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iminal Appeal No. 50 of 1969. Appeal from the judgment and order dated December 24, 1968 of the Calcutta High Court in Criminal Revisions No. 235 of 1966. Nur ur din Ahmed, section C. Agarwal and Indiraj Jaisingh, for the appellant. S.P. Mitra and G. section Chatterjee for Sukumar Basu for the respondent. The Judgment of the Court was delivered by Jaganmohan Reddy, J. This appeal is by certificate under article 134(1) (c) of the Constitution. The appellant is the Manager of Sree Krishna Oil Mills, Midnapore, the proprietor of which was one Srilal Bajoria. Both these persons were tried jointly for an offence under section 7(1)/16(1)(a)(i) of the Prevention of Food Adulteration Act, 1954 hereinafter referred to as 'the Act '. The proprietor Srilal Bajoria was acquitted but the appellant was sentenced to one year rigorous imprisonment. The offence in respect of which the appellant was charged was that he being the Manager of the Oil Mills for manufacturing mustard oil was responsible for the adulteration. On July 10, 1964, at about II A.M. the appellant was going in a truck carrying 100 tins of mustard oil and was stopped by the Food Inspector, Kharagpore Municipality. On being 847 questioned by the Food Inspector the appellant informed him that the oil which he was carrying was manufactured at Sree Krishna Oil Mills, Midnapore. As the Food Inspector suspected that this oil may have been adulterated, he took three samples according to the provisions of the Act. He sent one sample to the Public Analyst one he kept with himself and the third he gave to the appellant. The Public Analyst on examining the sample sent to him reported on August 5, 1964, that saponification value of the oil was 181.6, Iodine value 107.2 and B. R. reading at 40 'C was 60.1 and was of the opinion that the sample of mustard oil was adulterated vide Ext. After obtaining the sanction for prosecution from the Chairman of the Municipality, the appellant was prosecuted before, the Magistrate, 1st Class, Midnapore. He pleaded not guilty but on the evidence and the report of the Public Analyst he was convicted and sentenced as aforesaid. An appeal to the Sessions Judge was without success. Thereafter the appellant filed a revision before the High Court and that was also dismissed. Before us the learned counsel for the appellant has urged similar points as were urged before the High Court, namely, (i) that the trial was vitiated for want of valid and legal sanction; (ii) that the report of the Public Analyst was not a proper report in law and cannot form the basis of legal conviction; and (iii) that the Public Analyst 's report Was bad and incomplete for failure to carry out all the tests required under A. 17.06 of Appendix B to the Prevention of Food Adulteration Rules, 1955, and also for failure to disclose the data in the report. It is contended on behalf of the appellant that the sanction to prosecute the appellant was given by the Chairman of Kharagpore Municipality Shri K C. Chaki on August 19, 1964. This sanction did not show (a) that tile Chairman had applied his mind before giving the sanction; (b) that it was valid as it was not granted by the Local Authority, namely, the Municipality; and (c) that since the resolution of the Municipality had authorised the Chairman to give the sanction, the new Chairman cannot avail himself of that authorisation as by that time there were fresh elections and a new Chairman was elected. Accordingly it is submitted that the sanction given by Mr. Chaki was not a proper sanction. It appears to us that the challenge to the validity of the sanction is misconceived. As pointed out by the High Court, section 51 of the Bengal Municipal Act, 1932, enumerates the powers of the Chairman as under: "Save as hereinafter provided, the Chairman shall for the transaction of the business connected with this Act or for the purpose of making any order authorised 848 thereby, exercise all the powers, vested by this Act in the Commissioners and whereby any other law power is vested in the Commissioners for any purpose, the Chairman may transact any business or make any order authorised by that law in the exercise. of that power, unless it is otherwise expressly provided in that law." Section 20 of the Act provides for sanction of the Local Authority for prosecutions under the Act which includes a Municipality. Reading these two provisions together the Chairman of a Municipality duly authorised by the Municipality can accord sanction for prosecution of offences under the Act. In compliance with the aforesaid power under section 51 of the Bengal Municipal Act, the Municipality by resolution dated July 28, 1960 authorised the Chairman "to perform all the functions and exercise the. powers of the Local Authority within the meaning of the ." (Exe. This power, it may be noticed, is not granted to any particular Chairman Eo nominee, but is a general power exercisable by any Chairman for the time being of the Municipality. It is true that a fresh election of the Chairman was held after the resolution of the Municipality but that does not deprive the new Chairman of the power to grant sanction in under that, resolution. The appellant in Criminal Miscellaneous Petitions Nos. 450 & 515 of 1970 seeks permission to allow him to adduce additional evidence to show that there was another resolution by the Kharagpore Municipality dated August 18, 1965, which had given a, fresh authorisation to the Chairman to grant sanctions for prosecution under the Act which would show that the previous authorisation was not really valid when sanction was given to prosecute the appellant. Apart from the fact that, no case has been made out to adduce any fresh evidence, the resolution itself has been passed after the sanction for the prosecution was. given and even that resolution as can be noticed is in similar terms to the earlier resolution passed by the Municipality. This subsequent resolution does not in any way indicate that the previous power could not be availed of by the Chairman who in fact had granted the sanction. At, the most it may have been passed by way of abundant caution, having regard to the contentions raised during the trial of the appellant. The High Court has pointed out, and we think rightly, that under section 15(2) of the Bengal Municipal Act, the Municipality is a body corporate and it has perpetual succession, if so any authorisation granted by it is not limited to the Chairman then in office, but will continue unless otherwise rescinded. Nextly it has been strenuously urged before us on behalf of the appellant that the report of the Public Analyst is not a complete report in that out of the seven tests that he had to make under 849 A 17.06 of Appendix B to the Rules he had only made three tests and secondly the report does not give the basis on which. the Public Analyst came to the conclusion that the sample of the mustard oil was adulterated. It is true that the Public Analyst in his report has only indicated the result of the three tests out of which two tests were as indicated in A 17.06 while only one, namely, the saponification test was said to have exceeded the maximum on the strength of which the Public Analyst reported that the sample was adulterated. Omission to report on the other four tests does not, in our view make the reporter ineffective or the report inconclusive. Even assuming that the other four tests are normal, if the saponification test alone did not conform to the standards indicated in A 17.06 of Appendix B to the Rules the sample cannot be said to have come up to the standard and, therefore, it is adulterated. An attempt was made to refer us to certain technical books and the decisions in Jagadish Chandra Jain vs Corporation of Calcutta(1) Messrs. Netai Chandra and Surendra Nath Dey vs Corporation of Calcutta,(2) and In re. Perumal & Co.(3) for the proposition that the standard prescribed by A 17.06 in Appendix B to the Rules is not conclusive because in some places mustard can yield a higher reading. We cannot allow any fresh evidence to be used, nor do we think that the decisions referred to, even if they justify that contention, can alter or vary the standard fixed in exercise of the powers conferred by the Act in Appendix B to the Rules. Section 3 of the, Act authorises the Central Government to constitute a Committee called the Central Committee for Food Standards to advise the Central Government and the State Governments on matters arising out of the administration of the Act and to carry out the other functions assigned to it under the Act. Under section 23 ( 1 ) (b) of the Act the Central Government may, after consultation with the Committee and subject to the condition of previous publication, make rules "defining the standards of quality for, and fixing the limits of variability permissible in respect of, any article of food. " It is in exercise of this power that r. 5 was made authorising standards of quality of the various articles of food specified in Appendix B to the Rules. In view of this provision any article of food which does not conform to the standards specified in Appendix B to the Rules which under section 2 (1) of the Act is said to be adulterated because "the quality or purity of the article falls below the prescribed standard or its constituents are present in quantities which are in excess of the prescribed limits of variability. " The contention that the standards cannot be conformed to by an ordinary vendor who is not versed in the technicalities is also (1) (3) A.I.R. 1943 Mad. (2) A.I.R. 1967 Cal. 65. 850 not of significance. In this regard it was pointed out by Shah, J., as he then was, speaking for this Court in Andhra Pradesh Grain and Seed Merchants Association and others vs Union of India & Anr. (1) : "The various items in the Schedule setting out standards of quality use technical expressions with which an ordinary, retail dealer may not be familiar, and also set out percentages of components which the dealer with the means at his command cannot verify. But by section 3, the Central Government has to set up the Central Committee for Food Standards to advise the Central and the State Governments on matters arising out of the administration of the Act. . . Under section 23 ( 1 ) (b) the Central Government makes rules prescribing the standards of quality and the limits of variability permissible in any article of food. The rules are made after consultation with the Committee for Food Standards. The standards set out in the Appendix to the Rules are prescribed after consultation with the Committee for Standards. " It appears to us therefore that standards having been fixed as aforesaid any person who deals in articles of food which do not confirm to them contravenes the provisions of the Act and is liable to punishment thereunder. It was again urged that the Public Analyst had not given the basis for his conclusion that the saponification test did not conform to the standards specified in A 17.06 of Appendix B to the Rules which contention is also not tenable. Under section 13 (5) of the Act any document purporting to be a report signed by a Public Analyst, unless it has been superseded under sub section (3), or any document purporting to be a certificate signed by the Director of the Central Food Laboratory, may be used as evidence of the facts stated therein in any proceeding under the Act or under sections 272 to 276 of the Indian Penal Code. Under the proviso to that sub section any document purporting to be a certificate signed by the Director of the Central Food Laboratory shall be final and conclusive evidence of the facts stated therein. If the report of the Public Analyst was not satisfactory, it was open to the appellant to have made an application for the sample which was in his possession to be sent to the Director of the Central Food Laboratory for examination. If he had made such an application and sent the sample under section 13 (2) the certificate granted by the (1) ; 851 Director of the Central Food Laboratory would have superseded the report given by the Public Analyst. This he has not done. In the circumstances he has been properly convicted. Lastly it has to be considered whether the sentence awarded in the circumstances requires any modification. It was urged that the prosecution of the appellant was prior to the amendment of sub section (1) of section 16 of the with effect from March 1, 1965, under which the sentence has to be a minimum of six months rigorous imprisonment, but there is no such injunction under the unamended section and yet the maximum sentence has been awarded to the appellant which is harsh for a first offender. Offences under the Act being antisocial crimes affecting the health and well being of our people, the Legislature having regard to the trend of courts to impose in most cases only fines or where a sentence of imprisonment was passed a light sentence was awarded even in cases where a severe sentence was called for, a more drastic step was taken by it in prescribing a minimum sentence and a minimum fine to be imposed even for a first offence. An exception was however made in cases falling under sub cl. (i) of cl. (a) of section 16(1) and in respect of an article of food which was considered to be adulterated under section 2 cl. (i),(i) or misbranded under section 2 cl. (ix) or for an offence under sub clause (ii) of clause (a) of section 16(1), in which case the Court is given the discretion, for any adequate and special reasons to be mentioned, to award a lesser sentence than six months or impose a fine lesser than one thousand rupees or of both lesser than the minimum prescribed. If for the offence of which the appellant is convicted even under the amended section a lesser sentence can be awarded, if there were adequate and special reasons, it would be much more so under the unamended section. The reasons for the Legislature to make the exception is not that the offences specified are not considered to be serious, but the gravity of the offence having regard to its nature can be less if there are any special or adequate reasons. In our view though offences for adulteration of food must be severely dealt with, no doubt depending on the facts of each case which cannot be considered as precedents in other cases, in this case having regard to the fact that the appellant has been on bail since 1964 for a period of nearly seven years, and also because not only the mustard oil sample satisfied all the tests except one but the main person concerned in the manufacture of the said oil has been acquitted, interests of justice would be served if the sentence of one year is reduced to two months rigorous imprisonment and the appellant is further directed to pay a fine of 852 Rs. 1,000/ failing which to be directed to undergo a further term of rigorous imprisonment for one month. We accordingly so direct. Subject to this modification, the appeal and the Criminal Miscellaneous Petitions Nos. 450 and 515 of 1970 are dismissed. K.B.N. Appeal and petitions dismissed.

The appellant, manager of an Oil Mill, was convicted under section 7(i)/16(1)(a)(i) of the , and sentenced to one year rigorous imprisonment. His appeal to the Sessions Judge was without success and a revision to the High Court, was also dismissed. In appeal to this Court it was contended that (i) the sanction for prosecution did not show (a) that the Chairman of the Muni cipality had applied his mind before giving the sanction, (b) that it was invalid since it was not granted by the local authority, namely, the municipality and (e) that since the resolution of the Municipality had authorised the Chairman to give the sanction, the new Chairman could not avail himself of that authorisation and, therefore. the trial was vitiated for want of valid and legal sanction; (ii) the 'report of the Public Analyst was not a proper report in law and was bad and incomplete for failure to carry out all the tests required under A. 17.06 of Appendix B to the Prevention of Food Adulteration Rules, 1955, and also for failure to disclose the data in the report; and (iv) the sentence awarded was harsh for a first offender. Reducing the sentence and dismissing the appeal, HELD : (i) Reading sections 20 and 51 of the Bengal Municipal Act, 1932, the Chairman of a municipality duly authorised by the municipality can accord sanction for prosecution of offences under the Act. The resolution of the Municipality authorising the Chairman to perform all the functions and exercise the powers of the local authority within the meaning of the , is not to grant power to any particular Chairman eo nominee, but, is a general power exercisable by any Chairman, for the time being, of the municipality. The High Court has rightly pointed out that under section 15(2) of the Bengal Municipality Act the Municipality is a body corporate and it has perpetual succession and, as such, any authorisation granted by it is not limited to the Chairman then in office but will continue unless rescinded. [848 D; G H] (ii) It is. true that the Public Analyst in his report has only indicated the result of the three tests out of which two tests were as indicated in A 17.06, while, only one, namely, the saponification test, was said to have exceeded the maximum on the strength of which the Public Analyst reported that the sample was adulterated. Omission to.report on the other four tests does not make the report ineffective or inconclusive. Even assuming that the other four tests are normal, if the saponification test alone did not conform to the standards indicated in A 17.06 of Appendix B to the Rules, the sample cannot be said to have come up to the standard and, therefore, it is adulterated. It is in exercise of the powers conferred by section 23 (i) (b) that rule 5 was made authorising standards of quality of 846 the various articles of food specified in Appendix B to the Rules. Standards having been fixed, any person who deals in articles of food which do not conform to them contravenes the provisions of the Act and is liable to punishment thereunder. [849 A C; 850 E] Andhra Pradesh Grain and Seed Merchants Association and others vs Union of India & Anr., A.I.R. , referred to. If the report of the Public Analyst was not satisfactory it was open to the appellant to make an application for sending the sample which was in his possession to the Director. If he had made such an application and sent the sample under section 13(2) the certificate granted by the Director of the Central Food Laboratory would have superseded the report given by the Public Analyst. This has not been done. In the circumstances he has been properly convicted. [850 H] (iv) The reason for the legislature to makeexception to the minimum of six months rigorous imprisonment prescribedunder section 16(1) is not that the offences specified are not considered to be serious, but the gravity of the offences, having regard to its nature can be less if there are any special or adequate reasons. In the present case having regard to the fact that the appellant has been on bail since 1964 for a period of nearly seven years, and also because not only the oil sample satisfied all the tests except one but the main person concerned in the manufacture of the oil has been acquitted, interests of justice would be served if the sentence of one year is reduced to two months rigorous imprisonment and the appellant is further directed to pay a fine of Rs. 1000/ . [851 F, H]

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

The constitutionality of the Madras Land Reforms (Fixation of Ceiling on Land) Act, 1961 was attacked on the ground that it violated articles 14, 19, 31(2) of the Constitution. Held (i) The provisions of section 5(1) of the Act result in discrimination between persons equally circumstanced and are thus violative of article 14 of the Constitution. As this section is the basis of Chapter II of the Act, the whole chapter must fall along with it. The ratio of Karimbil Kunhikoman vs State of Kerala [1962] Supp. 1 S.C.R. 829 applies with full force to the present case. (ii)The provisions in section 50 read with Sch. III of the Act with respect to compensation are discriminatory and violate article 14 of the Constitution. Karimbil Kunhikoman vs State of Kerala [1962] Supp. S.C.R. 829, followed. (iii)Ss. 5 and 50 are the pivotal pro visions of the Act, and as they fall, the whole Act must be struck down as unconstitutional.

Special Leave Petition (Civil) No. 363 l of 1987. From the Judgment and order dated 11.12.1986 of the Delhi High Court in C.W. No. 1943 of 1986. AND Special Leave Petition (Civil) No. 4321 of 1987. From the Judgment and order dated 5.3.1987 of the Delhi High Court in R.A. No. 8 of 1987 in W.P. No. 2013 of 1986 B.R.L. Iyenger, Mrs. Lalitha Kaushik and Naresh Kaushik for the Petitioner. V.B. Saharya for the Respondents. The Judgment of the Court was delivered by RANGANATHAN, J. In both these matters, notice was given to the respondent on a limited point: whether the Lt. Governor of Delhi to competent is issue a notification under section 4(1) of the Land Acquisition Act. 1894 ( 'the 1894 Act '), to acquire hand "for the planned development of Delhi". That is the ground on which, inter alia, the petitioners unsuccessfully challenged before the High Court the validity of a notification dated 27.1.1984 issued by the Lt. Governor of Delhi (as the Head of the Delhi Administration) for the acquisition of about 3550 hectares of land situated in Delhi. We have, therefore, heard counsel on this limited question. Section 4(1) of the 1894 Act, insofar as it is relevant, reads as follows: "4(1)Whenever it appears to the appropriate Government that land in any locality is needed or is likely to be needed for any public purpose, a notification to that effect shall be published in the official Gazette 763 Section 3(ee) of the same Act defines "appropriate Government" A as follows: "In this Act, unless there is something repugnant in the subject or context (ee) the expression "appropriate Government" means, in relation to acquisition of land for the purposes of the Union, the Central Government, and, in relation to acquisition of land for any other purposes, the State Government. A reference should also be made, in this context, to notifications issued under Article 23(1) of the Constitution of India by the Ministry of Home Affairs of the Government of India on 19.8.1954, 1.11.1956 and 7.9.1966. The cumulative effect of these notifications is that the Lt. Governor of the Union Territory of Delhi is entitled to exercise the powers and discharge the functions of the Central Government under the provisions of the 1894 Act within the Union Territory of Delhi. There is no doubt, considering the provisions of the 1894 Act and the above notifications, that the Lt. Governor of Delhi was fully competent to issue the notification dated 27.1.1984. The argument addressed on behalf of the petitioners, however, is that, after the enactment of the Delhi Development Act, 1957 (the 1957 Act '), the provisions of the 1894 Act are no longer relevant in the present context. It is submitted that the expression "planned development of Delhi" can and does envisage the development of Delhi only in accordance with the provisions of the Master Plan and the Zonal Plans drawn up under the 1957 Act. Under the said Act, the full responsibility of drawing up plans for the development of Delhi as well as executing the same in several phases is vested in the Central Government. Sec. 15 of the Act, makes it clear that this takes in also the acquisition of Lands for such planned development. It reads: "section 15 Compulsory acquisition of land (1) If in the opinion of the Central Government, any land is required for the purpose of development, or for any other purpose, under this Act, the Central Government may acquire such land 764 under the provisions of the Land Acquisition Act, 1894. (1 of 1894). (2) Where any land has been acquired by the Central Government, that Government may, after it has taken possession of the land, transfer the land to the Authority or any local authority for the purpose for which the land has been acquired on payment by the Authority or the local authority of the compensation awarded under that Act and of the charges incurred by the Government in connection with the acquisition. " It is argued that while the notifications under Article 239 of the Constitution may have delegated the power of acquisition under the second part of section 15(1) to the Lt. Governor, they do not affect the Central Government 's jurisdiction under the first part to take a decision that certain lands are needed for the purposes of the Act. The argument that land acquisition in Delhi for planned development is the 'business ' of the Central Government is sought to be reinforced by reference to the Allocation of Business Rules, 1961, made by the President under Article 77(3) of the Constitution of India. These rules enumerate the following items as falling within the purview of the Ministry of Works & Housing in the Union Government: 16. Schemes of large scale acquisition, development and disposal of land in Delhi. Delhi Development Authority. Master Plan of Delhi, Co ordination of work in respect of the Master Plan and slum clearance in the Union Territory of Delhi. Administration of the Delhi Development Act, 1957. All this shows, according to the learned counsel, that the Lt. Governor has no jurisdiction or competence to issue the impugned notification. There is ex facie, a very plausible reply to the petitioner 's arguments based on section 15 of the 1957 Act. It is this: that the expression "Central Government" in section 15 of the 1957 Act has to be understood in 765 the light of the definition contained in section 3(8) of the . That definition reads: "3. In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context, XX XX XX (8) 'Central Government ' shall (a) . . . (b) in relation to anything done or to be done after the commencement of the Constitution, mean the President; and shall include (i) in relation to functions entrusted under clause (1) of Article 258 of the Constitution to the Government of a State, the State Government acting within the scope of the authority given to it under that clause; (iii)in relation to the administration of a Union Territory, the administration thereof acting within the scope of the authority given to him under Article 239 of the Constitution. " It, therefore, follows, it can be said that, even under this provision, the jurisdiction to acquire lands rests only in the Lt. Governor of Delhi. Anticipating this reply counsel for petitioners urges that the definition in the is inapplicable in the context of the Delhi Development Act. It is said that throughout this Act there runs a clear demarcation between the Central Government on the one hand and the Administrator of the Union Territory on the other. Reference is made to section 30, 41 and 52 of the 1957 Act and it is urged, in the light of these provisions, that the reference to the Central Government in section 15 should be construed as a reference only to the Central Government and not to the Administrator (i.e. Lt. Governor) of the Union Territory. 766 A counter affidavit had been filed on behalf of the Delhi Development Authority (DDA) which contained an annexure which would have provided a direct answer to the contentions urged on behalf of the petitioners. This answer is a notification dated 14.2.69, issued by the Central Government under section 52(2) of the 1957 Act. By this notification, the Central Government directs that the powers of that Government under the provisions of the 1957 Act mentioned in the Schedule thereto annexed would, subject to the control of the Central Government and until further orders, also be exercised by the Administrator of the Union Territory of Delhi. 11 items are mentioned in the Schedule. Of these, the powers in regard to item 2 of the Schedule alone have to be exercised by the Administrator with the prior approval of the Central Government. The others, which include powers in regard to section 15(item 6) can be exercised by the Administrator even without such prior approval. This notification places it beyond doubt that the powers of the Central Government under section 15 can be exercised by the Lt. Governor of Delhi. Both the power to form an opinion under the first part of section 15(1) and the power of acquisition under the second part are comprehended by this notification. This notification, therefore, would have furnished a complete answer to the contentions urged on behalf of the petitioners. Unfortunately, it appears, the notification was only at the draft stage and was never gazetted. We have, therefore, to leave this notification out of account. But, even otherwise, we are of the opinion that Lt. Governor was quite competent to issue the notification in question. It is no doubt true that the 1957 Act makes separate mention of the Central Government and the Administrator and demarcates some functions between the Central Government on the one hand and the State Government or the Administrator on the other. But, whatever may be the position in regard to other provisions, there can be no doubt that, in the con text of section 15, it would not be correct to understand these two expressions in different senses. We say this because on reading of section 15(1) it is the obvious intention of the Legislature that the same authority should exercise its functions under both the parts of the sub section. If the sub section is read in the manner in which the petitioners seek to read it, the working of the section would become impracticable and cumbersome. According to them, the Central Government will first to have form an opinion that certain lands are required for the purposes of planned development of Delhi under the Act; thereafter this opinion has to be communicated to the Lt. Governor who, in view of the delegation of powers under Article 239 of the Constitution which we have referred to earlier, will have to apply his 767 mind once again to the same question before he can issue a notification under section 4 of the 1894 Act. This is a duplication of functions which could not have been within the contemplation of the Legislature. The provision requires the satisfaction of only one authority and since the powers of the Central Government under the 1894 Act have been delegated to the Lt. Governor, the expression 'Central Government ' will have to be understood in the same sense for the first part of the sub section as well. The Allocation of Business Rules relied on by counsel, have no relevance in this context. They only provide that, when any of the items mentioned (such as DDA, master plan, the 1957 Act, or acquisition etc. Of properties in Delhi) comes up for the consideration of the Central Government, it will have to be dealt within the Ministry of Works & Housing. They are quite consistent with the position that even the powers delegated to the Lt. Governor are exercisable by him only subject to the control and further orders of the President. They cannot be understood as negativing the competence of the Lt. Governor to deal with the subject matter in question. Even assuming that the petitioners are right in their interpretation of section 15(1), the competence of the Lt. Governor to issue the impugned notification can be upheld on another ground. The provisions of the 1894 Act clearly empower the Lt. Governor to acquire the lands for the planned development of Delhi, which, it is now settled law, is clearly a public purpose. That competence cannot be denied without some express provision in some statute. Both the 1894 Act and 1957 Act are Central enactments. Granting that the 1957 Act desired to empower the Central Government to acquire lands in Delhi for the purposes of the said Act and even granting that such power has to be exercised through the Lt. Governor because of the notification under Article 239(1), such power can also stand size by side with the wider power of the Lt. Governor to acquire lands for a public purpose. There is nothing in the 1957 Act which prohibits the Lt. Governor taking such steps as he desires, under the powers available to him, to carry out the planned development of Delhi in consonance with the plans approved or finalised under the 1957 Act. Viewed in this light, the powers of the Lt. Governor under section 4 of the Land Acquisition Act can be read as additional to the powers of the Central Government under the Delhi Development Act. The 1957 Act does not destroy but only supplements the 1894 Act. This is the view taken by the High Court and we agree with it. Both counsel referred to certain decisions. We do not think it is necessary to refer to them in detail except to say that the decision in H 768 the Express Newspapers Pvt. Ltd. & Ors. vs Union of India & Ors. , [1985] Supplement 3 SCR 382 relied upon for the petitioner is clearly distinguishable and it related to a case regarding the powers of the Delhi Administration in regard to lands belonging to the Union. For the reasons discussed above, we reject the contention urged on behalf of the petitioners. The Special Leave Petitions fail and are dismissed. We, however, make no order as to costs. S.L. Petitions dismissed.

% Under a family partition deed (exhibit 1), the properties under 'A ' schedule were allotted to Maharaja Pillai, and after his death, his widow was given the right to take the income from the properties. One of the sons of Maharaja Pillai filed a suit claiming his right to 1/3rd share in the properties above said. The trial court held that the widow got absolute right over the properties in dispute under section 14(1) of the . On appeal, the appellate court held that the widow got only a restricted right under section 14(2) of the Act. On further appeal, the High Court mainly upheld the view of the first appellate court. Against the judgment of the High Court, appeal was filed to this Court by special leave. Allowing the appeal and restoring the judgment of the trial court, the Court, ^ HELD: The question to be decided is whether the widow got an absolute right or a restricted right over the properties in the 'A ' schedule after the coming into force of the . During the life time of Maharaja Pillai, his wife (The widow in the case) was maintained by him. After his death, the widow was in exclusive possession of the 'A ' schedule properties and was taking the income from those properties. She had a right to utilise that income for her maintenance. That right was conferred on her under exhibit D. 1. The properties possessed by the widow fairly and squarely fall under Section 14(1) of the Act. The property mentioned in section 14(1) may be acquired by a female by inheritance or devise or at a partition or in lieu of maintenance or arrears of maintenance, etc. The right to maintenance of a Hindu female is a personal obligation of the husband. If the wife is put in exclusive possession of property with the right to take 781 income for her maintenance, it must be presumed that the property is given to her in lieu of maintenance. The property under 'A ' schedule was allotted against the share of Maharaja Pillai. That property was given to the possession of the widow with a right to take income for her maintenance, and this is sufficient to get the protection of section 14(1) of the Act. [782B; 783D E; 784C D; 786G] Gulwant Kaur & Anr. vs Mohinder Singh & Ors., Civil Appeal No. 112 of 1980, date 20.7.87; Bai Vajia vs Thakorbhai Chelabhai & Ors., [19793 3 SCR 291; V. Tulsamma vs Sesha Reddi, ; at 310. referred to.

tition Criminal No. 1892 of 1981. Under Article 32 of the Constitution of India Ram Jethmalani, Vineet Kumar, M. G. Karmali and Naresh K Sharma for the Petitioner. The Judgment of the Court was delivered by BHAGWATI J. : This is a petition for a writ of Habeas Corpus for securing the release of one Hasnain Mukhtar Hussain Lakdawala (hereinafter referred to as the detenu) who has been detained by the Government of Maharashtra under an order of detention dated 31st December 1980 made in exercise of the powers conferred under section 3(1) of the (hereinafter referred to as the COFEPOSA. This order of detention though dated 31st December 1980 was served on the detenu on 17th January 1981 and alongwith the order of detention, a communication, also dated 31st December 1980, was served on the detenu containing the grounds of detention. The Government of Maharashtra also served on the detenu at the same time a letter dated 7th January 1981 enclosing copies of the documents relied upon in the grounds of detention. It appears that on 6th February 1981 the advocate of the detenu addressed a letter to the Superintendent, Bombay Central Prison where the detenu was then confined and alongwith this letter he forwarded nine copies of the representation which was to be submitted by the detenu to the Government of Maharashtra against the order of detention. This letter was delivered by the authorities in charge of the Bombay Central Prison to the detenu on 6th February 1981, but on the same day the detenu was shifted from the Bombay Central Prison to Nasik 291 Road Central Prison and the nine copies of the representation were therefore carried by the detenu with him to the Nasik Road Central Prison and from there, the requisite number of copies of the representation duly signed by the detenu were forwarded to the Government of Maharashtra and the Chairman of the Advisory Board on 10th February 1981. This representation was however rejected by the Government of Maharashtra by its letter dated 25th February 1981. It appears that a copy of the representation was also sent by the detenu to the Central Government and by its letter dated 26th February 1981 the Central Government too rejected the representation. In the meantime, the case of the detenu was referred to the Advisory Board and on 11th March 1981, the detenu was called for an oral hearing by the Advisory Board and at this meeting the detenu handed over to the Chairman and Members of the Advisory Board four copies of a further representation dated 11th March 1981 addressed by him jointly to the Chairman and the Members of the Advisory Board and the Government of Maharashtra praying that the Government of Maharashtra may be pleased to revoke the order of detention and set the detenu at liberty. The Advisory Board considered the case of the detenu and by a letter dated 16th March 1981, the Secretary of the Advisory Board intimated to the advocate of the detenu that the Advisory Board had by its report dated 12th March 1981 advised the Government of Maharashtra that there was sufficient cause for the detention of the detenu. The State Government thereafter in exercise of the powers conferred under clause (f) of section 8 passed an order dated 23rd March 1981 reciting the opinion given by the Advisory Board and confirming the order of the detention. The petitioner who is the wife of the detenu thereupon preferred the present writ petition challenging the order of detention made by the Government of Maharashtra as also the continuance of the detention under the subsequent order dated 23rd March 1981. There were several grounds urged on behalf of the petitioner in support of the petition and each one of them was seriously pressed before us by Mr. Jethmalani on behalf of the petitioner. The first ground was that the order of detention was made by one P. V. Nayak, Secretary to Government, Revenue and Forest Department and Ex officio Secretary to Government, Home Department while the representation made by the detenu against the order of detention was considered and disposed of by the Minister of State for Home Affairs not by P. V. Nayak and hence there was no effective consideration of the representation of the detenu as required by law. The argument on behalf of the detenu was that the representation of a 292 detenu must be considered by the same person who has passed the order of detention and since in the present case, the representation was considered by a different person, it was not a valid and proper consideration of the representation and the continuance of the detention of the detenu was therefore invalid There was also another related ground urged on behalf of the petitioner and it was that the Minister of State for Home affairs who considered the representation of the detenu was not competent to do so, both by reason of lack of authority as also in view of the fact that the case had already been dealt with by P. V. Nayak. We do not think there is any substance in either of these two grounds. If we look at the order of the detention, it is clear that it was not made by P. V. Nayak in his indi vidual capacity as an officer of the State Government but it was made by him as representing the State Government. It was the State Government which made the order of detention acting through the instrumentality of P. V. Nayak, Secretary to Government who was authorised so to act for and on behalf of and in the name of the State Government under the Rules of Business. Rule 15 of the Rules of Business of the Government of Maharashtra provided that those Rules may "to such extent as necessary be supplemented by instructions to be issued by the Governor on the advice of the Chief Minister" and in exercise of the power conferred under this Rule, the Governor of Maharashtra issued Instructions for the more convenient transaction of the business of the Government. Clauses (4), (5) and (6) of these Instructions as they stood at the material time provided inter alia as under: 4. Except as otherwise provided in these Instructions, cases shall ordinarily be disposed of by, or under the authority, of the Minister in charge, who may by means of standing orders give such directions as he thinks fit for the disposal of cases in the Department, Copies of such standing orders shall be sent to the Governor and the Chief Minister. 5 Each Minister shall arrange with the Secretary of the Department what matters or classes of matters are to be brought to his personal notice. Except as otherwise provided in these instructions, cases shall be submitted by the Secretary in the Department to which the case belongs to the Minister in charge. 293 Pursuant to the instructions contained in these clauses, Shri A. R. Antulay, Chief Minister of Maharashtra and Minister incharge of the Home Department, issued a Standing order dated 18th July 1980 directing that cases under sub section (I) of section 3 of the COFEPOSA Act need not be submitted to him or to the Minister of State for the Home Department and that such cases may be allotted to and disposed of by any of the six officers mentioned there one of them being P. V. Nayak. On the same day, another Standing order was issued by Sh. A. R. Antulay Chief Minister of Maharashtra and Minister in charge of Home Department in pursuance of the provisions contained in Rule 6 of the Rules of Business, directing inter alia that all cases appertaining to the COFEPOSA Act and all other matters arising under the provisions of that Act may be allotted to the Minister of State for Home Affairs. This latter Standing order provided that nothing contained in it shall affect the directions contained in the earlier Standing order issued on the same day. It will therefore be seen that P. V. Nayak was authorised under the earlier Standing order dated 18th July 1980 to deal with and dispose of cases under sub section (I) of section 3 of the COFEPOSA and it was in exercise of the authority thus conferred upon him that P. V. Nayak acting for the State Government made the order of detention against the assessee under sub section (I) of section 3. [t was the State Government which made the order of detention and not P. V. Nayak in his individual capacity. The representation made by the detenu against the order of detention was also therefore required to be considered by the State Government and either it could be disposed of by P. V. Nayak acting for the State Government under the earlier Standing order dated 18th July 1980 or the Minister of State for Home could dispose it of under the later Standing order dated 18th July 1980. Whether P. V. Nayak considered the representation and disposed it of or the Minister of State for Home did so would be immaterial, since both had authority to act for the State Government and wherever be the instrumentality, whether P. V. Nayak or the Minister of State for Home, it would be the State Government which would be considering and dealing with the representation. The only requirement of Article 22 (5) is that the representation of the detenu must be considered by the detaining authority which in the present case is the State Government and this requirement was clearly satisfied because when the Minister of State for Home considered the representation and rejected it, he was acting for the State Government and the consideration and rejection of the representation was by the State Government. There is no requirement express or implied in any provision of the COFEPOSA that the same person who acts for 294 the State Government in making the order of detention must also consider the representation of the detenu. In fact, as pointed out by Chinnappa Reddy, J. in Smt. Kavita vs State of Maharashtra(l) a Government business can never get through if the same individual has to act for the Government in every case or proceeding or transaction, however advantageous it may be to do so. " Moreover it would really be to the advantage of the detenu if his representation is not considered by the same individual but fresh mind is brought to bear upon it. We do not therefore see any constitutional or legal infirmity in the representation having been considered by the Minister of State for Home. The next contention of Mr. Jethmalani on behalf of the petitioner was that there was nothing to show that the decision to confirm the order of detention and continue the detention of the detenu was taken by the State Government as required by clause (f) of section 8 and hence the continuance of the detention was invalid. lt is really difficult to appreciate this contention urged on behalf of the petitioner. It is clear from the annexures to the writ petition that after receipt of the opinion of the Advisory Board that there was in its opinion sufficient cause for the detention of the detenu, the State Government in exercise of the powers conferred under clause (f) of section 8, made an order dated 23rd March 1981 confirming the detention order and continuing the detention of the detenu. This order was expressed to be made "By order and in the name of the Governor of Maharashtra" and was authenticated by the Under Secretary to the Government of Maharashtra Home Department. It recited in so many terms that it was the State Government which was confirming the order of detention and continuing the detention of the detenu and no material has been placed before us on behalf of the detenu to displace the correctness of this recital. There can therefore be no doubt that the ord r confirming the detention of the detenu was made by the State Government. Moreover, we have the statement on oath made by C. V. Karnik, Assistant Secretary to the Government of Maharashtra, Home Department that "the Government of Maharashtra thereafter under clause (f) of section 8 of the said Act confirmed the said detention order by an order dated 23rd March 1981. " lt was then contended by Mr. Jethmalani on behalf of the petitioner that under clause (b) of section 8 it as the obligation of 295 the State Government to make a reference to the Advisory Board A within five weeks from the date of detention of the detenu and there was nothing to show that the State Government had made such a reference to the Advisory Board. This contention is also without substance and totally futile, because it is clear from the statement of C. V. Karnik in his affidavit that it was the State Government which referred the case of the detenu to the Advisory Board under clause (b) of section 8 and no material has been placed before us on behalf of the detenu controverting the correctness of this statement. Mr. Jethmalani also raised another contention in this connection and it was that, before making a reference to the Advisory Board, the State Government had not applied its mind to the question whether it was necessary to detain the detenu for a period longer than three months and this non application of mind vitiated the reference to the Advisory Board and the subsequent order of confirmation following upon it. The argument of Mr. Jethmalani was that it was only if the State Government decided to detain a person for a period longer than three months that it was required to refer the case of such person to the Advisory Board and it was therefore necessary for the State Government in every case of detention to apply its mind and consider at least before making a reference to the Advisory Board whether the detention was to be continued for a period longer than three months. We are of the view that this argument is not well founded and must be rejected. It is clear that under clause (4) of Article 22 no law providing for preventive detention can authorise the detention of a person for a period longer than three months unless the Advisory Board has reported before the expiration of the period of three months that there is in its opinion sufficient cause for such detention. This requirement of clause (4) of Article 22 is satisfied by the enactment of section 8 iq the COFEPOSA. Section 8 clause (b) provides that in case of every detention the appropriate Government shall, within five weeks from the date of detention, make a reference to the Advisory Board and the Advisory Board is required to make a report as to whether or not there is sufficient cause for the detention of the detenu and submit the same to the appropriate Government within eleven weeks from the date of detention of the detenu. The period of eleven weeks from the date of detention is prescribed for the submission of the report obviously because under clause (4) of Article 22 no detention can lawfully continue for a period longer than three months unless the Advisory Board has reported before the expiration of the period of three months that there is in its opinion sufficient cause for such detention. But one thing is clear that this provision for reference to the Advisory Board is not confined to cases where 296 the detaining authority has already come to a decision that the detention shall be continued for a period longer than three months. It applies equally where the detaining authority has not yet made up its mind as to how long the detention shall continue or even where the detention is to continue for a period of three months or less. Whenever any order of detention is made, whether the detention is to continue for a period longer than three months or a period of three months or less or the detaining authority has not yet applied its mind and determined how long the detention shall be continued, the appropriate Government is bound within five weeks from the date of detention to make a reference to the Advisory Board and if it fails to do so, the continuance of the detention after the expiration of the period of five weeks would be rendered invalid. The Advisory Board is, in every such case where a reference is made, required to submit its report within eleven weeks from the date of detention and if it reports that there is in its opinion no sufficient cause for detention the detaining authority is bound to release the detenu forthwith, even though a period of three months may not have expired since the date of detention. This is a safeguard provided by the COFEPOSA Act, which is applicable in all cases of detention, whether the detention is to be continued beyond a period of three months or not and whether or not the detaining authority has applied its mind and determined, before making a reference to the Advisory Board, as to what shall be the period of detention. We are clearly of the view that it is not at all necessary for the detaining authority to apply its mind and consider at the time of passing the order of detention or before making a reference to the Advisory Board, as to what shall be the period of detention and whether the detention is to be continued beyond a period of three months or not. The only inhibition on the detaining authority is that it cannot lawfully continue the detention for a period longer than three months unless the Advisory Board has, before the expiration of the period of three months, reported that three is in its opinion sufficient cause for such detention. We must therefore hold that the State Government did not commit any breach of its constitutional or legal obligation in making a reference to the Advisory Board without first determining the period for which the detenu was to be detained. Mr. Jethmalani on behalf of the petitioner lastly submitted that there was unreasonable delay on the part of the State Government in considering the representation of the detenu and this delay was fatal to the validity of the continuance of the detention. This contention is also without substance and must be rejected. It is no 297 doubt true that the advocate of the detenu sent nine copies of the representation to the detenu on 6th February, 1981 and these nine copies came to be forwarded to various authorities only on 10th February, 1981 but the affidavit of B. B. Mulay, Jailer attached to the Bombay Central Prison, shows that these nine copies were handed over by B. B. Mulay to the detenu as soon as they were received by him from the emissary of the detenu 's advocate and the detenu got B these documents on the same day, namely 6th February, 1981. B. B. Mulay asked the detenu to sign the representation and hand over the same for being forwarded to the State Government but the detenu stated that he would sign the representation only after going through it and he therefore carried the nine copies of the representation with him to the Nasik Central Jail where he was shifted in the evening of 6th February, 1981 and it was only on 10th February, 1981 that he signed all the nine copies of the representation and handed over the same to C. P. Gaekwad, Jailer, In charge of the Nasik Central Prison and according to the affidavit of C. P. Gaekwad, these nine copies of the representation duly signed by the detenu were forwarded to the respective authorities on the same day. There was therefore no un reasonable delay on the part of the State authorities at this stage. Proceeding further we find that the representation sent by the detenu was received in the Home Department of the State Government on 13th February, 1981 and on the same day, a letter was addressed by the Home Department to the Collector of Customs calling for his remarks in regard to the various allegations contained in the representation and para wise comments were received from the Customs Department on 21st February, 1981. Now, it cannot be said that the Government acted unreasonably in forwarding the representation of the detenu to the Collector of Customs and waiting for the para wise comments of the Customs Authorities, since there were various allegations made in the representation which called for the comments of the Customs Department and without such comments, the State Government could not fairly and properly consider the representation of the detenu. It may be noted that the communication from the Home Department dated 13th February, 1981 could not have reached the Collector of Customs until 16th February, 1981 because 14th and 15th February were Saturday and Sunday and therefore closed holidays. The reply of the Customs Authorities which was received on 21st February 1981 must have been despatched on 20th February and therefore the Customs Authorities did not have more than four or five days within which to give their comments in regard to the various allegations contained in the repre 298 sentation of the detenu and this time taken by the Customs Authorities cannot be regarded as unreasonable. We do not think that in these circumstances the State Government could be said to be guilty of any unreasonable delay so far as the period between 13th February and 21st February, 1981 is concerned. There was also no unreasonable delay after 21st February, 1981. The affidavit of C. V. Karnik shows that the representation of the detenu was immediately put up before the Minister of State for Home for consideration, in the light of the comments received from the Customs Authorities and the representation was considered and rejected by the Minister of State for Home on 23rd February, 1981 and necessary intimation to that effect was conveyed to the detenu by a letter dated 25th February 1981. It is impossible to hold in these circumstances that there was any unreasonable delay on the part of the State Government in considering the representation of the detenu and this contention of Mr. Jethmalani must be rejected. These were all the contentions urged on behalf of the petitioner and since there is no substance in them, the petition fails and is dismissed. section R. Petition dismissed.

One Hasnain Mukhtar Hussain Lakdawala was detained by the Government of Maharashtra by an order of detention dated 31st December, 1980 passed under section 3(1) of COFEPOSA, 1974. The order of detention was served on the detenu on 17th January, 1981 along with a communication dated 31st December, 1980 and a letter dated 7th January, 1981 was also served enclosing copies of the documents relied upon in the grounds of detention. A letter dated 6th February, 1981 along with nine copies of the representation to be made by the detenu sent by the detenu 's advocate to the Superintendent, Bombay Central Prison, though handed over to the detenu by the prison authorities on the same day was carried by the detenu to the Nasik Road Central Prison to which he was shifted on that day. The requisite copies of the representation duly signed by the detenu were forwarded to the Government and the Chairman of the Advisory Board on 10th February, 1981. The State Government, however, rejected the representation by its letter dated 25th February, 1981. A copy of the representation sent to the Central Government was also rejected on 26th February 1981. In the meantime, the case of the detenu was referred to the Advisory Board and on 11th March 1981, when the detenu was called for an oral hearing, the detenu handed over four copies of a further representation dated 11th March 1981, praying for revocation of the detention order. The Advisory Board consi dered the case and by its report dated 12th March 1981 advised the State Government that there was sufficient cause for the detention of the detenu, and through its letter dated 16th March, 1981 apprised the detenu 's advocate of the position. The State Government thereafter confirmed the order of detention. Hence the writ petition by the detenu 's wife. Dismissing the petition, the Court, ^ HELD: 1:1. There was no constitutional or legal infirmity in the representation of the detenu having been considered by the Minister of State for Home. [294 B] 1:2. The only requirement of Article 22(5) of the Constitution is that the representation of detenu must be considered by the detaining authority which in 289 the present case was the State Government and this requirement was clearly satisfied, because when the Minister of State for Home considered the representation and rejected it, he was acting for the State Government and the consideration and rejection of the representation was by the State Government. [293 G] 1:3. There is no requirement express or implied in any provision of COFEPOSA that the same person who acts for the State Government in making the order of detention must also consider the representation of detenu. More over, it would really be to the advantage of the detenu, if his representation is not considered by the same individual but fresh mind is brought to bear upon it. [293 H 294 B] In view of the clear provisions of Rule IS of the Rules of Business of the Government of Maharashtra, clauses 4 to 6 of the Instructions issued by the Governor thereunder and the two standing orders dated 18th July 1980 it was immaterial, whether P.V. Nayak considered the representation and disposed it of, or the Minister of State for Home did so, since both had authority to act for the State Government and whatever be the instrumentality, it would be the State Government which would be considering and dealing with the representation [292 D H; 293 F] Smt. Kavita vs State of Maharashtra, [1982] I S.C.R. 138, followed. The State Government did not commit any breach of its constitutional or legal obligation in making a reference to the Advisory Board without first determining the period for which the detenu was to be detained. [296 G] 2:2. It is not at all necessary for the detaining authority to apply its mind and consider at the time of passing the order of detention or before making a reference to the Advisory Board, as to what shall be the period of detention and whether the detention is to be continued beyond a period of three months or not. The only inhibition on the detaining authority is that it cannot lawfully continue the detention for a period longer than three months unless the Advisory Board has, before the expiration of the period of three months, reported that there is in its opinion sufficient cause for such detention. [296 E F] 2:3. The requirement of clause (4) of Article 22 of the Constitution is satisfied by the enactment of section 8(b) of the COFEPOSA. This provision for reference to the Advisory Board is not confined to cases where the detaining authority has already come to a decision that the detention shall be continued for a period longer than three months. It applies equally where the detaining authority has not yet made up its mind as to how long the detention shall continue or even where the detention is to continue for a period of three months or less. Whenever any order of detention is made, whether the detention is to continue for a period longer than three months or a period of three months or less or the detaining authority has not yet applied its mind and determined how long the detention shall be continued, the appropriate Government is bound within five weeks from the date of detention to make a reference to the Advisory Board and if it fails to do so, the continuance of the detention after the expiration of the period of five weeks should be rendered invalid. The Advisory Board is, in every such case where a reference is made, required to submit its report 290 within eleven weeks from the date of detention and if it reports that there is in its opinion no sufficient cause for detention, the detaining authority is bound to release the detenu forthwith, even though a period of three months may not have expired since the date of detention. This is a safeguard provided by the COFEPOSA, which is applicable in all cases of detention, whether the detention is to be continued beyond a period of three months or not and whether or not the detaining authority has applied its mind and determined, before making a reference to the Advisory Board, as to what shall be the period of detention. [295 F 296 E] 3. The State Government, in the instant case, cannot be said to be guilty of any unreasonable delay, at any stage, in considering the representation of the detenu. [297D, 299 B, D]

Appeal No. 251 of 1982. From the Judgment and Order dated 24.10.81 of the Disciplinary Committee of the Bar Council of India, Delhi in B.C.I.T R. Case No. 28 of 1979. B.Singh, S.K.Gambhir and Davinder Singh for the Appellant. R.P.Kapur and Rajiv Kapur for the Respondents. The Judgment of the Court was delivered by 491 KULDIP SINGH, J. D.S. Dalal was a practising advocate in Delhi. The Bar Council of India by its order dated October 24, 1981, removed his name from the rolls of advocates of the Bar Council of Delhi and the sanad granted to him has been withdrawn. This appeal under Section 30 of the is against the order of the Bar Council of India. The State Bank of India lodged a complaint before the Bar Council of Delhi on September 4, 1978. It was alleged in the complaint that the appellant along with two other advocates was practising under the name and style of "M/s Singh and Company" a firm of advocates and solicitors having their office at 2670, Subzi Mandi, Delhi. It was alleged that the advocates were duly engaged by the Asaf Ali Road branch of the State Bank of India to file a recovery suit against M/s Delhi Flooring (Pvt) Ltd. for the recovery of Rs. 6,12,164.10. "Singh and Company" (the firm) at that time was represented by Mr. D.S. Dalal, Mr. B. Singh and Ms V.Singh, Advocates, who were the partners of the said firm and were conducting cases for and on behalf of the firm. It is the case of the complainant that in the year 1975, the file relating to the case which was to be filed against m/s Delhi Flooring (Pvt) Ltd., containing original and valuable documents, was handed over to the Firm by the complainant. Thereafter, the Firm submitted a bill for filing the recovery suit which included the professional fees and other miscellaneous charges. An amount of Rs. 11,475 was paid to the Firm on November 15, 1975, for filing the suit which included 1/3rd of the professional fee plus the miscellaneous charges. This was acknowledged by the Firm under a receipt which was placed on the record. Till December 19, 1975, the Firm did not inform the bank as to whether the suit was filed and if so what was the stage of the proceedings. The bank wrote a letter dated December 05, 1975 to the Firm asking it to send a copy of the plaint before December 8, 1975, for signatures and verification failing which the bank would be compelled to withdraw the case from the firm. At that stage Mr. B. Singh, Advocate, one of the partners of the Firm, in his letter dated December 15, 1975 informed the bank that the suit had been filed on December 15, 1975 in the High Court of Delhi. Thereafter, the bank appears to have received no communication from the said advocates despite repeated reminders oral and other ,vise and the bank was kept in the dark about the fate of the case entrusted to the appellant and his associates. 492 As there was no response from the appellant, the bank engaged the services of Mr. R.P. Arora, Advocate, in order to find out as to what happened to the suit filed by the appellant and his associates on behalf of the bank. R.P. Arora in his letter dated March 2, 1977, informed the bank that the suit which had been filed on December 15, 1975 was returned by the original Branch on January 31, 1976 to the Registry of the High Court with objections. Mr. Arora in his letter dated March 31, 1977 further informed the bank that the entire suit paper book had been returned to Mr. B. Singh, Advocate on July 27, 1976 for removing the objection and thereafter the suit has not been re filed in the Registry of the High Court of Delhi. The complainant, therefore, claimed that the appellant and his associates were guilty of serious professional misconduct as they failed to discharge their professional duties and responsibilities entrusted to them by the bank in its capacity as a client. It was further claimed by the bank that the appellant and his associates had misappropriated the money paid to them for court fee, miscellaneous expenses and one third of the professional fee. The complainant further stated that even the documents and other papers handed over to the appellant and his associates for filing the suit were not returned. The complainant was originally registered with the Bar Council of Delhi. On September 19, 1979, the Disciplinary Committee of the Bar Council of Delhi transferred the case to the Bar Council of India on the ground that the case had been pending for more than one year. The Bar Council of India issued notices returnable on November 2, 1980. On that date the respondents were not present and as such fresh notices were issued for December 20, 1980. Mr. D.S. Dalal, though served was not present on December 20, 1980 and as such ex parte proceedings were ordered. Notice to Mr. B. Singh, Advocate was returned with the postal endorsement "refused". He was also ordered to be proceeded ex parte. The case was posted for January 23, 1981 for the evidence of the complainant. On that day the appellant moved an application for setting aside the ex parte order dated December 20, 1980. The ex parte order was set aside conditionally permitting the appellant to participate in the proceedings and the case was adjourned to February 27, 1981. On February 27, 1981, three witnesses were examined in the presence of the appellant and he cross examined them. Thereafter the case was adjourned from time to time and finally fixed for evidence on August 22, 1981. The appellant again sent an application for adjournment which was rejected. The evidence was con 493 cluded, arguments were heard and the order reserved. The Bar Council of India in the impugned order observed as under : "From a perusal of the order sheet of the Disciplinary Committee of the Bar Council of Delhi and also of the order sheet before us, it reveals that the respondents have throughout adopted the tactics of non cooperation purposely with a view to protract the proceedings unnecessarily '. It may be mentioned that the complainant had given up its case against Ms. V. Singh, Advocate and as such the Bar Council of India ultimately did not proceed against her. So far as Mr. B. Singh and Mr. D.S. Dalal are concerned, the case against them was proved beyond reasonable doubt and their names were removed from the rolls of advocates of Bar Council of Delhi and the sanads granted to them were ordered to be withdrawn. The appeal before us is by D.S. Dalal. We have been informed that Mr. B. Singh Advocate filed a review petition before the Bar Council of India on October 22,1989 which is still pending. The Bar Council has also granted stay of the order dated October 24, 1981 with the result that Mr.B. Singh is continuing with his legal practise. This appeal was argued before us by Mr. B.Singh, Advocate. It is not disputed before us that Mr.B.Singh and Mr. D.S.Dalal were the main partners of the Firm. It is also not disputed that an amount of Rs.11,475 was received by these advocates towards the filing of the suit and further that the connected documents and papers were received by them. B.Singh, learned counsel for the appellant primarily argued that the suit was filed by the appellant in the Delhi High Court on December 15, 19 '/5 but the record of the suit file was misplaced/lost by the High Court registry. He further stated that by his letter dated August 20, 1977, he informed the bank about the suit file being not traceable and further that the record of the suit was to be re structured and refiled. We have been taken through the copy of the letter dated August 20, 1977, written by Mr.B.Singh on behalf of the Firm to the Regional Manager, State Bank of India, Parliament Street, New Delhi. The relevant paragraph is as under 494 "However, as already intimated two bank cases one of Delhi Flooring (P) Ltd. of Asaf Ali Road branch and second of J.M.A.I.E. Corporation of Jungpura branch filed by the undersigned in Delhi High Court have been misplaced/lost by High Court Registry and the record reconstruction petitions have already been given to the branches in March, 1976 itself. In case the said suits have not already been got restored through some other learned counsel and the assistance the undersigned is required for the restoration/reconstruction then he is willing to cooperate fully without charging any fee and without insisting on the payment of his outstanding bills first. The undersigned can work only when he is allowed to work in terms of his approved schedule of fees and the payment is made of all his bill, forthwith. " The letter dated August 20, 1977, quoted above was not produced before the Bar Council of India. It has been placed before us for the first time. Apart from the ipse dixit of the appellant and Mr.B. Singh in the above letter, there is no evidence on the record to show that the suit file was misplaced or lost by the High Court Registry. On the other hand, there is cogent and reliable evidence on the record to show that the Delhi High . Court Registry returned back the papers to, Mr. B. Singh for removing the objections raised by it. Mr. R.P. Arora, Advocate, appeared as a witness before the Bar Council of India. The relevant part of his evidence is as under "I know the respondents in the case. I was instructed by the complainant in case to find out as to whether the respondents had filed the suit against the Delhi Flooring (P) Ltd. in the High Court of Delhi which was entrusted by the complainant with the respondents. Accordingly I went to Delhi High Court and made enquiries to find out whether such a suit has been filed. On enquiry I came to know from the registers of the High Court that the suit had been filed on behalf of the complainant against Delhi Flooring (P) Ltd. on 15th December, 1975. 1 found from the records that the office has not registered the suit 495 because of certain objections raised by the office. I also came to know that the entire suit filed had been returned to the respondents for complying with the objections and to refile the suit. This was so returned on 27.7.76. The enquiries that were made by me in the High Court office was during March 1977 and till that date the suit had not been refiled by the respondents." Mr. R.P. Arora, Advocate, after examining the records of the Delhi High Court had sent two reports to the State Bank of India. In his report dated March 2, 1977 he stated as under : "As desired by you, to know the whereabouts of the above noted case, I contacted the concern clerk in the Original Branch of High Court of Delhi at New Delhi and also inspected the registers of the Original suits. The above noted case was filed by M/s Singh & Co. on 15.12.1975, but there were certain objections by the original branch and on 31.1.76 the said case (file) was returned to the registree by the original branch. The register of the registree in respect of the period from 31.1.1976 is not available and I shall let you know the upto date information, when the said case was returned to M/s. Singh & Co. within a short period. " Subsequently in his report dated March 31, 1977, Mr. R.P.Arora, Advocate gave the following information to the bank: "I have enquired from the Original section of High Court of Delhi at New Delhi, that the file of the above stated case was returned to Shri B.Singh on 27.7.1976 as the said case was under objections. So far he has not again filed the said case in High Court. " Both the above quoted reports have been proved on the record of the Bar Council of India as evidence. The Bar Council of India on appreciation of the evidence before it came to the conclusion that the charge against the appellant and Mr. B. Singh was proved beyond doubt. The Bar Council of India concluded as under: 496 ". After having gone through the evidence and the documents produced in the case carefully, we have come to the conclusion that the complainant had entrusted the suit to be filed against M/s Delhi Flooring (Pvt) Ltd. with the necessary papers and Rs. 11,400.74 for expenses etc. to the respondent advocates. It is also established that the respondents have filed the suit on 15.12.1975 with some objections deliberately and when the papers were returned by the High Court, they had not refiled the suit for a pretty long time and as is established tiff this day. So, we have no hesitation to conclude that the respondents, have misappropriated the amount realised by them from the Bank without filing the suit in a proper manner. " We have given our thoughtful consideration to the evidence on the record against the appellant. We see no ground to interfere with the order of the Bar Council of India. We agree with the reasoning and the conclusions reached therein. We, therefore, dismiss the appeal. No costs. V.P.R. Appeal dismissed.

The prosecution alleged that the appellant borrowed a sum of Rs. 450 from the deceased and had executed two hand notes exhibit 7 and exhibit 8, promising to repay the amount on 21.3.1976. On the said date the deceased accompanied by his nephew, PW.3 proceeded to the village of the appellant and as he was getting late, PW.3 carried with him a torch light. The distance of the house of the deceased from that of the appellant was about one furlong. The appellant was present in the fields in front of his house and on being asked as to why he had not come to return the money, he asked them to wait there and proceeded towards his house When the appellant did not return for some time, the deceased alongwith PW.3 proceeded towards the house of the appellant when they found him and his two brothers coming towards them variously armed, one had a crowbar while the others had a crooked dao and a kupi dao with them. PW.3 apprehended some danger from the appellant and his brothers, but his uncle told him that since they had done no wrong, they need not be afraid of any assault. On coming near the deceased and PW.3, one of the brothers gave a blow with a crowbar, while the other two brothers assaulted the deceased thereafter. PW.3 pulled the deceased towards his house and implored the accused not to assault him. At the asking of his uncle PW3 ran away to his house and gave the information to the wife of the deceased and also narrated the occurrence to PW.4. The wife of the deceased went to PW.6, and after telling him as to what had been told to 390 her by PW3 she requested him to accompany her to the place of occurrence. On reaching the place of occurrence, they found him lying on the spot with injuries on his person but he was still alive. Two of the PWs brought a bullock cart and PW.7 after lifting the body with some difficulty brought it to his house and kept it in the verandah. However, before any medical aid could be provided, the deceased succumbed to the injuries at night. The first information report was lodged at the police station at 12.30 p.m. by PW.2. During the investigation, some weapons including an axe were seized from the house of the accused and on the same day one of the brothers was arrested at 6.45 p.m. and the other two brothers surrendered subsequently in the court. The Investigation Officer prepared a sketch of the place of occurrence and sent the body for postmortem examination. The appellant alongwith his brothers were tried for offences under section 302/34 IPC for the murder of the deceased, and the Sessions Judge convicted all the three brothers for the said offence and sentenced them for life. On appeal by the three brothers the Division Bench of the High Court upheld the conviction and sentence of all the three. The instant SLP was admitted as regards one petitioner only and notice was issued. The S.L.P. of the second petitioner was dismissed while the third brother did not file any appeal. Allowing the appeal and acquitting the appellant, this court, HELD: 1. Conviction can be based on the testimony of a single eye witness and there is no rule of law or evidence which says to the contrary provided the sole eye witness passes the test of reliability. So long as the single eye witness is a wholly reliable witness the courts have no difficulty in basing conviction on his testimony alone. However, where the single eye witness is not found to be a wholly reliable witness, in the sense that there are some circumstances which may show that he could have an interest in the prosecution, then the courts generally insist upon some independent corroboration of his testimony, In material particulars, before recording conviction. It is only when the courts find that the single eye witness is a wholly unreliable witness that his testimony is discarded in toto and no amount of corroboration can cure that defect. [393E F] 391 2. The instant case, the medical evidence is consistent with the theory that the deceased had been assaulted only by one person and not by all the three brothers as alleged by the prosecution. The possibility, therefore, that Mahendra accused alone had caused injuries on the deceased cannot be ruled 'Out. May be on account of the recovery of the two bonds Ext. 7 and Ext 8, from the house of Anil, he was also implicated. [395G] 3. The origin of the fight is totally obscure, and the prosecution has not explained the genesis of the origin of the fight either. It is not even the case of the prosecution that Anil had refused to repay the loan or that any hot words or abuses had been exchanged between Anil and the deceased when the later had demanded from him the repayment of the loan. [395H, 396A] 4. In view of the infirmities of the prosecution evidence it would not be safe to rely upon the testimony of Ajoy PW.3, the sole eye witness, without looking for independent corroboration and as already noticed, the corroboration furnished by the prosecution, unlike in the case of Mahendra the appellant 's brother, is negative in character in so far as the involvement of Anil appellant is concerned. [396B] 5. The appellant, was held entitled to the benefit of doubt and granting him that benefit, his conviction and sentence for the offence under Section 302/34 IPC were set aside. [396C]

200 of 1955. 439 Petition under Article 32 of the Constitution of India for the enforcement of Fundamental Rights. section K. Kapoor and Ganpat Rai, for the petitioner. G. C. Kasliwal and D. Gupta, for the respondents. St 1961. March 17. , J. Section 4 of the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952 (which will be hereafter referred to as the Rajasthan Act), enacts: "4. All lands liable to pay land revenue. Not withstanding anything contained in any existing jagir law or any other law, all jagir lands shall, as from the commencement of this Act, be liable to payment of land revenue to the Government; and as from such commencement, the liability of (a) all Jagirdars to pay tribute to the Government under any existing Jagir Law shall cease, and The expression 'tribute ', the liability to pay which was thus extinguished from and after the commencement of the Act, was defined in section 2(r) of that Act in the following terms: 'Tribute ' in relation to a jagir, includes rekh, rakam, chatund, chakri or other charge of a similar nature; and" In the absence of the above provision the petitioner would have been under an obligation to pay to the Government 'hukamnama ' under section 190 of the Marwar Land Revenue Act, 1949 (referred to hereafter as the Marwar Act) which codified the earlier law irk that State. The short question that is raised by this petition under article 32 of the Constitution is whether the liability of the petitioner to pay 'hukamnama, the nature of which we shall explain later, has been extinguished by the provision of the Rajasthan Act above extracted which, as would be seen, turns on whether such a payment could be comprehended within the expression 'tribute '. Relying on section 4(a) of the Rajasthan Act, the petitioner resists the demand of he same made by the respondent State and impugns the legality of the claim. 440 It is necessary to set out a few facts and certain provisions of the Marwar Act to appreciate the matter in controversy. Thakur Nathu Singh, the Jagirdar of Ras a "Scheduled Jagir" under the Marwar Act died in July 1946 leaving the petitioner, Thakur Bahadur Singh as his next heir. "Scheduled Jagirs" are, under the Marwar Act, impartable and their line of devolution was prescribed by section 182 thereof which ran: "Succession shall be governed in the case of Scheduled Jagirs by the rule of primogeniture. " The succession, " however, was not automatic but had to be recognised by the Government and a renewal granted in favour of the successor before his title to the jagir was perfected. Sections 183 185 of the Marwar Act which are of relevance in this connection, ran: "section 183. All grants of Scheduled Jagirs are only for the life time of the holder, and no person is entitled to succeed to such jagir until his succession is recognized and the grant is renewed in his favour by His Highness. section 184. Subject always to His Highness pleasure, the grant of a Scheduled Jagir, on the death of the holder, shall be renewed in favour of the person entitled to succeed him in accordance with the provisions of this Act. section 185(1). A Scheduled Jagir, on the death of the holder, and until the renewal of the grant in favour of his successor, shall be resumed by the Government and taken under direct management. Provided that the claimant to succession shall, in the, absence of special orders of His Highness be permitted to retain possession pending orders of His Highness regarding the claim, if he is a direct lineal descendant in the male line of the last holder. (2). . . . (3). . . . (4). . . . The title of the petitioner to succeed to the jagir as the next heir of his father was recognised and a renewal granted in his favour by the Government by an 441 order dated March 18, 1952. Section 190 of the Marwar Act imposes an obligation on a succeeding heir whose title has been recognised and to whom a renewal of the jagir has been granted, to make certain payments. This section runs: "section 190(1). When succession to a Scheduled Jagir is recognised by His Highness and renewal of the grant ordered, the person in whose favour the grant is ordered to be renewed shall execute within one month of the communication to him of the orders, a 'Kabuliyat ' for payment of Hukamnama and other fees payable in accordance with sub sections (2) and (3). (2). . . . . . (3). . . . . . The amount payable by the petitioner, according to the scale of fees prescribed under the Act, came to Rs. 30,000 and the respondent State demanded this sum. Before, however, the date of the order according recognition and granting renewal in favour of the petitioner, the Rajasthan Act of 1952 had been passed and having received the assent of the President on February 13, 1952, came into force on publication in the Gazette on February 16, 1952, and under section 4 of this Act, whose terms have been set out already, the liability on the part of Jagirdars to pay "all tribute" to Government got extinguished. The question debated in this petition is whether the liability to pay 'hukamnama ' or other fees under section 190 of the Marwar Act is a 'tribute ' from the payment of which the Jagirdars are thus relieved. It is common ground, subject to a submission of the learned Advocate General for the respondent State, which we shall refer to a little later, that if the 'hukamnama ' which the petitioner has been required to pay to the Government was a 'tribute ' within section 4 of the Rajasthan Act, it would cease to be exigible and cannot be enforced from and after February 16, 1952, because it is not in dispute that the petitioner is a Jagirdar and 'hukamnama ' regarding which the demand has been made on him "is a demand which 56 442 is due under an existing Jagir law", viz., the Marwar Act. The precise question which now arises for our decision came up before the High Court of Rajasthan in 1955 on facts exactly parallel with the case before us and a Bench of that Court held in a case reported as Thakur Narpat Singh vs The State of Rajasthan (1) that 'hukamnama ' and the fees payable under section 190 of the Marwar Act were not within,%. 4(a) of the Rajasthan Act. Consequently, the arguments on either side before us took the form of either supporting the reasoning contained in that judgment or in disputing its correctness. It therefore becomes necessary for us to examine the reasoning upon which the learned Judges of the Rajasthan High Court reached a conclusion adverse to the contention of the petitioner now before us. Before doing so, however, it is necessary to advert to a point sought to be raised by the learned Advocate General for Rajasthan for the respondent which would cut across all this debate. He sought to urge that section 4 of the Rajasthan Act was not retrospective and that as the recognition of the title of the Petitioner and the renewal of the grant of the jagir in his favour related back to July 1946 when the succession opened, the Rajasthan Act could not be invoked to put an end to the obligation which had accrued years before it came into force notwithstanding that the orders of recognition and renewal were passed only in March 1952. In the circumstances of this case, however, and also regard being had to the point not having been raised in the answer filed by the State to the writ petition, we did not consider it proper to permit the Advocate General to pursue the submission. We will now proceed to consider the correctness or otherwise of the conclusion reached by the learned Judges of the Rajasthan High Court in the case just now referred to. Stated briefly, the ratio of their decision was as follows: Under the law governing jagir grants and the tenure on which they are held in Marwar, a 'hukamnama ' is a levy chargeable for recognition of the succession of a person to a Scheduled Jagir (1) I.L.R. 443 of his deceased ancestor. The specific dues, Rekh and Chakri enumerated in the definition of section 2(r) of the Rajasthan Act are those levied in Marwar, the former being 8 per cent of the gross rental value of an estate and the second the cash equivalent of the obligation to supply horsemen or camelsowars or foot soldier, , by Jagirdars dependent upon the value of the estate. Similar payments are known as 'Rakam ' in the State of Bikaner and 'Chatund ' in the State of Udaipur, these States being the components of the State of Rajasthan. All these dues, Rekh, Rakam, Chatund and Chakri were annual and recurring payments made by Jagirdars. When therefore the definition in section 2(r) concluded with the words other charges of a similar nature ', it must necessarily be held that these general words should be confined to charges which were also recurring. The 'hukamnama ' and other dues payable under section 190 of the Marwar Act, however, were not recurring payments and were in consideration of the ruler exercising his discretion to recognise a succession and grant renewal of the jagir in favour of the next heir. In other words, these were payments due to the ruler in recognition of his sovereign right to the ownership of the land which was statutorily embodied in sections 169 170 of the Marwar Act which ran: "section 169. The ownership of all land vests in His Highness and all jagirs, bhoms, sansans, dolis or similar proprietary interests are held and shall be deemed to be held as grant, from His Highness. and section 170. All grants shall be held by the original grantee or his successors during His Highness ' pleasure. " The payments under section 190 of the Act therefore were not of the same category as the payments enumerated in section 2 (r) of the Rajasthan Act and hence could not be comprehended within the meaning of the expression 'tribute '. The same matter was also put in a slightly different form by saying that whereas the payments enumerated in the definition of 'tribute ' were those made by Jagirdars as such, i.e., after they got into possession, a 'hukamnama ' was a payment made not by a 144 Jagirdar but by a person who was merely a claimant to a jagir and as a condition of his title to it being recognised. The correctness of this reasoning was challenged before us by learned Counsel for the petitioner who urged that the learned Judges of the High Court did not accord sufficient consideration to the fact that the definition in section 2(r) was an 'inclusive ' definition and could, therefore, include others not falling within the enumerated types. In this connection, learned Counsel relied upon the meaning of the word 'tribute ' in Webster 's New International Dictionary and in the Oxford English Dictionary, Volume IT. In the former, one of the meanings given is: "A tax, impost, duty, rental, or the like, paid by a subject vassal to his sovereign or lord". and in the latter: "A tax or impost paid by one prince or state to another in acknowledgement of submission or as the price of peace, security and protection". He therefore urged that the expression 'tribute ' in section 2(r) would include those which fell within the ordinary dictionary meaning of the term , in addition to those specifically enumerated therein. If the word were understood in its ordinary dictionary meaning without any statutory definition, learned Counsel added, the incidence of recurrence would not be a necessary attribute of the concept of a 'tribute '. The submission was that the learned Judges of the Rajasthan High court erred in confining the meaning of 'tribute ' to the enumerated payments and "other charges of a similar nature", without taking into account the fact that this was an inclusive and not an exhaustive or even an illustrative definition. We see force in these submissions and it must also be said that the argument in this form and the construction of section 2(r) from this aspect has not been considered by the learned Judges of the Rajasthan High Court. We have, therefore, to examine whether the submission can be sustained. Our task is, to discover whether the expression 'tribute ', as it occurs in the Rajasthan Act, includes payments of the type now in 445 controversy. Apart from the usual express saving contained in the opening words of section 2 that the definitions set out are to be applied "unless the context otherwise requires", the meaning of the word 'tribute ' has to be ascertained from a consideration of the various provisions of the Act and not merely from section 4(a) of the Act read in the light of the definition. It would be seen that in ultimate analysis the question of construction posed for our decision may be thus set out: The four specific enumerated dues in the definition in section 2(r) are recurring annual payments. "Other charges of a like nature" which follows this enumeration, would obviously partake of that character and they would also have to be similarly annual. and recurring. This was the basis of the decision of the learned Judges of the Rajasthan High Court and the correctness of this view up to this point cannot be and has not, been disputed. The definition, however, being "inclusive" and not "meaning" these, it is said it must "include" something else. It must, however, be added that the possibility cannot be ignored that the definition was made inclusive out of caution and with a view not to exclude any payment which jagirdars were making or were under an obligation to make, to Government, seeing that the Act was to apply to an integrated State composed of several States in which there might have been great diversity of nomenclature in designating these payments, and so as not to exclude any payment which would squarely fall within the category regarding which provision was made in the operative portion of the enactment. Learned Counsel for the petitioner urges that every payment by a Jagirdar to the Government, whatever be the nature of the payment and whatever be the consideration therefore, is included in the expression. If the expression 'tribute ' occurred only in section 4(a) in the operative provisions of the Act, there might be much to be said for the view presented by learned Counsel for the petitioner and for invoking its dictionary meaning to ascertain the content of that word. The Act, however, has used the word 'tribute ' in several other sections and in different contexts and we 446 consider that the precise ambit of this expression of rather indefinite import as contemplated or intended by the framers of this Act has necessarily to be gathered from the entirety of the provisions. The ,word tribute ' was apparently no equivalent in the local languages, so that it was obviously used as a convenient and compendious expression to designate certain imposts which were levied by the rulers of the several States which integrated to form the State of Rajasthan. Further, this circumstance should obviously induce some caution before the dictionary meaning of the English word tribute ' is treated as expressing the intention of the framers of the Rajasthan Act. We shall therefore proceed to set out and consider the other provisions of the enactment in which the word is used to discover the intentions of the framers of the Act as to what they meant by it. Before proceeding further, we should add, that as under section 4(a) of the Rajasthan Act, the payment of Land Revenue computed under it is to be the substitute for the 'tribute ' previously demandable or paid, the manner in which the land revenue under the Act is determined would be relevant as throwing light on for what it is substituted. We have already set out the terms of section 4 of the Rajasthan Act under which in substitution of the payment of 'tribute ' all lands are made liable to the payment of land revenue. The amount of land revenue payable by a Jagirdar is fixed by section 8 and this is based in part on the annual rental income which could be derived from the jagir computed in the manner set out in sections 6 and 7. For our present purpose section 8 is of importance, because the amount of 'tribute ' payable forms one of the factors for determining the amount of 'land revenue payable '. Section 8 enacts: "section 8. Amount of land revenue payable. The land revenue payable by a Jagirdar in respect of his jagir lands shall be (a) for the agricultural year 1951 52, an amount equal to the amount of tribute payable by him to the Government for that year; (b) for the agricultural year 1952 53 and each of the six succeeding agricultural years 447 (i) in the case of jagir lands the annual rental income of which as determined under section 6 or section 7, exceeds five hundred rupees but does not exceed five thousand rupees, one sixteenth of such rental income or the amount of the tribute which was payable by the Jagirdar for the agricultural year 195051, whichever is greater; (ii) in the case of jagir lands the rental income of which as determined under section 6 or section 7 exceeds five thousand rupees, one eighth of such annual rental income or the amount of the tribute which was payable by the Jagirdar for the agricultural year 1950 51, whichever is greater. Explanation. For the purpose of this clause the amount of tribute payable by a Jagirdar to the Government for the agricultural year 1950 51 shall be deemed to be the amount of such tribute less the amount of any tribute payable to such jagirdar by any person to whom the Jagirdar may have granted any of his jagir lands; (c) for the agricultural year 1959 60 and subsequent years, one fourth of the rental income from the jagir lands as determined under sections 6 and 7; Provided that (i) where no tribute was payable by the Jagirdar before the commencement of the Act or where the whole of the tribute has been paid before such commencement, the jagir lands shall be deemed to be exempt from the payment of land revenue for the agricultural year 1951 52; (ii) where the jagirdar has paid a part of the tribute before the commencement of this Acts, the land revenue payable by him for the agricultural year 1951 52 shall be an amount equal 'to the balance of the tribute which would have been payable by him for that year if this Act had not been passed; and (iii) the Government may direct that for the purposes of clauses (b) and (e) of this section, the rental income of any jagir land for all or any of the agricultural year mentioned in those clauses shall be 448 determined or redetermined on the basis of the rental income which actually accrued to the jagirdar from the jagir in such year or years, as the case may be." It will be seen that this section speaks of tribute payable for the, year specified 1951 52 or 1950 51and it is obvious that the tribute here referred to could only be the recurring payments like those enumerated in the definition in section 2(r) to which could be attributed the character of being a payment for a specific year. Besides, it will be, seen that under section 8(b) the land revenue payable for the seven agricultural years 1952 53 to 1959 60 is to be either a fraction of the annual rental income or "the amount of the tribute which would be payable by the Jagirdar for the year 1950 51 whichever is greater". Surely it would be most unreasonable to hold that if during the year 1950 51 a Jagirdar made a payment of 'hukamnama ' this ad hoe payment should be treated as part of the tribute for that year and the Jagirdar made liable to pay sums including 'hukamnama ' for the seven years 1952 53 to 1959 60. The main object of the Rajasthan Act was to effect resumption of jagir lands by eliminating intermediaries and the 'tribute ' payable by the erstwhile Jagirdars enters into the calculation for computing the compensation payable to them on such resumption. The second schedule to the Act sets out the principles governing the compensation payable to Jagirdars. It may broadly be stated that the compensation payable, to Jagirdars is determined on the basis of a multiple of the net income of the basic year as determined under r. 1 of the second schedule. The net income is computed by first determining the gross income of the Jagirdars under various heads including the rental income and deducting therefrom certain outgoing which included the "tribute ' Rule 4 of schedule 2 provides: "4. Net income. The net income of a Jagirdar for the basic year shall be calculated by deducting from his gross income therefore, (i) the amount that the Jagirdar would have 449 been liable to pay to the Government as tribute, and, in the case of grantee from a Jagirdar, to the Jagirdar in respect of such grant, for the basic year if this Act had not been passed; (ii) any sums of recurring nature due to the Government from the Jagirdar, or in the case of grantee from the Jagirdar to the Jagirdar, for the basic year on any account other than land revenue,; and . . . . . . It is impossible to conceive that the framers of the Act would have intended that the payment of a 'hukamnama ' in the basic year should have a permanent effect on the quantum of compensation payable to a Jagirdar under the provisions above extracted. In addition to the compensation for the presumption of the jagir under the provisions of the Rajasthan Act, the Jagirdars are entitled to be paid a rehabilitation grant under Chapter VIII A of the Act. The method of calculation of this amount is set out in Schedule III of the Act and for this purpose Jagirdars are classified on a graduated scale into various categories depending on the gross income from the estate. This is followed by a proviso in these terms: "Provided that for the purpose of calculating the rehabilitation grant payable to a Jagirdar falling in this category such marginal adjustments shall be made as will ensure that a Jagirdar having a higher net income does not get an amount by way of rehabilitation grant which is less than that payable to a Jagirdar having a lower net income. Provided further that, in comparing Jagirdars with different amounts of income for the purpose of the first proviso to this sub clause, (i) Jagirdars who were riot paying tribute shall be compared only with Jagirdars who were not paying tribute, (ii) Jagirdars who were paying tribute shall be compared only with Jagirdars who were paying ' tribute, (iii) Jagirdars who were paying any sums of 57 450 recurring nature referred to in sub clause (ii) of clause 4 of the Second Schedule shall be compared only with Jagirdars Who were paying such sums, and (iv) in respect of Jagirdars who were paying tribute or any sums of recurring nature referred to in sub. clause (ii) of clause 4 of the Second Schedule at different scales, the Government shall prescribe a percentage of the gross income at which the amount of tribute or such sums in respect of each Jagirdar shall be calculated irrespective of whether the amount of tribute or such sums of recurring nature that were being actually paid by him. " What we have said earlier about the construction of the word 'tribute ' in r. 4 of Schedule II would equally apply to the construction of that expression as it occurs in the provision extracted from Schedule III. Notwithstanding therefore that the definition in section 2(r) of the Rajasthan Act is 'inclusive ' it appears to us from an examination of the meaning of the word as used in the operative provisions of the Act, that it could refer only to recurring payments which could be said to be attributable to particular years and not to the type of ad hoc payments of which hukamnamas and patta fees are examples. It might very well be that the words at the end of section 2(r) "other charges of a similar nature" might not exhaust all the payments which a 'tribute ' connotes but still if the rest of the Act indicates unmistakably the intention, that the word 'tribute ' has been used in a special sense taking into account the law and usage obtaining in the locality, these cannot be disregarded in favour of a wider construction based merely upon the dictionary meaning of the expression. We need hardly add that the provision to which we have adverted should suffice to show that the construction put forward by learned Counsel for the petitioner would work to the grave disadvantage of the Jagirdars and would cause them deprivation which could never have been intended. We have thus reached the same conclusion as the learned Judges of the Rajasthan High Court, though on a different line of reasoning. 451 On the construction which we have adopted of the expression 'tribute ' in section 4 of the Rajasthan Act the petitioner can have no legal or legitimate grievance against the enforcement of the payment made against him. The petition fails and is dismissed. There will st, be no order as to costs. Petition dismissed.

The Abducted Persons (Recovery and Restoration) Act (Act LXV of 1949) does Dot infringe article 14, article 16, article 19 (1) (d), (e) and (g), article 21 or article 22 of the Constitution and is not unconstitutional on the ground that it,contravenes any of these provisions. The physical restraint Put upon an abducted person in the process of recovering and, taking that person into custody without any allegation or accusation of any actual or suspected or apprehended commission by that person of any offence of a criminal or quasi criminal nature or of any act prejudicial to the State or the public interest, and delivery of that person to the custody of the officer in charge of the nearest camp under section 4 of the Abducted Persons (Recovery and Restoration) Act (LXV of 1949) is not arrest and detention within the meaning of article 22 (1) and (2) of the Constitution. The said Act does not therefore infringe the fundamental right guaranteed by article 22 of the Constitution. 255 The fundamental right conferred by article 22 gives protection ,against such arrests as are effected otherwise than under a warrant issued by a Court on the allegation or accusation that the arrested person has, or is suspected to have,. committed, or is about or likely to commit, an act of a criminal or quasi criminal nature or some activity prejudicial to the public or the State interest. There is indication in the language of article 22 (1) and (2) that it was designed to give protection against the act of the exe cutive or other non judicial authority. The Blitz Case (Petition No. 75 of 1952) explained. Muslim abducted persons constitute a well defined class for the purpose of legislation and the fact that the Act is extended only to the several States mentioned in section 1 (2) of the Act does not make any difference, for a classification may well be made on a geographical basis. The Act does not therefore contravene article 14 of the Constitution. If the language of an article is plain and unambiguous and admits of only one meaning, then the duty of the Court is to adopt that meaning irrespective of the inconvenience that such a construction may produce. If, however, two constructions are possible then the Court must adopt that which will ensure smooth and harmonious working of the Constitution and, eschew, the other which will lead to absurdity or give rise to practical inconvenience or make well established provisions of existing law nugatory.

Civil Appeal No. 3482 of 1984. Appeal by Special Leave from the Judgment and Order dated the 8th May, 1984 of the Patna High Court in Second Appeal No. 182 of 1978. Jayanarayan, Miss section Agarwal D.S. Mehra and R. P. Singh for the Appellant. Lal Narain Sinha and D. P. Mukharji for the Respondent. After hearing counsel for the parties we are clearly of the view that the judgment of the High Court cannot be sustained for two reasons. Firstly, the High Court had earlier remanded the case to the trial court and called for a finding from the trial court on the question of partial eviction. The trial court while recording its finding was of the view that the question of partial eviction should be considered in the light of the requirement of the landlord as deposed to by him. In doing so, the High Court failed to take into account the proviso to Section 12 (1) (c) of the Bihar Building (Lease, Rent & Eviction) Control Act of 1977, which in terms enjoins that what is necessary to be considered is the 'reasonable ' requirement of the landlord and whether it would be 'Substantially ' satisfied by evicting the tenant from a part only of the premises. The Court has therefore, in the first instance, to determine the extent of the premises which the landlord "reasonably" requires. Determine it objectively and not on the basis of his ipse dixit or his mere desire to occupy as much as he wants. But the Court has to furthermore apply a test as to whether such requirement, as the Court considers reasonable, will be 'substantially ' satisfied (not fully satisfied) by ordering partial eviction. This vital aspect has been 640 altogether overlooked by the trial court. Secondly, since the High Court had directly called for a finding from the trial court itself, the High Court should have scrutinized the said finding with special reference to the question of partial eviction even on facts as the finding of the trial court standing on its own (not confirmed by appellate court) is not conclusive on facts even in a second appeal. This is so because the High Court had called for a finding of fact from the trial court bypassing the appellate court and thus deprived the right of appeal to the District Judge (last court on facts) which, for aught we know, might not have agreed with the trial court and may have considered the question from the point of view indicated by us, viz, giving full effect to the concept of reasonable extent of the requirement from the perspective of 'substantials ' satisfaction of such requirement as considered to be reasonable objectively. Only in case the District Judge would have agreed with the finding of the trial court then it may have become a finding of fact which was binding on the High Court in second appeal. Besides the question as to the connotation of the word 'substantial ' was itself a substantial point of law there being no decision of the Patna High Court on this specific point. Other Acts in various States do not embody the concept of "substantial" satisfaction. These decision would therefore be of no avail in the context of the facts of the present case. In these circumstances, it cannot be said that the finding of the trial court, which is not the final court on facts, is conclusive and immune from the scrutiny of the High Court even in a second appeal. We therefore, allow appeal, set aside the decree of the High Court and remand the case to the High Court to decide the question fresh after considering the evidence on record in the light of the aforesaid observations. The appeal is disposed of accordingly. In the meantime there will be stay of dispossession. The High Court is requested to expedite the hearing of the case.

Section 2(k) of the (the Act, for short) defines an 'industrial dispute ' to mean any dispute or difference between employers and employers, or between employers and workmen or between workmen and workmen, which is connected with the employment or non employment or the terms of employment or with the conditions of labour, of any person. Section 7 A of the Act provides that the appropriate Government may by notification in the Official Gazette constitute one or more Industrial Tribunal for the adjudication of industrial disputes relating to any matter whether specified in the Second Schedule or the Third Schedule. Entry at plecitum 7 in the Third Schedule reads 'Classification by grades '. Sec, 4 of the (1946 Act, for short) also requires the employer in an industrial establishment to make provision in the standing orders for every matter set out in the Schedule which is applicable to the industrial establishment. The Schedule provides, amongst others, for making provision in the standing orders for classification of workmen for example, whether permanent, temporary apprentices, probationers or badlis. The Government of Maharashtra referred to the Industrial Tribunal a dispute between appellants workmen and the respondent employer as to whether "All the employees who are acting continuously in higher grades for more than three months should be confirmed in the respective grades immediately and all the benefits should be given to the concerned employees with retrospective effect had they been confirmed immediately after three months of their continuous acting. " The respondent raised a preliminary objection that the dispute was not an industrial dispute within the meaning of the expression in the Act, because if the demand as raised is conceded, it would tantamount to allowing the workmen to decide the work force required in various grades which is a managerial function. The Industrial Tribunal up 642 held the preliminary objection and rejected the Reference as incompetent holding that the demand shorn of verbiage is one for promotion which is the managerial function and therefore cannot be the subject matter of industrial adjudication. Hence this appeal by special leave. Allowing the appeal and remitting the matter to the Tribunal for disposing of the Reference on merits, ^ HELD: (1) It is well settled that certified Standing Orders under the 1946 Act which have a statutory flavour prescribe the conditions of service and they shall be deemed to be incorporated in the contract of employment of each workman with his employer. Since there is a statutory obligation on the employer in an 'industrial establishment ' to classifi workmen under the 1946 Act, the classification would be permanent, temporary, apprentices, probationers and all other known categories, such as, acting, officiatingetc. In respect of the classification, a dispute can conceivably arise between the employer and the workmen because failure of the employer to carry out the statutory obligation would enable the workman to question his action which will bring into existence a dispute. It would become an industrial dispute because it would be connected with the condition of employment. It becomes a condition of employment because necessary conditions of service have been statutorily prescribed one such being classification of workmen. Therefore, without anything more where the demand of the workmen was to confirm employees employed in an acting capacity in a grade, it would unquestionably be an industrial dispute. [646C G] Sudhir Chandra Sarkar vs Tata Iron & Steel Co. Ltd., , referred to. (2) Even if one does not reach the conclusion that the dispute raised in question would be an industrial dispute by reference to the Standing Orders certified under the 1946 Act, a mere reference to Entry 7 of the Third Schedule read with Sec. 7 A would clinch the issue. Entry at plecitum 7 in the Third Schedule reads "Classification by grades". If there is any dispute in respect of classification by grades, it will necessarily be an industrial dispute. This would flow indisputably from the language of section 7 A which provides for setting up of Industrial Tribunal for adjudication of industrial dispute relating to any matter specified, amongst others, in the Third Schedule. In the instant case, the demand of the workmen was for classification of the workmen officiating in the higher grades either as permanent or temporary and they should not be continued indefinitely as temporary by making them permanent on rendering of continuous service in the higher grade for a period of three months. The demand involves both the classification of employees and classification by grade. Therefore, the Industrial Tribunal overlooked this obvious fact situation by mis interpreting the demand and reached a wholly untenable conclusion that the demand was for promotion which appeared to the Tribunal to be a managerial function and beyond the reach of adjudication. [647 C E] (3) Even on the footing of the law as it stands at present in this country that promotion is a management function, the industrial dispute referred 643 to the Tribunal was not one for claiming promotion. The Tribunal committed a grave error in so misinterpreting the dispute referred to it. The Tribunal overlooked the fact that the demand was in respect of workmen already promoted i.e. in respect of whom managerial function of selecting personnel for promotion had been already performed. The demand was in respect of already promoted workmen, may be in an officiating capacity, for their classification from acting or temporary to confirmed, that is, permanent, in the higher grade to which they were promoted, after a reasonable period of service which according to the Union must be three months of service. By no canon of construction this demand could be said to be one for promotion. [550 B D] Management of Brooke Bond India (P) Ltd. vs Workmen ; and The Hindustan Lever Ltd. vs The Workmen ; held inapplicable. In the decisions of this Court in Management of Brooke Bond India (P) Ltd. vs Workmen ; and The Hindustan Lever Ltd. vs The Workmen it is assumed without controversy that promotion is a managerial function. But in view of the decision of this court in All India S.M. and A.S.M. 's Association vs General Manager, Central Railway ; , it is time to reconsider this archaic view of the laissez faire days that promotion is a management function. The expression "terms and conditions of employment" would ordinarily include not only the contractual terms and conditions but those terms which are understood and applied by the parties in practice or habitually or by common consent without ever being incorporated in the contract. [649 E G] British Broadcasting Corporation vs Hearn & Others, and R. Industrial Disputes Tribunal & Anr. vs Ex parte Queen Mary College University of London, , referred to.

vil Appeal No. 2457 of 1966. Appeal from the judgment and order dated September 13, 1963 of the Calcutta High Court in Income tax Reference No. 29 of 1959. section T. Desai, B. R. L. Iyengar and R. N. Sachthey, for the appellant. A. K. Sen, R. M. Hazarnavis, and K. L. Hathi, for the respon dent. The Judgment of the Court was delivered by Shah, J. One Amritlal died on October 18, 1944. For the assessment year 1945 46 his estate was assessed to tax on a total income of Rs. 22,160/ from salary and other sources. In January 1946, Anusuya Devi widow of Amritlal encashed high denomination notes of the value of Rs. 5,84,000/ , and made a declaration as required by the High Denomination Bank Notes (Demonetisation) Ordinance, 1946 that: "A sum of Rs. 5,84,000/ in notes were made over and/or directed to be made over by the declarant 's deceased husband Amritlal Ojha at Rajkot in April, 1944, sometime before his death for the benefit of declarant and her 8 minor sons. " In a proceeding for reassessment of the income of Amritlal for the assessment year 1945 46 the attorney who appeared on behalf of Anusuya Devi stated that "Amritlal was from time to time, during the last 30. years of his life, giving gifts to his wife and also setting apart money exclusively for his wife and children and that the fund so accumulated which remained in a cupboard" was found after his death. The Income tax Officer disbelieved the explanation furnished and brought the amount of Rs. 5,84,000/ to tax as income of Amritlal in the year of account 1944 45 from an undisclosed source, and with his decision the Appellate Assistant Commissioner agreed. At the hearing of the appeal before the Income tax Appellate Tribunal, Anusuya Devi widow of Amritlal filed an affidavit in which it was stated, inter alia 469 5. "From time to, time during our married life, late Sri Amritlal Ojha used to make presents of cash moneys to me on occasion of birthday of myself and of my sons and daughter by him and also on the occasion of his own birthday and on the anniversary of our marriage. " 6. "My husband late Sri Amritlal Ojha used to tell me that these presents of cash money that he made was to make provisions for me and my minor sons and daughter and also to meet the expenses of their education and marriage in the event of his death. " 8. "The total amount of the money so paid by late Sri Amritlal Ojha was Rs. 5 84,600/ . This amount was my stridhan property and was all along in my possession." This affidavit was admitted in evidence by the Tribunal, but the Tribunal declined to admit an affidavit of Gunvantray one of the sons of Amritlal, because in their view an attempt was made to bring on record a large number of new facts which were not disclosed before the departmental authorities. The Tribunal declined to accept the case set up by Anusuya Devi. Beside pointing out the discrepancies in the statements made from time to time, which rendered her case unreliable, the Tribunal expressed the view that gifts made during a long period of "20 to 30 years" could not all have been made only in thousand rupee notes. The Tribunal accordingly upheld that order bringing to tax Rs. 5,84,000/ as income from an undisclosed source in the account year 1944 45. In her application for stating a case to the High Court on eleven questions set out therein Anusuya Devi asserted that in her declaration under section 6 of the High Denomination Bank Notes (Demonetisation) Ordinance, 1946, she had given information pursuant to the queries as follows : Reasons for keeping above in No bank account. The high denomination notes rather amount is held in trust than in current account, fixed for minors and as prices deposit or securities. of securities very so for greater safety the amount is held in cash for the benifit of the defandent and in trust for the minors. When and from what source did A sum of Rs. 5,84,000 in declarant come into possession notes were made over and or of bank notes now tendered. directed to be made over by the declarant 's deceased husband Amritlal Ojha at Rajkot in April 1944 sometime before his death for benefit of the declarant and her eight minor sons. in the latter part of August and beginning 470 of September 1945, Rs.4,94,000/was deposited with the Bank of India Ltd. at its Bombay Branch and transferred by T.T. to their Calcutta Branch in the account of the declarant 's major son Bhupatray Ojha who drew a self cheque for Rs. 4,94,000/ received payment by 494 pieces of 1,0001 notes (included in the list) and made them over to the declarant. The Tribunal rejected the application. The High Court of Judicature at Calcutta however directed the Income tax Appellate Tribunal to state a case on the following question : "Whether the Tribunal erred in law by basing their decision on part of the evidence ignoring the statement made as regards the withdrawal of Rs. 4,94,000/ by 494 pieces of Rs. 1,000/ notes from the bank?" In compliance with the order, the Tribunal observed that the extract from the statement incorporated in the petition under section 66(1) was materially different from the statement reproduced in the order of the Income tax Officer and that the Tribunal was not invited to consider at the hearing of the appeal the truth or otherwise of the alleged copy of the declaration incorporated in the petition under section 66(1) and that at the hearing of the appeal the original declaration had not been produced. The learned Judges of the High Court who heard the reference were apparently of the view that the question referred did not arise out of the order of the Tribunal, but they felt bound by the view expressed in Chainrup Sampatram vs Commissioner of Income tax, West Bengal(1) that it is not open to the Court hearing a reference under section 66(2) to hold, contrary to the decision recorded at the time when the Tribunal was directed to state the case on a question, that the question did not arise out of the order of the Tribunal. Bijayesh Mukherji, J., who delivered the principal judgment of the Court observed that the Tribunal had apparently ignored a part of the declaration made by Anusuya Devi that 494 high denomination notes out of those encashed in January 1946 were received from a Bank in Calcutta in realization of a cheque for Rs. 4,94,000/ drawn in September 1945 by Bhupatray her eldest son; that there was reason to doubt that statements referred to in his order by the Appellate Assistant Commissioner were made by Anusuya Devi or her attorney; and that in any event opportunity to "clear up the discrepancies" between the statement made at the time of the disclosure of the high denomination notes and the statements said to have been made before the Income tax Officer or before the Appellate Assistant Commissioner ought to have been given to her. Holding that the (1) 471 order of the Tribunal suffered from those infirmities the learned Judges of the High Court answered the question in the affirmative. In our, judgment the order of the High Court cannot be sus tained. The statement that out of 584 high denomination notes disclosed by Anusuya Devi 494 notes were received in realization of a cheque drawn by Bhupatray at Rajkot was made for the first time in a petition under section 66(1): it did not find place in the statement before the Income tax Officer, nor in the grounds of objection raised before the Appellate Assistant Commissioner, and. not even in the affidavit filed before the Tribunal. The Tribunal was never apprised of that part of the case, and had no opportunity to test the correctness of that statement. On the statements made before the Income tax Officer and in the affidavit there can be no doubt that it was the case of Anusuya Devi that she had encashed high denomination notes which she had received from her husband. No fault can therefore be found with the observations of the Tribunal that it was "a peculiar fact that all the money stated to have been received and found in the cupboard was all in high denomination notes and the entire amount had to be exchanged under the High Denomination Bank Notes (Demonetisation) Ordinance". In the question which was referred under the direction of the High Court, it was assumed that the Tribunal had before it the statement about the receipt of 494 currency notes of Rs. 1,000/each from a Bank at Calcutta in realization of a cheque. But that evidence was not before the Tribunal, and the order of the Tribunal was not open to the objection that it had decided the appeal before it on a partial review of the evidence. Even in the application made to the Tribunal under section 66(1) in the large number of, questions which it was claimed arose out of the order of the Tribunal it was not suggested that the finding of the Tribunal was vitiated because some relevant evidence was ignored. If the Tribunal refuses to state a case under sub section (1) of section 66 on the ground that no question of law arises, and the High Court is not satisfied with the correctness of that decision, the High Court nay in exercise of the power under section 66(2) require the Tribunal to state a case, and refer it. When the Tribunal is not invited to state a case on a question of law alleged to arise out of its order, the High Court cannot direct the Tribunal to state it on that ques tion: see Commissioner of Income tax vs Scindia Steam Navigation Co. Ltd. (1). The reason of the rule is clear: the High Court cannot hold that the decision of the Tribunal refusing to state a case on a particular question is incorrect if the Tribunal was not asked to consider whether the question arose out of its order, and whether it was a question of law. (1) ; 472 We find it difficult to uphold the view of the Calcutta High Court that if an order is passed by the High Court calling upon the Tribunal to state a, case on a question which does not arise out of the order of the Tribunal, the High Court is bound to advise the Tribunal on that question even if the question does not arise out of the order of the Tribunal. The High Court may only answer a question referred to it by the Tribunal : the High Court is however not bound to answer a question merely because it is raised and referred. It is well settled that the High Court may decline to answer a question of fact or a question of law which is purely academic, or has no bearing on the dispute between the parties or though referred by the Tribunal does not arise out of its order. The High Court may also decline to answer a question arising out of the order of the Tribunal, if it is unnecessary or irrelevant or is not calculated to dispose of the real issue between the tax payer and the department. If the power of the High Court to refuse to answer questions other than those which are questions of law directly related to the dispute between the tax payer and the department, and which when answered would determine qua that question the dispute, be granted, we fail to see any ground for restricting that power when by, an erroneous order the High Court has directed the Tribunal to state a case on a question which did not arise out of the order of the Tribunal. We are unable therefore to hold that at the hearing of a reference pursuant to an order calling upon the Tribunal to state a case, the High Court must proceed to answer the question without considering whether it arises out of the order of the Tribunal, whether it is a question of law, or whether it is academic, unnecessary or irrelevant. We are of the opinion that the very basis of the question on which the Tribunal was called upon to submit a statement of the case did not exist. The Tribunal cannot in this case be charged with recording its decision without considering all the evidence on the record : the decision of the Tribunal was clearly based on appreciation of evidence on the record before it, and the High Court was, in our view, incompetent to direct the Tribunal to state the case on the question which was directed to be, referred and dealt with by the High Court. We are also unable, to agree with the observation of the High Court that the explanation which the Assistant Commissioner says was made by Anusuya Devi was not made by her or by her attorney. No such plea was apparently raised before the Tribunal. There is also no ground for believing that Anusuya Devi was not given an opportunity to " clear up the discrepancies" between the statements made by her or on her behalf from time to time in connection with the encashment of the high denomination notes. That plea was not raised before the Tribunal, and the validity of the conclusion of the Tribunal on appreciation of evidence cannot be assailed before 473 the High Court on the ground that departmental authorities had violated the basic rules of natural justice without raising that question before the Tribunal. Counsel for Anusuya Devi requested that in any event the question which has been referred by the Tribunal in pursuance of the order of the High Court may be reframed and a supplementary statement may be ordered to be submitted by the Tribunal. But power to reframe a question may be exercised to clarify some obscurity in the question referred, or to pinpoint the real issue between the tax payer and the department or for similar other reasons : it cannot be exercised for reopening an enquiry on questions of fact which is closed by the order of the Tribunal. Again, a supplementary statement may be ordered only on the question arising out of the order of the Tribunal, and if the Court is satisfied that the statements are not sufficient to enable the Court to determine the question raised thereby, and when directed may be only on such material and evidence as may already be on the record but which has not been included in the statement initially made: Keshav Mills Ltd. vs Commissioner of Income tax, Bombay North, Ahmedabad(1). We do not think that the judgment of this Court in Narain Swedeshi Weaving Mills vs Commissioner of Excess Profits Tax(2) lays down any general proposition that the High Court hearing a reference is entitled to amend or reframe a question and call for a supplementary statement so as to enable a party to lead evidence which has not been led before the Tribunal or the departmental authorities. In Narain Swadeshi Weaving Mills ' case(2) this Court merely reframed the question so as to bring out the real issue between the parties. Finally counsel for Anusuya Devi submitted that the Tribunal was bound to state a case on the following question which was. set out in the application under section 66 (1) : 6. "Whether there is any material before the Tribunal to hold that the said sum of Rs. 5,84,000/representing the value of the encashed high denomination notes was the income of the deceased Amritlal Ojha of the period of the year 1944 45 prior to his death ?" Counsel submitted that since the Tribunal had failed to raise and state a case on that question, and the High Court had also in directing that a statement of case be submitted, ignored that question, in the interest of justice and for a final and satisfactory disposal of the case this Court may order a statement on that question. Counsel said that merely because on the findings of (1) (2) 474 the Tribunal Amritlal was on April 30, 1944, possessed of a large sum of money it could not be assumed that the whole amount was earned after April 1, 1944, and was on that account taxable in its entirely in the year of assessment 1945 46. The question whether the amount of Rs. 5,84,000/ was taxable in the proceeding for assessment for the year 1945 46 was considered by the Income tax Officer and by the Appellate Assistant Commissioner. The Income tax Officer observed that by the explanation submitted on behalf of Anusuya Devi before him, contrary to what was stated at the time of encashment of the high denomination notes, it was attempted "as an afterthought, to spread over the amount over a number of years". The contention that the amount of Rs. 5,84,000/ was not taxable in the .year of assessment 1945 46 was rejected. The Appellate Assistant Commissioner observed that on the statement made by Anusuya Devi that she had received the amount from her husband in the year of account 1944 45 and that it was unfortunate that there was ' no complete record of the "earnings and withdrawals" .,of Amritlal from the various businesses in which he was interested, and that in the absence of such a record all that was to be done was to examine whether the explanation was credible. He observed that "the accounting year was very favourable for all types . of business, and in all probability the sum represented some income earned by the deceased in some ventures which were not known to the Department and therefore the sum could be treated as income of Amritlal from undisclosed sources". The Tribunal observed that they were unable to believe the version of Anusuya Devi that the amount was accumulated by her husband during a long period, and since the assessee and his legal representatives had failed to prove the source of the fund, it "must be considered as of income character". Apparently, no argument was raised before the Tribunal that the amount though taxable was not income of the year of account 1944 45 and could obviously not he referred. The High Court may answer only those questions which are ,actually referred to it. New questions which have not been referred cannot be raised and answered by the High Court. If the Tribunal refuses to refer a case under section 66(1) which arises out of its order, the proper course is for the aggrieved party to move the High Court to require the Tribunal under section 66(2) to refer the same. The question whether Rs. 5,84,000/ represented income of the year of account 1944 45 was not submitted by the, Tribunal to the High Court. Even if it be assumed that the High Court was moved to direct the Tribunal to state a case on the sixth question which was set out in the, application filed 'before the Tribunal under section 66(1), the application must be 475 deemed to have been rejected, and the order of rejection has become final. We have no power, without an appeal by the assessee, to set aside that order of the High Court and to direct the Tribunal to state a case on that question. The appeal must therefore be allowed, and the order passed by the High Court set aside. The answer to the question will be in the negative. This case discloses a very disturbing state of affairs prevailing in the Income tax Department. It is a startling revelation that the entire record of an assessee 's case both before the Income tax Officer and the Appellate Assistant Commissioner was found missing, and has not been traced thereafter. Even if collusion be ruled out, the persons concerned in looking after the safety of the important record of proceedings of assessment cannot escape a charge of gross negligence. In the circumstances of the case. we think there shall be no order as to costs in the High Court and in this Court. Appeal allowed.

The husband of the respondent died in October 1944. For the assessment year 1945 46, his estate was assessed to income tax on a total income of Rs. 22,160. In January 1946, the respondent encashed 584 high denomination notes of the value of Rs. 5,84,000. There were proceedings for re assessment of the total income of the assessee, wherein it was stated before the Income tax Officer, on behalf of the respondent, that during the previous 30 years, her husband was giving gifts to the respondent and was also setting apart money exclusively for her and their children and, that the fund so accumulated amounting to Rs. 5,84,000 remained in a cupboard and was found after his death, and therefore, the amount was not liable to tax as the income of her husband in the previous year. The Income tax Officer disbelieved her explanation and brought the amount of Rs. 5,84,000 to tax as tre income of the respondents ' husband from an undisclosed source in the year of account 1944 45. The order was con firmed by the Appellate Assistant Commissioner who also referred to the respondent 's declaration under the High Denomination Bank Notes (Demonetisation) Ordinance that the amount was made over by the de,ceased, some time before his death, to her for her benefit and that of her 8 minor sons. The Appellate Tribunal also upheld the order of the Income tax Officer. The respondent then filed an application under section 66 (1) to state a case to the High Court. In that application she asserted that 494 out of the 584 notes were received from a Bank in Calcutta in realisation of a cheque drawn for Rs. 4,94,000 in September 1945 by her eldest son. The Tribunal rejected the application. The High Court, under section 66(2) directed the Tribunal to state a case on the question6n: Whether the Tribunal erred in law by basing its decision on a part of the evidence ignoring the 'statement made as regards the withdrawal of Rs. 4,94,000 by 494 pieces of Rs. 1,000 notes from the bank. The Tribunal, while submitting the statement of case, pointed out that the statement in the petition under section 66(1) was materially different from that made before the Income tax Officer and that the Tribunal was not invited to consider, at the hearing of the appeal, the truth of that statement. The High Court, thereafter, heard the reference and decided in favour of the assessee, holding that: (1) the Tribunal ignored a part of the declaration made by the respondent that 494 high denomination notes were received from the bank in Calcutta in September 1945; (2) no opportunity was given by the Tribunal to the respondent to clear up the discrepancies in her statements made at the time of the disclosure of the high denomination notes and before the Income tax Officer; and (3) it was not open to the Court hearing a reference under section 66(2) to hold, contrary to the decision recorded at the time when the Tribunal was directed to state the case on a question, that the question did not arise out of the order of the Tribunal. 467 In appeal to this Court, HELD : (1) In the question which was directed to be referred it was assumed that the Tribunal had before it the statement about the receipt of 494 currency notes from the bank at Calcutta. But that evidence was not before the Tribunal. No such statement was made either before the Income tax Officer, or before the Appellate Assistant Commissioner or in the appeal before the Tribunal. The statement was made for the first time in the petition under section 66(1). Even in the application it was not suggested that the finding of the Tribunal was vitiated because some relevant evidence was ignored. The order of the Tribunal was not therefore open to the objection that the appeal before it was decided on a partial review of the evidence. [471 B, D F] (2) The plea of want of opportunity was not raised before the Tribunal, and therefore, the validity of the conclusion of the Tribunal on the evidence could not be assailed before the High Court on the ground that the departmental authorities had violated the basic rules of natural justice, without raising that question before the Tribunal. [472 H] (3) The High Court was in error in holding that at the hearing of a reference pursuant to an order calling upon the Tribunal to state a case, the High Court must proceed to answer the question without considering whether it arises out of the order of the Tribunal or whether it is a question of law, or whether it is academic, unnecessary or irrelevant especially when by an erroneous order the High Court directed the Tribunal to state a case on a question which did not arise out of the order of the Tribunal. [472 D E] Observations contra in Chainrup Sampatram vs Commissioner of Income tax, West Bengal, overruled. (4) When the Tribunal was not invited to state a case on a question of law alleged to arise out of its order, the High Court could not direct the Tribunal to state it on that question. [471 G H] Commissioner of Income tax vs Scindia Steam Navigation Co. Ltd., followed. (5) The irregularities in the judgment of the High Court could not be cured by reframing the question referred to the High Court and calling for a supplementary statement from the Tribunal The power to reframe a question may be exercised only to clarify some obscurity in the question referred or to pinpoint the real issue between the tax payer and the department or for similar other reasons. It cannot be exercised for reopening an enquiry on questions of fact, which was closed by the order of the Tribunal. Similarly, a supplementary statement could be ordered only on a question arising out of the order of the Tribunal if the court is satisfied that the original statement is not sufficient to enable it to determine the question raised thereby, and, when directed the supplementary statement may be only on such material and evidence as may already 1 on record, but not included in the statement initially made. [473 B D] Keshav Mills Ltd. vs Commissioner of Income tax, Bombay North, Ahmedabad, and Narain Swadeshi Weaving Mills Y. Commissioner of Excess Profits Tax, , referred to. (6) The Tribunal was not in error in failing to raise and state a case on the question whether the amount of Rs. 5,84,000 was taxable in the accounting year 1944 45. That question was considered by the Incometax Officer and by the Appellate Assistant Commissioner and the explana 468 tion of the respondent was rejected by them, and no argument was raised before the tribunal that the amount, though taxable, was not the income of the year of account 1944 45. Further, when the High Court did not direct the Tribunal to state a case on the question, it must be deemed to have, rejected the application to refer that question, and the order of rejection having become final, this Court cannot set it aside without an appeal by the respondent. [474 B, E, H; 475 A]

CIVIL Appeal No. 2609 of 1983. Appeal by Special leave from the Judgment and order dated the 1st July, 1982 of the Bombay High Court in Appeal No. 215 of 1981. D. V. Patel, T. U. Mehta, H. J. Zaveri for the Appellants. As the matter brooked no delay, after granting special leave to appeal. we proceeded to hear the appeal on merits. When hearing was over. we pronounced the following order and stated that the reasons would follow. The order reads as under: "The appeal is allowed and the order made by the learned Single Judge as well as the Division Bench of the Bombay High Court rejecting the Judge 's Summons taken out by the appellants is set aside and the Judge 's Summons is granted to the extent indicated herein. The appellants shall deposit Rs. 1,50,000 by or be fore March 1, 1983 in this Court. Respondent No. 2 Smt. Sabita V. Adapa shall hand over vacant and peaceful possession of the property being a shop Nos. 8/9 on the ground floor of the building formerly known as 'Jagmohan Building No. 2 ' or as 'Ayaz Mansion ' and now styled as 'Ram Kutir ' situated at Station Road, Andheri, Bombay 400058 to the liquidator on or before February 28, 1983 who shall forthwith hand over possession on March 1, 1983 to the appellants, after taking a statement from the appellants that they have deposited the amount Rs. 1, 50, 000 in this Court as herein indicated. On respondent No. 2 handing over vacant and peaceful possession of the afore mentioned shops to the liquidator by or before February 28, 1983, the liquidator shall forthwith refund to her the security deposit of Rs. 28,800 deposited by the second respondent with the liquidator. Respondent No. 2 will be at liberty to remove all furniture and fixtures placed by her in the suit shop without Causing damage to the property. The amount of Rs. 1, 50, 000 to be deposited by the appellants in this Court will with the consent of the appellants be disbursed according to the direction to be given by this Court to the needy and the deserving creditors of the Chit Centre Pvt. Ltd. already ordered to be wound up 660 by the High Court. Neither the liquidator nor the creditors of Chit Centre Pvt. Ltd. have any right to claim this amount of Rs. 1,50,000 or any part thereof as it is an ex gratia payment made by the appellants for alleviating the misery if any of some of the hard hit creditors of Chit Centre Pvt. Ltd. The distribution of the aforesaid amount will be at the absolute discretion of this Court. The appeal is allowed to the extent herein indicated with no order as to costs. " These are the reasons. On a winding up petition filed under the , a learned Company Judge of the Bombay High Court made an order on September 23, 1974 winding up Chit Centre Private Ltd. ( 'Company ' for short). The Company had its office in shops bearing Nos. 8 and 9 on the ground floor of the building formerly known as 'Jagmohan Building No. 2 ' or as 'Ayaz Mansion ' now known as 'Ram Kutir '. On the winding up order being made, the official Liquidator who was appointed as Liquidator of the Company while taking possession of the assets of the Company also took possession of the office premises of the Company. It is in this manner that the Liquidator acquired possession of shops Nos. 8 and 9, the premises involved in this appeal. Subsequently, the Liquidator sought direction of the court on April 25, 1979 whether the premises should be let out on lease or licence or whether the furniture and fixtures in the premises should be sold ? The Court gave a direction that the premises be given on caretaker basis after obtaining a proper document on a compensation not less than Rs. 2, 250 per month. Pursuant to this direction the Liquidator invited offers from persons willing to occupy the premises on terms and conditions laid down by the Court. On July 2, 1980, the Liquidator sought the direction of the Court whether to accept the offer of M/s Modern Caterers represented by respondent No. 2 herein, Smt. Sabita V. Adapa. The Company Judge by his order dated July 3, 1980 directed the Liquidator to accept the offer as modified by the Court of the second respondent. The Liquidator there upon entered into an agreement on July 29, 1980 with the second respondent and gave possession of the premises to the second respondent on terms and conditions set out in the agreement. Appellants herein are the Landlords of the building of which the premises involved in this appeal formed part. Appellants took 661 out Judge 's summons praying for a direction to the Liquidator to terminate the caretaker 's agreement entered into with the 2nd respondent under the directions of the Court, and to hand over vacant and peaceful possession of the premises to the appellants. There were other prayers in the Judge 's summons with which we are not concerned in this appeal. The learned Company Judge repelled the contention of the appellants that the so called caretakers ' agreement entered into by the Liquidator with the 2nd respondent was in contravention of the various provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 as amended in 1973 ( 'Rent Act ' for short) and held that in substance and in form it was a caretaker 's agreement which was permissible. Accordingly, the learned Judge rejected the Judge 's summons in respect of both the prayers. Appellants preferred an appeal to the Division Bench of the High Court. The Division Bench held that appellants were not entitled to the notice in respect of the report submitted by the Liquidator for directions in respect of the premises and further observed that the appellants had no right to the present possession of the premises, more so, because the appellants had already filed a suit for eviction in the Small Causes Court at Bombay against the official Liquidator and on this short ground the appeal was dismissed. Hence this appeal by special leave. The Company is already ordered to be wound up by the order of the Court dated September 23, 1974. The name of the Company clearly spells out the objects for which it was formed. The name of the Company was Chit Centre Pvt. Ltd. The Company had undertaken the business of floating prize chit schemes. The nature of business in modern times is sufficiently well known and does not require elaboration. The Company had set up an office for carrying on this business and the office was set up in premises taken on lease. The business of the Company of floating prize chit schemes came to a stand still, the moment it was ordered to be wound up. It is not the Liquidators ' case that he is carrying on business of the Company which is being wound up with the permission of the Court under sec. 457 of the . 457 enables the Liquidators in a winding up by the Court, with the sanction of the court, amongst others, to carry on the business of the Company so far as may be necessary for the beneficial 662 winding up of the Company. If the floating of the schemes for prize A chits came to a stand still, the moment the Company was ordered to be wound up, there was no question of the business of the Company to be carried on by the Liquidator and that too for the beneficial winding up of the Company. Whether to carry on the business of the Company which is ordered to be wound up is not a matter left to uncontrolled discretion of the Liquidator. The Liquidator undoubtedly has the power under sec. 457 to carry on the business of the Company, if it is necessary for the beneficial winding up of the Company. And this power can be exercised not at the discretion of the Liquidator but with the sanction of the court. Reliance was placed on In re Batey; Ex parte Emmanuel(1) wherein it was observed that the power to carry on the business can only be exercised for the purpose of the beneficial winding up of the Company not because the creditors may think that the business will be a very profitable one and that the longer it is carried on the better it will, and that they will make a profit from it. Reliance was also placed on Panchmahals Steel Ltd. vs Universal Steel Traders,(2) wherein it was held that amongst others ' the Liquidator with the sanction of the court has the power to carry on business of the Company so far as may be necessary for the beneficial winding up of the Company. It is true that the Liquidator cannot carry on business for any other purpose except the purpose for which the power is conferred upon him, namely, for the beneficial winding up of the Company. He cannot carry on any business on the ground that it would be beneficial to the creditors or the contributors. The jurisdictional fact which must be ascertained and established for the exercise of the power by the Liquidator to carry on business of a Company, is that carrying on of the business of the Company is necessary for the beneficial winding up of the Company. ' However, the language of the section being unambiguous and clear, one does not need the assistance of precedents to come to a conclusion that the Liquidator with the sanction of the court can carry on the business of the Company only to the extent that such carrying on of the business is necessary for the beneficial winding up of the Company. Let it at once be made clear that there is no order of the Court brought to our notice which accorded the Court 's sanction to the exercise of the power to carry on the business of the Company by 663 the Liquidator, and we posed a question as to which business of the Company was to be carried on by the Liquidator? The business of A floating prize chits scheme has come to a stand still, the moment the Company was ordered to be wound up. It is not for a moment suggested that a Liquidator was to float some prize chit schemes or that a pending scheme was to be continued or perused by him. That is not even the Liquidator 's case nor was it so contended before the learned Company Judge. The Liquidator has adopted a contradictory posture which the learned Company Judge has unfortunately overlooked. If the Liquidator wanted to exercise power under Sec. 457 (1) (b) to carry on business of the Company so far as necessary for its beneficial winding up, the business which was to be carried on must be the business of the Company. Giving premises on lease, licence or under caretaker 's agreement was not the business of the Company. If some other business of the Company was to be carried, the use of the office premises would be necessary for carrying on the business of the Company. If possession of the premises was to be retained for carrying on the business of the Company, the Liquidator could not have sought the direction of the court to hand over possession under. any nomenclature such as lease, licence, caretaker 's agreement or any other facade to the second respondent. Now if the Liquidator wanted to exercise power under Sec. 457 (1) (b), he ought to have, with reference to the object clause in the Memorandum of Association of the Company, shown that giving on lease or licence or under caretaker 's agreement was part of the routine business of the Company. Such is not the case here. In fact, as the business has come to a grinding halt, the office premises are of no use to the Liquidator. He has therefore, devised a scheme by which he can knock out the compensation for the use and occupation of the premises, not necessary for the use of the Company, in contravention of the Rent Act and unfortunately the Court accorded sanction of this venture of the Liquidator disregarding the relevant provisions of the . The Company was a tenant or a lessee of the premises of which the appellants are the landlords. The date of the commencement of the lease is not made available to us, but it is also not claimed on behalf of the Liquidator that there was lease of long duration. If so, the Company was a statutory tenant under the Rent Act. The statutory tenancy confers the right to be in possession but 664 if the tenant does not any more require use of the premises, the provisions of the Rent Act and especially Secs. 13 and 15 completely prohibit giving the possession of the premises on licence or on sublease. The learned Company Judge therefore spelt out a third way of parting with the possession by the Liquidator, namely, that he may give the premises to the second respondent under a caretaker 's agreement. This caretaker 's agreement appears to us to be an euphemism for collecting compensation which is nothing else but the charge for use and occupation of the premises exclusively by the second respondent. Whether it is sub lease or licence does not call for decision. For the purpose of the present proceedings it is enough for us to say that the Company and its Liquidator no more needs. the premises for its own use. The Liquidator does not need the use of the premises for carrying on the winding up activities of the Company because he sought direction for parting with possession. We are not impressed by the learned Judge saving that there is some third mode of parting with possession of the premises exclusively in favour of the second respondent, namely, caretaker 's agreement which appears to us to be a facade to wriggle out of the provisions of the Rent Act. The Rent Act is no doubt enacted for protecting the tenants, and indisputably its provisions must receive such interpretation as to advance the protection and thwart the action of the landlord in rendering tenants destitutes. But this does not imply that the court should lend its aid to flout the provisions of the Rent Act so as to earn money by unfair and impermissible use of the premises. And that is what the Liquidator sought to do and the Court extended its help to the Liquidator. This, in our opinion, is wholly impermissible. The learned Company Judge could not have authorised the Liquidator to enter into such an agreement and therefore his order is liable to be set aside. In the appeal before the Division Bench, this aspect was not at all examined because it h stated that this aspect was not canvassed before the Bench hearing the appeal. The point we have examined goes to the root of the matter and, therefore, we consider it immaterial whether the point was examined at the hearing of the appeal. The learned Company Judge could not have permitted holding on to possession of the premises, not needed for efficiently carrying on winding up proceedings. The only course open to him was to direct the Liquidator to surrender possession to landlords and save recurring liability to pay rent. Before we part with this judgment, we must 665 take note of one submission that was made on behalf of the respondent. It was said that the creditors and members of the Company in liquidation have suffered huge losses and if the Liquidator would have been permitted to enter into an agreement with the second respondent, it would fetch a steady income which would have gone towards mitigating the hardships of the creditors and members of the Company. The accounts of the Company in liquidation were not brought to our notice nor can we permit violation of law howsoever laudable the object of such act may be. However, we must record a statement made on behalf of the appellants when the aforementioned argument was being examined by us. It was said that the second respondent was to pay Rs. 2,500 per month as compensation under the directions of the Court. That would have fetched the Liquidator an income of Rs. 30,000 per year and deducting the costs, expenses and taxes, the Liquidator may have been able to realise at least Rs. 25,000 per year. The learned counsel for the appellants submitted that adopting a multiplier of six, assuming that roughly six years was the period for which the agreement would have been renewed from year to year, the appellants unconditionally offered to deposit Rs. 1,50,000 in the Court to be distributed at the discretion of this Court amongst the creditors of the Company in liquidation. We recorded this offer in our order disposing of the appeal. We are now informed that the amount has been deposited. The Liquidator is accordingly directed to submit the list of the creditors of the Company with the names, addresses and claims admitted by him within 4 weeks from today when the matter will appear again on board for directions. These are the reasons which persuaded us to allow the appeal and make the order extracted at the commencement of this judgment. H.S.K. Appeal allowed.

The petitioner was convicted for the offence u/s 302 I.P.C. and sentenced to life imprisonment by the Sessions Judge. The appeal preferred by him was dismissed by the High Court of Bombay in limine. Hence the appeal by Special leave. Allowing the petition and directing the High Court to admit the appeal and deal with it according to law, the court ^ HELD: An appellate Court has the undoubted power to dismiss an appeal in limine, as provided under section 384 of the Code of Criminal Procedure. But, it is a power which must be exercised sparingly and with great circumspection, more so in a case where the conviction is for murder and the sentence is one of imprisonment for life, which are serious enough matters for the High Court to warrant admission of the appeal and fair and independent consideration of the evidence by the High Court. Summary rejection of the appeal with the laconic expression, "dismissed" is a drastic step in such cases.[653 C E] To so reject an appeal is to practically deny the right of appeal. Except in certain cases when an accused person has pleaded guilty and in petty cases every person convicted of an offence has a right of appeal under the Code; an appeal may be both against conviction and on facts and law. A convicted person is entitled to ask an appellate Court to reappraise the evidence and come to its own conclusion. Therefore, it is necessary to make a speaking order, while dismissing a criminal appeal. [653 E F] Mustaq Hussain vs State of Bombay, [ ; ; Ramayya vs State of Bombay, ; ; Vishwanath Shankar Beldar vs State of Maharashtra, ; Siddanna Appa Rao vs State of Maharashtra A.I.R. 1970 S C. 977; Narayan Nathu Naik vs State of Maharashtra, A.l. R. ; Govinda Kadutji Kadam vs State of Maharashtra, ; Shaik Mohamed Ali vs State of Maharastra, A.I.R. 1973 S.C. 43; 652 K.K. Jain vs State of Maharashtra, A.l. R. ; Jeewan Prakash vs State of Maharashtra, A.I.R. 1973 S.C. 278; Mustaq Ahmed vs State of Maharashtra, A.I.R. 1973 S.C. 1122; Krishna Vithu Suroshe vs State of Maharashtra, A.I.R. ; Sampata Tatyada Shinde vs State of Maharashtra, A.I.R. 1974 S.C. 791; and Dagadu vs State of Maharashtra, ; reiterated.

Civil Appeals Nos. 209 & 2280 of 1970. No. 209/70 arising out of certificate & CA. No. 2280/70 arising out of special leave from the common judgment and decree dated the 28th February, 1968 of the Patna High Court in Appeal from Appellate Decree No. 1055 of 1962, S.C. Misra and U.P. Singh, for the Appellant in C.A. No. 209/70 and for the Respondent in CA. No. 2280/70. Sinha, S.K Sinha and M.L. Chibber for the Appellant in CA. 2280/70 and for the Respondent in C.A. 209 of 1970. The Judgment of the Court was delivered by MISRA J. These two connected appeals are directed against a t common judgment dated 28th February, 1968 of the Patna High Court, the first one by certificate and the second by special leave. 421 Bhaiya Rudra Pratap Deo was the holder of an impartible A estate, known as Nagaruntari estate, in the district of Palamau. The succession to the estate was governed by the rule of lineal primogeniture. Under the said rule the eldest male member of the eldest line was to succeed to the estate while the junior members of the family were entitled only to maintenance grants subject to resumption on extinction of an heir in the male line of the eldest branch. It appears that the estate was accorded protection under the Chota Nagpur Encumbered Estates Act, 1876, on the application of Bhaiya Rudra Pratap Deo as per notification dated 17th March 1932 published in the Bihar Gazette dated 23rd March, 1932 and after liquidation of debt it was released from the operation of Chota Nagar Encumbered Estates Act in October 1945. Eventually the estate vested in the State of Bihar under the Bihar Land Reforms Act, 1950 in pursuance of a notification dated 5th of November, 1951. Harihar Pratap Deo, who was the younger brother of Bhaiya Rudra Pratap Deo, had died in a state of jointness with his brother Bhaiya Rudra Pratap Deo in 1934 leaving behind his son Lalu Maheshanuj Pratap Deo alias Nila Bacha, and one other step son who also died in 1937 unmarried. Lalu Maheshanuj Pratap Deo demanded land for khorposh (maintenance) from Bhaiya Rudra Pratap Deo in 1950. Bhaiya Rudra Pratap Deo executed a deed of maintenance on 14th of April, 1952 in respect of eight h villages in favour of Lalu Maheshanuj Pratap Deo. A dispute, however, arose between the parties in respect of the plots of village Sigsigi which culminated in a proceeding under section 144 Cr. The proceedings were, however, later converted into proceedings under section 145 Cr. P.C. which ended in favour of Lalu Maheshanuj Pratap Deo on 4th of July, 1955. Bhaiya Rudra Pratap Deo feeling aggrieved by the order filed a suit which has given rise to the present appeals and which was later on numbered as suit No. 16 of 1955, against Lalu Maheshanuj Pratap Deo alias 'Nila Bacha ' in respect of the agricultural plots of village Sigsigi and the grains in the custody and control of the police, Bisrampur, district Palamau. The case of the plaintiffs as follows: After the vesting of the estate in the State of Bihar the defendant approached him with a request that the plaintiff should give him the villages Bhojpur, Jaungipur, Chitri, Rohila, Bhandar and Khundra but the plaintiff declined to do so as section 12A of the Chota Nagpur Encumbered Estate Act and the provisions of the Bihar Land Reforms Act stood as a bar. 422 The defendant, however, implored and wanted to take a chance and try his luck. On the beseechment of the defendant the plaintiff allowed him six villages only, namely Bhojpur, Jaungipur Chitri, Rohila, Bhandar and Khundra subject to acceptance of the State of Bihar. There was neither any proposal for villages Sigsigi and Patihari nor had the plaintiff ever agreed to give these two villages to the defendant. A formal unstamped and unregistered deed of Khorposh(maintenance) was no doubt created in respect of only six villages on 14th of April, 1952 subject to the approval of the authorities. The defendant, however, in collusion with the plaintiff 's employees and ex employees and without the knowledge and information of the plaintiff managed to use the plaintiff 's signature and manufactured evidence to show that the two villages Sigsigi and Patihari had also been included in Khorposh grant and included these two villages in the formal deed dated 14th of April, 1952 in collusion with the typist and designing persons by perpetrating fraud on the plaintiff. When the plaintiff came to know of the fraud and fabrication of the defendant he lodged protest before the authorities and the authorities refused to accept the plea of khorposh and they ordered the villages to be included in the compensation list of the plaintiff and the rent of all the sirjot lands was fixed in favour of the plaintiff. Thus, no khorposh grant remains even in respect of the six villages and such grants, if any, are void under section 12A of the Chota Nagpur Encumbered Estates Act and the provisions of the Bihar Land Reforms Act. Even assuming for the sake of argument that the two villages Sigsigi and Patihari were included in the deed dated 14th of April, 1952, the transfer is void ab initio and no title accrued to the defendant on that basis. At the time of proceedings under section 145 Cr. P.C. paddy crops grown by the plaintiff were standing and on the petition of the plaintiff the same were harvested by the police. Subsequent cultivation was also done through the police, Bisarampur and the plaintiff is entitled to all the grains in the custody of the police. On these allegations the plaintiff sought a declaration that the land in dispute, detailed in Schedule A, situated in village Sigsigi was the khasjot land of the plaintiff, that the defendant had no concern therewith and that he (the plaintiff ) was entitled to the grain or the value thereof as detailed in Schedule B. The plaintiff also claimed a relief for possession over the disputed plots 423 and the grain or the value thereof. A relief for mesne profits to be A ascertained in subsequent proceedings was also claimed. Bhaiya Rudra Pratap Deo, the plaintiff, died during the pendency of the suit and his two sons and four widows got themselves substituted in his place. His eldest son, Bhaiya Ramanuj Pratap Deo filed a petition before the Trial Court for substitution in place of his deceased father alleging that the Nagaruntari Estate was an impartible estate governed by the rule of lineal primogeniture under which the eldest son alone is entitled to succeed his father. His prayer was allowed. Subsequently the second son of Bhaiya Rudra Pratap Deo and his widows filed a petition for being substituted. The Sub Judge impleaded all these persons provisionally as plaintiffs ordering to strike out an issue as to which of them was or were entitled to the fruits of the litigation, if eventually the court decided the suit as against the defendant. The conduct of the suit was given to plaintiff No. I under the provisions of rule 11, order 1 C.P.C. The suit was contested by the defendant on the following grounds amongst others: The Nagaruntari estate was never an impartible estate governed by the rule of lineal primogeniture but in its origin it was a non heritable Ghatwala Jagir and it was subsequently made heritable and raised to the status of a revenue paying estate and thus it became an ordinary joint family property partible amongst the members. His father died in a state of jointness with Bhaiya Rudra Pratap Deo sometime in 1934 when he was only four years old and he was living under the guardianship of his uncle. He was made to carry an impression, due to propaganda made by his uncle Bhaiya Rudra Pratap Deo that Nagaruntari estate was an impartible estate and being under this wrong impression he subsequently filed an application against his uncle in 1950 claiming khorposh grant of 22 villages including village Sigsigi from out of Nagaruntria estate and also partition of the self acquired property of his grand father. That application was, however, rejected. The Nagaruntari estate later on vested in the State of Bihar under the Bihar Land Reforms Act. Thereafter Bhaiya Rudra Pratap Deo of his own accord executed a khorposh deed in his favour in respect of eight villages including Sigsigi and got it typed in his house and sent it to him with a direction to take possession of the eight villages and accordingly he took possession of the same. The defendant denied that he had fraudulently got Sigsigi and Patihari villages inserted in the Khorposh deed or that this deed was illegal. The defendant 424 claimed that he was a co sharer with the plaintiff and was entitled to remain in possession of all the eight villages covered by the Khorposh deed till partition was made, The Subordinate Judge held that by the khorposh deed Bhaiya Rudra Pratap Deo had in fact given to the defendant in khorposh eight villages including village Sigsigi but the defendant did not acquire any interest in the said land on the basis of the khorposh deed as the same was against the provisions of section 12A of the Chota Nagpur Encumbered Estates Act and the Chota Nagpur Tenancy Act; that Nagaruntari estate was an impartible estate governed by the rule of lineal primogeniture but it ceased to be so after the enforcement of the in June 1956 and since Bhaiya Rudra Pratap Deo died after this Act came into force the succession to the estate would be governed by survivorship as contemplated by section 6 of the . As such the plaintiffs, as well as the defendant would succeed. The defendant is thus entitled to remain in possession of the said property as one of the co owners and the plaintiffs could not claim an exclusive khas possession till the matter is decided in a partition suit. On these findings he dismissed the suit Feeling aggrieved by the decision heirs and legal representatives of Bhaiya Rudra Pratap Deo, the deceased plaintiff, preferred an appeal. On appeal the District Judge confirmed the findings of the Trial Court. He, however, held that the grant of khorposh by Rudra Pratap Deo after the release of the estate from the management of the Chota Nagpur Encumbered Estates Act was void under section 12A of the Act as the khorposh grant was not made with the sanction of the Commissioner and also because the possession of the ex proprietor with respect to the Bakasht land became that of a raiyat under the State of Bihar and the raiyati right was not transferable without a registered document. the possession of the defendant was on the basis of a void document. The learned Judge further held that the document of khorposh being unregistered was not admissible in evidence but it could be used for a collateral purpose of explaining the nature of possession; that the defendant being a minor member of the family was put in possession of the property covered by it by the holder of the estate and his possession was as khorposh holder (maintenance holder) and not as a trespasser and he was not liable to be evicted. The Nagaruntari estate was found to be an impartible estate where succession was governed by 425 the rule of lineal primogeniture. But after the death of Bhaiya A Rudra Pratap Deo section 6 of the. became applicable and the devolution of the property would not be governed by the rule of lineal primogeniture but by the ordinary rule of succession as is provided under the . It was also held that Rudra Pratap had died in a state of jointness with the defendant and after came into force the Nagaruntari estate became an ordinary joint family property of the parties and that the possession of the defendant was as a co sharer. On these findings the appeal filed by the plaintiffs was dismissed by the District Judge. Undaunted, the plaintiffs preferred a Second Appeal in the High Court which was partly allowed inasmuch as the High Court found that the heirs of Rudra Pratap were entitled to get a decree for possession of the suit land jointly with the sole defendant as also for mesne profits for their share, that is, one half in addition to the entire mesne profits to which Rudra Pratap was entitled in his lifetime. Both the parties have come up in appeal to this Court against the judgment and decree of the High Court to the extent it went against them. First we take up appeal No. 209 of 1970 filed by Bhaiya Ramanuj Pratap Deo, heir and legal representative of deceased plaintiff. Mr. S C. Misra assisted by Mr. U.P. Singh raised a number of contentions. His first contention is that the rule of lineal primogeniture survived even after the enforcement of the . To appreciate the contention it will be necessary to examine the relevant provisions of the Act. Section 4(1) (a) of the Act lays down: "4. (1) Save as otherwise expressly provided in this Act G (a) any text, rule or interpretation of Hindu Law or any custom or usage as part of that law in force immediately before the commencement of this Act shall cease to have effect with respect to any matter for which provision is made in this Act. " 426 Section 6 of the Act provides: "6. When a male Hindu dies after the commencement of this Act, having at the time of his death in interest in a Mitakshara coparcenary property, his interest in the property shall devolve by survivorship upon the surviving members of the coparcenary and not in accordance with this Act: Provided that, if the deceased had left him surviving a female relative specified in class I of the Schedule or a male relative, specified in that class who claims, through such female relative, the interest of the deceased in the Mitakshara coparcenary property shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship. " A bare perusal of section 4 would indicate that any custom or usage as part of Hindu law in force will cease to have effect after the enforcement of with respect to any matter for which provision is made in the Act. If rule of lineal primogeniture in Nagaruntari estate is a customary one it will certainly cease to have effect, even though it was part of Hindu law. Faced with this situation the learned counsel for the appellant invokes section 5 (ii) of the . In so far as it is material for the present discussion it reads: "5. This Act shall not apply to: (i) . . . (ii) any estate which descends to a single heir by the terms of any covenant or agreement entered into. or by the commencement of this Act. " This section protects an estate which descends to a single heir by the terms of any covenant or agreement entered into or by the terms of any enactment in as much as is not applicable to such an estate. This section stands as an exception to section 4 of the Act referred to above. It is urged by Shri Misra that the rule of lineal primogeniture in the instant case is a statutory rule and not a customary rule and 427 therefore it is saved by section 5 (ii) of the . A In support of his contention he placed reliance upon Bengal Regulation 10 of 1800. Bengal Regulation 10 of 1800 reads as under: (i) By Regulation 11, 1798 the estates of proprietors of land dying intestate are declared liable to be divided among the heirs of the deceased agreeably to the Hindu or Muhamdan laws. A custom, however, having been found to prevail in the jungle Mahals of Midnapore and other districts by which the succession to the landed estates invariably devolves to a single heir without the division of the property. the Governor General in Council has enacted the following rule to be in force in the Provinces of Bengal, Bihar and Orissa from the date of its promulgation. Regulation 11, 1798 (2) shall not be considered to supersede or affect any established usage which may have obtained in the jungle Mahals of Midnapore and other districts, by which the succession to landed estates, the proprietor of which may die intestate, has hitherto been considered to devolve to a single heir, to the exclusion of the other heirs of the deceased. In the Mahals in question the local custom of the country shall be continued in full force as heretofore, and the Courts of Justice be guided by it in the decision of all claims which may come before them to the inheritance of landed property situated in those Mahals. " The following propositions are clearly deducible from this Regulation: F (a) The Regulation takes note of an earlier Regulation (Regulation No. 11 of 1798) according to which the estate of a proprietor of land dying intestate was to be divided amongst his heirs according to his personal law. (b) It further notes that a custom had been found to pre vail in certain areas by which land devolved on a single heir. (c) It then lays down that such a custom would not be deemed to have been superseded by Regulation No. 11 428 of 1798 and that in the said areas such custom shall be rule of decision. This analysis of the Regulation leads to the further preposition that it did not by its own force declare that any estate would descend to a single heir. All that it did was to keep alive the custom sanctioning the rule of primogeniture entailing impartibility of the estate. The rule of custom was thus recognised as such and no estate by the terms of the Regulation itself was made to descend to a single heir. In this view of the matter clause (ii) of section 5 of the does not cover such a custom. Alternatively it was argued that even if the rule of lineal primogeniture did not survive after the enforcement of the the suit land will be deemed to be settled with the plaintiff under section 6 of the Bihar Land Reforms Act and the plaintiff became the exclusive owner of the suit land. Section 6 of the Bihar Land Reforms Act, 1950, insofar as it is material for this case reads: 6. (1) On and from the date of vesting all lands used for agricultural or horticultural purposes, which were in 'khas ' possession of an intermediary on the date of , such vesting, including: (a) (i) proprietor 's private lands let out under a lease for a term of years or under a lease from year to year, referred to in Sec. 116 of the Bihar Tenancy Act, 1885 (8 of 1885), (ii) landlord 's privileged lands let out under a registered lease for a term exceeding one year or under a lease, written or oral, for a period of one year or less, referred to in Sec. 43 of the Chota Nagpur Tenancy Act, 1908 (Ben. Act 6 of 1908), (b) lands used for agricultural or horticultural purposes and held in the direct possession of a temporary lease of an estate or tenure and cultivated by himself with his own stock or by his own servants or by hired labour or with hired stock, and 429 (c) lands used for agricultural or horticultural purposes forming the subject matter of a subsisting mortgage on the redemption of which the intermediary is entitled to recover 'khas ' possession thereof; shall subject to the provisions of Sec. 7 A and 7 be deemed to be settled by the State with such intermediary and he shall be entitled to retain possession thereof and hold them as a 'raiyat ' under the State having occupancy rights in respect of such lands subject to the payment of such fair and equitable rent as may be determined by the Collector in the prescribed manner. " This section only contemplates that the land will be deemed to be settled by the State with such intermediary and he shall be entitled to retain possession thereof and hold it as a raiyat under the State having occupancy rights in respect of such land subject to payment of fair and equitable rent. But if the intermediary was in possession in a representative capacity on behalf of the other coparceners, as a necessary corollary the land will be deemed to be settled with all those persons on whose behalf one particular intermediary was in khas possession. Consequently if the possession of Bhaiya Rudra Pratap Deo was on behalf of other coparceners the land will be deemed to be settled with all those coparceners and they shall all become raiyats. It is nobody 's case that there has been any partition between the plaintiff and the defendant. The joint status of the family continued and, therefore, after the death of Bhaiya Rudra Pratap Deo his interest devolved on other coparceners as well. F It was next contended for the appellant that the defendant got the land under a khorposh deed which was void ab initio and, therefore, the status of the defendant was that of a trespasser and he was liable to ejectment on the suit of the plaintiff. According to the appellant the khorposh deed was void for two reasons: firstly because there was no sanction of the Commissioner for the deed as contemplated by section 12 A of the Chota Nagpur Encumbered Estates Act, 1876; secondly because the deed was neither stamped nor registered, In order to appreciate the first reason it is pertinent to read section 12 A insofar as it is material for the purpose of the case: "12 A (1) When the possession and enjoyment of 430 property is restored, under the circumstances mentioned in the first or the third clause of section 12, to the person who was the holder of such property when the application under section 2 was made, such person shall not be competent, without the previous sanction of the Commissioner, (a) to alienate such property, or any part thereof, in any way, or (b) to create any charge thereon extending beyond his lifetime. (2) . . (3) Every alienation and charge made or attempted in contravention of sub section (I) shall be void. " Section 12 A would be attracted only when possession and enjoyment of the property is restored under the circumstances mentioned in the first or the third clause of section 12. It was for the plaintiff to show that the conditions contemplated by section 12 were satisfied, which he has failed to do As regards the second reason, the argument is based on section 17 read with section 49 of the Indian Registration Act. Section 17 of the Registration Act enumerates the documents requiring registration. Section 49 of the Registration Act provides that no document required by section 17 or by any provision of the to be registered shall be (a) affect any immovable property comprised therein, (b) . (c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered. Khorposh (maintenance) deed is a document which requires registration within the meaning of section 17 of the Indian Registration Act and as the document was not registered it cannot be received as evidence of any transaction affecting such property. Proviso to section 49, however, permits the use of the document, even though unregistered, as evidence of any collateral transaction not required to be effected by registered instrument. In this view of the legal position the maintenance deed can be looked into for collateral purpose of ascertaining the nature of possession. 431 Admittedly the defendant was a member of a joint Hindu family. Even in an impartible estate he was entitled to maintenance and the land in dispute had admittedly been given to the defendant by the impartible estate holder. His possession, therefore, cannot be taken to be the possession of a trespasser and the High Court in our opinion has erred in branding the defendant as a trespasser. This leads us to the last, but not the least in importance, contention raised on behalf of the appellants. According to Shri S.C.Misra the original plaintiff being holder of an impartible estate, his estate would go to his successors alone and not to the other members of the family by survivorship. The learned counsel relied upon the following cases in support of his contention: Rajah Velugoti Kumara Krishna Yachendra Varu & Ors. vs Rajah Velugoti Sarvagna Kumara Krishna Yachendra Varu and Ors., Raja Rama Rao vs Raja of Pittapur, Hargovind Singh vs Collector of Etah, Raja Rao Venkata Surya Mahipati Rama Krishna Rao Bahadur vs Court of Wards. In Rajah Velugoti Kumara Krishna Yachendra Varu and Ors. vs Rajah Velugoti Sarvagna Kumara Krishna Yachendra Varu and Ors., (supra) the first and the foremost case relied upon, a contention was raised on behalf of the plaintiff that the property of the impartible estate was held in coparcenary as joint family property and became partible amongst the members once it lost its character of impartibility. In other words the contention was that the junior members had a present interest in the impartible estate and were entitled to a share in the estate once impartibility was removed. This argument was repelled and this Court observed: "In our opinion there is no justification for this argument. The law regarding the nature and incidents of impartible estate is now well settled. Impartility is essentially the creature of custom. The junior members of a joint family in the case of ancient impartible joint family estate take no right in the property by birth, and therefore, have no right of partition having regard to the very nature of the estate that is impartible. Secondly, they have 432 no right to inerdict alienation by the head of the family either for necessity or otherwise. " This Court, however, further exposed the legal position in these words: "To this extent the general law of Mitakshara applicable to joint family property has been modified by custom and an impartible estate, though it may be ancestral joint family estate, is clothed with the incidents of self acquired and separate property to that extent. The only vesting of the incident of joint family property, which still attaches to the joint family impartible estate is the right of survivorship which, of course, is not inconsistent with the custom of impartibility. For the purpose of devolution of the property, the property is assumed to be joint family property and the only right which a member of the joint family acquires by birth is to take the property by survivorship but he does not acquire any interest in the property itself. The right to take by survivorship continues only so long as the joint family does not cease to exist and the only manner by which this right of survivorship could be put an end to is by establishing that the estate ceased to be joint family property for the purpose of succession by proving an intention, express or implied, on behalf of the junior members of the family to renounce or surrender the right to succeed to the estate. " The observations extracted above are self explanatory and do not support the contention of the appellant, lather they support the defendant respondent. In Raja Rama Rao vs Raja of Pittapur (supra) it was held: "An impartible Zamindari is the creature of custom; it is of its essence that no coparcenary in it exists. Apart, therefore, from custom and relationship to the holder the junior members of the family have no right to maintenance out of it. " In Hargovind Singh vs Collector of Etah (supra) the Allahabad High Court quoted with approval the following observations made by the Privy Council in Baijnath Prasad Singh vs Tej Bali Singh : 433 ". Zamindari being the ancestral property of the joint family, though impartible, the successor falls to be designated according to the ordinary rule of the Mitakshara law, and that the respondent being the person who in a joint family would, being eldest of the senior branch, be the head of the family is the person designated in this impartible raj to occupy the Gaddi." In Raja Rao Venkata Surya Mahipati Rama Krishna Rao Bahadur vs Court of Wards (supra) it was laid down that an impartible zamindari was not inalienable by will or otherwise by virtue only of its impartibility, and in the absence of proof of some special family custom or tenure attaching to the zamindari and having that effect. This question, however, need not detain us long as this Court had the occasion to consider the point at great length in Mirza Raja Shri Pushavathi Viziaram Gajapathi Raj Manne Sultan Bahadur and Ors. vs Shri Pushavathi Visweswar Gajapathi Raj and Ors. Dealing with the point in question this Court observed as follows: "Since the decision of the Privy Council in Shiba Prasad Singh vs Rani Prayag Kumari Debi it must be taken to be well settled that an estate which is impartible by custom cannot be said to be the separate or exclusive property of the holder of the estate. If the holder has got the estate as an ancestral estate and he has succeeded to it by primogeniture, it will be a part of the joint estate of the undivided Hindu family. In the illuminating judgment delivered by Sir Dinshah Mulla for the Board, the relevant previous decisions bearing on the subject have been carefully examined and the position of law clearly stated. In the case of an ordinary joint family property, the members of the family can claim four rights: (1) the right of partition; (2) the right to restrain alienations by the head of the family except for necessity; (3) the right of maintenance, and (4) the right of survivorship. It is obvious that from the very nature of the property which is impartible the first of these rights cannot exist. The second is also incompatible with the custom of impartibility as was laid down by the Privy Council in the case of Rani Sartaj 434 Kuari vs Deoraj Kuari and the First Pittapur case Venkata Surya vs Court of Wards. Even the right of maintenance as a matter of right is not applicable as laid down in the Second Pittapur case Rama Rao vs Raja of Pittapur. The 4th right viz., the right of survivorship, however, still remains and it is by reference to this right that the property, though impartible, has, in the eyes of law, to be regarded as joint family property. The right of survivorship which can be claimed by the members of the undivided family which owns the impartible estate should not be confused with a mere spes successionis. Unlike spes successionis, the right of survivorship can be renounced or surrendered. It also follows from the decision in Shiba Prasad Singh 's case that unless the power is excluded by statute or custom, the holder of customary impartible estate, by a declaration of his intention can incorporate with the estate self acquired immovable property and thereupon, the property accrues to the estate and is impressed with all its incidents, including a custom of descent by primogeniture. It would be noticed that the effect of incorporation in such cases is the reverse of the effect of blending self acquired property with the joint family property. In the latter category of cases where a person acquires separate property and blends it with the property of the joint family of which he is a coparcener, the separate property loses its character as a separate acquisition and merges in the joint family property, with the result that devolution in respect of that property is then governed by survivorship and not by succession. On the other hand, if the holder of an impartible estate acquires property and incorporates it with the impartible estate he makes it a part of the impartible estate with the result that the acquisition ceases to be partible and becomes impartible. " Prior to the decision of the Privy Council in the case of Rani Sartaj Kuari vs Deoraj Kuari (supra), it was always assumed that a holder of an ancestral impartible estate cannot transfer or 435 mortgage the said estate beyond his own life time so as to bind the coparceners, except, of course, for purposes beneficial to the family and not to himself alone. In 1888, however, this view was shaken by the decision of the Privy Council in Rani Sartaj Kuari 's case (supra). In that case, the holder of the estate had gifted 17 of the villages of his estate to his junior wife and the validity of this gift was questioned by his son. The son 's plea, however, failed because the Privy Council held that "if, as their Lordships are of opinion, the eldest son, where the Mitakshara law prevails and there is the custom of primogeniture, does not become a co sharer with his father in the estate, the inalienability of the estate depends upon custom, which must be proved, or it may be in some cases, upon the nature of the tenure". This decision was again affirmed by the Privy Council in the First Pittapur case (supra). As a result of these decisions it must be taken to be settled that a holder of an impartible estate can alienate the estate by gift inter vivos, or even by will, though the family is undivided; the only limitation on this power would flow from a family custom to the contrary or from the condition of the tenure which has the same effect. Again in Chinnnthayal alias Veeralakshmi vs Kulasekara Pandiya Naicker & Anr. , it was held by this Court that to establish that an impartible estate has ceased to be joint family property for purposes of succession it is necessary to prove an intention, express or implied, on the part of the junior members of the family to give up their chance of succeeding to the estate. In each case it is incumbent on the plaintiff to adduce satisfactory grounds for holding that the joint ownership of the defendant 's branch in the estate was determined so that it became the separate property of the last holder 's branch. The test to be applied is whether the facts show a clear intention to renounce or surrender any interest in the impartible estate or a relinquishment of the right of succession and an intention to impress upon the zamindari the character of separate property. In Pushavathi Viziaram Gajapathi Raj Manne 's cases (supra) this Court reiterated the same legal position. For the foregoing discussion this appeal must fail. This leads us to the other appeal filed by the defendant. The contention of the learned counsel for the defendant appellant in 436 this case is that the possession of the appellant was not as a trespasser but he was a maintenance holder on the khorposh grant (maintenance) given by the impartible estate holder. The High Court, therefore, erred in law in passing a decree for possession and mesne profits against the defendant appellant. It was further contended that the Nagaruntari estate was a partible estate. As regards the first contention it is open to a co sharer to remain in possession of the joint property and the proper remedy for the plaintiff in such case is to file a suit for partition where the equities of the parties would be adjusted. The learned counsel for the plaintiff respondent on the other hand urged that the defendant 's possession was only as a trespasser. In support of his contention he placed reliance on Collector of Bombay vs Municipal Corporation of the City of Bombay & Ors. The majority took the view that: "The position of the Corporation and its predecessor in title was that of a person having no legal title but nevertheless holding possession of the land under colour of an invalid grant of the land in perpetuity and free from rent for the purpose of a market. Such possession not being referable to any legal title it was prima facie adverse to the legal title of the Government as owner of the land from the very moment the predecessor in title of the Corporation took possession of the land under the invalid grant. This possession had continued openly, as of right and uninterruptedly for over 70 years and the Corporation had acquired the limited title to it and its predecessor in title had been prescribing for during all this period, that is to say, the right to hold the land in perpetuity free from rent but only for the purpose of a market in terms of the Government Resolution of 1865". In the instant case the defendant being a member of a joint Hindu family was entitled to maintenance from the impartible estate holder. The impartible estate holder executed a khorposh deed in favour of the defendant. If the document in question was invalid for want of registration or stamps the same can be looked into for collateral purpose to find out the nature of possession of the defendant appellant. This being the position in the instant case, the case cited above is not of much help to the plaintiff respondent. In 437 that case the sole basis of title itself was invalid. A perusal of the plaint also indicates that the plaintiff had given some grant to the defendant by way of maintenance and a formal deed of maintenance was executed. The execution of the document is not denied by the plaintiff. All that he says is that village Sigsigi was not included in the deed. We find considerable force in the contention raised on behalf of the defendant appellant that the High Court has decree in passing the decree for possession and mesne profits against the defendant. The proper remedy for the plaintiff in this case was to file a regular suit for partition in respect of all the properties and not a suit for possession of plots of one village and mesne profits. The second contention that disputed estate was a partible estate has been raised only to be repelled. The overwhelming evidence on the record leaves no room for doubt that the disputed estate was an impartible estate till the death of the original plaintiff in 1957 In the result the first appeal No. 209 of 1970 filed by the plaintiff is dismissed while the other appeal filed by the defendant, No. 2280 of 1970, is allowed and the decree passed by the High Court is set aside and the decree of the Trial Court as affirmed by the first appellate court, is restored. In the circumstances of the case we direct the parties to bear their own costs. V.D.K. C.A. 209/70 dismissed 2280/70 allowed.

Premises, "Aranaya Kutir" bearing Municipal No. 47A Jakhan in Dehradun was owned by one Shri R.C. Sood. He executed a gift deed in favour of Shree Anand Mayee Sangh, Dehradun, with a stipulation that the donor shall remain in possession of the premises during his life time and after his death his widow if alive would remain in possession. The management of the same would be taken up by the Sangh after their death. In 1967, the appellant, the widow of the brother of Shri R.C. Sood was invited by Shri Sood to reside with him in the aforesaid house and ever since she has been residing peacefully there. On 10th of October, 1973 Shri R.C. Sood expired. Respondent No. 1, Shri Nawal Kishore as secretary of the Anand Mayee Saogh, served a notice dated 13th November, 1973 on the appellant asking her to vacate the premises immediately, and threatening to take criminal action against her on failure to do so, as her further stay in the premises would be deemed to be in the nature of a criminal trespass. When the appellant did not vacate the premises, respondent No. 1 filed a complaint under section 468 of the Penal Code. The Sub Divisional Magistrate, Mussorie found that the continued stay of the appellant amounted to criminal trespass within the meaning of section 441 of the Penal Code, convicted her under section 448 and sentenced her to pay a fine of Rs. 100 or in lieu thereof to undergo simple imprisonment for 40 days. In addition, the learned Magistrate also passed an order directing the appellant to vacate the premises within two months of the order, purporting to be one under section 456 o; the Criminal Procedure Code. The appeal preferred by the appellant was allowed and the conviction and sentence passed were set aside. Respondent No. 1, therefore assailed the order of acquittal by filing a criminal appeal before the High Court. The High Court allowed it and reversed the order of acquittal passed by the Sessions Judge and convicted the appellant. In the opinion of the High Court, the appeal filed by the appellant before the Sessions Judge was incompetent, as no appeal would lie against the imposition of fine. The High Court declined to treat the appeal as a division in as much as under the provisions of section 401(5) of the Criminal 872 Procedure Code, it is permissible to treat a revision as an appeal but not vice versa. Hence the appeal by special leave. Allowing the appeal, the Court ^ HELD: 1.1. In order to satisfy the conditions of section 441 of the Penal Code, it must be established that the party, complained of entered in possession over the premises with intent to commit an offence. Every trespass does not amount to criminal trespass within the meaning of that section. [875 G] 1:2. Initiating criminal proceedings in the circumstances of this instant case is only an abuse of the process of the court. This is essentially a civil matter which could be properly adjudicated upon by a competent civil court. (a) The appellant was allowed to occupy tho premises in 1967 by Mr. Sood perhaps on 'lease and license ' basis. (b) A bare perusal of the complaint filed by Respondent No. 1 makes it abundantly clear that there is absolutely no allegation about the intention of the appellant to commit any offence, or to intimidate, insult or annoy any person in possession; and (c) If a suit for eviction is filed in the civil court, the appellant, who may be fondly thinking that she had a right to occupy the premises even after the death of Shri Sood, might be in a position to vindicate her right and justify her possession. [875 E H, 876 A, E F] 2. The appeal filed by the appellant before the Sessions Judge was competent and maintainable. If the learned Magistrate had only awarded a sentence of fine, in that case revision alone would be competent and not an appeal. But in the instant case, the Magistrate not only awarded the fine of Rs. 100 but also directed the appellant to vacate the premises within two months from the date of the order. This part of the order presumably was passed under section 456 of Criminal Procedure Code, and this made the order appealable. [876 F H]

Criminal Appeal No. 323 of 1978. 1098 From the Judgment and Order dated 9.3.1976 of the Orissa High Court in Criminal Appeal No. 1 of 1974. N.K. Agarwal for the Appellant. Ms. Mona Mehta and R.K. Mehta for the Respondent. The Judgment of the Court was delivered by OZA, J. This appeal has been filed after obtaining leave from this Court by the appellant against his conviction under Section 302 and sentence of imprisonment for life awarded by Sessions Judge, Mayurbharj, Kenjhar, Baripada by his order dated 8th December 1973 and maintained by High Court of Orissa by its judgment dated 9th March, 1976. The prosecution case in short was that the deceased Bhatal Majhi had some land dispute with Jitrai Majhi and his brothers. It is alleged that Jitrai Majhi did away with the deceased through the instrumentality of the present appel lant. The incident is alleged to be at the night intervening between 13th and 14th December 1968. Bhatal Majhi was found dead in the morning of 14th December, 1968 by the road side near a weekly market known as Joka Hata with his throat cut. Bishnu Majhi the brother in law of the deceased P.W. 1 identified the dead body and lodged the information to Bangriposi Police Station the same day Ext. The assailant was reported to be unknown. P.W. 10, the Second Officer attached to the said Police Station investigated into the case, held an inquest, des patched the dead body for post morten examination seized certain incriminating articles and finally arrested the appellant on 15.12.68 at 11 a.m The same day 3 a.m. he arrested accused Jitrai Majhi. The weapon of offence a razor M.O. IV was produced by accused Jitrai Majhi which was seized under Ext. 5 Investigating Officer, P.W. 10 forwarded both the accused Jitrai Majhi and Kansa Behera, present appellant, in custody to Court, the appellant escaped as the lock up was defective and he,could not be traced. Finally a charge sheet was submitted against both Jitrai and Kansa indicating the appellant as absconder. Jitrai was discharged by the Sub Divisional Magistrate, Baripada vide his order dated 27.2.1970 for want of prima facie case as against him. So the case as against him needs no consideration. Later, after the apprehension of the appellant on 22.8.72, he was committed to the Court of Sessions on 28.6. 1099 The prosecution examined 10 witnesses and nobody was examined in defence. There is no eye witness of the inci dent. The learned courts below convicted the appellant on the basis of circumstantial evidence. The circumstances established against the appellant are: i) that he was last seen with the deceased on the evening of 13th Dec. 1968 when it is alleged that he and deceased took liquor together; ii) that a dhoti and shirt were recovered from the possession of the appellant when he was arrested on 15.12.68 and these articles were found to be stained with human blood; and iii) that P.Ws 7 and 8 have deposed to about an extra judicial confession made by this appellant when he was ultimately arrested after absconding in Bihar. So far as the first circumstance that the appellant was seen with the deceased on the evening preceding the night when the deceased is alleged to have been killed is not in dispute. This fact has been established by the evidence of PWs 3 and 4 and the appellant himself in his statement also admitted that he was there although his case was that the deceased throat was cut by Jitrai Majhi who also was an accused and was discharged on the basis of police papers by the Sub , Divisional Magistrate. It is clear that only on the basis of this circumstances the appellant could not have been convicted and as this circumstance is not in dispute, in our opinion, it is not necessary to go into this ques tion. Learned counsel appearing for the appellant contended that the circumstances appearing in evidence indicate that the deceased and Jitrai Mejhi had some trouble about land. It is alleged that the deceased land was pledged with Jitrai and the possession of the land was given to him. When the deceased offered him to repay the loan so that he may get back his land, it is alleged that Jitrai refused to give possession on the plea that the land was purchased by him. Ultimately it is alleged that the deceased took forcible possession of the land from Jitrai and therefore Jitrai bore a grudge against the deceased. It was also contended that the razor, the alleged instrument of offence was recovered at the instance of Jitrai when he was arrested and that was also found stained with blood. It was contended by learned counsel that in fact the appellant 's case is that it was Jitrai who cut the throat of the deceased and this also is born out from a circumstance that next morning the appellant went to the wife of the deceased and informed her that their husband was lying dead at the place of occurrence. It was also contended by learned counsel that the two witnesses who deposed about the dying declaration are P.Ws 7 and 8 but in fact 1100 P.W. 8 in cross examination has gone back on that statement. It contended that even otherwise the dying declaration is a weak piece of evidence. As regards the recovery of a shirt and dhoti which are alleged to be stained with human blood, it was contended that there is no clear evidence to indicate that the appel lant was wearing dhoti at the time of the incident. As regards shirt it was Contended that although the serologist report indicate that it is stained with human blood but blood grouping is not there. In this view of the matter the presence of some stains of human blood after sometime could not be a circumstance on the basis of which any conclusive inference could be drawn. It was therefore contended that in view of these circumstances it could not be held that the circumstances point to the only conclusion of the guilt of the appellant. It is significant that the wife of the deceased who has been examined as a witness deposed that next morning the appellant went to her and told her that her husband was lying dead, but she did not believe him and later Phudan Majhi came and told her that her husband was ill and wanted her to accompany him without taking food and she stated that she went alongwith him and found her husband lying dead with his throat cut. It is interesting that this Phudan Majhi who came and told her a false story has not been examined. The three circumstances on the basis of which the appel lant has been convicted have to be considered. The last one i,e. the extra judicial confession is proved by P.Ws 7 and 8. A perusal of the evidence of P.W. 8 discloses that this witness in cross examination went back and denied any con fession having been made by the appellant. The other witness is P.W. 7 who no doubt has spoken about an extra judicial confession made by the appellant. This is after a long lapse of time as admittedly this appellant absconded after his arrest on 15.12.68 and was later arrested on 22.8.72 and this extra judicial confession therefore appears to have been made after a long lapse of time. The circumstances .in which this appellant was apprehended and this statement is alleged to have been made also is rather interesting. In Bihar this appellant was apprehended for having committed theft and that he was produced before the Mukhiya of the Village P.W. 7 and the Mukhia wanted him to be handed over to the police. That it is alleged that the appellant said that I am wanted in connection with a murder case and I am hiding from the police and therefore requested not to be handed over to the police and in this background it is alleged that he made a statement that he has killed one Bhatal Majhi. 1101 Such an extra judicial confession for proving which two witnesses were produced. One of these witnesses has gone back on that statement and this statement is alleged to have been made after a long lapse of time, in our opinion, is a piece of evidence on which no reliance could be placed and under these circumstances, in our opinion, this piece of evidence has to be left out of consideration. As regards the recovery of a shirt or a dhoti with blood stains which according to the serologist report were stained with human blood but there is no evidence in the report of the serologist about the group of the blood and therefore it could not positively be connected with the deceased. In the evidence of the Investigating Officer or in the report, it is not clearly mentioned as to what were the dimensions of the stains of blood. Few small blood stains on the cloths of a person may even be of his own blood especially if it is a villager putting on these clothes and living in villages. The evidence about the blood group is only conclusive to connect the blood stains with the deceased. That evidence is absent and in this view of the matter, in our opinion, even this is not a circumstance on the basis of which any infer ence could be drawn. So far as the appellant being with the deceased in the evening is concerned, it is not in dispute. But it is also significant that the instrument of the offence was recovered at the instance of one Jitrai Majhi who has been discharged and under these circumstances therefore the evidence about the appellant having been seen in the evening with the deceased also is of no consequence. It is a settled rule of circumstantial evidence that each one of the circumstances have to be established beyond doubt and all the circum stances put together must lead to the only one inference and that is of the guilt of the accused. As discussed above the only circumstance which could be said to have been estab lished is of his being with the deceased in the evening and on that circumstance alone the inference of guilt could not be drawn especially in the circumstances of the case where one another accused person from whom an instrument of of fence was recovered, who had a grudge against the deceased has been let off. In the light of the discussions above therefore, in our opinion, the courts below were wrong in convicting the appellant on these facts. The appeal is therefore allowed, the conviction and sentence passed against the appellant are set aside. It is reported that he is in custody. He shall be set at liberty forthwith. N.P.V. Appeal allowed.

Sub section (4) of section 8 of the Delhi School Education Act, 1973 interdicts the management of a recognised private school from suspending any of its employees except with the prior approval of the Director of Education. However, in cases of gross misconduct the first proviso to that sub section provides for suspension of the employee with immedi ate effect, while the second proviso limits the period of such suspension to fifteen days, unless it has been communi cated to the Director and approved of by him before the expiry of the said period. The petitioner, a teacher in a recognised private school run by a linguistic minority educational society, was placed under suspension by the management by its order dated April 23, 1986 on charges of diversion of funds, pending depart mental inquiry and the fact intimated to the Director of Education, without formally seeking his approval under section 8(4) of the Act. She filed a suit assailing the order as violative of section 8(4) of the Act and also an application for the grant of a temporary injunction which was dismissed by the trial court following the decision of the High Court in S.S. Jain Sabha vs Union of India, [ILR (1976) 2 Del. 61] taking the view that the educational institution having been established and administered by a linguistic minority, it was protected under article 30(1) of the Constitution, and therefore, the provisions of the Act and in particular, section 8(4) were not applicable. Her special leave petition having been dismissed as withdrawn by this Court, she filed the present writ petition in this Court and thereafter withdrew the suit. 975 Relying upon the decision in Frank Anthony Public School Employees Association vs Union of India, ; it was contended for the petitioner that the impugned order of suspension being without prior approval of the Director, as required under section 8(4) of the Act, was vitiated. For the respondents it was contended that the decision of the Court in Frank Anthony Public School 's case being contrary to the decision of the Constitution Bench in Lilly Kurian vs Sr. Lewina & Ors., ; required reconsideration and that section 8(4) of the Act was violative of Article 30(1). Disposing of the writ petition, the Court, HELD: 1. The exercise of the power of management of the aided schools run by the linguistic minority educational institutions in Delhi to suspend a teacher is subject tO the requirement of prior approval of the Director of Education under sub section (4) of section 8 of the Delhi School Education Act, 1973. [979EF] 2.1 While the right of the minorities, religious or linguistic, to establish and administer educational institu tions of their choice cannot be interfered with, restric tions by way of regulations for the purpose of ensuring educational standards and maintaining excellence thereof can validly be prescribed. [987B] 2.2 Sub section (4) of section 8 of the Act requiring the prior approval of the Director of Education for the suspen sion of a teacher was regulatory in character and did not, therefore, offend against the fundamental right of the minorities under article 30(1) of the Constitution to adminis ter educational institutions established by them. [986H 987A] Frank Anthony Public School Employees ' Association vs Union of India & Ors., ; ; All Saints High School vs Government of Andhra Pradesh, ; ; In re. the Kerala Education Bill, 1957, [1959] SCR 995; Ahmeda bad St. Xavier 's College Society vs State of Gujarat, ; and Lilly Kurian vs Sr. Lewina & Ors., ; ; applied. State of Kerala vs Very Rev. Mother Provincial, ; and D.A.V. College vs State of Punjab, [1971] Suppl. SCR 688, referred to. 3.1 The decision in Frank Anthony Public School 's case holding that sub section (4) of section 8 of the Act was applicable to the unaided minority 976 educational institutions proceeds upon the view taken by the majority in All Saints High School 's case that the right guaranteed to religious and linguistic minorities by article 30(1) to establish and to administer educational institu tions of their choice was subject to the regulatory power of the State, which in its turn was based on several decisions right from In re. the Kerala Education Bill, 1957 down to St. Xavier 's case including that in Lilly Kurian 's case. It could not, therefore, be said to be in conflict with the decision of the Constitution Bench in Lilly Kurian 's case and required reconsideration. [983BC 986FG] 3.2 The endeavour of the Court in all the above cases has been to strike a balance between the constitutional obligation to protect what is secured to the minorities under article 30(1) with the social necessity to protect the members of the staff against arbitrariness and victimisa tion. The provision contained in sub s.(4) of section 8 of the Act is designed to afford some measure of protection to the teachers of such institutions without interfering with the managements ' right to take disciplinary action. [987E, D] 4.1 In a case like the present one where the management of an educational institution governed by sub section (4) of section 8 of the Act charged the petitioner with diversion of funds and communicated the impugned order of suspension pending departmental inquiry to the Director, a duty was cast on him to come to a decision whether such immediate suspension was necessary by reason of the gross misconduct of the petition er as required by sub section (5) ors. 8 of the Act. [987F, 988A] 4.2 Since there was no response from the Director within the period of 15 days, as envisaged by the second proviso to a. 8(4), the impugned order of suspension had lapsed. Howev er, the management could yet move the Director for his prior approval under sub section (4) of section 8 of the Act, who would then deal with such an application, if made, in accordance with the principle laid down in the Frank Anthony Public School 's case. [988BC]

ition No. 106 of 1980 Under Article 32 of the Constitution of India. with 509 Civil Appeal No. 2735 of 1986 Arising out of Special Leave Petition (Civil) No. 2775 of 1980. P.S. Potti, K.R. Chaudhary, Miss Malini Poduval and Miss R. George for the Petitioners. M.K. Ramamurthy, T.V.S.N. Chari and Miss. V. Grover for the Respondents in W . No . 106 of 1980. K. Ram Kumar for the Appellant in C.A. No. 2735 of 1986. A. Subba Rao for the Respondents in C.A. No. 2735 of 1986. The Judgment of the Court was delivered by DUTT, J. The Writ Petition No. 106 of 1980 under Article 32 of the Constitution of India preferred by the petitioners, Smt. M. Nirmala & 309 others, and the appeal by special leave filed by the State of Andhra Pradesh have been heard together as they involve the common question as to the seniority of certain employees of the Government of Andhra Pradesh in Group II and Group IV services. Group II services relate to the posts of Junior Assistants in the Secretariat and Group IV services relate to the posts of Lower Division Clerks, Lower Division Assistants, Lower Division Typists and Steno Typists. The petitioners are working in Group IV services in various Departments of the Government of Andhra Pradesh. On August 18, 1970 by G.O. Ms. No. 682, the Government of Andhra Pradesh put a ban on direct recruitment of all categories of State and subordinate services, pending the recommendations of the Backward Classes Commission. In spite of the said order baning direct recruitments, the Government had to appoint employees in all Departments in view of exigencies of circumstances and in the public interest. Such appointments were made under the General Rule 10(a)(i)(1) on a purely temporary basis. Most of the petitioners were appointed after April, 1974 as temporary employees under General Rule 10(a)(i)(1). Indeed, General Rule 10(a)(iii) provides that a person appointed under clause (i) shall, whether or not he possesses the qualifications prescribed for the service, class or category to which he is appointed, be replaced as soon as possible by a member of the service or an approved candidate qualified to hold the post under the rules. In view of clause (iii) of 510 General Rule 10(a), the appointments of the petitioners were to be replaced as soon as possible by qualified and approved candidates. In 1973, the ban on recruitment through Public Service Commission was partially lifted. By G.O. Ms. No. 725 dated December 28, 1973, the Government of Andhra Pradesh directed the Public Service Commission to conduct a special qualifying test for recruitment in Group IV services with a view to regularising the temporary appointments made during the ban period. One of the conditions of eligibility for appearing at the said qualifying test was, as fixed by the Public Service Commission, two years of service as on 1.1.1973. As the petitioners were appointed after April, 1974, the question of their appearing at the said qualifying test did not arise. It appears that those who appeared at the said test were all absorbed in the regular service. On the representation of the temporary employees who were not absorbed, the Public Service Commission conducted another special qualifying test as directed by the Government by G.O. Ms. No. 787 dated November 9, 1976. The petitioners could not avail themselves of the said test as they had not put in two years of service as on 1.1.1976 as fixed by the Public Service Commission. The temporary employees including the petitioners who were appointed on or after January 2, 1974, became eligible only in 1976 in which year a test for recruitment through Public Service Commission was conducted to facilitate all temporary employees including the petitioners to compete for regular appointments. About 82,000 candidates appeared in the test for Group IV services. The petitioners, however, did not appear at the said qualifying test even though they were eligible for the same. At the same time, the petitioners and others, who did not appear at the qualifying test in 1976, began to put pressure on the Government for their absorption. The Government was also prevented from replacing the temporary employees including the petitioners by the candidates who were successful in the said qualifying test. The successful candidates were appointed to additional posts in Group II and Group IV services sometime in 1977 or 1978. The temporary employees made a representation to the Government that their appointments should be regularised without requiring them to appear at the special qualifying test. The Government seems to have yielded to the pressure brought to bear upon it by these temporary employees, as a result of which the appointments of successful candidates in the said test could not be regularised. By Memo No. 1806/ Ser B/78 2 dated 25.1.1979 the Government proposed to fix the inter se 511 seniority between the Public Service Commission candidates, that is, those who passed in the qualifying test held in 1976 and the temporary employees who did not appear at the qualifying test. Being aggrieved by the said Memo, certain Public Service Commission candidates belonging to Group II services filed a representation petition being R.P.No. 145/79 before the Andhra Pradesh Administrative Tribunal. i; Subsequently, another representation petition being R.P. No. 447 of 1979 was filed by certain other Public Service Commission candidates belonging to Group IV services including the respondents Nos. 18 to 108 in the Writ Petition. While the said representation petitions were pending before the Andhra Pradesh Administrative Tribunal, the Government of Andhra Pradesh issued G.O.Ms. No. 646 dated September 14, 1979 whereby the temporary employees including the petitioners were exempted from appearing at any examination and the posts held by them were withdrawn from the purview of the Public Service Commission. By another order, being G.O.Ms. No. 647 dated September 14, 1979, the Government directed regularisation of the temporary employees including the petitioners without subjecting them to any test, written or oral. One of the conditions of such regularisation, as contained in clause (b) of the G.O.Ms. No. 647, is that "in the case of temporary Junior Assistants, Typists and Steno Typists in the Secretariat and L.D.Cs, Typists and Steno Typists in the offices of the Heads of Departments, their services should be regularised from the date subsequent to the date of last regular appointment in that category or from the date of temporary appointment whichever is later and subject to the decision of the Andhra Pradesh Administrative Tribunal before which representation petitions in this regard are pending. " At this stage, it may be stated that R.P. No. 145 of 1979 and R.P. No. 447 of 1979 were both decided by the Tribunal in favour of the Public Service Commission candidates, holding that their appointments were regular and their seniority should be computed from the respective dates of regular appointments under the General Rule 33(a) which, inter alia, provides that the seniority of a person in a service, class, category or grade shall be determined by the date of his first appointment to such service, class, category or grade. The State of Andhra Pradesh being aggrieved by the said order of the Tribunal passed in R.P. No. 145 of 1979, has preferred the instant appeal by special leave. It is not in dispute that the Public Service Commission candidates including the respondents Nos. 18 to 108, who belong to Group IV services, were appointed sometime in 1977 or 1978 pursuant to their 512 being successful in the special qualifying test held by the Public Service Commission in 1976. In view of General Rule 33(a), the seniority of the respondents should be computed from the respective dates of their appointments as held by the Administrative Tribunal. The petitioners, however, claim that their seniority should be computed from the respective dates of their appointments after April, 1974 so that they maybe placed before the respondents Nos. 18 to 108 in the seniority list. In our view, the claim of the petitioners is untenable. The petitioners were not appointed on a regular basis, but by way of stop gap arrangements to be replaced by the appointment of qualified candidates. The petitioners failed to avail themselves of the opportunity of qualifying themselves for regular appointments by appearing at the special qualifying test held in 1976, although they were eligible for the test. The Government order being G.O.Ms. No. 647 dated September 14, 1979 on which much reliance has been placed by Mr. Patti, learned counsel appearing on behalf of the petitioners, does not support their claim of seniority from the respective dates of their appointments after April, 1974. Under the said G.O.Ms. No.647, the services of the employees belonging to Group IV services would be regularised from the date of last regular appointment in that category or from the date of temporary appointments whichever is later and subject to the decision of the Andhra Pradesh Administrative Tribunal. The Andhra Pradesh Administrative Tribunal, as stated already, held that the appointments of the Public Service Commission candidates were regular appointments. The appointments of the Public Service Commission candidates are, therefore, the last regular appointments as contemplated by G.O.Ms. No. 647. In view of the said decision of the Andhra Pradesh Administrative Tribunal and the directions contained in G.O.Ms. No.647, the services of the petitioners will be regularised subsequent to the respective dates of appointments of the respondents Nos. 18 to 108 or the other employees in Group IV services, who were appointed pursuant to their being successful in the special qualifying test held by the Public Service Compression in 1976. The petitioners have not challenged the said G.O.Ms. No. 647; on the contrary, as stated already, they have placed reliance upon the same and have also prayed for the implementation of the same. The petitioners, therefore, cannot assail the. findings of the Andhra Pradesh Administrative Tribunal and claim that their seniority should be computed from the respective dates of their appointments after April, 1974. WE have also considered the findings of the Administrative Tri 513 bunal and we are of the view that the findings arrived at by it are quite legal and justified, and no exception can be taken to the same. For the reasons aforesaid, both the Writ Petition and the appeal are dismissed. However, in view of the peculiar facts and circumstances of the case, there will be no order as to costs. S.R. Petition and appeal dismissed.

The assessee Company, carrying on business of selling timber in India and abroad, entered into contracts in the nature of forest leases with the Government of Burma, under which it was authorised to fell teak trees, convert them into logs, and remove them after payment of royalty. These leases, which were made first in the year 1862, had been continuously renewed from time to time. Clause 27 of the agreement authorised the assessee company even after the expiry of the lease period of 15 years to remove the logs in respect whereof extraction had been completed, upon payment of royalty during the next three years. At the relevant time the assessee company was the owner of fifteen such forest leases. The last of these leases commenced on Ist January 1926 and 31st December, 1940 was the due date of expiry. However, before the expiry of the period, the Second World War started and the Government of Burma extended them until such time as it became possible to resume forest operations. After formation of the Union of Burma, the ownership of the forest leases of the assessee company was taken over by the Government of Burma in 1948 49; a third of the total teak area on June 1, 1948 and the rest on or about June 10, 1949. In terms of an agreement dated 10th June, 1949 between the parties the assessee made over to the Burmese Government its residuary rights under the forest leases together with the non duty paid logs, wherever found, and also all the assets viz. buildings, dwelling houses, etc. pertaining to the forest leases and received 28,847 tons of teak logs in substitution of non duty paid logs, 2,946 tons against depreciable assets and stores and 12,067 tons against livestock. The logs so received by the assessee com 270 pany were sold off by it from time to time in the accounting years 1949, 1950, 1951 and 1952. The Income tax Officer sought to bring these sale proceeds to tax by allocating them amongst the various assessment years. The questions that arose were: (i) whether the realisation in respect of substituted logs was exempt from tax as being a receipt of capital nature, and (ii) whether the sale proceeds in respect of logs received in lieu of depreciable assets, stores and livestock were liable to tax under the Act or were altogether free from liability. The Income tax Officer, the Appellate Assistant Commissioner and the Tribunal held against the assessee. The High Court, however, answered the questions in favour of the assessee. In these appeals by certificate under section 66A(2) of the Income tax Act, 1922 it was contended for the Revenue that the contracts entered into by the assessee company for obtaining its stock in trade in timber were trading contracts, that under cl. 27 of the agreements the assessee had no interest in land as such, it had only a right to collect and take away logs, its stock in trade, and it could not fell any fresh trees, that 28,847 tons of logs received by the assessee under the agreement were in substitution of the logs that it had already cut and had not been able to remove from the forests, merely as a recompense for its rights in the stock in trade, and that the excess realisation in respect of logs received against depreciable assets, stores and livestock were profits and liable to tax under section 10(2)(vii) of the Income tax Act, 1922. For the assessee respondent it was contended that the forest leases constituted the income producing capital assets of the company in which it had invested large funds in building dams, canals, roads, railways, buildings etc., that the forest leases were not ordinary commercial contracts made in the course of carrying on their trade or for the disposal of their products, these related to the whole structure of the assessee 's profit making apparatus, that the consideration for the logs received was the surrender of the residuary rights under the forest leases and acquisition of assets of the business under the take over agreement, that the assessee was prevented from carrying on business upon the nationalisation of forest resources and acquisition of residuary rights and assets pertaining to the forest leases. It was further submitted that the compensation paid to the assessee was the sterilisation of the company 's business and thus a capital receipt, not subject to tax. Dismissing the appeals, the Court, 271 ^ HELD: 1.1. The forest leases constituted capital assets of the assessee. The payments made for cancellation or sterilization of the rights under these leases were, therefore, capital receipts and not liable to tax. [290E] 1.2. Whether in a particular case payments were capital receipts or not depends upon the facts and circumstances of the case. The basic principles are: if there was any capital asset and if there was any payment made for acuisition of that capital asset, such payment would amount to a capital payment in the hands of the payee. Secondly, if any payment was made for sterilization of the very source of profit making apparatus of the assessee, or a capital asset, then that would also amount to a capital receipt in the hands of the recipient. If on the other hand, the leases were merely stock in trade and payments were made for taking over the stock in trade then no question of capital receipt comes. The sum would represent payments of revenue nature or trading receipts. Compensation received for immobilisation, sterilization, destruction or loss, total or partial, of a capital asset would, therefore, be capital receipt. If a sum represented profit in a new form then that would be income but where the agreement related to the structure of assessee 's profit making apparatus and affected the conduct of business, the sums received for cancellation or variation of such agreement would be capital receipt. [286H; 287A D] In the instant case, the forest leases affected the very structure of the operation of the assessee. The compensation received for the cancellation of assessee Company 's activities could not be regarded as an income receipt, nor the legal character of the payment misjudged by the magnitude of the payment. [289A; 290C D] Glenboig Union Fireclay Co. Ltd. vs The Commissioner of Inland Revenue, 12 Tax Cases 427; Senairam Doongarmall vs Commissioner of Income tax, Assam, at 406; Commissioner of Income tax, U.P. vs Gangadhar Baijnath, ; Commissioner of Income tax, Poona vs Manna Ramji and Co., ; Van Den Berghs Ltd. vs Clark (H.M. Inspector of Taxes), case): British Insulated & Helsby Cables Ltd. vs Atherton, ; Hood Barrs vs Commissioners of Inland Revenue (No.2), 37 Tax Cases 188; Commissioner of Income tax, Hyderabad Deccan vs Vazir Sultan & Sons, , referred to. For levy of a balancing charge under section 10(2)(vii) of the Income tax Act, 1922 it was absolutely necessary that the depreciable 272 assets should have been sold at a price agreed to between the parties. The agreement under which the assessee company received logs by way of compensation in lieu of depreciable assets did not involve any transaction of sale between it and the Union of Burma. The assessee company never paid any money by way of a price in respect of assets delivered to it by the Government. Therefore, the sale proceeds of these logs could not be brought to tax against the assessee company under the second proviso to section 10(2)(vii) of the Income tax Act, 1922. [29 ID F] Commissioner of Income tax vs Motors & General Stores (P) Ltd., , referred to. The logs delivered to the assessee company in respect of the depreciable assets, stores and livestock came into possession of the assessee in consequence of the agreement against surrender of all outstanding or residuary rights of the assessee to the Government. The arrangement was in consequence of nationalisation of forest operations. The fact is that the assessee company did not mix up these logs with any of the stock in trade held by it in its ordinary course of business. The sale proceeds of these logs could not, therefore, be held to have been received by the assessee company on revenue account. Consequently, the excess realisation received over the cost incurred in getting delivery of these logs was not liable to tax under the Act. [29 IG H; 292A C] 4. Nothing was paid by the Government to the assessee company in connection with 1/3rd area of the forest leases taken over from the assessee company. The assessee company had filed a suit in connection with the timber logs and stores taken over by the Government and succeeded in obtaining a decree. The sum awarded in the decree in lieu of the rights which the assessee company had under cl. 27 of the agreement could not, therefore, be taxed. [292F G] 5. Normally in trade, there are two types of capital, one circulating and the other fixed. Fixed capital is what the owner turns to profit by keeping it in his own possession, circulating capital is what he makes profit of by parting with it and letting it change hands. What is capital assets in the hands of one person may be trading assets in the hands of the other. The determining factor is the nature of the trade in which the asset was employed. [287A C]

vil Appeals No. 2290 (N) of 1970 and 97 to 99 of 1972. From the Judgment and Order dated 6.5.1970 of the Rajas than High Court in First Appeal Nos. 134, 119, 120, 121 of 1960. Harish Salve. Mrs. A.K. Verma and D.N. Mishra for the Appellants. V.M. Tarkunde, V.C. Mahajan, S.K. Jain, S, Atreya, E.K. Gupta and C.V. Subba Rao for the Respondents. The Judgment of the Court was delivered by THAKKAR, J. Whether the High Court was justified in reversing the judgment and decree passed by the trial court in favour of the four sons of the Sovereign Ruler of the then State of Jodhpur in the context of an order Passed by the said Ruler, and in dismissing the suits instituted by them against the State of Rajasthan for the recovery of various amounts under the said order, it the problem in these appeals2 by the unsuccessful plaintiffs. That order issued by the Ruler inter alia provided that an annual sum of Rs.30,000 be paid to each of his aforesaid sons (de scribed as Maharajkumars) by way of an annual allowance with retrospective effect from the date of their birth till the date of their attaining majority. On September 13, 1946, some two and a half years prior to the merger of the then State of Jodhpur with the United States of Rajasthan (which event occurred on April 7, 1949), the then Ruler of 1. Order No. C.B./7114 dated 13th September, 1946. (exhibit 1). By certificate granted under Article 133(1)(a) of the Constitution of India. 212 the said State passed order exhibit 1 which is the foundation of the suits giving rise to the present group of appeals. The said order in so far as material reads as under: "His Highness the Maharaja Sahib Bahadur has been pleased to order that with a view to making suitable provision for the maintenance of younger Maharajkumar and Shri Baiji Lal Sahiba: (i) XXXXX (ii) xxxxx (iii) An annual allowance of Rs.30,000 per annum each be granted to all younger Maharajkumars from the dates of their birth for the period of their minority. (iv) XXXXXX (v) xxxxxxx. " The amounts claimed by each of the four sons in the suits instituted by them in 1955 was in respect of the claim for annual allowance by way of grant at Rs.30,000 per annum computed retrospectively from the dates of their birth till the date of the passing of the order, that is to say, till September 13, 1946. The particulars relating to the claim may be tabularized as under: Appeal No. Name of the Date of Period or Amount before the appellant. Birth which claimed Supreme allowance Rs. Court is claimed C.A. 97(N) Devisinghji 20.9.1933 20.9.1933 of 1972 to 2,34,550 13.9.1946 (13 years & 7 days). Dalipsinghji 20.10.1937 20.10.1937 of 1972 to 1,61,050 13.9.1946 (8 years, 11 months & 11days). C.A.99(N) Harisinghji 21.9.1929 21.9.1929 of 1972 to 3,06,500 ( 17 years & 10 days) C.A. 2290(1) Himmat 21.6.1925 21.6.1925 of 1970 singhji to 4,42,000 13.9.1946 ( 17 years & 10days) The following facts have been established: (1) Jodhpur was a sovereign State till April 6, 1949. (2) The said Jodhpur State merged with the other Sovereign States to form the United State of Rajasthan on April 7, 1949. (3) On April 7, 1949, an ordinance was promulgated which provided for the continuance of the laws of the covenanting States (which included Jodhpur State) in the United State of Rajasthan by virtue of Section 3 which provid ed inter alia, that all laws in force in the aforesaid covenanting States immediately before the commencement of the Ordinance shall continue to be in force. (4) On April 7, 1949, administrators were appointed in respect of different States which had merged in the State of Rajasthan. The High Court allowed the appeals preferred by the State and dismissed the suits instituted by the sons of the late Ruler of Jodhpur on the following reasoning: (1) The Order(Ex. 1), on the basis of which the claim of 214 the plaintiffs was founded was not passed by the then Ruler in his capacity as the Head of the State in the discharge of any legal li ability or obligation subsisting in favour of his four sons. It was an ex gratia payment ordered to be made by him in his personal capacity as the father of the four plaintiffs and not in his capacity as the Sovereign Ruler of the State inasmuch as the order for payment was not supported by any law or custom having the force of law in the then State of Jodhpur. The cash allowance ordered to be paid to the four plaintiffs as per Order (exhibit 1) retrospectively for the past period preced ing the date of making of the order was in substance a gift by the ruler in his personal capacity to his children and not an enforce able obligation incurred by the Sovereign Ruler vis a vis the plaintiffs. (3) On the aforesaid premises the amount which had not yet been recovered in respect of the past period could not be recovered from the State of Rajasthan as there was no legal and enforceable obligation against the said State. It was contended before the High Court that on taking into account the true nature of the order (exhibit 1) it was a law within the meaning of Section 3 (ii) of Ordinance No. 1 of 1949, the order had all the characteristics of law that is to say, of a binding rule of conduct "of the will of the Sovereign". Since this was a law in the Sovereign State of Jodhpur, its operation continued on the formation initially of the United State of Rajasthan and subsequently of the State of Rajasthan. The High Court negatived this contention relying on the law enunciated by this Court in a catena of decisions. 2 The view taken in the 1. In this section "Law" means any Act. Ordinance, regula tion, rule, order or bye law which having been made by a competent Legislature or other competent authority in a Covenanting State. has the force of law in that State. " 2. ; = ; of Gujarat vs Vora Fiddali ). ; = ; (Narsingh Pratap Singh Deo v State of Orissa) ; = ; (State of Madhya Pradesh vs Bhargavendra Singh). ; = ; (State of Madhya Pradesh vs Lal Rampal). 215 aforesaid decisions in substance was that every order passed by a Sovereign Ruler was not 'law ' inasmuch as it was not necessarily an order passed in the discharge of its legisla tive function. The Ruler of the Sovereign State, when he passes an order, may be acting in any one of the three spheres namely, legislative sphere, executive sphere or the judicial sphere, though all the three capacities were com bined in him. All the same, only that order would constitute 'law ', which was passed in exercise of the powers of the Sovereign in the legislative. sphere, and none other. An order passed by the Sovereign in his executive capacity, if it is not the result of a legislative process, and if it is not calculated or designed to bind as a rule of conduct, cannot be characterized as a 'law '. If the result of the order was no more then to bring about a contract, or a grant or a gift, it would not constitute 'law '. The High Court was right in taking the view that having regard to the language of the order itself, it appeared to be an executive order conferring a grant (or a gift) on the plaintiffs appellants. It did not have the characteristics of a legislative measure and did not constitute a law inasmuch as it failed to pass the earlier mentioned tests evolved by this Court in the matter of State of Gujarat vs Vora Fiddali, (supra) and Narsingh Pratap Singh Deo vs State of Orissa (supra). It appears to us that in fact the then Ruler of Jodhpur was making a gift in favour of the appellants. It is evident from the fact that the amount ordered to be paid at the rate of Rs.30,000 per annum is in respect of the preceding years. The four sons had. admittedly, already been maintained and brought up with due dignity and decorum, prior to the pass ing of the order in question. Since they had already been maintained in a manner and style befitting their status and dignity, at the expense of the State, there was no question of granting any allowance in respect of the (past) period during which they had already been maintained. There is therefore no escape from the conclusion that it was by way of a gift albeit. without saying so in so many words. The fact that the expression 'gift ' has not been employed did not detract from this obvious conclusion. It was an amount ordered to be paid by the Ruler to his sons. It was clearly a gift, inasmuch as it is not shown that till the date of the order any obligation had been incurred by the grantor in favour of the grantees either under any law or under 1. As per order Ex.1 dated 13th September.1946. 2. As disclosed by the Budget Estimate of the State of Jodhpur recorded at exhibit A 10 to exhibit A 12. 216 any custom. It has of course been argued on behalf of the appellants that under the 'custom ' of the State, the Ruler was bound to maintain his sons. To say that the Ruler was bound to maintain the appellants is not to say that the Ruler was obliged to make a gift in respect of the past period during which the appellants had 'already ' been maintained. It is not the case of the appellants, and there is no evidence to that effect, that there was a custom of making any cash allowance every year besides being main tained with due dignity and decorum at the cost of the State exchequer. No such allowance was shown to have been made in the past. What, it may be wondered, was the occasion for making a retrospective allowance for a period ranging from 8 years to 17 years by the Order (exhibit 1) at a point of time, just two and a half years before the merger '? In fact the circumstances might well give rise to an inference that it was 'gift ' being made in anticipation of the forthcoming merger. Be that as it may, at best it is a gift which has nothing to do with any customery obligation of the Ruler to maintain the sons, which obligation was already fulfilled by the Ruler in bringing up the appellants with due dignity and decorum at the cost of the State for all the past years till the passing of the said order. A communication addressed by the Chief Minister of the then State of Jodhpur to the Finance Minister prior to the passing of the aforesaid order: supports and strengthens the conclusion that the allowance which was ordered to be paid had nothing to do with the past maintenance as will be evident from the fol lowing extract the refrom: "His Highness has expressed a wish that 'his two sons Maharaj Kumars Himmat Singhji and Hari Singhji should now be placed on an allow ance to be granted by the State as a prelimi nary to their being given Jagirs later on. His Highness ' idea is that if they receive an allowance and it is carefully husbanded they should accumulate some surplus to help them when they become Jagirdars. His Highness considers that an allowance of Rs.5,000 per mensem in each case is the correct figure. " We are therefore satisfied that the High Court was right in taking the view that the order for paying annual allowance at Rs.30,000 for the past years was not made in the dis charge of any legal liability or obligation of the Ruler under any law or custom having the force of law. It was merely an ex gratia payment in the nature of a gift which could not dated 2. Ex.1 217 be enforced against the State. The relevant part of the order cannot be construed as a 'law ' obtaining in the then State of Jodhpur. And accordingly it cannot be held that the said order continued to prevail as a 'law ' in the State of Rajasthan under the 1949 ordinance or any other law. The order cannot therefore be enforced against the State of Rajasthan treating it as a 'law ' creating a legally enforce able obligation. It was contended that the purpose of granting mainte nance allowance in cash to meet the expenditure from the civil list was to enable the junior members of the Ruler 's family to accumulate some surplus to help them when they become jagirdars in due course on attaining majority. It was argued that if the allowance had been granted earlier, the allowance could have been accumulated by the beneficiaries and since it was not granted earlier, it was granted with retrospective effect. We cannot accede to this submission. In so far as it relates to the period anterior to the pass ing of the order (stretching from 8 to 21 years) it cannot be said to be an order passed in connection with the mainte nance of the junior members of the Ruler 's family for they had already been maintained at the expense of the State exchequer as revealed by the evidence, including the budget estimates.1 Another argument addressed by counsel for the appellants was that the annual allowance ordered to be paid to the junior members of the family of the Ruler has the same legal status as a 'Jagir ', and that the order granting such an allowance would have the force of law. The submission is sought to be buttressed by two decisions of this Court. In the first instance support is sought from Thakur Amarsinghji vs State of Rajasthan, [1955] 2 S.C.R.p. 303. This Court was concerned with the constitutional validity of Rajasthan Land Reforms and Resumption of Jagirs Act in Thakur Amarsinghji 's case. In the course of the discussion, the Court had an occasion to consider the import of the expression 'Jagir '. What emerges from the discussion is that the term 'Jagir ' originally connoted grants made by Rajput Rulers to their clansmen in lieu of services rendered or to be rendered. With passage of time, the term 'Jagir ' came to be applied to grants made for religious and charitable purposes and even to non Rajputs. The Court has then proceeded to make it clear that both in its popular sense and in legislative practice the word 'Jagir ' has come to be used as connoting all grants which conferred on the grantees rights in respect of land revenue. And it was in this sense that the term 'Jagir ' was construed under Article 31A of the Constitution of India. What is of significance is that jagir has been 218 associated with the grant in respect of land revenue. Ac cordingly the Court proceeded to observe that considering the world jagir in that sense it must be held that a jagir was meant to cover all grants in which the grantees had only rights in respect of land revenue and were not tillers of the soil. The expression 'Jagir ' would also be applicable to maintenance grants in favour of persons who were not culti vators such as the members of the ruling family. However, the grant has been construed in relation to rights in re spect of land revenue recoverable from the actual tillers by intermediaries known as Jagirdars. Testing the grant said to have been made under the order in question by the Ruler of Jodhpur in favour of the appellants, it is futile to contend that it is a grant of a 'jagir ' in this sense for no ques tion of alienation of land revenue in favour of the appel lants is involved. All that the Ruler has done is to order that a particular amount of money be paid in respect of a specified period anterior to the date of the order at the specified rate. There is nothing in Thakur Amarsinghji 's case which could come to the rescue of the appellants in support of the contention that the allowance in question would constitute a 'Jagir '. It was argued as a matter of logical corrollary that since it was a jagir, the order confering the jagir could be construed as a 'law ' even if it was not a legislative measure promulgated by the Ruler. Since the first premise that the allowance constitutes 'Jagir ' is found to be lacking in substance the submission urged as a corrollary of this premise must also fail to the grounds as a matter of logical necessity. Reliance was also placed on Madhaorao Phalke vs The State of Madhya Bharat, [1961] 1 S.C.R.p. 957 in support of the contention that the grant made in favour of the appel lants would constitute 'law ' and that the State of Rajasthan would therefore be under a legal obligation to make payment of the annual allowance to the appellants as provided in the order. The submission, in our opinion, is not well founded. Madhaorao 's case is not an authority for the proposition that any order passed by the sovereign directing payment of an allowance would constitute law of the State concerned which would have the force of 'law ' in the covenanting States by virtue of the provision made for continuing the existing laws in the covenanting States. The question which had arisen before this Court in Madhaorao 's case was as regards the kalambandis ' issued by the then Ruler of Gwalior conferring a right to receive Rs.21 and annas 8 per month in favour of an Ekkan. It may be mentioned that the Ekkans were a class of horsemen who formed part of the Peshwa 's Cavalry. They were foreigners and they brought with them their own horses and accountrements. After making an allowance for the fact that they would have to pay for the 219 maintenance of the horses, a provision for payment of Rs.21 and annas 8 per month was made, by way of 'Bachat '. Whether the right to receive this amount was a statutory right, in other words, whether the kalambandis on which the rights were founded, constituted rules and regulations having the force of law was the problem posed before the Court in Madhaorao 's case. The Court considered the nature of the provisions contained in the documents and came to the con clusion that the documents unambiguously bore the imprint of the character of a statute or regulation having the force of a statute inasmuch as it recognised and conferred: (i) hereditary rights; (ii) it provided for the adoption of a son by a widow of the deceased holder; (iii) it provided for the maintenance of widows out of the funds specially set apart for that purpose; (iv) it provided for the offering of a substitute when the holder became old or otherwise became unfit to render services; and (v) it also provided for protection in respect of the execution of decree against the amount payable under the kalambandi. Having taken into account all these features of the grant, the Court proceeded to observe: "In our opinion, having regard to the contents of the two orders and the character of the provisions made by them in such a detailed manner it is difficult to distinguish them from statutes or laws; in any event they must be treated as rules or regulations having the force of law. " Far from supporting the claim of the appellants, the deci sion in Madhaorao 's case highlights the fact that the order in question providing for payment of annual allowance for the past years during which the appellants had already been maintained by the State exchequer lacks in the essential ingredients which would justify characterising the order as a rule or a regulation. To put it somewhat crudely, divest ing of refinement, the order merely directs payment of a specified sum to 220 the appellants which payment has no nexus with any services rendered by them or any customary right enjoyed by them by virtue of their status as junior members of the family, but 'merely by reason of the fact that the appellants were the sons of the Ruler on whom the Ruler intended to confer cash benefit. In our opinion, what has been granted under the aforesaid order is nothing but an ex gratia payment or a gift. Lastly it was contended that the junior members of the family of the Ruler were entitled to a maintenance allowance during their minority as per the custom in the State and that they were entitled to grant of Jagir Upon their attain ing majority as per the same custom. The allowance made to the junior members during their minority was treated under a separate head of the State Budget. On these premises it ,was argued that the order in question must of necessity be construed as legislative in character. We are not impressed by this submission. The allowance made under the order had no nexus with any right to a jagir. All the appellants were minors at the relevant point of time and they had not even become entitled to jagirs. As discussed earlier the expres sion 'Jagir ' is apposite only in the context of alientation of land revenue recoverable from the tillers. What was granted by the Ruler to the appellants had nothing to do with a jagir. Even according to the custom pleaded by the appellants the question of granting a jagir would have arisen only after they had attained majority. The payment which was directed to be made to them was not referable either to a jagir or to any other customary right. It was merely a direction to pay a particular amount computed on a particular basis referable to a past period commencing from the date of their birth. We are therefore fully convinced, and firmly of the view, that in substance the amount direct ed to be paid as per Order exhibit 1 was nothing else but a 'gift ' by the then Ruler to his sons, unrelated to any legal rights of the appellants. And that it did not create any legal obligation enforceable against the State of Rajasthan inasmuch as the order in question was not a 'law '. There is thus no substance in any of the submissions urged on behalf of the appellants. The view taken by the High Court is unexceptionable and the appeals are devoid of merit. We accordingly dismiss the appeals. There will be no order as to costs. S.R. Appeals dismissed.

The petitioner detenue was detained pursuant to an order of detention passed under section 3(2) of the . The detention was based on three incidents in respect of which criminal Cases were already pending against the petitioner. Before the detention order was passed, he had moved applications for bail and was released on three successive days in the three cases. The detention order did not mention the fact that the detenue had made application for bail in the three criminal cases relating to the afore said incidents and was enlarged on bail. The petitioner moved the High Courts for quashing the order of detention. The High Court dismissed the petition. The petitioner in special leave petition against the judgment of the High Court and his wife in a Writ Petition under article 32 of the Constitution prayed for quashing the aforesaid order of detention on the ground that there was clear indication of non application of mind by the detaining authority when it passed the detention order. Allowing the petitions, HELD: (1) This is not a fit case to resort to preventive detention. As there was clear non application of mind on the part of the detaining authority, the judgment of the High Court under appeal is set aside and the order of detention is quashed and it is directed that the petitioner be re leased forthwith. [223E G] (2) There is absolutely no mention in the order about the fact that the petitioner was an under trial prisoner, that he was arrested in connection with the three cases, that applications for bail were pending and that he was released on three successive days in the three cases. This indicates a total absence of application of mind on the part of detaining 222 authority while passing the order of detention. [223C]

Appeal No. 207 of 1975. From the Judgment and Order dated the 19 4 74 of the Gujarat High Court in Special Civil Appln. No. 306 of 1973. S.T. Desai and Girish Chandra for the Appellants. I. N. Shroff and H.S. Parihar for Respondent. The Judgment of the Court was delivered by RAY, C.J. This appeal is by certificate against the judgment and order dated 19 April 1974 of the High Court of Gujarat in Special Civil Application No. 306 of 1973. The question for consideration in this. appeal is wheth er the petitioner before the High Court, who was the Regis trar of the Small Causes Court, Ahmedabad was subject to the disciplinary jurisdiction of the High Court. The Registrar was appointed on 12 September, 1969 by an order of the Governor of Gujarat. The High Court said that in view of the fact that the High Court is not the appointing authority the High Court has no disciplinary jurisdiction over the Registrar. The High Court was in error in considering that the question of appointing authority is relevant in regard to the disciplinary jurisdiction of the High Court. Under Article 235 the control over district Courts and Courts subordinate thereto including the posting and promo tion of, and the grant of leave to, persons belonging to the judicial service of a State and holding any post inferior to the post of district judge shall be vested in the High Court. The expression 'judicial service ' is defined in Article 236 to. mean "a service consisting exclusively of persons intended to fill the post of district judge and other civil judicial posts inferior to the post of district judge". These two articles 235 and 236 are relevant for the purpose. of ascertaining the extent of disciplinary juris diction of the High Court. The Registrar of the Court of Small Causes is a person holding a civil judicial post inferior to the Post of district judge and is 'in Judicial service. ' Reference to the presidency Small Causes Courts Act 1882 is necessary to find out the powers, position and duties of the Registrar 712 of the Small Causes Court. Section 13 of the Act states :. "There shall be appointed an officer to be called the Regis trar of the Court who shall be chief ministerial officer of the Court". The other provisions in the Act which deal with the Powers of the Registrar are to be found in Sections 9(1) 2(aa), 14, 33, 34, 35 and 36, which read as follows: "9(1) (aa). The High Court may, from time to time, by rules having the force of law empow er the Registrar to hear and dispose of unde fended suits and interlocutory applications or matters. 14 The Provincial Government may invest the Registrar with the powers of a Judge under this Act for the trial of suits in which the amount or value of the subject matter does not exceed twenty rupees. And subject to the orders of the Chief Judge, any Judge of the Small Cause Court may, whenever he thinks fit, transfer from his own file to the file of the Registrar any suit which the latter is competent to try. 33 Any non judicial or quasi judicial act which the Code of Civil Procedure as applied by this Act requires to be done by a Judge, and any act which may be done by a Commission er appointed to examine and adjust accounts under section 394 of that Code as so applied, may be done by the Registrar of the Small Cause Court or by such other officer of that Court as that Court may, from time to time, appoint in this behalf. 34 The suits cognizable by the Registrar under section 14 shall be heard and determined by him in like manner in all respects as a Judge of the Court might hear and determine. the same. 35 The Registrar may receive applications for the execution of decrees of any value passed by the Court, and may commit and dis charge judgment debtors, and make any order in respect thereof which a Judge of the Court might make under this Act. 36 Every decree and order made by the Regis trar in any suit or proceeding shall be sub ject to the same provisions in regard to new trial as if made by a Judge of the Court. " These provisions of the Act indicate in No. uncertain manner that the Registrar of a Small Causes Court exercises judicial powers, hears suits, passes decrees and an appeal is preferred from a decree of the Registrar. Counsel for the appellant is right in his contention that the Registrar, Small Causes Court, inasmuch as he exercises judicial functions, is a judicial officer in Judicial Service and comes within the scope and intent of Articles 235 and 236. 713 The High Court was in error in holding 'that the High Court had no power to order disciplinary proceedings. It is significant that the High Court abdicated its own discipli nary jurisdiction. The independence of the judiciary has been emphasised by this Court in un mistakable terms in the following two decisions: 1. High Court of Punjab & Haryana etc. vs State of Haryana & Ors., reported in ; and 2. Shamsher Singh & Anr. vs State of Punjab, reported in 1975 (1) S.C.R.814. The Gujarat High Court like other High Courts is compe tent to enquire into such disciplinary matters. In the present appeal there were five contentions before the High Court on behalf 0f the Registrar. The first contention falls in view of our conclusion that the High Court is the competent authority to hold departmental en quiry. The second contention of the Registrar was that the High Court had no authority to direct further inquiry to be made in respect of recording the statement of Bhatt or to consider the reports made by the inquiry officer and come to a conclusion about the guilt of the Registrar. The third contention of the Registrar was that the direction of the High Court that the statement of Bhatt be recorded was passed without hearing the Registrar and was violative of the rule of natural justice. It will appear that the High Court issued directions and the statement of Bhatt was recorded by the Inquiry Officer. Bhatt is a Lawyer. He was busy in Court. He could not appear before the Inquiry officer on the date fixed for taking his evidence. The High Court asked the Inquiry Officer to record the evidence of Bhatt. The Registrar was given a copy of the statement of Bhatt after recording of Bhatt 's evidence. The Registrar was given an opportunity to deal with the evidence of Bhatt. It is idle to contend that the Registrar ought to have been heard before the High Court directed that the statement of Bhatt should be recorded. The fourth contention of the Registrar was that there was failure to give copies of documents demanded by him; therefore he did not have reasonable opportunity to defend himself. The High Court did not go into this question in view of the fact that the High Court did not consider this question. Counsel for the Registrar submitted that he wanted to address the Court on the materials which were not available now. We are of opinion that the matter should be remitted to the High Court only on this question viz 'fail ure to give copies of certain documents demanded by the Registrar thus depriving him of a resonable opportunity to defend himself and therefore, the inquiry was contrary to the provisions of Article 311 of the Constitution '. The fifth contention that the impugned order was passed by the Government without consulting the Public Service Commission does not survive in view of our conclusion that the High Court is the competent authority to make departmen tal inquiry. 714 For the foregoing reasons the judgment of the High Court is set aside and the matter is remitted to the High Court for consideration only of the fourth question as indicated above. Parties will pay and bear their own costs. S.R. Appeal allowed and case remitted.

Pursuant to the departmental enquiry conducted by the High Court and on its recommendation, the Gujarat Governor dismissed the respondent from the service of Registrar, Small Causes Court, Ahmedabad. The respondent challenged by way of a writ the said order contending: (1) The High Court was not his appointing authority and he being the member of general State service, the High Court has no authority to initiate proceedings, the appointment of the enquiry offi cer, framing of charges of misconduct and taking discipli nary proceedings etc. (2) The High Court has no authority to direct further enquiry to be made in respect of recording the statement of one Mr. Bhatt, an advocate or to consider the reports made by the enquiry officer and come to the conclusion about his guilt or to issue show cause notice of punishment. (3) The direction of the High Court that the statement 0f Mr. Bhatt is recorded was passed without hear ing the petitioner and this violated the rules of natural justice. (4) The failure to give copies of certain documents demanded by the petitioner deprived him of a reasonable opportunity to defend himself and, therefore, the enquiry was contrary to the provisions of article 311 of the Constitu tion; and (5) .The impugned order was passed by the Govern ment without consulting the Public Service Commission and the same was illegal and bad in law. The High Court held: (1 ) The post of the Registrar of Small Causes Court does not fall within the expression "judicial service" within the meaning of article 235 and (2) The High Court has no disciplinary jurisdiction over the Registrar in view of the fact that the High Court is not the "appointing authority". Accepting the State 's appeal by certificate and remitting the case, the Court, HELD: (1 ) The Registrar of the Court of .Small Causes is a person holding a civil judicial post inferior to the post of District Judge and he is in judicial service. Sections 9(1), 13 14, 33 to 36 of the indicate in no uncertain manner that the Registrar of Small Causes Court exercises judicial powers, Inasmuch as the Registrar Small Causes Court exer cises his judicial function, he is a judicial officer in judicial service and comes within the scope and intent of article 235 and 236. [711 H, 712 G H] (2) The High Court was in error in considering the question of "appointing authority" as relevant in regard to the disciplinary jurisdiction of the High Court and also in holding that it had no power to order disciplinary proceed ings. The High Court abdicated its own disciplinary juris diction. The High Court is the competent authority to hold departmental enquiries. [711 D E, 713 A C]. High Court of Punjab & Haryana etc. vs State of Haryana and Ors. ; and Shamsher Singh & Anr. vs State of Punjab ; , referred to. 711 (3) In the instant case the enquiry was contrary to the provisions of article 311 of the Constitution due to the fail ure to give copies of certain documents demanded by the Registrar, thus deprived him of a reasonable opportunity to defend himself. [713 G]

Appeal No. 2568 of 1966. Appeal by special leave from the judgment and order dated March 23, 1966 of the Patna High Court in Misc. Judicial Case No. 118 of 1963. H. R. Gokhale and Sukumar Ghose, for the appellant. M. K. Ramamurthi, Shymala Pappu and Vineet Kumar, for the respondents. The Judgment of the Court was delivered by Bhargava, J. The Government of Bihar, by an Order dated 14th June, 1961, referred an industrial dispute under section 10(1) of the (14 of 1947) to the Labour Court, Patna, wherein the following two issues were referred: "(1) Whether the discharge of the following forty workmen was proper? If not, whether they are entitled to reinstatement and/or any other relief? (2) Whether the above mentioned workmen are entitled to be made permanent?" Subsequently, the Government issued an Order by way of corrigendum on the 19th July, 1961, substituting "Ranchi" for "Patna" 62 in the original order of reference dated 14th June, 1961. The effect of this corrigendum was that the reference of the dispute, instead of being made to the Labour Court, Patna, came before the Labour Court, Ranchi. In the proceedings before that Court, the principal objections that was raised was that the Government, having once made a reference to the Labour Court, Patna, was not competent to cancel or withdraw that reference and could not make a competent reference of the same industrial dispute to the Labour Court, Ranchi, so that the latter Court had no jurisdiction to deal with the reference. The case before the Labour Court was also contested on various other grounds, but we need only mention those grounds which have been urged before us in this appeal. While the Labour Court was dealing with the reference, adjournments were sought on behalf of the appellant, M/s. Dabur (Dr. section K. Burman) Private Ltd. After decision of some preliminary points by the order dated 18th August, 1962, the case was fixed for hearing on 19th November, 1962. On that date, the management again prayed for an adjournment on the ground that their local Manager, Sri Basant Jha, had been lying ill for some time past and it was not possible for the management to prosecute their case with diligence. The Labour Court rejected this application and, thereupon, proceeded to hear the reference ex parte. The Labour Court held that the reference to it was competent and it had jurisdiction to deal with it, even though, by the original order of reference, the Government had purported to refer the dispute to the Labour Court, Patna. On the first issue referred, the Court recorded the finding that the 40 workmen, who had been discharged, were not casual workers and that their discharge by the employers on the basis that they were casual workers was not proper. It was further held that the discharge was mala fide inasmuch as the purpose of the discharge was to avoid the liability of treating these workmen as permanent employees by preventing them from completing 240 days of work in a year. There was the further finding that the workmen were all discharged from service as they had demanded increase in rates of wages and had also claimed that Sundays should be made paid holidays. Against this award, the appellant filed a petition under Article 226 of the Constitution in the High Court of Patna requesting that Court to quash the award. That Court upheld the award and dismissed the writ petition. Consequently, the appellant has come up to this Court by special leave against that judgment of the High Court. Mr. Gokhale, appearing on behalf of the appellant, emphati cally urged that both the Labour Court, Ranchi as well as the Patna High Court were wrong in holding that,the reference to the Labour Court, Ranchi, was competent even after the reference, 63 had originally been made to the Labour Court, Patna. He relied on the principle laid down by this Court that once the Government has made a reference to a particular Labour Court, it is that Labour Court which becomes seized of that industrial dispute and, thereafter, the Government has no jurisdiction either to withdraw that reference or cancel it. In this case, however, as is clear from the judgment of the High Court, the question that arose was entirely different. The High Court has clearly held that this was not a case where the Government either withdrew or cancelled the reference to the Labour Court, Patna. The High Court has held that, from the facts stated by the appellant in the writ petition filed in that Court, it appeared that the alteration in the order of reference was a mere correction of a clerical error. because, by mistake, Patna had been mentioned in place of Ranchi in the first notification. The second notification merely corrected that mistake. Mr. Gokhale wanted us to hold that the High Court was wrong in its view that the Government had merely made ' correction of a clerical error and that we should accept the submission on behalf of the appellant that, in fact, the State Government bad first intentionally referred the dispute to the Labour Court, Patna, and issued the corrigendum only when the Government decided that the reference should go to the Labour Court, Ranchi and not Labour Court, Patna, because Labour Court, Patna bad no jurisdiction to entertain the reference. We are unable to accept this submission made on behalf of the appellant. The High Court drew in inference from the facts stated in the writ petition filed by the appellant itself that this was a case of mere correction of a clerical error. This finding recorded by the High Court on the basis of the facts given in the writ petition is not now open to challenge in this special appeal, particularly because even a copy of that writ petition has not been made a part of the paper book before us. We cannot see how any objection can be taken to the competence of the State Government to make a correction of a mere clerical error. The finding that it was a clerical error means that the Government in fact intended to make the reference to the Labour Court, Ranchi; but while actually scribing the order of reference, a mistake was committed by the writer of putting down Patna instead of Ranchi. Such a clerical error can always be corrected and such a correction does not amount either to the withdrawal of the reference from. or cancellation of the reference to. the Labour Court, Patna. The High Court was. therefore. right in rejecting this contention on behalf of the appellant. On merits, Mr. Gokhale wanted to urge only two points before us. 'One was that the Labour Court committed a manifest error of law apparent on the face of the record in holding that the workmen concerned were not casual workers. The judgment of the High Court, however, shows that before that Court 64 it was nowhere urged or argued that any such error of law apparent on the face of the record had been committed by the Labour Court. What was urged before the High Court was that, even on the ex parte evidence on record, the Labour Court ought to have held that the workmen were mere casual labourers. The High Court was right in holding that this point urged on behalf of the appellant essentially raised a question of fact only and that Court, in its jurisdiction under Article 226 of the Constitution, could not interfere on such a question of fact. Since no submission was made before the High Court that the finding of the Labour Court that the workmen are not casual labourers suffers from any manifest error of law apparent on the face of the record, the appellant is not entitled to raise this point in this special appeal before us. On the finding actually recorded by the Labour Court and upheld by the High Court, the order of the Labour Court directing reinstatement of these workmen is fully justified, so that the order made by the Labour Court, insofar as it is against the interests of the appellant, is correct and must be upheld. In view of this position, it is unnecessary to go into the question whether the Labour Court was or was not right in recording the finding as to mala fides. The only other point urged was that the Labour Court should not have proceeded ex parte when material was placed before that Court on behalf of the appellant to show that its local Manager, Sri Basant Jha, was in fact lying ill. The question whether an adjournment should or should not have been granted on this ground was in the discretion of the Labour Court. Even the order by which the Labour Court rejected that application for adjournment is not before us and, consequently, it cannot be held that the Labour Court committed any such error in rejecting the application for adjournment and proceeding ex parte as would justify interference by this Court. The appeal fails and is dismissed with costs. Y.P. Appeal dismissed.

