which he can lift by a unilateral declaration. When such a power is conferred on an exporter by a statute good faith, on his part must be implied and is a condition prerequisite. Section 22 provides that the declare shall not give any information which he knows or has reasonable cause to believe to be false or not true Clerical mistakes and mistakes made bona fide even in respect of material particulars would not come within the mischief of the section. but a deliberate falsehood and deliberate evasion of the provisions of the section would be a contravention of section 12(1) for otherwise the ambit of the section read with section 23A would be narrowed to the point of extinction. An exporter and persons concerned in the export, could with impunity give a deliberately false declaration but in apparent compliance with section 12(1) and deprive this country of foreign exchange. There is no distinction, between an exporter and the persons concerned in the export when no declaration under section 12(1) is given at all and in a case where the exporter gives a deliberately false declaration for the purpose of the applicability of section 167(8) of the . [1744 D 745 D] (4) Since the same contravention may attract penalties under the as well as the Foreign Exchange Act it will be incongruous to hold that the restrictions imposed by section 12(1) are different for the two acts. [740 F G] The Mayor of Portsmouth vs Charles Smith, 10 A.C. 364, 371, applied. (5) Section 23A of the Foreign Exchange, Act deems the restrictions imposed under section 12(1) to have been imposed under s, 19 of the , without prejudice to the provisions in section 23 dealing with penalty and procedure for contravention of the provisions of section 12 or any rule or direction or order made thereunder of Foreign Exchange Act and therefore, offenders who violate those restrictions could be proceed with both under the Foreign, Exchange Regulation Act as well as the . It may be that action can be taken against an exporter under other sections of the Foreign Exchange ReguLation Act 730 or the , but that does not prevent action under section 23A read with section 12(1) with the aid of customs authorities, both against exporters and persons concerned in the prohibited export. [745 E H]