The respondents were selling agents for the goods manufactured by another company. They were paid 7 1/2% on the sales as selling commission and 5% as contingency expenses. The question in income tax proceedings was whether the amount not spent out of the grant for contingency expenses was exempt from taxation by virtue of s, 4(3) (vi) of the Indian Income tax Act, 1922. The High Court in reference held that the "5% commission" received by the respondents represented a special allowance to meet expenditure and was on that account exempt from tax. The Revenue appealed. HELD,: (i) In the context in which: the expression 'incurred ' occurs in section 4(3) (vi) it undoubtedly means 'incurred or to be incurred '. To qualify for exemption the allowance must be granted to meet expenses incurred or to be incurred wholly and necessarily in the performance of the duties of an office or employment of profit. [41A] (ii) In framing section 4(3) (vi) the intention of the framers of the Act was to grant exemption in respect of amounts received by the assesses, not for his own benefits but for the specific purpose of meeting the expenses wholly and necessarily incurred or to be incurred in the performance of his duties as agent. It would therefore be reasonable to hold that the allowance granted to meet the expenses wholly and necessarily incurred or to be incurred in the Performance of the duties of the office or employment of the grantee alone qualifies for exemption under the Act, and any surplus remaining in the hands of the grantee after meeting the expenses does not bear the character of the allowance for meeting expenses. This would be so even if the employer has disabled himself from demanding refund of the amount not expended for meeting the expenses incurred or to be incurred in the performance of the duties of an office of employment or profit, and the surplus remaining in the hands of the grantee acquires for the purpose of the Income tax Act the character of additional remuneration. [40C E] Tejaji Farasram Kharawala vs Commissioner of Income tax. Bombay (Mofussil), , disapproved. (iii) The allowance may be in respect of a period longer than the accounting year or years. But on that account the whole receipt reduced by the expenses actually incurred in the year of account is not liable to be brought to tax in that year. In such a case it will be the duty of the Income tax Officer to determine the amount allowed in respect of the year of account in which the expenditure has been incurred and the difference between the amount so determind and the amount actually expended would alone be brought to tax. [41G] The position in this respect remains the same even after the amendment of section 4(3) (vi) by the Finance Act, 1955. [41B] 38 Commissioner of Income tax, U.P. vs Sharma & Company. , disapproved.

Appeal No. 6 of 1959. Appeal by special leave from the judgment and order dated March 5, 1957, of the Bombay High Court in Special Civil Application No. 3255 of 1956. Dhan Prasad Balkrishna Padhye and P. K. Chatterjee, for the appellant. H. N. Sanyal, Additional Solicitor General of India, N. P. Nathwani, K. N. Hathi and R. H. Dhebar, for the respondents. October 3. The Judgment of the Court was delivered by WANCHOO J. This appeal by special leave raises questions relating to the constitutionality and interpretation of certain provisions of the Bombay Personal Inams Abolition Act No. XLII of 1953, (hereinafter called the Act). The brief facts necessary for present purposes are these. The appellant was the holder of a personal inam which he had purchased from the original inamdar to whom a Sanad had been issued under Bombay Act No. VII of 1863. The land 953 which forms part of the inam was originally in village Athwa but is now in the suburbs of the city of Surat. The appellant was paying Rs. 7 as Salami and Rs. 6 3 0 as quit rent, the full assessment of the land being Rs. 56 8 0. In November, 1952, the City Survey Officer of Surat wanted to levy non agricultural assessment on this land under section 134 of the Bombay Land Revenue Code, 1879, (hereinafter called the Code), as the land was being used for non agricultural purpose and a large bungalow had been erected on it. The appellant objected to this and eventually in September, 1954, he was informed by the Collector that he would not be assessed under section 134 of the Code but was liable to Don agricultural assessment with effect from August 1, 1955, in view of proviso (b) to section 4 of the Act. The appellant objected to this also. The Collector decided on July 28, 1955, that the land was liable to full assessment from August 1, 1955, as non agricultural under section 52 of the Code. The appellant then went up in appeal to the Bombay Revenue Tribunal which was dismissed. He filed a writ petition in the High Court challenging the order of the Revenue Tribunal and also challenging the constitutionality of the Act. The High Court rejected the application. It relied on an earlier decision of that Court so far as the challenge to the constitutionality of the Act was concerned. It also held that the order of the Collector by which non agricultural assessment was to be levied on the applicant from August 1, 1955, was correct. The appellant then applied for a certificate to appeal to this Court which was rejected. He then filed a special leave petition in this Court and was granted special leave; and that is how the matter has come up before us. So far as the constitutionality of the Act is concerned we have considered it in Gangadharrao Narayanrao Majumdar vs State of Bombay (1) in which judgment is being delivered to day, and have upheld the Act. The only fresh point that has been urged in this connection is that in view of article 294(b) of the Constitution and in view of the fact that the holder was given (1) ; 954 a Sanad when his inam was recognized, it was not open to the State of Bombay to enact a law which would in any way vary the terms of the Sanad. This argument based on the immutability of Sanads was rejected by the Federal Court in Thakur Jagannath Baksh Singh vs The United Provinces (1) and has also been rejected by this Court in Maharaj Umeg Singh and others vs The State of Bombay and others (2). We also reject it for reasons given in the two cases cited. The challenge therefore to the constitutionality of the Act fails in the present appeal also. This brings us to the contention of the appellant that in any case the Collector 's order to the effect that the land should be assessed under section 52 of the Code as non agricultural is not correct. We are of opinion that there is no force in this contention either. Under section 4 of the Act, all personal inams have been extinguished and save as expressly provided by or under the Act, all rights legally subsisting on the said date in respect of such personal inams are also extinguished. Therefore the appellant cannot claim protection from being assessed fully after the Act came into force. Section 5 makes it clear that all inam lands shall be liable to the payment of land revenue in accordance with the provisions of the Code and would thus be liable to full assessment as provided by the Code. The appellant however relied on section 7 of the Act and contended that section 7 created an exception to sections 4 and 5 with respect to lands of inamdars used for building or for other non agricultural purposes and therefore the appellant 's inam land which was used entirely for non agricultural purposes (namely, building) could not be assessed under section 5 of the Act. As we read section 7, we find no warrant for holding that it is an exception to sections 4 and 5. As already pointed out, section 4 abolishes personal inams and the rights of inamdars with respect to such inams and section 5 makes all inam villages or inam lands subject to the payment of full assessment of land revenue in accordance with the Code. Section 7 deals with vesting of certain parts of inam lands in the State, (namely, public (1) [1946) F.C.R. III. (2) ; 955 roads, lanes and paths, all unbuilt village site lands, all waste lands and all uncultivated lands and so on); but an exception has been made so far as vesting is concerned with respect to lands used for building or other non agricultural purposes by the inamdar. The C. appellant relies on this exception and it is urged on his behalf that this exception takes out the land so excepted from the provisions of sections 4 and 5. This reading of section 7 is in our opinion incorrect. That section vests certain parts of inam lands in the Government and but for the exception even those inam lands which were used for building and non agricultural purpose would have vested in the Government. The exception made in section 7 only saves such inam lands from vesting in the Government and no more. The result of the exception is that such inam lands do not vest in the Government and remain what they were before and are thus subject to the provisions of sections 4 and 5 of the Act. The appellant therefore cannot claim because of the exception contained in section 7 that the lands excepted from vesting are not subject to sa. 4 and 5 of the Act. The argument therefore based on section 7 must fail. The next contention on behalf of the appellant is that the Collector has no power to assess this land to non agricultural assessment under section 52 read with as. 45 and 48 of the Code. Section 45 lays down that all land unless specially exempted is liable to pay land revenue. Section 48 lays down that the land revenue leviable on any land shall be assessed with reference to the use of the land (a) for the purpose of agriculture, (b) for the purpose of building and (c) for any purpose other than agriculture or building. Reading the two sections together it is obvious that the assessment depends upon the use to which the land is put and is to be made according to the rules framed under the Code. In the present case it is not disputed that the land of the appellant is not being used for agriculture and is actually being used for non agricultural purposes, namely, for the purpose of building; therefore, if the land is to be assessed, as it must now be assessed in view of section 5 of the Act to full assess 956 ment, it can only be assessed as non agricultural. For the purpose of such assessment it is immaterial when the non agricultural use of the land started. It was in a special category being a personal inam land and was upto the time the Act came into force governed by the law relating to personal inams. The personal inams; and all rights thereunder were abolished by the Act and the land is now to be assessed for the first time to full assessment under section 5 of the Act read with the provisions of the Code; it can only be assessed as non agricultural land for that is the use to which it is being put now when the assessment is to be made. Section 48 makes it clear that the assessing officer when assessing the land should look to the use to which it is being put at the time of the assessment and assess it according to such use. As the assessment is to be made after the coming into force of the Act it has to be on non agricultural basis for that is the use for which the land is being put at the time of assessment. Lastly, it is urged that section 52 which gives power to the Collector to make assessments of lands not wholly exempt from the payment of land revenue does not apply to this case because here the assessment has been fixed under the provisions of Ch. VIII A of the Code and section 52 only applies when no assessment has been fixed under Ch. VIII A. Reference was also made to section 117 R which appears in Ch. VIII A. That Chapter was introduced in the Code in 1939 and deals with assessment and settlement of land revenue on agricultural lands. Section 117 R is a deeming provision and lays down that all settlements of land. revenue heretobefore made and introduced and in force before the commencement of the Bombay Land Revenue Code (Amendment) Act, 1939, by which this Chapter was introduced in the Code shall be deemed to have been made and introduced in accordance with the provisions of this Chapter and shall notwithstanding anything contained in section 117 E (which deals with the duration of a settlement) be deemed to continue in force until the introduction of a revision settlement. The argument is that because of this deeming 957 provision, the settlement on which this land was held as inam land must be deemed to have been made under this Chapter and therefore it cannot be said that no assessment has been fixed under the provisions of Ch. VIII A in this case. We are of opinion that there is no force in this argument. Section 117 R of the Code is a deeming provision. Section 52 on the other hand when it says that that section will not apply where assessment has been fixed under Ch. VIII A, refers to actual assessment under Ch. VIII A and not to what is deemed to be an assessment under that Chapter by virtue of section 117 R. It is not in dispute that there has in fact been no assessment under Ch. VIII A in this case. We are therefore of opinion that as the land in this case was not wholly exempt from revenue and as in fact no assessment has been fixed on this land under Ch. VIII A, section 52 would apply and the Collector would have power to make an assessment in the manner provided by that section. There is therefore no force in this appeal and it is hereby dismissed with costs. Appeal dismissed.

Respondent, a non resident company, in the accounting year supplied goods which were sent F. O. R. Bhopal to the buyers in British India. The railway receipts were handed over to a Bank in Bhopal with instructions to hand over the railway receipts to the buyers, who were named as consignees, only on receipt of payment of the bill and collection charges. The branches of the Bank within the taxable territory collected the amounts due from the buyers and transmitted them to Bhopal to the credit of the respondent. The question was whether the profits in the goods were received or deemed to be received in British India. Held, that the decision of this Court in Commissioner of Income tax vs P. M. Rathod & Co. applied to this case; and the income, profits or gain must be deemed to have been received within the taxable territory. The fact of payment to the agent determines the place where the money can be said to be received by the seller. Since in the instant case the railway receipts were not to be handed over to the buyers by the Bank, as per instructions of the seller, unless payment for the value of the goods were received by the Bank which instructions the buyers could not countermand, this was sufficient to make the Bank an agent of the seller. Held, also, that a railway receipt is a document of title to goods, and, for all purposes, represents the goods. When the railway receipt is handed over to the consignee on payment, the property in the goods is transferred. The Commissioner of Income tax vs P. M. Rathod and Co., ; , relied on.

Civil Appeal Nos. 1866 68 of l988. PG NO 861 From the Judgment and Order dated 25.7.1986 of the Allahabad High Court in C.M.W.P. Nos. 149, l5l and 172 of 1976. R.C. Misra, B.B. Singh for the Appellant. R.K. Jain, R.K. Khanna and R.P. Singh for the Respondents. The Judgment of the Court was delivered by OZA, J. These appeals have been filed by the U.P. Bhooden Yagna Samiti, Kanpur against the judgment of the High Court of Allahabad delivered in Misc. Writ Petition No. 149/76, 151/76 and 172/76. By the impugned order the High Court quashed the Order passed By Additional Collector, Kanpur dated 1.1.76 quashing the Pattas granted in favour of the respondent. In the month of April and May, 1968 the Petitioner before the High Court i.e. present respondent obtained grant under Sec. l4 of the U.P. Bhoodan Yagna Act in respect of various plots of land situated in Village Jahangirabad Paragana Ghatampur, District Kanpur from Bhoodan Yagna Samiti on 17.5.1972. Tehsildar Ghatampur submitted a report to Collector. kanpur and on the basis thereof the Additional Collector, Kanpur issued notices to these respondents under Sections of the U.P. Bhoodan Yagna Act requiring them to how as to why the settlement obtained by them be not cancelled On following grounds: (i) As the petitioners did not reside in the village where the plots were situated they had obtained the grant fraudulently and by misrepresenting facts. (ii) As the petitioners did not fall in the category of land less persons it was not proper to make the grant in their favour. (iii) The grants had not been approved by the Government of U.P." After considering the objections filed by the respondents. the Additional Collector came to the conclusion that the Order of the Bhoodan Yagna Samiti settling the land could not be justified as it could only be made in favour of poor landless agricultural labourers and not in favour of persons like the respondents who were quite well off and who reside in the city of Kanpur, owned propery there and carried on business. In his opinion such persons did not PG NO 862 fall in the category of landless persons as contemplated under the Act and the grants made in their favour in the year 1968 were irregular and liable to be set aside and on the basis of these reasons the Additional Collector by his order dated 1.1.76 quashed all the grants made in favour of the three respondents against which the writ petitions were filed before the High Court of Allahabad and by the impugned judgment, the Division Bench of the High Court quashed the order passed by the Additional Collector and maintained the grants in favour of the respondents and against this order of the High Court by grant of leave the present appeals are before us. Before the High Court two questions were raised. First was about the jurisdiction of the Additional Collector as under the Act the duties were cast on the Collector to enquire into these matters and therefore on that ground it was contended before the High Court that Additional Collector has no jurisdiction. The other ground which was raised before the High Court was that the view taken by the Additional Collector is not in accordance with law. So far as the first ground is concerned, even the High Court held against the respondents and before us learned counsel for parties conceded that to that part of the High Court Judgment there is no challenge and this now is not in dispute that the Additional Collector has jurisdiction to enquire into the matter and therefore on that ground it is not necessary for us to dilate any more. We are therefore mainly concerned with as to whether the settlement made by the Bhoodan Yagna Samiti in favour of the respondent was in accordance with law or which was not in accordance with law and therefore Additional Collector was right in setting aside those allotments. As regards the second question, the facts in this case are not in dispute. The respondents are businessmen residing in Kanpur. It is not in dispute that they have their trade in Kanpur and have properties also and are income tax payers. It is also not in dispute that they are not agriculturists and they had at the time of allotment nothing to do with agriculture. Apart from it their source of livelihood was not agriculture at all but trade and business. It is also not in dispute that they did not fall into any of the categories of persons depending on agriculture who did not have land in their name. On this ground, it was contended before the Additional Collector that in fact the allotment was obtained by the respondents PG NO 863 by misrepresenting that they are landless persons and on the basis of this the allotments were made which could not be justified. Before the High Court it was contended that Sec. 14 of the U.P. Bhoodan Yagna Act which provides for allotment of land only talks of landless persons. 14 as it stood in the year 1968 enabled the Samiti to settle the land vested in it with landless persons. Section neither specifies that such landless persons should also be agricultural labourers nor it provided that they have to be residents of a place in which the concerned lands were located. It was also not provided that the persons must be such whose source of livelihood is agriculture. The High Court on the basis of its earlier decision felt that Section 14 as it stood in 1968 did not provide any one of these qualifying clauses and therefore the respondents who admittedly had no land in that village and the district, they were covered by the definition of landless persons, in spite of the fact that they may be traders and paying income tax, may have properties in the City of Kanpur, still the learned Judges of the High Court felt that they fell within the ambit of the definition of landless persons as it stood in 1968 and therefore settlement made in their favour was justified. High Court relied on Sec. 14 as it stood in 1968. It reads: "Grant of land to landless persons The Committee or such other authority or person as the Committee may, with the approval of the State Government specify either generally or in respect of any area, may in the manner prescribed, grant lands which have vested in it to the landless persons, and the grantee of the land shall (i) where the land is situate in any estate which has vested in the State Government under and in accordance with Section 4 of the U.P. Zamindari Land Abolition and Reforms Act, 1950, enquire in such land the rights and the liabilities of a sirdar, and (ii) where it is situate in any other area, acquire therein such rights and liabilities and subject to such conditions, restrictions and limitations as may be prescribed and the same shall have effect, any law to the contrary notwith standing. It is not disputed that these allotments were made in accordance with Sec. 14 but had not been approved by the Government and it was even before that the Additional PG NO 864 Collector took notice of the complaint and issued notice to the respondents and on the basis of his enquiry he cancelled the allotments made in their favour by the Order in 1976 which has been quashed by the High Court. It was contended by learned counsel appearing for the petitioner (Bhoodan Yagna Samiti) that although Sec. 14 quoted above does not clearly indicate what the law meant by landless persons but in view of the scheme of Bhooden Yagna the movement which Acharya Vinoba Bhave and later Jaya Prakash Narain carried out and the purpose of the movement clearly indicated that when in Sec. 14 allotment was contemplated in favour of landless persons it only meant those landless persons whose main source of livelihood was agriculture and who were agriculturists residing in the village where the land is situated and who has no land in their name at that time. It never meant that all those rich persons who are residing in the cities and have properties in their possession but who are technically landless persons as they did not have any agricultural land in their name in the tehsil or the village where the land was situated or acquired by the Bhoodan Samiti that it could be allotted in their favour. This was not the purpose or the philosophy of Bhoodan Yagna and therefore it was contended that such a view which has been taken by the learned Judges of the High Court is contrary to law and the interpretation put by the High Court on the language of Sec 14 could not be justified. It was contended that landless person has to be interpreted in the background of the law which was enacted and the movement and the philosophy behind the movement which was the basis of the enactment of this law and it is only in that background that these words landless persons could be properly interpreted. It was also contended that if there was any doubt left. 15 makes the things still clearer. 15 reads: Grants to be made in accordance with Bhoodan Yagna Scheme All grants shall be made as far as may be in accordance with scheme of the Bhoodan Yagna. 15 provides that all grants shall be made so far as may be in accordance with the scheme of the Bhoodan Yagna, and it could not be disputed that Bhoodan Yagna scheme only contemplated allotment of lands in favour of those landless agricultural labourers who were residing in the villages concerned and whose source of livlihood was agriculture and who were landless and in that context only the landless person could be understood as contemplated PG NO 865 under Sec. It appears that in 1975 by an amendment in place of landless persons in Sec. 14 landless agricultural labourers was substituted and the objects and reasons when this Amendment Bill was moved, clearly go to show that it was because of such errors committed that it became necessary to make this amendment. The Objects and Reasons of the Uttar Pradesh Bhoodan Yagna (Amendment) Act, 1975 reads: Prefatory Note Statement of Objects and Reasons The Uttar Pradesh Bhoodan Yagna Act, 1952 provides for distribution of Bhoodan land to the landless persons by the Uttar Pradesh Bhoodan Samiti. It has come to the notice of Government that in certain cases persons other than land less persons have also received by fraud the land donated under the said Act. It has also come to the notice of Government that in many cases, for various reasons, the land vested in the Committee is not actually distributed. It has, therefore, been considered necessary to empower the Collector to cancel the grants received by misrepresentation or fraud, and further, where the committee does not grant the land within a period of three years to authorise him to distribute the land according to the provisions of the Act. By this Amendment Act in Sec. 14 in place of landless person landless agricultural labourers was substituted, and this clearly shows that it became necessary only because such errors were committed in under standing the meaning of words landless persons . The rule of interpretation which had been generally accepted in later part of 19th century and the first half of 20th century was that the word should be given its plain ordinary dictionary meaning and it is clear that learned Judges of the High Court in the impugned judgment interpreted the words landless persons on that basis and in so doing they followed their earlier judgment. But if the scheme of Bhoodan Yagna which has to be looked into because of Sec. l5 has been looked into or the purpose of the movement of Bhoodan Yagna which was started by late Acharya Vinoba Bhave and followed by Shri Jaya Prakash Narain was understood, this interpretation would not have been possible. In India we have yet another problem. The movement and the problems which are debated at all levels is not in the language in which ultimately the law to meet those PG NO 866 situations was enacted. The Bhoodan Yagna movement used generally a term Bhoomihin Kissan and it is this term which gained momentum and virtually was understood to mean those agricultural labourers whose main source of livlihood is agriculture but Who have no lands of their own or who have no lands (agricultural) recorded in their names in the revenue record and it is this problem of Bhoomihin Kissan that this movement went on to to settle and this Act was enacted to remedy that problem but our draftsman while drafting the law borrowed the phrase landless person in place of Bhoomihin Kissan and this unfortunately led to the present interpretation put by the High Court in the impugned judgment as the High Court followed the rule of interpretation which in my opinion has become obsolete. At the time when Acharya Vinoba Bhave started his movement of Bhoodan Yagna our rural society had a peculiar diversity. There were some who owned or had leasehold rights in vast tracks of agricultural lands whereas on the other hand there were those who were working on agriculture as labourers in the fields and depending on what little they got from their masters. Sometimes they were even bound down to their masters and therefore had to lead miserable life. It was this problem in rural India which attracted the attention of Acharya Vinoba Bhave followed by Shri Jaya Prakash Narain and they secured large donations of land from big land holders and the scheme of the Bhoodan Yagna movement was to distribute this land to those Bhoomihin Kissan who were living on agriculture but had no land of their own and it was to make this effective and statutory that this law was enacted and in this context it is clear that if one had noticed even the slogan of the Acharya Vinoba Bhave s movement or its basis and the purpose it would have clearly indicated the problem which was to be remedied by this enactment and if this was looked into for the purpose of interpretation of the term landless persons no Court could have come to the conclusion which has been arrived at in the impugned judgment. In this country we have a heritage of rich literature, it is interesting to note that literature of interpretation also is very well known. The principles of interpretation have been enunciated in various Shlokas which have been known for hundreds of years. One such Shlok (Verse) which describes these principles with great precision is: "UPKRAMOP SANHARO ABHYASO UPPURWATA PG NO 867 FALAM ARTHWADOPPATTI CH LINGAM TATPARYA NIRNAYE" This in short means that when you have to draw the conclusion from a writing you have to read it from beginning till end. As without doing it, it is difficult to understand the purpose, if there is any repetition or emphasis its meaning must be understood. If there is any curiosity or a curious problem tackled it should be noticed and the result thereof must be understood. If there is any new innovation (Uppurwatta) or something new it should be taken note of. Then one must notice the result of such innovation. Then it is necessary to find what the author intends to convey and in what context. This principle of interpretation was not enunciated only for interpretation of law but it was enunciated for interpretating any piece of literature and it meant that when you have to give meaning to anything in writing then you must understand the real meaning. You can only understand the real meaning by understanding the reference, context, the circumstances in which it was stated and the problems or the situations which were intended to be met by what was said and it is only when you take into consideration all this background, circumstances and the problems which have to be tackled that you could really understand the real meaning of the words. This exactly is the principle which deserves to be considered. When we are dealing with the phrase landless persons these words are from English language and therefore I am reminded of what Lord Denning said about it. Lord Denning in The Discipline of Law at Page No. 12 observed as under: Whenever a statute comes up for consideration it must be remembered that it is not within human powers to foresee the manifold sets of facts which may arise, and, even if it were, it is not possible to provide for them in terms free from all ambiguity. The English language is not an instrument of mathematical precision. Our literature would be much the poorer if it were. This is where the draftsmen of Acts of Parliament have often been unfairly criticized. A Judge, believing himself to be fettered by the supposed rule that he must look to the language and nothing else, laments that the draftsmen have not provided for this or that, or have been guilty of some or other ambiguity. It would certainly save the judges trouble if Acts of Parliament were PG NO 868 drafted with divine prescience and perfect clarity. In the absence of it, when a defect appears a judge cannot simply fold his hands and blame the draftsmen. He must set to work on the constructive task of finding the intention of Parliament. And it is clear that when one has to look to the intention of the Legislature, one has to look to the circumstances under which the law was enacted. The Preamble of the law, the mischief which was intended to be remedied by the enactment of the statute and in this context, Lord Denning, in the same book at Page No. 10, observed as under: At one time the Judges used to limit themselves to the bare reading of the Statute itself to go simply by the words, giving them their grammatical meaning and that was all. That view was prevalent in the l9th century and still has some supporters today. But it is wrong in principle. The Statute as it appears to those who have to obey it and to those who have to advise them what to do about it; in short, to lawyers like yourselves. Now the eccentrics cut off from all that is happening around them. The Statute comes to them as men of affairs who have their own feeling for the meaning of the words and know the reason why the Act was passed just as if it had been fully set out in a preamble. So it has been held very rightly that you can enquire into the mischief which gave rise to the Statute to see what was the evil which it was sought to remedy. " It is now well settled that in order to interpret a law one must under stand the background and the purpose for which the law was enacted. And in this context as indicated earlier if one has bothered to under stand the common phrase used in the Bhoodan Movement as Bhoomihin Kissan which has been translated into English to mean landless persons there would have been no difficulty but apart from it even as contended by learned counsel that it was clearly indicated by Sec. 15 that the allotments could only be made in accordance with the scheme of Bhoodan Yagna. In order to understand the scheme of Bhoodan and the movement of Shri Vinoba Bhave, it would be worthwhile to quote from Vinoba And His Mission by Suresh Ram printed with an introduction by Shri Jaya Prakash Narain and foreword by Dr. section RadhaKrishnan. In this work, statement of annual Sarvodya Conference at Sevapuri has been quoted as under: PG NO 869 The fundamental principle of the Bhoodan Yagna movement is that all children of the soil have an equal right over the Mother Earth, in the same way as those born of a mother have over her. It is, therefore, essential that the entire land of the country should be equitably redistributed anew, providing roughly at least five acres of dry land or one acre of wet land to every family. The Sarvodaya Samaj, by appealing to the good sense of the people, should prepare their minds for this equitable distribution and acquire within the next two years at least 25 lakhs of acres of land from about five lakhs of our villages on the rough basis of five acres per village. This land will be distributed to those landless labourers who are versed in agriculture, want to take to it, and have no other means of subsistence. " (Underlining for emphasis by us) This would clearly indicate the purpose of the scheme of Bhoodan Yagna and it is clear that Sec. 15 provided that all allotments in accordance with Sec. 14 could only be done under the scheme of the Bhoodan Yagna. In the light of the discussion above therefore, the judgment of the High Court could not be maintained. The appeals are therefore allowed. The judgment of the High Court is set aside and the orders passed by the Additional Collector are restored. Appellant shall be entiled to costs of the appeals, counsel fee Rs. l,500 in each of these three appeals. G.N. Appeals allowed.

The Government of India set up a Wage Board for the port and dock workers at major ports on November 13, 1964(1) to determine the categories of employees who should be brought within the scope of proposed wage fixation, and (2) to work out a wage structure for those employees on the basis of the guidelines laid down by the Government. The Wage Board submitted its final report on November 29, 1969. The Wage Board did not choose to make any recommendation in respect of bargemen, i.e., Dandees and Majhis at the Port of Calcutta. According to the Wage Board, the bargemen were engaged more in the transport of cargo rather than its handling and they therefore did not fit in with the definition of 'dock worker '. Thereupon, the bargemen raised an industrial dispute claiming the benefit of the Wage Board recommendations. Accordingly, the Central Government on August 22, 197o constituted a National Tribunal at Calcutta for adjudication whether the recommendations of the Wage Board were applicable. to the bargemen, and if not, to what relief with regard to wages and allowances were they entitled. The National Tribunal held that the bargemen were entitled to be paid wages and allowance at the rates of wages recommended by the Wage Board on the ground that the bargemen came within the meaning of the definition of 'dock worker ' and thus the recommendations of the Wage Board were applicable to them, and alternatively, on the ground that PG NO 1034 PG NO 1035 they were entitled to the same rates of wages and allowances even independently~ having regard to the financial capacity of the management and all other relevant considerations governing the determination of the wages. Aggrieved by the award of the National Tribunal, the managements filed two writ petitions before the High Court at Calcutta questioning its validity on the ground that it was beyond the scope of the reference. The learned Single Judge observed: (1) that the scope of the reference was to find out from the report of the Central Wage Board itself whether the recommendations were applicable to the bargemen or not, and it was not for the National Tribunal to criticise the report of the Central Wage Board and to establish that the bargemen were dock workers within the meaning of the Act; (2) the National Tribunal, in a round about way, made the recommendations of the Central Wage Board applicable to the bargemen although apparently the recommendations were not applicable to them, and (3) the National Tribunal having held that the recommendations of the Central Wage Board were applicable to the bargemen, there was no scope for it to decide independently the pay structure of the bargemen. The learned Single Judge accordingly quashed the award as beyond the jurisdiction of the National Tribunal. The Division Bench, on appeal, agreed with the Single Judge and further held that the National Tribunal had failed to fix the wages in accordance with the settled principles. Allowing the appeal, it was, HELD: (l) The object of enacting the and of making provision therein to refer disputes to tribunals for settlement is to bring about industrial peace. Whenever a reference is made by a Government to an industrial tribunal it has to be presumed ordinarily that there is a genuine industrial dispute between the parties which requires to be resolved by adjudication In all such cases an attempt should be made by Courts exercising power of judicial review to sustain as far as possible the awards made by industrial tribunals instead of picking holes here and there in the awards on trivial points and ultimately frustrating the entire adjudication process before the tribunals by striking down awards on hyper technical grounds.[1042B C] PG NO 1036 (2) In order to decide the question whether the bargemen were dock workers or not the National Tribunal had to examine incidentally the correctness of the decision of the Wage Board on the question, and after taking into consideration all the material before it the National Tribunal had come to the conclusion that the bargemen were also dock workers and there was no justification for denying them the benefit of the recommendations of the Wage Board. This part of the Award could, therefore, be considered to be outside the scope of the reference made to the National Tribunal. The finding recorded by the National Tribunal may be right or wrong but it could not be considered as one recorded without jurisdiction. [1048B D] (3) The National Tribunal while holding that even independently of the recommendations of the Wage Board, the bargemen were entitled to the same wages and allowances which had been recommended by the Wage Board had observed that it would not be beyond the capacity of the employers to pay. The criticism of the award in this regard by the High Court was wholly unjustified. [1048E F; 1049A] (4) The wages and allowances fixed by the National Tribunal were just and not at all excessive. [1049E] Express Newspapers (Private) Ltd. and Anr. vs The Union of India and Others, referred to.

Civil Appeal No. 806 of 1982. From the Judgment and order dated 27 7 1981 of the Industrial Tribunal (III) U.P. in Adjudication Case No. 15 of 1977. 114 M. K. Ramamurthy, Jitendra Sharma and P. Gaur for the Appellants G.B. Pai, H. K. Puri and J. K. Mehra for the Respondent. The Judgment of the Court was delivered by DESAI, J. In exercise of the power conferred by Sec. 4 (K) of the U.P (`Act ' for short) the Government of Uttar Pradesh by its order dated May 23, 1975 referred the following dispute to the Industrial Tribunal for adjudication. The reference is in Hindi. Agreed translation of the industrial dispute referred for adjudication reads as under: "Whether the variable dearness allowance payable by the employers to their workmen should be revised and it should be linked with the consumer price index for industrial workers at Kanpur computed by Labour Bureau Simla ? If yes, then from what rate (sic) and with what other details. " There are two rival unions of the workmen employed by the Indian Oxygen Ltd. (`Company ' for short) in its Industrial under taking at Kanpur. They are the Indian Oxygen Karamchari Union (Karamchari Union ' for short) and the Indian Oxygen Sharamik Sangh (`Sharamik Sangh ' for short). There is a federation of trade unions formed at various centres where the Company has its industrial undertaking. Sharamik Sangh is affiliated to the federation. Karamachari Union claims to represent the workmen employed by the Company at Kanpur. The demand and the consequent industrial dispute which led to the reference was espoused by Karamchari Union. The Karamchari Union in its statement of claim stated that the Company is a unit of the multi national British Oxygen Company. The Indian Unit of the multi national corporation operates under the name and style of M/s Indian Oxygen Ltd. The industrial activities of the Company comprises manufacture and sale of industrial and medical gases etc. It was stated that while the wage structure is uniform in respect of workmen employed by the Company all over the country the dearness allowance formula varies from centre to centre. Briefly it was stated that the workmen of the Company employed at Bombay, Madras, Hyderabad, Bangalore and 115 Delhi are in receipt of higher dearness allowance compared to the workmen employed in Kanpur Unit. The immediate provocation for raising the demand was an award by the Industrial Tribunal Delhi by which the dearness allowance of the workmen employed in Delhi unit was linked to consumer price index for Delhi prepared by the Labour Bureau Simla which resulted in a substantial increase in the dearness allowance available to the workmen posted at Delhi. Soon after the award was published, the Karamahcari Union submitted a demand on January 7, 1975 for revising the rate of dearness allowance for workmen employed in Kanpur unit and as there was no adequate response from the employer, the matter was taken into conciliation. The Company in its attempt to thwart the demand being pursued entered into a settlement with the Sharamik Sangh in respect of the dearness allowance and then approached the Labour Commissioner Kanpur for registering the settlement. Failing to obtain the registration, the Company unilaterally enforced the new scheme of dearness allowance linked to the all India average consumer price index prepared by Labour Bureau Simla. The Karamchari Union did not accept the revised formula, and pressed its demand that the dearness allowance should be linked to all India consumer price index number prepared by Labour Bureau, Simla for Kanpur centre, after adopting the linking factor as has been done in the award by the Industrial Tribunal at Delhi. The conversion ratio was suggested at 4.83 linked to January 1970 index number. The Company consistent with the employer culture put forth number of preliminary objections so as to delay the adjudication of the demand. All the preliminary objections failed as per the decision of this Court in Indian Oxygen Ltd. vs The Workmen as represented by Indian Oxygen Karamachari Union.(1) After the matter went back for adjudication on merits it was contended on behalf of the Company that the settlement arrived at between the Sharamik Sangh and the Company would be binding on the members of the Karamachari Union and the Tribunal should not adjudicate the dispute on merits. This settlement has been stigmatized by this Court to be a collusive one. (See page 920). It was further contended that the Company is desirous of linking dearness allowance to all India average consumer price index for working class with base 1960=100 and that the Tribunal should avoid accepting a demand of a few workmen where a majority of the workmen have accepted and are satisfied with the revised formula introduced by the Company. 116 The Company employs 5,400 workmen in all its establishments all over the country. Out of total strength of 5,400 workmen, 3030 are employed in gas manufacturing unit. The employment strength in Kanpur unit is roughly about 200. It is not in dispute that the basic wages of all workmen employed all over the country by this Company are occupation wise uniform but the dearness allowance paid to workmen differs or varies from place to place. This ought to be so as will be presently pointed out. Prior to 1975 dearness allowance to the workmen employed in the units of the Company in North Eastern Zone i.e. in the States of West Bengal, Bihar, Orissa, U.P., Delhi and Punjab was linked to the consumer price index number (middle class) prepared by the Bengal Chamber of Commerce for Calcutta. It may be mentioned that the Bengal index has been discontinued since 1975. It is important to note that by the two awards of the Industrial Tribunal, the office staff and the workmen employed the Company at Delhi are being paid dearness allowance linked to consumer price index compiled by Labour Bureau Simla for Delhi. Subsequently by a decision of this Court in Govardhan Prasad and others vs The Management of M/s Indian Oxygen Ltd.(1) 10 workmen employed by the Company stationed at Ghaziabad were required to be paid dearness allowance to the same extent and in the same manner as was being paid under the awards of the Industrial Tribunal to the workmen of the Company at Delhi. Before we delve into the narrow contentions raised in this behalf we would remove the gloss over the submission that the attempt of the company, having all India operation, is to introduce uniformity in the matter of dearness allowance payable to its workmen all over the country. Uniformity, to an uninformed mind, appears to be very attractive. But let it not be forgotten that sometimes this uniformity amongst dissimilar persons becomes counter productive. Uniformity and equality have to be amongst equals measured by a common denominator. One can appreciate the implementation of the constitutional aspiration of `equal pay for equal work. ' In the matter of basic wages it is a consummation devotedly to be wished. But when it comes to dearness allowance any attempt at uniformity between workmen in such metropolitan areas like Delhi, Bombay, Madras, Calcutta and in smaller centres 117 would be destructive of the concept of dearness allowance. Dearness allowance is directly related to the erosion of real wages by constant upward spiraling of the prices of basic necessities and as a sequel to the inflationary input, the fall in purchasing power of the rupee. It is a notorious phenomenon hitherto unquestioned that price rise varies from centre to centre. Dearness allowance is inextricably intertwined with price rise, it being an attempt to compensate loss in real wages on account of price rise considered as a passing phenomenon by compensation. That is why it is called variable dearness allowance. Any uniformity in the matter of dearness allowance may confer a boon on persons employed in smaller centres and those in big metropolitan areas would be hard hit. Dearness allowance by its very form and name has an intimate relation to the prevailing price structure of basic necessities at the centre in which the workman is employed. Therefore, the claim in the written statement on behalf of the company that imbued with the equitable principle of introducing uniformity in the matter of dearness allowance, the Company with the easy availability of consent of its protege union Sharamik Sangh introduced a new scheme of dearness allowance linked to the all India average consumer price index prepared by Labour Bureau, Simla is misleading. The Tribunal rightly observed that it is by now well settled that dearness allowance to workmen at a particular place should depend upon the place where the workman is working irrespective of the fact that the industrial undertaking in which the workman is employed is a unit of an industrial enterprise having an all India or inter State operations. In Dunlop Rubber Co. (India) Ltd vs Workmen & Ors.,(1) a contention on behalf of the employer that in the case of an all India concern, it would be advisable to have uniform conditions of service throughout India was repelled observing that `however desirable uniformity may be in the case of all India concerns, the tribunal cannot abstain from seeing that fair conditions of service prevail in the industry with which it is concerned. ' This view to some extent was affirmed in the Remington Rand of India Ltd vs The Workmen(2). Leaving aside basic wages in the matter of dearness allowance specially the Court should lean in favour of adjudication of dispute on the principle of industry cum region because dearness allowance is linked to cost of living index of a particular centre which has a local flavour. If the concept of uniformity on an all India basis is introduced in the matter of dearness allowance, it would work havoc, because the price structure 118 in a market economy at places like Bombay, Madras, Calcutta, Delhi, Ahmedabad has little or no relation to smaller centres like Kanpur, Varanasi etc. If workmen working in such disparate centres are put on par in the matter of dearness allowance in the name of proclaimed all India uniformity, not only unequals will be treated as equals but the former would suffer irreparable harm. Such an approach would deal a fatal blow to the well recognised principle of industrial adjudication based on region cum industry developed by courts by a catena of decisions. Realising this situation courts have learned in favour of determination of dearness allowance linked to cost of living index, if available for the centre where the workman employed and in the matter of neutralisation on the industry cum region principle. The Tribunal having rejected this approach committed an error apparent on the record. At this stage, it is necessary to have some idea of what is consumer price index number, how it is being complied and what is its relevance in the matter of dearness allowance ? Pursuant to the recommendations of the Planning Commission for the Second Five Year Plan the Labour Bureau, Simla and the Industrial Statistical Organisation of the Government of India took steps to conduct fresh family living surveys among working class and middle class population respectively with a view to constructing the new series of consumer price index numbers. The working class surveys were conducted at 50 selected centres and the middle class surveys at 45 centres, 18 centres being common to both. The work of this survey was commenced in the second half of 1958 and was concluded by September, 1959. One of the centres selected for survey was Kanpur (See Ahmedabad Mill Owners ' Association etc. vs The Textile Labour Association(1) What materials and statistical information enter into the compilation of consumer price index number may be briefly noticed. The consumer price index number for industrial workers (base 1960=100) are being compiled and published by the Labour Bureau, Simla every month in respect of 50 industrial centres scattered all over the country. Amongst them is Kanpur. The material collected is through the family surveys of working class families. There are six main groups for which indices for each centre are being compiled besides the general index. They are: 119 (i) Food (ii) Pan, Supari, Tobacco and intoxicants (iii) Fuel and light (iv) Housing (v) Clothing, bedding and footwear, and (vi) Miscellaneous Consumer price index numbers are intended to measure relative temporal (overtime) changes in the price of a fixed basket of goods and services consumed by the index population in a current period in relation to the base period. The index numbers are compiled by using Laspeyers ' Formula. The Broadly stated this formula takes note of base and current prices for a particular item, quantity consumed of that item during the base period. It would appear that for the compilation of an index, there are three essential requirements namely: (1) weighting diagram which is the relative percentage share of the total consumption expenditure as revealed by the basic family budget enquiry in respect of different items, (2) Base prices of the different items which go into the index basket and (3) current prices in respect of each one of the items featuring in the index basket. The weighting diagram for a centre is derived on the basis of the data collected through family budget enquiries which were conducted in the 1958 59 at each one of the 50 centres. The survey was conducted by taking all samples of working class families in each of the 50 centres and the data was collected by interviewing these families. Based on the results of the family budget enquiries, the average expenditure of a family per month on different items of consumption was arrived at. All India average consumer price index number is a weighted average of the 50 centres ' indices. This is compiled and published alongwith the index number for each centre (Source: Consumer Price Index: An anatomy published by Labour Bureau, Simla). It would appear at a glance that there would be a noticeable difference between the consumer price index number for a centre and its weighted average for 50 centres which would be the all India average consumer price index number, the latter would generally be lower than the former in some cases. 120 Reverting to the demand in this case, the Karamchari Union raised a demand that the variable dearness allowance payable to the workmen should not only be revised but it should be linked with the consumer price index for industrial workers at Kanpur. The Tribunal by its award directed the employer to pay dearness allowance linked to the all India consumer price index (1960= 100) for the Kanpur Centre compiled by Labour Bureau, Simla. On the question of neuturalisation, the Tribunal directed that the calculation in the rate of dearness allowance will remain the same as presently operative and no change is required therein. In reaching this conclusion, the Tribunal committed two manifest errors apparent on the record. The company introduced as stated in its written statement, a new scheme of dearness allowance linked to the all India consumer price index prepared by Labour Bureau, Simla. That was a very recent innovation introduced by way of a counter blast to the demand raised by the Karamchari Union. Prior thereto, it is an admitted position that the workmen at Kanpur were being paid dearness allowance linked to Bengal Chamber of Commerce Index Number. That was unilaterally given up by the Company. There appeared to be at least two valid reasons for scrapping that scheme: one is that since 1975 Bengal Chamber of Commerce Index which was compiled for middle class families and was being artificially applied to industrial workers has been scrapped. In other words, the index is no more being compiled. Secondly, the constituent members of the Bengal Chamber of Commerce had started their business in India long before the present century and most of them were incorporated in England or other Western countries while the Company in the present case has been started a few decades back and therefore, re induction of the Bengal Chamber Index Number would not be relevant. On behalf of the Karamchari Union, it was contended that in devising a dearness allowance formula, the region cum industry principle should ordinarily be accepted. As pointed out earlier, dearness allowance generally has a local flavour. A man is exposed to the vagaries of the market where he resides and works, even though he may be an employee of a national, multinational or trans national industrial empire. The workman is concerned with the vagaries of price fluctuation in the area in which he resides and works for gain and to which he is exposed. Therefore, the region 121 cum industry principle must inform industrial adjudication in the matter of dearness allowance. In Woolcombers of India Ltd. vs Woolcombers Workers Union & Anr. (1) this Court following its earlier decision in Greaves Cotton & Co. and Ors vs Their Workmen (2) held that in devising basic wages and dearness allowance structure, industrial adjudication sometimes leans on the industry part of the industry cum region formula and at other times, on the region part of the formula as the situation demands. This well recognised principle of industrial adjudication cannot be given a go by on the specious plea that the workmen are employed by an industrial undertaking which has an all India operation. In this case, the Tribunal has overlooked this important principle of industrial adjudication. Before we examine the second manifest error committed by the Tribunal in narrowly construing the terms of reference, it would be advantageous to briefly recapitulate what relevant considerations have to be kept in view in devising dearness allowance formula. This aspect is no more res integra. In Bengal Chemical and Pharmaceutical Works Ltd. vs Its workmen (3), after reviewing all the earlier decisions, the court restated the principles on which a fair and just dearness allowance formula must be devised. They are: "1. Full neutralisation is not normally given, except to the very lowest class of employees. The purpose of dearness allowance being to neutralise a portion of the increase in the cost of living, it should ordinarily be on a sliding scale and provide for an increase on the rise in the cost of living and a decrease on a fall in the cost of living. The basis of fixation of wages and dearness allowance is industry cum region. Employees getting the same wages should get the same dearness allowance, irrespective of whether they are working as clerks or members of subordinate staff or factory workmen. 122 5. The additional financial burden which a revision of the wage structure or dearness allowance would impose upon an employer, and his ability to bear such burden, are very material and relevant factors to be taken into account. " We need not examine whether the dearness allowance formula as at present existing is valid according to the principles herein extracted because we are not devising a dearness formula for the workmen working in the industrial undertaking of the company at Kanpur for the first time. The demand is for upward revision of the dearness allowance formula and its linkage. The terms of reference extracted hereinbefore unmistakable show that the workmen sought upward revision of the variable dearness allowance by linking it to the consumer price index number for industrial workers at Kanpur computed by Labour Bureau, Simla. If the demand is to be granted, the Tribunal was requested to specify the rate and other details. Interpreting this reference the Tribunal observed that the new dearness allowance formula which was in vogue at the time of the reference as being related to all India average consumer price index number for industrial workers in accordance with the settlement with the Shramik Sangh which settlement was found to be collusive by this Court yet the Tribunal must proceed on the basis that dearness allowance was being paid to the workmen at Kanpur as per the settlement and that cannot be wished away. This approach overlooks a vital fact that the introduction of the new formula under a collusive settlement led to the demand for revision. The Tribunal rejected the submission that it must examine and devise a new formula in relation to the Bengal Chamber of Commerce Index Scheme which was in vogue before the formula as per the collusive settlement was introduced. If the settlement between the company which is found to be collusive by this Court is to be the starting point of revision of the dearness allowance formula as has been done by the Tribunal, the conclusion is inescapable that the Tribunal started from a wrong premise and landed itself into an utterly unsustainable conclusion. This is the second apparent error in the face of the record which would impoll us to interfere. Mere so because the genesis of the demand for a revision of the dearness allowance was the collusive settlement. The Tribunal committed a grave error in accepting the settlement as the starting point of the revision. 123 The demand of the Karamchari Union was that the Tribunal should first take into account, relevant to a certain date, the all India consumer price index number for Kanpur centre (1960=100) and then the index figure should be multiplied by the conversion factor of 4.83 and then dearness allowance should be linked to the figure so worked out. The Tribunal rejected this demand on the ground that in the statement of claim, the Karamchari Union demanded payment of dearness allowance according to Simla Index Number for Kanpur. The Tribunal took note of the fact of the linking factor but observed that as the same has been discontinued by the Labour Commissioner, U.P., the demand has been essentially for dearness allowance according to the Simla Index for Kanpur. This reasoning manifests an error in approaching, appreciating and evaluating the demand for revision of dearness allowance. Before we examine the error, let it be made clear that where for a certain industrial centre, a dearness allowance formula is in vogue and it is linked to some consumer price index number, whenever the base year for consumer price index number is changed, a fresh linkage requires a conversion ratio. In the absence of a conversion ratio, the whole scheme falls out of gear and becomes unworkable. To illustrate, in the textile industry, the consumer price index number was compiled on the basis of base year 1939=100. The year 1939 was chosen as the year in which the second world was engulfed the world which completely overhauled the consumer pattern and the prices of essential articles. Over years the price spiral relentlessly moved upward and that too so rapidly that in most of the industries where even though 100% neutralisation was not given by devising a dearness allowance yet the dearness allowance for a given month was occasionally double or triable of the basis wage. This was unjust, unfair and from an economist 's point of view, imprudent. Therefore, as pointed out earlier, a fresh survey was undertaken in 1958 with the base year 1960=100. A fresh index was compiled and continues to be compiled with 1960=100 as base year. In fact the 1960=100 base year is being replaced. We will however, confine ourselves in this appeal to the base year of 1960=100. Now if those industrial undertakings in which dearness allowance formula was linked to the base year 1939=100 are to be delinked and relinked to the index number compiled on the base year 1960=100, before the fresh number is adopted, a linking or a conversion ratio between 1939 100 and 1960=100 will have to be computed. Only then a fresh linkage 124 can be devised. This very obvious fact has been wholly overlooked by the Tribunal when it merely awarded that the workmen of the company at Kanpur should be paid dearness allowance linked to the all India consumer price index number (1960=100) for Kanpur Centre compiled by Labour Bureau, Simla. This approach overlooks the linking factor. The rejection of the linking or conversion factor makes the scheme devised by the award unworkable, ineffective and in fact unjust. In this connection, we may refer to the Ahmedabad Mill Owner 's Association case in which this Court after noting the fact that the base year having changed, pointed out that the question of linking factor loomed large and assumed importance. The court had before it the admitted position that there was only one index existing in Ahmedabad which was based on the new series (1960=100) and the old series (1939=100) has rightly gone out of existence since it had become antiquated. Two alternatives were submitted to the court for its consideration. It was submitted that an entirely new scheme of basic wages based not on the pre war level of 1939, but based on the cost of living of 1960 as the base year be devised and then award dearness allowance in relation thereto. In the alternative, it was submitted that an arithmetical method of linking the old and the new series be devised. The Tribunal had accepted the conversion ratio at 3.17. This was attacked on diverse grounds. After examining the whole gamut of arguments, this Court held that the linking factor of 3.17 was valid and correct Approaching the matter from the same angle, and avoiding the arguments which have been rejected by this Court in the aforementioned judgment, we are of the opinion that the conversion ratio of 4.83 is valid and correct and the Tribunal ought to have accepted the same. It is usual in the matter of dearness allowance to examine the paying capacity of the employer. Rightly Mr. Pai did not at all contend that this employer can not bear the additional burden. We therefore, need not stray into this aspect at all. On behalf of the Karamchari Union, it was seriously contended that the award of the Industrial Tribunal at Delhi between this very Company and its Workmen at Delhi be accepted. We need not examine the same as the comparison between Delhi and Kanpur is ill conceived and untenable. Delhi is the capital of the sub continent and it is fast growing. Kanpur is at best a district town though 125 undoubtedly an important industrial centre in U.P. But the comparison would be invidious. Accordingly, this appeal partly succeeds and is allowed. The award of the Industrial Tribunal that the workmen of the Kanpur unit of the Indian Oxygen Ltd. should be paid dearness allowance linked to all India consumer price index (1960=100) for Kanpur centre compiled by the Labour Bureau, Simla is modified to read that 'the dearness allowance should be paid according to all India consumer price index number for Kanpur (1960=100) compiled by Labour Bureau, Simla after applying conversion factor also called linking factor of 4.83. ' In all other respects i.e. the date of enforceability etc. the award remains unaltered except for the modification herein granted. The appeal is allowed to this extent with costs quantified at Rs. 3,000. A.P.J. Appeal partly allowed.

Taluk Kakwara was in its origin a Zemindari Ghatwali tenure and continued to be so, and was in fact treated as such ever since. Even if by virtue of Captain Browne 's Sanad it became a Government Ghatwali tenure, then under the Sanad of Raja Kadir Ali or after the Permanent Settle ment at any rate, it became a Zemindari Ghatwali and as such alienable with the consent of the Zemindar according to the custom of Kharakpur judicially recognised [Nature and incidents of Ghatwali tenures discussed].

Appeals Nos. 139, 147, 214 and 510 of 1961. Appeals by special leave from the judgment and decrees dated October 8, 21. 1959, and March 4,1959, of the Punjab High Court in R. section A. No. 473 of 1959, L.P.A. No. 332 of 1959, R.S.A. Nos. 921 of 1959 and 508 of 1953. J. P. Goyal, for the appellant (in C. A. No. 139 of 1962). 861 Nanak Chand, for respondent No. 1. (in C. A. No. 139 of 1962). Hardyal Hardy and N. N. Keswani, for the appellants (in C. A. No. 147 of 1961). Dayal Swarup Mehra and K. R. Choudhuri, for respondent No. 1 (in C. A. No. 147 of 1961). Hardev Singh and Y. Kumar, for appellants Nos. 2 to 5 'in C. A, No. 214 of 1961). K. L. Gosain and M. L. Aggrawala, for respondents Nos. 1 to 4 (in C. A. No. 214 of 1961). P. section Safeer, for the appellant (in C. A. No. 510 of 1961). Achhru Ram and B. D. Jain, for the respondent (in C. A. No. 510 of 1961). August 30. The Judgment of the Court was delivered by AYYANGAR, J. These four appeals which have been filed pursuant to special leave granted by this Court principally raise for consideration the constitutional validity of section 15 of the Punjab Preemption Act (Act 1 of 1913), hereinafter referred to as the Act. The property involved in these appeals are agricultural lands and in each one of them decrees have been passed in favour of the preemptors whose claim to preempt was based on different sub clauses of section 15, and the vendees who are the appellants in the several appeals challenge the constitutional validity of the law under which the suits have been decreed. One of the appeals Civil Appeal No. 214 of 1961 however could be decided without considering the constitutional point regarding the validity 862 of section 15 of the Act and it would therefore be convenient to dispose it of first. The facts giving rise to the appeal are briefly as follows The 5th and 6th respondents before us owned certain agricultural land in village Dugri which they sold to the appellants by a deed dated April 25, 1957. Res pondents 1 to 4 instituted a suit against the appellants to which the vendors respondents 5 & 6 were also impleaded as co defendants. The right of preemption was based on the plaintiffs being the nearest collaterals of the vendors and heirs according to the rule of succession. There were certain points of dispute on the facts but these are not now material and it is sufficient to state that the suit was decreed by the Subordinate Judge on December 10, 1958. This judgment in favour of respondents 1 to 4 was affirmed by the District Judge on appeal and on further appeal, by the High Court. It is from this judgment and decree of the High Court that the vendees who are the appellants before us have brought the matter to this Court. The appellants were five in number. They fell into two groups constituted respectively by the 1st and 2nd appellants who are brothers and by appellants 3, 4 and 5. While the appeal was pending in this Court the 1 at appellant Mehar Singh died on May 18, 1960, leaving a widow and five children four daughters and a son, as his heirs. No application was, however, made to bring on record the legal representatives of the deceased 1st appellant Mehar Singh and learned Counsel appearing for the other four appellants informed the office that the legal representatives were not being brought on record and that he would proceed with the appeal on behalf of the four surviving appellants. At the hearing of the appeal learned Counsel for the respondents submitted that the appeal ought 863 to be dismissed as incompetent since the same had abated on the death of the first appellant without his legal representatives being brought on record. Learned Counsel for the appellants, however, contended that whatever might be the position as regards the share to which Mehar Singh was entitled in the property purchased, the interest of the deceased was distinct and separate from that of the others and that the abatement could be in any event only partial and would not affect the continuance of the appeal by the surviving appellants at least as regards their share in the property. As the deed of sale under which the appellants purchased the property was not among the printed records of this Court, the appeal was adjourned in order to enable learned Counsel for the appellants to produce. it and substantiate his contention that the interest of the deceased Mehar Singh wag distinct and separate. An English translation of the deed of sale has now been produced before us and a perusal of it indicates that the submission made on behalf of the appellants is not sustainable. The consideration for the sale is a sum of Rs.22,750/and the conveyance recites that Mehar Singh and the second appellant bad paid one half amounting to Rs. 11,375/ while the other three appellants had paid the other half It is therefore not a case of a sale of any separated item of property in favour of the deceased appellant but of one entire set of properties to be enjoyed by two sets of vendees in equal shares. It is clear law that there can be no partial pre emption because preemption is the substitution of the pre emptor in place of the vender and if the decree in favour of the preemptors in respect of the share of the deceased Mehar Singh has become final it is manifest that there would be two conflicting decrees if the appeal should be allowed and a decree for 864 preemption insofar as appellants 2 to 5 are concerned is interfered with. Where a decree is a joint one and a part of the decree has become final by reason of abatement, the entire appeal must be held to be abated. It is not necessary to cite authority for so obvious a position but we might refer to the decision of this court in Jhanda Singh vs Gurmukh Singh (deceased) (1). The result is that the appeal fails as having abated and is dismissed with costs. Civil appeal No. 139 of 1961 The material provision of section 15 of the Act relevant for the consideration of the constitutional point raised in this appeal is section 15(a), but as the validity of other clauses of the same section are challenged in the other appeals, we consider it convenient to set out the other relevant ones also: "15. Subject to the provisions of section 14 the right of preemption in respect of agricultural land and village immoveable property shall vest (a) where the sale is by a sole owner or occupancy tenant or, in the case of land or property jointly owned or held, is by all the co sharers jointly, in the persons in order of succession, who but for such sale would be entitled, on the death of the vendor or vendors, to inherit the land or property sold: (b) where the sale is of a share out of joint land or property, and is not made by all the co sharers jointly,firstly, in the lineal, descendants of the vendor in order of succession; (1) Civil Appeal No. 344 of 1956, decided on April IO, 1962. 865 secondly, in the co sharers, if any, who are agnates, in order of succession; (c) If no person having a right of pre emption under clause (a) or clause (b) seeks to exercise it : . . . . . . . thirdly, in the owners of the estate; The following few facts are necessary to be stated to appreciate the manner in which the question arises. One Ram Nath sold certain agricultural land of an area of about 65 bighas in village Durjanpur in District Sangrur of Punjab to the second respondent Pooran by a deed of sale dated December 12, 1957. The vendee Pooransold the land he had purchased, in favour of Ram Sarup appellant before us. Subsequently Munshi the first respondent brought a suit Suit 297 of 1958 in the Court of the Subordinate Judge First Class at Narwana stating that he was the son of vendor Ram Nath and claiming preemption under is. 15 of the Act. There were rival claims for preempting the same property and another suit was filed in regard to it which was tried along with the suit by Munshi, but this failed and is no longer of relevance. The main contest to the suit by Munshi was based upon a denial of the fact that be was the son of Ram Nath. This issue was found in favour of the respondent by the Subordinate Judge who decreed the suit, which judgment was confirmed successively by the District Judge on appeal and thereafter by the High Court on second appeal. It was therefore common ground that if section 15(a) was constitutionally valid, the sale by Ram Nath was subject to the right of Munshi, to preempt and that consequently his suit was properly decreed. 866 The constitutional validity of section 15 was not contested before the High Court because of the decision of a Full Bench of that Court which had upheld its validity. It was only at the stage of an application for a review of the Judgment of the High Court that this point was raised but the learned Judges rejected it and it was on the ground of this constitutional point that special leave was granted and that is the only point for consideration in this appeal. Before adverting to the points urged by learned Counsel as regards the constitutional validity of section 15 it is necessary to notice an argument urged on behalf of the appellant for sustaining a contention that even apart from the unconstitutionality of the provision the right of pre emption conferred by section 15(a) has ceased to be enforceable. The argument under this head was rested on the opening words of section 15 and certain other provisions to which we shall immediately advert. It would be noticed that a. 15 opens with the words "Subject to the provisions of section 14 the right of preemption in respect of agricultural land. . shall vest". Section 14 runs in these terms: "14. No person other than a person who was at the date of sale a member of an agricultural tribe in the same group of agricultural tribes as the vendor shall have a right of pre emption in respect of agricultural land sold by a member of an agricultural tribe. " The expression "agricultural tribe" referred to in section 14 is defined in section 3(4) of the Act thus: "member of an agricultural tribe and group of agricultural tribes shall have the meanings assigned to them respectively under the Punjab Alienation of Land Act, 1900. " 867 Next it would be seen that a. 15 employs the words "in respect of agricultural land". "Agricultural land" is defined in section 3(1) of the Act thus: " 'agricultural land ' shall mean land as defined in the Punjab Alienation of Land Act, 1900 (as amended by Act 1 of 1907), but shall not include the rights of a mortgagee whether usufructuary or not, in such land,; Section 6 of the Act enacts; "6. A right of preemption shall exist in respect of agricultural land and village immoveable property, but every such right shall be subject to all the provisions and limitations in this Act contained". , and section 23 enacts: "No decree shall be granted in a suit for pre emption in respect of the sale of agricultural land until the plaintiff has satisfied the Court (a) that the sale in respect of which pre emption is claimed is riot in contravention of the Punjab Alienation of Land Act, 1900: and (b) that he is not debarred by tile provisions of section 14 of this Act from exercising the right of preemption." Now, by the Adaptation of Laws (Third Amendment) Order, 1951, the Punjab Alienation of Land Act, 1900, has been repealed and the argument urged by the learned Counsel for the appellant was that by reason of the repeal of that Act the right of preemption granted by section 15(a) has become unavailable. The argument was somewhat on these lines. It is under section 6 that the right of preemption is recognised and granted, though section 15 868 sets out the circumstances in which it arises. Under section 6 the right is (a) in respect of "agricultural land ", and (b) the right conferred by the Act is subject to every provision and limitation contained in it. In the Act, as originally framed before the amendment effected by the Adaptation of Laws (Third Amendment) Order, 1951 i. e., before the repeal of the Punjab Alienation of Land Act, 1900, there were two principal limitations on the right of preemption in respect of "agricultural land:" (1) it applied only to such land as was defined in the Punjab Alienation of Land Act, and (2) by virtue of section 14 there was a limitation of the group of persons who might claim the right of preemption if a sale took place by "a member of an agricultural tribe", and the expression "member of an agricultural tribe" was as defined by the Punjab Alienation of Land Act. Section 15 therefore was subject to the limitations of section 14 and to the definition of 'agricultural land ' and 'agricultural tribe ' and this read in conjunction with the positive provision in s.23 has become wholly inapplicable and unworkable after the repeal of the Punjab Alienation of Land Act of 1900. The problem here raised is dependent upon the construction which the several provisions which we have set out earlier would bear after the repeal of the Punjab Alienation of Land Act, 1900. One thing is clear and that is that the authority which effected the repeal of the Punjab Alienation of Land Act did not consider that Punjab Act 1 of 1913 had itself to be repealed. We shall now consider the effect of the repeal of the Punjab Alienation of Land Act with reference to each of the provisions: Definition of "agricultural land ' under 8.3(1): Where the provisions of an Act are incorporated by reference in a later Act the repeal of the earlier Act 869 has, in general, no effect upon the construction or effect of the Act in which its provisions have been incorporated. The effect of incorporation is stated by Brett, L. J., in Clarke vs Bradlaugh: (1) "Where a statute is incorporated, by reference, into a second statute the repeal of the first statute by a third does not affect the second. " In the circumstances, therefore, the repeal of the Punjab Alienation of Land Act of 1900 has no effect on the continued operation of the Preemption Act and the expression 'agricultural land ' in the later Act has to be read as if the definition in the Alienation of Land Act had been bodily transposed into it. Section 2 of the Punjab Alienation of Land Act, 1900, as amended by Act 1 of 1907 defined `Land ' as follows: "The expression 'land ' means land which is not occupied as the site of any building in a town or village and is occupied or let for agricultural purposes or for purposes sub servient to agricultural or for pasture, and includes. . . . . " It is not in dispute that the land concerned in the claim for preemption made in the appeal satisfies this definition. We shall next take up the effect of the repeal of the Punjab Alienation of Land Act, 1900, on s.14 of the Act and of the definition contained in a. 3 (4) thereof of the expression "member of an agricultural tribe" and the effect of these on the right of preemption conferred by section 15(a). With the repeal of the Punjab Alienation of Land Act, 1900, it is manifest that s.14 would lose all (1) 870 significance, but this does not help, in any manner, the contentions urged by learned Counsel for the appellant. It would be seen that section 14 is restrictive, in that in the case of the alienations by persons referred to in that section the right of preemption is conferred upon a limited group. With the repeal of the Punjab Alienation of Land Act, 1900, the restriction imposed by section 14 as regards the availability of the right of preemption to particular agricultural tribes would disappear. In other words, the effect of the removal of the limitation of section 14 would only be that the opening words of section 15 cease to operate. In such circumstances section 14 would lose all significance because the post Constitution law does not recognise membership of tribes as conferring any special rights and consequently the elimination of section 14 would leave a. 15 without the limitation originally imposed upon it. In the same manner the restriction imposed upon the passing of decrees by section 23 could also not operate after the repeal of the Punjab Alienation of Land Act but that would leave the Court with an unfettered power to grant decrees under the provisions of the Act, i. e., without the limitations imposed by a. 23. We are therefore clearly of the opinion that neither the repeal of the Punjab Alienation of Land Act, 1900, nor the consequential removal of the fetters imposed by sections 14 and 23 have the effect of rendering the substantive provision contained in section 15 not available to those who satisfy its terms. In these circumstances we have necessarily to consider the main question raised by learned Counsel for the appellant, viz., that the rights conferred upon the pre emptor is an unreasonable restriction on the right of vendors "to hold and dispose of property)" and of prospective vendees to acquire property" guaranteed to citizens of India by article 19(1) (f) of the Constitution. 871 Before proceeding to consider the question about the constitutional validity of a. 15(a) of the Act, it is necessary to mention that section 15 of the Act has been the subject of very substantial amendments effected by the Punjab Preemption (Amendment) Act of 1960 (Act 10 of 1960). This however makes no difference to the present appeal since the relevant portion of section 15 as amended reads : "15. (1) The right of preemption in respect of agricultural land and village immoveable property shall vest (a) where the sale is by a sole owner FIRST, in the son or daughter or son 's son or daughter 's son of the vendor;" In view of this feature, it is needless to consider in this appeal as to whether the amending Act is retrospective and if so, the degree of retrospectivity a question which falls for decision only in Civil Appeal No. 510 of 1961. It is common ground that the right of preemption granted by the statute is a restriction on the right "to hold and dispose of property" on the part of the vendor the right guaranteed by Art.19(1)(f) of the Constitution. The question, however, is whether the restriction imposed is reasonable and in the interest of the general public within article 19(5) of the Constitution. The general question about the impact of the right conferred by article 19(1)(f) on the right of preemption has been dealt with exhaustively in the judgment of this Court in Bhau Ram vs Baij Nath (1) and it is (1) (1952) Supp. 3 S.C.R. 724. 872 unnecessary to cover the ground again. The proper approach to the question would be as to whether the grounds which are stated to underlie the provision are reasonable judged in the light of present day standards and needs of the community and are in the interests of the general public. The question about the reasonableness of this restriction contained in 3. 15 of the Act was considered by a Full Bench of the High Court of Punjab in Uttam Singh vs Kartar Singh (1) and as the grounds stated there have been referred to with approval in subsequent decisions of the Punjab High Court and were relied on before us by learned Counsel for the respondent we might as well extract the passage in full : "It is plain that the objects underlying as. 15 and 16 of the Act may be briefly enumerated as follows : (1) to preserve the integrity of the village and the village community; (2) to avoid fragmentation of holdings; (3) to implement the agnatic theory of the law of succession; (4) to reduce the chances of litigation and friction and to promote public order and domestic_comfort; and (5) to promote private and public decency and convenience. " The reference here in the above passage to "the promotion of public order and domestic comfort" and to "Private and public decency and convenience" obviously have relevance to urban immoveable property dealt with in section 16. The (1) A. 1. R. 1954 Punjab 55. 873 grounds on which the reasonableness of the right of pre emption granted by law in regard to agricultural property dealt with in section 15 would therefore appear to be the first four of the above. Among them much stress could not be laid on the avoidance of chances of litigation and friction because the existence of the right of preemption could also give rise to litigation which otherwise might not exist. Nor can the ground of avoidance of fragmentation of holdings afford assistance to sustain the claim of a son to preempt in the event of a sale by a sole owner father, for that criterion has primary relevance to the right of preemption enjoyed by co sharers and the like. The grounds for upholding section 15(a) as reasonable and in the interest of the general public therefore finally resolve themselves into two: (1) to preserve the integrity of the village and the village community; and (2) to implement the agnatic rule of succession. The objective underlying the first ground is prima facie reasonable and calculated to further the interest of the general public. It was however pointed out by learned Counsel for the appellant that with the large scale migration of population into Punjab consequent on the problems created by partition there has been a disintegration of the village community and that in the circumstances, what is at the present date imperatively required is not the keeping out of strangers from rural areas but rather for their being absorbed into the village community and that in that context the existence of a law which prevented such absorption could not be characterized as being either reasonable or in the interests of the general public. Though we see some force in this submission of learned 874 Counsel we are unable to accept it as a final and conclusive answer to the argument against the reasonableness of the provision for we find that in the schemes for rehabilitation of the refugees the principle of the integrity of the village community and the need to maintain some degree of cohesion as regards the population in each village has been observed and, indeed, forms the basis of the methods by which different groups of refugees were settled in various parts of the Punjab. It has thus been possible to reconcile somewhat the needs of the refugees being settled in India, with the preservation of the integrity of the village community. Even if this ground cannot serve to sustain the constitutionality of the provision, we consider that the other ground viz., that the next in succession should have the chance of retaining the property in the family, would suffice to render the restriction reasonable and in the interest of the general public within article 19(5). In this connection we might refer to the reasoning in the decision of the Rajasthan High Court in Siremal vs Kantilal(1) where the learned Judges struck down as unconstitutional a provision in a. 3 of the Marwar Preemption Act which granted a right of preemption "to persons related within three degrees to the vendor of the house or building plot provided that the nearer in degree shall have priority over one more remote" as an unreasonable restriction on the right conferred by article 19(1)(f) of the Constitution. The basis of this ruling was that the impugned enactment conferred the right of preemption on all relations within three degrees and did not restrict it to the members of the family. Under s.15 of the Act, particularly after the amendment effected by Act 10 of 1960, the right of preemption is confined to the members of the family (1) A.I.R. 1954 Rajastban 195. 875 of the vendor, i. e., those who would have succeeded to the property in the absence of any alienation. The relevant portion of section 15 (1) after amendment reads: "15. (1) The right of preemption in respect of agricultural land and village immoveable property shall vest (a) where the sale is by a sole owner,FIRST, in the son or daughter or son 's son or daughter 's son of the vendor; SECONDLY, in the brother or brother 's son of the vendor; THIRDLY, in the father 's brother or father 's brother 's son of the vendor; FOURTHLY,. . . " No doubt, the son and the other members of the family would not have been entitled to a present interest in the property alienated and consequently would not have a right to prevent the alienation (in which event, however, it is needless to add that a right to preempt wan wholly unnecessary as a means of preserving the property), but they would have a legitimate expectation of succeeding to the property an expectation founded on and promoted by the consciousness of the community. If the social consciousness did engender such feelings, and taking into account the very strong sentimental value that is attached to the continued possession of family property in the Punjab, it could not be said that the restriction on the right of free alienation imposed by section 15(1)(a) limited as it is to small class of near relations of the vendor is either unreasonable or not in the interest of the general public. The result is the appeal fails and is dismissed with costs. 876 Civil Appeal No. 147 of 1961. The facts giving rise to this appeal are briefly as follows : The appellant Dalip Singh purchased under a deed dated June 1,, 1957, agricultural land measuring 98 bighas and 10 biswas situated in village Bailerkha in district Sangrur under a registered deed of sale. The vendors were Nihal Singh, Wazir Singh and Gurdial Singh who are respondents 2 to 4 before us. Sunder Singh brother of respondents 2 & 3 and uncle of the 4th respondent filed a suit in the Court of the Sub Judge, Narwana, for preemption basing his claim under section 15(a) of the Act. It is manifest that even under the amended section 15 a person in the position of the first respondent has a right to preempt. It would be seen that under section 15(a), as it originally stood, the right of pre emption is conferred upon persons who would succeed as heir to the vendor in the event of his death. In other words, preemption in such cases is the grant of an option to the heirs to retain property in the family. As we have already pointed out in dealing with the claim by a vendor 's son in Appeal 139 of 1961, we consider that the provisions contained in section 15(a), as it originally stood, as well as in the modified form in which it has been reenacted do not transgress the limits of reasonableness required by Art.19(5) of the Constitution. As the constitutionality of s.15(a) was the only ground which was or could be canvassed before us in this appeal and as we are rejecting it follows that the appeal fails. It is accordingly dismissed with costs. Civil Appeal No. 510 of 1961 What now remains to be dealt with is Civil Appeal 510 of 1961. This appeal arises out of a suit filed by the first respondent as plaintiff for preemption of certain agricultural land in village 877 Fatehabad in Amritsar district. The sale which gave rise to the suit was under a deed dated December 29, 1949, in favour of the appellate Singh. The claim to preempt was based on section 15 (c) "thirdly" of the Punjab Preemption Act, 1913, which has already been set out. The expression " estate" which is used in cl. (c) "thirdly" is not defined by the Act but by reason of its section 3 (6) the definition in section 3 of the Punjab Land Revenue Act, 1887, is attracted to it. Turning now to section 3 of the Punjab Land Revenue Act (Act XVII of 1887), it defines an 'estate ' as meaning, inter alia, "any area for which a separate record of rights has been made. " It was the case of the plaintiff first respondent before us that he owned land in the "estate" whereas the under the appellant before us did not own any land there. The defendant while not disputing that the plaintiff owned land in the village or the correctness of the allegation that the land was in an "estate", sought to prove that he too owned land in the same village and "estate" but in this he failed. As the case of the plaintiff was directly covered by the terms of the statute his suit was decreed by the trial Court on November 8, 1951, and an appeal and second appeal there from were also dismissed. It was from this judgment of the High Court that this appeal has been brought and the principal point on which leave was granted related to the constitutionality of the provision in section 15 of the Pre emption Act upon which the respondent based his claim to preempt. In regard to the point about the Considerational validity of section 15 (c) "thirdly" we consider that the case is clearly covered by the judgment of this Court in Bhau Ram vs Baij Nath (1) where the Court upheld the validity of the right of preemption granted under Ch, XIV of the Berar Land Revenue Code (Appeal 430 of 1958). In the (1) [1962] Supp 3 section C.R 724. 878 case of an estate within section 3 of the Punjab Land Revenue Act of 1887, section 61 of the Act enacts: "61 (1) In the case of every estate, the entire estate and the landowner or, if there are more than one, the landowners jointly and severally, shall be liable for the land revenue for the time being assessed on the estate : Provided that. (a) the State Government may by notification declare that in any estate a holding or its owner shall not be liable for any part of the land revenue for the time being assessed on the estate except that part which is payable in respect of the holding; and (b). . . . (2) A notification under proviso (a) to sub section (1) may have reference to any single estate or to any class of estates or estates generally in any local area. " Thus it will be seen that an "estate" is an unit of assessment and there is a joint and several liability on persons owning land within the "estate ', to pay the entire assessment due on the estate. Thus though it is not really the case of a co sharer, it is somewhat akin to that of a co sharer because of the joint liability for payment of land revenue. We therefore consider that the restriction on the right of a vendor in such a case is a reasonable one and not repugnant to article 19 of the Constitution. As learned Counsel for the appellant desired to have time to ascertain whether there had been a notification of the Local Government such as is referred to in a. 61 of the Punjab Land Revenue 879 Code, we adjourned the case to enable him to produce the notification, if there was one, and we were informed that there was none. If therefore the matters had stood as under the law as enacted in section 15 of the Act the appeal would have to be dismissed. The Punjab Legislature, however, effected substantial amendments to the Punjab Preemption Act of 1913 by Punjab Act 10 of 1960 and it is the impact of this later legislation on the rights of the parties to this appeal that now requires to be considered. Punjab Act 10 of 1960 received the assent of the Governor on February 2, 1960, and was published in the Punjab Government Gazette two days later. By section 4 of the Amending Act section 15 of the parent Act was repealed and in its place was substituted a new provision which omitted to confer a right of Preemption in the case of persons "owning land in the estate )I as the original section 15 (c) "thirdly" had done. Retrospective effect was giving to the provisions contained in the Amending Act by the insertion of a new section 31 in the parent Act Which read: "31. No court shall pass a decree in a suit for preemption whether instituted before or after the commencement of the Punjab Pre emption (Amendment) Act, 1959, which is inconsistent with the provisions of the said Act". It may be mentioned that the figure 1959 in section 31 is an obvious mistake for 1960 which is the correct year of the Amending Act. The question now for consideration is whether by reason of this amendment in the law, the respondent is entitled to the benefit of the decree which he obtained under the previously existing enactment. That section 31 is plainly retrospective and that it affects 880 rights to preemption which had accrued before the coming into force of the Amending Act is not in controversy for section 31, in plain terms, makes the substantive provisions of the enactment applicable to suits whether instituted "before or after" the commencement of the Amending Act. It was urged before us by learned Counsel for the appellant that in view of the plain language of section 31 this Court should apply the substantive law enacted by the Punjab Legislature in the amended section 15 of the Preemption Act and set aside the decree for preemption passed in favour of the first respondent. In this connection learned Counsel referred us to the judgment of the Federal Court in Lachmeshwar Prasad Shukul vs Keshwar Lal Chaudhuri(1) as to the course which this Court would adopt in giving effect to Amending legislation interfering with the. rights of parties in pending appeals, and to the decision of a Division Bench of the Punjab High Court in Ram Lal vs Raja Ram(2) where the learned Judges, on a construction of section 31 of the Act set aside a decree for pre emption passed in favour of the respondent before the Court, giving effect to the provisions contained in Punjab Act 10 of 1960. Mr. Achhru Ram, learned Counsel for the respondent, however, submitted that the language employed in the new section 31 was not sufficient to permit a decree passed in favour of a pre emptor being set aside by an appellate Court merely because the ground on which preemption had been claimed and decreed was not one that was included within the amended provisions. He placed reliance on the principle that besides the rule of construction that retrospective operation is not, in the absence of express words therefore, to be given to a statute so as to impair existing rights except as regards matters of procedure, there was a further (1) (2) 881 well recognised rule that a statute was not to be construed to have a greater retrospective operation than its language rendered strictly necessary. The argument was that though by the use, in section 31, of the words "Suit for preemption instituted before or after the commencement of the Act" a certain amount of retrospective effect was intended, still the retrospectivity was but partial in its operation and that the words used did not permit the setting aside by an appellate Court of a decree which was validly passed under the substantive law applicable to the facts at the date of the original decree,. In this connection he placed considerable reliance on the employment of the words "no decree shall be passed" in the opening words of section 31 as indicative of a ban only on the passing of a decree an event which be contended would occur, firstly when a trial Court passed a decree and secondly when the trial Court having refused a decree, the appellate Court is called upon to pass a decree which the trial Court should properly have done and in no other Contingency. On this reasoning the contention was urged that where a trial Court had passed a decree and that decree gave effect to the law as it stood up to the date of that decree, the words of section 31 did not enable an appellate Court to set aside that decree on the ground of a change in the substantive law effected by the Amending Act. Through we agree that there is a presumption against the retrospective operation of a statute and also the related principle that a statute will not be construed to have a greater retrospective operation than its language renders necessary, we consider that in the present case the language used in section 31 is plain and comprehensive so as to require an appellate court to give effect, to the substantive provisions of the Amending Act whether the appeal before it is one against a decree granting preemption or one refusing that relief. The decision of the 882 Federal Court in Lachmeshwar Prasad vs Keshwar Lal (1) on which learned Counsel for the appellant relied fully covers this case. The question there raised related to the duty of the Federal Court when an amending Act enacted after the decree appealed from was passed adversely interfered with the rights of the respondent before the Court. The learned Judges held. that the provisions of the Act were clearly retrospective and should be applied to the decree which was the subject matter of appeal before it and the appeal was accordingly allowed and remitted to the High Court for effect being given to the new legislation. Mr. Achhru Ram, however, sought to suggest that the language of section 7 of the Bihar Moneylenders Act, 1939 which was the subject of construction before the Federal Court was differently worded and was of wider amplitude. That section ran: "7. Notwithstanding anything to the contrary contained in any other law or in anything having the force of law or in any agreement, no Court shall, in any suit brought by a money lender before or after the commencement of this Act in respect of a loan advanced before or after the commencement of this Act or in any appeal or proceedings in revision arising out of such suit, pass a decree for an amount of interest for the period preceding the institution of the suit, which, together with any amount already realised as interest through the Court or otherwise, is greater than the amount of loan advanced, or, if the loan is based on a document, the amount of loan mentioned in, or evidenced by such document." In particular learned counsel stressed the fact that unlike in section 31 of the Act now under consideration, in the Bihar Act there were specific references to (1) 883 "appeals" and "revision" and that this made a difference. But in our opinion this makes no difference since it is admitted that section 31 even according to the respondent has to be given effect to, not merely by a trial Court but also by an appellate Court, only learned Counsel could urge that the appellate Court could give effect to the Amending Act only in cases where the trial Court has refused a decree for pre emption. No distinction can, therefore, be rested on the ground that the Bihar Act specifically referred to ",appeals" and "revisions" seeing that the relevant operative words in section 7 of the Bihar Act were "no Court shall pass a decree" words which occur in section 31 of the Act as well. On the other hand the reasoning of the learned Judges of the Court which was based on the nature of an appeal under the Indian procedural law as a rehearing and a court of appeal being not a court of error merely, and the view expressed that when an appeal was filed the finality which attached to the decree of the trial court disappeared, all these lines of reasoning point to the fact that even when an appellate court dismisses an appeal it also is passing a decree. In this connection we consider that the reasoning and the conclusion of the Division Bench of the Punjab High Court in Ram Lal vs Raja Ram (1) correctly sets out the principles underlying the scope of an appeal as well as the proper construction of section 31 of the Amending Act. It was not suggested that if the provisions of section 15 as amended by Punjab Act 10 of '1960 had to be applied the decree in favour of the respondent could be sustained. The result therefore is that the appeal has to be allowed, the decree in favour of the respondent set aside and the respondent 's suit for preemption dismissed. In view, however, of (1) 884 the circumstances that the appellant has succeeded only by virtue of subsequent legislation, we direct that there shall be no order as to costs in the appeal. Appeals Nos. 139, 147 and 214 dismissed. Appeal No. 510 Allowed.

The appellants along with four others were charged with having committed offences under section 148 and sections 202 and 326, read with section 149, of the Indian Penal Code. The incident which gave rise to the present criminal proceedings related to a cultivable field in respect of which a dispute arose as to its possession between the appellants and the faction of the complainants. On September 14, 1960, a rioting took place in the field which resulted in the death of six persons and injuries to nine persons. The appellant 's case was that they were in possessions of the field and were cultivating it at the time of the incident whereas the prosecution contended that the complainant 's party was in possession and that the appellants virtually invaded it and caused a massacre. The High Court found that the crop in the field had been ploughed by the appellants and their companions and that when the operations were being carried on by them on the day of rioting, the villagers, who did not tolerate the strangers, came to the field armed with weapons to take forcible Possession of the field, that as soon as fire arms were used for the first time killing a person, the villagers started running away and that after all the villagers had run away, the appellants used their rifles against their respective victims when the latter were standing at a considerable distance from them. The High Court took the view that as at the relevant time the property had been saved from the trespass, there was no justification for using any force against the running villagers and so, the appellants who were proved to have caused the deaths of the victims could not claim protection of the right of private defence and were guilty of the offence of murder under s 302. Held, that the appellants were rightly convicted under s.302 of the Indian Penal Code on the findings given by the High Court. 490 In exercising the right of private defence, the force which a person defending himself or his property is entitled to use must not be unduly disproportionate to the injury which is to be averted or which is reasonably apprehended and should not exceed its legitimate purpose. The use of the force must be stopped as soon as the threat has disappeared. The exercise of the right of private defence must never be vindictive or malicious, In exercising its powers under section 342 of the Code of Criminal Procedure the Court must take care to put all the relevant circumstances appearing in the evidence to the accused, so that he might get an opportunity, to say what he wanted to do so in respect of the prosecution case against him, but it is not necessary that the Court should put to the accused detailed questions which may amount to his cross. examination. Held, that the failure to put the specific point of the distance from which the appellants used their rifles, under section 342 of the Code of Criminal Procedure, did not vitiate the trial or affect the conclusion of the High Court.

Appeal No. 620 of 1960. Appeal by special leave from the judgement and decree dated February 11, 1954, of the former Hyderabad High Court in Second Appeal Suit No. 476/4 of 1954 Fasli. Gopal Singh and B. section Narula, for the appellant. A. Banganatham Chetty, A. V. Rangam, A. Vedavali and P. C. Agarwala, for respondent No. 1. 1962. May 4. The Judgment of the Court was delivered by VENKATARAMA AIYAR, J. This is an appeal by special leave against the judgment of the High Court of Hyderabad whereby it affirmed the judgment of the Court of the Additional District Judge of Adilabad dismissing the suit of the appellant. The facts are that there was a joint family consisting of one Chakkayya and his, younger brother Rajanna. Chakkayya died in year 1923 leaving 231 behind the appellant his son who it is said was at that time a minor a few months old. On December 21, 1923, Rama Rao second defendant, sold the lands which are the subject matter of the suit to Rajanna. It appears that as there was some difficulty in Rajanna getting possession of the pro perties which were stated to have been 'usufructuarily mortgaged to the first defendant, the transaction of sale was cancelled and the same was endorsed on the sale deed. Thereafter the second defendant executed a fresh sale deed in favour of the first defendant and the latter has ever since continued in possession. The appellant filed the present suit on February 14, 1943, for recovery of possession of these properties from the first defendant on allegation that the first defendant was in management of the properties belonging to the joint family of Chakkayya and Rajanna and himself, that the sale deed in favour of Rajanna dated December 21, 1923, vested title to the suit properties in the joint family, that the first defendant had entered on the management of these properties also as manager on behalf of the joint family, that Rajanna died in 1930 as a minor, that the first defendant was discharged from the management in 1933, that he had not surrendered possession of the suit properties to the family, but was setting up a title to them in himself on the basis of a sale deed executed by the second defendant subsequent to the sale deed dated December 21, 1923 in favour of Rajanna, but that the said sale deed could confer no title on him, as the second defendant had sold the lands previously to Rajanna, and had no title which he could thereafter convey. It was further alleged that the plaintiff became a major some time in June 1940 and that the suit for possession was within three years of his attaining majority and not barred by limitation. The first defendant contested the suit. He pleaded that he was merely a jawan or servant 232 in the service of the family, that he was not in management of the joint family properties, that the suit lands had been usufructuarily mortgaged to him in 1916 for Rs. 800/ long before they were sold to Rajanna in 1923, that the sale in favour of Rajanna had been cancelled with his consent he having been paid back the consideration, that it was thereafter that the second defendant sold the properties to him, and that he had therefore acquired a good title to them, and that further as he had been in possession of the properties thereafter for over the statutory period in assertion of a title as owner, be had acquired title to them by prescription and that the suit was barred by limitation. He denied that Rajanna was a minor at the relevant dates as stated in the plain. On these pleadings the District Munsiff framed the following issues (1) Whether according to the suit (plaint), the suit lands have been sold by defendant No. 2 in favour of Padma Rajanna through registered sale deed dated 17th Bahman 1334 F (corresponding to 21st Dec. 1923) ? (2) Whether as stated by the plaintiff in his suit. , the family of the plaintiff and Padma Rajanna was joint ? And whether on account of the death of the said Rajanna, the plaintiff is entitled to the suit lands ? (3) Whether the defendant No. 2 has executed the sale deed dated 3 Farwardi 1334 F (corresponding to 4th February 1925 AD) and what is its legal effect on the sale deed dated 17th Bahman 1334 F. (corresponding to 21st December 1923) ? (4) Whether at the time of the execution of the sale deed dated 3rd Farwardi 1334 F (21. 12. 1923) the plaintiff was minor? And whether this suit is within limitation ? 233 To what relief are the parties entitled to ? The learned District Munsiff, Nirmal, who tried the suit held that as the endorsement of tHE cancellation of the sale deed in favour of Rajanna was unregistered, no title passed to the second defendant by reason of that endorsement and that accordingly the sale by him in favour of the first defendant conferred no title on him and further that the suit had been instituted within three years of the plaintiff 's attaining majority and that it was in time and so he decreed the suit. Against this Judgment and decree there was an appeal by the respondents to the Additional District Court of Adilabad, which held that the plaintiff had not established that he had attained majority within three years of the suit and on the finding the appeal was allowed. The appellant took the matter in second appeal to the High Court of Hyderabad which agreeing with the District Judge, held that the suit was instituted more than three years after the plaintiff had attained majority and dismissed the appeal. It is against this Judgment that the present appeal by special leave has been filed. The first contention that is urged on behalf of the appellant is that the finding that the plaintiff had attained majority more than three years prior to the suit was erroneous. But there are concurrent findings on what is a question of fact. and we see no sufficient reason to differ from them. The contention strongly urged by Mr. Gopal Singh in support of the appeal is that the first defendant bad been put in management of all the properties belonging to the plaintiff 's family and that having entered into the possession of the suit lands as manager on behalf of the family, it was not open to him 'to set up a title by adverse possession, unless he first surrendered possession of 234 the properties. On this point the learned Judges of the High Court held that there was no satisfactory proof that the first defendant had been in management of the properties as agent of the plaintiff and his family. The contention of the appellant is that there is a large body of evidence in support of the allegations in the plaint that the first defendant was not a mere servant but manager of the properties, that he had not gone into the box and denied them and that under the circumstances it must be held that he entered into possession of the properties as manager and it was not competent for him to set up a claim by adverse possession. The respondent argues that he was merely a jawan in the service of the family of appellant and that he had nothing to do with the management of the properties and that as there was no evidence worth the name in support of the allegations in the plaint, there was no need for him to enter into the box and give evidence that he was not in management of the land%. If the fact of this appeal turned on a determination of this question, we should. on the materials before us, feel considerable difficulty in agreeing with the decision of the learned Judges. The failure of the first defendant to go into the box would have been sufficient to shift the burden of proving that he was not the manager on to him, Vide Murugesam Pillai vs Manickavasaka Pandara(1) and Guruswami Nadar vs Gopalaswami Odayar (2). But then it is pointed out by the respondent that the suit lands had come into his possession under a usufructuary mortagage executed by the second defendant in 1916, that there was no allegation that this mortagage was obtained by him while he was the manager of the family properties or on (1) [1917] L.R. 44 I.A. 98. (2) Mad. 235 behalf of the family, and that when once his possession has been traced to the usufructuary mortgage of 1916, there could be no question thereafter of his having entered into possession of the properties as manager on behalf of the family. Before us the appellant did not dispute the truth of the usufructuary mortgage in favour of the first respondent nor did he contend that in taking that mortgage the first defendant acted on behalf of the family. Such a contention would be untenable as at that time Chakkayya the father of the plaintiff and the manager of the joint family was alive. That being so the question whether the first defendant is precluded as manager from acquiring title by adverse possession does not arise for decision because he entered into possession of the properties in his own right as usufructuary mortgagee. On the finding reached above that the first defendant entered into possession of the properties as usufructuary mortgagee in 1916, the question is what are the rights of the appellant. On the basis of the sale deed by the second defendant in favour of Rajanna he would be entitled to redeem the mortgage. But the present suit is not one for redemption of the mortgage but for ejectment. and that by itself would be a ground for dismissal of the suit. But in view of the fact that this litigation had long been pending, we consider it desirable to decide the rights of the parties on the footing that it is a suit to redeem the usufructuary mortgage, without driving the parties to a separate action. We have now to consider the defence of the first defendant to the suit, treating it as one for redemption. Now the contention of Mr. Ranganathan Chetty for the respondent Is that he had been in possession of the properties as owner ever since 1923 when the second defendant sold them to him, that he bad thereby acquired a prescriptive title to them, and that the right of the appellant to 236 redeem was thereby extinguished. It is not disputed that when a person gets into possession of properties as mortgagee, he cannot by any unilateral act declaration of his prescribe for a title by adverse possession against the mortgagor, because in law his possession is that of the mortgagor. But what is contended is that if the mortgagor and mortgagee subsequently enter into a transaction under which the mortgagee is to hold the properties thereafter not as a mortgagee but as owner that would be sufficient to start adverse possession against the mortgagor if the transaction is for any reason inoperative under the law. This contention, in our opinion, is well founded. Though there was at one time a body of judicial opinion that when a person enters into possession as a mortgagee he cannot under any circumstances acquire a title by prescription against the owner, the law is now fairly well settled that he can do so where there is a change in the character of his possession under an agreement with the owner, vide Kanda Sami Pillai vs Chinnabba (1). Now the question is was there such an arrangement ? The contention of the respondent is that the agreement between Rajanna and the two defendants under which Rajanna received back the sale consideration and made an endorsement cancelling the Bale followed, as part of the transaction, by the sale of the properties by the second defendant to the first defendant would be sufficient to start adverse possession. The endorsement of cancellation on the back of the sale deed in favour of Rajanna dated December 21, 1923, has been held, as already stated, to be inadmissible in evidence as it is not registered. The result of it is only that there was no retransfer of title by Rajanna to the second defendent, and the family would in consequence continue to be the owner, and that is why the appellant is (1) Mad. 253. 237 entitled to redeem. But the endorsement taken along with the sale deed by the second defendant in favour of the first defendant is admissible in evidence to show the character of possession of the latter. Vide Varatha Pillai vs Jeevanathammal (1). And that was clearly adverse to the owners. The answer of the appellant to this contention is that Rajanna himself was a minor at the time when this arrangement is stated to have taken place and that in consequence no title by adverse possession can be founded on it. We agree that if Rajanna was a minor when he entered into this arrangement that would not operate to alter the character of possession of the first defendant as mortgagee. The respondent contended that there could be adverse possession against a minor in certain circumstances, and relied on the decision in Sitharama Raju vs Subba Raju(2), in support of this position. That is not questioned, but the point for decision is whether possession lawful at the inception can become adverse under an arrangement entered into by a minor. Now a minor is in law incapable of giving consent, and there being no consent, there could be no change in the character of possession, which can only be by consent,. and not by any unilateral act. Therefore the crucial point for determination is whether at the time of the cancellation of the sale deed dated December 21, 1923, Rajanna was minor or major. According to the respondent he was a major and there is evidence also on record in support of this contention. According to the appellant Rajanna was a minor at that time and he died a minor in 1930. On this disputed question of fact there has been neither an issue framed nor evidence adduced. Under the circumstances we think it desirable that the matter should be remanded to the Court of District Munsiff for a fresh inquiry on this question. The plaintiff should (1) [1918] L.R. 46 I.A. 285. (2) Mad. 361. 238 on remand be required to suitably amend the plaint so, as to convert the suit into one for redemption of the usufructuary mortgage of the year 1916. The first defendant will then file his written statement in answer thereto. An issue will be framed whether Rajanna was a major at the time when the sale deed was cancelled. If it is held that he wag a major then the possession of the first defendant thereafter would be adverse and on the findings given by the Courts below the suit will have to be dismissed as barred by limitation. But if it is held that Rajanna was then a minor, then there would be no question of adverse possession and the plaintiff would be the entitled to redeem the mortgage. The decree of the lower court is accordingly set aside and the matter remanded to the Court of the District Munsiff for fresh disposal as stated above. Costs incurred throughout in all the Courts will abide the result. Case remanded.

In 1961 R executed a usufructuary mortgage of the suit lands in favour of M. Later, in 1923 he executed a sale deed of the same lands in favour of Rajanna, uncle of the appel lant. The appellant and Rajanna formed a joint Hindu family. As there was difficulty in obtaining possession by Rajanna, he R and M entered into an arrangement under which the sale deed was cancelled by making endorsements on the back of it and the lands were sold by R to M. Rajanna died in 1930 as a minor, and in 1943 the apppellant brought a suit against M for possession of the lands on the ground that the cancellation of sale deed of 1923 was ineffective as it was not registered and that accordingly the sale deed in favour of M passed no title to him. M pleaded adverse possession on account of the invalid sale in his favour. The suit for possession was dismissed on the ground that the appellant had filed the suit more than three years after attaining majority. Held, that though the suit for possession was time barred the appellant could maintain a suit for redemption if M had not prescribed title by adverse possession. M who had entered into possession as a mortgagee could acquire title by prescription if there was a change in the character of his possession under an agreement with the owner. The endorsement of cancellation on the sale deed taken along with the sale deed 230 in, favour of M were admissible to show the character of possession of M. This arrangement would clearly show that the possession of M was adverse provided Rajanna was not a minor and was capable of giving his consent. Though, in certain circumstances there could be adverse possession against a minor, possession lawful at the inception could not become adverse under an arrangement with a minor. A minor was in law, incapable of giving consent, and there being no consent, there could be no change in the character of possession which could only be by consent and not by unilateral action. Kanda Sami Pillai vs Chinnabba Mad. 253 and Varatha Pillai vs Jeevarathnammal (1918) L R. 46 I.A. 285, relied on. Sitharama Raju vs Subba Raju, Mad. 361, referred to.

Appeal No. 2339 of 1968. (Appeal by Special Leave fro.m the Judgment and Order dated the 27 3 1968 of the Allahabad High Court in Second Appeal No. 2352 of 1963). G.N. Dikshit, and O.P. Rana, for the appellant. E.C. Agrawala, for the respondent. The Judgment of the Court was delivered by SHINGHAAL, J. Respondent Nawab Hussain was a confirmed SUbInspector of Police in Uttar Pradesh. An anonymous complaint was made against him and was investigated by Inspector Suraj Singh who submitted his report to the Super intendent of Police on February 25, 1954. Two cases were registered against him under the Prevention of Corruption Act and the Penal Code. They were also investigated by Inspector Suraj Singh, and the respondent was dismissed from service by an order of the Deputy Inspector General of Police dated December 20,1954. He filed an appeal, but it was dismissed on April 17, 1956. He; then filed a writ petition in the Allahabad High Court for quashing the disci plinary proceedings on the ground that he was not afforded a reasonable opportunity to meet the allegations against him and the action taken against him was mala fide. It was dismissed on October 30, 1959, ' The respondent then filed a suit in the court of Civil Judge, Etah, on January 7, 1960, in which he challenged the order of his dismissal on the ground, inter alia, that he had been appointed by the Inspector General of Police and that the Deputy Inspector General of Police was not competent to. dismiss him by virtue of the provisions of article 311 (1) of the Constitu tion. The State of Uttar Pradesh traversed the claim in the. suit on several grounds, including ' the plea that the suit was barred by res judicata as "all the matters in issue in this case had been raised or ought to have been raised both 430 in the writ petition and special appeal. " The trial court dismissed the suit on July 21, 1960, mainly on the ground that the Deputy Inspector General of Police would be deemed to be the plaintiffs appointing authority. It however held that the suit was not barred by the principle of res judica ta. The District Judge upheld the trial court 's judgment and dismissed the appeal on February 15, 1963. The respond ent preferred a second appeal which has been allowed by the impugned judgment of the High Court dated March 27, 1968, and the suit has been decreed. The appellant State of Uttar Pradesh has therefore come up in appeal to this Court by special leave. The High Court has taken the view that the suit was not barred by the principle of constructive res judicata and that the respondent could not be dismissed by an order of the Deputy Inspector General of Police .as he had been appointed by the Inspector General of Police. As we have reached the conclusion that the High Court committed an error of law in deciding the objection regarding the bar of res judicata, it will , not be necessary for us to examine the other point. The principle of estoppel per rem judicatam is a rule of evidence. As has been stated in Marginson vs Blackburn Borough council,(1) it may be said to be "the broader rule of evidence which prohibits the reassertion of a cause of action." This doctrine is based on two theories: (i) the finality and conclusiveness of judicial decisions for the final termination of disputes in the general interest of the community as a matter of public policy, and (ii) the inter est of the indidual that he should be protected from multi plication of litigation. It therefore serves not only a public but also a private purpose by obstructing the reopen ing of matters which have once been adjudicated upon. It is thus not permissible to obtain a second judgment for the same civil relief .on the same cause of action, for other wise the spirit of contentiousness may give rise to con flicting judgments of equal authority, lead to multiplicity of actions and bring the administration of justice into disrepute. It is the cause of action which gives rise to an action, and that is why it is necessary for the courts to recognise that a cause of action which results in a judgment must lose its identity and vitality. and merge in the judg ment when pronounced. It cannot therefore survive the judgment, or give rise to another cause of action on the same facts. This is what is known as the general principle of res iudicata. But it may be that the same set of facts may give rise to two or more causes of action. If in such a case a person is allowed to choose and sue upon one cause of action at one time and to reserve the other for subsequent litigation, that would aggravate the burden of litigation. Courts have therefore treated such a course of action as an abuse of its process and Somervell L.J., has answered it as follows in Greenhalgh vs Mallard(2) . "I think that on the authorities to which I will refer it would be accurate to say that res judicata for this purpose is (1) at p. 437. (2) at p, 257. 431 not confined to the issues which the court is actually asked to decide, but that it covers issues or facts which are so clearly part of the subject matter of the litigation and so clearly could; have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in re spect of them. " This is therefore another and an equally necessary and efficacious aspect of the same principle, for it helps in raising the bar of res judicata ,by suitably construing the general principle of subduing a cantankerous litigant. That is why this other rule has .sometimes been referred to as constructive res judicata which, in reality, is an aspect or amplification of the general principle. These simple but efficacious rules of evidence have been recognised for long, and it will be enough to refer ' to this Courts decision in Gulabchand Chhotalal Parikh vs State of Bombay(1) for the genesis of the doctrine and its develop ment over the years culminating in the present section 11 of the Code of Civil Procedure, 1908. The section, with its six explanations, covers almost the whole field, and has admirably served the purpose of the doctrine. But it relates to suits and former suits, and has, in terms, no direct application to a petition for the issue of a high preroga tive writ. The general principles of res judicata and ,constructive res judicata have however been acted upon in cases of renewed applications for a writ. Reference in this connection may be made to Ex Parte Thompson(2). There A.J. Stephens moved for a rule calling upon the authorities concerned to show cause why a mandamus should not issue. He obtained a rule nisi, but it was discharged as it did not appear that there had been a demand and a refusal. He applied again saying that there had been a demand and a refusal since then. Lord Denman C.J., observed that is Stephens was making an application which had already 'been refused, on fresh materials, he could not have "the Same application repeated from time to time" as they had "often refused rules" on that ground. The same view has been taken in England in respect of renewed petition for certiorari, quo warranto and prohibition, and, as we shall show, that is also the position in this country. We find that the High Court in this case 'took note of the decisions this Court in L. Janakimma lyer and others vs P. M. Nilakanta lyer and others(3), Devilal Modi vs Sales Tax Officer, Ratlam and others(4) and Gulabchand Chhotalal Parikh vs State of Bombay (supra) and reached the following conclusion : "On a consideration of the law as laid down by the Supreme Court in ,the above three eases I am inclined to. agree with the alter native argument of Sri K.C. Saxena, learn (1) ; (2) 6 Q.B. 720. (3) [1962] Supp. 1 S.C.R. 206. (4) ; 432 ed counsel for the plaintiff appellant, that the law as declared by the Supreme Court in regard to the plea of res judicata barring a subsequent suit on the ground of dismissal of a. prior writ petition under Article 226 of the Constitution is that only that issue between the parties will be res judicata which was raised in the earlier writ petition and was decided. by the High Court after contest. Since no plea questioning the validity of the dismissal order based on the incompetence. of the Deputy Inspector General of Police was raised in the earlier writ petition filed by the plaintiff in the High Court: under Article 226 of the Constitution and the parties were never at issue on it and the High Court never considered or ' decided it. I think it is competent for the plaintiff to raise such a plea in the subsequent 'suit and bar of res judicata will not apply. " We have gone through these cases. Janakirama lyer 's was a case where the suit which was brought by defendants 1 to 6 was withdrawn during the pendency of the appeal in the High Court and was dismissed. In the mean time a suit was filed 'in a representative capacity under Order 1 rule 8 C.P.C. One of the defences there was the plea of res judicata. The suit was decreed. Appeals were filed against the decree, but the High Court dismissed them on the ground that there was no bar of res judicata When the matter came to this Court it was "fairly conceded" that" in terms section 11 of the Code of Civil Procedure could not apply because the suit was filed by the creditors defendants 1 to 6 in their repre sentative character and was conducted as a representative suit, and it could not be said that defendants 1 to 6 who were plaintiffs in the earlier suit and the creditors who had brought the subsequent suit were the same parties or parties who claimed through each other. It was accordingly held that where section 11 was thus inapplicable, ' it would not be permissible to rely upon the general doctrine of res judicata, as the only ground on which res judicata could be urged in a suit could be the provisions of section 11 and no other. That was therefore quite a different case ' and the High Court failed to appreciate that it had no bearing on the present controversy. The High Court then proceeded to consider this Court 's decisions in Devilal Modi 's case (supra) and Gulabchand 's case (supra). Gulabchand 's was the later of these two cases. The High Court has interpreted it to mean as follows : "It was held that the decision of the High Court on a writ petition under Article 226 on the merits on a matter after contest will operate as res judicata in a subse quent regular suit between the same parties with respect to the same matter. As appears from the report the above was majority view of the Court and the question whether the principles of constructive res judicata can be invoked by a party to the subsequent suit on the ground that a matter which might or ought to have been raised in the earlier proceedings was left open. The learned Judges took care to 433 observe that they made it clear that it was not necessary and they had not considered that the principles of constructive res judicata could be invoked by a party to the subse quent suit on the ground that a matter which might Or ought to have been raised in the earlier proceeding was not so raised therein. " As we shall show, that was quite an erroneous view of the decision of this Court ,on the question of constructive res judicata. It will help in appreciating the view of this Court correctly if we make a brief reference to the. earli er ' decisions in Amalgamated Coalfields Ltd. and others vs Janapada Sabha, Chhindwara(1) and Amalgamated Coalfields Ltd. and another vs Janapada Sabha, Chhindwara,(2) which was also a case between the same parties. In the first of these cases a writ petition was filed to challenge the coal tax on some grounds. An ' effort was made to canvass an addi tional ground, but that was not allowed by this Court and the writ petitton was dismissed. Another writ petition was filed to challenge the levy of the tax for the subsequent periods on grounds distinct and separate from those which were rejected by this Court. The High Court held that the writ petition was barred by res judicata 'because: of the earlier decision of this Court. The matter came up in appeal to this Court in the second case. The question which directly arose for decision was whether the principle of constructive res judicata was applicable to petitions under articles 32 and 226 of the Constitution and it was an swered as follows, "It is significant that the attack against the validity of the notices in the present proceedings is based on grounds different and distinct from the grounds raised on the earlier occasion. It is not as if the same ground which was urged on the earlier occasion is placed before the Court in another form. The grounds now urged are entirely distinct, and so, the decision of the High Court can be upheld only if the principle of constructive res judicata can be said to apply to writ petitions filed under article 32 or article 226. In our opinion, constructive res judica ta which is a special and artificial form of res judicata enacted by section 11 of the Civil Procedure Code should not generally be applied to writ petitions field under article 32 or article '226. We would be reluctant to apply this principle to the present appeals all the more because we are dealing with cases where the impungned tax liability is for different years. " It may thus appear that this Court rejected the application of the principle of constructive res judicata on the ground that it was a "special and artificial form of res judica ta" and should not generally be applied to writ petitions, .but the matter did not rest there. It again arose for consideration in Devilal Modi 's case (supra). Gajendragadkar, J. who had spoken for the court in the second case of Amalgamated Coalfields Ltd. spoke for the Court in that case also. The (1) ; (2) [1963]. Supp. 1. S.C.R. 172. 434 petitioner in that case was assessed to sales tax and filed a writ petition to challenge the assessment. The petition was dismissed by the High Court and he came in appeal to this Court. He sought to make some ' additional contentions in this Court, but was not permitted to do so. He. there fore filed another writ petition in the High Court raising ,those ' additional contentions and challenged the order of assessment for the same year. The High Court dismissed the petition on merits, and the case came up again to this Court in appeal. The question which specifically arose for consid eration was whether the principle of constructive res judicata was applicable to writ petitions of that kind. While observing that the rule of constructive res judicata was "in a sense a somewhat technical or artificial rule prescribed by the Code of Civil Procedure", this Court declared the law in the following terms, "This rule postulates that if a plea could have been taken by a party in a proc ceding between him and his opponent, he would not b0 permitted to take that plea against the same party in a subsequent proceeding which is based on the same cause of action; but basi cally, even this view is founded on the same considerations of public policy, because if the doctrine of constructive res judicata is not applied to writ proceedings, it would be open. to the party to take one proceeding after another an urge new grounds every time; and that plainly is inconsistent with consid erations of public policy to which we have just referred. " While taking that view, Gajendragadkar C.J., tried to ex plain earlier decision in Amalgamated Coalfields Ltd. vs Janapada Sabha, Chhindwara(1) and categorically held that the principle of constructive res judicata was applicable to writ petitions also. As has been stated, that case was brought to the notice of the High Court, but its signifi cance appears to have been lost because of the decisions, in Janakirama Iyer and others vs P.M. Nilakanta lyer (supra) and Gulabchand 's ease (supra). We have made a reference to the decision in Janakirama Iyer 's case which has no bearing on the ' present controversy, and we may refer to the deci sion in Gulabchand 's case as well. That was a case where the question which specifically arose for consideration was whether a decision of the High Court on merits. on a certain matter after contest, in a writ petition under article 226 of the Constitution, operates as res judicata in a regular suit with respect to the same matter between the same par ties. After a consideration of the earlier decisions in England and in this country, Raghubar Dayal J., who spoke for the majority of this Court, observed as follows, These decisions of the Privy Council well lay down that the provisions of section 11 C.P.C. are not exhaustive with respect to an earlier decision in a proceeding operating as res judicata in a subsequent suit with respect ,to the same matter inter parties, and do not preclude the. application to regular suits of the general principles of res judicata based on public policy ' and applied .from ancient. times. " (1) [1963] Supp. 1 S.C.R. 172. 435 He made a reference to the decision in Daryao and others vs The State of U.P. and others(1) on the question of res judi cata and the decisions in Amalgamated Coalfields Ltd. and others vs Janapada Sabha, Chhindwara(2) and Devilal Modi 's case (supra) and summarised the decision of the Court as follows : "As a result of the above discussion, we are of opinion that the provisions of section 11 C.P.C. are not exhaustive with respect to an earlier decision operating as res judicata between the same parties on the same matter in controversy in a subsequent regular suit and that on the general principle of res judicata, any previous decision on a matter in contro versy, decided after full contest or after affording fair opportunity to the parties to prove their case by a Court competent to decide it, will operate as res judicata in a subsequent regular suit. It is not necessary that the Court deciding the matter formerly be competent to decide the subsequent suit or that the former proceeding and the subsequent suit have the same subject matter. The nature of the former proceeding is immaterial. " He however went on to make the following further observa tion, "We may make it clear that it was not necessary, and we have not considered, wheth er the principles of constructive res judicata can be invoked by a party to the subsequent suit on the ground that a matter which might or ought to have been raised in the earlier proceeding was not so, raised therein. " It was this other observation which led the High Court to take the view that the question whether the principle of constructive res judicata could be invoked by a party to a subsequent suit on the ground that a plea which might or ought to have been raised in the earlier proceeding but was not so raised therein, was left open. That in turn led the High Court to the conclusion that the principle of construc tive res judicata could not be made applicable to a writ petition, and that was why it took the view that it was competent for the plaintiff in this case to. raise an additional plea in the suit even though it was available to him in the writ petition which was filed by him earlier but was not taken. As is obvious, the High Court went wrong in taking that view because the law in regard to the applicability of the principle of constructive res judicata having been clearly laid down in the decision in Devilal Modi 's case (supra), .it was not necessary to reiterate it in Gulabchand 's case (supra) as it did not arise for consid eration there. The clarificatory observation of this Court in Gulabchand 's case (supra) was thus misunderstood by the High Court in observing that the matter had been "left open" ' by this Court. It is not in controversy before us that the respondent did not raise the plea, in the writ petition which had been filed in the High Court, that by virtue of clause (1) of article 311 of the Constitution he (1) ; (2) [1963] Supp. 1 S.C.R.172 436 could not be dismissed by the Deputy Inspector General of Police as he had been appointed by the Inspector General of Police. It is also not in controversy that that was an important plea which was within the knowledge of the re spondent and could well have been taken in the writ peti tion, but he contented himself by raising the other pleas that he was not afforded a reasonable opportunity to meet the Case against him in the departmental inquiry and that the action taken against him was mala fide. It was there fore not permissible for him to challenge his dismissal, in the subsequent suit, on the other ground that 'he had been dismissed by an authority subordinate to that by which he was appointed. That was clearly barred by the principle constructive res judicata and the High Court erred in taking a contrary view. The appeal is allowed, the impugned judgment of the High 'Court dated March 27, 1968, is set aside and the respond ent 's suit is dismissed. In the circumstances of the case, we direct that the parties shall pay and bear their own costs. P.B.R. Appeal allowed. 436SCI/77 2500 12 10 77 GIPF.

Although the joint recording of statements made by witnesses during an investigation is a contravention of section 161(3) of the Code of Criminal Procedure and must be disapproved, that by itself does not render the testimony given by such witnesses in court inadmissible. It is, however, for the court to decide whether it will rely on such testimony or attach any weight to it. Zahiruddin vs Emperor, (A.I.R. , applied. Baliram Tikaram vs Emperor, (A.I.R. and Magan lal Radhakishan vs Emperor, (A.I.R. , disapproved. Bejoy Chand Patra vs The State, (A.I.R. , ap proved. The court has power to substitute a charge under section 149 of the Indian Penal Code for a charge under section 34. Karnail Singh and others vs The State of Punjab, ([1954] S.C.R. 904)and Willie Slaney 's case, (Criminal Appeal No. 6 of 1955), referred to. Although section 342 of the Code of Criminal Procedure contem plates oral examination of the accused in court and though the practice of filing written statements is to be deprecated, the fact that the accused filed a statement instead of being examined is no ground for interference unless he is shown to have been prejudiced thereby. Consequently, in a case where the accused were put up for trial under section 302 read with section 34 of the Indian Penal Code, and the Additional Sessions Judge relying on the evidence of three of the prosecution witnesses whose statements during the investigation were recorded jointly in contravention of section 161(3) of the Code of Criminal Procedure, convicted and sentenced them to transportation for life and the High Court in appeal agreed with the findings of fact, but altered the conviction to one under section 326 read with section 149 of the Indian Penal Code, as also the sentence, their conviction was not liable to be set aside.

Appeal No. 124 of 1951. Appeal by Special Leave granted by His Majesty in Council, dated the 30th October, 1945, from the Judgment and Decree, dated the 12th July, 1944, of the High Court of Judicature at Lahore in Civil Regular Second Appeal No. 450 of 1942, against the Judgment and Decree, dated the 14th January, 1942, of the Court of the District Judge, Gurdaspur, in Appeal No. 91 of 1941, arising from the Judgment and Decree, dated 31st July, 1941, of the Court of Senior Subordinate Judge, Gurdaspur, in Suit No. 80 of 1940. G. section Vohra and Harbans Singh for the appellants. Achhru Ram (J. B. Dadachanji and R. N. Sachthey, with him) for respondents. 45 1954. April 1. The Judgment of the Court was delivered by GHULAM HASAN J. This is an appeal by special leave granted by the Privy Council against the judgment and decree dated July 12, 1944, of a Division Bench of the High Court at Lahore passed in second appeal confirming the dismissal of the appellants ' suit cone currently by the trial Court and the Court of the District Judge, Gurdaspur. The two appellants are admittedly the first cousins of the respondent, Harnam Singh, and belong to village Gillanwali, Tahsil Batala, District Gurdaspur. Gurmej Singh, respondent No. 2, is a collateral of Harnam Singh in the 8th degree. The appellants sued for a declaration that the deed of adoption executed by Harnam Singh on July 30, 1940, adopting Gurmej Singh was invalid and could not affect the reversionary rights of the appellants after the death of Harnam Singh. The appellant 's case was that under the Customary Law of Gurdaspur District applicable to the Gill Jats ,of village Gillanwali, Harnam Singh could only adopt a is near collateral" and Gurmej Singh being a distant collateral his adoption was invalid. The defence was a denial of the plaintiffs ' claim. Both the trial Judge and the District Judge on appeal held that the factum and the validity of the adoption were fully established. In second appeal Trevor Harries C. J. and Mahajan J. (as he then was) held that there was sufficient evidence of the factum of adoption as furnished by the deed and the subsequent conduct of Harnam Singh. They held that all that was necessary under the custom to constitute an adoption was the expression of a clear intention on the part of the adoptive father to adopt the boy concerned as his son and this intention was clearly manifested here by the execution and registration of the deed of adoption coupled with the public declarations and treatment as adopted son. Upon the legal validity of the adoption the High Court found that the answer to Question 9 of the Riwaj i am of Gurdaspur District of the year 1913 laying down that the adoption of "near collaterals only " was recognised was not mandatory. The High Court relied in support of their 46 conclusion on a decision of Tek Chand J. in Jowala vs Diwan Singh (1) and the Privy Council decision in Basant Singh vs Brij Raj Saran Singh (2). The first question regarding the factum of adoption need not detain us long. The deed of adoption, Exhibit D. 1, recites that Harnam Singh had no male issue who could perform his kiry a karam ceremony after his death, that Gurmej Singh had been brought up while he was an infant by his wife and that he had adopted him according to the prevailing custom. The recital continues that since the adoption he had been treating and calling Gurmej Singh as his adopted son. This fact was well, known in the village and the adoptee was en joying all rights of a son. He had executed a formal document in his favour in order to put an end to any dispute which might be raised about his adoption. As adopted son he made him the owner of all of his property. We are satisfied that there is ample evidence to sustain the finding on the factum of adoption. The main question which falls to be considered is whether under the terms of the Riwaj i am applicable to the parties, Gurmej Singh being a collateral of Harnam Singh in the 8th degree could be validly adopted. The custom in question is founded on Question 9 and its answer the Customary Law of the Gurdaspur District. They are as follows: " Question 9. Is there any rule by which it is required that the person adopted should be related to the person adopting ? If so, what relatives may be adopted ? Is any preference required to be shown to particular relatives ? If so, enumerate them in order of preference. Is it necessary that the adopted son and his adoptive father should be (1) of the same caste or tribe; (2) of the same got? Answer : The only tribes that recognised the adoption of a daughter 's son are the Sayyads of the Shakargarh and the Arains of the Gurdaspur Tahsil. The Brahmans of the Batals Tahasil state that only such of them as are not agriculturists by occupation recognize such adoption. The Muhamadan Jats of the (1) (2) I.L.R. 57 All 494. 47 Gurdaspur. Tahsil could not come to an agreement on this point. The remaining tribes recognise the adoption of War collaterals only. The right of selection rests with the person adopting. The Khatris, Brahmans and Bedis and Sodis of the Gurdaspur Tahsil, however, state that the nearest collaterals cannot be sperseded and selection should always be made from among them" It is contended for the appellants that the expression " near collaterals only " must be construed to mean a collateral up to the third degree and does not cover the case of a remote collateral in the 8th degree. The restriction as regards the degree of relationship of the adoptee, it is urged, is mandatory and cannot be ignored. The expression " near collaterals " is not defined by the custom. The relevant answer which we have underlined above gives no indication as to the precise import of the words " near collaterals. " The custom recorded in the Riwaj i am is in derogation of the general custom and those who set up such a custom must prove it by clear and unequivocal language. The language is on the face of it ambiguous and we can see no warrant for limiting the expression to signify collateral relationship only up to a certain degree and no further. We are also of opinion that the language used amounts to no more than an expression of a wish on the part of the narrators of the custom and is not mandator. If the intention was to give it a mandatory force, the Riwaj i am would have avoided the use of ambiguous words which are susceptible of a conflicting interpretation. The provision that the right of selection rests with the person adopting also detracts from the mandatory nature of the limitation imposed upon the degree of relationship. Though the adoption of what the custom describes as "near collaterals only" was recognized by the community of Jats, the right of selection was left to the discretion of the adopter. There is no meaning in conferring a discretion upon the adopter if he is not allowed to exercise the right of selection as between collaterals inter se. We are unable to read into the answer a restriction upon the choice of the adopter of any particular collateral however near in degree he may be, 48 In his valuable work entitled "Digest of Customary Law in the Punjab" Sir W.H. Rattigan states in paragraph 35 that "a sonless proprietor of land in the central and eastern parts of the Punjab may appoint one of his kinsmen to succeed him as his heir" and in paragraph 36 that "there is no restriction as regards the age or the degree of relationship of the person to be appointed". It appears to us that the basic idea underlying a customary adoption prevalent in the Punjab is the appointment of an heir to the adopter with a view to associate him in his agricultural pursuits and family affairs. The object is to confer a personal benefit upon a kinsman from the secular point of view 'unlike the adoption under the Hindu Law where the primary consideration in the mind of the adopter if a male is to derive spiritual benefit and if a female, to confer such benefit upon her husband. That is why no emphasis is laid on any ceremonies and great latitude is allowed to the adopter in the matter of selection. Mulla in his well known work on Hindu Law says: "It has similarly been held that the texts which prohibit the adoption of an only son, and those which enjoin the adoption of a relation in preference to a stranger, are only directory; therefore, the adoption of an only son, or a stranger in preference to a relation, if completed, is not invalid. In cases such as the above, where the texts are merely directory, the principle of factum valet applies, and the act done is valid and binding." (Page 541). We see no reason why a declaration in a Riwaj i am should be treated differently and the text of the answer should not be taken to be directory. However peremptory may be the language used in the answers given by the narrators of the custom, the dominant intention underlying their declarations which is to confer a temporal benefit upon one 's kinsmen should not be lost sight of. A number of cases have been cited before us to show that in recording the custom the language used was of peremptory nature and yet the Courts have held that 49 the declarations were merely directory and non compliance with those declarations did not invalidate the custom. In Jiwan Singh and Another vs Pal Singh and Another(1) Shah Din and Beadon JJ. held "that by custom among Randhawa Jats of Mauza Bhangali, Tahsil Amritsar, the adoption, by a registered deed, of a collateral in the 9th degree who is of 16 years of age is valid in the presence of nearer collaterals. " The adoption was objected to on the ground that the adoptee was a remote collateral and that he was not under the age of twelve at the time of the adoption as required by the Riwaj i am. The learned Judges held that the provision as regards the age was recommendatory and not of a mandatory character. In Sant Singh vs Mula and Others ) Robertson and Beadon Jj. held "that among Jats and kindred tribes in the Punjab, the general, though not 'the universal, custom is that a man may appoint an heir from amongst the descendants of his ancestor and that he need not necessarily appoint the nearest collateral. " This was a case where a distant collateral was preferred to a nearer collateral. The learned Judges expressed the opinion that the clause which points to the advisability of adopting from amongst near collaterals was nothing more than advisory. In Chanan ' Singh vs Buta Singh and Others(3), a case from Jullundur District, the question and answer were as follows : "Q. No. 71: Are any formalities necessary to constitute a valid adoption, if so, describe them. State expressly whether the omission of any customary ceremonies will vitiate the adoption ? A. . The essence of adoption is that the fact of adoption be declared before the brotherhood or other residents of the village. The usual practice is that the Baradari gathers together and the adopter declares in their presence the fact of the adoption. Sweets are distributed and a deed of adoption is also drawn up. If (1) 22 P.R. (2) 44 P.R. (3) A.I.R. 1935 Lah. 7 50 these formalities are not observed the adoption is not considered valid. " The adoption was challenged on the ground that there was no gathering of the brotherhood. The learned Judges (Addison and Beckett JJ.) held that it was immaterial whether there was or was not a gathering of the brotherhood at the time. It appears that the adopter had made a statement in Court acknowledging the appointment or adoption in question. The next day he celebrated the marriage of the boy as his son, and thereafter he looked after his education and allowed him to describe himself as his adopted son or appointed heir, and the boy lived with him as his son. The learned Judges held that the details given in the answers to questions in various Customary Laws were not necessarily mandatory but might be merely indicatory. In Jowala vs Dewan Singh(1) Tek Chand J. held "that an adoption of a collateral in the fourth degree, among Jats of Mauza Hussanpur, Tahsil Nakodar, District Jullundur, is valid although nearer collaterals are alive." He also held "that an entry in the Riwaj i am as to the persons who can be adopted is merely indicatory". In a case from Delhi reported in Basant Singh and Others vs Brij Raj Saran Singh(2)the Privy Council held "that the restriction in the Riwaj i am of adoption to persons of the same gotra is recommendatory and a person of a different gotra may be adopted. " Counsel for the appellants frankly conceded that he could cite no case where the declarations governing customary adoptions were held to be mandatory. Whether a particular rule recorded in the Riwaj i am is mandatory or directory must depend on what is the essential characteristic of the custom. Under the Hindu Law adoption is primarily a religious act intended to confer spiritual benefit on the adopter and some of the rules have, therefore, been held to be mandatory and compliance with them regarded as a condition of the validity of the adoption. On the other hand, under the (1) (2) 57 All, 494. 51 Customary Law in the Punjab, adoption is secular in character, the object being to appoint an heir and the rules relating to ceremonies and to preferences in selection have to be held to be directory and adoptions made in disregard of them are not invalid. There is no substance in the appeal and we dismiss it with costs. Appeal dismissed.

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

Appeals Nos. 663 and 664 of 1966. Appeals by special leave from the judgment ,and order dated January 2, 1964 of the Allahabad High Court in I.T. Reference No. 244 of 1959. S.C. Manchanda and J.P. Goyal, for the appellant (in both the appeals ). D. Narsaraju, T. A. Ramachandran and 8. P. Nayar, for the respondent (in both the appeals). The Judgment of the Court was delivered by Grover, J. In these appeals by special leave the facts may be stated: The assessee at the material time was a Hindu Undivided Family. The relevant assessment year is 1944 45 corresponding to the accounting year ending on Diwala Samvat 2,000 (October 28, 1943). On February 20, 1945 the Income 802 tax Officer made an assessment on a total income of Rs. 26,800 odd which comprised income from the share in the business of Kasi Iron Foundry and the income from the property. This order was revised under section 34 of the Indian Income tax Act, 1922 hereinafter called the Act. In the revised assessment order the total income of the assessee was computed at Rs. 71,731. In this amount a sum of Rs. 40,000 was included as income from undisclosed sources. This assessment was challenged before the Appellate Tribunal and was set aside on the ground that there had not been proper service of a notice under section 34. A fresh notice under section 34 was issued in October 1951. On October 16, 1952 a revised assessment order was passed and the total income of the assessee was computed at Rs. 85,817 which included a sum of Rs. 49,696 as income from undisclosed sources. On March 31, 1953 the Income tax Officer served on the assessee another notice under section 34 in respect of the same assessment year 1944 45. On March 18, 1954 a revised assessment was made in which was included a sum of Rs. 32,000 as the assessee 's income from undisclosed sources, being the alleged investment of the assessee in the Satpat and bamboo. business prior to February 18, 1944. The total income of the assessee was computed at Rs. '1,17,817. The income from undisclosed source which came to be included in this computation amounted to Rs. 81,696. The assessee filed appeals against the assessment order dated October 16, 1952 contending inter alia that there had been no escapement of any income and that in any case the first revised assessment dated October 16, 1952 was barred by time under section 34(1)(b) of the Act as the provisions of section 34(1)(a) did not apply. The second revised assessment was challenged on the ground, inter alia, that the Income tax Officer had no jurisdiction to issue the notice under section 34 as the material facts necessary for making the assessment were fully and truly disclosed to the Income tax Officer during the assessment proceedings for the year 1945 46. That appeal was also dismissed. Thereafter the assessee filed two appeals before the Income Tax Appellate Tribunal. Before the tribunal it was contended by the assessee that the first revised assessment dated October 16, 1952 was barred by limitation and that the period of limitation was four years under section 34(1)(b) and not eight years under section 34(1)(a). The second revised assessment was challenged on the ground that the Income tax Officer had no jurisdiction to issue a notice and make assessment under section 34. It was argued that the investment, expenditure and the profits earned from the business of Sarpat and bamboo had been duly shown. As regards the first revised assessment the tribunal held that the income of the assessee from the firm Rajnarain Durga Prasad had escaped assessment by failure on the part of the assessee to disclose fully and truly all the facts necessary for making the assessment and that the provisions of 803 section 34( 1 )(a) were attracted and therefore the period of limitation was eight years and not four years. With regard to the second revised assessment it was urged that all the materials necessary for making the assessment were before the Income tax Officer and by issuing a notice under section 34 the Income tax Officer had changed his opinion and a mere change of opinion did not authorise the Income tax Officer to take recourse to section 34. The tribunal disposed of the argument with regard to the second revised assessment in the following words: "The Income tax Officer who made the assessment for 1945 46 might have had all the accounts of the business in Satpat and bamboos before him and might have known the investments made by the assessee in that business;. The question for consideration is whether the Income tax Officer had reason to believe that by the failure on the part of the assessee to fully and truly disclose all the material facts necessary for the making of the assessment for the year 1944 45, income had escaped assessment. Surely, even if the Income tax Officer had known that the investment made by the assessee in that business were his revenue income, he could not have proceeded u/s 34 because the income could not have been assessed in the assessment year 1945 46. It could be assessed in the assessment year 1944 45. The income appearing by way of deposits in the Sarpat business could be assessed only as income from some undisclosed source and the previous year for income from undisposed source for which the assessee had not elected any previous year would be the financial year. The investments were made in the financial year relevant for the assessment year 1944 45 and were not made in the financial year relevant for the assessment year 1945 46. The Income tax Officer had, therefore, no choice but to resort to section 34 of the Act. " The tribunal, however, found as is apparent from its 'order dated March 21, 1957 that the unexplained investment which was really the income of the assessee from undisclosed source was Rs. 27,875 instead of Rs. 32,000. The tribunal called for a report on certain other matters with which we are not concerned and which were disposed of by subsequent order dated August 31, 1958. On a petition filed under section 66(1) of the Act the tribunal referred the following question to the High Court for decision: "Whether. on the facts and in the circumstances of the ease the revised assessments under section 34 dated 16 10 1952 and 18 3 1954 are legal and valid". 804 As regards the first revised assessment the High Court was of the view that even if the provisions of section 34(1)(b) were to apply the assessment could not be said to be barred by time nor could it be said to be barred under section 34(1)(a) as the assessee had failed to show that the income tax Officer was aware that the assessee had received income from its share in the firm. The question was consequently answered in the affirmative so far as the assessment order dated October 16, 1952 was concerned. The assessment order of March 18, 1954 was challenged before the High Court on the ground that there was no default on the part of the assessee attracting applicability of section 34(1)(a). It was noticed by the High Court that although the Income tax Officer had, during the proceedings for the assessment year 1945 46, made an enquiry about the investments in Sarpat and bamboo business no action had been taken in those assessment proceedings against the assessee but it could not be presumed that he had accepted the explanation of the assessee. Having held that the investment represented income from undisclosed source he was bound to treat it as income which accrued in December 1943 when it was invested, being the income during the financial year 1943 44 and therefore it had to be taxed in the assessment year 1944 45. The question referred was answered in the affirmative with regard to the assessment order of March 18, as well. The argument of Mr. S.C. Manchanda in respect of the assessment made in October 1952 is that there was no failure on the part of the assessee to disclose material facts. It is submitted that the share income of the assessee 's son from the firm Raj Narain Durga Prasad could not be shown in the assessee 's return as the accounting period of that firm closed on April 1, 1944 which was well after the close of the previous year of the assessee which ended on October 28, 1943. is said that neither the income of the firm nor the share of the assessee 's son had been determined till then and it was not possible for the assessee to show the said income in his return. Moreover the Income tax 'Officer had knowledge of the assessee 's interest in the firm Ramnarain Durga Prasad on May 12, 1947 when the assessment for the year 1945 46 was made. Thus the escapement, if any, has not resulted from any default or omission on the part of the assessee. The High Court had disposed of this contention by observing that there was no finding in the order of the appellate tribunal that the share of the income from the said firm was not known at the time when the return was filed. It was admitted that the return filed by the assessee did not disclose that the assessee enjoyed income from his share in that firm. It was no longer open to the assessee to press this contention particularly when the burden lay upon him to show that the Income tax Officer was aware that the assessee received income from his share in that firm. Mr. Manchanda has not been able to persuade us 805 to take a different view in the matter. The real challenge. on behalf of the assessee before us has been to the amount which was included as income from undisclosed source in the revised assessment order made in March 1954 being the capital which had been invested in the business of Sarpat and bamboos. This amount, as found by the tribunal, came to Rs. 27,000 odd and had been invested in partnership with Ram Narain Durga Prasad for the business of the supply of Sarpat and bamboo. to the Government, the investment having been made between December 8, 1943 and February 17, 1944. According to Mr. Manchanda no income from the aforesaid business could be shown in the return for the year 1944 45 because the business itself had been commenced after the close of the relevant previous year which ended on October 28, 1943. For the assessment year 1945 46, however, a sum of Rs. 1640 was assessed as the assessee 's income in this joint venture. During the course of the assessment proceedings for the year 1945 46 the assessee is stated to have filed an affidavit before the Income tax Officer giving details in respect of the Sarpat and bamboo business. Mr. Manchanda has invited our attention to the definition of "previous year" as contained in section 2( 11 ) of the Act at the relevant period and has pointed out that the Sarpat and bamboo business did not fall within the year up to which accounts had been made i.e. October 28, 1943. It was verily impossible, says Mr. Manchanda, to have shown in the return any amount relating to Sarpat and bamboo business. The method to be adopted in such a situation has now been settled by a long course of decisions In Commissioner of Income tax, Bihar & Orissa vs P. Darolia & Sons(1) the facts were that for the assessment year 1947 48 the accounting year of the assessee was the Diwali year corresponding to November 4, 1945 to October 24, 1946. The Income tax Officer rejected the books of the assessee and ascertained his income from the business at an estimate for that year. He also added to this estimate certain cash credits in its account books entered on the 22nd and 27th of November, 1945, as secret profits from undisclosed sources which dates were after the end of the accounting year. It was found that the amount included as secret profits from undisclosed source was not from the business of the assessee but from separate sources and no account was maintained by the assessee in respect of the amount nor had it exercised any option as regards the previous year with respect to that source. It was held that in the aforesaid circumstances the previous year of the assessee in respect of its undisclosed source of income was the financial year ending on March 31, 1946. In Bishan Dutt vs Commissioner of Income tax U.P. & V.P.(2) the previous year of the assessee for he assessment year 1945 46 in respect of his cloth business was July 4, 1943 to June 26, 1944. In the account books of that busi (1) (2) 39 I.T.R. 534. CI/69 5 806 ness for that period a sum of Rs. 9,800 appeared as credit in the suspense account on September 2, 1943. The Income tax Officer, in the absence of a satisfactory explanation, held this amount to be income from undisclosed source. The view expressed by the High Court was that there being nothing to show that any accounts in respect of the undisclosed source of income existed or were maintained or that the assessee exercised any option under section 2(11)(i)(a) in respect of such accounts, the only course. open to the department was to tax his income from undisclosed source on the basis of the financial year being the previous year. On that basis the amount could be taxed only for the assessment year 1944 45 and not for the assessment year 1945 46. On similar facts the Calcutta High Court expressed the same view in Jethmal vs Commissioner of Income Tax(1). By now it appears to be well settled and no decision even of a High Court has been cited to the contrary that in such circumstances the only possible way in which such undisclosed income can be assessed or reassessed is to make the assessment during the ordinary financial year. Mr. Manchanda has called our attention to section 68 of Income tax Act, 1961 according to which where any sum is found credited in the books an assessee maintained for any previous year and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Income tax Officer, satisfactory the sum so credited may be charged to income tax as the income of the assessee of that previous year. It is, however, obvious that even under the provisions embodied under the new Act it is only when any amount is found credited in the books of an assessee that the section will apply. On the other hand if the undisclosed income was found to be from some unknown source or the amount represents some concealed income which is not credited in his books the position would probably not be different from what was laid down in the various cases decided when the Act was in force. The last argument of Mr. Manchanda is that in order to attract the applicability of section 34(1)(a) of the Act the omission or the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment must be found to be wailful and deliberate. In support of his submission he has relied on P.R. Mukherjee vs Commissioner of Income tax, West Bengal(2) in which it was observed that a person cannot be said to have omitted or failed to disclose something when, of such thing, he has no, knowledge and that a similar implication is carried by the word "disclose" because one cannot be expected to disclose a thing unless it is a matter which he know or knows of. It is altogether unnecessary to decide whether this view is sustainable (1) (2) 30 I.T.R. 535. 807 or not. At any rate, in the present case, the assessee had failed to show that he did not know and was not aware of the true position in respect of the sum of Rs. 27,000 odd which was invested in the Sarpat and bamboo business. For all these reasons the appeals fail and are dismissed with costs. G.C. Appeals dismissed.

The assessee a Hindu undivided family ( ) was assessed in 1944 45 for the income of its previous year ending October 30, 1943. The income shown in the return was from iron foundry business and property, and income from these sources only was taken into account in the original assessment. The assessee through a son of the karta was also a partner in the firm Raj Narain Durga Prasad. The accounting year of the firm ended on April 1, 1944 and the assessee 's return,did not show any income as share of profit in the firm nor was mention made in the return of the existence of the partnership. In December, 1943 the assessee along with Raj Narain Durga Prasad started a joint venture of supplying Sarpat and bamboo to the Government. Between the commencement of the joint venture and February 18, 1944, the assessee made investments in the Sarpat and bamboo business to the tune of Rs. 27,000 (as found by the Tribunal). The Income tax Officer, when he discovered the assessee 's connection with the firm Rajnarain Durga Prasad gave a notice under section 34 of the Indian Income tax Act, 1922 and made in 1952 a revised assessment for 1944 45, assessment year, in which he added the income of the assessee as found in the books of the firm to the income already assessed. Later, he discovered the assessee 's investments in the Sarpat and bamboo business and in 1954 he made another revised assessment for the assessment year 1944 45 treating the said investments as representing income from undisclosed sources. The assessee challenged both the assessments on the ground that section 34(1)(a) was not attracted. The assessee 's plea was rejected by the Appellate Assistant Commissioner and the Tribunal. The High Court in 'reference also held against the assessee who by special leave appealed to this Court. The contentions on behalf of the appellant were; (i) As regards income from firm Rajnarain Durga Prasad it was submitted that the accounting year of that firm ended on April 1, 1944 which was well after the close of the assessee 's previous year which ended on October 28, 1943. Neither the. income of the firm, nor the share of assessee had been determined till then, and it was not possible for the assessee to show the said income in the return for 1944 45. Moreover the full facts came to the knowledge of the Income tax Officer when the assessment for the next assessment year was made. Therefore section 34(1)(a) was not attracted. (ii) As regards investments in the Sarpat and bamboo business the assessee submitted that the business itself commenced in December, 1943 and having regard to the definition of previous year ' in section 2(11) as it existed at the relevant time, the income from this source could not be shown as income of his previous year which ended on October 28. The income from this source was duly disclosed to the Income tax Officer and was actually assessed in 1945 46. Therefore in the case of the 1954 revised assessment also 'section 34(1)(a) was not attracted. 801 HELD: (i) The High Court had rightly observed in dealing with the 1952 assessment that there was no finding of the appellate tribunal that the share of income from the firm was not known at the time when the return was filed. In view of the admitted fact that the return filed by the assessee did not disclose the fact of partnership in the firm Raj Narain Durga Prasad it was no longer open to the assessee to urge that section 34(1)(a) was not attracted, particularly when the burden lay upon the assessee to show that the Income tax Officer was aware of the income received from the firm. [804 G H] (ii) It is now weD settled that the only way in which income from undisclosed sources can be taxed is to take it as the income of the relevant financial year. Therefore the investments made by the assessee in Sarpat and bamboo business between December, 1943 and February, 1944 were rightly taxed by the Income tax Officer in the year 1944 45. The disclosure of the investments by assessee in the proceedings for 1945 46 cannot be treated as a disclosure for the purpose of assessment year 194445. The plea that the revised assessment made in 1954 was not covered by section 34(1)(a) could not therefore be accepted. [806 B C] Section 68 of the Indian Income tax Act, 1961 which provides that amounts credited. in the account books of the assessee and not satisfactorily explained by him should be treated as income of the 'previous year ', does not alter the position under the old Act. Even under the new Act the position, except where the credits are found in the assessee 's account books, is probably not different from that laid down in the cases under the old Act. [806 D F] Commissioner of Income tax, Bihar and orissa vs P. Darolia & Sons, and Bishan Dutt vs Commissioner of Income tax, U.P. & V.P. , applied. Jethmal vs Commissioner of Income tax, , approved. P.R. Mukherjee vs Commissioner of Income tax, West Bengal. referred to.

tition (Criminal) No. 53 of 1983. (Under Article 32 of the Constitution of India) J. Verghese for the Petitioner. A. K. Sanghi and D. Goburdhan for the Respondent. The Judgment of the Court was delivered by BHAGWATI, J. This writ petition has been filed on the basis of a letter addressed by one Ram Kumar Misra, President of Free Legal Aid Committee, Bhagalpur. This letter complained that the workmen employed in two ferries one at Bhagalpur and the other at Sultanganj which were being operated by respondent No. 5 were not being paid minimum wages as prescribed by the relevant notification issued under the . The wages of the workmen employed in these two ferries were given in the annexure to the letter and the amount of the difference between what the petitioner claimed to be the minimum wage payable to the workmen and the actual wage paid to them, was set out in the annexure. The letter was treated as a writ petition and by an order dated 25th January, 1983, this Court issued notice on the writ petition and on Mr. Goburdhan, learned Advocate, for the State of Bihar, waiving service of the notice, the District Magistrate, Bhagalpur and Ram Kumar Misra, the petitioner, were directed to jointly carry out an inquiry into the various averments made in the writ petition and submit a report within two weeks from the date of the order. The direction for holding an inquiry was given by us because we wanted to satisfy ourselves whether there was a prima facie case to proceed further with the writ petition. Pursuant to the order made by us, the District Magistrate, Bhagalpur and the petitioner conducted a joint inquiry into the various averments made 1013 in the writ petition and they finally submitted a report dated 23rd February, 1983 stating that in their opinion, in the light of the material gathered at the inquiry, the ferries operated by respondent No. 5 at Bhagalpur and Sultanganj were establishments to which the applied, since they fell within Entry 27 in the Schedule to the Act and respondent No. 5 was, therefore, liable to pay minimum wage to the workmen employed in the two ferries with effect from 20th January, 1979, that being the date when the notification issued under section 3(1) (a) of the was amended so as to make the minimum wage applicable to "employment in any shop or establishment other than that covered under any of the other entries in this Schedule. " We may point out that there was also one other complaint in the writ petition, namely, that the workmen were made to work as bonded labourers, but his complaint was not found to be correct by the District Magistrate, Bhagalpur and the petitioner in the Report made by them. When the report was received by this Court, copies thereof were supplied to the learned Advocates appearing on behalf of the parties. Respondent No. 5, who was joined as respondent to the writ petitions on an application made by him and who appeared at the hearing of the writ petition, disputed the correctness of the report made by the District Magistrate, Bhagalpur and the petitioner. It is not necessary for us for the purpose of the present writ petition to go into the question whether the facts stated in the report are correct or not, because, as we have stated above, the report was called for by us for the purpose of satisfying ourselves that there was a prima facie case for respondent No. 5 to meet. The only question which was raised before us and argued vehemently on both sides was whether the applied at all to the Bhagalpur and Sultanganj ferries owned by respondent No. 5. argument of respondent No. 5 was that the had no application to these two ferries since they did not fall within any of the entries in the Schedule to the Act, whereas, on the other hand, both the petitioner and the State Government argued that the Act applied to these two ferries because they were establishments within Entry 27 of the Schedule to the Act. These rival contentions raised a short question of construction of the relevant provisions of the and the notifications issued under that Act. 1014 The provides for fixation of Minimum rates of wages in certain employments. 3(1) (a) provides that the appropriate Government shall fix the minimum rates of wages payable to employees employed in an employment specified in or of the Schedule. Sub section (IA) of Section 3 enacts that "Notwithstanding anything contained in sub sec. (1), the appropriate Government may refrain from fixing minimum rates of wages in respect of any scheduled employment in which there are in the whole state less than 1,000 employees engaged in such employment. " It is obvious that sub sec. (IA) of sec. 3 does not preclude the appropriate Government from fixing minimum rates of wages in respect of any scheduled employment even if there are in the whole State less them 1,000 employees engaged in such employment. It merely empowers the appropriate Government to refrain from fixing minimum rates of wages in respect of such employment. Leaving it open to the appropriate Government to fix minimum rates of wages in respect of such employment, if it so thinks fit. The Schedule to the Act lists various employments in respect of which minimum rates of wages can be fixed by the appropriate Government. Mr. Verghese, learned Advocate appearing on behalf of the petitioner, relied on Entry 6 of the Schedule which reads "Employment under any local authority" but we do not think any reliance can be placed upon it, because in the present case, the workmen, on whose behalf claim of minimum wages has been made, are not employed under any local authority. Respondent No. 5, who is the employer of the workmen employed in the Bhagalpur and Sultanganj ferries, is not a local authority; he is merely a lessee of the tolls of public ferry. Entry 6 in the schedule can, therefore, have no application in the present case, but there is Entry 27 in the Schedule which helps the petitioner. This Entry prior to its amendment by the State Government on 25th November, 1978 read as follows: "27. Employment in Shops and Establishments registered under the Bihar Shops and Establishments Act, 1953 other than those covered under any of the other entries in this Schedule. " The Bhagalpur and Sultanganj ferries were not establishments registered under the Bihar Shops and Establishments Act, 1953 and prima 1015 facie, they would not, therefore, be covered by Entry 27 as it stood prior to 25th November, 1978. But Entry 27 was amended to enlarge its scope and the amended Entry ran as follows: 27. Employment in any Shop or establishment other than that covered under any of the other entries in this Schedule. " The State Government thereafter issued a Notification dated 20th January, 1979 in exercise of the powers conferred under sec. 3(1) (a) of the amending an earlier Notification dated 25th June 1975 under which rates of minimum wages were fixed for different categories of employees employed in shops and establishments registered under the Bihar Shops and Establishments Act, 1953 other than those covered under any of the other entries in the Schedule and by this amendment, the words "Employment in Shops and establishments registered under the Bihar Shops and Establishments Act, 1953 other than those covered under any of the other entries in this Schedule" were substituted by the words "Employment in any shop or establishment other than that covered under any of the other entries in this Schedule. " The object of the amendment was to make the Notification dated 25th June, 1975 applicable in relation to employment in any shop or establishment other than that covered under any of the other entries in the Schedule so as to bring it in line with the amended Entry 27 in the Schedule. Now it is clear from the Explanation to the amended Entry 27 that the word "establishment" in that entry has the same meaning which is assigned to it in the Bihar Shops and Establishments Act, 1953 and we must, therefore, look at the definition of "establishment" as given in the Bihar Shops and Establishments Act, 1953 in order to determine as to whether the Bhagalpur and Sultanganj ferries could be said to be establishments within the meaning of the amended Entry 27. The word "establishment" is defined in sec. 2(6) of the Bihar Shops and Establishments Act, 1953 to mean an establishment which carries on any business, trade or profession or any work in connection with, or incidential or ancillary to, any business, trade or profession. Now it can hardly be disputed that the Bhagalpur and Sultanganj ferries are establishments which carry on business or trade of plying ferries across the Ganges and they are clearly within the meaning of the word "establishment" in sec. 2(6) 1016 of the Bihar Shops and Establishments Act, 1953 and consequently they would also be establishments within the meaning of that expression as used in the amended Entry 27. The would, therefore, clearly be applicable to employment in the Bhagalpur and Sultanganj ferries. Since the Notification dated 25th June, 1975 as amended by the Notification dated 20th January, 1979 fixed rates of minimum wages for different categories of employees employed in any establishment, which would cover the Bhagalpur and Sultanganj ferries, there can be no doubt that the workmen employed in these two ferries were entitled to receive minimum wages as laid down in the Notification dated 25th June, 1975 read with the Notification dated 20th January, 1979 with effect from the date of latter notification. It appears that a further Notification was issued by the State Government on 26th November, 1981 in exercise of the powers conferred under sec. 3(1) read with sec. 5(2) of the revising the minimum rates of wages for different categories of employees employed in any shop or establishment other than that covered under any of the other entries in the Schedule. This Notification came into force with effect from 26th November, 1981. The workmen employed in Bhagalpur and Sultanganj ferries were, therefore, entitled to the revised minimum wage as set out in the Notification dated 26th November, 1981 with effect from that date. We accordingly reach the conclusion that the workmen employed in the Bhagalpur and Sultanganj ferries were entitled to receive minimum wage as set out in the Notification dated 25th June 1975 as amended by the Notification dated 20th January 1979 for the period from 20th January 1979 upto 25th November 1981 and thereafter at the rate fixed in the Notification dated 26th November 1981. The question, however, remains whether the workmen were paid wages at these minimum rates. Since there is a dispute between the parties in regard to this question, the argument of the petitioner being that the workmen were not paid wages at these minimum rates, while the contention of respondent No. 5 being that they where so paid, it becomes necessary to give directions for the purpose of determining whether the workmen employed in these two ferries were paid wages at these minimum rates with effect from 20th January, 1979. We would therefore direct the Labour Department of the Government of Bihar to intimate to the petitioner as to which 1017 is the appropriate authority under the Minimum wages Act, 1948 for adjudicating upon the claims of the workmen employed in these two ferries for arrears of minimum wage. The appropriate authority will, by adopting suitable means including the giving of publicity, invite the workmen to file their claims for arrears of minimum wage and not only the workmen will be entitled to file their claims but the petitioner who has moved this court will also be at liberty to file claims on behalf of the workmen for arrears of minimum wage. The appropriate authority will inquire into all such claims which may be filed before it by or on behalf of the workmen and determine, after giving full opportunity to respondent No. 5 of being heard in the matter, whether any and if so what arrears of minimum wage in the light of this judgment remain to be paid by respondent No. 5 to the workmen employed in these two ferries. The workmen will be entitled to appear before the appropriate authority either personally or through their agent or advocate and the petitioner will also be at liberty to appear before the appropriate authority on behalf of the workmen. If any amount is determined by the appropriate authority to be payable by respondent No. 5 to any of the workmen in respect of the arrears of minimum wage, respondent No. 5 is directed to make payment of the same within one month from the date of the order of the appropriate authority. The appropriate authority will carry out the directions given by us and complete the assignment entrusted to it within six months from today. We would also direct respondent No. 5 to pay to the workmen employed in these two ferries minimum wage at the rate fixed under the Notification dated 26th November 1981 or at such other revised rate or rates as may be fixed from time to time. So far as the costs of the writ petition are concerned since the petitioner has come to this Court for the purpose of vindicating the rights of poor workmen, he we would direct the State of Bihar to pay to the petitioner a sum of Rs. 2,000 by way of costs. H.S.K. Petition allowed.

Pursuant to tho policy decision taken by the Andhra Pradesh Government in 1964 that the secondary school duration should be 10 years instead of 11 years and it should be followed by a two years ' intermediate course, the Government decided in G.O.Ms. 1920, Education, dated 25.10.1968 that in the existing colleges the two years ' intermediate course should be introduced and laid down in G.O.Ms. 2063, Education, dated 25.8.69 the staff pattern and pay scales of staff m Junior Colleges started for the two years ' intermediate course. In G.O.Ms. 2186, Education, dated 17.9.1969 the Government issued instructions regarding the absorption of Post Graduate teachers in Junior Colleges on the basis of the Post Graduate degree and the number of years of service rendered by them. It was stated in that G.O. that all the existing Post Graduates who will be absorbed as Junior Lecturers in Junior Colleges will be appointed temporarily as Junior Lecturers pending framing of adhoc rules in due course. The Government ordered in G.O. Ms, 1147, Education, dated 4.6.1970 that in the common seniority list first rank should be given only to those who have secured first and second class Post Graduate degree. On 19.9.1973 the Government framed Adhoc Rules, 1973 with retrospective effect from 1.8.1969 for the temporary post of Junior Lecturers in Junior Colleges. Rule 13 of the Adhoc Rules, 1973 says that seniority of Post Graduate Assistants appointed as Junior Lecturers shall be a determined with reference to the dates of their actual appointment as Post Graduate Assistants. Rule 3 states that post graduates with first or second class degrees are to be given preference over Post Graduates holding third class degrees. On 19.6.1974 the Government framed Adhoc Rules, 1974 for the temporary posts of principals of Junior Colleges with retrospective effect from 1.8.1969. Rule 6 of the Adhoc Rules, 1974 prescribes first or second class Post Graduate degree for promotion of Junior Lecturers to the posts of Principals of Junior Colleges. Rule 8 of the Adhoc Rules 1974 says that a person who held the post of Principal of a Junior College immediately before 546 the issue of these Rules shall be continued as Principal and given option either A to continue in the post of Principal or to revert to his original post. The appellants in Civil Appeals 1652 1659 of 1978 who were working as Post Graduate Assistants and were first or second class Post Graduate degree holders were appointed as Junior Lecturers in 1969. Soon after the Adhoc Rules, 1973 were framed the second respondent, Joint Director of Higher Education, prepared a subjectwise seniority list in 1974 and on the basis of their seniority in that seniority list all the appellants except one were promoted as Principals of different Junior Colleges. The first respondent State, under the directions of the High Court in a separate proceeding to prepare the seniority list as per Rule 13(1) of the Adhoc Rules, 1973, prepared a revised seniority list in 1976 in which respondents 3 to 8, who were third class Post Graduate degree holders and were appointed as Junior Lecturers in 1970 and 1975 were placed as seniors to the appellants. The appellants as petitioners filed petitions in the Administrative Tribunal for quashing the revised seniority list of 1976 and restoring the earlier seniority list of 1974 or in the alternative for declaring that Rule 13(1) of the Adhoc Rules, 1973 is violative of Articles 14 and 16 of the Constitution. The petitioners contended that under the Adhoc Rules Post Graduate Assistants with first and second class Post Graduate degrees should be treated as one group and as senior to Post Graduate Assistants with third class Post Graduate degrees The Tribunal held that the seniority list of 1976 framed as per Rule 13(1) of the Adhoc Rules, 1973 having precedence over the earlier executive instruction is valid and as the petitioners and respondents 3 to 8 belonged to the same category of Post Graduate Assistants, there is no question of violation of Articles I 1 and 16 of the Constitution. The appellants in Civil Appeal 415 of 1979 who were working as School Assistants in Higher Secondary Schools and were third class Post Graduates were appointed as Junior Lecturers in Junior Colleges in terms of Rule 3 of t the Adhoc Rules, 1973. Pending the framing of Adhoc Rules for the temporary posts of Principals of Junior Colleges, the second respondent, Director of Public Instructions, issued proceedings dated 14.3.1974 promoting under Rule 10(a) (i) of the State and Subordinate Services Rules seven third class Post Graduate Junior Lecturers as Principals of Junior Colleges. The appellants as petitioners challenged in the Administrative Tribunal these Adhoc promotions. They also challenged the validity of Rule 6 of the Adhoc Rules, 1974 on the ground that it violates Articles 14 and 16 of the Constitution. The Tribunal held that Rule 6 does not contravene Articles 14 and 16 of the Constitution. The Tribunal found nothing objectionable in Rule 8 of the Adhoc Rules, 1974 which protects the right of third class Post Graduate degree holders who had been promoted under Rule 10(a) (i) of the State and Subordinate Services Rules pending framing of Adhoc Rules. Allowing Civil Appeals 1652 59 and dismissing Civil Appeal 415, ^ HELD: There is no need to quash Rule 13(1) of the Adhoc Rules, 1973 which has to be interpreted in the manner indicated in the Judgment and 547 seniority has to be fixed accordingly. The seniority list of 1976 is quashed and the seniority list of 1974 is restored. Rule 6 of the Adhoc Rules, 1974 is valid. [571 H, 572 A] There is no reason to think that the Government intended by Rule 13(1) of the Adhoc Rules, 1973 to take away from First and second class Post Graduate Junior Lecturers the preference shown to them over third class Post Graduate Junior Lecturers in the executive instructions especially G.O. Ms. 1147, Education, dated 4,6.1970 and even in Rule 3(1) and (2) of the Adhoc Rules, 1973. Rules 3(1) and (2) and 13(1) have to be read together. Only then there will be harmony between those rules. If Rule 13(1) is read without reference to Rule 3(1) and (2) the consequence will be disharmony and the first and second class Post Graduate Junior Lecturers who were given preference over third class Post Graduate Junior Lecturers will be placed in a less advantageous and inferior position as compared with third class Post Graduate Junior Lecturers as regards seniority alone, which will not even help them in the matter of promotion as Principals of Junior Colleges in view of Rule 6 of Adhoc Rules, 1974 so long as they do not improve their academic attainment by obtaining a first or second class Post Graduate Degree. Every rule in the Adhoc Rules must be given its full, natural and legal effect. There is no doubt that Rule 13(1) is inartistically worded though when read with Rule 3(1) and (2) it would be clear that the principle laid down in it has to be applied separately to each of the three categories of Junior Lecturers mentioned in Rule 3(1) and (2). Each of these three categories forms a distinct and separate category. The first category consists of first and second class Post Graduates, and on their appointment as Junior Lecturers their inter se seniority has to be fixed under Rule 13(1) with reference to the dates of their original appointment as Post Graduate School Assistants. When Post Graduates with not less than five years of service, working as Post Graduate School Assistants are appointed as Junior Lecturers their inter se seniority has to be fixed like wise under Rule 13(1) on the basis of the dates of their original appointment as Post Graduate School Assistants. Similarly, when Post Graduates with less than five years of service, working as Post Graduate School Assistants are appointed as Junior Lecturers their inter se seniority has to be fixed on the basis of the dates of their original appointment as Post Graduate School Assistants. If Rule 13(1) is interpreted in this manner, no disharmony will result from applying all the adhoc rules. It is only by constructing Rule 13(1) in this manner the Government framed the seniority list of 1974. [569 D H 570 A F] The object of achieving excellence in educational institutions like Junior Colleges is a laudable one, and excellence in academic attainments of heads of such institutions is a relevant fact. Promotion of Junior Lecturers as Principals is based only on merit judged by their academic distinction which cannot be said to be discriminatory. Prescribing a first or second class Post Graduate Degree for the head of an educational institution has a direct nexus with the object of excellence sought to be achieved, and it cannot be said to be discriminatory. Therefore, it is not possible to hold that Rule 6 of the Adhoc Rules? 1974 is liable to be struck down as being discriminatory and illegal. [572 G H, 573 A] 548 section M. Pandit vs State of Gujarat, not applicable. The promotion of seven third class Post Graduate Junior Lecturers as Principals were irregular having regard to the fact that even for appointment as Junior Lecturers preference has to be given to first and second class Post Graduate School Assistants. The irregularity has been sought to be overlooked by providing a saving clause by way of Rule 8 of the Adhoc Ruler, 1974. It is not possible to think that there could have been any valid necessity to continue those adhoc promotions made even after the Adhoc Rules, 1974 were framed within about three month of those promotions. There is no meaning in providing for the option in that rule as it is not likely that a person who has been promoted as Principal would voluntarily opt for reverting to his original post of Junior Lecturer. However, having regard to the long lapse of time it is not desirable to declare those appointments as illegal. [573 E H, 574 A] Rule 33(c) of the Andhra Pradesh State and Subordinate Services Rules applies to persons who were transferred from one class or category of service to another class or category of the same service and would not apply to the fact of the present case where Junior Lecturers have been appointed by election amongst Post Graduate School Assistants in the manner indicated in Rule 3(1) and (2) of the Adhoc Rules and there is no question of transfer of Post Graduate School Assistants as Junior Lecturers. [571 C E] Reserve Bank of India vs N. C. Paliwal, A.I.R. 1976 S.C. 2342 not applicable.

uld be open to all the parties to place their claims, or further claims, as the case may be, in regard to the areas applied for by them on or before 30.4.1987, hacked by supporting reasons, before the State Government in the form of representations within four weeks from the date of this order; that the State Government would dispose of these applications within the statutory period failing which the parties will have their remedy under the statute by way of revision to the Central Government; that in arriving at its decisions, it will be open to the State Government to take into account the dis cussions and findings of the Rao Report in the light of this judgment; that the State Government should also keep in mind that no leases to any of the parties (other than OMC and IDCOL) could be granted unless either the areas so proposed to be leased out are deserved and thrown open to appellants from the public or unless the Central Government, after considering the recommendations of the State Government, for reasons to be recorded in writing considers a relaxation in favour of any of the parties necessary and justified. [96B E] & CIVIL APPELLATE JURISDICTION: Civil Miscellaneous Peti tion Nos. 16435 37 of 1987. IN Writ Petition No. 14116 of 1984. (Under Article 32 of the Constitution of India). WITH Special Leave Petition (C) Nos. 5163/88 with 8574 of 1989 read with I.A. No. 1/89. K. Parsaran, Dr. L.M. Singhvi, G. Ramaswamy, V.C. Maha jan, Harish N. Salve, Rajan Mahapatra, Ms. Lira Goswami, section Sukumaran, C. Mukhopadhyay, A. Subba Rao, A.D.N. Rao, P.K. Mehta, Ms. Mona Mehta, Girish Chandra, S.C. Patel, T. Sriku mar, p. 36 Parmeshwaran, Bishamber Lal Khanna and M.C. Bhandare for the appearing parties. S.C. Roy, Advocate General and A.K. Panda for the State of Orissa. The Judgment of the Court was delivered by RANGANATHAN, J. THE "DRAMATIS PERSONAE" All these matters are in the nature of off shoots of a basic controversy raised in W.P. No. 14116/84 which was "disposed of" by the orders of this Court dated 30.4.87 and 6.10.87. The parties are now seeking certain clarifications and directions in relation to the orders passed by this Court in the above writ petition. There have been several subsequent developments having an impact on the issue origi nally brought to this Court in the Writ Petition (W.P.) and, at present, the matter has become very complicated and involves the interests of a large number of parties. To give a cogent narration of the necessary facts, it is best to start with an enumeration of the various parties with whom we are concerned in the matters which are being disposed of by this judgment. The writ petition as well as the connected matters arise out of applications for grant of rights for the mining of chrome ore or Chromite in the State of Orissa. Chrome ore is one of the minerals specified in the First and Second Sched ules to, and not a "minor mineral" within the meaning of section 3(f) of, the Mines and Minerals (Development and Regulation) Act, 1957. The right to grant mining rights in respect of this mineral is vested in the State Government, subject, as we shall see later, on control by the Union of India. The State of Orissa (S.G.) and the Union of India (C.G.) are, therefore, the primary respondents in this litigation. On the other side are ranged a number o[ applicants for the mining rights we have referred to above. These are: (1) Indian Metals and Ferro Alloys Limited (IMFA); (2) Ferro Alloys Corporation Limited (FACOR); (3) Orissa Cements Limited (OCL); (4) Orissa Industries Limited (ORIND); 37 (5) Orissa Mining Corporation (OMC); (6) Industrial Development Corporation of Orissa Ltd. (IDCOL); and (7) Shri Mantosh Aikath. Of the above, the first four are companies in the private sector, the next two are public sector corporations owned substantially by the State of Orissa and the last, a private individual. THE PRESENT CONTROVERSY The principal question for decision before us is as to whether all or any of the various parties referred to above are entitled to obtain leases for the mining of chrome ore (hereinafter referred to as MLs) and, if so, to what extent. In particular, we are concerned with an area consisting of five blocks referred to in para 8 of the W.P. to which reference will be made later. The controversy primarily turns round applications made in respect of these blocks by IMFA, FACOR, AIKAT and OCL. ORIND also lays claim to mining rights in respect of a portion of these blocks. It has filed a special leave petition which is separately numbered as S.L.P. No. 8574 of 1989 and is directed against an order dated 7.4.89 passed by the Orissa Government rejecting an application made by the company on 5th July, 1971. FACOR has also preferred S.L.P. No. 5163 of 1988 from an order of the High Court of Orissa dated 11.11.1987 dismissing a writ petition filed against an order of rejection by the S.G. of an application made by it on 18.7.1977 for grant of a ML which was confirmed by the C.G. As already mentioned, this Court 'disposed ' of W.P. No. 14116/ 1984 by its order of 30.4.87. We shall have to con sider this and several other orders passed by this Court in the course of the hearing more closely but a brief reference may be made here to the resultant effect thereof. When this Court found that there were a large number of applications for MLs over varying extents of land in the areas in ques tion, this Court decided that the respective merits of the applications ' could not be gone into by this Court but that they should be considered by a responsible officer of the C.G. Accordingly, by the orders above referred to, this Court referred the entire controversy to the Secretary to the Government of India in the Ministry of Mines (Shri B.K. Rao, "Rao", for short) for a detailed consideration of the claims of the various parties. When the matter went to Rao, OMC and IDCOL also 38 put forward claims that the public sector units in the State of Orissa were entitled to the grant of mining rights in the State to the exclusion of all private parties inasmuch as there was a reservation in their favour by an appropriate notification issued by the State Government. The other parties objected to the intervention of the OMC and IDCOL at, what they alleged was, a belated stage of the proceed ings. However, on applications made by OMC and IDCOL, this Court directed that the claims of these two public sector undertakings would also be examined by Rao. Eventually Rao, after considering the claims of all parties, reduced his conclusions in the form of a report dated 1st February, 1988. in his report, Rao accepted the claim of reservation made on behalf of the OMC and the IDCOL. Nevertheless it appears that, bearing in mind certain interim orders passed by this Court in the various applications made to it during the pendency of the writ petitions, Rao came to the conclu sion that only three of the parties other than the two public sector undertakings should be granted leases to the extent mentioned by him. Broadly speaking, Rao accepted partially the claims of IMFA, FACOR and AIKATH. He rejected the claims made by ORIND and OCL. He accepted the claim of the public sector undertakings but he recommended for them leases in respect of only the balance of the lands left, after fulfilling the claims of the others which he had accepted. Applications have now been filed before us which, inter alia, seek directions on Rao 's report. There has been a good deal of contest before us as to the precise legal character of the report submitted by Rao. One suggestion is that Rao was nothing more than a commissioner appointed by the Court to examine the claims of the various parties and to submit a detailed report thereon. It is submitted that this report having been received we should pass such orders thereon as we may consider appropriate. A second approach suggested is that the Rao report should be taken to be the decision of the Central Government, which it is now for the State Gov ernment to implement, leaving it open to any aggrieved party to take such appropriate proceedings as may be available to them in law for successfully challenging the findings reached by Rao. A third line of argument which has been addressed before us, particularly by the State of Orissa, the OMC and the IDCOL, is that Dr. Rao 's report suffers from a fundamental defect in that he has completely ignored the reservation made by the State Government in favour of the public sector. According to them, Rao was not right in suggesting the grant of leases to any of the other parties and should have simply left it to the State to exploit the mines in public sector, including inter alia, the OMC and IDCOL. A fourth 39 stance taken up by the State Government may also be men tioned here, The learned Advocate General for the State made a statement before us that, without prejudice to a conten tion that the Rao report suffered from the fundamental defect referred to above, the State Government was prepared to abide by the findings of Rao provided this Court decides to accept the same in toto without any modifications. He clarified that this is not because they think the Rao report is ' correct. On the other hand they have got several objec tions to the validity and correctness of Dr. Rao 's report. However, having regard to the interim orders passed by this Court and having regard to the fact that what Rao has done is virtually to implement various orders passed by this Court during the pendency of the writ petition, the State Government, without prejudice to its contentions in relation to the Rao report, is prepared to abide by it. However, the learned Advocate General said, the State Government wish to make it clear that if, for some reason, this Court does not accept the Rao Report in toto, then the State Government would like to put forward their contentions against the report of Dr. Rao. In that event the State Government should be given the liberty to attack Dr. Rao 's report and urge all contentions that are open to it in respect of the grant of mining leases relating to chrome ore in the State of Orissa. The above stance understandably, is not acceptable to OCL and ORIND or, indeed, even to OMC and IDCOL who have got nothing at the hands of Rao. IMFA and FACOR are substantial ly satisfied with the report given by Dr. Rao (except for certain minor contentions which they are prepared to give up for the present, with liberty to make representations to the State Government) but they also wish to make it clear that, in case the Rao report is not to be accepted by this Court, they would also like to put forward all their contentions so that their case may not go by default. In that event, in particular, they would like to attack the reservation plea urged by the S.G., OMC and IDCOL both as belated as well as on merits. AIKATH 's submission is that he is a small opera tor who discovered the mines and that Rao 's recommendation for the grant of a ML in his favour in respect of a small extent of land should not be disturbed by us. We have only broadly set out here the attitudes of the various parties to the Rao report and shall discuss their contentions later in detail. In the light of these various contentions, we have to determine the legal character of the Rao report and decide whether the findings of Rao are to be given effect to in toro or are to be modified and, if so, in what respects. Before dealing with these questions and even setting out the details of the claims of the various parties and the material they placed 40 before Rao to substantiate their claims, it will be useful to survey the relevant statutory provisions relating to the grant of mineral concessions of the nature we are concerned with here. This we shall at once proceed to do. THE RELEVANT STATUTORY PROVISIONS (a) Constitution: Article 297 of the Constitution of India unequivocally declares that 'all lands, minerals and other things of value underlying the ocean . . shall vest in the Union and be held for the purposes of the Union '. Arti cle 298 defines the extent of the executive power of the Union and of each State thus: "298. Power to carry on trade, etc. The executive power of the Union and of each State shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose: Provided that (a) the said executive power of the Union shall, in so far as such trade or business or such purpose is not one with respect to which Parliament may make laws, be subject in each State to legislation by the State; and (b) the said executive power of each State shall, in so far as such trade or business or such purpose is not one with respect to which the State Legislature may make laws, be subject to legislation by Parliament." The Union and the States have both been vested with powers to legislate in respect of mining rights under the Seventh Schedule to the Constitution. The respective rights of the Union and the States in this regard are contained in the following entries in the said Schedule: List 1, Entry 54 Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in public interest. 41 List H, Entry 23 Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and develop ment under the control of the Union. (b) Act: In exercise of the above powers, the Union legisla ture has enacted the Mines and Minerals (Development & Regulation) Act, 1957 (hereinafter referred to as 'the Act '). The Act has been substantially amended and several drastic changes introduced in 1986 with a view, inter alia, to prevent unscientific mining, remove bottle necks and promote speedy development of mineral based industries. We are concerned only with the provisions relating to the grant of mining leases and we may proceed to consider the same. section 2 of the Act contains the declaration referred to in Entry 54 referred to above. It reads: "2. Declaration as to expediency of Union control It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided. " With this declaration, the Act proceeds to circumscribe the extent to which the regulation of mining rights in the States should be subject to the control of the Union. We may now proceed to refer to the relevant provisions of the Act in relation to minerals like "chrome ore", which may be described, for convenience, as "major minerals". section 4 of the Act provides as follows: "No person shall undertake any prospecting or mining opera tion in any area except under and in accordance with the terms and conditions of a prospecting licence or as the case may be, a mining lease granted under this Act and the rules made thereunder. (2) No prospecting licence or mining lease shall be granted otherwise than in accordance with the provisions of this Act and the rules made thereunder. " Sections 10 and 11 outline the procedure for obtaining a prospecting 42 licence (PL) or a mining lease (ML). They read thus: "10. Application for prospecting licences or mining leases: (1) An application for a prospecting licence or a mining lease in respect of any land in which the minerals vest in the Government shall be made to the State Government con cerned in the prescribed form and shall be accompanied by the prescribed fee. (2) Where an application is received under sub section 1 there shall be sent to applicant an acknowledgement of its form. (3) On receipt of an application under this section, the State Government may, having regard to the provisions of this Act and any rules made thereunder, grant or refuse to grant the licence or lease. Preferential right of certain person: (1)Where a pros pecting licence has been granted in respect of any land, the licensee shall have a preferential right for obtaining the mining lease in respect of the said land over any other per son: XXX XXX XXX (2) Subject to the provisions of sub section (1), where two or more persons have applied for a prospecting licence or a mining lease in respect of the same land, the applicant whose application was received earlier shall have a prefer ential right for the grant of the licence or lease as the case may be over an applicant whose application was received later: Provided that where any such applications are received on the same day, the State Government, after taking into consideration the matters specified in subsection (3), may grant the prospecting licence or mining lease, as the case may be, to such one of the applicants as it may deem fit. (3) The matters referred to in sub section (2) are the following: 43 (a) any special knowledge of, on experience in, prospecting operations or mining operations as the case may be possessed by the applicant; (b) the financial resources of the applicant; (c) the nature and quality of the technical staff employed or to be employed by the applicant; (d) such other matters as may be prescribed. (4) Notwithstanding anything contained in sub section (2) but subject to the provisions of sub section (1), the State Government may for any special reasons to be recorded and with the previous approval of the Central Government. grant a prospecting licence or a mining lease to an applicant whose application was received later in preference to an applicant whose application was received earlier. " We may next to refer to section 17A which has been inserted in the Act by the 1986 amendment. It reads thus: section 17 A: Reservation of area for purposes of conservation (1) The Central Government, with a view to conserving any mineral and after consultation with the State Government may reserve any area not already held under any prospecting licence or mining lease and, where it proposes to do so, it shall, by notification in the Official Gazette. specify the boundaries of such area and the mineral or minerals in respect of which such area will be reserved. (2) The State Government may, with the approval of the Central Government, reserve any area not already held under any prospecting licence or mining lease, for undertaking prospecting or mining operations through a Government compa ny or corporation owned or controlled by it or by the Cen tral Government and where it proposes to do so, it shall by notification in the Official Gazette, specify the boundaries of such area and the mineral or minerals in respect of which such areas will be reserved. (3) Where in exercise of the powers conferred by subsection (2) the State Government undertakes prospecting 44 or mining operations in any area in which the minerals vest in a private person, it shall be liable to pay prospecting fee, royalty, surface rent or dead rent, as the case may be, from time to time at the same rate at which it would have been payable under this Act if such prospecting or mining operations had been undertaken by a private person under prospecting licence or mining lease. section 19 of the Act declares that any prospecting licence or mining lease granted, renewed or acquired in contravention of the provisions of this Act or any rules or orders made thereunder shall be void and of no effect. section 30 confers revisional powers on the C.G. It reads: "The Central Government may, of its own motion or on appli cation made within the prescribed time by an aggrieved party, revise any order made by the State Government or other authority in exercise of the powers conferred on it by or under this Act. " These are the provisions of the Act relevant for our pur poses. (c) Rules: Turning now to the rules framed under the Act which also have a material bearing on the present issues, they are contained in Chapter IV of the Mineral Concessions Rules, 1960 which deals with the grant of mining leases in respect of land the minerals in which vest the Government. Rule 22 outlines the procedure in respect of applications for MLs. It requires the application to be made in a pre scribed form and accompanied by a fee of Rs.500 and certain documents and particulars. Rules 24 and 26 ' prescribe the procedure for disposal of such applications. Sub rules (1) and (3) of rule 24 are relevant for our present purposes and are extracted below: "24. Disposal of application for mining lease: (1) An appli cation for the grant of a mining lease shall be disposed within twelve months from the date of its receipt. XXX XXX XXX (3) If any application is not disposed of within the period specified in sub rule (1), it shall be deemed to have been refused. XXX XXX XXX 45 Under rule 26, the S.G. may, after giving an opportunity of being heard and for reasons to be recorded in writing and communicated to the applicant, refuse to grant or renew a mining lease over the whole or part of the area applied for. Rule 31 prescribes that where an order for grant of a lease is made, a lease deed has to be executed within a period of six months of the order or such further period as the S.G. may allow in this behalf. Failure to do this, if attributable to any default on the part of the appellant, could entail the revocation of the lease. The lease shall commence from the date of the lease deed. We next turn to rule 54 which deals with applications for revision to the C.G. It reads, in so far as is relevant for our purposes: "54. Application for revision: (1) Any person aggrieved by any order made by the State Government or other authority in exercise of the powers conferred on it by the Act or these rules may, within three months of the date of communication of the order to him, apply to the Central Government in triplicate in Form N, for revision of the order. The appli cation should be accompanied by a treasury receipt showing that a fee or ' Rs.500 has been paid into a Government treas ury or in any branch of the State Bank of India doing the treasury business to the credit of Central Government under the head of account '128 Mines and Minerals Mines Depart ment Minerals Concession Fees and Royalty ': Provided that any such application may be entertained after the said period of three months, if the applicant satisfies the Central Government that he had sufficient cause for not making the application within time. xxx xxx xxx (4) On receipt of the application and the copies thereof, the Central Government shall send a copy of the application to each of the parties impleaded under sub rule (2), speci fying a date on or before ' which he may make his representa tions, if any, against the revision application. Explanation: For the purposes of this rule, where a State 46 Government has failed to dispose of an application for the grant of renewal of a prospecting licence or a mining lease within the period specified in respect thereof in these rules, the State Government shall be deemed to have made an order refusing the grant or renewal of such licence or lease on the date on which such period expires. Rule 55 provides that the C.G., after getting the comments of the S.G. and other parties on the application and after giving each of them an opportunity to put forward their comments on the stand taken by the others, "may confirm, modify or set aside the order (of the S.G.) or pass such other order in relation thereto" as it "may deem just and proper". Three more rules need to be set out which deal with the topic of reservation. Rules 58, 59 and 60, before 1980, were in the following terms: "58. Availability of areas for regrant to be notified (1) No area which was previously held or which is being held under prospecting licence or a mining lease so the case may be or in respect of which the order granting licence or lease has been revoked under sub rule (1) of the rule 15 or sub rule (1) of rule 31, shall be available for grant un less (a) an entry to the effect is made in the register referred to in sub rule (2) of rule 21 or sub rule (2) of rule 40, as the case may be, in ink; and (b) the date from which the area shall be available for grant is notified in the Official Gazette at least thirty days in advance. (2) The Central Government may, for reasons to be recorded in writing, relax the provision of sub rule (1) in any special case. Availability of certain areas for grant to be notified In the case of any land which is otherwise avail able for the grant of a prospecting licencor a mining lease but in respect of which the State Government has refused to grant a prospecting licence or a mining lease on the ground that the land should be reserved for any purpose, the State Government, shall, as soon as such land becomes again avail able for the grant of prospecting licence or mining lease, grant the licence or lease after following the procedure laid down in rule 58. 47 60. Premature applications Applications for the grant of a prospecting licence or a mining lease in respect of the areas in which (a) no notification has been issued under rule58 or rule59; or (b) if any such notification has been issued the period specified in the notification has not expired. Shall be deemed to be premature and shall not be entertained and the fee, if any, paid in respect of any such application shall be refunded." G.S.R. 146 dated 16th January, 1980 substantially amended these rules. After this amendment, Rule 58 reads: "58. Reservation of areas for exploitation in the public sector, etc. : The State Government may, by notification in the Official Gazette, reserve any area for exploitation by the Government, a Corporation established by any Central, State or Provincial Act or a Government company within the meaning of Section 6 17 of the ( 1 of 1956)". Rule 59 is relevant only in part. It reads: "59. Availability of area for regrant to be notified: (1) No area XXX XXX XXX (e) which has been [reserved by the State Government] Sub stituted for the words "reserved by the Government" by G.S.R. 86(E) w.e.f. 10.2.87 under Rule 58, [or u/s 17A) These words were inserted by G.S.R. 146(E) dated 16.1.80 w.e.f. 2.2.80 shall be available for grant unless (i) an entry to the effect that the area is available for grant is made in the register referred to in sub rule (2) of Rule 21 or sub rule (2) of Rule 40 as the case may be, in ink; and (ii) the availability of the area for grant is notified in the Official Gazette and specifying a date (being a date not 48 earlier than thirty days from the date of the publication of such notification in the Official Gazette) from which such area shall be available for grant: XXX XXX XXX (2) The Central Government may, for reasons to be recorded in writing relax the provisions of sub rule (1) in any special case. Rule 60 deals with "premature applications". It reads: 60. Premature applications: Applications for the grant of a prospecting licence or mining lease in respect of areas whose availability for grant is required to be notified under Rule 59 shall if, (a) no notification has been issued under that rule: or (b) where any such notification has been issued, the period specified in the notification has not expired, shall be deemed to be premature and shall not be entertained, and the application fee thereon, if any paid, shall be refunded. The above are the relevant rules governing application for, and grant of, leases, revision petitions and reservation of areas in the light of which the issues in the present case have to be considered. We shall now proceed to give the details of the various applications for MLs preferred by the parties before us. ML APPLICATIONS OF THE PARTIES Though it was the IMFA which came to this Court with a writ petition, there were a number of other applications for grant of MLs pending before the State Government. The broad details of these applications are set out below: 1. IMFA (a) Previous Histor),: IMFA made five applications for grant of mining lease in respect of five blocks of land as per the following details (which are hereinafter referred to as items 1 to 5 respectively): 49 Area Date of Area Village & District No. Applica applied for tion 1. 1.7.1981 634.359 Ghotarangia and other villages 8.7.1981 hects. (Dhankanal Distt. ) 2. 23.6.1981 142.000 Ostapal Village, SukhindaTehsil hects. (Cuttack Distt. ) 3. 6.7.1981 108.860 Kamarada and padar villages hects. (Cuttack Distt. ) 4. 9.9.1981 37.008 Ostapal and Gurjang villages, Sukhinda 10.9.1981 hects. Tehsil (Cuttack Distt.) 5. 24.11. 1981 147.693 Ostapal and Gurjang villages, Sukhinda hects. Tehsil (Cuttack Distt. ) The S.G. did not dispose of these applications within the prescribed period of twelve months. They were, there fore, deemed to have been rejected under rule 24(3). IMFA applied to the C.G. for the revision of these deemed rejec tion orders of the S.G. The C.G. set aside the deemed rejec tion orders and directed the S.G. to dispose of the matter on merits within a period of 200 days. However, the S.G. did not take any action on the applications of the IMFA within the period of 200 days. IMFA made a representation to the Central Government but the Central Government gave no relief on the ground that it had become functus officio and had no jurisdiction to issue further directions to the State Gov ernment. Thereupon IMFA filed Writ Petition No.14116 of 1984 in this Court. IMFA alleged, that while its applications were kept pending, the S.G. had granted leases in favour of FACOR and thus discriminated against IMFA. It prayed for the issue of a writ of mandamus to the S.G. to grant leases to IMFA also. (b) Subsequent developments: This Court, on 27.9.84 passed an order (extracted later) directing the S.G. to consider IMFA 's applications by 23.10.84 and restraining it from granting MLS to any one else in the meanwhile. FACOR moved for a recall of this order. The Court passed an inter im order on 18.10.84 holding over the implementation of the earlier order in regard to grant of lease to IMFA and call ing for the records. However, it appears, on 21.11.84, the S.G. had agreed to grant a ML in favour of AIKATH in respect of 140 acres out of 147.69 hectares covered by item No. 5 above. On 26.12.84, the S.G. filed a counter affidavit pointing out: (a) that there was a reservation of the 50 areas for the public sector and (b) that except item 1, the areas covered by the other applications overlapped areas covered by earlier applications of OMC IDCOL and others. Nevertheless, it was stated, on due consideration in the light of the observations of this Court, the S.G. had tenta tively decided to grant a ML to IMFA in respect of 634.359 hectares in item 1. On 27.11.84, IMFA stated that it was not interested in item 1 which, according to it contained only low grade ore and was not commercially viable unless IMFA was given, at the same time, areas bearing high quality ore which could be blended with the low grade ore. It stated that it was willing to accept M.L. in respect of items 2, 3 and either item 4 or half of item 5. On 2.1.85. the S.G. passed formal orders rejecting IMFA 's application in respect of items 2 to 5 of the list. This was on the ground, so far as item 2 was concerned, that the area fell within the reserved areas, that there were prior applications of OMC & FACOR in respect of the areas and that the S.G. had already agreed to lease out item 1 to IMFA. On 15.2.85, the S.G. informed IMFA that, on reconsideration it had recommended grant of MLs to it in respect of 139.37 hectares (out of 142 hectares of item 2) and the entire area of item 3. On 18.2.85, the S.G. submitted in court that it had already agreed to grant 140 acres in item 5 to AIKATH and the rest to FACOR as per compromises in the writ proceedings pending in the Orissa High Court. The compromise with AIKATH had been placed before. and accepted by the Orissa High Court on 4.12.84 but the final terms and conditions were proposed on 18.2.85 and, accepted on 19.2.85. In respect of FACOR also, the compromise agreeing to lease to it 596 acres (out of which 180 acres were covered by item 5 of IMFA 's applica tion) had been filed in the Orissa High Court only on 18.2.85. The validity of these allotments was challenged by IMFA before this Court. Without going into the merits or ' this controversy, this Court on 28.2.85. passed an order directing the S.G. to grant a lease to IMFA in respect of item 3 in full and 26.62 hectares in item 4. (This order was objected to by FACOR and on 8.5.85 the Court passed an order directing the grant of a lease to FACOR over 180 acres in item 5). IMFA says that it has not been given physical possession of the areas granted to it except to an extent of a small area of 2 hectares. The net result is that out of the five items applied for by IMFA: (i) item 1 has been given but surrendered, (ii) the S.G. is agreeable to give 139.37 acres out of 142 acres of item 2; (iii) this Court has directed the grant to IMFA of item 3; (iv) in item 4, this Court has directed the grant to IMFA of 26.62 out of 37.008 hectares of item 4: and (v) In item 5, the S.G. has agreed to lease our 140 acres to AIKATH and 180 acres to FACOR. FACOR (a)Earlier History: FACOR 'S applications for mining leases for chrome ore were made on various dates between 1974 and 1978. Relevant particulars in respect of the said applications are set out in the following table: Sl. Village Extent Date of Date of final Particulars No. appli final order of of the pro cation disposal of ceedings in revision app High Court 1. Ostapal 142,000 8.7.74 29/76 12.3.76 OJC 67 of 79 Distt. hects. 315/78 3.7.78 12.1.79 Cuttack or 359 acres 2. Chingudi 749.32 8.7.74 21/76 21.4.76 OJC 66 of 79 pal Distt. hects. 278/78 30.5.78 12.1.79 3. Samole 248.447 6.8.74 182/77 29.8.77 OJC 72 of 79 Distt. hects. 15.1.79 Dhankanal (618 acres) 4. Bangur 40.47 22.6.77 432/78 17.8.78 OJC 1309 of Distt. hects. 80 21.1.80 Keonjhar (100 acres) 5. Ostapal & 312.42 7.6.78 528/79 21.9.79 OJC 2036 of Gurjang hects. 579/80 26.9.80 31.8.81 Distt. Cuttack 6. Kamarda 108 6.10.78 17/80 1.1.80 OJC 1028 of Distt. hects. 513/82 29.10.82 11.5.83 All the six applications made by FACOR were rejected by the S.G. Against the revision orders of the C.G. affirming the orders of the S.G. FACOR filed writ petitions in the High Court of Orissa and these writ petitions are pending dispos al there [except the one re: item 4 which was dismissed by the High Court on 11.11.87 and is the subject matter of S.L.P. (C) 5163 of 1988 before us. In this sense, the appli cations of FACOR were alive and awaiting disposal when IMFA filed W. P. 14 116 of 1984 in this Court. 52 (b) Subsequent developments: As we shall mention later. FACOR had obtained leases over 486 acres at Barua in Keonjhar district and 280 acres at Kathpal over Dhankanal district in 1971 72. The above applications were rejected and the writ petitions filed against the rejections were pending in the Orissa High Court when the writ petition was filed. It has been stated that the S.G. had entered into a compromise with FACOR on 18.2.85 agreeing to grant a mining lease in its favour in respect of 596 acres out of 772 acres applied under item No. 5 above on condition that FACOR gave up its claim in respect of the balance of the area of 702 acres as well as the claim made in the other five applica tions. It may be added that on 18.5.85 this Court passed an interim order directing that FACOR be given a lease in respect of 180 acres out of the 596 acres covered by the compromise dated 18.2.85. A lease was accordingly executed by the S.G. in favour of FACOR on 16.8.85 after obtaining the approval of the C.G. to the lease under section 5(2) of the Act (before its amendment in 1986) as well as to the relaxa tion under rule 59(1) of the Rules. The net result, there fore. is that, though FACOR made six applications, it had agreed to give up all of them in lieu of a ML for 596 acres out of item 5 out of which a lease in respect of 180 acres has already been obtained and is being exploited by FACOR. MANTOSH AIKATH (a) Previous History: This gentleman had obtained a lease from the Raja Sri Pitamber Bhupati Harichandan Mohapa tra, the proprietor of Sukhinda Estate on 17.10.52 (regis tered on 28.10.52) for a period of 20 years in respect of 640 acres situated in village Gurjang in Cuttack District. On 12.1.53 the State Government (in whom the estate of the former Zamindar had come to vest w.e.f. 27.11.52 under the Orissa Estates Abolition Act) issued a notice terminating the lease. Mr. AIKATH made representations against the termination. It is said that, ultimately, a compromise was reached between him and the S.G. whereunder it was agreed that a lease in respect of half of the area covered by the original lease deed on the southern side could be retained by him. Thereupon, it is said, he filed a formal application on 25.5.54 for a mining lease in respect of 320 acres. But this was rejected on the ground that the S.G. preferred to exploit the area in public sector. A revision petition to the C.G. was rejected on 9.2.72. Mr. AIKATH filed a writ petition in the High Court of Orissa impleading the C.G. and the S.G. as parties. The Orissa High Court on 18.4.1984 set aside the order of the C.G. and directed the C.G. to dispose of Mr. 53 AIKATH 'S application afresh. The C.G., in turn, set aside the order of the S.G. on 3.8.78 and directed the S.G. to decide the application of the party afresh, after taking into account the plea of the party that the area could not be reserved for exploitation in the public sector. However, no orders were passed by the S.G. The petitioner, therefore. again filed a revision application before the C.G. which passed orders on 12.12.79 directing the State Government to pass a speaking order and dispose of the application on merits. The S.G. by an order dated 17.1.80, rejected the application. Mr. AIKATH filed a writ petition in the High Court and this was pending when W.P. 14116/84 was filed here by IMFA. (b) Subsequent Development: On 21.11.84, AIKATH and 'the S.G. entered into a compromise under which the former was to be granted a lease in respect of 140 acres situated on the eastern side of the 320 acres referred to earlier. This compromise was accepted by the High Court of Orissa on 4.12.84. Thereafter the S.G. offered a lease of 140 acres on certain terms and conditions and these were accepted by AIKATH on 19.2.85. This was reported by the S.G. to this Court but no orders were passed by this Court, and no ML has been executed, in favour of AIKATH. It may be mentioned that one of the areas applied for by IMFA on 24.11.81 covered the area which. according to AIKATH, had been in his possession all along. ORISSA INDUSTRIES LIMITED (ORIND) (a) Previous History. ' ORIND made an application for mining lease on 5.7.71. It applied for mining leases over an area of 1129.25 hectares in the villages of Telangi, Patna. Ostapal, and Gurjang in District Cuttack. This application was rejected by the S.G. on 23.10.73 on the ground that the area was reserved for exploitation in the public sector. It is stated that subsequently on a representation made by ORIND on 15.12.73, the S.G. recommended to the C.G. that a lease in favour of ORIND may be granted in respect of 749.82 out of 1129.25 hectares applied for. However. this recommen dation was withdrawn (as will be discussed later). The C.G., by an order dated 23.2.77, directed the S.G. to pass a speaking order on the application but the S.G. did not comply with this direction. The company, therefore, filed writ petition. O.J.C. 1585/198 1 in the High Court of Oris sa. This writ petition was pending when W.P. 14116/84 was filed here. It may be here mentioned that one of the contentions of ORIND 54 before us is that it had also applied on 5.7.71 lot a lease of mining rights in respect of 446.38 hectares in village Sukrangi in Distt. Cuttack. That had been rejected but a revision petition had been filed before the C.G. against the said rejection. The S.G. it is said. while Lending its comments on 26.2.74 to the C.G. on the ORIND 's revision petition. had reiterated that their revision petition may be rejected as S.G. had already decided to grant ORIND a lease of 749.82 out of the area of 1129.25 hectares applied for by it. (b) Subsequent developments: It is stated that the S.G. has subsequently withdrawn its recommendations for the area of hectares. The S.G. rejected ORIND 's application for 1129.25 hectares by an order dated 7.4.89. The contents of the order are discussed later It concludes: In view of the above facts and pendency of Writ Petition No. 14116 of 1984 before the Hon 'ble Supreme Court of India. it is not possible for the S.G. at this stage to pass any order on the mining lease application dated 5.7. 1971 of ORIND and. accordingly the said application is disposed of. ORIND has preferred S.L.P. No. 8574/89 from this order of the S.G. So far as the other application of ORIND is con cerned. no information has been given to us as to what orders. if any. the C.G. has passed on ORIND 'S revision or as to what steps the applicant has taken subsequently. ORISSA CEMENT LIMITED (OCL) (a) Previous History: The company 's grievance is that it has been filing applications for mining rights in respect of chrome ore right from the year 1961 but none of the applications have been considered by the State Government on the plea that the areas applied for had been reserved for exploitation in the public sector. Further applications were made by OCL in respect of following areas: 55 SI. Date Area Date of Orders Orders Remarks No. of and Revis passed passed Appeal Village sion of by the by the appli State Central cation, Govt. , if any. if any. 1. 2. 3. 11.5.70 354,505 3.5.71 5.2.71 3.6.72 This area Hectare, The area was free, Gurjang is reser previously & Telan ved by held by gi, P.S. the State Aikath for Sukinda Govt. for 320 Acrs. Distt. exploita The State Cuttack tion in Govt. has public now gran sector. ted i.e. in the year 1985 as per compromise petition filed be fore High Court Ori ssa. M/s. Aikath 140 Acs. Factor 180 Acs. Same application filed again 2. 8.5.74 354,505 Deemed 23,277 Rejected Although Hectares Rejec M/s. Facor 's Gurjang tion application & on 7.6.78 Ostapal was much Distt. after our Cuttack application they were granted M/L by S.G.vide No.6844 dated 24.5.85 In fairness S/G should have given us this area. As per deci sion taken by them earlier, 50% of the area should be released to us keep 56 ing in view the principles of natural justice, as recommended by State Govt. vide in their letter No17410 dated 26.2.74, to centre for 142 Acrs. to Orissa Cement. 15.5.70 226.22 1.5.72 10.2.71 1.6.72 Although Ferro Hecta on the Alloys Corpo res same ration have no Boula plea, unit in Orissa & Soso reser but have a Distt. ved manufacturing Keonjher for state unitin Andhra exploita the Central tion Govt. passed orders as un der in 1971 72 over an area of 187.03 hects. against strong opposi tion by State Govt. : "Whereas the Central Govt. in exercise of the powers conferred by Rule 58(2) of the N.C. Rules 1960 relaxed the provision of rule 58(1) as a special case for the reason that the appli cants having establis 57 hed a big fac tory for manu facturing Fer ro Chrome ore, provision has to be made for procurement of raw materials for the proper running of the factory". Based on the said decision a fresh revi sion petition was filed on 6.4.73 but the C.G. it rejec ted on30.11.74 although the S.G.recommen ded: vide letter No.17410 NG dated26.2.1974 for approval for grant of 142 Acrs. to O.C.L. Same application filed again 4. 10.4.74 226.22 No 6.6.75 29.8.75 The Please see re Hectares Orders Central marks in Sl(3) Boula were Govt. set 142 Ac. could Keonjhar passed aside the have been gra as re the deemed nted. This quired rejection application by sta and reman was filed pur tute. ded the suant to the matter back Notification to the S.G. issued by the for consi S.G. throwing deration. open for re grant 58 The State vide No.38/73 Govt. on dated 5.3.74. 25.9.1975 The State Govt rejected latter changed the appln. their decision on the plea for working in that the public sector, area over contrary to laps other the decision lease area. pronounced by Our earlier Supreme Court appln. as referred to 15.3.70 in AIR. 1976 was rejec Delhi. ted but was granted to Keeping in some other view principle party i.e. of justice, FerroAlloys 50% of this Corporation area should be for a redu released to ced area. Orissa Cement. 11.5.70 388.498 22.10.70 23.10.70 7.4.72 C.G. rejected Hectares as above the applica Shrhranqi tion on the & plea they did Tailangi, not like to P.S. interfere with Sukinda. the decision District taken by the Cuttack. S.G. for keep ing the area reserved for exploitation in public sector. Same application filed again 6. 8.5.74 388.498 Deemed 23.2.77 3.6.77 The M/s Sirajudin Hectares rej delay was was holding Sukrangi ection explained the area of & but rejec 100 Ac. under Tailangi ted becau M.L. for 20 Distt. se of delay years from cuttack. 8.8.85 which expired in 1975. 59 Renewal has been refused, Sirajudin being a trader (However M/s Sirajudin & Co., has gone in writ to Orissa High Court, which is still pen ding) OMC has been granted lease over 382.709 Hects. 8.5.74 7 Sq. Deemed 6.6.75 8.6.76 The This could miles rejec Central Govt.have been Kala tion set aside granted to us ran the deemed but M/s. OMS is gista rejection working which & Ka and reman can be taken liapani ded to S.G. out from them Distt. The S.G. to grant the Cuttack. rejected our property to us appln. but OMC was just granted a permitted to free area work on ad hoc of 3 sq.km. basis. to OMC, who are holding a lease from more than 70 sq Kms. approx. and hardly working 15/20 sq. in different ML areas granted to M/s. OMC. 23.10.82 20.072 Dee 14.11.83 The C.G. set hec med aside the tares re order of area jec tion 60 Bangura deemed rejec etc. tion on Distt. 23.12.83. No Keonjhar final order has been passed by the S.G. 9. 23.10.82 549,1098 Dee 14.11.83 29.12.83 as This has Hectares med above been gran Kalia rej ted to M/s. pani & ec OMC. Gurjang tion etc. 23.10.82 365.467 Dee 14.11.82 19.12.83 This area Hecta med as above pertains res re to Sl.1&2 Ostopal jec therefore & Gur tion the jang, remarks etc. stated Distt. therein Cuttack. stand. 23.10.82 16.087 Dee 14.11.83 19.12.83 As The S.G. Hecta med above. rejected res rej it on Bangu ec 27 6 1985 ra, tion. on the P.S. ground Soso that the Distt. area over Keonjhar laps in full with the area previously held by Sirajudin & Co. Re newal was refused by StateGovt. 21.1.83 29.477 Deemed 28.3.84 Against Hectares rejec The C.G. this rejec of 72.64 tion remanded tion we Acs. the mat filed re Sajana ter back vision on garh P.S. to 2.9.85 before C.G 61 Nilgiri S.G. Therefore it Distt. is free. It Balascre. No should be orders granted to us have On similar been grounds the passed. S.G. has granted. 28.6.85 558.74 No orders acres or passed by 226.14 S.G. des hectares pite C.G. 's Asurbandha orders on Distt. revision kanal 14. 27.1.86 356.70 No orders hectares passed by in Namla S.G. Revi bhanga sion peti in Karma tion filed khya nagar before C.G. Distt. on 18.3.87 Dhankanal The previous history as well as the latter developments are indicated in the above columns. It will be seen, there from that the first seven and the eleventh applications of OCL were duly disposed of before the present litigation started and the party 's grievance is that, in respect of some of them, leases have been granted to others like IMFA, FACOR, AIKATH & OMC. The others are pending before the S.G. after a remand by the C.G. or, in revision, before the C.G. The thirteenth and fourteenth applications are pending before the S.G. and C.G. respectively. ORISSA MINING CORPORATION LIMITED (OMC) OMC is a State Government undertaking. It submitted an application for an area of 725.21 hectares in village Chin gripal on 30.6.82. 62 Though this area was within the area of 1460 sq. re served for exploitation of chromium ore in public sector as per the State Government notification dated 3.8.77, its application remained un disposed of and was deemed to be rejected on the expiry of the statutory period of one year. The C.G., by an order dated 10.10.83, on a revision filed by OMC, directed the S.G. to dispose of the application within 200 days. The S.G., however, did not grant OMC any lease but, instead, granted ML to IMFA on 14.3.85 in respect of 26.62 hectares which was well within the area applied for by OMC. OMC has also made an application for mining rights regarding 108.86 hectares in Kamrarda Balipada villages and 220.15 hectares in Gurjang village which has not been grant ed. In the result, the OMC has not been granted by mining lease despite its claim that the area in question has been reserved for exploitation in public sector though IMFA has been given ML in respect of 26.62 acres out of the area covered by these applications. However. from the details given earlier pertaining to OCL, it will be seen that OMC has been permitted to exploit about 382.709 Hectares in one area on an ad hoc basis and has leases over about 70 sq. and 3 sq. in other areas. INDUSTRIAL DEVELOPMENT CORPORATION OF ORISSA LIMITED (IDCOL) This company submitted two applications on 11.1.83 before the S.G. for grant of mining leases for chromium ore over an area of 740.67 hectares in village Patna Chingiripal and 171.73 hectares in village Gurjang. The applications were not disposed of by the S.G. within the specified time. The C.G. set aside the deemed refusal and directed the application to be disposed of but no decision has been taken by the S.G., apparently on the ground that the entire dis pute regarding grant of mining rights for chromium ore is pending in this Court in W.P. 14116/84. ORDERS PASSED BY THIS COURT It is now necessary to refer to the various interim orders passed by this Court in this matter because some of the parties have made a grievance that, though their claims for leases were pending at various levels, IMFA and FACOR have been able to obtain from this Court orders directing the grant of leases to them and that this procedure was wholly unjustified. To start with, it must be mentioned, the C.G., the S.G. and certain officers of the C.G. and S.G. were impleaded as respondents 1 to 6 in the Writ Petition with FACOR as the 7th respon 63 dent. In the writ petition IMFA referred to its applications in respect of five blocks of land detailed in para 8 of the writ petition and alleged that, while the petitioner 's application for a lease in respect of the five blocks re ferred to earlier remained pending for more than a year for consideration in pursuance of the C.G. 's directions for its disposal, the S.G. had granted mining leases for chrome ore in favour of FACOR which, according to the petitioner, was similarly placed. In view of this allegation, this Court passed a detailed and stiff interim order on 27.9.84 in the following words after hearing the counsel for the petition ers and the standing counsel to the S.G.: "Mr. R.K. Mehta, learned counsel appears on behalf of Respondents Nos. 4 to 6 pursuant to the notice served upon him as Standing Counsel for those respondents, and he asks for time in order to enable him to obtain instructions from those respondents and to file a counter affidavit for these respondents. We would, therefore, adjourn the Writ Petition to 30.10.84. But in the meanwhile we would direct respondents Nos. 4 to 6 not to grant to anyone else other than the petitioners mining lease for chromite ore in re spect of the areas applied for by the petitioners and form ing the subject matter of applications made by them as set out in paragraph 8 of the Writ Petition. Since the project which is being set up by the petitioners is a very important export oriented project for which the necessary permission has already been granted by the Govt. of India and the Consortium of Foreign Banks has already agreed to finance the Project and it is a project which will earn considerable foreign exchange for the country and provide employment to a large number of workmen, we would direct the 4th respondent to consider and decide the application of the petitioners set out in paragraph 8 of the Writ Petition on or before 23. 10.84 after giving an opportunity to the petitioners of being heard in the matter. We have no doubt that the 4th respondent will keep in view the nature and importance of the project and its foreign exchange earning capacity, as also its potential for providing job employment to a large number of workmen in the State of Orissa while considering and deciding the applications of the petitioners. The 4th respondent will also take into account the fact that similar mining leases have been given to the 7th respondent and prima facie there does not appear to be any reason for denying the same facility to the petitioners, for 64 otherwise the action of the 4th respondent may be liable to be condemned as discriminatory and arbitrary and moreover the 4th respondent cannot over look the fact that if mining lease as applied for are not granted, the petitioners will have to import chromite and that will be a drain on the foreign exchange resources of the country. There are matters where national interest alone must count. It is indeed surprising that though the Central Govt. directed the 4th respondent to dispose of the application of the petitioners more than a year ago, the 4th respondent has not yet chosen to dispose of the applications. We would direct the 4th respondent to carry out the direction given by us and dis pose of the applications of I.the. ,petitioners in the light of the observations contained in this order on or before 23.10.84. The decision taken by the State Govt. on the application shall contain the reasons and will be communi cated to the petitioners and also placed before this Court along with the Counter affidavit. The previous order made by us in regard to the production of files will stand and the files shall be produced at the next hearing of the Writ Petition. The Writ Petition stands adjourned to 30/10/84. On coming to know of this order, FACOR had the matter men tioned and, after hearing the arguments of its counsel, the Court passed an order on 18.10.84, the material portion of which reads as under: "On the application of Mr. Kapil Sibbal, learned counsel appearing on behalf of the 7th respondent, we direct that no decision shall be taken on the applications of the petitioner until 30.10.84 unless a decision has already been taken. In the event the decision has already been taken it shall not be implemented until then. The files relating to the applications of the petitioner and the 7th respondent for mining leases in respect of chromite ore shall be sent to the Registry of this Court forthwith in a sealed cover along with a responsible officer of the State Government so as to reach the Registry of this Court by 2 p.m. on Satur day, 20th October, 1984. " A little later, Mr. Aikath was impleaded as respondent No. 8 and, pending the filing of a counter affidavit by him, the Court passed the following order on 28.2. 1985: 65 " . . We would direct the State Government to give to the petitioners within 15 days from today the leases in respect of the areas of item No. 3 and 26.62 hectares area out of item No. 4 set out in para 8 of the writ petition . so far as the remaining controversy is concerned, we shall dispose it of on 2.4.85 after hearing the parties. " The State Government will make an application to the Union of India within 5 days from today for the approval of the leases and the Union of India shall grant approval to them within 10 days". By the next date of hearing viz. 8/5/85, ORIND entered into the fray and was ordered to be made respondent No. 9 in the writ petition. Pending further affidavits by the parties, the Court gave another direction in the following terms: " . . the State Government will give to respondent No. 7 within 3 weeks from today lease in respect of 180 acres in item No. 5set out in paragraph 8 of the writ peti tion excluding the area which the State Government propose to give to respondent No. 8. This order. is without preju dice to the rights and contentions of the parties . . The State will make an application to the Union of India within a week from today for the approval of the lease and the Union of India will grant its approval within a period of 2 weeks from that date". Then comes the order dated 30.4.87 by which the writ peti tion was disposed of. It needs to be set out in full: "After hearing counsel appearing for the parties we consider that the proper order to be passed is to direct the parties who have applied for grant of mining leases to file representations before the Secretary Ministry of Mines and Steel, Department of Mines, Government of India within ten days from today setting out their claims in respect of the areas covered by their respective applications. We direct that the Secretary; Department of Mines shall consider the claims of the various parties in respect of the areas cov ered by their application in the light of the observations contained in the orders already passed by the Court; namely; the Order dated 27th September, 1984 and 66 8th May 1985 after duly taking into consideration the re quirements of the manufacturing industries concerned and decide about the question of grant of mining leases after giving an opportunity of being heard to the parties con cerned. Final orders in the matters should be passed by the Secretary within a period of six weeks from today. It is made clear that the memoranda of compromise said to have been filed in the High. Court of Orissa will be treated as not binding either on the parties or on the State Government and the whole question will be treated as being fully open for fresh consideration and determination by the Secretary Department of Mines, Government of India. The status quo as obtaining at present with regard to the carting out of the mining operations over the areas will continue until the representations are disposed of by the Secretary pursuant to this order within six weeks from today. As already indicated the entire matter will be fully open for consideration by the Secretary and the orders passed by this Court should not be treated as final in regard to the allocation of the areas to the different claimants. The fact that certain writ petitions are pending before the High Court of Orissa will not in any way hamper the effective carrying out of this order. It is needless to add that the disposal of the matter by the Secretary should be by a reasoned order. The writ petition is disposed of on the above terms. " Sometime later, IMFA moved an application for clarification of the Court 's order dated 30.4.87. On this the following order was passed on 6.10. 1987: "There are several claimants for the grant of mining leases in different parts of Orissa. This question has come up from time to time before this Court. The first relevant order was the one dated the 28th February, 1985. Therein a bench consisting of P.N. Bhagwati, J. (as he then was) and V. Balakrishna Eradi, J. directed the State Govern ment to give to the petitioners M/S Indian Metal & Ferro Alloys Ltd. within 15 days from today the leases in respect of the full areas of Item No. 3 and 26.62 hectares area out or ' Item No. 4 as set out in paragraph 8 of the Writ Peti tion. This Court further directed so far as the remaining controversy was concerned that the same shall be disposed of later on 67 by giving certain other consequential directions as the petitioners might seek which it is not necessary to refer ' here. It was directed that the State Government was to make an application to the Union of India within 5 days from the date of the order for the approval of the leases by the Union of India and which should grant approval within ten days therefrom. Thereafter it appears that on 8.5.85 another order was passed by the same bench of this Court wherein it was di rected that the Orissa Industries Ltd. should be joined as respondent No. 9 in the Writ Petition and respondent No. 9 would file counter affidavit and directions were also given for filing rejoinder, if any. It was directed that "pending hearing and final disposal of the writ petition the State Government would give to the respondent No. 7 within three weeks from today, lease in respect of 180 acres in Item No. 5, set out in paragraph 8 of the writ petition the State excluding the area which the State Government proposed to give to respondent No. 8. " It was stated that this order was made without prejudice to the rights and contentions of the parties directions were given for hearing of the writ peti tions. Finally the order with which we are directly concerned with is the order dated the 30th April, 1987 which was passed by a bench consisting of Hon 'ble V. Balakrishna Eradi, J. and one of us G.L. Oza, J. The said order is set out in paragraph 2 of the C.M.P. Nos. 16435 37/87. It is not necessary to set out in detail the order. It may be noted that the Court directed that the proper order to be passed was to direct the parties who had applied for grant of mining |eases to file representations before the Secretary, Ministry of Mines and Steel, Department of Mines; Government of India within ten days from that date setting out their claims in respect of the areas covered by their respective applications. This Court directed the Secretary Department of Mines to consider the claim of the various parties in respect of the areas covered by their applications in the light of the observations contained in the orders already passed by this Court, namely, the orders dated the 22nd September, 1984 and the 8th May, 1985 after duly taking into consideration the requirements of the manufacturing Indus tries concer 68 ned and decide about the question of grant of Mining Leases after giving an opportunity of being heard to the parties concerned. Thereafter, the present applications have been made by different claimants seeking for directions for being added for consideration by the Secretary subject to their existing rights under the existing leases and grant of future leases. Mr. Kapil Sibbal, counsel appearing for the respondent No. 7 and Dr. Gauri Shankar counsel appearing for the applicant submitted that there are existing leases in their favour which cannot be entertained (sic) by any order passed by the Secretary and they are entitled to work out their full rights. On the other hand the Orissa Mining Corporation as well as Industrial Development Corporation Orissa are also claiming for grant of Mining leases includ ing respondent No. 8 who is alleged to have found out the mines. In our opinion the proper order would be to pass order in terms of the order passed by this Court on 30.4.87. The claims of the.different claimants including Mr. Sibal 's clients as well as Dr. Gauri Shankar 's should be considered in accordance with law by the Secretary in making his con siderations. The Secretary should bear in mind the previous orders made in their favour and the previous leases and the rights, if any, granted therefrom and their consequences. Similarly the public benefit and public interest involved and proper exploitation of the mines should be borne in mind. Bearing these facts it is directed that the Secretary should arrive at a just, equitable and objective decision and send a report to this Court within three months on receipt of the copy of the order within a fortnight from today. The Secretary should only consider the applications of those who had existing leases applications at the time when the order of 30.4.87 was made and not of those who had no existing leases applications on 30.4.87. The copy of the report to be made shall be supplied to the parties. " It is in pursuance of this order Rao has heard the parties and submitted the report which has now been placed before us for further directions. OTHER PENDING APPLICATIONS It is necessary, to clear the ground, to refer to a number of applications made by the various parties subse quent to the order of this Court dated 30.5.87: 69 (i) By C.M.P. No. 13347/87, FACOR pointed out that a lease in respect of 180 acres (being part of item 5) had been granted to it by the S.G. on 13.8.85 in pursuance of this Court 's order dated 8/5/85. It claimed that it had made substantial investments, engaged a huge labour force and started mining in this area. It was disturbed by the fact that OMC and IDCOL had suddenly entered into the picture and claimed before Rao that they were entitled to leases on the basis of reservations. According to the applicant, only the parties to the writ petition could be heard by Rao and OMC and IDCOL should not be permitted to join the proceedings before Rao and allowed to disturb the leases directed to the given to it and IMFA by the orders dated 28.2.85 and 8.5.85. A second point taken in the application was this: "13. That it is submitted that the order dated 30.4.87 does not make it clear as to under what statutory authority the Secretary to the,Government of India shall dispose of the representations made by the various parties to the writ petition. This matter requires to be clarified by this Hon 'ble Court". This application was opposed by the OMC and the IDCOL. The Court, by its order dated 6.10.87, rejected the first re quest and allowed OMC and IDCOL to participate in the pro ceedings before Rao; it was directed that the claims of all parties whose applications for lease were subsisting on 30.4.87 should be heard by Rao. It was, however, clarified that in arriving at his conclusions, the Secretary should bear in mind the previous orders made in favour of IMFA and FACOR, the previous leases and rights granted to them and their consequences. The second aspect to which the applica tion referred was, however, not clarified. (ii) A second application of FACOR (C.M.P. 22588/77) was directed primarily at the IMFA. It was submitted here that the order dated 28/2/85 needed to be recalled and FACOR allowed to put forward claims in respect of the areas di rected to be leased out to IMFA as IMFA had not at all been operating its export oriented unit (EOU) since 1984 and was attempting to divert the ore to its domestic units whereas FACOR was the one that was operating an EOU and needed all the ore it could get. No notice was issued on this applica tion apparently as all the claims had already been referred to Rao. (iii) In August 1987, IMFA moved C.M.P. 21578/1987. This was in the nature of a counter to C.M.P. 13347/87 moved by FACOR. This 70 application also prayed that the consideration before the Rao Committee should be confined to the parties to the writ petition. IMFA also took this occasion to request that the area of 180 hectares leased out to FACOR by the order dated 3/5/85 should be treated as provisional and taken into account in the allotment to be decided on by Rao. FACOR tiled a reply. No orders have, however, been passed on the petition. again. apparently since all the claims were before Rao. (iv)C.MP. 9284/88 was filed by OCL to quash the "order" of 1.2.88 passed by Rao which has totally rejected the claims of OCL. No orders on this petition have been passed so far but this will now have to be disposed of in the light of the conclusions we may reach in regard to OCL 's claims on the merits and no separate orders need to be passed thereon. (v) I.A. 1/89 was filed by ORIND challenging the cor rectness of Rao 's findings and praying that, pending dispos al of W.P. 14116/84 which according to it stands undisposed of despite the orders dated 30/4/87 and 6/10/87 the S.G., OMC, Tisco. Sirajuddin & Co. and Mysore Minerals (the re spondents to the application) should be directed to supply to ORIND 3000 M/T of chrome ore per month. No orders have been passed on this application so far but, since the writ petition itself is now being disposed of, no interim orders as prayed for in this application are at all called for. STATUTORY INADEQUACIES 1) Delay and Ineffectiveness: Now the first thing that strikes one on perusing the course of the proceedings in the case is the extremely unsatisfactory and impractical proce dure followed under the Act in regard to the grant of mining leases for important minerals like chrome ore. The statute envisages that the application should be made to the S.G. and disposed of by it within a prescribed period. But the course of events in the case and other reported cases show that this time limit is observed more in breach than in observance. Anticipating this possibility, the rules provide that, if an application is not disposed of within the statu tory period, it shall be deemed to have been refused. So far so good, as at least, the applicant can, on the expiry of the period, have recourse to a higher authority. The remedy provided to the aggrieved applicant is to file a revision application before the C.G. under section 30 of the Act for revision of the order within three months thereafter. Rule 55 enables the C.G., after hearing all necessary parties, to "confirm, modify or set aside the order or pass such other order in relation to 71 thereto as the Central Government may deem just and proper". A note under rule 55 also says that "during the pendency of a revision application the State Government should not take any action in respect of the area, which is the subject matter of the revision petition as the matter becomes sub judice". Having regard to the wide powers thus conferred. one would except the C.G. to dispose of the application on merits, either granting the lease in whole or in part or rejecting it. But, curiously, in most of the cases which come up before Courts as also in this case, the C.G. seems reluctant to pass any order except to set aside the "deemed refusal" and direct the S.G. to dispose of the application afresh within a specified period. That was the order passed, for example, in IMFA 's case the time given being 200 days. But the S.G. does not seem to pay any heed to this direction and no order is passed within a reasonable period. Well, one would think a second approach to the C.G. may be helpful. IMFA tried it but got back a reply to say that the C.G. was helpless in the matter. The original order in revision has stated: "should the State Government fail to pass order on the petitioner 's application he may seek redress in an appropriate Court of Law, if so advised" and the subsequent application was rejected by the C.G. on the ground that the C.G. becomes functus officio when it passes the order in revision and has no jurisdiction to revise it. So all that the applicant can do is to wait for some time and then file a writ petition. Even if the writ petition were to be heard quickly all that the Court can do is to direct the S.G. to dispose of the application expeditiously. This is an ex tremely cumbrous and ineffective procedure in which several years pass but the application stands still. Thus, for e.g., ORIND made an application in 1971 and is yet to know what the fate of its application would be. It puzzles 'us why the C.S., even in the first instance, could not dispose of the application on merits in the light of the report received from the S.G. and after hearing concerned parties. (2) Proliferation of applications: Another problem created by the passage of time is the entry of new parties in the fray. We shall later point out that, though section 11 tries to enunciate a simple general principle of "first come; first served" in practice, priority of an application in point of time does not conclude the issue. In this case itself. for instance: during the period ORIND 's application of 1971 has been under consideration before various authorities and in the writ petition filed in Orissa High Court, several other competitors have come into the picture. The statutory provi sion is not clear as to which of the applications in respect of any particular area, are to be considered together. If ORIND 's application of 1971 for example: were to be 72 considered only on the basis of the persons who had made applications at that time or a short time before or after, one result would follow; if, on the other hand: if all the applications pending for disposal at the time ORIND 's appli cation is to be granted or rejected are to be considered. the result would be totally different. Since the interests of the nation require that no lease for mining rights should be granted without all applications therefore at any point of time being considered and the best among them chosen or the areas distributed among such of them as are most effi cient and capable; the latter is the only reasonable and practical procedure. That is why this Court, in its order dated 30.4.87: laid down we think rightly that all appli cations pending for consideration as on 30.4.87 should be considered by Rao. (3) Procedure for consideration of applications: A further confusion created in this case is due to the fact that leases of different areas in different villages and dis tricts have been applied for. No attempt has been made to locate, with reference to any compact block of land; who exactly are the competitors and whether there are areas in respect of which there is no competition at all. It will be seen later how this has caused difficulty in the present case. But what we wish to point out here is that the statute must lay down clearer guidelines and procedure. Having regard to the new avenues for vast industrial development in the country, the more workable procedure would be for the S.G. to call for applications in respect of specified blocks by a particular date and deal with them together: other later entrants not being permitted in the field. Otherwise only confusion will result, as here. There was a time when the S.G. looked to private enterprises for mineral develop ment in its territory. Even now, it has been stated that 87% of the State territory containing chromite is under lease to one industrial house. Of late, however, competition has crept in. The S.G. has its own public sector corporations and various entrepreneurs are interested in having mining leases for their purposes. It is, therefore: vital that there should be a better and detailed analysis, district wise and area wise and that a schedule for consideration of applications in respect of definite areas should be drawn up with a strict time frame so that the State is no longer constrained to deal with sporadic applications or make a routine grant of leases in order of priority of applica tions. These are aspects which call for careful considera tion and appropriate statutory amendments. IS section 11(2) CONCLUSIVE? Now, to turn to the contentions urged before us: Dr. Singhvi, who 73 appeared for ORIND, vehemently contended that the rejection of the application of ORIND for a mining lease was contrary to the statutory mandate in section 11 (2); that, subject only to the provision contained in section 11(1) which had no application here, the earliest applicant was entitled to have a prefer ential right for the grant of a lease; and that a considera tion of the comparative merits of other applicants can arise only in a case where applications have been received on the same day. It is no doubt true that section 11(2) of the Act read in isolation gives such an impression which, in reality, is a misleading one. We think that the sooner such an impres sion is corrected by a statutory amendment the better it would be for all concerned. On a reading of section 11 as a whole one will realise that the provisions of sub section(4) completely override those of sub section (2). This sub section preserves to the S.G. a right to grant a lease to an applicant out of turn subject to two conditions: (a) record ing of special reasons and (b) previous approval of the C.G. It is manifest, therefore, that the S.G. is not bound to dispose of applications only on a "first come, first served" basis. It will be easily appreciated that this should indeed be so for the interests of national mineral development clearly require in the case of major minerals. that the mining lease should be given to that applicant who can exploit it most efficiently. A grant of ML in order of time will not achieve this result. In the context of his submission pleading for priority on the basis of the time sequence Dr. Singhvi referred to certain observations in the decisions reported as Ferro Alloys Corporation of India vs Union, I.L.R. 1977 Delhi 189 at p. 196 and as Mysore Cements Ltd. vs Union, A.I.R. at p. 15 1. we do not think these decisions help him. In the former case; an application by FACOR for a lease was rejected on the ground that an earlier application was being accepted. FACOR contended this was wrong that the S.G. could not have refused to look into its application merely because another applicant had a preferential right under section 11(2) and that its application as well as that of the earlier applicant should have been considered together. It is in the situation that the Court observed that rule 11 primarily embodies the general principle of "fist come first served" and an out ofturn consideration under section 11(4.) was an exception for which a strong case had to be made out. The petitioner could not have a grievance if the general principle was followed. So also, in the latter case an earlier application having been accepted and a lease granted, the consideration of a later application was held to be uncalled for. These decisions cannot be treated as authorities for the proposition that the S.G. is bound to grant an earlier application as soon as it is received 74 and cannot wait for other applications and consider them all together and grant a later one 'if the circumstances set out in rule 11(4) are fulfilled. That apart it has to be remem bered that the S.G. did reject ORIND 's application by an order dated 23.10. This order was set aside in the C.G. on 20.2. 1977 and the S.G. directed to consider it afresh. The S.G. did not comply with this order and so a writ petition was filed by ORIND which was pending when this writ petition was" filed. Subsequently the High Court on 9.2.89 directed the S.G. to consider and ,dispose of ORIND 's application on merits. The S.G. on ' 7.4.89 dismissed ORIND 's application on the ground that the issue is before us and hence the S.L.P. against the order of rejection of the S.G. Even assuming that we accept the S.L.P. filed by ORIND that will only entitle ORIND to have its application reconsidered for grant along with such other applications as may be pending as on the date of such reconsideration. In the context of the scheme of the Act and the importance of a lease being granted to one or more of the better qualified candidates where there are a number of them it would not be correct to say that as the S.G. 's order of 29.10.1973 has been set aside ORIND 's application should be restored for reconsideration on the basis of the situation that prevailed as on 29.10. 1973 and that therefore it has to be straight away granted as there was no other application pending on that date before the S.G. In matters like this subsequent applications cannot be ignored and a rule of thumb applied. We are unable to accept the submission of Dr. Singhvi that the application of ORIND being the earliest in point of time should have been accepted and that we should direct accord ingly. As to how far the requirements of section 11(4) are ful filled in the present case that is an aspect which will be considered later. PROMISSORY ESTOPPEL It will be convenient here also to deal with another argument raised by Dr. Singhvi based on grounds of promisso ry estoppel. Dr. Singhvi points out that when ORIND applied to the C.G. for revision of the order of rejection of its application on 23.10.73 the S.G. on 26.2.74 wrote to the C.G. as follows: M/s Orissa Industries Limited made 'representation to the State Government on ' 15.12. 1973 for reconsidering grant of lease to serve the captive requirements of their refractory plant. They also brought to the notice of the State Government an export order of refractories of sizeable value of about Rs.2 crores received from National 75 Iranian Steel Mills. Teheran Chromite, being essential raw material for manufacture of refractories they pressed for grant of Mining Lease. After careful consideration of the representation, the State Government have revised the policy of reserving the chromite area only for exploitation in public sector and have decided for grant of chromite to serve the captive requirements of industry within the State should be given first priority. Accordingly, it is proposed to grant the mining lease for chromite over the available areas subject to revision of the previous order of the State Government by Government of India u/s 30 of the Mines & Minerals (Regulation & Development) Act, 1957 and u/s 5(2) of the said Act. Steps are being separately taken to exclude this area from the operation of reservation notification for exploitation of chromite in the public sector. In the interest of the local industries. the State Govt. do not intend to throw open the area after releasing from reservation. Approval of Government of India would also be necessary for not throwing open the area in the relaxa tion of the rule 58 of the Mineral Concession Rules 1960. Out of 1129.25 hectares applied for, an area of 379.93 hectares is covered by overlapping of applied leases or applications including an area of 142 hectares which is being separately recommended to Government of India for grant of Mining lease in favour of M/s Orissa Cement Limit ed. As such the net area available for grant of mining lease is therefore. 749.32 hectares. The State Government having rejected the application of the party in Government Proceeding No. 1043 dated 23.10. 1973 are got obtain to revise their own order by granting Mineral Concession as instructed in your department letter No. MV I(445)/61 dated 5.1.72. The case is therefore. recom mended to Government of India for grant of Mining Lease over an area of 749.32 hects. in favour of M/s Orissa Industries Limited revising the above order of the State Government u/s 30 of the . As chromite ore is specified mineral under the first schedule of the Act approval of Government of India is also requested u/s 5(2) of the Act. I would therefore, request you to kindly obtain and communicate orders of Government of India on revision u/s 30 of Mines & Minerals (Regulation & Development) Act, 1957 and approval u/s 5(2) of the said Act and in relaxation of Rule 58 of the Mineral Concession Rules. 1960 for grant of Mining Lease for chromite over an area of 749.32 hectares in Cuttack District in favour of Orissa Industries Limited. " Simultaneously, it is pointed out, the S.G., while sending its comments to the C.G. on the contents of another revision application filed by ORIND against the rejection of its application (also dated 5.7.71) for a lease of 446.38 hec tares in village Sukrangi of Cuttack District, had this to say: "Recently in State Government letter No. 1747MG dated 26.2.74 chromite bearing area to the extent of 749.32 hectares in Cuttack district has been recommended to Govern ment of India for grant in favour of M/s Orissa Industries Ltd. The need of M/s Orissa Industries Ltd. will be met from this. It is the responsibility of the party to obtain raw materials for its factory and the State Government cannot take such responsibility as contended by the petitioner. The party is at liberty to purchase the chrome ore from Orissa Mining Corporation. XXX XXX XXX The State Government have already recommended an area in favour of M/s Orissa Industries Ltd. to the Govt. of India to meet the requirements of their industry. The State Government have already decided to grant the area applied for by M/s Orissa Industries Ltd. in their M.L. application under revision to M/s Orissa Mining Corporation Ltd. who are now working the area as an agent of the State Government. Hence the question of granting this area to M/s Orissa Industries Ltd. does not arise. " Also, on 5.3.74 the S.G. published a notification dereserv ing the said 749.32 hectares (said to have been earlier reserved for exploitation in the public sector by a notifi cation of 3.7. 1962). Dr. Singhvi submitted on the strength of this correspondence and notification that the S.G. having sought to justify its rejection of ORIND 's application for 77 446.38 acres on the ground that the company 's application for 749.32 hectares was being recommended after dereserva tion, it was not open to the S.G. now to take up a different stand and that ORIND 's application for 1229.25 hectares now under consideration should have been granted at least to the extent of 744.32 hectares the dereservation and lease in favour of ORIND, of which had been recommended by the S.G. itself as early as 1974. In support of this contention, learned counsel relied on the observations made in a series of decisions of this Court: Kanai Lal Sur vs Paramnidhi Sadhukhan, ; M/s Motilal Padampat Sugar Mills Co. (P) Ltd. vs State of Uttar Pradesh and Ors. , ; ; Gujarat State Financial Corporation vs M/s Lotus Hotels Pvt. Ltd., ; Surya Narain Yadav & Ors. vs Bihar State Electricity Board & Ors., [1985] Suppl. 1 S.C.R. 605; Union of India & Ors. vs Godfrey Phi lips India Ltd., [1985] Suppl. 3 SCR 123 and Mahabir Auto Stores & Ors. vs Indian Oil Corporation & Ors., [1990] J.T. 1 S.C. 363. This argument is interesting but overlooks certain very important relevant circumstances. As mentioned earlier, ORIND 's revision petition was disposed of by the C.G. on 23.2. This order contains no reference to the S.G. 's letter of 26.2.74; on the contrary, it proceeds on the footing that no comments had been received from the S.G. Possibly this is because the letter of 26.2.74 was not in the form of comments on the ORIND 's revision application but was in the form of the S.G. 's recommendations on ORIND 's representation to it dated 15.12.73, although it does sug gest that the C.G. could set aside the order of 23.10.73 and direct the grant of a lease to ORIND in respect of 749.32 hectares. Be that as it may, the C.G. did not accept the recommendation of the S.G. Indeed, we find on record that, having regard to a letter of the C.G. dated 15.5.74, the S.G. sent a letter dated 17.7.74 withdrawing the earlier recommendation made by it on 26.2.74 for the allotment of 749.32 acres to ORIND. In view of this letter, the C.G. simply set aside the order of 23.10.73 on the ground that it was not a speaking order and directed the S.G. to dispose of ORIND 's application within 100 days in the light of the letter of the C.G. dated 15.5.74. Interestingly, this letter had been written in reply to a proposal from the S.G. that the exploitation of chromite had to be entrusted to the public sector. Accepting this suggestion, the letter pro ceeded to lay down certain broad priorities on the basis of which leases could be granted and certain other directions in respect of research and development. The position, there fore, is that the C.G. did not accept the S.G. 's recommenda tions regarding the grant of a lease to ORIND in respect of 749.32 hectares out of the 1129.25 78 hectares applied for. There was, however, delay in the disposal of the application by the S.G. When the S.G. took up consideration of the matter once again it took note of three circumstances to reject the application of ORIND. These were: (i) One of the directions in the C.G. 's letter of 15.5.74 was that "no lease of lumpy ore for metallurgical and re fractory grade be granted to private sector unless mining undertakings of the State or Central Government are not interested in the exploitation of ore in these leaseholds" and the requirement of ORIND was for lumpy chromite ore; (ii) Two notifications had been issued on 28.4.77 and 3.8.77 reserving certain areas for exploitation by the public sector. The former dealt specifically with the 749.32 hec tares which had been proposed for allocation to ORIND in the letter of the S.G. dated 26.2.74. The latter covered a huge area of 1460 sq. km. in various districts of the State; (iii) The claims of all applicants had been considered by Rao and Rao had come to the conclusion that no mining leases need be given to ORIND. We shall consider later the claim of ORIND on merits. But, for the present, we only wish to point out that no grounds have been made out which could support a plea of promissory estoppel. The grant of a lease to ORIND had to be approved by the C.G. The C.G. never approved of it. The mere fact that the S.G., at one stage, recommended the grant cannot stand in the way of their disposing of the application of ORIND in the light of the C.G. 's directives. Perhaps, the highest that ORIND can claim is that, since this lease of 749.32 acres has not come through, the SG 's order rejecting its application in respect of 446.38 hectares deserves to be considered. But that area is not the subject matter of the present S.L.P. by ORIND. Moreover, ORIND has not placed before us any information as to what happened to the revi sion petition filed by it against the rejection of the application in respect of 446.38 hectares of the further proceedings, if any, in relation thereto. We express no opinion as to ORIND 's entitlement to a lease on that appli cation in case it does not succeed in its claim here in respect of 749.32 hectares. It will be open to ORIND to pursue such remedies in respect thereof as it may be advised and as may be available to it in law. 79 THE RESERVATION POLICY The principal obstacle in the way of ORIND as well as the other private parties getting any leases was put up by the S.G., OMC and IDCOL. They claimed that none of the private applications could at all be considered because the entire area in all the districts under consideration is reserved for exploitation in the public sector by the noti fication dated 3.8.77 earlier referred to. All the private parties have therefore joined hands to fight the case of reservation claimed by the S.G., OMC and IDCOL. We have indicated earlier that the S.G. expressed its preparedness to accept the Rao report and to this extent waive the claim of reservation. Interestingly, the OMC and IDCOL have en tered caveat here and claimed that as public sector corpora tions they could claim, independently of the S.G. 's stand, that the leases should be given only to them and that the Rao report recommending leases to IMFA, FACOR and AIKATH should not be accepted by us. The relevant provisions of the Act and the rules have been extracted by us earlier. Previously, rule 58 did not enable the S.G. to reserve any area in the State for exploi tation in the public sector. The existence and validity of such a power of reservation was upheld in Kotiah Naidu vs State of A.P., A.I.R. 1959 A.P. 185 and Amritlal Nathubhai Shah vs Union, A.I.R. 1973 Guj. 117, the latter of which was approved by this Court in ; pointed out earlier, rule 58 has been amended in 1980 to confer such a power on the S.G.). It is also not in dispute that a notification of reservation was made on 3.8.77. The S.G., OMC and IDCOL are, therefore, right in contending that, ex facie, the areas in question are not available for grant to any person other than the S.G. or a public sector corpora tion [rule 59(1), proviso] unless the availability for grant is renotified in accordance with law [rule 59(1)(e)] or the C.G. decides to relax the provisions of rule 59(1) [rule 59(2) ]. None of those contingencies have occurred since except as is indicated later in this judgment. There is, therefore, no answer to the plea of reservation put forward by the S.G., OMC and IDCOL. The private applicants seek to get over this difficulty in several ways. In the first place, they all vociferously urge that this plea has been taken by the S.G. belatedly, that the OMC and IDCOL have come into the picture very late and that this plea should not be allowed to be raised at this stage. The learned Advocate General for the State of Orissa has pointed out, we think rightly, that there is no substance 80 this grievance. The objection regarding reservation was raised by the S.G. at the very first opportunity it had, in a preliminary counter affidavit filed by it in the writ petition dated 29.10.1984. The counteraffidavit mentioned about the reservation in no uncertain terms and a copy of the relevant page of the Orissa Gazette dated 12.8.77 which contained the reservation notification dated 3.8.77 was also annexed to the counter affidavit. Reference was also made to the statutory provisions and judicial decisions. The claim was reiterated, when ORIND joined the proceedings, in a reply filed by the State to the counter affidavit filed by ORIND on 22.8.85; this reply affidavit refers to the letter of the C.G. dated 15.5.74 and the notification of reserva tion dated 28.4.77 pertaining to the 749.32 acres in respect of which ORIND had made an application. In a further coun ter affidavit dated 24.11.89 filed "in reply to the addi tional submissions dated 17.10.89 filed on behalf of ORIND", the notification of 3.8. 1977 has also been referred to. OMC and IDCOL had submitted their applications for lease but no orders had been passed thereon. When they came to know that the applications of IMFA and FACOR were considered by this Court and certain interim orders passed, they approached Rao to consider their applications as well. This request was opposed by the other parties whereon OMC and IDCOL sought and obtained the directions of this Court that their appli cations should also be considered by Rao. Before Rao, they supported the S.G. plea of reservation. In the circumstances Set out above, it is difficult to accept the contention of the various private applicants that the plea as to reserva tion should not be entertained at all on the ground of delay and 1aches. It is then argued that though the S.G. may have formally notified a reservation, it has not been very serious about this and has always been willing to consider private appli cations for leases. In support of this contention, reliance is placed on the following circumstances: (a) On 26.2.74, the S.G. has clearly expressed its willingness to dereserve the area of 749.32 acres and, indeed, followed it up on 5.3.74 with a notification of dereservation. (b) Though the S.G. claims that reservation is neces sary to meet the S.G. 's requirements because 81% of chromite ore rich lands already stand leased out to a private party (TISCO), the S.G. proceeded to renew the grant in favour of that party. (c) The S.G. has been willing enough to lease out lands to private parties: (i) The S.G. has granted leases to FACOR on 81 9.2.72, 7.10.72 and 12.11.76 in respect of 157.05 hects. 133.31 hects. and 72.84 hects. respectively in Bokhla, Kathpal and Ostapal villages. (ii) it has entered into an agreement with AIKATH to grant a lease in respect of a part of the land applied for by him in item 8; (iii) it has agreed to lease out item 3 and 26.62 hectares out of item 4 in favour of IMFA; (iv) it agreed to lease out 180 acres in item 5 in favour of I FACOR. (d) Even at this final stage of hearing of the writ petition. the Advocate General of the State has conceded that the S.G. is prepared to abide by the Rao report i.e. the S.G. is willing to grant leases to IMFA, FACOR and AIKATH but not to OCC or ORIND. This is patently discrimina tory. We do not, however, think that these circumstances establish that the State is not serious about its plea of reservation. So far as item (a) is concerned. we have al ready pointed out that this was the initial attitude of the Government but this policy was changed in pursuance of the C.G. 's letter dated 15.5.74 and its order on ORIND 's revi sion application. The S.G. itself had, in fact, withdrawn the recommendations made on 26.2.74 by its letter of 17.7.74. The thought of dereservation had therefore been given up by the S.G. in July '74 itself though the notifica tion of dereservation was superseded only in 1977. In regard to items (b) & (c), the position is that the lease of 1976 was after the dereservation of 5.3.74. The leases to FACOR in 1972 (the details of which are not available before us) are stated to have been granted after obtaining C.G. 's order for relaxation. The full circumstances in which the lease in favour of TISCO was renewed are not before us but perhaps such renewal was dictated by the nature of the industry run by TISCO and its importance for the economy of the State and the country. These apart, the Court approved of the grant of leases to IMFA and FACOR. So far as (d) is concerned, the learned Advocate General of Orissa has made it clear that the S.G. does not accept the Rao report in so far as it ignores its claim of reservation. The concession made only is that since the Rao Committee, in recommending grant of leases to IMFA and FACOR is only giving effect to a fait accompli in pursuance of the interim directions of this Court, they are willing to abide by it. It will therefore be clear that, except for two or three instances, where leases have been granted by the S.G. on its own, the S.G. has generally and consistently adhered to its stand that the chromite bearing lands are reserved for exploitation in the public sector. The rules permit the C.G. to relax the rigid requirements of reservation in individual cases after re cording special reasons. We are 82 not here called upon to decide whether the relaxations made in the above eases were in accordance with the rules or not. It is sufficient to say here that these exceptional and isolated instances of lease are not sufficient to sustain the plea of the parties before us that the policy of reser vation is merely being raised as a formal defence and has never been seriously implemented by the S.G. Dr. Singhvi also raised a plea of arbitrariness and mala fide to challenge the reservation policy. He urges on the first count that it was not open to the S.G. to go on shift ing its reservation policy from time to time without ade quate reasons, Such conduct was also vitiated, he said, as amounting to malice in law and referred in this context to the observations of this Court in Venkataraman vs Union, ; We do not think this contention has any substance. Chromite ore is an important major mineral and the importance of its conservation and proper utilisation for our country 's development cannot be gainsaid. The S.G. rightly decided upon a policy of reservation in 1967 and this was kept up till 1974. In February 1974 the S.G. was in favour of freer issue of mining leases but gave up this policy in pursuance of the C.G. 's letter of 15.5.74. Reser vation was, therefore, clamped in 1977 again. Applications could still be considered to see how far a relaxation was permissible having regard to the nature of the applicant 's needs, the purpose for which the lease was asked for, the nature of the ore sought to be exploited, the relative needs of the State, the availability of a public sector undertak ings to carry out the mining more efficiently and other relevant considerations. There is no material on record to substantiate a plea that the S.G. has been acting arbitrari ly or mala fide in its policy formulations in this regard. Our conclusion that the areas in question before us were all duly reserved for public sector exploitation does not, however, mean that private parties cannot be granted any lease at all in respect of these areas for, as pointed out earlier, it is open to the C.G. to relax the reservation for recorded reasons. Nor does this mean, as contended for by OMC and IDCOL, that they should get the leases asked for by them. This is so for two reasons. In the first place, the reservation is of a general nature and does not directly confer any rights on OMC or IDCOL. This reservation is of two types. Under section 17A(1), inserted in 1986, the C.G. may after consulting the S.G. just reserve any area not covered by a PL or a ML with a view to conserving any mineral. Apparently, the idea of such reservation is that the miner als in this area will not be exploited at all, neither by private parties nor in the public sector. It is not neces sary to consider whether any area so 83 reserved can be exploited in the public sector as we are not here concerned with the scope of such reservation, there having been no notification under section 17A(1) after 1986 and after consultation with the S.G. The second type of reserva tion was provided for in rule 58 of the rules which have already been extracted earlier in this judgment. This reser vation could have been made by the S.G. (without any neces sity for approval by the C.G. ) and was intended to reserve areas for exploitation, broadly speaking, in the public sector. The notification itself might specify the Govern ment, Corporation or Company that was to exploit the areas or may be just general, on the lines of the rule itself. Under rule 59(1), once a notification under rule 58 is made, the area so reserved shall not be available for grant unless the two requirements of sub rule (e) are satisfied: viz. an entry in a register and a Gazette notification that the area is available for grant. It is not quite clear whether the notification of 5.3.74 complied with these requirements but it is perhaps unnecessary to go into this question because the reservation of the areas was again notified in 1977. These notifications are general. They only say that the areas are reserved for exploitation in the public sector. Whether such areas are to be leased out to OMC or IDCOL or some other public sector corporation or a Government Company or are to be exploited by the Government itself is for the Government to determine de hors the statute and the rules. There is nothing in either of them which gives a right to OMC or IDCOL to insist that the leases should be given only to them and to no one else in the public sector. If, there fore the claim of reservation in 1977 in favour of the public sector is upheld absolutely, and if we do not agree with the findings of Rao that neither OMC nor IDCOL deserve any grant, all that we can do is to leave it to the S.G. to consider whether any portion of the land thus reserved should be given by it to these two corporations. Here; of course, there are no competitive applications from organisa tions in the public sector controlled either by the S.G. or the C.G., but even if there were, it would be open to the S.G. to decide how far the lands or any portion of them should be exploited by each of such Corporations or by the C.G. or S.G. Both the Corporations are admittedly instrumen talities of the S.G. and the decision of the S.G. is binding on them. We are of the view that, if the S.G. decides not to grant a lease in respect of the reserved area to an instru mentality of the S.G., that instrumentality has no right to insist that a ML should be granted to it. It is open to the S.G. to exercise at any time, a choice of the State or any one of the instrumentalities specified in the rule. It is true that if, eventually, the S.G. decides to grant a lease to one or other of them in respect of such land, the instru mentality whose application is rejected may be aggrieved .by the 84 choice of another for the lease. In particular, where there is competition between an instrumentality of the C.G. and one of the S.G. or between instrumentalities of the C.G. inter se or between the instrumentalities of the S.G. inter se, a question may well arise how far an unsuccessful in strumentality can challenge the choice made by the S.G. But we need not enter into these controversies here. The ques tion we are concerned with here is whether OMC or IDCOL car, object to the grant to any of the private parties on the ground that a reservation has been made in favour of the public sector. We think the answer must be in the negative in view of the statutory provisions. For the S.G. could always denotify the reservation and make the area available for grant to private parties. Or, short of actually dere serving a notified area, persuade the C.G. to relax the restrictions of rule 59(1) in any particular case. It is. therefore. open to the S.G. to grant private leases even in respect of areas covered by a notification of the S.G. and this cannot be challenged by any instrumentality in the public sector. Before leaving this point, we may only refer to the position after 1986. Central Act 37 of 1986 inserted sub section (2) which empowers the State Government to reserve ureas for exploitation in the public sector. This provision differs from that in rule 5, ', in some important respects (i) the reservation requires the approval of the C.G.; (ii) the reservation can only be of areas not actually held under a PL or ML; (iii) the reservation can only be for exploitation by a Government company or a public sector corporation (owned or controlled by the S.G. or C.G. ) but not for exploitation by the Government as such. Obviously, section 17A(2) and rules 58 could not stand together as section 17A empowers the S.G. to reserve only with the approv al of the C.G. while rule 58 contained no such restriction. There was also a slight difference in their wording. Perhaps because of this rule 58 has been omitted by an amendment of 1988 (G.S.R. 449E of 1988) made effective from 13.4.88. Rule 59, however, contemplates a relaxation of the reservation only by the C.G. By an amendment of 1987 effective on 10.2. 1987, (G.S.R. 86 E of 87) the words "reserved by the State Government" were substituted for the words "reserved by the 85 Government" in rule 59(1(e). Later, rule 59(1) has been amended the insertion of the words "or under section 17 A of the Act" after the words "under rule 58" in clause (e) as well as in the second proviso. The result appears to be this ' (i) After 13.4.88, certainly, the S.G. cannot notify any reservations without the approval of the C.G., as rule 58 has been deleted. Presumably, the position is the same even before this date and as soon as Act 37 of 1986 came into force. (ii) However, it is open to the S.G. to denotify a reservation made by it under rule 58 or section 17A. Presumably, dereservation of an area reserved by the S.G. after the 1986 amendment can be done only with the approval of ,the C.G. for it would be anomalous to hold that a reservation by the S.G. needs the C.G. 's approval but not the dereservation. Anyhow, it is clear that relaxation in respect of reserved areas can be permitted only by the C.G. (iii) It is only the C.G. that can make a reservation with a view to conserve minerals generally but this has to be done with the concurrence of the S.G. We are concerned in this case with reservations made by the S.G. under rule 58 before 1986 which, there is no reason to doubt, continue in force even after the introduction of section 17A. These, as pointed out above, can be dereserved by th S.G. but a relaxation can be done by the C.G. only. We shall consider later whether this power of the C.G. can be or has been or should be exercised in this case. It is sufficient to observe here that the reservations notified in 1977 do not necessarily vitiate the grant of leases to private parties. STATUS OF RAO REPORT We now come to the question regarding the status of, and the weight to be attached to, the Rao report. The writ petition and other proceedings before us were directed against the S.G. 's failure to pass favourable orders on the applications of various parties. Normally, in such a case, this Court would either have directed the S.G. to consider the applications afresh and pass appropriate orders or left it to the parties to file revision petitions before the C.G. against the S.G. 's orders. Here, as described earlier, the various parties came up before 86 this Court one after the other and some of them had their writ petitions pending in the Orissa High Court. This Court, therefore, decided that the best course would be to consoli date all the applications that were pending on 30.4.87 for the consideration of the C.G. so that a satisfactory deci sion could be arrived at after an examination of the rela tive merits of the various applicants. This Court did not specify the statutory provision under which this was to be done but it is apparent that it was intended to be an exer cise of the power of the C.G. under section 30, though this aspect was not clarified when FACOR draw attention to it in C.M.P. 13347/87. We have no difficulty in construing the Rao report as a decision on the claims of the various parties before it, though, having regard to the terms of the order of this Court dated 6.10.87, it has been styled as a report. The objections to this conclusion are three fold and they are dealt with below: First, it is pointed out that revisions to the C.G. under section 30 can be validly dealt with only by a "tribunal" and not by a single officer. We find that the procedure indicated is not dictated by the statute or the rules. It is only a forum outlined in an office order more as a matter of internal regulation than as a rigid rule of procedure. We have seen one of these orders dated 10.7. It consti tutes three Single Bench Tribunals each consisting of a designated Joint Secretary in the Department of Mines and three Divisional Bench Tribunals each comprising of a desig nated Joint Secretary in the Department of Mines and a designated Joint Secretary in the Department of Legal Af fairs in the Ministry of Law and Justice. The instructions are: "To the extent possible, cases in which parties have not asked for personal hearing should be disposed of by Single Bench Tribunals unless the member feels that some complicated legal issue is involved requiring advice of the member from the Law Ministry. The cases where personal hearing has been requested by parties, the Single Member Tribunals will decide whether to dispose of the cases after grant of hearing by himself or whether the hearing should be held by Division Bench Tribu nal. " It will thus be seen that even regular revision petitions under section 30 can be validly disposed of solely by a Joint Secretary in the Department of Mines unless he considers it necessary, either because a personal hearing is asked for or because some complicated legal issue is involved, to 87 invoke the aid of a Joint Secretary in the Law Ministry. Here, there is no regular revision petition except perhaps in one case; the disposal is by the Secretary to the Depart ment of Mines; he has been specially authorised to deal with the matter by this Court; and no legal issued at all are involved. We, therefore, see nO irregularity or defect in the procedure forged by this Court for a speedy and effec tive disposal of the claims before the Court. Secondly, it is said that though the order of 30.4.1987 directs the secretary to dispose of the representations by a reasoned final order, the subsequent order of 6.10.87 asks him to sent a report to this Court. We do not think there is any inconsistency between the two orders. Even the order of 6.10.87 requires the Secretary to arrive at a just, equita ble and objective decision. He has been asked to send a report of his decision to the Court, with copies to the parties, only in order that, if any of the parties are aggrieved by his decision, their grievances may be consid ered by this Court in this W.P. itself, instead of driving the parties to a fresh course of litigation. Thirdly, it is submitted that Rao 's hands were more or less tied by the various observations and directions of this Court thus preventing him from coming to independant conclu sions of his own. This criticism is unfounded and also belied by the contents of the report. This Court had made it clear that Rao should not consider himself bound by the memoranda of compromise filed in the High Court of Orissa (with AIKATH and FACOR) or the orders passed by this Court in regard to the allocation of areas (to IMFA and FACOR) though necessarily he had to "bear in mind the previous orders made in their [IMFA and FACOR] favour and the previ ous leases and the rights, if any, granted therefrom and their consequences". He was also asked to bear in mind the public benefit and public interest involved and also the need for the proper exploitation of the mines. In fact also we find that although Rao has approved the grants made in favour of IMFA and FACOR by the S.G. (which, he remarks, were perhaps based on the observations made by this Court). he has clearly reached his conclusions on these independent ly. In fact, he has set out a basis for justifying the grants to IMFA and FACOR. It is also clear that there were no Court orders that could have influenced his decisions on the claims of the other parties. This objection is, there fore, not at all tenable. OMC, IDCOL, OCL and ORIND complain, indeed, that Rao has been completely overwhelmed by the weight of the observa tions and the leases granted by the S.G. pursuant to interim orders of this 88 Court. They have gone to the length of criticising, and, indeed, challenging, the validity of these interim orders which had been passed without notice to any of them. They have invoked, in support, several passages from the decision of this Court in Antulay vs Nayak, ; We think these criticisms are unfounded. This Court had only directed the grant of two leases pending disposal of the writ petition. At the time these directions were made, only IMFA, FACOR and AIKATH were before the Court. IMFA had pointed out that FACOR had been given certain leases al though its earlier applications were pending before the C.G. The S.G. submitted to the Court that a lease in respect of item 1 had been granted to FACOR, that item 5 had already been agreed to be leased in favour of AIKATH and FACOR and that it was willing to grant a ML in respect of item 3 and 26.62 acres out of item 4 to IMFA. It was in view of this that the Court passed the order. Similarly, the ML directed to be granted to FACOR was also in consequence of the S.G. 's acquiescence therein. It is, therefore, incorrect to characterise these orders as erroneous or unjustified. They were fully within the scope of the writ petition and were passed after hearing the parties before the Court. No doubt, OCC, ORIND, OMC and IDCOL were not there then. After they put in their appearance, this Court made it clear that while the earlier orders, the observations therein and the leases granted in pursuance thereof should be kept in mind, Rao would not be bound by them but would be free to arrive at his conclusion. We, therefore, do not see any grounds for the criticisms put forward by these parties in regard to the interim orders passed by the Court. For the above reasons, we are of opinion that, though styled a report, the findings given by Rao are in the nature of a decision of the C.G. on the claims of the various parties. We, therefore, proceed to consider the Rao report on its merits. MERITS OF THE RAO REPORT This takes us then to the merits of the various claims put forward before Rao and his decision thereon. For our present purposes, we think we can consider the Rao report in two parts: (a) his endorsement of the S.G. 's decision to grant ML to IMFA, FACOR and AIKATH: (b) the rejection by him of the claims put forward by the above three parties for leases in respect or areas over the above what 89 has been allotted to them as well as the rejection of the claims of the other parties. So far as the first aspect is concerned, we think that Rao 's decision, that the leases that have been granted already in favour of IMFA, FACOR be confirmed, should be upheld. In our view, these should be treated as leases legitimately granted to them in exercise of the powers of relaxation under rule 59(2). It is true that the orders granting the leases do not elaborately record the reasons but they were passed in the context of this litigation and have to be considered in the light of the affidavits and counter affidavits filed herein. We are also of opinion that the Rao 's decision regarding the grant of a lease to AIKATH (not yet implemented) should also be upheld. In these three cases, we think, the records disclose sufficiently the reasons on the basis of which the leases have been decided upon and are adequate to justify the MLs actually granted. We shall just summarise these reasons which have also been taken note of by Rao. (a) ML to AIKATH, IMFA, FACOR 1. AIKATH is admittedly an individual who discovered chromite ore in the State. He had secured a lease as early as in 1952 though that lease was annulled by the State when it took over. Again, as against a lease of 640 acres which he had once obtained and started operating upon, the S.G. has finally approved of a lease in respect of only 140 acres. AIKATH had been actually working some mines from 1.5.53. His original grant had been approved before the area was reserved on 3.7.62. If the S.G. considers these to be weighty considerations and entered into a compromise with him for a lease of 140 acres and this has also been recorded by the Orissa High Court, there are no grounds to interfere with the decision of the S.G. 2. So far as FACOR is concerned, the requirements for their plant in Andhra Pradesh were met by the ML granted to them in 1971 72 at Kathpal and Boula, thus recognising their claim for a ML to meet part of their requirements of ore. Their present needs were in connection with their plant at Randia in Balasore District which required about 1,20,000 tons per annum of ore. The compromise entered into with FACOR agreeing to grant a ML for an area 72.84 hectares having a potential of about 2.4 million tons would cater to 50% of its needs on a 20 year time frame making allowances for wastage in recovery. IMFA needs 50,000 tons per annum for their plant at Therbauli and 120,000 tons in respect of a plant at Chandwar run by a subsidiary. While the reserve potential of 26.62 hectares allotted to IMFA out of item 4 is roughly 0.8 million tons the reserve potentials of 108.86 acres given out of area 3 and of another 17.02 hectares in Balasor District given for the plant of the subsidiary were yet to be assessed. Nevertheless. it was expected that they would cater to the needs of IMFA more or less to the same extent that the ML in favour of FACOR catered to its needs. It is true that a relaxation under rule 59(2) has to be made by the C.G. The orders of grant do recite the approval of the C.G. in this regard. An objection has been taken that the C.G. granted the approval not after applying its mind to the matter but merely because this Court had directed it to do so. We do not think this contention can be accepted. Apparently, when the S.G. agreed to lease out the areas to IMFA and FACOR it was pointed out that this could not be given effect to without the C.G. 's approval. This Court thereupon directed that the S.G. should seek such approval. The direction to the C.G. is only that its approval should be given within the particular time limit set out therein. It cannot be construed, reasonably, as a direction compel ling the C.G. to grant approval whether it agreed with the S.G . 's decision or not. We would. therefore, reject this contention and treat the grants to IMFA anti FACOR as made in exercise of the power of relaxation u/s 59(2 ). Once again, we would like to observe that, though there is no specific recording of reasons by the S.G. or C.G. inasmuch as these leases came to be granted by way of com promise, it is a fair inference that the compromise propos als were prompted by the, at least partial, acceptance of the claims put forward by these parties. Since the grant of leases to these three parties can be attributed to the relaxation of the reservation rule in particular cases, the finding of Rao that these leases may be confirmed deserves acceptance. We have to add a few words in respect of AIKATH. Though the S.G. and AIKATH had entered into a compromise as early as 4.12. 1984, no lease has yet been granted in his favour perhaps as the C.G. has had no occasion to consider the matter earlier. We do not think that any useful purpose will be served by remitting the matter and asking the S.G. to seek the formal approval of the C.G. therefore. The decision of Rao itself can be taken as containing the approval of the C.G. in this regard. We would, therefore, uphold Rao 's decision 91 and direct the S.G. to execute, at as early as possible,a ML in favour of AIKATH in respect of the 140 acs. agreed to be leased to him under the compromise dated 4.12.84. (b) OTHER CLAIMS It is asserted on behalf of OCL and ORIND that, if there are factors justifying the relaxation of reservation in favour of IMFA and FACOR there are equally valid factors justifying a like relaxation in favour of these two compa nies as well. The operative part of the Rao report in regard to the claims of these two parties reads thus: "For the requirement of the other parties viz. M/s Orissa Industries Ltd., M/s Orissa Cements Ltd., manufactur ing refractories, their requirements of chrome ore are relatively less and that too, consisting mostly of hard lumpy ore. The potential for hard lumpy ore in the areas under consideration is relatively less, since most of it is located in the areas which have already been leased out to TISCO who are also one of the larger producers of hard lumpy ore and are capable of meeting the needs of other industries also. The occurrence of chrome ore is such. that hard lumpy ore, lumpy friable ore and fine ore occur together and in varying proportion. The refractory manufacturers require ments are such that if they want to get hard lumpy ore from the areas under consideration, they will have to necessarily become traders of the other grades which will be in higher proportion. They have been carrying on their business for the past several years without any captive mines. Hence. it is felt that their requirements can be adequately met by the other producers of chrome ore, including hard lumpy ore. Hard lumpy ore will be available from other producers of chrome ore to meet their requirements, including the Orissa Mining Corporation and no captive mining leases need be given to them, in the areas under consideration." XXX XXX XXX The Refractory industries viz. the Orissa Industries Ltd. and M/s Orissa Cements Ltd. for their level of production 92 and their need for hard lumpy ore, captive mines in the areas under consideration do not optimally meet their re quirements and there is enough lumpy ore in the State from other sources. " Rao 's line of reasoning is criticised by OCL and ORIND. Sri Bhandare, on behalf of OCL, urges, inter alia: (a) The company 's refractory plant is in need of at least 35,000 to 40,000 MT of ore per annum (not 15000 MT as worked out by Rao) and for securing a regular uninterrupted supply, it needs a captive mine badly; instead it is thrown at the mercy of traders like TISCO or Sirajuddin & Co. or the OMC who are unable to supply the quantities of ore needed by OCL. (b) The company which has a vital mineral based industry has not been granted even a single ML for which it had been applying from 1961 to 1986 whereas traders like Mohanty and Sirajuddin have been granted leases. (c) Besides supply of refractories for domestic consumption OCL has also a vast export market and has earned huge foreign exchange by exports to countries like Pakistan, Bangladesh, Korea, Kenya, etc. (d) The company has also employed about 3000 workers who are adivasis or who belong to the Scheduled Castes and Scheduled Tribes. (e) The industrial licence granted to OCL by the C.G. envisages that the OCL should secure PL and ML from the S.G. for its needs of ore. (f) The S.G. had made on 25.1.72 a grant of a ML to OCL over an area of 187.02 hectares with the approval of the C.G. The S.G. had indeed recommended the grant of ML to OCL. (g) It is also stated that in certain informal meet ings held recently, the S.G. has expressed itself in favour of granting ML in favour of the OCL. Likewise, on behalf of ORIND, it has been urged that Rao has erred in thinking that the need of the company was of lumpy ore which 93 could be adequately met by procuring the ore from private parties and that it would not be necessary to grant a mining lease for meeting its requirements. It is submitted, in particular, that (i) ORIND 's requirements are not small as suggested by the SG but come to a minimum of 25,000 MT per annum and would indeed go up to 65,000 MT with the setting up of a ferroalloys plant for which steps are being taken; (ii) the reasoning that ORIND has been functioning without a captive source all along and hence could continue to do so is bad logic and also a misleading argument which overlooks that ORIND has been put to great difficulty in obtaining even 8,000 to 10,000 MT (about one half of its needs) in driblets from various sources being at their mercy in regard to quantity, price and other vagaries. Even OMC has been capricious in its supplies of ore in that it has agreed to supply 25,000 MT to OCL against their needs of 15,000 MT only whereas it is willing to supply only 9,000 MT only to ORIND against its present requirements of 20,000 MT. (iii) the assumption that ORIND needs only lumpy ore is not correct. Actually more than 60 to 65% of the ore used by ORIND is friable ore. (iv) ORIND also/deserves grant of ML on other grounds of national and public significance. It supplies basic refrac tories not only to core and strategic domestic industries but also exports them outside India and the exports made by it, being value added and involving proportionately less consumption of ore, earn much more foreign exchange than the exports of IMFA & FACOR. The want of a captive source of supply has gravely prejudiced the commissioning of ORIND 's first benefaction plant for refractories. It also employs a strong labour force and thus provides opportunities for large scale employment. (v) if MLs can be granted to AIKATH, IMFA, FACOR, ORIND also deserves one. OMC has been allotted huge areas which remain idle and unexploited and a predominant portion of its ore is supplied to the metallurgical industry not leaving much for the refractory industry. (vi) atleast the area marked as Area No. 7 in the plan filed 94 by ORIND should be allotted to it. We have briefly summarised the claims of ORIND & OCL. It is unnecessary to discuss these contentions at length as we cannot but help feeling that the claims of OCL and ORIND have been rejected summarily by Rao without an advertence to the various considerations urged by them. In our opinion, this part of Rao 's decision has to be set aside as being too cryptic and unsustainable. Pursuant to this conclusion, it is open to us to direct these claims to be considered afresh by the C.G. We, however, think it more expedient that the claims of the OCL and ORIND should be restored, for detailed consideration in all their several aspects, before the S.G., as the 'S.G. has had no opportunity to consider the various aspects pointed out and as this course will also provide one opportunity to the claimants to approach the C.G. again, if dissatisfied with the S.G. 's decision to consider whether, despite the reservation, some relaxation can be made also in favour of these two companies. The learned Advocate General for Orissa criticised the conclusion of Rao conceding the right of industries set up in the State, even of FACOR and IMFA, to captive mines for meeting their requirements. We are inclined to think he is right in saying that merely because an industry is allowed to be set up in the State by grant of an industrial licence and/or certain other conces sions, it does not follow that it becomes entitled to a captive mine to cater to its needs. We, however, express no concluded opinion on this issue ' which does not arise for our consideration. The SG has to take into account various factors and aspects (some of which have also been referred to in the interim order of this Court dated 27.9.84) before granting a ML to an individual concern carving out an excep tion to its reservation policy. This it has done in respect of IMFA and FACOR for certain special reasons which have been elaborated upon earlier. Whether it would do so also in favour of OCL and ORIND is for the State to consider. We express no opinion on these claims and leave it for the consideration of the SG and C.G. It would have been noticed that the applications of these two companies have not been considered in this light earlier. We, therefore, restore the applications of OCL and ORIND for the consideration of the S.G. The learned Advocate General of Orissa also submitted that Special Leave Petition No. 8574/89 filed by ORIND from the order of the S.G. is not maintainable. He urged that the S.G., in disposing of applications for ML, is not function ing as "tribunal" and he cited the decisions in Shivji vs Union; , and Indo China Steam Navigation Co. vs Jasjit Singh; , in support. We do not 95 consider it necessary to go into this issue. The S.G. has, by the impugned order, rejected ORIND 's application, inter alia, on the ground that, in view of the pendency of W.P. 14116/84 before this Court, it could not at that stage pass any order on the application. It would, therefore, be open to ORIND to ask the S.G. to reconsider the application in the light of our present order. We see no necessity f6r insisting on such a formal request and would, therefore, direct the S.G. to consider ORIND 's application afresh in the light of this judgment. So far as OMC & IDCOL are concerned, Rao has "recommend ed" that the areas of items I & 2, left after the grants to IMFA and FACOR. be given on lease to OMC. We have seen that there are huge areas of mineral bearing lands which have been reserved for the public sector. Its interests do not clash or come into conflict with those of private applicants which can only claim a right to the extent the SG is willing to relax the rule of reservation. We do not think the OMC or IDCOL have any voice in requiring that the SG should keep certain extents of land reserved and should not grant any ML at all in favour of an), private party. The interests of these corporations are safe in the hands 01 ' the S.G. and the allocation of MLs to these organisations is a matter of discretion with the S.G. Strictly speaking,, therefore. no question of any application by them for ML need arise at all. But, when made, their applications arc considered by the S.G. and, on revision by the C.G. as a matter of form. To this extent, they have a statutory remedy but, beyond this. we think they cannot go. We are of opinion that their interests are safe with the S.G. and need no directions from us. Even IMFA and FACOR urge that their claims to further leases deserve consideration. Rao has already adjudicated upon their claims and "recommended" leases to them to the extent indicated. If they apply to the S.G. for more leases. it is open to the S.G. to consider whether they deserve any further leases and if so, to what extent. more reserved areas could be released in their favour. The learned Advocate General for the State emphasised that the State is also interested in its industrial develop ment and the national economy and that, while reserving substantial areas for public sector exploitation, the State has a well formulated policy in respect of grant of private leases which has been placed before Rao. He also submits that, even if grant of a ML in favour of a particular party is not found feasible, the State will do its best to ensure that the ore mined in the 96 State is equitably distributed so as to meet the legitimate needs of all industries operating in the State. We have no doubt that the S.G. will keep. all relevant aspects urged by the parties in reaching their decision on the matters re manded to it by us. In the circumstances, we accept and confirm Rao 's recom mendation for grant of MLs to IMFA, FACOR and AIKATH, to the extent indicated by him. We set aside his rejection of the claims of OCL and ORIND. We leave it open to all the parties to place their claims, or further claims, as the case may be, in regard to the areas applied for by them on or before 30.4.1987, backed by supporting reasons, before the S.G. in the form of representations within four weeks from the date of this order. The S.G., we hope, will dispose of these applications within the statutory period failing which the parties will have their remedy under the statute by way of revision to the C.G. In arriving at its decisions, it will be open to the S.G. to take into account the discussions and findings of the Rao report in the light of this judgment. The S.G. should also keep in mind that no leases to any of the parties (other than OMC & IDCOL) can be granted unless either the areas so proposed to be leased out are dereserved and thrown open to applications from the public or unless the C.G., after considering the recommendations of the S.G., for reasons to be recorded in writing, considers a relaxa tion in favour of any of the parties necessary and justi fied. Before we conclude, we should like to place on record our appreciation of the detailed and excellent report given by Dr. Rao. He has brought together all the relevant data and analysed the various claims put forward before him; a detailed note on chromite deposits in the State of Orissa prepared by the Chief Mining Geologist of the Indian Bureau of Mines has also been made an Annexure to the report. The report and its annexures are bound to be of immense help and value to the S.G. and C.G. in arriving at their decisions not only on the various applications but also in regard to their future policy in the matter of grant of chromite leases and of the supply of chromite to the needy applicants in an equitable manner. W.P. No. 14116/87 and the other applications are dis posed of in the above terms. There will be no order as to costs. G.N. Petitions disposed of.

The appellant was manufacturing Hacksaw blades and Bandsaw falling under Tariff Item No. 51 A(iv) of the Cen tral Excise Tariff. On 26.3.1985 they filed a classification list as per Rule 173 B of the Central Excise Rules, 1944 in respect of their products furnishing the tariff rate of 15% Ad valorem by mistake instead of furnishing the effective rates of duty as per Notification No.85/85 CE dated 17.3.1985. The Assistant Collector of Central Excise ap proved the classification list on 3.6.1985. On 31.10.1985 the appellant filed a revised classification list with the effective rates of its products with retrospective effect from 26.3.1985 which was also approved by the Assistant Collector of Central Excise. On 30.10.1985 the appellant made an application under section 11B of the for refund of excise duty claiming that they had paid excess excise duty from 1.4.1985 to 31.8.1985. By its order dated 13.12.1985 the Assistant Collector of Central Excise allowed the claim only partly but rejected the claim for the period from 1.4.1985 to 27.4.1985 on the ground that the claim was barred under section 11B of the Act because the 'relevant date ' for preferring the claim for the appellant was the date of payment of duty and the duty had been paid by adjustment in the personal ledger account as and when goods were removed; The order of the Assistant Collector was confirmed in the appeal by the Collector of Central Excise (Appeals). Appellant 's further appeal to the Customs Excise and Gold (Control) Appellate Tribunal was also unsuccessful. In appeal to this Court under section 35L of the it was contended on behalf of the appellant (i) that mere debiting in the personal ledger account should not be taken as the 2 starting point for limitation and the, relevant date should be the date on which ART 12 Returns, which were filed on a monthly basis, were assessed: and (ii) that clause (e) of Explanation to Section 11 (B) was applicable to the case. Allowing the appeal, this Court, HELD: 1. The scheme for payment of duty of goods under which the appellant was clearing his goods is known as 'self removal ' procedure. There will be no time bar for refund if the duty is paid under protest. The period of 6 months is prescribed in other cases. [6H; 7A] 2. In the instant case, the classification list filed by the appellant for the period 1.4.1985 to 27.4.1985 was not approved till 3.6.85. From provisions of Rules 173B, 173C and 173CC of the Central Excise Rules, 1944 it is clear that clearances can be made only after the approval of the list by the particular officer. However, if there is likely to be delay in accordance with the approval the officer can allow the assessee to avail himself of the procedure prescribed under Rule 9B for provisional assessment of goods. Between 1st April, 1975 when the classification list was filed and 3rd June, 1985 when the list was approved, the assessee was clearing the goods by determining the duty himself and debiting the amount of duty in his personal ledger account. The amount of duty paid by him was obviously provisional and subject to the result of the final approval by the officer concerned. In these circumstances, the clearance of goods made by the appellant between 1st April and 3rd of June, 1985 were in accordance with the procedure for provisional assessment. In such a situation clause (e) of para (B) of the Explanation under section 11 B will be attracted. The RT 12 Return for the month of April, 1985 was filed on 8.5.1985 and the same was assessed on 29.10.1985. It is, therefore, only from the date of this assessment that time bar in section 11 B will operate. The refund application having been filed on 30th October, 1985 cannot, therefore, said to be time barred. [7B D; E F]

vil Appeal Nos.1177 to 1184 (NT) of 1990. From the Judgments and Order dated 5.3.85, 21.1.85, 25.2.85, 11.2.85, 14.10.85, 11.2.85 and 20.10.86 of the Madras High Court in T.C. Nos.694/82,565/80, 1404/80, 637/81,638/81,521/81,429/83 and 572/83. T.A. Ramachandran and Mrs. Janki Ramachandran for the Appellant. S.C. Manchanda, B.B. Ahuja and Ms. A. Subhashini for the Respondent. The Judgment of the Court was delivered by VENKATACHALIAH, J. These Special Leave Petitions arise out of and are directed against the orders of the High Court of Judicature at Madras disposing of references made under Section 256(1) of the Income Tax Act 1961 (Act for short) in Tax Case Nos. 694 of 1982, 565 of 1980, 1404 of 1980, 637 and 638 of 1981, 521 of 1981, 429 of 1983 and 572 of 1983. The High Court following its earlier pronouncement of that Court in Commissioner of Income tax vs O.M.S.S. Sankaralinga Nadar & Co., answered the question of law, similar in all the cases, in favour of the revenue. The question was whether in making a disallowance for the inter est paid by a partnership firm to a partner under Section 4O(b).of the Act the interest, in turn, paid by the partner on his borrowings from the firm should be taken account of and deducted and only the balance disallowed under Section 40(b). On this question, there is a sharp divergence of judi cial opinion in the High Courts. In Sri Ram Mahadeo Prasad vs C.I.T., 1; C.I.T. vs Kailash Motors, ; C.I.T. vs T.V. Roman sigh & Sons, ; C.I.T. vs Kothari & Co., ; C.I.T. vs Balaji Commercial Syndicate, ; C.I.T. vs Motiisi Ramjiwan and Co., ; C.I.T. vs Precision Steel and Engg.Works, & Har.), the High Courts have taken the view that where a firm pays interest to its partner and the partner also pays interest to the firm, only the net amount of interest paid by the firm to the partner is liable to disallowance under Section 40(b) of the Act. However, in C.I.T. vs O.M.S.S. 250 Sankaralinga Nadar & Co., , the High Court of Madras has taken a contrary view. We have heard Shri Ramachandran, learned senior counsel for the appellants and Sri Manchanda, learned Senior Counsel and Sri B.B. Ahuja for the revenue. Special Leave is granted. The appeals are taken up for final hearing, heard and are disposed of by this common judgment. We may refer to the facts in SLP(C) No. 14291/1985 which is representative of and typifies the context in which the question arises. The appellant, M/s. Keshavji Ravji & Co. is a registered firm consisting of 6 partners and car ries on a business in the manufacture and export of stain less steel articles. In the accounting year ended 13.11.1974, corresponding to the assessment year 1975 76, the firm paid interest to the partners on the amounts standing to their respective credits in the firm. The firm also received from the partners interest on their borrowings from the firm. For the relevant assessment year, the appellant filed a return disclosing a total income of Rs.2,55,225. The Income tax Officer while disallowing the amount of interest paid to partners did not set off the interests received from the partners on their own borrowings. With this disallow ance, the income of the firm was assessed at Rs.2,79,730. In the assessee 's appeal, the Appellate Assistant Commissioner of Income Tax by his order dated 18.10.1977 allowed the claim of the appellant that only the net interest paid to the partners, after setting off the interest received from them, was to be disallowed. The Revenue took up the matter in further appeal before the Income Tax Appellate Tribunal which by its order dated 6.1.1979 dismissed the appeal and affirmed the appellate order of the Assistant Commissioner. The Tribunal, as did the Appellate Assistant Commissioner, placed reliance on the decision of the Allahabad High Court in Sri Ram Mahadeo Prasad vs C.I.T., At the instance of the revenue the Tribunal stated a case and referred the following question of law for the opinion of the High Court. "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in holding that net interest should be disallowed under section 40(b) of the Income tax Act, 1961 ?" This reference under Section 256(1) of the Act was registered in 251 the High Court as Tax Case No. 694/82 and the High Court by its order dated 5.3.1985 answered the question in the negative and against the appellant relying, as stated earli er, on its earlier pronouncement in Sankaralinga Nadar 's case. Broadly, similar are the circumstances under which the other appeals arise. Before we advert to and evaluate the merits of the contentions, it is appropriate to refer to the statutory provision as it then stood. Section 40 of the Act provided: "40. "Notwithstanding anything to the contrary in sections 30 to 39, the following amounts shall not be deducted in computing the income chargeable under the head 'Profits and gains of business or profession", (a) ] (1) ] to ] Omitted as unnecessary (v) ] (b) in the case of any firm, any payment of interest, salary bonus, commission or remuneration made by the firm to any partner of the firm." (c) ] ] Omitted as unnecessary (d) ] By the Taxation Laws (Amendment) Act, 1984, several amend ments were introduced in the body of Section 40. One of them was the introduction of Explanation 1 in clause (b) of Section 40. That Explanation reads: "Explanation 1: Where interest is paid by a firm to any partner of the firm who has also paid interest to the firm, the amount of interest to be disallowed under this clause shall be limited to the amount by which the payment of interest by the firm to the partner exceeds the payment of interest by the partner to the firm. " Referring to the new Explanation inserted in clause (b) of Section 40 by the amendment, the "Notes on Clauses" say: 252 "This clause seeks to insert three new Explanations to section 40(b) of the Act. Explanation 1 seeks to provide that where interest is paid by a firm to a partner who has also paid interest to the firm, the amount of interest to be disallowed under section 40(b) of the Act shall be limited to the net amount of interest paid by the firm to the part ner, that is, the amount by which the payment of interest by the firm to the partner exceeds the payment of interest by the partner to the firm." "The proposed amendments will take effect from 1st April, 1985, and will, accordingly, apply in relation to the as sessment year 1985 86 and subsequent years. " The Explanation I, which was introduced in 1984, proprio vigore, does not apply to the assessment relating, as here, to an earlier year. Whether the Explanation brings about a change in, or admits of being understood as an exposition of, the law is, however, a different matter. It is, perhaps, also appropriate here to refer to the circular No. 33 D (XXV 24) of 1965 of the Central Board of Direct Taxes, the operative part of which provides: "However where a firm pays interest to as well as receives interest from the same partner, only the net interest can be stated to have been received or paid by the firm, as the case may be, and only the net interest should be taken into consideration. This view also finds support in the decision of the Allahabad High Court in the case of Sri Ram Mahadeo Prasad, In view of the above, the in structions contained in Board 's Circular No. 55 of 1941 may be treated as modified accordingly . Section 40 imposes a restriction on the deductibility of certain outgoings and expenses which are, otherwise, enabled under Sections 30 39 of the Act and constitutes an exception to these sections. Clause (b) of Section 40 is analogous, with some enlargement, to Section 10(4)(b) of the predecessor Act of 1922. The prohibition in Section 40 against the deductibility of certain outgoings is in mandatory terms. It is this aspect that has loomed large in the reasoning supporting the view accepted by the Madras High Court in Sankaralinga Nadar 's case and emphasised by the learned counsel for the Revenue. The reasoning of the Madras High Court in that case and of the Andhra Pradesh High Court in Commissioner of Income tax vs T.V. Ramanaiah & Sons, 157 illustrate the rival points of view. The Madras High Court held: "The collocation of the words shows that what is disallowed in the matter of payment of interest cannot be the net interest, but can only be interest paid with refer ence to a given account relating to payment of interest by the firm to the partner. This is because the subject of disallowance in the matter of payment of interest appears in section 40(b) cheek by jowl with salary, bonus, commission or remuneration made by the firm to the partner. There cannot be any net salary or net bonus or net remuneration as mat ters of disallowance. They can only be salary, as such, or bonus, as such, or commission, as such, or remuneration as such which are the subject of disallowance. In like manner, when the section speaks of payment of interest by the firm to a partner as the subject of disallowance, it can only be payment of 'gross ' interest in the particular account in which interest is payable. Salary, bonus, commission or remuneration do not have what may be characterised as a two way traffic . " " . . In the earliest of the cases, the Allahabad High Court endorsed the Tribunal 's decision to disallow only the net interest. The court did so, not on a construction of the words of the section, but on equitable grounds of fairness". " (P. 336) The Andhra Pradesh High Court, however, taking the contrary view relied on, what it considered, the revenue 's own understanding of the legal position as made manifest in the Board 's circular that the "real purpose of Section 40(b) of the Act was to add back only the net amount of interest and not the gross amount". On the interpretation of Section 40(b), the High Court in Rarnanaiah 's case said: "As a matter of interpretation of section 40(b) of the Act, we find that there is nothing in the provision which expressly states that the amount to be added back is either gross or net. The provision requires that "any pay ment of interest" by a partnership firm to a partner shall not be deducted in computing the income of the partnership firm. For the purpose of finding out the amount paid by way of 254 interest, it is necessary for the Income tax Officer to find out the amount of interest paid by the partnership firm to the partner and also see if the same partner paid any inter est to the partnership firm and ascertain the amount of interest effectively paid by the partnership firm to the partner . " at p. 304] 5A. The arguments of the learned counsel on both sides covered a wide range of contentions. The submissions of Sri Ramachandran in support of the appeals admit of being formu lated thus: (a) The scheme of Section 40 of the Act does not evince any intention to penalise a firm for the outgoings which are rendered non deductible; but the sole object of Section 40(b) is, having regard to the special features and legal incidents of a partnership, to enable the assessment of the 'real income ' of the firm. The outgoings disallowed by Section 40(b) are not really outgoings at all, but constitute what are, otherwise, ingredients or components of the real income of the firm. Therefore, the ascertainment of the real income or the real commercial profits does not require or compel the exclusion of the cross interest paid by a partner in determining the quantum to be disallowed under Section 40(b). (b) The extent of the embargo under Section 10(4)(b) of the 1922 Act on the disallowance of "interest" paid to a partner was judicially interpreted and ascertained in Sri Ram Maha deo Prasad vs Commissioner of Income tax, and when the legislature re enacted those provisions in Section 40(b) of the 1961 Act in substantially the same terms, legislature must be held to have used that expression with the same implications attributed to it by the earlier judicial exposition. (c) Interest payable by the partners to the firm pursuant to an agreement between the partners is of the same nature as that payable by the firm to the partners on the capital, brought in by them. Interest paid to and received from a partner are both integral parts of a method adopted by the partners for adjusting the division of profits and in that sense both payments partake of the same character. In identifying and quantifying the 'interest ' for purposes of 255 Section 40(b) it would be permissible to take both the payments into consideration and treat only such excess, ii any, paid by the firm as susceptible to the exclusionary rule in Section 40(b). (d) The circular No. 33 D(XXV 24) of 1965 of the Central Board of Direct 'Faxes, which is statutory in character, is binding on the authorities. The High Court was in error in taking a view of the legal position different from the one indicated in it. (e) The amendment of 1984 inserting Explanation I in Section 40(b), though later in point; of time, constitutes a legis lative exposition of the correct import of the provision and so construed offers a guide to the correct understanding of the provisions in Section 40(b) in its application to the earlier years as well. Re: Contention (a) The premises of the argument is good in parts; but the inference does not logically follow. Section 40(b), it is true, seeks to prevent the evasion of tax by diversion of the profits of a firm; but the legislative expedience adopt ed to achieve that objective requires to be given effect on its own language. Section 40 opens with the non obstante clause and directs that certain outgoings specifically enumerated in it "shall not be deducted" in computing the income chargeable under the head "profits and gains of business or profession": As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature can not then be ap pealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words used it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the Legislature. In Doypack Systems Pvt. Ltd. vs Union of India, ; it was observed: "The words in the statute must, prima facie, be given their ordinary meanings. Where the grammatical construction is clear and manifest and without doubt, that construction ought to prevail unless there are some strong and obvious reasons to the contrary . " (p. 33 1) 256 "It has to be reiterated that the object of interpretation of a statute is to discover the intention of the Parliament as expressed in the Act. The dominant purpose in construing a statute is to ascertain the intention of the legislature as expressed in the statute, considering it as a whole and in its context. That intention, and therefore the meaning of the statute, is primarily to be sought in the words used in the statute itself, which must, if they are plain and unam biguous, be applied as they stand . " (Emphasis Supplied) (p. 332) Artificial and unduly latitudinarian rules of construc tion which, with their general tendency to "give the tax payer the breaks", are out of place where the legislation has a fiscal mission. Indeed, taxation has ceased to be regarded as an "impertinent intrusion into the sacred rights of private property" and it is now increasingly regarded as a potent fiscal tool of State policy to strike the required balance required in the context of the felt needs of the times between citizens ' claim to enjoyment of his property on the one hand and the need for an equitable distribution of the burdens of the community to sustain social services and purposes on the other These words of Thomas M. Cooley in 'Law of Taxation ' Vol.2 are worth mentioning; "Artificial rules of construction have probably found more favour with the courts than they have ever deserved." Their application in legal controversies has often times been pushed to an extreme which has defeated the plain and mani fest purpose in enacting the laws. Penal laws have sometimes had all their meaning construed away and in remedial laws, remedies have been found which the legislature never intend ed to give. Something akin to this has befallen the revenue laws . . " (Emphasis Supplied) There are, indeed, strong and compelling considerations against the adoption of the test suggested by Sri Ramachan dran. Limiting of the ambit of Section 40(b) on the supposed 'real income ' test would, perhaps, lead to positions and results, whose dimensions and implications are not, to say the least, fully explored. The test suggested by Sri Rama chandran, might on its own extended logic, validate a set off of the interest paid to one partner against interest received from another and likewise 'interest ' received from one partner on some other deal 257 ings between him and the firm against interest paid to another partner on his or her capital contribution. The test of 'real income ' as one on which the operation of Section 40(b) could be sought to be limited is not a reliable one. Indeed, the following observations of this Court on the concept of 'Real Income ' in State Bank of Travancore vs C.I.T. ; at 155, though made in a different context, are apposite: . The concept of real income is certainly applicable in judging whether there has been income or not but, in every case, it must be applied with care and within well recognised limits. We were invited to abandon legal fundamentalism. With a problem like the present one, it is better to adhere to the basic fundamentals of the law with clarity and con sistency than to be carried away by common cliches. The concept of real income certainly is a well accepted one and must be applied in appropriate cases but with circumspection and must not be called in aid to defeat the fundamental principles of the law of income tax as developed". This contention of Sri Ramachandran rests on generalisation which incur the criticism of being too broad and have cer tain limitations of their own. Contention (a) does not advance appellants ' case. Re: Contention (b) The submissions of Sri Ramchandran on the point are that where the meaning of a word used in a statute had been judicially ascertained by a court and where the legislature, while re enacting the law on the subject, uses the same word, it must be taken to have been aware of the meaning so judicially ascertained earlier and not to have used the word with a different content. This is, no doubt, a well recog nised guide to construction. When words acquire a particular meaning or sense because of their authoritative construction by superior courts, they are presumed to have been used in the same sense when used in a subsequent legislation in the same or similar context. This principle was stated by the Judicial Committee in H.H. Ruckmaboye vs Lulloobhoy Mottic hund, Moore 's Indian Appeals, Vol. 5, p. 234 at 250 thus: 258 " . it is, therefore, of considerable importance to ascertain what has been deemed to be the legal import and meaning of them, because, if it shall appear that they have long been used, in a sense which may not improperly be called technical, and have been judicially construed to have a certain meaning, and have been adopted by the Legislature in that sense, long prior to the Statute, 21 James I., c. 16, the rule of construction of Statutes will require, that the words in the Statute should be construed according to the sense in which they had been so previously used, al though that sense may vary from the strict literal meaning of them." This principle has been reiterated by this Court in several pronouncements. But the limitations of its application in the present cases arise out of the circumstance that the decision of the Allahabad High Court in Sri Ram Mahadeo Prasad vs Commissioner of Income tax, did not proceed or rest on any special or technical connotation of the word "interest" nor any special legal sense which that word could be said to have acquired by the earlier judicial ascertainment of its amplitude. The decision proceeded on a construction of the relevant provision i.e. Section 10(4)(b) of the 1922 Act and on what the High Court considered as affording to the assessee a fair treatment. Nothing particu lar stemmed from the interpretation of the expression "interest". The appeal to this principle of construction is, in our opinion, somewhat out of place in this case. The rules of interpretation are not rules of law; they are mere aids to construction and constitute some broad pointers. The interpretative criteria apposite in a given situation may, by themselves, be mutually irreconcilable. It is the task of the Court to decide which one, in the light of all relevant circumstances, ought to prevail. The rules of interpretation are useful servants but quite often tend to become difficult masters. It is appropriate to recall the words of Lord Reid 's in Maunsell vs olins, "Then rules of construction are relied on. They are not rules in the ordinary sense of having some binding force. They are our servants not our masters. They are aids to construction, presumptions or pointers. Not infrequently one 'rule ' points in one direction, another in a different direction. In each case we must look at all relevant circumstances and decide as a matter of judgment what weight to attach to any particular 'rule '. " 259 This passage was referred to with approval by this Court in Utkal Contractors and Joinery vs State of Orissa, ; at 330. Contention (b) is, therefore, not of any assistance to the appellants. Re: Contention (c) There are certain aspects of the legal relationship amongst partners which do impart a special complexion to the question under consideration. The point raised in these appeals in confined to a situation where a partner receives interest on the capital subscribed by him and the same partner pays interest on the drawings made by him. A firm under the general law is not a distinct legal entity and has no legal existence of its own. The partner ship property vests in all the partners and in that sense every partner has an interest in assets of the partnership. However, during the subsistence of the partnership no part ner can deal with any portion of the property as his own. In Narayanappa vs Krishtappa, ; , this Court referred to the nature of the interest of a partner in the firm and observed: " . .The whole concept of partnership is to embark upon a joint venture and for that purpose to bring in as capital money or even property including immovable property. Once that is done whatever is brought in would cease to be the exclusive property of the person who brought it in. It would be the trading asset of the partnership in which all the partners would have interest in proportion to their share in the joint venture of the business of the partnership. The person who brought it in would, therefore, not be able to claim or exercise any exclusive right over any property which he has brought in, much less over any other partnership property. He would not be able to exercise his right even to the extent of his share in the business of the partnership . In CIT vs Chidambaram, at 295 & 296 this Court observed: "Here the first thing that we must grasp is that a firm is not a legal person even though it has some at tributes of personality. Partnership is a certain relation between 260 persons, the product of agreement to share the profits of a business. 'Firm ' is a collective noun, a compendious expres sion to designate an entity, not a person. In income tax law, a firm is a unit of assessment, by special provisions, but is not a full person which leads to the next step that since a contract of employment requires two distinct persons viz. the employer and the employee, there cannot be a con tract of service, in strict law, between a firm and one of its partners. So that any agreement for remuneration of a partner for taking part in the conduct of the business must be regarded as portion of the profits being made over as a reward for the human capital brought in. Section 13 of the Partnership Act brings into focus this basis of partnership business." " . . It is implicit that the share income of the part ner takes in his salary. The telling test is that where a firm suffers loss, the salaried partner 's share in it goes to depress his share of income. Surely, therefore, salary is a different label for profits, in the context of a partner 's remuneration" (Underlining Supplied) In Lindley on Partnership (14th Edn.), we find this statement of the law: " . . In point of law, a partner may be the debtor or the creditor of his co partners, but he cannot be either debtor or creditor of the firm of which he is himself a member, nor can he be employed by his firm, for a man cannot be his own employer." (p. 30) The position as stated above was approved by this Court in Chidabaram 's case. In Regional Director Employees State Insurance Corpora tion, Trichur vs Ramanuja Match Industries, , this Court dealing with the question whether there could be a relationship of master and servant between a firm on the one hand and its partners on the other, indicated that under the law of partnership there can be no such relationship as it would lead to the anomalous position of the same person being both the master and the servant. The following observations of Justice Mathew in Ellis vs Joseph Ellis & Co., were referred to with approval: 261 "The argument on behalf of the applicant in this appeal appears to involve a legal impossibility, namely, that the same person can occupy the position of being both master and servant, employer and employed." (p. 126) And observed: ". . A partnership firm is not a legal entity. This Court in Champaran Cane Concern vs State of Bihar and Anr., pointed out that in a partnership each partner acts as an agent of the other. The position of a partner qua the firm is thus not that of a master and a servant or employee which concept involves an element of subordination but that of equality. The partnership business belongs to the partners and each one of them is an owner thereof . " (p. 123) "It is thus clear that in the United States, Great Britain and Australia, a partner is not treated as an employee of his firm merely because he receives a wage or remuneration for work done for the firm. This view is in complete accord with the jurisprudential approach. In the absence of any statutory mandate, we do not think there is any scope for accepting the view of the Rajasthan High Court." (p. 127) Sri Ramachandran 's contention is that both the capi tal brought in by the partners to the firm and the amounts that may be drawn by them from the partnership firm partake of the same nature and character as the funds of the partnership. This may be so. But in effectuating the conse quences of the recognition of this position, it is necessary to ensure that express provisions of the statute departing from the general law are not whittled down. To the extent that the statute expressly or by necessary implication departs from the general law, the latter cannot be invoked to displace the effect of the statute. But, if there is no such statutory departure the general principles operating in that branch of the law determine the nature of the legal relationship. Sir Francis Bennion in his Statutory Interpretation observes: "Unless the contrary intention appears, an enactment by 262 implication imports any principle or rule of law (whether statutory or non statutory) which prevails in the territory to which the enactment extends and is relevant to its opera tion in that territory." (p. 350) "Unless the contrary intention appears, an enactment by implication imports the principle of any legal maxim which prevails in the territory to which the enactment extends and is relevant to the operation of the enactment in that terri tory." (p. 354) What follows is that, to the extent not prohibited by the statute, the incidents of the general law of partners are attracted to ascertain the legal nature and character of a transaction. This is quite apart from distinguishing the 'substance ' of the transaction from its 'from '. In Sargaison vs Roberts, [1969] 45 Tax Cases 612 at 617 & 618, Megarry, J., observed: "I appreciate that what I have to do is to construe the words used, and not to insert words which are not there, or to resort to a so called "equitable construction" of a taxing statute. But even when I have given full weight to this consideration, I think that I am entitled to distin guish between the substance of a transaction and the machin ery used to carry it through . . " ". . "Substance" and "form" are words which must no doubt be applied with caution in the field of statutory construction. Nevertheless, where the technicalities of English conveyancing and land law are brought into juxtaposition with a United Kingdom taxing statute, I am encouraged to look at the realities at the expense of the technicalities. In Commissioner of Income tax vs Gillanders Arbuthnot & Co., at 418, this Court said: ". .The taxing authority is entitled and is indeed bound to determine the true legal relation resulting from a trans action. If the parties have chosen to conceal by a device the legal relation, it is open to the taxing authority to unravel 263 the device and to determine the true character of the relationship. But the, legal effect of a transaction cannot be displaced by probing into the substance of the transaction" (Emphasis Supplied) The Court is not precluded from treating what the trans action is in point of fact as one in point of law also. How do these principles operate on the present controversy? It appears to us that if in substance interest paid by the firm to a partner and the interest, in turn, received from the partner are mere expressions of the appli cations of the funds or profits of the partnership and which, having regard to the community of interest of the partners, are a mere variations of the method of adjustment of the profits, there should be no impediment in treating them as part of the same transaction if, otherwise, in general law they admit of being so treated. The provisions of Section 40(b) do not exclude or prohibit such an approach. If instead of the transactions being reflected in two separate or distinct accounts in the books of the part nership they were in one account, the quantum of interest paid by the firm to the partner would to the extent of the drawings of the partner, stand attenuated. The mere fact that the transactions are split into or spread over to two or more accounts should not by itself make any difference if, otherwise, the substance of the transaction is the same. One of the relevant tests would be whether the funds on which interest is paid or received partake of the same character. A broad analogy, though in itself may not be conclusive, is furnished by the idea of "mutual dealings" and the prin ciple of set off statutorily recognised in bankruptcy pro ceedings under Section 46 of the Provincial Insolvency Act and attracted also to proceedings for winding up of compa nies by virtue of Section 529 of the , where the 'mutual credit ' clause steps in to avoid the injustice, which would otherwise, arise, of compelling a creditor to pay the official assignee the full amount of the debt due from him to the insolvent, while the creditor would, perhaps, only receive a small dividend on the debt due from the insolvent to him under a pari passu payment. This principle was recognised by this Court in Official Liquidator vs Lakshmikutty, ; The set off in this case is, no doubt, the result of a statutory provision. In the case of partners, the special legal incidents of their relationship would substitute for the statutory provi sion and govern the situation. Indeed, even the idea of 264 a set off itself, which presupposes a duality of entities, may be out of place in the very nature of the relationship between a firm and its partners where the former is a mere compendious reference to the latter. But even to the extent the income tax law which identifies the firm as a distinct entity and unit of assessment goes, the idea of set off may be invoked in view of the mutuality implicit in the putative duality inherent in deeming the firm as a distinct entity under the Act for certain purposes. The fiction may have to be pushed to its logical conclusions. The decision of the Madras High Court in Sankaralin ga Nadar 's case speaks of income tax and equity being strangers. To say that a Court could not resort to the so called "equitable construction" of a taxing statute is not to say that where a strict literal construction leads to a result not intended to subserve the object of the legisla tion, another construction, permissible in the context, should not be adopted. In Commissioner of Income tax vs J.H. Gotla, , this Court said: " . . we should find out the intention from the language used by the Legislature and if strict literal construction leads to an absurd result, i.e., a result not intended to be subserved by the object of the legislation found in the manner indicated before, then if another construction is possible apart from strict literal construction, then that construction should be preferred to the strict literal construction. Though equity and taxation are often strang ers, attempts should be made that these do not remain always so and if a construction results in equity rather than in injustice, then such construction should be preferred to the literal construction. Furthermore, in the instant case, we are dealing with an artificial liability created for coun teracting the effect only of attempts by the assessee to reduce tax liability by transfer . " (p. 339 40) In this respect taxing statutes are not different from other statutes. In A. G vs Carlton Bank, , Lord Russel of Killowen, CJ said: "I see no reason why any special canons of construction should be applied to any Act of Parliament, and I know of no authority for saying that a taxing Act is to be construed 265 differently from any other Act. The duty of the court is, in my opinion, in all cases the same, whether the Act to be construed relates to taxation or any other subject, viz. to give effect to the intention of the legislature . " We, accordingly, accept the submission of Sri Rama chandran on this point. In our opinion, where two or more transactions on which interest is paid to or received from the partner by the firm are shown to have the element of mutuality and are referable to the funds of the partnership as such, there is no reason why Section 40(b) should be so construed as to exclude in quantifying the interest on the basis of such mutuality. In such circumstances the interest, if any, paid to a partner by the firm in excess of what is received from the partner could alone be excluded from deduction under Section 40(b). Contention 'c ' is held and answered accordingly. Re: Contention (d) Sri Ramachandran contended that circular of 1965 of the Central Board of Direct Taxes was binding on the authorities under the Act and should have been relied upon by the High Court in support of the Court 's construction of Section 40(b) to accord with the understanding of the provision made manifest in the circular. This contention and the proposition on which it rests, namely, that all circulars issued by the Board have a bind ing legal quality incurs, quite obviously, the criticism of being too broadly stated. The Board cannot pre empt a judi cial interpretation of the scope and ambit of a provision of the 'Act ' by issuing circulars on the subject. This is too obvious a proposition to require any argument for it. A circular cannot even impose on the tax prayer a burden higher than what the Act itself on a true interpretation envisages. The task of interpretation of the laws is the exclusive domain of the courts. However, this is what Sri Ramachandran really has in mind circulars beneficial to the assessees and which tone down the rigour of the law issued in exercise of the statutory power under Section 119 of the Act or under corresponding provisions of the predecessor Act are binding on the authorities in the administration of the Act. The Tribunal, muchless the High Court, is an authority under the Act. The circulars do not bind them. But the benefits of such circulars to the assessees have been held to be permissible even though the circulars might have departed from the strict tenor of the statutory provision and mitigated the 266 rigour of the law. But that is not the same thing as saying that such circulars would either have a binding effect in the interpretation of the provision itself or that the Tribunal and the High Court are supposed to interpret the law in the light of the circular. There is, however, support of certain judicial observations for the view that such circulars constitute external aids to construction. In State Bank of Travancore vs C.I.T., ; , however, this Court referring to certain circulars of the Board said: "The earlier circulars being executive in character cannot alter the provisions of the Act. These were in the nature of concessions and could always be prospectively withdrawn. However, on what lines the rights of the parties should be adjusted in consonance with justice in view of these circulars is not a subject matter to be adjudicated by us and, as rightly contended by counsel for the Revenue, the circulars cannot detract from the Act." (Emphasis Supplied) (p. 139) The expression 'executive in character ' is, presumably, used to distinguish them from judicial pronouncements. The circulars referred to in that case were also of the Central Board of Direct Taxes and were, presumably also, statutory in character. However, this contention need not detain us, as it is unnecessary to examine whether or not such circulars are recognised, legitimate aids to statutory construction. In the present case, the circular of 1965 broadly accords with the view taken by us on the true scope and interpretation of Section 40(b) in so far as the quantification of the inter est for purposes of Section 40(b). Contention (d) is disposed of accordingly Re: Contention (e) Sri Ramachandran urged that the introduction, in the year 1984, of Explanation I to Section 40(b) was not to effect or bring about any change in the law, but was intend ed to be a mere legislative exposition of what the law has always been. An 'Explanation ', generally speaking, is in tended to explain the meaning of certain phrases and expres sions contained in a statutory provision. There is no gener al theory as 267 to the effect and intendment of an Explanation except that the purposes and intendment of the 'Explanation ' are deter mined by own words. An Explanation, depending on its language, might supply or take away something from the contents of a provision. It is also true that an Explanation may this is what Sri Ramachandran suggests in this case be introduced by way of abundant caution in order to clear any mental cobwebs surrounding the meaning of a statutory provision spun by interpretative errors and to place what the legislature considers to be the true meaning beyond controversy or doubt. Hypothetically, that such can be the possible purpose of an 'Explanation ' cannot be doubted. But the question is whether in the present case, Explanation I inserted into Section 40(b) in the year 1984 has had that effect. The notes on clauses appended to the Taxation Laws (Amendment) Bill, 1984, say that Clause 10 which seeks to amend Section 40 will take effect from 1st April, 1985 and will, accordingly, apply in relation to the assessment year 1985 86 and subsequent years. The express prospective opera tion and effectuation of the 'Explanation ' might, perhaps, be a factor necessarily detracting from any evincement of the intent on the part of the legislature that the Explana tion was intended more as a legislative exposition or clari fication of the existing law than as a change in the law as it then obtained. In view of what we have said on point (c) it appears unnecessary to examine this contention any further. Contention (e) is disposed of accordingly. In the result, for the foregoing reasons these appeals are allowed; the orders of the High Court under appeal set aside and the question of law referred for opin ion is answered in the affirmative in terms of para 12 (supra). In the circumstances, there will be no orders as to the costs in these appeals. P.S. S Appeals allowed.

Section 40(b) of the Income Tax Act, 1961, as it stood at the relevant time, prohibited deduction of interest, salary, bonus, commission or remuneration paid by the firm to the partner. Explanation 1 introduced thereto by the Taxation Laws (Amendment) Act, 1984, which took effect from 1st April, 1985, provided that where interest is paid by a firm to a partner who has also paid interest to the firm, the amount of interest to be disallowed shall be limited to the net amount of interest paid by the firm to the partner. Circular No. 33D(XXV 24) of 1965 issued by the Central Board of Direct Taxes provided that where a firm pays interest to as well as receives interest from the same partner, only the net interest can be stated to have been received or paid by the firm. The assessee appellant, a registered partnership firm, in the accounting year for the assessment year 1975 76, paid interest to the partners on the amounts standing to their respective credits. It also received from the partners interest on their borrowings from the firm. The Income tax Officer 244 while disallowing the amount of interest paid to the part ners did not set off the interest received from them on their borrowings. The Appellate Assistant Commissioner allowed the claim of the appellants that only the net inter est paid to the partners after setting off the interest received from them was to be disallowed. The Appellate Tribunal affirmed the appellate order. The High Court an swered the reference in favour of the Revenue on the view that the Tribunal was not justified in holding that net interest should be disallowed under section 40(b) of the Act. In these appeals by special leave it was contended for the appellants that: (a) the sole object of section 40(b) was, having regard to the special features and legal incidents of a partnership, to enable the assessment of the 'real income ' of the firm and did not require or compel the exclusion of the cross interest paid by a partner in determining the quantum to be disallowed; (b) the extent of the embargo under section 10(4)(b) of the 1922 Act on the disallowance of interest paid to a partner was judicially interpreted and ascertained in Sri Ram Mahadeo Prasad vs CIT, All. and when the legislature re enacted those provisions in section 40(b) of the 1961 Act in substantially the same terms, legislature must be held to have used that expression with the same implications attributed to it by the earlier judi cial exposition; (c) the interest paid to a partner on the capital brought in by him and the interest received from a partner on his borrowings from the firm were both integral parts of a method adopted by the partners for adjusting the division of profits and in that sense both payments partook of the same character and it would be permissible to take both the payments into consideration in quantifying the interest and treat only such excess, if any, paid by the firm as susceptible to the exclusionary rule in section 40(b); (d) the circular of the Central Board of Direct Taxes, which was statutory in character, was binding on the authorities and the High Court was in error in taking a view of the legal position different from the one indicated in it; and (e) the amendment of 1984 inserting Explanation 1 in section 40(b), though later in point of time, constitutes a legisla tive exposition of the correct import of the provision and so construed offers a guide to the correct understanding of the provisions in section 40(b) in their application to the earlier years as well. Allowing the appeals, the Court, HELD: 1.1 As long as there is no ambiguity in the statu tory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be ap pealed to whittle down the statutory 245 language. If the intendment is not in the words used it is nowhere else. [255E F] Doypack Systems Pvt. Ltd. vs Union of India, ; , referred to. 1.2 Section 40 of the Income Tax Act, 1961 opens with the nonobstante clause and directs that outgoings such as interest, salary, bonus, commission or remuneration specifi cally enumerated in cl. (b) shall not be deducted in comput ing the income chargeable under the head "profits and gains of business or profession". The words used therein on their own terms, are plain and unambiguous. They manifest the intention of the legislature and must, therefore, be applied as they stand. [255D E, F G, 256B] 1.3 Artificial and unduly latitudinarian rules of con struction, with their general tendency to 'give the tax payer the breaks ', are out of place where the legislation has a fiscal mission. Taxation is regarded as a potent fiscal tool of State policy to achieve equitable distribu tion of the burdens of the community to sustain social services. [256C D] Thomas M. Cooley: Law of Taxation, Vol. 2, referred to. 1.4 The test of 'real income ' as one on which the opera tion of section 40(b) could be sought to be limited is not a reliable one. It might on its own extended logic validate a set off of the interest paid to one partner against interest received from another and likewise, interest received from one partner on some other dealings between him and the firm against interest paid to another partner on his or her capital contribution and thus lead to positions and results, whose dimensions and implications are not fully explored. It must not, therefore, be called in aid to defeat the funda mental principles of the law of income tax. [257 A, 256A, 256G, 257D1 State Bank of Travancore vs CIT, ; at 155, referred to. 2.1 When words acquire a particular meaning or sense because of their authoritative construction by superior courts, they are presumed to have been used In the same sense when used In a subsequent legislation In the same or similar context. [257G] H.H. Ruckmaboye vs Lulloobhoy Mottichund, Moore 's Indian Appeals, Vol. 5, p. 234 at 250, referred to. 2.2 However, the rules of interpretation are not rules of law. they 246 are mere aid to construction and constitute some broad pointers. The interpretative criteria apposite in a given situation may, by themselves, be mutually irreconcilable. It is the task of the court to decide which one, in the light of all relevant circumstances, ought to prevail. [258E F] Maunsell vs Olins, and Utkal Contrac tors & Joinery vs State of Orissa, ; at 330, referred to. 2.3 The decision in Sri Ram Mahadeo Prasad vs CIT, All.) proceeded on a construction of the relevant provision i.e.s. 10(4)(b) of the 1922 Act and on what the High Court considered as affording to the assessee a fair treatment. It did not rest on any special or technical connotation of the word 'interest ' nor any special legal sense which that word could be said to have acquired by the earlier judicial ascertainment of its amplitude. The appeal to this principle of construction in the instant case is, therefore, out of place. [258D E] 3.1 To the extent the statute expressly or by necessary implication departs from the general law, the latter can not be invoked to displace the effect of the statute. But if there is no such statutory departure the general principle operating in that branch of law would determine the nature of legal relationship. [261F H] Sir Francis Bennion, on Statutory Interpretation, p. 350, 354, referred to. In the case of partners, therefore, to the extent not prohibited by section 40(b) of the Act, the incidents of the general law of partners would be attracted to ascertain the legal nature and character of a transaction. This is quite apart from distinguishing the 'substance ' of the transaction from its 'form '. But the legal effect of a transaction, cannot be displaced by probing into the substance of the transaction. The Court, however, is not precluded from treating what the transaction is in point of fact as one in point of law also. [262C D, 263A B] Sargaison vs Roberts, [1969] 45 Tax Cases 612; CIT vs Gillanders Arbuthnot & Co., ; Narayanappa vs Krishtappa; , ; CIT vs Chidambaram, ; Lindley on Partnership, (14th Edn.) p. 30; Regional Director Employees State Insurance Corporation, Trichur vs Ramanuja Match Industries, and Ellis vs Joseph Ellis & Co., referred to. 3.2 If interest paid by the firm to a partner and the inter est, in 247 turn, received from the partner are mere expressions of the application of the funds or profits of the partnership and which, having regard to the community of interest of the partners, are mere variations of the method of adjustment of the profits, they could be treated as part of the same transaction if, otherwise, in general law they admit of being so treated. The provisions of section 40(b) do not exclude or prohibit such an approach. [263B D] If instead of the transactions being reflected in two separate or distinct accounts in the books of the partner ship they were in one account, the quantum of interest paid by the firm to the partner would, to the extent of interest on drawings of the partner, stand attenuated. The mere fact that the transactions were split into or spread over to two or more accounts would not by itself make any difference if, otherwise. the substance of the transaction was the same. [263D E] Official Liquidator vs Lakshmikutty, ; , referred to. Even the idea of a set off itself, which presupposes a duality of entities may be out of place in the very nature of the relationship between a firm and its partners where the former is a mere compendious reference to the latter. But even to the extent the income tax law which identifies the firm as a distinct entity and unit of assessment goes, the idea of set off may be invoked in view of the mutuality implicit in the putative duality inherent in deeming the firm as a distinct entity under the Act for certain pur poses. The fiction may have to be pushed to its logical conclusions. [263H 264B] 3.3 Where a strict literal construction leads to a result not intended to subserve the object of the legisla tion another construction, permissible in the context should be adopted. Therefore, though equity and taxation are often strangers, attempts should be made that these do not remain always so. More so, a taxing statute being not different from other statutes it is not to be construed differently. The duty of the Court is to give effect to the intention of the legislature. [264C, E F, G H, 265A] CITv. J.H. Gotla, and A.G.V. Carlton Bank, , referred to. 3.4 Accordingly, where two or more transactions on which interest is paid to or received from the partner by the firm are shown to have the element of mutuality and are referable to the funds of the 248 partnership as such, section 40(b) should not be so construed as to exclude in quantifying the interest on the basis of such mutuality. If that be so, the interest, if any paid to a partner by the firm in excess of what is received from the partner could alone be excluded from deduction under section 40(b). [265B C] C.I.T. vs T.V. Ramanaiah & Sons, A.P., approved. C.I.T. vs O.M.S.S. Sankaralinga Nadar & Co., Mad., overruled. The Central Board of Direct Taxes cannot pre empt a judicial interpretation of the scope and ambit of a provi sion of the Income Tax Act by issuing circulars on the subject. A circular cannot even impose on the tax payer a burden higher than what the Act itself on a true interpreta tion envisages. Nor can it detract from the Act. The task of interpretation of the laws is the exclusive domain of the courts. The circulars do not bind them. [265E F, 266D, 265F, G H] State Bank of Travancore vs CIT, ; , re ferred to. Since the circular of 1965 broadly accords with the view taken on the true scope and interpretation of section 40(b) as regards qualification of interest it is unnecessary to examine whether or not such circulars are recognised legiti mate aids to statutory construction. [266E F] 5. An 'Explanation ' is generally intended to explain the meaning of certain phrases and expressions contained in a statutory provision. There is no general theory as to the effect and intendment of the Explanation except that the purpose and intendment of the Explanation are determined by its own words. An Explanation depending on its language, might supply or take away something from the contents of a provision. An Explanation may also be introduced by way of abundant caution in order to clear the meaning of a statuto ry provision and to place what the legislature considers to be the true meaning beyond controversy or doubt. [266G 267B] In the instant case, the notes on clauses appended to the Taxation Laws (Amendment) Bill, 1984 say that clause 10 which seeks to amend section 40will take effect from 1st April, 1985 and will, accordingly, apply in relation to the assess ment year 1985 86 and subsequent years. In view of the express prospective operation and effectuation of the Expla nation 249 it is not necessary to examine its possible purpose any further. [267C E]

ivil Appeal No. 463 of 1966. Appeal by special leave from the judgment and order, dated March 30, 1964 of the Punjab High Court in Letters Patent. Appeal No. 24 of 1963. E. C. Agrawala and Champat Rai, for the appellant. Harbans Singh and R.N. Sachthey, for the respondents. The Judgment of the Court was delivered by Hegde, J. Though several questions of law were raised in this appeal by special leave, after hearing the Counsel for the parties on one of those questions, namely on what date section 32 (KK) of the Pepsu Tenancy and Agricultural Lands Act 1955 (Act No. XIII of 1955) (to be hereinafter referred to as the Principal Act) should be deemed to have come into force, we did not think it necessary to hear the. Counsel for the parties on the other questions raised in the appeal. Before examining the question of law referred to hereinbefore it is necessary to set out the material facts. The second appellant is the son of the first appellant. The appellants alongwith Charanjit Singh and Darshan, the two other sons of the first appellant were members of a joint Hindu family. That family owned agricultural lands in the village Hathoa, Tehsil Malerkotla, District Sangrur. The principal Act came into force on March 6, 1955. The preamble to that Act says that it is an Act to amend and consolidate the law relating to tenancies of agricultural lands and to provide for certain measures of land reforms. That Act provided that: "subject to the provisions of section 5 every land .owner owing land exceeding thirty standard acres shall be en 349 titled to select for personal cultivation from the land held by him in.the State as a land owner any parcel or parcels of land not exceeding in aggregate area the permissible limit and reserve such land for personal cultivation by intimating his selection in the prescribed form and manner to the Collector. " The permissible limit is thirty standard acres. Under that Act, there was no provision for Government taking over the lands that were in excess of the permissible limits. The appellants ' family divided their family properties as per a registered partition deed on September 6, 1956. Thereafter necessary changes in the mutation register were made. The principal Act was amended in 1956 as per Amendment Act 15 of 1956 which came into force, it appears several alienations were effected by to the principal Act Chapter 4A which provides for Government 'taking over the surplus lands in the hands of a land owner i.e. the lands in excess of the permissible limit. After that amendment came into force, it appeals several alienations were effected by the land owners to get out of the reach of the law. Neither the principal Act nor the Amendment effected in 1956 prohibited any alienation. Then came the Pepsu Tenancy and Agricultural Lands (Amendment) Act, No. HI of 1959 which was made operative from January 19, 1959. Among other provisions that Amendment Act incorporated into the Act section 32(FF) which says: "Save in the case of land acquired by the State Government under any law for the time being in force or by an heir by inheritance or up to 30th July 1958 by a landless person or a small landowner not being a relation as prescribed of the person making the transfer or disposition of land, for consideration up to an area which with or without the area owned or held by him does not in the aggregate exceed the permissible limit, no transfer or other disposition of land effected after 21st August, 1956, shall affect the right of the State Government under this Act to the surplus area to which it would be entitled but for such transfer or disposition :" This Section has a proviso which reads: "Provided that any person who has received any advantage under such transfer or disposition of land shall be bound to restore it, or to make compensation for it, to the person from whom he received it." In 1962 the Pepsu Tenancy and Agricultural Lands (Amendment and Validation) Act, No. XVI of 1962 was passed. It 350 crone into force on July 20, 1962. two sections in that Act which are relevant for our present purpose are sections 7 and 1 Section 7 reads: "Insertion of new section 32 KK in Pepsu Act 13 of 1955. After section 32 KK of the principal Act,the following section shall be inserted, namely : "32 KK. Land owned by Hindu undivided family. to be deemed land of one landowner. Notwithstanding anything contained in this Act or in any other law for the time being in force, (a) where, immediately before the commencement this Act, a landowner and his descendants constitute a Hindu undivided family, the landowned by such family shall, for the purposes. of this Act, be deemed to. be the land of that landowner and no descendant shall, 'as. member of such family, be entitled to claim that in respect of his share of such land he is a landowner in his own right; and (b) a partition of land owned by a Hindu undivided family referred to in clause (a) shall be deemed to be a disposition of land for the purposes of section 32 FF. " Explanation : In this section, the expression "descendant" includes an adopted son. " Section 1 sets out the short title and commencement of that Act. That Section reads: "This Act may be called the Pepsu Tenancy and Agricultural Lands (Amendment and Validation) Act, 1962. (2) Section 2, section 4, section 5, section 7 and section 10 shall be deemed to have come into force on the 30th day of October 1956 and the remaining provisions of this Act shall come into force at once. " After the Pepsu Tenancy and Agricultural Lands (Amendment) Act No. III of 1959 came into force, the Collector of Sangrur started proceedings under Chapter 4A of the Act for determining the surplus lands in the hands of the appellants. In those proceedings despite the representations of the appellants, the Collector ignored the partition effected in the family of the appellants in determining the surplus lands in the hands of the members of the family. He considered them as one unit and on that basis held that eighteen standard acres and 51/2 units of lands are surplus in their hands. There is no dispute that if the partition entered into in the family had been taken into consideration, the lands 351 held by the different sharers are within permissible limit. The appellants unsuccessfully went up in appeal against that order to the Commissioner, Patiala Division. Against the order of the Commissioner, the appellants appealed to the State Government but that appeal was rejected on September 1, 1961. Thereafter the appellants filed Civil Writ No. 1418 of 1961 in the High Court of PUnjab at Chandigarh under article 226 of the Constitution challenging the decisions of respondents 1 to 3. The learned Single Judge who heard that petition dismissed the same on November 27, 1962. He held that as section 32(KK) had become a part of the principal Act the words "this Act" in that section must refer to the principal Act. and not to section 7 of the Amendment Act. The decision of the learned Single Judge was affirmed by a Division Bench of that Court. That bench followed an earlier decision of that Court in Bit Singh and Ors. vs The State of Punjab and Ors.(1). At this stage we may mention that in the Punjab High Court at one stage there were conflicting decisions on the question of law under consideration. It is not necessary to refer to those decisions as grounds on which they differed are referred to in Bit Singh 's case(1). The decisions which have taken the same view as taken by the High Court in this case have ignored the significance of section 1 (2) of the 1962 Amendment Act. They have exclusively focussed their attention on section 32(KK) and the supposed reasons for its enactment. It is, a well settled rule of construction that No. provision in a statute should be given retrospective effect unless the legislature by express terms or by necessary implication has made it retrospective and that where a provision is made retrospective, care should be taken not to extend its retrospective effect beyond what was intended. To accept the line o.f reasoning adopted by the learned Judges of the High Court who decided this case is to completely ignore sub section (2) of section 1 of the 1962 Amendment Act. That Section in specific terms says that section 32(KK) (section 7 of the Amendment Act) shall be deemed to have come into force on the 30th day of October 1956. We fail to see how we can ignore this mandate of the legislature. That provision clearly brings out the intention of the legislature. There is no ambiguity in it. It is not possible to adopt any rule of construction which would necessitate the Court to ignore that provision. It is not possible to accept the conclusion of the High Court that section 32(KK) must be deemed to have come into force on the date the principal Act came into force namely on March 6, 1955. That is not even the case of the respondents. Clause (b) of section 32(KK) which is the clause relevant for our present purpose would be a meaningless provision unless the same is read along with section 32(FF) which was for (1) 352 the. first time incorporated into the principal Act in 1959 though it affects all transfers and other dispositions of land effected after August 21, 1956. It is not the case of the respondents that the transfers effected or the .partitions made before August 21, 1956. ,are within the mischief of section 32(FF) or section 32(FF) read with section 32(KK). Therefore there is no basis for saying that section 32(KK) has been given retrospective effect as from the date the principal Act came into force. On a reading of the various provisions of the Pepsu Tenancy and Agricultural Lands (Amendment and Validation) Act, 1962, it appears to us that the legislature intended that section 7 of that .Act which introduced into the principal Act section 32(KK) should be deemed to. have come into force on the 30th October 1956. Evidently the draftsman when he drafted section 7 of that Act had in his mind the Amendment Act and not the principal Act. The words "this Act" in section 7 of the Amendment Act (section 32 KK of the principal Act) in our opinion were intended to refer to the Amendment Act and not to the principal Act. It is true that ordinarily when a Section is incorporated into the principal Act by means of an amendment, reference in that Section to "this Act" means the principal Act. But in view of sub section (2) of section 1 of the Amendment Act of 1962 that construction has become impermissible. Every statute has to be construed as a whole and the construction given should be a harmonious one. It may be that the legislature intended that section 32(KK) should be deemed to have come into force on the 30th day of October 1956, on which day section 32(FF) became a part of the principal Act. It is possible that the legislature did. not intend to give to that Section the same retrospective effect as it had given to section 32(FF). It is not permissible for us to proceed on the basis that the legislature had enacted subs. (2) of section 1 of the Amendment Act 1962 by oversight. If any mistake had crept into that Section it is for the legislature to correct the same and it is not for this Court to proceed on the supposition that the same was enacted by oversight. For the reasons mentioned above this appeal is allowed and the orders impugned in the Writ Petition are quashed. The respondents shall pay the costs of the appellants both in this Court as well as in the High Court. R.K.P.S. Appeal allowed.

The Pepsu Tenancy and Agricultural Lands Act XIII of 1955 came into force on March 6, 1955, whereby it was provided that every land owner would be entitled to select any parcel or parcels of land not exceeding the permissible limit, which was fixed at 30 standard acres. The principal Act was amended in 1956 by the inclusion of Chapter 4A which provided for the Government taking over the surplus lands in the hands of a land owner. Another Amendment Act III of 1959 which was made operative from January 19, 1959 incorporated into the principal Act section 32(FF) which provided that except in certain specified cases no transfer or other disposition of land effected after 21st .August 1956 could affect the rights of the State Government under the Act. In 1962 the Pepsu Tenancy and Agricultural Lands (Amendment and Validation) Act XVI of 1962 was passed. Section 7 of this Act introduced a new section 32KK into the principal Act whereby it was provided that land owned by a Hindu undivided family would be deemed to be land of one land owner and, a partition of land owned by such a family shall be deemed to. be a disposition of land for the purposes of section 32 FF. Section 1(2) of 'the Amendment Act provided that Sections 2, 4, 5, 7 and 10 "shall be deemed to. have come into force on the 30th day of October, 1956 and the remaining provisions of this Act shall come into force at once,". The first Appellant together with his son the second Appellant and two other sons were members of a joint Hindu family which owned agricultural lands in Punjab. The Appellant 's family divided their family property by a Registered Partition Deed on September 6, 1956 and necessary changes were thereafter made in the mutation register. After Act III of 1959 ' came into force, the Collector of Sangrur started proceedings under Chapter 4A of the Act for determining the surplus lands in the hands of the appellant. Despite the representations of the Appellants, the Collector ignored the partition effected in the family 'and held that about 18 standard acres were surplus in their hands. Appeals filed by the Appellants before the Commissioner, Patiala Division and the State Government were rejected. The Appellants then challenged the orders of these authorities by a writ petition under article 226 of the Constitution, but this was dismissed ' by a Single Judge of the High Court who took the view that as section 32 KK had become a part of the principal Act, the words "this Act" in that section must refer to the principal Act and not to Section 7 of the Amendment Act. A Division Bench of the High Court dismissed an appeal following an earlier decision of the Court in Bir Singh and Ors. vs The State of Punjab and Ors. In the appeal to this Court there was no dispute that if the partition entered into in the family was. taken into consideration, the lands held by the different sharers would ' be within the permissible limits. 348 HELD: The orders impugned in the writ petition must be quashed. A reading of the various provisions of the 1962 Act show that the legislature intended that section 7 of that Act which introduced section 32 KK into the principal Act should be deemed to have come into force on the 30th October 1956. The words "this Act" in section 7 of the Amendment Act (section 32 KK of the principal Act) were intended to refer to the Amendment Act 'and not to the principal Act. It is true that ordinarily when a section is incorporated into the principal Act by 'means of an amendment, reference in that section to "this Act" means the principal Act. But in view of sub section (2) of section 1 of the Amendment Act of 1962 that construction had become impermissible. Every statute has to be construed as a whole and the construction given should be 'a harmonious one. It was not permissible for the Court to. proceed on the basis that the legislature had enacted sub section (2) of section 1 of the Amendment Act 1962, by oversight. If any mistake had crept into that section it was for the legislature to correct the same. [352 C F]

Appeals Nos. 490 and 491 of 1958. Appeals from the judgment and decree dated February 18, 1955, of the Madras High Court in Second Appeals Nos. 2038 and 2039 of 1950. N. R. Raghavachariar, M. R. Krishnaswami and T. V. R. Tatachari, for the appellant. R. Ganapathi Iyer and D. Gupta, for the respondent. November 29. The Judgment of the Court was delivered by KAPUR, J. Two suits were brought by the appellants for a declaration against the levy of sales tax by the State of Madras and an injunction was also prayed for. Both the suits were decreed by the Subordinate Judge of Salem and the decrees were confirmed on appeal by the District Judge of Salem. Two appeals were taken to the High Court by the State of Madras against those decrees and by a judgment dated February 18, 1955, the decrees were set aside by a common judgment. Against these decrees the appellants have brought these appeals by a certificate of that Court. The appellants are merchants dealing in cotton yarn. They obtained a license under section 5 of the Madras General Sales Tax Act (Act IX of 1939), hereinafter referred to as the 'Act '. This license exempted 738 them from assessment to sales tax under section 3 of the Act on the sale of cotton yarn and on handloom cloth "subject to such restrictions and conditions as may be prescribed including conditions as to license and license fees". The license was issued on March 31,1941, and was renewed for the following years. On September 20, 1944, the Commercial Tax Authorities made a surprise inspection of the premises of the appellants and discovered that they were maintaining two separate sets of account on the basis of one of which the appellants submitted their returns to the Department. Because the other set of account books showed black market activities of the firm Balakrishna Chetty was prosecuted and sentenced to six months ' imprisonment for an offence connected with the breach of Cot. ton Yarn Control Order. During the pendency of those proceedings the Deputy Commercial Tax Officer made assessments for the years. 1943 44 and 1944 45, the tax for the former was Rs. 37,039 and for the latter Rs. 3,140. The appellants unsuccessfully appealed against these assessments and their revisions also failed. On August 24, 1945, the appellants brought a suit for a declaration and injunction in regard to the first assessment alleging that the assessment was against the Act. On September 2, 1946, a similar suit was brought in regard to the second assessment. It is out of these suits that the present appeal has arisen. The controversy between the parties centres round the interpretation of the words "subject to" in section 5 of the Act. The High Court has held that on a true interpretation of the provisions of the Act and the rules made thereunder, the observance of conditions of the license was necessary for the availability of exemption under section 5; that as the appellants had contravened those conditions they were liable to pay tax for both the years notwithstanding the license which had been issued to them under section 5 of the Act. it will be convenient at this stage to refer to the provisions of the Act which are relevant for the purpose of this appeal. section 2(b) " dealer" means any person who carries on the business of buying or selling goods;" 739 section 2(f) " "prescribed" means prescribed by rules made under this Act;". section 3(1) "Subject to the provisions of this Act, every dealer shall pay in each year a tax in accordance with the scale specified below: (a). . . . . . (b) if his turnover ex One half of I per ceeds twenty cent of such turn thousand rupees. over". section 5 "Subject to such restrictions and conditions as may be prescribed, including the conditions as to licenses and license fees, the sale of bullion and specie, of cotton, of cotton yarn and of any cloth woven on handlooms and sold by persons dealing exclusively in such cloth shall be exempt from taxation under Section 3". section 13 "Every dealer and every person licensed under section 8 shall keep and maintain a true and correct account showing the value of the goods sold and paid by them; and in case the accounts maintained in the ordinary course, do not show the same in an intelligible form, he shall maintain a true and correct account in such form as may be prescribed in this behalf.". The following rules are relevant for the purpose of this appeal and we quote the relevant portions: R. 5 "(1) Every person who (a). . . . . (b) deals with cotton and/or cotton yarn, (c). . . . . . (d). . . . . . (e) shall if he desires to avail himself of the exemption provided in sections 5 and 8 or of the concession of single point taxation provided in section 6, submit an application in Form I for a licence and the relevant portion of Form III is as follows: "Form III Cotton Licence to a dealer in Cotton yarn cloth woven on handlooms 740 See rule 6(5). Licence No. dated having paid a licence fee of Rs. (in words) hereby licensed as a dealer in Cotton/Cotton yarn Cotton woven on handlooms for the year ending at (place of business) subject to the provisions of the Madras General Sales Tax Act, 1939, and the rules made thereunder and to the following conditions:". R. 8 "Every licence granted or renewed under these rules shall be liable to cancellation by the Deputy Commercial Tax Officer in the event of a breach of any of the provisions of the Act, or of the Rules made thereunder or of the conditions of the licence. " The contention raised on behalf of the appellants was that as long as they held the licence it was immaterial if they were guilty of any infraction of the law and that they were not liable to any assessment of sales tax under the provisions of the Act and the only penalty they incurred was to have their licence cancelled and/or be liable to the penalty which under the criminal law they had already suffered. The contention comes to this that in spite of the breaches of the terms and conditions of the licence, having a licence was sufficient for the purpose of exemption under the Act. This contention, in our opinion, is wholly untenable. Section 3 is the charging section and section 5 gives exemption from taxation but that section clearly makes the holding of a licence subject to restrictions and conditions prescribed under the provisions of the Act and the rules made thereunder because the opening words of that section are "subject to such restrictions and conditions as may be prescribed." Under B. 13 an important condition imposed under the Act is the keeping by the dealer and every person licensed of true and correct accounts showing the value of the goods sold and paid by him. Next there is r. 5 of the General Sales Tax Rules which provided 741 that if any person desired to avail himself of the exemption provided in section 5, he had to submit an application in Form I for a licence and the Form of the licence shows that the licence was subject to the provisions of the Act and the rules made thereunder which required the licensee to submit returns as required and also to keep true accounts under section 13. This shows that the giving of the licence was subject to certain conditions being observed by the licensee and the licence itself was issued subject to the Act and the rules. But it was contended that the words "subject to" do not mean "conditional upon" but "liable to the rules and the provisions" of the Act. So construed section 5 will become not only inelegant but wholly meaningless. On a proper interpretation of the section it only means that the exemption under the licence is conditional upon the observance of the conditions prescribed and upon the restrictions which are imposed by and under the Act whether in the rules or in the licence itself ; that is, a licensee is exempt from assessment as long as he conforms to the conditions of the licence and not that he is entitled to exemption whether the conditions upon which the licence is given are fulfilled or not. The use of the words "subject to" has reference to effectuating the intention of the law and the correct meaning, in our opinion, is "conditional upon". The appellants have been found to have contravened the provisions of the Act as well as the rules and therefore it cannot be said that they have observed the conditions upon which the exemption under the licence is available. In that view of the matter, it was rightly held that they were not exempt from assessment under the Act. The appeals are therefore dismissed with costs. Appeals dismissed.

The appellant entered into contract with Government for the supply of goods, and in the assessment year 1942 43 Rs. 10,80,653 and in the assessment year 1943 44, Rs. 7,45,336 were assessed as its income by the Income tax Officer. The supplies to Government were made for. Jaipur by the appellant, and payment was by cheques which were received at Jaipur. The contention of the appellant was that this income was received at Jaipur outside the then taxable territories. This contention was not accepted by the Income tax Appellate Tribunal, Delhi. The appellant then applied for a reference to the High Court under section 66(1) of the Indian Income tax Act, and by its order dated December 10, 1952, the Tribunal referred the following question for the decision of the High Court. " Whether on the facts and circumstances of the case the profits and gains in respect of the sales made to the Government 211 of India were received by the assessee in the taxable terri tories ?" The High Court remanded the case to the Tribunal for a supplemental statement of case calling for a finding on the question " whether the cheques were sent to the assessee firm by post or by hand and what directions, if any, had the assessee firm given to the department in the matter ". The appellant questioned the order of the High Court relying on the decision in New Jehangir Vakil Mill 's case; , Held, that the enquiry in such cases must be to see whether the question decided by the Tribunal admits of the consideration of the new point as an integral or an incidental part thereof. The supplemental statement which the Tribunal is directed to submit must arise from the facts admitted and/or found by the Tribunal and should not open the door to fresh evidence. Held, further, that the question as framed in this case was wide enough to include an enquiry into whether there was any request, express or implied, that the amount of the bills be paid by cheques so as to bring the matter within the dicta of this Court in the Ogale Glass Works case, [1955] 1 S.C.R. 185 or Jagdish Mills case; , In the absence of anything expressly said in the Order of the High Court to the contrary, it cannot be held that the direction given would lead inevitably to the admitting of fresh evidence as that has been prohibited by the New Jehangir Vakil Mills case. The New Jehangir Vakil Mills Ltd. vs The Commissioner of Income tax, ; , distinguished. Jagdish Mills Ltd. vs Commissioner of Income tax, ; , Keshav Mills Co. Ltd., vs Commissioner of Income tax, , Sir Sobha Singh vs Commissioner of Income tax, , Kirloskar Bros. Ltd.v. Commissioner of Income tax, [1952] 21 I.T.R. 82, Commissioner of Income tax vs Ogale Glass Works Ltd. , Commissioner of Income tax vs Kirloskar Bros. Ltd., and Mrs. Kusumben D. Mahadevia, Bombay vs Commissioner of Income tax, Bombay, ; , referred to.

: Criminal Appeal No. 45 of 1972. Appeal by Special Leave from the Judgment and Order dated 18 8 71 of the Calcutta High Court in Crl. Revision No. 1006 of 1970. Sukumar Ghosh for the Appellant. M. M. Kshatriya and G. section Chatterjee for the Respondent. Jaswant Singh, J. concurred with the Opinion of Koshal, J. Kailasam, J. gave a dissenting Opinion. JASWANT SINGH, J. I have had the advantage of going through the judgments prepared by my esteemed Brothers Kailasam and Koshal. While I find myself unable to agree with the view expressed by my learned Brother Kailasam, I am inclined to agree with the opinion of and the conclusion arrived at by my learned brother Koshal. KAILASAM, J. This appeal is filed by special leave by Kamlapati Trivedi against the judgment of the Calcutta High Court in Criminal Revision No. 1006 of 1970 by which it refused to quash the proceedings which were taken cognizance of by the Magistrate, on a complaint given by one Satya Narayan Pathak. Satya Narayan Pathak is the Secretary of Bhartiya Primary School in Howrah. The appellant before us, Kamlapati Trivedi, was a Head Teacher of the Bhartiya Primary School. On 18th April, 1970 Satya Narayan Pathak served a Notice on the appellant calling upon him to show cause why he should not be found guilty of negligence of duty. On receipt of the Notice, the appellant attempted to remove certain records from the school but he was prevented. On the same day, that is, on 18th April, 1970 the appellant complained in writing to the Officer In charge of Bally Police Station, Howrah at 21.40 hours that Satya Narayan Pathak and others criminally trespassed, assaulted and abused him in filthy language and committed theft of money and valuable documents of the school. The Police treating the complaint of the appellant as First Information Report took cognizance of an offence under Sections 147, 448 and 722 379 I.P.C. and registered it. A warrant of arrest was issued against Satya Narayan Pathak and others. Satya Narayan Pathak attended the Court on 21 5 1970 and 21 7 1970 the dates fixed for submission of the Police report. The Police Officer who investigated the case on finding no evidence against Satya Narayan Pathak and others, named as accused, submitted a final report and the magistrate agreeing with the report discharged all the accused. As Satya Narayan Pathak felt that the appellant instituted criminal proceedings with intent to cause injury to him and others, for offences under Sections 147, 448 and 379 knowing that there was no just or lawful ground and had caused pecuniary loss and agony to him, he preferred a complaint against the appellant for offences under Sections 211 and 182 of the I.P.C. on 20th October, 1970. The learned Magistrate took cognizance of the case and summoned the appellant under Section 211 of the Indian Penal Code. fixing 10th December, 1970 for appearance of the appellant. On 16th November, 1970 the appellant appeared in court and was released on bail. The appellant moved the High Court of Calcutta for quashing the proceeding of the Magistrate on the ground that the cognizance taken by the Magistrate was bad and without jurisdiction for non compliance of the provisions of Section 195(1) (b) of Criminal Procedure Code. The learned Judge refused to quash the proceedings and discharge the accused, by judgment dated 18th August, 1971. Against the order of the Single Judge of the High Court, the present appeal to this Court has been filed. The main ground of attack in this appeal is that the High Court failed to appreciate the meaning of the words "in relation to any proceedings in any court" in Section 195 (1) (b) of the Code of Criminal Procedure. It is submitted that when a final report was submitted by the Police under Section 173 of Criminal Procedure Code and the Magistrate passed an order it would be a judicial order and the bar under Section 195 (1) (b) would be attracted. The question that arises for consideration is whether on the facts of the case the bar against taking cognizance in Section 195(1)(b) is attracted. Section 195(1)(b) so far as it is relevant for the purpose of this case may be extracted: "195(1) No court shall take cognizance (a) . . . (b) of any offence punishable under any of the following sections of the same Code, namely, sections 723 193, 194, 196, 195, 199, 200, 205, 206, 207, 208, 209, 210, 211 and 228, when such offence is alleged to have been committed in, or in relation to, any proceeding in any Court, except on the complaint in writing of such Court or of some other Court to which such Court is subordinate; or (c) . . . (2) In clauses (b) and (c) of sub section (1), the term "Court" (includes) Civil, Revenue or Criminal Court, but does not include a Registrar or Sub Registrar under the Indian Registration Act, 1877. While Section 190 of the Criminal Procedure Code enumerates the conditions requisite for initiation of proceedings, Section 195 bars taking cognizance of certain offences except on complaint by authorities specified in the Section. Section 195(1) (a) requires that the complaint should be by a public servant if the offences complained of are under Sections 172 to 188 of the Indian Penal Code. Sub section (1)(b) refers to offences under Sections 193, 194, 195, 196, 199, 200, 205, 206, 207, 208, 209, 210, 211 and 228 and requires the complaint in writing of the Court before whom the offence is alleged to have been committed in or in relation to any proceeding in any Court. Sub section (c) relates to offences under Sections 463, 471, 475 or 476 when the offence is committed by a party to any proceeding in any Court in respect of a document produced or given in evidence in such proceeding a complaint in writing by the court is required. Sections 172 to 190 of the Indian Penal Code deal with offences constituting contempt of lawful authority of public servants. The bar to taking cognizance of offences under Sections 172 to 188 except on a complaint by the public servant is laid down in Section 195(1) (a) of the Code of Criminal Procedure. Chapter XI, of the Indian Penal Code relates to false evidence and offences against public justice. The cases of offence such as under Section 463, 471, 475 or 476 alleged to have been committed by a party in a proceeding in any court in respect of a document produced or given in evidence in such proceeding, the complaint in writing of such court is required. The policy behind the bar for institution of criminal proceedings by a private party is that when offences are committed against lawful authority or false evidence is given or offence committed against public justice, it should be the concerned authority that should prefer a complaint and no one else. 724 In this appeal we are concerned with the question whether the offence under Section 211 I.P.C. is "committed in or in relation to any proceeding in any court". Before I deal with the question whether the offence is committed in or in relation to any proceeding in any court, I have determined the meaning of the word 'court ' for the purpose of this Section. Sub section (2) to Section 195 states that 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. It may be noted that the word 'includes ' was introduced by an amendment to sub clause (b) Act 18 of 1923 instead of the word "means". In the Criminal Procedure Code 1974 the word 'means ' has been introduced in the place of 'includes '. To some extent the use of the word 'includes ' may widen the scope of the definition. In Halsbury 's Laws of England, third edition, volume 9 at page 342, the meaning of court is given. At page 343 it is stated: "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". Lord Sankley in Shell Co. of Australia Ltd. vs Federal Commissioner of Taxation has enumerated some negative propositions as to when a Tribunal is not a court. The learned Judge observed "The authorities are clear to show that there are Tribunals with many of the trappings of a court which nevertheless are not courts in the strict sense of exercising judicial power". In enumerating the propositions Lord Sankey observed: "In that connection it may be useful to enumerate some negative propositions on this subject: (1) A tribunal is not necessarily a Court in this strict sense because it gives a final decision. (2) Nor because it hears witnesses on oath. (3) Nor because two or more contending parties appear before it between whom it has to decide. (4) Nor because it gives decisions which affect the rights of subjects. (5) Nor because there is an appeal to a Court. (6) Nor because it is a body to which a matter is referred by another body". In enumerating the negative propositions the learned Judge relied on the decision in Rex. vs Electricity Commissioners. In Shri Virinder Kumar Satyawadi vs The State of Punjab. Venkatarama Ayyar, J. speaking for this Court quoted with approval the decision in Shell Co. of Australia (supra) and observed that the dis 725 tinction between Courts and tribunals exercising quasi judicial functions is well established, though whether an authority constituted by a particular enactment falls within one category or the other may, on the provisions of that enactment, be open to argument. After referring to the various decisions, the learned Judge observed "it may be stated broadly that what distinguishes a Court from a quasi judicial tribunal is that it is charged with a duty to decide disputes in a judicial manner and declare the rights of parties in a definitive judgment. To decide in a judicial manner involves that the parties are entitled as a matter of right to be heard in support of their claim and to adduce evidence in proof of it. It also imparts an obligation on the part of the authority to decide the matter on a consideration of the evidence adduced and in accordance with law. This view was accepted by the Supreme Court in Smt. Ujjam Bai vs State of Uttar Pradesh where Justice Hidayatullah observed that though the taxing authorities follow a pattern of action which is considered judicial, they are not converted into courts of civil judicature and they still remain instrumentalities of the State and are within the definition of the State. The answer to the question as to what is 'court ' in the Criminal Procedure Code is not free from difficulty for in many places the word Magistrate as well as court is used in identical situations. Section 6 of the Criminal Procedure Code states that besides the High Courts and the Courts constituted under any law other than this Code for the time being in force there should be five classes of Criminal Courts in India, namely: (i) Courts of Sessions; (ii) Presidency Magistrate, (iii) Magistrates of the first class (iv) Magistrates of the second class, (v) Magistrates of the third class. Criminal courts according to this section therefore, consist of courts specified besides the High Court and courts that are constituted under any other law other than Criminal Procedure Code. The Code of Criminal Procedure provides not merely judicial enquiry into or trial of alleged offences but also for prior investigation thereof. Section 5 of the Code provides that all offences under Indian Penal Code shall be investigated, inquired into and tried and otherwise dealt with in accordance with the provisions hereinafter contained. For the purposes of investigation offences are divided into two categories 'cognizable ' and non cognizable. When information of the commission of a cognizable offence is received or such commission is suspected, the appropriate police officer has the authority to enter on investigation. 726 In case of non cognizable offence the officer shall not investigate without the order of a competent Magistrate. According to scheme of the Code investigation is preliminary to a case being put up for trial for a cognizable offence. Investigation starts on an information relating to commission of an offence given to an officer in charge of Police Station and recorded under Section 154 of the Code. Investigation consists generally of various steps, namely proceeding to the spot ascertainment of facts and circumstances of the case, discovery and arrest of suspected offender, collection of evidence relating to the commission of the offence which may consist of examination of various persons including the accused, and the reduction of the statement into writing such as places and seizure of things and formation of opinion as to whether on material collected there is a case to place the accused before the Magistrate for trial and filing of the charge sheet under Section 173 of the Criminal Procedure Code. After the investigation is completed and a chargesheet is filed under Section 173 of the Criminal Procedure Code the question of taking cognizance arises. Section 190 of the Criminal Procedure Code lays down conditions necessary for initiation of proceedings. It provides for that any Presidency Magistrate, District Magistrate or Sub Divisional Magistrate or any other Magistrate specially empowered in this behalf may take cognizance of any offence. (a) upon receiving a complaint of facts which constitute such offence; (b) upon a report in writing of such facts made by any police officer; and (c) upon information received from any person other than a police officer or upon his own knowledge or suspicion, that such offence has been committed. One mode of taking cognizance by the Magistrate is upon a report in writing of such facts made by any police officer. This stage is reached when the police officer submits a report under Section 173. When the Police Officer upon investigation forms an opinion that there is sufficient evidence or reasonable ground he shall forward the case to the Magistrate empowered to take cognizance of the offence upon a Police report. Under Section 190 of the Criminal Procedure Code, if the Magistrate to whom the report is sent by the Police Officer, agrees with the opinion of the police officer, he proceeds to take cognizance, and issues process under Section 204. The judicial opinion is unanimous that when once Magistrate taking cognizance of an offence finds that there is sufficient ground for proceeding and issues 727 summons or a warrant as the case may be, he takes cognizance, and the trial begins, and further proceedings will be undoubtedly before a criminal court. In Jamuna Singh and others vs Bhadai Sah, Das Gupta, J. observed "The Code does not contain any definition of the words 'institution of a case '. It is clear, however, and indeed not disputed, that a case can be said to be instituted in a court only when the court takes cognizance of the offence alleged therein. " When once this stage is reached the requirement of Section 211 of the Indian Penal Code "institutes or causes to be instituted any criminal proceeding" is satisfied. The second part of Section 211 I.P.C. refers to falsely charging a person with having committed an offence. A person falsely charging another of a cognizable offence before a police officer will come within the mischief of the second part of the Section. The crucial question that arises in this case is whether it can be said that when a person falsely charges another person of a cognizable offence before a Police Officer and when the Police Officer upon investigation finds that there is no sufficient evidence or reasonable ground for suspicion to justify the forwarding of the accused to the Magistrate under Section 169 and the Magistrate agrees with him, an offence under Section 211 is committed in or in relation of any proceeding in any court '. It is settled law that when a Magistrate applies his mind under Chapter XVI that is on complaints, he must be held to have taken cognizance of the offence mentioned in the complaint but when he applies his mind not for such purpose but for purpose of ordering investigation under Section 156 (3) or issues a search warrant for the purpose of investigation, he cannot be said to have taken cognizance of any offence vide R. R. Chari vs State of U.P. and in Gopal Das vs State of Assam. When the Magistrate receives a report under Section 169 of the Criminal Procedure Code that there is not sufficient evidence or reasonable ground for suspicion and agrees with it, he may be doing so in exercise of his judicial function but the question is whether he is acting as a court. In Abhinandan Jha & Ors. vs Dinesh Mishra this Court has pointed out the difference between the report by the police filed under Section 170 of the Criminal Procedure Code which is referred to as a charge sheet and a report sent under Section 169 which is termed variously in different States as either 'referred charge ', 'final report ' or 728 summary. This court observed that when the police submitted a report that no case has been made out for sending up accused for trial it is not open to the Magistrate to direct the police officer to file a chargesheet. In such circumstances the Magistrate is not powerless as it is open to him to take cognizance of an offence on the report submitted by the Police under Section 190(1)(c) of the Criminal Procedure Code. Dealing with the position of the Magistrate when a report is submitted by the police that no case is made out for sending a case for trial the court observed that it is open to the magistrate to agree with the report and close the proceedings. Equally it will be open to the Magistrate if he takes a different view to give directions to the police under Section 163(1) to make further investigations. After receiving a report from the police on further investigation if the Magistrate forms an opinion on the fact that it constitutes an offence he may take cognizance of an offence under Section 190(1) (c) notwithstanding the opinion of the police expressed in final report. This court held in conclusion that there is no power expressly or impliedly conferred on the Magistrate under the Code to call upon the police to submit a charge sheet when they have sent a report under Section 169 of the Code that there is no case made out for sending the case for trial. The same view is expressed in the decision in Kamla Prasad Singh vs Hari Nath Singh and another. In R. N. Chatterji vs Havildar Kuer Singh, A. N. Ray J. as he then was, followed the decision in Abhinandan Jha & Ors. vs Dinesh Mishra (supra) and held that the provisions of the Criminal Procedure Code do not empower the Magistrate to direct the police officer to submit a charge sheet but if he is of the opinion that the repot submitted by the police requires further investigation, the Magistrate may order investigation, under Section 163 of the Criminal Procedure Code. It was held that directing further enquiry is entirely different from asking police to submit a charge sheet. The only source open for the Magistrate if he is not satisfied with the police report under Section 169 is to take cognizance of an offence under Section 190(1) (c) of the Criminal Procedure Code. It may be noted that in M. L. Sethi vs R. P. Kapur & Anr., it was held that if the Magistrate disagrees with the opinion of the police he may proceed to take cognizance on the facts stated in the police under Section 190(1) (b). It is clear that when a Magistrate applies his mind to the contents of a complaint before him for the purpose of proceeding under Section 729 200 and the other provisions of the Code following it, he is taking cognizance of an offence as held by five judges Bench decision of this Court in Mowu vs The Superintendent, Special Jail, Nowgong, Assam and Others. The position regarding the case in which Magistrate accepts a report under Section 169 Criminal Procedure Code is different. On an analysis of the various sections, it appears that a report under Section 169 of the Cr. P. C. and the magistrate agreeing with it, are proceedings under Chapter XIV which relates to information to the police and their power to investigate. The Chapter provides for supervision by the Magistrates of the investigation by the police. It has been laid down that Magistrate has no option except to agree with the report of the Police Officer unless he proceeds to take cognizance of the offence under Section 190(1) (c). Though the Magistrate in deciding whether to accept the report or not may be exercising his judicial mind, it cannot be said that he is acting as a court. The Magistrate acting at this stage cannot be said to fulfil the positive requirements enumerated by Venkatarama Ayyar, J. in Shri Virinder Kumar Satvawadi vs The State of Punjab (supra). To be classified as court it must be charged with a duty to decide disputes in a judicial manner and declare the rights of parties in a definitive judgment and to decide in a judicial manner. It involves that the parties are entitled as a matter of right to be heard in support of their claim and to adduce evidence in proof of it and an obligation on the part of the authority to decide the matter on a consideration of the evidence adduced and in accordance with law. As pointed out by Lord Sankey in Shell Co. case (supra) though there may be some of the trappings of the court the magistrate at this stage cannot be termed as a court within the provisions of Section 195(2) Cr. The magistrate may decide the question finally which may affect parties but that is not enough. Even when a tribunal bears witnesses on oath and decides rights of parties and a right of appeal is provided, it may not, as observed by Lord Sankey, become a court. Most of requirements of a court are lacking when the Magistrate agrees with the report of the police officer under Section 169. At this stage the rights of the parties are not finally decided as the complainant is entitled to file a complaint directly to the Magistrate. The persons accused are not before the Magistrate and neither the complainant nor the accused are entitled to be heard or to adduce evidence before the Magistrate at this stage. It cannot be said that the Magistrate has a duty to decide the matter on a consideration of the evidence adduced before him. 730 Taking into account the scheme of the Criminal Procedure Code, the function of the Magistrate in agreeing with a report under Section 169 can only be said to be in the course of investigation by the police. In Chapter XIV which relates to information to the police and their powers to investigate, the Magistrate having jurisdiction over the area and empowered to take cognizance is given certain supervisory powers. Thus the Police Officer incharge of Police Station is required to refer the informant to the Magistrate when information as to a non cognizable offence is received by him. The Police Officer shall not investigate a non cognizable case without the orders of the Magistrate though the Police Officer is entitled to investigate a cognizable offence without the order of the Magistrate. The Magistrate under Section 190 is entitled to order an investigation into a cognizable offence. Section 157 Cr. P.C. requires the officer incharge of the Police Station to send a report to the Magistrate empowered to take cognizance of the offence of which he has received information. Under Section 159 Crl. P.C. the Magistrate receiving a report under Section 157 may proceed or depute any magistrate subordinate to him to proceed to hold a preliminary inquiry into the case. Section 164 empowers Presidency Magistrate or any Magistrate of first class or any Magistrate of second class specially empowered by the State Government to record a statement or confession made to him in the course of an investigation under this Chapter. When a search is conducted by a Police Officer, he is required to send copies of the record to the nearest Magistrate empowered to take cognizance. Section 167 of the Crl. P.C. requires that when investigation cannot be completed within 24 hours and when there are grounds of believing that the accusation or information is well founded, the Officer incharge of the Police Station shall transmit to the nearest Magistrate the copy of the entries in the diary relating to the case and forward the accused to such Magistrate. The Magistrate to whom the accused is forwarded is empowered to authorise the detention of the accused in such custody as he thinks fit for a term not exceeding 15 days. If the period is to exceed 15 days he is required to forward the accused to the Magistrate having jurisdiction. When an investigation is completed and when the Police Officer is of the opinion that there is sufficient evidence, he shall forward the accused to the Magistrate along with his report. The final report of the Police Officer is to be submitted under Section 173. It may be noticed that Section 169 does not require the Police Officer to send a report as he is required under Section 170 when he is of the opinion that there is no sufficient evidence or reasonable ground of suspicion to justify the forwarding of the accused to the Magistrate. The only precaution he has to take is to take steps to ensure the appearance of 731 the accused in the event of the Magistrate empowered to take cognizance wants his presence. A perusal of the various Sections under Chapter XIV shows that the Magistrate is associated with the investigation by the Police in a supervisory capacity. It has been laid down that when the Magistrate applies his mind for ordering an investigation under Section 156(3) of the Cr. P.C. or for issue of a search warrant for the purpose of investigation, he cannot be said to have taken cognizance of the offence. The Magistrate during this stage functions as a Magistrate during investigation. As the trial has yet to commence it cannot be said that he is acting as a court. Before leaving this aspect of the case I would refer to some of the decisions which were cited before us on this point. Strong reliance was placed by the learned counsel for the appellant on a decision in J. D. Boywalla vs Sorab Rustomji Engineer. Boywalla, the appellant in the case, lodged a complaint with the police against the respondent Sorab Rustomji Engineer for cheating in respect of three rupees. The police after investigation submitted a report stating that no offence has been disclosed against him with a request that he may be discharged and his bail bond cancelled. On receipt of the report the Magistrate discharged the accused and cancelled the bail bond. Sorab Rustomji Engineer, against whom the complaint was filed, filed a case under Section 211 of the I.P.C. alleging that the appellant Boywalla instituted criminal proceedings against him knowing that there is no just or lawful ground for such proceedings. The appellant contended that it is the Magistrate that can lodge a complaint under Section 195 (b) of the Cr. P.C. and that no court shall take cognizance of the offence punishable under Section 211 of the I.P.C. when such offence is alleged to have been committed in or in relation to any proceeding to a court except on a complaint in writing of such court. John Beaumont Chief Justice held that in doing what he had done the Magistrate had taken cognizance of the case and therefore under Section 195(b) Cr. P.C. it was the Magistrate alone who could lodge a complaint. Two reasons were given by the Chief Justice. The second ground with which we are concerned at the moment deals as to the capacity in which Magistrate acted when he accepted the police report under Section 169 and discharged the accused. The Chief Justice expressed that after considering the report if the Magistrate thinks that there is no sufficient ground of proceeding he may discharge the accused and though the Code does not expressly provide there can be no doubt that when the Magistrate can act upon the report of the 732 police officer and discharge an accused person without further inquiry only by acting in his judicial capacity which should be open to review by the High Court. The learned Chief Justice proceeded on the basis that before a magistrate passed orders on the report of the police under Section 169 he should take cognizance of the offence. The Chief Justice thus took the view that (1) the Magistrate before discharging the accused in pursuance of a police report under Section 169 takes cognizance and (2) acts in his judicial capacity. While there could be no doubt that the magistrate is acting judicially, I am unable to hold that before a magistrate discharges an accused agreeing with the report of the police under Section 169 Cr. P.C., he takes cognizance. This Court has held that the stage of laking cognizance arises only when he acts under Section 190(1) (b). Further this Court has taken the view that if the magistrate does not agree with a police report under Section 169 Cr. P.C., he can only proceed under Section 190(1)(c). The facts of the case were the accused was arrested and later after the order of discharge the bail bond was cancelled. The circumstances of the arrest of the accused his being released on bail during investigation and his discharge after the police report were the reasons for the learned Chief Justice coming to the conclusion that the Magistrate was acting in a judicial capacity. The learned Judge observed "indeed it is a novelty to me to hear it suggested that there is any authority which can make an administrative order discharging the arrested person from judicial capacity". But as he has pointed out acting in a judicial capacity alone is not enough. The Supreme Court in M. L. Sethi 's case (supra) expressed its dissent from the view taken in Ghulam Rasul vs Emperor where the learned Judge held that a complaint by criminal court is necessary when a false report is made in an investigation by the police. The facts of the case are that Ghulam Rasul made a report to the police that a certain person stole his watch from his car. On investigation the police came to the conclusion that the report was false and that the watch had been removed by the petitioner himself. The case was reported to the Magistrate for cancellation. A complaint was given against Ghulam Rasul for offence under Sections 193 and 211 I.P.C. and the Magistrate took cognizance and recorded the evidence of the prosecution witnesses and framed charge against him. Accepting the contention on behalf of Ghulam Rasul the High Court held that in view of section 195(1) (b), Criminal Procedure Code, the Magistrate 's taking cognizance of the offence was illegal. The Court observed: "I am clear that the words in this sub section 'in relation to any proceeding in any court ' apply to this case of a false report or a false 733 statement made in an investigation by the police with the intention that there shall in consequence of this, be a trial in the Criminal Court". The facts of the case show that a report under Section 169, Criminal Procedure Code was submitted by the police for cancellation and the Magistrate dropped further proceedings. The Supreme Court referring to the view of the High Court observed: "He appears to have held the view that the Magistrate having passed an order of cancellation, it was necessary that the complaint should be filed by the Magistrate, because section 195(1)(b) had become inapplicable. If the learned Judge intended to say that without any proceeding being taken by the Magistrate in the case which was investigated by the police it was still essential that a complaint should be filed by the Magistrate simply because a subsequent proceeding following the police investigation was contemplated we consider that his decision cannot be accepted as correct". This decision makes it clear that even though the Magistrate passed an order of cancellation on the report by the police under section 169 if the Magistrate has not taken any proceeding, a complaint by the Magistrate is not necessary. The decision of the Supreme Court covers the facts of the present case so far as the discharge of the accused on a police report under section 169, Criminal Procedure Code, is concerned. Referring to the Bombay decision, the Supreme Court observed that "the decision of the Bombay High Court in J. D. Roywalla vs Sorab Rustomji Engineer (supra) is also inapplicable because in that case also orders were passed by a Magistrate on the final report made by the police after investigation of the facts in the report, in respect of which complaint under section 211 I.P.C. was filed". In Sethi 's case (supra) at the stage when the complaint was filed by the respondent under Section 211 I.P.C., the police were enquiring into the appellant 's report. When there is no proceeding pending before any court at the time when the applicability of section 195(1) (b) is to be determined, a complaint by the court is not necessary. The decision in Bombay case is therefore not applicable to the facts in Sethi 's case as in the Bombay case orders were passed by the magistrate on the final report of the police. There is a conflict between various High Courts as to whether a complaint is necessary when on a police report under Section 169 the Magistrate does not take any further action. The Bombay, Saurashtra and Andhra Pradesh High Courts in 1946 Bombay 7(11), 1952 Saurashtra 67(68) and (287) have held that a Magistrate passing an order on a final report of police under Section 173 referring the case as false should be deemed to be a Court passing a judicial order disposing of the information to the police, and 734 that in such a case, the complaint of the Magistrate is necessary for the prosecution of the informant under Section 211 of the I.P.C. The Madras, Calcutta and Allahabad High Courts in A.I.R. 1934 Madras 175, A.I.R. 1948 Allahabad 184 Full Bench and A.I.R. 1916 Calcutta 593 following 1921 Patna 302 and 1917 Calcutta 593 have held the other view. For the reasons already stated I hold that when no further proceedings are taken by the Magistrate on receipt of a police report under Section 169 there is no proceeding in or in relation to any court and, therefore, no complaint by the court is necessary. The next question which arises in this case is that whether a complaint by the court is necessary because of the arrest and release on bail of the accused Satya Narayan Pathak in consequence of the complaint given by the appellant. The police after taking cognizance of the complaint by Kamlapati Trivedi, the appellant in this case, took cognizance under Sections 147, 448 and 379 I.P.C., registered a case and issued a warrant of arrest against Satya Narayan Pathak and five others. They all surrendered in court on 6 5 1970 and were released on bail on a bond of Rs. 200/ each. They attended court on 21 5 1970 and 21 7 1970 when the police report was expected to be filed. The High Court found that there was a police investigation and during investigation Satya Narayan Pathak surrendered before the Magistrate who released him on bail and police submitted a final report and the Magistrate discharged him from his bail bond. On this evidence the High Court came to the conclusion that the proceedings before the court become a criminal proceeding only when the court takes cognizance and not before. On these facts the question arises whether the proceedings when the accused were released on bail and later after the receipt of the report from the police they were discharged, would be in or in relation to a court. It was submitted that when in pursuance of a complaint the accused was arrested and remand and bail proceedings were subsequently taken before a Magistrate in connection with the report to the police, they were proceedings in court and a complaint by the court was necessary. In support of the proposition a decision in Badri vs State was relied upon. In that case the Allahabad High Court held that an offence under section 211, Indian Penal Code, alleged to have been committed by the appellant by making a false report against the complainant and others to the police, was an offence in relation to the remand proceedings and the bail proceedings because those proceedings were a direct consequence of the making of the report and the subsequent arrest and, therefore, the case is governed by section 195(1)(b) of Code of 735 Criminal Procedure. The Supreme Court in Sethi 's case (supra) at page 538 did not consider it necessary to express any opinion whether remand and bail proceedings before the Magistrate can be held to be proceedings in a court nor did they consider the question whether the charge of making a false report could be rightly held to be in relation to these proceedings. The position, therefore, is the question whether remand and bail proceedings before the Magistrate in pursuance of information given to the police of a cognizable offence are proceedings in or in relation to a court is left open. To determine whether the remand or bail proceedings are proceedings in a court it is useful to refer again to Chapter XIV of the Criminal Procedure Code. On a complaint by an informant relating to a commission of a cognizable offence the investigation starts. The information may not be against any person. When an investigation cannot be completed in 24 hours after the arrest of the accused and when the officer is of the view that there are grounds for believing that the accusation or information is well founded the officer is required to transmit to the nearest Magistrate a copy of the entries in the diary and to forward the accused to the Magistrate. When the accused is produced the Magistrate is required to act under Section 167(2) of the Criminal Procedure Code. The Magistrate to whom the accused is produced can from time to time authorise detention of accused in such custody as such Magistrate thinks fit for a term not exceeding 15 days in whole. If he has not the jurisdiction to try the case or commit it for trial but considers further detention is necessary, he may order the accused to be forwarded to a Magistrate having jurisdiction. We have seen that in investigation by the police the Magistrate is associated in a supervisory capacity. The action taken by the Magistrate cannot be taken to be that of a court for the Magistrate who has no jurisdiction to try the case has a limited power. Even the Magistrate who has jurisdiction to try the accused when acting under the Section is not acting as a court for the words used are the Magistrate having jurisdiction. The trial commences only after the offence has been taken cognizance of. The proceedings under Section 167, is during investigation. But it has to be noted that when the bail and remand proceedings are before the Magistrate, he has to act judicially. If the accused applies for bail the Magistrate has to act judicially and take into account the facts of the case before he decides to release the accused on bail or refuse bail. Chapter XXXIII Cr. P. C. deals with bail. Section 496 provides as to when bail may be taken of non bailable offences. The provisions of Sections 496 and 497 speak of an accused person in custody charged with a non bailable offence 736 being produced before court at any stage of the proceedings. The Section deals with the exercise of the power of a court at any stage of proceedings when the accused is brought before a court while in the custody of the police officer. According to the wording of Section, the bail proceedings would be before a court even though the accused is produced while in custody of a police officer. Even though the word 'court ' is used in Sections 496 and 497, we have to consider whether proceedings can be said to be taken before a court as defined in Section 195(2) of Cr. P. C. In deciding the question we have to bear in mind the restricted meaning given to the word in the observations of Lord Sankey in Shell Company 's case reported in Shell Co. of Australia Ltd. vs Federal Commissioner of Taxation (supra) and the tests laid down by Venkatarama Ayyar, J. in Shri Virinder Kumar Satyawadi vs The State of Punjab and Hidayatullah, J. in Smt. Ujjam Bai vs State of Uttar Pradesh (supra). Though there may be some trappings of a court and the section itself mentions the word 'court ', I feel that the requirements for being a court for the purpose of Section 195(2) have not been satisfied. The intention of the legislature in prescribing a bar when an offence under Chapter XI of I.P.C. is committed, that is, when false evidence is given or offence against public justice is committed is that the court should decide whether a complaint should be given for an offence committed before it and if satisfied should prefer the complaint itself. Before a court gives a complaint, it will have to satisfy itself that a prima facie case is made out and that it is in the interest of justice that a complaint should be lodged. The purpose, therefore, is that a private party should not be permitted to make a complaint regarding offences committed in or in relation to court proceedings. In an investigation by the police the complainant is only in the background. He might not have mentioned the name of any person as being involved in the crime. Taking all the circumstances into account, I am, in the absence of the complainant, unable to hold that remand and bail proceedings before cognizance of the offence is taken could be held to be proceedings before a court bearing in mind the restricted meaning given to the word 'court '. The second question is whether the charge of making of the false report could be rightly held to be in relation to proceedings in court. When an information is given of a commission of a cognizable offence, the police register a case and start investigation. For facilitating the investigation provision for remand is provided for. If the investigation is not completed within 24 hours the police may ask for further remand and the court may grant according to provisions of section 167 of 737 Criminal Procedure Code. At this stage though the remand and bail proceedings arise as a consequence of complaint given, it cannot be said that it is the direct result of a false report to a court for no one might have been mentioned in the complaint as a suspect. Further, it will be seen that the complainant is not entitled to appear in court and oppose grant of bail. The court dealing with the remand or bail proceedings cannot be said to fulfil the conditions laid down by Venkatarama Ayyar as the parties are not entitled as a matter of right to be heard in support of their claim and adduce evidence in proof of it. The Magistrate dealing with remand proceedings or a bail petition does not hear the complainant. He acts on the material that is placed before him by the police during investigation. The complainant has no opportunity of substantiating or presenting his case before the Magistrate at this stage. If the action of the Magistrate in agreeing with the report under section 169 Cr. P.C. and the proceedings taken during investigation by way of remand or bail are understood to be proceedings in or in relation to court a complaint may be preferred by the Magistrate without giving an opportunity to the complainant to satisfy the Magistrate about the truth of his case. In this connection, it is useful to refer to section 476 of the Cr. P. C. The section provides that when any Civil, Revenue or Criminal Court is, whether on application made to it in this behalf or otherwise, of opinion that it is expedient in the interests of justice that an inquiry should be made into any offence referred to in section 195, sub section (1), clause (b) or clause (c), which appears to have been committed in or in relation to a proceeding in that Court, such Court may, after such preliminary inquiry, if any, as it thinks necessary, record a finding to that effect and make a complaint thereof in writing signed by the presiding officer of the Court, and shall forward the same to a Magistrate of the first class having jurisdiction. Before making a complaint a preliminary inquiry is contemplated. Normally, it would mean that the person against whom a complaint is preferred has an opportunity to show why a complaint should not be preferred against him. These stages are not reached in a case when the Magistrate has still to take cognizance of an offence. The restricted meaning given to the Code in section 195(2) Cr. P.C. read along with the conditions to be specified before a complaint is preferred by the court, inclines me to hold that the proceedings before a Magistrate in which he agrees with the report by the police under section 169, Criminal Procedure Code, and the proceedings in remand or bail applications during investigation will not amount to proceedings in or in relation to court. 738 In the result I agree with the High Court that there was no proceeding in or in relation to a court, and, therefore, section 195(1)(b) of Criminal Procedure Code is not attracted. The appeal is dismissed. KOSHAL, J. I have had the advantage of going through the judgment prepared by my learned brother, Kailasam, J. Having given it my best consideration, I regret that I have to differ with him. The facts giving rise to this appeal lie in a narrow compass and may be stated in brief. The appellant before us is one Kamlapati Trivedi (hereinafter called Trivedi) on whose complaint a case was registered under sections 147, 448 and 379 of the Indian Penal Code at the Bally Police Station on the 18th April, 1970 against six persons including one Satyanarayan Pathak (called Pathak hereinafter). Warrants were issued for the arrest of the accused, all of whom surrendered on the 6th of May, 1970 in the Court of the Sub Divisional Judicial Magistrate, Howrah (referred to later herein as SDJM) who who was the magistrate having jurisdiction and who passed an order releasing them on bail. The police held an investigation culminating in a report dated the 25th of July, 1970 which was submitted to the SDJM under section 173 of the Code of Criminal Procedure, 1898 (the Code, for short). The contents of the report made out the complaint to be false and included a prayer that the accused "may be released from the charge". On the 31st of July, 1970 the SDJM, agreeing with the report, passed an order discharging the accused. On the 20th of October, 1970 Pathak filed a complaint before the SDJM accusing Trivedi of the commission of offences under sections 211 and 182 of the Indian Penal Code by reason of the latter having lodged with the police the false complaint dated the 18th of April, 1970. Trivedi appeared in the Court of the SDJM on the 16th of November, 1970 in response to a summons issued by the latter only in respect of an offence under section 211 of the Indian Penal Code and was allowed a fortnight to furnish security while the case itself was adjourned to the 10th of December, 1970. It was then that Trivedi presented a petition dated the 23rd December, 1970 to the High Court at Calcutta praying that the proceedings pending against him before the SDJM be quashed inasmuch as the latter was debarred from taking cognizance of the offence under section 211 of the Indian Penal Code in the absence of a complaint in writing of the SDJM himself in view of the provisions of clause (b) of sub section (1) of section 195 of the Code. Sub sections (1) and (2) of that section may be reproduced here for ready reference: 739 195. (1) No Court shall take cognizance (a) of any offence punishable under sections 172 to 188 of the Indian Penal Code, except on the complaint in writing of the public servant concerned, or of some other public servant to whom he is subordinate; (b) of any offence punishable under any of the following sections of the same Code, namely, sections 193, 194, 195, 196, 199, 200, 205, 206, 207, 208, 209, 210, 211 and 228, when such offence is alleged to have been committed in, or in relation to, any proceeding in any Court, except on the complaint in writing of such Court or of some other Court to which such Court is sub ordinate; or (c) of any offence described in section 463 or punishable under section 471, section 475 or section 476 of the same Code, 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, 1977. " It was argued before the High Court that part of the proceedings which started with the registration of the case by the police on the 18th of April, 1970 at the instance of Trivedi and culminated in the order dated the 31st of July, 1970 discharging Pathak and his five co accused constituted proceedings before a Court, that the offence under section 211 of the Indian Penal Code attributed to Trivedi was committed in or, in any case, in relation to such part and therefore the case against Trivedi fell within the ambit of clause (b) above extracted. The argument did not find favour with the High Court and the learned Single Judge before whom it was made rejected it with the following observations: "The police submitted a final report and so the Magistrate discharged him from his bail bond but there was no criminal proceeding before the Court against Satyanarayan. The proceeding before the Court becomes a criminal proceeding only when a Court takes cognizance and not before. Whatever the view of the other High Courts 740 may be, the consistent view of this High Court is that so long as cognizance is not taken it cannot be said that there was a proceeding pending in the Court in respect of that offence and since no proceeding was pending before the Court section 195 (1)(b) of the Code is not attracted. " It is against the order of the High Court (which is dated the 18th of August, 1971) that Trivedi has instituted this appeal by special leave. Before us the argument which was put forward on behalf of Trivedi for the consideration of the High Court has been repeated and it has been urged strenuously by his learned counsel that in so far as the SDJM passed an order on the 6th of May, 1970 releasing him on bail and then another on the 31st of July, 1970 discharging him, the SDJM acted judicially and therefore as a Court, that it cannot but be held that these orders were passed in proceedings in relation to which the offence under section 211 of the Indian Penal Code was alleged to have been committed and that consequently the SDJM had no jurisdiction to take cognizance of that offence. The points requiring determination therefore are: (a) Whether the SDJM acted as a Court when he passed the orders dated the 6th of May, 1970 and the 31st of July, 1970 or any of them? (b) If the answer to question (a) is in the affirmative, whether the offence under section 211 of the Indian Penal Code attributed to Trivedi could be regarded as having been committed in relation to the proceedings culminating in either or both of the said orders? 5. In finding an answer to question (a) I attach quite some importance to the provision of sections 6, 496 and 497 of the Code. These sections are extracted below: "6. Besides the High Court and the Courts constituted under any law other than this Code for the time being in force, there shall be five classes of Criminal Courts in India, namely: I. Courts of Session: II. Presidency Magistrates: III. Magistrates of the first class: IV. Magistrates of the second class: V. Magistrates of the third class." 741 "496. When any person other than a person accused of a non bailable offence is arrested or detained without warrant by an officer in charge of a police station, or appears or is brought before a Court, and is prepared at any time while in the custody of such officer or at any stage of the proceedings before such Court to give bail, such person shall be released on bail: Provided that such officer or Court, if he or it thinks fit, may, instead of taking bail from such person, discharge him on his executing a bond without sureties for his appearance as hereinafter provided : "Provided, further, that nothing in this section shall be deemed to affect the provisions of section 107, sub section (4), or section 117, sub section (3)." "497. (1) When any person accused of or suspected of the commission of any non bailable offence is arrested or detained without warrant by an officer in charge of a police station, or appears or is brought before a Court, he may be released on bail, but he shall not be so released if there appear reasonable grounds for believing that he has been guilty of an offence punishable with death or imprisonment for life: "Provided that the Court may direct that any person under the age of sixteen years or any woman or any sick or infirm person accused of such an offence be released on bail. (2) If it appears to such officer or Court at any stage of the investigation, inquiry or trial, as the case may be, that there are not reasonable grounds for believing that the accused has committed non bailable offence, but that there are sufficient grounds for further inquiry into his guilt, the accused shall, pending such inquiry, be released on bail, or, at the discretion of such officer or Court, on the execution by him of a bond without sureties for his appearance as hereinafter provided. "(3) An officer or a Court releasing any person on bail under sub section (1) or sub section (2) shall record in writing his or its reason for so doing. "(3A) If, in any case triable by a Magistrate, the trial of a person accused of any non bailable offence is not concluded within a period of sixty days from the first date fixed 742 for taking evidence in the case, such person shall, if he is in custody during the whole of the said period, be released on bail to the satisfaction of the Magistrate, unless for reasons to be recorded in writing, the Magistrate otherwise directs. "(4) If, at any time, after the conclusion of the trial of a person accused of a non bailable offence and before judgment is delivered the Court is of opinion that there are reasonable grounds for believing that the accused is not guilty of any such offence, it shall release the accused, if he is in custody, on the execution by him of a bond without sureties for his appearance to hear judgment delivered. "(5) A High Court or Court of Sessions and, in the case of a person released by itself any other Court may cause any person who has been released under this section to be arrested and may commit him to custody. " Magistrates are specifically labelled as Courts by the statutory provisions of section 6 and therefore have to be regarded as such. It is no doubt true that the Code assigns to a Magistrate various functions which do not fall within the sphere of judicial duties and are, on the other hand, functions of an executive nature such as the exercise of supervisory jurisdiction in relation to investigation carried out by the police or work done on the administrative side; and it may plausibly be argued that in the discharge of such functions a Magistrate does not act as a Court. But then in my opinion a Magistrate cannot but be regarded as a Court when he acts judicially. This follows from the provisions of section 6 itself. The Code does not contain any provision to the effect that no functions performed by a Magistrate in relation to criminal proceedings whether handled by him or dealt with by the police would be regarded as functions performed by a Court unless they are posterior in point of time to the stage when he acts under section 190 of the Code. On the contrary, sections 496 and 497 which embrace bail matters specifically describe a Magistrate while dealing therewith as a Court and these sections operate fully at all stages of a case including that when the investigation has just started. There is nothing in the context in which the word `Court ' is used in these two sections and section 195 which would provide an indication that it has been used in two different senses therein, and in such a situation the legislature must be deemed to have used it in one and the same sense wherever it occurs in the Code. While deciding the question of bail, therefore, a Magistrate must be held to be 743 acting as a Court and not in any other capacity, irrespective of the stage which the case has reached by then, that is, whether it is still under investigation by the police or has progressed to the stage of an inquiry or trial by the Magistrate. It at once follows that the taking of cognizance of any offence by a Magistrate under section 190 of the Code is not a condition precedent for him to be regarded as a Court. Nor do I feel that the opinions expressed by Halsbury and Lord Sankey lay down any different principle. Those opinions appear to me to cover only cases of tribunals which perform quasi judicial functions but are not statutorily recognised as `Court '. At page 342 of Volume 9 of Halsbury 's Laws of England (third edition) appears the following passage in Para 809 : "Originally the term "court" meant, among other meanings, the Sovereign 's palace; it has acquired the 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 reason 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. A coroner 's court is a true court although its essential function is investigation. " In para 810 the learned author proceeds to lay down the criteria which determine when a tribunal would be regarded as a Court. In his opinion, the 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. 744 The learned author then quotes Lord Sankey 's observations in Shell Co. of Australia Ltd. vs Federal Commissioner of Taxation and then gives numerous examples of tribunals which are not regarded as Courts. One common feature of such tribunals is that they are not described as Courts by statute and are charged with the performance of administrative or executive functions as distinguished from judicial functions. Paragraph 812 on page 344 of the same Volume deals with the subject of creation of Courts and lays down : "Courts are created by the authority of the Sovereign as the fountain of justice. This authority is exercised either by statute, charter, letters patent, or Order in Council. In some cases, a court is held by prescription, as having existed from time immemorial, with the implication that there was at some time a grant of the Court by the Sovereign, which has been lost. "An Act of Parliament is necessary to create a court which does not proceed according to the common law. " Reference may usefully be made to Section 6 of the same Chapter in which the above paragraphs occur. That Section is headed "Magistrates ' Courts". The relevant part of paragraph 1041 with which the Section begins is to the following effect: "A magistrate 's court consists of a justice or justices of the peace acting under any enactment or by virtue of his or their commission or under common law (otherwise than as a court or committee of quarter sessions or a purely administrative tribunal), or of a stipendiary magistrate." The combined effect of the various paragraphs forming part of the treatise and noticed above would be that a Court may be created by a statute and that when such a Court performs judicial functions, it will be deemed to act as a Court and further, that Magistrates ' Courts are regarded as such unless performing executive or administrative functions. That is how the position stands in England and there is nothing in the case of Shell Company of Australia Ltd. vs Federal Commissioner of Taxation (supra) which runs to the contrary. It may be noted that in that case the question for decision was as to whether the Board of Review which had been constituted under the Australian Income Tax Assessment Act to review the decisions of the Commissioner of Taxation was or was not a Court and it was in that context that Lord Sankey expressed his opinion. Obviously he was 745 not dealing with the functions of a tribunal which had been statutorily labelled as a Court. What I have said of Lord Sankey 's opinion is true of the decisions of this Court in Virinder Kumar Satyawadi vs The State of Punjab and Smt. Ujjam Bai vs State of Uttar Pradesh. In the former the question for decision was as to whether a returning officer discharging functions under the Representation of the People Act, 1951 was a Court and in answering the same the Court referred to the case of Shell Company of Australia (supra) and other English and Australian authorities and then observed : "It is unnecessary to traverse the same ground once again. It may be stated broadly that distinguishes a court from a quasi judicial tribunal is that it is charged with a duty to decide disputes in a judicial manner and declare the rights of parties in a definitive judgment. To decide in a judicial manner involves that the parties are entitled as a matter of right to be heard in support of their claim and to adduce evidence in proof of it. And it also imports an obligation on the part of the authority to decide the matter on a consideration of the evidence adduced and in accordance with law. When a question therefore arises as to whether an authority created by an Act is a Court as distinguished from a quasi judicial tribunal, what has to be decided is whether having regard to the provisions of the Act it possesses all the attributes of a Court. " In Ujjam Bai 's case (supra) this Court was resolving a question as to whether an officer of the income tax department was a Court and replied in the negative, broadly for the reason that even though taxing authorities follow a pattern of action which is considered judicial, they are not converted into Courts of civil judicature and that their actions are executive in nature. Neither of these cases deals with an authority on which the status of a Court is conferred by statute, nor with one forming part of the judiciary, such as a Magistrate in whose case the opinion of this Court would surely have been different as is apparent from the judgment of Hidayatullah, J., in Ujjam Bai 's case (supra) which quotes the following passage from Gullapalli Nageswara vs State of Andhra Pradesh 746 "The concept of a quasi judicial act implies that the act is not wholly judicial, it describes only a duty cast on the executive body or authority to conform to norms of judicial procedure in performing some acts in exercise of its executive power." and then proceeds : "The taxing departments are instrumentalities of the State. They are not a part of the Legislature; nor are they a part of the judiciary. Their functions are the assessment and collection of taxes, and in the process of assessing taxes they have to follow a pattern of action, which is considered judicial. They are not thereby converted into Courts of civil judicature. They still remain the instrumentalities of the State and are within the definition of `State ' in article 12. In this view of the matter, their actions must be regarded, in the ultimate analysis, as executive in nature, since their determinations result in the demand of tax which neither the legislature nor the judiciary can collect. Thus, the actions of these quasi judicial bodies may be open to challenge on the ground of breach of fundamental rights. " It is thus clear that the source of power exercised by the authority, that is, whether it is an executive power or judicial power would make all the difference in the determination of the question as to whether the authority acts as a Court or merely as a quasi judicial tribunal not functioning as a Court. In this connection a reference may also be made to section 19 of the Indian Penal Code coupled with illustration (b) appended thereto and section 20 thereof : Section 19 : "The word "Judge" denotes not only every person who is officially designated as a Judge, but also every person. "Who is empowered by law to give, in any legal proceeding, civil or criminal, a definitive judgment, or a judgment which, if not appealed against, would be definitive, or a judgment which if confirmed by some other authority, would be definitive, or "who is one of a body of persons, which body of persons is empowered by law to give such a judgment." 747 Illustration (b) : "A Magistrate exercising jurisdiction in respect of a charge on which he has power to sentence to fine or imprisonment, with or without appeal, is a Judge. " Section 20 : "The words "Court of Justice" denote a Judge who is empowered by law to act judicially alone, or a body of Judges which is empowered by law to act judicially as a body, when such Judge or body of Judges is acting judicially. " Although we are not here concerned with the terms "Judge" and "Court of Justice" properly so called, the provisions above extracted do give a definite indication of the attributes of a Court as used in criminal law generally. It may be noted that the Code and the Indian Penal Code are the main statutes operating in India in relation to the dispensation of criminal justice and may in a sense be regarded as supplementary to each other, the Code forming the procedural link of the same chain of which the Indian Penal Code constitutes the link of substantive law. This relation between the two enactments is further strengthened by the provisions contained in sub section (2) of section 4 (the definition clause) of the Code which runs thus : "4 (2) : Words which refer to acts done, extend also to illegal omissions; and "all words and expressions used herein and defined in the Indian Penal Code, and not hereinabove defined, shall be deemed to have the meanings respectively attributed to them by the Code. " It is no doubt true that the expression "Court of Justice" does not appear to have been used in the Code (although the expression "Judge" does find a place in section 197 thereof), but then there is no escape from the conclusion that when a "Judge" (including a Magistrate) who is empowered to act judicially and does so act constitutes not merely a Court but a Court of Justice. Now I proceed to examine the relevant provisions contained in Chapter XIV of the Code which carries the caption "INFORMATION TO THE POLICE AND THEIR POWERS TO INVESTIGATE". It may be stated at once that although the Chapter is headed as stated, it is not confined to matters which are strictly concerned with the investigation stage but also deals with situations which arise after the investigation has been finalized. Reference may be made in this behalf to subsection (2) of section 172 of the Code reads thus : 748 "Any Criminal Court may send for the police diaries of a case under inquiry or trial in such Court, and may use such diaries, not as evidence in the case, but to aid it in such inquiry or trial. Neither the accused nor his agents shall be entitled to call for such diaries, nor shall he or they be entitled to see them merely because they are referred to by the Court, but, if they are used by the police officer who made them, to refresh his memory, or if the Court uses them for the purpose of contradicting such police officer, the provisions of the , section 161 or section 145, as the case may be, shall apply. " The sub section clearly deals with the use of police diaries at an inquiry or trial which a Magistrate holds not in his administrative or executive capacity but undoubtedly as a Court. The caption of the Chapter therefore is not decisive of the question as to whether a particular provision contained therein is limited to the supervisory jurisdiction of the Magistrate in relation to the investigation being conducted by the police or deals with his judicial functions as a Court. The contents of sections 169, 170 and 173 of the Code may now be scrutinised. They are re produced below : "169. If, upon an investigation under this Chapter, it appears to the officer in charge of the police station or to the police officer making the investigation that there is not sufficient evidence or reasonable ground of suspicion to justify the forwarding of the accused to a Magistrate, such officer shall, if such person is in custody, release him on his executing a bond, with or without sureties, as such officer may direct, to appear, if and when so required, before a Magistrate empowered to take cognizance of the offence on a police report and to try the accused or commit him for trial." "170. (1) If, upon an investigation under this Chapter, it appears to the officer in charge of the police station that there is sufficient evidence or reasonable ground as aforesaid, such officer shall forward the accused under custody to a Magistrate empowered to take cognizance of the offence upon a police report and to try the accused or commit him for trial or, if the offence is bailable and the accused is able to give security, shall take security from him for his appearance before such Magistrate on a day fixed and for his attendance from day to day before such Magistrate until otherwise directed." 749 "(2) When the officer in charge of a police station forwards an accused person to a Magistrate or take security for his appearance before such Magistrate under this section, he shall send to such Magistrate any weapon or other article, which it may be necessary to produce before him, and shall require the complainant (if any) and so many of the persons who appear to such officer to be acquainted with the circumstances of the case as he may think necessary, to execute a bond to appear before the Magistrate as thereby directed and prosecute or give evidence (as the case may be) in the matter of the charge against the accused. "(3) If the Court of the District Magistrate or Sub divisional Magistrate is mentioned in the bond, such Court shall be held to include any Court to which such Magistrate may refer the case for inquiry or trial, provided reasonable notice of such reference is given to such complainant or persons." "173. (1) : Every investigation under this Chapter shall be completed without unnecessary delay, and, as soon as it is completed, the officer in charge of the police station shall "(a) forward to a Magistrate empowered to take cognizance of the offence on a police report a report, in the form prescribed by the State Government, setting forth the names of the parties, the nature of the information and the names of the persons who appear to be acquainted with the circumstances of the case, and stating whether the accused (if arrested) has been forwarded in custody, or has been released on his bond and, if so, whether with or without sureties, and "(b) 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. "(2) Where a superior officer of police has been appointed under section 158, the report shall, in any case in which the State Government by general or special order so directs, be submitted through that officer, and he may, pending the orders of the Magistrate, direct the officer in charge of the police station to make further investigation. "(3) Whenever it appears from a report forwarded under this section that the accused has been released on his bond, 750 the Magistrate shall make such order for the discharge of such bond or otherwise as he thinks fit. "(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 all other documents or relevant extracts 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 sub section (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 stating 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. " Section 169 and 170 do not talk of the submission of any report by the police to the Magistrate, although they do state what the police has to do short of such submission when it finds at the conclusion of the investigation (1) that there is not sufficient evidence or reasonable ground of suspicion to justify the forwarding of the accused to a Magistrate (section 169) (2) that there is sufficient evidence or reasonable ground as aforesaid (section 170). In either case the final report of the police is to be submitted to the Magistrate under sub section (1) of section 173. Sub section (3) of that section further provides that in the case of a report by the police that the accused has been released on his bond (which is the situation envisaged by section 169), the 751 Magistrate shall make "such order for the discharge of such bond or otherwise as he thinks fit". Now what are the courses open to the Magistrate in such a situation? He may, as held by this Court in Abhinandan Jha & Others vs Dinesh Mishra. (1) agree with the report of the police and file the proceedings, or (2) not agree with the police report and (a) order further investigation, or (b) hold that the evidence is sufficient to justify the forwarding of the accused to the Magistrate and take cognizance of the offence complained of. The appropriate course has to be decided upon after a consideration of the report and the application of the mind of the Magistrate to the contents thereof. But then the problem to be solved is whether the order passed by the Magistrate pertains to his executive or judicial capacity. In my opinion, the only order which can be regarded as having been passed by the Magistrate in his capacity as the supervisory authority in relation to the investigation carried out by the police is the one covered by the course 2 (a). The order passed by the Magistrate in each of the other two courses, that is, (1) and 2(b), follows a conclusion of the investigation and is a judicial order determining the rights of the parties (the State on the one hand and the accused on the other) after the application of his mind. And if that be so, the order passed by the Magistrate in the proceeding before us must be characterised as a judicial act and therefore as one performed in his capacity as a Court. The reasons which have weighed with me in coming to the conclusion arrived at in the last paragraph are equally applicable to the consideration of the question whether an order of bail passed by a Magistrate calls for the performance by him of his judicial functions. Such an order also decides the rights of the State and the accused and is made by the Magistrate after the application of his mind and therefore in the discharge of his judicial duties, which factor constitutes it an act of a Court. For a tribunal to be acting as a Court, it is not necessary that the parties must have a right of hearing or adducing evidence at every stage of the proceedings before it. This is specially true of Courts constituted as such by the legislature. Reference may here be made to interlocutory orders issuing temporary injunctions or staying 752 proceedings in a subordinate Court or dispossession of a party by Civil Courts at the instance of a plaintiff or appellant and in the absence of the opposite party which comes into the picture later on after it is served with a notice. And even subsequent to the appearance of the party adversely affected, the existence of a prima facie case would till the scales against it so that the order earlier passed in favour of the other party is confirmed till the conclusion of the case on merits, even though the case may finally be decided otherwise and the interlocutory order found to be unjust and then vacated. And yet it can hardly be argued that the presiding officer of the Court does not act as a Court when passing such an order. Really, the right to adduce evidence and be heard is to be taken into consideration as being available at one stage of the proceedings or the other. Thus in the case of an order passed by a Magistrate under sub section (3) of section 173 of the Code in agreement with the police report does not call for any hearing or the production of any evidence on the part of the accused, as it goes in his favour. If the Magistrate, on the other hand, disagrees with the report submitted by the police and takes cognizance of the offence, the accused comes into the picture and thereafter shall have the right to be heard and to adduce evidence in support of his innocence. Viewed in this context, all orders passed by a Magistrate acting judicially (such as orders of bail and those passed under subsection (3) of section 173 of the Code discharging an accused or orders taking cognizance of the offence complained of) are parts of an integral whole which may end with a definitive judgment after an inquiry or a trial, or earlier according to the exigencies of the situation obtaining at a particular stage, and which involves, if need be, the adducing of evidence and the decision of the Magistrate on an appreciation thereof. They cannot be viewed in isolation and given a character different from the entire judicial process of which they are intended to form a part. In the view that I have taken of the matter, I do not consider it necessary to go into the details of the conflict of opinion amongst the High Courts in India in relation there to but I would touch briefly thereupon. In J. D. Boywalla vs Sorab Rustomji Engineer Beaumont, C. J. speaking for himself and Macklin, J., emphatically held that a Magistrate while passing a order releasing an accused person on bail or discharging him in pursuance of a report submitted by the police to the effect that the evidence was insufficient to sustain the charge, acts judicially and therefore as a Court within the meaning of that term as used in clause (b) of sub section (1) of section 195 of the Code. That decision was followed by a Division Bench consis 753 ting of Shah, C. J., and Baxi, J., in State vs Vipra Khimji Gangaram in so far as an order discharging an accused person as aforesaid is concerned. Beaumont, C. J. 's view in regard to orders of bail was accepted as correct by M. C. Desai, C.J., and Mishra, J., in Badri vs State. These three decisions, in my opinion, lay down the correct law on the point and the view expressed to the country by the Madras, Calcutta and Patna High Court as also by a Full Bench of the Allahabad High Court in Hanwant vs Emperor and by a Full Bench of the Lahore High Court in Emperor vs Hyat Fateh Din merits rejection for the reasons stated above. In so far as this Court is concerned, the point debated before us has not been the subject matter of any decision and was expressly left open in M. L. Sethi vs R. P. Kapur & Anr. In that case the appellant had lodged a report with the police charging the respondents with certain cognizable offences. While the police were investigating into the report, the respondent filed a complaint in the Magistrate 's Court alleging that the appellant had committed an offence under section 211 of the Indian Penal Code by falsely charging the respondent with having committed an offence. The Magistrate took cognizance of the respondent 's complaint under section 190 of the Code. At that stage there were no proceedings in any Court nor any order by any Magistrate for arrest, remand or bail of the respondent in connection with the appellant 's report to the police. Later, however, the police arrested the respondent in connection with the appellant 's report and filed a charge sheet against him, but the case ended in an order of discharge. Thereafter, the appellant raised an objection in the Court of the Magistrate to the effect that cognizance of the offence under section 211 of the Indian Penal Code could not be taken in view of the provisions of clause (b) of sub section (1) of section 195 of the Code. The Magistrate rejected the contention and the order was confirmed by the Sessions Court and the High Court. While dismissing the appeal, this Court held that the complaint filed by the respondent was competent and that clause (b) aforesaid did not stand in the way of the Magistrate taking cognizance, in as much as, there had been no proceedings of any kind whatsoever before the Magistrate in relation to the report lodged by the appellant with the police till the complaint was 754 filed by the respondent. Reliance was placed on behalf of the appellant in that case on Badri vs State (supra) and J. D. Boywalla vs Sorab Rustomji Engineer (supra) but the points decided in those cases were held not to arise in the case then before the Court which made the following observations in relation thereto : "In the case of Badri vs State, where an offence under section 211, I.P.C., was alleged to have been committed by the person making a false report against the complainant and others to the police, it was held that it was an offence in relation to the remand proceedings and the bail proceedings which were subsequently taken before a Magistrate in connection with that report to the police, and, therefore, the case was governed by section 195 (1) (b), Cr. P. C., and no cognizance of the offence could be taken except on a complaint by the Magistrate who held the remand and bail proceedings. We do not consider it necessary to express any opinion whether the remand and bail proceedings before Magistrate could be held to be proceedings in a Court, nor need we consider the question whether the charge of making of the false report could be rightly held to be in relation to those proceedings. That aspect need not detain us, because, in the case before us, the facts are different. The complaint for the offence under section 211, I.P.C. was taken cognizance of by the Judicial Magistrate at Chandigarh at a stage when there had been no proceedings for arrest, remand or bail of the respondent and the case was still entirely in the hands of the police. There was, in fact, no order by any Magistrate in the proceedings being taken by the police on the report lodged by the appellant up to the stage when the question of applying the provisions of section 195 (1)(b), Cr. P.C. arose. These two cases are also, therefore, of no assistance to the appellant. On the same ground, the decision of the Bombay High Court, in J. D. Boywalla vs Sorab Rustomhi Engineer is also inapplicable, because in that case also orders were passed by a Magistrate on the final report made by the police after investigation of the facts in the report in respect of which the complaint under section 211, I.P.C. was sought to be filed." 13. In another part of the judgment deciding M. L. Sethi vs R. P. Kapur (supra) this Court disagreed with the view expressed in Ghulam 755 Rasul vs Emperor wherein Blacker, J., made the following observation : "I am clear that the words in this sub section "in relation to any proceedings in any Court" apply to the case of a false report or a false statement made an investigation by the police with the intention that there shall in consequence of this be a trial in the criminal Court, and I find support for this view in the case reported as 1929 Sind 132 (1)". This view of Blacker, J., was repelled by this Court thus : "The decision in the words in which the learned Judge expressed himself appears to support the argument of learned counsel for the appellant in the present case but we think that very likely in that case, the learned Judge was influenced by the circumstances that the case had been reported by the police to the Magistrate for cancellation. He appears to have held the view that the Magistrate having passed an order of cancellation, it was necessary that the complaint should be filed by the Magistrate, because section 195 (1) (b) had become applicable. If the learned Judge intended to say that without any proceeding being taken by the Magistrate in the case which was investigated by the police, it was still essential that a complaint should be filed by the Magistrate simply because a subsequent proceeding following the police investigation was contemplated, we consider that his decision cannot be accepted as correct. " These observations cannot be held to mean that if an order of cancellation of a case has actually been passed by a Magistrate in agreement with the report of the police to the effect that no sufficient evidence was available against the accused, such order could not be regarded as a judicial proceeding and the Magistrate passing it could not be given the status of a Court. This is apparent from the last sentence of the passage just above extracted which indicates that all that was meant was that if Blacker, J., meant to say that even though no proceeding at all had been taken by the Magistrate, clause (b) of sub section (1) of section 195 of the Code would be attracted merely for the reason that the police had held an investigation which would at a later point of time result in any proceedings before the Magistrate this Court could not agree with him. Another fact which may be noted in this connection is that judgment in Ghulam Rasul vs Emperor (supra) does not state in unmistakable terms that any order 756 of cancellation of the case was passed by the concerned Magistrate and all that is mentioned is that the police had reported the case for "cancellation", which may well mean that really no order of cancellation had in fact been made by the Magistrate. As the order releasing Trivedi on bail and the one ultimately discharging him of the offence complained of amount to proceedings before a Court, all that remains to be seen is whether the offence under section 211 of the Indian Penal Code which is the subject matter of the complaint against Trivedi can be said to have been committed "in relation to" those proceedings. Both the orders resulted directly from the information lodged by Trivedi with the police against Pathak and in this situation there is no getting out of the conclusion that the said offence must be regarded as one committed in relation to those proceedings. This requirement of clause (b) aforementioned is also therefore fully satisfied. For the reasons stated, I hold that the complaint against Trivedi is in respect of an offence alleged to have been committed in relation to a proceeding in Court and that in taking cognizance of it the SDJM acted in contravention of the bar contained in the said clause (b), as there was no complaint in writing either of the SDJM or of a superior Court. In the result, therefore, I accept the appeal and, setting aside the order of the High Court, quash the proceedings taken by the SDJM against Trivedi. ORDER In accordance with the opinion of the majority, the appeal is allowed, the order of the High Court is set aside and the proceedings taken by the Sub Divisional Judicial Magistrate against the appellant, Kamlapati Trivedi, are quashed. N.V.K. Appeal allowed.

Section 195(1)(b) of the Code of Criminal Procedure provides that no court shall take cognizance of any offence punishable under any of the sections enumerated therein (one of which is section 211) if such offence is alleged to have been committed in or in relation to any proceedings in any court. The appellant filed a complaint with the police that the accused criminally trespassed, assaulted and abused him in filthy language and committed theft of money and valuable documents of the school of which he was the secretary. After investigation the police found that there was no evidence against the accused and therefore, the Magistrate discharged all the accused. One of the accused thereupon preferred a complaint under section 211 IPC alleging that the appellant had instituted criminal proceedings with the intent to cause injury to him and others knowing that there was no just or lawful ground and thereby caused pecuniary loss and agony to him. The appellant moved the High Court for quashing the proceedings before the Magistrate because in the absence of a complaint in writing of the Magistrate himself, the Magistrate had no jurisdiction to take cognizance of the offence under s.211 IPC in view of the provisions of section 195 (1)(b) of the Cr. The High Court refused to quash the proceedings. On further appeal it was contended that an order passed by a Magistrate on a report submitted by the police under section 173 Cr. P. C. being a judicial order the bar of section 195(1)(b) would be attracted. Allowing the appeal, ^ HELD: Per Koshal, J. (with whom Jaswant Singh, J. agreed) 1. The complaint against the appellant was in respect of an offence alleged to have been committed in relation to a proceeding in court. In taking cognizance of it the Magistrate acted in contravention of the bar contained in section 195(1)(b) because there was no complaint in writing either of the Magistrate or of a superior court. [756 D] 2. Taking cognizance of any offence by a Magistrate under section 190 is not a condition precedent for him to be regarded as a court. Magistrates are specifically labelled as courts by section 6 of the Code of Criminal Procedure and, therefore, have to be regarded as such. It is true that a Magistrate also performs functions which are of an executive nature and do not fall within 718 the sphere of judicial duties and it may plausibly be argued that in the discharge of those functions he does not act as a court. But then he cannot but be regarded as a court when he acts judicially. Sections 496 and 497 which make provision for bail matters describe a Magistrate while dealing with those matters as a court and these sections operate at all stages of a case including that when the investigation has just started. Neither in these sections nor in section 195 is there anything to show that the word "court" has been used in two different senses and therefore the legislature must be deemed to have used it in one sense wherever it occurs in the Code. [743 B, 742 D H] 3. The well accepted position is that a court created by a statute, when it performs judicial functions, would be deemed to act as a court; and Magistrates ' courts are regarded as such unless they are performing executive or administrative functions. [744 F G]. Shell Co. of Australia Ltd. vs Federal Commissioner of Taxation, PC and Halsbury 's Laws of England (3rd Edn.) Vol. 9 p. 342; Virinder Kumar Satyawadi vs The State of Punjab, ; Smt. Ujjam Bai vs State of U.P., [1963] 1 SCR 778; referred to. The source of power exercised by the authority, i.e. whether it is executive or judicial power, would make all the difference in the determination of the question whether the authority acts as a court or merely as a quasi judicial tribunal. [746 F]. Section 4(2) of the Code of Criminal Procedure provides that "all words and expressions used herein and defined in the IPC and not hereinabove defined shall be deemed to have the meanings respectively attributed to them by the Code. " In the matter of dispensation of criminal justice the Indian Penal Code (which contains the substantive law) and the Criminal Procedure Code (which deals with procedure) may be regarded as supplementary to each other. The term "Judge" and "Court of justice" used in sections 19 and 20 of the Indian Penal Code give an indication of the attributes of a court as used in criminal law generally. Although the term "court of justice" has not been used in the Cr. P.C. the expression "Judge" is used in section 197 and, therefore, when a judge (including a Magistrate) who is empowered to act judicially and does so act, constitutes not merely a Court but a Court of Justice. [747 E, D, C, F G]. The caption of Chapter XIV is not decisive of the question whether a particular provision contained in it is limited to the supervisory jurisdiction of the Magistrate in relation to the investigation being conducted by the police or deals with his judicial functions as a court. Although Chapter XIV is headed "Information to the police and their powers to Investigate", it is not confined to matters which are strictly concerned with the investigation stage but also deals with situations arising after the investigation has been finalised. For example, section 172(2) clearly deals with the use of police diaries at an inquiry or trial which a Magistrate holds not in his administrative or executive capacity but as a court. Similarly sections 169 and 170 are another instance in point in which an order passed by a Magistrate is a judicial order determining the rights of the parties after application of his mind. If that 719 be so the order passed by the Magistrate in the instant case must be characterised as a judicial act and therefore as one performed in his capacity as a court. [748 D, 747 G 748 C, 750 G, 751 E] 7. For a tribunal to be acting as a court, it is not necessary that the parties must have a right of hearing of adducing evidence at every stage of the proceedings before it. While passing interlocutory orders, issuing temporary injunctions etc. , the presiding officer of a court does act as a court. [751 H 752 B]. All orders passed by a Magistrate acting judicially (such as orders of bail and those passed under sub section (3) of section 173 of the Code discharging the accused or orders taking cognizance of an offence complained of) are parts of an integral whole which may end with a definitive judgment after an inquiry or a trial or earlier, according to the exigencies of the situation obtaining at a particular stage and which involves, if the need be, the adducing of evidence and the decision of the Magistrate on an appreciation thereof. They cannot be viewed in isolation and given a character different from the entire judicial process of which they are intended to form a part. [752 E F]. Abhinandan Jha & Ors. vs Dinesh Mishra, ; ; M. L. Sethi vs R. P. Kapur & Anr., ; ; referred to. Kailasam, J. (dissenting) The restricted meaning given to "Court" in section 195(2) Cr. P.C. read along with the conditions to be specified before a complaint is preferred by the court, indicate that the proceedings before a Magistrate in which he agrees with the report by the police under section 169 Cr. P.C. and the proceedings in remand or bail applications during investigations will not amount to proceedings 'in or in relation to court. ' [737 H]. The policy behind the bar against institution of criminal proceedings by a private party is that when offences are committed against lawful authority or false evidence is given or offence is committed against public justice, it should be the concerned authority that should prefer a complaint and no one else. [723 H]. A court is charged with a duty to decide disputes in a judicial manner and declare the rights of parties in a definitive judgment. To decide in a judicial manner involves that the parties are entitled as a matter of right to be heard in support of their claim and to adduce evidence in proof of it. It also imparts an obligation on the part of the authority to decide the matter on a consideration of the evidence adduced and in accordance with law [725 B C]. It is settled law that when a Magistrate applies his mind on complaints, he must be held to have taken cognizance of the offence mentioned in the complaint but when he applies his mind not for such purpose but for the purpose of ordering investigation under section 156(3) Cr. P.C. or issues a search warrant for the purpose of investigation, he cannot be said to have taken cognizance of any offence. [727 E] 4. When the Magistrate receives a report under section 169 of the Cr. P.C. that there is not sufficient evidence or reasonable ground for suspicion and agrees 720 with it, he may be doing so in exercise of his judicial function but the question is whether he is acting as a court. Most of the requirement of a court are lacking at this stage. To be classified as a court, an authority must be charged with a duty to decide disputes in a judicial manner and declare the rights of parties in a definitive judgment. This involves that the parties are entitled as a matter of right to be heard in support of their claim and to adduce evidence in proof of it and an obligation on the part of the authority to decide the matter on a consideration of the evidence adduced and in accordance with law. [729 D E]. Though the Magistrate in deciding whether or not to accept the report of a police officer under section 169 Cr. P.C. may be exercising his judicial mind and though there may be some of the trappings of the court, at this stage he cannot be termed as a court within the provisions of section 195(2) Cr. At this stage the rights of the parties are not finally decided as the complainant is entitled to file a complaint directly to the Magistrate. The persons accused are not before the Magistrate and neither the complainant nor the accused are entitled to be heard or to adduce evidence before the Magistrate at this stage. It cannot, therefore, be said that the Magistrate has a duty to decide the matter on a consideration of the evidence adduced before him. [729 B, F H] 7. The proceeding under section 167 Cr. P.C. is during investigation. The Magistrate to whom the accused is produced can from time to time authorise detention of accused in such custody as such Magistrate thinks fit for a term not exceeding 15 days in whole. If he has not the jurisdiction to try the case or commit it for trial but considers further detention is necessary, he may order the accused to be forwarded to a Magistrate having jurisdiction. In investigation by the police the Magistrate is associated in a supervisory capacity. The action taken by the Magistrate cannot be taken to be that of a court for the Magistrate who has no jurisdiction to try the case has a limited power. The trial commences only after the offence has been taken cognizance of. [735 E F] 8. Section 496 provides as to when bail may be taken in non bailable offences. The provisions of section 496 and section 497 speak of an accused person in custody charged with a non bailable offence being produced before court at any stage of the proceedings. The section deals with the exercise of the power of a court at any stage of proceedings when the accused is brought before a Court while in the custody of the police officer. Though there may be some trappings of a court and the section itself mentions the word 'court ', the requirements for being a court for the purpose of section 195(2) have not been satisfied. [735 H 736 D] 9(i) There is a conflict between various High Courts as to whether a complaint is necessary when on a police report under section 169 the Magistrate does not take any further action. The Bombay, Saurashtra and Andhra Pradesh High Courts in , 1952 Saurashtra 67(68) and (287) have held that a Magistrate passing an order on a final report of police under section 173 referring the case as false should be deemed to be a court passing a judicial order disposing of the information to the police, and that in such a case, the complaint of the Magistrate is necessary for the prosecution of the informant under section 211 IPC. The Madras, Calcutta and 721 Allahabad High Court in AIR 1934 Mad. 175, AIR 1948 All. 184 FB and AIR 1916 Cal. 593 have held the other view. (ii) When no further proceedings are taken by the Magistrate or receipt of a police report under section 169 there is no proceeding in or in relation to any court and therefore, no complaint by the court is necessary. [733 G 734 B].

ivil Appeal No. 672 of 1962. Appeal by special leave from the judgment and order dated December 10, 1958, of the Patna High Court in Appeal from Appellate Decree No. 716 of 1954. S.P. Varma, for the appellants. Sarjoo Prasad and Mohan Behari Lai, for the respondents. 107 October 10, 1963. The Judgment of P.B. Gajendragadkar, K. Subba Rao, K.N. Wanchoo and J.C. Shah JJ., was delivered by Subba Rao J. Raghubar Dayal J. delivered a separate Opinion. SUBBA RAO J. This appeal by special leave is directed against the judgment of the High Court of ' Judicature at Patna and raises mainly the question of the scope of the right of pre emption under the Mohamedan law as applied by custom in Bihar. The facts lie in a small compass. On June 17, 1930, Chathilal Sah of Sahebganj, who was the owner of a house and two golas bearing holdings Nos. 184 and 185 situated in mahalla Sahebganj, executed a will bequeathing the said property to his daughter Parbati Kuer and nephew Ram Swarup in equal shares. Under the said will Ram Swarup was to get the entire property in case Parbati Kuer died unmarried or issueless. On July 18, 1940, Ram Swarup sold one half of the said property to the plaintiff respondent 1. On July 27, 1942, the plaintiff respondent 1 acquired under a patta some lands adjoining the said property. On October 10, 1949, defendant 3 (respondent 3 herein), alleging to be the husband of the said Parbati Kuer, sold the remaining half of the disputed property to defendants 1 and 2. It may be mentioned at this stage that the land on which the said house and golas stand is Dih Basgit Lagani (rent paying) land. On December 10, 1949, respondent 1 filed Title Suit No. 214 of 1949 in the First Court of the Munsif at Chapra for a declaration that he has a right to pre empt the property purchased by appellants 1 and 2 and for directing them to transfer the said property to him. To that suit, the first appellant and his two sons were made defendants 1, 2 and 2A and their vendor was made defendant 3. The defendants contested the suit, inter alia, on the ground that the ceremonies of pre emption were not performed and that under the Mohamedan, law the plaintiff was not entitled to pre emption, as the land on which the said house and golas stood was "rent paying" land. The learned Munsif dismissed the suit. But, on appeal the Subordinate 108 Judge of Chapra allowed the appeal and granted a decree for pre emption in favour of the plaintiff respondent 1. On appeal, the High Court agreed with the Subordinate Judge and dismissed the appeal. Defendants 1, 2 and 2A have preferred the present appeal by 'special leave against the Judgment of the High Court. Mr. Varma, learned counsel for the appellants, raised before us the following four points: (1) the right of pre emption infringes the fundamental right of a citizen under article 19(1) (f) of the Constitution and it is not saved by cl. (5) thereof: (2) the first respondent failed to establish his title and, therefore, his suit should have been dismissed on that ground; (3) the ceremonies of pre emption were performed only on October 11, 1949 whereas the sale deed in favour of the appellants was executed and registered on October 20, 1949 and, as the said performance of the ceremonies was premature, they having been performed before the sale was completed, the right of pre emption could not be enforced; and (4) there is no right of pre emption in respect of leasehold interest and, therefore, there cannot be a right of pre emption in respect of a house standing on such land, as Mohamedan law does not recognize a right of pre emption in mere super structure. Mr. Sarjoo Prasad, learned counsel for the respondents controverts the correctness of the said propositions. We shall deal with his arguments in the course of the judgment. To appreciate the first contention, some dates may be recapitulated. Respondent 1 purchased one half share of the property by a sale deed dated July 18, 1940. Appellants 1 and 2 purchased the other half of the property on October 10, 1949. The suit was filed on December 10, 1949. The Munsif dismissed the suit on April 14, 1953. The Constitution came into force on January 26, 1950. The appellants had no fundamental right on the date when they purchased the property. But it is said that under the law of pre emption a person who seeks the assistance of a court with a view to enforce the right of pre emption is bound to establish that the 109 right existed on the date of the sale, on the date of the institution of the suit, and also on the date of the decree of the primary court See Nuri Mian vs Ambica Singh(1) and, therefore, the restriction on the appellants ' fundamental right to acquire the property was not finally imposed before the Constitution, but became crystallized into an irrevocable restriction only at the time of the passing of the decree which was subsequent to the coming into force of the Constitution. We need not express our opinion on this question, as it has been held by this Court in Bhau Ram vs Baij Nath(2) that a right of pre emption vis a vis co sharers was not an unreasonable restriction on the fundamental right of a person to acquire, hold and dispose of property. But learned counsel contends that decision should be confined to a case of co sharers who are related to each other, and should not be extended to co sharers who are not related to each other. Reliance is placed upon the following observations in that judgment found at p. 1483: "If an outsider is introduced as a co sharer in a property it will make common management extremely difficult and destroy the benefits of ownership in common. " This sentence does not, in our view, sustain the distinction sought to be made by the learned counsel between co sharers who are relatives and co sharers, who are not relatives. The word "outsider" in the said passage can only mean a person who is not a co sharer. The judgment of this Court finally settled the question as between co sharers. Following the decision we hold that the law of pre emption vis a vis co sharers does not infringe the fundamental right conferred under article 19 (1) (f) of the Constitution. The second question, namely, that of the plaintiff 's title does not call for consideration by us. It was not raised in the courts below, and it being a pure question of fact, we cannot allow it to be raised for the first time before us. We, therefore, disallow it. (1) Cal. (2) ; 110 The next point raised by the learned counsel is that the ceremonies of pre emption performed in this case were premature, as the sale was completed only on October 20, 1949 whereas the ceremonies were performed on October 11, 1949. This Court, by a majority, held in Ram Saran vs Domini Kuer(1) that the registration under the Registration Act is not complete till the document to be registered has been copied out in the records of the Registration Office as provided in section 61 of that Act. Learned counsel contends that a perusal of the sale deed dated October 10, 1949, ex facie shows that it was copied only on October 20, 1949. The question as to when a document was copied out in the concerned register is certainly a question of fact. The argument was not raised either before the trial court or before the first appellate court. No issue was framed on the point. It was raised for the first time before the High Court. The learned Judges of the High Court pointed out that if the appellants wanted to take advantage of the said point, it was their duty to have raised it either in the trial court or in the first appellate court and to have adduced evidence by calling for the register from the registration department to show on what date the actual copying of the record was made under section 61 of the Registration Act. In the circumstances, the learned Judges refused to allow the appellants to raise the point. The High Court, in our opinion, was certainly right in disallowing the appellants from raising the question of fact for the first time in second appeal. If the plea had been taken at the earliest point of time, the respondents might have had many defences and might have explained the various dates found on the documents. We cannot allow the appellants to raise the said plea. Now we come to the substantial point raised in the appeal. The right of pre emption is sought to be enforced in respect of a rent paying land with a house thereon. Learned counsel for the appellants contends that the right of pre emption does not arise (1) ; 111 on the sale of a leasehold interest in land and that in the absence of such a right there cannot be a right of pre emption in respect of the super structure alone. Learned counsel for the respondents, on the other hand, contends that under Mohamedan law the right of pre emption exists in the case of akar i.e., a house or mansion, to enable the co sharer to have peaceful enjoyment thereof and that the fact that there is no right of pre emption in respect of a leasehold interest in land does not in any way detract from that right. He further contends that whatever might have been the strict incidents of the right of pre emption under Mohamedan law, this Court cannot ignore the modern evolution of law recognizing the transferability and heritability of leasehold interest in land. Before we consider the problem thus presented for our decision, it would be convenient at the outset to notice certain general principles relevant to the present enquiry. It has not been disputed that Hindus in the Province of Bihar came to adopt the Mohamedan law of pre emption as a custom. This was because under the Muslim rule the law of pre emption under the Mohamedan law was administered as a rule of common law of the land in those parts of the country which came under their domination. We must, therefore,. look to Mohamedan law to ascertain the incidents of the right of pre emption unless it is established in a particular case that by custom the said law has been modified to any extent. Being a customary law, it is not permissible for courts to extend the custom beyond the limits within which upto now it has been recognized. The concept of rationalization is out of place in the ascertainment of the customary incidents of the right of pre emption. This Court in Bishan Singh vs Khazan Singh(1) considered the law on the subject and laid down the propositions flowing from the discussion. The following propositions are relevant to the present enquiry: (1) The right of pre emption is simply a right of sub (1) 78. 112 situation, but not of re purchase i.e., the pre emptor takes the entire bargain and steps into the shoes of the original vendee; (2) it is a right to acquire the whole of the property sold and not a share of it; and (3) the right being a very weak right, it can be defeated by all legitimate methods, such a.s the vendee allowing the claimant of a superior or equal right being substituted in his place. It is, therefore, settled law that the pre emptor must take the entire bargain: he cannot split up the bargain and claim to be substituted in respect of a portion of it either on the ground that he does not require a part of it or for the reason that he is entitled to claim pre emption only in respect of a part of it. Further, the right being a weak one, a court need not be astute to rationalize the doctrine so as to make it fit into modern trends of property law. Indeed, it should be reluctant to extend it beyond the incidents clearly recognized by Mohamedan law or by custom. With this background let us now turn to the question that arises in this case. The subject can conveniently be considered under three heads: the pre emptor; (ii) the vendor; and (iii) the property in respect of which the right is claimed. In Baillie 's "Digest of Moohummudan Law" the following passage appears at p. 478: "When it is said that akar (such as mansions, vine yards and other kinds of land) are proper objects of the right of pre emption, it is by virtue of a right of milk, or ownership, that they are so. " Mahmood 3. in Gobind Dayal vs Inayatullah(1) observed at p. 779 thus: "pre emption is a right which the owner of certain immovable property possesses, as such, for the quiet enjoyment of that immovable property, to obtain, in substitution for the buyer, proprietary possession of certain other immovable property, not his own, on such terms as these 113 on which such latter immovable property is sold to another person. " The same learned Judge in Sakina Bibi vs Amiran(1) states that in the pre emptive tenement (the tenement by the ownership of which the pre emptor wants to exercise his right of pre emption ), the pre emptor should have vested ownership and not a mere expectancy of inheritance or a reversionary right, or any other kind of contingent right, or any interest which falls short of full ownership. Beaumont C.J. in Dashrathlal vs Bai Dhondubai(2), after considering the law on the subject, accepted the view that the custom of preemption only exists as between free holders, that is to say neighbouring lands in respect whereof the custom is claimed to apply must be freehold and that the land sought to be pre empted must also be free hold. This Court, in Shri Audh Bihari Singh vs Gajadhar Jaipuria(3), has laid down the correct legal position thus: ". . the benefit as well as the burden of the right of pre emption run with the land and can be enforced by or against the owner of the land for the time being although the right of the pre emptor does not amount to an interest in the land itself." This legal requirement of the full ownership of the pre emptor may be traced either to the fact that "in ancient times Mohamedan law did hot recognize leases although it recognized hire of|and for the purpose of user, or to the circumstance that the right was conferred to enable the pre emptor to prevent an undesirable person from becoming his neighbour" which would not be the case if he was only a temporary occupant of the property in respect whereof the right arose. Whatever may be the reason, it may safely be held now that the pre emptor must be the owner of the property in respect whereof he claims the right of pre emption. (1) (1888)I.L.R.10 All. 472, 477. (2) A.I.R. 1941 Bom.262. (3) ; , 80. 1 SCI/64 8 114 The next question, namely, the quantum of interest which the vender shall possess in the land sought to be pre empted depends upon the doctrine of reciprocity. Unless the land in respect of which the custom is claimed and the land sought to be pre empted are freeholds, the principle of reciprocity will be defeated. To illustrate: "A" has full ownership in a land in respect of which he claims the right of pre emption;the co sharer vendor has only a leasehold interest in respect of the land sought to be pre empted; if the pre emptor had sold the land earlier, the vendor having only a leasehold interest in his land, could not have claimed the right of pre emption in respect of his land, for he had no full ownership in the land. The absence of this reciprocity gives an advantage to one of the sharers which the Mohamedan law does not permit. This doctrine of reciprocity has been succinctly stated by Mahmood J. in Gobind Dayal vs Inavatullah(1) in the passage we have extracted earlier. In Mt. Bibi Saleha vs Amiruddin(2) the said doctrine was restated. It was held therein that a mukarraridar holding under a co sharer had no right to pre empt as against another co sharer and as a mukarraridar could not claim pre emption, the co sharer on the doctrine of reciprocity, which is well understood in the Mohamedan law, could not claim pre emption against the mukarraridar. A Full Bench of the Bombay High Court in Deshrathlal vs Bai Dhondubai(3) has given its approval to the said principle. This Court in Shri Audh Behari Singh vs Gajadhar Jaipuria(4) succinctly put the legal position in the following words: "The crux of the whole thing is that the benefit as well as the burden of the right of pre emption run with the land and can be enforced by or against the owner of the land for the time being although the right of the pre emptor does not amount to an interest in the land itself. " That leasehold interest is not subject to the law of pre emption has been well settled: see Baboo Ram (1) All. (2) [1929] I.S.R. 8 pat 251. (2) A.I.R. 1941 Bom. (4) ; ,80. 115 Golam Singh vs Nursingh Sabey(1), Mohammad Jamil vs Khub Lal Raut(2); Sakina Bibi vs Amiran(3); Phul Mohammad Khan vs Qazi Kutubuddin(4); Moorooly Ram vs Baboo Hari Ram(5); Rameshwar Lal vs Ramdeo Jha(6); and Nathuni Ram vs Gopinath(7). Indeed this legal position has not been controverted by learned counsel for the respondents. Now let us address ourselves to the main contention of the respondents, namely, that the right of pre emption exists in the Mohamedan law in respect of akar which includes a building, that the main purpose intended to be served by the said right is to prevent an undesirable person from becoming the sharer of the house and that, therefore, it would be unrealistic to negative that right in the case of a house on the ground that the land on which the house stands is a leasehold interest. Reliance is placed upon the following passage in Charles Hamilton 's "The Hedaya", 2nd Edn., at p. 558: "It is observed, in the abridgment of Kadooree, that Shaffa does not affect even a house or trees when sold separately from the ground on which they stand. This opinion (which is also mentioned in the Mabsoot) is approved; for as buildings and trees are not of a permanent nature, they are therefore of the class of movables. " Relying upon this passage it is contended that, as in the present case the house was sold along with the ground, the doctrine of "Shaffa" applies to the house. But this passage must be understood on the assumption that the right of pre emption exists in respect of the land on which the house stands. In Baillie 's "Digest of Moohummudan Law", the legal position is made clear. Therein the author says at pp. 479 480: "When a person has purchased a palm tree to cut it down, or when he has purchased it absolutely, there is no right of pre emption in it. But (1) (2) [1921] 5 Pat. L.J. 740. (3)[1888] I.L.R. 10 All. 472, 477. (4) A.I.R. 1937 Pat. (5) [1867] 8 W.R.106. (6) A.I.R. 1957 Pat. (7) A.I.R. 1962 Pat. 226 (F.B.) 116 if it be purchased with its roots and the ground on which it stands, it is liable to the right. The rule is the same with regard to buildings purchased for removal, and the same buildings purchased with their foundations; and there is no preemption in the former case, while there is in the latter. " This passage indicates that a building sold as a superstructure is not subject to the right of pre emption, for it would be in effect a sale of a movable. Unless the house is sold with its foundations, that is to say with the land on which it stands, there is no right of pre emption in regard thereto. Though it may be said that in the present case the house was sold with its foundations, the same principle will have to be applied, for the right of pre emption cannot be invoked in the case of a leasehold interest. In effect and substance the right is sought to be invoked in the case of the building decors the foundations which the law does not permit. Reliance is placed upon the proposition found in para. 370 of Wilson 's Anglo Muhammadan Law, which reads: "If a house is sold apart from the ground on which it stands with a view to being pulled down, so that it is in fact a sale of the materials, no right of pre emption arises with respect to it. If it is sold for occupation as a house, then preemption can be claimed on the ground of vicinage by the owner of any adjoining land or house (and perhaps by the owner of the site itself, supposing him to be a different person from the vendor of the house, even though he should happen to own no land except that covered by the house). " It is said that the words in the brackets conceding the right of the owner of a site to pre empt the house sold as a house indicates that the real principle is whether the house is sold as a habitate or only as materials and that in the former case irrespective of the ownership of the land or the existence of the right of pre emption in respect thereof, the sale of the house can be pre empted. The opening word 117 of the passage, namely, "perhaps", shows that the author himself is not sure of the legal position. That apart, the illustration only deals with a land in respect of which there can be a right of pre emption, i.e., the owner of the land has a freehold interest therein. Strong reliance is placed upon the decision of a Division Bench of the Allahabad High Court in Zahur vs Nur Ali(1). There, a dwelling house was sold as a house to be inhabited as it stood with the same right of occupation as the vendor had enjoyed, but without the ownership of the site. It was held that the right of pre emption under the Mohamedan law attached to such house. The judgment is not a considered one. The learned Judges observed at p. 100 thus: "The seller not only sold the materials of the house, but such interest as he possessed as an occupier of the soil. The house was sold as a house to be inhabited on the spot with the same right of occupation as the seller had enjoyed. ' ' The learned Judges distinguished the texts cited on the ground that they applied only to the sale of the materials of a house or a house capable of and intended to be removed from its site. This judgment no doubt supports the contention of learned counsel for the respondents; but the learned Judges have not considered the well settled principle that there cannot be a right of pre emption in respect of a land over which the vendor has no full ownership. The decision suffers from the infirmity that the said well settled principle has escaped the attention of the court. Reliance is also placed on the decision of a Division Bench of the Patna High Court in Chariter Dusadh vs Bhagwati Pandey(2). There, the question was whether the pre emptor had the milkiyat or ownership in the property on account of which he claimed the right of pre emption. The pre emptor was birtdar though he was described as a tenant in the Record of Rights for a particular purpose. The court held (1) (1880)I.L.R. 2 All. (2) A.I.R. 1934 Pat. 596. 118 that he was a full owner. This decision does not really support the respondents. There is a direct decision of a Full Bench of the Patna High Court on the question now raised, in Nathuni Ram vs Gopinath(1). There, as here, a right of pre emption was claimed in respect of a house which stood on a leasehold land. After a full discussion of the subject, Choudhary J., speaking for the Full Bench, came to the following decision, at p. 229: "On a careful consideration of the authorities and the principle of law involved in the case, my concluded opinion is that,in case of a sale of different properties, the. right of pre emption cannot be exercised with respect to one or some of them only if the enjoyment thereof is dependent on the property over which that right is not and cannot be exercised in law and consequently, where the land is sold with a house thereon, pre emption cannot be allowed. with respect to the house only apart from the land over which the right could not be exercised on account of its being a leasehold property. The sale of a house for inhabitation or occupation, without the sale of its foundations and the land over which the foundations stand, is inconceivable, except, as pointed out in Hedaya, in case of the sale of the upper story of a house. " We agree with the conclusion. As this judgment has considered the earlier decisions on the subject, we need not again refer to them. To summarize: A right of pre emption is annexed to full ownership of property of co sharers. It is not attached to property held on subordinate tenure, such as leases etc. It is an incident of the co sharer 's property operating both as a right and as a burden in different situations. It is a right of substitution taking in the entire bargain. It must take the whole or nothing. It does not matter if the inability to take the whole arises out of a voluntary act or out of a legal limitation inherent in the nature of the (1) A.I.R. 1962 Pat. 226 (F.B.) 119 property transferred. It is reciprocal in operation, that is, if the situation was reversed and the vendor became the pre emptor, he should be in a position to pre empt the co sharer 's whole bargain. The two doctrines which may, for convenience, be referred to as "entire bargain" and "reciprocity" cannot ' operate unless both the co sharers are full owners of their respective properties. Akar or a house standing on a freehold land is subject to the right of preemption, but a house on a leasehold land stands on a different footing. As there is no right of preemption in respect of a land held on a subordinate tenure, the right of pre emption cannot be enforced against the house either, as the pre emptor cannot be substituted for the entire bargain. The right must fall also on the ground that the super structure disannexed from the land would be movable property and it is well settled that the right of pre emption cannot be enforced in respect of movables. We, therefore, hold that the first respondent has no right to pre empt the sale executed in favour of the appellants. In the result, the appeal is allowed, the decrees of the Subordinate Judge 's Court and the High Court are set aside and that of the trial Court is restored. The appellants will have their costs throughout. RAGHUBAR DAYAL J. I agree that the law of pre emption regarding co sharers does not infringe the fundamental right conferred under article 19(1)(g), that the pre emptor must be the owner of the property in respect whereof he claims the right of pre emption, that the vendor must have proprietary right in the property sold and sought to be pre empted, that the sale of lease hold interest is not subject to the law of pre emption and that the sale of the super structure of a house is not pre emptible. I also agree that the pre emptor must pre empt for the entire property sold if that be pre emptible. I would, however, not like to express an opinion upon the point whether, in certain circumstances, the pre emptor can or cannot 120 pre empt part of the property sold. There have been cases where partial pre emption has been allowed. Some of the exceptional cases have been referred to at p. 778 of 'Muslim Law as Administered in India & Pakistan ' by K.P. Saksena, IV Edition. In Zainab Bibi vs Umar Havat Khan(1) the preemptor was allowed to pre empt that part of the property sold which was pre emptible and in support of the decision it was stated at p. 457: "So far as the Mohammedan Law is concerned, there is no doubt that where several properties are sold in portions of which a pre emptor has the right of pre emption, he is entitled to preempt that portion only on payment of a proportionate price. On this point there was a consensus of opinion among the three Imams as quoted in the Fatawa Alamgiri, referred to in Omur Khan vs Mooras Khan (1865 N.W.P. H.C.R. 173, 174)" This Court did express an opinion in Bishan Singh vs Khazan Singh(2): "The general law of pre emption does not recognize any right to claim a share in the property sold when there are rival claimants. It is well established that the right of pre emption is a right to acquire the whole of the property sold in preference to other persons (See Mool Chand vs Ganga Jal: ILR 11 Lah. 258, 273) " In that case the dispute lay between two rival preemptors and arose in these circumstances. One preemptor pre empted the entire sale and obtained the decree on condition that he would deposit a certain amount within a certain time. But, before he could deposit the amount, the rival pre emptor instituted another suit for the pre emption of the entire property sold and impleaded in that suit the first pre emptor. The rights of the two pre emptors were found to be equal. The entire property sold was clearly pre emptible. It was, in this context, that the observation (1) (2) ; ,884. 121 was made. It would be a matter for consideration at the appropriate time whether there can be any exception to this general rule that the entire property sold must be pre emptor by the pre emptor in his suit. I would therefore rest my decision on the facts that the sale of the lease hold interest in land is not pre emptible and that the super structure of the house is also not pre emptible and that therefore the plaintiff pre emptor cannot pre empt the sale of the property sold. I therefore agree that the appeal be allowed, the decrees of the Subordinate Judge and the High Court be set aside and that of the trial Court be restored and that the appellants would have their costs throughout. Appeal allowed.

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

Appeal No. 1223 of 1967. Appeal from the judgment and decree dated March 5, 1964 of the Allahabad High Court in Income tax Reference No. 71 of 1959. section K. Mitra, B. B. Ahuja, R. N. Sachthey and B. D. Sharma, for the appellant. Ram Lal and A. T. M. Sampat, for the respondent. The Judgment of the Court was delivered by Shah, C.J. The respondent who is the Karta of a Hindu Un divided Family entered on behalf of the family into a partnership with one Devi Sharan Garg to carry on the business of 407 manufacturing and selling pharmaceutical products and literature relating thereto. On July 27, 1946 the partnership was dissolved . The assets of the firm which included goodwill, Machinery, furniture, medicines, library and copyright in respect of certain publications were valued at the date of dissolution at Rs. 2,50,000/ . The respondent was paid a sum of Rs. 1,25,000/ in lieu of his share and the business together with the goodwill was taken over by Devi Sharan Garg. In proceedings for assessment of the respondent for the year 1947 48 the Income tax Officer sought to bring an amount of Rs. 70,000/ to tax as capital gains. The contention raised by the respondent that no part of the amount of Rs. 1,25,000/received by the respondent represented capital gains was rejected by the Income tax Officer, Appellate Assistant Commissioner and the Income tax Appellate Tribunal. The Tribunal however reduced the amounts capital gains brought to tax to Rs. 65,000/ . The Tribunal referred the following question to the High Court of Allahabad under section 66(1) of the Indian Income tax Act, 1922 "Whether on a true interpretation of sub section (1) of section 12 B of the Income tax Act, the sum of Rs. 65,000/ has been correctly taxed as capital gains". The High Court answered the question in the negative. Against that order, with certificate granted by the High, Court, this appeal has been preferred. Section 12 B(1), insofar as it is relevant provides "The tax shall be payable by an assessee under the head "Capital gains" in respect of any profits or gains arising from the sale, exchange or transfer of a capital asset effected after the 31st day of March 1946 . and such profits and gains shall be deemed to be income of the previous year in which the sale, exchange or transfer took place Provided. Provided further. Provided further that any transfer of capital assets . . on the dissolution of a firm or other association of persons. . . shall not for the purposes of this section, be treated as sale, exchange or transfer of the capital assets; 408 Liability to pay capital gains arises under section 12 B(1) if there be a sale, exchange or transfer of capital assets. There was no sale or exchange of his share in the capital assets of the firm by the respondent to Shri Devi Sharan Garg. Nor did he transfer his share in the capital assets. The assets of the firm included the goodwill, machinery, furniture, medicines library and the copyright in respect of certain publications. A large majority of the assets were incapable of physical division, and the partners agreed that the assets be taken over by Devi Sharan Garg at a valuation, and the respondent be paid his share of the value in money. Such an arrangement, in our judgment, amounted to a distribution of the assets of the firm on dissolution. There is no clause in the partnership agreement providing for the method of dissolution of the firm or for winding up of its affairs. In the course of dissolution the assets of a firm may be valued and the assets divided between the partners according to their respective shares by allotting the individual assets or paying the money value equivalent thereof. This is a recognized method of making up the accounts of a dissolved firm. In that case the receipt of money by a partner is nothing but a receipt of his share in the distributed assets of the firm. The respondent received the money value of his share in the assets of the firm; he did not agree to sell, exchange or transfer his share in the assets of the firm. Payment of the amount agreed to be paid to the respondent under the arrangement of his share was therefore not in consequence of any sale exchange or transfer of assets. To persuade us to take a different view, reliance was placed on behalf of the Revenue upon James Anderson vs Commissioner of Income tax Bombay City(1). In that case the assessee held a power of attorney from the executor of a deceased person, in the course of the administration of his estate. He sold certain shares and securities belonging to the deceased for distribution among the legatees. The excess realized by sale was treated by the Income tax Department as Capital gains. The contention of the assessee that since the sale of the shares and securities fell within the purview of the third proviso to section 12 B (1) it could not be treated as a sale of capital assets within the meaning of section 12 B(1) was rejected by this Court. This Court observed that the object of the third proviso to section 12 B(1), in providing that "any distribution of capital assets under a will" shall not be treated as sale, exchange or transfer of capital assets for the purpose of section 12 B was that as long as there was distribution of capital assets in specie and no sale, there was no transfer for the purposes of that section, but if, there was a sale of the capital assets and profits or gains arose therefrom, the liability to tax (1) 409 arose, whether the sale was by the administrator or executor or a legatee, and that the expression "distribution of capital assets" in the third proviso to section 12 B(1) meant distribution in specie and not distribution of sale proceeds. That case has no application. There was no distribution of capital assets between the legatees : the assessee had pursuant to the authority reserved to him from the executor of the deceased person sold the shares and securities, and from the sale of shares and securities capital gains resulted. In the case in hand there is no sale and payment of price, but payment of the value of share under an arrangement for dissolution of the partnership and distribution the assets. The rights of the parties were adjusted by handing over to one of the partners the entire assets and to the other partner the money value of his share. Such a transaction is not in our judgment a sale, exchange or transfer of assets of the firm. In Commissioner of Income tax, Madhya Pradesh, Nagpur & Bhandara vs Dewas Cine Corporation(1) in dealing with the meaning of the expressions "Sale" and "sold" as used in section (10) (2) (vii) of the Income tax Act, 1922, this Court observed that the expression "sale" in its ordinary meaning is a transfer of property for a price, and adjustment of the rights of the partners in a dissolved firm by allotment of its assets is not a transfer for a price. In that case the assets were distributed among the partners and it was contended that the assets must in law be deemed to be sold by the partners to the individual partners in consideration of their respective shares, and the difference between the written down value and the price realised should be included in the total income of the partnership under the second proviso to section 10(2) (vii). This Court observed that a partner may, it is true, in an action for dissolution insist that the assets of the partnership be realised by sale of its assets, but property allotted to a family in satisfaction of his claim to his share, cannot be deemed in law to be sold to him. We therefore agree with the High Court that the question referred must be answered in the negative. The appeal fails and is dismissed with costs. G.C. Appeal dismissed.

In order to deal with extensive damage to property and to clear the debris and refuse caused by communal riots in 1947 in Punjab, statutes we 're enacted, giving suitable powers the last of which is the Punjab Development of Damaged Areas Act, 1951. Under section 2(d) of the Act the State Government declared by a Notification that the entire area within the walled city of Amritsar to be damaged area. The Improvement Trust formulated certain schemes which were sanctioned by the State Government. Thereafter, notice was issued to the first petitioner to vacate the shop in his possession and to the second and third petitioners to appear before the Land Acquisition Collector and explain the interest which they had in the, premises in their occupation sought to be acquired. In a petition under article 32, on the questions whether (1) the Act is violative of article 14, because (a) the power to declare an area as damaged is arbitrary, and (b) the property can be acquired at the discretion of the Trust either under the Punjab Town Improvement Act, 1922, or under the Act, compensation payable under the form& Act being more advantageous; (2) the restrictions imposed by the Act are unreasonable and violative of article 19(1 ) (f) and (g); and (3) the acquisition and compensation provisions of the Act violate article 31(2). HELD : (1) There is no violation of article 14. (a) The purpose of the Act is for framing and executing schemes of improvement in urban areas where damage has been caused to buildings by wholesale and serious rioting and hence, the power conferred on the State Government to declare an area damaged area is not arbitrary, unguided or uncanalised. If the whole of the walled city of Amritsar is a damaged area and part thereof is equally a damaged area. Therefore, it is not difficult to determine what is damaged area and the Notification in the present case is not vague. [773 A D] (b) No option is given to acquire the area either under the 1951 Act or Punjab Town Improvement Act according to the discretion of the Improvement Trust. The 1951 Act only provides that the Trust in framing a scheme may provide for all or any of the matters mentioned in section 28 of the Punjab Town Improvement Act, and that any scheme already framed under the latter Act is deemed to have been framed under 1951 Act. [771 A B] (2) The provisions of the Act are reasonable and are designed to serve the interest of the general public by executing schemes in a planned manner for the improvement of the damaged areas of the city and the restrictions imposed are protected by article 19(5) and (6) of the Constitution. [769 G H] 763 (a) Persons who are affected by a scheme are given an opportunity to file their objections which have to be given due consideration by the Improvement Trust before finalising the scheme, and by State Government before sanctioning the scheme. They have also the right to take part in, the proceedings before the Collector in the inquiry into claims for compensation. They are given notice of the award and are given a right to have their objections to the award fixing the compensation or the are ' I demarcated and other matters specified in section 20 referred to a Tribunal. The award, or any order passed by the Tribunal, is deemed to be a judgment 'and decree under the Civil Procedure Code, and affected persons have a right of appeal to the High Court and to this Court. [770 B F] (b) The fact that there are some newly built buildings which are not damaged would not make the provisions of the Act unreasonable nor justify an impediment being placed to a scheme which is designed to achieve a social purpose and is for the public good [770 G H] (c) The persons in occupation of shops have been assured in writing by the Improvement Trust of alternative accommodation and allotment of pucca shops as soon as possible. [771 H] (3) The compensation payable is neither inadequate nor illusory but on the other hand it is not less than the market value and may even be more. There is thus no violation of article 31(2) of the Constitution. [770 G 772 B] (a) The compensation payable to persons interested under the Act is more in the nature of a profit sharing scheme in that the minimum that they would be entitled for payment is the market value of the property which has come under the scheme and may even be more depending upon the income of the scheme and the expenditure incurred therefore. The com pensation is determined on principles similar to those under the Land Acquisition Act or the Punjab Town Improvement Act. [770 B C, H] (b) It cannot be contended that compensation is not payable for the buildings but only for the land, because, the definition of land under the Act is similar to that in section 3 (a) of the Land Acquisition Act and is comprehensive enough to include buildings also. [771 D] (c) The finalisation of the scheme will take time but under section 12(2) the submission of the scheme by the Trust is not to be later than three years. Therefore, it cannot be urged that the final compensation is not immediately payable and that it may take several years without any payment of interest during that time. In any case, the scheme is for the benefit of all those who have properties in the areas which are covered by the scheme and is on a profit sharing basis. There is thus no hardship or disadvantage. [771 E G]

Appeal No. 790 of 1957. Appeal from the judgment and decree dated February 10, 1954, of the Allahabad High Court in Civil Misc. Writ No. 280 of 1950. C. B. Aggarwala, G. C. Mathur and C. P. Lal, for the appellants. G. section Pathak and D. N. Mukherjee, for the respondent No. 1. 1960. November 11. The Judgment of the Court was delivered by MUDHOLKAR J. This is an appeal by the State of Uttar Pradesh against the decision of the Full Bench of the Allahabad High Court in a writ petition. In the writ petition the respondents challenged certain orders made by the Government of Uttar Pradesh under section 3, cl. (b) of the United Provinces , (XXVIII of 1947) requiring the respondents to pay bonus at certain rates for the years 1947 48 and 1948 49 to their workers and also payment of retaining allowances to the skilled seasonal workmen and clerical staff. The circumstances under which the orders were made are briefly these: 333 The Indian National Sugar Mills Workers ' Federation, Lucknow, served notices on various sugar factories in Uttar Pradesh on December 15, 1949, in which they made six demands. We need, however, mention only one of them as that alone is in controversy in this appeal. That demand related to the bonus for the year 1948 49 and to the restoration of the reduction which had been made in the previous year 's bonus. By that notice the Federation threatened a strike in the industry with effect from January 16, 1960, if the demands were not met by the sugar factories. Since this situation brought into existence an industrial dispute, the Government of Uttar Pradesh, in exercise of the power conferred by sections 6 and 10 of the , (XIV of 1947) appointed a Court of Inquiry and referred the dispute to it. The notification also stated the points which were referred to the Court of Inquiry. That notification was twice amended but nothing turns on those amendments. A full enquiry was held by the Court of Inquiry at which the representatives of both the employers as well as the employees were represented and material was placed before the Court of Inquiry by both the sides. The Court of Inquiry submitted its report to the Government on April 15, 1950. On receipt of this report the Government of Uttar Pradesh published the report in the Uttar Pradesh gazette on May 8, 1950, as provided for in section 17 of the . On July 5, 1950, the Government of Uttar Pradesh, in exercise of the powers conferred by section 3(b) of the Uttar Pradesh , issued a notification directing the various sugar factories to pay bonus to their workmen for the year 1948 49 as well as to pay certain amounts as bonus for the year 1947 48. A further direction was made in the notification for payment of retaining allowance to the skilled seasonal workmen and clerical staff with effect from the off season in the year 1950. Thereupon the Indian Sugar Millers Association, which is an Association of sugar factories in India and is registered under the Trade Union Act made a petition before the High Court at Allahabad under 334 article 226 of the Constitution for the issue of a writ against the Government of Uttar Pradesh prohibiting the Government from enforcing the notification. The writ petition was dismissed by the High Court on September 14, 1950, on the ground that the Association had no legal interest in the matter. Thereupon various sugar mills preferred separate writ petitions before the High Court, the respondents before us being one of them. As many as fourteen grounds were taken on their behalf in their writ petition. We are, however, concerned with only three of them to which Mr. G. section Pathak, who appears for the respondents confined his arguments. Before we refer to those grounds we would complete the narration of facts. The High Court of Allahabad allowed the writ petitions, in so far as the question of payment of bonus was concerned, though Sapru, J., one of the judges constituting the Full Bench, expressed a doubt as to the correctness of the view that the order of the State Government as regards the payment of bonus was invalid. After the decision of the High Court, the State of Uttar Pradesh applied for a certificate under article 133(1)(b) and article 133(1)(c) of the Constitution. The High Court having granted the certificate, the present appeal has been brought to this Court. In order to appreciate the points raised by Mr. G. section Pathak, it is necessary to set out the provisions of section 3 of the Uttar Pradesh . They are as follows: " If, in the opinion of the State Government, it is necessary or expedient so to do for securing the public safety or convenience, or the maintenance of public order or supplies and services essential to the life of the community, or for maintaining employment, it may, by general or special order, make provision (a) for prohibiting, subject to the provisions of the order, strikes or look outs generally, or a strike or lock out in connection with any industrial dispute; (b) for requiring employers, workmen or both to observe for such period, as may be specified in the order, such terms and conditions of employment as may be determined in accordance with the order; 335 (c) for appointing industrial courts; (cc) for appointing committees representative both of the employer and workmen for securing amity and good relations between the employer and workmen and for settling industrial disputes by conciliation; for consultation and advice on matters relating to production, organization, welfare and efficiency; (d) for referring any industrial dispute for conciliation or adjudication in the manner provided in the order ; (e) for requiring any public utility service, or any subsidiary undertaking not to close or remain closed and to work or continue to work on such conditions as may be specified in the order; (f) for exercising control over any public utility service, or any subsidiary undertaking, by authorising any person (hereinafter referred to as an authorised controller) to exercise, with respect to such service, undertaking or part thereof such functions of control as may be specified in the order; and, on the making of such order the service, undertaking or part thereof such functions of control as may be specified in the order; and, on the making of such order the service, undertaking or part, as the case may be, shall so long as the order continues to be carried on in accordance with any directions given by the authorised controller in accordance with the provisions of the order and every person having any functions of management of such service, undertaking or part thereof shall comply with such directions; (g) for any incidental or supplementary matters which appear to the State Government necessary or expedient for the purposes of the order: Provided that no order made under clause (b) (i) shall require an employer to observe terms and conditions of employment less favourable to the workmen than those which were applicable to them at any time within three months preceding the date of the order; (ii) shall, if an industrial dispute is referred for adjudication under clause (d), be enforced after the decision of the adjudicating authority is announced be or with the consent of, the State Government. " 336 The view taken by the High Court was that clause (b) of section 3 of the Uttar Pradesh , is prospective in operation in that thereunder it is open to the State Government to ask an employer or an employee to observe a term or a condition of employment in future and that consequently it is not competent thereunder to require an employer to pay bonus to workmen in respect of a period of employment which is already past. The view of the High Court was challenged before us on behalf of the State. According to the State the provisions of the aforesaid clause are wide enough to permit the making of such a direction to the employer because by doing so the State Government would only be imposing a condition of employment in future. In answer to this contention Mr. Pathak has, as already stated, raised three points and they are as follows: (1) Clause (b) of section 3 does not operate retrospectively and must be construed as having a prospective operation only. (2) This clause does not apply at all where an industrial dispute has arisen and that the appropriate provision under which the State Government can take action where an industrial dispute has arisen is cl. (3) If cl. (b) is susceptible of the interpretation that it is applicable even when an industrial dispute has arisen then it is ultra vires in as much as it would enable the State Government to discriminate between an industry and an industry or an industrial unit and another industrial unit or between a workman and a workman by referring some cases for adjudication to an industrial court under cl. (d) and passing executive order itself in respect of others. The provisions of cl. (b), according to him, are violative of article 14 of the Constitution. Further, according to him, they are also violative of the provisions of article 19(1)(g) of the Constitution in as much as they confer an arbitrary power on the State Government to require an employer to pay whatever it thinks fit to an employee and thus place an unreasonable restriction on the rights of the employer to carry on his business. 337 We entirely agree with the learned judges of the Allahabad High Court that cl. (b) of section 3 cannot be given a retrospective effect. But we are unable to agree with them that the State Government in making a direction to the employers to pay bonus for the years in question purported to give a retrospective operation to the provisions of that clause. The order made by the State Government in regard to bonus is to the effect that it shall be paid for the year 1947 48 to those persons who worked during that year and for the year 1948 49 to those persons who worked in that year. This payment was directed to be made within six weeks of the making of the order. By giving this direction the State Government did no more than attach a condition to the employment of workmen in the year 1950 51 in sugar factories affected by the order. That is all that it has done. Mr. Pathak contended that bonus has certain attributes of a wage and wage being a matter of contract can only be a term of employment agreed to between the employer and the employee but could not be a condition of employment which could be imposed by a statute or which could be imposed by a Government acting under a statute. We agree that normally wage is a term of contract but it would be futile to say that it cannot be made a condition of employment. The Minimum Wages Act provides for the fixation of a statutory minimum wage payable to a worker in respect of certain types of employments and is an instance of wage being made a condition of employment. That apart, whether wage or bonus is a term of a contract or a condition of employment it is clear that section 3 empowers the State Government to require the employers and workmen or both to observe any term or condition of employment for a specified period. Since the law enables the State Government to impose a term it is apparent that the legislature which enacted that law did not import into that word a con. sensual sense. We cannot, therefore, accept the argument that under cl. (b) it was not open to the State Government to make the payment of bonus to 338 workmen a condition of their employment in future and thus augment their past wages. Mr. Pathak then referred to the following observations in the judgment of Bhargava, J. s " Obviously there can be no question of requiring any one to observe for a future period terms and conditions of employment which have already remained effective and have already been carried out by those persons ". According to Mr. Pathak the effect of the order of the Government is to add a new term or a condition with regard to employment for a period which is already over. We would again point out that this is not the effect of the order of the Government. The effect of that order is merely to require the employer to pay an additional sum of money to his employees as a term and condition of work in future. Mr. Pathak, however, said that this would involve payment of bonus even to new employees, that is, those who had not participated in earning the profits in the past and that this would be contrary to the very conception of bonus. The answer to that is that under the order of the Government such bonus is payable only to those workers who had worked during the years in question and not to new employees. It is further to be borne in mind that in the dispute in question the employees were bargaining in their collective capacity and, therefore, the question whether the personnel forming the employees of the factories in July, 1950, when the order was made by the Government, and in the years 1947 48 and 1948 49 to which the dispute relates was the same is quite immaterial. As has been rightly pointed out by Sapru, J., " The employees might well have taken in the industrial dispute the line that the payment of bonus in respect of the years 1947 48 and 1948 49 to the workmen employed in those years was regarded by those who were employed in future as a preliminary and essential condition for not only the settlement of the industrial dispute in progress but also for carrying on their future work in sugar factories ". We also concur with the observations of the learned judge that by coming 339 conceded the State Government was not passing an order which will have retrospective effect but was passing an order which was to ensure that the work. men to be employed in the year 1950 would work in a contented manner. It must not be forgotten that the dispute was in the present, that is, it existed when the impugned order was made, though its origin was in the past. What the order did was to resolve that dispute and this it could only do by removing its cause. Mr. Pathak then relied upon the following observations of Bhargava, J., in L. D. Sugar Mills vs U. P. Government (1): " The expression 1 to observe for such period as may be specified, such terms and conditions of employment as may be determined ' gives an indication that clause (b) of section 3 of the U. P. , is meant for the purpose of passing orders by which the Government gives directions about what the terms and conditions of employment should be and not how a particular term and condition of employment already in existence should be acted upon. " Bhargava, J. 's decision was, however, reversed in Ram Nath Koeri and Another vs Lakshmi Devi Sugar Mills and Ors. (2) by a division bench of the Allahabad High Court in Letters Patent Appeal brought against Bhargava, J. 's decision. We agree with the view taken by the Appellate Bench. In our opinion, therefore, there is nothing in cl. (b) of section 3 of the Act which prohibited the State Government from making a direction to the sugar factories with regard to the payment of bonus for the years 1947 48 and 1948 49 in their order of July 7, 1950 and that by making such a direction the State Government was not giving a retrospective effect to the provisions of that clause. In this connection it is relevant to remember that any direction as to payment of bonus must inevitably be based on the available surplus, and such surplus can be determined only at the end of a given year. Therefore, what the impugned (1) A.I.R. 1954 All. 705, 714. (2) (1956) II L. L. J. 11. 340 order purports to do is to require the employers to pay specified amounts in future, though the said ,amounts are fixed by reference to the profits made in the two preceding years. If a direction as to payment ;of bonus can be issued under section 3(b) it cannot, therefore, be said to be retrospective. The next argument of Mr. Pathak appears, at first sight, to be more formidable. He points out that undoubtedly an industrial dispute had arisen, and indeed it is upon that basis that the State Government proceeded to appoint a Court of Inquiry. Therefore, according to Mr. Pathak resort could be taken by the State Government only to the special provisions of cl. (d) and not to the more general provisions of cl. (b) of section 3. In other words, where there is an industrial dispute, the appropriate thing for the Government to do is to refer it for conciliation or adjudication under the provisions of cl. (d) and not to deal with the matter by an executive order as it has done in this case. Mr. Pathak then refers to a further passage from the judgment of Bhargava, J., just cited which is as follows: " It appears from the language that this provision was not meant for the purpose of dealing with individual disputes arising out of the application of a term or condition of employment and no power was granted to the State Government under this provision of law, to sit as an adjudicator to decide a dispute that might have arisen relating to the working and actual application of terms and conditions of employment already in force. The provision was for the purpose of enabling the State Government to vary the agreed terms and conditions of employment for purposes specified in a. 3 of U. P. , under the pressing necessities or expediency justifying such course of action. " We entirely agree with Mr. Pathak that the normal way of dealing with an industrial dispute under the Act would be to have it dealt with judicially either by conciliation or by adjudication and that judicial process cannot be circumvented by resort to executive action. The proceeding before a conciliator or an 341 adjudicator is, in a sense, a judicial proceeding because therein both the parties to the dispute would have the opportunity of being heard and of placing the relevant material before the conciliator or adjudicator. But there may be an emergency and the Government may have to act promptly " for securing the public safety or convenience or the. maintenance of public order or supplies and services essential to the life of the community or maintaining employment. " It was, therefore, necessary to arm it with additional powers for dealing with such an emergency. Clause (b) of section 3 was apparently enacted for this purpose. An order made thereunder would be in the nature of a tempor ary or interim order as would be clear from the words " for such period as may be specified " appearing therein and from the second proviso to section 3. Under this proviso where an industrial dispute is referred for adjudication under cl. (d) an order made under cl. (b) cannot be enforced after the decision of the adjudicating authority is announced by or with the consent of the State Government. It would, therefore, follow from this that where the Government has made an executive order, as it did in this case, under cl. (b) of section 3, it is open to the aggrieved party to move the Government to refer the industrial dispute for conciliation or adjudication under cl. (d) of section 3. Mr. Pathak, however, stated that under this section, the Government has a discretion whether or not to refer a dispute for conciliation or adjudication under cl. But in our opinion where once the Government has acted under cl. (b) on the ground that it was in the public interest to do so, it would not be open to the Government to refuse to refer the dispute under cl. (d) for conciliation or adjudication. Mr. C. B. Agarwal, who appeared for the State of Uttar Pradesh conceded, and we think rightly, that this would be so and added that in case the State Government was recalcitrant it could be forced to do its duty by the issue of a writ of mandamus by the High Court under article 226 of the Constitution. There is a further argument of Mr. Pathak which must be noticed and that argument is that there is 342 nothing in cl. (b) which limits its operation to an emergency and that it is, therefore, not open to us to place a construction thereon of the kind we are placing. The opening words of section 3 themselves indicate that the provisions thereof are to be availed of in an emergency. It is true that even a reference to an arbitrator or a conciliator could be made only if there is an emergency. But then an emergency may be acute. Such an emergency may necessitate the exercise of powers under cl. (b) and a mere resort to those under cl. (d) may be inadequate to meet this situation. Whether to resort to one provision or other must depend upon the subjective satisfaction of the State Government upon which powers to act under section 3 have been conferred by the legislature. No doubt, this result is arrived at by placing a particular construction on the provisions of that section but we think we are justified in doing so. As Mr. Pathak himself suggested in the course of his arguments, we must try and construe a statute in such a way, where it is possible to so construe it, as to obviate a conflict between its various provisions and also so as to render the statute or any of its provisions constitutional. By limiting the operation of the provisions of cl. (b) to an emergency we do not think that we are doing violence to the language used by the legislature. Further, assuming that the width of the language could not be limited by construction it can be said that after the coming into force of the Constitution the provisions can, by virtue of article 13, have only a limited effect as stated above and to the extent that they are inconsistent with the Constitution, they have been rendered void. In our view, therefore, the provisions of cl. (b) of section 3 are not in any sense alternative to those of cl. (d) and that the former could be availed of by the State Government only in an emergency and as a temporary measure. The right of the employer or the employee to require the dispute to be referred for conciliation or adjudication would still be there and could be exercised by them by taking appropriate steps. Upon the construction we place on the 343 provisions of cl. (b) of section 3 it is clear that no question of discrimination at all arises. Similarly the fact that action was taken by the Government in an emergency in the public interest would be a complete answer to the argument that that action is violative of the pro visions of article 19(1)(g). The restriction placed upon the employer by such an order is only a temporary one and having been placed in the public interest would fall under cl. (6) of article 19 of, the Constitution. Upon this view we hold that the High Court was in error in issuing a writ against the State Government quashing their order in so far as it related to payment of bonus. The appeal is allowed and order of the High Court is set aside. Costs of this appeal will be paid by the respondents. Appeal allowed.

The appellant who was a shopkeeper was convicted for the second time by the Additional District Magistrate for contravening the provisions of section 7(1) of the Punjab Trade Employees Act, 1940, under which he was required to keep his shop closed on the day which he had himself chosen as a " close day ". He raised the plea that the Act did not apply to his shop as he did not employ any stranger but that himself alone worked in it and that the application of section 7(1) to his shop would be violative of his fundamental rights under articles 14, 19(1)(f) and (g) of the Constitution and also that the restriction imposed was not reasonable within article 19(6) as it was not in the interest of the general 344 public. The High Court dismissed his application for revision of the Magistrate 's order. On appeal on a certificate of the High Court, Held, that the main object of the Act was the welfare of the employees and to protect their as well as the employers ' health by preventing them from over work. Such a restriction being in the interest of the general public was reasonable within the meaning of article 19(6) of the Constitution. The provisions of section 7(1) were constitutionally valid and were justified as for securing administrative convenience and avoiding evasion of those provisions designed for the protection of the workmen. Manohar Lal vs The State, ; , referred to.

Civil Appeal No. 1482 of 1972. Appeal by Special Leave from the Judgment and order dated 20th September 1971 of the Punjab and Haryana High Court in Income Tax Reference No. 12/71. Hardayal Hardy, K. C. Dua and Miss A. Suhhashini for the Appellant. G. C. Sharma, P. A. Francis, Anoop Sharma and P. K. Mukherjee for the Respondent. The Judgment of the Court was delivered by BHAGWATI, J. This appeal by special leave arises out of an assessment to income tax made on M/s Groz Backert Saboo Ltd. (hereinafter referred to as the assessee) for the assessment year 1962 63 the corresponding accounting year being the financial year being 31 st March, 1962. The assessee set up in collaboration with M/s Theodor Groz & Soehne and Ernst Backert, West Germany (hereinafter referred to as the West German Collaborators) a factory for fabrication and manufacture of hosiery needles and it was not disputed on behalf of the assessee that this factory started business sometime prior to the commencement of the relevant year of account. It appears that in the early part of the relevant accounting year, the assessee received from the West German Collaborators consignment of machinery costing Rs. 9,45.545/ and along with this consignment, the West German Collaborators also sent to the assessee certain goods free of cost. These goods consisted partly of raw materials and partly of semi finished needles at various stages of manufacture. The invoice in respect of this consignment was dated 4th April, 1961 and it showed only the price of the machinery consigned to the assessee and did not make any mention of the raw materials and semi finished needles supplied to the assessee along with this consignment, since these goods were supplied free of cost and no charge was made in respect of the same. 374 The Custom Authorities raised objection in respect of these goods and a separate invoice had, therefore, to be sent by the West German Collaborators showing Rs. 44,448.20 as the value of the raw materials, namely, wire and strip and Rs. 30,000/ as the value of the semi finished needles supplied to the assessee. These goods were not entered in the books of account of the business immediately on receipt by the assessee but they were brought into the books for the first time on 30th September, 1961 by making the following entries: Rs. 44,448.20 debited to the account of "Wire and Strip" and credited to the "Wire and Strip Gift Account" and Rs. 30,000/ debited to the account of "Semi processed Needles" and credited to the "Semi processed Needles Gift Account". The assesses utilised these goods in the manufacture of finished products and sold the same in the market and the sale proceeds received by the assessee were credited in the trading account maintained in the books of account of the business, since they represented revenue receipts arising from the sale of the finished products. On 31st March, 1962, being the last date of the accounting year, the assessee closed the "Wire and Strip Gift Account" and the "Semi Processed Needles Gift Account" by transferring the respective sums of Rs. 14,448.20 and Rs. 30,000/ to the credit of the "Capital Reserve Account" and debited an aggregate sum of Rs. 74,448.20 to the trading account by making corresponding credit entries in the accounts of "Wire and Strip" and 'Semi processed Needles". The net effect of these entries was that the profit of the assessee was reduced by Rs. 74,448.20. The Income Tax officer, in course of the assessment of the assessee to income tax for the assessment year 1962 63, took the view that the debit of Rs. 74,448.20 was wrongly made in the trading account as on 31st March, 1962 since no monies were expended by the assessee in acquiring the raw materials and semi finished needles, but they were received by way of gift from the West German Collaborators and hence no amount was deductible in respect of the value of these goods. The same view was taken by the Appellate Assistant Commissioner in appeal and on further appeal, the Tribunal also affirmed the same view. This led to a Reference by the Tribunal at the instance of the assessee and the following two questions were referred for the opinion of the High Court: 1. Whether on the facts and in the circumstances of the case, the sum of Rs. 74,448.20 being the actual value of raw material received from German Collaborators free of cost represented Revenue receipt ? 375 2. Whether on the facts and in the circumstances of the case, the amount of Rs. 74,448/ being the actual value of raw material received free of cost from German collaborators was rightly debited at that value to the revenue account ? The High Court misapprehended the true nature and scope of the controversy between parties and seemed to proceed on the erroneous impression that what the Tribunal had held was that the raw materials and semi finished needles received by the assessee from the West German Collaborators constituted revenue receipt and its value was, therefore, liable to be taxed as income in the hands of the assessee. The High Court held that the value of these goods could not be treated as revenue receipt because they had been received by way of gift and in any even, even if they constituted revenue receipt, they could "in no sense be income" since they were take out of the ambit of taxability by sub section (3) of section 10 of the Income Tax Act, 1961. The High Court accordingly answered the questions referred it by the Tribunal in favour of the assessee and against the Revenue. The Revenue thereupon brought the present appeal with special leave obtained from this Court. It was found as a fact by the Tribunal, and indeed there was no dispute about it, that the raw materials and semi finished needles were received by the assessee from the West German Collaborators free of cost by way of gift. These raw materials and semi finished needles were received some time in April, 1961 and it was only on 30th September, 1961 that they were for the first time introduced in the books of account of the business. There can, therefore, be no doubt that these raw materials and semi finished needles were received by the assessee as capital assets and subsequently on 30th September, 1961 they were transferred to the business as part of its stock If that be so, the cost of these raw materials and semi finished needles to the business could not be said to be nil, but, on the principle laid down by this Court in Commissioner of Income Tax vs Sherinbai Kooka(1) and subsequently followed in Commissioner of Income Tax vs Hanrepara Tea Co. Ltd.(2), it would be the market value of there raw mate rials and semi finished needled as on 30th September, 1961. It is now well settled by these decisions that where an assessee converts his capital assets into stock in trade and starts dealing in them, that able profit on the sale must be determined by deducting from the sale . (1) (2) 376 proceeds the market value at the date of their conversion into stock in trade (since this would be the cost to the business) and not the original cost to the assessee. Here, the original cost of these raw materials and semi finished needles to the assessee was undoubtedly nil because these goods were received by the assessee from the West German Collaborators free of cost, but they were introduced in the business and converted into its stock on 30th September, 1961 and, therefore, their market value as on 30th September, 1961 would represent the cost to the business and that would have to be taken into account in determining the profit arising from the sale of the manufactured products. The entries made by the assessee in the books of account of the business on 30th September, 1961 clearly reflected this opinion. The assessee debited the sums of Rs. 44,448.20) and Rs. 30,000/ representing respectively the market value of these raw materials and semi finished needles to the stock accounts of "Wire and Strip" and "Semi processed Needles" which would clearly show that these goods were treated by the assessee as having been introduced in the business as part of its stock at their market value represented by the sums of Rs. 44,448.20 and Rs. 30,000/ . The position was no different than what it would have been if, instead of giving these raw materials and semi finished needles to the assessee free of cost, the West German Collaborators had gifted the sums of Rs. 44,448.20 and Rs. 30,0000/ to the assessee and the assessee had introduced these amounts in the business and an identical quantity of raw materials and semi finished needles had been purchased for the business with these amounts. The cost of raw materials and semi finished needles thus purchased would have been clearly liable to be deducted from the sale proceeds of the finished products manufactured out of them in determining the profit of the business. Would the position then be different if instead, the West German Collaborators gave these raw materials and semi finished needles to the assessee free of cost and the assessee introduced them in the business as part of its stock. We do not sec and distinction in principle between these two types of cases and we are clearly of the view that the cost of these law materials and semi finished needles to the business represented by the sums of Rs. 44,448.00 and Rs. 30,000/ debited in the respective accounts of "Wire and Strip" and "Semi Processed Needles" was liable to be deducted from the sale proceeds of the finished products in arriving at the profit of the business. It is true that initially on 30th September, 1961 the credit entries for the sums of Rs. 44,448.20 and Rs. 30,000 were made in "Wire and Strip Gift Account" and "Semi processed Needles Gift Account" respectively and it was only on the last date of the ac count year, namely, 31st March, 1962 that these amounts were trans 377 ferred to the credit of the Capital Reserve Account. But that cannot make any difference to the correct legal inference to be drawn from the proved facts because the nomenclature of the account or accounts in which the credit entries were made is not material but what is really decisive is that these amounts were debited to the respective accounts of "Wire and Strip" and "Semi processed Needles" as representing their real value on 30th September, 1961. These raw materials and semi finished needles were introduced in the business as part of its stock at their real value represented by the sums of Rs. 44,448.20 and Rs. 30,000/ . The aggregate amount of Rs. 74,448.20 made up of Rs. 44,448.20 and Rs. 30,000/ was, therefore, liable to be deducted in determining the profit of the business and it was rightly debited to the trading account. We accordingly dismiss the appeal and answer the questions referred by the Tribunal in favour of the assessee and against the Revenue. The Revenue will pay the costs of the appeal to the assessee. S.R. Appeal dismissed.

The appellant who was working as an investigator in the office of the Chief Controller of Imports and Exports was charged, found guilty and convicted and sentenced to suffer rigorous imprisonment for 18 months on each count for an offence under Sections 5(1) (d) and 5(2) of the Prevention OF Corruption Act, 1947 and section 161 I.P.C. and a fine of Rs. 200/ or in default to undergo further rigorous imprisonment under section 5(2) of the Act. His appeal to the High Court was dismissed and the conviction and sentence were confirmed. Special leave was granted by the Supreme Court limited to the question. Of validity of sanction accord under section 6 of the Prevention of Corruption Act, 1947. The appellant died during the pendency of the appeal and his near relatives were granted permission to continue the appeal. Dismissing the appeal, the. Court ^ HELD 1. The preliminary objection of the State as to the abatement of the appeal because of the death of the appellant taking into account preparedness to conclude that the sentence might he set aside must be negatived. [352D] (a) As per the proviso to section 394(2) of the Criminal Procedure Code, 1973, where the appeal is against the conviction and sentence of imprisonment and the appellant dies during the pendency of the appeal, any of his near relatives may, within the time prescribed therein, apply to the appellate Court before which the appeal is pending for leave to continue the appeal and if the leave is granted the appeal shall not abate. [352A B] (b) The appellant, in the, instant case, has preferred the appeal against his conviction and sentence of imprisonment and also sentence of fine. After his death his near relatives as contemplated in the Explanation to sub section (2) of section 394 Crl. P.C., applied to continue the appeal and were granted leave to continue the appeal. Therefore, the near relations of the deceased can continue the appeal and even if the respondent State concedes that the sentence of fine be set aside yet the appeal would not abate if leave is granted o the near relation of the deceased to continue the appeal. [352C D] 349 2. 'The sanction accorded, for prosecution of the appellant under section 6 of the Prevention of Corruption Act, 1947 by the Joint Chief Controller of Imports and Exports is valid in law: [355H, 356A] (a) The instant case is governed by Central Civil Services (Classification, Control & Appeal) Rules, 1965 and in view of S.R.O. 631 issued by the President, in exercise of the power conferred by sub rule (2) of rule 11, clause (b) of sub rule (2) of rule 14, and sub rule (2) of rules 23 of the Central Civil Services (Classification, Control & Appeal) Rules, 1957, which order was saved by rule 34 of the 1965 Rules. [353C D] (b) Rule 12(1) and (2) of 1965 Rules is in pari materia with rule 14 of 1957 Rules. Rule 2 of 1965 Rules confers power on the President to impose any of the penalties specified in rule 11 on any Government servant. Sub rule (2) (b) provides that any person appointed to a Central Civil Post included in the General Central Service by the authority specified in this behalf by a general or special order of the President or where no such order has been issued, by the appointing authority specified in the Schedule in this behalf, may impose any of the penalties specified in rule 11 which includes the penalty of removal from service. Therefore, the President has the power to issue any general or special order to confer power to impose penalties as specified in rule 11 on any authority other than the one specified in the Schedule in this behalf. If the order issued by the President. S.R.O. 631 under corresponding rule 11 and the relevant rules bearing on the subject of 1957 Rules is not shown to be inconsistent with any of the Rules included in 1965 Rules, obviously such order would be saved under rule 34. There being no inconsistency as contemplated by Rule 34, indisputably the order issued by the President S.R.O. 631 along with the schedule would be saved. Once S.R.O. 631 is saved, the relevant entry in the schedule in respect of the origination of C.C.I.E. would be saved. Accordingly the entry in the order issued by the President would supplant the corresponding entry in 1965 Rules and would have to be substituted for the entries in the relevant item in the Schedule. The necessary consequence would be that in the case of the organization of The C.C.I.E. for all posts in Headquarters office, lt. C.C.I.E. would be both the appointing and the disciplinary authority having tho power to remove from service such persons belonging to Class III services. Now, the appellant was indisputably holding a post in Class III service in the Headquarters office of the organisation of C.C.I.E. He was at the relevant time holding the post of Investigator which is admittedly a Civil Post in Class III service in the office of C.C.I.E. Indisputably, therefore. C.C.I.E. would be both the appointing and disciplinary authority with power to remove him from service. Therefore, Jt. C.C.I.E. would be competent to accord sanction as envisaged by section 6(1)(c) of the Act. [355B H] The fact that the administrative department in respect of the office of C.C.I.E. is the Ministry of Foreign Trade & Supply does not make any difference because C.C.I.E. is a separate office with its own establishment.[1354A] R. J. Singh Ahluwalia vs State of Delhi, A.L.R. ; distinguished.

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

On the question whether three several sums appropriated by the Directors of the respondent company towards reserves on the 8th August, 1963 out of the profits of the year ending 31st March, 1963, should be added to other items for computation of the capital of the respondent as on the 1st day of April, 1963 in terms of rule 1 of the Second Schedule to the , HELD: The fact that the directors were unable to appropriate the SUMS to reserves of different kinds cannot make any difference to the nature or quality of the appropriation of the profits to reserves as determined by the directors after 1st April, 1963. Their determination to appropriate the sums mentioned to the three separate classes of reserves on the 8th of August, 1963 must be related to the 1st of April, 1963 i.e. the beginning of the accounts for the new year and must be treated as effective from that day. [524D] Commissioner of Income tax, Delhi vs Aryodya Ginning & Manufacturing Co. Ltd., and Commissioner of Income tax vs Vasantha Mills Ltd., , referred to.

Appeal No. 199 of 1955. Appeal by special leave from the judgment and order dated the 17th day of April 1953 of the Nagpur High Court in Miscellaneous Civil Case No. 53 of 1950. Nur ud din Ahmad and Naunit Lal, for the appellant. C. K. Daphtary, Solicitor General of India, G. N. Joshi and B. H. Dhebar, for the respondent. February section The Judgment of the Court was delivered by BHAGWATI J. This is an appeal with special leave from the Judgment and Order of the High Court of Judicature at Nagpur on a reference made by the Income tax Appellate Tribunal, Bombay Branch 'A ' under section 66(1) of the Indian Income tax Act XI of 1922 whereby the High Court answered the ref erred question against the appellant. The appellant, a firm of Messrs Pratapmal Laxmichand of Betul consisted of 7 partners, viz., Misrilal Goti, Meghraj Goti, Panraj Goti, Phulchand, Basantibai, Ratanbai and Gokulchand Goti. A deed of partnership was executed on the 12th February 1944 by all the partners except Gokulchand Goti who happened to be in the Seoni Jail being a security prisoner under the Defence of India Rules. He was unable to sign the same in spite of all efforts to obtain his signature in prison. An application for registration of the firm under section 26 A of the Act for the assessment year 1943 44 was made on the 24th March 1944 personally signed by the other 6 partners of the firm and was accompanied by the deed of partnership which also had been signed by those 6 partners. The Special Income tax Officer, Nagpur, rejected the application on the ground that the deed itself was not valid inasmuch as it had not been signed 93 by all the partners mentioned in the body and there was no signature of Gokulchand on the deed and the application. An appeal was taken to the Appellate Assistant Commissioner against this decision of the Special Income tax Officer on the 24th April 1944. Gokulchand appended his signature to the deed of partnership in Seoni Jail on the 9th January 1945. The appeal was heard before the Appellate Assistant Commissioner on the 20th March 1947 and he passed an order on the 17th February 1948 cancelling the order of the Special Income tax Officer and directing him to register the firm after obtaining the signature of Gokulchand both on the application for registration and the deed of partnership. At the instance of the Commissioner of Income tax, C. P. and Berar, an appeal was filed against this order of the Appel late Assistant Commissioner by the Income tax Officer, Spl. I.T. cum E.P.T. Circle, Nagpur, before the Income tax Appellate Tribunal. The Tribunal allowed the appeal by its order dated 11/16 October 1948 observing that the Special Income tax Officer was justified in refusing to register the firm as the application for registration was not signed by Gokulchand, that Rule 2(c) of the Indian Income tax Rules, 922, on which the Appellate Assistant Commissioner teems to have relied did not apply and the Appellate Assistant Commissioner was not justified in directing the Income tax Officer "to register the firm after obtaining the signature of Seth Gokulchand both in the application for registration and the deed of partnership". The appellant applied for a reference to the High Court under section 66(1) of the Act and the Tribunal referred the following question arising out of its order for the opinion of the High Court: "Whether on the facts and in the circumstances of the case the Appellate Assistant Commissioner was legally competent to direct the Income tax Officer to register the firm after obtaining the signature of Seth Gokulchand both in the application for registration and in the deed of partnership". When the statement of the case was being drawn up by the Tribunal, counsel for the appellant suggested that the words 94 appearing in para 6 of the statement, viz., "No application was submitted to the Appellate Assistant Commissioner seeking his permission under Rule 2(c) of the Indian Income tax Rules" be deleted. He also suggested that the concluding words in the question referred to the High Court, viz., "after obtaining the signature of Seth Gokulchand both in the application for registration and in the deed of partnership" be deleted. With regard to the latter suggestion the Tribunal observed that they were unable to delete the same inasmuch as the words sought to be deleted were the concluding words appearing in the Appellate Assistant, Commissioner 's order dated the 17th February, 1948 giving directions to the Income tax Officer and were words which were material to the question before the High Court. With regard to the first suggestion counsel for the appellant had stated that the appellant had submitted three applications to the Appellate Assistant Commissioner all dated 20th March, 1947 and that it would be wrong to state that no application was submitted to the Appellate Assistant Commissioner. The allegation made by the appellant was properly investigated subsequently and the Tribunal was satisfied that the appellant did not appear to have put in the application dated 20th March, 1947 as alleged. This being the position the Tribunal stated that no change in the statement of case was called for as suggested by the appellant. It was on this statement of case by the Tribunal that the referred question came to be determined by the High Court. Before the High Court the appellant had applied on the 27th November, 1950 that the three certified copies of the three applications dated 20th March, 1947 made by the appellant to the Appellate Assistant Commissioner with their originals should be sent for by the High Court from the Incomeax Tribunal and an order had been made accordingly. he High Court was of the opinion that the Appelate Assistant Commissioner should have ordered egistration of the firm provided there was an application before him duly signed by all the partners. As, 95 however, there was no such application, he could not have directed the Income tax Officer to register the firm after obtaining the signature of Gokulchand on the application and also in the partnership deed . The High Court accordingly answered the referred question in the negative. An application under section 66 A(2) of the Act for a certificate for leave to appeal to this Court against that order was dismissed by the High Court but the appellant obtained special leave to appeal against the same from this Court on the 6th December, 1954. The main question that arises for our determination in this appeal is: What are the powers of the Appellate Assistant Commissioner on the hearing of an appeal against the refusal by the Income tax Officer to register a firm under section 26 A of the Act and Rule 2 of the Indian Incometax Rules, 1922? Section 26 A of the Act provides: " (1) Application maybe made to the Income tax Officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purposes of this Act and of any other enactment for the time being in force relating to income tax or supertax. (2) The application shall be made by such person or persons, and at such times and shall contain such particulars and shall be in such form, and be verified in such manner, as may be prescribed; and it shall be dealt with by the Income tax Officer in such manner as may be prescribed". Rule 2 of the Indian Income tax Rules, 1922, which was in force at the relevant period, in so far as is material for the purpose of this appeal, provided: "Any firm constituted under an Instrument of Partnership specifying the individual shares of the partners may, under the provisions of section 26 A of the Indian Income tax Act, 1922 register with the Income tax Officer the particulars contained in the said Instrument on application made in this behalf. Such application shall be signed by all the partners 96 (not being minis) personally and shall be made (a) before he income of the firm is assessed for any year under section 23 of the Act, or (b). . or (c) with the permission of the Appellate Assistant Commissioner hearing an appeal under section 30 of the Act, before the assessment is confirmed, reduced, enhanced or annulled, or (d) (e) The decision of the Income tax Officer in regard to the invalidity of the deed of partnership inasmuch as it did not bear the signature of Gokulchand was not challenged by the appellant at any stage of the proceedings nor in the statement of case before us. Counsel for the appellant, however, relying on a passage in the "Law and Practice of Income tax by Kanga and Palkhivala", 3rd Ed., at page 754, urged that it was not necessary that the partnership agree ment should be signed by all the partners and if the agreement had not been signed by one of the partners but that partner had assented to the agreement and put it forward along with the other partners for registration, the agreement would be admissible for registration. In the first instance, it was not open to the appellant to urge any point which was not taken in the statement of case and even if it was open to him to urge that contention we do not think it necessary to express any opinion on the correctness or otherwise of the statement above referred to in view of the construction which we put on Rule 2 of the Indian Income tax Rules, 1922. The Rules were framed under section 26 A(2) of the Act and bad statutory force. Under Rule 2, the application for registration of the firm was to be made to, the Income tax Officer and the particulars contained in the Instrument of Partnership specifying the individual shares of the partners were to be registered with him on an application made in that behalf signed by all the partners (not being minors) personally. No such application was submitted to the Special Income tax Officer in this case before he 97 made his order on the 18th March 1944, and on the materials as they stood on record then, the order of the Special Income tax Officer was perfectly justified. No such application signed by all the partners of the firm including Gokulchand was also available before the Appellate Assistant Commissioner when he heard the appeal on the 20th March 1947. The appellant contended that he had in fact filed in the office of the Appellate Assistant Commissioner on the said 20th March 1947 three applications one of which was such an application signed by all the partners personally including Gokulchand and it was strenuously urged on his behalf that the Appellate Assistant Commissioner passed his order dated the 17th February 1948 ignoring the said application which had been filed in his office. It was urged that, if the Appellate Assistant Commissioner had before him the said application dated the 20th March 1947 signed by all the partners personally including Gokulchand, it was his duty to direct a registration of the firm himself without anything more inasmuch as the deed of partnership had been signed by Gokulchand on the 9th January 1945 and the application for registration of the firm dated the 20th March 1947 bore his signature. The direction given by the Appellate Assistant Commissioner to the Income tax Officer to register the firm was, it was contended, therefore proper and we were asked to treat the words "after obtaining the signature of Seth Gokulchand in the application for regis tration and in the deed of partnership" as superfluous. We are not impressed with this argument. As appears abundantly clear from the terms of the order made by the Appellate Assistant Commissioner himself and also from the statement of case prepared by the Tribunal, the application signed by all the partners personally including Gokulchand was not before the Appellate Assistant Commissioner. An application had been made by the appellant before the Tri bunal to amend the statement of case by deleting from para 6 thereof the words "no application was submitted to the Appellate Assistant Commissioner 13 98 seeking his permission under Rule 2(c) of the Indian Income tax Rules" but the same had been rejected by the Tribunal as a result of proper investigation conducted by it subsequently, the Tribunal stating that they were satisfied that the assessee did not appear to have put in an application dated the 20th March 1947 as alleged. The reference was beard by the High Court on this statement of case prepared by the Tribunal and no steps were taken by the appellant before the High Court for having the statement of case amended by the Tribunal or for having a further statement of case submitted by the Tribunal recording therein the facts alleged by the appellant. We must, therefore, decide this appeal on the facts stated in the statement of case by the Tribunal and on the basis that the application for registration dated the 20th March 1947 signed by all the partners personally including Gokulchand was not before the, Appellate Assistant Commissioner. If that was the position, the only power which the Appellate Assistant Commissioner bad under Rule 2(c) was to accord permission to the appellant to make the application in proper form to the Incometax Officer signed by all the partners personally including Gokulchand before the assessment was confirmed, reduced, enhanced or annulled. The Appellate Assistant Commissioner had, under the Rule, no power to direct the Income tax Officer to register the firm after obtaining the signature of Gokulcband both in the application for registration and in the deed of partnership as he did. As a matter of fact the appellant did not ask for such permission from the Appellate Assistant Commissioner nor was any revision taken by the appellant before the Commissioner under section 33 A of the Act against the said order of the Appellate Assistant Commissioner. The appellant contented himself with arguing that the order made by the Appellate Assistant Commissioner was justified and the sole controversy which arose between the parties and was the subject matter of the referred question was whether the Appellate Assistant Commissioner was legally competent to direct the Income 99 tax Officer to register the firm after obtaining the signature of Gokulchand both in the application for registration and in the deed of partnership. The appellant attempted no doubt to have the words "after obtaining the signature of Seth Gokulchand both in the application for registration and in the deed of partnership" deleted from the referred question. That attempt, however, failed and no steps were taken by the appellant before the High Court at the hearing of the reference to either have the referred question amended or reframed in order to bring into prominence his contention in regard to the powers of the Appellate Assistant Commissioner. On the question as framed, the only answer which the High Court could give was that the Appellate Assistant Commissioner was not legally competent to direct the Income tax Officer to register the firm after obtaining the signature of Gokulchand both in the application for registration and in the deed of partnership. Rule 2(c) above quoted did not empower the Appellate Assistant Commissioner to do anything of the sort and we are of the opinion that the answer given by the High Court in the negative was, therefore, correct. Counsel for the appellant tried to support his argument by referring to the provisions of the earlier partnership deeds between the several partners of this firm in the years 1929 and 1941 which specifically provided that in the event of retirement, or death of, or relinquishment, of his share by a partner, the partnership will not be dissolved but will be continued, in case of death of any of the partners, by such of the partners as remained and the legal representatives or nominees of the deceased partner and in the case of retirement of any of the partners by such of the partners as remained. We fail to understand what bearing these clauses have on the determination of the referred question. In the result, the appeal of the appellant fails and must stand dismissed with costs.

The appellant (a firm) consisted of seven partners and a deed of partnership was executed by all the partners except one who happened to be in Jail being a security prisoner under the Defence of India Rules. An application for registration of the firm under section 26 A of the Indian Income tax Act was made before the Incometax Officer, who, however, rejected it on the ground that the deed of partnership and the application for registration were not signed by all the partners. On appeal, the Appellate Assistant Commissioner cancelled the order of the Income tax Officer and directed him to register the firm after obtaining the signature of the partner who had not signed before, both on the application for registration and the deed of partnership. Held, that under Rule 2(c) of the Indian Income tax Rules, 1922, framed under section 26 A(2) of the Indian Income tax Act, the Appellate Assistant Commissioner had only the power to direct registration of the firm if an application duly signed by all the partners had been presented to him before the assessment was confirmed, reduced, enhanced or annulled and that he was not legally 92 competent to direct the Income tax Officer to register the firm after obtaining the signature of the partner who had not signed before.

Petition Nos. 841 and 728/1980. (Under Article 32 of the Constitution.) R. section Sharma and section M. Ashri for the Petitioner in WP Nos. 841 and 728/80. K. Parasaran, So]. B. P. Maheshwari and Suresh Seth for the RR in WP Nos. 841 and 728. The Judgment of the Court was delivered by KRISHNA IYER, J. We have disposed of today applications from cycle rickshaw pliers of Amritsar Municipality where a scheme has been worked out to help them become owners of cycle rickshaws. A 374 similar scheme, says the Solicitor General appearing for the Delhi Administration, will be extended to the Delhi territory. We, therefore, annex a copy of the judgment in Writ Petitions Nos. 839 of 1979 and 563 of 1979 Azad Rickshaw Pullers Union, Amritsar and others vs State of Punjab & others and Nanak Chand and others vs State of Punjab and others, respectively to this judgment. There is another problem which arises in these two cases and that is that the Delhi Administration has put a ceiling on the total number of cycle rickshaws permissible to be plied within its territory perhaps we do not know for certain this number may not accommodate all the applicants for cycle rickshaws applying licencees. We are told that apart from the applicants in this Court under Article 32 of the Constitution, there are numerous petitioners who have approached the High Court of Delhi under Article 226 of the Constitution and yet others who have filed suits in civil courts for the same relief. All that we can do is to accept the suggestion made by the learned Solicitor General that the Delhi Administration will effectively publicize and notify applications for licencees for plying of cycle rickshaws and all those who apply will be considered on their merits including length of service as cycle rickshaw pliers. The criteria that the Delhi Administration will adopt must be reasonable and relevant; otherwise it will be open to the aggrieved parties to challenge the selection. Likewise we do not want to fetter the rights of parties aggrieved if the ceiling upon the total number of rickshaws permissible within the Delhi territory is arbitrary. On the basis of reasonable criteria the Delhi Administration will direct the concerned Municipal authorities to grant licences for plying rickshaws and if the applicants so chosen are not owners themselves all the facilities we have indicated in the Amritsar order will be extended to such cycle rickshaw pliers fixing reasonable time limits. With these directions we dispose of the applications. Until fresh licences are issued by the Delhi Administration and the Municipal authorities the present petitioners will be allowed to ply their cycle rickshaws.

The Delhi Municipal Corporation Which framed the Cycle Rickshaw Bye Law of 1960 under section 481 of the Delhi Municipal Corporation Act, 1957 amended Bye law 3 in 1976 to provide that 'no person shall keep or ply for hire a cycle rickshaw in Delhi unless he himself is the owner thereof and holds a licence granted in that behalf '. In writ petitions challenging the provision: ^ HELD: In Azad Rickshaw Pullers Union Amritsar & others vs State of Punjab & others, [1981] I SCR 366 a scheme had been worked out to help the rickshaw pliers of Amritsar Municipality to become owners of cycle rickshaws. [374 A B] 2. The Delhi Administration will effectively publicize and notify applications for licences for plying of cycle rickshaws and all those who apply will be considered on their merits including length of service as cycle rickshaw pliers. The criteria that the Delhi Administration will adopt must be reasonable and relevant. [374 D] 3. On the basis of reasonable criteria the Delhi Administration will direct the concerned Municipal authorities to grant licences for plying rickshaws and the applicants so chosen are not owners themselves all the facilities indicated in the Amritsar order will be extended to such cycle rickshaw pliers fixing reasonable time limits. [374F]

N: Criminal Appeals Nos. 86 93 of 1974. From the Judgment and Order dated 25 7 73 of the Orissa High Court in Criminal Misc. Case Nos. 131 138 of 1972. D. Mukerjee and B. Parthasarthy for the Appellant. D. V. Patel and Vinoo Bhagat for the Respondent in (all the appeals). The Judgment of the Court was delivered by KAILASAM, J. These appeals are by State of Orissa by certificate granted by the Orissa High Court against the judgment in Criminal Miscellaneous Cases Nos. 131 to 138 of 1973. The eight respondents before this Court filed a batch of eight criminal miscellaneous petitions under Section 561 A/ and 562 of the Code of Criminal Procedure for a review of the orders passed by the High Court in Criminal Reference Nos. 13 and 15 to 21 of 1972 on 7 5 73, enhancing their sentence of fine of Rs. 2,000/ to one of rigorous imprisonment for six months. The facts of the case are briefly as follows: On 1 2 1967, the Vigilance police filed nine criminal cases against certain firms and their partners or proprietors under Section 20(e) of the Forward Contracts (Regulation) Act, 1952 (Act 74 of 1952). The cases were tried by the Additional District Magistrate (Judicial), Cuttack. The District Magistrate found the firms and persons, in management of the business, guilty of the offences with which they were charged and inflicted a consolidated fine of Rs. 2,000/ with the direction that, they would suffer simple imprisonment for three months in default of payment of fine. Against their conviction and sentence, the accused preferred an appeal to the Sessions Judge. The Sessions Judge, while dismissing the appeals, found that the law required imposition of a minimum sentence of fine of Rs. 1,000/ for each offence and as the sentence passed by the trial court was not in accordance with the law, he referred the matter to the High Court for passing of appropriate sentence. The accused preferred Revision Petitions against the order of the Sessions Judge. The Reference made by the Sessions Judge as well as the revision Petitions by the High Court. The High Court, while dismissing the Revision Petitions preferred by the accused, accepted the Reference by the Sessions Judge and enhanced the sentence so far as the firms are concerned, to a sum of Rs. 3,900/ at the rate of rupees one thousand and three hundred for each offence. As regards the Managers or the managing partners, the High Court 1117 sentenced them to six months rigorous imprisonment, i.e., two months for each deal The firms paid up their fines but the persons, who were awarded substantive sentence of imprisonment, filed criminal miscellaneous petitions before the High Court for a review of its order. The High Court accepted the petitions for review and recalled its previous judgment imposing substantive sentence of six months rigorous imprisonment on the petitioners but imposed a fine of Rs. 3,900/ at the rate of Rs. 1,300/ for each of the offence on each of the petitioners who are the respondents in this Court. Against the decision of the High Court, the State of Orissa applied for a certificate for preferring an appeal to this Court which was granted. Before the High Court it was urged that the petitioners were not given notice of enhancement in the Reference cases in respect of fines imposed. It was submitted that the notice was based on the recommendation of the learned Sessions Judge to pass appropriate sentence, but there was no indication in the notice, that the sentence would be enhanced to a substantive term of imprisonment. The order of Reference by the Sessions Judge provided that, the sentence imposed by the trial court was illegal and therefore while maintaining the convictions, he set aside the consolidated sentence of fine and referred the matter to the High Court for passing appropriate sentences. The learned Judge who dealt with the References made by the Sessions Judge passed an order in the following terms : "Admit. Issue notice fixing 20.3.72 for appearance. The acceptance of the reference may have the effect of enhancement of the sentence. Let clear notice be given to show cause against enhancement of sentence. " In pursuance of the order, the High Court sent a notice, directing the respondents to appear and show cause as to why the sentences, inflicted on them, should not be enhanced. The submission, that was made on behalf of the respondents, was that, neither the parties nor the lawyers ever took it, that the notices were comprehensive notices, which would include enhancement of sentence by way of converting the fine into imprisonment. The High Court accepted the plea on behalf of the respondent that the Criminal References read with the revisions would establish that the petitioners merely were given notice to show cause why the sentence of fine should not be regularised by way of enhancement of fine and that the notices ruled out enhancement by way of imprisonment since in this setting the notices were specifically in respect of fine and therefore imposition of sentence of imprisonment. 1118 was without jurisdiction. We do not find any basis for the conclusion arrived at by the High Court. The notice, under Section 439 (2) of the Criminal Procedure Code requires that no order, under Section 439, shall be made to the prejudice of the accused unless he has had an opportunity of being heard either personally or by pleader in his own defence, and sub section (6) states that "notwithstanding anything contained in this section, any convicted person, to whom an opportunity has been given under sub section (2) of showing cause why his sentence should not be enhanced, shall, in showing cause, be entitled also to show cause against his conviction. The order of the learned Judge by whom the reference was received and the notice issued by the High Court clearly show that, the respondents were asked to show cause why their sentence should not be enhanced. The view, taken by the High Court, that notice was only to show cause why the sentence should not be regularised by enhancement of the fine and not to a term of imprisonment is not borne out by the record. Mr. Mukherjee, learned counsel appearing for the State of Orissa submitted that, apart from the merits, the High Court had no jurisdiction to review its own judgment, and as such, the order of the High Court passed in review will have to be set aside as being without jurisdiction. On behalf of the respondent, Mr. D. J. Patel, submitted that, so far as the High Court is concerned, it has ample jurisdiction under Section 561 (A) and other provisions of the Code to review its own judgment. Mr. Patel further submitted that Section 369 of the Criminal Procedure Code is not applicable to judgments on appeal passed by the High Court, much less to judgments of the High Court passed in exercise of its criminal jurisdiction under Section 439. To support this contention, the learned counsel submitted that Chapter XXVI refers only to judgments of the trial court and cannot be made applicable to appellate judgments. We referred to Section 424 which provides that, the rules, contained in Chapter XXVI as to the judgement of criminal court of original jurisdiction, shall apply, so far as may be applicable to the judgment to any appellate court other than the High Court. The plea is that if Section 369 could be understood as being applicable to appellate judgments of the High Court also, there is no need for providing separately for the applicability of Chapter XXVI to the judgments of appellate courts other than the High Courts. Reliance was placed on Section 430 for the submission that the finality provided for judgments, orders passed by the appellate court would also indicate that, Section 369 is not intended to apply to judgments of the appellate courts and to the High Court in appeals and in revisions. In order to appreciate the contention of the parties the relevant sections may be set out. 1119 Section 369 as enacted in 1898, provided that "No Court other than a High Court, when it has signed its judgment, shall alter or review the same, except as provided in Section 395 and 484 or to correct a clerical error. Despite the express exclusion of the High Courts from the operation of this provision, it was held that the High Court had no implied power to alter or review their own judgments whether under Section 369 or under Section 439 or otherwise. It was accordingly proposed in 1921 that the words "other than a High Court" should be omitted to make it clear that Section 369 conferred no such power on the High Courts, as it was noticed that one or two other sections of the Code besides 395 and 484 and clause 26 of the Letters Patent of the High Courts empowered the High Courts to revise their judgments. Hence the Section was redrafted. Section 369 of the Code of Criminal Procedure 1898 reads as follows : "Save as otherwise provided by this Code or by any other law for the time being in force or, in the case of a High Court, by the Letters Patent or other instrument constitute such High Court, no court, when it has signed its judgment shall alter or review the same, except to correct a clerical error". Under the Code of Criminal Procedure (Act 2 of 1974) the new Section 362 provides "Save as otherwise provided by this Code or by any other law for the time being in force, no Court, when it has signed its judgment or final order disposing of a case, shall alter or review the same except to correct a clerical or arithmetical error". The words "or in the case of a High Court, by the Letters Patent or other instrument constituting such High Court" which were found in the corresponding Section 369 of the old Code have been omitted in the present section. Hence an alteration or review by a High Court would be permissible as in the case of other Courts, where provision therefore is made in this Code or by any other law for the time being in force. A reading of Section 369 discloses that the section prohibits all courts when it has signed its judgment to alter review the same except to correct a clerical error. While, regarding other courts, the prohibitions subject to any provision in the Code of. . or any provision of any other law in force, in the case of the High Court it is provided that the prohibition will be subject to the Letters Patent or other instrument constituting such High Court. Thus so far as the High Court is concerned, the prohibition against alteration and the 1120 review of the judgment will be subject to the Letters Patent or other instrument constituting such High Court. The Letters Patent of the High Courts of Bombay, Calcutta and Madras provide that the High Courts will have original criminal jurisdiction as well as the appellate criminal jurisdiction as provided by clauses 22 to 24. Clause 26 provides that such point or points of law reserved under clause 25 or on its being certified by the Advocate General that there is an error and that the points should be further considered, the High Court shall have full power to review the case. No other provision is found in the Letters Patent enabling the High Court to review its own judgment. No other instrument, relating to the power to review, in the constitution of the High Court, was brought to our notice. Giving the plain meaning to Section 369, it is clear that no court, subject to exceptions made in the section, shall alter or review its judgment. Two other sections were relied on by the defence as providing an exception to the rule laid down in Section 369. They are Sections 424 and 430 of Code of Criminal Procedure. Section 424 runs as follows: "424. The rules contained in Chapter XXVI as to the judgment of a Criminal Court of original jurisdiction shall apply, so far as may be practicable, to the judgment of any appellate Court other than a High Court: Provided that unless the Appellate Court otherwise directs, the accused shall not be brought up, or required to attend, to hear judgment delivered". The first part of Section 424 provides that the rules, contained in Chapter XXVI as to the judgment of a Criminal Court of original jurisdiction, shall apply, so far as may be practicable, to the judgment of any Appellate Court other than a High Court. Chapter XXVI relates to the judgment. Section 366 is the first section in the Chapter. It prescribes the mode of delivering judgment, i.e. it shall be delivered in the open court and in the language of the court. Sub Section (2) provides that the accused shall be required to attend, to hear judgment delivered. Section 367 prescribes the language and contents of the judgment and provides that the judgment may be in the alternative. When read with Section 424, it is seen that Sections 366, 367 and 368, which relate to the judgment of a criminal court of original jurisdiction, are made applicable, as far as may be to the judgment of the appellate court other than the High Court. The effect of Section 424 Crl. P.C. would be that the judgment of the appellate court should, as far as applicable, be in accordance with the requirements of Sections 366, 367 and 368 of the Code. This rule is not made applicable 1121 to a High Court hearing an appeal. The proviso to Section 424 is significant, in that, it states that unless the appellate court otherwise directs, the accused, shall not be brought up or required to attend to hear the judgment delivered. This proviso makes an exception to the requirement, that is found in Section 366(2), which requires that the accused should attend when the judgment is delivered. Section 367 prescribes the language of the judgment and requires the points for determination, the decision thereon, the reasons for the decision that it shall be dated and signed in open court. While Section 369 prohibits altering or reviewing the judgment after a court has signed its judgment, section 424 requires that the judgment of the appellate court shall, as far as applicable, be in accordance with Sections 366, 367 and 368 of the Criminal Procedure Code, which deals with the trial court. Sections 369 and 424 do not restrict the prohibition under Section 369 to the trial court alone. The purpose of Section 424 is to prescribe mode of delivering of judgment, the language and the contents of the judgment while Section 369 is general in its application and prohibits all courts from altering or reviewing its judgment when once it has signed it. The second section, that is relied on, is Section 430. Section 430 provides, "When the judgment passed by an appellate court upon appeal shall be final except in the cases provided for in Section 417 and Chapter XXXII". The section deals with the finality of orders on appeal. An exception is made in the case of a judgment under Section 417 that is, in an appeal by a public prosecutor against an order of acquittal, whether made by the trial court or the appellate court. So also, the provisions of Chapter XXXII is excepted in that the judgment of an appellate court will not be final when provision is made for reference and revision. Neither Section 424 nor Section 430 deal with the prohibition imposed under Section 369 prohibiting the court from altering or reviewing its judgment when once it has signed it. It was next submitted that in any event Section 561 A is wide enough to include a power of review by the High Court. Section 561 A of Criminal Procedure Code runs as follows : "561A. Nothing in this Code shall be deemed to limit or effect the inherent power of the High Court to make such orders, as may be necessary, to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice". The inherent power of the High Court is restricted to making such orders, as may be necessary, to give effect to any order, under the Code or to prevent abuse of the process of any court or otherwise to 1122 secure the ends of justice. The scope of the section has been explained. In the two decisions of the Privy Council, which have been uniformly followed by this Court. In Emperor vs Khwaja Nazir Ahmad the Privy Council, repelling the view that Section 561A of Criminal Procedure Code gave increased powers to the court which it did not possess before that section was enacted, observed, that "it was not so" and proceeded to state "The section gives no new powers, it only provides that those powers which the Court already inherently possess shall be preserved, and is inserted as. Their Lordships think lest it should be considered, that the only powers possessed by the Court are those expressly conferred by the Criminal Procedure Code and that no inherent power had survived the passing of that Act. Reiterating the same view the Privy Council in Lala Jairam Das and Others vs Emperor observed: that Section 561A of the Code confers no new powers. It merely safeguards all existing inherent powers possessed by a High Court necessary (among other purposes) to secure the ends of justice. This Court in State of Uttar Pradesh vs Mohammad Naim cited with approval the two decisions of the Privy Council referred to above. Section 561A was added to the Code in 1923. It purports to save the inherent powers of the High Court to make such orders as may be necessary to give effect to any order passed under the Code, to prevent abuse of the process of the Court and otherwise to secure the ends of justice. The introduction of the section was because doubts were expressed about the existence of such inherent powers in the High Courts after the passing of the Criminal Procedure Code. By the introduction of the section it was made clear that, the inherent powers of the High Court, for the purposes mentioned in the section, shall not be deemed to be limited or affected by the provisions of the Criminal Procedure Code. Thus, inherent power cannot relate to any of the matters specifically dealt with by the Code. It would follow that inherent powers cannot be invoked to exercise powers which would be inconsistent with any of the specific provisions of the Code. The saving of inherent power is only for giving effect to orders passed under the Code, to prevent abuse of the process of any court or otherwise to secure the ends of justice. Section 369 of the Criminal Procedure Code is understood as applying to judgments on appeal by the High Court, Section 561A cannot be invoked for enabling the Court to review its own order which 1123 is specifically prohibited by Section 369 by providing that, no court when it has signed its judgment, shall alter or review the same except to correct a clerical error. Section 424 read along with Sections 366 and 367 would show that the requirements of the two sections in a judgment by a criminal court of original jurisdiction, shall also apply, as far as applicable to the judgment of the appellate court other than the High Court. The proviso is significant. It states that the appellate court, when delivering the judgment the accused shall not be brought up or required to attend unless otherwise directed to hear the judgment delivered. The provisions of Section 366(2) require the court to secure the personal attendance of the accused at the time of delivery of the judgment, except where his personal attendance during the trial has been dispensed with. The effect of Section 424 is generally that, the appellate court should comply with the requirements prescribed under Sections 366 and 367. Section 430 deals with finality of orders on appeal, that is, the judgment passed by an appellate court shall be final unless otherwise provided for, but the finality of the appeal is subject to the provisions of section 417 of the Criminal Procedure Code which enable the State to prefer an appeal against an order of the trial court or by an appellate court. Similarly a judgment by an appellate court is final subject to the Chapter which provides for reference and revision. Section 424 deals with the general requirements of judgments and Section 430 with the finality of judgment on appeal unless otherwise provided for. These two sections, it may be noted, do not deal with restriction against altering or reviewing the judgment except for correcting a clerical error. A reading of Section 369 of Criminal Procedure Code would reveal that this Section is intended to apply to all courts, the provision being "no court when it has signed its judgment shall alter or review the same". 'no court ' would include 'all courts '. The operation of the section is saved if it is provided by the Code or by any other law for the time being in force. So far as the High Court is concerned, the Section provides that the prohibition will not apply if the Letters Patent or other instrument constituting such High Courts confers such a power. We see no justification for restricting the application of the Section to judgments delivered by the High Court in criminal trials alone. The reference to the High Court in the section would indicate that the High Court is also covered by the provisions of the section subject to the exception provided for. The criminal jurisdiction as conferred by the Letters Patent on the High Court covers not only the original criminal jurisdiction but also appellate powers. Though Section 369 appears in Chapter XXVI, we 1124 are not inclined to accept the contention put forward on behalf of the defence that it is applicable only to trial courts and in any event not to appellate judgments of the High Court. Section 362 of the new Act has done away with the special provisions regarding the High Court and has made the section applicable to all courts. On a careful reading of Sections 369 and 424 and 430, we are satisfied that Section 369 is general in its application. The word 'no court ' would include all courts and apply in respect of all judgments. Section 424 in confined, in its application, only to the mode of delivery of judgment, the language of the judgment, the contents of judgment etc. and section 430 of Criminal Procedure Code to the finality of judgments on appeal, except as provided for. Whether the judgment is by the trial court or the appellate court, Section 369 is universal in its application and when once a judgment is signed, it shall not be altered or reviewed except for correcting a clerical error. Mr. Patel, the learned counsel for the respondents, submitted that this Court has laid down that Section 369 is applicable only to judgments of the trial court and therefore Section 369 cannot be construed as being applicable to appellate court, especially to High Court. He relied on the decision in U.J.S. Chopra vs State of Bombay. The question that arose for decision in the case was whether a revision preferred by the State of Bombay to the High Court praying for enhancement of sentence, passed on the accused, is maintainable after the appeal preferred by the accused to the High Court of Bombay, was summarily dismissed. This court held that the summary dismissal of the appeal, preferred by the appellant, did not preclude him, from taking advantage of the provision of Section 439(6) of the Code of Criminal Procedure, and showing cause against his conviction when he was subsequently called upon to show cause why the sentence imposed on him should not be enhanced. Two separate judgments were delivered by the three Judge Bench. Justice Bhagwati along with Imam, J. spoke for the court while S.R. Das, J. delivered a separate judgment. Justice Das, while repelling the contention that the power under Section 439(6) is conditioned or controlled by the provisions relating to finality of judgment embodied under Section 369 and 430 at page 108, observed: "There is indication in the Code itself that the purpose of Section 369 is not to prescribe a general rule of finality of all judgments of all criminal courts but is only to prescribe the finality of the judgment so far as the trial court is concerned. That this Section does not, by itself, apply to the judgment of an appellate court is quite obvious, because if it did, there 1125 would have been no necessity for enacting Section 424 specifically making the rules contained in Chapter XXVI which includes Section 369 applicable to the judgment of any appellate Court other than High Court, nor for again prescribing by Section 430 a rule of finality for judgments and orders passed by an appellate Court". The learned Judge concluded that the finality of section 369 attaches to the judgments pronounced by all trial courts including the High Court in the exercise of its original criminal jurisdiction, it certainly has no bearing on the question of finality of appellate judgments which is specifically provided by section 430 of the Code. Bhagwati J. who spoke for the Court has not held that the provisions of section 369 are applicable only to judgments of the trial courts. On the other hand, a reading of the judgment of Bhagwati J. would indicate that the learned Judge was inclined to hold that the finality provided for in section 369 of the Criminal Procedure Code is also applicable to the judgments rendered by the High Court in the exercise of its appellate or criminal jurisdiction. At p. 144 of the Reports the learned Judge observed that once a judgment of the lower court is replaced by the judgment of the High Court, the High Court has no further powers to review or revise its own judgment and enhance the sentence which is thus passed by it upon the accused. The principle as to the finality of judgments applied by the Court by virtue of the provisions of section 369 and section 430 of the Criminal Procedure Code should not have been confined merely to the question of con firming the conviction but also should have been extended to the con firming of the sentence insofar as the High Court did not see any reason to reduce the sentence already passed by the lower Court upon the accused. Again dealing with the principle of finality the learned Judge observed that the principle of finality of judgments should therefore be extended not only to the question of the confirming of the conviction but also to the question as to the adequacy of the sentence, whether the sentence which is passed upon the accused by the lower Court should be reduced, confirmed or enhanced. Once therefore the judgment of the High Court replaces that of the lower Court there is no question which can ever arise of the exercise by the High Court of its revisional powers under section 469 ( 1 ) of the Criminal Procedure Code. Again at p. 162 the learned Judge reiterated the principle and observed "As we have observed that principle comes into operation when once a judgment of the High Court has replaced that of the lower Court and in those cases the High Court would not be competent to review or revise its own judgment." In referring to the import of section 369 on the powers of the High Court under section 439(6), Bhagwati J. held that section 369 in terms provides, 1126 "save as otherwise provided in this Code" and section 439(6) would be an otherwise provision which is saved by this non obstante clause appearing in section 369. It is significant to note that both these amendments the one is section 369 and the other is section 439, were enacted by section 119 of Act XVIII of 1923 and the very purpose of these simultaneous amendment would appear to be to effectuate the right given to the accused to show cause against his conviction as enacted in section 439(6) of the Criminal Procedure Code". As the majority judgment does not share the view expressed by Das J. quoted above reliance cannot be placed on the view of Das J. The view expressed by Privy Council in Jai Ram Das 's(1) case that alteration by the High Court of its judgment is prohibited by section 369 of the Code was not brought to the notice of Das J. Later decision Of this Court particularly the decision in Superintendent and Remembrance of Legal Affairs, W.B. vs Mohan Singh and Others (2) held that when once the judgment has been pronounced by the High Court either in exercise of its appellate or its revisional jurisdiction, no review or revision can be entertained. In the Full Bench decision of the Allahabad High Court in Raj Narain and other vs The State (2), Moothem J. observed: "It has commonly been assumed, even it would appear by the Privy Council in Jairam Das 's case, that this section applies also to the judgment of the appellate Court but it is clear that this is not so: U.J.S. Chopra vs State of Bombay ; In a latter decision in Nirbhay Singh vs State of Madhya Pradesh, (4) this Court, dealing with section 369, after referring to Chopra 's case observed that section 369 occurs in Chapter XXVI and prima facie applies to judgments of the court of first instance. The Court did not proceed on the basis that it was settled law that section 369 is applicable only to judgments of trial courts. Before concluding we will very briefly refer to cases of this Court cited by counsel on both sides. 1958 S.C.R.1226 relates to the power of the High Court to cancel bail. The High Court took the view that under section 561A of the Code, it had inherent power to cancel the bail, and finding that on the material produced before the Court it would not be safe to permit the appellant to be at large cancelled the bail distinguishing the decision in 1945 Law Reports and 72 Indian Appeals (supra) and stated that the Privy Council was not called upon to consider the question about the inherent power of the High Court 1127 to cancel bail under section 561A. In Sankata Singh vs State of U.P.,(1) this Court held that section 360 read with section 424 of the Code of Criminal Procedure specifically prohibits the altering or reviewing of its order by a court. The accused applied before a succeeding Sessions Judge for re hearing of all appeal. The learned Judge was of the view that the appellate court had no power to review or restore an appeal which has been disposed of. The Supreme Court agreed with the view that the appellate court had no power to review or restore an appeal. This court, expressing its opinion that the Sessions Court had no power to review or restore an appeal observed that a judgment. which does not comply with the requirements of section 369 of the Code, may be liable to be set aside by a superior court but will not give the appellate court any power to. set it aside himself and rehear the appeal observing that "section 369 read with section 424 of the Code makes it clear that the appellate court is not to alter or review the judgment once signed, except for the purpose of correcting a clerical error. Reliance was placed on a decision of this Court in Superintendent and Remembrance of Legal Affairs W.B. vs Mohan Singh and others(2) by Mr. Patel, learned counsel for the respondent wherein it was held that rejection of a prior application for quashing is no bar for the High Court entertaining a subsequent application as quashing does not amount to review or revision. This decision instead of supporting the respondent clearly lays down, following Chopra 's case (supra) that once a judgment has been pronounced by a High Court either in exercise of its appellate or its revisional jurisdiction, no review or revision can be entertained against that judgment as there are no provisions in the Criminal Procedure Code which would enable the High Court to review the same or to exercise revisional jurisdiction. This Court entertained the application for quashing the proceedings on the ground that a subsequent application to quash would not amount to review or revise an order made by the Court. The decision clearly lays down that a judgment of the High Court on appeal or revision cannot be reviewed or revised except in accordance with the provisions of the Criminal Procedure Code. The provisions of section 561A of the Code cannot be revoked for exercise of a power which is specifically prohibited by the Code. In the result we accept the contention put forward by Mr. Mukerjee for the State and hold that High Court has no power to revise its own order. The appeal is allowed. P.H.P. Appeal allowed.

On the strength of the permission granted by the Revenue Divisional Officer, as required under clause 6 of the Orissa Scheduled Areas Transfer of Immovable Property by Scheduled Tribes Regulation 3 of 1956 and Rule 4 made thereunder, to sell his private property to a non scheduled Tribe person for a sum of Rs. 4000/ , Respondent 3 sold his property on January 2, 1964 by a registered deed of sale to the appellant, despite an attachment order passed by the Executing Court on July 13, 1963 on an application dated June 28, 1963 made by Respondent 1 to recover the decretal amount as per the money decree obtained by him on August 18, 1962 against Respondent 3 and his mother Respondent 4. Later, Respondent No. 1 however, produced the copy of the order passed by the R.D.O. dated October 23, 1963, at the instance of appellant in the Executing Court and got the property put to sale on May 15, 1964. In the court auction respondent 2 son of respondent 1 purchased the property. On June 22, 1964, the appellant filed an application under order 21 Rules 89 and 90 and Section 47 and 151 C.P.C. for setting aside the auction sale on the ground that the attachment and the auction sale were void for want of permission from the competent authority under Orissa Regulation 2 of 1956 and also due to fraud committed by the decree holder. The application was allowed followed by confirmation by the appellate judge, in appeal. But the High Court in Second Appeal reversed it accepting the contention of res judicata. Allowing the appeal by special leave, the Court. ^ HELD: 1. Both clauses 6 of the "Orissa Scheduled Areas Transfer of Immovable Property by Scheduled Tribes Regulation 2 of 1956, and Rule 4 made thereunder, provide that no immovable property belonging to a member of the scheduled Tribe is liable to be attached or sold except in accordance with the permission granted by the competent authority. Prior to the sale to the private party, the property was undoubtedly attached in execution proceedings on July 13, 1963, but the order of attachment was void, being contrary to the express inhibition contained in clause 6 of Regulation 2 of 1956 read with Rule 4 made thereunder. [200E G] 2. The auction sale is bad and invalid: It is elementary that what can be brought to sale in a Court sale is the right, title and interest of the judgment debtor and therefore, the auction purchaser can get nothing more than that right, title and interest. In the instant case, the appellant having become an owner of the property on account of the 197 Private sale dated January 2, 1964 respondent 3 had no saleable interest left in the property which could be put to auction. The auction sale therefore cannot displace the title of the appellant which is the same thing as saying that as between the title of the appellant and the so called title of the auction purchaser the appellant 's title must prevail. [200G H, 201A] Moreover, as the condition imposed by the R.D.O. regarding the price was violated by the auction sale, the auction purchaser cannot get a valid title to the property under that sale. In the private sale, the appellant purchased the property for Rs. 4,000/ and therefore the condition of the permission was complied with. But the auction sale was held in satisfaction of the decretal dues which were far less than Rs. 4,000/ the decree itself being in the sum of Rs. 1,000/ and odd and the highest bid at the auction being of Rs. 3,000/ only.[201 B C] 3. (a) The basic issue being the validity of auction sale in favour of respondent 2, no question of res judicata can arise. the appellant claims through the judgment debtor and neither the latter nor the decree holder ever disputed that he, the judgment debtor, was a member of the Scheduled Tribe. On the other hand both of them were conscious of the situation that the property could not be sold without the sanction of the R.D.O., Nowrangpur. The decree holder himself apprised The Executing Court of that position. The permission which was granted by the R.D.O., Nowrangpur at the instance of the appellant was produced by respondent 1 in the execution proceedings as if the permission was granted in sis favour for the sale by respondent 3 of his property. The failure, therefore, of the judgment debtor to raise any particular contention cannot operate as res judicata actually or constructively, either against him or against the appellant. [201 D F] (b) Whether "Bhotras" fall within any of the sub groups of the Scheduled Tribes enumerated in Part IX of the Schedule to the Constitution (Scheduled Tribes) Order, 1950 is a question which could not have been permitted to be raised for the first time in the Second Appeal. Much less can it be allowed to be raised in this Court in an appeal under article 136 of the Constitution.[200C D]

Appeal No. 59 of 1953. Appeal from the Judgment and Order dated the 5th April, 1950, of the High Court of Rajasthan at Jaipur in Case No. 24 of Samvat 2005 (Review modifying the Decree dated the 3rd March, 1949, of the High Court of the former Jaipur State in Civil Second Appeal No. 187 of Samvat 2004 against the Decree 52 dated the 15th April, 1948, of the Court of the District Judge, Jaipur City, in Civil Appeal No. 40 of Samvat 2004 arising out of the Decree dated the 23rd August, 1947, of the Civil Judge, Jaipur City, in Suit No. 66 of Samvat 2002). Dr. Bakshi Tek Chand, (Rajinder Narain, with him) for the appellant. D.M. Bhandari, (K. N. Aggarwala and R. N. Sachthey, with him) for the respondent. April 9. The Judgment of the Court was delivered by MEHR CHAND MAHAJAN C. J. This is an appeal from the judgment and decree of the High Court of Judicature of Rajasthan, dated the 5th April, 1950, modifying the decree of the High Court of the former Jaipur State, dated the 3rd March, 1949, on an application for review in a second appeal concerning a suit for possession of property. The property in dispute originally belonged to one Ramchandra who died sonless in the year 1903. He was survived by his mother, Sheokori, his widow, Mst. Badni, and his two daughters,. Bhuri and Laxmi. It is alleged that he made an oral will under which he bequeathed the property in dispute to his daughter, Laxmi. On the 6th September, 1906, Mst. Sheokori and Mst. Badni, purporting to act in accordance with the directions of the oral will, executed and registered a deed of gift of the property in dispute in favour of Mst. Laxmi. The gift deed contains the following recitals: " These houses are made a gift to you according to the will of your father, Ramchandra. . In this way, these houses belonging to us were purchased by your father, Ramchandra, and he in his last days having made a gift of these houses to you, made a will to us that he had made a gift of that house to his daughter, Laxmi, and directed us to get the gift deed registered in her name. He further said that if we or our relations., kinsmen, creditors do raise any dispute with her he would I damangir hoonga catch hold of him by his 53 garments. According to his aforesaid will, we have got this gift deed executed in your favour, while in best of our senses and in discharge of our sacred duty enjoined by Dharma. No other person except you has got any claim over the house. You deal with your house in any way you like. If anybody takes back the land gifted by himself or his ancestors, he will live in hell as along as the sun and moon shines. " The scribe, it seems, did not in appropriate language express the directions of the two widows and his ideas of the legal situation were somewhat confused but there can be no manner of doubt that the two executants were not conferring themselves any title which they had in the property on Laxmi but were merely giving effect to the oral will as executors and were putting the legatee in possession of the bequeathed property in this manner. That the widows had no title themselves is evident from the fact that Mst. Sheokori also joined in executing the gift deed. Admittedly Ramchandra 's estate could not devolve on her. Bhuri, the second daughter, died in the year 1907, while Mst. Badni, the widow., died in the year 1927. Laxmi remained in possession of the property till her death in the year 1928. After her death Balabux, her husband, on the 5th of July, 1930, claiming as heir to her mortgaged the house in dispute to the defendant appellant Nathoo Lal and later on the 5th of October, 1933, he sold it to him and put him into possession of it and since then he is in possession. On the 4th October, 1945, that is one day before the expiry of the period of 12 years from the date of the defendant 's entry into possession of the house, the plaintiff, son of Mst. Bhuri, sister of Mst. Laxmi, claiming as an heir to her estate, filed this suit in forma pauperis for possession of the house. He alleged that he was in possession of the house till the 24th of August, 1933, through his tenant, that after it was vacated by the tenant he locked it and went away to his native village Harmara ; and that on the 27th of September, 1944, he came to know that the house had been taken possession of by the appellant during his absence. It 54 was contended by him that Balabux had no right either to mortgage or sell the house and that Laxmi was not the absolute owner of the property but had only a limited estate in it, and on her death he was entitled to possession of it. On the 28th of August, 1947, the suit was dismissed by the Civil Judge, who held that Mst. Laxmi became the absolute owner of the property, and the plaintiff therefore had no title to claim possession of it after her death, Balabux being her stridhan heir. The learned Judge however held that the suit was within limitation. On appeal, this decision was affirmed by the District Judge. He expressed the opinion that the widow in executing the deed of gift was only acting as an execution of the oral will made by Ramchandra at his deathbed and that Laxmi got under this will an absolute estate in the suit property. The plea of limitation raised by the defendant was negatived on the finding that the plaintiff was in possession of it within twelve years of the suit. Plaintiff preferred a second appeal to the High Court of Jaipur and this time with success. The High Court held that after the death of Laxmi the plaintiff continued in possession of the house till he was dispossessed by the defendant on the 5th of October, 1933, and that he was in possession even during her lifetime. On the main question in the case the High Court held that though the house was bequeathed to Laxmi by Ram chandra under an oral will, there was no proof that it conferred upon her an absolute interest in the property and that in the absence of any evidence indicating that the donor intended to convey an absolute interest to her, the gift being in favour of a female could only confer upon her a limited life estate and on her death revert to the donor 's heirs and the plaintiff being such an heir was entitled to succeed. In the result the appeal was allowed and the plaintiff 's suit was decreed with costs throughout. The defendant applied for a review of this judgment. Meanwhile the Jaipur High Court had become defunct and the review was heard by the Rajasthan High Court 55 as successor to the Jaipur High Court under the High Courts Ordinance and was partially allowed on the 5th of April, 1950, and the decree was accordingly amended and it was provided therein that the plaintiff shall not be entitled to possession of the house except on payment of Rs. 4,000 to the defendant as costs of improvements and repairs. It is against this judgment and decree passed after the coming into force of the Constitution of India that the present appeal has been preferred to this Court by leave of the Rajasthan High Court under article 133(1)(c) of the Constitution. The learned counsel for the respondent raised a preliminary objection as to the maintainability of the appeal. He contended that according to the Code of Civil Procedure of the Jaipur State the decision of the Jaipur High Court had become final as no appeal lay from it and hence this appeal was incompetent. It was argued that the proceedings in the suit decided in 1945 had concluded by the decision of the High Court given in 1949, and the review judgment which modified the decree in regard to improvements, could not entitle the appellant to reopen the decision of the High Court of Jaipur given in 1949. In our opinion, this objection is not well founded. The only operative decree in the suit which finally and conclusively determines the rights of the parties is the decree passed on the 5th of April, 1950, by the Rajasthan High Court and that having been passed after the coming into force of the Constitution of India, the provisions of article 133 are attracted to it and it is appealable to this Court provided the requirements of that article are fulfilled. The Code of Civil Procedure of the Jaipur State could not determine the jurisdiction of this Court and has no relevancy to the maintainability of the appeal. The requirements of article 133 having been fulfilled, this appeal is clearly competent. The learned counsel then contended that the High Court was in error in granting the certificate in this case. We are unable to agree. An inquiry was made into the valuation of the property and it was reported that its value was Rs. 20,000 or that the decision affected 56 property of the value of above Rs. 20,000. A substantial question of law was involved in the case, that is, whether a testamentary disposition by a Hindu in favour of a female ' heir conferred on her only a limited estate in the absence of evidence that he intended to confer on her an absolute interest in the property. In these circumstances the High Court was fully justified in granting the certificate. We ourselves would have been prepared to admit this appeal under our extraordinary powers conferred by article 136(1) of the Constitution, if such a certificate had not been given in the case. For the reasons given above we see no force in either of these two preliminary objections which we overrule. Dr. Bakshi Tek Chand for the appellant contended that the Courts below were in error in holding that the plaintiff 's suit was within limitation. He urged that in order to bring the suit within limitation the plaintiff in paragraph 5 of the plaint alleged that after the death of Laxmi he kept tenants in the house, realised the rent and enjoyed it and/that the last tenant vacated on the 24th August, 1933, and thereafter he went to his native place after locking the house, but that this allegation had not been made good by him, and as there was no evidence that he looked the house, it should be held that plaintiff 's possession discontinued with effect from the 24th August, 1933, and hence his suit brought more than twelve years from that date was not within time. It has been found by the Courts below that the plaintiff was in possession of this house even during the lifetime of Laxmi and continued in possession thereafter. Even if the tenant vacated the house on the 24th August, 1933, and the plaintiff did not lock it, his possession would be presumed to continue till he was dispossessed by some one. The law presumes in favour of continuity of possession. The three Courts below have unanimously held that on the evidence it was established that after the death of Laxmi plaintiff continued in possession of the house and the suit was within limitation. There are no valid grounds for reviewing this finding in the fourth Court and the contention is therefore negatived. 57 Dr. Bakshi Tek Chand next contended that Laxmi acquired an absolute title in the suit property under the will of her father and that the High Court was in error in@holding that unless there were express words indicating that the donor who had absolute interest in the gifted property intended to convey an absolute interest to her, the gift in favour of an heir who would ordinarily inherit a limited interest could not be construed as conferring an absolute interest. The learned counsel for the respondent on the other hand raised two contentions. He urged in the first instance that it seems that the intention of Ramchandra was to make a gift of the suit property in favour of Laxmi but he was unable to perfect the gift by executing a registered deed, being on his deathbed and in that situation the property devolved on his widow by inheritance and it only came to Laxmi under the widow 's gift and under it she could not get a larger interest than what the widow herself possessed, namely, a limited life estate, which terminated on her death. In the alternative, it was said that there was no evidence as to the terms of the oral will and that 'being so, the gift being in favour of a female heir, the presumption in the absence of evidence to the contrary was that the donee got only a limited life interest in the bequeathed property. In our judgment, there is force in the contention of Dr. Tek Chand and none of the contentions raised by the respondent 's 'counsel have any validity. That Ramchandra bequeathed the suit property and did not gift it to his daughter Laxmi is a fact which cannot be questioned at this stage. It was admitted by the plaintiff himself in the witness box. This is what he said : " Ramchandra had made a will in favour of Mst. Laxmi and in that connection my maternal grandmother and maternal great grandmother got the gift deed registered. This very gift deed was got executed by my maternal grandmother and maternal great grandmother and had got it registered. Through this gift deed Mot. Laxmi held possession over it till she was alive. She had kept deponent as her son and so 8 58 she got the rent notes executed in my name." ' What is admitted by a party to be true must be presumed to be true unless the contrary is shown. There is no evidence to the contrary in the case. The gift deed fully supports the testimony of the plaintiff on this point. It definitely states that according to the will, the gift deed was executed in favour of Laxmi and it further recites that Laxmi was entitled to deal with the house in any manner she liked. Those who were directed to execute the oral will made by Ramchandra must be presumed to have carried out his directions in accordance with his wishes. It seems clear that the intention of the testator was to benefit his daughter, Laxmi, and to confer upon her the same title as he himself possessed. She was the sole object of his bounty and on the attendant circumstances of this case it is plain that he intended to confer on her whatever title he himself had. Laxmi therefore became the absolute owner of the property under the terms of the oral will of her father and the plaintiff is no heir to the property which under the law devolved on Laxmi 's husband who had full right to alienate it. We are further of the opinion that the High Court was in error in thinking that it is a settled principle of law that unless there are express terms in the deed of gift to indicate that the donor who had absolute interest intended to convey absolute ownership, a gift in favour of an heir who inherits only a limited interest cannot be construed as conferring an absolute interest. It is true that this was the principle once deduced from the Privy Council decision in Mahomed Shumool V. Shewukram(1) wherein it was held that a bequest to a daughter in law passed a limited estate. The proposition laid down in Mahomed Shumsool 's case was construed by the High Courts in India to mean that a gift of immovable property to a woman could not be deemed to confer upon her an absolute estate of inheritance which she could alienate at her pleasure unless the deed or will gave her in express terms a heritable estate or power of alienation. Later decisions of the Judicial Committee made it clear that if words were used (1) 2 I.A. 7. 59 conferring absolute ownership upon the wife, the wife enjoyed the rights of ownership without their being con ferred by express and additional terms. Shumsool 's case(1) has been examined in recent years in some High Courts and it has been observed that according to the law as understood at present there is no presumption one way or the other and there is no difference between the case of a male and the case of a female, and the fact that the donee is a woman does not make the gift any the less absolute where the words would be sufficient to convey an absolute estate to a male (see Nagammal vs Subbalakshmi Ammal(2). The matter has now been set at rest by the decision of this Court in Ram Gopal vs Nand Lal(3). In this case it was observed as follows: " It may be taken to be quite settled that there is no warrant for the proposition of law that when a grant of an immovable property is made to a Hindu female, she does not get an absolute or alienable interest in such property, unless such power is expressly conferred upon her. The reasoning adopted by Mitter J. of the Calcutta High Court in Mst. Kollani Kuar vs Luchmi Kuar(4), which was approved of and accepted by the Judicial Committee in a number of decisions, seems to me to be unassailable. It was held by the Privy Council as early as in the case of Tagore V. Tagire (5) that if an estate were given to a man without express words of inheritance, it would, in the absence of a conflicting context, carry, by Hindu Law, an estate of inheritance. This is the general principle of law which is recognized and embodied in section 8 of the Transfer of Property Act and unless it is shown that under Hindu Law a gift to a female means a limited gift or carries with it the restrictions or disabilities similar to those that exist in a "widow 's estate, ' there is no justification for departing from this principle. There is certainly no such provision in Hindu Law and no text could be supplied in support of the same. " The position, therefore, is that to convey an absolute estate to a Hindu female, no express power (1) 21 A. 7. (4) (2) (1947) I M.L.J. 64. (5) , P.C. (3) ; 60 of alienation need be given; it is enough if words are used of such amplitude as would convey full rights of ownership." The learned Judges of the High Court were therefore clearly wrong in law in holding that the will having been made by the father in favour of his daughter, it should be presumed that he intended to give her a limited life estate. For the reasons given above we allow the appeal, set aside the decree of the High Court decreeing the plaintiff 's suit and restore the decree of the trial Court dismissing the plaintiff 's suit. In the circumstances of this case we will make no order as to costs. Appeal allowed.

The respondent was the owner of the suit properties leased to the appellants by lease deeds executed in 1945 and 1946 and sued the appellant for their possession on various grounds. The appellant claimed an 'occupancy right ' in the properties and pleaded that he could not be evicted in view of the protection afforded to him by section 6 of the Madras Estates Land Act 1 of 1908. The Trial Court upheld his contention and dismissed the suit but the High Court allowed an appeal holding that as the case fell within the scope of section 8(5) of the Act, the appellant was not entitled to the benefit of section 6; it therefore remanded the case for trial on other issues. During the pendency of the appeal in the High Court, the Madras Cultivating Tenants Protection Act came into force and therefore the appellant claimed before the Trial Court after remand that he was a 'cultivating tenant ' within the meaning of the Act and could not, for this additional reason, be evicted. Both the Trial Court as well as the High Court rejected the appellant 's contentions. In the appeal to this Court it was contended on behalf of the appellant that although section 8(5) of Madras Act 1 of 1908 may govern the present case, but when section 8(5) says that the land holder shall 'have the right notwithstanding anything contained in the Act for a period of twelve years from the commencement of the Madras Estate Land (Third Amendment) Act, 1936 of admitting any person to the possession of such land on such terms as may be agreed upon between them", it merely means that for the period of twelve years, the tenants on the land cannot claim the benefit of section 6(1) of the Act but they get those rights immediately after the twelve years period is over; furthermore, that section 6(1) is the main provision; it has general application and contains the policy and purpose of the law; section 8(5) is an exception; therefore section 6(1) should be construed liberally while section 8(5) should be strictly construed with a view to advance the purpose of the law. It was also contended that the Trial Court as well as the High Court were in error in holding that the decision of the High Court prior to the remand was binding on both courts and could not be reagitated before them. HELD: Dismissing the appeal. (i) While section 6(1) is subject to the provisions of the Act, section 8(5) is not controlled by any other provision of the Act. Therefore if the case falls both within section 6(1) as well as section 8(5), then the governing, provision will be section 8(5) and not section 6(1). As the present case fell within section 8(5) it necessarily followed that it was taken out of the scope of section 6(1). [513 C D] From the language of 'section 8(5), it is not possible to. hold that the contract itself is exhausted or stands superseded at the end of the twelve year period mentioned therein. [514 C D] 509 Executive Officer vs L.K. Ganapathi Thevar, ; and Sri Navaneethaswaraswami Devasthanam Sikki, represented by its Executive Officer vs P. Swaminatha Pillai, I.L.R. ; referred to. Muminia Damudu and Ors. vs Datla Papayyaraju Garu by Muktyar Putravu Ramalingaswami and Ors. , A.I.R. 1944 Mad. 136; Korda Atchanna vs Jayanti Seetharamaswami, A.I.R. 1950 Mad. 357; Thota Seshayya and six Ors. vs Madabushi Vedanta Narasimhacharyulu, I.L.R. and Vadranam Ramchandrayya and Anr. vs Madabhushi Ranganavakamma, (1957) 2 Andhra Weekly Reports, p. 114 distinguished. (ii) On the facts found in the present case, the appellant could not be considered a 'cultivating tenant ' after the amendment of the definition of a cultivating tenant ' in the Madras Cultivating Tenants Act, 1955, became of the addition of the explanation; in order to fall within the definition of 'cultivating tenant ' a person should carry on personal cultivation which again requires that he should contribute physical labour. The use of physical labour includes physical strain, the use of muscles and sinews. Mere supervision of work, or, maintaining of accounts or distributing the wares will not be such contribution of physical labour as to. attract the definition. [516 G] Mohamed Abubucker Lebbai & Anr. vs The Zamindar of Ettayapuram Estate, Koilapatti, (1961) (1) M.L.J., p. 256 and S.N. Sundalaimuthi Chettiar vs palaniyandayan; , ; referred to. (iii) The trial court could not go into the question of the claim to an occupancy tenant 's right after the judgment of the High Court at the time of the remand. That decision was also binding on the bench which heard the appeal. However, the appellant was entitled to reagitate the issue in the present appeal. Satyadhyan Ghosal and Ors. vs Sm. Deorajin Debi and Anr. , ; , referred to,.

Appeals Nos. 116 to 125 of 1961. Appeals by. special leave from the judgment and decrees dated March 4, 1955, of the former Andhra Pradesh High Court, Guntur, in section T. Appeals Nos. 83,85 88,90,91 and 119 121 of 1954. M. C. 'Setalvad, Attorney General for India, R. Ganapathy Iyer, V. Sureshan and G. Gopalakrishnan, for the appellants (in C.As. 116 119 of 61) aid the respondents (in C.As. 120 125 of 1961). 282 A.V. Viswanatha Sastri, V. Yedantachari and T.V.R. Tatachari, for respondents 1 to 5 (in C.A. No. 116/61) and respondent No. 1 (in C.As. Nos. 117 119/61) and the appellants in C.A. Nos.120125/61. K.Bhimasankaram and P. D. Menon, for respondent No. 2 (in C.A.Nos. 117 119/61). November 19. The judgment of the Court was delivered by RAGHUBAR DAYAL, J. These appeals arise out of the order of the Tribunal appointed under section 8 of the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948 (Madras Act XXVI of 1948), hereinafter called the Act, apportioning the advance compensation given and interim payments made in connection with the vesting of the Venkatagiri Estate in the Government of Madras as a result of a notification issued under sub section (4) of section 1 of, the Act from the notified date, i.e., September 7, 1949. The Act received the assent of the Governor General on April 2, 1949 and some of its sections, including sections 4 and 8, mentioned in sub section (4) of section 1, came into force at once. The other sections came into force with respect to the Venkatagiri Estate from the notified date. With effect from the notified date, i.e., September 7, 1949, the entire Venkatagiri Estate stood transferred to the Government and vested in it by reason of section 3(b) of the Act. 283 Section 39 provides for the Director of Settlements to determine the basic annual sum in respect of the estate and also the total compensation payable in respect of the estate, in accordance with the provisions of the Act. Section 54 A provides that the Government shall estimate roughly the amount of compensation payable in respect of the estate and deposit one half of that amount within six months from the notified date in the office of the Tribunal as advance payment on account of compensation. (2) of section 50 provides for the deposit of interim payments by the Government during the period between the notified date and the final determination and deposit of the compensation payable in respect of the estate. In respect of the Venkatagiri Estate, the Government deposited Rs. 12,11,419/ as and by way of advance payment of compensation, after deducting Rs. 7,28,500/ payable to the Government by the Estate for peishkush out of the sum of Rs. 19,39,919 8 0, half of the estimated amount of compensation payable. The Government also deposited as interim payment Rs. 1,55,194/ for each of the Fasli years 1359 to 1362 F. It is the distribution of these amounts in deposit as advance payment of compensation and interim payments, which is the subject matter for determination in these appeals. To understand the various claims for payment out of these deposits, the following genealogical table will be helpful: 284 KUMARA YACHENDUR VARU | | | | Rajagopala Krishna Raja Venkata Krishna Yachendra(Deacsed) Yachendra (Deacsed) | | | | Rajagopala Krishna Raja V. Kumara Krishna Yachendra Yachendra (dead). (Petitioner in O.P. No. 392 of 1950) | Petitioner | | | | | | | | Raja V. Venkata Raja V. Rama Raja Venkata | Krishna Krishna Rajagopala | Yachendra R.10 Yachendra Krishna Yachendra | O.P. R.11 O.P. R.12 O.P. | No. 382/50 384/50 | | | | | | vegna Kumara Raja Venkata Rajagopala Krishna Krishna R 3. R.4 O.P. 256/50 | | | | | Rajagopala Krishna Gopal Krishna Yachendra R 6. | | | | Son Unnamed R 8. Son Unnamed R 9. 285 | | Raja Maddukrishna Raja Venugopala Yachendra Krishna Yachendra (Died Issueless) | | | | Raja V. Rajeswara Rao Raja Maheswara Rao (R 14) (R 15) | | Venkata | | Gopala Minor Madanagopal Died Krishna (R 16 O.P. (R 15) No. 385 of 50) 3/50. | | vaneethu R O.P. 3/50 286 The Venkatagiri Estate is an ancient estate in North Arcot and the necessary history of the estate for the purposes of this case is contained in the document Exhibit A 1 with which we now deal. Kumara Yachendra Bahadur Varu, who tops the genealogical table noted above and his four sons mentioned therein, are parties to this document. Kumara Yachendra Bahadur Varu represents also his minor son Venugopala Krishna Yachendra. The document recites that the estate had been made over in 1878 to Rajagopala Krishna Yachendra, the eldest of the four brothers, by their father Kumara Yachendra Bahadur Varu, the then Rajah, as he wanted to devote himself to offering prayers to God for obtaining salvation. He was said to be the sole heir to the estate, as Venkatagiri Zamindari was an impartible estate and succession to it was governed by the rule of lineal primogeniture. In 1889, two of the brothers, Venkata Krishna Yachendra ' and Muddukrishna Yachendra, expressed a desire for the partition of the estate. The then Rajah, i.e., Rajagopala Krishna Yachendra, the eldest brother, asserted that it was not liable for partition. The four brothers then consulted their father and he told them : "that the Venkatagiri Zamindari was originally acquired by the valour of our ancestors in warfare, that the Zamindari is ancient, that it is an Impartible Estate which has to pass in the order of primogeniture, that at the time when the Sannad Istimdar Milk was given to the Raja of Venkatagiri who was ruling at the time of the permanent settlement th e Peshkush was settled for this Venkatagiri Samasthanam on the amount which was being paid as tribute and on the entire expenses relating to military assistance that was to be rendered lo the Nawab 's government which was in power previously that for this reason this Venkatagiri Samasthanam is not at all partible that the 287 immovable properties relating thereto and also other immovable properties acquired with the income of the said Samasthanam are not liable for partition that this is his opinion in regard to immovable properties. . The father suggested partition of certain other property. The terms of the final settlement between the father and his four sons are then noted. They may be briefly mentioned. (1) As the Venkatagiri Estate is an Impartible Estate and it passes to the eldest son by the rule of lineal primogeniture, the said Estate, the immovable properties pertaining to it and other immovable properties acquired with the income derived from the said Estate will be enjoyed by the Rajah, the eldest brother, and after his death his sons and grandsons and so on in succession shall enjoy, always the eldest male being the heir. (2) If in the line of the said Rajah, his natural sons or adopted so s do not have male issue and that line stops short, then the properties shall be enjoyed by him who is the nearest heir and who is also the eldest to whom the impartible properties of the family pass according to law and custom and the same shall be enjoyed by his successors. (3) The said Estate, all the properties pertaining to it, the title, power, privileges, all these shall be enjoyed fully and with all powers according to law and custom by the respective individuals who would be ruling at the respective periods subject to the condition of payment of allowances to other members of the family from the income derived from the Estate and from the properties in a manner befitting their respective status. (4) The allowances were settled as follows Each of the brothers was to get Rs. 1,000/ per mouth 288 for the rest of his life. After the death of each of these brothers, his male heir would continue to get this allowance of Rs. 1,000/ per month. This amount of Rs. 1,000/ would be distributable between such male heirs and their male issues, according to Hindu Law. If the male member died without leaving a natural son or an adopted son, the allowance was to pass the nearest agnates of the same branch according to Hindu Law and in case he left a wife or wives who had to be paid maintenance, their maintenance would be a liability on such agnate. It was further provided that if any of the three lines of the family ceased for want of male issue, i.e., whether natural or adopted son, then subject to the condition that the wife or wives of the surviving male member of that branch who dies last shall be paid for their life time as maintenance a sum of Rs. 500/ being one half of the entire allowance of Rs. 1000/ that was being paid to the said male member, the allowance which was being paid to that branch would entirely cease. This document has been acted upon. In 1904, the Madras Impartible Estates Act, 1904 (Act 11 of 1904) came into force. The Venkatagiri Estate was included in the Schedule of that Act and had to be deemed to be an impartible estate in view of section 3 of that Act. Section 9 of that Act mentioned the persons entitled to maintenance out of the impartible estate, where for the purpose of ascertaining the succession to the impartible estate the estate had to be regarded as the property of a joint Hindu family. In view of section 66 of the Act the Madras Impartible Estates Act of 1904 is deemed to have been repealed in its application to the Venkatagiri Estate with effect from the notified date. The expression 'impartible estate ' in the Act means an estate governed immediately before the notified date by the Madras Impartible Estates Act, 1904 and therefore applies to this estate. 289 section 41 of the Act provides for the compensation to be deposited in the office of the Tribunal. Section 42 provides for the; filing of claims to the compensation before the Tribunal by persons claiming any amount by way of a share or by way of maintenance or otherwise and by creditors. By section 43, the tribunal is to inquire into the validity of the claims and determine the persons who, in its opinion, are entitled to the compensation deposited and the amount to which each of them is entitled. Section 44 provides that as a preliminary to the final determination, the Tribunal shall apportion the compensation among such persons whose rights or interests in the estates stood transferred to the Government, including persons who are entitled to be maintained from the estate and its Income, as far as possible, in accordance with the value of their respective interests in the estate. Its sub section (2) provides how the value of those interests shall be ascertained, and says that in case of an impartible estate referred to in section 45, the ascertainment shall be in accordance with the provisions contained in that section and in such rules, not inconsistent with that section, as may be made by the Government in that behalf. Section 45 is the main section for our purpose and may be quoted : "45. (1) In the case of an impartible estate which had to be regarded as the property of a joint Hindu family for the purpose of as certaining the succession thereto immediately before the notified date, the following pro visions shall apply. (2) The Tribunal shall determine the aggregate compensation payable to all the following persons, considered as a single group : (a) the principal landholder and his legitimate sons, grandsons, and great grandsons in 290 the male. line living or in the womb on the notified date including sons, grandsons and great grandsons adopted before such date (who are hereinafter called 'sharers ') ; and (b) other persons who, immediately before the notified date,were entitled to maintenance out of the estate and its income either under section 9 or 12 of the Madras Impartible Estates Act, 1904, or under any decree or order of a Court, award, or other instrument in writing or contract or family arrangement, which is binding on the principal landholder (who are hereinafter called 'maintenance holders '): Provided that no such maintenance holder shall be entitled to any portion of the aggregate compensation aforesaid, if before the notified date, his claim for maintenance, or the claim of his branch of the family for maintenance, has been settled or discharged in full. (3) The Tribunal shall next determine which creditors, if any, are lawfully entitled to have their debts paid from and out of the assests of the impartible estate and the amount of which each of them is so entitled; and only the remainder of the aggregate compensation shall be divisible among the sharers and maintenance holders as hereinafter provided. (4) The portion of the aggregate com pensation aforesaid payable to the maintenanceholders shall be determined by the Tribunal and notwithstanding any arrangement already made in respect of maintenance whether by a decree or order of a Court, award or other instrument in writing or contract or family arrangement, such portion shall not exceed 291 one fifth of the remainder referred to in sub section (3), except in the case referred to in the second proviso to section 47, sub section (2). (5) (a) The Tribunal shall, in determining the amount of the compensation payable to the maintenance holders and apportioning the same among them, have regard, as far as possible, to the following considerations, namely: (i) the compensation payable in respect of the estate ; (ii) the number of persons to be maintained out of the estate (iii) the nearness of relationship of the person claiming to be maintained; (iv) the other sources of income of the clai mant; and (v) the circumstances of the family of the claimant. (b) For the purpose of securing (i) that the amount of compensation payable to the maintenance holders does not exceed the limit specified in sub section (4) and (ii) that the same is apportioned among them on an equitable basis, the Tribunal shall have power, wherever necessary, to re open any arrangement already made in respect of maintenance, whether by a decree or order of a Court, award, or otherinstrument in writing or contract or family arrangement. (6) The balance of the aggregate compen sation shall be divided among the sharers, as if 292 they owned such balance as a joint Hindu family and a partition thereof had been effected among them on the notified date," Rajah Velugoti Kumara Krishna Yachendra, appellant in Appeal No. 117 of 1961, hereinafter called Krishna Bahadur, filed Original Petition No. 2300 of 1953 before the 'Tribunal. Three of his sons Ramakrishna Yachendra, Rajagopala Krishna Yachendra and Movva Gopala Krishna Yachendra, appellants in Civil Appeals Nos. 118, 119 and 116 of 1961, respectively, filed separate petitions. By their applications they raised the contentions that they were entitled to an amount in the compensation as sharers, as the impartible estate lost its character as such from the notified date and that the compensation payable with respect to their estate became partible and that in any case, they were entitled to the amount as creditors. It was further contended that the provisions of section 45 of the Act were ultra vires the State Legislature and were discriminatory and so void and that the maintenance amount be determined with respect to the amount of compensation and not with respect to the amount of compensation minus the amount of peishkush which was payable by the estate to the Government. None of these contentions was accepted by the Tribunal or by the Special Tribunal constituted in accordance with section 21 of the Act for bearing appeals against the orders of the Tribunal. The Tribunal fixed Rs. 75,000/ as the amount payable to Krishna Bahadur 's branch out of the sum of Rs. 12,11,419/ deposited as advance payment of compensation and further fixed the ratio of the value of the interests of Krishna Bahadur and the two brothers of the present Rajah, in the 1/5th of the advance compensation, at 75:75:92. The amounts 293 deposited as interim Payment were to be distributed in the same, ratio. The present Rajah, Sarvagna Kumara Krishna, had urged before the 'tribunal that the amount of maintenance to be paid to Krishna Bahadur 's branch should be calculated on a different basis which, in brief, may be said to be that the amount to which he be; held entitled out of the compensation should bear the same proportion to the total compensation as the monthly allowance payable to him under the document Exhibit A 1 bears to the income of the Estate in 1889 when that allowance of Rs. 1,000/per month was fixed. This contention also did not find favour with the Tribunal or the Special Tribunal on appeal. The Rajah has therefore filed Civil Appeals Nos. 120 to 123 of 1961. He has also filed two appeals Nos. 124 and 125 with respect to the interim payments made so Krishna Bahadur 's branch for the Fasli years 1359 and 1360 which were apportioned in accordance with the same principle which the Tribunal had adopted for the distribution of the maintenance allowance out of the advance compensation. The points urged for the appellants in appeals Nos. 116 to 119 are (1) Venkatagiri Estate was, impartible by custom that impartibility was recognized when disputes arose in 1889, that impartibility continued under the Madras Impartible Estates Act of 1904 but ceased when the Estate vested in the Government on September 7, 1949; (2) In these circumstances, the compensation Will not bear the character of impartibility as the property,, became the property of the joint family, the coparcenary having continued all through 294 (3)Section 45 and other provisions of the Act are ultra vires the State Legislature for want of legislative competence inasmuch as the said Legislature had no power to enact a law disturbing the rights of a joint family and also because the provisions of section 45 are discriminatory and offend article 14 of the Constitution as they provide for the maintenanceholders to get 1/5th out of the compensation while the proprietor and his sons are to get 4/5ths out of it after satisfying the claims of the creditors; (4) The appellants are not maintenanceholders, but creditors; (5) The amount of peishkush payable by the Venkatagiri Estate to the Government was not to be deducted from the compensation when calculating maintenance amount payable to the maintenance. holders. Now, the amount of peishkush payable to the Government had to be deducted out of the amount to be deposited under sub section (1) of section 54 A in view of the provisions of its sub section (2) which provides that from the amount to be deposited under sub section (1) the Government shall be entitled to deduct one half of all moneys, if any, due to them in respect of peishkush. Sub section (4) of section 54 A authorizes the Tribunal, after such enquiry as it thinks fit, to apportion the amount deposited in pursuance of that section, among the persons mentioned in that sub section as far as possible in accordance with the value of their respective interests and further provides that the provisions of sections 42 to 46 (both inclusive), shall apply mutatis mutandis in respect of the amount so deposited. It is true that the peshkash was a payment which the holder of the Estate had to make to the Government out of the income of the estate and that any arrears of peshkash remain a liability on the 295 estate. It was in view of this fact that s.55(1) of the Act which takes away the right of any land holder to collect any rent which had accrued to him from any ryot before the notified date and was outstanding on that, date empowers the manager appointed under section 6 to collect such rent and to pay the balance, if any, after making certain deductions specified in the section, including any arrears of peshkash to the landholder. The real compensation which is to be paid by the Government on the vesting of the estate must be equal to the amount of the value of the estate as such, minus the liabilities of the estate. What is to be distributed between the various persons entitled to the compensation must be the net amount and not the theoretical compensation for the estate as such. In this view of the matter too, the share of the maintenance holders will have to be calculated in the amount of compensation deposited, i. e., the amount of compensation minus the permissible deductions including peshkash. It is therefore clear that the Tribunal could not have ignored the deduction of peshkash from one half of the estimated amount of compensation payable in respect of the estate and had to apportion the amount deposited after taking into consideration such deduction. The contention for the appellants that the amount to be considered for calculating the share of the maintenance holders should have been taken at Rs. 19,00,000/ odd and not at Rs. 12,00,000/ odd, the actual amount of the deposit, is not sound. The next question is whether the allowance is a debt owed by the Rajah landholder to his brothers to whom the allowance was to be paid. It might have been so only if it was postulated that the Rajah had purchased the share of the other members of the family and was paying the sale price in the form of an allowance. This is, not what the document Exhibit A 1 recites. There is nothing in it to indicate 296 that the brothers of the Rajah to whom the estate had been made over by their father claimed a share in the estate after they had been told by their father that the estate was impartible. The sale price is normally fixed while the amount of allowance to be payable is an indefinite quantity depending upon length of time through which each of the brother 's branches continues to have a male member. The word 'allowance ' appears to have been used either as a dignified expression preferable in form to that of 'maintenance ' or due to the idea that the word ,maintenance ' is to be used appropriately only for the amounts to be paid to female members of the family in certain circumstances. The allowance referred to in the deed, Exhibit A. 1, as payable to Kishen Chander, father of Krishna Bahadur, is not akin to a debt owed by the Rajah to Kishen Chander. It is not made payable on account of certain loans taken by the Rajah, but is payable for maintenance, as the estate being impartible the other members of the family had a reasonable claim to maintenance. The only ground urged in support of the contention that the allowance is not an allowance for maintenance is that the word 'maintenance ' is used in the document A 1 in connection with the amount payable to the widows. A different terminology in referring to the amounts to be paid to Kishen Chander and his brothers does not change the character of the payment. The widows were to get a share out of the same allowance when there was no male member in the particular family. That amount cannot be a debt so long as it was payable to a male member and a maintenance when payable to a female member. Kishen Chander himself 'referred to this amount as maintenance in earlier proceedings. We therefore hold that the view expressed by the Courts below with respect to the nature of this allowance is correct. 297 The validity of section 45 of the Act on the ground of the ' competence of the Legislature of the State was not questioned in the High Court. The contention, however, is that the Act was made by the State Legislature by virtue of Entry 21 in List II of the Seventh Schedule to the Government of India Act, 1935, which reads: "Land, that is to say, rights in or over land, land tenures, including the relation of land lord and tenant, and the; collection of rents transfer, alienation and devolution of agricultural land ; land improvement and agricultural loans ; colonization; Courts of Wards; Encumbered and attached estates ; treasure trove. " The question of succession to the impartible estate does not come under this Entry and comes under Entry No. 7 of List III of the Seventh Schedule to the Government of India Act which reads : "Wills, intestacy, and succession, save as regards agricultural land. " The reply for the respondent is that the Act can come within either item No. 9 or item No. 21 or both, of List II ' of the Seventh Schedule to the Government of India Act, 1935. We are of opinion that the Act does not (teal with the succession to impartible estates. The Act acquires the impartible estate which vests in the Government on the notified date. The rights of the and holder in the estate cease on that date. The Act was enacted by the State Legislature by virtue of item No. 9, List II, Seventh Schedule to the Government of India Act which reads: "Compulsory acquisition of land. " The Act is not ultra vires the State Legislature Theattack on the validity of section 45 of the Act on 298 the ground of its contravening the provisions of Art 14 of the Constitution is not open to the appellants in view of article 31B which provides inter alia that not of the Acts specified in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void or ever to have become void on the ,round that the Act takes away or abridges any of the rights conferred by any provisions of Part III. Article 14 is in that Part of the Constitution. The Act is mentioned at item No. 10 in the Ninth Schedule. We therefore hold that the provisions of section 45 of the Act are not void. The next question for determination is whether the appellants should have got share in the compensation as "sharers ' on account of the partible character of the estate reviving on the notified date as a result of the repeal of the Impartible Estates Act, 1904. We are concerned in these appeals with the distribution of advance compensation given and interim payments made in accordance with the provisions of the Act. We have held the relevant provisions to be valid. Therefore, the appellants can only ask for their share of the compensation in accordance with those provi sions. We do not consider it necessary to decide the question whether any property ceased to be impartible after the notified date and understand that an appeal in which the question directly arises is pending against a judgment in a civil suit holding that the buildings to which sub section (4) of section 18 applied were impartible and were owned by the Rajah. Even if the appellants had any right in the estate, (though we do not so decide), that right ceased on the notified date in view of the provisions of section 3 of the Act and thereafter they are entitled to such rights and privileges only as are recognized or conferred by or under the Act. Section 3 of the Act provides the consequences of notification of the estate. The relevant portions of section 3 are : " x x x x 299 (b) . the entire estate. shall stand transferred to the Government and vest in them. . (c) all rights and interests created in or over the estate before the notified date by the principal or any other land holder, shall as against the Government cease and determine x x x x x (e) the principal or any other landholder and any other person, whose tights stand transferred under clause (b) or cease and determine under clause (c), shall be entitled only to such rights and privileges as are recognized or conferred on him by or under this Act. , x x x x x (g)any rights and privileges which may have accrued in the estate, to any person before the notified date, against the principal or any other landholder thereof, shall cease and determine, and shall not be enforceable against the Government or such landholder, and every such person shall be entitled only to such rights and privileges as are recognized or conferred on him by or under this Act. ' The estate was impartible up to the moment it vested in the Government on the notified date. Whatever be the nature of the compensation payable, the distribution of the compensation between the persons who had an interest in the estate would be in accordance with the provisions of sub section (2) of section 45 which defines "sharers ' to be the principal landholder and his legitimate sons, grandsons and the great grandsons in the main line living, or in the womb on the notified date, including sons, grandsons and great grandsons adopted before such date. The appellants do not come under any of the persons mentioned in this 300 clause and therefore they cannot get, compensation as "sharers". The result of our findings is that all the four appeals nos. 116 to 119 of 1961 fail. The dispute in the remaining six civil appeals relates to the principle on which the amounts of maintenance payable to the persons entitled to it are to be calculated. The contention is that when the net income of the estate in 1889, was about Rs ' 6,00,000/ a year, the allowance payable to each brother was Rs '. 1,000/ per month and that therefore the value of the interest of each brother in the estate came to about 1/50th of the income. The amount payable to him now, it is urged should% bear the same proportion to the basic annual sum which is first calculated under the provisions of the Act and later capitalised to obtain the amount of compensation payable for the estate. The relevant provisions in connection with the apportionment of the maintenance allowance applicable to impartible estates are to be found in section 45 of the Act, Sub section (3) provides for determining the amount to which the creditors of the holder ' of the estate are entitled out of the assets of the estate. The amount due to them is first to be deducted from the compensation and out of the balance the maintenance holders as a body can have an amount equal to 1/5 th and no more. If the amount due to them comes to less than 1/5th they will get it as they had been getting in the past. If the , amount exceeds 1/5th of the aforesaid balance,, the tribunal has the authority, to re open any arrangement previously made in respect of maintenance and re assess the amount to paid to each maintenance holder, keeping in regard the provisions of sub section (5) There is nothing in this sub section which authorises the Tribunal to calculate the incidents of the amount of compensation on the income of the estate at the time it was fixed. Even in the present case, the amount of 301 maintenance allowance was not. fixed as a certain proportion of the net income of the estate but was fixed, according to document A 1, after considering several factors affecting the question as is apparent from the following statement in ' the document "The aforesaid mediator considered in full the status of all the claimants. the status and dignity, of the Estate and all the other matters deserving consideration and settled that the said Rajha. Rajagopala Krishna Yachendra. . of Venkatagiri should pay the allowances as mentioned below. " We are therefore of opinion,. that the Special Tribunal had held rightly that the apportionment of the advance payment of compensation and the interim payment had been made in accordance with the provisions of the Act. In view of what we have stated above, we dismiss all the appeals with costs, one :hearing fee for Civil Appeals Nos. 116 to 119 and one hearing fee for C I Appeals Nos. 120 to 125. Appeals dismissed.

A Receiver authorised and appointed by a Court to collect the debts due to the plaintiff respondent instituted a suit against the appellant firm and its alleged partners for the recovery of the price of tobacco and interest thereon. The right of the receiver to institute a suit in his own name was challenged by the appellant. Thereupon the respondent firm amended the Plaint by describing the plaintiff as "M/s. T. R. & Co., represented by I. Surayanarayana Garu receiver appoin. ted in O.S. 275 of 1948 on the file of the District Munsiff 's Court Guntur. " The appellant firm amended the written statement and contended that the amendment of the plaint was timebarred, that it did not cure the initial defect in the suit and that consequently, the suit was barred by limitation. The trial court dismissed the suit on the ground that Suryanarayana was not entitled to institute a suit in his capacity as Receiver, that the amendment of the plaint was beyond time and that the suit was therefore time barred. On appeal the High 996 Court held that the Receiver was entitled to institute the suit, that at the most there was a misdescription of the plaintifffirm in the cause title of the suit which could be corrected any time, that consequently the suit was within time and that the plaintiff was entitled to a decree with interest from the date of delivery of the goods till realization. Held, that a Receiver invested with full powers to administer the property which is custodia legis or who is expressly authorised by the court to institute a suit for collection of the assets is entitled to institute a suit in his own name provided he does so in his capacity as a Receiver. His function cannot be limited merely to the preservation of the property and it is open to a court, if occasion demands, to confer upon him the power to take such steps including instituting suits in the interest of the parties themselves. The suit as originally instituted, was thus perfectly competent. The High Court rightly held, that where there is a case of misdescription of parties it is open to the court to allow an amendment of the plaint at any time and the question of limitation would not arise in such a case. Jagat Tarini Dasi vs Naba Gopal Chaki (1907) r. L. R. , relied on. Held, further that this court does not interfere with the concurrent findings of the courts below on a pure question of fact, unless there are exceptional circumstances or unusual reasons which induce it to re examine the entire evidence. Srimati Bibhabati Devi vs Kumar Ramendra Narayan Boy, (1946) L. R. 73 1. A. 246 and Sriniwas Ram Kumar vs Mahabir Prasad, ; , referred to.

ivil Appeal No. 2311 of 1978. From the Judgment and Order dated 27.3.1978 of the Allahabad High Court in Second Appeal No. 130 of 1975. Awadh Behari and N.N. Sharma for the Appellants. Yogeshwar Prasad and Mrs. Rani Chhabra for the Respondent. The Judgment of the Court was delivered by K.N. SAIKIA, J. This appeal by special leave is from the judgment and order dated 27.3.1978 of the High Court of judicature at Allahabad (Lucknow Bench), in second appeal No. 130 of 1975, dismissing the appeal and upholding the decree of the plaintiff respondent 's suit. The plaintiff respondent Prem Behari Khare instituted suit No. 42 of 197 1 in the court of Civil Judge, Mohanlal Gun j, Lucknow praying for the reliefs, inter alia, that he be declared to be the sole and real owner of the suit house, and that the defendant appellant be permanently restrained from transferring the suit house. The learned Civil Judge, Lucknow, by his judgment dated 133.1974 decreed the suit declaring the plaintiff to be the sole and real owner of the suit house and permanently restraining the defendant from transferring the suit house to any other person. On first appeal by the defendant appellant the learned Additional District Judge; Lucknow by his judg 627 ment dated 23.12.1974 dismissed the appeal agreeing with the findings of the trial court that it was the plaintiff re spondent who paid the consideration and purchased the suit house benami in the name of tile defendant appellant who, therefore, had no right to create any equitable mortgage or to transfer the suit house. The defendant appellant 's second appeal thereafter was also dismissed by the High Court of Judicature at Allahabad by the impugned judgment dated 27.3.1978. Hence this appeal by special leave. Mr. A.B. Rohtagi learned counsel for the appellant submitS, inter alia, that the learned courts below erred in holding that the suit house was not gifted by the plaintiff to the defendant but was held benami in her name; and that even if it was so held benami, the subsequent legislation, namely, the Benami Transactions (Prohibition) Act 1988, has put a complete bar to the plaintiff 's suit against the defendant in respect of the suit house. Mr. Yogeshwar Prasad learned counsel for the respondent refutes submitting that the issues on gift and benami have been concluded by concurrent findings of fact of the learned courts below; and that the plaintiff 's right to the benami suit house having already become final, it will not be affected by the subsequent Act. The first question, therefore, is whether or not to interfere with the concurrent findings of fact of the learned courts below. It has been said in a series of deci sions that ordinarily this court in an appeal will not interfere with a finding of fact which is not shown to be perverse or based on no evidence, (Babu vs Dy. Director, A.I.R. 1982 S.C. 756), but will interfere if material cir cumstances are ignored by the High Court. Prasad vs Govin daswaray; , In Dhanjibhai vs State of Gujarat, ; it was observed that where a finding of fact has been rendered by a learned Single Judge of the High Court as a court of first instance and thereaf ter affirmed in appeal by an Appellate Bench of that High Court, this Court should be reluctant to interfere with the finding unless there is very strong reason to do so. There is no reason why this should not apply to cases where the first appellate court was the district court. It was noted in Ganga Bishan vs Jay Narayan, A.I.R. 1986 S.C. 441 that ordinarily this Court, under Article 136 of the Constitu tion, would be averse to interfere with concurrent findings of fact recorded by the High Court and the Trial Court. But where there are material irregularities affecting the said findings or where the court feels that justice has failed and the findings are likely to result in unduly excessive hardship this court could not 628 decline to interfere merely on the ground that findings in question are findings on fact. So also in Uday Chand Dutt vs Saibal Sen, A.I.R. 1988 S.C. 367 it was said that in an appeal by special leave under Article 136 of the Constitu tion of India where there are concurrent findings of the courts below this court is not called upon to reconsider the entire evidence in detail to ascertain whether the findings are justified. In Ram Singh vs Ajay Chawla, A.I.R. 1988 S.C. 514 where the concurrent finding was that the appellants were in unauthorised occupation of premises of which the respondents were the owners this court did not interfere with the concurrent findings of fact. Mr. Rohtagi lays emphasis on the facts, namely, that the plaintiff Prem Behari Khare 's wife having died in 1955 leaving behind two sons aged about 2 and 3 years respective ly, he faced great difficulties in managing the household, looking after his sons and carrying on his duties as employ ee of the Allahabad Bank; that under these circumstances he agreed to take in the defendant Mithilesh Kumari whose relation with her husband Ram Swarup was then estranged; that the relation between the plaintiff and the defendant come to be such that she bore two children to him; that there were efforts to legalise their de facto living as man and wife by obtaining defendant 's divorce from her husband, and in fact there was a decree for judicial separation in 1958; that the plaintiff had full confidence in, and affec tion towards the defendant; and that in the court he could give no reason why he purchased the house in the name of the defendant. Under those circumstances, counsel submits, the purchase of the suit house in the name of the defendant was made for Rs.8,000 out of which Rs.2,000 contributed by the defendant, and the learned courts below ought, therefore, to have held the transaction of purchase in the name of defend ant to have been a genuine gift out of love and affection and not a benami purchase in her name. Perusing the judgment of the Trial Court we find that whether the transaction was a benami or it was a genuine gift by the plaintiff to the defendant were main issues on which parties led evidence. The averment that the defendant contributed Rs.2,000 towards purchase price was disbelieved by both the courts below. The plaintiff respondent proved from the statement of his Savings Bank account of Allahabad Bank, Exts. 6, 7 and 8, that he withdrew Rs.8,250 on 8.11.1962 and stated in witness box that he purchased the suit house in the name of the defendant by sale deed execut ed on 8.11.1962 which was registered on 9.11.1962. The plaintiff respondent has since been staying in the suit house. As the two were living as man and wife the 629 custody of the sale deed was not very material. We thus find that the concurrent findings are based on reasonable appre ciation of evidence on record and, therefore, can in no way be said to be perverse or unreasonable. Counsel criticises the observation of the High Court that the relation between the two was of a rather objectionable nature. We do not think that this observation was unwarranted or it had in any way prejudiced the defendant 's case. The High Court has analysed the facts and correctly applied the tests to deter mine whether the transaction was benami or not discussing the case law. We do not find any justification in the appeal under Article 136 of the Constitution of India to interfere with the concurrent findings of fact. The next question is whether despite the decree in favour of the plaintiff respondent his suit or action will be affected by the subsequent legislation, namely, the Benami Transactions (Prohibition) Act, 1988 and its prede cessor Ordinance. In other words, whether the effectuation of the decree has been barred. For this it is relevant to note that the impugned High Court judgment was dated 27.3.1978. The first appellate court 's judgment was dated 23.12.1974, the trial court judgment dated 13.3.1974 and the suit was filed in 1971. The special leave to appeal was granted by this Court on 15.11.1978. The Benami Transactions (Prohibition of the Right to Recover Property) Ordinance, 1988, hereinafter referred to as 'the Ordinance ', was pro mulgated on May 19, 1988 to come into force at once. The Benami Transactions (Prohibition) Act, 1988 (Act No. 45 of 1988), hereinafter referred to as 'the Act ', received the asset of the President of India on September 5, 1988. The provisions of Sections 3, 5 and 8 of the Act came into force at once on that date and the remaining provisions were to be deemed to have come into force on 19th day of May 1988. It is an Act to prohibit benami transactions and the right to recover property held benami and matters connected therewith or incidental thereto. Mr. Rohtagi submits that provisions of the Act cover past benami transactions also and that to hold so it would be permissible for this Court to refer to the 57th Report of the Law Commission of India wherein it was suggested that the legislation should not be applied to past transactions but the Parliament did not accept that suggestion, and made the law applicable to past transactions also. Learned counsel for the respondent Submits that the provisions of the Act are prospective and not retrospective, and as such would not affect the respondent 's established right to the benami property. He has not controverted that this Court can refer to Law Commission 's Report. 630 To decide the controversy the relevant provisions of the Act may be referred to. As defined in section 2(a) of the Act "Benami Transaction" means any transaction in which property is transferred to one person for a consideration paid or provided by another person. As defined in section 2(c) of the Act "property" means property of any kind, whether movable or immovable, tangible or intangible and includes any right or interest in such property. There can, therefore, be no doubt that the transaction by which the suit house was transferred to the defendant appellant for Rs.8,000 paid or provided by the plaintiff respondent would be a benami transaction if this law is applicable to it. There is also no doubt that the suit house being a tangible immovable would be included within this definition of 'property '. Section 3 of the Act prohibits benami transactions by pro viding: "(1) No person shall enter into any benami transaction. (2) Nothing in sub section (1) shall apply to the purchase of property by any person in the name of his wife or unmarried daughter and it shall be presumed, unless the contrary is proved that the said property had been purchased for the benefit of the wife or the unmarried daughter. (3) Whoever enters into any benami transaction shall be punishable with imprison ment for a term which may extend to three years or with fine or with both. (4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), an offence under this section shall be non cognisable and bailable. " The appellant having not been wife or unmarried daughter of the respondent the exception in (2) will not be applica ble. Section 4 prohibits the right to recover property held benami by providing: "(1) No suit, claim or action to enforce any right in resspect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property. 631 (2) No defence based on any right in respect of any property held benami, whether against the person m whose name the property is held or against any other person, shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property. " Having upheld the finding that the suit house has been held benami by the respondent in the name of the appellant, the question is whether to this transaction the Act shall be applicable. The Act has not been made retrospective by any specific provision. Is it permissible to refer to the Law Commission 's Report to ascertain the legislative intent behind the provision? We are of the view that where a par ticular enactment or amendment is the result of recommenda tion of the Law Commission of India, it may be permissible to refer to the relevant report as in this case. What impor tance can be given to it will depend on the facts and cir cumstances of each case. In Santa Singh vs State of Punjab, [1977] 1 S.C.R. 229 Fazal Ali, J. in order to answer the question whether the non compliance with the provisions of section 235(2) of the Criminal Procedure Code, 1973 vitiated the sentence passed by the court considered it necessary to trace the historical background and social setting under which section 235(2) was inserted for the first time in the 1973 Code and referred to the research done by the Law Commission which made several recommendations in its 48th Report for revolutionary changes in the provision. The Statement of Objects and Reasons were also referred to in that context. In the instance case we find that way back in 1972 the Government of India consid ered it necessary to request the Law Commission of India to examine the problem of benami held property with a view to determining whether benami transactions should be prohibit ed. The Law Commission accordingly submitted its 57th Report on benami transactions on 7.8.1973 after studying benami system as operating in India and in England. It also exam ined implications of the provisions of the Indian Trust Act, 1882 and other statutory modifications of the Benami Law as contained in the Code of Civil Procedure, the Transfer of Property Act, the Indian Penal Code and the Income tax Act. It also suggested in its Report the following draft of proposed legislation: 6.33 Recommendation: In the light of the above discussion, we recommend the enactment of a separate law containing the following legislative provisions: 632 "(1) No suit to enforce any right in respect of any property held benami against the person in whose name the, property is held or against any other person shall be institut ed in any court by or on behalf of a person claiming to be the real owner of such proper ty. (2) In any suit, no defence based on any right in respect of any property held benami, whether against the person in whose name the property is held or against any other person, shall be allowed in any court by or on behalf of a person claiming to be the real owner of such property. (3) Nothing in this section shall apply: (a) whether the person in whose name the property is held is a manager of, or a co parcener in, a Hindu undivided family, and the property is held for)he benefit of the co parceners in the family, or (b) where the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity, and the property is held for the benefit of another person for whom he is a trustee or towards whom he stands in such capacity." On 19th May 1988, the President of India promulgated the Benami Transactions (Prohibition of the Right to Recover Property) Ordinance, 1988 (No. 2 of 1988) "to prohibit the right to recover property held benami and for matters con nected therewith and incidental thereto" based on the sug gestion of the Law Commission of India made as far back as in 1973. With this Ordinance the judicial acceptance of benami transactions was being removed with a view to help people to keep property they were holding for others. It remedied the age old doctrine of benami and made a benamidar the real owner in law, of course with few exceptions. The Ordinance was referred by the Government on July 22, 1988 to the Law Commission of India requesting the latter to take up the question of benami transactions for detail examination and to give its considered views as early as possible so that a Bill to replace the Ordinance could be drafted on the basis of its recommendations and got passed before the close of the Monsoon Session of the Parliament. 633 The 130th Report of the Law Commission was submitted to the Government on August 14, 1988. The Benami Transactions (Prohibition) Bill, 1988, drafted after getting the report, was introduced in the Rajya Sabha on 31st August, 1988 and the Bill was passed. The Law Commission devoted several pages to justify retrospective legislation and its view was that the legislation replacing the Ordinance should be retroactive in operation and that no locus penitentia need be given to the person who had entered in the benami trans actions in the past. It reported at para 3.18 as follows: "3.18. Therefore, viewed from either angle, the Law Commission is of the firm opinion that the legislation replacing the ordinance should be retroactive in operation and that no locus penitentia need be given to the persons who had entered into benami transactions in the past. They had notice of one and a half dec ades to set their house in order. No more indulgence is called for. " However, the court has to interpret the language used in the Act, and when the language is clear and unambiguous it must. be given effect to. Law Commission 's Reports may be referred to as external aid to construction of the provi sions. It may be noted that the Act is a piece of prohibito ry legislation and it prohibits benami transactions subject to stated exceptions and makes such transactions punishable and also prohibits the right to defences against recovery of benami transactions as defined in section 2(a) of the Act. The Parliament has jurisdiction to pass a declaratory legis lation. As a result of the provisions of the Act all proper ties held benami at the moment of the Act coming into force may be affected irrespective of their beginning, duration and origin. This will be so even if the legislation is not retrospective but only retroactive. The learned counsel for the respondent rightly submits that the Act contains no specific provision making its operation retrospective. The Law Commission itself observed that democratic culture abhors ex post facto legislation and that it was necessary .to curb unlawful nefarious uses of property. We read in Maxwell that it is a fundamental rule of English Law that no statute shall be construed to have retrOspective operation Unless such a construction appears very clearly at the time of the Act, or arises by necessary and distinct implication. A retrospective operation is, therefore, not to be given to a statute so as to impair existing right 634 or obligation, otherwise than as regards matter of procedure .unless that effect cannot be avoided without doing violence to the language of the enactment. Before applying a statute retrospectively the Court has to be satisfied that the statute is in fact retrospective. The presumption against retrospective operation is strong in .cases in which the statute, if operated retrospectively, would prejudicially affect vested rights or the illegality of the past transactions, or impair contracts, or impose new duty or attach new disability in respect of past transac tions or consideration already passed. However, a statute is not properly called a retrospective statute because a part of the requisites for its action is drawn from a time an tecedent to its passing. We must look at the general scope and purview of the statute and at the remedy sought to be applied, and consider what was the former State of Law and what the legislation contemplated. Every law that takes away or impairs rights vested agreeably to existing laws is retrospective, and is generally unjust and may be oppres sive But laws made justly and for the benefit of individu als and the community as a whole, as in this case, may relate to a time antecedent to their commencement. The presumption against retrospectivity may in such cases be rebutted by necessary implications from the language em ployed in the statute. It cannot be said to be an invariable rule that a statute could not be retrospective unless so expressed in the very terms of the section which had to be construed. The question is whether on a proper construction the legislature may be said to have so expressed its inten tion. Craise on Statute Law, 7th Ed. writes that the general rule of law that statutes are not operated retrospectively may be departed from (a) by express enactment and (b) by necessary implication from the language employed, and the author goes on to say: "If it is a necessary implication from the language employed that the legislature intend ed a particular section to have a retrospec tive operation, the courts will give it such an operation. "Baron Parke," said Lord Hather ley in Pardo vs Bingham, did not consider it an invariable rule that a statute could not be retrospective unless so expressed in the very terms of the section which had to be con strued, and said that the question in each case was whether the legislature had suffi ciently expressed that intention. In fact, we must look to the general scope and purview of the statute, and at the remedy sought to be applied, and consider what was the former state of the law, what it was that the legis lature contemplated. " But a statute is not to be read retrospectively except of necessity . In Main vs 635 Stark, Lord Selborne said: "Their lordships, of course do not say that there might not be something in the context of an Act of Parlia ment, or to be collected from its language, which might give towards prima facie prospec tive a larger operation, but they ought not to receive a larger operation unless you find some reason for giving it . In all cases it is desirable to ascertain the intention of the legislature." He went on: "Words not requiring a retrospec tive operation, so as to affect an existing statute preudicially, ought not to be so construed", but in Renold vs Att. for Novo Scotia it was held that this rule did not extend to protect from the effect of a repeal a privilege which did not amount to an accrued right. " (pp. 392 393) As defined in Section 2(a) of the Act "benami transac tion" means any transaction in which property is transferred to one person for a consideration paid or provided by any other person. " A transaction must, therefore, be benami irrespective of its date or duration. Section 3, subject to the exceptions, states that no person shall enter into any benami transaction. This section obviously cannot have retrospective operation. However, section 4 clearly provides that no suit, claim or action to enforce any right in re spect of any property held benami against the person in whose name the property is held or against any other person shall lie, by or on behalf of a person claiming to be real owner of such property. This naturally relates to past transactions as well. The expression "any property held benami" is not limited to any particular time, date or duration. Once the property is found to have been held benami, no suit, claim or action to enforce any right in respect thereof Shall lie. Similarly, sub section (2) of section 4 nullifies the defences based on any right in respect of any property held benami whether against the person in whose name the property is held or against any other person in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property. It means that once a property is found to have been held bena mi, the real owner is bereft of any defence against the person in whose name the property is held or any other person. In other words in its sweep section 4 envisages past benami transactions also within its retroactivity. In this sense the Act is both a penal and a disqualifying statute. In case of a qualifying or disqualifying statute it may be necessarily retroactive. For example when a Law of Represen tation declares that all who have attained 18 years shall be eligible to vote, those who attained 18 yearS in the past would be as much eligible as those who 636 attained that age at the moment of the law coming into force. When an Act is declaratory in nature .the presumption against retrospectivity is not applicable. Acts of this kind only declare. A statute in effect declaring the benami transactions to be unenforceable belongs to this type. The presumption against taking away vested right will not apply in this case inasmuch as under law it is the benamidar in whose name the property stands, and law only enabled the real owner to recover the property from him which right has now been ceased by the Act. In one sense there was a right to recover or resist in the real owner against the benami dar. Ubi jus ibi remedium. Where there is a right, there is a remedy. Where the remedy is barred, the right is rendered unenforceable. In this sense it is a disabling statute. All the real owners are equally affected by the disability provision irrespective of the time of creation of the fight. A right is a legally protected interest. The real owner 's fight was hitherto protected and the Act has resulted in removal of that protection. When the law nullifies the defences available to the real owner in recovering the benami property from the benam idar the law must apply irrespective of the time of the benami transactions. The expression "shall lie" in section 4(1) and "shall be allowed" in section 4(2) are prospective and shall apply to present (future stages) and future suits, claims or actions only. This leads us to the question wheth er there was a present suit between the plaintiff respondent and the defendant appellant on the date of the law coming into force. We have noted the dates of filing the suit and judgments of the courts below. On the date of the section 4 of the Act coming into force, that is, 19th May 1988 this appeal was pending and, of course, is still pending. Can the suit itself be said to be pending? Lachmeshwar vs Keshwar Lal, A.I.R. 1941 F.C. 5 is an authority for holding that the hearing of appeal under the procedural law of India is.in the nature of re hearing and therefore in moulding the relief to be granted in a case on appeal, the appellate court is entitled to take into account even facts and events which have come into existence after the decree appealed against. Consequently, the appellate court is competent to take into account legislative changes since the decision under appeal was given and its powers are not confined only to see whether the lower court 's decision was correct according to the law as it stood at the time when its decision was given. Once the decree of the High Court has been appealed against, the matter became sub judice again and thereafter this court had seisin of the whole case, though for certain purposes e.g., execution, the decree was regarded as final and the courts below retained jurisdiction in that regard. This was followed 637 in Shyabuddinsab vs The Gadag Betgeri Municipal Borough, ; where after the judgment of the High Court and after grant of special leave by this court the legislation was passed, and it was applied by this Court. Their lordships, referring to The King vs The General Com missioner of Income Tax, and Mukharjee Official Receiver vs Ramratan Kaur, [1935] L.R. 63 I.A. 47 rejected the contention that unless there are express words in the amending statute to the effect that the amendment shall apply to pending proceedings, it cannot affect the proceedings. In Dayawati vs Inderjit, ; it has been held that the word 'suit ' includes an appeal from the judgment in the suit. The only difference between a suit and an appeal is that an appeal only reviews and corrects and proceedings in a cause already constituted but does not create the cause. 1n Mohanlal Jain vs His Highness Maharaja Shri Man Singh, [1962] 1 S.C.R. 702 it was observed that "A person is "sued" not only when the plaint is filed against him, but is "sued" also when the suit remained pending against him. The word "sued" covers the entire proceeding, in an action." In Amerjit Kaur vs Pritam Singh, it has been held that an appeal is a reheating and in moulding relief to be granted in a case on appeal, the appellate court is entitled to take into account even facts and events which have come into existence after the passing of the decree appealed against. For the respondent it is submitted that right of the parties to a suit would be determined on the basis of rights available to them on the date of filing of the suit. Reli ance is placed on Nand Kishore Marwah vs Samundri Devi, ; That however was a case of eviction where the rights of the parties on the date of suit were material unlike in this case where subsequent legislation has nullified the defences of benami holders. That case is, therefore, distinguishable. Counsel for the respondent lastly submits that nobody should be allowed to suffer for fault of the court. As the maxim goes, actus curiae neminem gravabit. Nobody should suffer for an act of the court. However, the delay in dis posal of an appeal cannot be termed an action of the court. The consequence is that the plaintiff respondent 's suit or action cannot be decreed under the law; and hence the decree passed by the lower courts is annihiliated and the suit dismissed. In .the result, this appeal is allowed in the manner indicated above. Under the peculiar facts and circumstances of the case, we make no order as to costs. N.P.V. Appeal allowed.

Under an import licence dated 3rd March, 1971 issued by the Chief Controller of Imports and Exports the respondent imported two fishing trawlers with the financial assistance of the second respondent Canara Bank. The respondent con ducted negotiations with the appellant for a charter party agreement in respect of the said trawlers. On 21st March, 1977, an agreement between the parties was executed 470 under which the appellant agreed to take on charter hire the said two trawlers for the purpose of deep sea fishing for a period of two years with an option to continue the hire for a further period of three years. Under the terms of the agreement the respondent was to deliver the said trawlers to the appellant at Vishakhapatnam within seven days of the receipt of approval from the Chief Controller of Imports and Exports or no objection certificate from the Canara Bank, for making the said trawlers fully operational and to ascer tain the cost of such repairs. The appellant charterer was then to conduct fishing trials to ascertain actual condi tions and thereafter the charter hiring was to commence from the date the fishing trials were ended. On 18th August, 1977, the Chief Controller of Imports and Exports granted permission to the respondent to charter the said trawlers to the appellant on the conditions that the charter rent would be Rs.50,000 per month per trawler and that the charter would be for a period of three years. On 30th September, 1977, the respondent delivered the said two trawlers for repairs to the appellant. On 2nd February, 1978, the parties modified the agree ment revising the rate of charter hire and the date of commencement of hire, to the extent that the charter hire would commence from 15th January, 1978 and the revised rate of hire would be Rs.6,25,000 per trawler per year. The appellant charterer raised objections alleging that the trawlers suffered from inherent and latent defects in the refrigeration system which was an essential part of such trawlers and as such the trawlers were not fully operational because even after carrying out extensive repairs the re frigeration system could not be brought to the required standard of minus 20 degree F but attained only minus 10 degree F. On 29.9.1978, the appellant instituted a suit in the original side of the Calcutta High Court claiming (i) a decree for a sum of Rs.39,64,341 towards cost, charges, damages and compensation incurred on the said trawlers and, (ii) a declaration that the agreement was contrary to the terms of the permission granted by the Chief Controller of Imports and Exports and consequently illegal and against public policy and void; (iii) that the Parties had entered into the agreement on the basic fundamental assumption that by effecting necessary repairs the trawlers would be made fully operational but the assumption was subsequently dis covered to be mistaken because of the deficiency in the refrigeration system and it rendered the agreement void. 471 The respondent filed an application under Section 34 of the praying that the suit instituted by the appellant, and all proceedings therein be stayed because the disputes were wholly covered by the arbitration clause as contained in the modified agreement dated 2nd February, 1978 which was binding between the parties. The Single Judge held that there was no invalidity for non compliance of the conditions of the licence granted because necessary permission was obtained in respect of the agreement from the Chief Controller of Imports and Exports and the modifications of the agreement did not impair its validity; though in a particular case if there was any doubt about facts, the matter had to be decided by trial on evi dence but in the instant case, having regard to the admitted facts and conduct of the parties it was not necessary to set down the matter for trial on evidence; there was no illegal ity or mutual mistake; that the alleged fundamental breach was wholly covered by the arbitration clause; that the arbitration clause was valid and binding between the par ties; and that all the conditions of Section 34 were satis fied. Accordingly, the Single Judge granted stay of the suit and directed the parties to take immediate steps for initia tion of reference under the arbitration agreement. The judgment and order of the Single Judge was confirmed by the Division Bench by dismissing the appeal. In this appeal by special leave it was contended on behalf of the appellants that (i) the subject matter of the suit, namely, the question whether the agreement was void ab initio for mutual mistake was not arbitrable; and the courts below erred in holding so; (ii) assuming that the subject matter was arbitrable, the court should not have exercised its jurisdiction on the application under Section 34 because it involved complicated questions of fact and in exercising such jurisdiction the courts acted without jurisdiction; (iii) the court should have decided only after taking oral and documentary evidence and not merely on affidavits; (iv) the agreement was void being violative of the conditions of the permission granted by the Chief Controller of Imports and Exports; (v) the agreement itself having been void ab initio due to mutual mistake, the arbitration clause per ished with it and the courts below erred in holding that the disputes were arbitrable. Dismissing the appeal, the Court, HELD: 1. Section 34 deals with the staying of a suit where there 472 is an arbitration agreement concerning the subject matter of the suit and between the same parties. For the Court to have power to exercise the discretion conferred upon it by this section, there must have been a valid agreement to submit to arbitration. Where the objection is that the arbitration is a nullity, it amounts to an objection of want of jurisdic tion. The term "arbitration agreement" includes "agreement to refer", and "submission" to Arbitrator. A submission forming part of a void contract is itself void and cannot be enforced. [484B C] 1.1 Whether a particular dispute arising out of a par ticular contract is referable to arbitration or not, must necessarily depend on the intention of the parties as em bodied in the arbitration clause. If the dispute is squarely covered by the arbitration clause, the relevant provisions of the Act will be attracted. The question whether the dispute in the suit fails within the arbitration clause really pre supposes that there is such agreement and in volves consideration of two matters, that is (i) what is the dispute in the suit, and (ii) what dispute the arbitration clause covers. It is incumbent upon the court to decide whether there is a binding contract for arbitration between the parties. If it is found that the dispute in the suit is not covered by the arbitration clause the application for stay may be dismissed. [488H; 489A] 2. Where in an application under Section 34 of the Act an issue is raised as to the validity or existence of the contract containing the arbitration clause, the court has to decide first of all whether there is a binding arbitration agreement, even though it may involve incidentally a deci sion as to the validity or existence of the parent contract. If the arbitration clause is so wide as to have included the very validity or otherwise of the contract on the grounds of fraud, mis representations, mutual mistake or any valid reason the arbitrator will surely have jurisdiction to decide even that dispute. The proper approach would be to examine the issue raised in the suit and to ascertain wheth er it squarely falls within the compass of the arbitration clause and take a decision before granting the stay of the suit. If an issue is raised as to the formation, existence or validity of the contract containing the arbitration clause, the court has to exercise discretion to decide or not to decide the issue of validity or otherwise of the arbitration agreement even though it may involve incidental ly a decision as to validity or existence of the challenged contract. Should the Court find the parent contract to be void ab initio or illegal or non existent, it will be with out jurisdiction to grant stay. If the challenged contract is found to be valid and binding and the dispute raised in the suit covered by the arbitration clause, stay of the suit may be justified. [491F G; 492A B, D F] 473 2.1 In the instant case, considering the issues raised, the arbitration clause and the surrounding circumstances and the part played by the parties pursuant to the charter party since execution to the modification and thereafter till objection raised by the appellant plaintiff. it must be held that the trial court did not err in proceeding to decide the issue of validity or legality of the parent contract. [492F G] 3. Where the validity, existence or legality of the contract is challenged in suit on grounds de hors, independ ent of, or external to the terms or stipulations of the contract, the court in an application under Section 34 of the Act shall have no jurisdiction to go into the question, and that in a large majority of cases it would be applica ble, in appropriate cases, having regard to the nature of the dispute raised in the pleadings of the suit, the compass and scope of the arbitration clause in the contract, the surrounding facts and circumstances of the case having a bearing on the question of genuine grievance failing outside or inside the arbitration agreement and the objects and spirit of the , the Court may be justified in deciding the validity, existence or legality of the chal lenged contract containing the arbitration agreement. [488A C] 3.1 In the instant case, the arbitration clause formed part of the agreement. The arbitration agreement is not the same as the contract in the charter party. It cannot, there fore, be said that the validity or otherwise of the charter party was covered by the arbitration clause. [489D E] Jee Lae vs Lord Dalmeny, ; Heyman vs Darwins, ; Monro vs Bognor Urban District Council, ; Jawaharlal Burman vs Union of India, ; Waverly Jute Mills Co. Ltd. vs Raymon & Co. (India) Pvt. Ltd.; ,3 S.C.R. 209; ; Khardah Co. Ltd. vs Raymon & Co. India Ltd., ; ; Renusagar Co. vs General Electric Co., ; ; Anderson Wright Ltd. vs Moran and Company, [1955] 1 S.C.R. 862; Damodar Valley Corporation vs K.K. Kar; , ; Hirji Mulji vs Cheong Yue Steamship Co., ; applied. Banwari Lal vs Hindu College, A.I.R. 1949 East Punjab 165; Johurmull Parasram vs Louis Dreyfus Co. Ltd. 52 C.W.N. (1947 48) 137 A.I.R. 1949 Cal 179; Pramada Prasad vs Sagar Mal Aggarwal, A.I.R. 1952 Patna 352; Narsingh Prasad vs Dhanraj Mills. I.L.R. 21 Patna 544; A.I.R. 1943 Patna 53; Birla Jute Manufacturing Co. Ltd. vs Dulichand. A.I.R. 1953 Calcutta 450; W.F. Ducat & Co. Pvt. Ltd. vs 474 Hiralal Pannalal, A.I.R. 1976 Calcutta 126; General Enter prises vs Jardine Handerson Ltd., A.I.R. 1978 Calcutta 407; Khusiram vs Hanutmal, , approved. In the instant case, facts were admitted. [493B C] All the relevant documents and affidavits were before the Court and were considered by it. Therefore no illegality was committed by the trial court in not setting down the matter for trial on evidence and deciding the validity and legality of the matter without taking oral evidence. [49211; 493B] 4.1 Even if it appears that the discretion could have also been exercised to decide the issue of invalidity in a trial on evidence adduced, this court would not substitute its view for that of the trial court, unless the ends of justice required it to be done. This Court would not lightly interfere under Article 136 of the Constitution with the concurrent exercise of discretion of the courts below under Section 34 of the . Before it can justly do so, the appellant must satisfy the Court, on the relevant facts referred to by the Courts below, that they exercised their discretion in a manifestly unreasonable or perverse way which was likely to defeat the ends of justice. The appellant has failed to do so in the instant case. [493C, E F] Ormarod vs Todmordon, ; Charles Osenton and Co. vs Johnston, ; Gardner vs Jay, ; Printers (Mysore) Pvt. Ltd. vs Pothan Joseph; , , applied. Where the parties make mutual mistake misunderstand ing each other and are at cross purposes, there is no real correspondence of offer and acceptance and the parties are not really consensus ad idem. There is thus no agreement at all; and the contract is void. Section 20 is concerned with common mistake of fact and not mutual mistake. A common mistake is there where both parties are mistaken about the same vital fact although both parties are ad idem, e.g., the subject matter of the contract has already perished. A con tract in such a case is void. Where each party is mistaken as to the other 's intention, though neither realises that the respective promises have been misunderstood, there is mutual mistake. 1493H; 494A B] 6. A mistake will not affect assent unless it is the mistake of both parties, and is as to the existence of some quality which makes the thing 475 without the quality essentially different from the thing as it was believed to be. Neither party can rely upon his own mistake to say that it was a nullity from the beginning, no matter that it was a mistake which to his mind was fundamen tal, and no matter that the other party knew that he was under a mistake. A fortiori, if the other party did not know of the mistake but shared it. The question is not what the parties had in their minds, but what reasonable third par ties would infer from their words or conduct. The court has to ascertain the "sense of the promises". [496E; 495G H] 7. The application of the doctrine of mutual mistake depends upon the true construction of the contract made between the parties. A mutual misunderstanding will not nullify a contract but only if the terms of contract con strued in the light of the nature of the contract and of the circumstances believed to exist at the time it was done show that it was never intended to apply to the situation which in reality existed at that time, will the contract be held void. Thus a mistake as to an essential and integral element in the subject matter of the contract will avoid the con tract. A mistake as to the quality of the article contracted for may not always avoid the contract. A distinction, there fore, should be drawn between a mistake as to the substance of the thing contracted for, which will avoid the contract and mistake as to its quality which will be without effect. According to circumstances even a mistake as to the sub stance of the thing contracted for may not necessarily render a contract void. Thus there must be a difference so complete that, if the contract were enforced in the actual circumstances which have unexpectedly emerged, this would involve an obligation fundamentally different from that which the parties believed they were undertaking. [496A H] 8. From the series of steps taken for repairs and the stipulations in the charter party including the modifica tions thereof, it is not possible to hold that it was a case of mutual mistake as to a quality which made the trawlers transferred essentially different from the trawlers that the parties in their minds agreed to transfer. Therefore, there was no mutual mistake and the contract would not be avoided on this ground. [498C D] Cooper vs Phibbs, ; ; Ear/Beauchamp vs Winn., ; Hudders field Banking Co. vs Henry Lister & Sons, [1895] 2 Ch. 273; Bell vs Laver Brs. Ltd.; , ; Kannedy vs Panama Royal Mail Co., ; Smith vs Hughes, [1871] L.R. 6 Q.B. 597; Solle vs Butcher, 476 Fraderick E. Rose (London) Ltd. vs William H. Pim Junior & Co. Ltd. ; Sheikh Brothers LId. vs Arnold, ; referred to. U.P. Government vs Nanhoo Mal, A.I.R. 1960 All. 420, approved. It is settled law that where the subject matter of a reference is illegal, no award can be of any binding effect. If the contract itself was illegal, the controversy as to whether it was illegal or not would not be a dispute arising out of the contract as also would be the question whether the contract was void ab initio. When, however, it is found that a binding contract was made which was not illegal what follows from such a contract would be covered by the expres sion "dispute arising out of contract". To stay a suit under Section 34 the Court has to see whether there was a valid agreement to have the dispute settled by arbitration and that the proceedings are in respect of a dispute so agreed to be referred. [498E, (; H; 499A] 10. Public policy imposes certain limitations on the freedom of contract by forbidding the making of certain contracts. In such cases though all other requisites for formation of the contract are complied with, parties to such forbidden contracts are not allowed to enforce any rights under them. In clear cases the law strikes at the agreement itself by making the contract illegal. However, the effect and nature of illegality are by no means uniform and will depend upon the facts and circumstances of each case. Where a statute makes a contract illegal or where a certain type of contract is expressly prohibited there can be no doubt that such a contract will not be enforcible. [499B D] 11. A contract which was not illegal from the beginning may be rendered illegal later by the method of performance which did not comply with the statutory requirements. The appellant 's burden was to show that the charter party was illegal to take it out of the arbitration clause for if the contract is illegal and not binding on the parties the arbitration clause would also be not binding. Once it is shown to have been illegal it would be unenforcible as ex turpi causa non oritur actio. [499G H] 12. One who knowingly enters into a contract with im proper object cannot enforce his rights thereunder. The appellant in the instant case was also a party to the agree ment of charter party in respect of the two imported trawl ers. Though it purported to be actual user 's licence 477 there was no violation of this condition in view of the express permission granted by the Controller of Imports and Exports allowing the chartering of the two imported trawl ers. The modifications to the contract did not make any alteration so as to make the agreement contrary to the terms and conditions of the permission inasmuch as the permission was for a period of three years. The option to continue hire of the trawlers for a further period of three years did not ipso facto violate the permission. There was also no viola tion as to the duration of the charter party. [499H; 500C E] Taylor vs Barnett, ; Anderson Wright Ltd. vs Moran and Company, [1955] 1 S.C.R. 862; In Re arbi tration between Mahmoud and Isphani, ; applied. 13. The Courts below were right in holding that the matters were arbitrable apart from the question of illegali ty, invalidity of the contract. The question of invalidity of the contract due to the alleged mutual mistake would be de hors and independent of the contract and as such would not be referable under the arbitration clause. In so far as the question of illegality of the charter party is concerned as the appellant has not established that the charter party was illegal or void as initio, the question whether the modification as alleged had rendered the contract illegal would be covered by the arbitration clause. [500F G] 14. In the instant case, the reliefs claimed in the suit other than the question of ab initio invalidity or illegali ty of the contract would be referable. However, it will be within the jurisdiction of the arbitrator to decide the scope of his jurisdiction. The Court cannot make a contract between the parties and its power ends with the interpreta tion of the contract between them. The same principle also applies to the arbitration agreement unless the parties to the arbitration agreement authorises the court to make and modify the agreement. The arbitrator shall proceed in ac cordance with law to decide the questions including that of jurisdiction, if raised. [501C 1).

N: Criminal Appeal No. 124 of 1972 350 Appeal by Special Leave from the Judgment and order dated 24 11 1971 of the Delhi High Court in Criminal Appeal No.54 of 1971.C. P. Lal for the Appellant. H. R. Khanna and M. N. Shroff for the Respondent. The Judgment of the Court was delivered by DESAI, J. The; appellant in this appeal by special leave limited to the determination of the question: whether the sanction is valid in law or not, has been convicted for offences under section 5(2) read with section S(1) (d) of the Prevention of Corruption Act, 1947 ( 'Act ' for short), and section 161 of the Indian Penal Code, and was sentenced to suffer rigorous imprisonment for 18 months on each could and a fine of Rs. 2000/ , in default to suffer further rigorous imprisonment for a period of two months, for an offence under section 5(2) of the Act. His appeal being Criminal Appeal No. 54 of 1971 was dismissed by the High Court of Delhi and the conviction and sentence were confirmed. As the leave is limited to the question of the validity of sanction ac corded under section 6 of the Act, it is not necessary to set out in detail the prosecution case. Briefly stated, the prosecution case is that the appellant who was employed at the relevant time as Investigator in the office of the Chief Controller of Imports & Exports (C.C.I.E. for short), accepted from one P.T. Toprani an amount of Rs. 250/ by way. of illegal gratification which was not his legal remuneration in presence of witnesses on 18th June 1969 at about 5.30 p.m. near Gujarati Samaj; Sabha, Delhi. D. section P. Badri Sharma appeared as soon as the trap arranged by him materialised and recovered the amount of Rs. 2501/ from the appellant. After completing the investigation the appellant was charge sheeted for the offences hereinabove mentioned. Section 6 of the, Act forbids the Court from taking cognizance, inter alia, of offences punishable under section 161, IPC and under sub section (2) of s 5 of the Act except with the previous sanction of the authority therein set out. Necessary sanction was accorded by the Jt. C.C.I.E. On 26th November 1969. The relevant portion of the sanction reads as under: "Now, therefore, I, section P. Chablani, being the authority competent to remove the said Shri L. section Srivastava, from office do hereby accord sanction under section 6(1) (c) of the prevention of Corruption Act, 1947 for the prosecution of the said Shri L. section Srivastava, for the said offences under section 161, I.P.C. and 5(2) read with 5(1)(d) of Act II of 1947 and in 351 any other offence punishable under the provisions of law, in respect of the facts aforesaid and for the taking of cognizance of the said offences by a court of competent jurisdiction". Mr. H. R. Khanna, learned counsel who appeared for the respondent raised a preliminary objection. It was urged that the appellant died during the pendency of this appeal and, therefore, the appeal abates and cannot be proceeded with. Simultaneously it was urged that if the appeal were not to abate on the only ground that the appellant was also sentenced to pay a fine of Rs. 200/ and, therefore. it may he said that right to property of the legal representatives may he adversely affected and, therefore, they would be entitled to continue the appeal, the respondent State is prepared to concede that the sentence of fine may be set aside. Section 394 of the Criminal Procedure Code which provides for abatement of appeals reads as under: "394. (1) Every appeal under section 377 or section 378, shall finally abate on the death of the accused. (2) Every other appeal under this Chapter (except all appeal from a sentence of fine) shall finally abate on the death of the appellant: Provided that where the appeal is against a conviction and sentence of death or of imprisonment, and the appellant dies during the pendency of the appeal any of his near relatives may, within thirty days of the (death of the appellant, apply to the Appellate Court for leave to continue to the appeal; and if Leave is granted, the appeal shall not abate. Explanation In this section, "near relative" means a parent, spouse, lineal descendant, brother or sister". The appeal by the appellant is not one under section 377 or section 378 or the Cr. P.C. and, therefore, sub section (1) of section 394 will not be attracted The trial for an offence under section 161 IPC and section 5(2) of the Act would be governed by the provisions of Criminal Law Amendment Act, 1952. lt envisages setting up of Court of special Judge. Section 8(3) of the Criminal Law Amendment Act provides that the Court of Special Judge shall be deemed to be a Court of Sessions. Section 9 confers power upon the High Court to exercise all powers of appellate Court as if the Court of Special Judge were a Court of Sessions trying cases within the local limits of the jurisdiction of the High Court. 352 The present case would, therefore, be governed by sub section (2) of s.394, Cr. P.C. It becomes clear from the proviso to section 394(2), Cr. P.C. that where the appeal is against the conviction and sentence of imprisonment and the appellant dies during the pendency of the appeal, any of his near relatives may, within the time prescribed therein, apply to the appellate court before which the appeal is pending for leave to continue the appeal and if the leave is granted the appeal shall not abate. The appellant has preferred the appeal against his conviction and sentence of imprisonment as also sentence of fine. After his death his near relations as contemplated in the Explanation to sub section (2) of section 394, Cr. P.C. applied by Criminal Miscellaneous Petition No. 559 of 1978 to continue the appeal and this Court granted substitution of such near relations by its order dated 28th March 1978 and thereby granted leave to continue the appeal. Therefore, the near relations of the deceased can continue the appeal and even if the respondent State concedes that the sentence of fine be set aside yet the appeal would not abate because the appeal against conviction and sentence of imprisonment would not abate if leave is granted to the near relations of the deceased to continue the appeal. Such Leaving having been granted, the appeal would not abate. There is thus no merit in the preliminary objection and it must be negatived. Section 6 of the Act which provides for necessity of previous sanction for prosecution for any of the offences under the Act reads as. under: "6. (1) No court shall take cognizance of an offence punishable under section 161 ( or section 164) or section 1165 of the Indian Penal Code, or under sub section (2) or Sub section (3A) of section 5 of this Act, alleged to have been committed by a public servant, except with the previous sanction, (a) in the case of a person who is employed` in connection with the affairs of the Union and is not removable from his office save by or with the sanction of the State Government, of the Central Government. (b) in the case of a person who is employed in connection with the affairs of a State and is not removable from his office save by or with the sanction of the Central Government, of the State Government. (c) in the case of any other person, of the authority competent to remove him from his office. (2) Where for any reason whatsoever any doubt arises whether the previous sanction as required under sub section 353 (1) should be given by the Central or State Government or any other authority, such sanction shall be given by that Government or authority which would have been competent to remove the public servant from his office at the time when the offence was alleged to have been committed". Mr. Lal for the appellant contended that as the appellant was an Investigator in the office of the C.C.I.E. which at best was a Department under the over all control of the Ministry of Foreign Trade and Supply. Government of India, the sanction to prosecute him could only be given by the Government of India. In the alternative it was contended that as the C.C.I.E. is head of the office, he alone could accord sanction for prosecution as contemplated by section 6 and, therefore. the sanction accorded by Jt. C.C.I.E., an officer subordinate to C.C.I.E . was ab initio void and the Court could not have taken cognizance of the offence. Mr. Khanna for the respondent on the other hand contended that this case would be governed by Central Civil Services (Classification, Control and Appeal Rules, 1965 ( '1965 Rules ' for short), and in view of S.R.O. 631 issued by the President in exercise of the powers D` conferred by sub rule (2) of rule 11, clause (b) of sub rule (2) of rule 14, and sub rule (2) of rule 23 of the Central Civil Services (Classification, Control and Appeal) Rules, 1957 ( '1957 Rules ' for short), which order was saved by rule 34 of the 1965 Rules and, therefore, the Jt. C.C.I.E. was both the appointing and disciplinary authority including the authority competent to remove the appellant from service and was accordingly competent to accord sanction under section 6(1)(c) of the Act. Rule 11(2) of 1957 Rules provides that all appointments to Central Civil Posts, classes II, III and IV, included in the General Central Service shall be made by the authorities specified in that behalf by a general or special order of the President, or, where no such order has been made, by the authorities specified in the Schedule appended to the Rules. Similarly, rule 14(1) provides that the President may impose any of the penalties including one of removal or dismissal from service as envisaged by rule 13 on any Government servant. Sub rule (2) of rule 14 provides that without prejudice to the provisions of sub rule (1), any of the penalties specified in rule 1 may be imposed under sub clause (b) in respect of person appointed to a Central Civil post included in the General Central Services by the authority specified in this behalf by a general or special order of the President or where no such order has been made by the appointing authority or the authority specified in the Schedule in this behalf. The entry at p. 38 provides that the appointing and disciplinary authority in respect of posts in non Secretariat offices other than posts in respect of which specific provision has been made by a general or special order 354 of the President, the head of office would be both the appointing and the removing authority. Now, undoubtedly in respect of the office of the C.C.I.E., the C.C.I.E. would be the head of office. The office of the C.C.I.E. is a non Secretariat office. May be, the administrative department in respect of this office would be the Ministry of Foreign Trade and Supply. But C.C.I.E. is a separate office with its own establishment and undoubtedly head of office would be the C.C.I.E. The President in exercise of the power conferred by sub rule (2) of rule 11 and clause (b) of sub Rule (2) of rule 14 of the 1957 Rules has made a special order as contemplated by rule 11(2) and rule 14(2)(b) as under: "S.R.O. 631 In exercise of the powers conferred by sub rule (2) of rule 11, clause (b) of sub rule (2) of rule 14 and sub rule (1) of rule 23 of the Central Civil Services Classification, Control and Appeal) Rules, 1957, The President hereby directs that (1) in respect of the posts in the General Central Service, Class II specified in column 1 of Part I of the Schedule to this order, the authority specified in column 2 shall be the Appointing Authority and the authority specified in column 3 shall be the Disciplinary Authority in regard to the penalties specified in column 4, (2) in respect of the posts in the General Central Service. Class III and the General Central Service, Class II specified in column 1 of Parts II and III of the said Schedule, the authority specified in column 2 shall be the Appointing Authority ! and the authority specified in column 3 and 5 shall be the Disciplinary Authority and Appellate Authority respectively in regard to the penalties specified in column 4". A comprehensive Schedule is annexed to this order. 'The relevant entry is as under: Description of Post Appointing Authority competent Appellate authority to impose penalties authority penalties which it may impose (with reference to item numbers in rule 13) Authority Penalties 1 2 3 4 5 Organisation of the Chief Controller of Imports and Exports All posts in Headquarters office Joint Chief Joint Chief All Chief Controller of Controller ofController of Imports & Imports & Imports & Exports Exports Exports 355 The entries in the Schedule appended to 1957 Rules will be effective and operative subject of course to any general or special order made by the President in this behalf. It was, however, contended that by rule 34 of 1965 Rules, 1957 Rules were repealed and, therefore, the order issued by the President in exercise of the powers conferred by sub rule (2) of rule 11 and various other rules bearing on the point would stand repealed and the order of the President would not be effective unless a similar order is issued by the President under the corresponding rule 12 of 1965 Rules. Rule 12(1) and (2) of 1965 Rules is in pari materia with rule 14 of 1957 Rules. Rule 12 of 1965 Rules confers power on the President to impose any of the penalties specified in rule 11 on any Government servant. Sub rule (2)(b) provides that any person appointed to a Central Civil Post included in the General Central Service by the authority specified in this behalf by a general or special order of the President or where no such order Has been issued, by the appointing authority specified in the Schedule in this behalf, may impose any of the penalties specified in rule 11 which includes the penalty or removal from service. Therefore, the President has the power to issue any general or special order to confer power to impose penalties as specified in rule II on any authority other than the one specified in the Schedule in this behalf. Now, if the order issued by the President, S.R.O. 631 under corresponding rule l l and the relevant rules bearing on the subject of 1957 Rules is not shown to be inconsistent with any of the Rules included in 1965 Rules. obviously such order would be saved Tender rule 34. No inconsistency was shown to us as contemplated by rule 34. Therefore, indisputably the order issued by the President, S.R.O. 631 along with the Schedule would be saved. Once S.R.O. 631 is saved, the relevant entry hereinabove quoted in respect of the organisation of C.C.I.E. would be saved. Accordingly the entry in the order issued by the President would supplant the corresponding entry in 1965 Rules and would have to be substituted for the entries in the relevant item in the Schedule. The necessary consequence would be that in the case of the organisation of the C.C.I.E. for all posts in Headquarters office, Jt. C.C.I.E. would be both the appointing and the disciplinary authority having the power to remove from service such persons belonging to Class III services. Now, the appellant was indisputably holding a post in Class III service in the Headquarters office of the organisation of C.C.I.E. He was at the relevant time holding, the post of Investigator which was admittedly a Civil post in Class III service in the office of C.C.I.E. Indisputably, therefore, Jt. C.C.I.E. would be both the appointing and disciplinary authority with power to remove him from service. Therefore, Jt. C.C.I.E. would be competent to accord sanction as envisaged by section 6(1)(c) of the Act. Sanction 356 in this case having been granted by the Jt. C.C.I.E., it was valid. There is thus no substance in the contention of Mr. Lal. Mr. Lal in this connection drew our attention to a decision in R. J. Singh Ahluwalia vs The State of Delhi(1) The appellant in that case was at the relevant time working as Assistant in Co ordination III of D.G.T.D. at Udyog Bhavan, New Delhi. His contention was that sanction accorded by Shri K. Rajaram, Deputy Secretary to Government of India in the Ministry of Industrial Development and Company Affairs (Department of Industrial Development) was not valid and that he could only have been prosecuted under a sanction that may be accorded by the Home Ministry. In respect of this contention it was conceded on behalf of the State that in the absence of such sanction the prosecution must fail. The judgment proceeds on concession and not on any analysis or examination of the relevant provisions. Therefore it in no way helps the appellant in this case. This being the only point that could be raised in this appeal by limited leave and such contention being without merit, the appeal fails. and is dismissed. As the appellant is dead there is no question of his surrendering to Bail. S.R. Appeal dismissed. (1) A.I.R. 1971 S.C. 1552.

^ HELD: 1. Assurance of a fair trial is the first imperative of the dispensation of justice and the central criterion for the Court to consider when motion four transfer is made is not the hypersensitivity or relative convenience of a party or easy availability of legal services or the like mini grievances. Something more substantial, more compelling, more imperilling, from the point of view of public justice and its attendant environment is necessitous, if the Court is to exercise its power of transfer. This is the cardinal principle although the circumstances may be myriad and vary from case to case. courts must test the petitioner 's grounds on this touch stone bearing in mind the rule that normally the complainant has the right to choose any Court having jurisdiction and the accused cannot dictate where the case against him should be tried. Even so, the process of justice should not harass the parties and from that angle the Court may weigh the circumstances. [380F H] 2. The meat of the matter, in a case of defamation is something different than the common ground usually urged like the avoidance of substantial prejudice to a party or witnesses on account of logistics or like factors, especially when an alternative venue will not seriously handicap the complainant and will mitigate the serious difficulties of the accused. The main witnesses are those who speak to having read the offending matter and other relevant circumstances flowing therefrom. [381A B] In this case, the witnesses belong to Bombay and the suggestion that Delhi readers may be substitute witnesses and the complainant may consent herself with examining such persons is too presumptuous for serious consideration. [381 C] 3. The sophisticated processes of a criminal trial certainly require competent legal service to present a party 's case. If an accused person, for any particular reason, is virtually deprived of this facility, an essential aid to fair trial fails. If in a certain Court the whole Bar, for reasons of hostility or otherwise refuses to defend an accused person an extraordinary situation difficult to imagine, having regard to the ethics of the profession it may well be put forward as a ground which merits the attention of the Supreme Court. Glib allegation like the services of an efficient advocate may not be easy to procure involves a reflection on the members of the Bar in Bombay and, therefore, is cannot be easily accepted without incontestible testimony in that behalf which is absent in this case. apart from the ipse dixit of the party; Popular frenzy or official wrath shall not deter a member of the Bar from 379 offering his services to those who wear unpopular names or unpalatable causes and the Indian advocate may not fail this standard. [381C E] 4. It is true that a detached atmosphere of a fair and impartial judicial trial is a must. The tendency of toughs and street roughs to violate the serenity of Court is obstructive of the course of justice and must surely be stamped out. Likewise, the safety of the person of an accused or complainant is an essential condition for participation in a trial and where that is put in peril by commotion, tumult or threat on account of pathological conditions prevalent in a particular venue, the request for a transfer may not be dismissed summarily. It causes disquiet and concern to a Court of justice if a person seeking justice is unable to appear present one 's case, bring one 's witnesses or adduce evidence. Indeed, it is the duty of the Court to assure propitious conditions which conduce to comparative tranquility at the trial. Turbulent conditions putting the accused 's life in danger or creating chaos inside the Court hall may jettison public justice. If this vice is peculiar to a particular place and is persistent the transfer of the case from that place may become necessary. Likewise, if there is general consternation or atmosphere of tension or raging masses of people in the entire region taking sides land polluting the climate, vitiating the necessary neutrality to hold a detached judicial trial, the situation may be said to have deteriorated to such an extent as to warrant transfer. [381 H, 382A C] In the instant case, none of the allegations made by the Petitioner. read in the pragmatic light of the counter averments of the respondent and understood realistically makes the contention credible that a fair trial is impossible. [383A B] G. X. Francis vs Banke Bihari Singh, A.I.R. 1958 SC 809 and 810; referred to. Observation : The frequency of mobbing manouvres in Court precincts is a bad omen for social justice in its wider connotation. Mob action may throw out of the gear the wheels of the judicial process. Engineered fury may paralyse a party 's ability to present his case or participate in the trial. If the justice system grinds to a halt through physical manouvres or sound and fury of the senseless populace, the rule of law runs aground. Even the most hated human anethema has a right to be heard without the rage of ruffians or huff of toughs being turned against him to unnerve him as party or witness or advocate. Physical violence to a party, actual or imminent, is reprehensible when he seeks justice before a tribunal. Manageable solutions must not sweep the Supreme Court off its feet into granting an easy transfer but uncontrollable or perilous deterioration will surely persuade this Court to shift the venue. It depends. [383D F] Therefore (a) the trial Court should readily consider the liberal exercise of its power to grant for the accused exemption from personal appearance save on crucial occasions. [383G] (b) Where tranquil Court justice is a casualty, the collapse of an constitutional order is an inevitability. The Magistrate is the master 380 of the orderly conduct of court proceedings and his authority shall not hang limp if his business is stalled by brow beating. It is his duty to clear the Court of confusion, yelling and nerve racking gestures which mar the serious tone of judicial heaving. The officials whose duty is to keep the public peace shall, on requisition, be at the command of the Court to help it run its process smoothly. When the situation gets out of hand the remedy of transfer surgery may be prescribed Every fleeting rumpus should not lead to a removal of the ease as it may prove to be a frequent surrender of justice to commotion. The Magistrate shall take measures to enforce conditions where the Court functions free and fair and agitational our muscle tactics yield no dividends. [384A C]

Writ Petition (Crimi nal) No. 2 16 of 1989 (Under Article 32 of the Constitution of India) Surya Kant and M.C. Mehta for the Petitioner. Anil Dev Singh, Girish Chandra, Ms. A. Subhashini and Dalveer Bhandari for the Respondent. 777 The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This is a petition under Article 32 of the Constitution filed by one Madhu Mehta, who is the National Convenor of Hindustani Andolan. This petition seeks a writ of Habeas Corpus or an appropriate direction with regard to one Shri Gyasi Ram, S/o Shri Param aged above 60 years, who, it is claimed, has been waiting decision on his Mercy Petition pending before the President of India for about 8 or 9 years. The said Gyasi Ram was at all relevant time lodged in "DEATH CELL, CENTRAL JAIL" JHANSI having been convicted for an offence punishable under section 302 of Indian Penal Code and sentenced to death by the learned Sessions Judge, Jhansi on October 19, 1978. It appears that Gyasi Ram was convicted and sentenced to death by the learned Sessions Judge, Jhansi on 19th October, 1978 for committing murder, which has been described by the Under Secretary (Judicial), Ministry of Home Affairs, Govt. of India, as the 'cold blooded murder ' of a Government servant, namely, Bhagwan Singh, who was the resident of Mauranipur Tehsil, in District Jhansi, Uttar Pradesh. There then were arrears of land revenue due from Gyasi Ram and also one Mool Chand. For the purpose of realising the said arrears of land revenue, their property was attached by Amin Bhagwan Singh and the same was put to sale by auction. The auction took place on 26th December, 1976 and after the auction while the said Amin was returning along with his Peon Sripat from village Kakwara after delivering the sale certificate to the auction purchaser, they were way laid by Daya Ram (son of Mool Chand) and Gyasi Ram, the convicts involved in this case. In the evidence, it was stated that Daya Ram who was armed with pistol fired at the deceased Amin Bhagwan Singh who fell down from his cycle. While Daya Ram held down Amin Bhagwan Singh, Gyasi Ram, the person about whom this peti tion is concerned, cut Bhagwan Singh 's throat with the sword he was carrying and inflicted other injuries also. After this incident, both Daya Ram and Gyasi Ram, it has been stated, escaped. Gyasi Ram was, however, arrested, tried, convicted and sentenced to death, as mentioned hereinbefore. The death sentence was passed on Gyasi Ram by the learned Sessions Judge on 19th October, 1976. The Allahabad High Court confirmed this death sentenced on 28th February, 1979. This Court dismissed his Criminal Appeal No. 362/79 on 17th March, 1981. Mercy Petition was filed by the wife of the convicted to the President of India on 18th December, 1981. It appears that Mercy Petition has still not been disposed of. Daya Ram had absconded and could not be put on trial along with Gyasi Ram. It appears further that Gyasi Ram 's Mercy Petitions dated 6th October, 778 1981 and 26th November, 1981 were rejected by the Governor of Uttar Pradesh on the 26th November, 1981 and were re ceived in the Ministry of Home Affairs on the 5th December, 1981 for the consideration of the President of India. From the affidavit filed on behalf of the Government of India, it appears that after processing the case, the matter was put up before the President of India on 21st April, 1983 for his orders on the Mercy Petitions and that the President after examining the case file, returned the file on 30th July, 1983 for further consideration. While the Ministry of Home Affairs was processing the case of Gyasi Ram further, the intimation was received from this Court on 13th November, 1984 that Daya Ram, son of Mool Chand had also filed a Special Leave Petition against the judgment date 17th Octo ber, 1984 of the Allahabad High Court by which the sentence of death was confirmed on him. It appears from the order of this Court dated 18th February, 1985 dismissing Daya Ram 's Special Leave Petition that this Daya Ram was the same person who was Gyasi Ram 's partner in the crime as mentioned hereinbefore. Subsequently, .two Mercy Petitions were filed on behalf of Daya Ram which were forwarded for the consider ation of the Governor of Uttar Pradesh in the first instance by the Ministry of Home Affairs dated 9th April, 1984 and 9th August, 1985 respectively. These still remain undisposed of. It has been asserted on behalf of the Government of India in the half yearly return dated 8th August, 1985 submitted by the Government of Uttar Pradesh that it was reported that they had received a Mercy Petition from Daya Ram. Thereafter, in successive half yearly reports, the last of these being dated 16th January, 1989, the State Govern ment had been saying that the Mercy Petition of Daya Ram was still under consideration. It is the version of the Govern ment that in view of the implications of Daya Ram and Gyasi Ram in the same crime, it was considered, it is stated, that the decision on the Mercy Petition of Daya Ram by the Gover nor of Uttar Pradesh would have a direct bearing on the consideration of the Mercy Petition of Gyasi Ram by the President of India. It was, accordingly, felt, so it is .asserted, that it was desirable to await the decision of the Governor of Uttar Pradesh on Daya Ram 's Mercy Petition. But it was only on 18th January, 1989 that by a Wireless Message, the Central Government asked the State Government to let the Ministry of Home Affairs know the decision of the Governor on Daya Ram 's Mercy Petition and to send it immedi ately for consideration of the President of India so that the cases of Gyasi Ram and Daya Ram could be submitted together to the President. But the Government did not move. It is further stated that in reply to the Wireless Message of 18th January, 1989 the State Government through its letter dated 1st February, 1989 intimated that the Mercy Petition of 779 Daya Ram was still under consideration. Thereafter, there was another request to the Chief Secretary by demi official letter of the Ministry of Home Affairs dated 3rd February, 1989 to expedite consideration of Daya Ram 's Mercy Petition. And upon this, it is stated that by a telex message dated 15th March, 1989, the State Government had intimated that the Governor of Uttar Pradesh had rejected the Mercy Peti tion and that formal letter of State Government would fol low. It was stated on behalf of the Government of India that Mercy Petition of Daya Ram was received by the Ministry of Home Affairs on 21st March, 1989 along with the letter. In the affidavit, it is stated that after collecting certain further information from the Supreme Court Registry, the Ministry of Home Affairs "was now ready to process the Mercy Petitions of Gyasi Ram and Daya Ram and submit the same to the President of India for consideration". The deponent was good enough to state in the affidavit that the delay factor would be kept in view while taking a final decision in the case of Gyasi Ram and he was fully aware of the agony of Gyasi Ram and members of his family. It was stated that in view of the reasons stated above, it was not possible to avoid the delay. The learned District and Sessions Judge, Jhansi had, in the meantime, visited the said convict Gyasi Ram in jail on 22nd May, 1988 and had sent a report to the Inspector Gener al of Prisons stating "Gyasi 's mental state is such that he might commit suicide by hanging his head on the iron grill of his cell if a decision on his petition is not taken soon. If he is to be hanged, it should be done without any delay or he should be released". The Inspector General 's Office further sent an official to Delhi to expedite the case. Thereafter, this petition was filed for the condemned pris oner. Gyasi Ram, until the orders of this Court passed in these proceedings on the 3rd May, 1989, was kept in the Death Cell and it is only pursuant to the orders of this Court that the prisoner was allowed to stay in the Ordinary Cell during the day time. The petitioner moved this Court on 11th April, 1989 and the notice was issued returnable on 19th April, 1989. Time was taken to file affidavit and the order of this Court dated 3rd May, 1989 was passed. The matter was adjourned for three months. Affidavits have been filed but his Mercy Petition still remains undisposed of. The question is: what is to be done? This question of delay in these matters has been examined by this Court from time to time, and how far delay in execution of death sentence necessitates the commutation of the death sentence or re lease of the condemned prisoner, has been a matter of some controversy and debate. In T.V. Vatheeswaran vs State of Tamil Nadu, , a bench of two learned Judges considered this 780 aspect. Speaking for this Court, Chinnappa Reddy, J. stated in that decision that Article 21 of the Constitution enjoins that any procedure, which deprives a person of his life or liberty must be just, fair and reasonable. It implies humane conditions of detention, preventive or punitive. 'Procedure established by law ' does not end with the pronouncement of sentence; it includes the carrying out of sentence. Pro longed detention to await the execution of a sentence of death is an unjust, unfair and unreasonable procedure and the only way to undo the wrong is to quash the sentence of death. Reddy, J. was of the view that the sentence of death is one thing; sentence of death followed by lengthy impris onment prior to execution is another. A period of anguish and suffering is an inevitable consequence of sentence of death, but a prolongation of it beyond the time necessary for appeal and consideration of reprieve is not. And it was no answer to say that the man would struggle to stay alive. It was, therefore, found in that case that a delay exceeding two years in the execution of a sentence of death should be considered sufficient to entitle the person under sentence of death to invoke Article 21 and demand the quashing of the sentence of death. This Court did so and substituted the sentence of imprisonment in that case. That decision was rendered on 16th February, 1983. The validity of that deci sion did not last long. On 24th March, 1983, in Sher Singh & Ors. vs The State of Punjab, ; , a bench of three learned Judges of this Court held that the prolonged delay in the execution of a death sentence is unquestionably an important consideration for determining whether the sentence should be allowed to be executed. But no hard and fast rule that 'delay exceeding two years in the execution of a sentence of death should be considered sufficient to entitle the person under sentence of death to invoke Article 21 and demand the quashing of the sentence of death ' can be laid down as has been done in Vatheeswaran 's case (supra). It is not necessary, therefore, to go into the aspect of this matter any more. Chief Justice Chandrachud observed that a self imposed rule should be followed by the executive authority rigorously that every mercy petition should be disposed of within a period of three months from the date on which it was received. Long and interminable delay in the disposal of these petitions, it was observed, are serious hurdles in the dispensation of justice and indeed, such delays tend to shake the confidence of the people in the very system of justice. The learned Chief Justice stated that undoubtedly, the executive has the power, in appropri ate cases, to act under the aforesaid provisions but, all exercise of power is preconditioned by the duty to be fair and quick. Delay defeats justice, it was observed. In this background, we have to consider the reasons given in the affidavit in this case. We have set out the 781 reasons advanced on behalf of the Government. They are self explanatory. These do not, in our opinion, indicate any justifiable ground for keeping the Mercy Petitions of Daya Ram and Gyasi Ram pending for such a long time. Indeed, it is not disputed from the affidavit of the Under Secretary, Ministry of Home Affairs, Government of India that in the half yearly return dated 8th October, 1985 and thereafter in the successive half yearly returns of the Uttar Pradesh Government upto 16th January, 1989 year after year, the Mercy Petitions of Daya Ram remained unattended and undis posed of and consequently the Mercy Petition made to the President of India by Gyasi Ram was also undisposed. The time and the manner in which the Mercy Petition has been dealt with in this case in respect of Gyasi Ram make sad reading and speak of the deplorable lack of speed and promp titude which in these matters should be there. In the mean time, there is no denying the fact that Gyasi Ram has suf fered a great deal of mental pain and agony. His condition has been described by the learned Sessions Judge as indicat ed hereinbefore. Whether death sentence is the appropriate punishment for the crime of murder, cold blooded in certain cases, is another debate. This Court in Bachan Singh vs State of Punjab; , at page 221 of the report, observed as follows: "To sum up, the question whether or not death penalty serves any penological purpose is a difficult, complex and intractable issue. It has evoked strong, divergent views. For the purpose of testing the constitutionality of the impugned provision as to death penalty in Section 302, IPC on the ground of reasonable ness in the light of Articles 19 and 21 of the Constitution,, it is not necessary to express any categorical opinion, one way or the other, as to which of these two antithetical views, held by the Abolitionists and Retentionists, is correct. It is sufficient to say that the very fact that persons of reason, learning and light are rationally and deeply divided in their opinion, on this issue, is a ground among others, for rejecting the petitioners ' argument that retention of death penalty in the impugned provision is totally devoid of reason and purpose. If, notwithstanding the view of Abolitionists to the contrary, a very large segment of people, the world over, including sociologists, legislators, jurists, judges and administrators still firmly believe in the worth and necessity of capital punish ment for the protection of society, if in the perspective of prevailing crime conditions in India, contemporary public 782 opinion channelised through the people 's representatives in Parliament, has repeatedly in the last three decades, rejected all at tempts, including the one made recently, to abolish or specifically restrict the area of death penalty, if death penalty is still a recognised legal sanction for murder or some types of murder in most of the civilised countries in the world, if the framers of the Indian Constitution were fully aware . of the existence of death penalty as punishment for murder, under the Indian Penal Code, if Thirty fifth Report and subsequent reports of the Law Commission suggesting retention of death penalty, and recommending revision of the Criminal Procedure Code and the insertion of the new sections 235(2) and 354(3) in that Code providing for pre sentence hearing and sentencing procedure on conviction for murder and other capital offences were before the Parliament and presumably considered by it when in 1972 73 it look up revision of the Code of 1898 and replaced it by the Code of Criminal Procedure, 1973, it is not possible to hold that the provision of death penalty as an alternative punishment for murder, in section 302, Penal Code is unreasonable and not in the public interest. We would, there fore, conclude that the impugned provision in section 302, violates neither the letter nor the ethos of Article 19. " In that decision, Bhagwati, J. (as the learned Chief Justice then was), dissented. He held that death sentence was bad morally as well as constitutionally. It is no longer necessary in view of the majority judgment to deal with these views in detail. This aspect was examined in several cases and a bench of five learned Judges considered this question again in Smt. Triveniben vs State of Gujarat, ; , where Oza, J. speaking for the majority analysed the trend and observed at p. 688 that it was not necessary to go into the jurisprudential theories of punish ment deterrent or retributive in view of what has been laid down in Bachan Singh 's case (supra) with which learned Judges therein agreed. It is well settled now that undue long delay in execution of the sentence of death would entitle the condemned person to approach this Court or to be approached under Article 32 of the Constitution, but this Court would only examine the nature of delay caused and circumstances that ensued after sentence was finally con firmed by the judicial proces and will have no jurisdiction to reopen the conclusions reached by the Court while finally maintaining the sentence of death. But the court is entitled and indeed obliged to 783 consider the question of inordinate delay in the light of all circumstances of the case to decide whether the execu tion of sentence should be carried out or should be altered into imprisonment for life. No fixed period of delay can be considered to be decisive. It has been emphasised that Article 21 is relevant in all stages. Speedy trial in crimi nal cases though may not be fundamental right, is implicit in the broad sweep and content of Article 21. Speedy trial is part of one 's fundamental right to life and liberty. This principle is no less important for disposal of mercy peti tion. It has been universally recognised that a condemned person has to suffer a degree of mental torture even though there is no physical mistreatment and no primitive torture. See the 'observations of Shetty, J. in Triveniben 's case (supra) at p. 7 13 7 14 of the report, where it has been observed that as between funeral fire and mental worry, it is the latter which is more devastating, for funeral fire burns only the dead body while the mental worry burns the living one. In the instant case, Gyasi Ram has suffered a great deal of mental agony for over eight years. It is not disputed that there has been long delay. We do not find reasons sufficiently commensurate to justify such long delay. The convict has suffered mental agony of living under the shadow of death for long, far too long. He should not suffer that agony any longer. In the aforesaid facts and the circumstances of the case, therefore, we direct that the death sentence should not be carried out and the sentence imposed upon him be altered to imprisonment for life. We order accordingly. This Writ Petition is disposed of with the aforesaid direc tion. Y. Lal Petition dis posed of.

The Commissioner of Police, Ahmedabad, Respondent No. 1 therein passed an order of detention dated 23.5.1988 against Abdul Latif Abdul Wahab, petitioner 's brother under section 3(2) of the Gujarat Prevention of Anti Social Activities Act, 1985 and served the same on the detenu, while he was in jail, in pursuance of an order of remand made by the Desig nated Court, Ahmedabad in CR No. 40 of 1987. The petitioner, detenu 's brother challenged the validity of this order on the ground, amongst others, that there has been absolute non application of mind on the part of the detaining author ity in making the order of detention. The grounds of detention furnished to the detenu, makes mention of three criminal cases viz. Case No. 372/85, Case No. 456/87 and Case No. 2/88 pending against the detenu at P.S. Kalupur, out of which case No. 372/85 is stated to be pending in Court and the other two pending for examination. The detaining authority acting on the basis of the said complaints apprehended that detenu 's criminal activities will adversely affect the public order because the activi ties, the weapons kept by the detenu and his associates cannot except create terror in the State of Gujarat. The detaining authority further felt that the detenu though in jail, there are full possibilities that he may be released on bail in that offence. It may be pointed out that in case No. 2/88, the name of the detenu does not find place in the FIR. Likewise in case No. 372/85 aforesaid, detenu 's name is not there. 891 In case No. 456/87, registered on 16.10.87 the detenu was arrested the same day. The case related to the seizure of a revolver from the person of detenu. The detaining authority while issuing the order of detention against the detenu, did not at all consider the fact that the Designated Court declined to grant bail to the detenu by its order dt. May 13, 1988. The detaining authority also was not aware that no application for bail by detenu was filed between May 13 to May 23, 1988 i.e. when the detention order was made. The Court in order to decide the various contentions advanced by the parties felt it necessary to consider the background as well as the various detention orders passed against the detenu. The first in the series is an order dt. 11th September, 1984 when the Respondent No. 1 issued to the detenu a notice to show cause why he should not be externed from the boundaries of Ahmedabad and the surroundings rural areas. In 1985 the detenu was arrested u/s 307, 143, 147, 148 & 324, I.P.C. CR case No. 37/85 wherein he was granted bail by the Sessions Judge on February 14, 1985. On 24th March 1985, Commr. of Police passed an order of detenu 's detention. On 6th July 1985 charge sheet in CR Case No. 37 of 1985 was submitted. On 27th September, 1985 inquiry into the externment proceedings was completed. On Dec. 12, 1985 the detenu surrendered and was taken into custody. On May 26, 1986, the detenu was acquitted in that case. The detenu was released from the jail on June 23, 1986 and as soon as he came out of the jail, an order of detention under Preven tion of Anti Social Activities Act was served on the detenu there and then and he was once again taken into custody. It may be mentioned in this connection that on Jan. 18, 1986, the order of externment of the detenu from Ahmedabad city and rural areas of Gandhi Nagar etc. was made when the detenu was in jail. The State Govt. on appeal by the detenu confirmed the order of externment. However on August 7, 1986, the Govt. revoked the order of detention, as Advisory Board could not be constituted. On the same day the State Govt. passed the second order of detention under PASA and the same was served on the detenu the same day. The detenu challenged the validity of both the externment order as also the detention order in the High Court. The High Court re jected the petition challenging the order of detention and he filed petition for special leave in this Court. This Court released the detenu on parole on 23.1.87 as he was to participate in municipal elections which were to take place on 25th Jan. 1987. The detenu was released on parole on 24th Jan. 1987. He won the election from all the wards wherefrom he had contested. This Court on February 9, 1987 quashed the detention order and 892 directed the respondents to set the detenu at liberty. On February 14, 1987 when the detenu went to the police station with his advocate to mark his presence as required by the earlier bail order, he was again taken into custody for breach of order of externment of 18.1.1986. He was granted bail. On February 15, 1987 an order of detention under section 8(a) of the National Security Act was passed against the detenu. The detenu challenged the same but in the meantime Advisory Board released him. On October 16, 1987, the detenu was again arrested for an incident of Feb. 14, 1986. He applied for bail before the Designated Court which was refused. Against that order he preferred an appeal to this Court under section 16 of the Terrorists and Disruptive Activities (Prevention) Act 1985. This Court set aside the order of the Designated Court and remitted the matter back to the said Court with a direction to decide the matter afresh and enlarge the detenu on bail pending the disposal of the application for bail. Another order of detention was passed against the detenu on Jan. 25, 1988 which was later withdrawn as the Advisory Board declined to confirm the same. The detenu was released on March 14, 1988. At the hearing of the appeal by this Court on 7.4.88 an application was made that the detenu has absconded whereupon this Court ordered that the detenu should surrender within a week 's time. He accordingly surrendered on April 13, 1988. On May 23, 1988 the order of detention in question was made which is hereby challenged. The contention raised on behalf of the petitioner is that in the grounds of detention furnished in support of the order of detention, no prejudicial act on the part of the detenu is alleged between March 14, 1988 and April 13, 1988 during which small period he was a free man; as he was in jail for nearly three years prior to March 14, 1988 except for short periods when he was on parole, and after April 13, 1988 again he was under custody. It is urged that no preju dicial activity has been shown, when the detenu was on parole. As such the action of the respondent is wholly vindictive and in total defiance of law. According to him there has been no application of mind at all to the most glaring fact that the Designated Court in defiance of this Court 's order did not grant interim bail to the detenu by its order dt. 13.5.88. There was no possibility therefore of the detenu being released on bail. It was thus impossi 893 ble to prove the statement made in the grounds of detention that there were full possibilities that the detenu may be released on bail in this case. Allowing the petition, this Court, HELD: The detention of a person without a trial is a very serious encroachment on his personal freedom and so at every stage, all questions in relation to the detention must be carefully and solemnly considered. [901G] The past conduct or antecedent history of a person can be taken into account in making a detention order but the past conduct or antecedent history of the person, on which the authority purports to act, should ordinarily be proxi mate in point of time and would have a rational connection with the conclusion drawn by the authority that the deten tion of the person after his release is necessary. [901F G] There must be awareness in the mind of the detaining authority that the detenu is in custody at the time of service of the order of detention on him, and cogent rele vant materials and fresh facts have been disclosed which necessitate the making of an order of detention. [905D E] In the instant case, the detenu was in jail custody in connection with a criminal case and the order of detention was served on him in jail. It is also evident that the application for bail filed by the detenu was rejected by the Designated Court on May 13, 1988. The statement in the grounds of detention that at present you are in jail yet "there are full possibilities that you may be released on bail in this offence also" clearly shows that the detaining authority was completely unaware of the fact that no appli cation for bail was made on behalf of the detenu for his release before the Designated Court and as such the possi bility of his coming out on bail is non existent. This fact of non awareness of the detaining authority clearly estab lishes that the subjective satisfaction was not arrived at by the detaining authority on consideration of relevant materials. The only period during which he was free person was from March 14, 1988 to April 13 1988. During this period no act prejudicial to the maintenance of public order has been alleged to have been committed by the detenu. [905E G; 906E F] A mere bald statement that the detenu is in jail custo dy is likely to be released on bail and there are full possibilities that he may continue 894 the offensive activities without reference to any particular case or acts does not show on the face of the order of detention that there has been subjective satisfaction by the detaining authority in making the order of detention in question. [907C D] The order of detention was accordingly quashed and the detenu directed to be set at liberty forthwith. [907D] Rameshwar Shaw Burdwan & Anr. vs Distt. Magistrate Burdwan & Anr., ; referred to; Alijan Mian vs Distt. Magistrate Dhanbad & Ors. , [1983] 4 SCC 301 referred to; Ramesh Yadav vs Distt. Magistrate, Etah & Ors., referred to; Suraj Pal Sahu vs State of Maharashtra & Ors., ; referred to; Vijay Narain Singh vs State of Bihar & Ors., referred to; Raj Kumar Singh vs State of Bihar & Ors., ; referred to; Binod Singh vs Distt. Magis trate Dhanbad & Ors., ; at 420 21; Poonam Lata vs M.L. Wadhawan and Anr., ; referred to and Smt. Shashi Aggarwal vs State of U.P. & Ors., ; at 440, referred to.

Appeal No. 2123 of 1968. Appeal by special leave from the Award dated March 23, 1968 of the Labour Court, Bangalore in Reference No. 39 of 1967. M. K. Ramamurthi, B. R. Dolia, section Pappu and Vineet Kumar, for the appellants. H. R. Gokhale, C. Doraswamy and D. N. Gupta, for respon dent No. 1. The dispute related to the dismissal by the management of three workmen, Sandhyavoo, G. Prabhakar and M. V. Vasudevan out of the five workmen against whom the management had held a domestic enquiry at which they were found guilty of acts; of misconduct charged against them. The facts leading to the said dispute and the reference are as follows : On August 24, 1964 the said association handed over to the management a charter of demands. Negotiations between the parties having failed, the demands were taken before the conciliation officer when the parties arrived at a settlement dated December 23, 1964. On April 29, 1966, the management issued a notice suspending for a day, i.e., May 4, 1966, one B. G. Shenoy 307 as and by way of penalty. In consequence of a protest by the association, the said suspension was postponed and on May 10, 1966, the management served a charge sheet on Shenoy and suspended him pending an enquiry. On May 11, 1966 the association demanded withdrawal of the said suspension and the said charge sheet. Discussions took place on that day from 9.45 A.M. to 12.30 P.M. between the association and the management and the parties thereafter adjourned at 1 P.M. for lunch having decided to resume the talks at 2.30 P.M. At 2 P.M. the first shift ended and the workers of the second shift began to come, in. The workmen of the first shift, however, stayed on and those of the second shift along with the workmen of the general shift joined them and all of them went on strike. The discussions which were resumed at 2.30 P.M. ended in an agreement at 5 P.M. and the workmen returned to work. On May 18, 1966 the assistant establishment officer submitted a complaint to the chief personnel officer alleging certain acts of misconduct by a crowd of workmen mentioning therein the names of five of them including the said three workmen. On May 25, 1966 charge sheets alleging stoppage of work, abandoning the place of work, inciting clerks and officers of G. 2 department to join the said strike, disorderly behaviour including intimidation and assault on one, A. Lakshman Rao, were served upon those five workmen. Correspondence thereafter ensued between the association and the management wherein the association protested against the management 's decision to adopt disciplinary action against the said five workmen despite the agreement arrived at on May 11, 1966. Thereafter, a domestic enquiry was held on June 30, 1966 which was completed on July 27, 1966 when the enquiry officer made his report holding the said three workmen, Sandhyavoo, Prabhakar and Vasudevan, guilty of acts of misconduct under standing order 22(2), (3), (13) and (18). He exonerated the other two workmen except on the charge of participating in the strike and loitering about under clauses (2) and (18) of the said standing order. On August 12, 1966, the management, agreeing with the report, passed orders of dismissal against the said three workmen which gave rise to the said reference. On March 23, 1968 the Labour Court gave its award holding that the said enquiry was validly held and that the management were justified in passing the said orders of dismissal. Mr. Ramamurthi, appearing for the association, challenged the said award on the following grounds : (1) that the said association not having given a call for the said strike, the said charges were misconceived and the orders of dismissal were consequently not sustainable; (2) that the said strike, which was spontaneously staged by the workmen, was not illegal under section 24 of the , nor was it in contravention of any law as 308 required by standing order 22(2) and (3); (3) that the said disciplinary proceedings were in contravention of the agreement arrived at on May 11, 1966, and therefore, the dismissal following such disciplinary proceedings amounted to unfair labour practice; (4) that the orders of dismissal were passed on charges including that of intimidation though the misconduct of intimidation was not found proved by the enquiry officer and hence the said orders were illegal; (5) that to punish only three workmen when a large number of workmen had taken part in staging the strike and in inciting others to join it constituted victimisation; and (6) that the findings of the enquiry officer were based on no evidence or were perverse in that no reasonable body of persons could have arrived at them on the evidence before him. The argument on which the first contention was based was that the settlement dated December 23, 1964 was arrived at between three parties, the management, the association and the men, and that the association being the union registered under the Trade Unions Act was an entity distinct from the workmen. Under cl. 5 of the settlement it was the association which was obliged to give four days ' notice if it decided to resort to strike, go slow tactics or other coercive action. The said clause did not impose any such obligation on the workmen. The workmen thus having no such obligation and the said strike being a spontaneous one, without any call for it from the association, it could not be said to be in breach of the said settlement, and therefore, would not fall under the mischief of section 23 of the Act, the first condition of which is that to be illegal under section 24 read with section 23 it must be, in breach of a contract. Standing order 22 requires that participating in a strike would be misconduct if it is in breach of some provision of law. But as the strike was not in contravention of section 23, it would not constitute misconduct under that standing order. Therefore, the charges against the said three workmen were misconceived and the orders of dismissal passed against them on the basis that they stood established were bad. In our view this argument cannot be sustained. The construction of cl. 5 of the settlement suggested by Mr. Ramamurthi is contrary to (a) the tenor of that settlement, (b) the provisions of the under which a settlement arrived at between an employer and a union representing the employees during conciliation proceedings is binding not only on such union but also the workmen whom it represents and (c) the principles of collective bargaining recognised by industrial law. The settlement was a package settlement by which the management and the workmen, through their association, arrived at certain terms in the presence of the conciliation officer. The settlement, besides settling the demands contained in the said charter of demands, sets out the necessity of harmonious relations and of cooperation between the 309 management and the workmen so as to promote higher and better production. It was to achieve this object that direct action on the part of either of them such as a strike by the workmen and a lockout by the employer without notice was prohibited. Evidently the provision for four days ' notice before any direct action was taken by either of them was provided for so that during that period if. there was any grievance it could be ironed out by negotiations. 5 of the settlement falls in two parts : (I) the substantive part, and (2) the corollary thereof. The first part inter alia provided that neither the association nor the management would resort to any direct action, such as strike, go slow tactics or lock out or any such coercive action without giving to the other a four days ' notice. The second part provided an undertaking on the part of the association to cooperate with the management, if there was any strike by workmen without any call therefore from the association, if the management were to take disciplinary action against the workmen. If the construction of cl. 5 suggested by Mr. Ramamurthi were to be accepted it would lead to a surprising result, namely, that though a strike at the instance of the association required four days notice, a strike by the workmen without any call from the association would not require any such notice and that the settlement left complete liberty to the workmen to launch a sudden strike. Such a construction appears on the very face of it contrary to the object and purpose of the settlement and particularly cl. 5 which envisages a notice period of four days to enable the parties to resolve a dispute before direct action on its account is resorted to by either them. The suggested construction is also untenable, for surely the association irrespective of the workmen cannot by itself resort. to any direct action. How can, for instance, the association resort to go slow tactics without giving a call for it to the workmen ? It is obvious, therefore, that cl. 5 does not contemplate any dichotomy between the association and the workmen as suggested by, Mr. Ramamurthi, besides being repugnant to the principle that a settlement arrived at by the association must be regarded as one made by it in its representative character, and therefore, binding, on the workmen. Therefore, although the settlement mentions in, cl. 5 the management, workmen and the association, the expression 'workmen ' therein was unnecessary, for, without that expression also it would have been as efficaciously binding on the workmen as. on the association. This conclusion is strengthened by the fact that the settlement mentions the management and the association, on behalf of the workmen only as the parties thereto and the signatories thereto also are only the representatives of the two bodies. None of the workmen, nor any one separately representing them affixed his signature to it. If a lighting strike without notice is illegal under any provision of law (a question which we shall presently consider standing order 22 would come into operation and starting or joining such a strike and inciting others to L 13 Sup. C.I,/69 6. 310 join it would amount to misconduct for which disciplinary action by the management would be possible. The next question is whether the management could validly take disciplinary action against the workmen concerned in respect ,of the said strike. The recitals of the said settlement show that as a result of the association presenting the said charter of demands negotiations between the management and the association took place on the said demands as also on certain proposals made by the management, that on their failure conciliation proceedings took place in the course of which the parties arrived at the said settlement which, as aforesaid, was signed by the representatives of the management and the association in the presence of the conciliation officer. The settlement thus was one under section 12(3) of the and rule 59 of the Rules made thereunder by the Government of Mysore. It was to come into force as from January 1, 1965 and was to remain in force for three years and was thereafter to continue to be in force until its termination by either side. It is clear from thereof that the object with which it was made was to promote harmonious relations and cooperation between the company, the association and the workmen so that the company may on the one hand be able to achieve increased production and on the other be in a position to afford maximum opportunity for continued employment. To accomplish these aims it was agreed that the company on its part should be managed on sound and progressive lines and the association and the workmen on their part should combat any wasteful practices adversely affecting workmanship and production and assist the management in apprehending persons responsible for acts such as theft, sabotage and other subversive activities. As cl. 5 of the settlement itself states it was "in order to ensure continuation of smooth working" that the company and the association agreed that in no case would either of them resort to direct action such as lock outs, strikes, go slow and other coercive action without four days, notice and that should one or more workmen resort to any such direct action without the approval of the association, the association Would cooperate with the company in any disciplinary action which the company would take against such workmen. Then follows the agreement on the said demands of the workmen, and the proposals made by the management in the details of which it is not necessary to go, and finally, the agreement that the parties would adhere to the code of discipline and the grievance procedure annexed as annexure IV to the settlement. The said code also inter alia provided that there should be no strike or lock out without notice, that neither party should resort to coercion intimidation, victimisation or go slow tactics, that they would avoid litigation, sit down and stay in strikes and lock outs and would not permit demonstrations which are: not peaceful or rowdyism. Read 311 in the context of the other provisions of of the settlement of which it is part, cl. 5 was intended, to prohibit (a) direct action without notice by or at the instance of the association, and (b) strikes by workmen themselves without the approval of the association. The words "in no case" used in the clause emphasise that direct action by either the party without notice should not be re sorted to for any reason whatsoever. There can be no doubt that the settlement was one as defined by section 2(p) of the and was binding on the workmen under section 18 (3) of the Act until it was validly terminated and was in force when the said strike took place. The strike was a lightning one, was resorted to without notice and was not at the call of the association and was, therefore, in breach of cl. 5. Could the management then take disciplinary action against the concerned workmen in respect of such a strike ? Standing order 22 enumerates various acts constituting misconduct. 2, 3, 13 and 18 provide that striking either singly or in combination with others in contravention of the provisions of any Act, inciting any other workmen to strike in contravention of any law, riotous or disorderly behaviour or any act subversive of discipline and ' loitering within the company 's premises while on duty or absence without permission from the appointed place of work constitute misconduct. The point is whether participation in and incitement to join the said strike were in respect of a strike which was in contravention of any Act or law. Section 23 provides that no workman employed in an industrial establishment shall go on strike in breach of contract and during the period in which a settlement is in operation, in respect of any of the matters covered by such a settlement. The prohibition against a workman going on strike thus envisages two conditions; (a) that it is in breach of a contract and (b) that it is during the period in which a settlement is in operation and is in respect of any of the matters covered by such settlement. The said settlement was a contract between the company and the association representing the workmen and it was in operation on May 11, 1966. But was it in respect of a matter covered by the settlement ? Under section 24 a strike is illegal if it is commenced in contravention of section 23. Section 26 inter alia provides that any workman who commences, continues or otherwise acts in furtherance of a strike which is illegal under the Act shall be punished with imprisonment for a term extending to one month or with fine which may extend to Rs. 50 or with both. Section 27 provides punishment of a person who instigates or incites others to take part in or otherwise acts in furtherance of an illegal strike, The strike envisaged by these two sections is clearly the one which is illegal under section 24 read with section 23. A strike in breach of a contract during the operation of a settlement and in respect of a matter covered by that settlement falls under section 23 (c). But whereas section 26 312 punishes a workman for going on an illegal strike or for any act in furtherance of such a strike,, section 29 lays down the penalty for a person, not necessarily a workman, who commits breach of a term of a settlement which is binding under the Act. It is, therefore, an offence for any person on whom a settlement is binding under the Act to commit a breach thereof and the legislature has viewed it to be a more serious offence, for, it has a higher punishment of imprisonment extending to six months than the punishment for commencing etc. an illegal strike under section 26. Thus, commencing, a strike or acting in furtherance of it in breach of a settlement binding on the person who so commences it or acts in its furtherance is an offence punishable under section 29. It is clear that there is a distinction between a strike in visaged by section 23 (c) in respect of a matter covered by a settlement and a strike in breach of a settlement envisaged by section 29. That position was conceded by Mr. Gokhale for the management. But his argument was that the strike in question was, firstly, in respect of a matter covered by the said settlement, namely, its prohibition without notice while that settlement was in force and secondly that it was in breach of that settlement, and consequently, it was illegal both under section 24 and section 29. This contention does not seem correct, firstly, because though an agreement not to resort to a strike without notice would be the subject matter of a settlement, a strike in contravention of such an agreement is not in respect of any of the matters covered by such settlement. Secondly, such a construction would mean as if Parliament intended to provide two different penalties, one under section 26 and the other under section 29, for the very same offence, one higher than the other, an intention difficult to attribute. The strike was in the matter of the suspension of the said Shenoy pending a domestic enquiry against him, a matter which obviously was not one of the matters covered by the said settlement. It was, therefore, not a strike illegal under section read with section 23(c). However, the strike was in contravention of cl. 5 of the said settlement and that settlement being binding on the workmen concerned and in operation at the time was punish able under section 29, and therefore, illegal under that section. The question whether a strike in contravention of a similar clause in a settlement was illegal arose in The Tata Engineering and Locomotive Co. Ltd. vs C. B. Mitter & Anr. (1) As in cl. 5 of the settlement before us, the settlement there also provided that "in no case" would the parties thereto resort to direct action such as lockouts, strikes, go slow and other direct action without four days ' notice. The strike in question was commenced in respect of a demand by a workman for a pair of gum boots, a demand (1) C.A.No. 633 of 1963, dec. on April 2,1964. 313 not covered by the settlement. It was common ground that the strike would not fall within the ambit of section 24 but the controversy was whether it was otherwise illegal, the workmen 's contention being that it was not, as the said clause against. a strike without notice applied only to one declared for enforcing one or the other demands which formed the subject matter of the settlement and since the strike arose out of a matter not covered by the settlement, that clause was inapplicable. This Court negatived the conten tion and held that the words "in no case" in that clause meant a strike for whatever reason and though it was conceded that it was not illegal under section 24, it was, nevertheless, held to be illegal not because it was in respect of a matter covered by the said settlement but because it was in contravention of the settlement which was binding on the concerned workmen, which meant that the Court held the strike to be illegal under section 29. In our view the decision in the present case must be the same. The strike was illegal not under section 24 but because it was in contravention of the settlement binding on the workmen concerned. Consequently, standing order 22 would apply and participating in or inciting others to join such a strike would amount to misconduct for which ,the management were entitled to take disciplinary action. But against that position, the argument was that the agreement dated May 11, 1966 under which the workmen called off the strike also provided that no disciplinary action would be taken against any workmen in respect of the strike on that day and that therefore the proceedings taken against the three workmen in violation of that agreement amounted to unfair labour practice. The agreement was oral. According to Bernard, Secretary of the association, the agreement *as that (a) the charges and the suspension order passed against the said Shenoy should be withdrawn (b) the company should pay the wages for the 31 hours period ,of the strike provided the workmen made good the loss of production during that period, and (c) the management would take no action against any one for going on strike. The evidence of Martin, the company 's technical director, on the other hand, was that the company agreed only not to punish the said Shenoy and to consider paying wages for the hours of the strike. The Labour Court on this evidence held that the association failed to prove that the management had agreed not to take action against any of the workmen in connection with the strike though it may be that they might have agreed not to victimise any workman for participating in the strike. In fact, the management did not impose any penalty against any workman for joining the strike, not even against the three concerned workmen. This finding being purely one of fact and the Labour Court having given cogent reasons for it we would not interfere with it without the utmost reluctance. We have been taken through the evidence and the correspondence between the 314 parties but we fail to see any error on the part of the Labour Court in reaching that finding. The next contention was that the orders of dismissal were bad as they took into account the charge of intimidation of the company 's officers although the enquiry officer had found that that charge was not proved. The charge sheets, exs. M/4A, M/5A and M/6A against the three workmen alleged in express terms disorderly behaviour and intimidation. The report of the enquiry officer against the said Vasudevan clearly stated that the enquiry officer accepted the evidence of the management 's witnesses and that on that evidence all the charges against him stood proved. While summarising those charges, he, no doubt, did not in so many words use the expression "intimidation". But the evidence which he, as aforesaid, accepted, was that Vasudevan along with other workmen entered the G. 2 department at about 3 P.M. on that day and thumping his hand on the table of the said Lakshman Rao threatened that officer in the following words : "now I am in the forefront of the crowd]. You cannot do anything. You ask your people to come out and you also come out. Otherwise you can see what we can do for you now". The said Lakshman Rao had also deposed that he was surrounded by the workers who started pushing and pulling him. The evidence of other officers was that as the crowd which forced its way into this department got unruly they were also forced to leave their places of work. The evidence against Prabhakar was that he too was in the fore front of that crowd which squeezed Lakshman Rao and some members thereof inflicted kicks on him. Similarly, there was the evidence of one Raja, the assistant personnel officer, and others that Sandhyavoo was one of those in the forefront of that crowd. According to Raja. Sandhyavoo tried to lift him from his seat with a view to force him to leave his table and finding that the crowd had become restive he left his place. Acceptance of this evidence by the enquiry officer must necessarily mean acceptance of the version of these officers that they were intimidated by the crowd which forced its way into their department led by these three workmen. Though the enquiry officer has not, in so many words, used the expression 'intimidation ' his finding of disorderly behaviour must be held to include acts of intimidation. Lastly, were the orders of dismissal against the three workmen acts of victimisation on the part of the management when admittedly a large number of workmen had staged the strike and also incited others to join that strike ? The orders against the three workmen being identical in terms we take the orders passed against Vasudevan as a specimen. That order sets out four acts of misconduct by him; (1) striking or stopping work, (2) inciting, (3) riotous and disorderly behaviour and (4) loitering about in the 315 company 's premises. Though each one of these acts, according to the order, was misconduct punishable with dismissal, the order states that so far as acts 1 and 4 were concerned, the management. did not wish to take a serious view of them as a large number of "misguided" workmen had stopped work and left their places of work without permission. The management, therefore, took action only in respect of acts failing under cls. 3 and 13 of standing. order 22 evidently for the reason that they considered incitement, intimidation and riotous and disorderly behaviour as "very grave in nature". We do not think that in taking this view the, management discriminated against the three workmen concerned as against. the rest or that they dismissed them with the object of victimising. The evidence in the enquiry clearly disclosed that when the crowd forced its way into the G. 2 department it was led by these three workmen, all of whom were in the forefront thereof and two of them had defiantly forced the officers to leave their tables. of them had threatened as to what he and the others who were behind him in that crowd could do to him if he did not comply and the other had tried even to lift another officer from his chair to compel him to leave his place of work. In these circumstances. the management cannot be blamed if they took a serious view of these acts of the three workmen concerned, who had taken up their position in the forefront of that crowd, a position indicative of their having led, that crowd into that department and having, acted as its leaders. An act of discrimination can only occur if amongst those equally situated an unequal treatment is meted out to one or more of them. Having been found to be the leader& of the crowd, action taken against them cannot on any principle be regarded as discriminatory or unequal. The decision in Burn & Co. Ltd. vs Workmen(1) relied on by Mr. Ramamurthi has no, bearing on the facts of this case and cannot assist him. Once a misconduct graver than that of the rest was found proved against these three workmen and for which the punishment is dismissal, victimisation cannot legitimately be attributed to the management. It is relevant in this connection to remember that so far as their participation in the strike and loitering about were concerned, no,, action was taken against these three workmen on the ground that those acts were common with those of the rest of the workmen. In view of these facts it is not understandable how the impugned ' orders of dismissal could be characterised as acts of victimisation. It is also not possible to say that the finding of incitement and disorderly behaviour of these three workmen was perverse or such, as no reasonable body of persons could come to on the evidence on record on the ground only that the others also were guilty of those acts. For, there would be nothing wrong if those who misled or misguided other workmen were selected for disciplinary action (1) and not the victims of their persuasion, who in following their A precept did similar acts. In our judgment the orders of dismissal, based on the findings in the domestic enquiry which did not suffer from any infirmity, could not be successfully impeached, and therefore, the Labour Court was right in upholding them. The appeal fails and is dismissed. There will be no order as to costs. Appeal dismissed.

The order under section 10(2) of the , given to a proper officer of the Court may be an oral order and need not be a written one. The High Court can under section 10(2) refer a case on its own motion.

Appeals Nos. 9 and 10 of 1954. On appeal from the Judgment and Order dated the 9th day of June 1952 of the Calcutta High Court in Appeal No. 26 of 1952 arising out of the Order dated the 6th day of December 1951 of the said High Court exercising its Ordinary Original Civil Jurisdiction in Matter No. 110 of 1950. C.K. Daphtary, Solicitor General of India, (R. Ganapathy Iyer and R. H. Dhebar, with him) for the appellant in C. A. No. 9 of 1954 and respondent No. 3 in No. 10 of 1954. section Chowdhury, (section N. Mukherji, B. N. Ghosh and A. K. Bose, with him) for the appellant in C. A. No. 10 of 1954. section M. Bose, Advocate General of West Bengal, (B. Sen and P. K. Bose, with him) for respondents Nos. I and 2 in both appeals. 1078 1955. December 19. DAS ACTING C. J. The only question canvassed before us in the above appeals, which have been beard together, is whether certain sales of goods made by Shri Ganesh Jute Mills, Ltd. (hereinafter referred to as the Mills) to the Government of India, Ministry of Industry and Supplies are to be deducted from the taxable turnover of the Mills so as to be exempt from sales tax demanded by the Commercial Tax Officer of the State of West Bengal. The relevant facts are stated below. On the first of September 1948 the Government of India, Ministry of Industry and Supplies, in Calcutta, placed with the Mills a confirmatory order in writing bearing No. Cal/J 1/2001/103 for the supply to the Government of India of a large quantity of hessian cloth of different descriptions at different prices ,therein mentioned. It was stipulated that the contract would be governed by the conditions of contract specified in Form WSB 133 as amended up to date. It was specifically mentioned that the goods ordered were required to meet an international obligation of the Government of India and as such the execution of the contract in accordance with the programme of deliveries as given in the schedule attached thereto was essential. The agreed prices were stated to be exclusive of the Bengal Sales Tax and it was stipulated that the Government of India would arrange direct payment of sales tax to the Government of West Bengal if it was ultimately found that Sales Tax was payable in respect of that contract. Pursuant to the aforesaid contract, the Mills supplied goods to the Government of India of the aggregate value of Rs. 2,10,040 calculated at the prices agreed upon. The Commercial Tax Officer, Beadon Street, District If Charge, claimed that the aforesaid sales should be included in the taxable turnover of the Mills and assessed to sales tax. The Mills, on the ,other hand, claimed exemption under section 5 of the Bengal Finance (Sales Tax) Act, 1941. (Bengal Act VI of 1941). The relevant portion of section 5 ran as follows; 1079 "5. (1) The tax payable by a dealer under this Act shalL be levied at the rate of one quarter of an anna in the rupee on his taxable turnover; (2) In this Act the expression "taxable turnover" means that part of a dealer 's gross turnover during any period which remains, after deducting therefrom (a) his turnover during that period on (i). . . (ii). . (iii) sales to the Indian Stores Department, the Supply Department of the Government of India, and any railway or water transport administration; (iv). . . (v). . (vi). . (b). . " The Mills further contended that if any sales tax was at all payable the same was payable by the Government of India and not by them. The Commercial Tax Officer overruled both these objections and on the 8th November 1950 he assessed the Mills to sales tax in respect of the supplies made by the Mills to the Government of India under the aforesaid contract and demanded a sum of Rs. 9,401 10 6. On the 6th December 1950 the Mills filed a petition under article 226 of the Constitution of India before the High Court at Calcutta. In the petition the Mills impleaded as respondents the Commercial Tax Officer, the State of West Bengal and the Union of India. The Mills prayed for a writ of mandamus on the respondents to cancel and/or recall and/or forbear from acting or giving effect to the demand dated the 8th November 1950 and from realising the sum of Rs. 9,401 10 6 and for a writ of certiorari for production of the records and proceedings before the Commercial Tax Officer and for quashing the same and for other incidental reliefs. On the same day a rule was issued on the respondents to show cause why the orders prayed for should not be made. The Commercial Tax Officer filed an affidavit in opposition disputing the contentions put forward by 1080 the Mills in support of their claim for exemption and maintaining that sales tax was due and had been legitimately assessed and demanded. On behalf of the Union of India was filed an affidavit affirmed by one M. P. Pai, the then Joint Secretary in the Ministry of Works, Production & Supply. It was therein stated that a department of the Government of India named the Department of Supply came into existence in the month of September 1939 immediately on the commencement of World War II and before the enactment of the Bengal Finance (Sales Tax) Act, 1941 (Bengal Act VI of 1941). It was averred that before the 7th January 1946 the said Department of Supply was charged with the procurement of Stores from all places in India including Bengal and that it also directed the work of Indian Stores Department in the United Kingdom and of the India Supply Mission in the United States of America. It was added that by Resolution No. 227/45 Pub(c) dated the 31st December 1945 the Governor General in Council announced the creation with effect from the 7th January 1946 of the Department of Industries & Supply in place of the existing Department of Supply and of Industries and Civil Supplies. It was claimed that the powers and functions of the Department of Industries and Supplies were the same as those of the Department of Supply and that there was no variation in the nature of the said functions whatsoever. The rule came up for hearing before Bose, J., who took the view that the newly created Department of Industries & Supplies was charged with the same work of procurement of stores for Government as had been entrusted to the Department of Supply and certain additional works and that later on the name was again changed to Ministry of Industry and Supply. The learned Judge pointed out that although there was a change in the designation of the Indian Stores Department and the Supply Department of the Government of India, section 5 (2) (a) (iii) was not amended in any way until 1949 when by an amending Act (West Bengal Act X of 1949) the exemption 1081 granted under section 5(2)(a)(iii) was withdrawn. The learned Judge appears to have regarded this con , tinuance of section 5(2) (a) (iii) in the Bengal Finance (Sales Tax) Act, 1941 as indicative of the fact that in view of the State of West Bengal the Ministry of Industry & Supply was the same as the Indian Stores Department and the Supply Department of the Government of India referred to in the section. The learned Judge accordingly held that the Mills were entitled to the benefit of the exemption and were not liable to pay sales tax in respect of the supplies in question. He accordingly, on the 3rd January 1952, made the rule absolute. The Commercial Tax Officer and the State of West 'Bengal went up on appeal from the said judgment and order of Bose, J. The appeal came up for hearing before & Bench consisting of K.C. Das Gupta, J. and P. N. Mookerjee, J. In separate but concurring judgments both the learned Judges rejected the preliminary objection taken by the Mills and the Union of India as to the maintainability of the appeal. On the merits both of them held that the Department of Industries & Supplies was not the same as the Indian Stores Department or the Supply Department of the Government of India. The old departments ceased to exist and a new department combining some of the functions of these departments and some new functions was created and that, therefore, sales to the newly created department could not be deducted from the taxable turnover under section 5(2) (a) (iii). In the result, the Appeal Court allowed the appeal with costs, set aside the order of Bose, J. and dismissed the application of the Mills under Article 226. The Mills as well as the Union of India have now come up on appeal before us with a certificate of fitness granted by the High Court. In view of the decision of this Court in National Sewing Thread Co. Ltd. vs James Chadwick & Bros. Ltd.(1), the question of maintainability of the appeal before the High Court has not been raised before us. The appeals have been fought out on the merits only. (1) ; 1082 The appeals came up before this Court for bearing on the 22nd and 23rd September 1955. After going through the records it was felt that the materials on record were not sufficient to enable the Court to determine the real point of controversy between the parties. The appeals were accordingly adjourned and directions were given for the filing of supplementary affidavits setting out the facts relied on by the parties respectively. Fresh affidavits have since been filed. It appears from the affidavit of one A. R. Iyer, Deputy Director, Directorate General of Supplies and Disposals, under the Ministry of Works, Housing & Supply, that in 1918 a department called the Contracts Directorate had been constituted as a purchasing Organisation for the needs of the Army. With effect from the 1st January 1922 the Indian Stores Department was constituted as a result of the recom mendations of the Stores Purchase Committee. The functions of this department were to act as a purchasing and inspection agency in respect of certain commodities including textile goods for all Central departments and minor Local Governments and such other authorities as might desire to avail themselves of the services of this department. Annexure III to the affidavit of Iyer indicates that it was not obligatory on the other departments to make purchases through the Indian Stores Department. Originally this department was constituted for a period of two years but by Resolution No. section 217 of the Government of India, dated the 6th May 1924, it was placed on a permanent basis and continued to discharge the same functions. Rules 5 and 6 attached to this Resolution show that purchases could also be made locally by other departments in case of emergency or for convenience. In 1939 when the outbreak of World War 11 was imminent the necessity for creating a new department was keenly felt and the Governor General in Council by a Resolution of the Home Department dated the 26th August 1939 (Annexure V to Iyer 's affidavit) announced the creation from that date of a department of Supply "to deal directly with ques 1083 tions concerning supplies of all kinds required for the prosecution of war". Annexure VIII to Iyer 's affidavit shows that the control of the Indian Stores Department and all other matters relating to the purchase of stores in India which were being then dealt with in the Department of Commerce were to be dealt with in the department of Supply as a temporary measure for the duration of the war. That the Indian Stores Department and the Contracts Directorate did not lose their identity is shown by the Office Memorandum dated the 3rd August 1940 (Annexure X, Clause 4) and Office Memorandum dated the 2nd December 1941 (Annexure XI, Clause I (a) and Clause 4). It is thus clear that up to the end of the year 1940 purchases used to be made for and on account of the Government of India by the Contracts Directorate, the Indian Stores Department and the Department of Supply and that purchases were also made locally by other departments. It was then that on the 1st July 1941 the Bengal Legislature passed the Bengal Finance (Sales Tax) Act, 1941 which by section 5(2) (a) (iii) exempted sales to the Indian Stores Department, the Supply Department of the Government of India and any railway or water transport administration from sales tax. Sales to other departments of the Government of India were not so exempted. By a Press Note dated the 2nd September 1941 issued by the Government of India in the Supply Department (Annexure XIII to Iyer 's affidavit) a purchase branch of the Supply Department for the duration of the war was created with effect from the 1st August 1941 and it shows that the Contracts Directorate and the Indian Stores Department bad then "ceased to exist as separate entities" for the duration of the war and a new branch was being organised in their place. Then came the Office Memorandum dated the 23rd December 1941 issued by the Government of India in the Department of Supply (Annexure XIV) which superseded the previous office memorandum dated the 13th December 1940 (Annexure XII). The 137 1084 authorities under the Central Government concerned with the production, manufacture and purchase of supplies were shown in Statement I annexed thereto. It is clearly mentioned therein that departments other than the ones referred to therein were and, in the absence of orders to the contrary, would remain independent of the department though working in close touch with it (Clause 3). Powers of local purchase were also not disturbed in any way (Clause 4). Statement I indicates that purchases of various supplies, e.g., medical and veterinary supplies, coal and coke for Railway and other civil and military authorities in India, etc., and Printing and Stationery stores, were independent of the Supply Department. It is thus clear that the Indian Stores Department and the Supply Department of the Government of India were not the only departments which bad authority to make purchases for and on behalf of the Government of India in its various departments. On the 21st April 1943 came Notification No. 209No. 107/43 Pub(c) whereby the Governor General in Council announced the creation, from the 22nd April 1943, of a Department of Industries and Civil Supplies to deal with (i) Statistics and Research, (ii) Development and (iii) Controls. Shortly thereafter Office Memorandum No. E4(179) dated the 14th May 1943 issued by the Department of Supply intimated that the Governor General in Council bad decided that the Department of Industries and Civil Supplies would, with effect from the 15th May 1943, take over responsibility for the procurement of cotton textiles and cotton textile stores (Annexure XVI to Iyer 's affidavit). So this Department of Industries and Civil Supplies became another purchasing organisation of the Government of India apart from the Department of Supply. The Government of India Resolution dated the 31st December 1945 announced the creation, with effect from the 7th January 1946, of the Department of Industries and Supplies in place of the existing Department of Supply and the Department of Industries and Civil Supplies. By this Resolution the Indian 1085 Stores Department and the Contracts Directorate which during the war had been brought under the Supply Department, were incorporated in the newly created department. It will be noticed that this newly created department had assigned to it the work of the procurement of stores for the Government of India which was formerly assigned to the Department of Supply and the Department of Industries and Civil Supplies. In addition to these duties this department was authorised also to deal with other things, namely, development of industries, administration of Government factories not allocated to specialised departments, Disposals of Surplus and Civil Supplies. The nature and volume of the purchases made by this newly created department became obviously different from and larger than those of the two departments it replaced. It is also noteworthy that the Department of Supply which was created for the prosecution of war was abolished as soon as the war was over (Annexure XVII to the affidavit of Iyer). The Resolution of the Government of India dated the 2nd September 1947 published in the Gazette of India dated the 6th September 1947 (Annexure XVIII) announced, amongst other things, that with effect from the 29th August 1947 the Department of Industries and Supplies would be re designated as the Ministry of Industries and Supply. From the summary of the annexures to the affidavit of Iyer filed in these proceedings it is quite clear that while the Ministry of Industries and Supply was a new designation of the Department of Industries and Supplies, the Department of Industries and Supplies cannot be regarded merely as a new designation of the Department of Supply and the Department of Industries and Civil Supplies. Indeed, the Resolution announced the "creation" of the Department of Industries and Supplies in place of the two existing departments mentioned above. This newly created department had wider powers and was a new department altogether. The exemption granted by the Bengal Finance (Sales Tax) Act, 1941 was given to two departments by name. It was not given to the 1086 sales to the Government of India in all its departments. It is true that the Indian Stores Department and the Supply Department of the Government of India were not corporate bodies but they evidently were sufficiently well defined organisations to be referred to as "entities" in some of the Press Notes and Resolutions mentioned above and even in the affidavits filed in these proceedings. Further, the Bengal Finance (Sales Tax) Act, 1941 by section 5 (2) (a) (iii) certainly dealt with these two departments as if they were distinct entities. The Act, in a manner, conferred on these two departments the status, as it were, of well defined and distinct entities at least for the purposes of that Act, namely for making sales to them exempt from the tax. If it were the object of the Bengal Legislature to give exemption to all sales to all departments of the Government of India it would have been quite easy for it to frame sub clause (iii) in a general way as sub clause (iv) had been flamed. Further, if sales to these two departments were to be regarded as covering sales to all departments of the Government of India then the sales to the railways which at that time mostly, if not wholly, belonged to the Government of India need not have been separately mentioned in the way it has been in sub clause (iii). As already stated, there were, at the date when the Act was passed, various other departments of the Government of India which were concerned with purchase of stores but quite clearly the exemption conferred by the section was not intended to extend to the sales to those departments. Therefore, the reference to these two particular departments in the section cannot possibly be read as a reference to the Government of India generally. It has been urged that the real object of section 5(2)(a)(iii) was to give exemption not to the particular departments but to the sales of such goods as, at the date of the Act, used to be made to those departments and, therefore, sales of those goods made to any department of the Government of India which came to be charged with the duty of purchasing those 1087 goods should also come within the purview of the section and be entitled to the benefit of the exemption conferred by it. We are unable to accept this line of reasoning. This interpretation will unduly narrow the scope and ambit of the exemption by limiting it to sales of only those goods as, at the date of the Act, used to be sold to those two departments and sales of other goods even to those two departments, however necessary for the prosecution of the war, would not get the benefit of the exemption. Such could not possibly be the intention of the legislature as expressed by the language used by it in framing the section. According to the section the exemption is given to all sales made to those two departments, no matter whether the sales were only of the kind of goods which used to be sold to them at the date of the Act or of other kinds of goods. The suggested interpretation involves the addition of qualifying words to the section which ordinarily it is Dot permissible for the court to do. Further, the press notes and the resolutions of the Government of India summarised above clearly indicate that there were other purchasing departments which were independent of the Indian Stores Department or the Supply Department of the Government of India and that the authority of other departments of making local purchases was not interfered with by the creation of these two departments. Therefore it may well have been that, at the date of the passing of the Act, same or similar kinds of goods used to be sold to these two departments as well as to other departments but surely it cannot be contended, in view of the language of the section, that the exemption was intended to extend to the sales of the same or similar kinds of goods to those other departments also. It is not necessary for us to pronounce any opinion as to the validity or soundness of the extreme position taken up by the learned Advocate General of West Bengal namely that as the exemption is given by a statute to sales made to two departments eo nomine it will not extend to sales made to the same department redesignated by a new name. It is enough for our present 1088 purpose to say that the Department of Industries and Supplies which was subsequently re designated as the Ministry of Industries and Supply was not the same as the Indian Stores Department or the Supply Department of the Government of India under a different name. The scope and volume of the work entrusted to the Department of Industries and Supplies was much wider and larger than that with which the two departments which it replaced bad been charged. Unlike those of the two departments, its purchases were not confined to goods necessary for the prosecution of the war. To extend the benefit of the statutory exemption to the sales made to the newly created department of Industries and Supplies, of goods not required for war purposes but, say, for meeting international obligations as in the present case, will necessarily widen the scope of the exemption and impose greater loss of revenue on the State of West Bengal than what the Act by its language intends to do. In view of the ever expanding activities of the modern welfare State indifferent fields including that of trade and commerce, the Government departments are often entrusted with the performance of well defined activities and are authorised to deal with the outside world and to enter into contracts of sale and purchase and other transactions in the same way as an ordinary person or company may do. Such Government departments, therefore, may well be regarded as distinct units or quasi legal entities, at least for the particular purposes for which they are created. At any rate, the Bengal Finance (Sales Tax) Act, 1941 by providing for the deduction of the sales to the two named departments from the taxable turnover certainly treated those two departments as distinct entities. This exemption is the creation of the statute and must be construed strictly and cannot be ex tended to sales to other departments. The fact that the section was not amended until 1949 does not at all indicate that the Bengal Legislature intended to extend the benefit of the section to any but the departments specifically mentioned in the section. In our opinion the conclusion arrived at by the Appeal 1089 Court, namely that the sales tax is payable on the sale in question is correct and these appeals must be dismissed with costs. SINHA J. I regret to have to differ from my learned brethren in the determination of the only question involved in these appeals, namely, whether the sales by the appellant in Civil Appeal No. 10 of 1954 (Messrs Shree Ganesh Jute Mills Ltd.) to the appellant in Civil Appeal No. 9 of 1954, the Union of India (the Government of India at the time of the transactions in question) were liable to payment of sales tax under the Bengal Finance (Sales Tax) Act, 1941 (Bengal Act VI of 1941), to be referred to hereinafter as "The Act". The facts leading up to these appeals may shortly be stated as follows: The Government of India in the Ministry of Industry and Supply (which for the sake of brevity may be called "The Government" entered into a contract on the 1st September 1948 with Messrs Shree Ganesh Jute Mills Ltd., which may be designated "The Mills", for the supply of hessian at certain rates and of certain description appearing in Exhibit A to the affidavit filed on behalf of the Mills. With reference to the question of sales tax the contract contains the following stipulation: "The prices shown above are exclusive of the Bengal Sales Tax. The Government of India will arrange direct payment of sales tax to the Government of West Bengal if it is ultimately found that sales tax is payable in respect of this contract". It is also provided that "This contract will be governed by the conditions of contract specified in Form WSB. 133 as amended up to date". This contract was entered into and signed by "A Huq, Deputy Director of Supplies, for and on behalf of the Governor General of India". In pursuance of the aforesaid contract the Mills supplied hessian goods to the Government of India of a certain valuation on which the Commercial Tax Officer of Bengal, the main contesting respondent, made a demand of Rs. 9,401 10 6 as sales tax from the Mills. The Mills demurred to the 1090 payment and contended that the sales in question were exempt from payment of the sales tax demanded in view of the provisions of section 5 (2) (a) (iii) of the Act. Eventually the Mills moved the High Court of Calcutta for an appropriate writ under article 226 of the Constitution against the contesting respondents. The matter was heard by a Single Judge of that Court who by his judgment dated the 6th December 1951 held that the Mills were not liable to pay the sales tax demanded and cancelled the notice of demand and directed the respondents 1 and 2 to forbear from enforcing the demand. Respondents I and 2 went up in appeal under the Letters Patent. The appeal was heard by a Division Bench which came to the contrary conclusion. The major portion of the judgment of the Letters Patent Bench was devoted to the discussion of the question whether the judgment of the learned Single Judge in the writ matter was amendable to the appellate jurisdiction under the Letters Patent. That question has not been pressed during the arguments and is therefore no more in controversy. The only question that was canvassed before us was the applicability of section 5 (2) (a) (iii) of the Act which contains the exemption, the benefit of which is being sought by the appellants in each case. The exemption is in these terms: "Sales to the Indian Stores Department ', the Supply Department of the Government of India, and any railway or water transport administration". It has been contended on behalf of the appellants that the sale of hessian by the Mills to the Government of India in the Ministry of Industry and Supply is within the terms of the exemption quoted above. On the other hand, it is contended on behalf of the Sales Tax Department of the Government of West Bengal that the sales in question were not covered by the aforesaid exemption clause. It is therefore necessary to go into some detail of the formation and development of the Department in question. The supplementary affidavit filed on behalf of the Government and sworn to by Shri A. R. Iyer, Deputy Director of Directorate General of Supplies & 1091 Disposals, discloses the following facts. The Indian Stores Department was constituted with effect from the 1st January 1922 as a result of the recommendations of the Stores Purchase Committee which had been constituted by the Government of India to examine the whole question of the constitution of an expert agency to carry out on a large scale purchase of supplies required for the public services, as recommended by the Indian Industrial Commission, with the object of encouraging the purchase of articles made in India for Government requirements. The scope and functions of the Department, inter alia, were to act as a purchasing and inspection agency, and in an advisory capacity in all matters connected with the purchase of stores for the public services, on behalf of all Central Departments of the Government and of the minor local Governments and also on behalf of such major local Governments, Company worked Railways, Corporations, Port Trusts, Municipalities and quasi public bodies and Indian States as might desire to avail themselves of the Department 's assistance. The activities of the Department consisted in the purchase and inspection in India of a large variety of goods and articles including "textile goods", so that the purchase of hessian which is the particular commodity involved in this case, would be included in the activities of the Department. The Department had been constituted in the first instance for a period of two years. But by a Resolution. of the Government of India dated the 6th May 1924 it was placed on a permanent basis. It continued to discharge the same functions as before. It made purchases not only for the needs of the civilian departments of the Government of India but also of all the requirements of the Army. Hessian which had been purchased from the Mills in this case was one of the products which the Government of India used to purchase only through the Indian Stores Department whenever needed for Government purposes. A Department called the "Contracts Directorate" had been constituted in 1918 as a, purchasing organization for the needs of the Army. But after the constitution of the Indian 138 1092 Stores Department in 1922 the Army authorities also began to utilize the services of the Indian Stores Department for procurement of several categories of stores required by them. By a Resolution of the Home Department dated the 26th August 1939, apparently to meet the demands of the imminent second world war, the Contracts Directorate and the Indian Stores Department were in 1940 amalgamated with the Department of Supply so that in 1941, when the Act was passed, the position was that the Department of Supply as reorganized on the 3rd August 1940 included amongst its activities and functions the purchase of stores for the needs of the Government. This branch of its activity was administered by the Directorate General, Supply Branch, located at New Delhi. Jute products and textiles including hessian had to be purchased only by placing indents by the department concerned with the Directorate General of Supply, New Delhi. Thus this Department absorbed for the duration of the war the purchasing sections of the Indian Stores Department and the Contracts Directorate which were placed under completely self contained organizations empowered to procure all supplies, whether for war purposes or otherwise. All authorities requiring supplies to be procured in India had to place their indents or demands on the Directorate General concerned. With effect from the 1st August 1941 the Contracts Directorate and the Indian Stores Department ceased to exist as separate entities in the Supply Department and became one purchasing organization in the said Department. This Organisation arranged for supply of all classes of stores for purposes of Government, such as textiles, leather goods, etc. Thus hessian which came under the bead of "textiles" which was being purchased in the first instance only by the Indian Stores Department continued to be purchased by the Supply Department when the Indian Stores Department came under the control of the Supply Department. By a notification dated the 21st April 1943 issued by the Government of India in the Home Department, another Department called the Industries and 1093 Civil Supplies Department was created. This Department was primarily concerned with statistics and. research and development of industries, as also ' controls on civil supplies (other than foodstuffs). When this Department was first created, it had no purchasing activity. But with effect from the, 15th May 1943 the Government directed that the new department should take over responsibility for the procurement of cotton textiles and cotton textile stores which till then were being dealt with by the Indian Stores Department which later came under the Supply Department as aforesaid. Purchase of jute and woollen textiles continued to be the responsibility of the Supply Department. By a Resolution of the Government of India dated the 31st December 1945 the Department of Industries and Supplies in place of the existing Departments of Supply and of Industries and Civil Supplies was created with effect from the 7th January 1946. From that date the Department of Industries and Supplies became responsible for the procurement of stores from all places in India in the same manner as the Department of Supply had been doing previously to its amalgamation with the new Department. The powers and functions of the Department of Industries and Supplies in the matter of procurement of stores continued as before. The Department continued to procure and purchase only the same kinds of articles as the Department of Supply had been doing before the coming into existence of the Department of Industries and Supplies so that the creation of the Department of Industries and Supplies did not make any difference in its activities relating to purchase of stores. There was no addition to or subtraction from its functions in the matter of purchase of stores. From what has been stated above, it is clear that the purchasing functions of the Government of India with special reference to the procurement of textiles including hessian with which we are immediately concerned were discharged by the Indian Stores Department from 1st January 1922. Those functions were taken over by the Department of Supply in 1940, 1094 The Department of Supply itself merged in the Department of Industries and Supplies with effect from the 7th January 1946. By a notification of the 2nd September 1947 the Department of Industries and Supplies was redesignated as the Ministry of Industry and Supply with effect from the 29th August 1947 as a result of the emergence of India as an Independent State. Thus the Ministry of Industry and Supply is a lineal descendant of the Indian Stores Department, of course, with an added volume of work and functions, but the original activity of purchase of stores remaining the same in bulk and in character. It has already been noticed that the Indian Stores Department was concerned with the function, amongst others, of purchasing stores of a large variety of articles and goods on behalf of all Central Departments of the Government of India and Local Gov ernments, Railway Companies, Corporations, Port Trusts, Municipalities and other quasi public bodies, as also Indian States if they availed of the services of the department. Thus the infant Indian Stores Department has grown in stature and volume in the course of the last about 25 years. The same sapling has grown into a shady tree but its function as the sole purchasing agency of the Government of India and other Governments for a large variety of goods and commodities has 'Continued. The nomenclature has undergone successive changes, but the function of purchasing agency on behalf of the Central and other Governments and public bodies as aforesaid has remained the same. Furthermore, the purchase of hessian, which is the subject matter of the demand in question has continued in the same organization, though under a different name. It is well settled that the provisions of a statute have to be construed with reference to the state of affairs as they existed at the time the statute was passed. In the year 1941 there was in existence the Supply Department of the Government of India which had incorporated the Indian Stores Department. According to the affidavit referred to above, the main activities of purchase of goods and commodities 1095 required by the Government of India 'and other governments, local bodies, etc., except for purchases of small values, that is to say, not exceeding Rs. 100 in each case and of certain specified commodities, like foodstuffs, forage, lethal stores, etc. referred to in para. 7 of the affidavit (at p. 18 of the supplementary paper book) were carried on by the Supply Department. That is the reason why the exemption to the Government of India was worded as it stands in section 5(2) (a) (iii). As stated above, the Supply De partment existed as a separate department up to the 6th January 1946. With effect from the 7th January the Department of Industries & Supplies came into existence which later was re designated as the Ministry of Industry & Supply. The judgment under appeal is based chiefly on the consideration that the exemption clause in question does not in terms refer to the newly created department which now goes by the name of the Ministry of Industry & Supply. But this department in so far as it deals with industry, is not concerned with the main purchasing activities of the Government of India. The exemption was granted in respect of the purchasing activity of the Government of India and that function continues to be assigned to the Supply Department which has now become a wing of the newly created department of the Government. The question therefore arises whether in those circumstances the Government of India could claim the benefit of the exemption. The High Court in answering that question in the negative has gone upon mere nomenclature. It has emphasized the change in the name and overlooked the substance of the matter. After all, what is a Department of a Government? It is not a mere name, whatever else it may be. It is not a person, either natural or artificial. A Department of Government is a particular function. The Government has so many functions and each of its functions or a group of functions is placed in charge of a particular Department which may be made up of a number of clerks organized in a group, whose work is supervised by a hierarchy of officials with 1096 the head of the department at the apex. A department may therefore consist of a single function out of the many functions of the Government, or it may comprise several functions placed in charge of a single departmental head. The Indian Stores Department which came to be incorporated in the Supply Department of the Government of India and later merged in the larger Department of the Ministry of Industry & Supply, could have continued its separate existence as it did until 1939 or could have become part of a larger department as it did after the 3rd August 1940, or the 7th January 1946, or the 29th August 1947; and conversely, its activities could be split up into a number of sub departments under different heads classified according to the nature of the commodities to be purchased. But, in my opinion, the change in the nomenclature in either direction should not matter so long as the function, namely, of purchasing articles and commodities required by the Government of India and other Governments continued to be the same. It is a matter of substance and not of form. The Department concerned cannot be equated with a natural person. Nor can it be raised to the level of a legal person. I am not aware of any principle of jurisprudence which would justify placing a department of Government on the pedestal of a legal person. There is no tertium quid between the two positions. Though the High Court has not said so in so many words, it has treated the department either as a legal person or as something in between a legal person and a natural person. That, in my opinion, is not sound logic. Nor is there any legal basis for treating a department of Government either as a legal person or as a natural person. In my view, the terms of section 5(2) (a) (iii) show that it was an exemption granted to a particular function of the Government of India described by a certain name. And one might feel inclined to exclaim with the great poet Shakespeare "What is in a name!" It is but a description of the main purchasing activity of the Government of India, as the history of the department above set out shows, 1097 Sometimes the language of a statute has to be construed in a modified form in order to give effect to the real intentions of the legislature where, as in the present case,, the language is only of a descriptive nature and not a definitive one. An instance of this is furnished by the case of Miller vs Salomons(1). In that case the question arose whether a person of Jewish persuasion who was returned to Parliament as a Member of the House of Commons was entitled to sit without taking the prescribed oath. The form of the oath as given by 6 Geo. 3, c. 53, mentioned the name of "King George" only. It was argued on behalf of that member that the oath was confined to the name of a sovereign who bore that name. But it was held by the Court that it was a mere description and that the intention of the statute was to include all sovereigns who came after King George 111. The relevant portion of the observations of the Court are in these terms: "The second question arising on the construction of the Act is, whether, as the form of the oath given by the 6 Geo. 3, c. 53, mentions the name of King George only, the obligation to administer it ceased with the reign of that Sovereign, because it was applicable to no other than to him. I think this argument cannot prevail. It is clear that the legislature meant the oath to be taken always thereafter, for the enactment is general that it shall be taken without limit of time and the oath is not confined to the existing monarch, but mentions 'the successors '; and as it could not be taken in those words during the reign of a Sovereign not of the name of George, it follows that the name George is merely used by way of designating the existing Sovereign; and the oath must be altered from time to time in the name of the Sovereign, in the manner it was when actually administered in this case, in order to carry the obvious meaning of the enactment into effect. This is an instance in which the language of the legislature must be modified, in order to avoid absurdity and inconsistency with its manifest intentions". (1) [1852] 7 Exchequer 475; ; , 1068. 1098 The High Court referred to the observation of Lord Halsbury in the case Of Commissioners of Inland Revenue vs Forrest(1) to the effect that exemptions from taxation should be strictly construed because otherwise the burden of taxation will fall on other members of the community. Those observations, in my opinion, have no relevance to the facts and circumstances of the present controversy, because we know that the exemption was granted to the Government of India in the department dealing with purchase of certain commodities and articles without reference to quantity. As already pointed out, the Indian Stores Department was concerned with purchase of stores for public services on behalf of all Central Departments of Government and local Governments, etc., and the Government of Bengal as then constituted was one of the Provinces of India which have been receiving subsidies and subventions to make up the deficit in their budgets. As a matter of fact, as stated on behalf of the Bengal Government the concession was granted in order to enable business communities within the Province of Bengal to compete on favourable terms with others outside Bengal in the matter of supplying the needs of the Government. Hence there is no question of liberal construction of the exemption resulting in throwing a greater burden on other citizens. On the other hand, the larger the sales in the Province of Bengal as it used to be, the greater the benefit to the business community doing business within that Province. It was therefore stated at the Bar that though the present case involved taxes amounting to less than Rs. 10,000, the question arising for determination in this case affected much larger amounts because such sales within the Province amounted to several crores. I should have thought that the business community in the Province of Bengal having had the advantage of the transactions of sale, the Government of Bengal in all fairness should have allowed the purchasing agency of the Government of India the benefit of the exemption until that benefit was in (1) ; 1099 terms withdrawn some time in the beginning of 1949. The matter can be looked at from another point of view also. We are concerned here with the sale of hessian. As pointed out in the affidavit filed on behalf of the Government of India, the purchase of hessian has all along been the concern of the Supply Department, now incorporated in the Ministry of Industry & Supply. Sales tax is a tax on sale of goods and tax on hessians falls within the contemplation of the law granting the exemption if the sales were effected through the purchasing agency of the Government of India. The beneficiary certainly was not an amorphous body like a department but the Government of India, because it is the Government of India which could be a unit for purposes of the Act. In this connection our attention was invited to the last clause of the exemption covered by the words "and any Railway or water transport administration". The argument was that if the Government of India as such was to be the beneficiary, then there was no necessity for the words just quoted. But this argument overlooks the fact that a railway or a water transport administration need not necessarily be a department of Government because there were, and still are, railway systems or water transport systems which are owned and administered by corporate bodies other than the Government of India. Sales even to those public or semi public bodies were within the terms of the exemption. Those words therefore are not words of limitation but words which widen the scope of the exemption in so far as the same may be available to railways and water transport administrations not owned and carried on by the Government of India. Another reason which may be adduced in answer to the contention that there was nothing to prevent the Legislature from stating that the exemption was granted in respect of all purchases by the Government of India is that the Indian Stores Department and its later substitutes had to make purchases Dot only for the Government of India but also for local governments and other public bodies. Hence the exemption 1100 in the terms in which it occurs in section 5 (2) (a)(iii) was not an exemption in favour of the Government of India only but also to other Governments and public bodies which could avail themselves of the facility of purchase through that department. Another argument was urged to meet the appellant 's case that really the exemption was meant for the Government of India in its function of purchase of stores and commodities, discharged through the Indian Stores Department and later through the Supply Department. It was argued that if the legislature meant to grant the exemption to the Government of India, then the easiest thing to do would have been to say that sales to the Government of India were exempt from the tax. But it has not been the contention of the appellant that all sales to the Government of India are within the terms of the exemption. Only the sales transacted through the purchasing department of the Government of India were so exempt. In para. 7 of the affidavit referred to above it has been stated on behalf of the Government that the different departments were entitled to make local purchases of small values, that is to say, not exceeding Rs. 100 and of certain specified commodities like foodstuffs which were not within the purchasing activity of the departments aforesaid of the Government of India. Hence, in my opinion, there is no validity in this argument either. It was also suggested during the argument that if the exemption were to be related to only such commodities and articles as were within the purview of the Stores Department and later of the Supply Department, then such an interpretation would involve addition of qualifying words to the section which is not ordinarily within the function of the courts. But, in my opinion, this argument also suffers from the infirmity that,it equates the departments mentioned in the exemption clause quoted above with a legal person, an argument which has already been dealt with. In my opinion, there is no escape from the conclusion that those are mere words of description and are not words with defined connotation, because 1101 neither the Act nor the rules framed thereunder define those departments. If the nomenclature only mattered, then there is no escape from the conclusion that whatever articles and commodities were purchased by the Indian Stores Department or its later substitutes, of whatever magnitude and value, would be within the mischief of the exemption clause in question. But that, in my opinion, was not the intention of the framers of the Act. They knew what the activities of the Government through those departments were and the exemption was granted only in respect of those functions of the Government, as already indicated. For the aforesaid reasons I would allow these appeals, set aside the orders of the Letters Patent Bench and restore the orders passed by the Single Judge of the Calcutta High Court, with costs throughout. BY THE COURT. In accordance with the Judgment of the majority the appeals are dismissed with costs.

Under section 12(1 ) of the Bombay Rents. Hotel and lodging House Rates Control Act, 1947, a tenant is entitled to claim protection from eviction so long as he is willing and ready to pay the standard rent as defined in section 5(10) and permit ted increases and observes other conditions of the Act. The protection is subject to the limitations contained in section 12(2) and 12(3). Under section 12(3)(a) where the rent is pay able by the month and there is no dispute regarding the amount of standard rent or permitted increases, if such rent or increases arc in arrears for a period of 6 months or more and the tenant neglects to make payment thereof until the expiration of the period of one mouth after notice referred to in sub section (2), the court may pass a decree for eviction in any such suit for recovery of possession. Under a 12(3)(b) no decree for eviction shall be passed in any suit if on the first day of hearing of the suit or on or before such other date as the court may fix the tenant pays or tenders in court the standard rent and permitted in creases then due and thereafter continues to pay or tender in court regularly such rent and permitted increases till the suit is finally decided and also pays costs of the suit as directed by the court. The respondent tenant was in arrears of rent amounting to Rs. 990/ for the period from 6th March 1967 to 5th December 1969, house tax amounting to Rs. 27.49 and elec tricity charges amounting to Rs. 210.18. The appellant landlord served a notice upon him under section 106 of the Trans fer of Property Act terminating the tenancy and filed a suit for eviction. The respondent filed an application for fixation Of the standard rent within a month trader section 11(2) of the Act. He also filed an application for fixation of interim rent on the ground that he being a poor man was unable to pay rent and the total amount due at once. On these applications, the interim rent was fixed at Rs. 25/ by an order dated 3 2 1970 and he was directed to deposit arrears of rent and future rent at this rate on or before 1oth of the next month. These applications were dismissed for non prosecution later on. The trial court held that as the respondent tenant was "ready and willing" to pay the rent to the appellant landlord, the suit for ejectment could not be decreed in spite of the fact it found that the notice was validly issued and the arrears were true and correct. The appellate court held that the unwillingness of the respondent to pay the rent which was apparent from the patent facts and admissions and conduct disentitled him from the protection under section 12 and decreed the suit for eject ment. The High Court. however, relying on an affidavit dated 18 9 75 filed by the respondent allowed the revision application made by him under section 29(2) of the Act. Allowing the apppeal by special leave, the Court. HELD: (1) The statutory protection can only be given in accordance with the terms on which it is permissible. The Bombay Rents. Hotel and Lodging House Rates Control Act, 1947 does not confer a power upon the court to excuse a violation of the provisions of the Act by making wrong assumptions or on compassionate grounds. The Court. could not, therefore, exercise what would be in effect a power to condone infringement of the Act. [575F, 576B] (2) In cases where there is no dispute regarding the amount of standard rent if the provisions of section 12(3)(a) are nor shown to be complied with. 570 the Court is bound to pass a decree for eviction. Where a tenant does not prosecute an application for fixation of standard rent and deliberately permits to be dismissed for non prosecution, it could be reasonably inferred that it was not a bona fide application at all. [575 G H, 576 A] (3) A fixation of standard rent can only take place by means of the specified procedure provided for it. There is nothing in the instant case which could be "deemed" a fixa tion under the Act. It being admitted that the agreed rent was Rs. 30/ per mensem that would be the standard rent as defined by section 5(10) of the Act. That was the rate on which the rent was payable. Non prosecution of the application for standard rent indicate that there was no real dispute regarding standard rent or permitted increases. [571A 573G, 575FG] (4) Section 12(3)(b) applies only to cases where either on the first hearing of the suit or on such other dates as the court may fix for the purpose, the tenant pays or tenders in court the standard rent with permitted increases pays or In the instant case the respondent did not comply with the orders dated 3 2 1970 fixing the interim rent. Under the order dated 3 2 1970, the tenant had to deposit arrears of rent and in addition he had to deposit future rent at the rate fixed for the interim rent. The part of the order for future rent could not refer to arrears of rent. If the tenant was not quite clear about the meaning of the order, he could have applied to the court to clarify the orders and could have gone on depositing rent at Rs. 25/ per month after depositing arrears of rent so clarified. [575 FG, 574 B C] Vora Abbashai Alimahorned vs Haji Gulamnabi Haji Safibhai ; referred to. (5) The readiness and willingness of the tenant to pay could be found only if he had complied with the provisions of the Act. The Act does not cover the case of a person who is unable to pay owing to want of means but is otherwise "ready and willing". The Act, unfortunately, does not enable courts to make special law for such hard cases which fall outside the statutory protection. The instant case is clearly outside the protection conferred upon tenants under section 12 of the Act. The tenant could not be said to be "ready and willing" to pay the rent so as to avoid passing of a decree for eviction against him, in the face of detailed findings given by the appellate court. After assuming quite erroneously that the standard rent was fixed for the first time in the appellate court and by accepting the version of the tenant respondent that his default was due to his diffi culty in finding money to pay the rent, the High Court had erroneously condoned all defaults in payment of rent right upto the time of the making of the application before it on 18 9 1975. [576 B G] Shah Dhansukhlal Chaganlal vs Dalichand Virchand Shroff & Ors. ; applied.

Civil Appeal No. 1434 1435 of 1968. Appeal from the Judgment and order dated 6th April 1967 of the Calcutta High Court in Appeal from original order No. 175 of 1963 and 177 of 1963. G. L. Sanghi and Girish Chandra, for the Appellant. H. K. Puri and M. C. Dhingra, for Respondents. The Judgment of the Court was delivered by GOSWAMI, J. These two appeals are on certificate by the Calcutta High Court from its common judgment of April 6, 1967, in Appeal Nos. 175 and 177 of 1963. Respondent No. 1 prior to its liquidation was a private limited company carrying on business as an importer and dealer in sewing machines. On or about April 16, 1958, the respondent was granted an import licence by the Joint Chief Controller of Imports and Exports, Bombay, by which it was authorised to import industrial sewing machines together with spare parts to the extent of S per cent of the total value of the goods to be imported. The total value of the imports authorised was Rs. 47,406/ . The respondent could under the licence import the goods through any port in India. Out of the permitted value under the licence, goods worth about Rs. 9,919/ were imported by the respondent through the Bombay port. The respondent then wanted to arrange the rest of the import through the Calcutta port. At the request of the respondent the Customs authorities of Bombay gave a release order in respect of the remaining goods to be imported in terms of the aforesaid licence through the Calcutta port. By an indent of November 11, 1958, the respondent placed orders with M/s Fuji Trading Company Limited, Osaka, Japan, for supply of 162 pieces of industrial sewing machine head "Raruna Brand" and 973 208 dozen of oscillating rock shafts. By two other indents of December 3, 1958, the respondent sent orders to M/s Alickson & Company, Osaka, for the supply of 59 sets of industrial sewing machine head "Prosper Brand" And certain industrial sewing machine parts. All these three indents were accepted by the two Japanese Companies in , due course. M/s Fuji Trading Company Limited shipped the goods against orders placed with them on January 30, 1959, by section section Sydney Maru. M/s Alickson & Company also shipped the goods covered by the indents placed with them on January 28, 1959, by section section State of Andhra. The respondent apparently had some financial difficulties for releasing the goods at Bombay, as, according to it, it did not have sufficient credit with the Bombay Bank "to open the letter of credit with payment of a nominal margin only". The respondent, therefore approached the Bombay and Calcutta Cycle Company (briefly the Cycle Company), a partnership firm, which also used to carry on business as dealers in sewing machines and had previous dealings with the respondent. The Cycle Company agreed to guarantee the letter of credit if it were opened through their Bankers at Delhi. 'the respondent agreed to do so and thereupon at the request of the Cycle Company the Mercantile Bank Limited of Delhi agreed to Act as the respondent 's Bankers and also to allow the respondent to open the letter of credit. There after on or about December 29/30, 1958, the respondent opened with the Mercantile Bank Limited, Delhi, a letter of credit being L. C. No. 101/1085. The respondent advanced a sum of Rs. 2884.50 np by way of marginal deposit to the extent of 10 per cent of the value of the letter of credit and the necessary Bank charges. On February 20, 1959, while the said goods were on the high seas there was an agreement between the respondent and the Cycle Company by which the respondent agreed to sell and the Cycle Company agreed to buy at a future date certain quantities of industrial sewing machine heads and oscillating rock shafts. The contract of sale may be quoted in extenso: "SALE CONTRACT" We Messrs. Pednekar and Co. Private Ltd., 172, Girgaon Road, Bombay 1 . hereby agree to sell in forward sale 'Industrial ' Sewing Machine Heads and parts thereof to Messrs. Bombay & Calcutta Cycle Co. Of 48, Popatwadi, Kalbadevi Road, Bombay, on the following terms and conditions: Items and quantity: 221 pcs. IndustrialSewing Machine Head TA 1 Model complete with knee Lifter, accessories box Bobbin winder made in Japan. 200 dozen oscillating Rock Shaft "Coto" brand made in Japan. Rates and value: 221 pcs. Industrial Sewing Machine Heads @ 305/ per machine . Rs. 67,405/ 20O dozen oscillating Rock Shaft @ Rs. 24/ per dozen . Rs. 4,800/ __________ Total . Rs. 72,205/ __________ 974 Payment: The sum of Rs, 13,300/ already recied by the sellers from the buyers (Rs. 7000/ received on 19th June, 1958, Rs. 2300/ received on 7th July, 1958, and Rs. 4000/ received on 22nd December, 1958) will by adjusted against the above payment. The sum of Rs. 56,000/ (Rs. fifty six thousand only) will be paid by buyers as and when required before the delivery of the goods and the balance sum of Rs. 2,905/ will be paid by the buyer after the delivery of the goods to them in good condition in their godown. Place of delivery: Buyers ' Godown at Bombay. Time of Delivery : June July 1959 Sales Tax : Buyers will issue 'K ' From (Bombay Sales Tax) against sellers Bill for the goods. For Pednekar & Co. Private Ltd. Sd/ Managing Director Bombay, dated 20th February, 1959. We confirm. For Bombay & Calcutta Cycle Co. Sd/ Partner". section section State of Andhra and section section Sydney Maru arrived at the port 6 of Calcutta on February 26 and February 27, 1959, respectively The respondent instructed the Bankers to engage M/s Mackinon ,. Mackenzie & Co. Pvt. Ltd. (briefly the Clearing Agents) as Agents for clearing the goods arriving by the said two ships. The Bankers were also asked to despatch the shipping documents to the Clearing Agents. The Bankers carried out these instructions and the Clearing Agents filed with the Customs authorities, Calcutta, bills of entry or in respect of the aforementioned goods for consumption in the name of the respondent. On the requisition of the Customs authorities several documents, as required, were supplied to them. Informations as to who guaranteed for the letter of credit, who retained the documents and who paid for the goods were also supplied to the Customs authorities by the Clearing Agents as desired. On October 28, 1959, the Assistant Collector of Customs for Appraisement issued a show cause notice on the respondent under section 167(8) and section 167(37) of the , read with section 3(2) of the Imports and exports (Control) Act 1947 relating to the goods that arrived by section section Sydney Maru. On November 18, 1959, an exactly similar show cause notice was served upon the respondent by the Assistant Collector of Customs in respect of the goods arrived by section section State of Andhra. In these notices it was alleged that the importation of the goods in question had been " made by the Cycle Company without any valid import licence in their favour and not by the respondent and that the Cycle Company was the real owner of the goods. It was further alleged that the respondent had aided and abetted in the unauthorized importation of the goods by the Cycle Company. There was a further charge that the respondent had transferred the licence in favour of the Cycle 975 Company. It was alleged in the show cause notice of October 28, A 1959, that the licence in any case did not cover the importation of oscillating rock shafts. The respondent was asked to show cause within 14 days of receipt of the respective notices as to why the goods should not be confiscated and why a penalty should not be imposed on the respondent for being concerned in the unauthorized importation of the said goods. The respondent was also asked in the first show cause notice to show cause why oscillating rock shafts of the value of Rs. 1373.19 np should not be confiscated under section 167(37) of the and why a penalty should not be imposed on the respondent. The respondent submitted its explanation repudiating the allegations. The respondent further contended that the oscillating rock shafts were spare parts of which clearance could be allowed to the extent of S per cent of the face value of the notices. The respondent denied the applicability of clause 37 of section 167 of the and demanded the release of the goods immediately. On December 17, 1959, the Assistant Collector addressed a letter to the respondent which is described as an additional show cause notice. The substance of the allegations made in this letter is that the goods in question were ascertained and specific goods and that the property in the goods had passed from the respondent to the Cycle Company by reason of the agreement for forward sale dated February 20, 1959, and that the property in the goods had already vested in the Cycle Company at the time of importation so that the goods were not covered by the licence submitted by the respondent. The respondent was asked to make further submissions within a fortnight from receipt of this letter. There was a similar additional show cause letter dated December 22, 1959, addressed to the respondent with regard to goods which arrived by section section State of Andhra. The respondent sent a reply to the additional show cause notices. The respondent denied in its explanation that the property in the goods had passed to the Cycle Company before the goods were cleared On March 18, 1960, the Deputy Collector of Customs passed an order by which the go which arrived by section section State of Andhra were confiscated under section 167(8) of the read with section 3(2) of the Imports and Exports (Control) Act, 1947. personal penalty. Of Rs. 350/ was also imposed on the respondent as well as on the Cycle Company. Thereafter on March 23, 1960, the Deputy Collector of Customs passed another order by which the goods which arrived by section section Sydney Maru were confiscated and a personal penalty of Rs. 1000/ was imposed on the respondent as well as on the Cycle Company. The above is the background which led to two writ applications in the High Court against the aforesaid two orders under article 226 of the Constitution of India which the respondent filed against the appellants impleading also the Cycle Company as respondent No. 4 therein. The learned single judge of the High Court dismissed the respondent 's writ applications except with reference to the oscillating rock 976 shafts. According to the learned judge these shafts were properly imported under section 2, Part V, Item 76(a) of the Import 'trade Control Policy Book, but these shafts also except 8 dozen were liable to confiscation in view of his decision against the respondent in respect of 200 sewing machine heads. The respondent then appealed to the Division Bench of the High Court. The Division Bench allowed the appeals by setting aside the judgment of the single judge with out disturbing at the same time the aforesaid portion of the judgment regarding oscillating rock shafts. The High Court granted certificates to appeal to this Court under article 133 (1) (a) of the Constitution of India to the appellants. ,; We may note in passing that during the pendency of the proceedings before the High Court, the respondent was wound up by an order of the High Court of Bombay and necessary substitution was made. We are only concerned in these appeals with the confiscation of 200 sewing machine heads and of 200 oscillating rock shafts. Since there had been no appeal by the appellant against that part of the order of the single judge with regard to the importation of 8 oscillating rock shafts, Mr. Sanghi has, rightly, not addressed us in respect of the same. Mr. Sanghi at the commencement of his argument submitted, to quote his own words, that "the main thrust of the show cause notice was the realness of the transaction". In other words, he wanted to raise the question, which had also been unsuccessfully pressed into service before the Division Bench that though everything ostensibly was done by the respondent the real importer in the case was the Cycle Company and the respondent merely lent his name. The Division Bench, in our opinion, rightly rejected the submission holding that that was a completely new case which had not been made out either before the adjudicator or before the learned single judge. The Division Bench further rightly held as follows: "It was never the contention of the Customs authorities that the importation of the goods was not done by the petitioner and that though everything is ostensibly done by the petitioner the real importer is B. C. Cycle Company. In the show cause notice there is no allegation made on the part of the Customs that the contract with the Japanese supplier was a sham or that the petitioner 's contract with the B. C. Calcutta Cycle Co., was also a sham transaction. " We are, therefore, unable to agree with Mr. Sanghi that he can be permitted to raise this question of a "make believe ' transaction by the respondent. The only question, therefore, that arises for decision in this case and on which Mr. Sanghi has addressed us is as to the question whether property in the goods had passed to the Cycle Company when the contract had been entered by the respondent with it, that is to say. prior to the arrival of the goods at Calcutta port for clearance 977 We may even quote what was stated in the additional show cause notice: "Thus it appears that the sale contract which purports to be an 'agreement to sell ' is actually a sale and that the property in the subject goods vested with M/s Bombay & Calcutta Cycle Co., at the time of importation." The learned single judge answered the question in the following words: "In this case the goods were specific goods in a deliver able state as already held. There was nothing in the con tract indicating that the property in the goods would pass to the buyer at a later stage. Therefore, under section 20 of the Sale of Goods Act, that property passed at the time of the contract of sale and it was immaterial that time for payment of price and also time for delivery were postponed. " The Division Bench, on the other hand, after extensively dealing with all the facts and circumstances of the case including the terms of the contract, came to the conclusion that ". no property could pass before the goods were delivered at the Bombay godowns of the B. C. Cycle Company. " The controversy has to be resolved by reference to sections 18, 19 and 20 of the . It is, in our opinion, not possible to hold that the property in goods passed at the time of agreement dated February 20, 1959. The contract to sell related not to the entire consignment of the goods which were being imported by the respondent but only to part of those goods, even though it may be a major 'part. Out of 208 dozen rock shafts which were imported, 200 dozen were to be sold by the respondent company to respondent No. 2. There was nothing to prevent the respondent company from selecting for itself any eight dozen rock shafts out of the whole consignment. The place of delivery of the goods was buyer`s godown in Bombay. The property in the goods could not pass in favour of respondent No. 2 until, after the arrival of the goods in Bombay, two hundred dozen rock shafts to be delivered to the buyer were separated. So far as industrial sewing machines were concerned, the property in them could also not pass to the buyer before the passing of the property in rock shafts as the contract between the respondent company and the buyer was one indivisible contract. The High Court, in our opinion, rightly held that the property in the goods did not pass to the buyer till the time of the delivery of the goods in Bombay. No specific goods in a deliverable state were attached to the contract when it was made. Mr. Sanghi summits that the fact that the Cycle Company was principally financing the whole transaction and stood guarantee to the Bankers in Delhi enabling the respondent to open a letter of credit for the importation of the goods clearly indicates that, notwithstanding the place of delivery in the contract, the parties intended that the 978 imported goods were appropriated to the contract when the same was made. In many genuine commercial transactions guarantee can be arranged by a party importing or exporting goods under a valid licence. The mere fact of financial guarantee to a Banker for the purpose of opening a letter of credit, without any thing more, would not convert the guarantor to be the owner of the property the moment the contract was entered if the terms therein pointed to the contrary. We are unable to hold that the mere fact of the Cycle Company being the guarantor with regard to the financial arrangement, which the respondent made with the Bankers in Delhi, would lead to the in escapable conclusion that the property in the goods had passed to the Cycle Company at the time when the contract was made. The cor respondent between the respondent and the Cycle Company, that between the parties and the Banker and the arraignments for clearing the goods through the Calcutta Clearing House relied upon by Mr. Sanghi, do not lead to a contrary conclusion. It is clear that the respondent had a valid import licence under the cover of which It imported the goods from Japan and, as we have held above, the property in the goods had never passed during the importation as alleged by the Customs authorities. The entire controversy before the adjudicator was with reference to the importation of the goods by the Cycle Company which fact was sought to be established against the respondent from the legal position urged with regard to the passing of property to the Cycle Company at the time the contract had been made on February 20, 1959. Mr. Sanghi submits that if, on the facts and circumstances, conduct of the parties and the correspondences during the relevant period taken with the advance of finance and guarantee of the Cycle Company, the adjudicator came to the conclusion that the property had passed and the goods were liable to confiscation and the conclusion was prima facie reasonable the High Court had no jurisdiction to interfere with the order under article 226 of the Constitution. p This would be true, says counsel, even if the High Court could on the same facts and circumstances take another view in the matter. We are unable to accede to the submission. We are dealing with an order of confiscation of certain goods imported under a licence granted to the respondent. It was never disputed that it was a valid licence. It was also not an Actual User licence. 'the respondent, therefore, could sell these imported goods to others. The whole matter, therefore, turned on the legal issue as to whether property had passed at the time the respondent had enter ed into the contract for the sale of the imported goods. Even the Customs Authority in its additional show cause notice made particular reference to section 20 of the appointed out that: "the ownership in the goods under consideration appears to have passed on to M/s Bombay & Calcutta Cycle Co. right from the time the sale contract was concluded. " 979 When, therefore, on the terms of the contract along with other relevant facts and circumstances which had to be looked into by the adjudicator for application of section 20 of the , he committed a manifest error of law apparent on the face of the order the High Court 's jurisdiction to interfere under article 226 of the Constitution is clearly attracted. The submission of Mr. Sanghi is, therefore, without any force. In the view we have taken regarding passing of property in the goods we need not deal with Mr. Sanghi 's submission with reference to the provisions of warranty under section 12 of the . The orders of confiscation of the goods and penalties imposed are invalid and the High Court was right in quashing the same by issuing the appropriate writs. In the result the appeals are dismissed with costs. V.P.S. Appeals dismissed.

The first respondent, an importer and dealer in sewing machines, was granted an import licence for importing industrial sewing machines and spare parts. After importing some goods through the Bombay port, the first respondent was permitted by the Customs Authorities to import the rest through the Calcutta port, and the first respondent entered into contracts with Japanese companies for supply of a certain number of industrial sewing machines and oscillating rock shafts. Being in some financial difficulty the first respondent approached the 2nd respondent, and the latter stood guarantee to Bankers at Delhi enabling the first respondent to open the necessary letter of credit. Thereafter, while the goods contracted for from the Japanese companies were on the high seas, there was an agreement by which the first respondent agreed to sell to the second respondent at a future date, certain quantities of sewing machines, heads and oscillating rock shafts. When the goods arrived at Calcutta, the Customs authorities took the view that the goods were ascertained and specific goods, that the property in them had passed to and vested in second respondent by reason of the agreement to sell, so that at the time of importation the goods were not covered by the licence in favour of the first respondent and ordered confiscation of the goods and the imposition of a penalty. The first respondent thereupon moved the High Court and the High Court held against the appellant. In appeal to this Court, the appellant Collector of Customs, also raised the contentions that though everything ostensibly was done by the 1st respondent the real importer was the 2nd respondent and that, therefore, the importation was unauthorized; and that the High Court had no jurisdiction to interfere Under article 226, with the order of the Customs authority. Dismissing the appeal, ^ HELD: (I) It is not possible to hold on the facts of this case, that the property in the goods passed to the second respondent at the time of the agreement, and the High Court was right in holding that the property in the goods did not pass to the buyer till the time of delivery of the goods in Bombay., [977E, G H] (a) The agreement to sell related not to the entire consignment of the goods which were being imported by the first respondent but only to part of those goods even though it was a major part. Out of 208 dozen rock shafts which were imported, 200 dozen were to be sold to the 2nd respondent. There was nothing to prevent the first respondent from selecting for itself any 8 dozen rock shafts out of the consignment. The Place of delivery was the second respondent 's godown in Bombay, and therefore, the property in the goods could not pass in favour of the second respondent until after the arrival of the goods in Bombay and the 200 dozen rock shafts to be delivered to the 2nd respondent were separated. So far as the sewing machines were concerned, the property in them could also not pass to the buyer before the passing of the property in rock shafts as the contract was one indivisible contract. No specific goods in a deliverable state were attached to the contract when it was made. [977E G] 972 (b) [n many genuine commercial transactions guarantee can be arranged by a party importing or exporting goods under a valid licence. The mere fact of financial guarantee by the second respondent to a banker for the purpose of enabling the first respondent to open a letter of credit, without anything more, would not convert the guarantor (2nd respondent) to be the owner of the property, the moment the contract was entered into, if the terms therein pointed to the contrary. [978A B] (2) It was never the contention of the Customs authorities that the importation of the goods was not done by the 1st respondent or that the 1st respondent 's contracts with the Japanese suppliers were sham. Therefore the appellant cannot be permitted to raise the contention that the real importer was the 2nd respondent. [977E G] (3) The 1st respondent 's licence was not an Actual User Licence and there fore the 1st respondent could sell the imported goods to others. The legal issue in the case was whether property had passed to the 2nd respondent at the time the agreement was entered into between the respondents and if on the terms of the agreement along with relevant facts and circumstances, the customs authorities had committed a manifest error of law apparent on the face of the order the High Court 's jurisdiction to interfere under article 226 is attracted. [978G 979B]

Appeal No. 38 of 1989. From the Judgment and order dated 15.3. 1988 of the Central Administrative Tribunal, Ahmedabad in M.A. No. 49 of 1988. P.H. Parekh and Shishir Sharma for the Appellant. B. Dutta, Additional Solicitor General, Ms. Indu Malho tra and C.V. Subba Rao for the Respondents. The Judgment of the Court was delivered by VENKATARAMIAH, J. The appellant was working as an Upper Division Clerk in the year 1975. He was placed under suspen sion by an order dated 25.7.1975 as a result of the institu tion of a criminal prosecution against him and he continues to remain under suspension till today. By an order dated 4.9. 1975 he was sanctioned subsistence allowance at the rate of 50 per cent of his salary last drawn. By a further order made on 6.6.1982 the subsistence allowance was reduced to 25 per cent of the salary he was drawing on the date of suspension. The increments he would have earned from time to time and the periodical revisions of pay scales were not taken into consideration in determining the subsistence allowance. The charge sheet was filed in the criminal case against the appellant in 1976 and the case was committed to the sessions, but the committal proceedings were quashed by the High Court in 1978. Then the proceedings again began before the Metropolitan Magistrate in 1979. The case, however, has not yet come to an end. Aggrieved by the denial of the salary and allowances due to him for a long time on account of the order of suspension and in particular the order fixing the subsistence allowance at 25 per cent of the salary which he was drawing at the time of suspension by the Order dated 6.5. 1982, the appel lant approached in the year 1988 the Central Administrative Tribunal (Ahmedabad Bench) for a direction to be 227 issued to the Government to restore the original Order dated 4.8. 1975 by which the subsistence allowance was fixed at 50 per cent of his salary. That petition was dismissed by the Tribunal by its order dated 15.3.1988 on the ground that the appellant had approached the Tribunal more than five years after the date on which the Order dated 6.5. 1982 had been passed apparently on the ground of limitation set out in sub section (2) of section 21 of the Administrative Tribu nals Act, 1985 (hereinafter referred to as 'the Act '). Aggrieved by the order of the Tribunal, the appellant filed this appeal. The question for consideration in this appeal by special leave is whether in a case of this nature, the Tribunal was right in holding that the application before it, was barred by time. Sub section (1) of section 21 of the Act, no doubt, says that a Tribunal shall not admit an application in a case where a final order such as is mentioned in clause (a) of sub section (2) of section 20 has been made in connection with the grievance unless the application is made, within one year from the date on which such final order has been made, and in a case where an appeal or representation such as is mentioned in clause (b) of subsection (2) of section 20 has been made and a period of six months had expired thereafter without such final order having been made, within one year from the date of expiry of the said period of six months. Sub section (2) of section 21, however, provides that notwithstanding anything contained in sub section (1) of section 21 where the grievance in respect of which an application is made had arisen by reason of any order made at any time during the period of three years immediately preceding the date on which the jurisdiction, powers and authority of the Tribunal become exercisable under the Act in respect of the matter to which such order related, and no proceedings for the redressal of such grievance had been commenced before the said date before any High Court, the application shall be entertained by the Tribunal if it is made within the period referred to in clause (a), or, as the case may be, clause (b) of sub section (1) or within a period of six months from the said date, whichever period expires later. Sub section (3) of section 21 further confers power on the Tribunal to condone the delay in certain cir cumstances if the applicant satisfies the Tribunal that he had sufficient cause for not making the application within such period. In the present case the main grievance of the appellant was not that the Order dated 6.5.1982 by which the subsist ence allowance payable to him was reduced to 25 per cent was bad at the commencement although there were some allegations to that effect but it was one relating to the failure of the authority or the Government to review the Order dated 6.5.1982 even though a long period of 5 years had elapsed 228 after the reduction of the subsistence allowance. His con tention was that the delay in the conclusion of the criminal proceedings as a consequence of which he had been kept under suspension was not due to him and in the circumstances it was not just and proper that he should be paid a subsistence allowance at a reduced rate for an unreasonably long period. In support of his case the appellant relied upon a decision dated 23.6.1987 of the very bench of the Tribunal in Shri Bhupendra Mahashuklal Mehtap vs The Union of India & Ors., in T.A. No. 223 of 1986 (S.C.A. No. 3509 of 1922) in which Fundamental Rule 53 which authorised the Government to review an order regarding subsistence allowance arose for consideration. In the said case the Ahmedabad Bench of the Tribunal quashed the Order dated 6.5.1982 passed against the applicant in that case by which the subsistence allowance payable to the said applicant had been reduced. An order of suspension is not an order imposing punish ment on a person found to be guilty. It is an order made against him before he is found guilty to ensure smooth disposal of the proceedings initiated against him. Such proceedings should be completed expeditiously in the public interest and also in the interest of the Government servant concerned. The subsistence allowance is paid by the Govern ment so that the Government servant against whom an order of suspension is passed on account of the pendency of any disciplinary proceeding or a criminal case instituted against him could maintain himself and his dependants until the departmental proceeding or the criminal case as the case may be comes to an end and appropriate orders are passed against the Government servant by the Government regarding his right to continue in service etc. depending upon the final outcome of the proceedings instituted against him. The very nomenclature of the allowance makes it clear that the amount paid to such a Government servant should be suffi cient for bare subsistence in this world in which the prices of the necessaries of life are increasing every day on account of the conditions of inflation obtaining in the country. It is luther to be noted that a Government servant cannot engage himself in any other activity during the period of suspension. The amount of subsistence allowance payable to the Government servant concerned should, there fore, be reviewed from time to time where the proceedings drag on for a long time, even though there may be no express rule insisting On such review. In doing so the authority concerned no doubt has to take into account whether the Government servant is in any way responsible for the undue delay in the disposal of the proceedings initiated against him. If the Government servant is not responsible for such delay or even if he is responsible for such delay to some extent but is not primarily responsible for it, it is for the Government to recon 229 sider whether the order of suspension should be continued or whether the subsistence allowance should be varied to his advantage or not. The decision on the said question no doubt depends upon several factors relevant to the case. In the instant case the appellant was suspended in the year 1975. Now nearly 13 years have elapsed from the date of suspen sion. He was paid subsistence allowance at the rate of 50 per cent of the salary last drawn by him from 1975 and 1982 and from 1982 he is being paid 25 per cent of the salary last drawn by him. It is not clear from the record before us, since the application made by the applicant was dis missed by the Tribunal at the preliminary stage, whether the appellant was responsible for the inordinate delay in the disposal of the case instituted against him. In the circum stances of the case we are of the view that even though no relief could be given to the appellant in respect of the period which was beyond three years from the date on which the Tribunal commenced to exercise its powers under the Act, it was quite open to the Tribunal to consider whether it was proper for the Government to continue to give effect to the Order dated 6.5.1982 from any subsequent date and if the Tribunal came to the conclusion that the Order dated 6.5.1982 was required to be revised it could pass an appro priate order notwithstanding the fact that a period of five years had elapsed from the date on which the order reducing the subsistence allowance was passed. While doing so it was open to the Tribunal to fix a date within the period of the said three years from which the appellant should be paid the subsistence allowance at the revised rate of course, having due regard to the date of the application also. In the alternative, the Tribunal could have asked the authority concerned to review the order. In the circumstances, the Tribunal was not right in rejecting the application solely on the ground that the order reducing the subsistence allowance having been passed on 6.5. 1982 the Tribunal could not entertain an application for directing the Government to revise the Order dated 6.5. 1982 even in respect of any period within three years from the date on which the Tribunal commenced to exercise its powers having due regard to the date of the application also since we feel that the cause of action in respect of such prayer arises every month in which the subsistence allowance at the reduced rate is paid. We therefore set aside the order of the Tribunal and remand the case to it to dispose of the application made by the appellant on merits. We make an order accordingly. There is no order as to costs. P.S.S. Appeal allowed.

Sub section (2) of section 21 of the empowers the Tribunal not to entertain an applica tion the grievance in respect of which had arisen beyond three years immediately preceding the date on which the jurisdiction, powers and authority of the Tribunal became exercisable under the Act. The appellant, an Upper Division Clerk, was suspended from service, in July 1975 pending on account of the insti tution of criminal proceedings against him. By an order dated August 4, 1975 he was sanctioned subsistence allowance at the rate of 50 per cent of his salary last drawn. By a further order dated May 6, 1982 the subsistence allowance was reduced to 25 per cent of the salary he was drawing on the date of suspension. He moved a petition before the Tribunal in the year 1988 for a direction to the Government to restore the original order of August 4, 1975. That peti tion was dismissed by the Tribunal solely on the ground that the order reducing the allowance having been passed on May 6, 1982, it could not entertain the application made more than five years thereafter, apparently on the ground of limitation set out in section 21(2) of the Act. In this appeal by special leave it was contended for the appellant that the Government had failed to review the order of May 6, 1982 even though a long period of five years had elapsed after the reduction of the subsistence allowance, that the delay in conclusion of the criminal proceedings, as a consequence of which he had been kept under suspension, 225 was not due to him and in the circumstances it was not just and appropriate that he should be paid a subsistence allow ance at a reduced rate for an unreasonably long period. Allowing the appeal, HELD: 1. The Tribunal was not right in rejecting the application. [229F] 2. The cause of action in respect of a prayer seeking enhancement of subsistence allowance arises every month in which the said allowance at the reduced rate is paid. There fore, in the instant case, though no relief could be given to the appellant in respect of the period which was beyond three years from the date on which the Tribunal commenced to exercise its powers under the Act, it was quite open to the Tribunal to consider whether it was proper for the Govern ment to continue to give effect to the order dated May 6, 1982 from any subsequent date, and if the Tribunal came to the conclusion that the said order was required to be re vised it could pass an appropriate order notwithstanding the fact that a period of five years had elapsed from the date on which the order reducing the subsistence allowance was passed. While doing so it was open to the Tribunal to fix a date within the period of the said three years from which the appellant should be paid subsistence allowance at the revised rate having due regard to the date of the applica tion. [229C E] 3.1. The very nomenclature of the allowance makes it clear that the amount paid to a Government servant under suspension should be sufficient for bare subsistence in this world in which the prices of the necessaries of life are increasing every day on account of the conditions of infla tion obtaining in the country. More so, when a Government servant cannot engage himself in any other activity during the period of suspension. The amount of subsistence allow ance payable to the Government servant concerned should, therefore, be reviewed from time to time where the proceed ings drag on for a long time, even though there may be no express rule insisting on such review. [228F G] 3.2. In doing so, the authority concerned no doubt has to take into account whether the Government servant is in any way responsible for the undue delay in the disposal of the proceedings initiated against him. If the Government servant is not responsible for such delay or even if he is responsible for such delay to some extent but is not pri marily responsible for it, it is for the Government to consider whether the 226 order of suspension should be continued or whether the subsistence allowance should be varied to his advantage or not. [228G H; 229A] 4. The case is remanded to the Tribunal to dispose of the application made by the appellant on merits. [229G]

iminal Appeal No. 14 of 1968. Appeal by special leave from the judgment and order dated April 20, 1967 of the Calcutta High Court in Criminal Revision No. 502 of 1966. B. Sen and P. K. Chakravarti, for the appellants. A. section R. Chari, B. P. Maheshwari and Sobhag Mal Jain, for respondent No. 1. The Judgment of the Court was delivered by Shah J. In the course of investigation of offences under sections 420, 467, 471 and 120 B.I.P. Code the Officer in charge of the investigation submitted an application before the Chief Presidency Magistrate, Calcutta, for an order that a warrant for the arrest of Jugal Kishore More and certain other named persons be issued and that the warrant be, forwarded with the relevant records and evidence to the Ministry of External Affairs, Government of India, for securing extradition of More who was then believed to be in Hong Kong. It was stated in the application that More and others "were parties to a criminal conspiracy in Calcutta between May 1961 and December 1962 to defraud the Government of India in respect of India 's foreign exchange", and their presence was required for trial. The Chief Presidency Magistrate held an enquiry and recorded an order on July 19, 1965, that on the materials placed before him, a prima facie case was made out of a criminal conspiracy, 32 3 was "hatched in Calcutta" within his jurisdiction, and More was one of the conspirators. He accordingly directed that a nonbailable warrant in Form 11 Sch. V of the Code of Criminal Procedure be issued for the arrest of More, and that the warrant be sent to the Secretary Home (Political) Department, Government of West Bengal, with a request to take all necessary steps to ensure execution of the warrant. A copy of the warrant was sent to the Commissioner of Police, Calcutta, for information. In the warrant More was described as Manager, Premko Traders of 7, Wyndhan Street and 28, King 's Road, Hong Kong. The Chief Presidency Magistrate forwarded to the Government of West Bengal, the warrant with attested copies of the evidence recorded at the enquiry and photostat copies of documents tendered by the prosecution in evidence "in accordance with the procedure laid down in Government of India, Ministry of External Affairs, letter No. K/52/ 6131/41 dated 21st May, 1955". The warrant was forwarded by the Government of West Bengal to the Ministry of External Affairs, Government of India. The Ministry of External Affairs forwarded the warrant to the High Commissioner for India, Hong Kong, who in his turn, requested the Colonial Secretary, Hong Kong, for an order extraditing More under the Fugitive Offenders Act, 1881, (44 and 45 Vict., c. 69), to India for trial for offences described in the warrant. The Central Magistrate, Hong Kong, endorsed the warrant and directed the Hong Kong Police, "pursuant to section 13 of Part 11 and section 26 of Part IV of the Fugitive Offenders Act, 1881", to arrest More. The order recited : "WHEREAS I have perused this warrant for the apprehension of Jugal Kishore More, . accused of an offence punishable by law in Calcutta, Republic of India, which warrant purports to be signed by the Chief Presidency Magistrate, Calcutta, and 'is sealed with the seal of the Court of the said Magistrate, and is attested by section K. Chatterjee,. Under Secretary in the Ministry of External Affairs of the Republic of India and sealed with the seal of the said Ministry; AND WHEREAS I am satisfied that this warrant was issued by a person having lawful authority to issue the same; AND WHEREAS it has been represented to me that the said Jugal Kishore More . is suspected of being in the Colony; AND WHEREAS Order in Council S.R. and 0. No. 28 of 1918 by virtue of which Part 11 of the Fugitive Offenders Act, 1881, was made to apply to a group 324 of British Possessions and Protective States including Hong Kong and British India, appears to remain in full force and effect so far as the law of Hong Kong is concerned. Now therefore under section 13 of the Fugitive Offenders Act, 1881, I hereby endorse this Warrant and authorise and command you in Her Majesty 's name, forthwith to execute this Warant in the Colony to apprehend the said Jugal Kishore More, . wherever he may be found in the Colony and to bring him before a Magistrate of the said Colony to be further dealt with according to law. " More was arrested on November 24, 1965. By order dated April 4, 1966, the Central Magistrate, Hong Kong, over ruled the objection raised on behalf of More that the Court had no jurisdiction to proceed in the matter under the Fugitive Offenders Act, 1881, since the Republic of India was no longer a "British Possession". On May 16, 1966, Hanuman Prasad father of More moved in the High Court of Calcutta a petition under section 439 of the Code of Criminal Procedure and article 227 of the Constitution for an order quashing the warrant of arrest issued against More and all proceedings taken pursuant thereto and restraining the Chief Presidency Magistrate and the Union of India from taking any further steps pursuant to the said warrant of arrest and causing More to be extradited from Hong Kong to India. The petition was heard before a Division Bench of the High Court. A. Roy, J., held that the warrant issued by the Chief Presidency Magistrate was not illegal and the procedure followed for securing extradition of More was not irregular. In his view the assumption made by the Central Magistrate, Hong Kong, that for the purpose of the Fugitive Offenders Act, India was a "British possession" was irrelevant since that was only a view expressed by him according to the municipal law of Hong Kong, and by acceding to the requisition for extradition and surrender made upon that country by the Government of India in exercise of sovereign rights the status of the Republic of India was not affected. In the view of Gupta, J., the warrant issued by the Chief Presidency Magistrate and the steps taken pursuant to the warrant were without jurisdiction, that the request made to the Hong Kong Government by the Government of India was also without authority in the absence of a notified order under section 3 of the , and the High Court could not ignore the "laws of the land, even to support a gesture of comity to another nation," that 325 what was done by the Hong Kong authorities pursuant to the request made for the surrender of More was "not an instance of international comity but was regarded as the legal obligation under the Fugitive Offenders Act under which the Central Magistrate, Hong Kong, regarded India as a Colony or Possession of the British Commonwealth". The case was then posted for hearing before R. Mukherji, J. The learned Judge held that the. Chief Presidency Magistrate had no power to issue the warrant of arrest in the manner, he had done, a manner which in his view was "unknown to the Code of Criminal Procedure", since the Fugitive Offenders Act, 18 8 1, had ceased, on the coming into force of the Constitution, to be part of the law of India and could not on that account be resorted to for obtaining extradition if offenders from another country; that the instructions issued by the Government of India by letter No. 3516 J dated June 14, 1955, laying down the procedure to the followed by the courts for securing extradition 'of offenders from the Commonwealth countries should have been ignored by the Chief Presidency Magistrate, and that the 34 of 1962 did not authorise the Chief Presidency Magistrate to issue a warrant and to send it to the Secretary, Home (Political) Department, Government of West Bengal; that there "was no legal basis for the requisition made by the Central Government to Hong Kong" for extradition or surrender of More or for the issue of the warrant by the Chief ' Presidency Magistrate; and that the demand made by the Government of India to the Government of Hong Kong by making a requisition to Hong Kong for the arrest of More "was not a political act beyond the purview of law and judicial scrutiny" and being inconsistent with the law was liable to be rectified. He observed that the Central Government had the power under section 3 of the , to issue a notification for including Hong Kong in the list of countries from which offenders may be extradited, but since the Government had not issued any notification under that clause in exercise of the executive power, the Government could not attempt in violation of the statutory procedure seek extradition which the law of India did not permit. The learned Judge accordingly ordered that the warrant of arrest dated July 30, 1965, issued by the Chief Presidency Magistrate, Calcutta, against More and all subsequent proceedings taken by the Chief Presidency Magistrate and the other respondents be quashed. The State of West Bengal has appealed to this Court with special leave. Extradition is the surrender by one State to another of a person desired to be dealt with for crimes of which he has been accused or convicted and which are justiciable in the courts of the other State. Surrender of a person within the State to another 326 State whether a citizen or an alien is a political act done in pursuance of a treaty or an arrangement ad hoc. It is founded on the broad principle that it is in the interest of civilized communities that crimes should not go unpunished, and on that account it is recoginised as a part of the comity of nations that one State should ordinarily afford to another State assistance towards bringing offenders to justice. The law relating to extradition between independent States is based on treaties. But the law has operation national as well as international It governs international relationship between the sovereign States which is secured by treaty obligations. But whether an offender should be handed over pursuant to a requisition is determined by the domestic law of the State on which the requisition is made. Though extradition is granted in implementation of the international commitments of the State, the procedure to be followed by the Courts in deciding whether extradition should be 'granted and on what terms, is determined by the municipal law. As observed in Wheaten 's International Law, Vol. 1, 6th Edn., p. 213 : " 'The constitutional doctrine in England is that the Crown may make treaties with foreign States for the extradition of criminals, but those treaties can only be carried into effect by Act of Parliament, for the executive has no power, without statutory authority, to seize an alien here and deliver him to a foreign power. " Sanction behind an order of extradition is therefore the international commitment of the State under which the Court functions, but Courts jealously seek to protect the right of the individual by insisting upon strict compliance with the conditions precedent to surrender. The Courts of the country which make a requisition for surrender deal with the prima facie proof of the offence and leave it to the State to make a requisition upon the other ,State in which the offender has taken refuge. Requisition for surrender is not the function of the Courts but of the State. A warrant issued by a Court for an offence committed in a country from its very nature has no extra territorial operation. It is only a command by the Court in the name of the sovereign to its officer to arrest an offender and to bring him before the Court. By making a requisition in pursuance of a warrant issued by a ,Court of a State to another State for assistance in securing the presence of the offender, the warrant is not invested with extra territorial operation. If the other State requested agrees to lend its aid to arrest the fugitive the arrest is made either by the issue ,of an independent warrant or endorsement or authentication of 'the warrant of the Court which issued it. By endorsement or 327 authentication of a warrant the country in which an offender has taken refuge signifies its willingness to lend its assistance, in implementation of the treaties or international commitments and to secure the arrest of the offender. The offender arrested pursuant to the warrant or endorsement is brought before the Court of the country to which the requisition is made, and the Court holds an inquiry to determine whether the offender may be extradited. International commitment or treaty will be effective only if the Court of a country in which the offender is arrested after enquiry is of the view that the offender should be surrendered. The functions which the Courts in the two countries perform are therefore different. The Court within whose jurisdiction the offence is committed decides whether there is prima facie evidence on which a requisition may be made to another country for surrender of the, offender. When the State to which a requisition is made agrees consistently with its international commitments to lend its aid the requisition is transmitted to the Police authorities, and the Courts of that country consider, according to their own laws whether the offender should be suffendered the enquiry is in the absence of express provisions to the contrary relating to the prima facie evidence of the commission of the offence which is extraditable, the offence not being a political offence nor that the requisition being a subterfuge to secure custody for trial for a political offence. Prior to January 26, 1950, there was in force in India the Indian 15 of 1903, which as the preamble ex pressly enacted was intended to provide for the more convenient administration of the Extradition Acts of 1870 and 1873, and the Foreign Jurisdiction Act of 1881 both enacted by the British Parliament. The Act enacted machinery in Ch. II for the surrender of fugitive criminals in case of Foreign States i.e., States to which the of 1870 and 1873 applied and in Ch. II for surrender of fugitive offenders in case of "His Majesty 's Dominions". The Extradition Acts of 1870 and 1873 sought to give effect to arrangements made with foreign States with respect to the surrender to such States of any fugitive criminals Her Majesty may by Order in Council, direct and to prescribe the procedure for extraditing fugitive offenders to such foreign states. As observed in Halsbury 's Laws of England Vol. 16, 3rd Edn., para 1161 at p. 567 : "When a treaty has been made with a foreign State and the Extradition Acts have been applied by Order in Council, one of Her Majesty 's principal Secretaries of State may, upon a requisition made to him by some person recognized by him as a diplomatic representative of 328 that foreign State, by order under his hand and seal, signify to a police magistrate that such a requisition has been made and require him to issue his warrant for the apprehension of the fugitive criminal if the criminal is in or is suspected of being in, the United Kingdom. " The warrant may then be issued by a police magistrate on receipt of the order of the Secretary of State and upon such evidence as would in his opinion justify the issue of the warrant if the crime had been committed or the criminal convicted in England. The procedure for extradition of fugitive offenders from "British possessions" was less complicated. When the was applied by Order in Council unless it was otherwise provided by such Order, the Act extended to every "British possesSion" in the same manner as if throughout the Act the "British possession" were substituted for the United Kingdom, but with certain modifications in procedure. Under Part I of the Fugitive Offenders Act 1881 a warrant issued in one part of the Crown 's Dominion for apprehension of a fugitive offender, could be endorsed for execution in another Dominion. After the fugitive was apprehended he was brought before the Magistrate who heard the case in the same manner and had the same jurisdiction and powers as if the fugitive was charged with an offence committed within the Magistrate 's jurisdiction. If the Magistrate was satisfied, after expiry of 15 days from the date on which the fugitive was committed to prison, he could make an order for surrender of the fugitive on the warrant issued by the Secretary of State or an appropriate officer. There was also provision for "inter colonial backing of warrants" within groups of "British possessions" to which Part I of the Fugitive Offenders Act, 1881 has been applied by Order in Council. In such groups a more rapid procedure for the return of fugitive offenders between possessions of the same group was in force. Where in a "British possession", of a group to which Part II of the Act applied, a warrant was issued for the apprehension of a person accused of an offence punishable in that possession and such term is or was suspected of being, in or on the way to another British possession of the same group, a magistrate in the last mentioned possession, if satisfied that the warrant was issued by a person having lawful authority to issue the same, was bound to endorse such warrant, and the warrant so endorsed was sufficient authority to apprehend, within the jurisdiction of the endorsing magistrate the person named in the warrant and to bring him before the endorsing magistrate or some other magistrate in the same possession. If the magistrate before whom a person apprehended was brought was satisfied that the war rant was duly authenticated and was issued 329 by a person having lawful authority to issue it, and the identity of the prisoner was established he could order the prisoner to be returned to the British possession in which the warrant was issued and for that purpose to deliver into the custody of the persons to whom the warrant was addressed or of any one or more of them, ,and to be held in custody and conveyed to that possession, there to be dealt with according to law as if he had been there apprehended. This was in brief the procedure prior to January 26, 1950. The President of India adapted the Extradition Act 1903, in certain particulars. The Fugitive Offenders Act, 1881 and the Extradition Act, 1870, in their application to India were however not repealed by the Indian Parliament and to the extent they were consistent with the constitutional scheme they remained applicable. In order to maintain the continued application of laws of the British Parliament, notwithstanding India becoming a Republic, the British Parliament enacted the India (Consequential Provision) Act 1949 which by section 1 provided : "(1) On and after the date of India 's becoming a republic, all existing law, that is to say, all law which, whether being a rule of law or a provision of an Act of Parliament or of any other enactment or instrument whatsoever, is in force on that date or has been passed or made before that date and comes into force thereafter, shall, until provision to the contrary is made by the authority having power to alter that law and subject to the provisions of sub section (3) of this section, have the same operation in relation to India, and to persons and things in any way belonging to or connected with India, as it would have had if India had not become a republic. (3)His Majesty may by Order in Council make provision for such satisfaction of any existing law to which this Act extends as may appear to him to be necessary or expedient in view of India 's becoming a republic while remaining a member of the Commonwealth, and sub section (1) of this section shall have effect in relation to any such law as modified by such an order in so far as the contrary intention appears in the order. An Order in Council under this section (a)may be made either before or after India becomes a republic, and may be revoked or varied by a subsequent Order in Council ', and 330 (b)shall be subject to annulment in pursuance of a resolution of either House of Parliament." In 1954 this Court was called_upon to decide a case relating to extradition to Singapore, a British Colony, of a person alleged to be a fugitive offender The State of Madras vs C. G. Menon and Another(1). In that case Menon and his wife were apprehended and produced before the Chief Presidency Magistrate, Madras, pursuant to warrants of arrest issued under the provisions of the Fugitive Offenders Act, 1881. Arrests were made in pursuance of requisition made by the Colonial Secretary of Singapore requesting the assistance of the Government of India to arrest and return to the Colony of Singapore Menons under warrants issued by the Police Magistrate of Singapore. Menons pleaded that the Fugitive Offenders Act, 1881, under which the action was sought to be taken against them was repugnant to the Constitution of India and was void and unenforceable. The Chief Presidency Magistrate. referred two questions of law for decision of the High Court of Madras (1) Whether the Fugitive Offenders Act, 1881, applies to India after 26th January, 1950, when India became a Sovereign Democratic Republic; and (2)Whether, even if it applied, it or any of its provisions, particularly Part II thereof, is repugnant to the Constitution of India and is therefore void and or inoperative. The High Court held that the Fugitive Offenders Act was in consistent with the fundamental right of equal protection of the laws guaranteed by article 14 of the Constitution and was void to that extent and unenforceable against the petitioners. In appeal brought to this Court it was observed : "It is plain from the. . provisions of the Fugitive Offenders Act as well as from the Order in Council that British Possessions which were contiguous to one another and between whom there was frequent inter communication were treated for purposes of the Fugitive Offenders Act as one integrated territory and a summary procedure was adopted for the purpose of extraditing persons who had committed offences in these integrated territories. As the laws prevailing in those possessions were substantially the same, the requirement that no fugitive will be surren dered unless a prima facie case was made against him was dispensed with. Under the Indian Extradition (1)[1955] 1 S.C.R. 280. , also a similar requirement is insisted upon before a person can be extradited. The situation completely changed when India became a Sovereign Democratic Republic. After the achievement of independence and the coming into force of the new Constitution by no stretch of imagination could India be described as a British Possession and it could not be grouped by an Order in Council amongst those Possessions. Truly speaking, it became a foreign territory so far as other British Possessions are concerned and the extradition of persons taking asylum in India, having committed offences in British Possessions, could only be dealt with by an arrangement between the Sovereign Democratic Republic of India and the British Government and given effect to by appropriate legislation. The Union Parliament has not so far enacted any law on the subject and it was not suggested that any arrangement has been arrived at between these two Governments. The , has been adapted but the Fugitive Offenders Act, 1881, which was an Act of the British Parliament has been left severely alone. The provisions of that Act could only be made applicable to India by incorporating them with appropriate changes into an Act of the Indian Parliament and by enacting an Indian Fugitive Offenders Act. In the absence of any legislation on those lines it seems difficult to hold that section 12 or section 14 of the Fugitive Offenders Act has force in India by reason of the provisions of article 372 of the Constitution. The whole basis for the applicability of Part II of the Fugitive Offenders Act has gone : India is no longer a British Possession and no Order in Council can be made to group it with other British Possessions. . . . The political background and shape of things when Part II of the Fugitive Offenders Act, 1881, was enacted and envisaged by that Act having completely changed, it is not possible without radical legislative changes to adapt that Act to the changed conditions. That being so, in our opinion, the tentative view expressed by the Presidency Magistrate was right. After this judgment was delivered, the Government of India, Ministry of External Affairs, issued a notification on May 21, 1955, to all State Governments of Part A, B, C & D States. It was stated in the notification that : ". in a certain case of extradition of an offender, the Supreme Court of India recently ruled that in 332 the changed circumstances, the English Fugitive Offenders Act, 1881, is no longer applicable to India. There can therefore, be no question of issuing a warrant of arrest, addressed to a foreign police or a foreign court, in respect of persons who are residing outside India except in accordance with the Code of Criminal Procedure, 1898. 2.In the circumstances, to obtain a fugitive offender from the United Kingdom and other Commonwealth countries, the following procedure may be adopted as long as the new Indian Extradition law is not enacted and the Commonwealth countries continue to honour our requests for the surrender of the fugitive offenders notwithstanding decisions of the Supreme Court; (a)The Magistrate concerned will issue a warrant 'for the arrest of the fugitive offender to Police officials ,of India in the usual form prescribed under the Code of 'Criminal Procedure, 1898. (b)The warrant for arrest, accompanied by all such, documents as would enable a prima facie case to be established against the accused will be submitted by the Magistrate to the Government of India in the Ministry of External Affairs, through the State Government concerned. 3.This Ministry, in consultation with the Ministries ,of Home Affairs, and Law, will make a requisition for the surrender of a fugitive offender in the form of a letter, requesting the Secretary of State (in the case of dominions, the appropriate authority in the dominion) to get the warrant endorsed in accordance with law. This letter will be addressed to the Secretary of State, (or other appropriate authority in case of Dominions) through the High Commissioner for India in the United Kingdom/Dominion concerned and will be accompanied by the warrant issued by the Magistrate at (a) of para 2 above and other documents received therewith. " The Chief Presidency Magistrate Calcutta made out the warrant for the arrest of More pursuant to that notification and sent the warrant to the Secretary, Home (Political) Department, Government of West Bengal. Validity of the steps taken in accordance with the notification by the Chief Presidency Magistrate is questioned in this appeal. To complete the narrative, it is necessary to refer to the Extradition Act 34 of 1962. The Parliament has enacted Act 34 333 of 1962 to consolidate and amend the law relating to ' extraction of fugitive criminals. It makes provisions by Ch. II for extradition of fugitive criminals to foreign States and to commonwealth countries to which Ch. HI does not apply Chapter III deals with the return of fugitive criminals to commonwealth countries with extradition arrangements. By section 12 it is provided "(1) This Chapter shah apply only to any such commonwealth country to which, by reason of an extradition arrangement entered into with that country, it may seem expedient to the Central Government to apply the same. (2)every such application shall be by notified order, and the Central Government may, by the same or any subsequent notified order, direct that this Chapter and Chapters 1, IV and V shall, in relation to any such commonwealth country, apply subject to such modifications, exceptions, conditions and qualifications as it may think fit to specify in the order for the purpose of implementing the arrangement. " Section 13 provides that the fugitive criminals from common wealth countries may be apprehended and returned. Chapter IV deals with the surrender or return of accused or convicted persons from foreign States or commonwealth countries. By section 19 it was provided that (1)A requisition for the surrender of a person accused or convicted of an extradition offence committed in India and who is or is suspected to be, in any foreign State or a commonwealth country to which Chapter III does not apply, may be made by the Central Government (a)to a diplomatic representative of that State or country at Delhi; or (b)to the Government of that State or country throughthe diplomatic representative of India in that State or country; and if neither of these modes is convenient, the requisition shall be made in such other mode as is settled by arrangement made by the Government of India with that State or country. (2)A warrant issued by a magistrate in India for the apprehension of any person who is, or is suspected to be, in any Commonwealth country to which Chapter III applies shall be in such form as may be 'prescribed. 8 Sup CI/69 3 334 BY cl. (a) of section 2 the expression "commonwealth country" means 'a commonwealth country specified in the First Schedule, and such other commonwealth country as may be added to that Schedule by the Central Government by notification in the Official Gazette, and includes every constituent part, colony or dependency of any, commonwealth country so specified or added :". But in the Schedule to the Act "Hong Kong" is not specified as one of the commonwealth country and no notification ,has been issued by the Government of India under section 2(a) adding to the First Schedule "Hong Kong ' as a commonwealth country. It is common ground between the parties that the provisions of the , could not be resorted to for making the requisition for surrender of the fugitive offender from Hong Kong, and no attempt was made in that behalf. Validity of the action taken by the Chief Presidency Magis trate must therefore, be adjudged in the light of the action taken pursuant to the notification issued by the Government of India on May 21, 1955. Counsel for the respondent More urged that the warrant issued by the Chief Presidency Magistrate was intended to be and could in its very nature be a legal warrant enforceable within India : it had no extra territorial operation, and could not be enforced outside India, and when the Central Magistrate Hong Kong, purported to endorse that warrant for enforcement within Hong Kong he had no authority to do so. But this Court has no authority to sit in judgment over the order passed by the Hong Kong Central Magistrate. The Magistrate acted in accordance with the municipal law of Hong Kong and agreed to the surrender of the offender : his action cannot be challenged in this Court. It may also be pointed out that Form II of the warrant prescribed in Sch. V of the Code of Criminal Procedure only issues a direction under the authority of the Magistrate to a Police Officer to arrest a named person and to produce him before the Court. It does not state that the warrant shall be executed in any designated place or area. By section 82 of the Code of Criminal Procedure a warrant of arrest may be executed at any place in India. That provision does not impose any restriction upon the power of the Police Officer. The section only declares in that every warrant issued by any Magistrate in India may be executed at any place in India, execution of the warrant is not restricted to the local limits of the jurisdiction of the Magistrate issuing the warrant or of the Court to which he is subordinate. In Emperor vs Vinayak Damodar Savarkar and Ors. (1) the Bombay High Court considered the question whether a person who was brought to the country and was charged before a Magis (1) I.L.R. 335 trate with an offence under the Indian Penal Code was entitled to challenge the manner in which he was brought into the country from a foreign country. Savarkar was charged with conspiracy under sections 121, 121A, 122 and 123 of the Indian Penal Code. He was arrested in the United Kingdom and brought to India after arrest. under the Fugitive Offenders Act, 1881. When the ship in which he was being brought to India was near French territory Savarkar escaped from police custody and set foot on French territory at Marseilles. He was arrested by the police officers without reference to the French police authorities and brought to India. It was contended at the trial of Savarkar that he was not liable to be tried in India, since arrest by the Indian police officers in a foreign territory was without jurisdiction. Scott, C.J., who delivered the principal judgment of the Court rejected the contention. He observed : "Where a man is in the country and is charged before a Magistrate with an offence under the Penal Code it will not avail him to say that he was brought there illegally from a foreign country. " It is true that Savarkar was produced before the Court and be raised an objection about the validity of the trial on the plea that he was illegally brought to India after unlawful arrest in foreign territory. In the present case we are concerned with a stage anterior to that. The respondent More though arrested in a foreign country lawfully, by the, order of the Central Magistrate, Hong Kong, had not been surrendered and the invalidity of the warrant issued by the Chief Presidency Magistrate is set up as a ground for refusing to obtain extradition of the offender. But on the principle of Vinayak Damodar Savarkar 's case(1) the contention about the invalidity of the arrest cannot affect the jurisdiction of the Courts in India to try More if and when he is brought here. The 15 of 1903 which was enacted to provide for the more convenient administration of the English Extradition Act, 1870 & 1873 and the Fugitive Offenders Act. 1881, remained in operation. But after January 26, 1950, India is no longer a "British Possession." In C. G. Menon 's case (2) it was decided by this Court that application of sections 12 and 14 of the Fugitive Offenders Act, 1881, for surrendering an offender to a Commonwealth country in pursuance of a requisition under the Fugitive Offenders Act, 1881, is inconsistent with the political status of India. It is somewhat unfortunate that the Court hearing that case was not invited to say anything about the operation of the India (Consequential Provision) Act, 1949. But C. G. Menon 's case(2) was a reverse case, in that, the Colonial Secretary of Singapore had made a requisition for (1) I.L.R. (2) ; 336 surrender of the offender for trial for offences of criminal breach of trust in Singapore. Whether having regard to the political status of India since January 26, 1950, the Fugitive Offenders Act, 1881, insofar as it purported to treat India as a "British Possession" imposed an obligation to. deliver offenders in pursuance of the India (Consequential Provision) Act 1949. is a question on which it is not necessary to express an opinion. By the declaration of the status of India as a Republic, India has not ceased to be a part of the Commonwealth and the United Kingdom and several Colonies have treated the Fugitive Offenders Act, 1881, as applicable to them for the purpose of honouring the requisition made by the Republic of India from time to time. In Re. Government of India and Mubarak Ali Ahmed(1) an attempt to resist in the High Court in England the requisition by the Republic of India to surrender an offender who had committed offences in India and had fled justice failed. Mubarak Ali a native of Pakistan was being tried in the Courts in India on charges of forgery and fraud. He broke his bail and fled to Pakistan and thereafter to England. He was arrested on a pro ' visional warrant issued by the London Metropolitan Magistrate on the application of the Government of India. After hearing legal submissions the Metropolitan Magistrate made an order under section 5 of the Fugitive Offenders Act, 1881, for Mubarak Ali 's detention in custody pending his return to India to answer the charges, made against him. Mubarak Ali then filed a petition for a writ of habeas corpus before the Queen 's Bench of the High Court. It was held that the Fugitive Offenders Act, 1881, was in force between India and Great Britain on January 26,,1950, when India become a republic and it was continued to apply by virtue of section 1 (1) of the India (Consequential Provision) Act, 1949, and, therefore, the Magistrate had jurisdiction to make the order for the applicant 's return. Pursuant to the requisitions made by the Government of India,, Mubarak Ali was surrendered by the British Government. Mubarak Ali was then brought to India and was tried and convicted. One of the offences for which he was tried resulted in his conviction and an appeal was brought ' to this Court in Mobarik Ali Ahmed v, The State of Bombay(2) There are other cases as well, in which orders were made by the British Courts complying with the requisitions made by the Governments of Republics within the Commonwealth, for extradition of offenders under the Fugitive Offenders Act, 1881. An offender from Ghana was ordered to be extradited Pursuant to the Ghana (Consequential Provision) Act, 1960, even after Ghana became are public Re. Kwesi Armah(3). On July 1,1960, Ghana while remaining by virtue of the Ghana (Consequential (1) (3)[1966] ; 2 All E.R. 1006.(2) 3 37 Provision) Act, 1960, a member of the Comon wealth became a Republic. Kwesi Armah who was a Minister in Ghana fled the, country in 1966 and took refuge in the United Kingdom. He was arrested under a provisional warrant issued under the Fugitive Offenders Act, 1881. The Metropolitan Magistrate being satisfied that the Act of 1881 still applied to Ghana and that a prima facie case had been made out against the applicant in respect of two alleged contravention of the Ghana Criminal Code, 1960, by corruption and extortion when he was a public officer,commited Kwesi Armah to prison pending his return to Ghana to undergo trial. A petition for a writ of habeas corpus before the Queen '& Bench Division of the High Court was refused. Edmund Davies, J., was of the view that the Act of 1881 applied to the Republic of Ghana, in its new form, just as it did before the coup d 'etat of February 1966. The case was then carried to the House of Lords; Armah vs Government of Ghana and Another(1). The questions decided by the House of Lords have no relevance in this case. But it was not even argued that a fugitive offender from a republic which was a member of the Commonwealth could not be extradited under the Fugitive Offenders Act, 1881. There is yet another recent judgment of the House of Lords dealing with repatriation of a citizen of the Republic of Cyprus Zacharia vs Republic of Cyprus and Anr. (2) Warrants were issued against Zacharia on charges before the, Courts in Cyprus of offences of abduction, demanding money with menaces and murder. Under the orders issued by a Bow Street Magistrate under section 5 of the Fugitive Offenders Act, 1881, Zacharia was committed to prison pending his return to Cyprus. An application for a writ of habeas corpus on the ground that the offences alleged against him were political and that the application for the return of the fugitive was made out of motive for revenge was rejected by the Queen 's Bench Division and it was ordered that Zacharia be repatriated. The order was confirmed in appeal to the House of Lords. Merely because for the purpose of the extradition procedure, in a statute passed before the attainment of independence by the former Colonies and dependencies, certain territories continue to be referred to as "British Possessions" the statute does not become inapplicable to those territories. The expression "British Possession" in the old statutes merely survives an artificial mode of reference, undoubtedly not consistent with political realities, but does not imply for the purpose of the statute or otherwise political dependence. of the Government of the territories referred to. It is not for the Courts of India to take umbrage at expressions used in statutes of other countries and to refuse to give effect to Indian laws which govern the problems arising before them. (1) (2) ; 338 It is interesting to note that by express enactment the Fugitive. Offenders Act, 1881, remains 'in force as a part of the Republic of Ireland : see Ireland Act, 1949 (12, 13 and 14 Geo. 6 c. 41). In Halsbury 's Laws of England, 3rd Edn., Vol. 5 article 987, p. 433 in dealing with the expression "Her Majesty 's Dominions" in old statutes, it is observed : "The term 'Her Majesty 's dominions, means all the territories under the sovereignty of the Crown, and the territorial waters adjacent thereto. In special cases it may include territories under the protection of the Crown and mandated and trust territories. References to Her Majesty 's dominions contained in statutes passed before India became a republic are still to be construed as including India; it is usual to name India separately from Her Majesty 's dominions in statutes passed since India became a republic." In foot note (1) on p. 433 it is stated, British India, which included the whole of India except the princely States; and the Government of India Act, 1935 as amended by section 8 of the India and Burma (Miscellaneous. Amendments) Act, 1940, formed part of Her Majesty 's dominions and was a British possession, although it was not included within the definition of "colony". The territory comprised in British India was partitioned between the Dominions of India and Pakistan (Indian Independence Act, 1947), but the law relating to the definition ' of Her Majesty 's dominions was not thereby changed, and it was continued in being by the India (Consequential Provision) Act, 1949 (12, 13 & 14 Geo. 6 c. 92), passed in contemplation of the adoption of a re publican constitution by India. India is now a sovereign republic, but that by itself does not render the Fugitive Offenders Act, 1881, inapplicable to India. If the question were a live question, we would have thought it necessary to refer the case to a larger Bench for considering the true effect of the judgment in C. G. Menon 's case("). But by the Extradition Act 34 of 1962 the Extradition Act, 1870 and the latter Acts and also the Fugitive Offenders Act, 1881, have been repealed and the question about extradition by India of fugitive offenders under those Acts will not hereafter arise. We are not called upon to consider whether in exercise of the Power under the Fugitive Offenders Act a Magistrate in India may direct extradition of a fugitive offender from a "British Possession", who has taken refuge in India. It is sufficient to observe that the Colonial Secretary of Hong Kong was according to the law applicable in Hong Kong competent to give effect to the warrant issued by the Chief Presidency Magistrate, Calcutta, and the Central (1)[1955] 1 S.C.R. 280. 339 Magistrate, Hong Kong, had jurisdiction under the Fugitive Offender& Act, and, after holding inquiry, to direct that More be surrendered to India. The order of surrender was valid according to the law in force in Hong Kong, and we are unable to appreciate the grounds on which invalidity can be attributed to the warrant issued by the Chief Presidency Magistrate, Calcutta, for the arrest of More. That the Chief Presidency Magistrate was competent to issue a warrant for the arrest of More against whom there was prima facie evidence to show that he had committed an offence in India is not denied. If the Chief Presidency Magistrate had issued the warrant to the Commissioner of ' Police and the Commissioner of Police had approached the Ministry of External Affairs, Government of India, either through the local Government or directly with a view to secure the assistance of the Government of Hong Kong for facilitating extradition of More, no fault can be found. But Gupta, J., and Mukherjee, J., thought that the notification issued by the Government of India setting out the procedure to be followed by a Magistrate, where the offender is not in Indian territory and his extradition is to be secured, amounted to an invasion on the authority of the Courts. We do not think that any such affront is intended by issuing the notification. The Fugitive Offenders Act,, 1881, had not been expressly repealed even after January 26, 1950. It, had a limited operation: the other countries of the Commonwealth were apparently willing to honour the international commitments which arose out of the provisions of that Act. But this Court on the view that since India had become a Republic, held that the Fugitive Offenders Act could not be enforced in this country, presented to the Government of India a problem which had to be resolved by devising machinery for securing the presence of offenders who were fugitives from justice. The notification issued was only in the nature of advice about the procedure to be followed and did not in any manner seek to impose any executive will upon the Courts in matters judicial. Observations made by Mukherji, J., that the notification issued by the Central Government authorising the Chief Presidency Magistrate to issue the warrant in the manner he had done, came "nowhere near the law" and "to a Court of law it is waste paper beneath its notice" appear to proceed upon an incorrect view of the object of tile notification. The Chief Presidency Magistrate had the power to issue the warrant for the arrest of More, because there was prima facie evidence before him that More had committed certain offences which he was competent to try. The warrant was in Form II of Sch. V of the Code of Criminal Procedure. If the warrant was to be successfully executed against More who was not in India, assistance of the executive Government had to be obtained. It is not an invasion upon the authority of the Courts when they are informed that certain procedure may be followed for obtaining 340 the assistance of the executive Department of the State in securing through diplomatic channels extradition of fugitive offenders. In pursuance of that warrant, on the endorsement made by the Central Magistrate, Hong Kong, More was arrested. The warrant was issued with the knowledge that it could not be enforced within India and undoubtedly to secure the extradition of More. Pursuant to the warrant the Ministry of External Affairs, Government of India, moved through diplomatic channels, and persuaded the Colonial Secretary of Hong Kong to arrest and deliver More. Issue of the warrant and the procedure followed in transmitting the warrant were not illegal, not even irregular. One more argument remains to be noticed. It is true that under the Extradition Act 34 of 1962 no notification has been issued including Hong Kong in the list of the Commonwealth countries from which extradition of fugitives from justice may be secured. The provisions of the , cannot be availed of for securing the presence of More for trial in India. But that did not, in our judgment, operate as a bar to the requisition made by the Ministry of External Affairs, Government of India, if they were able to persuade the Colonial Secretary, Hong Kong, to deliver More for trial in this country. If the Colonial Secretary of Hong Kong was willing to hand over More for trial in this country, it cannot be said that the warrant issued by the Chief Presidency Magistrate for the arrest of More with the aid of which requisition for securing his presence from Hong Kong was to be made, was illegal. We are unable to agree with the High Court that because of the enactment of the 34 of J962 the Government of India is prohibited from securing through diplomatic channels the extradition of an offender for trial of an offence committed within India. There was, in our judgment,, no illegality committed by the Chief Presidency Magistrate, Calcutta, in sending the warrant to the Secretary, Home (Political) Department, Government ,of West Bengal, for transmission to the Government of India, Ministry of External Affairs, for taking further steps for securing the presence of More in India to undergo trial. The appeal must therefore be allowed and the order passed by the High Court set aside. 'Me writ petition filed by More must be dismissed. Y.P. Appeal allowed.

After this Court held in State of Madras vs C. G. Menon, ; that the Fugitive Offenders Act, 1881, was inconsistent with article 14 of the Constitution and was on that account unenforceable after 26th January 1950, the Government of India, Ministry of External Affairs issued a notification on May 21, 1955 indicating the procedure for securing the presence of a fugitive offender in India from the United Kingdom and other Commonwealth countries. Under the Notification, the Magistrate concerned is to issue a warrant of arrest of the fugitive offender under the Criminal Procedure Code, 1898, and the warrant is to be sent to the Government of India, Ministry of External Affairs through the concerned State Government. Thereafter, the Ministry is to address the appropriate authority in the Commonwealth country through the High Commissioner for India for the surrender of the fugitive offender. In 1962, the Indian Extradition Act was passed, but as Hong Kong was not included in the First Schedule, that Act could not be resorted for the surrender of the respondent who was a fugitive offender residing in Hong Kong. Action was therefore taken in the present case, pursuant to the notification. The Chief Presidency Magistrate Calcutta issued a warrant under the Criminal Procedure Code for the arrest of the respondent and the warrant was forwarded by the Government of West Bengal to the Ministry of External Affairs, Government of India. The Ministry forwarded the warrant to the High Commissioner for India, Hong Kong, who in his turn requested the Colonial Secretary, Hong Kong, for an order extraditing the respondent under the Fugitive Offenders Act 1881 (44 & 45 Vict Ch. 69). The Central Magistrate, Hong Kong, endorsed the warrant and directed the Hong Kong police to arrest the respondent referring to the Republic of India as a British possession to which the Fugitive Offenders Act was applicable. On the questions : (1) Whether the Chief Presidency Magistrate had no power to issue the warrant as it would have extraterrestrial operation; (2) Whether the Fugitive Offenders Act, having ceased to be part of the law of India, could be resorted to for obtaining extradition of fugitive offenders; (3) Whether the instructions of the Government of India for obtaining extradition are an invasion upon the authority of courts; and (4) Whether the , operates as a bar to the requisition made by the Ministry of External Affairs for the extradition of the ,respondent, HELD : (1) The Courts of the country which make a requisition for surrender proceed upon prima facie proof of the offence and leave it to the State to make a requisition upon the other State, in which the offender has taken refuge. Under section 82 of the Criminal Procedure Code, when a warrant is issued by a Magistrate in India, it can be executed anywhere 321 in India and has no extra territorial operation. By making a requisition to another State, in pursuance of such a warrant, for assistance in securing the presence of the offender, the warrant is not invested with extraterritorial operation. If the other State requested Agrees to lend its aid to arrest the fugitive, the arrest is made by the issue of an independent warrant or endorsement or authentication of the warrant of the court which issued it. By such endorsement or authentication the State expresses its willingness to lend its assistance in implementation of treaties or international commitments to secure the arrest of the offender. The offender arrested pursuant to the warrant or endorsement is brought before the Court of the country to which requisition is made and that court holds enquiry to determine whether the, offender may be extradited. [326 F327B] Courts in India have no authority to sit in judgment over the order passed by the Hong Kong Magistrate. He acted in accor dance with the municipal law of Hong Kong and agreed to surrender the offender : his action cannot be challenged in this Court even if it is wrong. The invalidity of the arrest in Hong Kong, if any, cannot affect the jurisdiction of Indian Courts to try the respondent if and when he is brought here. [334] Emperor vs Vinayak Damodar Savarkar, I.L.R. , approved. (2)But, in fact the Colonial Secretary of Hong Kong was, according 0 the law applicable in Hong Kong, competent to give effect to the warrant issued by the Chief Presidency Magistrate, Calcutta and the Central Magistrate, Hong Kong had jurisdiction under the Fugitive Offenders Act to direct that the respondent may be surrendered to India. Whatever may he the position in India after it has become a Republic the United Kingdom and several Colonies have treated the Fugitive Offenders Act is applicable for the purpose of honouring the requisition made by the republic of India. Merely because, for the purpose of the extradition procedure, in a statute passed before the attainment of independence by the former colonies and dependencies, certain territories continue to be referred as 'British Possessions ' the 'statute does not become inapplicable to those territories. The expression 'British Possessions ' in the old statutes merely survives as an artificial mode of reference. Though it is not consistent with the political realities, it does not imply political dependence of the Governments of the territories referred to. The order of surrender passed by the Magistrate in Hong Kong was valid according to. the law in force in Hong Kong. [338 H; 337G] Re. Government of India and Mubarak Ali Ahmed, , Re. Kweshi Armah , Zacharia vs Republic of Cyprus, ; and Halsbury 's Laws of England 3rd edn. 5 article 987, p. 433, referred to. (3) This Court, by holding in C. G. Menon 's case that since India became a Republic the Fugitive Offenders Act could not be enforced in his country, presented the Government of India with a problem which had to be resolved by devising a machinery for securing the presence of fenders who, were fugitives from justice. The notification was issued only in the nature of advice about the procedure to be followed and was not in any manner intended as an affront to the Courts or to impose any executive will upon the courts in judicial matters. [339 E F] In the present case, the Chief Presidency Magistrate, Calcutta, had power to issue the warrant for the arrest of the respondent because there was prima facie evidence against him. If the warrant was to be success 322 fully executed a against the. Respondent, who was not in India, the assistance of the executive government had to be obtained. Therefore, the issue of the warrant and the procedure followed in transmitting it were not illegal and not even irregular. (4)Extradition is the surrender by one State to another of a person desiredto be dealt with for crimes of which he had been accused or convicted. Such a surrender is a political act done in pursuance of a treaty or an ad hoc arrangement, and founded upon the principle that it is in the interest of all civilised communities that criminals should not go unpunished. While the law relating to extradition between independent States is based on treaties, whether an offender should be handed over pursuant to a requisition is determined by the domestic law of the State on which the requisition is made. Therefore, the fact that the , could not be availed of for securing the presence of the respondent for trial in India, did not operate as a bar to the requisition made by the Ministry of External Affairs, Government of India, if they were able to puksuade the Colonial Secretary, Hong Kong, to deliver the respondent for trial in this country. if the Colonial Secretary was willing to do so, it cannot be said that the warrant issued by the Chief Presidency Magistrate, Calcutta, for the arrest of the respondent with the aid of the requisition for securing his presence from Hong Kong in India, was illegal. [325 H; 340 C F]

Petition NO. 530 of 1959. 222 Petition for cancellation of the decree dated November 25, 1949, granted to the Respondent by the Order in Council in Privy Council Appeal No. XI of 1948. C. K. Daphtary, Solicitor General for India and B. R. L. Iyengar, for the petitioner. K. R. Bengeri and A. G. Ratnaparkhi, for the respondent. March 9. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. This petition has been made under section 10 of the Bombay Hereditary Offices Act, 1874 (hereinafter called the Act), for cancellation of the decree granted to the respondent by the Order in Council dated November 25, 1949, in so far as the said decree purports to operate on or include any right to the office of the Patilki and 11 Watan lands attached thereto. These lands are situated at Kirtgeri in the Taluk of Gadag. They form part of a Watan and, according to the revenue records, they have been assigned as remuneration to the officiator for the time being under section 23 of the Act. The petitioner has obtained a certificate prescribed under section 10, and he contends that as a result of the said certificate this Court should cancel the decree as claimed by him in the petition. It appears that the respondent had filed a suit against the petitioner in the Court of the First Class Sub Judge at Dharwar (Civil Suit No. 18 of 1934) and in the said suit he had claimed partition and possession of the properties as an adopted son of Shiddangouda. These properties were and are in the possession of the petitioner. The trial court passed a decree in favour of the respondent. The petitioner then preferred an appeal, No. 182 of 1935, in the High Court of Bombay. His appeal was allowed and the decree passed by the trial court was reversed. The respondent then challenged the High Court decree and went up to the Privy Council in Appeal No. 11 of 1948. His appeal was allowed, and the Privy Council held that the decree passed by the trial court should be restored. Accordingly an Order in Council was drawn up on November 25, 1949; under this order 223 the respondent was entitled to recover by partition a half share in the properties in suit. He was also entitled to mesne profits, past and future, till the recovery of possession or three years and an enquiry was directed in that behalf. Amongst the properties in which the respondent had thus become entitled to claim a share are the 11 lands in question. In due course the respondent filed an execution application Darkhast No. 41 of 1950, in the Court of the Subordinate Judge at Dharwar. The petitioner then contended that the 11 lands in question were governed by the provisions of the Act, they were assigned as remuneration to the office of the Patil, and as such they could not be partitioned. It was also urged on his behalf that in the original suit the respondent had not claimed any declaration that he was entitled to the office of Patil and that without such a claim the 11 lands in question could not be claimed by the respondent. In support of these pleas the petitioner relied upon the provisions of the Act contained in sections 7, 10, 11, 13, 24, 25 and 36. Pending the execution proceedings the petitioner applied for the grant of the prescribed certificate under section 10 of the Act, and a certificate was accordingly issued by the Collector addressed to the Civil Judge, Senior Division, Dharwar. Thereupon the said court acted upon the certificate and cancelled the execution process which had been issued against the Patilki assigned property of Kirtgeri. The respondent challenged the said order before the Bombay High Court and his challenge was upheld by the said High Court. The High Court followed its own earlier Full Bench decision in Rachapa vs Amingouda (1) and held that the certificate issued by the Collector under section 10 was invalid in that it was addressed not to the Privy Council which was the court which passed the decree but to the Civil Judge at Dharwar. In the result the order cancelling the execution process which had been passed by the executing court was set aside and a direction was issued that the execution proceedings should proceed according to law. Thereafter the petitioner applied for a reissue of a certificate under section 10 and prayed that the certificate (1) (1881) V BOM. 224 should be addressed to this Court as in the meanwhile the Privy Council had ceased to have any jurisdiction and this Court had become its successor. A certificate has accordingly been issued on January 13, 1958, addressed to this Court. The certificate says that the property in question has been assigned as remuneration to the office of Patil and as such it is inalienable and not liable to process of civil court and so the process of attachment levied against the said property should be removed and the decree in so far as it relates to the said property should be cancelled. It appears that after this certificate was issued by the Assistant Commissioner, Gadag Division, the respondent filed an appeal to the Deputy Commissioner, Dharwar. His appeal, however, failed and the certificate issued by the Assistant Commissioner has been confirmed. It is with this certificate that the petitioner has moved this Court for the cancellation of the decree in question in regard to the 11 properties at Kirtgeri. On behalf of the respondent it has been urged before us that the decision of the Bombay High Court operates as res judicata and so, in view of the said decision, the present certificate also should be held to be invalid. The argument is that the effect of the decision of the Bombay High Court is that the certificate should have been addressed to the Privy Council, and since it is addressed to this Court it is invalid. We are not impressed by this argument. What the Bombay High Court has held is that the certificate must be issued to the court which passed the decree, and if in law this Court can be said to be in effect and in substance the Court that pssed the decree then the Certificate must be held to be perfectly valid. Therefore, there is no substance in the argument of res judicata. The main 'question which falls to be considered is whether this Court can,. in view of the constitutional changes which have taken place in the meantime, be said to be the Court that has passed the present decree. In our opinion, the answer to this question must be in favour of the petitioner. Lot us, therefore, proceed to consider the relevant statutory Provisions. 225 Section 2 of the Abolition of the Privy Council Jurisdiction Act, 1949, has provided, inter alia, that as from the appointed day which was October 10, 1949, the jurisdiction of His Majesty in Council to entertain ' appeals and petitions 'from or in respect of any judgment, decree or order of any court or tribunal within the territory of India shall cease save hereinafter provided. Section 4(b) provides that nothing contained in section 2 shall affect the jurisdiction of His Majesty in Council to dispose of any Indian appeal or petition on which the, Judicial Committee has, after hearing the parties, reserved judgment order. This provision applied to 'Appeal No. 11 of 1948 between the parties then pending before the Privy Council. Section 5 conferson the Federal Court corresponding jurisdiction to entertain and dispose of Indian appeals and petitions which His Majesty in Council has, whether by virtue of His Majesty 's prerogative or otherwise, immediately before the appointed day. In other words, after the appointed day the Federal Court was given jurisdiction to entertain and dispose of not only Indian appeals but also petitions, and that would naturally include. a petition like the present with which we are dealing. Section 8 dealt with the effect of the orders of His Majesty in Council; 'it provided that any order made by His Majesty in Council on an Indian appeal or petition, whether before or after the appointed day shall, for all purposes, have the effect not only as an order of His Majesty in Council but also as if it were an order or decree made by the Federal Court in exercise of the jurisdiction conferred by this Act. This then was the position with regard to the jurisdiction and powers of the Federal Court vis a vis the appeals and petitions pending before the Privy Council and orders made on them. The next relevant provisions are contained in article 374 and article 135 of the Constitution. article 374(2) provides that all suits, appeals and proceedings, Civil or Criminal ' pending in the Federal Court at the commencement of the Constitution, shall stand removed to the Supreme Court, and the Supreme Court shall have jurisdiction to hear and determine the same and the judgments and orders of the Federal 29 226 Court delivered or made before the commencement of the Constitution shall have the same force and effect ,as if they had been delivered or made by the Supreme Court. It is with the latter part of article 374(2) that we are concerned in the present petition. We have 'I already seen that the Order in Council issued in accordance with the judgment of the Privy Council in Appeal No. 11 of 1948 had to be treated as if it was an order and decision of the Federal Court under the relevant provisions of the Act of 1949. Now another fiction has been introduced by article 374(2) and the said order and decree has now to be treated as if the decree had been passed and the 'order had been made by the Supreme Court. That takes us to article 135. This article provides that until Parliament by law otherwise provides the Supreme Court shall also have jurisdiction and powers with respect to any matter to which the provisions of article 133 or article 134 do not apply, if jurisdiction and powers in relation to that matter were exercisable by the Federal Court imme diately before the commencement of this Constitution under any existing law. We have already noticed that the Federal Court had jurisdiction to deal with a petition like the present before the commencement of the Constitution ; that jurisdiction can now be exercised by this Court as a result of article 135. The position, therefore, is that the petition which could have been presented to the Privy Council if the jurisdiction of the Privy Council had not been abolished could have been presented before the Federal Court before the commencement of the Constitution and can be presented to this Court after the commencement of the Constitution. We, therefore, feel no doubt that as a result of the relevant statutory provisions to which we have referred the certificate issued in the present case to this Court is valid and must be given effect to. It is not disputed that the properties in respect of which the certificate has been issued are properties assigned as remuneration to Patilki I office and are governed by the provisions of the Act. It is also conceded that if the certificate is duly issued under section 10 of the Act it makes it obligatory on the court to 227 cancel the decree in regard to the properties covered by the certificate. Section 10 provides, inter alia, that when it shall appear to the Collector that by virtue of, or in execution of, a decree or order of any court any watan or any part thereof, or any of the profits thereof, recorded as such in the revenue records or registered under this Act, and assigned under section 23 as remuneration of an officiator has or have, after the date of this Act coming into force, passed or may pass without the sanction of the State Government into the ownership or beneficial possession of any person other than the officiator for the time being, the court shall, on receipt of a certificate under the hand and seal of the Collector, stating the particulars mentioned in the section, cancel the decree or order complained of so far as it concerns the said watan or any part thereof. The only objection against the validity of the certificate is that it has been addressed to a wrong court. Since we have overruled that objection it follows that portion of the decree which concerns the watan properties must be cancelled. In the result the petition is allowed and the decree in question in so far as it purports to operate on or include any right to the office of Patilki and watan lands attached thereto at Kirtgeri as enumerated in the certificate is cancelled. Under the circumstances of this case there will be no order as to costs. Petition allowed.

The appellant company used to employ Messrs. section M. Chou dhary as its contractors for doing certain work for it and the contractors in their turn used to employ some workmen to carry out the work which they took on contract. A dispute having arisen between the contractors and their workmen an application was made before the conciliation board by the workmen in which both the company and the contractors were parties and four matters were referred, namely, non grant of bonus for two years, non grant of festival holidays, non fixation of minimum wages of those workmen at par with the workmen of the company and non abolition of the contract system. As conciliation failed the Government referred the dispute to the Industrial Tribunal under the U.P. Industrial Disputes Act in which only three points out of the four mentioned above were referred and the question of non abolition of the contract system was not referred. The parties to this reference were the contractors and their workmen and not the appellant company. By a subsequent notification, however, the Government impleaded the Company as a party to the dispute but did not amend the previous referring order by 190 adding the fourth point of dispute which was before the conciliation board, namely, the non abolition of the contract system. The Industrial Tribunal framed a number of issues the most important of which was whether the workmen concerned were the employees of the appellant company or of the contractors and came to the conclusion that those workmen were in fact and in reality the employees of the company. On appeal by the company by special leave, Held, that on such a reference there could be no jurisdiction in the tribunal to decide the question whether these workmen were the workmen of the company or of the contractors, for such a question was not referred to the tribunal.

: Civil Appeals Nos. 1393 1398 of 1975. (Appeals by Special Leave Petitions from the Judgment and Order dated 31 1G, 1975, of the Andhra Pradesh High Court in Revision Case No. 3 to 8 of 1974). V.P. Raman, Addl. Solicitor General of India, G.L. Sanghi, and Girish Chandra, for the appellant. A. K. Sen and P.P. Rao, for the respondent. The Judgment of the Court was delivered by KRISHNA IYER, J. This batch of cases between a State Government (Andhra Pradesh) and the Union Government sug gests the need for litigative discipline for our governments and a periodical postauditing in that behalf. And now we make good this inaugural observation by narrating briefly the necessary facts and examining closely the few points tersely presented by the Additional Solicitor General ap pearing for the common appellant in all these cases. Our Constitution mandates on the State welfare activism and contemplates its undertaking distribution of commodities essential to the life of the community at large through trade and business directly organised or in other suit able ways. Foodgrains and fertilisers are strategic items and the Union of India has, in fulfilment of high governmen tal functions, been procuring these vital goods and selling them lo the States or their nominees so as to ensure equita ble supplies and price discipline. Pursuant to this com mendable programme the Central Government constructed an infra structure and, pertinent to our purpose, appointed, inter alia, a Joint Director of Food stationed in the port town of Visakapatnam. This Officer sold, for the price fixed by his Government, food ' grains and fertilisers to the Andhra Pradesh State and other States. These transactions, in the language of sales tax law, fell within the twin categories of intra State and inter State sales. A vigilant State Sales Tax Officer directed the filing of returns by the appellant under the Andhra Pradesh General Sales Tax Act, 1957 (Act VI of 1957) (for short the State Act) and the (for short the Central Act). This was complied with in six returns for the span of three years but was coupled with a plea of immunity from tax on grounds which will be presently discussed. The adverse fate of those contentions at the hands of the Sales Tax Officer and the appellate officer eventuated in further appeals to the Tax Tribunal. The three appeals covered by the Central Act were remanded for the narrow purpose of determining the presence of profit motive in the Central Government while undertaking these dealings as that element 61 is decisive of the appellant being a dealer doing business and therefore liable to tax under the Central Act. The other three appeals were duly dismissed and these successive defeats notwithstanding, the Central Government 's Joint Director moved the High Court in all the. six cases. Un daunted by discomfiture there, the appellant has arrived here, discretion not being the better part of valour even where public money is involved. The learned Additional Solicitor General has rightly discarded some of the rhetorical but lifeless contentions urged before the: High Courtbased on Part IV of the Consti tution. The surviving points pressed before us may now be set out and discussed. A hyper technical point half heartedly urged may be mentioned first, it being easy of rejection Argued counsel that since, in any view. the sales were by the Central Government, the Joint Director could not be the assessee. Obviously this official represented his Government in the sales and therefore could legitimately be dealt with for sales tax. proceedings as representing the Union Govern ment. The less said about such obstructive contention on behalf of a public functionary the better. Devoid of presentability we decline to spend more space on this plea. Next in order was the argument that the defination of 'dealer ' in section 2(b) of the Central Act read in implicit harmony with s.9 excludes the Central Government as an exigible entity. The thrust of the argument, if we may say so, is that the Central Government being the taxing authori ty may not, without being guilty of grotesqueness, tax itself. Counsel was cautious to concede that legally it was not impossible for the Central Government as a statutorily empowered agency to collect tax that falls due from it is as an assessee. Indeed, if the statute deafly states that government is liable to pay tax qua dealer, it is not a legal plea to say that government is also the taxing author ity. We have therefore to examine whether ' there is any necessary exclusion from exigibility or other provision of immunisation which can be spelt out of section 2 or section 9. Section 2(b) Of the. Central Act reads: "2. (b) In this Act, unless the context otherwise requires, 'dealer ' means any person who carries on the business of buying or selling goods, and includes a Government which carries on such business". Quite plain is the conclusion from a bare reading of this provision that a government (ergo any government) is by express inclusive definition made a dealer. The Central Government being a govern ment is squarely covered by the definition. Nor does section 9 rescue the appellant. True it is that the tax shall be levied by the Government of India. But it does so for the benefit of the other State Governments and indeed through the machinery of the State tax agency. Section 9(3)reads: "The proceeds in any financial year of any tax, including any penalty, levied and collected under this Act in any State (other than a Union Territory) on behalf of the Government of India shall be assigned to that State and shall be re tained by it: and the proceeds attributable to Union territories shall form part of the Consoli dated Fund of India. " 62 Again, article 269(g) of the Constitution speaks in the same strain, viz., that the real beneficiary of Central sales tax is the State designated in the above provisions, the Union Government being empowered to levy behalf of and thereafter to assign to the respective States eventually entitled to the tax. We see no flaw in the reasoning of the High Court that the Central Government may tax itself, if it comes to that. A subsidiary contention calculated to insulate the Central Government from liability was set up by the learned Additional Solicitor General to the effect that an undertak ing to distribute essential commodities by the State in implementation of its governmental obligations cannot be described as 'trading ' activity or carrying on of busi ness 'without doing violence to the concepts of governmental functions and business operations. Indubitably the State has the power to carry on trade or business as is manifest from Art 19(6)(ii) and other provisions. In dubitably the State, distributes essential commoditise in a fair and. equitable way for the survival of the community under its protection. It does 'not follow that we cannot harmonize the tow functions. It is well on the agenda of State activity that it carries on trade or business in essential commodi ties because it has the power to do carries on trade or business it it obligated to ensure even distribution of vital goods and because sections of the people We see no difficulty in inferring that the style martic activity of buying food grains and fetrilisers and selling them by the State although in fulfilment of a benificant national policy is never theless trade or business. Necessarily Government becomes a 'dealer ' by definition and carries on 'busi ness, within the meaning of the central. Act and the State Act (omitting for a moment the distiction in the two defi nitions based upon the motive to make gain or profit). The conclusion therefore is inacvitable that the appellant, representing the Central Government is rightly held to be the assessee We may hasten to mention that the ordinary concept of business has the element: of gain or profit whose absence negatives the character of the activity as business in section 2(b) of the Central Act. A person becomes a dealer only if he carries on business and the Central Government can be designated as 'dealer ' only if there. is profit motive. This question not having been investigated by the fact finding authorities has been directed to be gone into by the Tax Tribunal in the three. case revolving round the Central Act. So far as the State Act is concerned, this question does not arise for the straight forward reason that the definition in section 2(1)(bbb) of that Act expressly includes within the concept of 'business ' any trade or any adventure or concern in the nature of trade or commerce carried on or undertaken whether or not 'with a motive to make gain or profit whether or not profit accrues therefrom '. Profit making in the State Act, it was conceded by counsel for the Union, was irrelevant in contrast to its pertinence in the Central Act. If this be the correct position in law, it follows that the State Sales Tax Officer is entitled 10 collect sales tax from the appellant in regard to intra State sales even assuming that there is no profit motive or profit accrual. The reverse is the case so far as Central sales tax is concerned. In the result the orders passed by the Sales Tax Appel late Tribunal in all the six appeals, affirmed as it were by the High Court are correct and these appeals deserve to be dismissed. 63 We are conscious of the social implications of sales tax being leviable on essential commodities like food grains and fertilisers. Both these items are vital to the common man and his fragile budget. Any tax, especially on food, casts an extra burden on the poor who are the ultimate consumers of the article and victims of the impost. But this socially desirable objective can .surely be achieved by appropriate notifications and, if need be, by necessary legislative direction. The Court has to interpret the law and apply it. The State, through its agencies. makes the law for socially beneficial ends. It is not for the former to salvage the latter from the legal coils which are its own. handiwork. We make these observations lest it should be felt that judicial constructions has contributed to extra food tax. The blame, if any, must belong to the authors of the law. The appeals are dismissed with costs one set. P.H.P. Appeals dismissed.

While assessing the income of the assessee under the head 'property ' the Income Tax Authorities allowed for one year. deduction of a part of a large sum of unrealised rent but rejected the claim for exclusion of the remainder during the three subsequent assessment years. Before the Tribunal the authorities contended that no deduction could be claimed by the assessee for more than one assessment year. The Tribu nal held that to the extent the irrecoverable rent had not been exempted in the previous assessment year, should be exempted in the subsequent years from the income from property of the assessee. The High Court answered the refer ence in favour of the assessee. Dismissing the appeal to this Court, HELD: There is no reason why the assessee should become disentitled claim the benefit of the exemption in respect of the balance of the irrecoverable rent in subsequent years subject to the condition that in no 'year the deduction would exceed the amount of rent payable for a year. [206 B] Section 9 of the Indian Income Tax Act, 1922 provides for computation of income from property on a notional basis. While computing the income from the property the tax Author ities have to take into account its bona fide annual value. The fact that the rent due from the tenant had become irre coverable would be known only in subsequent years. Section 9(1) of the Act does not deal with deductions in respect of irrecoverable rent. Item 38 in Notification No. 878F dated March 21, 19.22 exempts from, payment of tax such part of the income in respect of which tax is payable under the head 'property ' as is equal to the amount of rent payable for a year but not paid by a tenant of the assessee and so proved to be lost and irrecoverable. [205 B D] The underlying object of the exemption granted by item 38 is that the assessee shall be entitled to claim deduction under the head 'property ' in respect of the notional rental income which, it subsequently so transpires, was never received by him but on which he had to pay tax. Although item 38 fixes the limit of deduction which is permissible in one year, there is nothing in the language of that item to warrant the inference that the benefit of the exemption can be claimed only once. There is also nothing in the language of that item to indicate that in respect of the balance of the irrecoverable rent. no relief is permissible even though tax on that balance amount too had been paid by the asses see. [208 C D] Daljit Singh vs Commissioner of Income tax, Delhi, not approved.

ivil Appeal Nos. 1524 47 of 1973. From the Judgment and Order dated 13.12.1972 of the Gujarat High Court in Wealth Tax References Nos. 6 to 11, 13, 15, 17, 18, 22,24 and 25 of 1971, 34, 39, and 40 of 1970, 20 and 42 of 1971, 22, 35, 41,42,43 & 38 of 1970. S.C. Manchanda, B.B. Ahuja and Miss A. Subhashini for the Appellant. F.S. Nariman, Mrs. A.K. Verma and K.J. John for the Respondents. In Civil Appeal No. 1524 of 1973 the facts are these. In the computation of his net wealth for the assessment year 1962 63, the corresponding valuation date being March 31, 1962, the assessee claimed a deduction in respect of debts which included amounts representing estimated liabilities on account of income tax and wealth tax for the assessment year 1962 63. The Wealth Tax Officer rejected the claim on the ground that as those liabilities were claimed on the basis of an estimate they could not be regarded as 487 debts owed on the valuation dates. In appeal before the Appellate Assistant Commissioner of Wealth Tax the assessee claimed the deduction of a larger sum on account of income tax, wealth tax and gift tax liabilities. The Appellate Assistant Commissioner scrutinised the data placed before him and allowed part of the deductions claimed. The Revenue now appealed to the Appellate Tribunal, and contended that the deductions on account of income tax, wealth tax and gift tax liabilities for the assessment year 1962 63 should have been allowed on the basis of the respective returns filed by the assessee and not on the basis of the final assessment as the assessment orders were made after the valuation date. The Appellate Tribunal rejected the contention and dismissed the appeal. At the instance of the Revenue, the Appellate Tribunal referred the case to the Gujarat High Court for its opinion on the question of law set forth earlier. Similar references were made in other cases, and all of them were disposed of by a common judgment of the High Court dated December 13, 1972. The High Court, relying on its earlier judgment in Commissioner of Wealth Tax vs Kantilal Manilal(1) held that the deduction admissible in computing the net wealth of the assessee must be calculated on the basis of the tax as finally determined on assessment though the assessment may have been made subsequent to the valuation date, and not on the basis of tax computed in accordance with the returns filed by the assessee. In these appeals, it is contended on behalf of the Revenue that the High Court has erred, and that on a true construction of section 2 (m) of the Wealth Tax Act defining the expression "net wealth" the tax liability disclosed by the assessee in his returns should be taken as representing the debt owed by the assessee on the valuation date. Now, it is settled law that an income tax liability becomes crystallized on the last day of the previous year corresponding to the particular assessment year, and a wealth tax liability becomes crystallized on the valuation date corresponding to the particular assessment year. In each case the liabilities are perfected debts on the last day of previous year or the valuation date, as the case may be. See Kesoram Industries and Cotton Mills Ltd. vs Commissioner of Wealth Tax (Central), Calcutta(2) and H.H. Setu Parvati Bayi vs Commissioner of Wealth Tax, Kerala.(3) Likewise, we think a gift 488 tax liability becomes crystallized, and therefore a perfected debt, on the last day of the previous year relevant to the particular assessement year. See Commissioner of Wealth Tax, Madras vs K.S.N. Bhatt (1) The object and purpose of the assessment procedure prescribed by the relevant tax statute, be it the Income Tax Act, the Wealth Tax Act or the Gift Tax Act, is to quantify the precise amount of the tax liability. The process is initiated ordinarily by the assessee filing a tax return, and thereupon the asssessment machinery swings into motion. The tax return is scrutinised by the assessing authority and in accordance with the procedure detailed in the relevant statute the assessing authority proceeds to determine the true figure, in its opinion, of the asseessee 's taxable income or taxable wealth or total value of the taxable gifts, depending on whether it is a case of income tax, wealth tax or gift tax. The assessment order made by the assessing authority specifies the assessed income, wealth or value of the gifts, and on that the corresponding tax liability is computed followed by a notice of demand. The assessment order may be subjected to consideration in appeal before the Appellate Assistant Commissioner and thereafter the case may be carried in second appeal to the Appellate Tribunal, in reference to the High Court and ultimately in appeal before this Court. At every stage, the endeavour of the authority, tribunal or court is to adjudicate on questions which will lead in the final result to a true determination of the tax liability. There may be cases where the assessment finally made may be reopened in accordance with the procedure and subject to the conditions stated in the relevant statute. There may also be cases where a rectification of apparent errors is effected pursuant to jurisdiction granted by the relevant statute. Both these proceedings are similarly intended for the true quantification of the tax liability. When, in the course of a wealth tax assessment, the assessee makes a claim to deduction on account of income tax, wealth tax and gift tax liabilities subsisting as debts owed by him on the valuation date, it is the final quantification of the particular tax liability which must be taken into account. Where the wealth tax assessment so made is carried in appeal, we have no doubt that the appellate authority will take into account the ultimate quantification of the tax liability, even though such ultimate quantification has been reached after the relevant valuation date and during the pendency of the wealth tax appeal. 489 Upon the aforesaid considerations, we are of opinion that the High Court has acted rightly in holding that in computing the net wealth of the assessee the deduction admissible must be calculated on the basis of the tax as finally quantified on assessment even though the assessment may have been made subsequent to the valuation date. Once an assessement order is passed, the data disclosed by the assessee in his return is no longer determinative of the assessee 's tax liability becomes in law it stands superseded by the assessment order. The appeals are dimissed with costs. H.S.K. Appeals dismissed.

The assessee while computing his net wealth claimed a deduction in respect of debts which included amounts representing estimated liabilities on account of income tax, wealth tax and gift tax. The Wealth Tax Officer rejected the claim on the ground that as those liabilities were claimed on the basis of an estimate they could not be regarded as debts owed on the valuation date. In appeal the Appellate Assistant Commissioner allowed part of the deductions claimed. The Revenue 's appeal to the Appellate Tribunal was dismissed. On a reference being made the High Court held against the Revenue. In this Court the Revenue contended that on a true construction of sec. 2 (m) of the Wealth Tax Act defining the expression "net wealth" the tax liability disclosed by the assessee in his returns should. be taken as representing the debts owed by the assessee on the valuation date. Dismissing the appeals, ^ HELD: It is settled law that an income tax liability becomes crystallized on the last day of the previous year corresponding to the particular assessment year, and a wealth tax liability becomes crystallized on the valuation date corresponding to the particular assessment year. In each case the liabilities are perfected debts on the last day of the previous year or the valuation date, as the case may be. Likewise, a gift tax liability becomes crystallized, and therefore a perfected debt, on the last day of the previous year relevant to the particular assessment year. [487 F G; 488 A] Kesoram Industries and Cotton Mills Ltd. vs Commissioner of Wealth Tax (Central), Calcutta; , ; H.H. Setu Parvati Bayi vs Commissioner of Wealth Tax, Kerala, ; and Commissioner of Wealth Tax, Madras vs K.S.N. Bhatt, Civil Appeals Nos. 384 to 387 of 1978, Judgment delivered on October 21, 1983 referred to. When, in the course of a wealth tax assessment, the assessee makes a claim to deduction on account of income tax, wealth tax and gift tax liabilities 486 subsisting as debts owed by him on the valuation date, it is the final quantification of the particular tax liability which must be taken into account. Where the wealth tax assessment so made is carried in appeal, there is no doubt that the appellate authority will take into account the ultimate quantification of the tax liability even though such ultimate quantification has been reached after the relevant valuation date and during the pendency of the wealth tax appeal. [488 F G]

ivil Appeal No. 3081 of 1988. From the Judgment and Order dated 25. 1985 of the Punjab and Haryana High Court in Civil Revision No. 2457 of 1985. R.K. Jain and Ms. Abha Jain for the Appellant. K.C. Sharma and R.K. Virmani for the Respondent. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. Special leave granted. The appeal is disposed of herein after hearing counsel for both the parties. The appellant landlord filed a suit for possession in the Civil Court of Hissar in Haryana. The respondent is the tenant in the shop situated at Raj Guru Market which had PG NO 531 been rented out to the respondent in 1978. The suit was filed on the basis that the respondent was in arrears of rent from lst December, 1982 to 3lst May, 1982 and the tenancy of the respondent had been terminated by giving him notice. The suit was filed for recovery of possession on the termination or expiry of the period of tenancy. It was filed because of Section 1(3) of the Haryana Urban (Control of Rent and Eviction) Act, 1973 (hereinafter referred to as 'the Act '). The Act was passed with the object to control the increase of rent of certain buildings and rented land situated within the limits of urban areas and the eviction of tenants therefrom. For our present purpose, it would suffice if we bear in mind two relevant provisions. Section 1(3) of the Act provides as follows : "Nothing in this Act shall apply to any building the construction of which is completed on or after the commencement of this Act for a period of ten years from the date its completion. " Section 13 of the Act deals with the eviction of tenants and sub section (1) thereof provides that the tenant in possession of a building or a rented land shall not be evicted therefrom except in accordance with the provisions of that section. The section thereafter enumerates the statutory grounds for eviction upon which eviction is permitted which incidentally are more or less similar statutory ground all over the country. On or about 15th February, 1983, the respondent tenant filed his written statement. In November, 1984, the respondent tenant moved an application for dismissal of the suit of the appellant stating that the shop in question was constructed in June, 1974 as such the period of ten years had elapsed by June, 1984 in terms of section l(3) of the Act. and, as such, the immunity from the application of the had expired. The suit under the Act is not maintainable and the Jurisdiction of the Civil Court stands barred. The learned Sub Judge, Hissar. held that the decree was not necessary to be passed within the exemption period of ten years under section 1(3) of the Act. the learned Sub Judge accordingly dismissed the respondent 's application. Aggrieved thereby, the tenant respondent preferred a revision to the High Court of Punjab and Haryana. The High Court held that as the suit had not been decreed within the period of ten years, the building in question came within the operation of the Act and as such the Rent Act was applicable and the Civil Court had no jurisdiction. In the PG NO 532 premises, the learned Judge of the High Court dismissed the suit pending before the Sub Judge. Aggrieved thereby the appellant has come up in appeal to this Court. More or less identical provisions of the U. P. Act had come up for consideration before this Court in the case of Vineet Kumar vs Manal Sain Wadhera, [l984] 3 S.C.C. 352. The only point that was urged before this Court in that decision was whether the premises which was not ten years ' old on the date of the suit and was exempted from the operation of the new Rent Act, could be governed by it if ten years expired during the pendency of the litigation. The relevant provisions of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 provided as follows: "20. Bar of suit for eviction of tenant except on specified grounds. (1) Save as provided in sub section [2). no suit shall be instituted for the eviction of a tenant from a building, notwithstanding the determination of his tenancy by efflux of time or on the expiration of a notice to quit or in any other manner. Provided that nothing in this sub section shall bar a suit for the eviction of a tenant on the determination of his tenancy by efflux of time where the tenancy for a fixed term was entered into by or in pursuance of a compromise or adjustment arrived at with reference to a suit, appeal, revision or execution proceeding, which is either recorded in court or otherwise reduced to writing and signed by the tenant. " In Vineet Kumar vs Mangal Sain Wadhera, [supra], the respondent landlord filed a suit for eviction and for arrears of rent and damages, inter alia, on the grounds that the building in question was not covered by the U.P. Urban Buildings [Regulation of Letting, Rent and Eviction] ct, 1972 in view of the exemption granted to new buildings under section 2 [2] of the said Act and that the defendant appellant had defaulted in payment of rent. The tenant had resisted the claim on the ground that having regard to the date of construction of the building, it was covered ' by the Act, that the plaint having not been amended so as to bring the suit under the Act, it was barred by section 20 and that term was no default in payment of rent. As mentioned hereinbefore, during the pendency of the litigation the exemption granted under section 2 [2] expired. The question was whether the premises which was not ten years ' old on the PG NO 533 date of the suit and was exempted from the operation of the Rent Act, would be governed by it if ten years expired during~, the pendency of the litigation. Allowing the appeal, this Court held that the appellant must get benefits of the Act which became applicable to the premises in question during the pendency of the litigation. That would not affect the cause of action in that case. It was held that the contention that the Court had to decide the case on the basis of cause of action that accrued prior to the date of filing the suit and not on a new cause of action was not sustainable. It was further held that normally amendment in plaint is not allowed if it changes the causes of action. However, where the amendment does not constitute an addition of a new cause of action, or raise a new case, but amounts to no more than adding to the facts already, on the record, the amendment would be allowed even after the statutory period of limitation. This Court observed that processual justice required that the events and developments subsequent to the institution of proceedings must be taken into consideration in appropriate cases to promote substantial justice. Vineet Kumar 's case (supra] was discussed and explained by this Court in Nand Kishore Marwah und others vs Sammundri Devi, [1987] 4 S.C_ '.C. 382. This Court held that in view of section 2(2) of the 1972 Act, if an assessment is made of the newly built house then the date of completion of the building, the date from which 10 years have to be computed will be the date on which the first assessment was made. Therefore, the period of 10 years have to be computed from October. This Court further hold that if a tenant is entitled to the advantage of sections 39 and 40 of the Act and the period of 10 years elapses during the pendency of the eviction suit or appeal before this Court (which is the continuation of the suit), then the tenant would be entitled to the benefits of the Act. This Court further held that within 10 years as provided for in section 2(2) restriction on the institution of suit as provided for in section 20 (1) will not be applicable. It was held that during the pendency of the litigation even if 10 years expired the restriction under section 20 will not be attracted as the suit had been instituted within 10 years. It is well settled that the rights of the parties will have to be determined on the basis of the rights available to them on the date of the suit. This Court pointed out that the attention of the Court had not been drawn to the decision of this Court in Om Prakash Gupta vs Dig. Vijendrapal Gupta; , This Court referred to the words used in section 20 of the said Act which emphasised that "no suit shall be instituted for eviction." 'This clearly indicates that the restriction put under section 20 of the said Act is to the institution of the suit itself and, therefore, it is clear that if the provision of PG NO 534 this Act applies then no suit for eviction can be instituted except on the grounds specified in the sub sections of that section of the Act. This applies more so in the instant case where the section 13 of the Act provides that the tenant in possession of a building or a rented land shall not be evicted therefrom except in accordance with the provisions of this section. Those provisions would not be applicable to a suit instituted within 10 years from the date of the completion of the building in question. That is the plain meaning of the expression "use". It was further to be borne in mind that in finding out the plain meaning of the expression "use"z the language, the background, the context, the purpose, these all have to be borne in mind. In Ram Saroop Rai vs Lilavati, ; , Krishna lyer, J. has explained the section 2(2) of the U. P. Act as follows ; "The legislature found that rent control law has a chilling effect on new building construction, and so, to encourage more building operations, amended the statute to release, from the shackle of legislative restriction, 'new constructions ' for a period of ten years. So much so, a landlord who had let out his new building could recover possession with out impediment if he instituted such proceedings within ten years of completion ? ' It is well settled that no man should suffer because of the fault of the Court or delay in the procedure. Broom has stated the maxim "actus curiam neminem gravabit" an act of Court shall prejudice no, man. Therefore, having regard to the time normally consumed for adjudication, the 10 years exemption or holiday from the application of the Rent Act would become illusory, if the suit has to be filed within that time and be disposed of finally. It is common knowledge that unless a suit is instituted soon after the date of letting it would never be disposed of within 10 years and even then within that time it may not be disposed of. That will make the 10 years holidays from the Rent Act illusory and provide no incentive to the landlords to build new houses to solve problem of shortages of houses. The purpose of legislation would thus be defeated. Purposive interpretation in a social amelioration legislation is an imperative irrespective of anything else. Judicial time and energy is more often than not consumed in finding what is the intention of the Parliament or in other wards, the will of the people. Blackstone tells us that the fairest and most rational method to interpret the will of the legislator is by exploring his inten tions at PG NO 535 the time when the law was made, by signs most natural and probable. And these signs are either the words, the context, the subject matter, the effects and consequence, or the spirit and reason of the law. (Underlined by the Court). See Commentaries on the Laws of England (facsimile of lst edition of 1765, University of Chicago Press, 1979 Vol. 1, p. 59). Mukherjea, J. as the learned Chief justice then was, in Poppatlal Shah vs State of Madras, ; said that each word, phrase or sentence was to be construed in the light of purpose of the Act itself. But words must be construed with imagination of purpose behind the said Judge Learned Hand, long time ago. It appears, therefore, that though we are concerned with seeking of intention, we are rather looking to the meaning of the words that the legislator has used and the true meaning of what words as was said by Lord Reid in Black Clawson International Ltd. vs Papierwerke Waldhof Aschaffenburg A G, [1975] Appeal Cases 591 at 613. We are clearly of the opinion that having regard to the language we must find the reason and the spirit of the law. If the immunity from the operation of the Rent Act is made and depended upon the ultimate disposal of the case within the period of exemption of 10 years which is in reality ability, then there would be empty reasons. In our opinion,bearing in mind the well settled principle that the rights of the parties crystallise on the date of the institution of the suit as enunciated by this Court in Om Prakash Gupta vs Dig Vijendrapal Gupta, (supra), the meaningful construction must be that the exemption would apply for a period of 10 years and will continue to be available until suit is disposed of or adjudicated. Such suit or proceeding must be instituted within the stipulated period of 10 years. Once rights crystallise the adjudication must be in accordance with law. In that view of the matter, we are of the opinion that the High Court was in error in the view it took. The judgment and order of the High Court are set aside and the order of the learned Sub Judge is restored. The suit will now proceed in accordance with law in the light of the observations herein as expeditiously as possible. The costs of the appeal will be the costs of the suit. N.V.K. Appeal allowed.

The appellant landlord filed a civil suit against the respondent tenant for possession of a shop which had been rented out by him in 1978. The suit was filed on the basis that the respondent was in arrears of rent from lst December, 1981 to 31st May,1982, that the tenancy had been terminated by giving a suit notice, and that section 1(3) of the Haryana Urban (Control of Rent and Eviction) Act, 1973_exempted the building from the purview of the Act. On or about 15th February, 1983, the respondent tenant filed his written statement, and in November, 1984, moved an application for dismissal of the suit stating that the shop in question was constructed in June 1974 and as such, the period of 10 year had elapsed by June 1984 in terms of section 1 [3] of the Act and as such, the immunity from the application of the Act having expired, the suit under the Act is not maintainable, and that the jurisdiction of the Civil Court was barred. The Sub Judge held that the decree was not necessary, to be passed within the exemption period of 10 years under section 1 (3) of the Act, and accordingly dismissed the respondent 's application. The respondent preferred a revision petition to the High Court , which held that as the suit had not been decreed within the period of 10 years, the building in question came within the operation of the Act and as such, PG NO 528 PG NO 529 the rent Act was applicable and the Civil Court had no jurisdiction. The High Court allowed the petition and consequently dismissed the suit pending before the Sub Judge. The landlord appealed to this Court by Special Leave. Allowing the appeal and remanding the case, HELD: l.(a) The rights of the parties will have to be determined on the basis of the rights available to them on the date of the suit. The Judgment and Order of the High Court set aside, and order of the Sub Judge restored. The suit to proceed in accordance with law. {533G 535F] (b) Section 13 of the Act provides that the tenant in possession of a building or a rented land shall not be evicted therefrom except in accordance with the provisions of the said Section. Those provisions world not be applicable under Section 1(3) to a suit instituted within 10 years from the date of the completion of the building in question. {534B} (c) It is well settled that no man should suffer because of the fault of the Court or delay in the procedure. "Actus curiam neminem gravabit ' ' an act of Court shall prejudice no man. [534E] (d) Having regard to the time normally consumed for adjudication, the 10 years exemption or holiday from the application of the Rent Act would become illusory, if the suit has to he filed within that time and be disposed of finally. [534F] (e) It is common knowledge that unless a suit is instituted soon after the date of letting, it world never be disposed of within 10 years and even then within that time it may not be disposed of. That will make the 10 years holiday from the Rent Act illusory and provide no incentive to the landlords to build new holiday to solve problem of shortages of houses. The purpose of the legislation would thus be defeated. [534G] (f) Bearing in mind the well settled principle, that the rights of parties crystallise on the date of the institution of the suit, the meaningful construction must be that the exemption world apply for a period of 10 years and will continue to be available until the suit is disposed of or adjudicated. Such suit or proceedings must be instituted within the stipulated period of 10 years. Once rights crystallise the adjudication must be in accordance with law. [535E] PG NO 530 Vineet Kumar vs Mangal Sain Wadhera, [1984] 3 S.C.C. 352; Nand Kishore Marwah and Ors. vs Samundri Devi, ; ; Om Prakash Gupta vs Dig. Vijendrapal Gupta, ; ; Ram Saroop Rai vs Lilavati, ; , referred to. 2.(a) Purposive interpretation in a social amelioration legislation is an imperative irrespective of anything else. [534G] (b) Judicial time and energy is more often than not consumed in Finding what is the intention of the Parliament or in other words, the will of the people. The fairest and most rational method to interpret the will of the legislator is by exploring his intentions at the time when the law was made, by signs most natural and probable and these signs are either the words, the context, the subject matter, the effects and consequences or the spirit and reasons of the law. [534H 535A] (c) Each word, phrase or sentence has to be construed in the light of the purpose of the Act itself but words must be construed with imagination of purpose behind them. Though the Court is concerned with seeking of intention, it is rather looking to the meaning of the word that the legislator has used and the true meaning of the words used. {535B} Poppatlal Shah vs State of Madras, ; and Black Clawson International Ltd. vs Papierwerke Walnhof Aschaffenburg A G, {1975] A.C. 591 at 613.

Writ Petition (Crl.) No. 408 of 1987. (Under Article 32 of the Constitution of India). 842 R.K. Garg and Ms. Rani Jethmalani (Not present) for the Petitioner. Anil Dev Singh, Hemant Sharma and Ms. A. Subhashini for the Respondent. The Judgment of the Court Was delivered by RANGANATH MISRA, J. Petitioner 's husband, Shital Kumar, was detained by an order passed by the Additional Secretary to the Government of India, Ministry of Finance, Department of Revenue, dated February 28, 1986, made in exercise of powers vested under section 3(1) of the (hereinafter referred to as 'the COFEPOSA '). The peti tioner made an application to this Court under Article 32 in Writ Petition (Crl) No. 292 of 1986 challenging that order of detention. In the earlier writ application, on 15th of May, 1986, the learned Vacation Judge of this Court made an order for the release of the detenu on parole on the follow ing terms: "The detenu is released on parole until further orders on the condition that he will report to the Directorate of Revenue, New Delhi, every day and the Directorate will be at liberty to direct him to explain his con duct during this time . . In the mean time the respondents will be at liberty to make an application for the revocation of the parole if any misconduct or any other activity comes to their notice which requires the revocation of the parole. " On 3rd March, 1987, the writ petition was listed for hearing before the Bench consisting of both of us. In the writ petition, several contentions had been raised but Mr. Jeth malani, learned counsel for the petitioner confined his submissions to only one aspect, namely, that the period of parole, that is, from 15th May, 1986, till February 22, 1987, should not be added to the period of detention speci fied in the impugned order under section 3(1) of the COFEPO SA and the period of one year from the date of detention having expired on February 20, 1987, the impugned order has lapsed and the detenu became entitled to be freed from the impugned order of detention. That point was examined at length and by the judgment of this Court delivered on 22nd April, 1987 in Poonam Lata vs M.L. Wadhawan, AIR 1987 SC 1383 the writ petition was dismissed by saying: 843 "In the premises, it must according ly be held that the period of parole has to be excluded in recokning the period of detention under sub section (1) of section 3 of the Act. " In paragraph 14 of the judgment, it was fur ther observed: "For these reasons, the only conten tion advanced by Shri Jethmalani in course of the hearing namely, that the period of parole from May 15, 1986 to February 28, 1987 could not be added to the maximum period of deten tion of the detenu Shital Kumar for one year as specified in the impugned order of deten tion passed under sub section (1) of section 3 of the , must fail. The writ petition is accordingly dismissed. There shall be no order as to costs. We direct that the petitioner shall surrender to custody to undergo remaining period of detention. We give the detenu 10 days ' time to comply with this direction failing which a non bailable warrant for his arrest shall issue." This writ petition was thereafter filed on 27th of April, 1987. In paragraph 2 of the petition, with reference to the earlier writ petition, it was averted: "Arguments were advanced by the counsel for the petitioner only to the one point and it was clearly stated by the senior counsel, Shri Ram Jethmalani, who appeared in the hearing that he had a strong, almost unanswerable case on merits but he was very keen to have the question of exclusion of the parole period decided since it arises squarely in this case. It would have been a breach of professional duty on the part of the counsel not to raise those points against the validity of the detention order on which the court had prima facie issued notice. Shri Ram Jethmala ni, senior counsel, did not give up the other points in the said writ petition. However, the Hon 'ble Court has dismissed the said writ petition on 22.4. 1987. Though the Hon 'ble Court has rightly observed that the only point which was argued was on the question of the period of parole it Was submitted that had the Hon 'ble Court indicated that the petitioner 's submission on this score did not find favour of the Hon 'ble Court, counsel would have proceeded to argue the case. " 844 We are surprised that in the writ petition which has been settled by Mr. Jethmalani, such allegations have been made. It is common experience that when those several contentions are advanced in the pleadings, counsel chooses to press one or some out of the several contentions at the time of the heating. The judgment indicated that only one point was argued. The averments in paragraph 2 of the present writ petition accepts that position. It, therefore, follows that Mr. Jethmalani made submissions confined to one contention a contention which had not been raised in the earlier writ petition but arose out of the proceedings in court therein relating to the effect of release on parole. The fact that Mr. Jethmalani raised only one submission having been accepted, it is a matter of no consequence as to whether giving up the other pleas raised in the writ peti tion amounted to breach of professional duty on the part of Mr. Jethmalani. The fact remains that only one contention had been raised. There is absolutely no basis for the alle gation in paragraph 2 of the writ petition that if the Court had indicated to Mr. Jethmalani in course of arguments that the submission on this limited point did not find favour with the Court he would have proceeded to argue the other points. That certainly was an unusual expectation. It was open to Mr. Jethmalani to make full submission on all as pects arising in the writ petition. That having not been done, it was improper on the part of Mr. Jethmalani to raise such allegations in paragraph 2, as have been extracted above. We are surprised that Mr. Jethmalani who was aware of the proceedings in the Court and did not dispute the fact that he had confined his arguments to one point settled the writ petition as senior counsel with the allegations quoted above in paragraph 2 of the writ petition. This writ peti tion was fixed for final hearing on 31st of July, 1987, as suggested by Mr. Jethmalani, but at the hearing he did not appear and Mr. Garg, senior counsel, appeared for the peti tioner. When we pointed out to Mr. Garg about the incorrect ness of the averments and that the allegations contained in paragraph 2 are without foundation against the Bench hearing the matter, he pleaded ignorance and stated that it was for Mr. Jethmalani to answer. We do not want to say anything more but we think it appropriate to point out that Mr. Jethmalani on the earlier occasion had argued the writ petition in his own way and had raised only one contention which was dealt with by the judgment in the writ petition. Mr. Garg, learned counsel for the petitioner has raised two points before us for consideration: (1) the detenu had been prejudiced in making an effective representation to the Board against his detention in the absence of the summons issued under section 108 of the Customs Act to him. In spite of demand, that document had not been 845 supplied, and(2) the petitioner was already in custody at the time the order of detention was served and since the detenu was already in custody, the order of detention is liable to be quashed. In Ground No. 4 of the writ petition, it has been alleged: "That the most material document under the circumstances turns out to be the summons which was served on the detenu being the summons referred to in the letter dated 21.3. 1986, Annexure E above mentioned. The detenu by his advocate 's letter of 12th April, 1986, has called upon the respondent No. 1 to supply him with a copy of the summons because he intends to use the said summons while presenting his case to the advisory board. True copy is annexed hereto and marked as Annexure F. The request contained in the said letter has not been complied with. " In paragraph 4(iv) of the counter affidavit, it has been stated: "In reply to para 4, it is submitted that the summons as required by the detenu 's advocate in the letter dated 12.4. 1986 were not supplied as there were no written summons served on the petitioner. I say that after the completion of the search of the residential premises of the petitioner on 27.2. 1986 the petitioner was taken by DRI officers. As the petitioner. happened to be in the presence of the empowered officers of DRI, he was accord ingly told that his presence was required for giving evidence and the petitioner accompanied the DRI officers on his free will. No written summons were, therefore, served on the peti t i o n e r . . . . . . . . " Section 108(1) of the Customs Act provides: "Any gazetted officer of customs shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making in connection with the smuggling of any goods." No specific provision has been made for summons in the Customs ACt and, therefore, the provisions of section 61 of the Code of Criminal Procedure will be applicable. That section provides: 846 "Every summons issued by a Court under this Code shall be in writing, in dupli cate, signed by the presiding officer of such Court or by such other officer as the High Court may, from time to time, by rule direct, and shall bear the seal of the Court. " On 12th of April, 1986, counsel for the petitioner wrote a letter to the detaining authority wherein it was stated: " . . I have to further request you to supply me with a copy of the summons said to have been served on client on or about 27th of February, 1986. The DRI has not yet supplied to my client the documents as stated in your above mentioned rejection letter. " In view of the positive case of the respondents that there was no summons and the detenu had been orally directed to attend the office by the authorities concerned, we think that it would not be proper to hold that summons under section 108 of the Customs Act was in existence. Once the summons is not in existence, there is no foundation in the submission that there is prejudice to the detenu on account of the authority 's withholding the summons. The first con tention fails. Admittedly the petitioner was taken into custody around 2.00 p.m. on 27.2.1986, in course of investigation of the case. He was produced before the Judicial Magistrate and an order was made requiring him to be produced next day in the court. Paragraphs 7 and 8 of the grounds served on the petitioner run thus: "7 I have carefully gone through the facts and circumstances of the case, relevant documents and also the statements of various persons in the subject case. I have also seen and gone through the various applications moved in the court of the ACMM, New Delhi and orders passed thereon." "8 In view of the facts mentioned hereinabove, I have no hesitation in arriving at the conclusion that you have been dealing in smuggled goods otherwise than engaging in transporting or concealing or keeping smuggled goods. Even though the investigations in the subject case is in progress, prosecution and adjudication proceedings under the , are likely to be initiated 847 against you, I am satisfied that you should be detained under the Conservation of Foreign Exchange and Prevention of Smuggling Activi ties Act, 1974, with a view to preventing you from dealing in smuggled goods otherwise than by engaging in transporting or concealing or keeping smuggled goods. " In paragraph 7 of the counter affidavit, it has been stated: " . . The petitioner, as already stated, was summoned after the search of his residental premises on 27.2. 1987 and his statement recorded by the competent officer of DRI. The petitioner was arrested at 2.00 p.m. on 27.2. 1986 and was produced at the resi dence of ACMM, New Delhi on 27.2. 1986 at about 8.00 p.m . . . ". In paragraph 9 of the said affidavit, it is further alleged that: "Shri Shital Kumar was arrested at 1400 hrs. of 27.2. 1986 and produced before the ACMM around 2000 hrs. at his residence the same day. Shri Shital Kumar was then remanded to judicial custody till 28.2.1986 by the said magistrate. " The order of detention is dated 28.2. It was addressed to the detenu at his residential address at Delhi and not to the jail authorities for service on the detenu. From the facts and circumstances emerging in this case it is clear that the detenu had been called by the Customs Authorities for investigation. A statement had been made by him under section 108 of the and thereafter he was taken into custody and produced before the Additional Chief Metropolitan Magistrate who ramanded him to custody and directed him to be produced on the following day in the court. By the time the order of detention came to be made the petitioner was in jail for at the most one day. Charge sheet had not been submitted against him in the criminal case and he had been remanded to the judicial custody on the 27th of February, 1986 with the direction to be produced before the Metropolitan Magistrate on the 28th of February, 1986. Now it has to be seen if on these facts the order of detention would become vitiated. Strong reliance was placed by Mr. Garg on a 848 two Judge judgment of this Court in Binod Singh vs District Magistrate, Dhanbad, ; Paragraph 3 of the judgment indicates the facts as follows: "The petitioner/appellant was in detention when the petitioner/appellant was served with the orders of detention. There were criminal cases against the petitioner. There was a murder case in respect of Crime No. 33 1 of 1985. In the said case, investiga tion was in progress and the defence of the petitioner in the murder case was that he was falsely implicated and was not at all con cerned with the murder. When the order was passed, the petitioner had not surrendered but when the order was served, the petitioner had already surrendered in respect of the criminal charge against him. At the relevant time, the petitioner was under trial in the said crimi nal case. " On such facts, it was the contention of the petitioner therein that the order of preventive detention could only be justified against a person in detention if the detaining authority was satisfied that his release from detention was imminent and the order of detention was necessary for put ting him back in jail. This Court therein pointed out: "The principles applicable in these types of preventive detention cases have been discussed in the decisions of Suraj Pal Sahu vs State of Maharashtra, ; and Raj Kumar Singh vs State of Bihar, ; Judged on the basis of the said principles, there is no ground for interfer ence with the order of detention as passed. It, however, appears that after the order of detention was passed and before the actual service of the order of detention, the peti tioner was taken into custody. From the affi davit of the District Magistrate, it does not appear that either the prospect of immediate release of the detenu or other factors which can justify the detention of a person in detention were properly considered in the light of the principles noted in the aforesaid decisions and especially in the decisions in Rameshwar Shaw vs District Magistrate, Burdwan and Ramesh Yadav vs District Magistrate, Etah. , , . . . . A Constitution Bench of this Court in Ramesh war Shaw vs District Magistrate, Burdwan, ; held as follows: 849 "As an abstract proposition of law, there may not be any doubt that section 3(1)(a) does not preclude the authority from passing an order of detention against a person whilst he is in detention or in jail; but the relevant facts in connection with the making of the order may differ and that may make a difference in the application of the principle that a detention order can be passed against a person in jail. " The self same question was examined in Kartic Chandra Guha vs State of West Bengal, where a three Judge Bench of this Court observed: "It is true that he had been held in custody in connection with the offences under the Arms Act which are nonbailable offences, but even so, it was open to the trying magis trate to release the petitioner on bail. The District Magistrate, on information received by him, thought that the petitioner was likely to be released on bail in which case having regard to his past activities, it was open to the District Magistrate to come to the reason able conclusion that having regard to the desperate nature of the activities of the petitioner, his enlargement on bail would be no deterrent to his desperate activity. Hence the District Magistrate was entitled to pass the order of detention if that was necessary to prevent the petitioner from acting in a manner prejudicial to the maintenance of public order. " That very question again came before a two Judge bench in Dr. Ramakrishna Rawat vs Dis trict Magistrate, Jabalpur, [ where it was observed: "In the case in hand, as already noticed, the petitioner was in jail custody in proceedings under section 151 Cr. That custody was obviously of a short duration. The mere service of the detention order on the petitioner in jail would not therefore invali date the order. On the basis of the antecedent activities of the petitioner in the proximate past the detaining authority could reasonably reach its subjective satisfaction about his tendency or inclination to act in a manner prejudicial to the maintenance of public order after his release on the termination of the security proceedings under the Code." 850 In Vijay Kumar vs State of Jammu & Kashmir, ; a two Judge Bench of this Court pointed out: "If the detenu is already in jail charged with a serious offence, he is thereby prevented from acting in a manner prejudicial to the security of the State. May be, in a given case there yet may be the need to order preventive detention of a person already in jail. But in such a situation the detaining authority must disclose awareness of the fact that the person against whom an order of preventive detention is being made is to the knowledge of the authority already in jail and yet for compelling reasons a preventive deten tion order needs to be made. " That vexed question came before a two Judge bench of this Court in the case of Merugu Satyanarayana vs State of Andhra Pradesh, ; wherein it was observed: "Now, if the man is already detained can a detaining authority be said to have been subjectively satisfied that a preventive detention order be made?" The Court then referred to the Constitution Bench decision in Rameshwar Shaw 's case (supra) and left it as a matter to be decided in every individual case on its own facts. The Court also indicated that it was not a matter of jurisdition but had to be decided on the facts of each case. We may now refer to a recent judgment of a three Judge Bench in the case of Suraj Pal Sahu vs State of Maharashtra, ; Mukharji, J. who delivered the judgment in Binod Singh 's case (supra) on which Mr. Garg has relied has also delivered the judgment in this case. Therein it was said: "In Ramesh Yadav vs District Magis trate, Etah, it was held that merely on the ground that an accused in deten tion as an undertrial prisoner was likely to get bail, an order of detention under the National Security Act should not ordinarily be passed. If the apprehension of the detaining authority was true, court observed, the bail application had to be opposed and in case bail was granted, challenge against that order in the higher forum had to be raised. We respect fully agree with this conclusion. But this 851 principle will have to be judged and applied in the facts and circumstances of each case. Where a person accused of certain offences whereunder he is undergoing trial or has been acquitted, the appeal is pending and in re spect of which he may be granted bail may not in all circumstances entitle an authority to direct preventive detention and the principle enunciated by the aforesaid decision must apply but where the offences in respect of which the detenu is accused are so interlinked and continuous in character and are of such nature that these affect continuous mainte nance of essential supplies and thereby jeo pardise the security of the State, then sub ject to other conditions being fulfilled, a man being in detention would not detract from the order being passed for preventive deten tion . . . . " It is thus clear that the fact that the detenu is al ready in detention does not take away the jurisdiction of the detaining authority in making an order of preventive detention. What is necessary in a case of that type is to satisfy the court when detention is challenged on that ground that the detaining authority was aware of the fact that the detenu was already in custody and yet he was sub jectively satisfied that his order of detention became necessary. In the facts of the present case, there is suffi cient material to show that the detaining authority was aware of the fact that the petitioner was in custody when the order was made, yet he was satisfied that his preventive detention was necessary. We do not think there is any force in this contention of Mr. Garg. Since both the contention canvassed are rejected, the writ petition is dismissed. P.S.S. Petition dismissed.

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

ivil Appeals Nos. 1266 & 1267 of 1969. From the Judgment and order dated the 29th July, 1968 of the Patna High Court in Civil Writ Jurisdiction Case No. 61 of 1967 H. K. Puri and K. K. Mohan, for the appellant 264 D. Goburdhan, for respondent Nos. 1 and 2 (In both the appear) Respondent No. 21 (In C.A. No. 1266/69) and for respondent No. 60 (in C.A. No. 1267/69). A. K. Nag, for respondent Nos. 3 19 (In C.A. No. 1266/69) and for respondent Nos, 4, S, 7 9, 11 32, 35 42, 44 52, 54 58 (In C.A. No. 1267/69). The Judgment of the Court was delivered by ALAGIRISWAMI, J. By two notifications dated 22 6 65 and 28 8 65 the Government of Bihar sent to the Labour Court, Chota Nagpur Division, Ranchi, applications in respect of 73 workers of the appellant for decision under section 33C(2) of the Industrial disputes Act for retrenchment compensation. The employer contended that it was a case of closure for reasons beyond its control and that therefore the workmen were entitled to compensation under the proviso to subsection (1) of section 25FFF of the Act and not to retrenchment compensation workers contended, however, that they were entitled to retrenchment compensation under s.25F. The Labour Court held that it was a case of retrenchment. Two writ petitions filed by the employer before the High Court of Patna failed and these appeals have been filed in pursuance of a certificate of fitness granted by the High Court. The argument on behalf of the appellant is that where there is a dispute before the Labour Court considering an application under section 33C(2) as to whether the workmen had been retrenched or the factory had been closed for reasons beyond the control of the employer, it was not a matter which the Labour Court was competent to decide and that it was a matter which only an Industrial Tribunal considering a reference under section 10 is competent to decide. In particular Item 10 of the Third Schedule to the Act is relied upon to show that the matter relating to retrenchment and closure is one which only an Industrial Tribunal is competent to decide. Reliance is placed upon a decision of this Court in U.P. Elect. Co. vs R. K. Shukla(1) where it was held that the power of the Labour Court is to complete the compensation claimed to be payable to the workmen on the footing that there has been retrenchment of the workmen, that where retrenchment is conceded and the only matter in dispute is that by virtue of section 25FFF no liability to pay compensation has arisen the Labour Court will be competent to decide the question, that in such a case the question is one of computation and not of determination, of the conditions precedent to the accrual of liability, and that where the dispute is whether workmen have been retrenched and computation of the amount is subsidiary or incidental, the Labour Curt will have no authority to trespass upon the powers of the Tribunal with which it is statutorily invested. In the U.P. Electric Company case (supra) the facts were somewhat different. The Court in that case noticed at page 513 of the report that "The company had expressly raised a contention that they had not retrenched the workmen and that the workmen had 265 voluntarily abandoned the Company 's service by seeking employment with the Board even before the company closed its undertaking". This Court emphasised at page 5l7 of the report that If the liability arises from an award, settlement or under the provisions of Ch. V A or by virtue of a statute or a scheme made thereunder, mere denial by the employer may not be sufficient to negative the claim under section 33C(2) before the Labour Court". We, therefore, do not see how the decision in the U.P. Electric Company 's case (supra) can come to the aid of the appellant in this case. The said case is clearly distinguishable on the peculiar facts as noticed above. In Central Bank of India Ltd vs P. section Rajagopalan(1) this Court considered the scope of section 33C(2) elaborately and it would be necessary to quote at some length from that decision. In that case it was urged by the employer that section 33C(2) can be invoked by a workman who is entitled to receive from the employer the benefit there specified, but the right of the workman to receive the benefit has to be admitted and could not be a matter of dispute between the parties and that the only point which the labour Court can determine is one in relation to computation of the benefit ill terms of money. This Court observed: "We are not impressed by this argument. In our opinion on a fair and reasonable construction of sub section (2) it is clear that if a workman 's right to receive the benefit is disputed, that may have to be determined by the Labour Court. Before proceeding to compute the benefit in terms of money the Labour Court inevitably has to deal with the question as to whether the workman has a right to receive that benefit. If the said right is not disputed, nothing more needs to be done and the labour Court can proceed to compute the value of the benefit in terms of money; but if the said right is disputed the Labour Court must deal with that question and decide whether workman has the right to receive the benefit as alleged by him and it is only if the Labour Court answers this point in favour of the workman that the next question of making necessary computation can arise. It seems to us that the opening clause of sub section (2) docs not admit of the construction for which the appellant contends unless we add some words in that clause. The clause "Where any workman is entitled to receive from the employer any benefit" does not mean "where such workman is admittedly, or admitted to be. entitled to receive such benefit. " The appellant 's constructional would necessarily introduce the addition of the words "admittedly, or admitted to be" in that clause, and that clearly is not permissible. Besides, if seems to us that is the appellant 's construction is accepted it would necessarily mean that 266 it would be at the option of the employer to allow the workman to avail himself of the remedy provided by sub section (2), because he has merely to raise an objection on the ground that the right claimed by the workman is not admitted to oust the jurisdiction of the Labour Court to entertain the workman 's application. The claim under section 33C(2) clearly postulates that the determination of the question about computing the benefit in terms of money may, in some cases, have to be preceded by an enquiry into the existence of the right and such an enquiry must be held to be incidental to the main determination which has been assigned to the Labour Court by sub s.(2). As Maxwell in Interpretation of Statutes, p. 350, has observed 'where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution; we must accordingly hold that section 33C(2) takes within its purview case of workmen who claimed that the benefit to which they are entitled should be computed in terms of money, even though the right to the benefit on which their claim is based is disputed by their employers. Incidentally, it may be relevant to add that it would be somewhat odd that under sub s (3), the Labour Court should have been authorised to delegate the work of computing the money value of the benefit to the Commissioner if the determination of the said question was the only task assigned to the Labour Court under sub section On the other hand, sub s.(3) becomes intelligible if it is held that what can be assigned to the Commissioner includes only a part of the assignment of the Labour of Court under sub section Further on this Court observed: "It is thus clear that claims made under s.33C(1), by itself can be only claims referable to the settlement, award, or the relevant provisions of Chapter VA. These words of limitations are not to be found in s.33C(2) and to that extent, the scope of section 33C(2) is undoubtedly wider than that of section 33C(1). It is unnecessary in the present appeals either to state exhaustively or even to indicate broadly what other categories of claims can fall under section 33C(2). There is no doubt that the three categories of claims mentioned in section 33C (1) fall under section 33C(2) and in that sense, section 33C(2) can itself be deemed to be a kind of execution proceeding, but it is possible that claims not based on settlements, awards or made under the provisions of Chapter VA, may also be competent under section 33C(2) and that may illustrate its wider scope." This Court then went on to discuss some of the claims which would not fall under s.33C(2), which is not very relevant for the purposes of this case. The present case stand on an even stronger footing. Even the employer does not dispute that the workmen are entitled to compensation. It only says that the compensation should be calculated on a particular basis different from the basis on which the workmen claim. The claim also falls under Chapter VA. 267 In the decision in South Arcot, Elect. Co. vs N. K. Khan(1) where a right had been claimed by the various workmen in their applications under section 33C(2), it was held that it was a right which accured to them under s.25FF of the Act and was an existing right at the time when these applications were made, that the Labour Court clearly had jurisdiction to decide whether such a right did or did not exist when dealing with the application under that provision, and that the mere denial of that by the company could not take away its jurisdiction. We hold that in this case it was competent to the Labour Court to decide whether the case before it was a case of retrenchment compensation or the proviso to sub section (1) of section 25FFF was attracted on closure of the establishment. The question even according to the employer falls under section 25FFF and therefore in deciding that question the Labour Court has necessarily to decide whether the proviso has been satisfied. We do not consider that the reference to item No. 10 of the Third Schedule to the Act can decide the matter one way or the other. The item reads as follows: "10. Retrenchment of workmen and closure of establishment It does not say that all questions arising out of retrenchment of workmen and closure of establishments have to be decided by Industrial Tribunal. Logically if the contentions is to be accepted, even if the question of retrenchment is not disputed the Labour Court will not be competent to decide the question of compensation payable in a case of retrenchment because it raises a question of jurisdiction. This entry should therefore be held to refer to cases where the right to retrench workers or to close an establishment is disputed and that question is referred for adjudication to the Industrial Tribunal. In that case the Tribunal will be competent to decide whether the closure or retrenchment was justified and whether the retrenched workmen should be reinstated or the workers in the establishment purported to have been closed should be continued to be paid on the basis that the so called closure was to closure at all. In the present case the workmen do not ask for reinstatement. They accept the termination of their services and ask for compensation. The only dispute is about the compensation whether it is to be paid under s.25F or 25FFF. Item 10 of Third Schedule will not cover such a case. We therefore uphold the decision of the High Court and dismiss these appeals with costs. V.M.K. Appeals dismissed.

The Government of Bihar sent to the Labour Court, Chota Nagpur Division, Ranchi, application in respect of 73 workers of the appellant for decision under sec. 33C(2) of the for retrenchment compensation. The contention of the appellant was that it was a case of closer for reasons beyond its control and that, therefore, the workmen were entitled to compensation under the proviso to sub section (1) of sec. 25FFF of the Act and not to retrenchment compensation. The workers contended that they were entitled to retrenchment compensation under sec. 25F. The Labour Court held that it was a case of retrenchment. The writ petitions filed by the employer in the High Court has failed and these appeals have been preferred to this Court on the basis of the certificate of fitness granted by the High Court. Dismissing the appeals, ^ HELD : (i) It was competent to the Labour Court to decade whether the case before it was a case of retrenchment compensation or the proviso to sub sec. (1) of section 25FFF was attracted on closure of the establishment. Even the employer does not dispute that the workmen are entitled to compensation. It only says that the compensation should be calculated on a particular basis different from the basis on which the workmen claim. The claim also falls under Chapter VA of the Act. [266H; 267B C] Central Bank of India Ltd. vs P. section Rajagopalan ; relied on. U.P. Electric Company vs R. K. Shukla [1970] 1 S.C.R. 507 and South Arcot Elect. Co. vs N. K. Khan [1969] 2 S.C.R. 902, referred to. (ii) Item No. 10 of the Third Schedule to the Act does not say that all questions arising out of retrenchment of workmen and closure of establishment have to be decided by Industrial Tribunal. This entry refers to cases where the right to retrench workers or to lose an establishment is disputed and that question is referred for adjudication to the Industrial Tribunal. In that case the Tribunal will be competent to decide whether the closure or retrenchment was justified and whether the retrenchment workmen should be reinstated or the workers in the establishment purported to have been closed should be continued to be paid on basis that the so called closure was no closure at all. In the present case the workmen do not ask for reinstatement. They accept the termination of the services and ask for compensation. The only dispute is about the compensation whether it is to be paid under section 25F or 25FFF. Item 10 of Third schedule will not cover such a case. [267D G]

Civil Appeal No. 531 of 1979. Appeal by Certificate from the Judgment and Order dated the 23 10 1969 of the Bombay High Court in S.C.A. No. 1596 of 1965. D. V. Patel, N. N. Keshwani and R. N. Keshwani for the Appellant. J. Sorabjee, R. Daruwala, P. G. Gokhale and J. R. Gagarat for the Respondent. The Judgment of the Court was delivered by KAILASAM, J. This appeal is by the defendant tenant by certificate granted by the High Court of Judicature at Bombay against its judgment dated 21 1 69 is Special Civil Application No. 1596 of 1965 granting a decree directing that the defendant shall vacate and deliver peaceful possession not only of the land demised to him under the lease in the suit but also of the three buildings which have been constructed on the demised land. By a lease deed dated 14th December, 1948 the plaintiff gave to the defendant on lease two plots Nos. 12 and 13 situated at Sitaladevi 1018 Temple Road, Mahim for a period of 15 years commencing from 1st December, 1948 at the yearly rent of Rs. 10,200/ payable in equal quarterly instalments of Rs. 2,550/ in advance. The lease deed provided that the defendant was at liberty to erect building and structures on the two plots of land. The defendant agreed to pay and discharge all taxes and outgoings imposed on the above two plots as also on the buildings to be created by the defendant. On the expiration of the term of 15 years or sooner termination of the lease the defendant agreed to deliver back the possession of the two plots to the plaintiff ' free of all buildings, erections and structures and levelled and put in good order and condition to the satisfaction of the plaintiff '. Clause IV of the lease provided for determination and forfeiture of the lease in the event of the rents having been allowed to be in arrears for more than 30 days or upon breach of conditions of the lease. The forfeiture clause also provided that upon forfeiture the plaintiff would be entitled to re enter upon not only the two plots of land but also the structures standing thereon. The defendant defaulted not only in payment of rent but also in payment of taxes due in respect of lands and buildings which he erected. The plaintiff filed a suit in 1951 for ejectment. The defendant filed an application for the fixation of standard rent and the standard rent was fixed at Rs. 435/ per month from September 1, 1950. A compromise was entered into between the parties in the suit on 5th March, 1954 by which the parties agreed on a rent of Rs. 435/ per month from September, 1950 to February, 1954. An appeal against the fixation of standard rent of Rs. 435/ per mensem was disposed of on 28th June, 1955 whereby standard rent was fixed at Rs. 620/ per month from 1st September, 1950. The defendant again defaulted in payment of rent and taxes. The arrears of rent amounted to Rs. 11,472.30 and taxes to the extent of Rs. 1,12,053.60 for the period ending 30th September, 1960. The plaintiff by a notice determined and forfeited the lease and called upon the defendant to deliver possession of the lands alongwith structures thereupon. The notice also specified that the notice was not only a notice of forfeiture but also notice under section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as the Bombay Rent Act). On 1st December, 1961 as the defendant failed to pay the arrears of rent and the taxes, the plaintiff filed the present suit and prayed for a decree for ejectment against the defendant in respect of two plots of land and also the buildings and structures standing thereon, and claimed arrears of rent of Rs. 11,472.30 and mesne profits at the rate of Rs. 620/ 1019 per month. The defendant filed written statement and denied the allegations made in the plaint. The defendant in order to get the benefit of the provisions of Section 12(3) (b) of the Bombay Rents Act applied for time for making deposit of arrears of rent. The application was taken on the 20th June, 1962 and further time was granted to enable the defendant to make the deposits. Time was extended on several occasions and finally on 6th August, 1962, the defendant informed the court that he was not in a position to make any deposit at all. After the issues were framed and the suit was taken up for trial, the defendant once again applied for relief under section 12(3)(b) of the Act and prayed that he may be allowed to deposit the arrears of rent and cost. The deposit was accepted by the Court after making an endorsement, "accept without prejudice". Subsequently, on 11th November, 1964, the trial Court passed a decree for ejectment in respect of plots and the buildings in favour of the plaintiff. A decree was granted regarding arrears of rent and for mesne profits. Both the plaintiff and the defendant preferred appeals and the Bench of two Judges of the Court of Small Causes by a common judgment disposed of both the appeal on 4th April, 1965. The appellate Court held that it had no jurisdiction to give a decree for ejectment in respect of the two buildings constructed on Plot No. 12 by the defendant. It held that clause IV of the lease which permitted forfeiture was in the nature of penalty and the defendant was entitled to be relieved from the liability to deliver possession of the buildings constructed by him upon forfeiture by the plaintiff. It also found that the defendant was entitled to be relieved from the penalty of forfeiture of the lease under Ss. 114 and 114A of the Transfer of Property Act. It rejected the plea of the defendant that he was always ready and willing to pay all arrears of rents and found that because of repeated defaults the defendant was not entitled for relief from ejectment under section 12(3) (b) of the Bombay Rent Act. The plaintiff filed a revision petition against the order of the appellate Court declining to direct possession of the two buildings and the defendant/tenant filed an appeal against the order of the appellate Court directing ejectment of the defendant from the two plots of lands mentioned in the plaint. The High Court disposed of both the revisions by the plaintiff and the appeal by the defendant by a common judgment whereby it allowed the revisions filed by the plaintiff and dismissed the appeal of the defendant and decreed the suit of the plaintiff directing the defendant to deliver peaceful possession of the land demised to him and also buildings which have been constructed by the defendant on the demised 1020 lands. It also confirmed the decree regarding arrears of rents and mesne profits. On behalf of the defendant it was submitted that the Court 's jurisdiction is limited only to adjudicate on leased premises under the Bombay Rent Act and therefore it had no jurisdiction to try the suit regarding possession of the structures put upon the leased lands. It was pleaded that a relief regarding the superstructures will not be one under the provisions of the Bombay Rent Act. It was contended that as the suit is for a composite relief namely for the possession of the leased land and for the superstructures it is beyond the jurisdiction of the court and the suit as a whole should have been dismissed. It was submitted that in any event as clause IV in the lease deed is in the nature of penalty providing for the forfeiture of the structure which did not form part of the lease, the decree for possession of the structures is not maintainable. In any event it was submitted that there could be no forfeiture of the structures on the ground that the municipal taxes were not paid and that the term as to payment of arrears of taxes cannot be considered as a clause in the lease deed and the defendant should be relieved against the penal clause. Lastly, it was submitted that the Courts below were wrong in not granting relief under section 12(3) (b) of the Bombay Rent Act. Before considering the several contentions raised by the learned counsel for the appellant it will be useful to refer to the relevant clauses of the lease deed and the relief prayed for in the plaint. The lease deed dated 14th December, 1948 executed by the plaintiff in favour of the defendant was a lease of two plots of land, plot Nos. 12 and 13 situated at Sitladevi Temple Road, Mahim for a period of 15 years at an yearly rent of Rs. 10,200/ payable in equal quarterly instalments of Rs. 2,550/ in advance. Subsequently standard rent was fixed by the trial Court at Rs. 435/ which was raised by the appellate court to Rs. 620/ per mensem. The lease permitted the defendant to erect buildings and structures in the two plots of land. The buildings were erected in only plot No. 12 and not in plot No. 13 which remains unbuilt and vacant. The defendant agreed to pay and discharge all taxes and outgoings imposed on the above two plots as also to the buildings to be erected by the defendant. The defendant also undertook to deliver possession of the two plots to the plaintiff "free of all buildings, erections and structures" on the expiration of the lease. Clause IV empowered the lessor to terminate the lease and provided that the lessor will be at liberty to re enter not only upon the two plots of the lands but also on the structures standing thereon. In the plaint it was stated that as the defendant had failed to pay rents and taxes and 1021 committed breach of conditions the plaintiff forfeited the lease and called upon the defendant to pay arrears of rent and taxes. The suit was based not only on the forfeiture of the lease but also for possession of the leased plots under section 12 of the Bombay Rents Act. In paragraph 9 of the plaint it is alleged "the plaintiff say that in the event of the defendant contending that he has become a statutory tenant of the said land, after the tenancy had been duly and validly terminated, the plaintiff would submit that the defendant had failed and neglected to pay the arrears of standard rent amounting to Rs. 11,472.30 upto 31st August, 1961 and does not observe and perform condition 11(b) of his lease, and so he is not entitled to the protection of the Bombay Rent Control Act. " In paragraphs 10 and 11 of the Plaint, it is alleged that the provisions of the Bombay Rents Act 47 of 1947 apply to the said land and the Court has jurisdiction to entertain and try the suit. The reliefs asked for by the plaintiff in paragraph 13(a) is that the defendant may be directed to hand over peaceful possession of the lands to the plaintiff together with the buildings and structures standing thereon. Thus it would be seen that the plaint is based on the terms of the lease deed after forfeiting the lease and for the possession of the leased lands according to the terms of the Bombay Rent Act. The main defence which was raised by the tenant in the Courts below as well as before us is that the suit is not triable under section 28 of the Bombay Rents Act and in any event relief regarding possession of the structures would be beyond the scope of the relief contemplated in the Bombay Rent Act. Section 28 of the Bombay Rent Act runs as follows: "28 (1). Notwithstanding anything contained in any law and notwithstanding that by reason of the amount of the claim or for any other reason, the suit or proceeding would not, but for the provision, be within its jurisdiction, in Greater Bombay, the Court of Small Causes Bombay. (a) X X X X X X X X X (b) X X X X X X X X X shall have jurisdiction to entertain and try any suit or proceeding between a landlord and a tenant relating to the recovery of rent or possession of any premises to which any of the provisions of this part apply and to decide any application made under this Act and to deal with any claim or question arising out of this Act or any of its provisions 1022 and subject to the provisions of sub section (2), no other court shall have jurisdiction to entertain any such claim or question. " The Section confers jurisdiction on the Court of Small Causes Bombay to entertain and try any suit or proceedings between a landlord and tenant relating to recovery of rents or possession of any premises to which any of the provisions of this part apply. The jurisdiction thus conferred enables the Court to try any suit between the landlord and the tenant relating to recovery of possession of the premises. It is admitted that the premises is the two plots of land only and not the superstructure. The plea of the plaintiff is that the relief for recovery of possession of the plot which is the subject matter of the lease, would also include relief relating to the superstructure as being related to relief of recovery of possession of the leased premises namely the plots and land. The submission on behalf of the plaintiff is that as the jurisdiction of Civil Courts have been specifically excluded, and the matters relating to possession of the leased premises, it would imply that not only relief of the possession of the leased lands but also matters relating to it would be beyond the jurisdiction of other courts and therefore the plaintiff has no other option than to file the suit for relief as to the structure being only ancillary and incidental to the relief of possession of the leased lands. Before we proceed to consider this plea, we might note that Mr. Soli J. Sorabjee, learned counsel for the plaintiff submitted that though it might be open to him to contend that the reliefs relating to the structures based on the terms of the contract would also be decisive on an application made under the act as being related to the recovery of the possession of the leased premises, he would content himself with the plea that the relief as to structures is so closely and inextricably related to possession of the land that no effective relief of possession of the leased lands could be given without giving relief in respect of structures. Relief as to structures also should inevitably follow. If this submission is accepted it would be unnecessary for us to consider the other limb of the arguments on behalf of the appellants that the relief claimed as a result of the forfeiture is not enforceable by a Court administering Bombay Rent Act or that the plaintiff cannot enforce terms of forfeiture which did not relate to leased plots or that the defendant would be entitled to relief against forfeiture under Ss.114 and 114A of the Transfer of Property Act. All the Courts below have found that the defendant is not entitled to any relief under section 12(3)(b) of the Act and that so far as the leased plots are concerned, the plaintiff is entitled to possession under the Bombay Rent Act. After filing of the suit it is seen that the 1023 defendant asked for time for payment of arrears of rents and the matter came up before the Court on the 28th June, 5th July and 6th August, 1962 for payment of arrears. On the last date the appellant 's advocate informed the Court that the appellant was not in a position to pay the arrears. It is only two years later on 18th September, 1964 the defendant obtained Court 's permission to deposit balance of arrears of Rs. 12,800/ and deposited the amount under protest by the plaintiff. The Trial Court after considering all the facts found that there was intention of default and neglect in payment of rent. The conduct of the defendant was wilfully not ready and willing to pay the rent. It again found that the payment of arrears was not made diligently and the defendant had flouted the orders of the Court to deposit the arrears of rent and the discretion cannot be exercised in his favour when he persisted in not paying the taxes for about 12 or 13 years and was constantly in arrears of rent for about 14 months at the time of the notice. The appellate Court also came to the same conclusion holding that it is not a case where discretion of the Court under S.12 (3) (b) should be exercised in favour of the tenant. The High Court also confirmed the findings of the Court below that the defendant was not entitled to relief under Section 12(3)(b) of the Act. On the facts we are also in agreement with the findings of the three courts below that the persistent default of the defendant on various occasions and his clear statement that he was not in a position to pay the arrears, would exclude any relief under section 12(3) (b). In a recent decision of this Court reported in Ganpat Ladha vs Sashikant Vishnu Shinde, it has been held that when the tenant does not fulfil the conditions as required under section 12(3)(b), he could not claim protection under section 12(3)(b). This Court observed that it is difficult to see how judicial discretion exercisable in favour of the tenant can be found under section 12(3)(b) even where conditions laid down by it were not satisfied. This Court overruled the decision of the case of Bombay High Court in Kalidas vs Bhavan Bhagwandas. The conditions specified in section 12(3) (b) will have to be strictly observed by the tenant if he wants to avail himself of the benefits provided under the Section. On the facts therefore we find that the plaintiff is entitled to a decree for possession of the two plots under the provisions of the Bombay Rent Act. As plot No. 13 has not been built upon and is vacant there could be no difficulty in confirming the decree for possession in favour of the plaintiff regarding plot No. 13. 1024 In Importers and Manufacturers Ltd. vs Pheroze Framroze Taraporewala and Ors, this Court held that the claim for compensation was merely an incidental claim for possession under the Act. "Section 28 had conferred jurisdiction on the Court of Small Causes not only to entertain and try any suit or proceeding between a landlord and tenant for recovery of rent or possession but also to deal with any claim or question arising out of this Act or any of its provisions and section 28 was thus wide enough to cover the question raised as between the plaintiff and the sub lessee". It will be seen that the plea that a suit against a sub lessee is not within the jurisdiction of the Small Causes Court, was negatived by this Court and it was held that section was wide enough to cover the questions raised between the plaintiff and the sub lessee. In Babulal Bhuramal and Anr. vs Nandram Shivram and Ors. related to sub lessee of the premises. The suit was filed for ejectment of the tenant and the sub tenant in the Court of Small Causes. The tenant and the sub tenants later filed a suit before the Bombay City Civil Court for declaration that the lessee was a tenant and was protected from eviction by the provisions of the Bombay Rents Act and that as B and C were lawful sub tenants, were also entitled to possession. This Court agreed with the view taken by the High Court that section 28 of the Act barred the City Civil Court from entertaining the suit filed by the lessees and the sub lessees as section 28 conferred the right on the Small causes to entertain a suit between a landlord and a tenant in respect of a claim which arose out of the Act or any of its provisions. Thus it prohibits a suit from being entertained by the City Civil Court at the instance of the tenant. In Raizada Topandas and Anr. vs M/s. Gorakhram Gokalchand it was held that if a suit is framed by a landlord or a tenant and relief asked for is in the nature of a claim which arises out of Act or any of the provisions then only and not otherwise will be covered by section 28 and as there were no such claim the City Civil Court has jurisdiction to entertain the suit. The plaint in the case proceeded on the footing that during the period of agreement the appellants were mere licensees and after the expiry of the agreement they were trespassers. As the plaint in terms negatived the relationship of the landlord and tenant, it was held that the Rent Court had no jurisdiction. This decision cannot be of any help to the appellant. 1025 In Sushila Kashinath Dhonde and Ors. vs Harilal Govindji Bhogani and Ors. , this Court held that it is not necessary that there should be relationship of landlord and tenant in respect of all the matters covered by section 28(1) of the Act so as to give jurisdiction to the Court of Small Causes. It further held that in respect of other matters dealt with sub section, it is not necessary that the relationship of landlord and tenant should exist between the parties before the Court. The Court repelled the contention that a charge created by the deed executed between the parties did not give rise to any claims or questions arising out of the Bombay Rents Act or its provisions and held that nature of reliefs to be granted to the plaintiff are all claims or questions arising out of the Act and can be dealt with only by the special court constituted under section 28 of the Act. No doubt, the deed of charge furnished a cause of action, but its legality, validity and binding nature and other incidental matters connected therewith are all questions arising out of the Act and the plea on behalf of the appellants that the rights of the plaintiff did not flow from the Act or any of its provisions but from the contract, could not be accepted. The decisions referred to above will show that the plaintiff/ landlord of the land is entitled to claim the relief for possession of his land and in effect the decree for possession of the land would mean that the land should be delivered to him without the structures. Apart from the relief under the lease deed, the plaintiff is entitled to succeed as he has established that there was default of payment under the provisions of the Bombay Rents Act. The jurisdiction of the Small Causes Court to grant an effective decree for possession of the land cannot be denied. Equally untenable is the contention of the respondent that as the plaintiff has sought two reliefs one under the Bombay Rent Act and another under the Contract, the entire plaint must be rejected. As we have already observed so far as the relief of possession of the premises, i.e the land is concerned, it is exclusively within the jurisdiction of the Small Causes Court. In asking for the relief for possession of the land, the plaintiff is entitled to incidental and consequential reliefs such as for effectively taking possession of the plot without the structures. The prayer in the plaint asking for possession of the land including the structures would not take the suit out of the competence of the Small Causes Court. In this view it is not necessary for us to go into the question as to whether the terms in the contract regarding the forfeiture can be enforced by the Small Causes Court. It is sufficient for the purpose of this Suit to hold that the plaintiff is entitled to seek for 1026 possession of the land which is the premises in the suit, and in getting possession of the land he is entitled to ask for possession of the land without any superstructures. In this connection reference may be made to the nature of the relief which the plaintiff is entitled to. In Ramchandra Raghunath Shirgaonkar vs Vishnu Balaji Hindalakar, it was held that the ordinary rule of law is that the tenant must give up vacant possession of the land demised at the end of the term and that if he builds on the land of the tenancy he builds at his own risk. At the end of the term he can take away his building but if he leaves it there, it becomes the landlord 's property. The Court further held that the tenant who had been in possession of land for a large number of years and built a costly and substantial house on the land of the tenancy with the knowledge of the landlord, is entitled to some compensation In K. Arumugham Naicker and Anr. vs Tiruvalluva Nainar Temple that after the determination of the lease, lessees were required to deliver over possession of the demised premises to the lessor and the lessees were entitled to remove the structures which they might have erected during the continuance of the tenancy. The lessees, however, failed to remove the structures on the date of the determination of the tenancy and on the next date the premises were occupied by other lessees, it was held the lessees could remove the structures on and not after determination of the tenancy and having failed to remove the same on the determination of the tenancy they lost not only their right to remove the structures after the determination of the tenancy but also all right, title and interest in those structures In K. Arumugham Naicker and Anr. vs Tiruvalluva Naickar Temple by its Trustee, it was held that where a court directs by a decree or order vacant possession of land, that decree could be made effective by directing its own officers to remove the super structures in the property and deliver vacant possession of the properties to the decree holder. It is unnecessary to have any specific power in that behalf. The power to remove the superstructures is an incidental necessary and ancillary power to the power to deliver possession of the property. We are satisfied that the Small Causes Court had jurisdiction to entertain the suit of the plaintiff not only for possession of the land which is the premises under the Act but also for other reliefs to make the decree for possession effective. In this connection the plaintiff is entitled to ask for relief regarding the superstructures. This incidental or ancillary relief would not take out the suit beyond 1027 the jurisdiction of the Small Causes Court. The plea that the composite relief had been asked for and that the entire plaint ought to be rejected is also unsustainable. In the result, we agree with the contentions of the plaintiff that in asking for relief as to possession of the land, he is entitled to ask for the demolition of the structures and for grant of vacant possession of the plots. So far as the plot No. 13 is concerned, there is no difficulty. The plot is not built upon and is vacant and therefore we have no hesitation in confirming the decree for possession so far as the plot No. 13 is concerned. Plot No. 12 has been built upon. There are about three storeys consisting of about 72 flats, shops with carpet area of 13,000 square ft. and the cost of building with superstructures in 1949 was about Rs. 6,00,000/ . We may in this connection note that from the date of the decree passed by the High Court on 23rd October 1969, the defendant has not paid arrears of rents or the taxes due on the buildings. He is in law bound to pay the arrears of rent and the municipal charges which he has undertaken. On a consideration of the facts of the case, we feel that there are no grounds for interfering with the decree passed by the High Court for possession not only of the vacant plot but also of the superstructure and mesne profits and arrears of rent. The law provides for the tenant to remove the superstructure on the termination of the tenancy. If it is not thus removed the tenant loses all his rights to the superstructure and the landlord becomes entitled to it. But in a case where there is a substantial building, it is only reasonable that the court should explore the possibility of payment of some compensation to the tenant who had put up this structure. But in this connection we are reminded that for several years neither the arrears of rent nor the taxes amounting to several lacs of rupees had been paid by the tenant. Not only the tenant but several persons who have put up flats at their own costs may press their claim for compensation and it will be difficult to determine as to who are entitled to compensation and the proportion of the compensation to which they will be entitled to. We enquired of the parties at the conclusion of the arguments if it was possible to come to some arrangement regarding the superstructure but to our regret the parties informed us that they could not arrive at any settlement. In the circumstances, we have no alternative except to confirm the judgment and decree passed by the High Court. We, therefore, dismiss the appeal, but in the special circumstances of this case we make no order as to costs in this Court. S.R. Appeal dismissed.

By a lease dated 14th December 1948, the respondent plaintiff gave to the appellant defendant on lease two plots Nos. 12 and 13 situated at Sitaladevi Temple Road, Mahim for a period of 15 years commencing from 1st December 1948 at the yearly rent of Rs. 10,200/ payable in equal quarterly instalments of Rs. 2,550/ in advance. The lease deed provided that the appellant was at liberty to erect building and structures on the two plots of land. The appellant agreed to pay and discharge all taxes and outgoings imposed on the above two plots as also on the buildings to be erected by the defendant. On the expiration of the term of the lease, the appellant agreed to deliver back the possession of two plots to the respondent `free of all buildings, erections and structures and levelled and put in good order and condition to the satisfaction of the respondent '. Clause IV of the lease provided for determination and forfeiture of the lease in the event of the rents having been allowed to be in arrears for more than 30 days or upon breach of conditions of the lease. The forfeiture clause also provided that upon forfeiture the respondent would be entitled to re enter upon not only the two plots of land but also the structure standing thereon. The appellant constructed on plot No. 12 a three storied building consisting of about 72 flats, shops with carpet area of 13,000 square feet and the cost of the building with superstructures in 1949 was about Rs. 6,00,000/ . Since the appellant defaulted not only in payment of rent but also in payment of dues in respect of lands and buildings which he erected, the respondent filed a suit in 1951 for ejectment. The appellant filed an application for the fixation of standard rent and the standard rent was fixed at Rs. 435/ per month from September 1, 1950. A compromise was entered into between the parties in the suit on 5th March, 1954, by which they agreed on a rent of Rs. 435/ per month from September 1950 to February 1954. An appeal against the fixation of standard rent of Rs. 435/ per month was disposed of on 28th June, 1955 whereby standard rent was refixed at Rs. 620/ p.m. from 1st September 1950. The appellant again defaulted in payment of rent and taxes. The arrears of rent amounted to Rs. 11,472.30 and taxes to the extent of Rs. 1,12,053.60 for the period ending 30th September 1960. The respondent by a notice determined and forfeited the lease and called upon the appellant to deliver possession of the lands alongwith structures thereupon. The notice also specified that the notice was not only a notice of forfeiture, but also notice under section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. On 1st 1016 December 1961, as the appellant failed to pay the arrears of rent and the taxes, the respondent filed the suit for ejectment and prayed for a decree for ejectment against the appellant in respect of two plots of land Nos. 12 and 13 and also the buildings and structures standing thereon, and claimed arrears of rent of Rs. 11,472.50 and mesne profits at the rate of Rs.620/ p.m. The appellant in order to get the benefit of section 12(3)(b) of the Rent Control Act, 1947, applied for time for making deposit of arrears of rent. The appellant could not make the payment within the extended time allowed, but after the issues were framed and the suit was taken up for trial, he deposited the arrears of rent and cost in the Court after the Court made an endorsement "accept without prejudice". Subsequently, on 11th November, 1964 the Trial Court passed a decree for ejectment in respect of plots and the buildings in favour of the respondent. A decree was granted regarding arrears of rent and for mesno profits. Both the appellant and the respondent preferred appeals and the Bench of two Judges of the Court of Small Causes by a common judgment disposed of both the appeals on 4th April 1965. The Appellate Court held that it had no jurisdiction to give a decree for ejectment in respect of the two buildings constructed on plot No. 12 by the appellant. It held that clause IV of the lease which permitted forfeiture was in the nature of penalty and the appellant was entitled to be relieved from the liability to deliver possession of the buildings constructed by him upon forfeiture by the respondent. It also found that the appellant was entitled to be relieved from the penalty of forfeiture of the lease under section 114 and 114A of the Transfer of Property Act. It rejected the plea of the appellant that he was always ready and willing to pay arrears of rents and found that because of repeated defaults the appellant was not entitled for relief from ejectment under section 12(3)(b) of the Bombay Rent Act. The respondent filed a revision petition against the order of the appellate Court declining to direct possession of the two buildings and the appellant tenant filed an appeal against the order of appellate Court directing his ejectment from the two plots of lands Nos. 12 and 13. The High Court disposed of both the revision petition and the cross appeal by a common judgment whereby it allowed the revision petition of the respondent/landlord and dismissed the appeal of the appellant/tenant and decreed the suit of the respondent directing the appellant to deliver peaceful possession of the land demised to him and also buildings which have been constructed by the appellant on the demised lands. It also confirmed the decree regarding arrears of rents and mesne profits. Hence the appeal by certificate. Dismissing the appeal, the Court. ^ HELD: 1. Section 28 of the Bombay Rent Act, 1947 confers jurisdiction on the Court of Small Cause. Bombay to entertain try any suit for proceedings between a landlord and tenant relating to recovery of rents or possession of any premises to which any of the provisions of that part applied. The Jurisdiction thus conferred enables the Court to try any Suit between the landlord and the tenant relating to recovery of possession of the premises. [1022 A B] Importers and Manufacturers Ltd. vs Pheroze Framroze Taraporewala and Ors. ; Babulal Bhura Mal and Anr. vs Nandram Shivram and Ors., ; ; followed. 1017 Raizada Tapen Das and Anr. vs M/s Gorakhram Gokalchand ; ; Sushila Kashinath Dhonde and Ors. vs Harilal Govinji Bhogani and Ors., ; explained and distinguished. The conditions specified in section 12(3)(b) of the Bombay Rent Act, 1947 will have to be strictly observed by the tenant if he wants to avail himself of the benefits provided under the section. In the instant case, the persistent default of the appellant tenant on various occasions and his clear statement that he was not in a position to pay the arrears would exclude any relief under section 12(3) (b) of the Act. The respondent plaintiff would be entitled to a decree for possession of the plots under the provisions of the Bombay Rent Act and in effect the decree for possession of the land would mean that the land should be delivered to him without the structures. [1023 D G, 1025 D E] Ganpat Lodha vs Sachikant Vishnu Shivale. ; ; applied. 3. To contend that as the respondent plaintiff has sought two reliefs one under the Bombay Rent Act and another under the contract, the entire plaint must be rejected is wrong. In asking for the relief for possession of the land. the respondent plaintiff is entitled to incidental and consequential reliefs such as for effectively taking possession of the plot without the structure, that is he is entitled to ask for the demolition of the superstructure. The prayer in the plaint asking for possession of the land including the structures would not take the suit out of the competence of the Small Causes Court. [1025 E. F G] Ramachandra Raghunath Shirgaonkar vs Vishnu Balaji Hindalekar. ; Khimjee Thakorsee vs Pioneer Fibre Co. Ltd., AIR 1941 Bom. 337 and K Arumugham Naicker and Anr. vs Tiruvalluva Nainar Temple by its Trustee. AIR 1954 Mad. 985; approved.

: Criminal Appeal No. 2 of 1977. From the Judgment and Order dated 26.3.1976 of the Karnataka High Court in Criminal Appeal No. 169 of 1976: R.B. Datar, Swaraj Kaushal and M.A. Khan for the Appellants. K.R. Nagaraja for the Respondent. The Judgment of the Court was delivered by NATARAJAN, J. The objective of the State of Karnataka in filing this Appeal by Special Leave is to seek a pronounce ment of this Court on the scope and effect of Section 3(1) of the Mysore Motor Vehicles Taxation Act, 1957 (now the Karnataka Motor Vehicles Taxation Act 1957) and not to pursue the prosecutorial action against respondents 1 and 2 for their contravention of certain provisions of the said Act. This position was conceded by the learned counsel for the State even at the commencement of his arguments. Even so, the facts of the criminal case filed against the re spondents and the reasons for their acquittal require men tion for a proper comprehension of the legal issues involved in the case. The first respondent sold his goods vehicle, to wit a 12 ton lorry bearing Registration No. MYH 3797, to the second respondent on 2.1.71 but neither of the respondents reported the transfer of the vehicle to the Regional Transport Offi cer in compliance with the terms of Sub Section (1)(a) and Sub Section (1)(b) of Section 31 of the Motor Vehicles Act. Be that as it may, it came to the notice of the Regional Transport Officer subsequently that the tax payable for the vehicle under Section 3(1) of the Mysore Motor Vehicles Taxation Act, 1957 (hereinafter the Taxation Act) for the period 1.10.72 to 31.3.74 amounting to Rs.6,300 had not been paid. This led to a demand notice being issued to the first respondent to pay the arrears of tax together with penalty. The first respondent refuted his liability 485 to pay the arrears of tax on the ground he had transferred the vehicle to the second respondent as early as on 2.1.Tl. A demand notice was then issued to the second respondent and he too refuted his liability to pay the arrears of tax on the plea that the vehicle was not in a fit condition and it had been lying in a workshop during the relevant period without repairs being affected for want of spare parts. Since both the respondents failed to pay the arrears of tax the Transport Authorities filed a complaint against them under Section 3(1) read with Section 12(t)(a) of the Taxa tion Act in the Court of the Chief Judicial Magistrate, Mangalore. In the trial of the case the second respondent sought to prove his defence by examining the owner of a workshop known as Lokmata Garage and filing several defence exhibits. The Chief Judicial Magistrate accepted the defence of the respondents and held that since the first respondent had sold the vehicle he was not liable to pay the arrears of tax and likewise the second respondent too was not liable to pay the tax because the vehicle did not have a fitness certificate and had been left in a workshop for repairs being carried out. The Chief Judicial Magistrate further held that the currency of the Registration Certificate during the relevant period will not alter the situation in any manner because the Registration Certificate cannot have currency so as to attract tax liability when the vehicle was not covered by a valid certificate of fitness. For taking such a view and acquitting the respondents, the learned Magistrate relied on a decision of the Karnataka High Court in State vs Boodi Reddappa. [1975]1 Karnataka Law Journal p. 206. The State preferred an appeal against the acquittal to the High Court but the High Court dismissed the appeal in limine and hence the present appeal by special leave by the State. Before we proceed to consider the relevant provisions of the Taxation Act and the Motor Vehicles Act, we may refer to the decision in Reddappa 's case which has been followed by the Chief Judicial Magistrate. The case pertained to the owner of a goods vehicle who was prosecuted under Section 12(1)(a) of the Taxation Act for nonpayment of tax for a certain period during which the vehicle was covered by a certificate of fitness and there was also no evidence that the vehicle had been put to use on the roads even without a certificate fitness. The Trial Magistrate acquitted the owner of the goods vehicle and the State preferred an appeal to the High Court and contended that as per the deeming provision contained in the Explanation Section 3(1) of the Taxation Act, the owner was bound to pay tax as long as the Certificate of Registration was current. The Division Bench rejected the contention and held that the word 'kept ' occur ring 486 in Section 3(1) must be construed as 'kept for use ' and that in the absence of evidence to show that the vehicle had been made use of or that it had been 'kept for use ', the currency of the Certificate of Registration would not by itself attract tax liability. ,For taking such a view the High Court placed reliance on an earlier decision rendered in Naraina Reddy vs Commr. of Transport, [1971] 2 Mys. Law Journal 319). The Bench also held, following the view taken in yet another earlier case B.G. Bhagwan vs Regional Trans port Officer, (AIR that in the absence of a fitness certificate, Section 38 of the Motor Vehicles Act would be attracted and therefore a Certificate of Registra tion will not have currency without a co extensive certifi cate of fitness for the vehicle. Even without going into the correctness of the view taken by the High Courts, we would like to point out that the two earlier decisions do not really provide support for the view taken by the High Court. Bhagwan 's case was decided on the basis of the peculiar facts therein. What had hap pened in that case was that the Superintendent of Police made a surprise check of a stage carriage and found it to be defective and unsuitable for use on the roads. He, there fore, held a joint inspection of the vehicle with the Re gional Transport Officer and thereafter the Regional Trans port Officer cancelled the certificate of fitness of the vehicle on 9.2.63. The permit holder returned to the Region al Transport Officer the Certificate of Registration as well as the token of the vehicle but failed to surrender the permit till 23.11.63. His failure to surrender the permit was construed as a lapse contravening the notification issued by the Government and hence he was called upon to pay the tax and the penalty for three quarters commencing from 1.4.63 and ending with 31.12.63. The permit holder sought the issue of a writ to quash the order of demand served on him. Before the High Court the State took the stand that notwithstanding the cancellation of the Certificate of Fitness, the Certificate of Registration continued to have currency and therefore the permit holder was liable to pay the tax in terms of the Explanation to Section 3(1) of the Taxation Act. The High Court repelled the contention and held that once the certificate of fitness had actually been cancelled, the Certificate of Registration cannot be said to have currency on a deemed basis as envisaged by the Explana tion to Section 3(1) and hence the demand for tax for the three quarters was not legal and the order should therefore, be quashed. From the facts stated above it may be seen that it was a case where the certificate of fitness had actually been cancelled by the Transport Authorities but inspite of such cancellation they sought to recover the tax from the permit holder on the sole ground that the Certificate of 487 Registration had deemed currency by reason of the Explana tion to Section 3(1). The Division Bench did not lay down any general proposition of law that the currency of a Cer tificate of Registration is always linked up with the cur rency of a Certificate of Fitness and in the absence of the same, a Certificate of Registration by itself can never have currency and the deeming provision in the Explanation to Section 3(1) should be construed in that restricted manner. The Bench made it clear that its decision was confined to the peculiar facts of that case as may be seen from the following sentences at page 40: "In view of the cancellation of the fitness certificate, it follows that the Certificate of Registration issued to the petitioner was no more current. That being the position, the Explanation to Section 3(1) of the Mysore Motor Vehicles Taxation Act, 1957, is inapplicable to the facts of the present case." (Emphasis supplied) In so far as the decision in Naraina Reddy 's case is con cerned, the permit holder therein had paid the tax for his stage carriage for the quarter ended 30.6.59 but failed to pay the tax for the next two quarters ending with 30.9.59 and 31.12.59. On 5.2.60 he paid the tax for the months of February and March 60 alone. The non payment of tax for the period 1.7.59 to 5.2.60 was subsequently noticed and a demand was made on him to pay the arrears of tax for the abovesaid period together with penalty. The permit holder contended that the demand was illegal because the vehicle was not in Use during the relevent period and he had actual ly kept it in a workshop at Madanapalle in Andhra Pradesh from 30.6.59 and furthermore the certificate of fitness for the vehicle had expired on 30.6.59 itself and it had been renewed only on 5.2.60 and besides he had also surrendered the Certificate of Registration to the Transport Authorities and intimated them that he would not be operating the vehi cle. The permit holder 's representations were not accepted and he was directed to make the payment. The permit holder then challenged the validity of the demand before the High Court by means of a petition under Article 226 of the Con stitution. A two fold argument was advanced to assail the order of demand. The first one was that the words "kept in the State of Mysore" occurring in Section 3(1) should be read as "kept for use in the State of Mysore" and as such unless the State proved that the vehicle had infact been kept for use, whenever wanted, the physical act of keeping alone would not attract the tax liability under Section 3(1). The second argument was that the period of currency of a Certificate of Registration was co extensive with the currency of a 488 Certificate of Fitness and as such once the Certificate of Fitness expired and was not renewed, the Certificate of Registration would automatically cease to have currency. The High Court sustained the first argument and remanded the matter for a finding on the nature of the keeping of the vehicle but rejected the second contention and held that the currency of a Certificate of Registration was not dependent on the concurrent currency of a Certificate of Fitness. The High Court held as follows: "By the Explanation to Sub Section (1) of Section 3, the legislature, for the purpose of the Act has provided that Motor Vehicles so long as their Certificates of Registration are current shall be deemed suitable for use on roads. The legal fiction created by Section 38 of the Motor Vehicles Act is only for the purpose of Section 22 of that Act and cannot be extended to the Taxation Act." Inspite of this clear pronouncement in Naraina Reddy 's case about Section 38 not having any impact on Section 3(1) of the Taxation Act, the High Court has held in Reddappa 's case that Sections 38 and 22 of the Motor Vehicles Act have an impact on Section 3(1) of the Taxation Act and, therefore, a Certificate of Registration cannot have currency if the vehicle is not covered by a Certificate of Fitness for the corresponding period. Thus we find the decisions in Bhag wan 's case and Naraina Reddy 's case do not really constitute authority for the view taken in Reddappa 's case. We will now examine the scope of Section 3(1) of the Taxation Act and the effect of the Explanation to it. At the relevant time the Mysore Motor Vehicles Taxation Act 1957 (now the Karnataka Motor Vehicles Taxation Act, 1957) was in force and Section 3(1) and the Explanation read as follows: "(1) A tax at the rates specified in Part A of the Schedule shall be levied on all motor vehicles suitable for use on roads, kept in the State of Mysore; Provided that in the case of motor vehicles kept by a dealer in or manufacturer of, such vehicles for the purposes of trade, the tax shall only be levied and paid by such dealer or manufacturer on vehicles permitted to be used on roads in the manner prescribed by rules made under the . 489 Explanation. A motor vehicle of which the certificate of registration is current shall, for the purpose of this Act, be deemed to be a vehicle suitable for use on roads. " It will also be apposite to extract the relevant portion of Section 4 since Sections 3 and 4 go together. Payment of Tax. (1) The tax levied under Section 3 shall be paid in advance by the registered owner or person having possession or control of the motor vehicle, for a quarter, half year or year, at his choice, (within ten days from the commencement of such quarter, half year, or year as the case may be.) Proviso. "omitted". Explanation. "omitted". On a reading of Sections 3 and 4 it may be seen that they make the registered owner or person having possession or control of a motor vehicle kept in the State absolutely liable to pay tax in advance at the rates specified in Part A of the Schedule thereto for a quarter, halfyear or year at his choice. The Motor Vehicle Taxation Acts in all the States of the Indian Union follow a uniform pattern. Entry 57 of List II of Schedule VII of the Constitution is the Legislative Entry conferring power on the States to levy the tax. It has been observed by this Court in Automobile Trans port Ltd. vs State of Rajasthan, [1963] 1 S.C.R. 491 that the tax on motor vehicles is a compensatory tax levied for the use of the roads and it is not a tax on ownership or possession of motor vehicles. The object of the Act is achieved by charging to tax all motor vehicles suitable for use on roads kept in the State, the registered owner or person having possession or control being held liable to pay the tax in advance and then providing for grant of refund for non user subject to prescribed conditions. What falls for consideration now is whether the owner or person having the possession or control of a motor vehicle is not bound to pay the tax under Section 3(1) of the Act because the vehicle was in a state of repair and was not put to use on the road and furthermore the Certificate of Fit ness of the vehicle had not been kept current even though the Certificate of Registration was kept current. One factor which has to be borne in mind in interpreting Section 3(1) and its Explanation is the meaning to be given to the words "suitable for use 490 on roads" occurring in them as otherwise a misconception would arise. These very words occur in Entry 57 in the State List which reads as under: "Taxes on vehicles, whether mechanically propelled or not, suitable for use on roads, including ram cars subject to the provisions of Entry 35 of List III". The words "suitable for use on roads" in the said Entry have been construed by Hidayatullah, J. as he then was in Automo bile Transport case as under (vide page 571): "The words 'suitable for use on roads ' describe the kinds of vehicle and not their condition. They exclude from the Entry, farm machinery aeroplanes, railways etc. which though mechanically propelled are not suitable for use on roads. The inclusion of trams using tracks which may be on roads or off them, makes the distinction still more apparent. " It, therefore, follows that the same meaning should be given to those words occurring in Section 3(1) and the Explanation also. The resultant position that emerges is that Section 3(1) confers a right upon the State to levy a tax on all motor vehicles which are suitably designed for use on roads at prescribed rates without reference to the road worthy condition of the vehicle or otherwise. Section 4 enjoins every registered owner or person having possession or con trol of the motor vehicle to pay the tax in advance. The Explanation to Section 3(1) contains a deeming provision and its effect is that as long as the Certificate of Registra tion of a motor vehicle is current, it must be deemed to be a vehicle suitable for use on the roads. The inevitable consequence of the Explanation would be that the owner or a person having control or possession of a motor vehicle is statutorily obliged to pay the tax in advance for the motor vehicle as long as the Certificate of Registration is cur rent irrespective of the condition of the vehicle for use on the roads and irrespective of whether the vehicle had a Certificate of Fitness with concurrent validity or not. The Act, however, takes care to see that the owner of a motor vehicle or a person having possession or control of it is not penalised by payment of tax in advance for a vehicle which had not been actually used during the whole of a period or part of a period for which tax had been paid by him. The Legislative provision in this behalf is to be found in Section 7 of the Taxation Act. The relevant portion is contained in Sub Section (1) and it reads as follows: 491 "Refund of Tax. (1) Where a tax on any motor vehicle has been paid for any period and it is proved to the satisfaction of the prescribed authority that the vehicle has not been used during the whole of that period, or a continuous part thereof, not being less than one calendar month, a refund shall be made of such portion of the tax and subject to such conditions as may be prescribed. " The Rules framed under the Act prescribe the conditions referred to in Section 7. Rules 20 to 23 are the relevant Rules. Rule 20 sets out the manner and time in which the application for refund should be made and the Authorities who can sanction refund. Rule 21 provides for the issue of a Certificate of Refund, and Rule 22 refers to the payment of refund to a person on production of a Certificate of Refund in Form 17. Rule 23 deals with the scales of refund. If the vehicle had not been used during the whole of the period for which tax has been paid then the applicant is entitled to get a refund of the entire tax amount. If the vehicle had been made use of for a portion of the period then different scales of refund have been provided according to the period of user and period of non user of the vehicle. Section 7 read with the relevant Rules, therefore, makes it clear that an owner or other person paying the tax for a motor vehicle in advance would not suffer in any manner on account of the payment of the tax if the vehicle is not put to use on the roads and he can apply to the authorities concerned and seek appropriate refund as per the scales given in Rule 23. The scheme of the Taxation Act is such that the tax due on a motor vehicle has got to be paid in terms of Section 3 at the prescribed rate and in advance and the liability to pay tax continues as long as the Certifi cate of Registration is current but if it so happens that in spite of the Certificate of Registration being current, the vehicle had not actually been put to use for the whole of the period or a continuous part thereof, not being less than one calendar month, the person paying the tax should apply to the Prescribed Authority and obtain a refund of the tax for the appropriate period after satisfying the Authorities about the truth and genuineness of his claim. Sections 3 and 4 are absolute in their terms and the liability to pay the tax in advance is not dependant upon the vehicle being covered by a Certificate of Fitness or not. Even if the vehicle was not in a road worthy condition and could not be put to use on the roads without the necessary repairs being carried out, the owner or person having possession or con trol of a vehicle is enjoined to pay the tax on the vehicle and then seek a refund. Perhaps in exceptional cases where the vehicle has 492 met with a major accident or where it is in need of such extensive repairs that it would be impossible to put the vehicle to use or where the Transport Authorities themselves prohibit the use of the vehicle due to its defective condi tion and cancel the Certificate of Fitness or suspend it, the person concerned may surrender the Certificate of Regis tration and other documents like permit etc., and seek the permission of the Transport Authorities to waive the payment of tax on the ground that no proof of non user was necessary and as such payment of tax on the one hand and an automatic application for refund on the ' other would be a needless ritualistic formality and if the permission sought for is granted, he need not pay the tax. In all other cases the only course left open is for the person_concerned, to pay the tax in advance and thereafter apply to the Authorities and obtain refund of tax after proving that the vehicle was not fit for use on the roads and had infact not been made use of. The principle underlying the Taxation Act is that every motor vehicle issued a Certificate of Registration is to be deemed a potential user of the roads all through the time the Certificate of Registration is current and there fore liable to pay tax under Section 3(1) read with Section 4. If however, the vehicle had not made use of the roads because it could not be put on the roads due to repairs, even though the Certificate of Registration was current, the owner or person concerned has to seek for and obtain refund of the tax paid in advance after satisfying the Authorities about the truth of his claim. It is not for the Transport Authorities to justify the demand for tax by proving that the vehicle is in a fit condition and can be put to use on the roads or that it had plied on the roads without payment of tax. It would be absolutely impossible for the State to keep monitoring all the vehicles and prove that each and every registered vehicle is in a fit condition and would be making use of the roads and is therefore liable to pay the tax. For that reason, the State has made the payment of tax compulsory on every registered vehicle and that too in advance and has at the same time provided for the grant of refund of tax whenever the person paying the tax has not made use of the roads by plying the vehicle and substanti ates his claim by proper proof. Any view to the contrary would defeat the purpose and intent of the Taxation Act and would also afford scope and opportunity for some of the persons liable to pay the tax to ply the vehicle unlawfully without payment of tax and later on justify their non pay ment by setting up a plea that the vehicle was in repair for a continuous period of over a month or the whole of a quar ter, half year or year as they choose to claim. In view of a legislative change in the Act we do not find any 493 necessity to go into the question whether the words "kept in the State of Mysore" should be construed as "kept for use in the State of Mysore ". It may be remembered that this con struction found favour with the Karnataka High Court in its decision in Naraina Reddy 's case and Reddappa 's case. The Words "kept in the State of Mysore" and the proviso to the Section have been omitted by Karnataka Act 38 of 1976 and therefore, the discussion on that point will only be of academic value now. It is for that reason we do not feel it necessary to go into that aspect of the matter. The next factor for consideration is whether the impact of Section 38 of the on Section 22 of the said Act will have its ramifications on Section 3(1) and the Explanation of the Taxation Act. Section 22 deals with the necessity for registration of motor vehicles and mandates that no person shall drive a motor vehicle and no owner shall cause or permit his motor vehicle to be driven in any public place or in any other place for the purpose of carry ing passengers or goods unless the vehicle is registered in accordance with Chapter 3 of the Act and the Certificate of Registration granted has not been suspended or cancelled. Section 38 on the other hand deals with the Certificate of Fitness for transport vehicles. This section lays down that a transport vehicles shall not be deemed to be validly registered for the purposes of Section 22, unless it carries a Certificate of Fitness in the prescribed form issued by the Prescribed Authority. The very terms of Section 38 limit the deeming effect caused by the absence of a Certificate of Fitness to the rights conferred under Section 22 pursuant to the registration of a vehicle. There is therefore, no scope for extending the deeming provision in Section 38 to Section 3(1) and the Explanation thereto of the Taxation Act. In fact the Explanation to Section 3(1) clearly sets out that the deeming effect conferred by it will have overriding force on Section 3(1). This is made clear by the words "for the purposes of this Act" contained in the Explanation. The operative force of the deeming provision contained in Sec tion 38 being restricted to Section 22 of the has been correctly noticed by the Karnataka High Court in Naraina Reddy 's case and the High Court has held at page 322 as follows: "The legal fiction created by Section 38 of the is only for the purpose of section 22 of that Act and cannot be extended to the Taxation Act." Though the High Court has taken the correct view, it has not gone into the reason underlying the restriction of the operation of 494 Section 38 to Section 22 of the Motor Vehicle Tax Act alone. The reason is that Section 38 has been provided so as to effectively prevent an owner or person having possession or control of a motor vehicle from carrying passengers or goods in it inspite of the vehicle not being in a fit condition and not carrying a certificate of fitness and thereby endan gering the safety of the public. The deeming effect on the certificate of registration of a vehicle when it is not carrying a certificate of fitness is to ensure that the safety of the public is not jeopardised by anyone driving or using a vehicle without a certificate of fitness for carry ing passengers or goods and trying to take umbrage for the violation by contending that he was entitled to make such use because of the certificate of registration issued to the vehicle being current. It has also to be noticed that Sec tion 38 contains a safety measure while Section 3 of the Taxation Act pertains to a compensatory measure. The former cannot therefore limit the operation of the latter i.e. Section 3(1) of the Taxation Act and the explanation there to. In the light of our discussion it follows that Section 3(1) of the Taxation Act and its Explanation have to be construed on their own force and not with reference to Section 38 of the . The combined effect of Sections 3, 4 and 7 of the Act is that the State is empow ered to levy tax on all motor vehicles which are suitably designed and manufactured for use on the roads. The Explana tion provides that every motor vehicle of which a Certifi cate of Registration is current shall be deemed to be a vehicle suitable for use on roads and liable to pay tax as a potential user of the roads at the rates prescribed by the Government. Section 4 enjoins the tax levied under Section 3 to be paid in advance. Section 7 provides that in the event of a vehicle for which tax has been paid in advance under Section 4 had not been made use of for the whole of the period for which tax has been paid or of a continuous part thereof, not being less than one calendar month the person paying the tax may apply to the Prescribed Authority and obtain appropriate refund as prescribed by the Rules after producing proof in support of the claim for refund. In the light. of this position the decision rendered in Reddappa 's case is not correct law. Admittedly the respondents had failed to pay the tax in advance in compliance with Sections 3 and 4. They had also failed to inform the Transport Authorities that the goods vehicle was not fit for use on the roads and had been left in a workshop during the period 1.10.72 to 31.3.74 and they had also failed to surrender the Certificate of Registration and the Certificate of Fitness which was in force till 28.11.72. In such circumstances the Trial Court was in error in acquitting them and 495 the High Court too was not justified in dismissing in limine the appeal against acquittal. Since the transfer of the vehicle had not been reported to the Authorities the first respondent was as much liable as the second respondent to pay the arrears of tax that was demanded. However, as stated at the outset itself the State is not anxious to pursue the prosecution against the respondents. Moreover, it is reported that the second respondent has died during the pendency of the appeal. In the result the appeal succeeds in so far as the contentions of the State regarding the scope and effect of Section 3(1) and the Explanation of the Taxation Act, 1957, are concerned, but the acquittal of respondents 1 and 2 will remain undisturbed. H.L.C. Appeal allowed.

The first respondent sold his lorry to the second re spondent but did not report the transfer to the Transport Authority and the latter issued a demand notice for payment of tax due under section 3(1) of the Mysore Motor Vehicles Taxa tion Act, 1957. The first respondent refuted his liability on the ground of transfer of the vehicle, and the second respondent, on the plea that the vehicle was not in a fit condition and lying in a workshop during the relevant peri od. A complaint was filed against them under section 3(1) read with section 12(1)(a) of the Act. The Magistrate held that since the first respondent had sold the vehicle he was not liable to pay the tax and, likewise, the second respondent too was not liable since the vehicle did not have a fitness certifi cate and had been left in a workshop for repairs. The Magis trate further held that the currency of the Registration Certificate during the relevant period did not alter the situation in any manner because it could not have currency so as to attract tax liability when the vehicle was not covered by a valid Certificate of Fitness. The appeal filed against the acquittal of the respondents was dismissed in limine by the High Court. Holding that the Trial Court was in error in acquitting the respondents and the High Court was not justified in dismissing in limine the appeal against acquittal, and, allowing the appeal, this Court, HELD: The expression 'suitable for use on roads ' occur ring in section 3(1) of the Act and its Explanation must have the same meaning as in Entry 57 of the State List and as con strued by this Court in Automobile Transport Ltd. vs State of Rajasthan; [1963] 1 S.C.R. 491. The resultant position that emerges is that section 3(1) confers a right upon the State to levy 482 a tax on all motor vehicles which are suitably designed for use on roads at prescribed rates without reference to the road worthy condition of the vehicle or otherwise. Section 4 enjoins every registered owner or person having possession or control of the motor vehicle to pay the tax in advance. The Explanation to section 3(1) contains a deeming provision and its effect is that as long as the Certificate of Registra tion of a motor vehicle is current, it must be deemed to be a vehicle suitable for use on the roads. The inevitable consequence of the Explanation would be that the owner or a person having control or possession of a motor vehicle is statutorily obliged to pay the tax in advance for the motor vehicle as long as the Certificate of Registration is cur rent irrespective of the condition of the vehicle for use on the roads and irrespective of whether the vehicle had a Certificate of Fitness with concurrent validity or not. [490B C; E G] State vs Boodi Reddappa, [1975]1 Karnataka Law Journal 206, overruled. V. Naraina Reddy vs Commissioner of Transport, , B.G. Bhagwan vs Regional Transport Officer, A.I.R. , discussed and distin guished. Automobile Transport Ltd. vs State of Rajasthan, [1963] 1 SCR 491 referred to. (ii) The scheme of the Act is such that the tax due on a motor vehicle has got to be paid in terms of section 3 at the prescribed rate, and in advance, and, the liability to pay tax continues as long as the Certificate of Registration is current; but, if it so happens that inspite of the Certifi cate of Registration being current, the vehicle had not actually been put to use for the whole of the period or a continuous part thereof, not being less than one calendar month, the person paying the tax should apply to the Pre scribed Authority under section 7 and obtain a refund of the tax for the appropriate period after satisfying the Authorities about the truth and genuineness of his claim. Sections 3 and 4 are absolute in their terms and the liability to pay the tax in advance is not dependent upon the vehicle being covered by a Certificate of Fitness or not. Even if the vehicle was not in a road worthy condition and could not be put to use on the roads without the necessary repairs being carried out, the owner or person having possession or con trol of a vehicle is enjoined to pay the tax on the vehicle and then seek a refund. The principle underlying the Act is that every motor vehicle which has been issued a Certificate of Registration is to be deemed a potential user of the roads all through the time the Certificate of Registration is current and therefore liable to pay tax under section 3(1) read with section 4. [491E H; 492C D] 483 (iii) It is not for the Transport Authorities to justify the demand for tax by .proving that the vehicle is in a fit condition and can be put to use on the roads or that it had plied on the roads without payment of tax. It would be absolutely impossible for the State to keep monitoring all the vehicles and prove that each and every registered vehi cle is in a fit condition and would be making use of the roads and is therefore liable to pay the tax. For that reason, the State has made the payment of tax compulsory on every registered vehicle and that too in advance and has at the same time provided for the grant of refund of tax when ever the person paying the tax has not made use of the roads by plying the vehicle and substantiates his claim by proper proof. Any view to the contrary would defeat the purpose and intent of the Act. [492E G] (iv) Section 3(1) of the Act and the Explanation thereto have to be construed on their own force and not with refer ence to sections 22 or 38 of the .Motor Vehicles Act. Section 22 of that Act deals with the necessity for registration of motor vehicles and mandates that no person shall drive a motor vehicle and no owner shall cause or permit his motor vehicle to be driven in any public place or in any other place for the purpose of carrying passengers or goods unless the vehicle is registered in accordance with Chapter 3 of that Act and the Certificate of Registration granted has not been suspended or cancelled. Section 38 of that Act on the other hand deals with the Certificate of Fitness for trans port vehicles. This Section lays down that a transport vehicle shall not be deemed to be validly registered for the purposes of section 22, unless it carries a Certificate of Fit ness in the prescribed form issued by the Prescribed Author ity. The very terms of section 38 limit the deeming effect caused by the absence of a Certificate of Fitness to the rights conferred under section 22 pursuant to the registration of a vehicle. There is therefore, no scope for extending the deeming provision in section 38 of the Motor Vehicles Act to s.3(1) and the Explanation thereto of the Act. In fact the Explanation to s.3(1) clearly sets out that the deeming effect conferred by it will have overriding force on section 3(1). This is made clear by the words "for the purposes of this Act" contained in the Explanation. The reason is that section 38 of the Motor Vehicles Act has been provided so as to effectively prevent an owner or person having possession or control of a motor vehicle from carrying passengers or goods in it inspire of the vehicle not being in a fit condition and not carrying a Certificate of Fitness and thereby endan gering the safety of the public. The deeming effect on the Certificate of Registration of a vehicle when it is not carrying a Certificate of Fitness is to ensure that the safety of the public is not jeopardised , by any one driv ing or using a vehicle without a Certificate of Fitness for 484 carrying passengers or goods and trying to take umbrage for the violation by contending that he was entitled to make such use because of the Certificate of Registration issued to the vehicle being current. It has also to be noticed that section 38 of the Motor Vehicles Act contains a safety measure while section 3 of the Act pertains to a compensatory measure. The former cannot therefore limit the operation of the latter. [493C43; 494A C]

Appeal No. 2315 of 1966. Appeal from the judgment and order, dated August 25, 1965 of the Madras High Court in Tax Case No. 216 of 1962 (Reference No. 121 of 1962). Sukumar Mitra and R. N. Sachthey, for the appellant. T. A. Ramachandran, for the respondent. The Judgment of the Court was delivered by Shah, J. Arunachallam Chettiar whom will hereinafter be called "A Senior" had three wives Valami Achi, Lakshmi Achi and Nachiar Achi. By Valami Achi he had a son who was also called Arunachallam We will call him "A. Junior". A Junior married Umayal Achi. A Senior, A. Junior and the wives of the two members formed a joint Hindu family, possessing a large estate in Ceylon. A. Junior died on July, 9, 1934. A Senior died on February 1 23, 1.938, leaving heirs running his two wives Lakshmi Achi and Nachiar Achi and his son 's widow Umayal Achi. The Revenue authorities in Ceylon levied Rs. 221.743 as estate duty in respect of the estate of A. Junior and Rs. 6,33,601.76 in respect of the estate of A. Senior. The levy was challenged by the three widows and the dispute was carried to the Judicial Committee of the Privy Council. The Board set aside the entire levy. In 1957 the Government of Ceylon deposited in Court the duty which was levied together with Rs. 7,97,072 as interest due from the date on which the estate duty was collected. After the death of A. Senior, there were disputes between the three widows Lakshman Achi, Nachiar Achi and Uniayal Achi, and each widow adopted a son to her deceased husband. A suit for, partition of the joint family property was then filed in the Civil Court at Deokotai. Under a settlement reached on February 17, 1949 between the three widows and the adopted son of A. Junior (whom we will hereinafter call the assessee) was held entitled, to 5/24th share in the estate. This appeal relates to the liability to income tax on the share of the assessee in the amount of interest paid on the estate duty which was refunded by the Ceylon Government after the Judicial, Committee set aside the order levying the estate duty. The Income Tax officer, karaikudi brought to tax the, 'assessees share of the amount interest received from the Ceylon Government on the estate duty. The Income tax Officer rejected the, contention of the assessee that the receipt was of a capital nature,: and that in any case it was a casual receipt and on that account 309 exempt from tax under section 4(3) (vii) of the Income tax Act, 1922The order was confirmed by the Appellate Assistant Commissioner. The Income tax Appellate Tribunal, however, reversed the order holding that the amount of interest received by the assessee was of a capital nature and was on that account not liable to tax. The Tribunal referred the following question to the High Court of Madras under section 66(1) of the Income tax Act, 1922 "Whether the sum of Rs. 1,20,830 or Any part thereof is assessable to tax ?" The High Court was of the opinion that the assessee 's share in the interest attributable to the period ending February 17, 1947 was not taxable, but the 'share attributable to the period between that date and the date of payment by the Ceylon Government was taxable. Against that decision, with certificate granted by the High Court the Commissioner of Income tax has appealed to this Court. The assessee has not appealed against the opinion insofar as it was held that the receipt to the extent to which it related to a period subsequent to February 17, 1947 is taxable. In the view of. the High Court the amounts paid as estate duty must be deemed in law to have come from the joint family, estate and on severance of the joint family status,in February, 1947, each adopted son received his share in the estate then existing as capital. Counsel for the Revenue countended that the High Court erred in holding that the assessee 's share in the amount of interest received from the Ceylon Government Was of the nature of capital. Counsel submitted that the character of the receipt which was revenue when received by the joint family, could not be altered when it was divided between the members of the family. Counsel also contended that this Court has held that the share in the amount of interest on estate duty received by the son adopted by Nachiar Achi was liable to be taxed as income: RM. Ramanathan Chettiar vs Commissioner of Income tax Madras( ') . But that case has no relevance here. for the only argument advanced before the Tribunal and the High Court in that case was. that the receipt was of a casual,and non recurring nature and was on that account exempt from tax under section 4(3) (vii) of the Income tax Act. This Court negatived the contention. The Court declined to consider the argument advanced at the Bar that the share allotted to the adopted son of Nachiar Achi being a share in the estate of A. Senior was of the nature of capital, because the question did not arise out of the order made by the Income tax Appellate Tribunal and was not made the subject matter of 'lie reference. In RM. Ramanathan (1) L7Sup. CI.(NP)70 5 310 Chettiar 's case(1) the question argued before the High Court in this case was not raised before the income tax Appellate Tribunal and was not decided. After the death of A. Senior the property was held by the three widows as members of the Hindu Undevided family. Under the Hindu Law it is not predicted of a Hindu Joint family that there must be a male member in existence. Even after the death of the sole male member, so long as the property which was originally of the Joint Hindu family remains in the hands of the widows of the members of the family and is not divided among them, the joint family continues. Payment of the estate duty was doubtless made out of the joint family fund and the interest which accrued due, also acquired the character of joint family property when received. The joint family status came to an end only on February 17, 1947. On the severance of the joint status the assessee became entitled to a share in the family estate. The amount of interest on the estate duty accrued as income to the joint family but it was income of the joint family and not of the individual members. But when a share out of the estate which included the interest on estate duty was received by the assessee it had not the character of income. Once the. income was received by the joint family, the amount lost its character of income: it became merged in the joint family assets and became the capital 'Of the family. The share received by the assessee was therefore a share in the capital of the family. The share in the joint family property which included interest on the estate duty which accrued prior to February 17, 1947 was rightly held by the High Court to be not of the nature of revenue and accordingly not taxable. We express no opinion on the correctness of the finding of the High Court that the interest accrued due after February 17, 1947, must be regarded as income to the extent of the share of each of the members of the family. The appeal fails and is dismissed with costs. R.K.P.S. Appeal dismissed.

The respondent appeared in the Intermediate examination and passed, but the appellant, instead of declaring her result, addressed a letter on May 24, 1961, to the Principal of the college in which the Respondent was studying, making enquiries regarding the respondent 's attendance. According to the regulations, a candidate must attend 75% of the lectures given in each subject. The Principal, by her letter dated June 14, 1961, replied that the respondent was at one time short of attendance, that she made good the 'shortage in all subjects except one, but the shortage in that subject was due to the fact that lectures Were not given in that subject the lecturer having been on leave. By its letter dated July 6, 1961, the appellant cancelled the respondent 's result and no reference was made to the Principal 's letter in the appellant 's letter. The respondent thereupon filed a writ petition challenging the appellant 's order cancelling the result, and the High Court allowed the petition. In appeal to this Court, HELD : The appellant should have given an opportunity to the respondent to present her case and pursuade the appellant not to cancel her result. [269 C] Whether a duty arises in a particular case to issue a show cause notice before inflicting a penalty does not depend on the authority 's satisfaction that the person to be penalised has no defence but On the nature of the order proposed to be passed. In the present case, the impugned order imposed a penalty on the respondent as she was denied the fruits of her labour, and when passing it, the appellant was exercising quasi judicial functions. [269 D F]

iminal Appeal No. 5 of 1963. Appeal by special leave from the judgment and order dated June 21, 1962 of the Gujarat High Court in Criminal Appeal No. 383 of 1961. D. R. Prem and B. R. G. K. Achar, for the appellant. M. V. Goswami, for the respondent. April 7, 1962. The Judgment of the Court was delivered by HIDAYATULLAH, J. On June 21, 1960 at 5 50 A.M. the Hi Inspector of Factories, Bhavnagar, visited Saurashtra Metal and Mechanical Works, Wadhwan City, which is a factory within the meaning of section 2(m)(1) of the . He found even workmen working on a machine and on examining the notice of period of work for adult workers and the register of workers he found that three of the workmen belonged to a group which was expected to begin work from 7 A.M. He commenced proceedings under section 63 of the against the respondent Mr. Kansara Manilal Bhikhalal as the occupier/manager of the factory, after issuing notice to him to show cause. He asked for enhanced penalty under section 94 of the because the said Mr. Manilal Bhikhalal was convicted on a previous occasion in three cases. As three workmen were concerned three separate complaints were filed in the Court of the Judicial Magistrate, First Class, Wadhwan City. The defence of the respondent was that he was not the occupier and manager of the factory. It may be pointed out that one Mr. Dangi and the respondent are partners. They have another factory at Dharangadhra and the defence was that Mr. Bhikhalal was manager at the Dharangadhra factory 658 and Mr. Dangi was manager at Wadhwan. Another defence. was that a machine had gone out of order the previous day and after it was repaired work was started a little earlier the: next day, because production had suffered and goods were required. The Inspector, it was stated, was informed by a letter (Ext.11) written on the 20th about the change of timing though the letter, unfortunately, did not reach the Inspector till the 22nd. It was admitted that this change in the hours of work was not notified and displayed as required by section 61(1). It was urged that section 61(10) permitted a change to be made in the system of work in a factory and as this provision was fully complied with, there was no offence. The Judicial Magistrate did not accept these defences. According to him, Mr. Dangi 's letter (Ext. 15) showed that the respondent was the occupier and the manager of the factory at Wadhwan. On the second defence the Magistrate was of the opinion that the hours of work could not be changed without the permission of the Inspector of Factories under sub section (10) of section 61. The contention on behalf of the respondent that this being the first change it was not necessary to wait for one week before making another change, was not accepted because it was held that the factory manager must always wait for one week before introducing a change. The respondent was, therefore, convicted under section 63 of the in respect of three offences and under section 94, enhanced punishment was imposed upon him by ordering him to pay a fine of Rs. 100 in respect of each offence. On appeal the Sessions Judge of Surendranagar ordered the acquittal of the respondent. The learned Sessions Judge held that the second part of section 61(10) applied to a case of second or subsequent change and this being the first change it did not fall within the second part. According to the Sessions Judge, it fell in the first part of the sub section and the change could not be said to have been effected in breach of that part since the Inspector of Factories was informed about the change. The learned Sessions Judge was also of the opinion that section 117 of the protected the action because it was bonafide. The conviction and sentence were accordingly set aside. The State of Gujarat appealed against the acquittal but was unsuccessful. A Division Bench of the High Court which heard the appeal agreed with the Sessions Judge in his interpretation of section 61 (10) and did not express any opinion on section 117 of the Act. In this appeal filed by special leave of this Court these two points have again arisen for our consideration. The scheme of the bearing upon the present matter may now be examined. It is convenient to do so 659 in the reverse order. Section 92 is a section providing generally for penalties and section 94 provides for enhanced penalty after previous conviction. These sections prescribe penalties for contravention of any of the provisions of the Act or of any rule made or of any order in writing given thereunder. The breach here is stated to be of section 63 of the Act which lays down that the hours of work must correspond with notice required to be displayed under section 61 and the register directed to be maintained under section 62. It provides: "section 63. Hours of work to correspond with notice under section 61 and register under section 62 No adult worker shall be required or allowed to work in any factory otherwise than in accordance with the notice of periods of work for adults displayed in the factory and the entries made beforehand against his name in the register of adult workers of the factory. " Section 61 deals with the notice of periods of work for adults. It is divided into 10 sub sections of which sub sections (1), (2) and (10) alone are relevant here. They are as fol lows: "61. Notice of periods of work for adults. (1) There shall be displayed and correctly maintained in every factory in accordance with the provisions of sub section (2) of section 108, a notice of periods of work for adults showing clearly for every day the periods during which adult workers may be required to work. (2) The periods shown in the notice required by subsection (1) shall be fixed beforehand in accordance with the following provisions of this section, and shall be such that workers working for those periods would not be working in contravention of any of the provisions of sections 51, 52, 54, 55, 56 and 58. (10) Any proposed change in the system of work in any factory which will necessitate a change in the notice referred to in sub section (1) shall be notified to the Inspector in duplicate before the change is made, and except with the previous sanction of the Inspector, no such change shall be made until one week has elapsed since the last change." 660 Section 62 next provides that a register of adult workers shall be maintained in which will be shown (a) name of each adult workers in the factory; (b) the nature of his work; (c) the group, if any, in which he is included; (d) where his group works on shifts, the relay to which he is allotted and (e) such be prescribed. Section 51 to which second sub section of section 61, already hours week; section 52 refers to weekly fixes a maximum of 9 hours a day interval for rest and prescribes that exceed 5 hours at one stretch; section 56 fixes generally that the period of work and rest should be spread over 10 1/2 hours and section 58 prohibits the overlapping of shifts. The Sessions Judge and the High Court concurred in holding that the provisions of sub section (10) were complied with and there was thus no offence under section 63. They treated this as a change in the system of work in the factory necessitating a change in the notice referred to in sub G. (1) and held that as the change was notified to the Inspector before it was made there was nothing illegal in employing the three workers before their shift commenced. They also held that as this was the first change there was no need to wait for a week or to obtain the previous sanction of the Inspector as required by the latter part of the tenth sub section. With due respect to the High Court, we do not agree that this sort of case is contemplated by the tenth :sub section. That sub section speaks of "change in the system of work in any factory which will necessitate a change in the notice" and these words refer not to a departure from the notice but to a change in the system, a change which would require the notice to be recast. The notice shows "the periods during which adult workers may be required to work" and these words are descriptive of the scheme of the employment of labour in the factory but are not apt to contemplate the time of employment for each individual worker. That can only be found by referring to the register which goes with the notice. Sub section (1) makes no mention of the change in the register but of the change in the notice and thereby indicates that the change which is contemplated is an overall change affecting a whole group and not an individual worker. The latter part of the sub section also points in the same direction because it implies that such changes should not be frequent and if the change is for the second time it should not be made until one week has elapsed since the last change. This cannot possibly refer to a casual change in the hours of work of an individual worker. 661 The learned counsel sought to justify the action by referring to section 59 which provides that extra wages for over time shall be paid. No such claim was made earlier in this case and justification was sought only from the provisions of sub section (10) of section 61 and section 117 of the Act. Section 59 cannot be considered in isolation: It has to be read with section 64, where the State Government has been given the power to make exempting rules '. Under those rules a departure from the provisions of sections 51, 52, 55 and 56 can be made but only in accordance with the rules so framed; as for example, overtime work may be taken from workers engaged on urgent repairs in spite of the provisions of sections 51, 54, 55 and 56, but must be in accordance with rule 91 and the urgency which is referred to in this section and the rule is 'an urgency relating to the factory and not an urgency felt by the constituents of the factory '. A departure from the hours of work as laid down in section 61(2) can only be made in those cases in which the exempting provisions of the rules cover the case and not otherwise. It would, therefore, appear that the offence which was committed in the case was the employment of workers contrary to the notice displayed under section 61(1) without any justi fication by reason of any exempting provision. The respon dent was not saved from the operation of section 63, which is peremptory, by reason of anything contained in sub section (10) and the sending of the letter to the Inspector of Factories was therefore mis conceived. It was contended before us that the respondent was not the occupier/manager of the factory and, in any event, section 117 of the Act protected him because he was not present there and his action was bonafide. A: , to the first part of this argument it is sufficient to say that the Magistrate found that he was the occupier and manager. The letter of Mr. Dangi (Ext. 15) quite clearly establishes this. The argument under, section 117 of the Act requires a more detailed consideration. That section reads as follows: "17. Protection to persons acting under this Act. 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 under this Act. " It is argued by Mr. M. V. Goswami on the authority of cases about to be mentioned that this section gives protection against prosecution in respect of anything which is done in good faith under the Act. He referred us to two decisions of 662 Thomas, C. J. in Ranjit Singh vs Emperor(1) and Ranjit Singh vs Emperor,(2) in which the learned Chief Justice observes that the language of section 117 is not limited to the inspecting staff but is wide enough to include occupiers, managers, foremen, workers etc. Mr. Goswami also refers to two decisions of the Andhra Pradesh High Court in Public Prosecutor vs Mangaldas Thakker(3) and In re. P. Lakshmaiah Naidu(1) in which the same view has been expressed. Mr. D. R. Prem on behalf of the State of Gujarat relies on The Public Prosecutor vs Vattem Venkatramayya(5) and Provincial Government, C.P. and Berar vs Seth Chapsi Dhanji Oswal Bhate and Anr(6). Reference was also made to Superinte dent and Remembrancer of Legal Affairs, Bengal vs H. E. Watson(7). It is not necessary to refer to the lines of reasoning adopted in these cases. The language of this protecting clause is not limited to officers but is made wide to include "any person". It thus gives protection not only to an officer doing or intending to do something in pursuance or execution of this Act but also to "any person". But the critical words are "any thing * * * done or intended to be done" under the Act. The protection conferred can only be claimed by a person who can plead that he was required to do or omit to do something under the Act or that he intended to comply with any of its provisions. It cannot confer immunity in respect of actions which are not done under the Act but are done contrary to it. Even assuming that an act includes an omission as stated in the General Clauses Act, the omission also must be one which is enjoined by the Act. It is not sufficient to ,say that the act was honest. That would bring it only within the words "good faith". It is necessary further to establish that what is complained of is something which the Act requires should be done or should be omitted to be done. There must be a compliance or an intended compliance with a provision of the Act, before the protection can be claimed. The section cannot cover a case of a breach or an intended breach of the Act however honest the conduct otherwise. In this connection it is necessary to point out, as was done in the Nagpur case above referred to, that the occupier and manager are exempted from liability in certain cases men tioned in section 101. Where an occupier or a manager is charged (1) A.I.R. (1943) Oudh 308. (2) A.I.R. (1943) Oudh 311. (3) A.I.R. (1958) Andh. Pra. 79. (4) I.L.R. (5) A.I.R. (1963) Andh. Pra. 106). (6) I.L.R. (1938) Nag. 408. (7) 663 with an offence he is entitled to make a complaint in his own turn against any person who was the actual offender and on proof of the commission of the offence by such person the occupier or the manager is absolved from liability. This shows that compliance with the peremptory provisions of the Act is essential and unless the occupier or the manager brings the real offender to book he must bear the responsibility. Such a provision largely excludes the operation of section 117 in respect of persons guilty of a breach of the provisions of the Act. It is not necessary that means rea must always be established as has been said in some of the cases above referred to. The responsibility exists without a guilty mind. An adequate safeguard, however, exists in section 101 analysed above and the occupier and manager can save themselves if they prove that they are not the real offenders but who, in fact, No such defence was offered here. For these reasons we are of the opinion that the respondent is not saved by section 117. We, accordingly, set aside his, acquittal and convict him under section 63 read with section 94 of the . He is ,sentenced to pay a fine of Rs. 501/ in respect of each of the offences, or in default to undergo 15 days ' simple imprisonment.

The appellant held shares in a company the Board of Directors of which by a resolution dated August 30, 1950 declared interim dividends. The appellant received a dividend warrant dated December 28, 1950 for a certain amount being the interim dividend in respect of its share holdings in the company. The appellant 's year of accounting had ended on September 30, 1950. The revenue authorities brought to tax the amount so received with other income of the appellant in the assessment year 1952 53 after rejecting the objection of the appellant that it represented income for the assessment year 1951 52. In a reference made under section 66(1) of the Indian Income tax Act, 1922, the High Court agreed with the Revenue authority that the dividend was in view of article 95 of the First Schedule to Indian Companies Act, 1913, liable to be included in the assessment year 1952 53. Held: A declaration of dividend by a company in a general meeting gives rise to a debt. In re Severn and Wile and Severn Bridge Railway Co. , referred to. But a mere resolution of the Directors resolving to pay a certain amount as interim dividend does not create a debt enforceable against the company for it is always open to the Directors to rescind the resolution before payment of the dividend. The Lagunas Nitrate Company (Ltd.) vs J. Henry Schroeder and Company, 17 Times Law Reports 625, referred to. Commissioner of Income tax, Bombay vs Laxmidas Mutraj Khatau, , distinguished. (ii) The test applied by Chagla C. J. (in C.I.T., Bombay vs Laxmidas Mulraj Khatau, that because the ,dividend becomes due to the assessee who has the right to deal with or dispose of the same in any manner he likes, it is taxable in the year in which it is declared cannot be regarded as correct. (iii) Dividend may he said to be paid within the meaning of section 16(2) of the Indian Income tax Act, 1922 when the company discharges its liability and makes the amount thereof unconditionally available to the member entitled thereto. Purshottamdas Thakurdas vs C.I.T., Bombay, , referred to. I P(1)) 1 S.C.I 17 (a) 580 (iv) The declaration of interim dividend capable of being rescinded by the directors does not operate as a payment under section 16(2) of the Income tax Act before the company has parted 'with the amount of dividend or discharged its obligation by some other act.

Civil Appeal No. 57 of 1951. Appeal from a judgment dated 18th May, 1948, of the High Court of East Punjab at Simla (Khosla and Teja Singh JJ.) in Letters Patent Appeal No. 189 of 1946 arising out of the judgment dated 11 th February, 1946, of the Senior Subordinate Judge, Ambala. The facts are set out in the judgment. Gopinath Kunzru (B.C. Misra, with him) for the appel lants. Rang Behari Lal (N.C. Sen, with him) for the respond ents. March 7. The judgment of the Court was delivered by MUKHERJEA J. This appeal is on behalf of the judgment debtor in a proceeding for execution of a money decree and it is directed against the judgment of a Letters Patent Bench of the Punjab High Court dated 18th of May, 1949. by which the learned Judges 546 affirmed, in appeal, a decision of a single Judge of that court dated 29th October, 1946. The original order against which the appeal was taken to the High Court was made by the Senior Subordinate Judge, Ambala, in Execution Case No. 18 of 1945 dismissing the objections preferred by the appel lants under section 47 of the Civil Procedure Code. To appreciate the contentions that have been raised in this appeal, it would be necessary to give a short narrative of the material events in their chronological order. On September 30, 1925, Baldev Das, the father of the appel lants, who was, at that time the manager of a joint Hindu family, consisting of himself and his sons, executed a mortgage bond in favour of Mst. Naraini, the original re spondent No. 1, and another person named Talok Chand, by which certain movable properties belonging to the joint family were hypothecated to secure a loan of Rs 16,000. On April 16, 1928, the appellants along with a minor brother of theirs named Sumer Chand filed a suit: being Suit No. 23 of 1928 in the Court of the Subordinate Judge of Shahjahanpur against their father Baldev Das for partition of the joint family properties. The suit culminated in a final decree for partition on 20th July, 1928, and the joint family properties were divided by metes and bounds and separate possession was taken by the father and the sons. On 29th September, 1934, Mst. Naraini filed a suit in the Court of the Senior Subordinate Judge, Ambala, against Baldev Das for recovery of a sum of Rs. 12;500 only on the basis of the mortgage bond referred to above. It was stated in the plaint that the money was borrowed by the defendant as manager of a joint Hindu family and the plaintiff prayed for a decree against the mortgaged property as well as against the joint family. On 18th December, 1934, the appellants made an application before the Subordinate Judge under Order I, Rule 10, and Order XXXIV, Rule 1, Civil Procedure Code, praying that they might be added as parties defendants to the suit and the points in issue arising therein might be decided in their presence. It was asserted in the 547 petition that Baldev Das was not the manager of a joint family and that the family properties had been partitioned by a decree of the court, as a result of which the proper ties alleged to be the subject matter of the mortgage were allotted to the share of the petitioners. In reply to this petition, the plaintiff 's counsel stated in court on 7th February, 1935, that his client would give up the claim for a mortgage decree against the properties in suit and would be satisfied only with a money decree against Baldev Das personally. The plaint was amended accordingly, deleting all reference to the joint family and abandoning the claim against the mortgaged property. Upon this the appellants withdrew their application for being made parties to the suit and reserved their right to take proper legal action if and when necessary. On April 17, 1935, Baldev Das died and on 2nd September following the appellants as well as their mother, who figures as respondent No. 5 in this appeal, were brought on the record as legal representatives of Baldev Das. On October 9, 1935, the appellants filed a written statement in which a number of pleas were taken in answer to the plaintiff 's claim and it was asserted in paragraph 10 of the written statement that Baldev Das dealt Badri or specu lative transactions, and if any money was due to the plain tiff at all in connection with such transactions the debt was illegal and immoral and not binding on the family property. On the same day the court recorded an order to the effect that as the plaintiff had given up her claim for a mortgage decree, the legal representatives of the deceased could not be allowed to raise pleas relating to the validity or otherwise of the mortgage. On 20th November, 1935, the parties arrived at a compromise and on the basis of the same, a simple money decree was passed in favour of the plaintiff for the full amount claimed in the suit together with half costs amounting to Rs. 425 annas odd against the estates of Baldev Das in the hands of his legal representa tives. After certain attempts at execution of this decree which did not prove successful, 548 the present application for execution was flied by the decree holder on March 13, 1945, in the court of the Senior Subordinate Judge, Ambala, and in accordance with the prayer contained therein, the court directed the attachment of certain immovable properties consisting of a number of shops in possession of the appellants and situated at a place called Abdullaput. On April 23, 1945, the appellants filed objections under section 47, Civil Procedure Code, and they opposed the attachment of the properties substantially on the ground that those properties did not belong to Baldev Das but were the separate and exclusive properties of the objectors which they obtained on partition with their father long before the decree was passed. It was asserted that these properties could not be made liable for the satisfac tion of the decretal dues which had to be realised under the terms of the decree itself from the estate left by Baldev Das. After hearing the parties and the evidence adduced by them the Subordinate Judge came to the conclusion that there was in fact a partition between Baldev Das and his sons in the year 1928 and as a result of the same, the properties, which were attached at the instance of the decree holder, were allotted to the share of the sons. The decree sought to be executed was obtained after the partition, but it was in respect of a debt which was contracted by the father prior to it. It was held in these circumstances that the separate share of the sons which they obtained on partition was liable under the Hindu law for the pre partition debt of their father if it was not immoral and under section 53 of the Civil Procedure Code the decreeholder was entitled to execute the decree against such properties. As no point was raised by the objectors in their petition alleging that the debt covered by the decree was tainted with immorality, the objections under section 47, Civil Procedure Code, were dismissed. The objectors thereupon took an appeal to the High Court of East Punjab which was heard by Rahman J. sitting singly. The learned judge dismissed the appeal and affirmed the decision of the Subordinate 549 Judge. A further appeal taken to a Division Bench under the Letters Patent was also dismissed and it is the propriety of the judgment of the Letters Patent Bench that has been challenged before us in this appeal. Mr. Kunzru appearing for the appellants put forward a three fold contention in support of the appeal. He contended in the first place that under the terms of the compromise decree the decreeholder could proceed only against the properties of Baldev Das in the hands of his legal represen tatives and no property belonging to the appellants could be made liable for the satisfaction of the decree. The second contention put forward is that as the decree in the present case was obtained after partition of the joint family property between the father and his sons, the separate property of the sons obtained on partition was not liable under Hindu law for the debt of the father. It is urged last of all that in any event if there was any pious obligation on the part of the sons to pay the father 's debt incurred before partition, such obligation could be enforced against the sons, only in a properly constituted suit and not by way of execution of a decree obtained in a suit which was brought against the father alone during his lifetime and to which the sons were made parties only as legal representa tives after the father 's death. As regards the first point, the determination of the question raised by Mr. Kunzru depends upon the construction to be put upon the terms of the compromise decree. The operative portion of the decree as drawn up by the court stands as follows: "It is ordered that the parties having compromised, a decree in accordance with the terms of the compromise be and the same is hereby passed in favour of the plaintiff against the estate of Baldev Das deceased in possession of his legal representatives. It is also ordered that the defendants do also pay Rs. 425 7 0, half costs of the suit. " 71 550 There was no petition of compromise filed by the parties and made part of the decree, but there are on the record two statements, one made by Pannalal, the appellant No. 1, on behalf of himself and his mother, and the other by Lala Haraprasad, the special agent of the plaintiff, setting out terms of the compromise. The terms are worded much in the same manner as in the decree itself and are to the effect that a decree for the amount in suit together with half costs would be awarded against the property of Baldev Das deceased. It is argued by Mr. Kunzru that the expression "estate of Baldev Das deceased" occurring in the decree must mean and refer to the property belonging to Baldev Das at the date of his death and could not include any property which the sons obtained on partition with their father during the father 's lifetime and in respect of which the latter possessed no interest at the time of his death. Stress is laid by the learned counsel in this connection on the fact that when the appellants were brought on the record as legal representatives of their deceased father in the mortgage suit, they specifically asserted in their written statement that there was a partition between them and their father long before the date of the suit as a result of which the hypothecated properties were allotted to them. Upon that the plaintiff definitely abandoned her claim to a mortgage decree or to any relief against the joint family and agreed finally to have a money decree executable against the personal assets of Baldev Das in the hands of his heirs. In these circumstances, it is urged that if it was the intention of the parties that the decreeholder would be entitled to proceed against the separate property of the sons nothing could have been easier than to insert a provi sion to that effect in the compromise decree. There is undoubtedly apparent force in this contention but there is another aspect of the question which requires consideration. The terms of the decree that was passed in this suit, though based on the consent of the parties, are precisely the same as are contemplated by section 52 (1) of the Civil procedure Code. It was a decree for money 551 passed against the legal representatives of a deceased debtor and it provided expressly that the decretal amount was to be realised out of the estate of the deceased in the hands of the legal representatives. It is argued on behalf of the respondent, and we think rightly, that as the decree fulfils the conditions of section 52 (1) of the Civil Proce dure Code, it would attract all the incidents which attach by law to a decree of that character. Consequently the decreeholder would be entitled to call in aid the provision of section 53 of the Code; and if any property in the hands of the sons, other than what they received by inheritance from their father, is liable under the Hindu law to pay the father 's debts, such property could be reached by the de creeholder in execution of the decree by virtue of the provision of section 53 of the Civil Procedure Code. Wheth er the property which the sons obtained on partition during the lifetime of the father is liable for a debt covered by a decree passed after partition and whether section 53 has at all any application to a case of this character are ques tions which we have to determine in connection with the second and the third points raised by appellants. Section 53, Civil Procedure Code, it is admitted, being only a rule of procedure, cannot create or take away any substantive right. It is only when the liability of the sons to pay the debts of their father in certain circumstances exists under the Hindu law, is the operation of the section attracted and not otherwise. The only other question that can possibly arise by reason of the decree being a compromise decree is, whether the parties themselves have, by agreement, excluded the operation of section 53, Civil Procedure Code. It is certainly possible for the parties to agree among themselves that the decree should be executed only against a particular property and no other, but when any statutory right is sought to be contracted out, it is necessary that express words of exclusion must be usedl. Exclusion cannot be in ferred merely from the fact that the compromise made no reference to such right. As nothing was said in the compro mise decree in the present case about the 552 right of the decreeholder to avail herself of other provi sions of the Code which might be available to her in law, we cannot say that the plaintiff has by agreement expressly given up those rights. The first point, therefore, by itself is of no assistance to the appellants. We now come to the other two points raised by Mr. Kunzru and as they are inter connected they can conveniently be taken up together. These points involve consideration of the somewhat vexed question relating to the liability of a son under the Hindu law other than that of the Daybhag school to pay the debts of his father, provided they are not tainted with immorality. In the opinion of the Hindu Smriti writers, debt is not merely a legal obligation, but non payment of debt is a sin, the consequences of which follow the debtor even after his death. A text (1), which is attributed to Brihaspathi, lays down: "He who having received a sum lent or the like does not repay it to the owner, will be born hereafter in the credi tor 's house a slave, a servant, a woman or a quadruped. " There are other texts which say that a person m debt goes to hell. Hindu law givers therefore imposed a pious duty on the descendants of a man including his son, grandson and great grandson to pay off the debts of their ancestor and relieve him of the after death torments consequent on non payment. In the original texts a difference has been made in regard to the obligation resting upon sons, grand sons and great grandsons in this respect. The son is bound to discharge the ancestral debt as if it was his own, to gether with interest and irrespective of any assets that he might have received. The liability of the grandson is much the same except that he has not to pay any interest; but in regard to the great grandson the liability arises only if he received assets from his ancestor. It is now settled by judicial decisions that there is no difference as between son, grandson and great grandson so far as the obligation to pay the debts of the ancestor is concerned; but none of them has any personal (1) Vide Colebrooke 's Digest I, 228, 553 liability in the matter irrespective of receiving any assets (1). The position, therefore, is that the son is not person ally liable for the debt of his father even if the debt was not incurred for an immoral purpose and the obligation is limited to the assets received by him in his share of the joint family property or to his interest in such property and it does not attach to his self acquisitions. The duty being religious or moral, it ceases to exist if the debt is tainted with immorality or vice. According to the text writers, this obligation arises normally on the death of the father; but even during the father 's lifetime the son is obliged to pay his father 's debts in certain exceptional circumstances, e.g., when the father is afflicted with disease or has become insane or too old or has been away from his country for a long time or has suffered civil death by becoming an anchorite (2). It can now be taken to be fairly well settled that the pious liability of the son to pay the debts of his father exists whether the father 1s alive or dead (3). Thus it is open to the father during his lifetime, to effect a transfer of any joint family property including the interests of his sons m the same to pay off an antecedent debt not incurred for family necessity or bene fit, provided it is not tainted with immorality. It is equally open to the creditor to obtain a decree against the father and in execution of the same put up to sale not merely the father 's but also the son 's interest in the joint estate. The creditor can make the sons parties to such suit and obtain an adjudication from the court that the debt was a proper debt payable by the sons. But even if the sons are not made parties, they cannot resist the sale unless they succeed in establishing that the debts were contracted for immoral purposes. These propositions can be said to be well recognised and reasonably beyond the region of controversy(4). All of them, however, (1) Vide Masitullah vs Damodar Prasad, 53 I.A. 204. (2) Vide Mayne 's Hindu Law, 11th edition, p. 408. (3) Vide Brij Narain vs Mangla Prasad, 51 I.A. 129. (4) Vide Girdharee Lall vs Kantoo Lall, 1 I.A. 321; Maddan Thakoor vs Kantoo Lall, 1 I.A, 333; Suraj Bunsi vs Sheo Prasad, 6 I.A.88; Brij Narain vs Mangla Prosad, 51 I.A. 129. 554 have reference to the period when the estate remains joint and there is existence of coparcenership between the father and the son. There is no question that so long as the family remains undivided the father is entitled to alienate, for satisfying his own personal debts not tainted with immorality, the whole of the ancestral estate. A creditor is also entitled to proceed against the entire estate for recovery of a debt taken by the father. The position is somewhat altered when there is a disruption of the joint family by a partition between the father and the sons. The question then arises, whether the sons remain liable for the debt of the father even after the family is divided; and can the creditor proceed against the shares that the sons obtain on partition for realization of his dues either by way of a suit or in execution of a decree obtained against the father alone ? It must be admitted that the law on the subject as developed by judicial decisions has not been always consist ent or uniform and the pronouncements of some of the Judges betray a lack of agreement in their approach to the various questions involved in working out the law. As regards debts contracted by the father after parti tion, there is no dispute that the sons are not liable for such debts. The share which the father receives on partition and which after his death comes to his sons, may certainly, at the hands of the latter, be available to the creditors of the father, but the shares allotted on partition to the sons can never be made liable for the post partition debts of the father (1). The question that is material for our present purpose is, whether the sons can be made liable for an unsecured debt of the father incurred before partition, in respect to which the creditor filed his suit and obtained decree after the partition took place. On this point admit tedly there is divergence of judicial opinion, though the majority of decided cases are in favour of the view that the separated share of a son remains liable even after partition for the pre partition debts of the father which (1) Vide Mayne 's Hindu Law, 11th Edition, 430. 555 are not illegal or immoral (1). The reasons given in support of this view by different Judges are not the same and on the other side there are pronouncements of certain learned Judges, though few in number, expressing the view that once a partition takes place, the obligation of the sons to discharge the debts of their father comes to an end(2). The minority view proceeds upon the footing that the pious obligation of the son is only to his father and corre sponding to this obligation of the son the father has a right to alienate the entire joint property including the son 's interest therein for satisfaction of an antecedent debt not contracted for immoral purposes. What the creditor can do is to avail himself of this right of the father and work it out either by suit or execution proceedings; in other words, the remedy of a father 's simple contract credi tor during the father 's lifetime rests entirely on the right of the father himself to alienate the entire family property for satisfaction of his personal debts. The father loses this right as soon as partition takes place and after that, the creditor cannot occupy a better position or be allowed to assert rights which the father himself could not possess. The reasoning in support of the other view which has been accepted in the majority of the decided cases is thus expressed by Waller J. in his judgment in the Madras Full Bench case(3): "On principle, I can see no reason why a partition should exempt a son 's share from liability for a pre parti tion debt for which it was liable before partition. The creditor advances money to the father on the credit of the joint family property. Why should he be deprived of all but a fraction of his security by a transaction to which he was not a party and of which he (1) Vide Subramanya vs Sabapathi, ; Anna bat vs Shivappa, ; Jawahar Singh vs parduman, 14 Lab. 399; Atul Krishna vs Lala Nandanji. 14 Pat. 732 (F.B.); Bankey Lal vs Durga All 868 (F.B.); Raghunandan vs Matiram, 6 Luck. 497 (F.B.). (2) Vide Krishnaswami, vs Ramaswami, ; V.P. Venkanna vs V.S. Deekshatulu, ; Vide also the dissentient judgment of Ayyangar J. in Subramanya vs Sabapa thi, (3)Vide Subramanya vs Sabapathi, at 369 (F.B.). 556 was not aware ? and what becomes of the son 's pious obliga tion ? It was binding as regards the particular debt before partition; does it cease to apply to that debt simply be cause there has been a partition ?" The first part of the observation of the learned Judge does not impress us very much. An unsecured creditor, who has lent money to the father, does not acquire any lien or charge over the family property, and no question of his security being diminished, at all arises. In spite of his having borrowed money the father remains entitled to alien ate the property and a mere expectation of the creditor however reasonable it may be, cannot be guaranteed by law so long as he does not take steps necessary in law to give him adequate protection. The extent of the pious obligation referred to in the latter part of the observation of the learned Judge certainly requires careful consideration. We do not think that it is quite correct to say that the credi tor 's claim is based entirely upon the father 's power of dealing with the son 's interest in the joint estate. The father 's right of alienating the family property for payment of his just debts may be one of the consequences of the pious obligation which the Hindu law imposes upon the sons or one of the means of enforcing it, but it is certainly not the measure of the entire obligation. As we have said already, according to the strict Hindu theory, the obliga tion of the sons to pay the father 's debts normally arises when the father is dead, disabled or unheard of for a long time. No question of alienation of the family property by the father arises in these events, although it is precisely under these circumstances that the son is obliged to dis charge the debts of his father. As was said by Sulaiman A.C.J. in the case of Bankey Lal vs Durga Prasad(1): "The Hindu law texts based the liability on the pious obligation itself and not on the father 's power to sell the son 's share. " It is thus necessary to see what exactly is the extent of the obligation which is recognised by the Hindu (1) (9931) 53 All. 868 at 876 (F.B.). 557 texts writers in regard to the payment by the son c the pre partition debts of his father. Almost all the relevant texts on this point are to be found collected in the judg ments of Sulaiman A.C.J. and Mukherji J in the Allahabad Full Bench case referred to above A text of Narada recites(1): "What is left after the discharge of the father obliga tion and after the payment of the father 's debts shall be divided by the brothers so that the father, may not remain a debtor. " Katyan also says(2): "The sons shall pay off the debts and the gift,, prom ised by the father and divide the remaining among them selves. " There is a further passage in Manu(3): "After due division of the paternal estate if any debt or estate of the father be found out let the brother equally divide the same among themselves." According to Yagnavalka(4): "The sons should divide the wealth and the debts equal lyl. " It is true that the partition contemplated in these passages is one after the death of the father. but when ever the partition might take place, the view of the Hindu law givers undoubtedly is that the binding debts on the family property would have to be satisfied or provided for before the coparceners can divide the property. In Sat Narain vs Das (5), the Judicial Committee pointed out that when the family estate is divided, it is necessary to take account of both the assets and the debts for which the undivided estate is liable. It was argued in that case on behalf of the appellants that the pious obligation of the sons was an obligation not to object to the alienation of the joint estate by the (1) Narada., 13, 32. (2)Hindu Law in its Sources by Dr. Ganga Nath Jha, Vol. I. p quotation No. 211. (3)Chap. vs 218. (4) J.C.Ghosh 's Hindu Law, Vol. H, page 342. (5) (1936) 63 I.A. 384 72 558 father for his antecedent debt unless they were immoral or illegal, but these debts were not a liability on the joint estate for which provision was required to be made before partition. This contention did not find favour with the Judicial Committee and in their opinion, as they expressed in the judgment, the right thing to do was to make provision for discharge of such liability when there was partition of the joint estate. If there is no such provision, "the debts are to be paid severally by all the sons according to their shares of inheritance," as enjoined by Vishnu(1). In our opinion, this is the proper view to take regarding the liability of the sons under Hindu law for the pre partition debts of the father. The sons are liable to pay these debts even after partition unless there was an arrangement for payment of these debts at the time when the partition took place. This is substantially the view taken by the Allahabad High Court in the Full Bench case referred to above and it seems to us to be perfectly in accord with the princi ples of equity and justice. The question now comes as to what is meant by an ar rangement for payment of debts. The expressions "bona fide" and "mala fide" partition seem to have been frequently used in this connection in various decided cases. The use of such expressions far from being useful does not unoften lead to error and confusion. If by mala fide partition is meant a partition the object of which is to delay and defeat the creditors who have claims upon the joint family property, obviously this would be a fraudulent transaction not binding in law and it would be open to the creditors to avoid it by appropriate means. So also a mere colourable partition not meant to operate between the parties can be ignored and the creditor can enforce his remedies as if the parties still continued to be joint. But a partition need not be mala fide in the sense that the dominant intention of the parties was to defeat the claims of the creditors; if it makes no ar rangement or provision for the payment of the just debts payable (1) Vishnu, Chap. 6, verse 36. 559 out of the joint family property, the liability of the sons for payment of the pre partition debts of the father will still remain. We desire only to point out that an arrange ment for payment of debts does not necessarily imply that a separate fund should be set apart for payment of these debts before the net assets are divided, or that some additional property must be given to the father over and above his legitimate share sufficient to meet the demands of his creditors. Whether there is a proper arrangement for payment of the debts or not, would have to be decided on the facts and circumstances of each individual case. We can conceive of cases where the property allotted to the father in his own legitimate share was considered more than enough for his own necessities and he undertook to pay off all his personal debts and release the sons from their obligation in respect thereof. That may also be considered to be a proper ar rangement for payment of the creditor in the circumstances of a particular case. After all the primary liability to pay his debts is upon the father himself and the sons should not be made liable if the property in the hands of the father is more than adequate for the purpose. If the arrangement made at the time of partition is reasonable and proper, an unse cured creditor cannot have any reason to complain. The fact that he is no party to such arrangement is, in our opinion, immaterial. Of course, if the transaction is fraudulent or is not meant to be operative, it could be ignored or set aside; but otherwise it is the duty of unsecured creditor to be on his guard lest any family property over which he has no charge or lien is diminished for purposes of realization of his dues. Thus, in our opinion, a son is liable, even after partition for the pre partition debts of his father which are not immoral or illegal and for the payment of which no arrangement was made at the date of the partition. The question now is, how is this liability to be enforced by the creditor, either during the lifetime of the lather or after his death ? It has been held 560 in a large number of cases(1) all of which recognise the liability of the son to pay the pre partition debts of the father that a decree against the father alone obtained after partition in respect of such debt cannot be executed against the property that is allotted to the son on partition. They concur in holding that a separate and independent suit must be instituted against the sons before their shares can be reached. The principles underlying these decisions seems to us to be quite sound. After a partition takes place, the father can no longer represent the family and a decree obtained against him alone, cannot be binding on the sepa rated sons. In the second place, the power exercisable by the father of selling the interests of the sons for satis faction of his personal debts comes to an end with parti tion. As the separated share of the sons cannot be said to belong to the father nor has he any disposing power over it or its profits which he can exercise for his benefit, the provision of section 60 of the Civil Procedure Code would operate as a bar to the attachment and sale of any such property in execution of a decree against the father. The position has been correctly stated by the Nagpur High Court(2) in the following passages: "To say a son is under a pious obligation to pay cer tain debts is one thing; to say his property can be taken in execution is another. In our view, property can only be attached and sold in execution if it falls within the kind of property that can be attached and sold. What that is, is found by looking at section 60. When one looks at section 60 one finds that the property in question should either belong to the judgment debtor or he should have a disposing power over it. After partition, the share that goes to the son does not belong to the father and the father has no dispos ing power over it. Therefore such property does not fall within section. . . It by no means follows that a son cannot (1) Vide Kameswaramma vs Venkatasubba, 20; Subramanya vs Sabapathi, ; Thirumala Muthu vs Subramania, A.I.R. 1937 Mad. 458; Surajmal vs Motiram ; Atul Krishna vs Lala Nandanji, 14 Pat. 732; Govin dram vs Nathulal, I.L.R,. (2) Jainarayan v, Sonaji, A.I.R. 1938 Nag. 24 at 29 561 be made liable. He could be made liable for his father 's debts if he had become a surety; he can be made liable under the pious obligation rule. In neither of the cases put, could his liability take the form of having his property seized in execution and sold without any prior proceedings brought against him, leaving him to raise the question whether his liability as surety or under the pious obliga tion rule precluded him from claiming in execution. " It is not disputed that the provision of section 53 of the Civil Procedure Code cannot be extended to a case when the lather is still alive. We now come to the last and the most controversial point in the case, namely, whether a decree passed against the separated sons as legal representatives of a deceased debtor in respect of a debt incurred before partition can be exe cuted against the shares obtained by such sons at the parti tion ? As has been said already, the shares of the separated sons in the family property may be made liable for pre partition debts, provided they are not tainted with immoral ity and no arrangement for payment of such debts was made at the time the partition. The question, however, is whether this can be done in execution proceedings or a separate suit has to be brought for this purpose. Mr. Kunzru argues that what could not be done during the lifetime of the lather in execution of a decree against him cannot possibly be done alter his death simply because the lather died during the pendency of the suit and the sons were made parties defend ants not in their own right but as representatives of their deceased lather. It is pointed out that the appellants in the present case were not allowed to raise any plea which could not have been raised by their father and they never had any opportunity to show that they were under Hindu law not liable for these debts. It is undoubtedly true that no liability can be enforced against the sons unless they are given an opportunity to show that they are not liable for debts under Hindu law; but this opportunity can certainly be given to 562 them in execution proceedings as well. A decree against a father alone during his lifetime cannot possibly be executed against his sons as his legal representatives. As we have said already, the decree against the father after the parti tion could not be taken to be a decree against the sons and no attachment and sale of the sons ' separated shares would be permissible under section 60, Civil Procedure Code. The position, however, would be materially different if the sons are made parties to the suit as legal representatives of their father and a decree is passed against them limited to the assets of the deceased defendant in their hands. A proceeding for execution of such a decree would attract the operation of section 47 of the Civil Procedure Code under which all questions relating to execution, discharge and satisfaction of the decree between the parties to the suit in which the decree was passed or their representatives would have to be decided in execution proceedings and not by a separate suit. Section 52 (1), Civil Procedure Code, provides that when a decree is against the legal representa tives of a dead person and is one for recovery of money out of the properties of the deceased, it may be executed by attachment, and sale of any such property. Then comes sec tion 53 which lays down that "for purposes of section 50 and section 52 property in the hands of a son or other descend ants which is liable under Hindu law for payment of the debt of a deceased ancestor in respect of which a decree has been passed, shall be deemed to be property of the deceased which has come to the hands of the son or other descendant as his legal representative. " It is to be noted that before the Civil Procedure Code of 1908 came into force, there was a conflict of opinion as to whether the liability of a Hindu son to pay his father 's debts could or could not be enforced in execution proceedings. Under the Hindu law an undivided son or other descendant who succeeds to the joint property on the death of his father or other ancestor does so by right of survivorship and not as heir. In the old Code the term "legal representative" was not defined and 563 the question arose as to whether the son could be regarded as the legal representative of his father in regard to properties which he got by survivorship on the father 's death and whether a decree against the father could be enforced in execution against the son or a separate suit would have to be instituted for that purpose. It was held by the Madras and the Allahabad High Courts that the liabil ity could not be enforced in execution proceedings, whereas the Calcutta and the Bombay High Courts held otherwise. Section 53 in a sense gives legislative sanction to the view taken by the Calcutta and the Bombay High Courts. One reason for introducing this section may have been or undoubtedly ,was to enable the decreeholder to proceed in execution against the property that vested in the son by survivorship after the death of the father against whom the decree was obtained; but the section has been worded in such a compre hensive manner that it is wide enough to include all cases where a son is in possession of ancestral property which is liable under the Hindu law to pay the debts of his father; and either the decree has been made against the son as legal representative of the father or the original decree being against the father, it is put into execution against the son as his legal representative under section 50 of the Civil Procedure Code. In both these sets of circumstances the son is deemed by a fiction of law to be the legal representative of the deceased debtor in respect of the property which is in his hands and which is liable under the Hindu law to pay the debts of the father, although as a matter of fact he obtained the property not as a legal representative of the father at all. As we said have already, section 53 of the Civil Procedure Code being a rule of procedure does not and cannot alter any principle of substantive law and it does not enlarge or curtail in any manner the obligation which exists under Hindu law regarding the liability of the son to pay his father 's debts. It however lays down the procedure to be followed in cases coming under this SectiOn and if the son is bound under Hindu law to 564 pay the father 's debts from any ancestral property in his hands and the section is not limited to property obtained by survivorship a1one the remedy of the decreeholder against such property lies in the execution proceedings and not by way of a separate suit the son would certainty be at liberty to show that the property in his hands is for cer tain reasons not liable to pay the debts of his father and all these questions would have to be decided by the execut ing court under section 47, Civil Procedure Code. This seems to us to be the true scope and the meaning of section 53, Civil Procedure Code. In our opinion the correct view on this point was taken by Wort J. in his dissenting judgment in the Full Bench case of Atul Krishna vs Lala Nandanji (1) decided by the Patna High Court. The majority decision in that case upon which stress is laid by Mr. Kunzru overlooks the point that section 47, Civil Procedure Code, could have no application when the decree against the father is sought to be executed against the sons during his lifetime and consequently the liability of the latter must have to be established in an independent proceeding. In cases coming under sections 50 and 52 of the Civil Procedure Code on the other hand the decree would be capable of being executed against the sons as legal representatives of their father and it would only be a matter of procedure whether or not these questions should be allowed to be raised by the sons in execution proceedings under section 47, Civil Procedure Code. It remains only to consider what order should be passed in this case having regard to the principles of law dis cussed above. The High Court, in our opinion, was quite right in holding that the question of liability of the property obtained by the appellants in their share on parti tion with their father, for the decretal dues is to be determined in the execution proceeding itself and not by a separate suit. It is not disputed before us that the debt which is covered by the decree in the present case is a pre partition debt. The sons, (1) (1935) 14 Pat. 565 therefore, would be liable to pay the decretal amount, provided the debt was not immoral or illegal and no arrange ment was made for payment of this debt at the time when the partition took place. Neither of these questions has been investigated by the courts below. As regards the immorality of the debts, it is observed by the High Court that the point was not specifically taken in the objections of the appellants under section 47, Civil Procedure Code. The validity of the partition again was challenged in a way by the decreeholder in his reply to the objections of the appellants, but the courts below did not advert to the real point that requires consideration in such cases. The parti tion was not held to be invalid as being a fraud on the debtor but the question was not adverted to or considered whether it made any proper arrangement for payment of the just debts of the father. In our opinion, the case should be reheard by the trial judge and both the points referred to above should be properly investigated. The appellants did raise a point regarding their non liability for the decretal debt, in the suit itself when they were brought on the record as legal representatives after the death of their father. The court, however, did not allow them to raise or substantiate this plea inasmuch as they were held incompe tent to put forward any defence which the father himself could not have taken. Having regard to the conflicting judicial decisions on the subject, the appellants cannot properly be blamed for not raising this point again in the execution proceedings. We think that they should now be given an opportunity to do so. The result is that we set aside the judgments of the courts below and direct that the case should be heard de novo by the Subordinate Judge and that the appellants should be given an opportunity to put in a fresh petition of objection under section 47 of the Civil Procedure Code raising such points as they are competent to raise. The decreeholder would have the right to reply to the same. The court shall, after hearing such evidence as the parties might choose to adduce, decide 73 566 first of all whether the property attached is the ancestral property of the appellants and is liable to pay the just debts of their father. It will consider in this connection whether the debts are illegal or immoral and as such not payable by the sons. If this question is answered in favour of the appellants, obviously the execution petition will have to be dismissed. If on the other hand it is found that the sons are liable for this debt, the other question for consideration would be whether there was any proper arrange ment made at the time of the partition for payment of the debts of the father. The court below will decide these ques tions in the light of the principles which we have indicated above and will dispose of the case in accordance with law. In the event of the appellants being held liable for payment of the decretal debt, it would be open to the executing court to make an order that the decreeholder should in the first instance proceed against the separate property of the father which was allotted to him on partition and which after his death devolved upon the sons; and only if such property is not sufficient for satisfaction of the decree, then the decree could be executed for the balance against the ancestral property in the hands of the appellants. There will be no order for costs up to this stage. Further costs will follow the result.

The appellant was tried on a charge of murder by the Sessions judge with the aid of a jury. The evidence against him consisted of the testimony of an approver and the proof of corroborative circumstances tending to connect him with the crime. The jury found the appellant guilty and the Sessions judge accepting the verdict sentenced him to imprisonment for life. An appeal to the High Court was dismissed as that Court found no misdirections in the charge to the jury. The appellant contended that there was misdirection in the charge to the jury in that the jury was not told, as laid down in Sarwan Singh vs The State of Punjab, ; , that the approver 's evidence had to satisfy a double test i.e., he must be a reliable witness and his evidence must receive sufficient corroboration and in that the corroborating evidence was not sufficient to connect the appellant with the crime. Held, that there were no misdirections in the charge. The observations in Sarwan Singh 's case that it must be shown that the approver was a reliable witness were made in the special circumstances of that case where the approver had definitely been found to be so thoroughly discrepant as to be wholly unreliable. In the present case there was nothing to show that the evidence of the approver was in any way unreliable. Saywan Singh vs The State of Punjab, ; , dis tinguished. The Sessions judge had correctly directed the jury that the corroboration of the evidence of the approver in material particulars must relate not only to the commission of the crime, but also to the evidence connecting or tending to connect the accused with the crime. The circumstances proved in the case corroborated the approver 's evidence connecting the appellant with the crime. Once there was evidence of such circumstances it was for the jury to decide whether they were sufficient corroboration of the approver 's evidence that the appellant murdered the deceased.

Civil Appeal No. 483 of 1958. Appeal by special leave from the decision dated March 20, 1956, of the Labour Appellate Tribunal of India, Madras, in Appeal No. Bom. 90 of 1952 arising 145 out of the Award dated December 28, 1951, of the Industrial Tribunal, Madras, in Industrial Dispute No. 48 of 1951. February 11, 12. M. C. Setalvad, Attorney General of India, B. Ganapathy lyer and G. Gopalkrishnan, for the appellants. This appeal arises from an Industrial Dispute between M/s. Swadesamitran and their workmen. Three items of dispute were referred for adjudication to the Industrial Tribunal at Madras. One of them being whether the retrench ment of 39 workmen affected by the appellant in May 1951, was justified, and if not, what relief the retrenched workmen were entitled to. The modified award directed the reinstatement of 15 of the retrenched workmen and the question is whether such direction is correct. It has to be remembered that the direction was given on March 28, 1956, in respect of retrenchment made in May 1951, with half their back wages. The Tribunal erred in applying the rule "last come first go " as if it were an inflexible rule. The management is the best Judge as to who were fit to be retained and who should be sent out. No doubt, if the selection of persons disclosed that the management was guilty of any unfair labour practice, that would have been ground for interference. Tribunal and the Appellate Tribunal found that the action of management in selecting the personnel was not at all malafide. It cannot be said to be unreasonable if persons are selected for discharge because they had reached an age which would affect their efficiency and so fit for being retrenched. It cannot be the rule that once a workmen is entertained he should be kept on for ever. Moreover, the evidence shows that a committee of three sat for the purpose of making a, selection and they applied their minds to the problem and took into account all factors, viz. length of service, efficiency, defect in eye sight with regard to very small types and general aptitude for the new kind of work on lino machines. Further, the workmen had themselves settled accounts with the management and drawn whatever was due to them and their claims having been satisfied it was unfair 19 146 and unjust to direct that they should be reinstated in their old jobs with back wages. The others were found inefficient and irregular in attendance and therefore the selection by the management should not have been interfered with at all by the Tribunal. Principles of social justice do not compel an employer to keep an inefficient or unsuitable and superannuated workman in his service. The principle of I last come first go ' should not have been so strictly applied on the facts of this case. The Labour Appellate Tribunal erred in law in directing reinstatement when it did not differ from the conclusion of the Industrial Tribunal that the strike of the respondents was unjustified and that the appellants had acted bona fide in coming to the conclusion that retrenchment of 39 workmen was necessary. It is only if the Industrial Tribunal was satisfied that in retrenching its employees the appellant had acted malafide that it would be open to the Tribunal to interfere with the order of retrenchment passed by the appellant. The order of reinstatement in substance is inconsistent with the findings about the bona fides of the appellant. The Tribunal further erred in preparing a pooled seniority list to determine the seniority. The management must be given the discretion to run the business in its best interests and it is not for the Tribunal to say that the work done in the several sub sections of composing department was similar and the workmen can be inter shifted. Merely because no record was maintained as to the fitness or otherwise of each individual worker prior to the retrench ment, it was not right to infer that there was no material for the management to judge of the comparative fitness of the workmen under it. In entertaining the grievance of the workmen against their order of retrenchment the Labour Appellate Tribunal has exceeded its jurisdiction. Retrenchment is and must, be held to be a normal management function and privilege, and as soon as a case for retrenchment has been made out liberty and discretion must be left to the employer to select which employee should in fact be retrenched. In holding an enquiry about the Validity of reasonableness of retrenchment of certain 147 specified persons the appellate tribunal had trespassed on the management function and as such exceeded its jurisdiction. C. Anthoni Pillai, (President, City Printing Press Workers ' Union), for the respondents was not called upon to reply. March, 1. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. This appeal by special leave arises from an industrial dispute between Messrs. Swadesamitran Ltd., Madras (hereinafter called the appellant) and their workmen (hereinafter called the respondents). On November 3, 1951, three items of dispute were referred for adjudication to the Industrial Tribunal at Madras by the Madras Government under section 10(1)(c) of the (Act XIV of 1947) (hereinafter called the Act). One of these items was whether the retrenchment of 39 workmen effected by the appellant in May 1951 was justified, and if not, what relief the retrenched workmen were entitled to. It would be relevant to mention briefly the material facts leading to this dispute. It appears that on August 26, 1950, the respondents addressed a charter of demands to the appellant in which eleven demands were made, and they intimated to the appellant that, if the said demands were not granted, they would go on strike. The appellant pointed out to the respondents that it was working at a loss and that proposals for retrenchment and rationalisation were then under its active consideration. It promised the respondents that as soon as its financial condition improved their demands would be Sympathetically considered. Thereupon the demands were withdrawn; but on January 24, 1951, another communication was addressed by the respondents making as many as thirteen demands coupled with the same threat that if the said demands were not granted the respondents would go on strike. A copy of this communication was sent to the State Govern ment which was requested to refer the said demands for adjudication to the industrial tribunal. The Government, however referred the matter to the Conciliation Officer who found that the demands were 148 not justified. He accordingly made a report on February 22, 1951. Immediately thereafter the respondents wrote to the Government repeating their request for reference, but on April 24, 1951, the Government ordered that no case for reference had been made. Meanwhile the appellant was taking steps to effect retrenchment in the staff owing to the steep rise in the prices of newsprint and scarcity of supplies, the imposition by the Government of India of a price page schedule and the progressive introduction of mechanisation in the composing section by installation of lino type machines. When the respondents came to know about this their Union called for a strike ballot and as a result of the ballot the respondents decided to go on strike. A notice in that behalf was issued on May 9, 1951. The appellant then appealed to the respondents not to precipitate matters, promised to consider their demands as soon as its financial position improved and warned them that, if they refused to report for work in accordance with the strike notice, it would deem to amount to resignation of each one of the strikers of his job. The Conciliation Officer who was approached by the appellant also advised the respondents not to go on strike. Nevertheless the respondents went on strike on May 30, 1951. Before the respondents thus went on strike services of 39 members of the staff had been terminated by a notice as a measure of retrenchment with effect from May 18, 1951. It is the retrenchment of these 39 workmen which led to the industrial dispute with which we are concerned in the present appeal. Before this dispute was thus referred for adjudication the respondents had filed a writ petition in the Madras High Court asking for a writ calling upon the Government to make a reference under section 10(1)(c) of the Act. This writ application was allowed; but on appeal the Court of Appeal modified the order issued by the original court by substituting a direction that the Government should discharge its duties under section 12(5) of the Act. On June 12, 1951, the strike was called off by the respondents and they offered to resume work; but by then the appellant had engaged 149 new hands and so it was able to re engage only some of the respondents who offered to resume work. The failure of the appellant to take into service all its workmen is another item of dispute between the parties; but with the said dispute the present appeal is not concerned. It was as a result of the order passed by the Madras High Court that the present dispute was ultimately referred for adjudication to the industrial tribunal. The tribunal held that the strike declared by the respondents was not justified and that the appellant was justified in retrenching 39 workmen in question. According to the tribunal, though in retrenching 39 workmen the principle of I last come first go ' was not strictly followed, the appellant was justified in departing from the said principle because it was entitled to give preference to " persons mechanically inclined and having good eyesight. " That is why the tribunal rejected the respondents ' plea that in effecting retrenchment the appellant had indulged in any unfair labour practice. Since the tribunal was satified that the retrenchment of 39 workmen was effected in the usual course for good and sufficient reasons it ordered that the said retrenched workmen were not entitled to any relief. The respondents challenged this award by an appeal before the Labour Appellate Tribunal. The appellate tribunal was satisfied that the impugned finding about the bona fides and the validity of the retrenchment was not justified. It, therefore, remanded the proceedings to the industrial tribunal for deciding afresh the four points formulated by it. Two of these points are relevant for our purpose. One was whether the formula I last come first go ' had been complied with, and if it was not, the tribunal was asked to scrutinise in relation to each individual whether the reasons for breaking the said rule were sufficient in his case; and the other was whether the management was motivated by any unfair labour practice or victimisation. Pursuant to this order of remand the industrial tribunal allowed an opportunity to the appellant to lead evidence, and, on considering the evidence, it came to the conclusion that the appellant had made 150 out a case of necessity for retrenchment and that it had justified the extent of retrenchment as pleaded by it. No mala fides in that behalf had been established according to the tribunal. It, however, held that the principle of 'last come first go ' had not been observed in selecting the personnel for retrenchment; and it rejected the explanation given by the appellant in retrenching 15 out of the said 39 workmen. That is why it ordered the.appellant to reinstate the said 15 workmen without any back wages. In regard to the remaining 24 workmen no order was made by the tribunal in respect of any compensation payable to them. On receipt of the findings recorded by the tribunal the matter went back to the Labour Appellate Tribunal. Both parties had filed objections against the findings in question. The appellate tribunal considered these objections and held that the appellant had made out a case for retrenching 39 of its employees; but it agreed with the industrial tribunal that the principle of 'last come first go ' had not been observed and that no case had been made out to depart from the said principle. That is why it confirmed the finding of the tribunal that the 15 named employees should be reinstated and added that they should be given half the amount of their back wages. In regard to the remaining 24 workmen who had been retrenched, the appellate tribunal directed that they should be awarded compensation at the rate of half a month 's wages including dearness allowance for each year of service. It is against this decision that the present appeal has been preferred by special leave. The first point which the learned Attorney General has raised before us in this appeal on behalf of the appellant is that the Labour Appellate Tribunal erred in law in directing reinstatement when it did not differ from the conclusion of the industrial tribunal that the strike of the respondents was unjustified and that the appellant had acted bona fide in coming to the conclusion that retrenchment of ' 39 workmen was necessary. It is urged that it is only if the industrial tribunal is satisfied that in retrenching its employees the appellant had acted mala fide that it would be open to the 151 tribunal to interfere with the order of retrenchment passed by the appellant; and the argument is that s the order of reinstatement in substance is inconsistent with the findings about the bona fides of the appellant. In our opinion this argument is misconceived. There are two aspects of the question with which the appellate tribunal was concerned in the present proceedings: Was the appellant justified in coming to the conclusion in exercise of its management function and authority that 39 workmen had to be retrenched; if yes, has the retrenchment been properly carried out ? The first question has been answered in favour of the appellant by both the tribunals below. It has been found that the respondents ' strike was unjustified and that for the reasons set out by the appellant retrenchment to the extent pleaded by it was also called for and justified. It is in regard to this aspect of the matter that the appellant 's bonafides have Do doubt been found; but the bonafides of the appellant in coming to the conclusion that 39 workmen had to be retrenched have no material bearing nor have they any relevance in fact with the question as to whether the appellant acted fairly or reasonably in selecting for retrenchment the 39 workmen in question. It is in regard to this latter aspect of the matter that concurrent findings have been recorded against the appellant that it acted without justification and the retrenchment of the 15 workmen in question amounts to an unfair labour practice. Therefore, it is not possible to accept the argument that there is any inconsistency in the two findings. They deal with two different aspects of the matter and so they cannot be said to conflict with each other at all. It is then urged that in entertaining the grievance of the respondents against their order of retrenchment the Labour Appellate Tribunal has exceeded its jurisdiction. The, case presented before us on this ground assumes that retrenchment is and must be held to be a normal management function and privilege, and as soon as a case for retrenchment had been made out liberty and discretion must be left to the employer to select which employees should in fact be retrenched. In holding an enquiry about the.validity 152 or reasonableness of retrenchment of certain specified persons the appellate tribunal has trespasser on the management function and as such has exceeded its jurisdiction. We are not impressed by this argument. It may be conceded that if a case for retrenchment is made out it would normally be for the employer to decide which of the employees should be retrenched; but there can be no doubt that the ordinary industrial rule of retrenchment is I last come first go ', and where other things are equal this rule has to be followed by the employer in effecting retrenchment. We must, however, add that when it is stated that other things being equal the rule I last come first go ' must be applied, it is not intended to deny freedom to the employer to depart from the said rule for sufficient and valid reasons. The employer may take into account considerations of efficiency and trustworthy character of the employees, and if he is satisfied that a person with a long service is inefficient, unreliable or habitually irregular in the discharge of his duties, it would be open to him to retrench his services while retaining in his employment employees who are more efficient, reliable and regular though they may be junior in service to the retrenched workmen. Normally, where the rule is thus departed from there should be reliable evidence preferably in the recorded history of the workmen concerned showing their inefficiency, unreliability or habitual irregularity. It is not as if industrial tribunals insist inexorably upon compliance with the industrial rule of retrenchment; what they insist on is on their being satisfied that wherever the rule is departed from the departure is justified by sound and valid reasons. It, therefore, follows that, wherever it is proved that the rule in question has been departed from, the employer must satisfy the industrial tribunal that the departure was justified; and in that sense the onus would undoubtedly be on the employer. In dealing with cases of retrenchment it is essential to remember that the industrial rule of I last come first go ' is intended to afford a very healthy safeguard against discrimination of workmen in the matter of retrenchment, and so, though the employer may depart from the rule, he should able to justify 153 the departure before the industrial tribunal whenever an industrial dispute is raised by retrenched workmen on the ground that their impugned retrenchment amounts to unfair labour practice or victimisation. It appears that in 1946 the Government of India, in its Department of Labour, formulated certain rules for retrenchment and commended, them to the attention of all employers of labour and trade unions so that disputes on that score may be minimised. Rule 4 amongst the said rules was that as a rule discharge of personnel who are still surplus to requirements should be in accordance with the principles of short service, that is to say, last man engaged should be the first man to be discharged. Due notice or wages in lieu thereof should be given. The same principle has been accepted and applied by industrial tribunals on several occasions (Vide : Indian Navigation & Industrials, Alleppey And Certain Workmen (1); Cuttack Electric Supply Co. Ltd. And Their Workmen (2) ; and Shaparia Dock and Steel Company And Their Workers (3) ). We ought to add that the same principle has. now been statutorily recognised by section 25(g) of the Act. This section provides inter alia that where any workman in an industrial establishment, who is a citizen of India, is to be retrenched, the employer shall ordinarily retrench the workman who was the last person to be employed in the same category, unless, for reasons to be recorded, the employer retrenches any other workman; in other words, by this section a statutory obligation is imposed on the employer to follow the rule, and if he wants to depart from it to record his reason for the said departure. In support of his contention that the Labour Appellate Tribunal has exceeded its jurisdiction in examining the merits of the retrenchment effected by the appellant, the learned Attorney General has relied upon certain observations made by this Court in the case of J. K. Iron & Steel Co. Ltd. vs Its Workmen (4). Dealing with the argument of the appellant that the order of retrenchment should be left to the management and that the decision by the management that (1) (1952) II L.L.J. 611. (2) (3) (1954) II L.L.J. 208. (4) Civil Appeal No, 266 of 1958 decided on 11 2 1960. 20 154 some employees are better qualified than others should not be questioned by the adjudicator unless he came to the conclusion that the preferential treatment was deemed to be malafide, this Court observed that the proposition involved in the argument was unexceptionable, it was added, that, if the preferential treatment given to juniors ignores the well recognized principles of industrial law of 'first come last go without any acceptable or sound reasoning a tribunal or an adjudicator will be well justified to hold that the action of the management is not bona fide. We do not see how either of the two propositions set out in this judgment can support the appellant 's argument before us. The position under the industrial law seems to us to be fairly clear. The management has the right to retrench the workmen provided retrenchment is justified. In effecting retrenchment the management normally has to adopt and give effect to the industrial rule of retrenchment. For valid reasons it may depart from the said rule. If the departure from the said rule does not appear to the industrial tribunal as valid or satisfactory, then the action of the management in so departing from the rule can be treated by the tribunal as being mala fide or as amounting to unfair labour practice; in other words, departure from the ordinary industrial rule of retrenchment without any justification may itself, in a proper case, lead to the inference that the impugned retrenchment is the result of ulterior considerations and as such it is mala fide and amounts to unfair labour practice and victimisation. That is precisely what this Court has held in the case of J. K. Iron & Steel Co. Ltd. (4). We are, therefore, satisfied that there is no substance in the appellant 's contention that the tribunals below have exceeded their jurisdiction in enquiring into the validity of the retrenchment of the 39 workmen in question. There is one more point which may briefly be mentioned in this connection. After the matter was remanded the industrial tribunal has carefully considered the evidence given by the appellant. In fact it is clear from the record that at the original enquiry no evidence had been led by the appellant to justify (1) Civil Appeal No. 266 of i958 decided on 11 2 6o. 155 the departure from the rule even though it was conceded that the rule had not been followed. The Labour Appellate Tribunal, therefore, fairly gave a chance to the appellant to justify the said departure, and accordingly evidence was led by the appellant. This evidence consists of the testimony of Mr. Lakshminarasimlian, who has been working with the appellant for 32 years. He works as an Assistant Editor, and in addition attends to press work. He stated that he was having a personal supervision of the entire work and that when retrenchment was actually effected a committee was appointed consisting of himself, the Manager Mr. Ayyangar and the Press Manager Mr. Rajagopala Ayyangar. At the time of the enquiry the Manager was dead. According to the. witness the committee took the advice of the Foremen of various sections in deciding which workmen should be retained and which should be retrenched. The witness gave evidence about the defects in the cases of the 39 workmen who were retrenched; and in support of his oral testimony he filed two statements T 1 and T 2 giving material particulars in respect of all the said workmen. It is admitted that no records were made at the time when the cases of these workmen were examined and so the witness was driven to give evidence merely from memory. The tribunal has held that having regard to the nature of the defects attributed to the several workmen to which the witness deposed it was impossible to accept his testimony as satisfactory, and the tribunal was also not satisfied that it was likely that the witness should have any personal knowledge in regard to the said defects. In the result the tribunal rejected this testimony. It also examined some cases 'in detail, and it was satisfied that the reasons given for retrenching them were demonstrably unsatisfactory. It is on these findings that 'the tribunal came to the conclusion that the appellant had not shown any valid or reasonable ground for departing from the usual rule, and this finding has been accepted by the Labour Appellate Tribunal. In such a case we do not see how in the present appeal the appellant can successfully challenge the correctness of the conclusion that in substance the retrenchment 156 of the 15 workmen amounts to an unfair labour practice and victimisation. That leaves two minor questions which were formulated for our decision by the learned Attorney General. He contended that, even if the impugned retrenchment of the 15 workmen in question was not justified, reinstatment should not have been directed ; some compensation instead should have been ordered; and in the alternative he argued that the order directing compensation to the remaining 24 retrenched work men was also not justified. We do not see any substance in either of these two contentions. Once it is found that retrenchment is unjustified and improper it is for the tribunals below to consider to what relief the retrenched workmen are entitled. Ordinarily, if a workman has been improperly and illegally retrenched he is entitled to claim reinstatement. The fact that in the meanwhile the employer has engaged other workmen would not necessarily defeat the claim for reinstatement of the retrenched workmen ; nor can the fact that protracted litigation in regard to the dispute has inevitably meant delay, defeat such a claim for reinstatement. This court has consistently held that in the case of wrongful dismissal, discharge or retrenchment, a claim for reinstatement cannot be defeated merely because time has lapsed or that the employer has engaged fresh hands (Vide: The Punjab National Bank Ltd. vs The All India Punjab National Bank Employees ' Federation (1); and National Trans.port and General Co. Ltd. vs The Workmen (2). Then as to the compensation awarded to the 15 and 24 workmen respectively, it is a matter of discretion and as such is not open to challenge in the present appeal. In the result the appeal fails and is dismissed with costs. Appeal dismissed (1) [1960] I S.C.R. 806.

The management by a notice terminated the services Of 39 workmen as a measure of retrenchment. The workmen went on strike which led to an industrial dispute. The Industrial Tribunal interalia held that the strike was not justified and that the management had made out of a case of necessity for retrenchment and no malafides had been established; but the principle of last come first go had not been observed in selecting the personnel for retrenchment and ordered the reinstatement Of 15 out of the 39 workmen retrenched. The Appellate Tribunal confirmed the findings of the Industrial Tribunal with certain modifications by way of compensation. The management came up in appeal by special leave. Held, that where a case of retrenchment is made out the employer has normally to follow the industrial rule of retrenchment last come and first go; for valid reasons he may however depart from the said rule; in that case he has to show by reliable evidence, preferably from the recorded history of the workmen concerned showing their inefficiency, unreliability or habitual irregularity and can satisfy the Tribunal that the departure from the rule was justified by sound and valid reasons; otherwise the departure from the rule could be treated as being malafidc or amounting to unfair labour practice. Held, further that once it was found that retrenchment was unjustified and improper it is for the Tribunal to consider to what relief the retrenched workmen will be entitled; ordinarily retrenched workmen would be entitled to claim reinstatement, and the fact that in the meantime the employer has engaged other workmen would not necessarily defeat the claim for reinstatement, nor would the fact that protracted litigation in regard to the dispute has inevitably meant delay defeat such a claim for reinstatement. Therefore the conclusion that 15 workmen were improperly retrenched cannot be sucessfully challenged.

Appeal No. 378 of 1965. Appeal from the Judgment and decree dated April 9, 1963 of the Bombay High Court in First Appeal No. 616 of 1961. Rai Bahadur and B. R. Agarwala, for the appellants. section T. Desai, O. P. Malhotra and 0. C. Mathur, for the res pondent. 547 The Judgment of the Court was delivered by Shelat, J. Whether in determining the rateable value of a building the assessing authority under section 154(1) of the Bombay, Municipal Corporation Act, III of 1888 can take into consideration income derived by the owner under an agreement entitling an advertisement hoarding to be put up on the roof of such building is the question arising in this appeal. For consideration of this question a few relevant facts may first be recited. The appellants are the owners of "Fulchand Nivas", a building situate at the corner of what was known at the relevant time as Marine Drive and Sandhurst Road opposite Chowpatty Sea Face, Bombay. The building consists of ground and five upper floors and a terrace. The ground floor and five upper floors of the building were and are let out. For the last few years the Municipal Corporation has been assessing the rateable value of the building as equivalent to the actual rents recovered by the owners. After the rateable value for the year 1956 57 was assessed it was found that the terrace of the building was used for advertising Tata Mercedes Benz Automobile Trucks and Buses by means of a neon sign. This was done under an agreement dated February 5, 1957 entered into by the appellants under which the Tata Locomotive and Engineering Co. Ltd., had a reed to pay to the appellants Rs. 800 per month in consideration of their being allowed to display the said advertisement and a further sum of Rs. 700 in consideration of the owners agreeing not to allow any one else to use any portion of the said building for displaying any advertisement save those of the tenants on the ground floor not above the level of the height of the ground floor. The agreement provided also that it would be the owners who, during the continuance of the agreement, would pay all existing and future rates, taxes etc., which would be assessed, imposed, charged or become payable in respect of the said building or the said advertisement except the Municipal Licence fee in respect of the said advertisement which would be borne by the Company. On March 3, 1958 the respondent corporation issued a notice under section 167 of the Act informing the owners that the assessment book had been amended and that the amount of the rateable value of the building was increased from Rs. 44,320 to Rs. 64,685. The appellants thereupon filed a complaint under section 163(2) of the Act against the said increase and the assessing authority by an order dated February 21, 1959 reduced the rateable value from Rs. 64,685 to Rs. 59,600. In maintaining the increase from Rs. 44,320 to Rs. 59,600 the assessing authority took into account the additional income arising from the said agreement and received by the appellants. The appellants thereupon filed an appeal before the Chief Judge, Small Cause Court, Bombay, objecting to the said increase. The Chief Judge disallowed the said increase and directed that the rateable value should be Rs. 44,320. The Chief Judge held that under the said agreement 548 there was no demise or transfer of an interest in the said property in favour of the Committee, that the said agreement amounted merely to a licence revocable at any time though subject to the express terms of the agreement and was no more than a grant of 'a right in gross to display neon sign outside the property and that the, only user of the property was that of a small portion of the terrace used as a base for the said advertisement. He held that it was not any inherent or intrinsic quality 'of any portion of the property which commanded such a high consideration as the sum of Rs. 1,500 per month. Aggrieved by this order, the respondent Corporation filed an appeal before the High Court at Bombay. The High Court held that the Chief Judge was in error in holding that the Municipal Corporation was not entitled to take into account income earned by the owners under the said agreement, set aside his order and restored the original value assessed by the assessing authority at Rs. 59,600. The High Court analysed section 154 of the Act and after consideration of the rules as to rating recognised by several decisions both English and that of the High Court itself in Mahad Municipality vs Bombay S.R.T. Corporation(1) held that the said increase was justified. The appellants then applied for and obtained a certificate under article 133(1)(a) of the Constitution and filed this appeal. Counsel for the owners challenged the correctness of the High Court 's judgment and order and contended that in deter mining the annual rent of the building the assessing authority can, take into account the rent at which the. building is expected to be let, that therefore the income derived from an agreement which amounts to a mere licence and not a demise cannot be added to such rent, such income being totally irrelevant to the concept t of annual rent envisaged in rating. To appreciate the contention it is necessary first to examine section 154(1) of the Act. The section provides that in order to fix the rateable value of any building or land assessable to a property tax, there shall be deducted from the, amount 'of the annual rent for which such land or building might reasonably be expected to let from year to year a sum equal to ten percentum of the said annual rent and, the said deduction shall be in lieu of all allowances for repairs or on any other account whatever. The assessing authority for the purpose of fixing to rateable value has therefore to determine the annual rent. that is, the annual rent for which such building might reasonably be expected to let from year to. year and to deduct the 10 percent statutory allowance therefrom and arrive at the net rateable value which would be, equivalent to the net annual rent. The rateable value is thus taken to be the same as the net annual rent of the property. It is a well recognised principle in rating that both gross, value and net annual, value are estimated by reference to the rent at which the property might reasonably be expected to let from, year to year. Various methods of valuation are applied (1) LXIII Bombay Law Reporter, 174. 549 in order to arrive at such hypothetical rent, for instance by reference to the actual rent paid, for the property or for others comparable to it or where there are no rents by reference to the assessments of comparable properties or to the profits earned from the property or to the cost of construction. The expression "gross value" means the rent at which a hereditament might reasonably be expected to let from year to year. The rent which a tenant could afford to give is calculated rebus sic stantibus, that is to say, with reference to the property in its existing physical condition and to the mode in which it is actually used. The hypo thetical tenant includes all persons who might possibly take the property including the person actually in occupation, even though he happens to be the owner of the property. The rent is that which he will pay in the "higgling of the market", taking into account all existing circumstances and any relevant future trends. If the property affords the opportunity for the carrying on of a gainful trade, that fact also must be taken into account. The property is assumed to be vacant and to let and the material date for the valuation is that of the proposal which gives rise to the proceedings. The actual rent paid for the property is not conclusive evidence of value, though such actual rent may serve as an indication as to what a hypothetical tenant can afford to pay. However, if the actual rent is paid on terms which differ from those of the hypothetical tenancy it must be adjusted, if possible, to the terms of the hypothetical tenancy before it affords evidence of value. (See Halsbury 's Laws of England, (3rd ed.) vol. 32, p. 60 and onwards). It is also well recognised that while valuing the property in question every intrinsic quality and every intrinsic circumstance which tends to push the rental value up or down must be taken into consideration. In other words, in estimating the hypothetical rent "all that could reasonably affect the mind of the intending tenant ought to be considered." (Cartwright vs Sculcoates Union(1). Scott, L. J. Robinson Bros. vs Houghton and Chester le Street Assessment Committee( ') observed: "It is the duty of the valuer to take into consideration every intrinsic quality and every other circumstances which tends to push the rental value up or down, just bec ause it is relevant to the valuation and ought there fore to be cast into the scales of the balance. The 'objective being the real value of the actual hereditament, the inquiry is primarily economic and not legal , it is only legal in so far as logical relevance is the measure of legal admissibility." (See also Ryde on Rating, 11th ed., 385, 387). The measure for purposes of rating is therefore the rent which a hypothetical tenant, looking at the building as it is, would be prepared to pay. Though the tenant is hypothetical and the rent (1) (2) at 469. 550 too is, hypothetical, the property in respect of which he would estimate that which he would offer as rent is not hypothetical but concrete. While estimating the rent which he would be prepared to pay he would naturally take into consideration all the advantages, together with the disadvantages attached to the property, that is, the maximum beneficial use to which he would be able to put the property. In doing so he is bound to take into consideration the fact of the property being situated at an unique place as the instant property undoutedly is, viz., at the juncture of two of the most prominent roads with the additional advantage of Chowpatty Sea Face being opposite to it where in the evenings and on week ends, it cannot be questioned, large crowds usually gather. Coupled with this would be the ' advantage that a neon sign advertisement can be vividly seen if fixed on the top of the building by people, pedestrians and those in vehicles, from fairly long distances in all directions, especially as the advertisement happens to be a rotating one. There can therefore be no doubt that if a property possesses such an amenity, such amenity is bound to add to its beneficial value and the tenant who desires to take it on lease is bound to take into consideration while making up his mind as to the rent which he can profitably offer as to how much income he would be able to derive from exploiting such an amenity. The measure of the hypothetical rent which such a tenant would offer would thus be the extent of the beneficial use to which he would be able to put the property on its being demised ' to him. That being so it seems to us that the question whether an agreement under which such a tenant would be able to exploit the advantageous situation in which the property is situate amounts to a lease or licence is totally irrelevant for the purpose of assessing the rateable value. Equally irrelevant is the question whether the income arising from such an agreement is rent or licence fee. To consider such income as irrelevant in the process of rating on the ground that it does not amount to rent but to licence fee is to misconstrue the true measure of the rent expected from the prospective tenant. The tenant would not only take into consideration the actual rent derived from the property but also such other income which he would be able to extract from the situation of the property by exploiting as best as he can the beneficial use to which the property is capable of being put. Therefore, the mere fact that the income from the agreement is not rent but licence fee and therefore cannot be added to the actual rent fetched by the property does not justify on any principle 'of rating or any construction of section 154 of the Act, disregard of it while estimating the rent which ' the property would be expected to fetch. It is true that the rating was so far made including the year in question on the basis of the actual rent derived from 551 the property. That appears to have been done because 'of the restrictions under the Bombay Rent Act by reason of which the property cannot be leased at rent higher than the standard rent allowed under the provisions of that Act. Since no hypothetical tenant would pay rent higher than such standard rent the actual rent would ordinarily be the rent expected ' from a hypothetical tenant. The question would be whether the Corporation would be justified in enhancing the rateable value by adding the said sum of Rs. 1500 per month arising from the said amount? It is true, as 'observed earlier, that the hypothetical rent cannot be in view of the rent restrictions higher than the actual rent. But the income arising under the said agreement is not rent realised from letting out any part of the property to the Company but is in consideration of the exclusive privilege granted to it of displaying its neon sign advertisement. It is manifest that the user thereunder of part of the terrace adds to the beneficial value of the building. For such user the owner can legitimately expect something extra over and above the standard rent of the building. Though the owner of the building cannot charge rent over and above that which is permissible under the provisions of the Rent Act, there is nothing in that Act which prohibits him from charging an amount from an advertiser in consideration of the privilege of displaying his advertisement. A hypothetical tenant, therefore, would take into consideration such extra income arising from the special advantage attached to the building and would be prepared to pay over and above the actual rent something in respect of such an additional advantage. Counsel for the appellants relied upon certain decisions which we may now examine. Taylor vs Overseers of Pendle ton(1) is a case where the question was whether the advertising agent was a tenant or a licensee. If he was a licensee it would be the owner who would be the occupier; if a tenant it would be the advertising agent who would be the occupier. Since under the English law it is the occupier and not the owner who is liable for rates it was held that the agent being the tenant was the occupier and it was he and not the owner who was liable to pay rates. In Wilson vs Tavener(2) the defendant agreed by an agreement to let the plaintiff erect a hoarding upon the forecourt of a cottage and to allow him the use of a gable end for a bill posting station at yearly rent. It was held the agreement did not amount to tenancy from year to year but was a licence and a quarter 's notice terminating at the end of the year of the currency of the agreement was a reasonable notice. These decisions cannot be appropriately brought to aid by the appellants as under the English law it is the occupier who is liable for the tax and it is for that reason that the court had to determine in each case whether the agreement in question create (1) (2) 552 a demise or a licence. But whether the advertiser was a lessee or a mere licensee, the income arising from advertisement hoardings has always been rated irrespective of the question as to who was liable to pay the tax. Reliance was placed both before the High Court and also before us on the decision in Corporation of Calcutta vs Anil Prakash Basu(1). The building there was let out to the tenant at Rs. 64 / 14 / . per month. On the roof of it, however, the Calcutta. Street Advertising Company had displayed a neon sign board of Capstain cigarette for which the owner was paid Rs. 125 per month. The question was whether the Calcutta Corporation was right in treating this income as rent within the meaning of section 127(a) of the Calcutta Municipal Act, 1923 and take it into account while determining the annual letting value of the building. Section 127(a) is as follows. : "For the purpose of assessing land and building to the consolidated rate the annual value of land and the annual value of any building erected for letting purposes or ordinarily let shall be deemed to be the gross annual rent at which the land or building might at the time of assessment reasonably be expected to let from year to year less in the case of a building an allowance of 10% for the cost of repairs and for all other expenses necessary to maintain the building in a state. to command such gross rent. " The High Court held that the roof of the building on which the, sign board was put up could not be said to have been demised, that the amount paid to the owner by the advertising agency was therefore not rent and that the use of the roof for putting up the sign board amounted to a licence and therefore could not be treated as rent for the purpose of assessing the annual value of the building. The High Court relied on certain English decisions and also on its own earlier ' decisions for deciding whether the agreement between the owner and the advertising agency amounted to a lease or licence. Having held that the agreement amounted to a licence and not lease and, the income was licence fee and not rent it rejected the contention of the Municipal Corporation that it was entitled to treat the amount of Rs. 125 a month as rent over and above the actual rent of the building. , It may be observed that it was never argued before the High Court that the agreement, whether the said amount was rent or licence fee, added to the beneficial value of the building, that though the roof 'on the terms of that agreement could not be said to have been demised, what had to be considered under section 127(a) for assessing the annual rent of the building was the,, rent which a hypothetical tenant was expected to pay and not the actual rent, and whether such hypothetical tenant would or (1) A.I.R. 1958 Cal. 553 would not take into consideration the extra income derived from the use of the roof for the advertising hoarding over and above the actual rent while deciding what rent he can profitably offer for the building. Such a question not having been raised or decided this decision also cannot assist the appellants. In our view if the building or a part of it yields am extra income over and above the actual rent derived from it such income on the terms of section 154(1) of the Act can legitimately be taken into consideration by the assessing authority while determining the annual rent on the ground that a hypothetical tenant would take such extra income into account while considering what rent he can afford to offer for such building. That being the correct position under section 154(1) of the Act the High Court, was right in confirming the enhancement of the annual rent from Rs. 44,320 to Rs. 59,600. The appeal fails and is dismissed with costs. Y. P. n Appeal dismissed.

The members of a Ghee and Tel Brokers Association, used to enter into contracts for the sale and purchase of groundnut oil. Week after week contracts were cancelled by cross transactions and there was no delivery. Instead of payment of price losses resulting from the cross transactions were deposited by the operators in loss with the Association. On the due date also there was no delivery but adjustment of all contracts of sales against all contracts of purchase between the same parties and delivery was of the outstanding balance. Even this delivery was often avoided by entering into fresh contract at the rate prevailing on the due date, as part of the. transactions in the next period. The Sessions Judge convicted the respondents the Association 's President, Secretary and Directors. holding that these were forward contracts prohibited under the Forward Contracts (Regulation) Act and the Association was not recognised. The High Court set aside the convictions. In appeal, this Court: HELD: Section 18(1) of the Act speaks of true non transferable 'specific delivery contracts but the proviso at the same time makes it illegal for an unrecognised association to so arrange matters that non transferable specific delivery contracts will be worked out without actual delivery. Such conduct is prohibited by the proviso and directly punishable under section 20(1)(b). An offence under that clause of section 20(1) and also under el. (c3 of that section read with section 15 was made out. There was no question of considering the matter first under the main part of the first sub section and then to put the proviso out of the way because the first sub section did not apply. The Legislature contemplates that the first sub section of section 18 might be complied with in the documents evidencing the contract but in actuality the contract might be differently performed and has. therefore, provided for the identical situation which arose in this case. [182F H, D]

Civil Appeal No. 1932 of 1970. Appeal by special leave from the judgment and decree dated the 31st December, 1969, of the Madras High Court in Second Appeal No. 348 of 1966, M. Natesan, Mrs. Janaki Ramachandran and K. Kumar for the Appellants. Vepa P. Sarathy, Gopal Subramanian and Mrs. section Gopalakrishnan, for the Respondents. The Judgment of the Court was delivered by BAHARUL ISLAM, J. This appeal by special leave is by the plaintiffs. The material facts of the case are that the suit land belonged to one Venkataramabhadra Naidu, a Zamindar (hereinafter 'Naidu '), who donated it to Bhoodan Yagna on August 18, 1953 by executing documents, Exs. B 1 and B 2, which were unregistered deeds. Later in 1958, in Madras Bhoodan Yagna Act, 1958 (hereinafter 'The Bhoodan Act ') came into force. The Madras Bhoodan Yagna Board constituted under section 3 of the Bhoodan Act and functioning under the Act allotted the suit land to the defendants who claimed to have been in possession of the land since before the donation. On August 3, 1960, Naidu sold the suit land to the plaintiff by a registered sale deed for a sum of Rs. 2000. The plaintiffs alleged that they were in possession of the suit land but as the defendants were interfering in their possession, they filed the suit for declaration of their title to, and possession of, the suit land. 176 The plaintiffs ' case was that as the donation of the land by Naidu was not by any registered deed, no title passed to the Bhoodan Board and subsequently to its allottees, namely, the defendants and that Naidu validly transferred title to them. The defendants ' case, inter alia, was that the land vested in the Bhoodan Board under the provisions of the Bhoodan Act, and Naidu had no saleable interest thereto which he could transfer to the plaintiffs by the sale deed. The Trial Court decreed the plaintiffs ' suit. The decree was upheld by the First Appellate Court on appeal by the defendants. Both the courts held that the donation of the suit and by Naidu was not in conformity with Section 17 of the Registration Act and Section 12 of the Transfer of Property Act and as such title to the suit land did not pass from Naidu to the Bhoodan Board. The defendants preferred a second appeal before the High Court. The High Court reversed the decree of the courts below and dismissed the plaintiffs ' suit. It has to be mentioned that the First Appellate Court passed its decree on October 1, 1962 while the High Court passed its impugned decree on 31st December, 1969; while in the meantime, in 1964, the Madras Bhoodan Yagna Act of 1958 was amended by the Madras Bhoodan Yagna (Amendment) Act, 1964 (hereinafter 'the Bhoodan (Amendment) Act '). Learned counsel for the appellants submits that the donation of the suit land by Naidu to the Bhoodan Board was before the passing of the Bhoodan Act of 1958 and the Bhoodan (Amendment) Act of 1964; as such the provisions of these two Acts could not save the donation of the suit land by Naidu to Bhoodan Board from the operation of the relevant provisions of the Transfer of Property Act and the Indian Registration Act. In other words, the submission is that the donation was invalid for want of a registered deed. It may be mentioned that counsel of the appellants has not challenged the validity or vires of the provisions of the Bhoodan Act or Bhoodan (Amendment) Act. His submission is that the above provisions do not have retrospective effect. The object of the Bhoodan Act is, as it appears from the preamble, "to facilitate the donation of lands for the Bhoodan Yagna 177 initiated by Shri Acharya Vinobha Bhave and the transfer and settlement of such lands for the benefit of landless poor persons or for community purposes and to provide in Gramdan Villages for the vesting of lands in, and the management of those lands by the Sarvodaya Panchayat in the State of Madras." 'Bhoodan Yagna ' has been defined under clause (a) of section 2 as meaning "the movement initiated by Shri Acharya Vinobha Bhave for the acquisition of lands through voluntary gifts for distribution to landless poor persons, cooperative societies or Sarvodaya Panchayats or for community purposes. " It is why, therefore; it appears, the donations of land to Bhoodan Yagna were exempted from the operation of the Indian Registration Act and the Transfer of Property Act, as it will, presently appear. I shall first refer to the relevant provisions of the original Bhoodan Act (of 1958) and examine the position of the law that was before the amendment of 1964. Section 3 of the Bhoodan Act provided for the establishment and incorporation of a Board to be called "The Madras State Bhoodan Yagna Board" (herein after the 'Bhoodan Board '). Section 11 of the Bhoodan Act provided, "All lands donated for the purposes of the Bhoodan Yagna whether before (emphasis added) or after the commencement of this Act shall, subject to the provisions of section 16, 17 and 20, vest in the State Board". Section 11 clearly shows that the intention of the Legislature was to bring in to the purview of the Bhoodan Act lands donated by any person before the commencement of the Bhoodan Act. Clause (a) of sub section (1) of Section 16 which is material is in the following terms: "16(1) Notwithstanding anything to the contrary contained in any other law for the time being in force, (a) any owner may, by declaration made in the prescribed manner, donate his land for the Bhoodan Yagna. Provided that . . . . Provided further that . . Sub section (3) to Section 16 reads: 178 "Every declaration made under sub section (1) shall be filed with the Tahsildar or the Deputy Tahsildar in independent charge having jurisdiction in the taluk or sub taluk where the land is situate." Sub section (1) of Section 17 provided "Every declaration filed under sub section (3) of section 16 shall, as soon as may be, be published in the Fort St. George Gazette and in such other manner as may be prescribed." Any person whose interest were affected by the declaration of the donation might file objections before the Tahsildar or Deputy Tahsildar under sub section (2). Under sub section (3), the Tahsildar or the Deputy Tahsildar had to register every such objection, fix a date of hearing and give notice of the date of hearing to the donor, and the objector, the Bhoodan Board and the Local Committee concerned, and then under sub section (4), had to investigate and dispose of the objection, and by an order confirm the declaration or declare it null and void. Sub sections (5) and (6) which are important were in the following terms: "Sub section (5) If the Tahsildar or the Deputy Tahsildar confirms the declaration, then, notwithstanding anything contained in any other law for the time being in force, all the right, title and interest of the donor in such land shall stand transferred to and vest in the State Board for the purchases of the Bhoodan Yagna (emphasis added). Sub section (6) Every order under sub section (5) confirming a declaration shall be published in the Fort St. George Gazette and on such publication, the donation of land shall, subject to the provisions of section 23, be irrevocable. " Sub section (5) in clear terms lays down that on the confirmation of the declaration of the donation, notwithstanding the provisions of 'any other law ', (to wit the Transfer of Property Act and the Indian Registration Act in this case) right, title and interest in the land "shall stand transferred to and vest in" the Bhoodan Board. And after publication of the order of confirmation of the donation, it can be challenged only by a suit contemplated by Section 23. 179 Sub section (1) of section 20 provided that "The State Board shall prepare a list of all lands donated for purposes of Bhoodan Yagna prior to (emphasis added) the commencement of this Act" showing the area, description and other particulars of the land, the name and address of the donor and allied matters. Sub section (1) to section 20 also shows that the Bhoodan Act was intended to include the donations made prior to the commencement of this Act. Sub section (2) provides for publication of the list prepared under sub section (1) in the Fort St. George Gazette. The proviso added after sub section (3) of section 20, and sub section (4) of section 20 are important and need be extracted. They are as follows: "Sub section (3). . . Provided that where an order is made by the Inquiry Officer under sub section (4) of section 17 confirming the donation, such donation shall be deemed to have been accepted with effect from the date on which the donation was made and for this purpose, this Act shall be deemed to have been in force on such date. Sub section (4) Where such land has been granted to any person it shall, with effect from the date of grant, be deemed further to have been granted to the grantee under and in accordance with the provisions of Section 19." These two are deeming provisions and are a complete answer to the appellants ' contention. The meaning of the proviso is that although the Bhoodan Act was not in existence at the time a donation was made its acceptance by the Tahsildar or Deputy Tahsildar later on after the commencement of the Act, (as in the case in hand), by virtue of the deeming provision, the Act shall be deemed to be in existence on the date of the donation. Sub section (4) had made a similar deeming provision for the grant made in favour of a grantee before the coming into force of the Bhoodan Act. Section 24 reads: "Notwithstanding anything contained in any other law, every declaration and every grant of land made or deemed to have been made under this Act shall be and be deemed always to have been exempt from the payment of stamp duty and of encumbrance certificate fee, registration fee or of the fee payable for the attestation of a power of attorney under section 33, sub section 180 (2), of the Indian (Central Act XVI of 1908)." (emphasis added). The provision of this section also shows that donations and grants under the Bhoodan Act were exempted from the provisions of the Transfer of Property Act and the Indian with retrospective effect. The above considerations leave no doubt at all that the provisions of the Bhoodan Act had retrospective effect and intended to include donations of land by any person to the Bhoodan Yagna made before the commencement of the Bhoodan Act, and such donations were also exempted from the relevant provisions of the Transfer of Property Act and the Indian with retrospective effect. Section 23 made the order of Tahsildar or Deputy Tahsildar under sub section (4) of Section 17, final and not subject to appeal or revision. An aggrieved party however was not without remedy. Under the proviso of section 23, any person whose interest was affected as a result of the donation to the Bhoodan Yagna, whether before or after the commencement of the Act, might file a suit to set aside the order of the Tahsildar or the Deputy Tahsildar. The plaintiffs in the present suit (appellants before us) filed no such suit. Let us now turn to the relevant provisions of the Bhoodan (Amendment) Act of 1964. There was no material amendment to section 16 of the original Act. Only "The State Board" was substituted for "Tahsildar or Deputy Tahsildar". There was also no material amendment to Section 17. "Tahsildar or Deputy Tahsildar" was replaced by 'Inquiry Officer '. Only with the substitution of 'Inquiry Officer ' for 'Tahsildar or Deputy Tahsildar ', section 20 and section 23 have been retained. Section 24 as amended is as follows: "Notwithstanding anything contained in any other law, every declaration and every grant of land made or deemed to have been made under this Act shall be and be deemed always to have been exempt from registration and payment of stamp duty and of encumbrance certificate fee. " A comparison of the new section 24 with the old section 24 shows that there has been no change in the law so far as registration and stamp duty were concerned. 181 10. Section 11 of the Bhoodan (Amendment) Act of 1964 is new and very important. Clauses (b) and (c) which are material for our purpose need be extracted: "Section 11 Notwithstanding anything contained in any judgment, decree or order of any Court, no donation of any land for the Bhoodan Yagna or for Gramdan and no grant of any such land made or deemed to have been made under the principal Act as in force immediately before the commencement of this Act, shall be deemed to be invalid on the ground only that the donation or the grant of land as aforesaid was not made in accordance with any law relating to transfer of property or registration, and any such donation or grant of land shall, for all purposes, be deemed to be and to have always been validly made and accordingly (a) . . (b) no suit or other proceeding shall be maintained or continued in any Court for the declaration of title to, or the recovery of possession of, any land donated for the Bhoodan Yagna or for Gramdan on the ground that the donation was not made in accordance with the law relating to transfer of property or registration; (c) no Court shall enforce any decree or order declaring any donation of land for the Bhoodan Yagna or for Gramdan to be invalid or directing the recovery of possession of any such land by the person who donated it or any other person claiming under him, on ground referred to in clause (b): Provided that. . . Provided further that. . . Provided also that. . . . Explanation. . . . . " Clause (b) of section 11 of the Bhoodan (Amendment) Act puts a bar on the maintenance of a suit or other proceedings in any Court for the declaration of title to, or recovery of possession of, any land donated for the Bhoodan Yagna on the ground that the transfer (donation) was not in accordance with the provisions of the 182 Transfer of Property Act or Indian . Clause (c) to section 11 goes one step further and lays down that even if a decree has already been passed in such a suit, no court shall execute a decree in a suit referred to in clause (b). It is thus seen that the law both under the old and the new Acts so far as the operation of the provisions of the Transfer of Property Act and the is concerned, is the same. The law ingrained in section 11 is merely declaratory in express terms of the already existing law under the Bhoodan Act of 1958. The second appeal that was pending before the High Court fell within the mischief of clause (b) of section 11. Even if there had been no appeal by the defendants, the execution of the decree passed by the First Appellate Court could have been successfully objected to by the defendant or any other person as void on the ground that the suit itself was barred under section 23 of the old Act itself. This appeal has no merit and is dismissed with costs. N.K.A. Appeal dismissed.

The suit land belonged to one Naidu who donated it to Bhoodan Yagna in 1953 through unregistered deeds. Later the Madras Bhoodan Yagna Act 1958 came into force and this Act of 1958 was further amended by Bhoodan (Amendment) Act 1964. The said land was allotted to the respondents under the Act who claimed to have been in possession of the land since before the donation. Naidu sold the suit lands to the appellants by a registered sale deed. The appellants filed the suit for declaration of their title to, and possession of, the said land and pleaded that (i) as the donation of the land by Naidu was not by any registered deed, no title could be passed to the Bhoodan Board and subsequently to the respondents and (ii) Naidu validly transferred title of the lands to them. The respondents pleaded that (i) the land vested in the Bhoodan Board under the Bhoodan Act and (ii) Naidu had no saleable interest thereto which he could transfer to the appellants by the deed of sale. The trial court decreed the appellant 's suit which was upheld by the first appellate court. The respondents preferred second appeal before the High Court which reversed the decree of the courts below and dismissed the plaintiff 's suit. On appeal, it was argued by the appellants that the donation was invalid for want of registered deed and the provisions of the Bhoodan (Amendment) Act do not have retrospective effect. Dismissing the appeal, ^ HELD: 1. The object of the Bhoodan Yagna Act is "to facilitate the donation of lands for the Bhoodan Yagna initiated by Shri Acharya Vinoba Bhave and the transfer and settlement of such land for the benefit of poor landless persons or for community purposes and to provide in Gramdan villages for the vesting of lands in, and the management of those lands by the Sarvodaya Panchayat in the State of Madras." [176 H, 177 A B] 2. Section 11 clearly shows that intention of the Legislature was to bring in to the purview of the Bhoodan Act lands donated by any person before the commencement of the Bhoodan Act. The law ingrained in section 11 is merely declaratory in express terms of the already existing law under the Bhoodan Act of 1958. [177 E F, 182 B] 175 3. Clause (b) of section 11 of the Bhoodan (Amendment) Act puts a bar on the maintenance of a suit or other proceedings in any Court for the declaration of title to, or recovery of possession of, any land donated for the Bhoodan Yagna on the ground that the transfer (donation) was not in accordance with the provisions of the Transfer of Property Act or Indian Registration Act. Clause (c) to section 11 goes one step further and lays down that even if a decree has already been passed in such a suit, no court shall execute a decree in a suit referred to in clause (b). [181 G H, 182 A B] 4. Section 24 of the Act leaves no doubt that the provisions of the Bhoodan Act had retrospective effect and intended to include donations of land by any person to the Bhoodan Yagna made before the commencement of the Bhoodan Act, and such donations were also exempted from the relevant provisions of the Transfer of Property Act and the Indian Registration Act with retrospective effective. [180 B C]

Civil Appeal No. 879 of 1975. Appeal by special leave from the Judgment and order dated the 4th November, 1974 of the Punjab and Haryana High Court in Civil Writ No. 4346 of 1974. Hardyal Hardy, section K. Mehta, K. B. Nagaraja, P. N. Puri, M. Qamaruddin and K. Khanna, for the appellant. O. P. Sharma, for respondent No. 1. Luxmi Grover and section section Jauhar, for respondent No. 3. The Judgment of the Court was delivered by GOSWAMI, J. This appeal by special leave is against the judgment of the Punjab and Haryana High Court summarily dismissing a writ application under article 226 of the Constitution against the order of the State Transport Appellate Tribunal, Punjab. The appellant is a private limited company carrying on transport business over a long period. The company was granted 33 stage 219 carriage permits for various routes. It had a sanctioned fleet of 35 transport vehicles. On receipt of several reports and complaints from various sources, the State Transport Commissioner issued the following show cause notice to the appellant on March 28, 1974: "Regd. From: section Balinder Singh, IAS, State Transport Commissioner, Punjab. To The Managing Director, New Samundri Transport Company (P) Ltd., Ferozepur. No. 455/JFI(2) dated Chandigarh the 28th March, 1974. Subject: Departmental Action. Memorandum A list of prosecutions launched against your company by the Operational Staff is forwarded herewith. The offences committed are of a very serious nature. Your company is also short of fleet of fit vehicles. A copy of the joint report of the Secretary, Regional Transport Authority, Jullundur and Motor Vehicles Inspector, Jullundur relating to the condition of buses of your company is also enclosed. Due to the shortage of fit vehicles against the sanctioned fleet of 35 buses, number of services are being missed whereby the public is being put to a great inconvenience. You are, therefore, required to show cause as to why departmental action by way of suspension/cancellation of stage carriage permits under section 60 of the , should not be taken against your Company. Reply should be sent to this office within 10 days of the receipt of this notice failing which it will be presumed that you have nothing to say. State Transport Commissioner Punjab". The appellant says that an explanation was posted to the Commissioner within time under certificate of posting. According to the Commissioner it was not received. The District Judge, who is the State Transport Appellate Tribunal, observed in his order that "some mischief appears to have been committed in the office of the respondent with regard to the reply which was sent under postal certificate". 220 We will, however, proceed on the assumption that no explanation was sent by the appellant to the Commissioner. Even so a manifestly wrong procedure in a departmental action of this nature is obvious on the face of the above notice resulting in violation of the principles of natural justice. The notice was issued under section 60 of the (briefly the Act) which may be quoted: 60(1)"The transport authority which granted a permit may cancel the permit or may suspend it for such period as it thinks fit (a) on the breach of any condition specified in sub section (3) of section 59, or of any condition contained in the permit, or (b) if the holder of the permit uses or causes or allows a vehicle to be used in any manner not authorised by the permit, or (c) if the holder of the permit ceases to own the vehicle or vehicles covered by the permit, or (d) if the holder of the permit has obtained the permit by fraud or misrepresentation, or (e) if the holder of the permit, not being a private carrier 's permit, fails without reasonable cause to use the vehicle or vehicles for the purposes for which the permit was granted; or (f) if the holder of the permit acquires the citizenship of any foreign country: Provided that no permit shall be cancelled unless an opportunity has been given to the holder of the permit to furnish his explanation". Sub section (3) of section 60 provides for composition of breach of certain conditions. Section 59(3) contains the conditions laid down for every permit. The target of section 60 is the permit that has been issued breach of conditions of which is the subject matter of action under it except in cases covered by section 60(1) (d) and (f). It is true that for each permit the permit holder is responsible and he is the person who has to submit the explanation. The proposed penal action has to be particularised with reference to each permit detailing the particular conditions for breach of which action is sought to be taken in connection with a particular permit. This is the minimum requirement of section 60. What we find in this case is a kind of bald notice making no reference to any particular permit for cancellation or suspension of which action has been taken. It is as if all the 33 permits were going to be suspended or cancelled. It is clear that after receipt of the various reports the Commissioner did not apply his mind to scrutinise the same 221 for the purpose of taking appropriate legal action against any specific permit under section 60 of the Act. On the other hand taking the reports as they were, which may as well have been general allegations against the permit holder, immediately action was taken for suspension or cancellation of all the permits. From the list of prosecutions we find only 15 vehicles are involved and most of the cases are of overloading. Some of the cases relate to non accompaniment with the vehicles of registration certificates and other documents. In some cases, against certain vehicles, the time schedule was not kept and certain trips were missed. We are not at all on the merits of these prosecutions. What is important in a departmental action of this type for violation of conditions of permit is that it must relate to the particular permits appertaining to concerned vehicles. It is of utmost importance that charges are made with reference to each permit in clear terms in order to enable the permit holder to furnish his explanation. Proviso to section 60(1) which requires mandatory compliance is nothing short of a reasonable opportunity to the permit holder to furnish his explanation. Unless, therefore, the breaches of conditions or other allegations are particularised with reference to each permit in the show cause notice, such notice is clearly invalid and no action can be taken under such a notice. This is exactly what has happened in this case resulting in violation of the principles of natural justice ingrained in the proviso to section 60(1) of the Act. The High Court, therefore, was not right in not interfering with the order of the authorities cancelling the permits. In the result the appeal is allowed. The order of the High Court as well as the orders of the State Transport Appellate Tribunal and the Commissioner are set aside. We will, however, make no order as to costs. P.B.R. Appeal allowed.

Section 3 of the Bihar Land Reforms Act, 1 950, transfers all interests in estates or tenures of a proprietor or tenure holder to the State as from a date notified under section 4. Section 6 carves out of this land mass and leaves untouched, apart from raiyati holdings the bakasht lands in Khas possession of the 'intermediary ' i.e., the prior full owner. Several items of property were gifted by one Ram Badan Singh to his two wives whose names were duly mutated in the revenue register. By further gift deeds and transfers the lands covered by the original gift deeds can to vest in the plaintiff and defendants, second party. They divided them as per a partition deed Exhibit 4/a dated October 30, 1952 whereby the suit lands fell to the exclusive share, of the plaintiff along with some other items while other properties were similarly allotted to defendants 2nd party. Despite this fact defendants, second party, sold the suit lands to the defendants first party alleging an oral partition sometime before August 1952 and under cover of that ease, committed trespass. Thereupon, a scramble for possession of these properties and a proceeding under section 145 Cr. P.C. ensued in which the defendants, first party, got their possession upheld by Magistrate 's order dated S 4 1954. The plaintiff brought the present suit in April 1955 for a declaration of ' his title, for possession and mesne profits on the score that his exclusive possession was by force taken away in July August 1954 by defendants first party the latter put forward the plea of prior oral partition and exclusive hostile possession, tracing their claim through defendants second party. The courts of tact found against the defendants and decreed the suit, but in Letters Patent Appeal, the respondents i.e., the defendants 1st party succeeded on the ground that the plaintiff had lost his title on account of the operation of sections 3 and 4 of the Bihar Land Reforms Act, 1950. In this appeal filed on the basis of the special leave granted by this court, it was contended for the appellant that (i) Section 6 of the Act applied to the facts of the case and so there was no vesting of title in the State of the suit lands; (ii) This case, resting on the Act, which had been on the statute book for several ' years, had not been set up at the earlier stages of the litigation at and should not have been permitted at the Letters Patent Appeal stage in the High Court for the first time; and (iii) The deed of partition was not legally divestative of rights in view of the provisions of the Estates Partition Act, 1897, which empowered the Collector along to partition the properties, which not having been done, the lands remained in co ownership therefore the possession of ' the defendants first party, was that of co sharers. If that were so. the possession of one co sharer was constructive possession of the other co sharer and the plaintiff was thus in khas possession under section 2k of the Act and, on that basis, section 6 of the Act saved the disputed properties from vesting in the State. Rejecting the contentions except to a small extent of modifying the decree, ^ HELD: (i) It is well settled that a pure question of law going to the root or the case and based on undisputed or proven f acts could be raised even before the Court of last resort, provided the opposite side was not taken by surprise or otherwise unfairly prejudiced [745 E F] Connecticut Fire Insurance Company vs Kavanach. , 480. referred to. 740 In the present case the new plea springs from the common case of the, parties and nothing which may work injustice by allowance of this contention has been made out. [746 A] (ii) The Magistrate did not direct possession of the B Schedule properties to be handed over to the defendants, first party, but declared their actual possession. He has done no wrong nor conferred any unjust advantage. There is no principle on which it could be held that these circumstances deprive . party of the benefit of his possession and of the dispossession of the plaintiff flowing from s.6 of the Act. [746D E] (iii) Neither the provisions of section 6(1) nor those of section 35 contain any prohibition against the civil court 's power to decide the issue of the and right to possession of the plaintiff and, as a necessary corollary, the claim of actual possession set up by the defendants, first party. Nor can section 6(2) inferentially interdict the plenary power of the Civil court. [746.A B] (iv) The partition is valid, it divests title it binds all. but, so far as land revenue liability is concerned, it relieves parties from the burden falling on the other sharer 's land only if the exercise prescribed in the Estates Partition Act is gone through. The statute is a protective fiscal armour, not a monorail for division among co owners to travel. Section 7 makes it clear. Not that Courts have lost power to decree partition nor that co owners have become powerless to separate their shares voluntarily but that land revenue shall not be prejudiced without the procedure under that Act being gone through. More clinching is the fact that the plaintiff has here come to Court on the sole case of partition by metes and bounds and has founded his relief not as co sharer but as exclusive owner. [747 G H, 748 Al Mahanth Ram Bhushan Das V. Ramrati Kuer, 1965 Bihar L.J. 119, referred (v) The purpose and purport of section 6(1) is to allow the large land holders to keep possession of small areas which may be designated as the private or privileged or mortgaged lands traditionally held directly and occasionally made over to others, often servants or others, in the shape of leases or mortgages. It is obvious that section 6(1) uses the word 'including ' to permit enlargement of the meaning of khas possession for the limited purpose of that section, emphasising thereby that, but for such enlargement, the expression khas possession excludes lands outstanding even with temporary lessees. It is perfectly plain, therefore, that khas possession has been used in the restricted sense of actual possession and to the small extent it had to be enlarged for giving relief to proprietors in respect of 'private ', 'privileged ' and mortgaged lands, inclusive expressions had to be employed. Khas possession is actual possession. Constructive possession or possession in law is what is covered by sub clauses of section 6(1). It is not correct to say mat possession is so wide as to include a mere right to possess, when the actual dominion over the property is held by one in hostility to the former. [751 AB, G H, 752 C E.] (vi) In Anglo American jurisprudence also possession is actual possession and in a limited set of cases, may include constructive possession, but when there is a bare right to possess bereft of any dominion or factum of control, it will be a strange legal travesty to assert that an owner is in possession merely because he has a right to possess when a rival, in the teeth of owner 's opposition. is actually holding dominion and control over the land adversely, openly and continuously. This court has rejected the theory that the possession of a trespasser was that of the owner. [752 H, 753A, 754 D.] Surajnath Ahir vs Prithinath Singh , Ram Bijai Singh & Ors vs Behari Singh @ Bagandha Singh relied on. Brij Nandan Singh vs Jamuna Prasad A.I.R. 1958 Pat. 589, referred to. (vii) It is undeniable that the plaintiff had title to the entire Schedule properties as against defendants, first party, and second party. If defendants. first party, were not in possession the plaintiff would still be entitled for a decree 741 for possession of the same. If neither is in possession, the presumption that the owner is in possession holds good and he is entitled to that possession being restored to him. Therefore, the plaintiff is entitled to a decree for possession regarding the items of properly covered by paragraph, 27 of the written statement filed on behalf of the contesting defendants, first party. the rights of the State as against the plaintiff in regard these items of property, will not in any manner be effected. [754H. 755 A B] observation: Prima facie section 4 (f) and (g) of the Act and rule 7 H of the Rules framed under the Act attract the jurisdiction of the State and its revenue authorities. In the present case, the defendants, first party, are rank trespassers and have no equity in their favour. Section 4(f) declares that the Collectors shall be deemed to have taken charge of the estates and interests vested in the State. This means he has a public duty to take charge of lands vested in the State. Surely, a responsible public office like the Collector, charged with duty of taking delivery of possession of lands which by virtue of the vesting the State is entitled to take direct possession, will proceed to disposses the trespasser. In this case, defendants, first party the trespassers and the plaintiff being out of the pale of section 6, the State ii entitled to the direct possession of the suit lands. [756B, 755 D E]

minal Appeal No. 193 of 1964. Appeal from the judgment and order dated April 29, 1964 ,of the Calcutta High Court in Criminal Appeal No. 369 of 1962. section D. Banerjee, Advocate General for the State of West Bengal, B. Sen, P. K. Chatterjee, M. K. Banerjee and P. K. Bose, for the appellant. M.C. Setalvad, A. N. Sinha and Sukumar Ghose, for the respondent, N.S. Bindra, R. H. Dhebar and R. N. Sachthey, for inter vener No. 1. A. V. Rangam, for intervener No. 2. V. A. Seyid Muhamad, Advocate General for the State of Kerala and A. G. Puddisery, for intervener No. 3. O. P. Rana, for intervener No. 4. I. N. Shroff, for intervener No. 5. K. B. Mehta, for intervener No. 6. The Judgment of SUBBA RAO, C.J., WANCHOO, SIKRI, RAMASWAMI, SHELAT, BHARGAVA and VAIDIALINGAM, JJ. was delivered by SBBBA RAO, C. J. BACHAWAT J., delivered a separate concurring Judgment. SHAH, J. delivered a dissenting Opinion. Subbarao, C.J. This Full Bench of 9 Judges has been cons tituted to consider the correctness of the decision of this Court 175 in Director of Rationing and Distribution vs The Corporation of Calcutta(1). The relevant facts are simple and are not in dispute. The State of West Bengal was carrying on the trade of a daily market at 1, Orphanganj Road, Calcutta, without obtaining a licence as required under section 218 of the Calcutta Municipal Act, 1951 (West Bengal Act 33 of 1951) hereinafter called the Act. The Corporation of Calcutta filed a complaint against the State of West Bengal in the Court of the Presidency and Municipal Magistrate, Calcutta, under section 541 of the Act for contravening the provisions of section 218 thereof. Under section 218 of the Act, every person who exercises or carries on in Calcutta any trade, shall take out a licence and shall pay for the same such fee as is mentioned in that behalf in Schedule IV to the Act. Admittedly for the year 1960 61, the Government of West Bengal did not take out a licence under the said section but carried on the said trade. The main contention of the Government was that the State was not bound by the pro visions of the Act. The learned Magistrate, accepting the said contention, acquitted the State. On appeal, the High Court of Calcutta held that the State was carrying on the business of running a market and, therefore, it was as much bound as a private citizen to take out a licence. It distinguished the decision of this Court in Director of Rationing and Distribution vs The Corporation of Calcutta(1) on the ground that the said decision was concerned with the sovereign activity of the State. In the result the State of West Bengal was convicted under section 537 of the Act section 537 appears to be a mistake for section 541 and sentenced to pay a fine of Rs. 250, with the direction that when realized, it should be paid to the Corporation. Hence the present appeal. Learned Advocate General of West Bengal raised before us the following points: (1) The State is not bound by the provisions of a statute unless it is expressly named or brought in by necessary implication; (2) the said principle equally applies to sovereign and non sovereign activities of a State; and Mr. N. section Bindra, learned counsel appearing for the Attorney General raised before us the third point, namely, this Court has no power under the Constitution to review its earlier judgment. While the learned Advocate General contended that the rule of construction in favour of the State was part of the common law of England accepted as the law of this country and, therefore, was law in force within the meaning of article 372 of the Constitution, Mr. N. section Bindra argued that the said rule of construction was law of the land in that it was declared to be so by the Judicial Committee in Province of Bombay vs Municipal Corporation of (1) ; 176 the City of Bombay(1) and, therefore, it was law in force within the meaning of article 372 of the Constitution. The third contention need not detain us, for it has been rejected by this Court in The Bengal Immunity Company Limited vs The State of Bihar(2). There a Bench of 7 Judges unanimously held that there was nothing in the Constitution which prevented the Supreme Court from departing from a previous decision of its own if it was satisfied of its error and of its baneful effect on the general interests of the public. If the aforesaid rule of construction accepted by this Court is inconsistent with the legal philosophy of our Constitution, it is our duty to correct ourselves and lay down the right rule. In constitutional matters which affect the evolution of our polity, we must more readily do so than in other branches of law, as perpetuation of a mistake will be harmful to public interests. While continuity and consistency are conducive to the smooth evolution of the rule of law, hesitancy to set right deviations will retard its growth. In this case, as we are satisfied that the said rule of construction is inconsistent with our republican polity and, if accepted, bristles with anomalies, we have no hesitation to reconsider our earlier decision. At the outset it will be convenient to notice the facts of the decision of this Court in Director of Rationing and ' Distribution vs The Corporation of Calcutta(3) and the reasons given by this Court for applying the said rule of construction to an Indian statute. There, the Director of Rationing and Distribution was using certain premises in Calcutta for storing rice flour, etc. without taking out any licence under section 385 (1)(a) of the Calcutta Municipal Act, 1923. The Corporation of, Calcutta filed a complaint against the said Director in the Magistrate 's Court for the contravention of the said provision. This Court held that the State was not bound by the provisions of section 386 (1)(a) of the said Act and that the appellant was not liable to prosecution for the contravention of the said section. Sinha, C. J., speaking for Imam and Shah, JJ., gave one judgment, Sarkar, J., gave a separate but concurrent judgment, and Wanchoo, J., recorded his dissent. The reasoning of Sinha, C.J., is found in the following passage : "It is well established that the common law of England is that the King 's prerogative is illustrated by the rule that the Sovereign is not necessarily bound by a statutory law which binds the subject. This is further enforced by the rule that the King is not bound by a statute unless he is expressly named or unless he is bound by necessary implication or unless, the statute being for the public good, it would be absurd to exclude the King from it." (at page 170). (1) [1946] L.H. 73 I.R. 271. (2) (3 ; 177 "That was law applicable to India also, as authoritatively laid down by the Privy Council in the case referred to above [(1946) L. R. 73 I.A. 271)]. it (law in force under article 372 of the Constitution) must be interpreted as including the common law of England which was adopted as the law of this country before the Constitution came into force." (At p. 173). Sinha, C.J., therefore, held that the said rule of construction was, part of the common law of England, that it was adopted by this, country and that Art ' 372 of the Constitution continued it. Sarkar, J., on the other hand, agreed with the conclusion arrived at by Sinha, C.J., but on a different ground. He based his conclusion not on any common law doctrine, but simply on the ground that the said rule of construction of statutory provisions was accepted and followed in England, America and India. Wanchoo, J., in his dissent, put the case in a different perspective. The following, passage brings out his line of thought : "Two things are clear from this modern conception of royal prerogative, namely (1) that there must be a Crown or King to whom the royal prerogative attaches, and (2) that the prerogative must be part of the common law of England. Both these conditions existed when the Privy Council decision in Province1 of Bombay vs Municipal Corporation of the City of Bombay(1) was given in October 1946; the King was still there and the Privy Council held that the English common law rule of construc tion applied to Indian legislation as much as to English ,statutes." (At p. 184). "In our country the Rule of Law prevails and our Constitution has guaranteed it by the provisions contained in Part III thereof as well as by other provisions in other Parts. It is to my mind inherent in the conception of the Rule of Law that the State, no less than its citizens and others, is bound by the laws of the land. When the King as the embodiment of all power executive, legislative and judicial has disappeared and in our republican Constitution, sovereign power has been distributed among various organs created 'thereby, it seems, to me that there is neither justification nor necessity for continuing the rule of construction based on the royal, prerogative." (At p. 185). "But where the royal prerogative is merely a rule of construction of statutes based on the existence of the Crown in England and for historical reasons, I fail to see why in a democratic republic, the courts should not follow the ordinary principle of construction that no one (1) [1946] L.R. 73 I.A. 271. 178 is exempt from the operation of a statute unless the statute expressly grants the exemption or the exemption arises by necessary implication." (At pp. 188 189). The conflict between the two views expressed by the learned Judges in the earlier decision mainly rests on the meaning of the expression "law in force" in article 372 of the Constitution. While Sinha, C.J., took the view that the common law of England, including the rule of construction, was accepted as the law of this country and was, therefore, the law in force within the meaning of the said Article, Wanchoo, J., took the view that whatever might be said of the substantive laws, 'a rule of construction adopted by the common law of England and accepted by the Privy Council at a time when the Crown was functioning in India, was not the law in force within the meaning of the said Article. We shall now consider the validity of the conflicting views The common law of England is clear on the subject. In Halsbury 's Laws of England, 3rd Edn., Vol. 7, in Part 5 of the Chapter on "Constitutional Law" under the heading "The Royal Prerogative", the Royal prerogatives are enumerated and their limitations are given. In para 464 it is stated : "The general rule is that prerogatives cannot be affected or parted with by the Crown, except by express statutory authority. " The prerogative right can be taken away by law because the law is made by the Crown with the assent of the Lords and the Commons. It can be taken away only by law to which the Crown is a party. Whether a particular statute has taken away such right pertains to the domain of the rule of construction. The relevant rule of construction evolved by judicial decisions in England may be stated thus : "At all events, the Crown is not reached except by express words or by necessary implication in any case where it would be ousted of an existing prerogative or interest. " (See Perry vs Eames) (1). It is said much to the same effect in Maxwell 's Interpretation of Statutes, 11th Edn., at page 129, thus : "It is presumed that the legislature does not intend to deprive the Crown of any prerogative, right or property, unless it expresses its intention to do so in explicit terms, or makes the inference irresistible." The same rule is given in Bacon 's Abridgment 7th Edn., 9.462. The legal position in England may be summarised thus : (1) [1891] 1 179 "The substantive rule of law is that the prerogative of the Crown can only be taken away by law. The rule of construction evolved by the courts to ascertain the legislative intention is, that it is presumed that a statute has not taken away the prescriptive right unless it has expressly or by necessary implication done so. " There is an essential distinction between a substantive law and a rule of construction and that is well expressed by Craies in his book "On Statute Law", 6th Edn., at p. 10, thus : "A rule of law, e.g., the Rule against Perpetuities or the Rule in Shelley 's case (abolished in 1925), exists independently of the circumstances of the parties to a deed, and is inflexible and paramount to the intention expressed in the deed. A rule of law cannot be said to control the construction of a statute, inasmuch as a British statute is itself part of the supreme law of the land and overrides any pre existing rules with which it is inconsistent. A rule or canon of construction, whether of will, deed or statute, is not inflexible, but is merely a presumption in favour of a particular meaning in case of ambiguity. This was well expressed by Bowen, L.J. in L. N. W. Ry. vs Evans:(1) 'These canons do not override the language of a statute where the language is clear : they are only guides to enable us to understand what is inferential. In each case the Act of Parliament is all powerful, and when its meaning is unequivocally expressed the necessity for rules of construction disappears and reaches its vanishing point. " The same principle was stated by Bhashyam Ayyangar, J., in Bell vs The Municipal Commissioners for the City of Madras(2) thus : "These compendious canons of interpretation which are in the nature of maxims can only be regarded as mere guides to the interpretation of Statutes and ought not to be applied as if they were statutory clauses, enacted with all the precision and provisos of an Interpretation Act. " Franfurter, J., said to the same effect in United States vs United Mine Workers of America thus : (3) "At best, this canon, like other generalities about statutory construction, is not a rule of law. Whatever persuasiveness it may have in construing a particular (1) [1893] I Ch. 16, 27. (2) I.L.R. [1902] 25 Mad. 457, 484. (3) [1947] 91 L. ed. 180 statute derives from the subject matter and the terms of the enactment in its total environment. " Even in England this rule of interpretation has not been treated as inflexible. It is gradually losing ground in many branches of law. The incongruity of the rule of discrimination in favour of the Crown was pointed out by Glanville L. Williams in his treatise on "Crown Proceedings", at p. 53 : "The rule originated in the Middle Ages, when it perhaps had some justification. Its survival, however, is due to little but the vis inertiae. " The author continues at p. 54 : "With the great extension in the activities of the State and the number of servants employed by it, and with the modern idea, expressed in the Crown Proceedings Act, [compare in this connection article 300 of our Constitution], "that the State should be accountable in wide measure to the law, the presumption should be that a statute binds the Crown rather than it does not. " The next question is, how far and to what extent the common law of England relating to the prerogatives of the Crown has been accepted as the law of our country? Nothing has been placed before us to show that the entire body of the common law pertaining to prerogatives was accepted as the law throughout India. India at the relevant time comprised Provinces and Native States. As Bhashyam Ayyangar, J., pointed out in Bell vs The Municipal Commissioners for the City of Madras() "the prerogatives of the Crown in India a country in which the title of the British Crown is of a very mixed character may vary in different provinces, as also in the Presidency towns as distinguished from the mofussil. 'The determination, with anything like legal precision, of all the prerogatives of the British Crown in India is by no means an easy task. " It is well known that the Common law of England was applied as such in the original sides of the High Courts of Calcutta, Bombay and Madras, and that in the mofussil courts the principles embodied in the common law were invoked in appropriate cases on the ground of justice, equity and good conscience. It cannot, therefore, be posited that either the entire body of common law of England relating to prerogatives of the King or even the rule of construction as forming part of that law was accepted as law in every part of the country. It has to be established whenever a question arises as to what part of the common law was accepted as the law in a particular part of the country. Learned Advocate General of West Bengal referred us to the decision of the Privy Council in Province of Bombay vs Municipal (1) I.L.R. ,484. 181 Corporation of the City of Bomhay(1) in support of his contention that the common law of England was accepted as the law of our country in that regard. In that case the question was whether the Crown was not bound by section 222(1) and section 265 of the City of Bombay Municipal Act, 1888 which gave the Municipality power to carry water mains for the purposes of water supply through across or under any street and into, through or under any land "whatsoever within the city. " When the Municipal Corporation wanted to lay water mains through the land belonging to the Government of Bombay, the Government did not agree except on some condi tions. Thereafter, the dispute between the parties was referred to the High Court. Ultimately, setting aside the order of the High Court, the Privy Council held that the rule that no statute bound the Crown unless the Crown was expressly or by necessary implication made bound thereunder applied to the Crown in India and that there was no such express intention or necessary implication in the said section. Indeed, the High Court also accepted that principle, but on the construction of the relevant provisions it came to the conclusion that there was such a necessary implication thereunder. On the application of the principle there was no contest before the Privy Council. The Privy Council expressly stated so at p. 274, when it observed : "The High Court held, following previous decisions of its own, that the principle to be applied for the decision of the question whether or not the Crown is bound by a statute is no different in the case of Indian Legislation from that which has long been applied in England. The parties concurred in accepting this view, and their Lordships regard it as correct. " The decision made on a concession made by the parties even though the principle conceded was accepted by the Privy Council without discussion, cannot be given the same value as one given upon a careful consideration of the pros and cons of the question raised. Further, no argument was raised before the Privy Council that the Common law of England had legal force only in the said three Presidency towns and not in the rest of the country, for that case happened to be one that arose in the City of Bombay. The observations of the Privy Council that the principles obtaining in England also governed the Crown in India are, rather wide. Nor any argument was raised before the Privy Counsel making a distinction between substantive branches of common law and mere rules of construction. It is not possible to predicate what the Privy Council would have said if that distinction had been placed before it. Be that as it may, this decision cannot be taken as finally deciding the question that is raised before us. (1) [1946] L.R. 73 I.A. 271. 182 Learned counsel relied upon a series of Indian decisions in. support of his contention that this rule of construction had become the law of the land. It was held in The Secretary of State in Council of India vs The Bombay Landing and Shipping Company (Limited)(1) that in a winding up proceedings the Crown was entitled to the same precedence in regard to the debts due to it, in England, in Ganpat Putava vs Collector of Kanara(2) that the Crown was entitled to the same precedence in regard to fees payable to it by a pauper plaintiff, in The Secretary of State for India vs Mathura Bhai() that section 26 of the Limitation Act, 1877 being a branch of substantive law did not affect the Crown 's right, in Motilal Virchand vs The Collector of Ahmedabad(4) that the Mamlatdars ' Courts could not entertain and decide a suit to which the collector was a party in The Government of Bombay vs Esufali Salebhai(5) that the Crown had a prerogative right to intervene and claim compensation in Land Acquisition proceedings, in Hiranand Khushiram vs Secretary of State(6), that the Crown was not bound by the provision of the Bombay Municipality Act, in The Secretary of State for India vs The Municipal Corporation of Bombay (No. 1)(7) that the Crown was subject to a charge under section 212 of the Bombay City Municipal Act. A careful study of these decisions discloses that all of them related to particular prerogatives of the Crown and that the Court held either that the prerogative of the Crown Was taken away by the statute or not, having regard to the construction placed by it on the relevant statute. It is true that in some of the decisions the said rule of construction was noticed, but as the decisions turned upon the construction of the relevant provisions, it could not be said that the said rule had been accepted as an inflexible rule of construction by the Bombay High Court. In one of the judgments even the applicability of the rule of construction was doubted. A learned thesis on the subject is found in the judgment of Bhashyam Ayyangar, J., in Bell vs The Municipal Commissioners for the City of Madras(8). The Superintendent of the Government Gun carriage Factory, Madras, having brought timber belonging to the Government into the City of Madras without taking out a licence and paying the licence fees prescribed by section 341 of the City of Madras Municipal Act, was prosecuted. There was no mention of Government in the said section. A Division Bench of the Madras High Court (1) [1868] 5 Ho H. C. Rep. 23,27. (3) Bom. (5) Bom. (7) , 509. (2) Dom. 7. (4) Bom. (6) A.I.R. 1934 Bom. (8) I.L.R. (I 902) , 484. 183 Indian legislation, statutes imposing duties or taxes bound the Government unless the very nature of the duty or tax was such is to be inapplicable to it. Bhashyam Ayyangar, J., in his judgment, after considering all the relevant material on the subject statutes and English and Indian decisions came to the conclusion that exemption from the payment of tolls, rates and taxes was not in reality a prerogative of the Crown, but depended solely upon the right construction to be put on the Crown grant or the statute in question. Though the learned Judge noticed the rule of construction and affirmed its application both to English and Indian statutes vis a vis the Crown, he pointed out that the said rule, like every cognate rule of construction was not really a pre rogative of the Crown but only a canon of interpretation and a mere guide to the interpretation of statutes. That case arose in the Madras City. In Madras the_ position was that non liability of the Crown to taxes was not treated as its prerogative and the aforesaid rule of construction was only treated as a guide in interpreting the provisions of a statute. Now coming to Calcutta, a Division Bench of the Calcutta High Court in Corporation of Calcutta vs Bhupal Chandra Sinha(1) held that the Crown was bound by section 421 of the Calcutta Municipal Act, 1923 and that the unwholesome barley found in the Government stores was liable to be destroyed. No doubt, the Court re stated the said rule of construction and came to the conclusion that by necessary implication the State was bound by the said provision. A Division Bench of the same High Court in Corporation of Calcutta vs Director of Rationing and Distribution(2) held that the State Government which was carrying on a trade at premises No. 259, Upper Chitpur Road, Calcutta, and was using or permitting the use of the said premises for the purpose of storing rice etc. without licence was liable to be convicted under section 386(1)(a) of the Calcutta Municipal Act, 1923, read with section 488 thereof When the said rule of construction was pressed upon the learned Judges, they held that the law, even after coming into force of the Government of India Act, 1935, was that the Crown or the Government was bound by the statute unless it was exempted from its operation either expressly or by necessary implication. They did not, therefore, accept the rule of construction laid down by the Privy Council. It cannot, therefore, be said that in the City of Calcutta there was a universal recognition of the rule of construction in favour of the Crown. The legislative practice in India establishes that the various Legislatures of the country provided specifically exemptions in (1 ) A.I.R 1950 Cal. (2)A.I.R. 1955 Cal.282. 184 favour of the Crown whenever they intended to do so indicating thereby that they did not rely upon any presumption but only on express exemptions, see, for instance, section 74 of the Contract Act, section 9 of the Specific Relief Act, section 90 of the Indian Registration Act, section 2(a) and (b) of the Indian Easements Act, The Crown Grants Act XV of 1895, sections 295 (proviso), 356(b) and 411 and 616 (a) of the Code of Civil Procedure (old), section 212 (proviso) of the Indian Companies Act, section 20 (proviso) of the , section 1(4)(i) of the Indian Ports Act, section 3, proviso (1) of the Indian Stamps Act, 1899, and section 3 of the India Act XI of 1881 etc. What is more, Act XI of 1881 empowered the Governor General in Council by order to prohibit the levy by a Municipal Corporation of any specified tax payable by the Secretary of State for India and to direct the Secretary of State for India to pay to the Municipal Corporation in lieu of such tax some definite amounts. This Act was a pointer against the contention that there was a presumption in favour of the Crown that a statute was not binding on it. It is true that there are other Acts where there are specific provisions to the effect that the provisions of the Acts shall be binding on the Government: see section 10 of the Arbitration Act (Act X of 1940), section 116 of the Oil Field Regulation and Development Act (Act LIII of 1948). Subsequent to the making of the Constitution also there were Acts where such a provision was found. There is no firm legislative practice based upon the said presumptive rule of construction. Different statutes adopted different devices to achieve their desired results. The legislative practice, therefore, does not support the contention that in India the said rule of construction was accepted. It only shows that wherever an exemption was intended to be given to the Government it was expressly mentioned and wherever there might have been any doubt of the liability of the Government, it was expressly made liable. The rule of construction was not statutorily recognised either by incorporating it in different Acts or in any General Clauses Act; at the most, it was relied upon as a rule of general guidance in some parts of the country. Some of the American decisions may usefully be referred to at this stage. It was said that in America where the Crown did not exist, the same rule of construction was adopted in that country as law of the land and therefore by analogy the same legal position must be accepted in India. The decision in H. Snowden Marshall vs People of the State of New York(1) only lays down that the State of New York has the common law prerogative right of priority over unsecured creditors. This case has nothing to do with the rule of construction but was based upon the common law prerogative of the (1) (1920) 65 L.cd. 185 Crown expressly embodied in the State 's Constitution. The decision in Guarantee Trust Company of New York vs United States of America(1) accepted the immunity of the sovereign from he operation of statutes of limitation. That decision was based upon the doctrine of public policy evolved by courts, though in evolving the said policy the courts had been influenced, to some extent, by the doctrine of the pregrogative of the Crown. This decision also does not express any opinion on the rule of construction. The decision in United States of America vs United Mine Workers of America(2) ruled that statutes which in general terms, divested pre existing rights and privileges would not be applied to the sovereign without express words to that effect. But Frankfurter, J., after citing the said rule, pointed out that "At best, this canon, like other generalities about statutory construction, is not a rule of law. " The same rule was again re stated in United States of America vs Reginald P. Wittek.(3) The question there was whether the District of Columbia Emergency Rent Act did not apply to Government owned defence houses in the District such as Bellevue Houses. The Court relied not only upon the said rule of construction but also on other circumstances in support of the conclusion that the United States was exempt from the operation of that Act by necessary implication. In Jess Larson, as War Assets Administrator and Surplus Property Administrator vs Domestic and Foreign,, Commerce Corporation,(4) the purchaser of surplus coal from the War Assets Administration filed a suit against the said Administration for an injunction prohibiting the latter from selling or delivering the coal to any other person. The suit was dismissed on the ground that the sovereign immunity in suits for injunction or for specific performance was based upon public policy. But it was argued that the principle of sovereign immunity was an archaic hangover not consonant with modern morality; the majority conceded that there was substance in such a viewpoint as applied to suits for damages. Mr. Justice Frankfurter in his dissent went further and pointed out that the doctrine of sovereign immunity was in disfavour. The American decisions, therefore, were mainly based either on the provisions of the constitution of the State or on. the ground of public policy evolved by Courts. The founding fathers carried with them the English doctrine of the Crown Prerogative and it continued to influence some of the principles of public policy evolved in that country. Even so, the decisions made it clear that the rule of construction was relied upon only as one of the guides to arrive at the intention of a particular statute. That apart, the fact that the common law of England pertaining to 2,1.4 (1)(1938) 82 L. ed. 1224. (3)(1949) 93 L. ed. 1406. M19Sup. C.I./66 13 (2) (1947) 91 L. ed. 884,923. (4) (1949) 93 L. ed. 186 prerogatives influenced some of the decisions of the Supreme Court ,of the United States cannot help us in coming to a conclusion whether the said rule had become part of the Law in India. Mr. Bindra, the learned counsel appearing for the Attorney General sought to reach at the same result by a different process. He argued that the decision of the Privy Council in Province of Bombay vs Municipal Corporation of the city of Bombay and another(1) is a law of the country. We have already noticed the decision in another context. It accepted the rule of construction on a concession made by the counsel. Even if it was a considered decision on the point, it was nothing more than an application of a rule of construction with which it was familiar for ascertaining the intention of statutory provisions applicable to the Bombay city. To sum up : some of the doctrines of common law of England were administered as the law in the Presidency Towns of Calcutta, Bombay and Madras. The Common Law of England was not adopted in the rest of India. Doubtless some of its principles were embodied in the statute law of our country. That apart, in the mofussil, some principles of Common Law were invoked 'by courts on the ground of justice, equity and good conscience. It is, therefore, a question of fact in each case whether any particular branch of the Common Law became a part of the law of India or in any particular part thereof. The aforesaid rule of construction is only a canon of interpretation, it is not a rule of substantive law. Though it was noticed in some of the judgments of the Bombay High Court, the decisions therein mainly turned upon the relevant statutory provisions. One decision even questioned its correctness. There is nothing to show that it was applied in other parts of the country on the ground of justice, good con.science and equity. In Madras, it was not considered to be a binding rule of law, but only as a simple canon of construction. In Calcutta there was a conflict : one Bench accepted the construction and the other rejected it. The Privy Council gave its approval to the rule mainly on the concession of Advocates and that decision related to Bombay City. It is, therefore, clear that the said rule of construction was not accepted as a rule of construction throughout India and even in the Presidency towns it was not regarded as inflexible rule of construction. In short it has not become a law* of the land. Let us now proceed on the assumption that it has been accepted as a rule of construction throughout India. This leads us to the question whether the said rule of construction is the law of the land after the Constitution came into force. Under Article 372, (1)73 I.A. 271. 187 all the laws in force in the territory of India immediately before the commencement of this Constitution shall continue in force, therein until altered or repealed or amended by a competent Legislature or other competent authority. Can it be said that the said canon of construction was a 'law in force ' which can only be amended by a Legislature? Under Explanation (1) to the said Article, the expression 'law in force ' shall include a law passed or,. made by a Legislature or other competent authority in the territory of India before the commencement of the Constitution. it has been held by this court that the said expression includes not only enactments of the Indian Legislatures but also the Common Law of the land which was being administered by the Courts in India. (See Director of Rationing and Distribution vs The Corporation of Calcutta and others() and V. section Rice and Oil Mills & others vs State of Andhra Pradesh(2). But it is not possible to hold. that a mere rule of construction adopted by English Courts, and also by some of the Indian Courts to ascertain the intention of the Legislature was a law in force within the meaning of this term. There is an essential distinction between a law and a canon of construction. This distinction between law and the canon of construction has been noticed by us earlier and we have held that a canon of construction is not a rule of law. We are not concerned here. with the statutory rules of interpretation. We are, therefore, of the opinion that a rule of construction is not a 'law in force ' within the meaning of Article 372. The next question is whether this Court should adopt the rule of construction accepted by the Privy Council in interpreting statute vis a vis the Crown. There are many reasons why the said rule of construction is inconsistent with and incongruous in the present set up we have no Crown, the archaic rule based on the prerogative and perfection of the Crown has no relevance to a democratic republic; it is inconsistent with the rule of law based on the dictrine of equality. It introduces conflicts and discrimination. To illustrates: (1) State "A" made a general Act without expressly making the Act binding on the said State. In the same State States "B", "C" and "D" and the Union have properties. Would the rule of construction apply only to the properties of State "A? ' or to the properties of all the States and the Union ? (2) The Central Act operated in different States; the rule of construction was accepted in some States and rejected in other States. Is the Central Act to be construed in different States in different ways ? (3) Acts in general terms might be made in different States States where the said rule of construction was accepted and the States where it was not so accepted. 'Should different States construe (1) [1961] 1.S.C.R. 158. (2) 188 the General Acts in different ways, some applying the presumption and some ignoring it ? There is, therefore, no justification for this Court to accept the English canon of construction, for it brings about diverse results and conflicting decisions. On the other hand, the normal construction, namely, that the general Act applies to citizens as well as to State unless it expressly or by necessary implication exempts the State from its operation, steers clear of all the said anomalies. 'It prima facie applies to all States and subjects alike, a construction consistent with the philosophy of equality en shrined in our Constitution. This natural approach avoids the archaic rule and moves with the modern trends. This win not cause any hardship to the State. The State can make an Act, if it chooses, providing for its exemption from its operation. Though the State is not expressly exempted from the operation of an Act, under certain circumstances such an exemption may necessarily be implied. Such an Act, provided it does not infringe fundamental rights, will give the necessary relief to the State. We, therefore, hold that the said canon of construction was not 'the law in force ' within the meaning of article 372 of the Constitution and that in any event having regard to the foregoing reasons the said canon of construction should not be applied for construing statutes in India. In this view it is not necessary to express our opinion on the question whether the aforesaid rule of construction would not apply to the trade activities of the State, even if it applied to its sovereign activities. Even so, it was contended that by necessary implication the State was excluded from the operation of section 218 of the Act. It was contended that, as the infringement of the said provision entailed a prosecution and, on conviction, imposition of fine and imprisonment, and that as the State could not obviously be put in prison and as the fine imposed on the State would merge in the consolidated fund of the State, it should necessarily be implied that the State was outside the scope of the section. This argument was based upon the reasoning of Wanchoo, J., in his dissenting judgment in Director of Rationing and Distribution vs Corporation of Calcutta(1). To appreciate the argument it is necessary to notice the relevant provisions of the Act. Under section 218(1) every person who exercises or carries on in Calcutta any of the trades indicated in Schedule IV shall annually take out a licence before the prescribed date and pay the prescribed fee. Section 218 is in Ch. Under section 541(1)(b) if any person exercises on or after the first day of July in any year any profession, trade or calling referred to in Chapter XIII without having the licence prescribed by that chapter, he shall be punished with fine; and under section 541(2) (1) ; 189 such fine, when levied, shall be taken in full satisfaction of the demand on account of the said licence. Under section 547A, which was inserted in the Act by section 96 of the Calcutta Municipal (Amendment) Act, 1953 (West Bengal Act XIX of 1953), in every case of an offence punishable with imprisonment or fine, or with fine only, in which the offender is sentenced to pay an fine, it shall be competent to the Court to direct that in default of payment of the fine the offender shall suffer imprisonment for such term or further term not exceeding six months as may be fixed by the Court. Under the Act there is a distinction between fines imposed under section 537 and under section 541 of the Act. The fines under section 537 are in respect of offences enumerated therein and they certainly go to the coffers of the States. In respect of such offences it may be contended that, as the fines paid reach the State itself, there is an implication ' that the State is not bound by the sections mentioned therein, for a person who receives the fine cannot be the same person who pays it. This incongruity may lead to the said necessary implication. But the same cannot be said in respect of the provisions covered by section 541. Under the said section the fine recovered for the infringement of the said provisions, when levied, shall be taken in full satisfaction of the demand on account of the licence not taken thereunder. Though the expression "fine" is used, in effect and substance, section 541 is a mode of realization of the fee payable in respect of the licence: it goes to the municipal fund and forms part of it. In this context, section 115 of the Act is relevant. Under that section, there shall be one Municipal Fund held by the Corporation in trust for the purposes of the Act to which the moneys realised or realisable under the Act (other than fine levied by Magistrates) and all moneys otherwise received by the corporation shall be credited. Reliance is placed upon the words within the brackets, viz., "other than fine levied by Magistrates" and an argument is raised that the fine levied under section 541 will not be credited to the Municipal Fund. That interpretation brings that section into conflict with section 512. On the other hand, a harmonious construction of these two provisions makes it clear that the fine mentioned in section 115 is the fine imposed under section 537, for section 541(2) in terms directs that the fine shall be credited to the demand. All amounts credited towards demands, it cannot be denied, necessarily have to be credited in the Municipal Fund. Nor section 547A detracts from our conclusion. Under that section in every case of an offence where the offender is sentenced to pay a fine, it shall be competent to the court to direct that in default of payment of the fine the offender shall suffer imprisonment. It was said that this section necessarily implied that the State could not be, hit by section 218, as it could not obviously be imprisoned for default of payment of fine. But it will be noticed that this section only confers a discretionary power on the court and the court is not bound to 190 direct the imprisonment of the defaulter. It is only an enabling provision. There are other ways of collecting the money from ]persons against whom an order under section 547A is not made. This enabling provision does not necessarily imply an exemption in favour of the State. For all the aforesaid reasons we hold that the State is not exempt from the operation of section 218 of the Act. In the result we hold that the conclusion arrived at by the High Court is correct. The appeal fails and is dismissed. Shah, J. The High Court of Calcutta convicted the State of West Bengal of the offence of carrying on trade as owner and occupier of a market at Calcutta without obtaining a license under section 218 of the Calcutta Municipal Act, 1951, and imposed a sentence of fine of Rs. 250/ . In this appeal, it is urged that the State not being by express enactment or clear intendment bound by the provisions of the Act relating to the obtaining of a license for carrying on trade as owner or occupier of a market, the order of conviction is not sustainable, and reliance is placed upon the judgment of this Court in Director of Rationing & Distribution vs The Corporation of Calcutta & Ors.(1) The Corporation contends that since India became a Republic, the rule that "Crown is not bound by statute unless specially named, or clearly intended" has no application to the interpretation of the Calcutta Municipal Act, 1951. The argument is urged on two grounds : (i) since India has ceased to be governed in the name of the British Crown, the rule in terms has no application; and (ii) even if it be assumed that the rule applies to the State as the sovereign authority, it must be deemed to be superseded, for to accept it would be to countenance unequal treatment between the State and the citizens. The origin of the rule in England that the Crown is not bound by a statute unless expressly named or clearly intended lay undoubtedly in the prerogative of the British Crown. In Bacon 's Abridgement, 7th Edn., p. 462, the general rule is stated thus: "where a statute is general, and thereby any prerogative, right, title or interest is divested or taken away from the King, in such case the King shall not be bound, unless the statute is made by express terms to extend to him." But the Crown is bound where it is expressly named or by clear implication intended to be bound. An inference that the Crown was intended to be bound by implication is, however, not to be raised merely because the Crown assented to the statute, for as stated by Plowden "when the King gives his assent he does not mean to prejudice himself or to bar himself of his liberty and his privilege, but he assents that it shall be a law among his subjects. " (1) [1961]1 S.C.R. 158. 191 The common law of England was adopted in this country subject to local variations and the personal law of the parties, within the Presidency towns by the establishment of Mayors ' Courts in the, 18th century with the express, injunction to apply that law. In the mufassal of the three Presidencies the common law was adopted by the Regulations constituting tribunals for administration of justice enjoining them to decide disputes according to justice, equity and good conscience ', and elsewhere by the diverse Civil Courts Acts imposing similar injunctions. In the three Presidency towns of Calcutta, Madras and Bombay the charters of 1726 which established the Mayors ' Courts introduced within their jurisdiction the English common and statute law in force at the time so far as it was applicable to Indian circumstances. By the statute of 1781 (21 Geo. III c. 70, section 17) the Supreme Court at Calcutta was enjoined to apply in the determination of actions against the Indian inhabitants of the town in matters of succession and inheri tance to lands, rents, goods, and in all matters of contract and dealing between party and party, their personal law if both parties belonged to the same community, and by the law and usages of the defendant if they belonged to different communities. The English common law in its application to Hindus and Mahomedans in the matters enumerated in the statute was to that extent superseded, but in other matters the English common law unless it was inconsistent with statute or Indian conditions continued to apply. Similar statutes were passed enjoining the Courts in the Presidency towns of Madras and Bombay in 1797 (37 Geo. III c. 142, section 13), to apply in the enumerated matters the personal law of the parties. it may however be observed that by the Supreme Court charters, English law, not in its entirety but as nearly as the circumstances of the place and of the inhabitants admit, was applied: Advocate General of Bengal vs Ranee Surnomove Dossee.(1) In the mufassal Courts by Bengal Regulation III of 1793 in respect of Bengal, by Regulation 11 of 1802 in respect of Madras, it was ordained that where no specific rule existed the Courts were to act according to "justice, equity and good conscience" which expression was interpreted to mean the rules of English common law in so far as they were applicable to Indian society and circumstances: Waghela Rajsanji vs Shekh Masludin(2). The Bombay Regulation IV of 1827 provided by section 26 that the law to be observed in the trial of suits shall be Acts of Parliament and Regulations of Government; in the absence of such acts and regulations the usage of the country in which the suit arose; if none such appears, the law of the defendant, and in the absence of specific law and usage equity and good conscience. By the Letters Patents of the High Courts of the three principal Courts of Calcutta, Madras and Bombay by cls. 19 in exercise of the original jurisdiction law or equity to be applied (1) (1864) 9 M. 1. A. 387. (2) (1887) 14 1. A. 89. 192 was such law or equity which would have been applied if the Letters Patents had not been issued. By cl. 20 in respect of suits tried in exercise of the extraordinary original jurisdiction, and by cl. 21 in respect of the appellate jurisdiction, the High Courts were directed to apply law or equity and the rule of good conscience which the Court in which the proceeding was originally instituted would have applied. Similar provisions were made in the Letters Patents of the Allahabad, Patna, Lahore and Nagpur High Courts by cls. 13 & 14 and in respect of Jammu & Kashmir High Court by cls. 14 & 15, and in respect of Rajasthan by cls. 33 & 34 of the Rajasthan High Court Ordinance, 1949. The jurisdiction of the Assam and Orissa High Courts was derived from their respective parent High Courts the Calcutta High Court and the Patna High Court. In the Courts in the mufassal, the Civil Courts Acts e.g. section 37; the , section 5; the Central Provinces Laws Act, 1875, sections 5, 6; the , section 3. require the Courts to decide cases according to justice, equity and good conscience. There can therefore be no doubt that the Courts which functioned in the former British India territory were enjoined to decide cases not governed by any specific statutory rules according to justice, equity and good conscience, which meant rules of English common law in so far as they were applicable to Indian society and circumstances. By a long course of decisions of the High Courts in India the rule of the English common law that the Crown is not, unless expressly named or clearly intended, bound by a statute was applied in India. In The Secretary of State in Council of India vs Bombay Landing and Shipping Co. Ltd.(1) the Secretary of State for India claimed priority in the payment of a debt in the course of winding up of a company and it was held by the High Court of Bombay that a judgment debt due to the Crown is in Bombay entitled to the same precedence in execution as a like judgment debt in England, if there be no special legislative provision affecting that right in the particular case. The Court held that as the Crown is not, either expressly or by implication, bound by the Indian Companies ' Act (X of 1866), and as an order made under that Act for the winding up of a Company does not work any alteration of property against which execution is sought, such an order does not enable the Court to stay the execution of a judgment debt due to the Crown, or to the Secretary of State in Council for India. Westropp, J., who delivered the judgment of the Court after an exhaustive review of the earlier authorities observed "The King, by his prerogative, regularly is to be preferred, in payment of his duty or debt, before any subject although the King 's debt or duty be the latter." (1) 5 Bom. H.C.R O.CJ. 193 The learned Judge also observed that the rule was recognised by the laws of many countries as applicable to the claims of the Sovereign or the State, e.g. France, Spain, America and Scotland and that principle was no novelty in India, because at an earlier date it was promulgated by Hindu jurists Yajnavalkya and others. In The Secretary of State for India vs Mathurahbai and Ors.(1) the rule was held to apply to India as a rule of construction of statutes. In that case the inhabitants of a village sued to establish their right of grazing their cattle on certain Government land and for an injunction restraining the Government from interfering with their right. It was held by the High Court of Bombay that the right of free pasturage which the plaintiffs enjoyed did not necessarily confer that right on any particular piece of land, and that section 26 of the Limitation Act 15 of 1877 did not bind the Secretary of State. It was also applied in three later decisions of the Bombay High Court: Hiranand Khushiram Kirpalani vs Secretary of State; (2) Secretary of State vs Municipal Corporation Bombay (No. 1)(3) and Province of Bombay vs The Municipal Corporation of Bombay(4). In the first case the Secretary of State was held not bound by sections 305, 489 and 491 of the Bombay City Municipal Act, 1888, which deal with levelling, metalling or paving, sewering, draining, channelling and lighting of private streets and with execution of that work to the satisfaction of the Commissioner, if the work be not done in accordance with the requisition and for recovery of the expenses incurred in that behalf. In the second case, the Court held that the Crown was bound by necessary implication in respect of the charge which arises under section 212 of the Bombay City Municipal Act 3 of 1888, that section being an integral part of the general scheme of the Act imposing tax on land in Bombay including Government land. In the third case the Bombay High Court observed that the general principle is that the Crown is not bound by legislation in which it is not named expressly or by necessary implication. But reading the relevant sections in the Act relating to the water supply it appeared that it would be impossible to carry them out with reasonable efficiency, unless Government was bound by them. The view of the High Court in the last judgment that the Province was bound by the statute by imp lication was overruled by the Judicial Committee in Province of Bombay vs Municipal Corporation of the City of Bombay and Another(5) to which I will presently refer. The Madras High Court in Bell vs The Municipal Commissioners for the City of Madras(6) also upheld the rule which prevailed in the Bombay High Court that the Crown is not bound by a statute unless expressly named or clearly intended. In that case the Superintendent of the Gun 2,1.5 (1) 1. L. R. (3) I.L.R. (5) I.L.R. 73 I.A. 271. (2) I.L.R. (4) I.L.R. (6) I.L.R. 194 Carriage Factory in Madras brought timber belonging to Government into Madras without taking out a licence, and paying the license fee prescribed by section 341 of the ' City of , Madras Municipal Act. The Court held that the timber brought into Madras by or on behalf of Government was liable to the duty imposed by section 341 of the City of Madras Municipal Act, although Government was not named in the section. Bhashyam Ayyangar, J., entered upon a detailed analysis of the case law and set out certain principles at p. 500. The learned Judge was of the view that "the canon of interpretation of Statutes that the prerogative or rights of the Crown cannot be taken away except by express words or necessary implication, is As applicable to the Statutes passed by the Indian Legislatures as to Parliamentary and Colonial Statutes". But he held that "the English law as to the exemption of the Crown and Crown property from payment of tolls, poor rates and other taxes, local or imperial, imposed by statutes rests partly upon historical reasons and principally upon judicial decisions which do not proceed upon a course of reasoning or principle which will be binding on Indian Courts". It is not necessary to express any opinion on the question whether the general exception engrafted by the learned Judge on the rule in so far as it relates to taxing statute is wholly correct and applied to all taxing statutes in India. The Municipal Corporation of Calcutta is, it may be recalled, seeking to collect the license fee by prosecuting the State of West Bengal, but the primary purpose of the prosecution is to enforce compliance with the pro visions relating to the conduct of a market by compelling the State to take out a license, and paying a fee in lieu of services rendered to the owners of the markets. These decisions were affirmed by the Judicial Committee in Province of Bombay vs Municipal Corporation of the City of Bombay and Another(1). The question which fell to be determined was whether by section 222(1) and section 265 of the City of Bombay Municipal Act, 1888, which invested the Municipality with power to carry water mains through, across or under any street and "into,, through or under any land whatsoever within the city" bound the Crown in whom the lands were vested either expressly or by necessary implication. The Judicial Committee observed that the general principle applicable in England in deciding whether the Crown is bound by a statute that it must be expressly named or be bound by necessary implication applies to Indian legislation. The Board observed at p. 274 : "The maxim of the law in early times was that no statute bound the Crown unless the Crown was expressly named therein, "Roy n 'est lie per ascun statute si il ne soit expressment nosme." But the rule so laid down is subject (1) L.A. 73 I.A. 271. 195 to at least one exception. The Crown may be bound, as has often been said, "by necessary implication". If, that is to say, it is manifest from the very terms of the statute, that it was the intention of the legislature that the Crown should be bound, then the result is the same as if the Crown had been expressly named. It must then be inferred that the Crown, by assenting to the law, agreed to be bound by its provisions. " It is true that counsel appearing before the Judicial Committee accepted the correctness of the rule "that the question whether or not the Crown is bound by a statute is no different in the case of Indian legislation from that which has long been applied in England." But the judgment of the Judicial Committee did not proceed upon a concession: the Board expressly observed that they regarded the rule "as correct". The Union of India now includes territory of the former Indian States in which the law as originally existing and which the Courts are enjoined to apply may have been somewhat different. But that is not peculiar to the application of the rule of interpretation which was adopted by the Courts in British India that the State shall not be deemed to be bound by an enactment unless it is expressly named or by clear intendment included in the statute. Even in respect of matters of personal law, procedure and jurisdiction of the Courts and in other matters where uniform statutes do not apply differences do arise and must be determined according to the law and jurisdiction inherited by the Courts administering justice. But the present case concerns the administration of the law in the town of Calcutta which has for nearly 250 years been governed by the English common law as adopted by the various Acts, Regulations and finally by the Letters Patents. It may also be necessary to observe that we are not called upon to decide whether all the prerogatives of the British Crown have been incorporated in our system of law. Some of those are so wholly inconsistent with the system of law personal and common in India, that they have not been held applicable, e.g. the rule of English law incapacitating aliens from holding real property to their own use, and transmitting it by descent or devise has never been in troduced in India so as to create forfeiture of lands held in Calcutta or the mofussil by an alien and devised by will for charitable purposes. Mayor of the City of Lyons vs The East India Company(1): the English law of felo de se and forfeiture of goods does not extend to a Hindu committing suicide: Advocate General of Bengal vs Ranee Surnomoye Dossee(2). But the rule that the Crown debt is entitled to priority in payment of debts due to it has been adopted,. and the State is entitled to priority in payment of debts due to it : (1) L.R. I Moare 's I.A. 173. (2) (1864) 9 M.I.A. 196 The Secretary of State for India in Council vs The Bombay Landing A Shipping Co. Ltd.(1) and M/s. Builders Supply Corporation vs The 'Union of India(2). As I have already stated the adoption of the English law was not in its entirety, but as nearly as the circumstances of the case and of the inhabitants of the place admit. It would be confusing the issue to hold that because some prerogatives have not been adopted, no prerogative of the State may have any place in our system of law. Again in considering the limited question as to the application of the rule of interpretation under discussion, it would be an idle exercise to enter upon a detailed discussion of the prerogatives which have and which have not been assimilated in our system of law. In Director of Rationing & Distribution vs The Corporation of Calcutta & Ors.(3) this Court regarded the rule as one of interpretation, and it is so expressly stated in State of West Bengal vs Union of India(4); Sri Vankata Seetaramanjaneva Rice and Oil Mills vs State of Andhra Pradesh(5) and M/s. Builders Supply Corporation vs Union of India(2). In England and the Colonies the rule has not been restricted to common Crown actions or the personal prerogatives of the Crown. It excludes from the operation of statutes all public servants acting under the authority of the Crown. It is well settled that in the Colonies the executive government represents the Crown as it does in England, and therefore the Executive Government of the Commonwealth of Australia or of a State in Australia is not bound by a statute unless the intention that it shall be bound is apparent : Roberts vs Ahern(6). Again because of the origin of the rule, its protection is not restricted to the property and rights of the Crown alone, and applies to State property, actions and rights. When a statute expressly includes the State in its operation, no difficulty arises in giving effect to the statute. Even if there be no express provision, the State may be bound by clear intendment of the statute, having regard to the nature of the legislation, if the beneficent purpose intended to be served thereby would be wholly frustrated unless the State is bound. The rule of interpre tation applies only when the Court has no indication either by express reference or by clear intendment in the statute: a presumption arises in such a case that the words of the statute even though general are not intended to bind the State. The question is one of presumed intention where the language, purpose and the nature of the statute give no clear indication and mere general words .ire used. It was urged that in the Act there are certain provisions which ,expressly refer to the liability of the State and the binding character 5 Bom. H.C.R. O.C.J. 23. (2) ; (1) ; (3) 4 [1964] 1 S.C.R. 371. (5) [1964]7 S.C.R. 456. (6) ; 197 of those provisions against the State is not in doubt. But that cannot be a ground for holding that the remaining provisions apply to the State. , The Judicial Committee in Province of Bombay vs Municipal Corporation of the City of Bombay and Another() observed : "They (the Judicial Committee) were pressed with the argument that such an inference might be drawn from certain express references to the Crown in other parts of the Act itself, and from the fact that by the Government Building Act, 1899, the legislature had provided for the exemption of Government buildings from certain municipal laws. The argument was that no express provisions saving the rights of the Crown would be necessary if the Crown were already immune. This is not an unfamiliar argument, but, as has been said many times, such provisions may often be inserted in one part of an Act, or in a later general Act, ex abundanti cautela, and, so far as the Act of 1899 is concerned, it is fallacious to argue that the legislature which passed it must have had in mind the particular sections of the Act of 1888 which are not under review, or that it was impliedly interpreting those sections. " The argument that the rule had not received recognition in the High Courts in India, before the judgment of the Judicial Committee reported in Province of Bombay vs Municipal Corporation of the City of Bombay and Anr.(1) was pronounced, is belied by the course of authorities summarised earlier. There was practically a consistent course of authorities prior to the Constitution in support of the principle which was affirmed by the Judicial Committee in Province of Bombay vs Municipal Corporation of the City of Bombay and Another(1). The origin of the rule undoubtedly was in the prerogative of the Crown, but there is even in the country of its origin authority for the view that the rule is regarded primarily as one of construction. In Madras Electric Supply Corporation Ltd. vs Boarland(2), in dealing with the question whether "the immunity" of the Crown "from taxation depends on the construction of the statute or arises, from the prerogative in some other way", Lord MacDermott observed : "Whatever ideas may once have prevailed on the subject it is, in my opinion, today impossible to uphold the view that the Crown can find in the prerogative an immunity from tax if the statute in question, according to its true construction, includes the Crown amongst those made liable to the tax it imposes. The appropriate rule as I under (1) L.R. 73 I.A. 271. (2) H.L. 198 stand it is that, in an Act of Parliament, general words shall not bind the Crown to its prejudice unless by express provision or necessary implication. That, however, is, and has long been, regarded as a rule of construction. Lord Reid concurred in the view that the immunity depends upon construction of the statute rather than on royal prerogative. Lord Keith of Avonholm appeared to express a different view. In India the rule has been accepted as a rule of interpretation of statutes and applicable to all statutes which governed State actions, authority or property. Is there any reason then to hold that on January 26, 1950, the rule which previously applied to interpretation of statutes ceased to apply thereto on the date on which the Constitution came into force ? The rule of interpretation was, as already stated, a settled rule and was law in force in the territory of India within the meaning of article 372 of the Constitution. I am unable to agree with the contention that a rule of interpretation is not "law in force" within the meaning of article 372. There is no warrant for holding that a rule of interpretation which is incorporated in a statute e.g. The Indian Succession Act, or the General Clauses Act is law in force, and not a rule which was enunciated by the highest Court in the realm. The circumstance that a rule of interpretation is a rule for determination of intention of the legislature and for its application requires determination of facts and circumstances outside the statute will not make it any the less a rule of law. Acceptance of the proposition that a decision of the highest judicial tribunal before the Constitution is law does not involve the view that it is immutable. A statute may be repealed, and even retrospectively, it would then cease to be in operation : a decision which in the view of this Court is erroneous may be overruled and may cease to be regarded as law, but till then it is law in force. It may be pertinent to bear in mind that it was never seriously argued before us that the judgment of the Judicial Committee which affirmed the view expressed in a long course of decisions was erroneous in the circumstances then prevailing. It was said by counsel for the Corporation that it is one of the fundamental principles of our Constitution that there is equality between the State and the citizens and discrimination is not permissible in the application of a law generally expressed. it was claimed that if other occupiers of markets take out licenses, and comply with the regulatory provisions of the Act, and the State is not obliged to abide by the rules, there would be unequal treatment between owners similarly situate and that the State may ignore 199 the rules regulating the markets, and on that account the public interest would suffer. There is no reason however to assume that the State under a democratic Constitution would be impervious to public opinion, and would merely because it is not bound by a regulatory Act perpetuate 'a nuisance. If it be assumed that such be the attitude of the State there would be nothing to prevent the State from enacting express legislation excluding itself from the operation of the regulatory laws relating to markets. I do not think that the guarantee of the equal protection clause of the Constitution extends to any differential treatment which may result in the application of a special rule of interpretation between the State and the citizens. Nor can it be said that under our Constitution equality in matters of interpretation between the State and the citizens is predicated in all respects. It must be remembered that our Constitutional set up is built up not anew, but on the foundations of our old institutions. The political set up is indisputably changed, but can it be said that our concept of a State is so fundamentally altered that the traditional view about State privileges, immunities and rights must be abandoned because they had a foreign origin, an on the supposed theory of equality between the State and the citizens a theory which seeks to equate common good of the people represented by the State with the rights and obligations of the individual the Court should decline to give effect to the State privileges and immunities ? If it be granted that the State in making laws is entitled to select itself for special treatment different from the treatment accorded to the citizen and it is not denied that in order to achieve public good it can do so even if there is a differential treatment between the State and the citizen is there any reason to suppose that a statute which evidently was framed on the basis of the well settled rule of the pre Constitution days which accorded to the State a special treatment in the matter of interpretation of statutes must be deemed to have a different meaning on the supposition that the Constitution has sought to impose equality between the State and the citizen ? The fact that in our federal set up sovereignty is divided between the Union and the States, and in the application of the rule that the State is not bound by a statute, unless expressly named or clearly implied, conflicts between the State enacting a law and the Union, or another State may arise does not give rise to any insuperable difficulty which renders the rule in applicable to the changed circumstances, for it is the State which enacts a legislation in terms general which alone may claim benefit of the rule of interpretation, and not any other State. It was urged that even if the rule that the State is not, unless expressly named or by necessary implication intended, to be bound, applies, its application must be restricted to cases where an action of the State in its sovereign capacity is in issue. Where, however, 200 the State is following a commercial or trading activity, the rule can have no application. But in the context of modem notions of the functions of a welfare State, it is difficult to regard any particular activity of the State as exclusively trading. The State was originally regarded as merely concerned with the maintenance of law and order, and was not concerned with any trading activity. But that is now an exploded doctrine. For the welfare of the people the State does and is required in modern times to enter into many trading activities, e.g. to effectuate control of prices, prevent hoarding and distribute commodities in short supply, besides maintenance of departments like Posts, Telegraphs, Railways, Telephones etc., activities which may have been regarded as trading activities in the past. But if initiation and completion of schemes for social welfare of the people be regarded as an attribute of the exercise of sovereign authority, it is difficult to regard activities undertaken by the State for setting up markets for effective distribution of goods as merely trading. Assuming that conducting a market in a metropolitan town may be regarded in a sense as a trading activity there is, in my judgment, no sufficient reason to justify any distinction in the application of the rule of interpretation to statutes concerning sovereign authority and trading activity. Under the provisions of the Calcutta Municipal Act the owner or occupier of a market is required to take out a license. But there is no express reference to the State: nor is there anything peculiar in the nature, purpose and object or in the language used in the enactment relating to the issue of licenses which may suggest that the State must by necessary implication be bound by its provisions. I am, therefore, of the view that the High Court was in error in holding that the State of West Bengal was bound by the provisions relating to the issue of licenses for occupation or conduct of a market. I do not deem it necessary to consider the argument that since the State cannot be imprisoned in enforcement of the general provisions, and imposing a fine upon the State would be futile because the hand which pays and the hand which receives the fine is the same, an implication arises that it was not intended that the State should be bound by section 218 of the Calcutta Municipal Act. in my view the penal provision of s.541 is, though in form a provision creating an offence, intended to enable the Corporation to collect the license fee. The offender and the recipient of fine are therefore not the same bodies. Bachawat, J. By the common law of England, the Crown is not bound by a statute save by express provision or necessary implication. This rule was applied to Indian legislation in 201 Province of Bombay vs Municipal Corporation of the City of Bombay(1). In The Director of Rationing and Distribution vs Corporation of Calcutta(2), this Court followed the Privy Council decision. On the subject of the royal prerogative regarding statutes Chitty in his book on "Prerogatives of the Crown at P. 382 said "The general rule clearly is, that though the King may avail himself of the provisions of any Acts of Parliament, he is not bound by such as do not particularly and expressly mention him '. It has been said that the reason of the rule is that "it is inferred prima facie, that the law made by the Crown, with the assent of the Lords and the Commons, is made for the subjects, and not for the Crown" per Alderson, B. in A.G. vs Bonaldson (3). Two rules follow from the proposition that the law is prima facie made for subjects and not for the Crown: (i) the Crown is not bound by a statute save by express words or by necessary implication, (ii) that the Crown may take advantage of a statute, though not bound by it, unless expressly or impliedly prohibited from doing so. This Court categorically rejected the second rule in V. section Rice and Oil Mills vs State of Andhra Pradesh(4) and held that the State cannot be permitted to rely upon the artificial rule that the State can take advantage of a statute though not bound by it. I think that this Court should have refused to recognise the first rule also. The exception of the Crown from the operation of statutes is based sometimes on the royal prerogative, and sometimes on a rule of construction. Originally, the exemption was claimed and allowed on the ground of the prerogative. The King by virtue of his prerogative could claim that a statute was made for subjects only and he stood outside it. He waived this prerogative right by assenting to a statute which bound him expressly or by necessary implication. The immunity of the Crown is now couched in the form of a rule of construction. In spite of this modem disguise, there is high authority for the view that this immunity is still based upon the prerogative. In Madras Electric Supply Corporation Ltd vs Boarland(5) Lord Keith said: "The true explanation, easily understandable on his torical and legal grounds, is that words in a statute capable of applying to the Crown may be overridden in the exercise of the prerogative. That is necessarily involved in the oft repeated phrase that the King is not bound by a statute (1) [1946] L.R. 73 I.A. 271. (2) ; (3) ; ,124. (4) ; , 463, 463 4. (5) , 694. CI/66 14 202 unless by express words or by clear implication. If the statute does not apply to him there can be no question of his being bound by it. It is only because it can apply to him that appeal to the prerogative is necessary. The conception of the prerogative, in my view, is of something that stands outside the statute, on which the Crown can rely, to control the operation of the statute so far as it prejudices the Crown". But the prerogative right of overriding statutes did not extend to India. When the Crown of England became sovereign in India, it acquired such prerogative rights as were enjoyed by the former Indian sovereigns and such other prerogative rights as may be said to inhere in every sovereign power. But the common law was never bodily imported into India and the Crown never possessed in India all the prerogatives allowed to the Crown by the law of England. In The Mayor of the City of Lyons vs Hon. East India Company(1), the Privy Council held that the common law as to alienage and the royal prerogative of forfeiture of the lands held by a deceased alien on the ground of the incapacity of the alien to hold real property and transmit it by devise or descent was never ' introduced in the Presidency town of Calcutta or the mofussil. Such a right was not enjoyed by the Indian sovereign, nor was it a necessary incident of sovereignty. Lord Brougham said at pp. 280, 281, 282 and 286 of the Report: "But it seems to be contended both here and below, that there is something in the law incapacitating aliens, which makes it, so to speak, of necessary application wheresoever the sovereignty of the Crown is established, as if it were inherent in the nature of sovereign power. To this a sufficient answer has been already afforded, if the acts of the sovereign power to which we have referred, show that no such application to Bengal ever was contemplated, unless direct authority can be produced to show that the right is inseparable from the sovereignty, and, as it were, an essential part of it. It certainly is not an incident to sovereignty; in several countries the sovereign has no such right. . . Besides, if reference be made to the prerogative of the English Crown, that prerogative in other particulars is of as high a nature, being given for the same purpose of protecting the State; and it is not contended that these branches are extended to Bengal. Mines of precious metals, treasuretrove, royal fish, are all vested in the Crown, for the purpose of maintaining its power, and enabling it to defend the State. They are not enjoyed by the sovereign in all or even in most (1) 203 countries, and no one has said that they extend to the East Indian possessions of the British Crown. . . Upon the whole, their Lordships are of opinion that the law, incapacitating aliens from holding real property to their own use, and transmitting it by descent or devise, has never been introduced into Calcutta." The common law of attainder or corruption of blood and the prerogative right of forfeiture or escheat on conviction of treason or felony now abolished by the Forfeiture Act, 1870 (33 & 34 Vict. c. 23) did not prevail in India, see Papamma vs Appa Rau(1) ' Nor did the English law as felo de se and the forfeiture of goods and chattels consequent upon suicide apply to a Hindu, though a British subject, committing suicide at Calcutta, see Advocate General of Calcutta vs Ranee Surnomoye Dossee(2). At Common law, no proceedings, civil or criminal, were maintainable against the Sovereign in person for, it was said, that as the Courts were her own they could have no jurisdiction over her, see Halsbury 's Law of England, Vol. 7, article 544, p. 249. In India, the government did not enjoy a general immunity from suits and legal proceedings, see The Peninsular and Oriental Steam Navigation Company vs The Secretary of State for India.(1) The subjection of the Government to suits where it was liable to be sued before the Constitution is preserved by article 300 of the Consti tution. Though orders of mandamus and injunction cannot issue to the Crown in England, see Halsbury 's Laws of England, 3rd Edn. II, article 25 and 184 pages 16 and 98, such orders can issue to Government under articles 32 and 226 of the Constitution. See also State of Bihar vs Sonavati Kumari(4). Province of Bombay vs Khusaldas Advani(5). In England the King by his prerogative may sue in what Court he pleases, see Craies on Statute law, 6th Edn., p. 435. The prerogative of choice of Courts by the Crown never applied in India. The State can sue only in a Court competent to entertain the suit under the general law. In England it was the prerogative of the Crown not to pay costs in any judicial proceeding, see Craies on Statute Law, 6th edn, p. 432. But this prerogative was never recognised in India. The State pays and receives costs like a private individual. The Indian law did not deny that the Crown had certain pre rogatives. The Crown inherited the prerogatives enjoyed by the former Indian Sovereigns and had other prerogatives inherent in the nature of sovereignty. It was the prerogative of the King in Council to hear appeals and petitions from his Indian subjects, (1) 1. L. R. ,396. (2) (3) 5 Bom. H.C.R. Appendix 1. (4) ; (5) ; ,697. 204 see Modee Kai Khocscroo Hormusjee vs Cooverbhaee(1). prerogative was taken away by the Abolition of Privy Council Jurisdiction Act 1949. When there is a failure of heirs on a person dying intestate, the Crown had the prerogative right to take his property by escheat, and this right was said to rest on grounds of general or universal law, see the Collector of Masulipatam vs Cavaly Vencata Narrainapa(2), Sonet Koor vs Himmut Bahadoor(3) Mussammat Khursaidi Begun vs Secretary of State for India(4). The right of the Government to take the property by escheat or lapse on the failure of heirs or as bona vacantia for want of a rightful owner is recognised by article 300 of the Constitution. The prerogative right of the Crown to priority in payment of its claims was recognised on the ground that this right did not arise out of any peculiar quality in the writ of extent and the Hindu, Muhammadan and Poituguese Sovereigns had enjoyed a similar right, see Secretary of State for India vs Bombay Landing and Shipping company(5). The extent of this prerogative right may be limited by a statutory scheme of administration, see GrovernorGeneral in Council vs Shiromani Sugar Mills Ltd. (in liquidation)(6). It has been held that the Government continues to enjoy this prerogative right of precedence after the Constitution came into force, see Builders Supply Corporation vs Union of India (7), Bank of India vs J. Boman(8). The Crown as parens partriae had other prerogative rights. The Crown may have also enjoyed in India certain prerogative rights which were not allowed to the Crown of England by the common law and those prerogatives might vary in different parts of India, see Bell vs Municipal Commissioners for the City of Madras(9).Gopalan vs State of Madras (10). But in India the Crown never enjoyed the general prerogative of overriding a statute and standing outside it. Such a right is not indigenous to India, nor is it a necessary incident of sovereignty. In The Secretary of State for India in Council vs Bombay Landing and Shipping Company(5), Ganpat Putava vs The Col lector of Canars (11) the Bombay High Court held that a prerogative of the Crown cannot be taken away except by express words or by necessary implication. To appreciate these rulings, it is necessary to remember that until 1861 there were constitutional restrictions on the power of the Indian legislature to affect the prerogative of the Crown, see Statutes 3 and 4 William cap. LXXV section 43 and 16 and 17 Vict. cap XCV section 43, which were swept away by later statutes, see the Indian Councils Act, 1861 section 24, the Government of India Act 1915, section 84 (1) (A), the Government of (1) 6 M.I.A. 448,455. (3) [1876] I.L.R. I Cal.391. (5) (7) (9) I.L.R. (2) [1859 61] 8 M.I.A. 500. (4) Patna 538. (6) (8) A.I.R. 1956 Bom. 305 (10) Mad. 798,802. (11) [1875] I.L.R. I Bom. 205 India (Amendment) Act, 1917, section 2 as interpreted in The Secretary of State vs Bombay Municipality(1), with one exception introduced by the Government of India Act, 1935, section 1 10(b)(ii). Having regard to this historical background, it was considered that the prerogative of the Crown was a very special subject matter and in the absence of express words or necessary implication, it should be presumed that general words of an Indian Act were not intended to affect the prerogative. In Bells case(2) Sir Bhashyam Ayyangar J.therefore pointed out that the doctrine that the prerogative could not be taken away save by express words or by necessary implication could be based on the maxim generalia specialibus non derogant. This maxim does not exempt the Crown from the operation of statutes generally whenever a statute prejudicially affects it. In order to invoke this doctrine, the Crown must, establish that it has some prerogative right which it claims to be outside the purview of the statute. As pointed out already under the Indian law the Crown could not claim a general exemption from statutes on the ground of the prerogative. But there is high authority for the view that such an exemption is allowed to the Crown in England on the basis of a rule of construction. In Madras Electric Supply Corporation vs Boarland(3) at p. 685 Lord Macdermott said that the rule that in an Act of Parliament general words shall not bind the Crown to its prejudice unless by express words or by necessary implication has long been regarded as a rule of construction. This rule has a wide sweep, and is not limited to cases where the prerogative right or property of the Crown is in question. It protects the Crown whenever general words in a statute may operate to, its prejudice. See Broom ' s Legal Maxims, 10th Edn., pp. 39 40, Glanville L. Willams ' Crown Proceedings, p. 48 (f. n.). A review of the decided cases shows that until the decision of the Privy Council in the Province of Bombays case(4) this wide rule of construction had not obtained a firm foothold in India. In Verubai vs The Collector of Nasik(5), the Bombay High Court held that the Government was bound by article 167 of Schedule 11 of the Indian Limitation Act, 1877. Westropp, C.J. said: "The legislature in passing the Limitation Act of 1871, which is applicable to this case, where it intends that Government should have a longer period than the subject, has been careful expressly to say so, as for instance, in article 150 of Schedule II, where the period assigned to suits brought by the Secretary of State is sixty years from the time of the accruer of the cause of action; but the Legislature makes no difference between Government and its subjects (1) (2) I.L.R. (3)[1955] A.C. 667,685. (4) [1946] L.R. 73 I.A. 271. (5) I.L.R. 206 in the case of appeals or applications see Govind Lakshman vs Narayan Moreshvar(1)". In Appava vs The Collector of Vizagapatam (2), the Madras High Court held that the Government was bound by article 178 of the Indian Limitation Act, 1877. Turner, C.J. and Muttusami Ayyar, J.said: "If the maxim on which the counsel for the Crown relies applies to this country and the Crown is not bound by the provisions of any Act unless they are expressly declared binding on the Crown it may be inferred from the circumstance that this Act contains provisions prescribing a Limitation to the Government for the institution of suits and presentation of criminal appeals that the Legislature contemplated that the Crown should be subject to the provisions of the Act and should enjoy a privilege to the extent expressed and no further expressum facit cessare tacitum" In the last two cases, the Courts did not apply the strict English rule that the Crown under the prerogative was not bound by the statute of limitation, see Bank Voor Handel vs Hungarian Administrator(3). In The Secretary of State for India vs Mathurabhai(4) Sargent, C. J. was inclined to apply the English rule that the Crown is not included in an Act unless there are words to that effect and to hold that the Government was not bound by section 26 of the Indian Limitation Act, 1877. But he observed that it was not necessary to express a decided opinion on the question. In Bells, case(5), the Madras High Court held that the Government was bound by the taxing provisions of section 341 of the City of Madras Municipal Act, 1884, though not named in that section. Sir Bhashyam Ayyangar, J. reviewed the earlier cases and decisively rejected the general claim of immunity of the Crown from a statute imposing a tax on the basis of any prerogative right or supposed rule of construction. In Motilal vs The Collector of Ahmedabad(6). Russel, Acting C. J. and Beaman, J. doubted the application of the English rule of construction in this country. They said: "It is contended that the maxim of English law that the Crown cannot be bound by any statute unless expressly named therein applies, and reference is made to the cases of Ganpat Putaya vs The Collector of Kanara(7) The Secretary of State for India vs Mathurabhai(8). Without in any way wishing to prejudge the question or fetter future argument, (1) 1 1. (2) [1882] I.L.R.4 Mad. 135. (3) , 984 (H.L). (4) Bom. (5) I.L.R. (6) Bom. 86, 89. (7) [1875] I.L.R. I Bom. 1 (8) Bom. 207 we may say that as at present advised we entertain some doubt whether an exact analogy exists between the privileges and immunities of the Crown under the Constitutional Law of England and those of servants of the Indian Government. " The full Bench left the question open. In The Secretary of State vs Mohammed Yysuf(1), Pratt J. held that sections 17(2) (vii) and 90 of the Indian contained an implication that the Crown was bound by the Act. In Hiranand Khushiram vs Secretary of State for India(2), Beaumont, C. J. and Rangnekar, J. applied the strict English rule of construction and held that since the Crown was not named either expressly or by necessary implication in sections 305, 489 and 491 of the City of Bombay Municipal Act, 1888, the Crown was not bound by those sections. Soon thereafter, the same learned Judges held in Secretary of State for India vs The Municipal Corporation of Bombay(3), that the Crown was bound by section 212 of the City of Bombay Municipal Act, 1888 by necessary implication, though not expressly named therein. In Province of Bombay vs The Municipal Corporation for the City of Bombay(4), Beaumont, C. J. and Rajadhayaksha, J. held that sections 222(1) and 265 of the City of Bombay Municipal Act, 1888 by necessary implication bound the Crown. They refused to follow the dictum of Day, J. in Corton Local Board vs Prison Commissioner(5) that the test of necessary implication binding the Crown involves that the legislation is unmeaning unless the Crown is bound. They said: ". . if it can be shown that legislation cannot operate with reasonable efficiency, unless the Crown is bound, that would be a sufficient reason for saying that the Crown is bound by necessary implication. " This decision was reversed by the Privy Council on appeal in Province of Bombay 's case(6). The Privy Council rejected the test laid down by the Bombay High Court. They held that the strict English rule of construction exempting the Crown from the operation of statutes applied in the case of Indian legislation. The parties appearing before the Privy Council concurred in accepting this view. The attention of the Privy Council was not drawn to Bell 's case(7) and the propriety of applying the English rule to Indian legislation was not considered. Lord Du Parcq said: "If it can be affirmed that, at the time when the statute was passed and received the royal sanction, it was apparent from its terms that its beneficient purpose must be wholly frustrated unless the Crown were bound, then it may be inferred that the Crown has agreed to be bound." (1) , 1136.(2) Bom. (3) (4) I.L.R. 1944 Dom. 95. (5) (6) (1946) L.R. 73 I.A. 271. (7) I. L. R. 208 They held that the Crown was not bound by sections 222(1) and 265 of the City of Bombay Municipal Act, 1888 and an inference of necessary implication binding the Crown could not be drawn from certain express references to the Crown in other parts of the same Act and from the exemption of the Crown in a later general Act since such provisions are often inserted ex abundanti cautela. It is to be noticed that in several earlier decisions the Bombay High Court had drawn an inference of necessary implication binding the Crown in other sections of the same Act. Moreover, except the Bombay High Court, no other High Court held that the English c of Crown exemption from statutes applied to India. Even in Bombay, some of the Judges doubted the applicability of the rule to Indian conditions. The imposition of the strict rule of construction by the Privy Council decision was received very unfavourably in India. In Corporation of Calcutta vs Sub Postmaster, Dharamtala(1), the Calcutta High Court felt bound to follow the Privy Council decision, and held that the Government was not bound by the provisions of the Calcutta Municipal Act, 1923. Mookerjee, J., however, said: "Had the question been res integra and had it been open , to us to consider the question untrammelled by a decision of the Judicial Committee we might have considered the reasonableness and propriety of applying the principles as enunciated by the English Courts and also how far they should be applied to Indian conditions. For some years past the position of the Crown with regard to liability and procedure has been considered by the lawyers in England as being antiquated and absurd as contrasted with that of ordinary individuals and reform in this respect has been considered to be long overdue. " In The Corporation of Calcutta vs Director of Rationing and Distribution(2), the Calcutta High Court refused to follow the Privy Council decision and held that the State was bound by section 386(1) (a) of the Calcutta Municipal Act, 1923. This decision was reversed in The Director of Rationing and Distribution 's case (3) and a majority of a Bench of this Court held that the law was correctly laid down in the Province of Bombay 's case(4) and continued to apply in this country even after the Constitution came into force, and the State was not bound by section 386(1) (a) of the Calcutta Municipal Act, 1923. Wanchoo, J. dissented and held that the rule laid down by the Privy Council did not apply to the construction of Indian statutes after the Constitution came into force. Later decisions of this Court disclose a tendency to relax and soften the rigour of (1) [1948]54 C. W. N. 429. (3) ; (2) A.I.R. 1955 Cal. 282. (4) (1964) L.R. 73 I.A. 271. 209 this rule. In Sri Venkata Seetaramanjaneya Rice and Oil Mills and others vs State of Andhra Pradesh(1) this Court held that an inference of necessary implication binding the State may be drawn if "the conclusion that the State is not bound by the specific provision of a given statute would hamper the working of the statute, or would lead to the anomalous position that the statute may lose its efficacy". In other words, the Court was inclined to revive the Bombay heresy rejected by the Privy Council. With regard to this rule of exemption of the Crown from statutes, Glanville L. Williams in his book on "Crown Proceedings", 1948, pp. 53 and 54 said: "The rule originated in the Middle Ages, when it perhaps had some justification. Its survival, however, is due to little but the vis inertiae. The chief objection to the rule is its difficulty of application . With the great extension in the activities of the State and the number of servants employed by it, and with the modern idea, expressed in the Crown Proceedings Act, that the State should be accountable in wide measure to the law, the presumption should be that a statute binds the Crown rather than that it does not. " Thus, the artificial rule of construction has not escaped criticism even in England. This rule of construction is unsuitable to Indian conditions and should never have been applied to India. Before 1946 there was no settled course of decisions of the Indian Courts necessitating or justifying the application of this rule to the construction of Indian statutes. Rules of English law which could not suitably be applied to Indian conditions were not introduced even in the Presidency Town of Calcutta by 13 Geo HI c 63 or 21 Geo III c 70 or any other cognate statute or by the Charter of Charles II in 1661 see The Mayor of the City of Lyons vs The Hon. East India Company(2) The Advocate General of Calcutta vs Ranee Surnomoyee Dossee(3). Technical rules of English common law were not applied even in the Presidency Towns if they clashed with principles of justice, equity and good conscience, see Abdul Kawder vs Mahomed Mera (4) Mool Chand vs Alwar Chetty (5). In the mofussil, common law had no force proprio vigore but the Judges were free to adopt and apply any rule of common law if it was consonant with principles of justice, equity and good conscience. Artificial rules of Common Law based on feudal notions had no application in India. In Mithibai vs Limii Nowroji Benaji(6), the Bombay High Court refused to apply the rule in Shelley 's case in a case arising between Parsis in the mofussil. In The State of Rajasthan vs Mst. Vidyawati(7) (1) ; , 462 (2) [1837]1 M. A. 175, 246 9, 274 5. (4) I.L.R (5) I.L.R. , 553. 506,531. (3) , 407 13, 424 30. (7) [1962] 2 Supp. S.C.R 989, 1007. (6) Bom. 506, 531. 210 this Court refused to apply rules of immunity of the Crown based on old, feudalistic notions. In interpreting a statute, it is the duty of the Court to give effect to the expressed intentions of the legislature. There is no compelling reason why the Courts in India should not give full effect to the general words of a statute on the basis of some artificial rule of construction prevailing in England. No doubt, there are many Indian Acts which expressly provide that the Crown or the Government shall be bound by their provisions. See the Indian Arbitration Act No. 10 of 1940, section 43, Trades and Merchandise Marks Act No. 43 of 1958, section 130, the Factories Act No. 63 of 1948, section 116, the Oil Fields (Regulation and Development) Act No. 53 of 1948, the , section 85. Some of these Acts are modelled on English statutes which contain similar provisions. In some Acts, the express provision binding the Government is inserted by way of abundant caution. But the bulk of the Indian legislation proceeds upon the assumption that the Government will be bound unless the contrary is stated. Many Acts like the Code of Civil Procedure, 1908 and the make special provisions for the Government in respect of particular matters on the assumption that in respect of all other matters the Government will be bound by the general provisions of the Act. The Indian Limitation Act 1882 provided a special period of limitation for suits by the Government on the assumption that the Government like the subjects will be bound by its other general provisions. To apply the technical rule of construction exempting the Crown from the operation of Indian statutes will be to stultify the intention of the legislature in most cases. The English Courts have gone to the length of deciding that the Crown is not bound even by general regulations as to public safety, see Cooper vs Hawkins(1). Such a result has not escaped criticism even in England. In India, no one has doubted that general regulations as to public safety bind the Government equally like the citizens. The Director of Rationing and Distribution 's case(2) left open the question whether the State could claim immunity from the provisions of a statute with regard to its trading or commercial activities. But the executive power of the State extends to the carrying on of a trade or business, see article 298 of the Constitution. On a question of construction of a statute, no rational distinction can be made between the trading and non trading activities of the State. If the State is not bound by a statute, it would seem that it is not so bound in respect of all its activities. in a country having a federal system of government, it is difficult to apply the rule of Crown exemption from statutes. In (1) (2) ; 211 R vs Sutton(1), the High Court of Australia held that this presumption should not, be applied so as to bring about either State exemption from federal laws or federal exemption from State statutes. But the contrary opinion seems to have prevailed in later cases, see Minister of Works (W.A.) vs Gulson(2). The Commonwealth of Australia vs Bogle(3). This branch of Australian law is discussed in detail by Dr. Wynes in his book on Legislative, Executive and Judicial Powers, 3rd Edition pp. 518 to 544. We should not import in this country either the English rule of implied exception of the Crown or the subtle distinctions engrafted on it by the Australian Courts. Our system of Government is federal in character. The taxing power is vested both in the Union and the States. Subject to certain constitutional restrictions, the Union can tax the State and the State can tax the Union. There is no ground for presuming that the States are excluded from the scope of a general taxing statute enacted by Parliament or that the Union is outside the purview of the general words of a taxing statute enacted by a State legislature. I am therefore of the opinion that the rule that the Govern ment is not bound by a statute unless it is expressly named or bound by necessary implication does not prevail in this country and the decisions in the Province of Bombay 's case(4) and The Director of Rationing and Distribution 's case(s) and the subsequent decisions applying the rule to the construction of Indian Acts should not be followed. The imposition of this artificial rule has been harmful to our body politic. We have power to reconsider our previous decisions, see The Bengal Immunity Company Ltd. vs The State of Bihar(6). This is a fit case where we should exercise this power. If the rule of common law controlling the operation of a statute on the ground of the prerogative applied to India, it would be a law in force before the Constitution and would continue to be in force by virtue of article 372 of the Constitution. It would be the law in force because it would limit and control the operation of the existing Indian Acts. But we have ample power to say that this rule was not in force in India and the Indian law was not correctly laid down by the Privy Council in the Province of Bombay 's case(4) and the decisions which followed it. There is no presumption that the provisions of an Act do not bind the State (using the expression "State" in a compendious sense as including the Union and the States). In each case, it is a question of fair construction of the Act whether or not any particular provision of the Act binds the State. The intention of the legislature has to be gathered on a careful scrutiny of the Act in question. Particular care should be taken in scrutinising the pro visions of a taxing or a penal Act. If the application of the Act (1) ; (3) ; , 254. (5) ; (2) ; (4) [1946] L.R. 73 I.A. 271. (6) 212 leads to some absurdity, that may be a ground for holding that the State is excluded from its operation by necessary implication. If the only penalty for an offence is imprisonment, the State cannot be convicted of the offence, for the State cannot be locked up in prison. If the penalty for the offence is fine and the fine goes to the consolidated fund of the State, it may be presumed that the penal provision does not bind the State, for the legislature could not have intended that the State will be the payer as well as the receiver of the fine. Presumably, the Union is not bound by the Central Income tax Act because if it paid income tax, it will be both the payer and the receiver. Likewise, a State is prima facie not bound by a State Agricultural Income tax Act where the tax is receivable by it. Moreover cases may conceivably arise where "press provisions in a statute binding the State in respect of certain specific matters may give rise to the necessary implication that the State is not bound in respect of other matters. The Calcutta Municipal Act, 1951 contains special provisions exempting the Government from some of its provisions. Section 167(2) exempts from the consolidated rate certain open spaces and parade grounds which are the property of the Government. Section 208(1)(b) exempts certain carriages and animals belonging to the Government from payment of tax on carriages and animals. Section 225(1) (c) proviso exempts carts which are the property of the Government from payment of registration fees. Sections 218(1) and 541(1)(b) are however framed in general terms and do not expressly exempt the Government from their operation. Under section 218(1) it is the duty of every person carrying on any of the trades mentioned in schedule TV to take out a licence and to pay the prescribed fee. Under section 541(1) (b) any person carrying on such a trade without taking out the licence is punishable with fine. Prima facie, the two provisions apply to all persons including the State Government. Section 218 is a taxing section and its object is to levy revenue for the municipality. There is no reason why the State Government like any other person should not take out a license and pay the prescribed fee if it chooses to exercise or carry on a trade and why it should not be punished with fine under section 541(1)(b) if it chooses to carry on a trade without taking a license. By section 541(2), such fine, when levied, is taken by the Municipality in full satisfaction of the demand on account of the license Fee. Section II 5 of the Act no doubt provides that all monies realised or realisable under the Act (other than fine levied by magistrates) shall be credited to the municipal fund. Reading sections 115 and 541(2) together it appears that the excepting words "other than fine levied by magistrates" in section 115 do not refer to the fine levied under section 541. The general provisions of section 115 must be read subject to the special provisions of section 541(2) and the fine realisable under section 541 is receivby the Municipality. It follows that the State Government is 213 the payer but is not the receiver of the fine. There is nothing to indicate that the State Government should be excluded from the purview of section 218(1) and section 541(1)(b). Section 218 renders the State liable to pay the license fee. Section 541(1) provides the remedy for the recovery of the fee in case of default in taking out the license and payment of the fee. If we are to hold that section 218 (1) applies to the State but section 541(1) (b) does not, the result would be that though the State is liable to pay the license fee, the Municipality will have no remedy against the State for the recovery of the fee. The legislature could not have contemplated such a result. Section 541 (1)(b) is a penal provision. But the State is not necessarily exempt from the operation of a statute having a punitive aspect. No doubt, under section 547(A) the Court is competent to direct imprisonment of the offender in default of the payment of fine under section 547(1)(b). Obviously, this provision cannot be applied to the State, because the State cannot be detained in prison. But there is no reason why section 541(1) (b) should not be applied to the State. In Rani Sonavati Kumari vs The State of Bihar( ') this Court held that under the punitive provisions of 0 39, r. 2(3) of the Code of Civil Procedure, 1908, the Court could direct attachment of the property of the State for breach of an order of injunction, though the Court could not direct detention of the State in civil prison. The High Court found that the State of West Bengal was carrying on a trade referred to in schedule IV of the Calcutta Municipal Act, 1951, and was bound to take out a license under section 218(1). It is common case that the State did not take out a license for 1960 61. The State was therefore rightly convicted by the High Court under section 541(1). In the judgment of the High Court it is stated by inadvertence that the conviction was under section 537, but from the materials on the record it is clear that the High Court intended to pass the order of conviction under section 541. It was argued that the State was the owner of a market and did not carry on any business. it was suggested that the trades, if any, in the market were carried on by the stall holders and not by the Government. But the High Court has recorded the finding that the Government carried on a trade. In this appeal under article 136 of the Constitution, I do not propose to interfere with this finding Of fact. This judgment will not preclude the Government from proving in any future case that it is not carrying on any trade or business at 1, Orphanage Road, Calcutta, The appeal is dismissed. ORDER In accordance with the opinion of the majority, the appeal is dismissed. Y. P. (1) [1961] S.C.R.728.

The appellant State of West Bengal was carrying on trade as owner and occupier of a market at Calcutta without obtaining a licence as required under section 218 of the Calcutta Municipal Act, 1951. The respondent Corporation of Calcutta filed a complaint against the State for contravention thereof. The trial Magistrate, accepting the State 's contention that the State was not bound by the provisions of the Act acquitted the State. on appeal, theHigh Court convicted the State and sentenced it to a fine, holding thatthe State was as much bound as a private citizen to take out a licence. In appeal to this Court the appellant, relying on this Court 's decision inDirector of Rationing vs Corporation of Calcutta, ; ,contended that the State was not bound by the provisions of a statute unless it was expressly named or brought in by necessary implication and this common law rule of construction, accepted as the law in India was "law in force" within the meaning of article 372 of the Constitution and that in any event by necessary implication the State was excluded from the operation of section 218 of the Act. Held:Per Subba Rao C.J., Wanchoo, Sikri, Bachawat, Ramaswami, Shelat, Bhargava and Vaidialingam, JJ. (Shah, J. dissenting) : The State was not exempt from the operation of section 218 of the Calcutta Municipal Act, 1951 and was rightly convicted. Per Subba Rao C. J. Wanchoo, Sikri, Ramaswami. Shelat, Bhargava and Vaidialingam, JJ. (i) The Common Law rule of construction that the Crown is not, unless expressly named or clearly intended, bound by a statute,, was not accepted as a rule of construction throughout India and even in the Presidency Towns, it was not regarded as an inflexible rule of construction. It was not statutorily recognized either by incorporating it in different Acts or in any General Clauses Act; at the most, it was relied upon as a rule of general guidance in some parts of the country. The legislative practice establishes that the various legislatures of country provided specifically, exemptions in favour of the Crown 171 whenever they intended to do so indicating thereby that they did not rely upon any presumption but only on express exemptions. Even those courts that accepted it considered it only as a simple canon of construction and not as a rule of substantive law. In the City of Calcutta there was no universal recognition of the rule of construction in favour of the Crown. The Privy Council, in Province of Bombay vs Corporation of the City of Bombay, (1946) L.R. 73 I.A. 27 gave its approval to the rule mainly on concession made by counsel. [180 D G; 183 H; 184 E F; 186 D G] The archaic rule based on the prerogative and perfection of the Crown has no 'relevance to a democratic republic it is inconsistent with the rule of law based on the, doctrine of equality and introduces conflicts and anomalies. The normal construction, namely, that an enactment applies to citizens as well as to State unless it expressly or by necessary implication exempts the State from its operation, steers clear of all the anomalies and is consistent with the philosophy of equality enshrined in the Constitution. B] If a rule of construction accepted by this Court is inconsistent with the legal philosophy of the Constitution it is the duty of this Court to correct its self and lay down the right rule. This Court must more readily do so in constitutional matters than in other branches of law. [176 B C] Director of Rationing vs Corporation of Calcutta, ; ,, reversed. Province of Bombay vs Corporation of the City of Bombay, (1946) L.R. 73 I.A. 271, held inapplicable. Bengal Immunity Co. vs State of Bihar, , referred to. Case law discussed. (ii)Even assuming that the common law rule of construction was accepted as a canon of interpretation throughout India the rule is not "law in force" within the meaning of Article 372 of the Constitution. There is an essential distinction between a law and a rule of construction. A rule of construction adopted to ascertain the intention of the legislature is not a rule of law. [187 D] (iii)The State is not excluded from the operation of section 218 of the Act by necessary implication. The State is not the payer as well as the receiver of the fine, or the fine, when levied goes to the municipal fund. Though the expression fine ' is used, in effect and substance, section 541 is a mode of realization of the, fee payable in respect of the licence. The provision for imprisonment in default of fine is only an enabling provision and the court is not bound to direct the imprisonment of the defaulter. [189 D H; 190 A B] Per Bachawat, J : (i) This Court should have in Director of Rationing and Distribution vs Corporation of Calcutta, , refused to recognise the rule that the Crown is not bound by a statute save by express words or by necessary implication. In India the Crown never enjoyed the general prerogative of overriding a statute and 'standing outside it. The doctrine of the general immunity of the Crown from the operation of statutes so far as it is based upon the 'royal prerogative was never imported into India. Nor is there any compelling reason why the courts in India should not give full effect to the general words of a statute on the basis of some artificial rule of construction prevailing in England. The bulk of the Indian legislation proceeds upon the assumption that the Government will be bound unless the contrary is stated. The 172 rule,as rule of construction, never gained a firm foothold in untilthe Privy Council decision in Province of Bombay vs Municipal Corporation for the City of Bombay, (1946) L.R. 73 I.A. 271, in 1946, till which time there was no settled course of decisions of the Indian courts necessitating or justifying the application of this rule to the construction of Indian statutes; and even in this decision the propriety of applying the rule to Indian legislation was not considered. The imposition of this strict rule of construction by the Privy Council was received very unfavourably in India till this Court 's decision in the Director of Rationing case wherein Province of Bombay was held to have laid down the correct law. But subsequent decisions of this Court disclosed a tendency to relax and soften the rigour of the rule. Further, in a country having a federal system of government it is difficult to apply the rule of Crown exemption from statutes. This rule was not in force in India and therefore was not "law in force" within the meaning of article 372 of the Constitution. [201 D E; 202 C; 210 A B, C D; C, H; 210 H; 211 F] This Court has power to reconsider its previous decisions and this is a fit case where this power should be exercised. [211 E] Director of Rationing vs Corporation of Calcutta, ; , reversed. Province of Bombay vs Municipal Corporation for the City of Bombay, (1946) L.R. 73 I.A. 271, held inapplicable. Shivenkata Seetararnanjaneya Rice & Oil Mills vs State of Andhra Pradesh, ; and Bengal Immunity Co. vs State of Bihar, , referred to. Case law discussed. (ii)On a question of construction of a statute no rational distinction can be made between the trading and non trading activities of the State. [210 G] (iii)There is nothing in the Act to indicate that the State should be excluded from the purview of section 218(1) 'requiring the taking out of a licence on payment of the prescribed fee and section 5441(1) providing the remedy for the recovery of fee in face of default. If the State is to be exempt from the application of section 541(1)(b) it would lead to the anomaly that the State is liable to pay the licence fee but the Municipality will have no remedy for the recovery of the fee. Also, the fact that under section 547(A) the court is competent to direct imprisonment in default of fine is no reason why section 5411 1) (b) should not be applied to the State. The special provisions of section 541(2) indicate that the fine realizable under section 541 is receivable by the Municipality. It follows that the State Government is the payer but is not the receiver of the fine. The fine, when levied, is taken by the Municipality in full satisfaction of the demand on account of the licence fee. [212 H; 213B] State of Bihar vs Rani Sonavati Kumari ; , relied on. Shah, J. (Dissenting); (i) The English Common Law rule that the Crown is not, unless expressly named or clearly intended, bound by a statute, is a rule of construction and was settled law in India before the Constitution. [197 F; 198 D] The Common Law of England was adopted in this country subject to local variations and the personal law of the parties and the courts which functioned in the former British India territory were enjoined to cases not governed by any specific statutory rules according to equity and good conscience,, which meant rules of English Common Law 173 in so far as they were applicable to Indian society. Them was practically a consistent course of decisions of the High Courts in India, prior to the Constitution, in support of the view, affirmed by the Judicial Committee in Province of Bombay vs Municipal Corporation of the City of Bombay, (1946) L.R. 73 I.A. 271, that the rule that the Crown is not unless expressly named or clearly intended bound by a statute applied to India. It was accepted as a rule of interpretation ofstatutes applicable to all statutes governing state action, authority or property. A difference may have prevailed in Parts of the territories now comprising theIndian Union. But this is not peculiar to this rule of interpretation adoptedby the Courts in British India. Where uniform statutes do not apply differences do arise and must be determined according to the law and jurisdiction inherited by the courts administering justice. The present case concerns the administration of law in the town of Calcutta which has for more than two centuries been governed by the English Common Law as adopted by the various Acts, Regulations and finally by the Letters Patent. [191 A D; 192 D E; D F] Director of Rationing and Distribution vs The Corporation of Calcutta, ; , followed. Province of Bombay vs Municipal Corporation of the City of Bom. bay, L.R. 73 I.A. 271, applied. State of West Bengal vs Union, [1964] 1 S.C.R. 371 Srivenkata Seetaramanjaneya Rice & Oil Mills vs State of Andhra Pradesh, ; , Builders Supply Corporation vs Union of India, ; , referred to. Case law referred to. There is no reason to hold that the rule which previously applied to the interpretation of a statute ceased to apply. on the date on which the Constitution came into force. The Constitution has not so fundamentally altered our concept of 'State ' as to abandon the traditional view about State privileges, immunities and rights because they had a foreign origin and on the supposed theory of equality between the State and its citizens. The guarantee of equal protection clause of the Constitution does not extend to any differential treatment which may result in the application of a special rule of interpretation between the State and the citizens nor has the Constitution predicated in all respects equality in matters of interpretation between the State and its citizens. A State can, in the interest of public good, select itself for special treatment. This being so, there is no reason to suppose that a Statute which was framed on the basis of a well settled rule of pre Constitution days which accorded the State a special treatment in the matter of interpretation. of statutes must be deemed to have a different meaning on the supposition that the Constitution has sought to impose equality between the State and the citizens. [198 H 199 F] The fact that in the Indian federal set up sovereignty is divided between the Union and the States, and in the application of the rule that the State is not bound by a Statute, unless expressly named or clearly implied, conflict between the State enacting a law and the Union,, or another State, may arise, does not give rise to any insuperable difficulty which renders the rule inapplicable to the changed circumstances, for, it is the State which enacts a legislation in terms general which alone may claim benefit of the rule of interpretation and not any other State. [199 G] (ii)The rule of interpretation being a settled rule is "law in force" within Me meaning of article 372 of the Constitution. A rule is not any 174 the less a rule of law because it is a rule for determination of the intention of the legislature and for its application requires determination of facts and circumstances outside the statute. Acceptance of the proposition that a decision of the highest judicial tribunal before the Constitution, is law, does not involve the view that it is immutable. A statue may be repealed, ' and even retrospectively, it would then cease to be in ,operation; a decision which in the view of this Court is erroneous may be overruled and may cease to be regarded as law, but till then it was law in force. [198 D G] (iii)The application of the rule cannot be restricted to cases where an action of the State in its sovereign capacity is in issue. In the context of modem notions of the functions of a welfare State, it is difficult to regard any particular activity of the State as exclusively trading. [200 A B] (iv)The State of West Bengal was not bound by the provisions relating to the issue of licences for occupation or conduct of a market. [200 F] There is no, express reference to the State, nor is there anything peculiar in the nature purpose and object or in the language used in the enactment relating to the issue of licences, which may suggest that the State must by necessary implication be bound by its provision. [200 E]

Appeals Nos. 147 & 148 of 1955. Appeals from the judgment and order dated September 30, 1953, of the former Bombay High Court in Special Civil Applications Nos. 1008 and 1611 of 1953. V. M. Limaye, Mrs. E. Udayaratnam and section section Shukla, for the appellants (in both the appeals). H. N. Sanyal, Additional Solicitor General of India, B. Ganapathy Iyer, K. L. Hathi and R. H. Dhebar, for the respondent. 344 1960. August 25. The Judgment of Sinha, C. J., Kapur, Gajendragadkar and Wanchoo, JJ., was delivered by Gajendragadkar, J. Subba Rao, J., delivered a separate judgment. GAJENDRAGADKAR J. The appellants in these two appeals had filed two separate petitions under article 226 of the Constitution in the Bombay High Court in which they had challenged the vires of section 6(2) of the Bombay Tenancy and Agricultural Lands Act, 1948 (LXVII of 1948) (hereafter called the Act) and the validity of the notification issued by the Government on October 17, 1952, under the provisions of the said section 6(2). It appears that on June 23, 1949, in exercise of the powers conferred by section 6(2) of the Act, the Government had issued a notification fixing " in the case of an irrigated land 1/5 and in the case of any other land 1/4 of the crops of such land or its value as determined in the prescribed manner as the maximum rent payable by the tenants of the lands situate in the areas specified in the schedule appended thereto ". Amongst the areas thus specified was the area in which the appellants ' lands are situated. Subsequently, on October 17, 1952, by virtue of the same powers and in supersession of all other earlier notifications issued in that behalf the Government purported to prescribe a rate as the lower rate of maximum rent at which the rent shall be payable by the tenants in respect of the lands situate in the areas specified in Schedule I appended to it. It is unnecessary to set out the rates thus prescribed ; it would be enough to state that the rate of maximum rent prescribed by this notification is very much lower than the rate which had been fixed by the earlier one. By their petitions filed in the Bombay High Court the appellants contended that section 6(2) was ultra vires, and that even if section 6(2) was valid the impugned notification was in valid. Accordingly they prayed for a writ of mandamus or a writ in the nature of mandamus or any other appropriate direction or order against the Government, the Mamlatdar of the area concerned and their respective tenants prohibiting them or any one of them from giving effect to the said notification. 345 They also claimed a direction or order to the opponents directing them to cancel or withdraw the impugned notification. These two petitions were heard by the High Court along with other companion matters in which the same points were raised, and in the result the High Court dismissed the petitions. It held that section 6(2) was intra vires and the impugned notification was legal and valid. The appellants then applied for and obtained a certificate from the High Court, and it is with the said certificate that they have come to this Court by their two appeals. At the outset it may be relevant to state that, subsequent to the decision under appeal, in 1956 the Act has been substantially amended and now section 8 of the new Act provides for the rent and its maximum and minimum. Shortly stated this section incorporates the provisions of the impugned notification and adds to it the further provision that in no case shall the rent be less than twice the assessment. In consequence the point raised in the present appeals has ceased to be of any importance ; at best it may affect just a few cases between landlords and tenants that may be pending in respect of the rent payable by the latter to the former for a period prior to 1956. At the time when the certificate was granted the questions raised by the appellants were undoubtedly of general importance. We would first read section 6 of the Act. Section 6(1) provides that notwithstanding any agreement, usage, decree or order of a court or any law the maximum rent payable by a tenant for the lease of any land shall not in the case of an irrigated land exceed one fourth and in the case of any other land exceed one third of the crop of such land or its value as determined in the prescribed manner. Section 6(2) provides that the Provincial Government may by notification in the official gazette fix a lower rate of the maximum rent payable by the tenants of lands situate in any particular area or may fix such rate on any other suitable basis as it thinks fit. For the appellants Mr. Limaye has contended that section 6(2) suffers from the vice of excessive delegation. His argument is that 346 the power delegated to the Provincial Government is unfettered and uncanalised and no guidance has been afforded to it for exercising the said power. He has also relied on the fact that while giving such wide powers to the delegate in fixing the lower rate of the maximum rent the Legislature has not prescribed any minimum as it should have done. The High Court has held that the delegation involved in section 6(2) is within permissible limits and as such the challenge to the vires of the said provision cannot succeed. It is now well established by the decisions of this Court that the power of delegation is a constituent element of the legislative power as a whole, and that in modern times when the Legislatures enact laws to meet the challenge of the complex socioeconomic problems, they often find it convenient and necessary to delegate subsidiary or ancillary powers to delegates of their choice for carrying out the policy laid down by their Acts. The extent to which such delegation is permissible is also now well settled. The Legislature cannot delegate its essential legislative function in any case. It must lay down the legislative policy and principle, and must afford guidance for carrying out the said policy before it delegates its subsidiary powers in that behalf. As has been observed by Mahajan, C.J., in Harishankar Bagla vs The State of Madhya Pradesh (1) "the Legislature cannot delegate its function of laying down legislative policy in respect of a measure and its formulation as a rule of conduct. The Legislature must declare the policy of the law and the legal principles which are to control any given cases, and must provide a standard to guide the officials or the body in power to execute the law ". In dealing with the challenge to the vires of any statute on the ground of excessive delegation it is, therefore, necessary to enquire whether the impugned delegation involves the delegation of an essential legislative function or power and whether the Legislature has enunciated its policy and principle and given guidance to the delegate or not. As the decision in Bagla 's case(1) shows, in applying this test this Court has taken into (1) , 388. 347 account the statements in the preamble to the Act, and if the said statements afford a satisfactory basis for holding that the legislative policy and principle has been enunciated with sufficient accuracy and clarity the preamble itself has been held to satisfy the requirements of the relevant tests. In every case it would be necessary to consider the relevant provisions of the Act in relation to the delegation made and the question as to whether the delegation is intra vires or not will have to be decided by the application of the relevant tests. In this connection we may also refer to the decision of this Court in The Edward Mills Co. Ltd., Beawar vs State of Ajmer (1), where the validity of the notification issued under the provisions of the Minimum Wages Act XI of 1948 was impeached, and the said challenge raised the question about the validity of the delegation provided for by section 27 of the said Act. The scheme of the Act was that a schedule had been attached to it which gave a list of employments to. which the provisions of the Act applied an section 7 gave power to the appropriate Government to add to either part of the schedule any employment in respect of which it was of opinion that the minimum wages shall be fixed and this the appropriate Government was authorised to do by giving notification in a broad manner, and thereupon the schedule shall, in its application to the State, be deemed to be amended accordingly. The argument was that the Act had nowhere formulated a legislative policy according to which an employment should be chosen for being included in the schedule; no principles had been prescribed and no standards laid down in that behalf, and so the delegation was unfettered and uncanalised. This argument was rejected by this Court on the broad consideration that the legislative policy was apparent on the face of the Act itself. " What the Act aims at ", observed Mukherjea, J., as he then was, " is the statutory fixation of minimum wages with a view to obviate the chance of exploitation of labour. (1) ; ,750. 45 348 The Legislature undoubtedly intended to apply this Act not to all industries but to those industries only where by reason of unorganised labour or want of proper arrangements for effective regulation of wages or for other causes the wages of labourers in a particular industry were very low ". The learned Judge then pointed out that conditions of labour vary under different circumstances and from State to State, and the expediency of including a particular trade or industry within the schedule depends upon a variety of facts which are not uniform and which can best be ascertained by the person who is placed in charge of administration of a particular State. It is with a view to carry out the particular purpose of the Act that power is delegated to the appropriate Government by section 27. That is how the challenge to the vires of section 27 was repelled. The present Act is undoubtedly a beneficent measure. It has enacted provisions for agrarian reform which the Legislature thought was overdue. The preamble shows that the object of the Act, inter alia, was to improve the economic and social condition of peasants and ensure the full and efficient use of land for agriculture. With that object the Act has made several provisions to safeguard the interests of the tenants. Let us consider some of these provisions. Section 6 which we have already set out prescribes the maximum rent payable by a tenant, and provides for the reduction of the said maximum by reference to particular areas. Section 7 lays down that the rent payable by tenants shall, subject to the maximum rate fixed under section 6, be the rent agreed between the parties, or in the absence of any agreement or usage, or where there is a dispute as regards the reasonableness of the rent payable according to the agreement or usage, the reasonable rent. It is thus clear that even in regard to an agreed rent or a rent fixed by usage, if a tenant raises a dispute about its reasonableness that dispute has to be settled in the manner prescribed by the Act and the amount of reasonable rent determined. Section 8 provides for commutation of crop share rent into cash. Section 9 prohibits a landlord from receiving from his tenant any rent in terms of service or 349 labour; and it requires him to apply to the Mamlatdar for commuting such rent into cash. Section 10 provides for refund of excess rent recovered by the landlord from his tenant. Section 11 prohibits the recovery by the landlord of any cess, rate, vero, huk or tax or service of any description from the tenant other than the rent lawfully due from such land. Section 12 provides for enquiries in regard to the fixation of reasonable rent. On an application made by the tenant or the landlord in that behalf the Mamlatdar has to determine the reasonable rent under section 12(3) having regard to the factors specified in the said sub section. These factors are (a) the rental values of lands used for similar purposes in the locality, (b) the profits of agriculture of similar lands in the locality, (c) the prices of crops and commodities in the locality, (d) the improvements made in the land by the landlord or the tenant, (e) the assessment payable in respect of the land, and (f) such other factors as may be prescribed. There is no doubt that the last clause which refers to other factors must be construed as referring to factors ejusdem generis with those that have been previously enumerated. Section 13 provides for the suspension or remission of rent, and the conditions under which the said remission or suspension can be granted. It would thus be seen that the material provisions of the Act aim at giving relief to the tenants by fixing the maximum rent payable by them and by providing for a speedy machinery to consider their complaints about the unreasonableness of the rent claimed from them by their respective landlords. It is in the light of this policy of the Act which is writ large on the face of these provisions that we have to consider the question as to whether the delegation made by section 6(2) suffers from the infirmity of excessive delegation. Broadly stated section 6(2) seeks to provide for the fixation of a lower rate of maximum rent area wise. We have already seen that individual tenants are given the right to apply for the fixation of reasonable rent by section 12, and specific factors have been specified which the Mamlatdar must consider in fixing a reasonable rent. The Legislature realised that a large number of 350 tenants in the State were poor, ignorant and in many cases helpless, and it was thought that many of them may not be able to make individual applications for the fixation of a reasonable rent under section 12. That is why it was thought necessary to confer upon the Provincial Government the power to fix a lower rate of the maximum rent payable by tenants in respect of particular areas. In a sense what could be done by the Mamlatdar in individual cases can be achieved by the Provincial Government in respect of a large number of cases covered in a particular area. If that be so, the legislative policy having been clearly expressed in the relevant provisions and the factors for determining reasonable rent also having been specified in section 12(3), it is difficult to accept the argument that the Provincial Government has been given uncanalised or unfettered powers by section 6(2) to do what it likes without any guidance. The relevant factors having been specified by section 12(3) when the Provincial Government considers the question of fixing a lower rate of the maximum rent payable in any particular area it is expected to adopt a basis which is suitable to that particular area. The relevant conditions of agriculture would not be uniform in different areas and the problem of fixing a reduced maximum rent payable in the respective areas would have to be tackled in the light of the special features and conditions of that area ; that is why a certain amount of latitude had to be left to the Government in fixing the lower rate of the maximum rent in the respective areas, and that is intended to be achieved by giving it liberty to adopt a basis which it thinks is suitable for the area in question. The word " suitable " in the context must mean I suitable to the area ' having regard to the other provisions of the Act such as section 6(1) and section 12. It is true that the power to fix a reasonable rent conferred on the Mamlatdar under section 12 is subject to the power of the Provincial Government under section 6(2). Even so we think it would be difficult to hold that the factors prescribed for the guidance of the Mamlatdar would have no relevance at all when the Provincial Government acts under 351 section 6(2). In our opinion, therefore, having regard to the legislative policy laid down by the Act in its preamble and in the other relevant sections to which we have referred, and having regard to the guidance which has been provided for fixing a reasonable rent under section 12(3), it would not be possible to hold that the power delegated to the Provincial Government by section 6(2) suffers from the infirmity of excessive delegation The fact that no minimum has been prescribed would not materially affect this position. Mr. Limaye has then contended that even if section 6(2) is valid the impugned notification is invalid because it offends against article 31 of the Constitution. He concedes that the Act itself is saved under article 31B since it is one of the Acts enumerated in the Ninth Schedule; but his argument is that the notification has in substance amended the provisions of section 6(1) and thus it amounts to a fresh legislation to which article 31B cannot apply. There is no, substance in this argument. If section 6(2) is valid then the exercise of the power validly conferred on the Provincial Government cannot be treated as fresh legislation which offends against article 31. If the Act is saved by article 31B section 6(2) is also saved, and the power must be held to be validly conferred on the Provincial Government, and a notification issued by virtue of the said powers cannot be challenged on the ground that it violates article 31. The next argument is that the notification is invalid because the power to issue a notification conferred by section 6(2) was exhausted as soon as the Government issued the first notification on June 23, 1949. This argument proceeds on the assumption that the power conferred on the Government by section 6(2) can be exercised only once, and it seeks to derive support from the fact that the words " from time to time " which were used in the corresponding section of the earlier tenancy legislation in the State have not been used in section 6(2). Reliance is also placed on the fact that the said words have been used in section 8(1) of the Act. The omission of the said words from section 6(2) as contrasted with their inclusion in section 8(1), says Mr. Limaye, indicates that the power delegated under section 6(2) was 352 intended to be used only once. This argument is fallacious. Why the Legislature did not use the words " from time to time " in section 6(2) when it used them in section 8(1) it is difficult to understand ; but in Construing section 6(2) it is obviously necessary to apply the provisions of section 14 of the Bombay General Clauses Act 1904 (1 of 1904). Section 14 provides that where by any Bombay Act made after the commencement of this Act any power is conferred on any Government then that power may be exercised from. time to time as occasion requires. Quite clearly if section 6(2) is read in the light of section 14 of the Bombay General Clauses Act it must follow that the power to issue a notification can be exercised from time to time as occasion requires. It is true that section 14 of the (X of 1897), provides that where any power is conferred by any Central Act or Regulation then, unless a different intention appears, that power may be exercised from time to time as occasion requires. Since there is a specific provision of the Bombay relevant on the point it is unnecessary to take recourse to section 14 of the Central ; but even if we were to assume that the power in question can be exercised from time to time unless a different intention appears we would feel no difficulty in holding that no such different intention can be attributed to the Legislature when it enacted section 6(2). It is obvious that having prescribed for a maximum. by section 6(1) the Legislature has deliberately provided for a modification of the said maximum rent and that itself shows that the fixation of any maximum rent was not treated as immutable. If it was necessary to issue one notification under section 6(2) it would follow by force of the same logic that circumstances may require the issue of a further notification. The fixation of agricultural rent depends upon so many uncertain factors which may vary from time to time and from place to place that it would be idle to contend that the Legislature wanted to fix the maximum only once, or, as Mr. Limaye concedes, twice. Therefore the argument that the power to issue a notification has been exhausted cannot be sustained. 353 The last argument which Mr. Limaye faintly attempted to place before us was that the expression " any particular area" would not be applicable to the areas in which the appellants ' lands are situated because, according to him, the expression should be construed in the light of the same expression used in section 298(2)(a) of the Government of India Act, 1935. This argument is far fetched and fatuous and need not be considered. In the result the appeals fail and are dismissed with costs. SUBBARAO J. I have had the advantage of perusing the judgment prepared by Gajendragadkar, J. I regret my inability to agree with my learned brother on the question of the vires of section 6(2) of the Bombay Tenancy and Agricultural Lands Act, 1948 (LXVII of 1948) (hereinafter called the Act). The facts have been fully stated in the judgment of my learned brother and I need not restate them here. It would be enough if I expressed my opinion on the said question. Learned counsel for the appellants attacks the con stitutional validity of section 6(2) on the ground that the said subsection exceeds the limits of permissible delegated legislation. Before considering the validity of section 6(2), it would be convenient to notice briefly the relevant aspects of the law of the doctrine of delegated legislation. The scope of the doctrine of delegation of legislation has been so authoritatively laid down by this Court in more than one decision that it would be pedantic to attempt to resurvey the field over again. I would, therefore, be content to collate the relevant passages from the decisions of this Court to ascertain the principle underlying the doctrine. The leading decision on this subject is In re The (1). There the Central Legislature had empowered the executive authority under its legislative control to apply at its discretion the laws to an area which was also under the legislative sway of the Centre. The validity of the laws was questioned (1) ; 354 on the ground that the legislature bad no power to delegate legislative powers to executive authorities. As many as seven Judges dealt with the question and wrote seven separate judgments considering elaborately the different aspects of the question raised. I am relieved of the duty to ascertain the core of the decision as that has been done by Bose, J., with clarity in Rajnarain Singh vs The Chairman, Patna Administration Committee, Patna (1). Bose, J., after pointing out the seven variations of the authority given to the executive in the Case (2), summarized the majority view on the relevant aspect of the question now raised at p. 301 thus: " In our opinion, the majority view was that an executive authority can be authorised to modify either existing or future laws but not in any essential feature. Exactly what constitutes an essential feature cannot be enunciated in general terms, and there was some divergence of view about this in the former case, but this much is clear from the opinions set out above: it cannot include a change of policy. " Rajnarain Singh 's Case (1) dealt with section 3(1) of the Patna Administration Act, 1915, (Bihar and Orissa Act 1 of 1915) as amended by Patna Administration (Amendment) Act, 1928 (Bihar and Orissa Act IV of 1928) and with a notification issued by the Governor of Bihar picking out section 194 out of the Bihar and Orissa Municipal Act of 1922, modifying it and extending it in its modified form to the Patna Administration and Patna Village areas. Bose, J., after pointing out the difference between Rajnarain Singh 's Case (1) and the Case (2) observed at p. 303 thus: " But even as the modification of the whole cannot be permitted to effect any essential change in the Act or an alteration in its policy, so also a modification of a part cannot be permitted to do that either." This Court again in Harishankar Bagla vs The State of Madhya Pradesh (3) considered the scope of the Case (2). Mahajan, C. J., stated at p. 388 thus. (1) ; (2) ; (3) 355 " It was settled by the majority judgment in the Case (1) that essential powers of legislation cannot be delegated. In other words, the legislature cannot delegate its function of laying down legislative policy in respect of a measure and its formulation as a rule of conduct. The Legislature must declare the policy of the law and the legal principles which are to control any given cases and must provide a standard to guide the officials or the body in power to execute the law. The essential legislative function consists in the determination or choice of the legislative policy and of formally enacting that policy into a binding rule of conduct. " In The Edward Mills Co., Ltd., Beawar vs The State of Ajmer (2), Mukherjea, J., as he then was, speaking for the Court stated the principle thus at p. 749: " A Legislature cannot certainly strip itself of its essential functions and vest the same on an extraneous authority. The primary duty of law making has to be discharged by the Legislature itself but delegation may be resorted to as a subsidiary or an ancillary measure. " The latest decision on the point is that in Hamdard Dawakhana vs Union of India (3). One of the questions raised in that case was whether section 3(d) of , exceeded the permissible limits of delegated legislation. The principle has been restated by Kapur, J., at p. 566 thus: , "This means that the legislature having laid down the broad principles of its policy in the legislation can then leave the details to be supplied by the administrative authority. In other words by delegated legislation the delegate completes the legislation by supplying details within the limits prescribed by the statute and in the case of conditional legislation the power of legislation is exercised by the legislature conditionally leaving to the discretion of an external (1) ; (2) ; (3) ; 46 356 authority the time and manner of carrying its legislation into effect as also the determination of the area to which it is to extend. " Applying the principle to the facts of that case, the learned Judge observed at p. 568 thus: " In our view the words impugned are vague. ;Parliament has established no criteria, no standards and has not prescribed any principle on which a particular disease or condition is to be specified in the Schedule. It is not stated what facts or circumstances are to be taken into consideration to include a particular condition or disease. The power of specifying diseases and conditions as given in section 3(d) must therefore be held to be going beyond permissible boundaries of valid delegation. It is not necessary to multiply decisions; nor is it necessary to point out the subtle distinction between delegates legislation and conditional legislation. The law on the subject may be briefly stated thus: The Constitution confers a power and imposes a duty on the legislature to make laws. The essential legislative function is the determination of the legislative policy and its formulation as a rule of conduct. Obviously it cannot abdicate its functions in favour of another. But in view of the multifarious activities of a welfare State, it cannot presumably work out all the details to suit the varying aspects of a complex situation. It must necessarily delegate the working out of details to the executive or any other agency. But there is a danger inherent in such a process of delegation. An overburdened legislature or one controlled by a powerful executive may unduly overstep the limits of delegation. It may not lay down any policy at all; it may declare its policy in vague and general terms; it may not set down any standard for the guidance of the executive; it may confer an arbitrary power on the executive to change or modify the ' policy laid down by it without reserving for itself any control over subordinate legislation. This self effacement of legislative power in favour of another agency either in whole or in part is beyond the permissible limits of delegation. It is for a Court to hold on a fair, generous 357 and liberal construction of an impugned statute whether the legislature exceeded such limits. But the said liberal construction should not be carried by the Courts to the extent of always trying to discover a dormant or latent legislative policy to sustain an arbitrary power conferred on executive authorities. It is the duty of this Court to strike down without any ' hesitation any arbitrary power conferred on the executive by the legislature. Bearing the aforesaid principles in mind, I shall look at the provisions of the Act to ascertain whether section 6(2) is in conformity with the law laid down by this Court. I shall for the present ignore section 6(2) and briefly and broadly notice the scheme of the Act. The preamble shows that the object of the Act was mainly to improve the economic and social conditions of peasants and to ensure the full and efficient use of land for agriculture. It also indicates that the Act was not intended to be a confiscatory one, but was enacted to regulate the relationship between land lord and tenant, particularly in respect of rent payable by the tenant to the land lord. In section 6(1) the legislature in clear terms fixes the maximum rent payable by a tenant, having regard to the nature of the land: in the case of irrigated land it fixes one fourth and in the case of other land one third of the crop of such land or its value as determined in the prescribed manner as the maximum rent. The rest of the Act is to be worked out subject to the maximum rent fixed under section 6(1). Section 7 enables the land lord and tenant to agree upon the rate of rent. Section 8 gives power to the Provincial Government to issue notifications providing for the commutation of the rent in kind into cash rent. It also, if no rate of commutation has been so fixed by the State Government, enables the Mamlatdar to fix the amount of commutation in the manner prescribed. Sub section (3) of section 6 prohibits a landlord from recovering any rent by way of crop share or in excess of the commuted cash rent. Section 9 compels the land lord to apply to the Mamlatdar, if the land lord is receiving rent from any tenant in terms of service or labour, for commuting such rent into 358 cash. Section 10 makes the landlord liable to pay compensation to the tenant if he contravenes the provisions of sections 6, 7, 8 or 9. Section 11 prohibits the land lord from collecting any cesses other than the rent lawfully payable in respect of the land. Section 12 enables the tenant to apply to the Mamlatdar for the fixation of reasonable rent in respect of the land in his possession and section 12(3) lays down the factors the Mamlatdar has to take into consideration in fixing a reasonable rent. After fixing the rent, the Mamlatdar makes an order for Payment of the rent to the land lord and the rent so fixed shall hold good for a period of five years. There is also a provision for reduction of rent, if during the said period on account of deterioration of the land by floods or other causes beyond the control of the tenant the land has been wholly or partially rendered unfit for cultivation. Section 13 enjoins on the land lord to suspend or remit the rent payable by the tenant to him if the payment of land revenue by him to the Government is suspended or remitted. A right of appeal is provided against the order of the Mamlatdar to the Collector. Shortly stated, this Act provides for the fixation of maximum rent by the Government, a reasonable rent by Mamlatdar and an agreed rent by the parties. But both the agreed rent and the reasonable rent cannot exceed the maximum rent. There are express provisions for reduction or remission of rent in appropriate circumstances. The Act does not provide for an appeal or revision to the Government and the Government has, therefore, no say in the matter of fixation of reasonable rent. The whole scheme of the Act, therefore, excluding section 6(2), is a self contained and integrated one. The legislature fixes the maximum rent linked with crop having regard to the nature of the land, and the other provisions enable the appropriate authorities to fix reasonable rent subject to that maximum. Now let us see the impact of section 6(2) on this scheme. Section 6(2) reads : " The Provincial Government may, by notification in the Official Gazette, fix a lower rate of the 359 maximum rent payable by the tenants of lands situate in any particular area or may fix such rate on any other suitable basis as it thinks fit." Under this section the Provincial Government may fix a lower rate of the maximum in any particular area or to fix such rate on any other suitable basis. Three elastic words are used in section 6(2), namely, (1) lower rate; (2) particular area ; and (3) on any other suitable basis. Prima facie in section 6(2) the legislature has not laid down any policy or any standard to enable the Provincial Government to reduce the maximum rent fixed under section 6(1). What is the limit of the lower rate the Government is empowered to fix ? What is the extent of the area with reference to which that rate can be fixed? What are the conditions prevailing in a particular area which require the reduction of the maximum rent ? Even if there are conditions justifiable for reduction of the maximum rent, what is the basis for that reduction ? The disjunctive " or " between " particular area " and " may fix" and the word ,other" qualifying " suitable basis " indicate that the situation of 'the land in a particular area may also be a basis for fixing a lower rent. The situation of a land in a particular area cannot in itself afford a basis for fixing a specified rate of maximum rent. The words " suitable basis " in the alternative clause is so vague that in effect and substance they confer absolute and arbitrary discretion on the Provincial Government. What is the standard of suitability ? The standard of suitability is only what the Government thinks suitable. In this section the legislature in clearest terms abdicated its essential functions in favour of the executive authority without laying down any standard for its guidance. In effect it permitted the Government to amend section 6(1) of the Act. To illustrate, the legislature fixes the maximum rent payable by a tenant to his landlord at X; the Mamlatdar after enquiry fixes Y as reasonable rent which is less than X; the Government in exercise of the power conferred under section 6(2) can arbitrarily fix Z which is far less than the reasonable rent; with the result that the entire scheme 360 promulgated by the legislature breaks. The Government also may select any small area containing a few landlords and reduce the maximum rent to the lowest level with the result the Act can be worked out as an expropriatory measure which is contrary to the intention of the legislature. Learned counsel for the respondents realising that arbitrariness is writ large on the face of section 6(2) attempted to evolve the legislative formula from the preamble to section 6(1) and section 12(3) of the Act. I cannot find any indication of the legislative policy in the manner of fixation of the lower rate of maximum rent in the preamble. Nor can I discover any such in section 6(1). Section 6(1) contains a clear legislative policy in fixing the maximum rent on certain identifiable basis. The legislature says in effect in section 6(2), " I have fixed the maximum rent in respect of irrigated lands and other lands on the basis of a definite share of the crop of such lands, but you can reduce that maximum rent on any basis you like ". While section 6(1) overrides other provisions of the Act, section 6(2) derogates from section 6(1) itself Section 6(2) is capable of being exercised in such a way that the object of section 6(1) is itself frustrated. Section 6(1) in effect is made subject to section 6(2). Now coming to section 12(3), it is contended that the factors mentioned in section 12(3) afford a standard for the Government for fixing the maximum rent. To put it differently the suitable basis is one or other of the factors in section 12(3). The Act does not say so, either expressly or by necessary implication. The criteria for fixing rent in section 13 are to afford a guide to Mamlatdar for fixing reasonable rent. Indeed the sub clause is subject to section 6 indicating thereby that the maximum rent fixed by the Government is not the same as the reasonable rent. Indeed if the reasonable rent determined on the basis of all or some of the factors in section 12(3) is more than the maximum rent fixed by the Government on a suitable basis, the latter prevails over the former. As the maximum rent supersedes reasonable rent, the factors governing reasonable rent need not necessarily govern the fixation of maximum rent. To attempt to read the factors in section 12(3) into 361 section 6(2) is, in my view, not permissible. On a fair reading of the provisions of the Act, I find it not possible to discover any standard laid down by the legislature to enable the Provincial Government to fix a lower rate of the maximum rent. The section conferring such arbitrary power on the Provincial Government without laying down any legislative standard is in excess of the permissible limits of delegation. The learned Additional Solicitor General broadly contended that the policy of the legislature is to prevent rackrenting and to fix a reasonable rent and, therefore, any exercise of the power under section 6(2) is guided by that policy. This is an extreme contention and, if accepted, will enable Parliament and legislatures to confer absolute and unguided powers on the executive. If a legislature can legally be permitted to lay down a broad policy in general terms and confer arbitrary powers on the executive for carrying it out, there will be an end of the doctrine of the rule of law. If the contention be correct. , the legislature in the present case could have stated in the preamble that they were making the law for fixing the maximum rent and could have conferred an absolute power on the Government to fix suitable rents having regard to the circumstances of each case. Such a law cannot obviously be valid. When the decisions say that the legislature shall lay down the legislative policy and its formulation as a rule of conduct, they do not mean vague and general declaration of policy, but a definite policy controlling and regulating the powers conferred on the executive for carrying into effect that policy. I must, therefore, hold that section 6(2) of the Act is void inasmuch as it exceeded the permissible limits of legislative delegation. In the result the appeals are allowed with costs. BY COURT: In view of the majority judgment, the appeals are dismissed with costs.

Section 6(1) of the Bombay Tenancy and Agricultural Lands Act, 1948 (Bom. LXVII of 1948), provided that the maximum rent payable by a tenant shall not in the case of irrigated land exceed one fourth and in the case of any other land exceed one third of the crop of such land or its value as determined by the prescribed manner. Section 6(2) of the Act read as follows, " The Provincial Government may, by notification in the Official Gazette, fix a lower rate of the maximum rent payable by the tenants of lands situate in any particular area or may fix such rate on any other suitable basis as it thinks fit." By a notification under that section the Government of Bombay, in supersession of all other notifications prescribed a rate of maximum rent which was very much lower than the one previously fixed. The petitioners challenged the vires of the said section and the validity of the notification under article 226 of the Constitution, but the High Court found against them. The question for determination in these appeals was whether section 6(2) conferred unguided power on the Government and was void by reason of excessive delegation of legislative power. 342 Held (per Sinha, C. J., Kapur, Gajendragadkar and Wanchoo, jj.) that although the power of delegation is a constituent element of the legislative power, it is well settled that a legislature cannot delegate its essential legislative function in any case and before it can delegate any subsidiary or ancillary powers to a delegate of its choice, it must lay down the legislative policy and principle so as to afford the delegate proper guidance in implementing the same. A statute challenged on the ground of excessive delegation must, therefore, be subjected to two tests, (1) whether it delegates essential legislative function or power and (2) whether the legislature has enunciated its policy and principle for the guidance of the delegate. It is in that light that the preamble of the statute and its provisions relating to delegation should be considered. Harishankay Bagla vs The State of Madhya Pradesh, and The Edward Mills Co. Ltd., Beawar vs State of Ajmer ; , referred to. The preamble and the material provisions of the Act show that it seeks to improve the economic and social condition of the peasants and with that end in view fixes maximum rent payable by the tenants and provides a speedy machinery for fixation of reasonable rent. This being the legislative policy and regard being had to the specific provisions laid down by section 12(3) of the Act for determining reasonable rent, it is impossible to hold that the power delegated to the Provincial Government by section 6(2) was vitiated by excessive delegation. The fact that no minimum was prescribed by the section could not alter the position. Held, further, that since the Act itself is within the protection of article 31 B of the Constitution and there can be no question as to the validity of section 6(2), the notification issued in exercise of the power conferred by that section cannot be challenged as infringing article 31 of the Constitution. Nor was it correct to say that the power delegated by section 6(2) could be used only once and no more. Per Subba Rao, J. The essential legislative function is the determination of the legislative policy and its formulation as a rule of conduct. Obviously the legislature cannot abdicate its functions in favour of another. But in view of the multifarious activities of a welfare State, it cannot presumably work out all the details to suit the varying aspects of a complex situation. It must necessarily delegate the working out of details to the executive or any other agency. But there is a danger inherent in such a process of delegation. It may not lay down any policy at all; it may declare its policy in vague and general terms; it may not set down any standard for the guidance of the executive, it may confer an arbitrary power on the executive to change or modify the policy laid down by it without reserving for itself any control over subordinate legislation. This self effacement of legislative power in favour of another agency 343 either in whole or in part is beyond the permissible limits of delegation. It is for a Court to hold on a fair, generous and liberal construction of an impugned statute whether the legislature exceeded such limits. But the said liberal construction should not be carried by the courts to the extent of always trying to discover a dormant or latent legislative policy to sustain an arbitrary power conferred on executive authorities. In re The ; , , Rajnarain, Singh vs The Chairman, Patna Administration Committee, Patna, ; , Harishankay Bagla vs The State of Madhya Pradesh, , The Edward Mills Co., Ltd., Beaway vs The State of Ajmer, ; and Hamdard Dawakhana vs Union of India, ; , referred to. The whole scheme of the Bombay Tenancy and Agricultural Lands Act, 1948 (LXVII of 1948), excluding section 6(2), is a self contained and integrated one. The legislature fixes the maximum rent linked with crop having regard to the nature of the land, and the other provisions enable the appropriate authorities to fix reasonable rent subject to that maximum. But under section 6(2) the legislature in clearest terms abdicated its essential functions in favour of the executive authority without laying down any standard for its guidance. In effect it permitted the Government to amend section 6(1) of the Act. While section 6(1) overrides other provisions of the Act, section 6(2) derogates from section 6(1) itself. Section 6(2) is capable of being exercised in such a way that the object of section 6(1) is itself frustrated. Section 6(1) in effect is made subject to section 6(2). This is clearly an abdication by the legislature of its essential legislative function and the delegation must be held void. It was not correct to say that the factors specified by section 12(3) afforded a standard 'for fixing the maximum rent. It was not permissible to read them into section 6(2) of the Act. No legislature can be legally permitted to lay down a broad policy in general terms and confer arbitrary powers on the executive for carrying it out. Such a law must obviously be contrary to the decisions of this Court and cannot be valid.

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

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

TITION Nos. 356 361 OF 1977. (Under Article 32 of the Constitution) N. A. Palkhiwala, J. B. Dadachanji, Ravinder Narain, O. C. Mathur, H. P. Raina, section Swarup, K. 1. John, Talat Ansari, Mrs. A. K. Verma, section Thakora, Shri Narain, Robinson, F. section Nariman, A. N. Haksar, J. section Singh and Manzal Kumar for the Petitioners L. N. Sinha, Att. Genl., K. K. Venugopal, Addl. Genl., R. N. Sachthey, Grish Chandra, section Markendaya, Miss A. Subhashini and P. P. Singh for RR. 1 & 4. T.V.S. Narasimhachari, M. section Ganesh and Kailash Vasudeva for RR 2 & 3. L. N. Sinha, Att. Genl., Miss A. Subhashini for Attorney General of India. M. N. Shroff for the Advocates General for State of Maharashtra M. M. Ahdul Khader and K. R. Nambiar for the Advocate General for Kerala State. N. Nettar for the Advocates General for state of Karnataka State. Pranat Kumar Chatterjee, G. section Chatterjee and P. K. Chatterjee for State of West Bengal. B. M. Patnaik Advt. and R. K. Mehta for State of Orissa. section L. Garg, Adv. Genl and section K. Gambhir for State of Madhya Pradesh. R. K. Rastogi, Adv. Genl, Badridas Sharma and Aruneshwar Gupta for State of Rajasthan. M. V. Goswami and O. P. Rana for State of U.P. P. H. Parekh for the interveners, M/s, Domestic Cast Pvt. Ltd. and ors. Gocul Gas Pvt. Ltd. and ors. and Parel Investment Pvt. Ltd. and Ors. M. N. Phadke and N. M. Ghatate for the Applicant interveners M/s. Waman Rao and Ors. R. K. Garg and V. 1. Francis for The Applicant Intervener Shyam Narain Tewari. Chinta Subba Rao Applicant intervener in person. M. C. Bhandare and M. N. Shroff applicant intervener for State of Maharashtra. 235 Capt. Virendra Kumar applicant intervener in person. A N. section Grewal, B. P. Maheshwari and Suresh Sethi for G. section Grewal applicant intervener. H. K. Puri. for the intervener M/s Shree Sitaram Sugar Co. Ltd. The following Judgments were delivered: B CHANDRACHUD, C. J. In Keshavananda Bharati this Court held by a majority that though by Article 368 Parliament is given the power to amend the Constitution. that power cannot be exercised so as to damage the basic features of the Constitution or so as to destroy its basic structure. The question for consideration in this group of petitions under article 32 is whether sections 4 and 55 of the Constitution (42nd Amendment) Act, 1976 transgress that limitation, on the amending power. Petitioner No. 1 which is a limited company owned a textile undertaking called Minerva Mills situated in the State of Karnataka. This undertaking was nationalised and taken over by the Central Government under the provisions of the Sick Textile Undertakings (Nationalisation) Act, 1974. Petitioners 2 to 6 are shareholders of Petitioner No. 1, some of whom are also unsecured creditors and some secured creditors. Respondent 1 is the Union of India. Respondent 2 is the National Textile Corporation Limited in which the textile undertaking of Minerva Mills comes to be vested under section 3(2) of the Nationalisation Act of 1974. Respondent 3 is a subsidiary of the 2nd respondent. On August 20, 1970, the Central Government appointed a Committee under section 15 of the Industries (Development and Regulation Act, 1951 to make a full and complete investigation of the affairs of the Minerva Mills Ltd., as it was of the opinion that there had been or was likely to be substantial fall in the volume of production. The said Committee submitted its report to the Central Government in January 1971, on the basis of which the Central Government passed an order dated October 19, 1971 under section 18A of the Act of 1951, authorising Respondent 2 to take over the management of the Minerva Mills Ltd. On the ground that its affairs were being managed in a manner highly detrimental to public interest. 236 By these petitions, the petitioners challenge the constitutional validity of certain provisions of the Sick Textile Undertakings (NationaLisation) Act and of the order dated October 19, 1971. We are not concerned with the merits of that challenge at this stage the petitioners further challenge the constitutionality of the Constitution (39th Amendment) Act which inserted the impugned Nationalisation Act as Entry 105 is the 9th Schedule to the Constitution. That raises a question regarding the validity of article 31B of the Constitution with which we propose to deal in another batch of petitions. Finally, the petitioners challenge the constitutionality Of sections 4 and 55 of the Constitution (42nd Amendment) Act, 1976, and it is this contention alone with which we propose to deal in these petitions. The challenge to the validity of section 4 and SS of the 42nd Amendment rests on the ratio of the majority judgment in Kesavanand Bharati (Supra). The several opinions rendered in that case have been discussed and analysed threadbare in texts and judgments too numerous to mention. All the same, we cannot avoid making a brief resume of the majority judgments since the petitioners must stand or fall by them. Those judgments, on the point now in issue, were delivered by Sikri, CJ., Shelat and Grover JJ., Hegde and Mukherjea JJ., Jaganmohan Reddy J. and Khanna J. Sikri, CJ., held that the fundamental importance of the freedom of the individual has to be preserved for all times to come and that it could not be amended out of existence According to the learned Chief Justice, fundamental rights conferred by Part III of the Constitution cannot be abrogated, though a reasonable abridgement of those rights could be effected in public interest. There is a limitation on the power of amendment by necessary implication which was apparent from a reading of the preamble and therefore, according to the learned Chief Justice, the expression "amendment of this Constitution" in Article 368 means any addition or change in any of the provisions of the Constitution within the broad contours of the preamble, made in order to carry out the basic objectives of the Constitution. Accordingly, every provision of the Constitution was open to amendment provided the basic foundation or structure of the Constitution was not damaged or destroyed. Shelat and Grover, JJ. held that the preamble to the Constitution contains the clue to the fundamentals of the Constitution. According to the learned Judges, Parts III and IV of the Constitution which respectively embody the fundamental rights and the directive principles 237 have to be balanced and harmonised. This balance and harmony A between two integral parts of the Constitution forms a basic element of the Constitution which cannot be altered. The word 'amendment ' occurring in Article 368 must therefore be construed in such a manner as to reserve the power of the Parliament to amend the constitution, but not so as to result in damaging or destroying the structure and identity of the Constitution. There was thus an implied limitation in the amending power which precluded Parliament from abrogating or changing the identity of the Constitution or any of its basic features. Hegde and Mukherjea, JJ. held that the Constitution of India which is essentially a social rather than a political document, is founded on a social philosophy and as such has two main features: basic and circumstantial. The! basic constituent remained constant, the circumstantial was subject to change. According to the learned Judges, the broad contours of the basic elements and the fundamental features of the Constitution are delineated in the preamble and the Parliament has no power to abrogate or emasculate those basic elements or fundamental features. The building of a welfare State, the learned Judges said, is the ultimate goal of every Government but that does not mean that in order to build a welfare state, human freedoms have to suffer a total destruction. Applying these tests, the learned Judges invalidated Article 31C even in its unamended form. Jaganmohan Reddy, J., held that the word 'amendment ' was used in the sense of permitting a change, in contra distinction, to destruction, which the repeal or abrogation brings about. Therefore, the width of the power of amendment could not be enlarged by amending the amending power itself. The learned Judge held that the essential elements of the basic structure of the Constitution are reflected in its preamble and that some of the important features of the Constitution are justice, freedom of expression and equality of status and opportunity. The word 'amendment ' could not possibly embrace the right to abrogate the pivotal features and the fundamental freedoms and therefore, that part of the basic structure could not be damaged or destroyed. According to the learned Judge, the provisions of Article 31C. as they stood then, conferring power on Parliament and the State Legislatures to enact laws for giving effect to the principles specified in clauses (b) and (c) of Article 39, altogether abrogated the right given by Article 14 and were for that reason unconstitutional. In conclusion, the learned Judge held that though the power of amendment was wide. it did not comprehend the power to totally abrogate or emasculate or damage any of the fundamental rights or the essential elements on the basic structure of the Constitution or to 238 destroy the identity of the Constitution. Subject to these limitations, Parliament had the right to amend any and every provision of the Constitution. Khanna, J. broadly agreed with the aforesaid views of the six learned Judges and held that the word 'amendment ' postulated that the Constitution must survive without loss of its identity, which meant that the basic structure or framework of the Constitution must survive any amendment of the Constitution. According to the learned Judge. although it was permissible to the Parliament. in exercise of its amending power, to effect changes so as to meet the requirements of changing conditions it was not permissible to touch the foundation or to alter the basic institutional pattern. Therefore, the words "amendment of the Constitution", in spite of the width of their sweep and in spite of their amplitude, could not have the effect of empowering the Parliament to destroy or abrogate the basic structure or framework of the Constitution. The summary of the various judgments in Kesavananda Bharati (Supra) was signed by nine out of the thirteen Judges. Paragraph 2 of the summary reads to say that according to the majority, "Article 368 does not enable Parliament to alter the basic structure or framework of the Constitution". Whether or not the summary is a legitimate part of the judgment, or is per incuriam for the scholarly reasons cited by authors, it is undeniable that it correctly reflects the majority view. The question which we have to determine on the basis of the majority view in Keshavaananda Bharati (Supra) is whether the amendments introduced by sections 4 and 55 of the Constitution (42nd Amendment) Act, 1976 damage the basic structure of the Constitution by destroying any of its basic features or essential elements. Section 4 of the 42nd Amendment, which was brought into force with effect from January 3, 1977 amended Article 31C of the Constitution by substituting the words and figures "all or any of the principles laid down in Part IV" for the Words and figures "the principles specified in clause (b) or clause (c) of Article 39". Article 31C. as amended by the 42nd Amendment Act reads thus: "31C. Notwithstanding anything contained in article 13. no law giving effect to the policy of the State towards securing all or any of the principles laid down in Part IV shall be deemed to be void on the ground that it is inconsistent with, or takes 239 away or abridges any of the rights conferred by article 14, A article 19 or article 31; and no law containing a declaration that it is for giving effect to such policy shall be called in question in any court on the ground that it does not give effect to such policy: Provided that where such law is made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent. " Section 55 of the Constitution (Forty second Amendment) Act, 1976, which was also brought into force with effect from January 3, 1977 inserted sub sections (4) and (5) in Article 368 which read thus: "(4) No amendment of this Constitution (including the provisions of Part III) made or purporting to have been made under this article (whether before or after the commencement of section 55 of the Constitution (Forty second Amendment) Act, 1976) shall be called in question in any court on any ground. (5) For the removal of doubts, it is hereby declared that there shall be no limitation whatever on the constituent power of Parliament to amend by way of addition, variation or repeal the provisions of this Constitution under this article". We will first take up for consideration the comparatively easier question as regards the validity of the amendments made by section 55 of the 42nd Amendment. It introduces two new clauses in Article 368, namely, clauses 4 and section Clause S speaks for itself and is self explanatory. Its avowed purpose is the "removal of doubts" but after the decision of this Court in Kesavananda Bharati (Supra), there could be no doubt as regards the existence of limitations on the Parliament 's power to amend the Constitution. In the context of the constitutional history of Article 368, the true object of the declaration contained in Article 368 is the removal of those limitations. Clause S confers upon the Parliament a vast and undefined power to amend the Constitution, even, so as to distort it out of recognition. The theme song of the majority decision in Keshvanand Bharati (Supra) is: 'Amend as you may even the solemn document which the founding fathers have committed to your care, for you know best the needs of your generation. But, the Constitution is a precious heritage; therefore, you cannot destroy its identity '. The majority conceded to the Parliament the right to make alterations in the Constitution so long as they are within its basic framework. And 240 what fears can that judgment raise or misgivings generate if it only means this and no more: The Preamble assures to the people of India a polity whose basic structure is described therein as a Sovereign Democratic Republic; Parliament may make any amendments to the Constitution as it deems expedient so long as they do not damage or destroy India 's sovereignty and its democratic, republican character. Democracy is not an empty dream. It is a meaningful concept whose essential attributes are recited in the preamble itself: Justice, social, economic and political; Liberty of thought, expression, belief, faith and worship, and Equality of status and opportunity. Its aim, again as set out in the preamble, is to promote among the people an abiding sense of 'Fraternity assuring the dignity of the individual and the unity of the Nation '. The newly introduced clause S of Article 368 demolishes the very pillars on which the preamble rests by empowering the Parliament to exercise its constituent power without any "limitation whatever". No constituent power can conceivably go higher than the sky high power conferred by clause (S), for it even empowers the Parliament to "repeal the provisions of this Constitution", that is to say, to abrogate the democracy and substitute for it a totally antithetical form of Government. That can most effectively be achieved, without calling a democracy by any other name, by a total denial of social, economic and political justice to the people, by emasculating liberty of thought, expression, belief, faith and worship and by abjuring commitment to the magnificent ideal of a society of equals. The power to destroy is not a power to amend. Since the Constitution had conferred a limited amending power on the Parliament, the Parliament cannot under the exercise of that limited power enlarge that very power into an absolute power. Indeed, a limited amending power is one of the basic features of our Constitution and therefore, the limitations on that power cannot be destroyed. In other words, Parliament cannot, under Article 368, expand its amending power so as to acquire for itself the right to repeal or abrogate the Constitution or to destroy its basic and essential features. The donee of a limited power cannot by the exercise of that power convert the limited power into an unlimited one. The very 42nd Amendment which introduced clauses 4 and 5 in Article 368 made amendments to the preamble to which no exception can be taken. Those amendments are not only within the framework of the Constitution but they give vitality to its philosophy they afford strength and succor to its foundation. By the aforesaid amendments, what was originally described as a 'Sovereign Democratic Republic ' became a "Sovereign Socialist Secular 241 Democratic Republic" and the resolution to promote the `unity of the Nation ' was elevated into a promise to promote the "unity and integrity of the Nation". These amendments furnish the most eloquent example of how the amending power can be exercised consistently with the creed of the Constitution. They offer promise of more, they do not scuttle a precious heritage. In Smt. Indira Nehru Gandhi vs Raj Narain, Khanna, J. struck down clause 4 of Article 329A of the Constitution which abolished the forum for adjucating upon a dispute relating to the validity of an election, on the ground that the particular Article which was introduced by a constitutional amendment violated the principle of free and fair elections which is an essential postulate of democracy and which, in its turn, is a part of the basic structure of the Constitution. Mathew, J. also struck down the Article on the ground that it damaged the essential feature of democracy. One of us. Chandrachud. J. reached the same conclusion by holding that the provisions of the Article were an outright negation of the right of equality conferred by Article 14, a right which, more than any other, is a basic postulate of the Constitution. Thus whereas amendments made to the preamble by the 42nd Amendment itself afford an illustration of the scope of the amending power, the case last referred to affords an illustration of the limitations on the amending power. Since, for the reasons above mentioned, clause 5 of Article 368 , transgresses the limitations on the amending power, it must be held to be unconstitutional. The newly introduced clause 4 of Article 368 must suffer the same fate as clause 5 because the two clauses are inter linked. Clause 5 purports to remove all limitations on the amending power while clause 4 deprives the courts of their power to call in question any amendment of the Constitution. Our Constitution is founded on a nice balance of power among the three wings of the State, namely the Executive, the Legislature and the Judiciary. It is the function of the Judges, nay their duty, to pronounce upon the validity of laws. If courts are totally deprived of that power, the fundamental rights conferred upon the people will become a mere adornment because rights without remedies are as writ in water. A controlled Constitution will then become uncontrolled. Clause (4) of Article 368 totally deprives the citizens of one of the most valuable modes of redress which is guaranteed by Article 32. The conferment of the right to destroy the identity of the Constitution coupled with the provision that no court of law 242 shall pronounce upon the validity of such destruction seems to us a transparent case of transgression of the limitations on the amending power. If a constitutional amendment cannot be pronounced to be invalid even if it destroys the basic structure of the Constitution, a law passed in pursuance of such an amendment will be beyond the pale of judicial review because it will receive the protection of the constitutional amendment which the courts will be powerless to strike down. Article 13 of the Constitution will then become a dead letter because even ordinary laws will escape the scrutiny of the courts on the ground that they are passed on the strength of a constitutional amendment which is not open to challenge. Clause 4 of Article 368 is in one sense an appendage of Clause 5, though we do not like to describe it as a logical consequence of Clause 5. If it be true, as stated in clause 5, that the Parliament has unlimited power to amend the Constitution, courts can have no jurisdiction to strike down any constitutional amendment as unconstitutional. Clause 4, therefore, says nothing more or less than what clause 5 postulates. If clause 5 is beyond the amending power of the Parliament, clause 4 must be equally beyond that power and must be struck down as such. The next question which we have to consider is whether the amendment made by section 4 of the 42nd Amendment to Article 31C of the Constitution is valid. Mr. Palkhiwala did not challenge the validity of the unamended Article 31C, and indeed that would not be done. The unamended Article 31C forms the subject matter of separate proceeding and we have indicated therein that it is constitutionally valid to the extent to which it was upheld in Keshvananda Bharati (Supra). By the amendment introduced by section 4 of the 42nd Amendment, provision is made in Article 31C saying that no law giving effect to the policy of the State towards securing "all or any of the principles laid down in Part IV" shall be deemed to be void on the ground that it is inconsistent with or takes away or a bridges any of the rights conferred by Article 14, Article 19 or Article 31. It is manifest that the scope of laws which fall within Article 31C has been expanded vastly by the amendment. Whereas under the original Article 31C, the challenge was excluded only in respect of laws giving effect to the policy of the State towards securing "the principles specified in clause (b) or clause (c) of Article 39" under the amendment. 243 all laws giving effect to the policy of the State towards securing "all or any of the principles laid down in Part IV" are saved from a constitutional challenge under Articles 14 and 19. (The reference to Article 31 was deleted by the 44th Amendment as a consequence of the abolition of the right to property as a fundamental right). The question for consideration in the light of this position is whether section 4 of the 42nd Amendment has brought about a result which is basically and fundamentally different from the one arising under the unamended article. If the amendment does not bring about any such result, its validity shall have to be upheld for the same reasons for which the validity of the unamended article was upheld. The argument of Mr. Palkhivala, who appears on behalf of the petitioners, runs thus : The amendment introduced by section 4 of the 42nd Amendment destroys the harmony between Parts III and IV of the Constitution by making the fundamental rights conferred by Part III subservient to the directive principles of State Policy set out in Part IV of the Constitution. The Constitution makers did not contemplate a disharmony or imbalance between the fundamental rights and the directive principles and indeed they were both meant to supplement each other. The basic structure of the Constitution tests on the foundation that while the directive principles are the mandatory ends of government, those ends can be achieved only through permissible means which are set out in Part III of the constitution. In other words, the mandatory ends set out in Part IV can be achieved not through totalitarian methods but only through those which are consistent with the fundamental rights conferred by Part III. If Article 31C as amended by the 42nd Amendment is allowed to stand, it will confer an unrestricted licence on the legislature and the executive, both at the Centre and in the States. to destroy democracy and establish an authoritarian regime. All legislative action and every governmental action purports to be related, directly or indirectly, to some directive principle of State policy. The protection of the amended article will therefore be available to every legislative action under the sun. Article 31C abrogates the right to equality guaranteed by Article 14, which is the very foundation of a republican form of government and is by itself a basic feature of the Constitution. The learned counsel further argues that it is impossible to envisage that a destruction of the fundamental freedoms guaranteed by Part III is necessary for achieving the object of some of the directive principles like equal justice and free legal aid, organising village panchayat, providing living wages for workers and just and humane conditions of work. free and compulsory education for 244 children, organisation of agriculture and animal husbandry, an protection of environment and wild life. What the Constituent Assembly had rejected by creating a harmonious balance between Parts III and IV is brought back by the 42nd Amendment. Finally, it is urged that the Constitution had made provision for the suspension of the right to enforce fundamental rights when an emergency is proclaimed by the President. Under the basic scheme of the Constitution, fundamental rights were to lose their supremacy only during the period that the proclamation of emergency is in operation. Section 4 of the 42nd Amendment has robbed the fundamental rights of their supremacy and made them subordinate to the directive principles of State policy as if there were a permanent emergency in operation. While Article 359 suspends the enforcement of fundamental rights during the Emergency, Article 31C virtually abrogates them in normal times. Thus, apart from destroying one, of the basic features of the Constitution, namely, the harmony between Parts III and IV, section 4 of the 42nd Amendment denies to the people the blessings of a free democracy and lays the foundation for the creation of an authoritarian State. These contentions were stoutly resisted by the learned Attorney General thus: Securing the implementation of directive principles by the elimination of obstructive legal procedures cannot ever be said to destroy or damage the basic features of the Constitution. Further, laws made for securing the objectives of Part IV would necessarily be in public interest and will fall within Article 19(5) of the Constitution, in so far as clauses (d) and (e) of Article 19(1) are concerned. They would therefore be several in any case. The history of the Constitution. particularly the incorporation of Articles 31(4) and 31(6) and the various amendments made by Articles 31A, 31B and the unamended Article 31C, which were all upheld by this Court, establish the width OB the amending power under Article 368. The impugned amendment therefore manifestly falls within the sweep of the amending Power. The learned Attorney general further argues: A law which fulfils the directive of Article 38 is incapable of abrogating fundamental freedoms or of damaging the basic structure of the Constitution in as much as that structure itself is founded on the principle of justice, social, economic and political. Article 38, which contains a directive principle, provides that the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice. social. economic and political shall inform all the institutions of the national life. A law which complies 245 with Article 38 cannot conceivably abrogate the fundamental freedoms except certain economic rights and that too, for the purpose of minimising inequalities. A law which will abrogate fundamental freedoms will either bring about social injustice or economic injustice or political injustice. It will thereby contravene Article 38 rather than falling within it and will for that reason be outside the protection of Article 31C. In any event, each and every violation of Article 14 or Article. 19 does not damage the basic structure of the Constitution. The learned Additional Solicitor General has submitted a carefully prepared chart of 11 decisions of this Court ranging from Anvar Ali Sarkar to Haji Kader Kutty in order to show the possible impact of amended Article 31C on cases where this Court had held provisions of certain statutes to be violative of Article 14. He urged on the basis of his tabulated analysis that there can be many cases which are not relatable to directive principles and will not therefore be saved by the amended article. Those cases are reported in Anwar Ali Sarkar (Supra), Lachmandas Ahuja, Habib Muhammad, Moopil Nair, Jialal, Hazi Abdul Shakur, Devi Das, Osmania University, New Manek Chowk, Anandji Haridas and Haji Kader Kutty (Supra). He has also submitted a chart of 13 cases involving laws relatable to directive principle in which the fundamental rights were abridged but not abrogated. Since abridgement of fundamental rights in public interest is permissible as it does not damage the basic structure, laws similar to those involved in the 13 cases will not have to seek the protection of the amended article. These illustrative cases are: Ram Prasad Sahi, Rao Manohar Singhji, Kunhikaman. 246 Orissa Cement, Krishnaswami Naidu, Mukanchand, Nallaraja Reddy, Jallan Trading Co., Kamrup, Mizo District Council, Balammal, Rashbehari Pande and R. C. Cooper. The argument of the learned Additional Solicitor General proceeds thus: For extracting the ratio of Keshvananda Bharati (Supra). One must proceed on the basis that there were as many cases as there were declarations sought for by the petitioners therein. The majority in regard to Article 368 is different from the majority in regard to the decision in respect of Article 31C. The binding ratio in regard to Article 368 as well as the ratio resulting in upholding the validity of the first part of the Article 31C will both sustain the validity of section 4 of the 42nd Amendment. In regard to fundamental rights, the ratio of the judgments of 12 out of 13 Judges, i.e., all excepting Jagamohan Reddy J., will empower amendment of each one of the articles in part III, so long as there is no total abrogation of the fundamental rights which constitute essential features of the basic structure of the Constitution. Abrogation of fundamental rights which do not constitute essential features of the basic structure or abridgement of fundamental rights which constitute such essential features is within the permissible limits of amendment. The unamended Article 31C having been upheld by the majority in Kesavanada Bharti both on the ground of stare decisis and on the ground of 'contemporaneous practical exposition ' the amended Article 31C must be held to be valid, especially since it is not brought about a qualitative change in comparison with the provisions of the unamended article. A harmonious and orderly development of constitutional law would require that the phrases 'inconsistent with ' or 'take away ' which occur in Articles 31A, 31B and 31C should be read down to mean 'restrict ' or 'abridge ' and not 'abrogate '. If two constructions of those expressions were reasonably possible, the Court should accept that construction which would render the constitutional amendment valid. 247 The learned counsel further argues: The directive principles, including the one contained in Article 38, do not cover the exercise of each and every legislative power relatable to the Seventh Schedule of the Constitution. Besides, the directive principles being themselves fundamental in the governance of the country, no amendment of the Constitution to achieve the ends specified in the directive principles can ever alter the basic structure of the Constitution. If the unamended Article 31C is valid in reference to laws relatable to Articles 39(b) and (c), no dichotomy can be made between laws relatable to those provisions on the one hand and laws relatable to other directive principles. A value judgment is not permissible to the Court in this area. It is finally urged by the learned Additional Solicitor General that judicial review is not totally excluded by the amended Article 31C because it will still be open to the Court to consider: (i) whether the impugned law has 'direct and reasonable nexus ' with any of the directive principles. (ii) whether the provisions encroaching on fundamental rights are integrally connected with and essential for effectuating the directive principles or are at least ancillary thereto; (iii) whether the fundamental right encroached upon is an essential feature of the basic structure of the Constitution; and (iv) if so, whether the encroachment, in effect, abrogates that fundamental right. Besides these contentions Mr. R. K. Garg has filed a written brief on behalf of the Indian Federation of Working Journalists, opposing the contentions of Mr. Palkhivala. So have the learned Advocates General of the State of Karnataka and Uttar Pradesh. Mr. Aruneshwar Gupta has filed a brief on behalf of the State of Rajasthan supporting the submissions of Mr. Palkhivala. So has the State of Rajasthan. The Advocates General of Maharashtra, Kerala, West Bengal and Orissa appeared through their respective advocates. Both the Attorney General and the Additional Solicitor General have raised a preliminary objection to the consideration of the question raised by the petitioners as regards the validity of Sections 4 and 55 of the 42nd Amendment. It is contended by them that the issue formulated for consideration of the court; "whether the provisions of the Forty Second Amendment of the Constitution which deprived the Fundamental Rights of their Supremacy and, inter alia, made them subordinate to the directive principles of State Policy are 248 ultra vires the amending power of Parliament?" is too wide and academic. It is urged that since it is the settled practice of the court not to decide academic questions and since property rights claimed by the petitioners under articles 19(1)(f) and 31 do not survive after the 44th Amendment, the court should not entertain any argument on the points raised by the petitioners. In support of this submission reliance is placed by the learned counsel on the decisions of the American Supreme Court in Commonwealth of Massachussetts vs Andrew W. Mellon. George Ashwander vs Tennesee Valley Authority, and on Weaver 's Constitutional Law, 1946 Edition and American Jurisprudence. Reliance is also placed on certain decisions of this court to which it is unnecessary to refer because the Attorney General and the Additional Solicitor General are right that it is the settled practice of this Court not to decide academic questions. The American authorities on which the learned counsel rely take the view that the constitutionality of a statute will not be considered and determined by the courts as a hypothetical question, because constitutional questions are not to be dealt with abstractly or in the manner of an academic discussion. In other words, the courts do not anticipate constitutional issues so as to assume in advance that a certain law may be passed in pursuance of a certain constitutional amendment which may offend against the provisions of the Constitution. Similarly, our Court has consistently taken the view that we will not formulate a rule of constitutional law broader than is required by the precise facts to which it is to be applied. It is only when the rights of persons are directly involved that relief is granted by this Court. But, we find it difficult to uphold the preliminary objection because, the question raised by the petitioners as regards the constitutionality of sections 4 and 55 of the 42nd Amendment is not an academic or a hypothetical question. The 42nd Amendment is there for any one to see and by its sections 4 and 55 amendments have been made to Articles 31C and 368 of the Constitution. An order has been passed against the petitioners under section 18A of the Industries (Development and Regulation) Act, 1951, by which the petitioners are aggrieved. Besides there are two other relevant considerations which must be taken into account while dealing with the preliminary objection. There is no constitutional or statutory inhibition against the decision 249 of questions before they actually arise for consideration. In view of the importance of the question raised and in view of the fact that the question has been raised in many a petition, it is expedient in the interest of Justice to settle the true position. Secondly, what we are dealing with is not an ordinary law which may or may not be passed so that it could be said that our jurisdiction is being invoked on the hypothetical consideration that a law may be passed in future which will injure the rights of the petitioners. We are dealing with a constitutional amendment which has been brought into operation and which, of its own force, permits the violation of certain freedoms through laws passed for certain purposes. We, therefore, overrule the preliminary objection and proceed to determine the point raised by the petitioners. The main controversy in these petitions centres round the question whether the directive principles of State policy contained in Art IV can have primacy over the fundamental rights conferred by Part III of the Constitution. That is the heart of the matter. Every other consideration and all other contentions are in the nature of by products of that central theme of the case. The competing claims of parts III and IV constitute the pivotal point of the case because, Article 31C as amended by section 4 of the 42nd Amendment provides in terms that a law giving effect to any directive principle cannot be challenged as void on the ground that it violates the rights conferred by Article 14 or Article 19. The 42nd Amendment by its section 4 thus subordinates the fundamental rights conferred by Articles 14 and 19 to the directive principles. The question of questions is whether in view of the majority decision in Kesavananda Bharati it is permissible to the Parliament to so amend the Constitution as to give a position of precedence to directive principles over the fundamental rights. The answer to this question must necessarily depend upon whether Articles 14 and 19 which must now give way to laws passed in order to effectuate the policy of the State towards securing all or any of the principles of directive Policy are essential features of the basic structure of the Constitution. It is only if the rights conferred by these two articles are not a part of the basic structure. Of the Constitution that they can be allowed to be abrogated by a constitutional amendment. If they are a part of the basic structure they cannot be obliterated out of existence in relation to a category of laws described in Article 31C or, for the matter of that, in relation to laws of any description whatsoever, passed in order to achieve any object or policy whatsoever. This will serve to bring out the point that a total emasculation of the essential features of the Constitution is, by the ratio in Kesavananda Bharati, not permissible to the Parliament. 250 There is no doubt that though the courts have always attached very great importance to the preservation of human liberties, no less importance has been attached to some of the Directive Principles of State Policy enunciated in Part IV. In the words of Granville Austin,. (The Indian Constitution: Corner Stone of a Nation, p. 50) the Indian Constitution is first and foremost a social document and the majority of its provisions are aimed at furthering the goals of social revolution by establishing the conditions necessary for its achievement. Therefore the importance of Directive Principles in the scheme of our Constitution cannot ever be over emphasized. Those principles project the high ideal which the Constitution aims to achieve. In fact Directive Principles of State policy are fundamental in the governance of the country and the Attorney General is right that there is no sphere of public life where delay can defeat justice with more telling effect than the one in which the common man seeks the realisation of his aspirations. The promise of a better to morrow must be fulfilled to day; day after to morrow it runs the risk of being conveniently forgotten. Indeed so many tomorrows have come and gone without a leaf turning that today there is a lurking danger that people will work out their destiny through the compelled cult of their own "dirty hands". Words bandied about in marbled halls say much but fail to achieve as much. But there is another competing constitutional interest which occupies an equally important place in that scheme. That interest is reflected in the provisions of Part III which confer fundamental rights some on citizens as Articles 15, 16 and 19 do and some on. all persons alike as Articles 14, 20, 21 and 22 do. As Granville Austin says: "The core of the commitment to the social revolution lies in Parts III and IV. These are the conscience of the Constitution. It is needless to cite decisions which have extolled and upheld the personal freedoms their majesty, and in certain circumstances, their inviolability. It may however be profitable to see how the American Supreme Court, dealing with a broadly comparable Constitution, has approached the claim for those freedoms. In Barbara Elfbrandt vs Imogene Russell the U. section Supreme Court was considering the constitutionality of an Arizona Statute requiring State employees to take a loyalty oath. Justice Douglas speaking for the majority, observed while striking down the provision that: "Legitimate Legislative goals 'cannot be pursued by means that broadly stifle fundamental personal liberties when the end can 251 be more narrowly achieved '. "The objectionable quality of. . overbreadth" depends upon the existence of a statute "susceptible of sweeping and improper application. These freedoms are delicate and vulnerable as well as supremely precious in our society. The threat of sanctions may deter their exercise almost as potently as the actual application of sanctions". In United States vs Herbet Guest, though the right to travel freely throughout the territory of the United States of America does not find an explicit mention in the American Constitution, it was held that the right to travel from one State to another occupied a position fundamental to the concept of the Federal Union and the reason why the right was not expressly mentioned in the American Constitution though it was mentioned in the Articles of Confideration, was that "a right so elementary was conceived from the beginning to be a necessary concomitant of the stronger Union the Constitution created". This position was reiterated in Winfield Dunn vs James F. Blumstein. It was held therein that freedom to travel throughout the United States was a basic right under the Constitution and that the right was an unconditional personal right whose exercise may not be conditioned. Therefore, any classification which serves to penalize the exercise of that right, unless shown to be necessary to promote a compelling governmental interest, was unconstitutional. In New York Times Company vs United States the United States Government sought an injunction against the publication, by the New York Times, of the classified study entitled "History of U. section Decision Making Process on Viet Nam Policy". It was held by a majority of six Judges that any system of prior restraints of expression comes to the United States Supreme Court bearing a heavy presumption against its constitutional validity, and a party. who seeks to have such a restraint upheld thus carries a heavy burden of showing justification for the imposition of such a restraint. In National Association for the Advancement of Coloured People vs State of Alabama, a unanimous court while dealing with an attempt to oust the National Association of Coloured People from the State of Alabama held: "In the domain of these indispensable liberties, whether of speech, press, or association, the decisions of this Court recognise that abridgement of such rights, even though unintended, may 252 inevitably follow from varied forms of governmental action". In Frank Palko vs State of Connecticut. Justice Cardozo delivering the opinion of the Court in regard to the right to freedom of thought and speech observed "Of that freedom one may say that it is the matrix, the indispensable condition, of nearly every other form of freedom". In Jesse Cantwell vs State of Connecticut, Justice Roberts who delivered the opinion of the Court observed: "In the realm of religious faith, and in that of political belief, sharp differences arise. In both fields the tenets of one man may seem the rankest error to his neighbour. To persuade others to his own point of view, the pleader, as we know, at times, resorts to exaggeration, to vilification of men who have been or are, prominent in church or state, and even to false statement. But the people of this nation have ordained in the light of history, that, in spite of the probability of excesses and abuses, these liberties are, in the long view, essential to enlightened opinion and right conduct on the part of the citizens of a democracy. The essential characteristic of these liberties is, that under their shield many types of life, character, opinion and belief can develop unmolested and unobstructed, Nowhere is this shield more necessary than in our own country for a people composed of many races and of many creeds. There are limits to the exercise of these liberties. The danger in these times from the coercive activities of those who in the delusion of racial or religious conceit would incite violence and breaches of the peace in order to deprive others of their equal right to the exercise of their liberties, is emphasized by events familiar to all. These and other transgressions of those limits the states appropriately may punish". In Arthur Terminiello vs City of Chicago, Justice Douglas delivering the majority opinion of the Court, while dealing with the importance of the right to free speech, observed: "The vitality of civil and political institutions in our society depends on free discussion. As Chief Justice Hughes wrote in De Jonge vs Oregon, it is only through free debate and free 253 exchange of ideas that government remains responsive to the will of the people and peaceful change is effected, The right to speak freely and to promote diversity of ideas and programmes is therefore one of the chief distinctions that sets us apart from totalitarian regimes. Accordingly a function of free speech under our system of government is to invite dispute. It may indeed best serve its high purpose when it induces a condition of unrest, creates dissatisfaction with conditions as they are, or even stirs people to anger. Speech is often provocative and challenging. It may strike at prejudices and preconceptions and have profound unsettling effects as it presses for acceptance of an idea. That is why freedom of speech, though not absolute (Chaplinsky vs New Hampshire), is nevertheless protected against censorship or punishment unless shown likely to, produce a clear and present danger of a serious substantive evil that rises far above public inconvenience, annoyance, or unrest. See Bridges vs California; Craig vs Horney. There is no room under our Constitution for a more restrictive view. For the alternative would lead to standardization of ideas either by legislatures, courts, or dominant political or community groups. " The history of India 's struggle for independence and the debates of the Constituent Assembly show how deeply our people value their personal liberties and how those liberties are regarded as an indispensable and integral part of our Constitution. It is significant that though Parts III and IV appear in the Constitution as two distinct fasciculus of articles, the leaders of our independence movement drew no distinction between the two kinds of State 's obligations negative and positive. "Both types of rights had developed as a common demand, products of the national and social revolutions, of their almost inseparable intertwining, and of the character of Indian politics itself(4)". The demand for inalienable rights traces its origin in India to the 19th Century and flowered into the formation of the Indian National Congress in 1885. Indians demanded equality with their British rulers on the theory that the rights of the subjects cannot in a democracy be inferior to those of the rulers. Out of that demand grew the plants of equality and free speech. Those and other basic rights found their expression in Article 16 of The Constitution of 254 India Bill, 1895. A series of Congress resolutions reiterated that demand between 1917 and 1919. The emergence of Mahatma Gandhi; on the political scene gave to the freedom movement a new dimension: it ceased to be merely anti British it became a movement for the acquisition of rights of liberty for the Indian Community. Mrs. Besan 't Commonwealth of India Bill, 1925 and the Madras Congress resolution of 1928 provided a striking continuity for that movement. The Motilal Nehru Committee appointed by the. Madras Congress resolution said at pp. 89 90: "It is obvious that our first care should be to have our Fundamental Rights guaranteed in a manner which will not permit their withdrawal under any circumstances. Another reason why great importance attaches to a Declaration of Rights is the unfortunate existence of communal differences in the country. Certain safeguards are necessary to create and establish a sense of security among those who look upon each other with distrust and suspicion. We could not better secure the full enjoyment of religious and communal rights to all communities than by including them among the basic principles of the Constitution. " India represents a mosaic of humanity consisting of diverse religious linguistic and caste groups. The rationale behind the insistence on fundamental rights has not yet lost its relevance, alas or not, The Congress session of Karachi adopted in 1931 the Resolution on Fundamental Rights as well as on Economic and Social change. The Sapru Report of 1945 said that the fundamental rights should serve as a "standing warning" to all concerned that: "what the Constitution demands and expects is perfect. equality between one section of the Community and another in the matter of political and civic rights equality of liberty and security in the enjoyment of the freedom of religion, worship and the pursuit of the ordinary applications of life". (p. 260). The Indian nation marched to freedom in this background. The Constituent Assembly resolved to enshrine the fundamental rights in the written text of the Constitution. The interlinked goals of personal liberty and economic freedom then came to be incorporated in two separate parts, nevertheless parts of an integral, indivisible scheme which was carefully and thoughtfully nursed over half a century. The seeds sown in the 19th Century saw their fruition in 1950 under the leadership of Jawaharlal Nehru and Dr. Ambedkar. To destroy the guarantees given by Part III in order purportedly to achieve the goals of Part IV is plainly to subvert the Constitution by destroying its basic structure. 255 Fundamental rights occupy a unique place in the lives of civilized societies and have been variously described in our Judgments as "transcendental", "inalienable" and "primordial". For us, it has been said in Kesavananda Bharti (p. 991), they constitute the ark of the constitution. The significance of the perception that Parts III and IV together constitute the core of commitment to social revolution and they, together, are the conscience of the Constitution is to be traced to a deep understanding of the scheme of the Indian Constitution. Granville Austin 's observation brings out the true position that Parts III and IV are like two wheels of a chariot, one no less important than the other. You snap one and the other will lose its efficacy. They are like a twin formula for achieving the social revolution, which is the ideal which the visionary founders of the Constitution set before themselves. In other words, the Indian Constitution is founded on the bed rock of the balance between Parts III and IV. To give absolute primacy to one over the other is to disturb the harmony of the Constitution. This harmony and balance between fundamental rights and directive principles is an essential feature of the basic structure of the Constitution. This is not mere semantics. The edifice of our Constitution is built upon the concepts crystallised in the Preamble. We resolved to constitute ourselves into a Socialist State which carried with it the obligation to secure to our people justice social, economic and political. We, therefore, put part IV into our Constitution containing directive principles of State policy which specify the socialistic goal to be achieved. We promised to our people a democratic polity which carries with it the obligation of securing to the people liberty of thought, expression, belief, faith and worship; equality of status and of opportunity and the assurance that the dignity of the individual will at all costs be preserved. We, therefore, put Part, III in our Constitution conferring those rights on the people. Those rights are not an end in themselves but are the means to an end. The end is specified in Part IV. Therefore, the rights conferred by Art III are subject to reasonable restrictions and the Constitution provides that enforcement of some of them may, in stated uncommon circumstances, be suspended. But just as the rights conferred by Part III would be without a radar and a compass if they were not geared to an ideal, in the same manner the attainment of the ideals set out in Part IV would become a pretence for tyranny if the price to be paid for achieving that ideal is human freedoms. One of the faiths of our founding fathers was the purity of means. Indeed, under our law, even a dacoit who has committed a murder cannot be put to death 256 in the exercise of right of self defence after he has made good his escape. So great is the insistence of civilised laws on the purity of means. The goals set out in Part IV have, therefore, to be achieved without the abrogation of the means provided for by Part III. It is in this sense that Parts III and IV together constitute the core of our Constitution and combine to form its conscience. Anything that destroys the balance between the two parts will ipso facto destroy an essential element of the basic structure of our Constitution. It is in this light that the validity of the. amended Article 31C has to be examined. Article 13(2) says that the State shall not make any law which takes away or abridges the rights conferred by Part Ill and any law made in contravention of that clause shall to the extent of the contravention be void. Article 31C begins with a non obstante clause by putting Article 13 out of harm 's way. It provides for a certain consequence notwithstanding anything contained in Article 13. It then denudes Articles 14 and 19 of their functional utility by providing that the rights conferred by these Articles will be no barrier against passing laws for giving effect to the principles laid down in Part IV. On any reasonable interpretation, there can be no doubt that by the amendment introduced by section 4 of the 42nd Amendment, Articles 14 and 19 stand abrogated at least in regard to the category of laws described in Article 31C. The startling consequence which the amendment has produced is that even if a law is in total defiance of the mandate of Article 13 read with Articles 14 and 19, its validity will not be open to question so long as its object is to secure a directive principle of state Policy. We are disposed to accept, the submission of the learned Solicitor General, considering the two charts of cases submitted by him, that it is possible to conceive of laws which will not attract Article 31C since they may not bear direct and reasonable nexus with the provisions of Part IV. But, that, in our opinion, is beside the point. A large majority of laws, the bulk of them, can at any rate be easily justified as having been passed for the purpose of giving effect to the policy of the State towards securing some principle or the other laid down in Part IV. In respect of all such laws, which will cover an extensive gamut of the relevant legislative activity, the protection of Articles 15 and 19 will stand wholly withdrawn. It is then no answer to say, while determining whether the basic structure of the Constitution is altered, that at least. some laws will fall outside the scope of Article 31C. We have to decide the matter before us not by metaphysical subtlety, nor as a matter of semantics, but by a broad and liberal approach. We must not miss the wood for the trees. A total 257 deprivation of fundamental rights, even in a limited area, can amount to abrogation of a fundamental right just as partial deprivation in every area can. An author, who writes exclusively on foreign matters, shall have been totally deprived of the right of free speech and expression if he is prohibited from writing on foreign matters. The fact therefore that some laws may fall. Outside the scope of Article 31C is no answer to the contention that the withdrawal of protection of Articles 14 and 19 from a large number of laws destroys the basic structure of the Constitution. It was repeatedly impressed upon us, especially by the Attorney General, that Article 38 of the Constitution is the king pin of the directive principles and no law passed in order to give effect to the principle contained therein can ever damage or destroy the basic structure of the Constitution. That Article provides that the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life. We are unable to agree that all the directive Principles of State Policy contained in part IV eventually verge upon Article 38. Article 38 undoubtedly contains a broad guideline, but the other directive principles are not mere illustrations of the principle contained in Article 38. Secondly, if it be true that no law passed for the purpose of giving effect to the directive principle contained in Article 38 can damage or destroy the basic structure of the Constitution, what was the necessity, and more so the justification. for providing by a constitutional amendment that no law which is passed for giving effect to the policy of the State towards securing any principle laid down in Part IV shall be deemed to be void on the ground that it is inconsistent with or takes away or abridges the rights conferred by Articles 14 and 19 ? The object and purpose of the amendment of Article 31C is really to save laws which cannot be saved under Article 19(2) to (6). Laws which fall under those provisions are in the nature of reasonable restrictions on the fundamental rights in public interest and therefore they abridge but do not abrogate the fundamental rights It was in order to deal with laws which do not get the protection of Article 19(2) to (6) that Article 31 was amended to say that the provisions of Article 19, inter alia, cannot be invoked for voiding the laws of the description mentioned in Article 31C. Articles 14 and 19 do not confer any fanciful rights. They confer rights which are elementary for the proper and effective functioning of a democracy. They are universally so regarded, as is evident from the universal Declaration of Human Rights. Many countries in the civilised world have parted with their sovereignty in the hope and belief 258 that their citizens will enjoy human freedoms. And they preferred to be bound by the decisions and decrees of foreign tribunals on matters concerning human freedoms. If Articles 14 and 19 are put out of operation in regard to the bulk of laws which the legislatures are empowered to pass, Article 32 will be drained of its life blood. Article 32(4) provides that the right. guaranteed by Article 32 shall not be suspended except as otherwise provided for by the Constitution. Section 4 of the 42nd Amendment found an easy way to circumvent Article 32(4) by withdrawing totally the protection of Articles 14 and 19 in respect of a large category of laws, so that there will be no violation to complain of in regard to which redress can be sought under Article 32. The power to take away the protection of Article 14 is the power to discriminate without a valid basis for classification. By a long series of decisions this Court had held that Article 14 forbids class legislation but it does not forbid classification. The purpose of withdrawing the protection of Article 14, therefore, can only be to acquire the power to enact class legislation. Then again, regional chauvinism will have a field day if Article 19(1)(d) is not available to the citizens. Already, there are disturbing trends on a part of the Indian horizon. Those trends will receive strength and encouragement if laws can be passed with immunity, preventing the citizens from exercising their right to move freely throughout the territory of India. The nature and quality of the amendment introduced by section 4 of the 42nd Amendment is therefore such that it virtually tears away the heart of basic fundamental freedoms. Article 31C speaks of laws giving effect to the policy of the "State". Article 12 which governs the interpretation of Article 3 LC provides that the word "State" in Part III includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India. Wide as the language of Article 31C is, the definition of the word "State" in Article 12 gives to Article 31C an operation of the widest amplitude. Even if a State Legislature passes a law for the purpose of giving effect to the policy by a local authority towards securing a directive principle, the law will enjoy immunity from the provisions of Articles 14 and 19. The State Legislatures are thus given an almost unfettered discretion to deprive the people of their civil liberties. The learned Attorney General argues that the State is under an obligation to take steps for promoting the welfare of the people by bringing about a social order in which social, economic and political justice shall inform all the institutions of the national life. He says that the deprivation of some of the fundamental rights for the purpose 259 of achieving this goal cannot possibly amount to a destruction of the basic structure of the Constitution. We are unable to accept this contention. The principles enunciated in Part IV are not the proclaimed monopoly of democracies alone. They are common to all polities, democratic or authoritarian. Every State is goal oriented and claims to strive for securing the welfare of its people. The distinction between the different forms of Government consists in that a real democracy will endeavour to achieve its objectives through the discipline of fundamental freedoms like those conferred by Articles 14 and 19. Those are the most elementary freedoms without which a free democracy is impossible and which must therefore be preserved at all Costs. Besides, as observed by Brandies, J., the need to protect liberty is the greatest when Government 's purposes are beneficent. If the discipline of Article 14 is withdrawn and if immunity from the operation of that article is conferred, not only on laws passed by the Parliament but on laws passed by the State Legislatures also, the political pressures exercised by numerically large groups can tear the country asunder by leaving it to the legislature to pick and choose favoured areas and favourite classes for preferential treatment. The learned Attorney General and the learned Solicitor General strongly impressed upon us that Article 31C should be read down so as to save it from the challenge of unconstitutionality. It was urged that it would be legitimate to read into that Article the intendment that only such laws would be immunised from the challenge under Articles 14 and 19 as do not damage or destroy the basic structure of the Constitution. The principle of reading down the provisions of a law for the purpose of saving it from a constitutional challenge is well known. But we find it impossible to accept the contention of the learned counsel in this behalf because, to do so will involve a gross distortion of the principle of reading down, depriving that doctrine of its only or true rationale when words of width are used inadvertently. The device of reading down is not to be resorted to in order to save the susceptibilities of the law makers, nor indeed to imagine a law of one 's liking to have been passed. One must at least take the Parliament at its word when, especially, it undertakes a constitutional amendment. Mr. Palkhivala read out to us an extract from the speech of the then Law Minister who, while speaking on the amendment to Article 31 C, said that the amendment was being introduced because the government did not want the "let and hindrance" of the fundamental rights. If the Parliament has manifested a clear intention to exercise an unlimited power, it is impermissible to read down the amplitude of 260 that power so as to make it limited. The principle of reading down cannot be invoked or applied in opposition to the clear intention of the legislature. We suppose that in the history of the constitutional law, no constitutional amendment has ever been read down to mean the exact opposite of what it says and intends. In fact, to accept the argument that we should read down Article 31C, so as to make it conform to the ratio of the majority decision in Kesavanda Bharti, is to destroy the avowed purposes of Article 31C as indicated by the very heading "Saving of certain laws" under which Articles 31A, 31B and 31C are grouped. Since the amendment to Article 31C was unquestionably made with a view to empowering the legislatures to pass laws of a particular description even if those laws violate the discipline of Articles 14 and 19, it seems to us impossible to hold that we should still save Article 31C from the challenge of unconstitutionality by reading into that Article words which destroy the rationale of that Article and an intendment which is plainly contrary to its proclaimed purpose. A part of the same argument was pressed upon us by the learned Additional Solicitor General who contended that it would still be open to the Courts under Article 31C to decide four questions: (1) Does the law secure any of the directive principles of the Stats policy? (ii) Is it necessary to encroach upon fundamental rights in order to secure the object of the directive principles? (iii) what is the extent of such encroachment, if any? and (iv) Does that encroachment violate the basic structure of the Constitution? This argument is open to the same criticism to which the argument of the learned Attorney General is open and which we have just disposed of. Reading the existence of an extensive judicial review into Article 31C is really to permit the distortion of the very purpose of that article. It provides expressly that no law of a particular description shall be deemed to be void on the ground that it violate Article 14 or Article 19. It would be sheer adventurism of a most extraordinary nature to undertake the kind of judicial enquiry which, according to the learned Additional Solicitor General, the courts are free to undertake. We must also mention, what is perhaps not fully realised, that Article 31C speaks of laws giving effect to the "Policy of the State", "towards securing all or any of the principles laid down in Part IV." ' In the very nature of things it is difficult for a court to determine whether a particular law gives effect to a particular policy. Whether a law is adequate enough to give effect to the policy of the State towards securing a directives principle is always a debatable question 261 and the courts cannot set aside the law as invalid merely because, in their opinion, the law is not adequate enough to give effect to a certain policy. In fact, though the clear intendment of Article 31C is to shut out all judicial review, the argument of the learned Additional Solicitor General calls for a doubly or trebly extensive judicial review than is even normally permissible to the courts. Be it be remembered that the power to enquire into the question whether there is a direct and B. reasonable nexus between the provisions of a law and a directive principle cannot confer upon the courts the power to sit in judgment over the policy itself of the State. At the highest, courts can, under Article 31C, satisfy themselves as to the identity of the law in the sense whether it bears direct and reasonable nexus with a directive principle. If the court is satisfied as to the existence of such nexus, the inevitable consequence provided for by Article 31C must follow. Indeed, if there is one topic on which all the 13 Judges in Kesavananda Bharati were agreed, it is this: that the only question open to judicial review under the unamended Article 31 was whether there is a direct and reasonable nexus between the impugned law and the provisions of Article 39(b) and (c). Reasonableness is evidently regarding the nexus and not regarding the law. It is therefore impossible to accept the contention that it is open to the courts to undertake the kind of enquiry suggested by the Additional Solicitor General. The attempt therefore to drape Article 31C into a democratic outfit under which an extensive judicial review would be permissible must fail. We should have mentioned that a similar argument was advanced in regard to the amendment effected by section 55 of the 42nd Amendment to Article 368, by the addition of clauses (4) and (5) therein. It was urged that we should so construe the word "amendment" in clause (4) and the word "amend" in clause 5 as to comprehend only such amendments as do not destroy the basic structure of thy Constitution. That argument provides a striking illustration of the limitations of the doctrine of reading down. The avowed purpose. Of clauses (4) and (5) of Article 368 is to confer power upon the Parliament to amend the Constitution without any "limitation whatever". Provisions of this nature cannot be saved by reading into them words and intendment of a diametrically opposite meaning and content. The learned Attorney General then contends that Article 31C should be upheld for the same reasons for which Article 31A(1) was upheld. Article 31A (1) was considered as a contemporaneous practical exposition of the Constitution since it was inserted by the very First Amendment which was passed in 1951 by the same body of persons who were members of the Constituent Assembly. We can understand: 262 that Article 31A can be looked upon as a contemporaneous Practical exposition of the intendment of the Constitution, but the same cannot be said of Article 31C. Besides, there is a significant qualitative difference between the two Articles. Article 31A, the validity of which has been recognised over the years excludes the challenge under Articles 14 and 19 in regard to a specified category of laws. If by a constitutional amendment, the application of Articles 14 and 19 is withdrawn from a defined field of legislative activity, which is reasonably in public interest, the basic framework of the constitution may remain unimpaired. But if the protection of those articles is withdrawn in respect of an uncatalogued variety of laws, fundamental freedoms will become a 'parchment in a glass case ' to be viewed as a matter of historical curiosity. An attempt was made to equate the provisions of Article 31 with those of Article 31A in order to lend plausibility to the contention that since Article 31A was also upheld on the ground of stare decisis Article 31 can be upheld on the same ground. We see no merit in this contention. In the first place, as we have indicated above. the five matters which are specified in Article 31A are of such quality, nature, content and character that at least a debate can reasonably arise whether abrogation of fundamental rights in respect of those matters will damage or destroy the basic structure of the Constitution. Article 31C does not deal with specific subjects. The directive principles are couched in broad and general terms for the simple reason that they specify the goals to be achieved. Secondly, the principle of stare decisis cannot be treated as a fruitful source of perpetuating curtailment of human freedoms. No court has upheld the validity of Article 31A on the ground that it does not violate the basic structure of the Constitution. There is no decision on the validity of Article 31A which can be looked upon as a measuring rod of the extent of the amending power. To hark back to Article 31A every time that a new constitutional amendment is challenged is the surest means of ensuring a drastic erosion of the fundamental rights conferred by Part III. Such a process will insidiously undermine the efficacy of the ratio of the majority judgment in Kesavananda Bharati regarding the inviolability of the basic structure. That ratio requires that the validity of each new constitutional amendment must be judged on its own merits. Nor indeed are we impressed by a limb of the same argument that when Article 31A was upheld on the ground of stare decisis, what was upheld was a constitutional device by which a class of subject oriented laws was considered to be valid. The simple ground on which Article 31A was upheld, apart from the ground of contemporaneous practical exposition, was that its validity was accepted and recognised over the years and, therefore, it was not permissible 263 to challenge its constitutionality. The principle of stare decisis does not imply the approval of the device or mechanism which is employed for the purpose of framing a legal or constitutional provision. It was finally urged by the learned Attorney General that if we uphold the challenge to the validity of Article 31C, the validity or clauses (2) to (6) of Article 19 will be gravely imperilled because those clauses will also then be liable to be struck down as abrogating the rights conferred by Article 19(1) which are an essential feature or the Constitution. We are unable to accept this contention. Under clauses (2) to (6) of Article 19, restrictions can be imposed only if they are reasonable and then again, they can be imposed in the interest of a stated class of subjects only. It is for the courts to decide whether restrictions are reasonable and whether they are in the interest of the particular subject. Apart from other basic dissimilarities, Article 31C takes away the power of judicial review to an extent which destroys even the semblance of a comparison between its provisions and those of clauses (2) to (6) of Article 19. Human ingenuity, limitless though it may be, has yet not devised a system by which the liberty of the people can be protected except through the intervention of courts of law. Three Articles of our Constitution, and only three, stand between the heaven of freedom into which Tagore wanted his country to awake and the abyss of unrestrained power. They are Articles 14, 19 and 21. Article 31C has removed two sides of that golden triangle which affords to the people of this country an assurance that the promise held forth by the preamble will be performed by ushering an egalitarian era through the discipline of fundamental rights, that is. without emasculation of the rights to liberty and equality which alone can help preserve the dignity of the individual. These then are our reasons for the order which we passed on May 9, 1980 to the following effect: "Section 4 of the Constitution 42nd Amendment Act is beyond the amending power of the Parliament and is void since it damages the basic or essential features of the Constitution and destroys its basic structure by a total exclusion of challenge to any law on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by Article 14 or Article 19 of the Constitution, if the law is for giving effect to the policy of the State towards securing all or any of the principles laid down in Part IV of the Constitution." "Section 55 of the Constitution 42nd Amendment Act is beyond the amending power of the Parliament and is void since it removes all limitations on the power of the Parliament to 264 amend the Constitution and confers power upon it to amend the Constitution so as to damage or destroy its basic or essential features or its basic structure. " There will be no order as to costs. BHAGWATI, J. (His Lordship 's Judgment is a common judgment for Waman Rao 's case and Minerva Mill 's case. The petitioners in Writ Petitions Nos. 656 to 660 of 1977 Wamanrao & others etc, vs The Union of India & ors. (hereinafter referred to as Wamanrao 's case) and other allied petitions have challenged the constitutional validity of the Maharashtra Agricultural Lands (Ceiling on Holdings) Act 1961 (herein after referred to as the principal Act) as amended by the Maharashtra Agricultural Lands (Lowering of Ceiling on Holdings and (Amendment Act 1972 (hereinafter referred to as Act 21 of 1975) and the Maharashtra Agricultural Lands (Lowering of Ceiling on Holdings) and (Amendment) Act 1975 (hereinafter referred to as Act 47 of 1975) and the Maharashtra Agricultural Lands (Ceiling on Holdings) Amendment Act 1975 (hereinafter referred to as Act 2 of 1976) on the ground that the amended provisions of the Act are violative of Articles 14, 19(1)(f), 31 and 31A of the Constitution. We shall hereafter for the sake of convenience refer to the principal Act as duly amended by the subsequent Acts 21 of 1975, 47 of 1975 and 2 of 1976 as "the impugned legislation". It is not necessary for the purpose of this opinion to set out the relevant provisions of the impugned legislation but it is sufficient to state that it imposed a maximum ceiling on the holding of agricultural land in the State of Maharashtra and provided for acquisition of land held in excess of the ceiling and for the distribution of such excess land to landless and other persons with a view to securing the distribution of agricultural land in a manner which would best subserve the common good of the people. The impugned legislation recognised two units for the purpose of ceiling on holding of agricultural land. One was person which by its definition in section 2, sub section (2) included a family and 'family ' by virtue of section 2, sub section (11) included a Hindu Undivided Family and in the case of other persons, a group or unit the members of which by custom or usage, are joint in estate or possession or residence and the other was 'family unit ' which according to its definition in section 2(11A) read with section 4, meant a person and his spouse and their minor sons and minor unmarried daughters The impugned legislation created an artificial concept of a 'family unit ' for the purpose of applicability of the ceiling and provided that all lands held by each member of the family unit whether jointly or separately shall be aggregated together and by a fiction of law deemed to be held by the family unit. There were also certain provisions in the impugned legislation which prohibited transfers and acquisitions 265 of agricultural land with a view to effectuating the social policy and economic mission of the law. The impugned legislation also contained provisions prescribing the machinery for implementation of its substantive provisions. Now plainly and unquestionably this was a piece of legislation relating to agrarian reform and was immunised against challenge under Articles 14, 19 and 31 by the protective cloak of Article 31A but even so, by way of abundant caution, it was given additional protection of Article 31B by including the Principal Act and the subsequent amending Acts in the 9th Schedule: vide the Constitution (Seventeenth Amendment) Act 1964 and the Constitution (Fortieth Amendment) Act, 1976. The drastic effect of the impugned legislation was to deprive many land holders of large areas of agricultural lands held by them. Some of them, therefore. preferred writ petitions in the High Court of Bombay at Nagpur challenging the constitutional validity of the impugned legislation and on the challenge being negatived by the High Court, they preferred appeals in this Court. The only contention advanced on behalf of the land holders in support of the appeals was that the impugned legislation in so far as it introduced an artificial concept of a 'family unit ' and fixed ceiling on holding of land by such family unit was violative of the second proviso to cl. (1) of Article 31A and was not saved from invalidation by the protective armour of Article 31B. This contention was negatived by the Constitution Bench and it was held that the impugned legislation did not, by creating an artificial concept of a family unit and fixing ceiling on holding of land by such family unit, conflict with the second proviso to clause (1) of Article 31A and even if it did contravene that proviso, it was protected by Article 31B since the principal Act as well as the subsequent amending Acts were included in the 9th Schedules vide Dattatraya Govind Mahajan vs State of Maharashtra. Now at the time when this hatch of cases was argued before the Court, the emergency was in operation and hence it was not possible for the land holders to raise many of the contentions which they could otherwise have raised and, therefore, as soon as the emergency was revoked, the landholders filed review petitions in this Court against the decision in Dattatraya Govind Mahajan 's case and also preferred direct writ petitions in this Court challenging once again the constitutional validity of the impugned legislation. Now, concededly, Article 31A provided complete immunity to the impugned legislation against violation of Articles 14, 19 and 31 and Article 31B read with he 9th Schedule protected the impugned legislation not only against violation of Articles 14, 19 and 31 but 266 also against infraction of the second proviso to Clause (1) of Article 31A. Moreover, the impugned legislation being manifestly one for giving effect to the Directive Principles contained in Article 39 clauses (b) and (c), it was also protected against invalidation by Article 31C. The petitioners could not therefore successfully assail the constitutional validity of the impugned legislation unless they first pierced the protective armour of Articles 31A, 31B and 31C. The petitioners sought to get Articles 31A, 31B and 31C out of the way by contending that they offended against the basic structure of the Constitution and were. therefore, outside the constituent power of Parliament under Article 368 and hence unconstitutional and void. The argument of the petitioners was that these constitutional amendments in the shape of Articles 31A, 31B and 31C being invalid, the impugned legislation was required to meet the challenge of Articles 14, 19(1)(f), 31 and 31A and tested on the touchstone of these constitutional guarantees. the impugned legislation was null and void. The first and principal question which, therefore, arose for consideration in these cases was whether Articles 31A, 31B and 31C are ultra vires and void as damaging or destroying the basic structure of the Constitution. We may point out here that we were concerned in these cases with the constitutional validity of Article 31C as it stood prior to its amendment by the Constitution (Forty Second Amendment) Act, 1976. because it was the unamended Article 31C which was in force at the dates when. the amending Acts were passed by the legislature amending the principal Act. These cases were heard at great length with arguments ranging over a large areas and lasting for over five weeks and we reserved judgment on 8th March ]979. Unfortunately. we could not be ready with our judgment and hence on 9th May 1980 being the last working day of the Court before the summer vacation we made an order expressing our conclusion but stating that we would give our reasons later. By this order we held that Article 31A does not damage any of the basic or essential features of the Constitution or its basic structure and is therefore valid and constitutional and so is Article 31C as it stood prior to its amendment by the Constitution (Forty Second Amendment) Act, 1976 valid to the extent its constitutionality was upheld in Kesavananda Bharati 's case. So far as Article 31B is concerned, we said that Article 31 as originally introduced was valid and so also are all subsequent amendments including various Acts and Regulations in the 9th Schedule from time to time upto 24th April, 1973 when Kesavananda Bharati 's case was decided. We did not express any final opinion on the constitutional validity of the amendments made in the 9th Schedule on or after 24th April 1973 but we made it clear that, these amendments would be open to 267 challenge on the ground that they or any one or more of them damage the basic or essential features of the Constitution or its basic structure. and are therefore. Outside the constituent power of Parliament. This was The order made by us on 9th May. 1980 and for reasons which I shall mention presently. I propose to set out in this Judgment my reasons for subscribing to this order. So far as Minerva Mills Case is concerned, the challenge of the petitioners was directed primarily against an order dated 19th October, 1971 by which the Government of India, in exercise of the power conferred under Sec. 18A of the Industries (Development and Regulation) Act, 1951, authorised the taking over of the management of the industrial undertaking of the petitioners by the National Textile Corporation under the Sick Textile Undertakings (Nationalisation) Act 1974 (hereinafter referred to as the Nationalisation Act) by which the entire Industrial undertaking and the right, title and interest of the petitioners in it stood transferred to and vested in the Central Government on the appointed date. We are not concerned for the purpose of the present opinion with the challenge against the validity of the Order dated 19th October, 1971, for the question which has been argued before us arises only out of the attack against the constitutionality of the Nationalisation Act. The petitioners challenged the constitutional validity of the Nationalisation Act inter alia on the ground of infraction of Articles 14, 19(1)(f) and (g) and 31 Clause (2), but since the Nationalisation Act has been included in the 9th Schedule by the Constitution (Thirty ninth Amendment) Act, 1975, the petitioners also attacked the constitutionality of the Constitution (Thirty ninth Amendment) Act, 1975, for it is only if they could get the Nationalisation Act out from the protective wing of Article 31B by persuading the Court to strike down the Constitution (Thirty ninth Amendment) Act, 1975, that they could proceed with their challenge against the constitutional validity of the Nationalisation Act Now clauses (4) and (5) which were introduced in Article 368 by section 55 of the Constitution (Forty second Amendment) Act, 1976 and which were in force at the date of the filing of the writ petitions provided that no amendment of the Constitution made or purported to have been made whether before or after the commencement of that section shall be called in question in any Court on any ground and barred judicial review of the validity of a constitutional amendment (obviously, if these two clauses were validly included in Article 368, they would stand in the way of the petitioners challenging the constitutional validity of the Constitution (Thirty ninth Amendment) Act, 1975. The petitioners were, therefore, compelled to go further and impugn the constitutional validity of section 55 of the Constitution 268 (Forty second Amendment) Act, 1976. This much challenge, as shall presently point out, would have been sufficient to clear the path for the petitioners in assailing the constitutional validity of the Nationalisation Act, but the petitioners, not resting content with what was strictly necessary, proceeded also to challenge section 4 of the Constitution (Forty second Amendment) Act, 1976 which amended Article 31C. There were several grounds on which the constitutional validity of the Constitution (Forty second Amendment) Act, 1976 was impugned in the writ petitions and I shall refer to them when I deal with the arguments advanced on behalf of the parties. Suffice it to state for the present, and this is extremely important to point out. that when the writ petitions reached hearing before us, Mr. Palkhiwala, learned counsel appearing on behalf of the petitioners requested the Court to examine only one question, namely, whether the amendments made in Article 31C and Article 368 by section 4 and SS of the Constitution (Forty second Amendment) Act, 1976 were constitutional and valid and submitted that if these constitutional amendments were held invalid, then the other contentions might be examined by the Court at a later date. He conceded before us, in the course of the arguments, that he was accepting the constitutional validity of Articles 31A, 31B and the unamended Article 31C and his only contention vis a vis Article 31C was that it was the amendment made in Article 31C which had the effect of damaging or destroying the basic structure of the Constitution and that amendment was, therefore, beyond the constituent power of Parliament. The learned Attorney General on behalf of the Union of India opposed this plea of Mr. Palkhiwala and urged by way of preliminary objection that though the question of constitutional validity of clauses (4) and (S) of Article 368 introduced by way of amendment by section SS of the Constitution (Forty second Amendment Act, 1976 undoubtedly arose before the Court and it was necessary for the Court to pronounce upon it, the other question in regard to the constitutional validity of the amendment made in Article 31C did not arise on the writ petitions and the counter affidavits and it was wholly academic and superfluous to decide it. This preliminary objection raised by the learned Attorney General was in my opinion well founded and deserved to be sustained. Once Mr. Palkhiwala conceded that he was not challenging the constitutionality of Article 31A, Article 31B and the unamended Article 31C and was prepared to accept them as constitutionally valid, it became wholly unnecessary to rely on the amended Article 31C in support of the validity of the Nationalisation Act, because Article 31B would, in any event, save it from invalidation on the ground of infraction of any of the Fundamental Rights. In fact, if we look at the counter affidavit filed by Mr. T. section Sahani, Deputy Secretary, Government of 269 India in reply to the writ petitions, we find that no reliance has been placed on behalf of the Government on the amended Article 31C. The case of the Union of India is and that is supported by the legislative declaration contained in section 39 of the Nationalisation Act, that this Act was enacted for giving effect to the policy of the State towards securing the principles specified in clause (b) of Article 39 of the Constitution. Neither the Union of India in its counter affidavit nor the learned Attorney General in the course of his arguments relied on any other Directive Principle except that contained in Article 39 clause (b). Mr. Palkhiwala also did not make any attempt to relate the Nationalisation Act to any other Directive Principle of State Policy. Now either the Nationalisation Act was really and truly a law for giving effect to the Directive Principle set out in Article 39 clause (b) as declared in section 39 or it was not such a law and the legislative declaration contained in section 39 was a colourable device. If it was the former, then the unamended Article 31C would be sufficient to protect the Nationalisation Act from attack on the ground of violation of Articles 14, 19 and 31 and it would be unnecessary o invoke the amended Article 31C and if it was the latter, then neither the unamended nor the amended Article 31C would have any application. Thus, in either event, the amended Article 31C would have no relevance at all in adjudicating upon the constitutional validity of the Nationalisation Act. It is difficult to see how, in these circumstances, the Court could be called upon to examine the constitutionality of the amendment made in Article 31C: that question just did not arise for consideration and it was wholly unnecessary to decide it. Mr. Palkhiwala could reach the battle front for challenging the constitutional validity of the Nationalisation Act as soon as he cleared the road blocks created by the unamended Article 31C and the Constitution (Thirty ninth Amendment) Act, 1975 bringing the Nationalisation Act within the protective wing of Article 31B and it was not necessary for him to put the amendment in Article 31C out of the way as it did not block his challenge against the validity of the Nationalisation Act. I am, therefore, of the view that the entire argument of Mr. Palkhiwala raising the question of constitutionality of the amendment in Article 31C was academic and the Court could have very well declined to be drawn into it, but since the Court did, at the invitation of Mr. Palkhiwala, embark upon this academic exercise and spent considerable time over it, and the issues raised are also of the gravest significance to the future of the nation, I think, I will be failing in my duty if I do not proceed to examine this question on merits. I may point out at this stage (that the arguments on this question were spread over a period of about three weeks and considerable 270 learning and scholarship were brought to bear on this question on both sides. The hearing of the arguments commenced on 22nd October 1979 and it ended on 16th November 1979. I hoped after the completion of the arguments on questions of such momentous significance, there would be a 'free and frank exchange of thoughts ' in a judicial conference either before or after the draft judgment was circulated by my Lord the Chief Justice and I would either be able to share the views of my colleagues or if that was not possible, atleast try to persuade them to agree with my point of view. But, I find myself in the same predicament in which the learned Chief Justice found himself in Keshavananda Bharti vs State of Kerala. The learned Chief Justice started his judgment in that case by observing "I wanted to avoid writing a separate judgment of my own but such a choice seems no longer open. We sat in full strength of 13 to hear the case and I hoped that after a free and frank exchange of thoughts, I would be able to share the views of someone or the other of my esteemed brothers, but we were over taken by adventitious circumstances," namely, so much time was taken up by counsel to explain their respective points of view that very little time was left to the Judges "after the conclusion of the arguments, for exchange of draft judgments". Here also, I am compelled by similar circumstances, though not adventitious, to hand down a separate opinion without having had an opportunity to discuss with my colleagues the reasons which weighed with them in striking down the impugned constitutional amendments. Some how or other, perhaps owing to extraordinary pressure of work with which this Court is over burdened. no judicial conference or discussion was held nor was any draft judgment circulated which could form the basis of discussion, though. as pointed out above, the hearing of the arguments concluded as far back as 16th November, 1979. It was only on 8th May, 1980, just two days before the closing of the Court for the summer vacation, that I was informed by the learned Chief Justice that he and the other three learned Judges, who had heard this case along with me, had decided. to pass an order declaring the impugned constitutional amendments ultra vires and void on the ground that they violated the basic features of the Constitution and that the reasons for this order would be given by them later. I found it difficult to persuade myself to adopt this procedure, because there had been no judicial conference or discussion amongst the Judges where there could be free and frank exchange of views nor was any draft judgment circulated and hence I did not have the benefit of knowing the reasons why the learned Chief Justice and the other three learned judges were 271 inclined to strike down the constitutional amendments. If there had been a judicial conference or discussion or the draft judgment setting out the reasons for holding the impugned constitutional amendments Ultra vires and void had been circulated, it would have been possible for me, as a result of full and frank discussion or after considering the reasons given in the draft judgment, either to agree with the view taken by my Lord the Chief Justice and the other three learned judges or if I was not inclined so to agree, then persuade them to change their view and agree with mine. That is the essence of judicial collectivism. It is, to my mind, essential that a judgment of a Court should be the result of collective deliberation of the judges composing the Court and it would, in my humble opinion, not be in consequence with collective decision making, if one or more of the judges constituting the Bench proceed to say that they will express their individual opinion, ignoring their colleagues and without discussing the reasons with them and even without circulating their draft judgment so that the colleagues have no opportunity of participating in the collective decision making process. This would introduce a chaotic situation in the judicial process and it would be an unhealthy precedent which this Court as the highest Court in the land as a model judicial institution which is expected to set the tone for the entire judiciary in the country should not encourage Moreover, I felt that it was not right to pronounce an order striking down a constitutional amendment without giving a reasoned judgment. Ordinarily, a case can be disposed of only by a reasoned judgment and the order must follow upon the judgment. lt is true that sometimes where the case involves the liberty of the citizen or the execution of a death sentence or where the time taken in preparing a reasoned judgment might pre judicially affect the winning party, this Court, does, in the larger interests of justice, pronounce an order and give reasons later, but these are exceptional cases where the requirements of justice induces the Court to depart from the legally sanctioned course. But, there the court had in fact waited for about 5 1/2 months after the conclusion of the arguments and there was clearly no urgency which required that an order should be made though reasons were not ready, the delay of about 22 months in making the order was not going to injure the interests of any party, since the order was not going to dispose of the writ petition and many issues would still remain to be decided which could be dealt only after the summer vacation. Thus there would have been no prejudice to the interests of justice if the order had been made on he re opening of the Court after the summer vacation supported by a reasoned judgment. These were the reasons which compelled me to make my order dated 9th May, 1980 declining to pass an unreasoned order pronouncing on the validity of the impugned constitutional 272 amendments and stating that I would "prefer to pass a final order in this case when I deliver my reasoned judgment". This order unfortunately led to considerable misunderstanding of my position and that is the reason why I have thought it necessary to explain briefly why I acted in the manner I did. There is also one other predicament from which I suffer in the preparation of this opinion. It is obvious that the decision of the questions arising in Wamanrao 's case is closely and integrally connected with the decision of the questions in Minerva Mill 's case and therefore, logically as also from the point of view of aesthetics and practical pragmatics, there should be one opinion dealing with the questions in both the cases. But, unfortunately Minerva Mill 's case was heard by a Bench of five judges different from the Bench which heard Wamanrao 's case. Wamanrao 's case was heard by a Bench consisting of the learned Chief Justice, myself, Krishna Iyer, J., Tulzapurkar, J. and A. P. Sen, J. while Krishna Iyer, J., Tulzapurkar, J. and A. P. Sen, J. were not members of the Bench which heard the Minerva Mill 's case. Since two different Benches heard these cases, there would ordinarily have to be two opinions, one in each case. I. however, propose to write a single opinion dealing with the questions arising in both cases, since that is the only way in which I think I can present an integrated argument in support of my view, without becoming unduly and unnecessarily repetitive. The principal question that arises for consideration in these two cases is whether Article 31A, Article 31B read with the 9th Schedule as amended from time to time and particularly by the Constitution (Seventeenth Amendment) Act, 1964 and the Constitution (Fortieth Amendment) Act, 1976, Article 31C as it stood prior to its amendment by the Constitution (Forty second Amendment) Act, 1976 and the amended Article 31C are constitutionally valid; do they fall within the scope of the amending power of Parliament under Article 368. The determination of this question depends on the answer to the larger question as lo whether there are any limits on the amending power of Parliament under Article 368 and if so, what are the limits. This question came up for consideration before a Bench of 13 Judges of this Court the largest Bench that ever sat and after a hearing which lasted for 68 days the longest hearing that ever took place eleven judgments were delivered which are reported in Keshavananda Bharti vs State of Kerala (supra). The earlier decision of this Court in l. C. Golaknath & Ors. vs State of Punjab where, by a majority of six against five, the fundamental 273 rights were held to be unamendable by Parliament under Article 368, was over ruled as a result of the decision in Keshavananda Bharti 's case. But, six out of the thirteen learned Judges (Sikri, C. J. Shelat, Grover, Hegde, Reddy and Mukharjea, JJ. accepted the contention of the petitioners that though Article 368 conferred power to amend the Constitution, there were inherent or implied limitations on the power of amendment and therefore Article 368 did not confer power on Parliament to amend the Constitution so as to destroy or emasculate the essential or basic elements or features of the Constitution. The fundamental rights, according to the view taken by these six learned Judges, constituted basic or essential features of the Constitution and they could not be, therefore, abrogated or emasculated in the exercise of the amending power conferred by Article 368, though a reasonable abridgment of those rights could be effected in the public interest. Khanna, J. found it difficult in the face of the clear words of Article 368 to exclude from their operation Articles relating to fundamental rights and he held that "the word 'amendment ' in Article 368 must carry the same meaning whether the amendment relates to taking away or abridging Fundamental rights in Part II of the Constitution or whether it pertains to some other provision outside Part III of the Constitution. " But proceeding to consider the meaning of the word 'amendment ', the learned Judge held that the power to amend does not include the power to abrogate the Constitution, that the word 'amendment ' postulates that the existing Constitution must survive without loss of identity, that it must be retained though in an amended from. and therefore. the power of amendment does not include the power to destroy or abrogate the basic structure or framework of the Constitution. The remaining six Judges took the view that there were no limitations of any kind on the power of amendment, though three of them seemed willing to foresee the limitation that the entire Constitution could not be abrogated, leaving behind a State without a Constitution. Now some scholars have expressed the view that from the welter of confusion created by eleven judgments running over a thousand pages, it is not possible to extract any ratio decidendi which could be said to be the law declared by the Supreme Court. It is no doubt true that the six judges led by Sikri. C.J., have read a limitation on the amending power of Parliament under Article 368 and so has Khanna, J., have employed the formulations "basic features" and "essential elements" while Khanna. J. has employed the formulation "basic structure and framework" to indicate what in each view is immune from the amendatory process and it is argued that "basic features" and "essential elements" cannot be regarded as synonymous with "basic structure and framework". 274 These scholars have sought to draw support for their view from the following observation of Khanna, J. at page 706 of the Report: "It is then argued on behalf of the petitioners that essential features of the Constitution cannot be changed as a result of amendment. So far as the expression "essential features" means the basic structure or framework of the Constitution. I have already dealt with the question as to whether the power to amend the Constitution would include within itself the power to change the basic structure or framework of the Constitution. Apart from that, all provisions of the Constitution are subject to amendatory process and cannot claim exemption from that process by being described essential features. " Whatever be the justification for this view on merits, I do not think that this observation can be read as meaning that in the opinion of Khanna, J. "basic structure or frame work" as contemplated by him was different from "basic features" or "essential elements" spoken of by the other six learned judges. It was in the context of an argument urged on behalf of the petitioners that the "essential features" of the Constitution cannot be changed that this observation was made by Khanna, J. clarifying that if the "essential features" meant the "basic structure or framework" of the Constitution, the argument of the petitioners would be acceptable, but if the "essential features" did not form part of the "basic structure or framework ' ' and went beyond it, then they would not be immune from the amendatory process. But it does appear from this observation that The six Judges led by Sikri C.J. On the one hand and Khanna, J. On the other were not completely ad idem as regards the precise scope of the limitation on the amendatory power of Parliament. This might have raised a serious argument as to whether there, any ratio decidendi at all can be culled out from the judgments in this case in so far as the scope and ambit of the amendatory power of Parliament is concerned. A debatable question would have arisen whether "basic and essential features" can be equated with "basic structure or framework" of the Constitution and if they cannot be, then can the narrower of these two formulations be taken to represent the common ratio. But it is not necessary to examine this rather difficult and troublesome question, because l find that in Smt. Indira Gandhi vs Raj Narain a Bench of five Judges of this Court accepted the majority view in Keshavanand Bharti 's case to be that the amending power conferred under Article 368, though wide in its sweep and reaching every provision of the Constitution, does not enable Parliament to alter the basic structure or framework 275 of the Constitution. Since this is how the judgments in Keshavananda Bharti 's case have been read and a common ratio extracted by a 'Bench of five Judges of this Court, it is binding upon me and hence I must proceed to decide the questions arising in these cases in the light of the principle emerging from the majority decision that Article 368 does not confer power on Parliament to alter the basic structure or framework of the Constitution. I may mention in the passing that the summary of the judgments given by nine out of the thirteen Judges after the delivery of the judgments also states the majority view to be that "Article 368 does not enable Parliament to alter the basic structure or framework of the Constitution. " of course, in my view this summary signed by nine Judges has no legal effect at all and cannot be regarded as law declared by the Supreme Court under Article 141. It is difficult to appreciate what jurisdiction or power these nine Judges had to give a summary setting out the legal effect of the eleven judgments delivered in the case. Once the judgments were delivered, these nine Judges as also the remaining four became functus officio and thereafter they had no authority to cull out the ratio of the judgments or to state what, on a proper analysis of the judgments, was the view of the majority. What was the law laid down was to be found in the judgments and that task would have to be performed by the Court before whom the question would arise as to what is the law laid down in Keshavananda Bharti 's case. The Court would then hear the arguments and dissect the judgments as was done in Smt. Indira Gandhi 's case (supra) and then decide as to what is the true ratio emerging from the judgments which is binding upon the Court as law laid down under article 141. But here it seems that nine judges set out in the summary what according to them was the majority view without hearing any arguments. This was a rather unusual exercise, though well intentioned. But quite apart from the validity of this exercise embarked upon by the nine judges, it is a little difficult to understand how a proper and accurate summary could be prepared by these judges when there was not enough time, after the conclusion of the arguments, for an exchange of draft judgments amongst the Judges and many of them did not even have the benefit of knowing fully the views of others. I may, therefore, make it clear that I am not relying on the statement of the majority view contained in The Summary given at the end of the judgments in Keshavananda Bharti 's case, but I am proceeding on the basis of the view taken in Smt. Indira Gandhi 's case as regards the ratio of the majority decision in Keshavananda Bharti 's case. I may also at this stage refer to an argument advanced before its on the basis of certain observations in the judgment of Khanna, J. 276 that he regarded fundamental rights as not forming part of the basic structure of the Constitution and therefore, according to him, they could be abrogated or takes away by Parliament by an amendment made under Article 368. If this argument were correct, the majority holding in Keshavanda Bharti 's case would have to be taken to be that the fundamental rights could be abrogated or destroyed in exercise of the power of amendment. because Ray, J., Palekar, J., Mathew, J., Beg, J., Dwivedi, J. and Chandrachud, J. took the view that the power of amendment being unlimited, it was competent to Parliament in exercise of this power to abrogate or emasculate the Fundamental Rights and adding the view of Khanna, J., there would be 7 Judges as against 6 in holding that the Fundamental Rights could be abrogated or taken away by Parliament by a constitutionally amendment. But we do not think that this submission urged or behalf of the respondents is well founded. It is undoubtedly true. that there are certain observations in the judgment of Khanna, J. at the bottom of page 688 of the Report which seem into suggest that according to the learned Judge, the fundamental rights could be abridged or taken away by an amendment under Article 368. For example, he says: "No serious objection is taken to repeal, addition or alteration of provisions of the Constitution other than those in Part III under the power of amendment conferred by Article 368. The same approach in my opinion should hold good when we deal with amendment relating to Fundamental Rights contained in Part III of the Constitution. It would be impermissible to differentiate between the scope and width of the power of amendment when it deals with Fundamental Rights and the scope and width of that power when it deals with provisions not concerned with Fundamental Rights. " Then again at page 707 of the Report, the learned Judge rejects the argument that the core and essence of a Fundamental Right is immune from the amendatory process. These observations might at first blush appear to support the view that, according to Khanna, J., the amendatory power under Article 368 was sufficiently wide to comprehend not only addition or alternation but also repeal of a Fundamental Right resulting in its total abrogation. But if we look art the judgment of Khanna, J. as a whole, we do not think this view can be sustained. It is clear that these observations were made by the learned Judge with a view to explaining the scope and width of the power of amendment under Article 368. The learned Judge held that the amendatory power of Parliament was wide enough to reach every provision of the Constitution including the Fundamental Rights in Part Ill of the Constitution. but while so holding, he proceeded to make it clear that despite all this width the amendatory power was subject to an overriding limitation. 277 namely, that it could not be exercised so as to alter the basic structure or framework of the Constitution. The learned Judge stated in so many words at page 688 of the Report that though "the power of amendment is plenary and would include within itself, the power to add, alter or repeal the various articles including those relating lo fundamental rights", it is "subject to the retention, or the basic structure or framework of the Constitution." The same reservation was repeated by the learned Judge in cl. (vii) of the summary of his conclusions given at the end of his judgment. It will, therefore, be seen that according to Khanna, J. the power of amendment can be exercised by Parliament so as even to abrogate or take away a fundamental right, so long as it does not alter the basic structure or framework of the Constitution. But if the effect of abrogating or taking away such fundamental right is to alter or affect the basic structure or framework of the Constitution, the amendment would be void as being outside the amending power of Parliament. It is precisely for this reason that the learned Judge proceeded to consider whether the right to property could be said to appertain to the basic structure or framework of the Constitution. If the view of Khanna, J. where that no fundamental right forms part of the basic structure or framework of the Constitution and it can therefore be abrogated or taken away in exercise of the amendatory power under Article 368, it was totally unnecessary for the learned Judge to consider whether the right to property could be said to appertain to the basic structure or framework of the Constitution. The very fact that Khanna, J. proceeded to consider this question shows beyond doubt that he did not hold that fundamental rights were not a part of the basic structure. The only limited conclusion reached by him was that the right to property did not form part of the basic structure, but so far as the other fundamental rights were concerned, he left the question open. Therefore, it was that he took pains to clarify in his judgment in Smt. Indira Gandhi 's case (supra) that what he laid down in Keshavananda Bharati 's case was "that no Article of the Constitution is immune from the amendatory process because of the fact that it relates to fundamental right and is contained in Part III of the Constitution", and that he did not hold in That case that "fundamental rights are not a part of the basic structure of the Constitution". Now if this be so, it is difficult to understand how he could hold the Constitution (Twenty ninth Amendment) Act, 1972 unconditionally valid. Consistently with his view, he should have held that the Constitution (Twenty ninth Amendment) Act 1972 would be valid only if the protection afforded by it to the Kerala Acts included in the 9th Schedule was not violative of the basic structure or 278 framework of the Constitution. But merely because the learned Judge wrongly held the Constitution (Twenty ninth Amendment) Act, 1972 to be unconditionally valid and did not uphold its validity subject to the scrutiny of the Kerala Acts added in the 9th Schedule, it cannot follow that he regarded the fundamental rights as not forming part of the basic structure of the Constitution. If the law was correctly laid down by him, it did not become incorrect by being wrongly applied. It is not customary to quote from the writing of a living author, but departing from that practice which, I believe, is no longer strictly adhered to or followed, I may point out that what I have said above finds support from the comment made by Mr. Seervai in the 3rd Volume of his book on Constitutional Law, where the learned author says: "The conflict between Khanna, J. 's views on the amending power and on the unconditional validity of the Twenty Ninth Amendment is resolved by saying that he laid down the scope of the amending power correctly. but misapplied that law in holding Article 31B and Schedule 9 unconditionally valid. " l entirely agree with this perceptive remark of the learned author. The true ratio emerging from the majority decision in Keshavananda Bharati 's case being that the Parliament cannot in the exercise of its amendatory power under Article 368 alter the basic structure or framework of the Constitution. I must proceed to consider whether Article 31A, Article 31B read with 9th Schedule, Article 31C as it stood prior to its amendment and the amended Article 31C are violative of the basic structure or framework of the Constitution, for if they are, they would be unconstitutional and void. Now what are the features or elements which constitute the basic structure of framework of the Constitution or which. if damaged or destroyed, would rob the Constitution of its identity so that it would cease to be the existing Constitution but would become a different Constitution. The majority decision in Keshavananda Bharati 's case no doubt evolved the doctrine of basic structure or framework but it did not lay down that any particular named features of the Constitution formed part of its basic structure or framework. Sikri, C.J. mentioned supremacy of the Constitution, republican and democratic form of government. secular character of the Constitution, separation of powers among the legislature executive and judiciary, federalism and dignity and freedom of the individual as essential features of the Constitution. Shelat and Grover, JJ. added to the list two other features; justice social, economic and political and unity and integrity of the nation. Hegde and Mukherjee, JJ. added sovereignty of India as a basic feature of the Constitution. Reddy, J. thought that sovereign 279 democratic republic, parliamentary form of democracy and the three organs of the State formed the basic structure of the Constitution, Khanna, J. held that basic structure indicated the broad contours and outlines or the Constitution and since the right to property was a matter of detail, it was not a part of that structure. But he appeared to be of the view that the democratic form of government. the secular character of the State and judicial review formed part of the basic structure. It is obvious that these were merely illustrations of what each of the six learned Judges led by Sikri. C.J. thought to be the essential features of the Constitution and they were not intended to be exhaustive. Shelat and Grover, JJ. Hegde and Mukherjea JJ. and Reddy, J. in fact said in their judgments that their list of essential features which form the basic structure of the Constitution was illustrative or incomplete. This enumeration of the essential features by the six learned Judges had obviously no binding authority: first. because the Judges were not required to decide as to what features or elements constituted the basic structure or framework of the Constitution and what each of them said in this connection was in the nature of obiter and could have only persuasive value; secondly, because the enumeration was merely by way of illustration and thirdly, because the opinion of six Judges that certain specified features formed part of the basic structure of the Constitution did not represent the majority opinion and hence could not be regarded as law declared by this Court under Article 141. Therefore, in every case where the question arises as to whether a particular feature of the Constitution is a part of its basic structure, it would have to be determined on a consideration of various factors such as the place of the particular feature in the scheme of the Constitution, its object and purpose and the consequence of its denial on the integrity of the Constitution as a fundamental instrument of country 's governance. Vide the observations of Chandrachud, J. (as he then was) in Smt. Indira Gandhi 's case at page 658 of the Report. This exercise of determining whether certain particular features formed part of the basic structure of the Constitution had to be undertaken by this Court in Smt. Indira Gandhi 's case (supra) which came up for consideration within a short period of four years after the delivery of the Judgments in Keshvananda Bharti 's case. The constitutional amendment which was challenged in that case was the Constitution (Thirty ninth Amendment) Act. 1975, which introduced Article 329A and the argument was that clause (4) of this newly added article was constitutionally invalid on the ground that it violated the basic structure or framework of the Constitution. This challenge was unanimously upheld by a Constitution Bench which consisted of 280 the Chief Justice and four senior most Judges of this Court. It is not necessary for our purpose to analyse the judgments given by the five Judges in this case as they deal with various matters which are not relevant to the questions which arise before us. But it may be pointed out that two of the learned Judges, namely, Khanna and Mathew, JJ. held that democracy was an essential feature forming part of the basic structure and struck down clause (4) of Article 329A on the ground that it damaged the democratic structure of the Constitution. Chandrachud, J. (as he then was) emphatically asserted that, in his opinion, there were four unamendable features which formed part of the basic structure, namely, "(i) India is a sovereign democratic republic; (ii) Equality of status and opportunity shall be secured to all its citizens; (iii) The State shall have no religion of its own and all persons shall be equally entitled to freedom of conscience and the right freely to process, practise and propagate religion and (iv) The nation shall be governed by a government of laws, not of men. " These, according to him, were "the pillars of our constitutional philosophy, the pillars, therefore, of the basic structure of the Constitution." He then proceeded to hold that clause (4) of Article 329A was "an outright negation of the right of equality conferred by Article 14, a right which more than any other is a basic postulate of our Constitution" and on that account declared it to be unconstitutional and void, Mathew, J. however, expressed his dissent from the view taken by Chandrachud, J. as regards the right of equality conferred by Article 14 being an essential feature of the Constitution and stated inter alia the following reason: "The majority in Bharati 's case did not hold that Article 14 pertains to the basic structure of the Constitution. The Majority upheld the validity of the first part of Article 31C; this would show that a constitutional amendment which takes away or abridges the right to challenge the validity of an ordinary law for violating the fundamental right under that Article would not destroy or damage the basic structure. The only logical basis for supporting the validity of Article 31A, 31B and the first part of 31C is that article 14 is not a basic structure. " I shall have occasion to discuss later the concept of equality under the Constitution and whether it forms part of the basic structure. But, one position of a basic and fundamental nature I may make clear at this stage, and there I agree with Mathew, J., that whether a particular feature forms part of the basic structure has necessarily to be determined on the basis of the specific provisions of the Constitution. To quote the words of Mathew, J. in Smt. Indira Gandhi 's case (supra) "To be a basic structure it must be a terrestrial concept having its 281 habitat within the four corners of the Constitution. " What Constitutes basic structure is not like "a twinkling star up above the Constitution." "It does not consist of any abstract ideals to be found outside the provisions of the Constitution. The, Preamble no doubt enumerates great concepts ' embodying the ideological aspirations of the people but these concepts are particularised and their essential features delineated in the various provisions of the Constitution. It is these specific provisions in the body of the Constitution which determine the type or democracy which the founders of that instrument established; the quality and nature of justice, political, social and economic which they aimed to realise, the content of liberty of thought and expression which they entrenched in that document and the scope of equality of status and of opportunity which they enshrined in it. These specific provisions enacted in the Constitution alone can determine the basic structure of the Constitution. These specific provisions, either separately or in combination. determine the content of the great concepts set out in the Preamble. It is impossible to spin out any concrete concept of basic structure out of the gossamer concepts set out in the Preamble. 'The specific provisions of the constitution are the stuff from which the basic structure has to be woven. ( ')" Now, in Wamanrao 's case the broad argument of Mr. Phadke on behalf of the petitioners founded on the doctrine of basic structure was, and this argument was supported by a large number of other counsel appearing in the allied petitions, that the fundamental rights enshrined in Articles 14 and 19 form part of the basic structure of the Constitution and therefore Article 31A, Article 31B read with 9th Schedule and the unamended Article 31C in so far as they exclude the applicability of Articles 14 and 19 to certain kinds of legislation emasculate those fundamental rights and thereby damage the basic structure of the Constitution and they must accordingly be held to be outside the amending power of Parliament and hence unconstitutional and void. I have not made any reference here to Article 31 and treated the argument of Mr. Phadke as confined only to Articles 14 and 19, because, though Article 31 was very much in the Constitution when the arguments in Wamanrao 's case were heard, it has subsequently been deleted by the Constitution (Forty Fourth Amendment) Act, 1978 and reference to it has also been omitted in Articles 31A, 31B and 31C and we are therefore concerned with the constitutional validity of these Articles only in so far as they grant immunity against challenge on the ground of infraction of Articles 14 and 19. Mr. Phadke on behalf of the petitioners also challenged 282 the constitutional validity of the Constitution (Fortieth Amendment). 1976 which included the amending Acts 21 of 1975, 41 of 1975 and 2 of 1976 in the 9th Schedule. On the ground that the Lok Sabha was not in existence at the date when it was enacted. But obviously. in view of clauses (4) and (5) introduced in Article 368 by section 55 , of the Constitution (Forty second Amendment) Act, 1976, it was not possible for Mr. Phadke on behalf of the petitioners to assail the constitutional validity of Article 31A, Article 31B read with the 9th Schedule as amended by the Constitution (Fortieth Amendment) Act. 1976 and the unamended Article 31C. since these two clauses of Article 368 barred challenge to the validity of a constitutional amendment on any ground whatsoever and declared that there shall be no limitation whatever on the constituent power of Parliament to amend by way of addition. variation or repeal, any provision of the Constitution. He therefore. as a preliminary step in his argument challenged the constitutional validity of clauses (4) and (S) of Article 368 on the ground that these clauses damaged the basic structure of the Constitution and were outside the amending power of Parliament. The argument of Mr. Palkhiwala on behalf of the petitioners in the Minerva Mills ' case was a little different. He too attacked the vires of clauses (4) and (5) of Article 368 since they barred at the threshold any challenge against the constitutional validity of the amendment made in Article 31C, but so far as Article 31A, Article 31B and the unamended Article 31C were concerned, he did not dispute their validity and, as pointed out by me earlier, he conceded and in fact gave cogent reasons showing that they were constitutionally valid. His only attack was against the validity of the amendment made in Article 31C by section 4 of the Constitution (Forty second Amendment Act. ]976 and he contended that this amendment, by making the Directive Principles supreme over the fundamental rights. damaged or destroyed the basic structure of the Constitution. He urged that the basic structure of the Constitution rests on the foundation that while the Directive Principles are the mandatory ends of government, those ends have to be achieved only through the permissible means set out in the Chapter on fundamental rights and this balance and harmony between the fundamental rights and the directive Principles was destroyed by the amendment in Article 31C by making the fundamental rights subservient to the Directive Principles and in consequence, the basic structure of the Constitution was emasculated. A passionate plea was made by Mr. Palkhiwala with deep emotion and feeling that if Article 31C as amended was allowed to stand, it would be an open licence to the legislature and the executive, both at the Centre and in the States, to destroy democracy and establish an authoritarian or totalitarian regime, since almost every legislation could be related, 283 directly or indirectly, to some Directive Principle and would thus be able to earn immunity from the challenge of Articles 14 and 19 and the fundamental rights enshrined in these two Articles would be rendered meaningless and futile and would become mere rope of sand. Mr. Palkhiwala vehemently urged that Justice, liberty and equality were the three pillars of the Constitution and they were embodied in Articles 14 and 19 and therefore if the supremacy of the fundamental rights enshrined in these Articles was destroyed and they were made subservient to the directive Principles, it would result in the personality of the Constitution being changed beyond recognition and such a change in the personality would be outside the amending power of Parliament. Mr. Palkhiwala likened the situation to a permanent state of emergency and pointed out by way of contrast that whereas under an emergency the people may be precluded from enforcing their fundamental rights under Articles 14 and 19 for the duration of the emergency, here the people were prevented from moving the court for enforcement of these fundamental rights for all time to come even without any emergency where a law was passed purporting to give effect to any of the Directive Principles. The amendment in Article 31C was thus, according to Mr. Palkhiwala, outside the amending power of Parliament and was liable to be struck down as unconstitutional and void. Logically I must first consider the challenge against the constitutional validity of clauses (4) and (5) of article 368, because it is only if they can be put out of the way that Mr. Phadke and Mr. Palkhiwala can proceed further with their respective challenges against the validity of the other constitutional provisions impugned by them. Both these clauses were inserted in Article 368 by section 55 of the Constitution (Forty second Amendment), Act, 1976 with a view to overcoming the effect of the majority decision in Keshavananda Bharati 's case. Clause (4) enacted that no amendment of the Constitution "made or purporting to have been made under this Article [whether before or after the commencement of section 55 of the Constitution (Forty second Amendment) Act, 1976] shall be called in question in any court on any ground" while clause (5), which begins with the words "For the removal of doubts", declared that "there shall be no limitation whatever on the constituent power of Parliament to amend by way of addition, variation or repeal the provisions of this Constitution under this Article. " The question is whether these two clauses transgress the limitations on the amending power of Parliament and are therefore void. I will first take up for consideration clause (4) which seeks to throw a cloak of protection on an amendment made or purporting to have been made in the 284 Constitution and makes it unchallengeable on any ground. It is rather curious in its wording and betrays lack of proper care and attention in drafting. It protects every amendment made or purporting to have been made "whether before or after the commencement of section S of the Constitution (Forty second Amendment Act. " But would an amendment made by any other section of the Constitution (Forty second Amendment) Act, 1976 such as section (4). which would be neither before nor after the commencement of section 55, but simultaneous with it. be covered by this protective provision? This is purely a problem of verbal semantics which arises because of slovenliness in drafting that is becoming rather common these days and I need not dwell on it, for there are more important questions which arise out of the challenge to the constitutional validity of clause (4) and they require serious consideration. I will proceed on the basis that the protection sought to be given by clause (4) extends to every amendment whatsoever and that the parenthetical words "whether before or after the commencement of section SS of the Constitution (Forty second Amendment) Act, 1976" were introduced merely by way of abundant caution with a view to indicating that this protection was intended to cover even amendments made or purporting to have been made before the enactment of the constitution (Forty second Amendment) Act. 1976. Now even a cursory look at the language of clause (4) is sufficient to demonstrate that this is a case of zeal overrunning discretion. Clause (4) provides that no amendment to the Constitution made or purporting to have been made under Article 368 shall be called in question in any court on any ground. The words 'on any ground ' are of the widest amplitude and they would obviously cover even a ground that the procedure prescribed in clause (2) and its proviso has not been followed. The result is that even if an amendment is purported to have been made without complying with the procedure prescribed in sub clause (2) including its proviso, and is therefore unconstitutional. it would still be immune from challenge. It was undisputed common ground both at the Bar and on the Bench, in Keshavananda Bharati 's case that any amendment of the Constitution which did not conform to the procedure prescribed by sub clause (2) and its proviso was no amendment at all and a court would declare it invalid. Thus if an amendment were passed by a simple majority in the House of the People and the Council of States and the President assented to the amendment, it would in law be no amendment at all because the requirement of clause (2) is that it should be passed by a majority of each of the two Houses separately and by not less than two thirds of the members present and voting. But if clause (4) were valid, it would become difficult to challenge the validity of such an amendment and it would prevail though made in defiance of a 285 mandatory constitutional requirement. Clause (2) including its proviso A would be rendered completely superfluous and meaningless and its prescription would become merely a paper requirement. Moreover, apart from nullifying the requirement of clause (2) and its proviso, clause (4) has also the effect of rendering an amendment immune from challenge even if it damages or destroys the basic structure of the Constitution and is therefore outside the amending power of Parliament. So long as clause (4) stands, an amendment of the Constitution though unconstitutional and void as transgressing the limitation on the amending power of Parliament as laid down in Keshavananda Bharati 's case, would be unchallengeable in a court of law. The consequence of this exclusion of the power of judicial review would be that, in effect and substance, the limitation on the amending power of Parliament would from a practical point of view, become non existent and it would not be incorrect to say that, covertly and indirectly, by the exclusion of judicial review, the amending power of Parliament would stand enlarged contrary to the decision of this Court in Keshavananda Bharati 's case. This would undoubtedly damage the basic structure of the Constitution, because there are two essential features of the basic structure which would be violated, namely, the limited amending power of Parliament and the power of judicial review with a view to examining whether any authority under the Constitution has exceeded the limits of its powers. I shall immediately proceed to state the reasons why I think that these two features form part of the basic structure of the Constitution. It is clear from the majority decision in Keshavananda Bharati 's case that our Constitution is a controlled Constitution which confers powers on the various authorities created and recognised by it and defines the limits of those powers. The Constitution is supreme lex, the paramount law of the land and there is no authority, no department or branch of the State, which is above or beyond the Constitution or has powers unfettered and unrestricted by the Constitution. The Constitution has devised a structure of power relationship with checks and balances and limits are placed on the powers of every authority or instrumentality under the Constitution. Every organ of the State, be it the executive or the legislature or the judiciary, derives its authority from the Constitution and it has to act within the limits of such authority. Parliament too, is a creature of the Constitution and it can only have such powers as are given to it under the Constitution. It has no inherent power of amendment of the Constitution and being an authority created by the Constitution, it cannot have such inherent power, but the power of amendment is conferred upon it by the Constitution and it is a limited power which is so conferred. Parliament cannot in exercise of this power so 286 amend the Constitution as to alter its basic structure or to change its identity. Now, if by constitutional amendment, Parliament were granted unlimited power of amendment, it would cease to be an authority under the Constitution, but would become supreme over it, because it would have power to alter the entire Constitution including its basic structure and even to put an end to it by totally changing its identity. It will therefore be seen that the limited amending power of Parliament is itself an essential feature of the Constitution, a part of its basic structure, for if the limited power of amendment were enlarged into an unlimited power, the entire character of the Constitution would be changed. It must follow as a necessary corollary that any amendment of the Constitution which seeks, directly or indirectly, to enlarge the amending power of Parliament by freeing it from the limitation of unamendability of the basic structure would be violative of the basic structure and hence outside the amendatory power of Parliament. It is a fundamental principle of our constitutional scheme, and I have pointed this out in the preceding paragraph, that every organ of the State, every authority under the Constitution. derives its power from the Constitution and has to act within the limits of such power. But then the question arises as to which authority must decide what are the limits on the power conferred upon each organ or instrumentality of the State and whether such limits are transgressed or exceeded. Now there are three main departments of the State amongst which the powers of Government are divided; the Executive, the Legislature and the Judiciary. Under our Constitution we have no rigid separation of powers as in the United States of America, but there is a broad demarcation, though, having regard to the complex nature of governmental functions, certain degree of overlapping is inevitable. The reason for this broad separation of powers is that "the concentration of powers in any one organ may" t(t quote the words of Chandrachud, J. (as he then was) in Smt. Indira Gandhi 's case (supra) "by upsetting that fine balance between the three organs, destroy the fundamental premises of a democratic Government to which were pledged. " Take for example, a case where the executive which is in charge of administration acts to the prejudice of a citizen and a question arises as to what are the powers of the executive and whether the executive has acted within the scope of its powers. Such a question obviously cannot be left to the executive to decide and for two very good reasons. First, the decision of the question would depend upon the interpretation of the Constitution and the laws and this would pre eminently be a matter fit to be decided by the judiciary, because it is the judiciary which alone would be possessed of expertise in this field and secondly, the constitutional 287 and legal protection afforded to the citizen would become illusory. A if it were left to the executive to determine the legality of its own action. So also if the legislature makes a law and a dispute arises whether in making the law the legislature has acted outside the area of its legislative competence or the law is violative of the fundamental rights or of any other provisions of the Constitution, its resolution cannot, for the same reasons, be, left to the determination of the legislature. The Constitution has, therefore, created an independent machinery for resolving these disputes and this independent machinery is the judiciary which is vested with the power of judicial review to determine the legality of executive action and the validity of legislation passed by the legislature. It is the solemn duty of the judiciary under the Constitution to keep the different organs of the State such as the executive and the legislature within the limits of the power conferred upon them by the Constitution. This power of judicial review is conferred on the judiciary by Articles 32 anc! 226 of the Constitution. Speaking about draft Article 25, corresponding to present Article 32 of the Constitution, Dr. Ambedkar, the principal architect of our Constitution, said in the Constituent Assembly on 9th December, 1948: "If I was asked to name any particular article in this Constitution as the most important an article without which this Constitution would be a nullity I could not refer to any other article except this one. It is the very soul of the Constitution and the very heart of it and I am glad that the House has realised its importance". (CAD debates, Vol. VII, p, 953) It is a cardinal principle of our Constitution that no one howsoever highly placed and no authority however lofty can claim to be the sole judge of its power under the Constitution or whether its action is within the confines of such power laid down by the Constitution. The judiciary is the interpreter of the Constitution and to the judiciary is assigned the delicate task to determine what is the power conferred on each branch of Government, whether it is limited, and if so, what are the limits and whether any action of that branch transgresses such limits. It is for the judiciary to uphold the constitutional values and to enforce the constitutional limitations. That is the essence of the rule of law, which inter alia requires that "the exercise of powers by the Government whether it be the legislature or the executive or any other authority, be conditioned by the Constitution and the law". The power of judicial review is an integral part of our constitutional system and without it, there will be no Government of laws and the rule of law would become a teasing illusion and a promise of unreality. I am of the view that if there is one feature of our 288 Constitution which, more than any other, is basic and fundamental to the maintenance of democracy and the rule of law, it is the power of judicial review and it is unquestionably, to my mind, part of the basic structure of the Constitution. Of course, when I say this I should not be taken to suggest that however effective alternative institutional mechanisms or arrangements for judicial review cannot be made by Parliament. But what I wish to emphasise is that judicial review is a vital principle of our Constitution and it cannot be abrogated without affecting the basic structure of the Constitution. If by a Constitutional amendment, the power of judicial review is taken away and it is provided that the validity of any law made by the Legislature shall not be liable to be called in question on any ground, even if it is outside the legislative competence of the legislature or is violative of any fundamental rights, it would be nothing short of sub version of the Constitution, for it would make a mockery of the distribution of legislative powers between the Union and the States and render the fundamental rights meaningless and futile. So also if a. constitutional amendment is made which has the effect of taking away the power of judicial review and providing that no amendment made in the Constitution shall be liable to be questioned on any ground, even if such amendment is violative of the basic structure. and, therefore, outside the amendatory power of Parliament, it would be making Parliament sole judge of the constitutional validity of what it has done and that would. in effect and substance, nullify the limitation on the amending power of Parliament and affect the basic structure of the Constitution. The conclusion must therefore inevitably follow that clause (4) of Article 368 is unconstitutional. and void as damaging the basic structure of the Constitution. That takes us to clause (S) of Article 368. This clause opens with the words "For the removal of doubts" and proceeds to declare that there shall be no limitation whatever on the amending power of Parliament under Article 368. It is difficult to appreciate the. meaning of the opening words "For the removal of doubts" because the majority decision in Keshavananda Bharati 's case clearly laid down and left no doubt that the basic structure of the Constitution was outside the competence of the mandatory power of Parliament and in Smt. Indira Gandhi 's case all the Judges unanimously accepted theory of the basic structure as a theory by which the validity of the amendment impugned before them, namely, Article 329A(4) was to be judged. Therefore, after the decisions in Keshavananda Bharati 's case and Smt. Indira Gandhi 's case, there was no doubt at all that the amendatory. power of Parliament was limited and it was not competent to Parliament to alter the basic structure of the Constitution 289 and clause (5) could not remove the doubt which did not exist. What A clause (S) really sought to do was to remove the limitation on the amending power of Parliament and convert it from a limited power into an unlimited one. This was clearly and indubitably a futile exercise on the part of Parliament. I fail to see how Parliament which has only a limited power of amendment and which cannot alter the basic structure of the Constitution can expand its power of amendment so as to confer upon itself the power of repeal or abrogate the Constitution or to damage or destroy its basic structure. That would clearly be in excess of the limited amending power possessed by Parliament. The Constitution has conferred only a limited amending power on Parliament so that it cannot damage or destroy the basic structure of the Constitution and Parliament cannot by exercise of that limited amending power convert that very power into an absolute and unlimited power. If it were permissible to Parliament to enlarge the limited amending power conferred upon it into an absolute power of amendment, then it was meaningless to place a limitation on the original power of amendment. It is difficult to appreciate how Parliament having a limited power of amendment can get rid of the limitation by exercising that very power and convert it into an absolute power. Clause (S) of Article 368 which sought to remove the limitation on the amending power of Parliament by making it absolute must therefore be held to be outside the amending power of Parliament. There is also another ground on which the validity of this clause can be successfully assailed. This clause seeks to convert a controlled Constitution into an uncontrolled one by removing the limitation on the amending power of Parliament which, as pointed out above, is itself an essential feature of the Constitution and it is therefore violative of the basic structure would in the circumstances hold clause (5) of Article 368 to be unconstitutional and void. With clauses (4) and (S) of Article 368 out of the way, I must now proceed to examine the challenge against the constitutional validity of Article 31A, Article 31B read with the 9th Schedule and the unamended Article 31C. So far as Article 31A is concerned, Mr. Phadke appearing on behalf of the petitioners contended that, tested by the doctrine of basic structure, article 31A was unconstitutional and void, since it had the effect of abrogating Articles 14 and 19 in reference to legislation falling within the categories specified in the various clauses of that Article. He argued that the Fundamental Rights enshrined in Articles 14 and 19 were part of the basic structure of the Constitution and any constitutional amendment which had the effect of abrogating or damaging these Fundamental Rights was outside the amendatory power of Parliament. While considering this 290 argument, I may make it clear that I am concerned here only with constitutional validity of clause (a) of Article 31A since the protection of Article 31A has been claimed in respect of Maharashtra Land Ceiling Acts only under clause (a) of that Article and I need not enter upon a discussion of the constitutional validity of clauses (b) to (e) of Article 31A. I do not think that the argument of Mr. Phadke challenging the constitutional validity of clause (a) of Article 31A is well founded. I shall have occasion to point out in a later part of this judgment that where any law is enacted for giving effect to a Directive Principle with a view to furthering the constitutional goal of social and economic justice, there would be no violation of the basic structure, even if it infringes formal equality before the law under article 14 or any Fundamental Right under Article 19. Here clause (a) of Article 31A protects a law of agrarian reform which is clearly. in the context of the socio economic conditions prevailing in India, a basic requirement of social and economic justice and is covered by the Directive Principles set out in clauses (b) and (c) of Article 39 and it is difficult to see how it can possibly be regarded 1) as violating the basic structure of the Constitution. On the contrary, agrarian reform leading to social and economic justice to the rural population is an objective which strengthens the basic structure of the Constitution. Clause (a) of Article 31A must therefore be held to be constitutionally valid even on the application of the basic structure test. But, apart from this reasoning on principle which in our opinion clearly sustains the constitutional validity of clause (a) of Article 31A. we think that even on the basis of the doctrine of stare decisions, the whole of Article 31A must be upheld as constitutionally valid. The question as to the constitutional validity of Article 31 A first came up for consideration before this Court in Shankari Prasad vs Union of India. There was a direct challenge levelled against the constitutionality of Article 31A in this case on various grounds and this challenge was rejected by a Constitution Bench of this Court. The principal ground on which the challenge was based was that if a constitutional amendment takes away or abridges any of the Fundamental Rights conferred by Part III of the Constitution it would fall within the prohibition of Article 13(2) and would therefore be void. Patanjali Shastri, J., speaking on behalf of the Court, did not accept this contention and taking the view that in the context of Article 13, 'law ' must be taken to mean rules or regulations made in exercise of ordinary legislative power and not amendments to the constitution made in exercise of constituent power, be held that 291 Article 13(2) does not affect constitutional amendments. This view in regard to the interpretation of the word 'law ' in Article 13(2) has now been affirmed by this Court sitting as a full Court of 13 Judges in Keshavananda Bharati 's case and it is no longer possible to argue the contrary proposition. It is true that in, this case, the constitutional validity of Article 31A was not assailed on the ground of in fraction of the basic feature since that was a doctrine which came to be evolved only in Keshavananda Bharati 's case, but the fact remains that whatever be the arguments advanced or omitted to be advanced. Article 31A was held to be constitutionally valid by this Court. Nearly 13 years after this decision was given in Shankari Prasad 's case, a strong plea was made before this Court in Sajjan Singh vs State of Rajasthan that Shankari Prasad 's case should be reconsidered, but after a detailed discussion of the various arguments involved in the case, the Constitution Bench of this Court expressed concurrence with the view expressed in Shankari Prasad 's case and in the result, upheld the constitutional validity of Article 31A, though the question which arose for consideration was a little different and did not directly involve the constitutional validity of Article 31A. Thereafter, came the famous decision of this Court in Golak Nath 's case where a full Court of 11 Judges. while holding that the Constitution (First Amendment Act exceeded the constituent power or Parliament, still categorically declared on, the basis of the doctrine prospective overruling that the said amendment, and a few other like amendments subsequently made, should not be disturbed and must be held to be valid. The result was that even the decision in Golak Nath 's case accepted the constitutional validity of Article 31A. The view taken in Golak Nath 's case as regards the amending power of Parliament was reversed in Keshavananda Bharati 's case where the entire question as to the nature and extent of the constituent power of Parliament to amend the Constitution was discussed in all its dimensions and aspects uninhibited by any previous decisions, but the only constitutional amendments which were directly challenged in that case were the Twenty fourth and Twenty fifth and Twenty ninth Amendments. The constitutional validity of article 31A was not put in issue in Keshavananda Bharati 's case and the learned Judges who decided that case were not called upon to pronounce on it and it cannot therefore be said that this Court uphold the vires of Article 31A in that Case. It is no doubt true that Khanna, J. held Article 31A to be valid on the principle of stare decisis. but that was only for the purpose of upholding the validity of Article 31C. 292 because he took the view that Article 31C was merely an extension of the principle accepted in Article 31A and "the ground which sustained the validity of clause (1) of Article 31A, would equally sustain the validity of the first part of Article 31C". So far as the other learned Judges were concerned, they did not express any view specifically on the constitutional validity of Article 31A, since that was not in issue before them. Ray, J., Palekar, J., Mathew, J., Beg, J., Dwiwedi, J. and Chandrachud, J., held Article 31C to be valid and if that view be correct, Article 31A must fortiorari be held to be valid But it must be said that there is no decision of the Court in Keshavananda Bharati 's case holding article 31A as constitutionally valid, and logically, therefore, it should be open to the petitioners in the present case to contend that. tested by the basic structure doctrine, Article 31A is constitutional. We have already pointed out that on merits this argument has no substance and even on an application of the basic structure doctrine. Article 31A cannot be condemned as invalid. But in any event, I do not think that it would be proper to reopen the question of constitutional validity of Article 31A which has already been decided and silenced by the decisions of this Court in Shankari Prasad 's case, Sajjan Singh 's case and Golak Nath 's case. Now for over 28 years, since the decision in Shankari Prasad 's case Article 31A has been recognised as valid and on this view, laws of several States relating to agrarian reform have been held to be valid and as pointed out by Khanna, J. in Keshavananda Bharati 's case "millions of acres of land have changed hands and millions of new titles in agricultural lands have been created". If the question of validity of Article 31A were reopened and the earlier decisions upholding its validity were reconsidered in the light of the basic structure doctrine, these various agrarian reform laws which have brought about a near socio economic revolution in the agrarian, sector might be exposed . to jeopardy and that might put the clock back by settling at naught all changes that have been brought about in agrarian relationship during these years and create chaos in the lives of millions of people who have benefitted by these laws. It is no doubt true that this Court has power to review its earlier decisions or even depart from them and the doctrine of stare decisis cannot be permitted to perpetuate erroneous decisions of this Court to the detriment of the general welfare of the public. There is indeed a school of thought which believes with Cardozo that "the precedents have turned upon us and they are engulfing and annihilating us, engulfing and annihilating the very devotees that worshipped at their shrine" and that the Court should not be troubled unduly if it has to break away from precedents in order to modify old rules and if need be to fashion new ones to meet the challenges and problems thrown upon 293 by a dynamic society. But at the same time, it must be borne in A mind that certainty and continuity are essential ingredients of rule of law. Certainty in applicability of law would be considerably eroded and suffer a serious set back if the highest court in the land were readily to overrule the view expressed by it in earlier decisions even though that view has held the field for a number of years. It is obvious that when constitutional problems are brought before this Court for its decision, complex and difficult questions are bound to arise and since the decision on many of such questions may depend upon choice between competing values, two views. may be possible depending upon the value judgment or the choice of values made by the individual Judge. Therefore, if one view has been taken by the Court after mature deliberation, the fact that another Bench is inclined to take another view would not justify the Court in reconsidering the earlier decision and overruling it. The law laid down by this Court is binding on all Courts in the country and numerous cases all over the country are decided in accordance with the view taken by this Court. Many people arrange their affairs and large number of transactions also take place on the faith of the correctness of the decision given by this Court. It would create uncertainty, instability and confusion if the law propounded by this Court on the faith of which numerous cases have been decided and many transactions have taken place is held to be not the correct law after a number of years. The doctrine of stare decisis has evolved from the maxim "stare decisis et non quita movere" meaning "adhere to the decision and do not unsettle things which are established", and it is a useful doctrine intended to bring about certainty and uniformity in the law. But when I say this, let me make it clear that I do not regard the doctrine of stare decisis as a rigid and inevitable doctrine which must be applied at the cost of justice. There may be cases where it may be necessary to rid the doctrine of its petrifying rigidity. "Stare decisis" as pointed out by Brandeis "is always a desideratum, even in these constitutional cases, but in them, it is never a command". The Court may in an appropriate case overrule a previous decision taken by it, but that should be done only for substantial and compelling reasons. The power of review must be exercised with due care and caution and only for advancing the public well being and not 294 merely because it may appear that the previous decision was based on an erroneous view of the law. It is only where the perpetuation of the earlier decision would be productive of mischief or inconvenience or would have the effect of deflecting the nation from the course which has been set by the Constitution makers or to use the words of Krishna Iyer, J. in Ambika Prasad Misra vs State of U.P. & Ors. "where national crisis of great momenta to the life, liberty and safety of this country and its millions are at stake or the basic direction of the nation itself is in peril of a shake up" that the Court would be justified in reconsidering its earlier decision and departing from it. It is fundamental that the nation 's Constitution should not be kept in constant uncertainty by judicial review every now and then, because otherwise it would paralyse by perennial suspense all legislative and administrative action on vital issues. The Court should not indulge in judicial stabilisation of State action and a view which has been accepted for a long period of time in a series of decisions and on the faith of which millions of people have acted and a large number of transactions have been effected, should not be disturbed. Let us not forget the words of Justice Roberts of the United States Supreme Court words which are equally applicable to the decision making process in this Court: "The reason for my concern is that the instant decision, overruling that announced about nine years ago, tends to bring adjudications of this tribunal into the same days as a restricted rail road ticket good for this day and train only. It is regrettable that in an era marked by doubt and confusion, an era whose greatest need is steadfastness of thought and purpose, this Court which has been looked to as exhibiting consistency in adjudication, and a steadiness which would hold the balance even in the face of temporary ebbs and flows of opinion, should now itself become the breeder of fresh doubt and confusion in the public mind as to the stability of out institutions. " Here the view that Article 31A is constitutionally valid has been taken in atleast three decisions of this Court, namely, Shankari Prasad 's case, Sajjan Singh 's case and Golak Nath 's case and it has held the field for over 28 years and on the faith of its correctness, millions of acres of agricultural land have changed hands and new agrarian relations have come into being, transforming the entire rural economy. Even though the constitutional validity of Article 31A was not tested in these decisions by reference to the basic structure doctrine, I do not think the Court would be justified in allowing the earlier decisions to be 295 reconsidered and the question of constitutional validity of Article 31A A re opened. These decisions have given a quietus to the constitutional challenge against the validity of Article 31A and this quietus should not now be allowed to be disturbed. I may point that this view which I am taking is supported by the decision of this Court in Ambika Prasad Misra vs State of U.P. and ors. (supra). I may now turn to consider the constitutional challenge against the validity of Article 31B read with the 9th Schedule. This Article was introduced in the Constitution alongwith Article 31A by the Constitution (First Amendment) Act, 1951. Article 31A as originally introduced was confined only to legislation for acquisition of an estate or extinguishment or modification of any rights in an estate and it saved such legislation from attack under Articles 14, 19 and 31. Now once legislation falling within this category was protected by article 31A, it was not necessary to enact another saving provision in regard to the same kind of legislation. But, presumably, having regard to the fact that the constitutional law was still in the stage of evolution and it was not clear whether a law, invalid when enacted, could be revived without being re enacted. Parliament thought that Article 31A, even if retrospectively enacted. may not be sufficient to ensure the validity of a legislation which was already declared void by the courts as in Kameshwar Singh 's case, and therefore considered it advisable to have a further provision in Article 31B to specifically by pass judgments striking down such legislation. That seems to be the reason why Article 31B was enacted and statutes falling within Article 31A were included in the 9th Schedule. Article 31B was conceived together with Article 31A as part of the same design adopted to give protection to legislation providing for acquisition of an estate or extinguishment or modification of any rights in an estate. The 9th Schedule of l? Article 31B was not intended to include laws other than those covered by Article 31A. That becomes clear from the speeches of the Law Minister and the Prime Minister during the discussion on the Constitution (First Amendment) Act, 1951. Dr. Ambedkar admitted of the 9th Schedule that prima facie "it is an unusual procedure" but he went on to add that "all the laws that have been saved by this Schedule are laws that fall under Article 31." Jawaharlal Nehru also told Parliament: "It is not with any great satisfaction or pleasure that we have produced this long Schedule. We do not wish to add to it for two reasons. One is that the Schedule consists of a particular type of legislation, generally speaking, and another type should not come in. " (emphasis supplied). Articles 31A and 296 31B were thus intended to serve the same purpose of protecting legislation falling within a certain category. It was a double barelled protection which was intended to be provided to this category of legislation, since it was designed to carry out agrarian reform which was so essential for bringing about a revolution in the socio economic structure of the country. This was followed by the Constitution (Fourth Amendment) Act, 1956 by which the categories of legislation covered by Article 31A were sought to be expanded by adding certain new clauses after clause (a). Originally, in the draft bill in addition to these clauses, there was one more clause, namely, clause (d) which sought to give protection to a law providing for the acquisition or requisitioning of any immovable property for the rehabilitation of displaced persons and, as a corollary to the proposed amendment of article 31A, it was proposed in Clause (S) of the Bill to add in the 9th Schedule two more State Acts and four Central Acts which fell within the scope of clauses (d) and (f) of the revised Article 31A. Vide cl. (4) of the Statement of objects and Reasons The two State Acts which were proposed to be included in the 9th Schedule were the Bihar Displaced Persons Rehabilitation (Acquisition of Land) Act. 1950 and the United Provinces Land Acquisition (Rehabilitation of Refugees) Act, 1948. The West Bengal Land Development and Planning Act, 1948, which was struck down by this Court in State of West Bengal vs Bela Banerjee, and the invalidity of which really started the entire exercise of the Constitution (Fourth Amendment) Act. 1955, was however, left out of the 9th Schedule in the draft Bill because it included certain purposes of acquisition which fell outside the proposed clause (d) of Article 31A. But, while the Constitution (Fourth Amendment) Act, 1955 was being debated, an ordinance was issued by the Governor of West Bengal omitting with retrospective effect all the items in the definition of "public purpose" except the settlement of displaced persons who had migrated into the State of West Bengal, with the result that the West Bengal Act as amended by the ordinance came within the category of legislation specified in the proposed clause (d) of article 31A. In view of this amendment, the West Bengal Act was included in the 9th Schedule by way of amendment of the draft Bill. It is significant to note that similar Orissa Statute which provided for acquisition of land for purposes going beyond the proposed clause (d) of Article 31A and which was not amended in the same manner as the West Bengal Act, was not included in the 9th Schedule. A Central Act, namely, the Resettlement of Displaced Persons (Land Acquisition) Act, 1948 fell within the proposed clause (d) of article 31A and it was therefore included in the 297 9th Schedule in the draft Bill. The link between Articles 31A and A 31B was thus maintained in the draft Bill, but when the draft Bill went before the Joint Committee. the proposed clause (d) of Article 31A was deleted and the Bihar, U.P. and West Bengal Acts as also the above mentioned Central Act which were originally intended to be within the scope and ambit of Article 31A, became unrelated to that Article. Even so, barring these four Acts, all the other statutes included in the 9th Schedule fell within one or the other clause of the amended article 31A. Subsequent to this amendment. several other statutes dealing with agrarian reform were included in the 9th Schedule by the Constitution (Seventeenth Amendment) Act, 1964 and no complaint can be made in regard to such addition, because all these statutes partook of the character of agrarian reform legislation and were covered by clause (a) Of Article 31A in view of the extended definition of "estate" substituted by the same amending Act. The validity of the Constitution (Seventeenth Amendment) Act, 1964 was challenged before this Court in Golak Nath 's case (supra) and though the Court by a majority of six against five took the view that Parliament has no power to amend any fundamental right, it held that this decision would not affect the validity of the Constitution (Seventeenth Amendment) Act, 1964 and other earlier amendments to the Constitution and thus recognised the validity of the various constitutional amendments which included statutes in the 9th Schedule from time to time upto that date. Then came the Constitution (Twenty Ninth Amendment) Act, 1972 by which two Kerala agrarian reform statutes were included in the 9th Schedule. The validity of the Twenty Ninth Amendment Act was challenged in Keshavananda Bharati 's case, but by a majority consisting of Khanna. J. and the six learned Judges led by Ray. C.J., it was held to be valid. Since all the earlier constitutional amendments were held valid on the basis of unlimited amending power of Parliament recognised in Shankari Prasad 's case and Sajjan Singh 's case and were accepted as valid in Golak Nath 's case and the Twenty Ninth Amendment Act was also held valid in Keshavananda Bharati 's case. though not on the application of the basic structure test, and these constitutional amendments have been recognised as valid over a number of years and moreover, the statutes intended to be protected by them are all falling within Article 31A with the possible exception of only four Acts referred to above, I do not think, we would be justified in re opening the question of validity of these constitutional amendments and hence we hold them to be valid. But, all constitutional amendments made after the decision in Keshavananda Bharati 's case would have to be tested by reference to the basic structure doctrine, for Parliament would then have no excuse for saying that it did not know the limitation 298 on its amending power. It may be pointed out that quite a large number of statutes have been included in the 9th Schedule by the subsequent constitutional amendments and strangely enough, we find for the first time that statutes have been included which have no connection at all with Article 31A or 31C and this device of Article 3113 which was originally adopted only as a means of giving a more definite and assured protection to legislation already protected under Article 31A, has been utilised for the totally different purpose of excluding the applicability of Fundamental Rights to all kinds of statute which have nothing to do with agrarian reform or Directive Principles. This is rather a disturbing phenomenon. Now out of the statutes which are or may in future be included in the 9th Schedule by subsequent constitutional amendments. if there are any which fall within a category covered by Article 31A or 31C, they would be protected from challenge under Articles 14 and 19 and it would not be necessary to consider whether their inclusion in the 9th Schedule J ' is constitutionally valid, except in those rare cases where protection may be claimed for them against violation of any other fundamental] rights. This question would primarily arise only in regard to statutes not covered by Article 31A or 31C and in case of such statutes the Court would have to consider whether the constitutional amendments including such statutes in the 9th Schedule violate the basic structure of the Constitution in granting them immunity from challenge of the fundamental rights. It is possible that in a given case, even an abridgement of a fundamental right may involve violation of the basic structure. It would all depend on the nature of the fundamental right, the extent and depth of the infringement, the purpose for which the infringement is made and its impact on the basic values of the Constitution. Take for example, right to life and personal liberty enshrined in Article 21. This stands on an altogether different footing from other fundamental rights. I do not wish to express any definite opinion, but I may point out that if this fundamental right is violated by any legislation. it may be difficult to sustain a constitutional amendment which seeks to protect such legislation against challenge under article 21. So also where a legislation which has nothing to do with agrarian reform or any Directive Principles infringes the equality clause contained in Article 14 and such legislation is sought to be protected by a constitutional amendment by including it in the 9th Schedule, it may be possible to contend that such constitutional amendment is violative of the egalitarian principle which forms par of the basic structure. But these are only examples which I am giving by way of illustration. for other situations may arise where infraction. 299 of a fundamental right by a statute, if sought to be constitutionally A protected, might affect the basic structure of the Constitution. In every case, therefore, where a constitutional amendment includes a statute or statutes in the 9th Schedule, its constitutional validity would have to be considered by reference to the basic structure doctrine and such constitutional amendment would be liable to be declared invalid to the extent to which it damages or destroys the basic structure of the Constitution by according protection against violation of any particular fundamental right. I will now turn to consider the challenge against the constitutional validity of the unamended article 31C. This article was introduced in the Constitution by the Constitution (Twenty fifth Amendment) Act, 1971 and it provided in its first part that "Notwithstanding anything contained in article 13, no law giving effect to the policy of the state towards securing the principles specified in Cl. (b) or (c) of article 39 shall be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by article 14, article 19 or article 31". It is not necessary to reproduce here the second part of the unamended article 31C because that was declared unconstitutional by the majority decision in Keshavananda Bharti 's case and must consequently be treated as non est. The argument of Mr. Phadke against the constitutional validity of the unamended article 31C was the same as in case of article 31A, namely, that it emasculated the fundamental rights in Articles 14 and 19 and was, therefore, destructive of the basic structure of the Constitution. I shall presently examine this argument on merits and demonstrate that it is unsustainable, but before I do so, I may point out at the outset that it is wholly unnecessary to embark upon a discussion of the merits of this argument, because the first part of the unamended article 31C was held to be constitutionally valid by the majority decision in Keshavananda Bharti 's case and that decision being binding upon as, it is not open to Mr. Phadke to reagitate this question. Out of the thirteen Judges who sat on the Bench in Keshavananda Bharti 's case, Ray, J., as he then was, Palekar, J., Dwivedi, J., Khanna, J., Mathew. J., Beg, J., and Chandrachud, J., (as he then was took the view that the first part of the unamended article 31C was constitutionally valid, because the amending power of parliament was absolute and unlimited. Khanna, J. did not subscribe to the theory that Parliament had an absolute and unlimited right to amend the Constitution and his view was that the power of amendment conferred on Parliament was a limited power restricting Parliament from so amending the Constitution as to alter its basic structure, but even on the basis of this limited power, he upheld the constitutional validity of the first part of the unamended Article 31C. There were thus seven 300 out of thirteen Judges who held that the first part of the unamended article 31C was constitutionally valid, though the reasons which prevailed with Khanna, J. for taking this view were different from those which prevailed with the other six learned Judges. The issue as regards the constitutional validity of the first part of the unamended article 31C which directly arose for consideration before the Court was accordingly answered in favour of the Government and the law laid down by the majority decision was that the first part of the unamended article 31C was constitutional and valid and this declaration of the law must be regarded as binding on the court in the present writ petitions. Mr. Phadke, however, disputed the correctness of this proposition and contended that what was binding on the court was merely the ratio decidendi of Keshavananda Bharati 's case and not the conclusion that the first part of the unamended Article 31C was valid. The ratio decidendi of Keshavananda Bharti 's case, according to Mr. Phadke, was that the amendatory power of Parliament is limited and. it cannot be exercised so as to alter the basic structure of the Constitution and it was this ratio decidendi which was binding upon us and which we must apply for the purpose of determining whether the first part of the unamended Article 31C was constitutionally valid. It is no doubt true, conceded Mr. Phadke that the six learned Judges headed by Ray, J. (as he then was) held the first part of the unamended Article 31C to be constitutionally valid but that was on the basis that Parliament had absolute and unrestricted power to amend the Constitution, which basis was, according to the majority decision, incorrect. lt was impossible to say, argued Mr. Phadke, what would have been the decision of the six learned Judges headed by Ray, J. (as he then was if they had applied the correct test and examined the constitutional validity of the first part of the unamended Article 31C by reference to the yardstick of the limited power of amendment, and their conclusion upholding the validity of the first part of the unamended Article 31C by applying the wrong test could not therefore be said to be binding . On the Court in the present writ petitions. This argument of Mr. Phadke is, in my opinion, not well founded and cannot be accepted. I agree with Mr. Phadke that the ratio decidendi of Keshavananda Bharati 's case was that the amending power of Parliament is limited and, Parliament cannot in exercise of the power of amendment alter the basic structure of the Constitution and the validity of every constitutional amendment has therefore to be judged by applying the test whether or not it alters the basic structure of the constitution and this test was not applied by the six learned Judges headed by Ray, J. (as he 301 then was), but there my agreement ends and I cannot accept further argument of Mr. Phadke that for this reason, the conclusion reached by the six learned Judges and Khanna, J., as regards the constitutionality of the first part of the unamended Article 31C has no validity. The issue before the court in Keshavananda Bharti 's case was whether the first part of the unamended Article 31C was constitutionally valid and this issue was answered in favour of the Government by a majority of seven against six. It is not material as to what were the reasons which weighed with each one of the Judges who upheld the validity of the first part of the unamended Article 31C. The reasons for reaching this conclusion would certainly have a bearing on the determination of the ratio decidendi of the case and the ratio decidendi would certainly be important for the decision of future cases where the validity of some other constitutional amendment may come to be challenged, but so far as the question of validity of the first part of the unamended Article 31C is concerned, it was in so many terms determined by the majority decision in Keshavananda Bharati 's case and that decision must be held binding upon us. Mr. Phadke cannot therefore be allowed to reopen this question and I must refuse to entertain the challenge against the Constitutional validity of the unamended article 31C preferred by Mr. Phadke. But even if it were open to Mr. Phadke to dispute the decision in Keshavananda Bharti 's case and to raise a challenge against the constitutional validity of the first part of the unamended Article 31C, I do not think the challenge can succeed. What the first pari of the unamended Article 31C does is merely to abridge the Fundamental Rights in Articles 14 and 19 by excluding their applicability to legislation giving effect to the policy towards securing the principles specified in clauses (b) and (c) of Article 39. The first part of the unamended Article 31C is basically of the same genre as Article 31A with only this difference that whereas Article 31A protects laws relating to certain subjects, the first part of the unamended Article 31C deals with laws having certain objectives. There is no qualitative difference between Article 31A and the first part of the unamended Article 31C in so far as the exclusion of Articles 14 and 19 is concerned. The fact that the provisions to the first part of the unamended Article 31C are more comprehensive and have greater width compared to those of Article 31A does not make any difference in principle. If Article 31A is constitutionally valid, it is indeed difficult to see how the first part of the unamended Article 31C can be held to be unconstitutional. It may be pointed out that the first part of the unamended Article 31C in fact stands on a more secure footing because it accords protection against infraction of Articles 14 and 19 to legislation enacted for giving effect to the Directive Principles set out in clauses (b) and (c) of Article 39. 302 The legislature in enacting such legislation acts upon the constitutional mandate contained in Article 37 according to which the Directive Principles are fundamental in the governance of the country and it is the duty of the State to apply those principles in making laws. lt is for the purpose of giving effect to the Directive Principles set out in clause (b) and (c) of article 39 in discharge of the constitutional obligation laid upon the State under Article 37 that Fundamental Rights, in Articles 14 and 19 are allowed to be abridged and I fail to see how a constitutional amendment making such a provision can be condemned as violative of the basic structure of the Constitution. Therefore even on first principle, I would be inclined to hold that the first part of the unamended Article 31C is constitutionally valid. That takes us to the next ground of challenge against the constitutional validity of the Constitution (Fortieth Amendment) Act, 1956 in so far as it included the amending Acts 21 of 1975, 47 of 1975 and 2 of 1976 in the 9th Schedule and the Constitution (Forty second Amendment) Act, 1976 in so far as it introduced cls. (4) and (5) in article 368. The petitioners contended under this head of challenge that the Constitution (Fortieth Amendment) Act, 1976 was passed by the Lok Sabha on 2nd April, 1976 and the Constitution Forty Second Amendment) Act, 1976 sometime in November, 1976, but on these dates the Lok Sabha was not validly in existence because it automatically dissolved on 18th March, 1976 on the expiration of its term of 5 years. It is no doubt true that the House of People (Extension of Duration) Act, 1976 was enacted by Parliament under the Proviso to article 83(2) extending the duration of the Lok Sabha for a period of one year, but the argument of the petitioners was that this Act was ultra vires and void, because the duration of, the Lok Sabha could be extended under the proviso to article 83(2) only during the operation of a Proclamation of an Emergency and, in the submission of the petitioners, there was no Proclamation of Emergency in operation at the time when the House of People (Extension of Duration) Act, 1976 was passed. It may be conceded straight away that, strictly speaking, it is superfluous and unnecessary to consider this argument because, even if the Constitution (Fortieth Amendment) Act, 1976 is unconstitutional and void and the Amending Acts 21 of 1975, 47 of 1975 and 2 of 1976 have not been validly included in the 9th Schedule so as to earn the protection of article 318, they are still as pointed out earlier, saved from invalidation by article 31A and so far as the Constitution Forty second Amendment) Act, 1976 is concerned, I have already held that it is outside the constituent power of Parliament in so far as it seeks to include clauses (4) and (5) in article 368. But since a 303 long argument was addressed to us seriously pressing this ground of challenge, I do not think I would be unjustified in dealing briefly with it. It is clear on a plain natural construction of its language that under the Proviso to article 83(2), the duration of the Lok Sabha could be extended only during the operation of a Proclamation of Emergency and if, therefore, no Proclamation of Emergency was in operation at the relevant time, the House of People (Extension of Duration) Act, 1976 would be outside the competence of Parliament under the Proviso to article 83(2). The question which thus requires to be considered is whether there was a Proclamation of Emergency was in operation at the date when the House of People (Extension of Duration Act, 1976 was enacted. The learned Solicitor General appearing on behalf of the Union of India contended that not one but two Proclamations of Emergency were in operation at the material date. One Proclamation issued by the President on 3rd December, 1971 and the other Proclamation issued on 25th June, 1976. By the first Proclamation, the President in exercise of the powers conferred under cl. (1) of article 352 declared that a grave emergency existed whereby the security of India was threatened by external aggression. This Proclamation was approved by Resolutions of both the Houses of Parliament of 4th December, 1971 as contemplated under cl. 2(c) of article 352 and it continued in operation until 21st March, 1977 when it was revoked by a Proclamation issued by the President under clause 2(a) of article 352. The first Proclamation of Emergency was thus in operation at the date when the House of People Extension of Duration) Act, 1976 was enacted by Parliament. The second Proclamation of Emergency was issued by the President under article 352 cl. (1) and by this Proclamation, the President declared that a grave emergency existed whereby the security of India was threatened by internal disturbance. This Proclamation was also in operation at the date of enactment of the House of People (Extension of Duration) Act, 1976 since it was not revoked by another Proclamation issued under cl. 2(a) of article 35 until 21st March, 1977. The argument of the petitioners however, was that, though the first Proclamation of Emergency was validly issued by the President on account of external aggression committed by Pakistan against India, the circumstances changed soon thereafter and the emergency which justified the issue of the Proclamation ceased to exist and consequently the continuance of the Proclamation was malafide and colourable and hence the Proclamation, though not revoked until 21st March, 1972, ceased in law to continue in force and could not be said to be in operation at the material date, namely, 16th February, 1976. So far as the second Proclamation of Emergency is concerned, the petitioners contended that it was illegal and void on 304 three grounds, namely; whilst the first Proclamation of Emergency was in operation, it was not competent to the President under article 352. clause (1) to issue another Proclamation of Emergency; (2) the second Proclamation of Emergency was issued by the President on the advice of the Prime Minister and since this advice was given by the Prime Minister without consulting the Council of Ministers, which alone was competent under the Government of India (Transaction of Business Rules, 1961 to deal with the question of issue of a Proclamation of Emergency, the second Proclamation of Emergency could not be said to have been validly issued by the President; and (3) there was not threat to the security of India on account of internal disturbance, which could justify the issue of a Proclamation of Emergency and the second Proclamation was issued, not for a legitimate purpose sanctioned by clause (1) of article 352 but with a view to perpetuating the Prime Minister in power and it was clearly malafide and for collateral purpose and hence outside the power of the President under article 352 cl.(1). The petitioners had to attack the validity of both the Proclamations of Emergency, the continuance of one and the issuance of another, because even if one Proclamation of Emergency was in operation at the relevant time, it would be sufficient to invest Parliament with power to enact the House of People (Extension of Duration) Act, 1976. Obviously, therefore, if the first Proclamation of Emergency was found to continue in operation at the date of enactment of the House of People (Extension of Duration) Act, 1976, it would be unnecessary to consider whether the second Proclamation of Emergency was validly issued by the President. I will accordingly first proceed to examine whether the first Proclamation of Emergency which was validly issued by the President ceased to be in force by reason of the alleged change in circumstances and was not operative at the relevant time. It is only if this question is answered in favour of the petitioners that it would become necessary to consider the question of validity of the second proclamation of Emergency. I think it is necessary to emphasize even at the cost of repetition that it was not the case of the petitioners that the first Proclamation of emergency when issued, was invalid. It is a historical fact which cannot be disputed that Pakistan committed aggression against India on 3rd December, 1971 and a grave threat to the security of India arose on account of this external aggression. The President was, therefore, clearly justified in issuing the first Proclamation of Emergency under cl. (1) of article 352. The petitioners, however, contended that the circumstances which warranted the issue of the first Proclamation of Emergency ceased to exist and put forward various facts such as the termination of hostilities with Pakistan on 16th December, 1971, the signing of the Simla Pact on 2nd June, 1972, the resumption of postal and 305 telecommunication links on 4th November, 1974 and the conclusion of trade agreement between India and Pakistan on 24th November, 1974 as also several statements made by the Prime Minister and other Ministers from time to time to show that the threat to the security of India on account of external aggression ceased long before 1975 and there was absolutely no justification whatsoever to continue the Proclamation and hence the continuance of the Proclamation was mala fide and in colourable exercise of power and it was liable to be declared as unconstitutional and void. I do not think this contention of the petitioners can be sustained on a proper interpretation of the provisions of article 352. This Article originally consisted of three clauses, but by section 5 of the Constitution (Thirty eighth Amendment) Act, 1975. clauses (4) and (5) were added in this Article and thereafter, by a further amendment made by sec. 48 of the Constitution Forty second Amendments Act, 1976, another clause (2A) was introduced after cl. The whole of this Article is not relevant for our purpose but I shall set out only the material provisions thereof which have a bearing on the controversy between the parties; 352(1): "If the President is satisfied that a grave emergency exists hereby the Security of India or of any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance, he may, by Proclamation, make a declaration to that effect (in respect of the whole of India or cf such part of the territory thereof as may be specified in the Proclamation; (2) A Proclamation issued under cl. (1) (a) may be revoked (or varied) by a subsequent Proclamation; (b) shall be laid before each House of Parliament; (c) shall cease to operate at the expiration of two months unless before the expiration of that period it has been approved by resolutions of both Houses of Parliament. . . . . . . . . . . . . . . . . . . (2A). . . . . . . . . . . . . . . . . . (3) A Proclamation of Emergency declaring that the security of India or of any part of the territory thereof is threatened by war or by external aggression or by internal disturbance may be made before the actual occurrence of war or of any such aggression or disturbance if the President is satisfied the there is 306 imminent danger thereof. (4) The power conferred on the President by this article shall include the power to issue different Proclamations on different grounds, being war or external aggression or internal disturbance or imminent danger of war or external aggression or internal disturbance whether or not there is a Proclamation already issued by the President under cl. (1) and such Proclamation is in operation. (5) Notwithstanding anything in this Constitution: (a) the satisfaction of the President mentioned in clauses (1) and (3) shall be final and conclusive and shall not be questioned in any Court on any ground; (b) subject to the provisions of cl. (2), neither the Supreme Court nor any other court shall have jurisdiction to entertain any question, on any ground, regarding the validity of (i) a declaration made by Proclamation by the President to the effect stated in clause (1); or (ii) the continued operation of such Proclamation. " Now it is obvious on a plain natural construction of the language of cl. (1) of article 352 that the President can take action under this clause only if he is satisfied that a grave emergency exists whereby the security of India or any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance. The satisfaction of the President "that a grave emergency exists whereby the security of India. is threatened whether by war or external aggression or internal disturbance" is a condition precedent which must be fulfilled before the President can issue a Proclamation under article 352 cl. When this condition precedent is satisfied, the President may exercise the power under cl. (1) of article 352 and issue a Proclamation of Emergency. The constitutional implications of a declaration of emergency under article 352 cl. (1) are vast and they are provided in Articles 83(2), 250, 353, 354, 358 and 359. The emergency being an exceptional situation arising out of a national crisis certain wide and sweeping powers have been conferred on the Central Government and Parliament with a view to combat the situation and restore normal conditions. One such power is that given by article 83 (2), which provides that while a Proclamation of Emergency is in operation, Parliament may by law extend its duration for a period not exceeding, one year at a time. Then another power conferred is that under article 250 which says that, while a Proclamation of Emergency is in operation, Parliament shall have the power to make laws for the 307 whole or any part of the territory of India with respect to any of the matters enumerated in the State List. The effect of this provision is that the federal structure based on separation of powers is put out of action for the time being. Another power of a similar kind is given by article 353 which provides that during the time when a Proclamation of Emergency is in force, the executive powers of the Union shall extend to the giving of directions to any State as to the manner in which the executive power thereof is to be exercised. This provision also derogates from the federal principle which forms the basis of the Constitution. Then we come to article 354 which confers power on the President, during the operation of a Proclamation of Emergency, to direct that provisions relating to distribution of revenues under articles 268 to 270 shall have effect subject to such modifications or exceptions as he thinks fit. Another drastic consequence of the Proclamation of Emergency is that provided in Article 358 which suspends the operation of the Fundamental Rights guaranteed under article 19 while a Proclamation of Emergency is in operation. article 359 cl (1) em powers the President during the operation of a Proclamation of Emergency to make an order suspending the enforcement of any of the Fundamental Rights conferred by Part III and cl. (A) introduced by the Constitution (Thirty Eighth Amendment) Act, 1975 suspends the operation of those Fundamental Rights of which the enforcement has been suspended by the President by an order made under clause (1). These are the drastic consequences which ensue upon the making of a declaration of emergency. The issue of a Proclamation of Emergency makes serious inroads into the principle of federalism and emasculates the operation and efficacy of the Fundamental Rights. The power of declaring an emergency is therefore a power fraught with grave consequences and it has the effect of disturbing the entire power structure under the Constitution. But it is a necessary power given to the Central Government with a view to arming it adequately to meet an exceptional situation arising out of threat to the security of the country on account of war or external aggression or internal disturbance or imminent danger of any such calamity. It is therefore a power which has to be exercised with the greatest care and caution and utmost responsibility. It will be convenient at this stage to consider the question as to whether and if so to what extent, the Court can review the constitutionality of a Proclamation of Emergency issued under Article 352 cl. There were two objections put forward on behalf of the respondents against the competence of the Court to examine the question of validity of a Proclamation of Emergency. One objection was that the question whether a grave emergency exists whereby the security of India or any part thereof is threatened by war or external aggression 308 or internal disturbance is essentially a political question entrusted by the Constitution to the Union Executive and on that account, it is not justiciable before the court. It was urged that having regard to the political nature of the problem, it was not amenable to judicial determination and hence the court must refrain from inquiring into it. The other objection was that in any event by reason of clauses (4 and 5) of Article 352, the Court had no jurisdiction to question the satisfaction of the President leading to the issue of a Proclamation of Emergency or to entertain any question regarding the validity of the Proclamation of Emergency or its continued operation. Both these objections are in my view unfounded and they do not bar judicial review of the validity of a Proclamation of Emergency issued by the President under Article 352 cl. My reasons for saying so are as follows: It is axiomatic that if a question brought before the court is purely a political question not involving determination of any legal or constitutional right or obligation, the court would not entertain it, since the court is concerned only with adjudication of legal rights and liabilities. But merely because a question has a political complexion, that by itself is no ground why the court should shrink from performing its duty under the Constitution, if it raises an issue of constitutional determination. There are a large number of decisions in the United States where the Supreme Court has entertained actions having a political complexion because they raised constitutional issue. Vide Gomallion vs Lightfoot and Baker vs Carr. The controversy before the court may be political in character, but so long as it involves determination of a constitutional question, the court cannot decline to entertain it. This is also the view taken by Gupta, J. and myself in State of Rajasthan vs Union of India. I pointed out in my judgment in that case and I still stand by it, that merely because a question has a political colour, the court cannot fold its hands in despair and declare "Judicial hands off". So long as the question is whether an authority under the Constitution has acted within the limits of its power or exceeded it, it can certainly be decided by the court. Indeed it would be its constitutional obligation to do so. I have said before I repeat again that the Constitution is suprema lex the paramount law of the land, and there is no department or branch of government above or beyond it. Every organ of government, be it the executive or the legislature or the judiciary, derives its authority from the Constitution and it has to act within the limits of its authority and whether it has done so or not is for the Court to decide. The Court is H 309 the ultimate interpreter of the Constitution and when there is manifestly unauthorised exercise of power under the Constitution, it is the duty of the Court to intervene. Let it not be forgotten, that to this Court as much as to other branches of government, is committed the conservation and furtherance of constitutional values. 'the Court 's task is to identify those values in the constitutional plan and to work them into life in the cases that reach the court. "Tact and wise restraint ought to temper any power but courage and the acceptance of responsibility have their place too. " The Court cannot and should not shirk this responsibility, because it has sworn the oath of allegiance to the Constitution and is also accountable to the people of this country. It would not therefore, be right for the Court to decline to examine whether in a given case there is any constitutional violation involved in the President issuing a Proclamation of Emergency under cl. ( I) of Article 352. But when I say this, I must make It clear that the constitutional jurisdiction of this Court does not extend further than saying whether the limits on the power conferred by the Constitution on the President have been observed or there is transgression of such limits. Here the only limit on the power of the President under Article 35 cl. (1) is that the President should be satisfied that a grave emergency exists whereby the security of India or any part thereof is threatened whether by war or external aggression or internal disturbance. The satisfaction of the President is a subjective, one and cannot be decided by reference to any objective tests. It is deliberately and advisedly subjective because the matter in respect to which he is to be satisfied is of such a nature that its decision must necessarily be left to the Executive branch of Government. There may be a wide range of situations which may arise and their political implications and consequences may have to be evaluated in order to decide whether there is a situation of grave emergency by reason of the security of the country being threatened by war or external aggression or internal disturbance. It is not a decision which can be based on what the Supreme Court of the United States has described as "judiciably discoverable and manageable standards". It would largely be a political judgment based on assessment of diverse and varied factors, fast changing situations. potential consequences and a host of other imponderables. It cannot therefore, by its very nature, be a fit subject matter for adjudication by judicial methods and materials and hence it is left to the subjective satisfaction of the Central Government which is best in a position to decide it. The court cannot go into the question of correctness or adequacy of the facts and circumstances on which the satisfaction of the Central Government is based. That would be a dangerous exercise for the Court, both because it is not a fit instrument for determining a question of this kind and also because the court would thereby usurp 310 the function of the executive and in doing so, enter the "political thicket" which it must avoid, if it is to retain its legitimacy with the people. But one thing is certain that if the satisfaction is mala fide or is based on wholly extraneous and irrelevant grounds, the court would have jurisdiction to examine it, because in that case there would be no satisfaction of the President in regard to the matter on which he is required to be satisfied. The satisfaction of the President is a condition precedent to the exercise of power under article 352 cl. (1) and if it can be shown that there is no satisfaction of the President at all, the exercise of the power would be constitutionally invalid. It is true that by reason of clause (5)(a) of Article 352, the satisfaction of the President is made final and conclusive, arid cannot be assailed on any ground, but, as I shall presently point out, the power of judicial review is a part of the basic structure of the Constitution and hence this provision debarring judicial review would be open to attack on the ground that it is unconstitutional and void as damaging or destroying the basic structure. This attack against constitutionality can, however, be averted by reading the provision to mean and that is how I think it must be read that the immunity from challenge granted by it does not apply where the challenge is not that the satisfaction is improper or unjustified but that there is no satisfaction at all. In such a case, it is not the satisfaction arrived at by the President which is challenged but the existence of the satisfaction itself. Where therefore the satisfaction is absurd or perverse or mala fide or based on a wholly extraneous and irrelevant ground, it would be no satisfaction at all and it would be liable to be challenged before a court, notwithstanding clause (5)(a) of Article 352. It must, of course, be conceded that in most cases it would be difficult if not impossible, to challenge the exercise of power under Article 352 clause (1) even on this limited ground, because the facts and circumstances on which the satisfaction is based would not be known, but where it is possible, the existence cf the satisfaction can always be challenged on the ground that it is mala fide or based on a wholly extraneous or irrelevant ground. It is true that so far there is no decision of this court taking the view that the validity of a Proclamation of Emergency can be examined by the court though within these narrow limits. But merely because there has been no occasion for this Court to pronounce on the question of justiciability of a Proclamation of Emergency no inference can be drawn that a Proclamation of Emergency is immune from judicial scrutiny. The question whether or not a Proclamation of Emergency can be judicially reviewed on the ground that it is mala fide or an abuse of power of the President did arise before this Court in Gulam Sarwai vs Union of India. but the court declined to 311 express any opinion on this question since no material was placed before the Court making out a case of mala fides or abuse of power. Undoubtedly, in the subsequent decision of this Court in Bhutnath Mato vs State of West Bengal there are one or two observations which might seem to suggest at first blush that a Proclamation of Emergency being a political matter is "de hors our ken", but if one looks closely at the judgment of Krishna Iyer, J. in that case, it will be apparent that he does not lay down that a Proclamation of Emergency cannot be reviewed by the judiciary even on a limited ground and leaves that question open and rejects the contention of the petitioner challenging the continuance of Emergency only on the ground that "the onus of establishing the continuation of Emergency and absence of any ground whatever for the subjective satisfaction of the President, heavy as it is, has hardly been discharged, "and consequently it would be an academic exercise in constitutional law to pronounce on the question of judicial reviewability of a Proclamation of Emergency. There is thus no decision of this court holding that a Proclamation of Emergency is beyond the judicial ken and I am not fettered by any such decision compelling me to take a view different from the one which I have expounded in the preceding paragraph of this opinion. In fact, the judgment of Gupta, J. and myself in State of Rajasthan vs Union of India (supra) completely supports me in the view I am taking. A Proclamation of Emergency is undoubtedly amenable to judicial review though on the limited ground that no satisfaction as required by Article 352 was arrived at by the President in law or that the satisfaction was absurd or perverse or mala fide or based on an extraneous or irrelevant ground. Now the question arises whether the continuance of a Proclamation of Emergency valid when issued can be challenged before the court on the ground that the circumstances which necessitated or justified its issuance have ceased to exist. Can the court be asked to declare that the Proclamation of Emergency has ceased to exist and is no longer in force or does the Proclamation continue to be in force until it is revoked by another Proclamation under clause 2(a) of Article 352. The answer to this question depends on the interpretation of clause (2) of Article 352. That clause says in sub clause (a) that a Proclamation of Emergency issued under clause (1) may be revoked by a subsequent Proclamation. Sub clause (b) of that clause requires that a Proclamation issued under clause (1) shall be laid before each House of Parliament and under sub clause (c) such a Proclamation ceases to operate at the expiration of two months, unless it has been approved by both Houses of Parliament before the expiration of two 312 months. It is clear from this provision that a Proclamation of Emergency validly issued under clause (1) would continue to operate at least for a period of two months and if before the expiration of that period, it has been approved by resolutions of both Houses of Parliament, it would continue to operate further even beyond the period of two months, and the only way in which it can be brought to an end is by revoking it by another Proclamation issued under clause 2(a). There is no other way in which it can cease to operate. Neither Article 352 nor any other Article of the Constitution contains any provision saying that a Proclamation of Emergency validly issued under clause (1) shall cease to operate as soon as the circumstances warranting its issuance have ceased to exist. It is, therefore, clear on a plain natural interpretation of the language of sub clauses (a) to (c) of clause (2 that so long as the Proclamation of Emergency is not revoked by another Proclamation under sub clause (2) (a), it would continue to be in operation irrespective of change of circumstances. It may be pointed out that this interpretation of the provision of clause (2) of Article 352 is supported by the decision of this Court in Lakhan Pal vs Union of India where dealing with a similar contention urged on behalf of the petitioner that the continuance of the emergency which was declared on 26th October, 1962 was a fraud on the Constitution. this Court speaking through Sarkar, C. J. pointed out that "the only way a proclamation ceases to have effect is by one of the events mentioned in this clause" and since neither had happened, the Proclamation must be held to have continued in operation. The petitioner urged in that case that armed aggression which justified the issue of the Proclamation of Emergency had come to an end and the continuance of the Proclamation was therefore unjustified. But this contention was negatived on the ground that the Proclamation having been approved by the two Houses of Parliament within a period of two months of its issuance, it could cease to have effect only if revoked by another Proclamation and that not having happened, the Proclamation continued to be in force. It is true that the power to revoke a Proclamation of Emergency is vested only in the Central Government and it is possible that the Central Government may abuse this power by refusing to revoke a Proclamation of Emergency even though the circumstances justifying the issue of Proclamation have ceased to exist and thus prolong baselessly the state of emergency obliterating the Fundamental Rights and this may encourage a totalitarian trend. But the Primary and real safeguard of the citizen against such abuse of power lies in "the good sense of the people and in the system of representative and responsible Government" which is provided in the Constitution. Additionally, it may be possible for the citizen in a given case to move 313 the court for issuing a writ of mandamus for revoking the Proclamation of Emergency if he is able to show by placing clear and cogent material before the court that there is no justification at all for the continuance of the Proclamation of Emergency. But this would be a very heavy onus because it would be entirely for the executive Government to be satisfied whether a situation has arisen where the Proclamation of Emergency can be revoked. There would be so many facts and circumstances and such diverse considerations to be taken into account by the executive Government before it can be satisfied that there is no longer any grave emergency whereby the security of India is threatened by war or external aggression or internal disturbance. 'this is not a matter which is a fit subject matter for judicial determination and the court would not interfere with the satisfaction of the executive Government in this regard unless it is clear on the material on record that there is absolutely no justification for the continuance of the Proclamation of Emergency and the Proclamation is being continued mala fide or for a collateral purpose. The court may in such a case, if satisfied beyond doubt, grant a writ of mandamus directing the Central Government to revoke the Proclamation of Emergency. But until that is done, the Proclamation of Emergency would continue in operation and it cannot be said that, though not revoked by another Proclamation, it has still ceased to be in force. Here, in the present case it was common ground that the first Proclamation of Emergency issued on 3rd December 1971 was not revoked by another Proclamation under clause 2(a) of Article 352 until 21st March 1977 and hence at the material time when the House of People (Extension of Duration) Act, 1976 was passed, the first Proclamation of Emergency was in operation. Now if the first Proclamation of Emergency was in operation at the relevant time, it would be sufficient compliance with the requirement of the proviso to clause (2) of Article 83 and it would be unnecessary to consider whether the second Proclamation of Emergency was validly issued by the President. But, contended the petitioners, the House of People (Extension of Duration) Act, 1976 on a proper interpretation of section 2 postulated the operational existence of both the Proclamations of Emergency and if either of them was not in existence at the material date, the Act would be inoperative and would not have the effect of extending the duration of the Lok Sabha. It was therefore not enough for the respondents to establish that the first Proclamation of Emergency was in operation at the relevant date, but it was further necessary to show that the second Proclamation of Emergency was also in operation and hence it was necessary to consider whether the second Proclamation of Emergency was validly issued by the President. The respondents sought to answer this contention 314 of the petitioners by saying that on a proper construction of the language of section 2, it was not a condition precedent to the operation. of the House of People (Extension of Duration Act, 1976 that both the Proclamations of Emergency should be in operation at the date when the Act was enacted. The House of People (Extension of Duration) Act, 1976 no doubt referred to both the Proclamations of Emergency being in operation but that was merely, said the respondents, by way of recital and it was immaterial whether this recital was correct or in correct, because so long as it could be objectively established that on Proclamation of Emergency at least was in operation, the requirement of the proviso to Article 83 clause (2) would be satisfied and the Act would be within the competence of Parliament to enact. These rival contentions raised a question of construction of section 2 of the House of People (Extension of Duration) Act, 1976. It is a simple question which does not admit of much doubt or debate and a plain grammatical reading of section 2 is sufficient to answer it. It would be convenient to reproduce section 2 which co incidentally happens to be the only operative section of the Act: "Sec. 2: The period of five years (being the period for which the House of the People may, under clause (2) of Article 83 of the Constitution, continue from the date appointed for its first meeting) in relation to the present House of the People shall, while the Proclamations of Emergency issued on the 3rd day of December, 1971 and on the 25th day of June, 1975, are both in, operation, be extended for a period of one year: Provided that if both or either of the said Proclamations cease or ceases to operate before the expiration of the said period of one year, the present House of the People shall, unless previously dissolved under clause (2) of Article 83 of the Constitution,. continue until six months after the cesser of operation OF the said Proclamations or Proclamation but not beyond the said period of one year. " While interpreting the language of this section, it is necessary to bear in mind that the House of People (Extension of Duration) Act, 1976 was enacted under the proviso to clause (2) of Article 83 for the purpose of extending the duration of the Lok Sabha and it was a condition precedent to the exercise of this power by Parliament that there should be a Proclamation of Emergency in operation at the date when the Act was enacted. Now according to Parliament there were two Proclamations of Emergency which were in operation at the material date, one issued on 3rd December 1971 and the other on 25th June 1975 and the condition precedent for the exercise of the power under the proviso to cl. (2) of Article 83 to enact the House of People (Extension 315 of Duration) Act, 1976 was satisfied. It was, from the point of view of legislative drafting, not necessary to recite the fulfillment of this condition precedent, but the draftsman of the Act, it seems, thought it advisable to insert a recital that this condition precedent was satisfied and he, therefore, introduced the words "while the Proclamations of Emergency issued on the 3rd day of December, 1971 and on the 25th day of June, 1975 are both in operation" before the operative part in sec. 2 of the Act. These words were introduced merely by way of recital of the satisfaction of the condition precedent for justifying the exercise of the power under the proviso to clause (2) of Article 83 and they were not intended to lay down a condition for the operation of sec. 2 of the Act. Section 2 clearly and in so many terms extended the duration of the Lok Sabha for a period of one year and this extension was not made dependent on both the Proclamations of Emergency being in operation at the date of the enactment of the Act. It was for a definite period of one year that the extension was effected and it was not co extensive with the operation of both the Proclamations of Emergency. The extension for a period of one year was made once and for all by the enactment of section 2 and the reference to both the Proclamations of Emergency being in operation was merely for the purpose of indicating that both the Proclamations of Emergency being in operation. Parliament had competence to make the extension. It was therefore not at all necessary for the efficacy of the extension that both the Proclamations of Emergency should be in operation at the date of enactment of the Act. Even if one Proclamation of Emergency was in operation at the material date, it would be sufficient to attract the power of Parliament under the proviso to article 83 clause (2) to enact the Act extending the duration of the Lok Sabha. Of course, it must be concerned that Parliament proceeded on the assumption that both the Proclamations of Emergency were in force at the relevant date and they invested Parliament with power to enact the Act, but even if this legislative assumption were unfounded, it would not make any difference to the validity of the exercise of the power, so long as there was one Proclamation of Emergency in operation which authorised Parliament to extend the duration of the Lok Sabha wader the proviso to clause (2) of Article 83. It is true that the proviso to sec. 2 enacted that if both or either of the Proclamations of Emergency cease or ceases to operate before the expiration of the extended period of one year, the Lok Sabha shall continue until six months after the cesser of operation of the said Proclamations or Proclamation, not going beyond the period of one year, but the opening part of this proviso can have application only in relation to a Proclamation of Emergency which was in operation at the date of enactment of the Act. If such a Proclamation of Emergency which was in operation at the 316 material date ceased to operate before the expiration of the extended period of one year, then the term of the Lok Sabha would not immediately come to an end, but it would continue for a further period of six months but not so to exceed the extended period of one year. This provision obviously could have no application in relation to the second Proclamation of emergency if it was void when issued. In such a case, the second Proclamation not being valid at all at the date of issue would not be in operation at all and it could not cease to operate after the date of enactment of the Act. The proviso would in that event have to be read as relating only to the first Proclamation of Emergency, and since that Proclamation of Emergency continued until it was revoked on 21st March, 1977, the duration of the Lok Sabha was validly extended for a period of one year from 18th March, 1976 and hence there was a validly constituted Lok Sabha on the dates when the Constitution (Fortieth Amendment) Act, 1976 and the Constitution (Forty second Amendment) Act, 1976 were passed by Parliament. On this view it is not at all necessary to consider whether the second Proclamation of Emergency was validly issued by the President. It is the settled practice of this Court not to say more than is necessary to get a safe resting place for the decision and I do not think that any useful purpose will be served by examining the various grounds of challenge urged against the validity of the second Proclamation of Emergency, particularly since clause (3) has been introduced in article 352 by the Constitution (Forty Fourth Amendment) Act, 1978 requiring that a Proclamation of Emergency shall not be issued by the President unless the decision of the Union Cabinet recommending the issue of such Proclamation has been communicated to him in writing and clause (9) of Article 352 introduced by the Constitution (Thirty eighth Amendment) Act. 1975 and renumbered by the Constitution (Forty Fourth Amendment) Act, 1978 empowers the President to issue different Proclamations on different grounds. I would, therefore. reject the challenge against the validity of the Constitution (Fortieth Amendment) Act, 1976 and the Constitution (Forty second Amendment) Act, 1976 based on the ground that on the dates when these Constitution Amending Acts were enacted, the Lok Sabha was not validly in existence. That takes me to the challenge against the constitutional validity of the amendment made in Article 31. by section 4 of the Constitution (Forty second Amendment) Act, 1976. This amendment substitutes the words "all or any of the principles laid down in Part IV" for the words "the principles specified in clause (b) or clause (c) of Article 39" and so amended; Article 31C provides that "Notwithstanding anything contained in Article 13, no law giving effect to the policy of the State towards securing all or any of the principles laid dow. in Part IV shall 317 be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by Article 14 or Article 19". The amended Article 31C gives primacy to Directive Principles over Fundamental Rights in case of conflict between them and the question is whether this amendment is in any way destructive of the basic structure of the Constitution. To answer this question satisfactorily, it is necessary to appreciate the inter relationship between Fundamental Rights and Directive Principles and for this purpose it would be useful to trace briefly the history of their enactment in the Constitution. The genesis of Fundamental Rights and Directive Principles is to be found in the freedom struggle which the people of India waged against the British rule under the aegis of the Indian National Congress led by Mahatma Gandhi, Jawaharlal Nehru and other national leaders. These great leaders realised the supreme importance of the political and civil rights of the individual. because they knew from their experience of the repression under the British rule as also from the recent events of history including the two World Wars that these rights are absolutely essential for the dignity of man and development of his full personality. But, at the same time, they were painfully conscious that in the socio economic conditions that prevailed in the country. only an infinitesimal fraction of the people would be able to enjoy these civil and political rights. There were millions of people in the country who were steeped in poverty and destitution and for them, these civil and political rights had no meaning. It was realised that to the large majority of people who are living an almost sub human existence in conditions of object poverty and for whom life is one long unbroken story of want and destitution, notions of individual freedom and liberty, though representing some of the most cherished values of free society, would sound as empty words bandied about only in the drawing rooms of the rich and well to do and the only solution for making these rights meaningful to them was to re make the material conditions and usher in a new social order where socio economic justice will inform all institutions of public life so that the pre conditions of fundamental liberties for all may be secured. It was necessary to create socio economic conditions in which every citizen of the country would be able to exercise civil and politically rights and they will not remain the preserve of only a fortunate few. The national leaders, therefore, laid the greatest stress on the necessity of bringing about socio economic regeneration and ensuring social and economic justice. Mahatma Gandhi, the father of the nation, said in his inimitable style in words, full of poignancy: "Economic equality is the master key to non violent independence. A non violent system of Government is an impossibility so long as the wide gulf between the rich and the hungry 318 millions persists. The contrast between the palaces of New Delhi and the miserable hovels of the poor labouring class cannot last one day in a free India in which the poor will enjoy the same power as the rich in the land. A violent and bloody revolution is a certainty one day, unless there is voluntary abdication of riches and the power that riches give and sharing them for common good". Jawaharlal Nehru also said in the course of his presidential address to the Lahore Congress Session of 1929: "The philosophy of socialism has gradually permeated the entire structure of the society, the world over and almost the only point in dispute is the phase and methods of advance to its full realisation. India will have to go that way too if she seeks to end her poverty and inequality, though she may evolve her own methods and may adapt the ideal to the genius of her race. Then again, emphasizing the intimate and inseverable connection between political independence and social and economic freedom, he said: "If an indigenous Government took the place of the foreign Government and kept all the vested interests intact, this would not be even the shadow of freedom . . . . . . . . . . . . . India 's immediate goal can only be considered in terms of the ending of the exploitation of her people. Politically, it must mean independence and cession of the British connection, economically and socially, it must mean the ending of all special class privileges and vested interests. " The Congress Resolution of 1929 also emphasized the same theme of socio economic reconstruction when it declared: "The great poverty and misery of the Indian people are due, not only to foreign exploitation in India, but also to the economic structure of society, which the alien rulers support so that their exploitation may continue. In order therefore to remove this poverty and misery and to ameliorate the condition of the Indian masses, it is essential to make revolutionary changes in the present economic and social structure of society and to remove the gross inequalities. " The Resolution passed by the Congress in 1931 proceeded to declare that in order to end the exploitation of masses, political freedom must include social and economic freedom of the starving mil lions. The Congress Election Manifesto of 1945 also reiterated the same thesis when it said that "the most vital and urgent of India 's 319 problems is how to remove the curse of poverty and raise the standard of masses" and for that purpose it is "necessary. . . . . to prevent the concentration of wealth and power in the hands of individuals and groups and to prevent vested interests inimical to society from "growing". This was the socio economic philosophy which inspired the framers of the Constitution to believe that the guarantee of individual freedom was no doubt necessary to be included in the Constitution, but it was also essential to make provisions for restructuring the socio economic order and ensuring social and economic justice to the people. This was emphasized by Jawaharlal Nehru when, speaking on the resolution regarding the aims and objectives before the Constituent Assembly, he said: "The first task of this Assembly is to free India through a new Constitution, to feed the starving people and clothe the naked masses and give every Indian fullest opportunity to develop himself according to his capacity. In fact, as pointed out by K. Santhanan, a prominent southern member of the Constituent Assembly, there were three revolutions running parallel in India since the end of the first World War. The political revolution came to an end on 15th August, 1947 when India became independent but clearly political freedom cannot be an end in itself. it can only be a means to an end, "that end being" as eloquently ex pressed by Jawaharlal Nehru "the raising of the people,. . . . to higher levels and hence the general advancement of humanity. " It was therefore necessary to carry forward and accomplish the social and economic revolutions. The social revolution was meant to get India "out of the mediavalism based on birth, religion, custom and community and reconstruct her social structure on modern foundations of law, individual merit and secular education," while the economic revolution was intended to bring about "transition from primitive rural economy to scientific and planned agriculture and industry. " Dr. Radhakrishnan who was a member of the Constituent Assembly and who later became the President of India also emphasised that India must have a socio economic revolution designed not only to bring about the real satisfaction of the fundamental needs of the common man hut to go much deeper and bring about "a fundamental change in the structure of Indian society. " It was clearly realised by the framers of the Constitution that on the achievement of this great social and economic change depended the survival of India. "If we cannot solve this problem soon", Jawaharlal Nehru warned the Constituent Assembly "all our paper Constitutions will become useless and purposeless." The objectives Resolution which set out the and 320 objectives before the Constituent Assembly in framing the Constitution and which was passed by the Constituent Assembly in January 1947 before embarking upon the actual task of Constitution making, therefore, expressed the resolve of the Constituent Assembly to frame a constitution "wherein shall be guaranteed and secured to all the people of India justice, social, economic and political, equality of status and of opportunity before the law; freedom of thought, expression, belief, faith, worship, vocation, association and action subject to law and public morality and wherein adequate safeguards shall be provided for minority, backward and trial areas and depressed and other backward classes." These objectives were incorporated by the Constitution makers in the Preamble of the Constitution and they were a sought to be secured by enacting Fundamental Rights in Part III and Directive Principles in Part IV. It is not possible to fit Fundamental Rights and Directive Principles in two distinct and strictly defined categories, but it may be stated broadly that Fundamental Rights represent civil and political rights while Directive Principles embody social and economic rights. Both are clearly part of the broad spectrum of human rights. If we look at the Universal Declaration of Human Rights adopted by the General Assembly of the United Nations on 18th December 1948. we find that it contains not only rights protecting individual freedom (See Articles 1 to 21) but also social and economic rights intended to ensure socio economic justice to every one (See Articles 22 to 29). There are also two International Covenants adopted by the General Assembly for securing human rights, one is the International Covenant on Civil and Political Rights and the other is the International Covenant on Economic, Social and Cultural Rights. Both are international instruments relating to human rights. It is therefore not correct to t say that Fundamental Rights alone are based on human rights while Directive Principles fall in some category other than human rights. The socio economic rights embodied in the Directive Principles are as much a part of human rights as the Fundamental Rights. Hegde and Mukherjea, JJ. were. to my mind, right in saying in Keshavananda Bharati 's case at page 312 of the Report that "the Directive Principles and the Fundamental Rights mainly proceed on the basis of human Rights. " Together, they are intended to carry out the objectives set out in the Preamble of the Constitution and to establish an egalitarian social order informed with political, social and economic justice and II ensuring dignity of the individual not only to a few privileged persons but to the entire people of the country including the have nots and the handicapped, the lowliest and the lost, 321 Now it is interesting to note that although Fundamental Rights and Directive Principles appear in the Constitution as distinct entities, there was no such demarcation made between them during the period prior to the framing of the Constitution. If we may quote the words of Granville Austin in his book; "Both types of rights had developed as a common demand, products of the national and social revolutions, of their almost inseparable intertwining. and of the character of Indian politics itself". They were both placed on the same pedestal and treated as falling within the same category compendiously described as "Fundamental Rights". The Sapru Committee in its Constitutional Proposals made in 1945, recommended that the declaration of Fundamental Rights in its wider sense was absolutely necessary and envisaged these rights as falling in two classes; one justiciable and the other non justiciable the former being enforceable in Courts of law and the latter, not. The Committee however, felt difficulty in dividing the Fundamental Rights into these two classes and. left the whole issue to be settled by the Constitution making body with the observation that though the task was difficult, it was by no means impossible. This suggestion of the Sapru Committee perhaps drew its inspiration from the Irish Constitution of 1937, which made a distinction between justiciable and non justiciable rights and designated the former as Fundamental Rights and the latter as Directive Principles of Social Policy. Dr. Lauter pacht also made a similar distinction between justiciable and non justiciable rights in his "International Bill of the Rights of Men". The substantial provisions of this Bill were in two parts; Part I dealt with personal or individual rights enforceable in Courts of Law while Part II set out social and economic rights incapable of or unsuitable for such enforcement. Sir B. N. Rau, who was the Constitutional Adviser to the Government of India, was considerably impressed by these ideas and he suggested that the best way of giving effect to the objectives set out in the objectives Resolution was to split up the objectives into Fundamental Rights and Fundamental Principles of State Policy, the former relating to personal and political rights enforceable in Courts of Law and the latter relating to social and economic rights and other matters, not so enforceable and proposed that the Chapter on Fundamental Rights may be split up into two parts; Part A dealing with the latter kind of rights under the heading "Fundamental Principles of Social Policy" and Part dealing with the former under the heading "Fundamental Rights". The Fundamental Rights Sub Committee also recommended that "the list of fundamental rights should be prepared in two parts, the first part consisting of rights enforceable by appropriate legal process and the second consisting of Directive Principles of Social Policy". A week later, while moving for consideration, the Interim Report of Fundamental Rights, Sardar Vallabhbhai Patel said: 322 "This is a preliminary report or an interim report because the Committee when it sat down to consider the question of fixing the fundamental rights and its incorporation into the Constitution. came to the conclusion that the Fundamental Rights should be divided into two parts the first part justiciable and the other non justiciable. " This position was reiterated by Sardar Vallabhbhai Patel when he said while presenting the Supplementary Report: "There were two parts of the Report; one contained Fundamental Rights which were justiciable and the other part of the Report referred to Fundamental Rights which were not justiciable but were directives. " It will, therefore, be seen that from the point of view of importance and significance no distinction was drawn between justiciable and non justiciable rights and both were treated as forming part of the rubric of Fundamental Rights, the only difference being that whereas the former were to be enforceable in Courts of Law, the latter were not to be so enforceable. This proposal of dividing the fundamental rights into two parts, one part justiciable and the other non justiciable, was however not easy of adoption, because it was a difficult task to decide in which category a particular fundamental right should be included. The difficulty may be illustrated by pointing out that at one time the right to primary education was included in the draft list of Fundamental Rights, while the equality clause figured in the draft list of Fundamental Principles of Social Policy. But ultimately a division of the Fundamental Rights into justiciable and non justiciable rights was agreed upon by the Constituent Assembly and the former were designated as "Fundamental Rights" and the latter as "Directive Principles of State Policy". It has sometimes been said that the Fundamental Rights deal with negative obligations of the State not to encroach on individual freedom, while the Directive Principles impose positive obligations on the State to take certain kind of action. But, I find it difficult to subscribe to this proposition because, though the latter part may be true that the Directive Principles require positive action to be taken by the State, it is not wholly correct to say that the Fundamental Rights impose only negative obligations on the State. There are a few fundamental rights which have also a positive content and that has been. to some extent, unfolded by the recent decisions of this Court in Hussainara Khatton vs State of Bihar, Madhav Hayawadanrao Hoskot vs State of Maharashtra and Sunil Batra etc. vs Delhi Administration & Ors. There are new dimensions of 323 the Fundamental Rights which are being opened up by this Court and the entire jurisprudence of Fundamental Rights is in a stage of resurgent evolution. Moreover, there are three Articles, namely, article 15(2), article 17 and article 23 within the category of Fundamental Rights which are designed to protect the individual against the action of other private citizens and seem to impose positive obligations on the State to ensure this protection to the individual. I would not, therefore, limit the potential of the Fundamental Rights by subscribing to the theory that they are merely negative obligations requiring the State to abstain as distinct from taking positive action. The only distinguishing feature, to my mind, between Fundamental Rights and Directive Principles is that whereas the former are enforceable in a Court of Law, the latter, are not. And the reason for this is obvious; it has been expressed succinctly by the Planning Commission in the following words: "The non justiciability clause only provides that the infant State shall not be immediately called upon to account for not fulfilling the new obligations laid upon it. A State just awakened to freedom with its many pre occupations might be crushed under the burden unless it was free to decide the order, the time, the place and the mode of fulfilling them. " The social and economic rights and other matters dealt with in the Directive Principles are by their very nature incapable of judicial enforcement and moreover, the implementation of many of those rights would depend on the state of economic development in the country, the availability of necessary finances and the Government 's assessment of priority of objectives and values and that is why they are made non justiciable. But merely because the Directive Principles are non justiciable, it does not follow that they are in any way subservient or inferior to the Fundamental Rights. The Indian Constitution is first and foremost a social document. The majority of its provisions are either directly aimed at furthering the goals of the socio economic revolution or attempt to foster this revolution by establishing the conditions necessary for its achievement. Yet despite the permeation of the entire Constitution by the aim of national renascence, says Granville Austin, "the core of the commitment to the social revolution lies . . . in the Fundamental Rights and the Directive Principles of State Policy. " These are the conscience of the Constitution and, according to Granville Austin, "they are designed to be the Chief instruments in bringing 324 about the great reforms of the socio economic revolution and realising the constitutional goals of social, economic and political justice for all. The Fundamental Rights undoubtedly provide for political justice by conferring various freedoms on the individual, and also make a significant contribution to the fostering of the social revolution by aiming at a society which will be egalitarian in texture and where the rights of minority groups will be protected. But it is in the Directive Principles that we find the clearest statement of the socioeconomic revolution. The Directive Principles aim at making the Indian masses free in the positive sense, free from the passivity engendered by centuries of coercion by society and by nature, free from the object physical conditions that had prevented them from fulfilling their best salves. The Fundamental Rights are no doubt important and valuable in a democracy. but there can be no real democracy without social and economic justice to the common man and to create socio economic conditions in which there can be social and economic justice to every one, is the theme of the Directive Principles. It is the Directive Principles which nourish the roots of our democracy, provide strength and vigour to it and attempt to make it a real participatory democracy which does not remain merely a political democracy but also becomes social and economic democracy with Fundamental Rights available to all irrespective of their power, position or wealth. The dynamic provisions of the Directive Principles fertilise the static provisions of the Fundamental Rights. The object of the Fundamental Rights is to protect individual liberty, but can individual liberty be considered in isolation from the socio economic structure in which it is to operate. There is a real connection between individual liberty and the shape and form of the social and economic structure of the society. Can there be any individual liberty at all for the large masses of people who are suffering from want and privation and who are cheated out of their individual rights by the exploitative economic system ? Would their individual liberty not come in conflict with the liberty of the socially and economically more powerful class and in the process, get mutilated or destroyed ? It is axiomatic that the real controversies in the present day society are not between power and freedom but between one form of liberty and another. Under the present socio economic system, it is the liberty of the few which is in conflict with the liberty of the many. The Directive Principles therefore, impose an obligation on the State to take positive action 325 for creating socio economic conditions in which there will be an egalitarian social order with social and economic justice to all, so that individual liberty will become a cherished value and the dignity of the individual a living reality, not only for a few privileged persons but for the entire people of the country. It will thus be seen that the Directive Principles enjoy a very high place in the constitutional scheme and it is only in the framework of the socio economic structure envisaged in the Directive Principles that the Fundamental Rights are intended to operate, for it is only then they can become meaningful and significant for the millions of our poor and deprived people who do not have even the bare necessities of life and who are living below the poverty level. The Directive Principles are set out in Part IV of the Constitution and this Part starts with Article 37 which, to my mind, is an Article of crucial importance. It says: "The provisions contained in this Part shall not be enforceable in any court but the principles therein laid down are nevertheless fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws. " It is necessary, in order to appreciate the full implications of this Article, to compare it with the corresponding provision in the Irish Constitution which, as pointed out above, provided to some extent the inspiration for introducing Directive Principles in the Constitution. Article 45 of the Irish Constitution provides: "The principles of social policy set forth in this Article are E intended for the general guidance of the Directives. The application of those principles in the making of laws shall be the care of the Direchtas exclusively and shall not be cognizable for any court under any of the provisions of this Constitution. " It is interesting to note that our Article 37 makes three significant departures from the language of Article 45; first whereas Articles 4. provides that the application of the principles of social policy shall not be cognizable by any court, Article 37 says that the Directive Principles shall not be enforceable by any court: secondly whereas Article 45 provides that the principles of social policy are intended for the general guidance of the Direchtas, Article 37 makes the Directive Principles fundamental in the governance of this country; and lastly, whereas Article 45 declares that the application of principles of social policy in the making of laws shall be the care of the Direchtas exclusively, Article 37 enacts that it shall be the duty of the State to apply the Directive Principles in making laws. The changes made by the framers of the Constitution are vital and they have the effect of bringing about a total transformation or metamorphosis o f this provision, fundamentally altering its significance and efficacy, 326 It will be noticed that the Directive Principles are not excluded from the cognizance of the court, as under the Irish Constitution: they are merely made non enforceable by a court of law for reasons already discussed But merely because they are not enforceable by the judicial process does not mean that they are of subordinate importance to any other part of the Constitution. I have already said this before, but I am emphasizing it again, even at the cost of repetition, because at one time a view was taken by this Court in State of Madras vs Champkan Dorairajan that because Fundamental Rights are made enforceable in a court of law and Directive Principles are not. "the Directive Principles have to conform to and run as subsidiary to the Chapter on Fundamental Rights. " This view was patently wrong and within a few years, an opportunity was found by this Court in the Kerala Education Bill, 1959 SCR 995 to introduce a qualification by stating that: "Nevertheless in determining the scope and ambit of the Fundamental Rights relied on by or on behalf of any person or body, the court may not entirely ignore these Directive Principles of State Policy laid down in Part IV of the Constitution but should adopt the principle of harmonious construction and should attempt to give effect to both as much as possible." But even this observation seemed to give greater importance to Fundamental Rights as against Directive Principles and that was primarily because the Fundamental Rights are enforceable by the Judicial process while the Directive Principles are expressly made non enforceable I am however, of the opinion, and on this point I agree entirely with the observation of Hegde, J. in his highly illuminating Lectures on the "Directive Principles of State Policy" that: "Whether or not a particular mandate of the Constitution is enforceable by court, has no bearing on the importance of that mandate. The Constitution contains many important mandates which may not be enforceable by the courts of law. That does not mean that those Articles must render subsidiary to the Chapter on Fundamental Rights . it would be wrong to say that those positive mandates", that is the positive mandates contained in the Directive Principles, "are of lesser significance than the mandates under Part III. " Hegde, J. in fact pointed out at another place in his Lectures that: "Unfortunately an impression has gained ground in the organs of the State not excluding judiciary that because the Directive Principles set out in Part IV are expressly made by Article 37 non enforceable by courts, these directives are mere pious hopes 327 not deserving immediate attention. I emphasize again that no Part of the Constitution is more important that Part IV To ignore Part IV is to ignore the sustenance provided for in the Constitution, the hopes held out to the nation and the very ideals on which our Constitution is built up." (Emphasis supplied). I wholly endorse this view set forth by Hegde, J and express my full concurrence with it. I may also point out that simply because the Directive Principles do not create rights enforceable in a court of law, it does not follow that they do not create any obligations on the State. We are so much Obsessed by the Hohfeldian Classification that we tend to think of rights, Liberties, powers and privileges as being invariably linked with the corresponding concept of duty, no right, liability and immunity. We find it difficult to conceive of obligations or duties which do not create corresponding rights in others. But the Hohfeldian concept does not provide a satisfactory analysis in all kinds of jural relation ships and breaks down in some cases where it is not possible to say that the duty in one creates an enforceable right in another. There may be a rule which imposes an obligation on an individual or authority and yet it may not be enforceable in a court of law and therefore not give rise to a corresponding enforceable right in another person. But it would still be a legal rule because it prescribes a norm or con duct to be followed by such individual or authority. The law may provide a mechanism for enforcement of this obligation, but the existence of the obligation does not depend upon the creation of such mechanism. The obligation exists prior to and independent of the mechanism of enforcement. A rule imposing an obligation or duty would not therefore cease to be a rule of law because there is no regular judicial or quasi judicial machinery to enforce its command. Such a rule would exist despite of any problem relating to its enforcement. Otherwise the conventions of the Constitution and even rules of International Law would no longer be liable to be regarded as rules of law. This view is clearly supported by the opinion of Professor A. L. Goodhart who, while commenting upon this point, says: "I have always argued that if a principle is recognised as, binding on the legislature, then it can be correctly described as a legal rule even if there is no court that can enforce it. Thus most of Dicey 's book on the British Constitution is concerned with certain general principles which Parliament recognises as binding on it. " It is therefore. to my mind, clear beyond doubt that merely because the Directive Principles are not enforceable in a court of law, it does not mean that they cannot create obligations or duties binding on the 328 State. The crucial test which has to be applied is whether the Directive Principles impose any obligations or duties on the State; if they do, the State would be bound by a constitutional mandate to carryout such obligations or duties, even though no corresponding right is created in any one which can be enforced in a court of law. Now on this question Article 37 is emphatic and makes the point in no uncertain terms. It says that the Directive Principles are "nevertheless fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws. " There could not have been more explicit language used by the Constitution makers to make the Directive Principles binding on the State and there can be no doubt that the State is under a constitutional obligation to carry out this mandate contained in Article 37. In fact, non compliance with the Directive Principles would be unconstitutional on the part of the State and it would not only constitute a breach of faith with the people who imposed this constitutional obligation on the State but it would also render a vital part of the Constitution meaningless and futile. Now it is significant to note that for the purpose of the Directive Principles, the "State" has the same meaning as given to it under Article 13 for the purpose of the Fundamental Rights. This would mean that the same State which is injuncted from taking any action in infringement of the Fundamental Rights is told in no uncertain terms that it must regard the Directive Principles as fundamental in the governance of the country and is positively mandated to apply them in making laws. This gives rise to a paradoxical situation and its implications are for reaching. The State is on the one hand, prohibited by the constitutional injunction in Article 13 from making any law or taking any executive action which would infringe any Fundamental Right and at the same time it is directed by the constitutional mandate in Article 37 to apply the Directive Principles in the governance of the country and to make laws for giving effect to the Directive Principles. Both are constitutional obligations of the State and the question is, as to which must prevail when there is a conflict between the two. When the State makes a law for giving effect to a Directive Principle, it is carrying out a constitutional obligation under Article 37 and if it were to be said that the State cannot make such a law because it comes into conflict with a Fundamental Right, it can only be on the basis that Fundamental Rights stand on a higher pedestal and have precedence over Directive Principles. But, as we have pointed out above, it is not correct to say that under our constitutional scheme, Fundamental Rights are superior to Directive Principles or that Directive Principles must yield to Fundamental Rights. Both are in fact equally fundamental and the courts have therefore in recent times tried to 329 harmonise them by importing the Directive Principles in the construction of the Fundamental Rights. It has been laid down in recent decisions of this Court that for the purpose of determining the reasonableness of the restriction imposed on Fundamental Rights, the Court may legitimately take into account the Directive Principles and where executive action is taken or legislation enacted for the purpose of giving effect to a Directive Principle, the restriction imposed by it on a Fundamental Right may be presumed to be reasonable. I do not propose to burden this opinion with reference to all the decided cases where this principles has been followed by the Court, but I may refer only to one decision which, I believe, is the latest on the point, namely, Pathumma vs State of Kerala, where Fazal Ali, J. summarised the law in the following words: "one of the tests laid down by this Court is that in judging the reasonableness of the restrictions imposed by clause (5) of article 19, the Court has to bear in mind the Directive Principles of State Policy". So also in the State of Bihar vs Kameshwar Singh, this Court relied upon the Directive Principle contained in article 39 in arriving at its decision that the purpose for which the Bihar Zamindary Abolition legislation had been passed was a public purpose. The principle accepted by this Court was that if a purpose is one falling within the Directive Principles, it would definitely be a public purpose. It may also be pointed out that in a recent decision given by this Court in M/s Kasturi Lal Lakshmi Reddy etc. vs The State of Jammu & Kashmir & Anr, has been held that every executive action of the Government, whether in pursuance of law or otherwise, must be reasonable and informed with public interest and the yardstick for determining both reasonableness and public interest is to be found in the Directive Principle and therefore, if any executive action is taken by the Government for giving effect to a Directive Principle, it would prima facie be reasonable and in public interest. It will, therefore, be seen that if a law is enacted for the purpose of giving effect to a Directive Principle and it imposes a restriction on a Fundamental Right, it would be difficult to condemn such restriction as unreasonable or not in public interest. So also where a law is enacted for giving effect to a Directive Principle in furtherance of the constitutional goal of social and economic justice it may conflict with a formalistic and doctrinaire view of equality before the law, but it would almost always conform to the principle of equality before the law in its total magnitude and dimension, because the equality clause in the Constitution does not speak of more formal equality before the law but embodies the concept of real and 330 substantive equality which strikes at inequalities arising on account of vast social and economic differentials and is consequently an essential ingredient of social and economic justice. The dynamic principle of egalitarianism fertilises the concept of social and economic justice; it is one of its essential elements and there can be no real social and economic justice where there is a breach of the egalitarian principle. If, therefore, there is a law enacted by the legislature which is really and genuinely for giving effect to a Directive Principle with a view to promoting social and economic justice. it would be difficult to say that such law violates the principle of egalitarianism and is not in accord with the principle of equality before the law as understood not in its strict and formalistic sense, but in its dynamic and activist magnitude. In the circumstances, the Court would not be unjustified in making the presumption that a law enacted really and genuinely for giving effect to a Directive Principle in furtherance of the cause of social and economic justice, would not infringe any Fundamental Right under Article 14 or 19. Mr. C. H. Alexandrowick, an eminent jurist, in fact, says: "Legislation implementing Part IV must be regarded as permitted restrictions on Part III". Dr. Ambedkar, one of the chief architects of the Constitution, also made it clear while intervening during the discussion on the Constitution (First Amendment Bill in the Lok Sabha on 18th May 1951 that in his view "So" far as the doctrine of implied powers is concerned, there is ample authority in the Constitution itself, namely, in the Directive Principles to permit Parliament to make legislation, although it will not be specifically covered by the provisions contained in the Part on Fundamental Rights". If this be the correct interpretation of the constitutional provisions, as I think it is, the amended Article 31C does no more than codify the existing position under the constitutional scheme by providing immunity to a law enacted really and genuinely for giving effect to a Directive Principle, so that needlessly futile and time consuming controversy whether such law contravenes Article 14 or 19 is eliminated. The amended Article 31C cannot in the circumstances be regarded as violative of the basic structure of the Constitution. But I may in the alternative, for the purpose of argument. assume that there may be a few cases where it may be found by the court. perhaps on a narrow and doctrinaire view of the scope and applicability of a Fundamental Right as in Karimbil Kunhikoman vs State of Kerala where a law awarding compensation at a lower rate to holders of larger blocks of land and at higher rate to holders of smaller blocks of land was struck down by this Court as violative of the equality clause, that a law enacted really and genuinely for giving effect to a Directive Principle is violative of a Fundamental Right under Article 14 or 19. Would such a law enacted in discharge of the. 331 constitutional obligation laid upon the State under Article 37 be invalid, because it infringes a Fundamental Right ? If the court takes the view that it is invalid, would it not be placing Fundamental Rights above Directive Principles, a position not supported at all by the history of their enactment as also by the constitutional scheme already discussed by me. The two constitutional obligations, one in regard to Fundamental Rights and the other in regard to Directive Principles, are of equal strength and merit and there is no reason why, in case or conflict. the former should be given precedence over the latter. I have already pointed out that whether or not a particular mandate of the Constitution is justiciable has no bearing at all on its importance and significance and justiciability by itself can never be a ground for placing one constitutional mandate on a higher pedestal than the other. The effect of giving greater weightage to the constitutional mandate in regard to Fundamental Rights would be to relegate the Directive Principles to a secondary position and emasculate the constitutional command that the Directive Principles shall be fundamental in the governance of the country and it shall be the duty of the State to apply them in making laws. It would amount to refusal to give effect to the words "fundamental in the governance of the country" and a constitutional command which has been declared by the Constitution to be fundamental would be rendered not fundamental. The result would be that a positive mandate of the Constitution commanding the State to make a law would be defeated; by a negative constitutional obligation not to encroach upon a Fundamental Right and the law made by the legislature pursuant to a positive constitutional command would be delegitimised and declared unconstitutional. This plainly would be contrary to the constitutional scheme because, as already pointed out by me, the Constitution does not accord a higher place to the constitutional obligation in regard to Fundamental Rights over the contractional obligation in regard to Directive Principles and does not say that the implementation of the Directive Principles shall only be within the permissible limits laid down in the Chapter on Fundamental Rights. The main thrust of the argument of Mr. Palkhiwala was that by reason of the amendment of Article 31C, the harmony and balance between Fundamental Rights and Directive Principle are disturbed because Fundamental Rights which had. prior to the amendment, precedence over Directive Principles are now, as a result of the amendment, made subservient to Directive Principles. Mr. Palkhiwala picturesquely described the position emerging as a result of the amendment by saying that the Constitution is now made to stand on its head instead of its legs. But in my view the entire premise on which this argument of Mr. Palkhiwala is based is fallacious because it is not correct to say, and I have in the preceding portions 332 of this opinion, given cogent reasons for this view, that prior to the amendments Fundamental Rights had a superior or higher position in the constitutional scheme than Directive Principles and there is accordingly no question at all of any subversion of the constitutional structure by the amendment. There can be no doubt that the intention of the Constitution makers was that the Fundamental Rights should operate within the socio economic structure or a wider continuum envisaged by the Directive Principles, for then only would the Fundamental Rights become exercisable by all and a proper balance and harmony between Fundamental Rights and Directive Principles secured. The Constitution makers therefore never contemplated that a conflict would arise between the constitutional obligation in regard to Fundamental Rights and the constitutional mandate in regard to Directive Principles. But if a conflict does arise between these two constitutional mandates of equal fundamental character how is the conflict to be resolved ? The Constitution did not provide any answer because such a situation was not anticipated by the Constitution makers and this problem had therefore to be solved by Parliament and some modus operandi had to be evolved in order to eliminate the possibility of conflict howsoever remote it might be. The way was shown in no uncertain terms by Jawaharlal Nehru when he said in the Lok Sabha in the course of discussion on the Constitution (First Amendment) Bill: "The Directive Principles of State Policy represent a dynamic move towards a certain objective. The Fundamental Rights represent something static, to preserve certain rights which exist. Both again are right. But somehow and sometime it might so happen that dynamic movement and that static standstill do not quite fit into each other. The dynamic movement towards a certain objective necessarily means certain changes taking place: that is the essence of movement. Now it may be that in the process of dynamic movement certain existing relationships are altered, varied or affected. In fact, they are meant to affect those settled relationships and yet if you come back to the Fundamental Rights they are meant to preserve, not indirectly, certain settled relationships. There is a certain conflict in the two approaches, not inherently. because that was not meant, I am quite sure. But there is that slight difficulty and naturally when the courts of the land have to consider these matters they have to lay stress more on the Fundamental Rights than on the Directive Principles. The result is that the whole purpose behind the Constitution, which was meant to be a dynamic Constitution leading to a certain goal step 333 by step, is somewhat hampered and hindered by the static element A being emphasized a little more than the dynamic element. . If in the protection of individual liberty you protect also individual or group inequality, then you come into conflict with that Directive Principle which wants, according to your own Constitution. a gradual advance, or let us put it in another way, not so gradual but more rapid advance, whenever possible to a State where . there is less and less inequality and more and more equality. If any kind of an appeal to individual liberty and freedom is construed to mean as an appeal to the continuation of the existing inequality, then you get into difficulties. Then you become static, unprogressive and cannot change and you cannot realize the ideal of an egalitarian society which I hope most of us aim at" Parliament took the view that the constitutional obligation in regard to Directive Principles should have precedence over the constitutional obligation in regard to the Fundamental Rights in Articles 14 and 19, because Fundamental Rights though precious and valuable for maintaining the democratic way of life, have absolutely no meaning for the poor, down trodden and economically backward classes of people who unfortunately constitute the bull of the people of India and the only way in which Fundamental Rights can be made meaningful for them is by implementing the Directive Principles, for the Directive Principles are intended to bring about a socio economic revolution and to create a new socio economic order where there will be social and economic justice for all and every one, not only a fortunate few but the teeming millions of India, would be able to participate in the fruits of freedom and development and exercise the Fundamental Rights. Parliament therefore amended Article 31C with a view to providing that in case of conflict Directive Principles shall have precedence over the Fundamental Rights in Articles 14 and 19 and the latter shall yield place to the former. The positive constitutional command to make laws for giving effect to the Directive Principles shall prevail over the negative constitutional obligation not to encroach on the Fundamental Rights embodied in Articles 14 and 19. Parliament in making this amendment was moved by the noble philosophy eloquently expressed in highly in spiring and evocative words. full of passion and feeling. by Chandrachud, J. (as he then was) in his judgment in Keshavananda Bharati 's case at page 991 of the Report 1 may quote here what Chandrachud, J. (as he then was) said on that, occasion, for it sets out admirably the philosophy which inspired Parliament in enacting the amendment in Article 31C The learned Judge said: "I have stated in the earlier part of my judgment that the Constitution accords a place of pride to Fundamental Rights and 334 a place of permanence to the Directive Principles. I stand by what I have said. The Preamble of our Constitution recites that the aim of the Constitution is to constitute India into a Sovereign Democratic Republic and to secure to "all its citizens", Justice Social, economic and political liberty and equality. Fundamental Rights which are conferred and guaranteed by Part III of the Constitution undoubtedly constitute the ark of the Constitution and without them a man 's reach will not exceed his grasp. But it cannot be overstressed that, the Directive Principles of State Policy are fundamental in the governance of the country. What is fundamental in the governance of the country cannot surely be less significant than what is fundamental in the life of an individual. That one is justiciable and the other not may show the intrinsic difficulties in making the latter enforceable through legal processes but that distinction does not bear on their relative importance. An equal right of men and women to an adequate means of livelihood; the right to obtain humane conditions of work ensuring a decent standard of life and full enjoyment of leisure, and raising the level of health and nutrition are not matters for compliance with the Writ of a Court. As I look at the provisions of Parts IIl and IV, I feel no doubt That the basic object of conferring freedoms on individuals is the ultimate achievement of the ideals set out in Part IV. A circumspect use of the freedoms guaranteed by Part III is bound to subserve the common good but voluntary submission to restraints is a philosopher 's dream. Therefore, article 37 enjoys the State to apply the Directive Principles in making laws. The freedom of a few have them to be abridged in order to ensure the freedom of all. It is in this sense that Parts, III and IV, as said by Granville Austin, together constitute "the conscience of the constitution". The Nation stands today at the cross roads of history and exchanging the time honoured place of the phrase, may I say that the Directive Principles of State Policy should not be permitted to become "a mere rope of sand. " If the State fails to create conditions in which the Fundamental freedoms could be enjoyed by all, the freedom of the few will be at the mercy of the many and then all freedoms will vanish. In order, therefore, to preserve their freedom, the privileged few must part with a portion of it. " This is precisely what Parliament achieved by amending Article 3lC. Parliament made the amendment in Article 31C because it realised that "if the State fails to create conditions in which the fundamental freedoms could be enjoyed by all, the freedom of the few will be at 335 the mercy of then manly and then all freedoms will vanish" and "in order, therefore, to preserve their freedom, the privileged few must part with a portion of it. " I find it difficult to understand how it can at all be said that the basic structure of the Constitution its affected when for evolving a modus vivandi. for resolving a possible remote conflict between two constitutional mandates of equally fundamental character, Parliament decides by way of amendment of Article 31C that in case of such conflict, the constitutional mandate in regard to Directive Principles shall prevail over the constitutional mandate in regard to the Fundamental Rights under Articles 14 and 19. The amendment in Article 31C far from damaging the basic structure of the Constitution strengthens and reenforces it by giving fundamental importance to the rights of the members of the community as against the rights of a few individuals and furthering the objective of the Constitution to build an egalitarian social order where there will be social and economic justice for all, every on including the low visibility areas of humanity in the country will be able to exercise Fundamental Rights and the dignity of the individual and the worth of the human person which are cherished values will not remain merely the exclusive privileges of a few but become a living really for the many. Additionally, this question may also be looked at from another point of view so far as the protection against violation, of Article 14 is concerned. The principle of egalitarianism, as I said before, is an essential element of social and economic justice and, therefore, where a law is enacted for, giving effect to a Directive Principle with a view to promoting social and economic justice, it would not run counter to the egalitarian principle and would not therefore be violative of the basic structure, even if it infringes equality before the law in its narrow and formalistic sense. No law which is really and genuinely for giving effect to a Directive Principle can be inconsistent with the egalitarian principle and therefore the protection granted to it under the amended Article 31C against violation of Article 14 cannot have the effect of damaging the basic structure. I do not therefore see how any violation of the basic structure is involved in the amendment of Article 31C. In fact. Once we accept the proposition laid down by the majority decision in Keshavananda Bharati 's case that the unamended Article 31C was constitutionally valid, it could only be on the basis that it did not damage or destroy the basic structure of the Constitution and moreover in the order made in Waman Rao 's case on 9th May, 1980 this Court expressly held that the unamended Article 31C "does not damage any of the basic or essential features of the Constitution or its basic structure," and if that be so, it is difficult to appreciate how the amended 336 Article 31C can be said to be violative of the basic structure. If the exclusion of the Fundamental Rights. embodied in Articles 14 and 19 could be legitimately made for giving effect to the Directive Principles set out in clauses (b) and (c) of Article 39 without affecting the basic. structure. I fail to see why these Fundamental Rights cannot be excluded for giving effect to the other Directive Principles. If the constitutional obligation in regard to the Directive Principles set out in clauses (b) and (c) of Article 39 could be given precedence over the constitutional obligation in regard to the Fundamental Rights under Articles 14 and 19, there is no reason in principle why such precedence cannot be given to the constitutional obligation in regard. to the other Directive Principles which stand on the same footing. It would, to my mind, be incongruous to hold the amended Article 31C invalid when the unamended Articles 31C has been held to be valid by the majority decision in Keshavananda Bharati 's case and by the order made on 9th May, 1980 in Waman Rao 's case. Mr. Palkhiwala on behalf of the petitioners however contended that there was a vital difference between Article 31C as it stood prior to its amendment and the amended Article 31C, in as much as under the unamended Article 31C only certain categories of laws, namely, those enacted for the purpose of giving effect to the Directive Principles set out in clauses (b) and (c) of Article 39 were protected against challenge under Articles 14 and 19, while the position under the amended Article 31C was that practically every law would be immune from such challenge because it would be referable to one Directive Principle or the other and the result would be that the Fundamental Rights in Articles 14 and 19 would become meaningless and futile and would, for all practical purposes, be dead letter in the Constitution. The effect of giving immunity to laws enacted for the purpose of giving effect to any one or more of the Directive Principles would, according to Mr. Palkhiwala, be in reality and substance to wipe out Articles 14 and 19 from the Constitution and that would affect the basic structure of the Constitution. Mr. Palkhiwala also urge that the laws which were protected by the amended Article 31 C were laws for giving effect to the policy of the State towards securing any one or more of the Directive Principles and every law would be comprehended within this description since it would not be competent to the court to enter into questions of policy and determine whether the policy adopted in a particular law is calculated to secure any Directive Principle as claimed by the State. The use of the words "law giving effect to the policy of the State", said Mr. Palkhiwala, introduced considerable uncertainty in the, yardstick with which to decide whether a particular law falls within the description in the 337 amended Article 31C and widened the scope and applicability of the A amended Article so as to include almost every law claimed by the State to all within such description. This argument was presented by Mr. Palkhiwala with great force and persuasiveness but it does not appeal to me and I. cannot. accept it. It is clear from the Language of the amended Article 31C that the law which is protected from challenge under Articles 14 and 19 is law giving effect to the policy of the State towards securing all or any of this Directive Principles. Whenever, therefore, any protection is claimed for a law under the amended Article 31C, it is necessary for the court to examine whether this law has been enacted for giving effect to the policy of the State towards securing any one or more of the Directive Principles and ii is only if the court is so satisfied as a result of judicial scrutiny, that the court would accord the protection of, the amended Article 31C to such law. Now it is undoubtedly true that the words used in the amended Article are "law giving effect to the policy of the Stale", but the policy of the State which is contemplated there is the policy towards securing one or more of the Directive Principles. It is the constitutional obligation of the State to secure the Directive Principles and that is the policy which the State is required to adopt and when a law is enacted in pursuance of this policy on implementing the Directive Principles and it seeks to give effect to a Directive Principle, it would, both from; the point of view of grammar and language, be correct to say that it is made for giving effect to the policy of the State towards securing such Directive Principle. The words "law giving effect to the policy of the State" are not sc. wide as Mr. Palkhiwala would have it, but in the context and collocation in which they occur, they are intended to refer only to a law enacted for the purpose on implementing or giving effect to one or more of the Directive Principles. The Court before which, protection for a particular law is claimed under the amended Article 31C would therefore have to examine whether such law is enacted for giving effect to a Directive Principle, for then only it would have the protection of the amended Article 31C. Now the question is what should be the test or determining whether a law is enacted for giving effect to a Directive Principle. One thing is clear that a claim to that effect put forward by the State would have no meaning or value; it is the court which would have to determine the question. Again it is not enough that there may be some connection between a provision of the law and a Directive Principle. The concoction has to be between the law and the Directive Principle and it must be a real HE and substantial connection. To determine whether a law satisfies this test, the court would have to examine the pith and substance, the true 338 nature and character of the law as also its design and the subject matter dealt with by it together with its object and scope. If on such examination, the court finds that the dominant object of the law is to give effect to the Directive Principle, it would accord protection to the law under the amended Article 31C. But if the court finds that the law though passed seemingly for giving effect to a Directive Principle, is, in pith and substance. One for accomplishing an unauthorised purpose unauthorised in the sense of not being covered by any Directive Principle, such law would not have the protection of the amended Article 31C. To take the illustration given by Khanna, J. in Keshavananda Bharati 's case ' at page 745 of the Report, "a law might be made that as the old residents in the State are economically backward and those who have not resided in the State for more than three generations have an affluent business in the Stale or have acquired property in the State they shall be deprived of their business and property with a view to vest the same in the old residents of the State. " It may be possible, after performing what I may call an archaeological operation, to discover some remote the tenuous connection between such law and some Directive Principle, but the dominant object of such law would be, as pointed out by Mr H. M. Seeravi at Page 1559 of the second Volume of his book on "Constitutional Law of India", to implement "the policy of the State to discriminate against citizens who hail from another State, and in a practical sense, to drive them out of it", and such law would not be protected by the amended Article 31C. Many such examples can be given but I do not wish to unnecessarily burden this opinion. The point I wish to emphasize is that the amended Article 31 does not give protection to a law which has merely some remote or tenuous connection with a Directive Principle. What is necessary is that there must be a real and substantial connection and the dominant object of the law must be to give effect to the Directive Principle, and that is a matter which the court would have to decide before any claim for protection under the amended Article 31C can be allowed. There is also one other aspect which requires to be considered before protection can be given to a law under the amended Article 31C. Even where the dominant object of a law is to given effect to a Directive Principle. it is not every provision af the law which is entitled to claim protection. The words used in the amended Article 31C are: "Law giving effect to the policy of the State towards securing all or any of the principles laid down in Part IV" and these words, on a plain natural construction. do not include all the provisions on the law but only those which give effect to the Directive 339 Principle. But the question is how to identify these provisions giving effect to the Directive Principle in order to accord to them the protection of the amended Article 31C. The answer to this question is analogically provided by the decision of this Court in Akadasi Padhan vs State of Orissa. There the question was as to what was the precise connotation of the expression la relating to" a State monopoly which occurs in Article 19(6). This Court held that "a law relating to" a State monopoly cannot include all the provisions contained in such law but it must be construed to mean, "the law relating to the monopoly in its absolutely essential features" and it is only those provisions of the law "which are basically and essentially necessary for creating the State monopoly" which are protected by Article 19(6). This view was reiterated in several subsequent decisions of this Court which include inter alia Rashbihari Pande etc. vs State of Orissa, Vrajla Manilal & Co. & ors vs State of Madhya Pradesh & Ors and R. C. Cooper vs Union of India. I would adopt the same approach in the construction of Article 31C and hold that it is not every provision of a statute which , has been enacted with the dominant object of giving effect to a Directive Principle, that it entitled to protection. but only those provisions of the statute which are basically and essentially necessary for giving effect to the. Directive Principles are protected under the amended Article 31C. If there are any other provisions in the statute which do not fall within this category, they would not be entitled to protection and their validity would have to be judged reference to Articles 14 and 19. Where, therefore, protection is claimed in respect of a statute under the amended Article 31C, the court would have first to determine whether there is real and substantial connection between the law and a Directive Principle and the predominant object of the law is to give effect to such Directive Principle and if the answer to this question is in the affirmative, the court would then have to consider which are the provisions of the law basically and essentially necessary for giving effect to the Directive Principle and give protection of the amended Article 31C only to those provisions. The question whether any particular provision of the law is basically and essentially necessary for giving effect to the Directive Principle. would depend, to a large extent, on how closely and integrally such provision is connected with the implementation on the Directive Principle. If the court finds That a particular provision is subsidiary 340 or incidental or not essentially and integrally connected with the implementation of the Directive Principle or is of such a nature that, though seemingly a part of the general design of the main provisions of the statute, its dominant object is to achieve an unauthorised purpose, it would not enjoy the protection of the amended Article 31C and would be liable to be struck down as invalid if it violates. Article 14 or 19 These considerations which I have discussed above completely answer some of the difficulties raised by Mr. Palkhiwala. He said that if the amended Article 31C were held to be valid, even provision, like Section 23(e) and 24(1)(a) of the Bombay Prohibition Act, 1949 C which were struck down in State of Bombay vs F. N. Balsari as violating freedom of speech guaranteed under Article 19(1)(a), would have to be held to be valid. I do not think that freedom and democracy in this country would be imperilled if such provisions were held valid. In fact, after the amendment of Article 19(2) by the Constitution (First Amendment Act, 1951, it is highly arguable that both such provisions would fall within the protection of Article 19(2) and would be valid. And even otherwise, it is difficult to see how any violation of the basic structure is involved if a provision of a law prohibiting a person from commending any intoxicant, the consumption or use of which is forbidden by the law (except under a licence issued by the State Government) is protected against infraction of Article 19(1)(a). The position would perhaps be different if a provision is introduced in the Prohibition Act saying that no one shall speak against the prohibition policy or propagate for the repeal of the Prohibition Act or plead for removal of Article 47 from the Directive Principle. Such a provision may not and perhaps would not be entitled to the protection of the amended Article 31C, even though it finds a place in the Prohibition Act, because its dominant object would not be to give effect to the Directive Principle in Article 47 but to stifle freedom of speech in respect of a particular matter and it may run the risk of being struck down as violative of Article 19(1)(a). If the Court finds that even in a statute enacted for giving effect to a Directive Principle, there is a provision which is not essentially and integrally connected with the implementation of the Directive Principle or the dominant object of which is to achieve an unauthorised purpose, it would be outside the protection of the amended Article 31C and would have to meet the challenge of Articles 14 and 19. Lastly, I must consider the argument of Mr. Palkhiwala that almost any and every law would be within the protection of the 341 amended Article 31C because it would be referable to some Directive Principle or the other. I think this is an argument of despair. Articles 39 to 51 contain Directive Principles referring to certain specific objectives and in order that a law should be for giving effect to one of those Directive Principles. there would have to be a real and substantial connection between the law and the specific objective set out in such Directive Principle. Obviously, the objectives set out in these Directive Principles being specific and limited, every law made by a legislature in the country cannot possibly have a real and substantial connection with one or the other of these specific objectives. It is only a limited number of laws which would have a real and substantial connection with one or the other of specific objectives contained in these Directive Principles and any and every law would not come within this category. Mr. Palkhiwala then contended that in any event, the Directive Principle contained in Article 38 was very wide and it would cover almost any law enacted by a legislature. This contention is also not well founded. Article 38 is a general article which stresses the obligation of the State to establish a social order in which justice social, economic and political shall inform all the institutions of national life. It no doubt talks of the duty of the State to promote the welfare of the people and there can be no doubt that standing by itself this might cover a fairly wide area but it may be noted that the objective set out in the Article is not merely promotion of the welfare of the people, but there is a further requirement that the welfare of the people is to be promoted by the State, not in any manner it likes, not according to its whim and fancy, but for securing and protecting a particular type of social order and that social order should be such as would ensure social, economic and political justice for all. Social, economic and political justice is the objective set out in the Directive Principle in Article 38 and it is this objective which is made fundamental in the governance of the country and which the State is laid under an obligation to realise. This Directive Principle forms the base on which the entire structure of the Directive Principles is reared and social, economic and political justice is the signature tune of the other Directive Principles. The Directive Principles set out in the subsequent Articles following upon Article 38 merely particularise and set out facets and aspects of the ideal of social, economic and political justice articulated in Article 38. Mr. Palkhiwala 's complaint was not directed against the use of the words 'political justice ' in Article 38 but his contention was that the concept of social and economic justice referred to in that Article was so wide that almost any legislation could come within it. I do not agree. The concept 342 of social and economic Justice may not be very easy of definition but its broad contours are to be found in some of the provisions of the Fundamental Rights and in the Directive Principles and whenever a question arises whether a legislation is for giving effect to social and economic justice, it is with reference to these provisions that the question would have to be determined. There is nothing so vague or indefinite about the concept of social or economic justice that almost any kind of legislation could be justified under it. Moreover, where a claim for protection is made in respect of a legislation on the ground that it is enacted for giving effect to a Directive Principle, the Directive Principle to which it is claimed to be related would not ordinarily be the general Directive Principle set out in Article 38, but would be one of the specific Directive Principles set out in the succeeding Articles, because as I said before, these latter particularise the concept of social and economic justice referred to in Article 38. I cannot therefore subscribe to the proposition that if the Amendment in Article 31C were held valid, it would have the effect of protecting every possible legislation under the sun and that would in effect and substance wipe out Articles 14 and 19 from, the Constitution. This is a tall and extreme argument for which I find no justification in the provisions of the Constitution. I would therefore declare Section 55 of the Constitution (Forty second Amendment) Act, 1976 which inserted sub sections (4) and (5) in Article 368 as unconstitutional and void on the ground that it damages the basic structure of the Constitution and goes beyond the amending power of Parliament. But so far as Section 4 of the Constitution (Forty second Amendment) Act, 1976 is concerned. I hold that, on the interpretation placed on the amended Article 31C by me, it does not damage or destroy the basic structure of the Constitution and is within the amending power of Parliament and I would therefore declare the amended Article 31C to be constitutional and valid. I have also given my reasons in this judgment for subscribing to the order dated 9th May, 1980 made in Waman Rao 's case and this judgment ill so far as it sets out those reasons will be formally pronounced by me when Waman Rao 's case is set down on board for judgment.

The Kerala Motor Vehicles Taxation Act (Act 24 of 1963) was brought into force on 1 7 63. The Act provides that a "tax at the rates fixed by the Government by notification in the Gazette not exceeding the maximum rate specified in the First Schedule shall be levied on all motor vehicles used or kept for use in the state". The appellant company owned 17 motor vehicles, tractors, trailers and lorries all of which are registered in the Company 's name under the Motor Vehicles Act. The Company alleged that the vehicles were purchased by it solely and exclusively for use in the estates and intended to be used only for an cultural purpose and were not used nor kept for use in the State as contemplated under section 3 of the Act. The Company is a tea plantation having eight estates which lie contiguous to each other and have an extent of 9422.44 acres in the aggregate. The Company for the purpose of plantation are maintaining roads fit for vehicular traffic in the eight estates covering length of 131 miles in the aggregate. On 23rd September, 1964 a Bedford Lorry owned by the Company and bearing registration No. KLK 1540 was seized by the Police and taken into custody in Tangamullay Estate which is one of the estates owned by the Company but later released on payment under protest a sum of Rs. 3150/ as tax for the period between 1 7 1963 to 31 12 64. The appellant Company filed O.P. 199/65 before the High Court of Kerala claiming that they were not liable to pay any tax on the Motor Vehicles The High Court remanded the matter to the Transport Authority for a finding on the question raised. Since the Transport authorities was of the view that Section 3 covers private roads as well and decided against the appellant, the appellant moved the High Court once again in O.P. 2173/68. Having lost before the single bench and the Division Bench in the Letters Patent appeal, the appellant same up in appeal by special leave. Allowing the appeals in part, the Court ^ HELD: 1. On reading sections 3, S and 6 of the Kerala Motor Vehicles Taxation Act (Act 24 of 1963), it is clear that a levy of tax is contemplated only on the vehicles that are used or kept for the use on the public roads of the State. [1394G] Bolalni ores Ltd. vs State of Orissa, ; @ 155, explained and distinguished. Entry 57 in List IT of the Constitution relates to taxes on vehicles, whether mechanically propelled or not, suitable for use on roads, including tram 1389 cars subject to the provisions of entry 35 of List III This entry enables the A State Government to levy a tax on all vehicles whether mechanically propelled or not, suitable for use on roads. Section 3 of the Kerala. Motor Vehicles Taxation Act (Act 24 of 1963) provides that a tax "shall be levied on all motor vehicles used or kept for use in the State". The vehicles in the instant case are mechanically propelled and suitable for use on roads. The levy is within the competence of the State Legislature as Entry 57 in List. II authorises the levy on vehicles suitable for use on roads. [1393 B E] 3. In order to levy a tax on vehicles used or kept for use on public roads of the Stare and at the same time to avoid evasion of tax the legislature has prescribed the procedure. Under sub section 2 of section 3 there is a presumption that a motor vehicle for which the certificate of registration is current shall be deemed to be used or kept for use in the State. Section 3(2) safeguards the revenue of the State by relieving it from the burden of proving that the vehicle was used or kept for use on the public roads of the State. At the same time the interest of the bonafide owner is safeguarded by enabling him to claim and obtain Q certificate of non user from the prescribed authority. In order to enable the owner of the vehicle or the person who is in possession or being in control of the motor vehicles of which the certificate of registration is current to claim exemption from tax he should get a certificate in the prescribed manner from the Regional Transport officer. Section 5 provides for exemption from payment of tax under certain circumstances. Section 6 enables the registered owner or a person in possession or control of such a vehicle to get refund of tax if the conditions specified therein are satisfied. Thus in order to enable the registered owner or person in possession or control of a vehicle to get exemption of tax, advance intimation to the R.T.O. along with the surrender of certificate of registration is necessary. The provision of section 3 sub sec. (2) as well as section 5 and section 6 are meant to prevent evasion of tax and to provide for exemption from tax in proper cases. Though the purpose of the Act is to tax vehicles that are used or kept for use on the public roads of the State, the State is entitled for the purpose of safeguarding the revenue of the State and to prevent evasion of the tax to enact provision like provision as in section 3 raising a presumption that the vehicle is used or kept for use in the State without any further proof unless exemption is claimed under section 3(2), section 5 and section 6. [1393 G H, 1394 A G] 4. In order to claim exemption from payment of tax requirements of section 3(2) or sections 5 and 6 should be satisfied. Surrender of the registration certificate contemplated under section 5 is for making sure that the motor vehicles is not being put to any use and does not have the effect of annulling the certificate of registration. If the requirement contemplated under the Act is not satisfied the registered owner or person in possession or control of the vehicles would not be entitled to claim any exemption from payment of tax. [1394 H. 1395 A Bl 5. The Kerala Motor Vehicles Taxation Act, 1963 (Act 24 of 1963) came into force on 18 3 63. Section 2(1) of the Taxation Act provides that words, and expression used but not defined in the (Central Act 4 of 1939) shall have the meaning respectively assigned to them in that Act. On the date when the Kerala Motor Vehicles Taxation Act was enacted, was amended (by Act 100 of 1956) and the emended definition on the date when the Taxation Act came into force exempted only motor vehicles which are of a special type adopted for use 1390 only in factory or in any other enclosed premises. This amended definition will have to be read into the Taxation Act which was enacted subsequent to the date of the amendment (by Act 100 of 1956) of the definition of "motor Vehicle" in section 2(18) of the (Central), 1939. [1396 F H, 1397

Appeal No.241 of 1993. From the Judgment and Order dated 9.10.1991 of the Punjab and Haryana High Court in Civil Writ Petition No. 5727 of 1991. Harish N. Salve Jagdish Singh Kuhar, and A.K. Mahajan for the Appellant. Ujagar Singh, Ms. Naresh Bakshi R.S. Yadav and G.K. Bansal for the Respondents. The Judgment of the Court was delivered by S.C. AGRAWAL ,J. : This appeal relates to the inter se seniority of the appellant and respondent No. 3 in the punjab Superior Judicial Service (hereinafter referred to as 'The Service '). The appellant and respondent No. 3 were both appointed to the Service on May 26, 1986 on the basis of selection by direct recruitment. The appellant belongs to the general category whereas respondent No. 3 is a Mazhbi Sikh, which is a Schedule Caste in Punjab. The recruitment to the Service is governed by Punjab Superior Judicial Service Rules, 1963 (hereinafter referred to as 'The Rules '). By Rule 8 A, which was inserted in the rules by notification dated June 14,1977, the instructions issued by the State Government from time to time in relation to reservation of appointments or posts for Scheduled Castes and Backward Classes were made applicable for the purpose of making appointments to the posts in the Service. The orders of the State Government relating to persons belonging to Scheduled Castes in this regard which have a bearing in this appeal are as follows (1) Letter dated June 6, 1974 from the Secretary to the Government of Punjab, Welfare of Scheduled Castes and Backward Classes Department to all Heads of Department etc. It was communicated that it had been decided to increase the percentage of reservation in direct recruitment in all services from 20% to 25% in the case of members of Scheduled Castes and from 2% to 5% in the case of members belonging to Backward Classes. In the said letter, it was also indicated 599 that the vacancies to be reserved for the members of Scheduled Castes in a lot of 100 vacancies would be at the points specified below 1, 5, 9, 13, 17, 21, 25, 29, 33, 37, 41, 45, 49, 53, 57, 61, 65, 69, 73, 77, 8 1, 85, 89, 93 and 97 and so on. It was also directed that the Roster already existing would not be abondoned, but would now be maintained in continuation from the vacancy in the existing Roster last filled up according to the new pattern of reservation that has been prescribed in the earlier paragraphs in the said letter. (2) Circular dated November 19,1974 relates to carrying forward of reservation for members of Scheduled Castes/Backward Classes. It was directed that "the reservation should be carried forward from vacancy to vacancy in the same block until a Scheduled Caste or a Backward Class person, as the case may be, is appointed or promoted in the same block. It was further directed that if all the vacancies in any block determined on the basis of prescribed Roster are filled up by other category person due to non availability of Scheduled Castes or Backward Classes persons, the reservation should be carried forward to the subsequent blocks. The said letter required that the reservation should be carried forward from vacancy to vacancy in each block and from block to block until the carried forward vacancies are filled up by the members of the Scheduled Castes or Backward Classes. It was also provided that only one reserved vacancy out of the carried forward vacancies should be filled in a block of appropriate Roster in addition to the normal reserved point of the block. (3) Letter dated May 5, 1975, from the Secretary to the Government, Punjab, Welfare of Scheduled Castes & Backward Classes Department addressed to all Heads of Departments etc. It was communicated that the Government have decided that henceforth, 50% vacancies of the quota reserved for Scheduled Casstes should be offered to Balmikis and Mazhbi Sikhs, if available, as a first preference from amongst the Scheduled Castes candidates. (4) Letter dated. April 8, 1980 addressed by the Under Secretary to the Government of Punjab, Welfare Department Reservation Cell, to all Heads of Departments etc. The position with regard to the implementation of instructions regarding reservation for Mazhbi Sikhs and Balmikis under the letter dated May 5, 1975 was clarified as follows "i) Combined merit list can be disturbed while giving appointment 600 to the candidate belonging to Balmikis and Mazhbi Sikhs. ii) On the basis of 50% reservation the first reserved vacancy can be offered to Balmikis and Mazhbi Sikhs although his name may be below in the merit list. iii)On the basis of 50% reservation, Balmikis and Mazhbi Sikhs 1, 3, 5 and so on reserved vacancies shall go to the candidates of these castes if available and 2,4, 6 and so on reserved vacancies shall go to other Scheduled Castes candidates. It is clarified here that these instructions are to be implemented when the names of the candidates of Balmikis and Mazhbi Sikhs are included in the merit list after selection. If no candidate belonging to these communities has been selected or less candidate selected then the reserved vacancy should be filled up from amongst the other Scheduled Castes candidates meaning thereby no reserve vacancy reserved for Balmkis and Mazhbi Sikhs should be carried forward." After the introduction of Rule 8 A in the Rules, four persons were appointed by way of direct recruitment to the Service in the year 1979. One out of them, Shri Balwant Rai, belonged to a Scheduled Caste (other than Balmikis or Mazhbi Sikhs). Thereafter, in 1981, one post fell vacant but no person belonging to a Scheduled Caste 'could be selected and the candidate belonging to general category was appointed against the said post. In the year 1982, selection was made for two posts but only one person could be selected and he also belonged to the general category and no person belonging to a Scheduled Caste was available for appointment. In 1986, six persons including the appellant and respondent No.3 were appointed on the basis of direct recruitment. Out of those six persons, four belonged to the general category and two belonged to Scheduled Caste. One of the two persons was Shri G.S. Sarma who belonged to a Scheduled Caste other then Balmikis or Mazhbi Sikhs. In the merit list for the said selection the appellant was placed at No. 1, Shri G.S. Sarma was at No. 2 and respondent No. 3 was at No. 5. As per the Roster, Shri G.S. Samra was placed at Point No.7, the appellant at Point No.8 and respondent No. 3 at Point No. 9. After joining the Service, Shri G.S. Samra resigned from the same and had ceased to be a member of the Service prior to April 1, 1988. In the tentative seniority list of the members of the Service as on April 1, 601 1988, the appellant was placed at Serial No. 52 and respondent No. 3 was placed at Serial No.53. Respondent No.3 submitted a representation against his placement in the seniority list and claimed that he should be placed against the post reserved for Scheduled Caste at Serial No. 5 in the Roster and on that basis he should be given the seniority of the year of 198 1. He also submitted that since he is a Mazhbi Sikh, he is entitled to preference over Shri G.S. Samra who belonged to a Scheduled Caste other than Balmikis and Mazhbi Sikhs, and he claimed that he should have been placed at Point No.7 in the Roster and Shri G.S. Samra should have been placed at Point No. 9 and on that basis also respondent No. 3 is senior to the appellant. Representation was also invited from the appellant. in this regard. After considering the said representations the High Court, on its administrative side, decided that the respondent No. 3 was entitled to be placed above Shri G.S. Samra in view of the Circular Letter dated May 5, 1975 and that he should have been placed against Point No. 7 in the roster and Shri G.S. Samra should have been placed against Point No.9 in the Roster. On that basis the seniority list was revised and respondent No.3 was placed at Serial No. 52 while the appellant were placed at Serial No. 53. Feeling aggrieved by the revision in the seniority, the appellant filed a writ petition in the High Court which was dismissed by the High Court by judgment and order October 9, 199 1. This appeal is directed against the said judgment of the High Court. There is no dispute that appellant has been rightly assigned Point No. 8. If Respondent No. 3 has to be assigned Point No.7 as found by the High Court, then he would be senior to the appellant but if Respondent No. 3 is assigned Point No. 9 then appellant would be senior to Respondent No. 3 It is, therefore, necessary to determine whether respondent No. 3 is entitled to be placed at Point No. 7 in the Roster in place of Shri G.S. Samra who should be placed at Point No.9 or that the respondent no.3 should be assigned Point No.9 of the Roster. The said question requires consideration of the various orders relating to reservation for Scheduled Castes to which reference has been made earlier. As indicated earlier by letter dated June 6, 1974 points 1, 5, 9, 13, 17, 21, 25, 29, 33, 37,41, 45, 49, 53, 57, 6 1, 65, 69, 73, 77, 81, 85, 89, 93 and 97 in the Roster are reserved for members of Scheduled Castes. By letter dated May 5, 1975, 50% of the vacancies of the quota reserved for Scheduled Castes are required to be offered to Balmikis and Mazhbi Sikhs, if available, as a first preference from amongst the Scheduled Castes candidates. In view of the clarifications contained in the letter dated April 8, 1980 on the basis of 50% reservation the first reserved vacancy can be offered to Balmikis and Mazhbi Sikhs although his name may be below in the merit list and on the basis of 50% reservation, amongst the vacancies reserved for Scheduled Caste, vacancies 1, 3, 5 and so on would go to Balmikis and Mazhbi Sikhs, if available, and reserved vacancies 2, 4, 6 and so on would go to other Scheduled 602 Castes candidates. It has also been clarified that if no candidate belonging to the communities of Balmikis and Mazhbi Sikhs was selected or less number of candidates were selected then the reserved vacancies should be filled up amongst the other Scheduled Castes candidates and that no vacancy reserved for Balmikis and Mazhbi Sikhs should be carried forward. In view of the aforesaid clarifications out of the posts reserved for Scheduled Castes in the Roster, there was reservation for Balmikis and Mazhbi Sikhs on the posts against the following points in the Roster 1, 9, 17, 25, 33, 41, 49, 57, 65, 73, 81, 89, and 97. There was reservation for members of Scheduled Castes other than Balmikis and Mazhbi Sikhs on the posts against the following points in the Roster: 5, 13, 21, 29, 37, 45, 53, 61, 69, 77, 85, and 93. The learned counsel for the appellant has urged that since these orders relating to reservation for Scheduled Castes became applicable to the Service with effect from June 14, 1977, when Rule 8 A was inserted, all appointments to the Service after June 14, 1977 have to be made in accordance with these orders. The submission is that the first appointment, by direct recruitment, of a person belonging to the Scheduled Castes was of Shri Balwant Rai made in 1979. That was at point No. 1 in the Roster. That should have gone to a Balmiki or a Mazhbi Sikh but since no person belonging to those communities was available, Shri Balwant Rai, who belongs to a Scheduled Caste other than Balmikis and Mazhbi Sikhs, was appointed. It has been further urged that in view of the clarification contained in the letter dated April 8. 1980, a vacancy reserved for Balmikis and Mazhbi Sikhs is not required to be carried forward and the Balmikis and Mazhbi Sikhs cannot claim reservation in respect of the next vacancy at Point No. 5 which was reserved for Scheduled Castes other than Balmikis and Mazhbi Sikhs and they can only claim the vacancy that was reserved for Balmikis or Mazhbi Sikhs at point No.9. It was submitted that Shri G.S. Samra who belonged to a Scheduled Caste other than Balmikis and Mazhbi Sikhs was entitled to be appointed against the reserved vacancy at Point No.5 reserved for a candidate belonging to a Scheduled Caste other than Balmikis and mazhbi Sikhs but since at the time of selections that were made in the years 1981 and 1982, no person belonging to a Scheduled Caste was available. The vacancy at Point No. 5 reserved for Scheduled Castes was carried forward to point No. 7 and Shri G.S. Samra had to be adjusted at point No.7 in the Roster. The submission is that respondent No. 3, being a Mazhbi Sikh, could not claim to be placed at point No. 7 in the Roster against a vacancy which was reserved for a candidate belonging to a Scheduled Castes other than Balmikis and 603 Mazhbi Sikhs and he could be only placed against the vacancy at point No.9 in the Roster. The learned counsel for the respondent No.3 on the other hand has urged that in view of the order dated May 5, 1975, 50% vacancies of the quota reserved for Scheduled Castes have to be offered to Balmikis and Mazhbi Sikhs and since Shri Balwant Rai belonging to a Scheduled Caste other than Balmikis and Mazhbi Sikhs had been appointed in 1979, the next post should go to Balmikis and Mazhbi Sikhs, and on that basis, respondent No.3 was entitled to be appointed against the second post at point No. 7 of the Roster and Shri G.S. Samra could only be appointed against third post at point No.9 in the roster. In the alternative, it was urged that the order dated April 8, 1980 could only have prospective operation with effect from the date of issue of the said order and the sub roster indicated by the said order could be given effect to only from that date and on that basis the first post reserved for Scheduled Castes should go to Balmikis or Mazhbi Sikhs and on that basis also respondent No.3 was entitled to be placed against point No.7 in the 100point roster and Shri G.S. Samra against point No.9 in the said roster. From a parusal of the letter dated April 8,1980, we find that it gives clarifications on certain doubts that had been created by some Departments in the matter of implementation of the instructions contained in the earlier letter dated May 5,1975. Since the said letter dated April 8,1980 is only clarificatory in nature, there is no question of its having an operation independent of the instructions contained in the letter dated May 5, 1975 and the clarifications contained in the letter dated April 8, 1980 have to be read as a part of the instructions contained in the earlier letter dated May 5, 1975. In this context it may be stated that according to the principles of statutory construction a statute which is explanatory or clarificatory of the earlier enactment is usually held to be restrospective. (See: Craies on Statute Law, 7th Ed., p. 58). It must, therefore, be held that all appointments against vacancies reserved for Scheduled Castes made after May 5, 1975 (after May 14, 1977 in so far as the Service is concerned), have to be made in accordance with the instructions as contained in the letter dated May 5, 1975 as clarified by letter dated April 8, 1980. On that view, the appointment of Shri Balwant Rai in 1979 has to be treated to be an appointment made under the said instructions and operation of these instructions cannot be postponed till April 8, 1980. If the matter is considered in this light then the sub roster as indicated in the letter dated April 8, 1980 would have to be applied in respect of the post on which Shri Balwant Rai was appointed in 1979 and the said appointment has to be regarded as having been made against the vacancy at point No 1. in the the roster which was reserved for Balmikis or Mazhbi Sikhs but since no Balmiki or Mazhbi 604 Sikh was selected for that post, the said vacancy was assigned to Shri Balwant Rai who belonged to a scheduled Caste other than a Balmiki or Mazhbi Sikh. The said vacancy which was reserved for Balmikis or Mazhbi Sikhs could not be carried forward in view of the directions contained in the letter dated April 8, 1980. The next post reserved for Scheduled Castes at point No. 5 in the roster was meant for a person belonging to a Scheduled Caste other than Balmikis and Mazhbi Sikhs. In the selections that were made in 1981 and 1982 no person belonging to a Scheduled Caste was selected and, therefore, posts at Points nos. 5 and 6 in the Roster became available to candidates in the general category and the vacancy at Point no.5 reserved for Scheduled Castes was carried forward to point No.7 In 1986, two persons belonging to Scheduled Castes, namely Shri G.S. Samra and respondent No.3 were selected. Shri G.S. Samra belonged to a Scheduled Caste other than Balmiki and Mazhbi Sikh whereas respondent No. 3 was a Mazhbi Sikh. Since the post at point No.5 which had been carried forward to point No.7 was reserved for a candidate belonging to a Scheduled Caste other than Balmiki or Mazhbi Sikh it had to be assigned to Shri G.S. Samra falling in that category and respondent No. 3 who was a azhbi Sikh could only be appointed against the reserved vacancy at point No.9 in the Roster. Respondent No. 3 can not claim that the vacancy at Point No.7 should be assigned to him. If respondent No.3 is adjusted against the vacancy at Point No. 9 in the Roster, he has to be placed in seniority below the appellant who was appointed against point No. 8 in the Roster. In the judgment under appeal, the High Court has placed reliance on the instructions dated March 6, 1961 and the decision of this Court in Jagjit Singh vs State of Punjab, ; The instructions dated March 6, 1961 deal with a situation where the services of a Government Servant belonging to Scheduled Castes/Tribes and Backward Classes are terminated and a resultant vacant occurred. It has been directed as under "With a view to safeguard the interests of the members of the Scheduled Castes/Tribes and Backward Classes, it has been decided that if the services of a Government Servant belonging to Scheduled Castes/Tribes or Backward Classes are terminated, the resultant vacancy should not be included in the normal pool of vacancies to be filled in accordance with the Block System but should be filled up on ad hoc basis from the candidates belonging to these castes and classes. In other words the intention is that the posts vacated by members of Scheduled Castes/Tribes and Backward classes should remain earmarked and be filled up by members belonging to these Classes. " 605 In Jagjit Singh 's case, this Court was dealing with appointments to the Punjab Civil Service (Executive Branch). These selection was made for appointment against 12 vacancies in the said Service and other vacancies in the Allied Services. Two of the vacancies in the Punjab Civil Service were reserved for Scheduled Castes candidates. Three persons were selected from among the members of Scheduled Castes. The appellant in the said appeal was at third place in the merit list of the Scheduled Castes candidates. The first two candidates on the merit list were appointed and the appellant was appointed on the post of "A" Class Tehsildar in one of the Allied Services. Subsequently, one of the two candidates who had been appointed to the Punjab Civil Service resigned his office and a question arose as to whether the appellant was entitled to be appointed to the Punjab Civil Service against the vacancy arising on account of resignation of the Scheduled Castes candidate who had been appointed earlier. The appellant laid his claim for such appointment on the basis of the instructions contained in the circular of March 6, 196 1. The said claim of the appellant was upheld by this Court and it was held that the resultant vacancy caused by resignation of one of the Scheduled Castes candidate should have gone to the appellant. The Circular dated March 6, 1961 and the decision in Jagjit Singh vs State of Punjab (supra) do not have a bearing on the question in controversy in the instant case because here there is no dispute that the respondent No.3 has been appointed against the post reserved for members of Scheduled Castes and the question is about the inter se placement of two persons appointed against vacancies reserved for Scheduled Caste candidates. The Circular dated March 6, 1961 does not deal with the said question and it has to be dealt with on the basis of the instructions contained in the orders dated May 5, 1975 and April 8, 1980. For the reasons aforementioned the appeal is allowed, the judgment and the order of the High Court dated October 9, 1991 is set aside. The Civil Writ Petition filed by the appellant in the High Court is allowed and it is declared that respondent No.3 can only be treated to have been appointed against the vacancy at Point no.9 in the Roster and on that basis he must be placed below the appellant in the seniority list. Respondent No.2 is directed to revise the seniority list of the members of the Service accordingly. The appellant would be entitled to conse quential benefits if any, accruing to him as a result of such revision in the seniority. The parties are left to bear their own costs. N.V.K. Appeal allowed.

The appellant alongwith Radhey Shyam and Munni Lal were charged with the murder of Gokaran Prasad on 24.11.1975 at about 5 PM. The Trial Court on consideration of the evidence concluded that the prosecution has failed to prove the case beyond reasonable doubts and acquitted the accused persons. On appeal, the High Court appreciating the facts and circumstances of the case convicted Munni Lal along with the appellant for an offence under Section 302 read with 34 I.P.C. and sentenced each of them to undergo rigorous imprisonment for life. During the pendency of the appeal the main accused Radhey Shyam died. This appeal is against the High Court 's Judgment under Section 379 of the code of Criminal Procedure. Allowing the Appeal in part, HELD : 1. The High Court has rightly pointed out that PW 6 was not connected with the prosecution party in any manner and there was no reason for him to depose falsely, claiming to be an eye witness of the occurrence. As such, his evidence can be taken into consideration. to corroborate the evidence of the informant PW 1. (587 C) 2. The occurrence took place at about 5 P.M. and the first information report was lodged at 6.45 P.M. within two hours, the Police Station being at the distance of four miles from the place of occurrence. In the first information report the same version of the occurrence was disclosed, which has been stated in Court. Apart from naming himself, PW 1 also named PW 5 and PW 582 6 as eye witness of the occurrence. The Investigating Officer reached the place of the occurrence at 9. P.M. the same evening. In such a situation there does not appear to be any scope for concoction of a false case to implicate the accused persons leaving out the real culprits. PW 1 being the brother of the deceased, his going to the Court of Tehsildar at Sitapur and returning to village with the deceased is most natural. His evidence cannot he rejected merely on the ground that he happened to be the brother of the victim. It has been repeatedly pointed out by this Court that near relations will be the last persons to leave out the real culprits and to implicate those who have not participated in the crime. Taking all facts and circumstances into consideration, the prosecution has been able to prove the case as disclosed in FIR against the accused persons. (587 E G) 3.The appellant was a school student and there was no reason on his part to share the common intention of committing the murder of the victim. By merely pressing down the victim before the other two accused persons, assaulted him, it cannot be held that appellant had shared the common intention of causing the death of the victim. In the facts and circumstances of the case it has to he held that he shared only the common intention of culpable homicide not amounting to murder. He can be attributed with the intention that the injuries, which were being caused by the other two accused persons, were likely to cause the death of the victim. (588 E F) 4. The conviction of the appellant under Section 302 read with 34 I.P.C. as well as his sentence to imprisonment for life is set aside. He is convicted under Section 304, Part 1, read with Section 34 of the Penal Code sentenced to undergo rigorous imprisonment for ten years. (588 G)

Appeal No. 177 of 1954. Appeal from the judgment and decree dated October 9, 1950 of the Bombay High Court in First Appeals Nos. 361 & 363 of 1948 from Original Decree arising out of the judgment and decree dated July 31, 1946, of the Court of Special Tribunal, Mangalvedhe in Special Suit No. 1322 of 1938. L. K. Jha, Rameshwar Nath, J. B. Dadachanji and section N. Andley, for the appellant. K. R. Bengeri and K. R. Chaudhari, for the respondent. April 14. The following Judgment of the Court was delivered by SINHA J. This is a defendants ' appeal by leave granted by the High Court of Judicature at Bombay from the decision of that Court, dated October 9, 1950, in two cross appeals from the decision of the Special Judge of the Special Tribunal Court at Mangalvedhe, dated July 31, 1946, in Special Suit No. 1322 of 1938. Of the two cross appeals, the First Appeal No. 361 of 1948, by the appellants, was dismissed, and the First 481 Appeal No. 363 of 1948, by the plaintiff, was allowed. The plaintiff respondent had instituted another suit, being suit No. 1894 of 1937, which was also tried along with Special Suit No. 1322 of 1938. The former suit stands dismissed as a result of the judgment of the High Court, and no appeal has been brought against that judgment to this Court. The suit out of which this appeal arises (Special Suit No. 1322 of 1938), was instituted under the provisions of the Sangli State Agriculturists Protection Act, granting certain reliefs from indebtedness to agriculturists of that State which was then outside what used to be called " British India ". The suit as originally framed, prayed for accounts in respect of two mortgages, though there were really three mortgages, to be described in detail hereinafter, and for possession of the, lands comprised in those mortgages. The first, defendant filed his written statement on January 6, 1940, contesting the suit mainly on the ground that the plaintiff had no title to the mortgaged properties in view of the events that had happened; that the mortgaged properties had been sold at auction and purchased by the defendant 's father who, thus, became the full owner thereof; and that he had sold most of the properties to other persons who were holding those properties as full owners. Defelidant No. 3 who also represents the original mortgagee, filed a separate written statement supporting the first defendant. Of the defendants who are transferees from the original mortgagees or their heirs only defendant No. 8 filed his written statement on March 26, 1940, substantially supporting the first defendants written statement and adding that he had purchased the bulk of the mortgaged properties after acquisition of full title by the mortgagees themselves more than 12 years before the institution of the suit, and that, therefore, it was barred by limitation. The trial court dismissed the suit by its judgment dated November 26, 1941, with costs. On appeal by the defeated plaintiff, the Special Bench of the High Court of Sangli State, by its judgment dated June 13, 1944, remanded the suit for a fresh trial after having permitted the plaintiff to amend the plaint so as to 482 include the relief for redemption. It appears that during the pendency of the suit after remand, an application was made in February, 1945, for making substitution in place of defendant No. 2 who had died meanwhile, but the application was refused by the Court on the ground that the suit had abated as against that defendant. After reframing the issues and rehearing the ,lase, the trial court, by its judgment and decree dated July 31, 1946, dismissed the suit as against defendants 6 to 9 who were holding portions of the mortgaged properties by sale deeds of the years 1919 and 1922, for more than 12 years, as barred by limitation under article 134 of the Limitation Act. The Court decreed the suit in respect of the mortgaged portion of R. section No. 1735, having an area of 16 acres and 21 gunthas, as against defendant No. 3, and R. section No. 334 against defendant No. 1 's heirs. Each party was directed to bear its own costs throughout. From that decision, the defendants preferred a first appeal, being First Appeal No. 361 of 1948, and the plaintiff filed a crossings, being First Appeal No. 363 of 1948, in the High Court of Judicature at Bombay. Both the appeals were heard together along with two other cross appeals arising out of the other suit mentioned above. The High Court, by its judgment and decree dated October 9, 1950, dismissed the defendants ' appeal No. 361 of 1948, and allowed the plaintiff 's appeal No. 363 of 1948, with costs, holding that article 148 and not article 134 of the Limitation Act, applied to the suit, and that, therefore, it was not barred by limitation. In the result, the plaintiff 's suit was decreed in its entirety. Hence, this appeal by the defendants. A number of Questions of fact and law have been raised by the learned counsel for the appellants, but before we proceed to deal with them, it is convenient to dispose of the preliminary points in bar of the suit. At the fore front of his submissions, the learned counsel for the appellants contended that the suit was outside the jurisdiction of the Special Court created under the Sangli State Agriculturists Protection Act I of 1936. With reference to the provisions of that Act, it was contended that the Act authorized the Special Court to 483 take accounts and to reopen closed transactions only up to the year 1915, and that as the transactions which were the subject matter of the suit, were of the years 1898, 1900 and 1901, the Special Court was not competent to go into those transactions and grant any relief to the agriculturist plaintiff. In our opinion, there is no substance in this contention. The Sangli Act referred to above, had chosen the year 1915 as the dateline beyond which the court was not competent to grant any relief to agriculturists, by way of reopening of closed transactions. But that does not mean that the court itself was incompetent to grant any other relief in respect of transactions of a date prior to 1915. If the legislature had intended to limit the jurisdiction of the Special Court, as contended on behalf of the appellants, nothing would have been easier than to say in express terms that the court 's jurisdiction to grant relief was limited to transactions of that year and after, but there are no such words of limitation in any part of the statute. The operative portion of the statute does not contain any such provision. In our opinion, therefore, the Special Court was competent to entertain the suit for redemption, though it would not be competent to reopen those transactions even if any such question of reopening closed transactions had been raised. But it is manifest that no such question arose out of the pleadings in this case. Hence, those words of limitation are wholly out of the way of the plaintiff. It may be mentioned that no such plea of want of jurisdiction of the trial court, had been raised in the pleadings or in the issues in the courts below. This ground was raised, for the first time, in the statement of case in this Court. The preliminary objection to the jurisdiction of the trial court is, thus, overruled. It was next contended that the suit was barred by limitation of one year under article 12 of the Limitation Act. The point arose in this way. The properties sought to be redeemed were mortgaged, as will presently appear, successively under three bonds of the years 1898, 1900 and 1901, by the plaintiff 's father, Gundi (omitting all reference to his brothers). 484 It appears that there was a decree for money of the year 1903, in favour of a third party who is not before us. Gundi had been stied as the original defendant, but after his death, his place was taken by his brother Sadashiv as his heir and legal representative. In execution of the decree, the mortgaged properties were auction purchased by the mortgagee 's Fulchand, son of the first defendant as it appears from the sale certificate, Exh. D 56, dated October 31, 1907. On the basis of this auction purchase, it, has been contended on behalf of the mortgagee that unless the sale were set aside, it would bind Gundi and his successor in interest, the plaintiff. The High Court has held that article 12 is out of the way of the plaintiff because neither the plaintiff nor her father was a party to the sale. If Gundi himself were a party to the execution proceedings, the sale as against him, would bind his estate and his successor in interest. But it appears that Gundi was substituted by his brother Sadashiv in the execution proceedings. If Sadashiv could not be the representative in interest of Gundi, as will presently appear, he could not have represented Gundi 's estate, and, therefore, the gale as against him, would be of no effect as against the plaintiff. Bat it was argued in answer to this contention that the decision of the Privy Council in the case of Malkarjun Bin Shidramappa Pasare vs Narhari Bin Shivappa (1), is an authority for the proposition that even if the property was sold by substituting a wrong person as the legal representative of the judgment debtor, the sale would bind the estate of the judgment debtor as much as if the right legal representative had been brought on the record of the execution proceedings. Assuming that the decision of the Privy Council in Malkarjun 's case (supra) is correct, and that it is not subject to the infirmities of an ex parte judgment, asimay well be argued, that decision is clearly distinguishable so far as the present case is concerned. In Malkarjun 's case, the executing court had been invited to decide the question as to who was the true legal representative of the judgment debtor, and the court, after (1) (1900) L.B. 27 1, A. 216 485 judicially determining that controversy, had brought on record the person who was adjudged to be the true legal representative. The sale was held to be of the property of the judgment debtor through his legal representative, after the adjudication by the court. The Privy Council held that though the decision of the court on the question as to who was the true legal representative, was wrong, it was a decision given in that litigation which affected the judgment debtor and his true legal representative, unless set aside in due course of law. In the present case, there was no such adjudication. From the scanty evidence that we have on this part of the case, it appears that Gundi, the original defendant, had died and had been, without any controversy, substituted by his brother, Sadashiv. The court had not been invited to determine any controversy as between Sadashiv and the true legal representative of Gundi deceased. In execution proceedings, the property was sold as that of Sadashiv the substituted judgment debtor. It was a moneysale and passed only the right title and interest of Sadashiv, if it bad any effect at all. Malkarjun 's case (supra), therefore, is of no assistance to the appellants. The plaintiff, Gundi 's daughter, not being affected in any way by the sale aforesaid, it is not necessary for her to sue for setting aside the sale. She was entitled, as she has done, to ignore those execution proceedings, and to proceed on the assumption, justified in law, that the sale had not affected her inheritance. The suit is, therefore, not barred by article 12 of the Limitation Act. It was next contended that even if article 12 was not available to the defendants by way of a bar to the suit, the suit was certainly barred under article 134 of the Limitation Act. Under article 134, the plaintiff has to sue to recover possession of immovable property mortgaged and, afterwards, transferred by the mortgagee for a valuable consideration, within 12 years from the date the " transfer becomes known to the plaintiff ". On the other hand, it has been contended on behalf of the plaintiff that the usual 486 rule of 60 years ' limitation under, article 148 of the Limitation Act, governs the present case. On this part of the case, the defendants suffer from the initial difficulty that the sale deeds relied upon by them in aid of the plea of limitation under article 134, have not been brought on the record of this case, and, therefore, the Court is not in a position to know the exact terms of the sale deeds. This difficulty, the appellants sought to overcome by inviting our attention to the statements made in paragraph 8 of the plaint. But those are bald statements giving the reasons why the defendants other than the original mortgagee, were being impleaded as defendants. There is no clear averment in that paragraph of the plaint about the extent of the interest sold by those sale deeds and other transfers referred to therein. The Court is, therefore, not in a position to find out the true position. Those sale deeds themselves were the primary evidence of the interest sold. If those sale deeds which are said to be registered documents, were not available for any reasons, certified copies thereof could be adduced as secondary evidence, but no foundation has been laid in the pleadings for the reception of other evidence which must always be of a very weak character in place of registered documents evidencing those transactions. Article 134 of the Limitation Act contemplates a sale by the mortgagee in excess of his interest as such. The legislature, naturally, treats the possession of such transferees as wrongful, and therefore, adverse to the mortgagor if he is aware of the transaction. Hence, the longer period of 60 years for redemption of the mortgaged property in the hands of the mortgagee or his successor in interest, is cut down to the shorter period of 12 years ' wrongful possession if the transfer by the mortgagee is in respect of a larger interest than that mortgaged to him. In order, therefore, to attract the operation of Art,. 134, the defendant has got affirmatively to prove that the mortgagee or his successor in interest has transferred a larger interest than justified by the mortgage. If there is no such proof, the shorter period under article 134 is not available to the 487 defendant in a suit for possession after redemption. A good deal of argument was addressed on the question as to upon whom lay the burden to prove the date of the starting point of limitation under that article. It was argued on behalf of the defendants appellants that as it is a matter within the special knowledge of the plaintiff, the plaint should disclose the date on which the plaintiff became aware of the transfer. On the other hand, it was contended on behalf of the plaintiff respondent that it is for the defendants to plead and prove the facts including the date of the knowledge which would attract the bar of limitation under article 134. As we are not satisfied, for the reasons given above, that article 134 is attracted to the present case, it is not necessary to pronounce upon that controversy. It is, thus, clear that if articles 12 and 134 of the Limitation Act, do not stand in the way of the plaintiff 's right to recover posses. ,ion, the only other Article which will apply to the suit, is article 148. It is common ground that if that Article is applied, the suit is well within time. Before dealing with the factual aspects of the case, it is necessary to deal with another plea in bar of the suit raised on behalf of the appellants. It is contended that the suit is bad for defect of parties in so far as the heirs of the second defendant are concerned. It appears from the order dated March 27, 1946, passed by the trial court during the pendency of the suit after remand, that the second defendant died on April 26, 1943, that is to say, while the appeal before the Bombay High Court was pending in that Court before remand. The then appellant who was the plaintiff, did not take steps to bring on record the legal representatives of that defendant. An attempt was made by the plaintiff later on to get his heirs substituted on the record, but the Court upheld the defendants objection and did not allow substitution to be made. It was, therefore, noted that the appeal which was then pending in the High 'Court, had abated as against defendant No. 2, and that, the order of remand made after his death and in the absence of his legal representatives, would not affect them. Therefore, it was 488 contended that the whole suit would abate, because, in the absence of the heirs of the deceased defendant No. 2, the suit was imperfectly constituted under 0. 34, r. I of the Code of Civil Procedure. That rule requires that " all persons having an interest either in the mortgage security or in the right of redemption shall be joined as parties. . The original mortgagee. under the three mortgages, was Kasturchand Kaniram. The defendant No. 1 has contested this suit by filing a separate written statement of his own as the successor in interest of the original mortgagee. It does not appear from the pleadings that the second defendant was a joint mortgagee with the first defen dant or his ancestors. The only statement in the plaint in para. 8, with reference to the second defendant, is that the " Lands R. section No. 1735 has gone to the share of defendant No. 2. Defendant No. 3 looks after all the transactions of defendant No. 2 and the shop running under the name of ' Kaniram Kasturchand ' has gone to the share of defendant No. 3 ". Thus, it is not a case of the first defendant being joint with the other defendants including defendant No. 2 who is not now represented on the record. If defendant No. 2 had any distinct interest, that, on the plaint, appears to be confined to R. section No. 1735. In the written statement filed on behalf of the third defendant, it is stated in para. 9 that the mortgaged portion of R. section No. 1735 which, according to the plaint, was the property of the second defendant, was really in possession of the third defendant as owner. It would, thus, appear that even in respect of that plot, the second defendant had no subsisting interest. This claim of the third defendant is strengthened by the fact that the second defendant did not file any written statement challenging he statement aforesaid of the third defendant or claiming any interest in that plot or any other part of the mortgaged property. The second defendant had remained ex parte throughout, apparently because he had no interest in the property to be redeemed. In any view of the matter, his heirs are not parties to this suit, and any determination in this suit will not bind them. But it does appear that 489 the second defendant had no subsisting interest, if he had any at any anterior period, in any portion of the mortgaged property. It was also contended that the original defendant No. 8 died, and in his place defendants Nos. 8a to 8g were substituted. It appears that of the seven persons substituted on the record as the legal representatives of the original defendant No. 8, only defendants 8e, 8f and 8g were served, and the others, namely, 8a, 8b, 8c and 8d were not served. On those facts, it was contended that the suit for redemption was bad in the absence of all the necessary parties. It was sought, at one stage of the arguments, to be argued that the suit had abated against defendant No. 8, and this argument, in the High Court, was met by the observation that under O. XXII, r. 4, Code of Civil Procedure, it was enough to bring on record only some out of the several legal representatives of a deceased party, on the authority of the judgment of the Bombay High Court in Mulchand vs Jairamdas (1). But on the facts stated above, there was no room for the application of r. 4, O. XXII of the Code. All the legal representatives, at any rate, all those persons who were said to be the legal representatives of the deceased defendant No. 8, had been substituted. Thus, the requirements of O. XXTI had been fulfilled. If, subsequently, some of the heirs, thus substituted, are not served, the question is not one of abatement of the suit or of the appeal, but as to whether the suit or the appeal was competent in the absence of those persons. It does not appear that the absent parties were really necessary parties to the suit or the appeal in the sense that they were jointly interested with the others already on the record in any portion of the mortgaged property. In what circumstances they were not served or ordered to be struck off from the record, does not clearly appear from the printed record before us. The defendant No. 8e who happens to be the brother of the original defendant No. 8, has only filed a written statement claiming that he and his vendor, defendant No. 7, had been in possession for more than 12 years, and that (1) , 490 the suit was, on that count, barred by limitation. None of the other defendants who had been brought on the record in place of the original defendant No. 8, has appeared in the suit or in the appeal to contest the claim of defendant No. 8e that he was in possession of that portion of the property, namely, 6 acres and 32 gunthas out of R. section No. 242 (old survey No. 233). Renee, there was no question of abatement of the suit or the appeal. The only question which may or may not be ultimately found to be material on a proper investigation, may be whether the decree to be passed in this case, would be binding on those who had not been served. For ought we know it may be that they were not interested in the plot sought to be redeemed. On these findings, it must be held that the preliminary objections raised on behalf of the defendants in bar of the suit, must be overruled. Hence, the whole suit cannot be held to be incompetent for the reason that the heirs of defendant No. 2 have not been brought on the record. Having, thus, disposed of the specific pleas in bar of the suit, we now turn to the contentions bearing on the factual aspects of the controversy. It was contended that the plaintiff who is admittedly the daughter of Gundi, has not established her title to the mortgaged properties. In this connection, it is convenient to set out the essential facts in relation to the three mortgage. deeds in question. The first mortgage is dated June 4, 1898, in favour of Kasturchand Kaniram, executed by Gundi, son of Appa, for the sum of Rs. 700, the amount borrowed by him, mortgaging 7 survey numbers with an aggregate area of 43 acres and 38 gunthas. It was a mortgage with possession for a period of 4 years, with Gundi 's two brothers Sadashiv and Rama as sureties for the repayment of the amount borrowed which was the personal responsibility of Gundi under the terms of the document. But the property mortgaged is admittedly the ancestral land of the three brothers. The second mortgage between the same parties in respect of the same properties, bears the date May 25, 1900. It secures a further advance of Rs. 300 to the mortgagor, the payment of which debt 491 is again assured by his two brothers Sadashiv and Rama as sureties. The third mortgage bond is for a further advance of Rs. 200 to the mortgagor Gundi, with his brothers aforesaid again figuring as sureties. It would, thus, appear that all the three mortgages are between the same parties as mortgagor and mortgagee, and the two brothers of the mortgagor join in executing the mortgages as sureties, the property given in mortgage belonging to all the three brothers. The total advance of Rs. 1,200 under those three mortgages, was made to the principal debtor, Gundi. It appears that, of the three brothers, Rama died first, and then Gundi, some time in 1903, survived by his two daughters the plaintiff and defendant No. 13. The plaintiff 's case is that the common ancestor, Appa, in his lifetime, had effected a partition amongst his three sons aforesaid, giving them each specific portions of his lands, reserving a portion for the maintenance of his wife. Those transactions are exhibits P 43, P 44, P 45 and P 46, all dated August 31 or September 1, 1892, and, apparently, forming parts of the same transaction. These are formal documents giving details of the lands allotted to each one of the three brothers and to their mother by way of maintenance. The common recital in these documents, is that the executant of the documents, Appa, had three sons Gundi, Sadashiv and Rama, in order of seniority " who cannot pull on together The document further recites: ".Hence, separation having been effected with your consent, (I have) divided in every way and given you the estate, the land, the assets etc. , pertaining to the one third share. The same are as under. " Then follow the details of the properties separately allotted to each of them. The plaintiff 's case is that ever since 1892 the date of the documents aforesaid the three branches of the family had become separate in estate, if not also divided in all respects, and that on the death of Raina, Guildi and his brother Sadashiv inherited his one third share in equal moieties, that is to say , on the death of their mother and their brother, the two brothers became owners of half and half of the ancestral 492 property left by Appa who appears to have died soon after the alleged partition. The plaintiff 's case further is that the principal mortgagor in all those three transactions aforesaid, was Gundi, and his two brothers had joined only as sureties by way of additional security in favour of the mortgagee, It has been contended on the other hand on behalf of the defendants appallants that, in the first instance, the documets of 1892, referred to above, do not evidence an actual partition by metes and bounds, but only represent an arrangement by way of convenience for more efficient and peaceful management of the family property, and that, alternatively, if those documents are claimed to have the efficacy of partition deeds, they are inadmissible in evidence for want of registration. The courts below have held that those documents are inadmissible in evidence as regular deeds of partition which they purport to be, in view of the provisions of the Registration Act. But those transactions have been used for the collateral purpose of showing that from that time, the three brothers became separate in estate, and evidencing the clear intention on the part of each one of them to live as separated members, each with one third share in the paternal estate. In this connection, reliance was placed on behalf of the appellants ' upon what was alleged to be the subsequent conduct of the three brothers after 1892, as evidenced by the three mortgage bonds themselves and the saledeed exhibit D 54 dated June 17, 1909. By the last named document, Sadashiv purported to sell to Fulchand Kasturchand, son of the original mortgagee, practically the whole of the mortgaged properties, for a sum of Rs. 1,500. The recitals in the sale deed would certainly make it out that the three brothers were joint in estate, and that the sale deed was being executed to pay off the personal loans of Gundi and Rama during the Years 1900 to 1903, plus the loans taken by the vendor himself. Finally, the deed proceeds to make the following very significant declaration as to the status of the members of the so called joint family: "As I have sold to you my right, title and interest in the above said lands, neither I nor my heirs and 493 executors of my will have any right whatsoever over the said property. As I am the male heir in the joint family by survivorship nobody except me has any interest in the aforesaid lands. I have sold to you whatever interest I had in the said, lands. " It was further contended that even strangers to the family treated the brothers as joint in estate as shown by the execution proceedings and the sale certificates of the years 1903 to 1907, whereby Sadashiv was substituted as the sole heir and legal representative of the defendant Gundi, in the suit for money which resulted in the, auction sale referred to above, of the ear 1907. If the transaction of the year 1892, is admissible in evidence, for the purpose for which the document was used in the courts below, namely, to prove separation in estate, there is no room for ambiguity, and the position is clear that the three brothers had become separate. Further recitals in those documents that specific portions of the ancestral property had been allotted to the three brothers separately, being in the nature of a partition deed by the father in his life time, and being unregistered, are inadmissible in evidence to prove such a partition. But the plaintiff 's case does not depend upon proof of actual partition by metes and bounds. In the absence of any ambiguity, the later transactions would not be relevant except to show that there was a subsequent reunion amongst the brothers, which is no party 's case. But it was argued on behalf of the appellants that those documents exhibits P series aforesaid are not admissible in evidence even for the limited purpose of showing separation in estate. The question, therefore, is whether those documents " purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property", within the meaning of section 17(1) (b) of the Registration Act. No authority has been cited before us in support of this contention. Partition in the 63 494 Mitakshara sense may be only a severance of the joint status of the members of the coparcenary, that is to say, what was ' once a joint title, has become a divided title though there has been no division of any properties by metes and bounds. Partition may also mean what ordinarily is understood by partition amongst co sharers who may not be members of a Hindu coparcenary. For partition in the former sense, it is not necessary that all the members of the joint family should agree, because it is a matter of individual volition. If a coparcener expresses his individual intention in unequivocal language to separate himself from the rest of the family, that effects a partition, so far as he is concerned, from the rest of the family. By this process, what was a joint tenancy, has been converted into a tenancy in common. For partition in the latter sense of allotting specific properties or parcels to individual coparceners, agreement amongst all the coparceners is absolutely necessary. Such a partition may be effected orally, but if the parties reduce the transaction to a formal document which is intended to be the evidence of the partition, it has the effect of declaring the exclusive title of the coparcener to whom a particular property is allotted by partition, and is, thus, within the mischief of section 17(1) (b), the material portion of which has been quoted above. But partition in the former sense of defining the shares only without specific allotments of property, has no reference to immovable property. Such a transaction only affects the status of the member or the members who have separated themselves from the rest of the coparcenary. The change of status from a joint member of a coparcenary to a separated member having a defined share in the ancestral property, may be effected orally or it may be brought about by a document. If the document does not evidence any partition by metes and bounds, that is to say, the partition in the latter sense, it does not come within the purview of section 17(1) (b), because so long as there has been no partition in that sense, the interest of the separated member continues to extend over the whole joint property as before. Such a transaction 495 does not purport or operate to do any of the things referred to in that section. Hence, in so far as the documents referred to above are evidence of partition only in the former sense, they are not compulsorily registrable under section 17, and would, therefore, not come within the mischief of section 49 which prohibits the reception into evidence of any document " affecting immoveable property ". It must, therefore, be held that those documents have rightly been received in evidence for that limited purpose. Lastly, it was contended that if those documents of the year 1892 are admissible to prove separation amongst the three brothers, then, oil the death of one of the three, namely, Rama, and of their mother, the entire ancestral properties including the mortgaged properties, vested in the two brothers in equal shares. Both by the auction purchase of the year 1906 (D 57 D) and the sale deed (exhibit D 54 of the year 1909), Sadashiv 's moiety share in the mortgaged property, was purchased by Fulchand aforesaid. The plaintiff, therefore, could only claim the other moiety share of her father, Gundi. In our opinion, there is no answer to this contention because it is clear upon a proper construction of the three mortgage bonds and on the plaintiff 's own case that the entire ancestral properties and not only Gundi 's share, had been mortgaged. The appeal will, therefore, be allowed to the extent of the half share rightly belonging to Sadashiv, and the decree for possession after redemption will be confined to the other half belonging to the plaintiff 's father. In the result, the appeal is allowed to the extent indicated above. As success between the parties, has been divided, they are directed to bear their own costs throughout. Appeal allowed in part.

The appellant, a contractor entered into a contract with the respondent for the construction of a building. The contract consisted of two phases. The date of commencement of both the phases was March 10, 1979, the date of comple tion of Phase I was June 9, 1980 and that of Phase II was November 9, 1980. Dispute arose about the handing over of the site. The appellant 's case was that the site was not handed over as stipulated and consequently the work could not either be commenced or completed as stipulated. The respondent asserted that the appellant had abandoned the work and committed a breach of contract. This was negated by the appellant. As the contract provided for settlement of disputes by an arbitrator, the appellant filed a suit for the appoint ment of an arbitrator. The matter came up in appeal to this Court, and one of its former Judges was appointed as an arbitrator. The Arbi trator entered upon the reference, examined the documents, heard the parties, considered the evidence, and made an award after inspecting the sites. The respondent aggrieved by the award filed a petition and contested the same. It was contended that the arbitrator had travelled beyond his jurisdiction in awarding a sum of Rs.2 lakhs as escalation cost and charges in respect of claim I. Disposing of the Civil Miscellaneous Petition the Court, HELD: 1. It is well settled that an award can only be set aside under section 30 of the , if the Arbitrator has misconducted himself or the proceeding. [121C D] 116 2. Adjudicating upon a matter which is not the subject matter of adjudication, is a legal misconduct for the Arbitrator. [121D] 3. Escalation is a normal incident arising out of gap of time in this inflationary age in performing any contract. [121F] In the instant case, the dispute that was referred to the arbitrator was, as to who was responsible for the delay, what are the repercussions of the delay in completion of the building, and how to apportion the consequences of the responsibility. After discussing the evidence and the sub mission of the parties to the contract, the arbitrator, found that it was evident that there was escalation and, therefore, he came to the conclusion that it was reasonable to allow 20% of the compensation under claim I, he accord ingly allowed the same. This was a matter which was within the jurisdiction of the arbitrator, and the arbitrator had not misconducted himself in awarding the amount as he has done. [121D E, G H; 122A] 4. Once It was found that the arbitrator had jurisdic tion to find that there was delay In execution of the con tract due to the conduct of the respondent, the respondent was liable for the consequences of the delay, namely, in crease in prices. [122C D]

Appeal No. 349 of 1959. Appeal from the judgment and order dated February 1, 1957, of the Punjab High Court, in Civil Writ Application No. 385 of 1955. B. K. Khanna and D. Gupta, for the appellants. The respondent did not appear. May 4. The Judgment of the Court was delivered by SUBBA RAO, J. This appeal by certificate is preferred against the order of the Punjab High Court dated November 9, 1956, setting aside the order of the Consolidation Officer and directing him to proceed with the matter in accordance with law. The respondents are members of a joint Hindu family and are evacuees from Pakistan. On March 3, 1950, in lieu of the lands left by the family in Pakistan, the Custodian of Evacuee Property allotted to the said. family 11 standard acres and 9 units of Grade 'A ' land in Pati Kankra, Shahabad Estate in Tehsil Thanesar in Karnal District. The said units were valued as equal to 123 standard kanals and 18 standard marlas of 'A ' Grade land. The family took possession of the said land, and, it is alleged, made improvements thereon. On July 28, 1954, the State Government issued a notification under section 14 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 (hereinafter called the Act), declaring its intention to make a scheme for the consolidation of the holdings. On April 30, 1955, a draft scheme was proposed by the Consolidation Officer and published indicating, inter alia, that the respondents ' family would be given 84 standard kanals consisting of 50 standard kanals and 7 standard marlas of 'A ' Grade land, and 34 standard kanals and I standard marla of 'B ' Grade land. The lands proposed to be substituted for the lands already allotted on quasi permanent tenure to the respondents ' family are admittedly of a lesser value than the land allotted to them earlier. The said consolidation was not made 714 in strict compliance with the provisions of the Act, but pursuant to administrative directions given to the Consolidation Officer by the State Government. Broadly stated, under the said directions the Consolidation Officer was directed to take into consideration, for the purpose of consolidation, the number of acres held by the evacuee and not the actual valuation at site of the land allotted to him. The objections filed by the respondents were rejected by the Consolidation Officer. By an order dated August 6, 1958, the Settlement Commissioner confirmed the scheme pro pounded by the Consolidation Officer. Meanwhile, the (44 of 1954) became law; it came into force on October 9, 1954, i.e., after the Estate had been notified for consolidation of holdings. On March 24, 1955, the Central Government issued a notification under section 12 of the Displaced Persons Act (44 of 1954) acquiring all the evacuee properties to which that Act applied. This notification was issued before the scheme of consolidation was confirmed by the Settlement Commissioner. On February 23, 1956, the Central Government issued a sanad conferring proprietary rights on the respondents in respect of the lands allotted to them in 1950. This sanad was issued after the order of the Settlement Commissioner confirming the scheme of consolidation. On November 9, 1955, i.e., before the said sanad was issued to them, the respondents filed a petition in the High Court of Punjab under article 226 of the Constitution praying for the issue of an appropriate writ to quash the said scheme of consolidation. The High Court by its final order dated February 1, 1957, allowed the said objection and issued a direction to the Consolidation Officer to proceed with the matter before him in accordance with law. Mr. Khanna, learned counsel for the State, raised before us the following two points: (1) The respondents had no legal right to maintain the petition under article 226 of the Constitution. And (2) the directions issued by the State Government were validly issued and, therefore, the Consolidation Officer was 715 within his rights to formulate the scheme on the basis of those instructions. ' Re. The existence of a right and the infringement thereof are the foundation of the exercise of the jurisdiction of the court under article 226 of the Consti tution. The right that can be enforced under article 226 of the Constitution shall ordinarily be the personal or individual right of the applicant. It may be first considered whether the respondents had such a right on the date when they filed the petition under article 226 of the Constitution. They filed the petition on November 9, 1955, i.e., after the Central Government issued the, notification acquiring all the evacuee properties and before it issued the sanad conferring proprietary rights on the respondents in respect of the lands allotted to them. The nature of interest of a displaced person in the properties allotted to him under the evacuee law has been authoritatively decided by this Court in Amar Singh vs Custodian, Evacuee Property, Punjab (1). There, Jagannadhadas, J., speaking for the Court, after an elaborate survey of the law on the subject, came to the conclusion that the interest of a quasi permanent allottee was not property within the meaning of article 19(1)(f) and article 31(2) of the Constitution. But the learned Judge made it clear that, notwithstanding the said conclusion an allottee had a valuable right in the said interest. The learned Judge stated the legal position in the following words: "In holding that quasi permanent allotment does not carry with it a fundamental right to property under the Constitution we are not to be supposed as denying or weakening the scope of the rights of the allottee. These rights as recognized in the statutory rules are important and constitute the essential basis of a satisfactory rehabilitation and settle ment of displaced land holders. Until such time as these land holders obtain sanads to the lands, these rights are entitled to zealous protection of the constituted authorities according to administrative rules and instructions binding on them, and of the (1) [1957] S.C.R. 801, 836. 716 courts by appropriate proceedings where there is usurpation of jurisdiction or abuse of exercise of statutory powers. " It may be mentioned that the learned Judge in coming to the conclusion noticed all the relevant Acts on the subject, including the (44 of 1954) and particularly section 12 thereof. The observations of this Court indicate that notwithstanding such notification an evacuee has a valuable right in the property allotted to him, and that the said right is entitled to the protection of the constituted authorities and the courts. A perusal of the relevant provisions of Act 44 of 1954 demonstrates the correctness of the said observations. Section 10. Where any immovable property has been leased or allotted to a displaced person by the Custodian under the conditions published (a) by the notification of the Government of Punjab in the Department of Rehabilitation No. 4891 S or 4892 S, dated the 8th July, 1949; or (b) by the notification of the Government of Patiala and East Punjab States Union in the Department of Rehabilitation No. 8R or 9R, dated the 23rd July, 1949, and published in the Official Gazette of that State, dated the 7th August, 1949, and such property is acquired under the provisions of this Act and forms part of the compensation pool, the displaced person shall, so long as the property remains vested in the Central Government, continue in possession of such property on the same conditions on which he held the property immediately before the date of the acquisition, and the Central Government may, for the purpose of payment of compen sation to such displaced person, transfer to him such property on such terms and conditions as may be prescribed. Section 12. (1) If the Central Government is of opinion that it is necessary to acquire any evacuee property for a public purpose, being a purpose connected with the relief and rehabilitation of displaced persons, including payment of compensation to such 717 persons, the Central Government may at any time acquire such evacuee property by publishing in the Official Gazette a notification to the effect that the Central Government has decided to acquire such evacuee property in pursuance of this section. A reference to r. 14(6) of the rules made under the , will also be useful in this context. Tinder that rule, the Custodian has no power to make any order after July 22, 1952, cancelling or varying the allotments made, subject to certain exceptions with which we are not concerned here. The result of these provisions is that under the , the respondents became quasi permanent allottees in respect of the land allotted to them in 1950. After July 22, 1952, the Custodian ceased to have any authority to cancel or modify the said allotment. After the notification issued by the Government under section 12 of the Act, so long as the property remained vested in the Central Government, the respondents continued to be in possession of the property on the same conditions on which they held the property immediately before the date of acquisition, that is, under a quasi permanent tenure. The contention that on the issue of the said notification, the respondents ceased to have any interest in the said land is without any foundation. It is, therefore, clear that on the date when the respondents filed the petition in the High Court they had a very valuable, right in the properties allotted to them which entitled them to ask the High Court to give them relief under article 226 of the Constitution. That apart, on February 23, 1956, the Central Government issued a sanad to the respondents conferring an absolute right on them in respect of the said properties. Though the sanad was issued subsequent to the filing of the petition, it was before the petition came to be disposed of by the High Court. At the time the High Court disposed of the petition, the limited right of the respondents had blossomed 91 718 into a full fledged property right. In the circumstances of the case, the High Court was fully justified in taking note of that fact. From whatever perspective this case is looked at, it is obvious that the respondents hate sufficient interest in the property to sustain their petition under article 226 of the Constitution. Re (2). The second point has absolutely no legs to stand upon. The East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948, was enacted, in the words of the long title annexed to the Act, to, provide for compulsory consolidation of ' agricultural holdings and for the. prevention of fragmentation of agricultural holdings in the State of Punjab. Under section 15 of the said Act, the scheme prepared by the Consolidation Officer shall provide for the payment of compensation to any owner who is allotted a holding of less market value than that of his original holding and for the recovery of compensation from any owner who is allotted a holding of greater market value than that of his original holding. There is no provision in the Act empowering the Consolidation Officer to deprive a person of any part of his property without allotting to him property of equal value or paying him compensation if he is allotted a holding of less market value than that of his original holding. In the present case it is not disputed that while the respondents were allotted 123 kanals and 18 marlas of 'A ' Grade land on a quasi permanent basis by the Custodian and later confirmed by the Central Government, the consolidation proceedings gave him only 50 kanal 8 and 7 marlas of 'A ' Grade land, and 34 kanals and 1 marla of 'B ' Grade land. The area given under the consolidation pro ceedings is admittedly of less value than that of the holding allotted to the respondents by the Custodian, and the Consolidation Officer has not paid any compensation for the deficiency. This unjust situation in which the respondents have been placed is sought to be supported by learned counsel for the State on the basis of the instructions given to the Consolidation Officer by the State Government. There is no provision in the Act empowering the State Government to 719 give any such instructions to the Consolidation Officer; nor does any provision of the Act confer on the State Government any power to make rules or issue notifications to deprive owners of land of any part thereof or to direct the Consolidation Officer as to how he should exercise his statutory duties. Any such rule would be repugnant to the provisions of the Act. That apart, no such statutory rule empowering the State Government to issue such instructions has been placed before us. Both here as well as in the High Court, learned counsel appearing for the State has not been able to sustain the validity of such instructions on any legal basis. The order of the appropriate officers confirming the 'scheme on the basis of the said instructions was obviously illegal and, therefore, was rightly set aside by the High Court. In the result, the, appeal fails and is dismissed with costs. Appeal dismissed.

By the order of the then Government the right of S, an ancestor of the respondent, to the entire parganas "Syudpore Bhettree" was resumed. S challenged in a civil court the authority of the Government to resume his interest in the jagir. During the pendency of the dispute, settlement proceedings were commenced and in 1832 the Settlement Officer reported that to 166 mahals of the "Syudpore Bhettree" pargana, the village zamindars had established their proprietary rights and only on 12 mahals the proprietary right of S had been established. The dispute pending in the Civil Court was compromised, and the terms were finalised in 1838 with H, son of S (who had died in the meantime). The terms, inter alia, were that for 214 166 mahals settled with the Zamindars, H, and his heirs in perpetuity, be paid annually a pension of 1/4th of the collections after deducting the Tehsildari charges and for 12 mahals settled with H allowance be made in the form of remission of 1/4th of the revenue assessed. The Government under the settlement intended to give a clear fourth of the net revenue of the parganas as pension. The allowance and/ or pension was paid through Treasury Office year after year from 1838 to H and his descendants. In 1951 the U.P. Legislature enacted the Uttar Pradesh Zamindari Abolition and Land Reforms Act 1 of 1951, and under s.6(b) of the Act the revenue authorities stopped payment of the allowance to the respondent. The respondent claimed that by virtue of the notification issued under s.4 of the Act his right to receive pension did not cease because the pension was neither land nor immovable property nor an estate within the meaning of the Act and being merely compensation payable to him in lieu of the rights of his ancestors over the estates comprised within the pargana "Syudpore Bhettree", it was not liable to vest in the State. Held, that the right to receive the allowance of Rs.30,612 8 0 for 166 mahals from the Government under the, arrangement was not in respect of land or its revenue; it was granted as consideration for settlement of a claim litigated in a civil court relating to that land, and could not in the absence of an express provision to that effect be called "an area included under one entry in any of the registers" described in various clauses, (a) to (d) of s.32 of the U.P. Land Revenue Act, 1901. The intention of the Legislature was to extinguish estates and all derivative rights in estates and to extinguish the interest of intermediaries between the State and the tiller of the soil. The grant of confirmation of title which is in respect of a right or privilege to land in an estate or its revenue; it must determine under cl.(b) of s.6 of the Act; but a right to receive an allowance granted in consideration of extinction of a right to land or land revenue does not by the force of cl. (b) determine. The allowance has not the quality of land or land revenue; its quantum only was measured by equating it with a fourth share in the net revenue of a part of land which was the subject matter of the suit in which arrangement for payment of the allowance was made. A person receiving an allowance from the State in consideration "of extinction of a right to land or land revenue is not a proprietor who is an assignee of land revenue," and in particular if his name is not entered in the revenue record under cls.(a) to (d) of s.32 of the U.P. Land Revenue Act, 1901, the provisions relating to computation of gross and net assets will not apply to him. The Act does not intend to extinguish the right to receive allowance granted in 21 considerations of extinction of right to land or land revenue by the operation of s.6(b) of the Act 1 of 1951. Held, further, that the respondent was a proprietor of the 12 mahals, of the "Syudpore Bhettree" Parganas. The said 12 mahals were an "estate" within the meaning of s.3(8) of the Act and by section 4 the right of the respondent in that estate stood vested in and transferred to the State. The right of the respondent in the 12 mahals having ceased, the right of remission could not be converted into a positive right to receive the amount thereof.

Appeal No. 230 of 1955. Appeal from the judgment and order dated October 5, 1953, of the Patna High Court in M. J. C. No. 128 of 1953. Mahabir Prasad, Advocate General for the State of Bihar and R. C. Prasad, for the appellants. N. C. Chatterjee and P. K. Chatterjee, for the respondent. April 15. The Judgment of the Court was delivered by section K. DAS, J. This appeal relates to a trust known as the Srimati Charusila Trust and the properties appertaining thereto. By its judgment and order dated October 5, 1953, the High Court of Patna has held that the trust in question is a private trust created for the worship of a family idol in which the public are not interested and, therefore, the provisions 604 of the Bihar Hindu Religious Trusts Act, 1950 (Bihar I of 1951), hereinafter referred to as the Act, do not apply to it. Accordingly, it allowed an application made to it under article 226 of the Constitution and quashed the proceedings taken against the respondent herein under sections 59 and 70 of the Act. The State of Bihar, the President of the Bihar State Board of Religious Trusts and the Superintendent of the said Board who were respondents to the petition under article 226 are the appellants before us. The trust in question was created by a trust deed executed on March 11, 1938. Srimati Charusila Dasi is the widow of one Akshaya Kumar Ghose of No. 3, Jorabagan Street in Calcutta. She resided at the relevant time in a house known as Charu Niwas at Deoghar in the district of Santhal Parganas in the State of Bihar. In the trust deed she described herself as the settlor who was entitled to and in possession of certain properties described in schedules B, C and D. Schedule B property consisted of three bights and odd of land situate in mohalla Karanibad of Deoghar town together with buildings and structures thereon schedule C property was Charu Niwas, also situate in Karanibad of Deoghar; and schedule D properties consisted of several houses and some land in Calcutta the aggregate value of which was in the neighborhood of Rs. 8,50,000. In a subsequent letter to the Superintendent, Bihar State Board of Religious Trusts, it was stated on behalf of Srimati Charusila Dasi that the total annual income from all the properties was about Rs. 87,839. In the trust deed it was recited that the settlor had installed a deity named Iswar Srigopal in her house and had since been regularly worshipping and performing the " puja " of the said deity; that she had been erecting and constructing a twin temple (jugal mandir) and a Nat Mandir (entrance hall) to be named in memory of her deceased son Dwijendra Nath on the plot of land described in schedule B and was further desirous of installing in one of the two temples the deity Srigopal and such other deity or deities as she might wish to establish during her lifetime and also of installing in 605 the other temple a marble image of Sri Sri Balanand Brahmachari, who was her religious preceptor and who was regarded by his disciples as a divine person. It was further recited in the trust deed that the settlor was also desirous of establishing and founding a hospital at Karanibad for Hindu females to be called Akshaya Kumar Female Hospital in memory of her deceased husband. By the trust deed the settler transferred to the trustees the properties described in schedules B, C and D and the trustees were five in number including Srimati Charusila Dasi and her deceased husband 's adopted son Debi Prasanna Ghosh; the other three trustees were Amarendra Kumar Bose, Tara Shanker Chatterjee and Surendra Nath Burman, but they. were not members of the family of the settlers Amarendra Kumar Bose resigned from the office of trusteeship and was later replaced by Dr. Shailendra Nath Dutt. The trusts imposed under the trust deed were (1) to complete the construction of the two temples and the Nat Mandir at a cost not exceeding three lakhs to be met out of the trust estate and donations, if any ; (2) after the completion of the two temples, to instal or cause to be installed the deity Iswar Srigopal in one of the temples and the marble image of Sri Balanand Brahmachari in the other and to hold a consecration ceremony and a festival in connection therewith ; (3) after the installation ceremonies and festivals mentioned above, to provide for the payment and expenditure of the daily " sheba puja " and periodical festivals each year of the deity Srigopal and such other deities as might be installed at an amount not exceeding the sum of Rs. 13,600 per annum and also to provide for the daily " sheba " of the marble image of Sri Balanand Brahmachari and to celebrate each year in his memory festivals on the occasion of (a) the " Janma tithi " (the anniversary of the installation of the marble image); (b) " Gurupurnima " (full moon in the Bengali month of Ashar) ; and (c) " Tirodhan " (anniversary of the day on which Sri Balanand Brahmachari gave up his body) at a cost not exceeding Rs. 4,500 per annum ; and (4) to establish or cause to be established and run and 606 manage in Deoghar a hospital for Hindu females only to be called Akshaya Kumar Female Hospital and an attached outdoor charitable dispensary for all out patients of any religion or creed whatsoever and pay out of the income for the hospital and the outdoor dispensary an annual sum of Rs. 12,000 or such other sum as might be available and sufficient after meeting the charges and expenditure of the two temples and after paying the allowance of the " shebait " and trustees and members of the temple committee. It was further stated that the work of the establishment of the 'hospital and the out door charitable dispensary should not be taken in hand until the construction of the temples and the installation of the deities mentioned above. It may be here stated that it is the case of both parties before us that the temples and the Nat Mandir have been constructed and the deity and the marble image installed therein; but neither the hospital nor the charitable dispensary has yet been constructed. The powers, functions and duties of the trustees were also mentioned in the deed and, in schedule A, detailed rules were laid down for the holding of annual general meetings, special meetings, and ordinary meetings of the trustees. To these details we shall advert later. On October 27, 1952, the Superintendent, Bihar State Board of Religious Trusts, Patna, sent a notice to Srimati Charusila Dasi under section 59 of the Act asking her to furnish a return in respect of the trust in question. Srimati Charusila Dasi said in reply that the trust in question was a private endowment created for the worship of a family idol in which the public were not interested and therefore the Act did not apply to it. On January 5, 1953, the Superintendent wrote again to Srimati Charusila Dasi informing her that the Board did not consider that the trust was a private trust and so the Act applied to it. There was further correspondence between the solicitor of Srimati Charusila Dasi and the President of the Bihar State Board of Religious Trusts. The correspondence did not, however, carry the matter any further and on February 5, 1953, the President of the State Board of 607 Religious Trusts said in a notice that he had been authorised to assess a fee under section 70 of the Act in respect of the trust. Ultimately, on April 6,1953, Srimati Gharusila Dasi made an application to the High Court under article 226 of the Constitution in which she prayed that a writ or order be issued quashing the proceedings taken against her by the Bihar State Board of Religious Trusts on the grounds (a) that the trust in question was a private trust to which the Act did not apply and (b) that the Act was ultra vires the Constitution by reason of the circumstance that its several provisions interfered with her rights as a citizen guaranteed under article 19 of the Constitution. This application was contested by the State of Bihar and the Bihar State Board of Religious Trusts, though no affidavit was filed by either of them. On a construction of the trust deed the High Court came to the conclusion that the trust in question was wholly of a private character created for the worship of a family idol in which the public were not interested and in that view of the matter held that the Act and its provisions did not apply to it. Accordingly, the High Court allowed the application and issued a writ in the nature of a writ of certiorari quashing the proceedings under sections 59 and 70 of the Act and a writ in the nature of a writ of prohibition restraining the Bihar State Board of Religious Trusts from taking further proceedings against Srimati Charusila Dasi in respect of the trust in question. The appellants then applied for and obtained a certificate from the High Court that the case fulfilled the requirements of article 133 of the Constitution. The present appeal has been filed in pursuance of that certificate. In connected Civil Appeals numbered 225, 226, 228, 229 and 248 of 1955 (1) judgment has been pronounced to day, and we have given therein a conspectus of the provisions of the Act and have further dealt with the question of the constitutional validity of those provisions in the context of fundamental rights guaranteed by Part III of the Constitution. We have held therein that the provisions of the Act do not take away or (1) Mahant Moti Das vs section P. Saki, see P. 563, ante, 608 abridge any of the rights conferred by that Part. In Civil Appeal No. 343 of 1955 (1) in which also judgment has been pronounced today, we have considered the definition clause in section 2(1) of the Act and come to the conclusion that the Act does not apply to private endowments, and have further explained therein the essential distinction in Hindu law between private and public religious trusts. We do not wish to repeat what we have said in those two decisions; but in the light of the observations made therein, the two questions which fall for decision in this appeal are (I) if on a true construction of the trust deed dated March 11, 1938, the Charusila Trust is a private endowment created for the worship of a family idol in which the public are not interested, as found by the High Court and (2) if the answer to the first question is in the negative, does the Act apply by reason of section 3 thereof to trust properties which are situate outside the State of Bihar. We now proceed to consider and decide these two questions in the order in which we have stated them. On behalf of the appellants it has been contended that on a true construction of the deed of trust, the Charusila Trust must be held to be a public religious trust. The learned Judges of the High Court emphasised that part of the preamble wherein it was stated that the settler had installed a deity called Iswar Srigopal in her house and had been regularly worshiping the said deity, which circumstance (according to them) showed that in its, origin the endowment was a private endowment created for the worship of a family idol in which the public were not interested, and the learned Judges were further of the view that the installation of the said deity in one of the two temples and of the marble image of Sri Balanand Brahmachari in the other temple did not, alter the nature of the endowment which continued to be a expressed the opinion that deed for the establishment of a females and a charitable dispensary for patients of any main objects of the endowment. These findings of the private endowment; they also the provision in the trust hospital for Hindu religion or creed was merely incidental to the other (1) Mahant Ram saroop Dasji vs section e. sahi, see 609 High Court have been seriously and strenuously challenged before us. We say this with respect, but we consider that the learned Judges of the High Court have failed to give to several material clauses of the trust deed their due weight and these have an important bearing on the question in issue. It is true that the settler said that she had installed the deity Iswar Srigopal in her house and she had been regularly worshipping the deity since such installation; if the trust had been created only for the purpose of continuing such family worship, the conclusion would no doubt be that the endowment was wholly of a private character in which the public had no interest. That was not, however, what was done. The settlor created the trust for the construction of two temples, in 'one of which was to be installed the deity Iswar Srigopal and in the other the marble image of her preceptor; the trustees consisted of persons three of whom were strangers to the family, though the settlor reserved to herself the power to remove in her absolute discretion any one or more of the trustees for misconduct by reason of change of religion, etc. One of the relevant considerations is if by the trust deed any right of worship has been given to the public or any section of the public answering a particular description. One of the clauses of the trust deed reads : " The ' pronamis ' and perquisites to be offered to the deities and image in the Jugal Mandir shall form part of the Srimati Charusila Trust Estate and neither the shebait nor any one else shall have interest or claim in or over same." This clause to which the learned Judges of the High Court have made no reference shows that the right of worship was not confined to the family of the settlor or founder, but was given to other members of the Hindu public who could offer " pronamis " and perquisites to the deities, and those I pronamis ' and perquisites were to form part of the trust estate. Schedule E of the deed gives details of the festivals and ceremonials to be performed for the deity and the image of Sri Balanand Brahmachari. One of the cere monials is a Jal Chhatra " (free distribution of 77 610 water); another is annakoot " (distribution of food) at the time of Diwali, the approximate expenditure being fixed at Rs. 500. A third ceremony is a "bhandara ", culminating in free distribution of food, of the Mataji of Sri Balanand Brahmachari. These are ceremonies which even if ancillary to "deva sheba", appear prima facie to confer benefit on the general body of worshippers. Though not conclusive by them selves, they have to be considered in the light of the other main provisions of the trust deed. The other festivals which have to be performed as a rule for the deity are such well known festivals as Rath Yatra, Jhulan, Janmastami, Rash and Dol (Holi) in which members of the Hindu community usually take part in large numbers, and the scale of expenses laid down shows that the festivals are to be performed on a large scale so as to enable a large number of persons to take part in them. Even with regard to the special festivals for Sri Balanand Brahmachari on the occasion of the Janmatithi, Gurupurnima and Tirodhan, the provisions of the trust deed contemplate that they are to be performed on a large scale so that other disciples of Sri Balananda Brahmachari may also join in them. Even the constitution of the committee of trustees is such as would show that the endowment is not a mere private endowment. The trust deed says " In filling up a vacancy the trustees shall see that in the Board of Trustees there shall be, if available, one who is the seniormost lineal male descendant of Akshaya Kumar Ghose, the deceased husband of the settlor, who is eligible and willing and capable of acting as a trustee, another who is a trustee of the Sree Sree Balanand Trust created at Deoghar by the said Sree Balanandji Brahmachari Maharaj of sacred memory, and a third who shall be disciple of Sree Sree Balanand order, that is to say, any one of the disciples of the said Sree Sree Balanand Brahmachari Maharaj of sacred memory and his disciples and the disciples of the latter and so on if such a disciple is willing, eligible and capable of acting as a trustee of the said Trust hereby created, provided always that the full number of trustees shall at all times be five in number and no one 611 shall be eligible to be a trustee unless he be adult male, pious, Bengali Hindu and provided also that the shebait of Sree Gopal and the shebait of Sree Baleshwari Devi of the Ashram Deoghar shall under no circumstances be eligible to be a trustee tinder these presents save and except in the case of the settlor who shall so long as she lives to both a trustee and a shebait. " We may here draw attention to the formation of the temple committee as envisaged by the trust deed. It says that the temple committee 'shall consist of the Jugal Mandir shebait for the time being who shall be the ex officio member and president of the committee and the other members who will be appointed or nominated by the trustees shall consist of six pious Hindus who must be residents of Deoghar and of whom at least four shall be Bengalis. If the trust were created for the worship of a family idol, one would not expect provisions of this nature which vest the management of the temple and the " sheba puja " in members of the public outside the family of the settlor. Besides the aforesaid provisions, there is in express terms the imposition of a trust in favour of the public so far as the hospital and the charitable dispensary are concerned. It is necessary to quote here el. 8 of the trust deed. That clause reads: " To establish or cause to be established and run and manage in Deoghar a hospital for Hindu females only to be called in memory of the husband of the settlor, since deceased, the " Akshaya Kumar Female Hospital " and an attached out door Charitable Dispensary for all out patients of any religion or creed whatsoever and out of the said income to pay and/or spend for the objects of the said Hospital and out door Dispensary annually a sum of rupees twelve thousand or such sum as will be available and sufficient after meeting the aforesaid charges and expenditure and after paying the allowance of the shebait and trustees and members of the temple committee and the establishment charges of offices at Calcutta and Deoghar and of the temple establishment hereinafter mentioned provided however that the work of the establishment 612 of the Hospital and out door Charitable Dispensary shall not be taken in hand by the trustees until the construction of the temple and installation of the deities hereinbefore mentioned." The trust deed further states that the female hospital and charitable dispensary shall, so long as the settlor is alive, be located in a house to be rented in Deoghar and after her death shall be shifted to and located in Charu Niwas. Charu Niwas was, however, sold by an order of the Calcutta High Court and the sale proceeds, it is stated, were appropriated towards the satisfaction of the debts and liabilities of the trust estate. One clause of the trust deed relating to the hospital and the charitable dispensary says: " The object of the said Hospital shall be to provide Hindu females with gratuitous medical and surgical and maternity advice and aid and also to admit them as indoor patients in conformity with such rules and regulation as may be made by or with the sanction of the Board of Trustees. The outdoor Charitable Hospital shall be run as the trustees shall provide by rules. In furtherance of these objects, its funds may be expended in subscriptions or contributions to convalescent and other similar institutions and to other special hospitals and in sending patients to and maintaining them in such institution and hospitals provided that the sum so expended in any one year shall not exceed rupees one thousand or such sum as may be fixed by the trustees from time to time. " The learned Judges of the High Court have expressed the view that these provisions for the establishment of a hospital and charitable dispensary are merely incidental or ancillary to the other main objects of the trust. With great respect, we are unable to appreciate how the establishment of a hospital and charitable dispensary of the nature indicated in the trust deed can be said to be ancillary or incidental to other objects of the trust, viz., the construction of two temples and the installation of the deities therein. In clear and unequivocal terms the trust deed imposes a distinct and independent trust in favour of a considerable section of the public for whose benefit the hospital 613 and the charitable dispensary are to be established. It is true that the establishment of the hospital and the charitable dispensary is to be taken in hand after the construction of the temples and the installation of the deities; that circumstance, however, does not make the trust in relation to the hospital and the dispensary any the less important or even merely incidental or ancillary to the other trusts. It merely determines the priority of time when the different trusts created by the deed are to be given effect to. The High Court has placed reliance on the decision in Prasaddas Pal vs Jagannath Pal (1). That was a case in which by the deed of endowment were dedicated certain houses and premises to the " sheba of a family idol established in one of the said houses and for feeding the poor and carrying out other charitable objects; the deity was installed inside one of the residential quarters, the " shebaitship " was confined to the members of the family of the founder, and the feeding of the poor and of students, in case the income of the debutter property increased, was found to be part and parcel of the "debasheba ", and in those circumstances it was held that the feeding of the poor etc. was not an independent charity but incidental to the main purpose of the endowment, viz., the " puja " of the deity. We are unable to hold that the same considerations apply to the trust before us. In Deoki Nandan vs Murlidhar (2) this Court considered the principles of law applicable to a determination of the question whether an endowment is public or private, and observed: " The cardinal point to be decided is whether it was the intention of the founder that specified individuals are to have the right of worship at the shrine, or the general public or any specified portion thereof. In accordance with this theory, it has been held that when property is dedicated for the worship of a familyidol, it is a private and not a public endowment, as the persons who are entitled to worship at the shrine of the deity can only be the members of the family, and that is an ascertained group of individuals. But (1) Cal.538. (2) ; , 762. 614 where the beneficiaries are not members of a family or a specified individual, then the endowment can only be regarded as public, intended to benefit the general body of worshippers. " One of the facts which was held in that case to indicate that the endowment was public was that the idol was installed not within the precincts of residential quarters but in a separate building constructed for that very purpose on a vacant site. We do not suggest that such a fact is by itself decisive of the question. The fact that the temple is outside the dwelling house is only a circumstance in favour of it being regarded a public temple, particularly in Madras (except Malabar); there are, however, private temples in Bengal which are built outside the residential houses of donors (see the Hindu Law of Religious and Charitable Trust, Tagore Law Lectures by the late Dr. B. K. Mukherjea, 1952 edition, p. 188). In the case before us, the two temples were constructed outside the residential quarters, but that is only one of the relevant circumstances. We must construe the deed of trust with reference to all its clauses and so construed, we have no doubt that the trusts imposed constitute a public endowment. There is one other point to be noticed in this connexion. The deed of trust in the presept case is in the English form and the settlor has transferred the properties to trustees who are to hold them for certain specific purposes of religion and charity; that in our opinion is not decisive but is nevertheless a significant departure from the mode a private religious endowment is commonly made. It is necessary now to refer to a decision of the Calcutta High Court, In re Charusila Dasi (1) relating to this very trust. The question for consideration in that case was the assessment of income tax on the income of this trust estate for the accounting year 193839. The trustees were assessed upon the whole income of the trust. 'The trustees appealed against the assessment and contended that the entire trust was for public, religious and charitable purposes and the whole income (1) I.L.R. 615 fell within cl. (1) of sub section 3 of section 4 of the Income tax Act. The contention of the Commissioner of Income tax was that the trust was no more than a private religious trust and the income did not enure for the public benefit, save with respect to that part of the income which was to be devoted to the hospital and dispensary and to which the latter part of cl. (1) applied. A reference was accordingly made to the High Court and the question framed was whether on a proper construction of the deed of trust, so much of the income of the trust as was not applied for the purpose of constructing and maintaining the female hospital was exempt from tax under the provisions of section 4(3) of the Indian Income tax Act. It was pointed out before the High Court that no part of the income of the trust during the accounting year was devoted to the hospital and dispensary and it was conceded that part of the income which would be devoted to those institutions would fall within the exempting clause. It so happens that the learned counsel who argued the case on behalf of the trustees in the Calcutta High Court in the income tax reference is the same counsel who has argued the case before us on behalf of Srimati Charusila Dasi. The contention now is that the trust in its entirety is a private religious trust. Eleven circumstances were referred to by learned counsel in the income tax reference in support of his contention that the entire trust as ascertained from the trust deed was of a public nature. Gentle, J., with whom Ormond, J., agreed, held that on a proper construction of the deed of trust, so much of the income of the trust as was not applied for the purpose of constructing an maintaining the female hospital was not exempt from tax under the provisions of section 4(3) of the Indian Income tax Act. This decision, it must be stated at once, does not wholly support the present respondent. So far as the hospital and the dispensary are concerned the trust was held to be a public trust. We are of the view that having regard to the main clauses of the trust deed to which we have already made a reference, the trusts in favour of the deity Iswar Srigopal and the image of Sri Balanand Brahmachari are also of a public nature. 816 One of the points which was emphasised before the Calcutta High Court was the provision with regard to pronamis " and perquisites to be offered to the deity and the image. The High Court said: " This provision does not indicate the creation of a trust in favour of the public, but, on the contrary, it denies the right of any one, which must include any member of the public. having a right to the pronamis. In its terms, the deed negatives that benefit is conferred upon the public ". The aforesaid observations appear to us, with respect, to be based on a misconception. When a member of the public makes an offering to a deity, he does not retain any right to what he has offered. What he offers belongs to the deity. When we talk of the right of members of the public or a considerable section thereof, we refer to the right of worship or the right to make offerings in worship of the deity and not of the right to the offerings after they have been made. With regard to other clauses of the trust deed also we take a view different from that of the learned Judges 'who decided the income tax reference. We have already explained our view in the preceding paragraphs and it is unnecessary to reiterate it. The conclusions at which we have arrived on a construction of the deed of trust is that it creates a religious and charitable trust of a public nature. Now, we proceed to a consideration of the second point. Section 3 of the Act says " This Act shall apply to all religious trusts, whether created before or after the commencement of this Act, any part of the property of which is situated in the State of Bihar ". The argument before us on behalf of the respondent is this. Under article 245 of the Constitution, Parliament may make laws for the whole or any part of the territory of India and the legislature of a State may make laws for the whole or any part of the State. Clause (2) of the said Article further states that no law made by Parliament shall be deemed to be invalid on the ground that it would have extra territorial operation. Article 246 gives the distribution of legislative power; 617 Parliament has exclusive power to make laws with respect to any of the matters enumerated in what has been called the Union List; Parliament as also the legislature of a State have power to make laws with respect to any of the matters enumerated in the Concurrent List; the legislature of a State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in the State List. Item 28 of the Concurrent List is,, charities and charitable institutions, charitable and religious endowments and religious institutions ". Learned counsel for the respondent contends that by reason of the provisions in articles 245 and 246 of the Constitution read with item 28 of the Concurrent List, the Bihar legislature which passed the Act had no power to make a law which has operation outside the State of Bihar; he further contends that under section 3 the Act is made applicable to all religious trusts, whether created before or after the commencement of the Act, any part of the property of which is situated in the State of Bihar; therefore, the Act will apply to a religious institution which is outside Bihar even though a small part of its property may lie in that State. It is contended that such a provision is ultra vires the power of the Bihar Legislature, and Parliament alone can make a law which will apply to religious institutions having properties in different States. Alternatively, it is contended that even if the Act applies to a religious institution in Bihar a small part of the property of which is in Bihar, the provisions of the Act can have no application to such property of the institution as is outside Bihar, such as the Calcutta properties in the present case. It is necessary first to determine the extent of the application of the Act with reference to sections 1 (2) and 3 of the Act read with the preamble. The preamble states: " Whereas it is expedient to provide for the better administration of Hindu religious trusts in the State of Bihar and for the protection and preservation of properties appertaining to such trusts 78 618 It is clear from the preamble that the Act is intended to provide for the better administration of Hindu religious trusts in the State of Bihar. Section 1 (2) states that the Act extends to the whole of the State of Bihar, and section 3 we have quoted earlier. If these two provisions are read in the context of the preamble, they can only mean that the Act applies in cases in which (a) the religious trust or institution is in Bihar and (b) any part of the property of which institution is situated in the State of Bihar. In other words, the aforesaid two conditions must be fulfilled for the application of the Act. It is now well settled that there is a general presumption that the legislature does not intend to exceed its jurisdiction, and it is a sound principle of construction that the Act of a sovereign legislature should, if possible, receive such an interpretation as will make it operative and not in operative; see the cases referred to In re the Hindu Women 's Right to Property Act, 1937 and The Hindu Women 's Rights to Property (Amendment) Act, 1936 and In re a Special Reference under section 213 of The Government of India Act, 1935 (1), and the decision of this Court in R. M. D. Chamarbaugwalla vs The Union of India (2). We accordingly hold that section 3 makes the Act applicable to all public religious trusts, that is to say, all public religious and charitable institutions within the meaning of the definition clause in section 2 (1) of the Act, which are situate in the State of Bihar and any part of the property of which is in that State. In other words, both conditions must be fulfilled before the Act can apply. If this be the true meaning of section 3 of the Act, we do not think that any of the provisions of the Act have extra territorial application or are beyond the competence and power of the Bihar Legislature. Undoubtedly, the Bihar Legislature has power to legislate in respect of, to use the phraseology of item 28 of the Concurrent List, " charities, charitable institutions, charitable and religious endowments and religious institutions " situate in the State of Bihar. The question, therefore, narrows down to, this: in so legislating,, has it power to affect trust (1) , 27 30. (2) 619 property which may be outside Bihar but which appertains to the trust situate in Bihar ? In our opinion, the answer to the question must be in the affirmative. It is to be remembered that with regard, to an interest under a trust the beneficiaries ' only right is to have the trust duly administered according to its terms and this right can normally be enforced only at the place where the trust or religious institution is situate or at the trustees ' place of residence: see Dicey 's Conflict of Laws, 7th edition, p. 506. The Act purports to do nothing more. Its aim. , as recited in the preamble, is to provide for the better administration of Hindu religious trusts in the State of Bihar and for the protection of properties appertaining thereto. This aim is sought to be achieved by exercising control over the trustees in personam. The trust being situate in Bihar the State has legislative power over it and also over its trustees or their servants and agents who must be in Bihar to administer, the trust. Therefore, there is really no question of the Act having extraterrestrial operation. In any case, the circumstance that the temples where the deities are installed are situate in Bihar, that the hospital and charitable dispensary are to be established in Bihar for the benefit of the Hindu public in Bihar gives enough territorial connection to enable the legislature of Bihar to make a law with respect to such a trust. This Court has applied the doctrine of territorial connection or nexus to income tax legislation, sales tax legislation and also to legislation imposing a tax on gambling. In Tata Iron & Steel Co. Ltd. vs State of Bihar (1) the earlier cases were reviewed and it was pointed out that sufficiency of the territorial connection involved a consideration of two elements, namely, (a) the connection must be real and not illusory and (b) the liability sought to be imposed must be pertinent to that connection. It cannot be disputed that if the religious endowment is itself situate& in Bihar and the trustees function there, the connection between the religious institution and the property appertaining thereto is real and not illusory ; indeed, the religious institution (I) ; 620 and the property appertaining thereto form one integrated whole and one cannot be dissociated from the other. If, therefore, any liability is imposed on the trustees, such liability must affect the trust property It is true that in the Tata Iron & Steel Co. 's case this Court observed : " It is not necessary for us on this occasion to lay down any broad proposition as to whether the theory of nexus, as a principle of legislation is applicable to all kinds of legislation. It will be enough for disposing of the point now under consideration, to say that this Court has found no apparent reason to confine its application to income tax legislation but has extended it to sales tax and to tax on gambling. " We do not see any reason why the principles which were followed in The State of Bombay vs R. M. D. Chamarbaugwala (2) should not be followed in the present case. In R. M. D. Chamarbaugwala 's case (2) it was found that the respondent who was the organiser of a prize competition was outside the State of Bombay; the paper through which the prize competition was conducted was printed and published outside the State of Bombay, but it had a wide circulation in the State of Bombay and it was found that " all the activities which the gambler is ordinarily expected to undertake" took place mostly, if not entirely, in the State of Bombay. These circumstances, it was held, constituted a sufficient territorial nexus which entitled the State of Bombay to impose a tax on the gambling that took place within its boundaries and the law could not be struck down on the ground of extra territoriality. We are of the opinion that the same principles apply in the present case and the religious endowment itself being in Bihar and the trustees functioning there, the Act applies and the provisions of the Act cannot be struck down on the ground of extra territoriality. We proceed now to consider some of the decisions on which learned counsel for the respondent has placed reliance. These are (1) Sirdar Gurdyal Singh vs The Rajah of Faridkote (3) ; (2) Commissioner of Wakfs, Bengal (1) ; (2)[1957] S.C.R. 874. (3) (1894) 21 I.A. 17r, 185. 621 V. Narasingh Chandra Daw and Co. (1); (3) Madangopal Bagla vs Lachmidas (2); and (4) Maharaj Kishore Khanna vs Raja Ram Singh (3 ). Those decisions, in our opinion, are not in point, as they related to different problems altogether. In Sirdar Gurdyal Singh 's case (4) a Faridkote court passed an ex parte money decree against a defendant who had been a treasurer of Faridkode, but who at the time of suit had ceased to be such and was resident in Jhind of which State he was a domiciled subject; it was held that the decree was a nullity by international law. The ratio of the decision was thus expressed by Lord Selborne: "Territorial jurisdiction attaches (with special exceptions) upon all persons either permanently or temporarily resident within the territory while they are within it; but it does not follow them after they have withdrawn from it, and when they are living in another independent country. . . In a personal action, to which none of these causes of jurisdiction apply, a decree pronounced in absentem by a foreign Court, to the jurisdiction of which the defendant has not in any way submitted himself, is by international law an absolute nullity. " The decision in Commissioner of Wakfs, Bengal vs Narasingh Chandra Daw & Co. (1) proceeded on a construction of section 70 of the Bengal Wakf Act which also had a section similar to section 3 of the Act. Section 70 of the Bengal Wakf Act required notice to the Commissioner of Wakfs before any wakf property could be sold and the question was whether a court in Assam was under any obligation to send such a notice. It was held that the Bengal Act did not apply to Assam and section 70 stood in a different category from the other sections of the Bengal Act. The ratio of the decision was thus explained : " So far as the status of the Commissioner is concerned, it is conferred by the Bengal Act to operate even outside the province. Therefore, the Commissioner may bring suits under section 72 or section 73 of the Bengal Act in courts outside the province. But section 70 lies (1) I.L.R. (3) A.I.R. 1954 Pat. 164. (2) I.L.R. (4) (1894) 21 I.A. 171, 185. 622 in a different category, because it imposes an obligation on the court to issue notice to the Commissioner in certain circumstances. . Section 70(1) refers to a suit or proceeding in respect of any wakf property, etc., and if this wakf property is situated outside the province, so that the court having jurisdiction over it is also outside the province, then the Act cannot operate beyond its extent, that is to say outside the province of Bengal. " The decision in Madangopal Bagla vs Lachmidas and the decision in Maharaj Kishore Khanna vs Raja Ram Singh (1) both related to the interpretation of some of the provisions of the United Provinces Encumbered Estates Act (U. P. Act 25 of 1934). In the former case the limited question for decision was if the decreeholder under a decree of the Original side of the Calcutta High Court was precluded from executing the decree by reason of certain proceedings which had taken place before the Special Judge, Banaras, under the United Provinces Encumbered Estates Act, 1934. The answer given was that the decreeholder was not so precluded and the decision proceeded on a construction of section 18 of the United Provinces Encumbered Estates Act, 1934, read with sections 7, 13 and 14(7) of that Act. It was held that the exclusive jurisdiction intended to be conferred on the Special Judge in supersession of those of civil and revenue courts extended,, as indicated by section 7, only over debts enforceable through the courts within the province and the word " creditor " in section 10 must be limited to those of them who would have to enforce their rights through such courts alone. In the Patna case the question for decision was if section 14(7) of the U. P. Encumbered Estates Act, 1934, should be construed to mean that the decree of a Special Judge is to be deemed to be the decree of a civil court of competent jurisdiction even beyond the territorial jurisdiction of the State Legislature. It was held that the decree passed by the Special Judge of Banaras had not the effect of a decree of a civil court outside the territorial limits of the United Provinces and the Sub (1) I.L.R. (2) A.I.R. 1954 Pat. 164. 623 ordinate Judge of Purnea in Bihar had no jurisdiction to execute such a decree or to direct that the properties of a judgment debtor in Purnea should be attach, ed in execution of the decree. As we have said earlier, these decisions relate to an altogether different problem, namely, the proper construction of certain sections of the Bengal Wakf Act or of the United Provinces Encumbered Estates Act. The problem before us is of a more general nature and the aforesaid decisions are no authorities for the solution of that problem. There is a decision of this Court to which our attention has been drawn (Petition No. 234 of 1953 decided on March 18, 1953). A similar problem arose in that case where the head of a math situate in Banaras made an application under article 32 of the Constitution for a writ in the nature of mandamus against the State of Bombay and the Charity Commissioner of that State directing them to forbear from enforcing against the petitioner the provisions of the Bombay Public Trusts Act, 1950, on the ground inter alia that the Bombay Act could have no application to the math situate in Banaras or to any of the properties or places of worship appurtenant to that math. In the course of the hearing of the petition the learned Attorney General who appeared for the State of Bom bay made it clear that there was no intention on the part of the Government of Bombay or the Charity Commissioner to apply the provisions of the Bombay Act to any math or religious institution situated outside the State territory. The learned Attorney General submitted that the Bombay Act could be made applicable, if at all, to any place of religious instruction or worship which is appurtenant to the math and is actually within the State territory. In view of these submissions no decision was given on the point urged. The case cannot, therefore, be taken as a final decision of the question in issue before us. For the reasons which we have already given the Act applies to the Charusila Trust which is in Bihar and its provisions cannot be struck down on the ground of extra territoriality. 624 The result is that the appeal succeeds and is allowed with costs, the judgment and order of the High Court dated October 5, 1953, are set aside and the petition of Srimati Charusila Dasi must stand dismissed with costs. Appeal allowed.

In 1949 the appellant framed a scheme called " Tonnage Pro duction Bonus Scheme " whereunder the workmen were to get 13 days ' basic wages by way of bonus on a production Of 30,000 tons and thereafter an additional one day 's basic wage for every 46o tons produced upto a maximum Of 36,000. The scheme was accepted by the workmen. In 1953 the workmen raised industrial disputes claiming profit bonus for the years 1950 51 and 1951 52 in addition to the production bonus and asked for revision of the production bonus scheme. The Industrial Tribunal, to which the disputes were referred, rejected both the claims. On appeal, the Appellate Tribunal awarded profit bonus equal to one month 's basic wage for 1951 52 but dismissed the claim for 1950 51 as having been made too late. It revised the production bonus scheme by providing for i day 's basic wage for each increase Of 460 tons over 30,000 tons uPtO 36,000 tons and for 2 days, basic wage for each increase Of 46o tons in excess Of 36,000 tons. The appellant contended (i) that the Tribunal had no jurisdiction to vary the production bonus scheme ; (ii) that such a scheme could only be varied by agreement ; (iii) that no proper grounds had been made out for varying the scheme ; (iv) that profit bonus could not be awarded in addition ' to production bonus ; (v) that the production bonus in this case was really profit bonus ; and (vi) that there was no available surplus out of which profit bonus could be paid. Held, that the Tribunal had jurisdiction to revise the pro duction bonus scheme. Payment of production bonus was payment of further emoluments depending not upon extra profits, but, upon extra production, as an incentive to the workmen to put in more than the standard performance. Though it was discretionary with the appellants to introduce the scheme, once the scheme was introduced and put into operation, it became a term of employment of the workmen and any dispute with respect to such term of employment was an industrial dispute which could properly be referred to a Tribunal. The power of the Tribunal in considering the scheme 1013 was not confined to the question of mala fides etc. of the employer 's action but it had power to vary the terms of the scheme if circumstances justified it. There was no justification for interfering with the scheme upto a production Of 36,000 tons in view of the agreement between the parties. But the scheme did not provide for production above 36,000 tons and as such there was no agreement with respect to this, and as the production had gone up beyond 36,000 tons it was necessary to provide for production bonus beyond this quantity. There were two reasons for increase in the rates of payment of production bonus, viz., (i) the intensification of the efforts of the workmen in increasing production, and (ii) the progressive going down of the labour cost of production per ton as production increased. The rates had to be increased progressively with production. Consequently, for each 46o tons increase in production the proper rates for payment of production bonus would be 1 1/4, 1 3/4 and 2 days ' basic wages respectively or production between. 36,000 and 42,000 tons, 42,000 and 48,000 tons, 48,000 and 54,000 tons and 54,000 and 60,000 tons. The " Tonnage Production Bonus Scheme " introduced by the appellant was in fact also a production bonus scheme and not a profit bonus scheme. The fact that one of the terms of the scheme empowered the directors to cancel or reduce the payment of production bonus in case the gross profit was not sufficient to meet fixed dividends, interest, depreciation charges, taxation and 10% dividend to ordinary shareholders did not make it a profit bonus scheme as the circumstances mentioned are not the same that have to be taken into account in arriving at the available surplus according to the Full Bench formula. Nor was the position altered by the clause in the scheme which empowered the appellant to cancel or modify the scheme in case Government enforced by legislation any scheme for bonus or profit sharing as this did not mean that the scheme itself was for profit sharing or profit bonus. The other clauses of the scheme clearly indicated that it was for production bonus. If there was an available surplus of profits according to the Full Bench Formula the workmen were entitled to get profit bonus in addition to the production bonus. Mathuradas Kanji vs Labour Appellate Tribunal, A.I.R. , distinguished. Held further, that there was available surplus of profits and the profit bonus equal to one month 's basic wages was properly awarded by the Appellate Tribunal for [1951 52. The claim for deduction for rehabilitation was made on a wrong basis by the appellant. In order to arrive at a realistic figure for rehabilitation the total block should be divided into three heads : (i) land,(ii)buildings, railway sidings and things of that nature which had a. much longer life and where no imports were needed, and (iii)machinery. In the case of land no replacement was necessary and no provision need be made for rehabilitation. In the 1014 case of buildings etc. the multiplier would be smaller while the divisor would be larger. Machinery bad again to be sub divided according to when it was purchased so as to arrive at correct multipliers and divisors. As machinery purchased before the last war stood on one footing there would be a pre 1939 block. The second block may be of machinery purchased during the war and the third of that purchased after the war. The last two were not rigid divisions. In the circumstances of the present case, the proper multipliers for these three bocks would be 4, 2 and 1 respectively. As both Tribunals had accepted 10 as the divisor that may be accepted as. the divisor for the three blocks. Calculating on that basis the rehabilitation costs did not wipe out the entire gross profits as claimed by the appellants and there was an available surplus out of which profit bonus could be paid. The clerical staff, budli workers and temporary workers were not entitled to claim attendance bonus as they were differ ent from other workmen.

minal Appeals Nos. 36 of 1969 and 202 of 1970. Appeal from the judgment and order dated January 17, 1969 of the Rajasthan High Court in D.B. Criminal Appeal No. 376 of 1965. A. section R. Chari and Sobhagmal Jain, for the appellant (in, Cr. A. No. 36 of 1969). K. B. Mehta for the respondent (in Cr. A. No. 36 of 1969) (in Cr. A. No. 202 of 1970). section C. Gupta, Ramesh Chand, section Bhandare and P. H. Parekh, for the respondent (in Cr. A. No. 202 of 1970). The Judgment of the Court was delivered by Khanna, J. This judgment would dispose of criminal appeal No. 36 of 1969 Bhagat Ram vs State of Rajasthan and criminal appeal No. 262 of 1970 State of Rajasthan vs Ram Swaroop. Both the appeals have been filed on certificate granted by the Rajasthan High Court. Bhagat Ram during the year 1962 was posted as circle ins pector of police at Ganganagar. Ancestral village of Bhagat Ram is Mehna in Tehsil Moga, District Ferozepur. Ram Swaroop also belongs to that village. Both Bhagat Ram and Ram Swaroop were tried in the court of special judge, Ganga nagar for offenses under section 120B IPC for conspiring to ,extort bribe of Rs. 2,000 from P W I Niranjan Dass of Moga. Charges were also framed against Bhagat Ram for offenses under sections 161, 218, 347 and 389 Indian Penal Code as also section 5 (1) (a) read with section 5 (2) of Prevention of Corruption Act. Additional charge under section 165A Indian Penal Code was framed against Ram Swaroop. Both Bhagat Ram and Ram Swaroop were acquitted by the special judge, Ganganagar in respect of all the charges. The State of Rajasthan filed an appeal against the acquittal of the two accused. The appeal was heard by a Division Bench consisting of Tyagi and Lodha, T.T. 305 The Division Bench dismissed the said appeal against the acquittal of Ram SwarooP. The appeal of the State against Bhagat Ram in so far as it related to his acquittal for offenses under sections 347, 218, 389 and 120B IPC was also dismissed. There was, however, a difference of opinion between the two learned judges on the point as to whether the acquittal of Bhagat Rain for offenses under section 161 IPC and 5(1) (a) of Prevention of Corruption Act should be maintained. According to Tyagi, J., the case against Bhagat Ram for the above mentioned two offenses had not been proved and the State appeal in that respect also was liable to be dismissed. As against that Lodha, J. took the view that Bhagat Ram was guilty of offenses under section 161 Indian Penal Code and section 5 (1) (a) of Prevention of Corruption Act. He accordingly passed an order for the conviction of Bhagat Ram for the above mentioned two offenses. In view of the difference between the two judges regarding the acquittal of Bhagat Ram for offenses under section 161 IPC and 5 (1) (a) of Prevention of Corruption Act, the case was placed under section 429 of the Code of Criminal Procedure before Jagat Narayan, J. Jagat Narayan, J. came to the conclusion that the material on record showed that Ram Swaroop and Bhagat Ram had entered into an agreement to extort bribe, from Niranjan Dass and, as such, were guilty of an offence under section 120A punishable under section 120B of Indian Penal Code. The learned judge, however, felt that in view of the decision of the Division Bench, he could not set aside the acquittal of Ram Swaroop. As regards Bhagat Ram, the learned judge came to the conclusion that he could set aside the acquittal of Bhagat Ram for offenses under sections 120B, 218 and 347 IPC. Bhagat Ram was found guilty by Jagat Narayan, J. of the offenses under sections 120B, 161, 218 and 347 IPC. For the offence under section 161 IPC, Bhagat Ram was sentenced to undergo rigorous imprisonment for a period of one year and to pay a fine of Rs. 5001 or in default to undergo rigorous imprisonment for a further period of three months. For the offenses under sections 218 and 347 IPC, Bhagat Ram was sentenced to undergo rigorous imprisonment for a period of one year on each count. These sentences were ordered to run concurrently with the sentence imposed under section 161 IPC. No sentence was awarded for the offence under section 120B IPC. Bhagat Ram has filed criminal appeal No. 36 of 1969 against his conviction and sentence, while the State of Rajasthan has filed appeal No. 202 of 1970 against the acquittal of Ram Swaroop. The prosecution case is that a case under sections 408 and 420 IPC was registered on June 14, 1962 at police station Ganganagar on a report made by the general manager of Ganganagar 306 Sugar Mills against Ramesh, an employee of the sugar mills. Bhagat. Ram, who was circle inspector of Ganganagar, took over the investigation of the above case. Bhagat Ram during investigation came to know that Ramesh had sent the misappropriated amount to his brother Puran Chand at Ludhiana. Bhagat Ram also came to know that Puran Chand had entered into a transaction for the purchase of a truck from PW Niranjan Dass of Moga for a price of Rs. 22,000. Niranjan Dass received Rs. 7,000 from Puran Chand in that connection. As Puran Chand could not pay the balance of the purchase price, the bargain regarding the purchase of the truck was cancelled and the amount received by Niranjan Dass was stated to have been returned to Puran Chand. It seems that Bhagat Ram took the stand that part of Rs. 7,000 had been kept by Niranjan Dass with himself. Bhagat Ram, therefore. summoned Niranjan Dass to police station Ganganagar. In obedience to the summons, Niranjan Dass went with his brother Manohar Lal PW to Ganganagar police station on July 27, 1962. Niranjan Dass and Manohar Lal could not meet Bhagat Ram on that day but met him on the following day. Bhagat Ram then behaved in an unduly rude and harsh manner to Niranjan Dass and kept him at the police station. Manohar Lal apprehending trouble, returned to Moga and took with him Ram Swaroop accused and some other persons. Manohar Lal and his companions reached Ganganagar on July 29, 1962. In the meanwhile, Bhagat Ram had gone to Hindumalkot. Accompanied by Niranjan Dass, Ram Swaroop and others, Manohar Lal went to Hindumalkot Dak bungalow where Bhagat Ram was staying. It is stated that Ram Swaroop went inside the room in which Bhagat Ram was present, while others stayed outside. After ' some time Ram Swaroop came out of the room and told Niranjan Dass and Manohar Lal not to feel worried. Niranjan Dass was asked to give a statement which was thereafter recorded by Bhagat Ram. Bhagat Ram then produced three documents relating to the agreement for the sale of truck and the receipt which Niranjan Dass had obtained from Puran Chand. for the refund of Rs. 7,000. Bhagat Ram then told Niranian Dass to go back to Moga. It was also mentioned by Bhagat Ram that if the presence of Niranjan Dass was required for further investigation, he would be summoned again. About 10 or 15 days after that, it is stated, Bhagat Ram went to Moga in a jeep and stayed at the house of Niranjan Dass and Manohar Lal for the night. While leaving Moga early next morning, Bhagat Ram told Niranjan Dass and Manohar Lal that they should have a talk with Ram Swaroop and act according to Ram Swaroop 's instructions. After Bhagat Ram had left Moga, Ram Swaroop met Niranjan Dass and informed him that Bhagat Ram Wanted Rs. 21,000 as bribe for having helped Niranjan Dass 307 to get out of the trouble and that otherwise, Niranjan Dass would be again entangled in the case. Niranjan Dass then told Ram Swaroop that he would consult a lawyer and give a reply. Ram Swaroop, according to the prosecution case, came to Niranjan Dass in the first week of October 1962 and showed letter P. 2 which had been sent by Bhagat Ram to Ram Swaroop from Alwar. In the course of that letter it was stated Kindly kindness send that thing to Alwar. This is very important and please do not be careless and slack in the matter. " Ram Swaroop told Niranjan Dass that the words "that thing" in the letter referred to Rs. 2,000 and demanded that amount from Niranjan Dass, so that it could be passed on to Bhagat Ram. Niranjan Dass expressed his inability to accede to this demand. The letter was, however, retained by Niranjan Dass. A few days thereafter Ram Swaroop again came to Niranjan Dass and showed him telegram P.3A dated October 19, 1962. The telegram had been addressed by Bhagat Ram to Ram Swaroop and it was stated therein that Ram Swaroop should ask Niranjan Dass to see Bhagat Ram and that otherwise , warrants of arrest would be issued against him. This telegram too was kept by Niranjan Dass, with himself. On December 26, 1962, it is stated, Niranjan Dass came tos know that warrants for his arrest had been received by the Moga police in the above mentioned case registered at Ganganagar. Niranjan Dass then consulted a lawyer and sent complaint dated December 26, 1962 to the Inspector General of Police, Special Police Establishment. A case was thereafter registered on the basis of the above complaint by DSP Umaid Singh of AntiCorruption Department. After necessary investigation, Bhagat Ram and Ram Swaroop were sent up for trial. In his statement under section 342 of the Code of Criminal Procedure, Ram Swaroop admitted that he knew Bhagat Ram and that he had gone to him on July 29, 1962 with Manohar Lal and Niranjan Dass at Hindumalkot. Ram Swaroop denied that Bhagat Ram had made any demand through him for illegal gratification. According to Ram Swaroop, Bhagat Ram had asked him to realise the embezzled amount from Niranjan Dass. The other allegations made against him were denied by Ram Swaroop. he, however, admitted having received letter P. 2 and telegram P. 3A from Bhagat Ram and having handed over those documents to Niranjan Dass. Ram Swaroop added that he had asked Niranjan Dass to pay the embezzled amount which was with him. Bhagat Ram admitted that he had been entrusted with the investigation of the case against Ramesh and that he had called Niranjan Dass to Ganganagar in that connection. Bhagat Ram 308 denied having maltreated Niranjan Dass or having kept him under unlawful detention. Bhagat Ram admitted that Niranjan Dass and Ram Swaroop had met him on July 29, 1962 at Hinau malkot but he denied having made any demand through Ram Swaroop for the payment of Rs. 2,000 as bribe. It was admitted by Bhagat Ram that he had gone to Moga but the demand for any illegal gratification from Niranjan Dass at Moga was denied by Bhagat Ram. Bhagat Ram admitted having sent letter P. 2 and telegram P. 3A to Ram Swaroop. As regards the words "that thing", Bhagat Ram stated that they referred to the embezzled amount which had been retained by Niranjan Dass. The trial court, as stated earlier, acquitted both the accused, while the High Court maintained the acquittal of Ram Swaroop. As regards Bhagat Ram, there was a difference between the two judges. On the matter being referred to the third judge, Bhagat Ram was convicted and sentenced as above. Arguments have been addressed in the two appeals by Mr. Mehta on behalf of the State of Rajasthan, Mr. Chari on behalf of Bhagat Ram and Mr. Gupta on behalf of Ram Swaroop. After hearing the learned counsel, we are of the opinion that the appeal filed by the State of Rajasthan merits dismissal, while that filed by Bhagat Ram should be allowed. It would appear from the resume of facts given above that both Bhagat Ram and Ram Swaroop were acquitted by the spe cial judge. On appeal filed by the State of Rajasthan against the acquittal of the two accused, Tyagi and Lodha, JJ. maintained the order relating to the acquittal of Ram Swaroop. As regards Bhagat Ram, though there was a difference between the two judges regarding the correctness of his acquittal for offenses under section 5(1) (a) of Prevention of Corruption Act and section 161 of Indian Penal Code., they concurred with regard to the acquittal of Bhagat Ram in respect of the charges under sections 120B. 218, 347 and 389 IPC. The State appeal against the acquittal of Bhagat Ram was dismissed to that extent. The order which was made by the learned judges of the Division Bench reads as under : "BY THE COURT The result is that the appeal of the State against the order of acquittal of respondent Ram Swaroop is dismissed. The appeal of the State so far as it relates to the acquittal of respondent Bhagat Ram under sections 347, 218, 389 and 120B Indian Penal Code is also dismissed. In view of the difference of opinion about the acquittal of Bhagat Ram under section 161 Indian 309 .lm15 Penal Code and section 5 (1) (a) of the Prevention of Corruption Act, the matter may be laid before Hon 'ble the Chief Justice for referring it to the third judge. " In view of the fact that the State appeal against the acquittal of Bhagat Ram for offenses under sections 120B, 218, 347 and 389 I P C had been dismissed by the Division Bench, it was, in our opinion, not permissible for the third judge to reopen the matter and convict Bhagat Ram for offenses under sections 347, 389 and 120B IPC. The matter had been referred under section 429 of the Code of Criminal Procedure to Jagat Narayan, J. because there was a difference of opinion between Tyagi, J. and Lodha, J. regarding the correctness of the acquittal of Bhagat Ram for offenses under section 161 IPC and section 5(1) (a) of Prevention of Corruption Act. Jagat Narayan, J. could go only into this aspect of the matter and arrive at his conclusion. The present was not a case wherein the entire matter relating to the acquittal or conviction of Bhagat Ram had been left open because of a difference of opinion between the two judges. Had that been the position, the whole case relating to Bhagat Ram could legitimately be considered by Jagat Narayan, J. and he could have formed his own view of the matter regarding the correctness of the order of acquittal made by the trial judge in respect of Bhagat Ram. On the contrary, as mentioned earlier, an express order had been made by the Division Bench upholding the 'acquittal of Bhagat Ram for offenses under sections 120B, 218, 347 and 389 IPC and the State appeal in that respect had been dismissed. The above decision of the Division Bench was binding upon Jagat Narayan, J. and he was in error in convicting Bhagat Ram for offenses under sections 120B, 218 and 347 IPC despite the order of the Division Bench. It was, in our opinion, not within the competence of the learned judge to reopen the matter and pass the above order of conviction in the face of the earlier order of the Division Bench whereby the order of acquittal of Bhagat Ram made by the trial judge in respect of the said three charges had been affirmed. The order of the Division Bench unless set aside in appeal to this Court, was binding and conclusive in all subsequent proceedings between the parties. The principle of res judicata is also applicable to criminal proceedings and it is not permissible in the subsequent stage of the same proceedings or in some other subsequent proceedings to convict a person for an offence in respect of which an order for his acquittal has already been recorded. The plea of autrefois acquit as a bar to prosecution embodied in section 403 of the Code of Criminal Procedure is based upon the above wholesome principle. 310 In the case of Sambasivam vs Public Prosecutor, Federal of Malaya(1), Lord MacDermott observed: "The effect of a verdict of acquittal pronounced by a competent Court on a lawful charge and after a lawful trial is not completely stated by saying that the person acquitted cannot be tried again for the same offence. To that it must be added that the verdict is binding and conclusive in all subsequent proceedings between the parties to the adjudication. The maxim res judicata pro veritate accipitur ' is no less applicable, to criminal than to civil proceedings. Here, the appellant having been acquitted at the first trial on the charge of having ammunition in his possession, the prosecution was bound to accept the correctness of that verdict and was precluded from taking any steps to challenge it at the second trial." "The above observations were quoted with approval by this Court in the case of Pritam Singh vs State of Punjab(2). We are, therefore, of the opinion that the judgment of Jagat Narayan, J. in so far as he has convicted Bhagat Ram for offenses under sections 120B, 218 and 347 IPC cannot be sustained. The matter can also be looked at from another angle. 'The, charge under section 120B IPC related to , conspiracy between Bhagat Ram and Ram Swaroop for extorting Rs. 2,000 as illegal gratification from Niranjan Dass. When Ram Swaroop was acquitted of the charge under section 120B IPC, the basis of the charge against Bhagat Ram for conspiracy between him and Ram, Swaroop disappeared. It is not the case of the prosecution that Bhagat Ram bad conspired with another person and even though the identity of the other person has not been established. Bhagat Ram would still be guilty for the offence under section 120B IPC. On the contrary, the case of the prosecution was that Bhagat Ram had conspired with Ram Swaroop to extort Rs. 2,000 as illegal gratification from Niranjan Dass. Once Ram Swaroop was acquitted in respect of the charge relating to conspiracy, the charge against Bhagat Ram for conspiracy must necessarily fall to the ground. So far as the State appeal against the acquittal of Rain Swaroop is concerned, we find that there are concurrent findings of the trial court and the High Court that the evidence on record had failed to prove that he was guilty of offenses under sections 120B and 165A IPC. Nothing has, been brought to our notice at the (1) (2) 311 hearing of the appeal as may justify interference with those concurrent findings by a fresh appraisement of that evidence. We are, therefore, of the view that the State appeal against the acquittal of Ram Swaroop is liable to be dismissed. As regards the conviction of Bhagat Ram for the offence under section 161 IPC, we find that it is not the prosecution case that Bhagat Ram had made any demand directly to Niranjan Dass for payment of illegal gratification. On the contrary, the High Court found that Bhagat Ram had not demanded bribe directly from Niranjan Dass. The case set up by the prosecution is that Bhagat Ram attempted to obtain illegal gratification from Niranjan Dass through the instrumentality of Ram Swaroop. In view of the acquittal of Ram Swaroop, it is not possible to maintain the conviction of Bhagat Ram. The acquittal of Ram Swaroop would necessarily lead to the conclusion that the prosecu tion allegation about Ram Swaroop having made a demand of illegal gratification from Niranjan Dass for Bhagat Ram has not been proved. The case, in the circumstances, against Bhagat Ram for asking for bribe through Ram Swaroop must consequently fail. It would indeed be incongruous and inconsistent to acquit Ram Swaroop, for offenses under sections 165A and 120B IPC and, at the same time, to convict Bhagat Ram for the offence tinder section 161 IPC for asking for bribe from Niranjan Dass through the instrumentality of Ram Swaroop. We, therefore, accept the appeal of Bhagat Ram and set aside .his conviction and acquit him. The appeal of the State of Rajasthan against the acquittal of Ram Swaroop is dismissed. V.P.S. Appeal allowed.

Prior to 1947, the respondent was in the service of the Government of Assam as an unarmed Police constable and on partition, he opted for service Pakistan. The respondent went to the then East Pakistan and joined Pakistan Government service as a peon. He entered India in 1953 on the strength of a Pakistani passport but returned to Pakistan in 1954. Again in 1955, he obtained an Indian visa which was valid upto January 26, 1955. On the strength of that visa, he entered India but instead of returning to Pakistan, he over stayed until he was detected and arrested. He was then prosecuted under section 14 of the read with Clause 7 of the Foreigners Order, 1948. The Additional District Magistrate Convicted and sentenced him and the Sessions Judge also upheld the said order of conviction and sentence. In a revision application, the High Court, relying on Fida Hussain vs U.P., ; , reversed the said order of conviction and sentence and acquitted him on the ground that he was not a 'foreigner ' under section 2(a) of the , but was a citizen of India under article 5 of the Constitution; when he entered India in 1955 (before the said definition was amended in 1957. Allowing the appeal, Held :(1) The respondent was a foreigner when he entered India in 1955 as the definition of 'foreigner ' then stood and by overstaying beyond the period permissible under the visa, he clearly committed breach of Clause 7 of the Foreigners Order, 1948 and was liable to be convicted under section 14 of the . (690B C] The crucial point in the present case, was whether the Respondent had migrated to Pakistan between 1947 and 1950. If he did, then notwithstanding his complying with the requirement of article 5, his case would fall under article 7 and he would be deemed not to be a citizen even, on the date of his entry in India in 1955. Considering the facts of the present case, viz., the option exercised by the respondent for Pakistan service, his having secured release from Indian service, as a constable, his going to Pakistan and obtaining service there as a peon, his staying there for a long period; his obtaining Pakistani passport and visas declaring therein that he had acquired Pakistani citizenship and domicile etc; there could be no doubt that he had gone to Pakistan permanently. His case thus fell within article 7 and therefore, at his entry in India in 1955 he was a person who was deemed not to be a citizen of India. [688C G] H. P. vs Peer Mohammad, , Kulathil Mammu vs Kerala, ; , State vs Ibrahim Nabiji, A.I.R. 1959 Bom. 526 and State vs Akub, A.I.R. 1961 All. 428, referred to. 686

ivil Appeal No. 3119 of 1984. From the Judgment and Order dated 20.9.1982 of the Delhi High Court in S.A.O. No. 181 of 1979. Dr. Y.S. Chitale and Mukul Mudgal for the Appellant. R.K. Garg, Gopal Singh, L.R. Singh and Mrs. Vimal Sinha for the Respondent. The Judgment of the Court was delivered by: PATHAK, CJ. This is a landlady 's appeal by special leave arising out of proceedings for the ejectment of the respondent tenant. The appellant let out the premises in suit to the respondent on 1 September, 1962, the rent being stipulated as payable in advance. With effect from 1 January, 1972 the rent payable was Rs. 515 per month. On 29 November, 1972, the contractual tenancy was determined by notice. The re spondent received a notice on 7 May, 1976 calling upon him to pay the arrears of rent. The rent in fact had been re ceived upto 31 March, 1976 and, therefore, when the notice of demand was served on the appellant, rent for the months of April and May 1976 had fallen due. The rent was payable in advance. On 13 May, 1976, the respondent offered a bank draft of Rs.515 to the appellant. The appellant refused to accept it. Two days later, the respondent sent the same bank draft by registered post. The appellant 746 received the bank draft and retained it. On 7 June, 1976, the appellant wrote to the respondent informing him that his tender was not valid. On 11 June, 1976, the appellant sent another bank draft for Rs.515 to the landlady, and this draft again was neither encashed nor returned. On 2 August, 1976, the appellant filed an application for ejectment out of which the present appeal arises. After filing the application for ejectment, the appellant informed the respondent that both the bank drafts sent by him were lying uncashed. The Additional Controller, Delhi, dismissed the eviction petition holding that the tenant was not in default. The Rent Control Tribunal, Delhi, noted that the rent was pay able in advance in accordance with the agreement between the parties, that the respondent had earlier enjoyed the benefit of section 14(2) of the Act, that when the notice of demand was served on 7 May, 1976 the arrears of rent for the months of April and May 1976 had arisen, that the bank draft sent on 13 May, 1976 related to the rent of April 1,976 only, that as the rent for the month of May 1976 had also become due but had not been tendered, the landlady was justified in not accepting the tender, and that when the respondent again sent a draft on 11 June, 1976 to cover the rent for the month of May 1976 the rent for the month of June 1976 had also fallen due but was not tendered. Holding that the respondent had not tendered the arrears of rent due up to date within two months of the notice of demand, the Tribunal held that the ground of non payment of rent stood estab lished. The Tribunal noted that the rent had not been paid for the months of April, May and June 1976 in advance for each month and, therefore, the respondent had committed three consecutive defaults. That being so, the Tribunal observed, the respondent was not entitled to the benefit of section 14(2) again. In second appeal, the High Court reversed the decision of the Rent Control Tribunal and dismissed the application for ejectment upon the finding that the notice demanding the arrears of rent related to the months of April and May 1976, and as one draft had been sent on 13 May, 1976 and another on 11 June, 1976 representing a total of two months ' rent, and as this rent had been paid within two months of the service of notice of demand, it must be taken that the rent due at the time of the service of notice of demand had been tendered by the respondent to the appellant. The High Court proceeded on the view that section 14(1)(a) of the Act made out a ground for eviction only where the tenant had neither paid nor tendered the whole of the arrears of rent legally recov erable from him within two months of the date on 747 which a notice of demand for the arrears of rent was served on him by the landlord, the arrears being the rent due on the date of the notice. In this case, the High Court said, as the notice called for payment of the arrears due for the months of April and May 1976 and the bank drafts were ten dered within the period indicated in the notice, the notice was satisfied and no default could be said to have been committed in terms of section 14(1)(a) of the Act. Accordingly, the High Court allowed the appeal and dismissed the applica tion for ejectment. It is urged before us by learned counsel for the appel lant that section 14(1)(a) of the Act contemplates the payment or tender of the whole of the arrears of rent legally recovera ble from the tenant on the date when the demand notice is sent including the rent which has accrued after service of the demand notice. When the notice was sent on 7 May, 1976, rent for the months of April and May 1976 had become due, and as two months was given for payment of the arrears, it would include also the rent which had accrued during the said period of two months. We are not satisfied that there is substance in the contention. The arrears of rent envis aged by section 14(1)(a) of the Act are the arrears demanded by the notice for payment of arrears of rent. The arrears due cannot be extended to rent which has fallen due after serv ice of the notice of demand. In this case, the two bank drafts representing the arrears of rent covered by the notice of demand had been tendered within two months of the date of service of the notice of demand. The High Court is fight in the view taken by it. We are not satisfied that the construction placed by B.C. Misra, J. in Jag Ram Nathu Ram vs Shri Surinder Kumar, S.A.O. No. 52 of 1975 decided on 28 April, 1976 and in S.L. Kapur vs Dr. Mrs. P.D. Lal, All India Rent Control Journal 1975 p. 322 lays down the control law on the point. In the result, the appeal fails and is dismissed but there is no order as to costs. P.S.S. Appeal dismissed.

The appellant State by virtue of the judgment in Nida marti Maheshkumar vs State of Maharashtra & Ors. , ; , after providing 15 per cent of seats under the All India Quota and under Article 15 of the Constitution for admission to MBBS course, laid down the policy of reserva tion of the remaining seats for local students in the city of Bombay and for students from outside Bombay but within the State of Maharashtra, in the ratio of 70:30. In the writ petitions preferred by the respondents a Single Judge of the High Court took the view that 30 per cent of seats meant for students from outside Bombay should have been filled in before 70 per cent of seats were filled in by local students. The Division Bench dismissed the Letters Patent Appeal by the State. In the Letters Patent Appeals by the respondents it directed creation of five additional seats in each of the three Municipal Medical Colleges and four additional seats in the Government Medical College. Allowing the appeals, HELD: 1. There was no unreasonableness or impropriety in the State Government 's decision to fill up 70 per cent of seats first. The question whether the seats reserved for local students or for those residing outside Bombay should be filled up first was not within the purview or the juris diction of the Court. The High Court was, therefore, not justified in directing admission on the basis of filling up 30 per cent of seats first. [713C D] 2. The Additional seats can be created only if the Indian Medical 711 Council approves of it. There is also the question of bear ing the cost of creation of such seats. In the instant case, neither the Government nor the Indian Medical Council had consented to such creation. In exceptional circumstances and for ends of justice, the court may direct the creation of one or two seats after giving the Indian Medical Council an opportunity of being heard. The High Court, therefore, should not have directed the creation of so many additional seats. [713E G] [Appropriate directions issued for admission to four seats in the Grant Medical College in Bombay and thirty four seats in the other Bombay available under the All India Quota.]

ivil Appeal No, 3201 of 1989. From the Judgement and Order dated 28.2.1989 of the Punjab and Haryana High Court in C.W.P. No. 7769 of 1988. Dr. N.M. Ghatate and C.V.S. Rao for the Appellants. P.P.Singh for the Respondent. The Judgement of the Court was delivered by K. JAYACHANDRA REDDY, J. Whether a personal hearing is required before disposing of a petition filed under Section 117(2) of The (`Act ' for short) against an order of the Summary Security Force Court? This in short is the question involved in this appeal filed by the Union of India. The facts that give rise to this appeal may be noted at the outset. The sole respondent who was working as Mounted Constable in the Border Security Force (`BSF ' for short) was charged for an offence under Section 31(b) of the for extracting a sum of Rs. 14,000 from a person without proper authority. A chargesheet was issued to the respondent. The evidence in support of the same was recorded. Thereafter a Summary Security Force Court as provided under the was constituted and the respondent was put on trial on 17,2.1988. During the recording of the evidence, though the respondent was given an opportunity to cross examine the witnesses he declined to do so and according to the enquiring authorities, he pleaded guilty and prayed that a lenient view may be taken. During the trial he was also given an opportunity to examine defence witnesses, if any but he did not do so. It is also averred that since the respondent pleaded guilty, Summary Security Force Court passed the orders and sentenced him to rigourous imprisonment for one year in civil prison and also to be dismissed from service. Aggrieved by the said order the respondent preferred a petition under Section 117(2) of the to the Director General, BSF who 185 after going through the petition as well as other records of the case rejected the same as devoid of any merit. The said decision was informed to the respondent. Aggrieved by the same, the respondent filed a petition under Articles 226 and 227 of the Constitution of India before the High Court of Punjab & Haryana. It was urged that there was violation of principles of natural justice e since he had not been heard before disposing of the petition filed under Section 117(2) of the . The High Court without going into the merits allowed the writ petition and directed a fresh hearing of the petition filed by the respondent in accordance with law after hearing him. Aggrieved by the saidorder the Union of India has filed the present appeal. Learned counsel for the appellants submitted that Section 117 (2) of the does not provide for personal hearing and that the courts, which examined the similar provisions in the Army , have held that the personal hearing need not be given particularly having regard to the nature of the act and the post held. The learned counsel appearing for the respondent, on the other hand, submitted that the statute does not expressly exclude a personal hearing and that an employee cannot be condemned without observing the principles of natural justice. Before we examine the decisions cited by either side, it is necessary to refer to some of the provisions of the and the Army . The BSF is an armed force of the Union of India constituted under Item 2 of List I of Schedule 7 of the Constitution of India and is primarily connected with the defence of the country. The preamble states that the is to provide for the constitution and regulation of an Armed Force of the Union for ensuring the security of the borders of India and for matters connected therewith. Section 4 provides for constitution of an Armed Force of the Union called the Border Security Force for ensuring the security of the borders of India and subject to the provisions of the , the Force shall be constituted in such manner as may be prescribed and the conditions of service of the members of the Force shall be such as may be prescribed. Chapter III deals with offences and Chapter IV with punishments that can be awarded by the Security Force Court. Chapter VI deals with the constitution of the Security Force Courts and their powers of try the offences punishable under the . Chapter VII contains the procedure, the witnesses can be summoned and examined. Section 87 lays down that the Evidence , shall, subject to the provisions of the , apply to all proceedings before the Security Force Courts. For the purpose of this appeal it may not be necessary to go into the details of this procedure. As per Section 107 no finding or sentence of a Security 186 Force Court shall be valid except so far as it may be confirmed as provided under the . Sections 108 and 109 deal with the authorities empowered to confirm the decision of the General Security Force Court or an ordinary Security Force Court. Under Section 117, the aggrieved person is entitled to file a petition to the concerned authority mentioned therein against the order passed by any Security Force Court. Section 117 reads as under: "117(1) Any person subject to this who considers himself aggrieved by any order passed by any Security Force Court may present a petition to the officer or authority empowered to confirm any finding or sentence of such Security Force Court, and the confirming authority may take such steps as may be considered necessary to satisfy itself as to the correctness, legality or propriety of the order passed or as to the regularity of any proceeding to which the order relates. (2) Any person subject to this who considers himself aggrieved by a finding or sentence of any Security Force Court which has been confirmed, may present a petition to the Central Government, the Director General, or any prescribed officer superior in command to the one who confirmed such finding or sentence, and the Central Government, the Director General, or the prescribed officer, as the case may be, may pass such order thereon as it or he thinks fit. " The next relevant Section is Section 118 which reads thus: "The Central Government, the Director General, or any prescribed officer may annul the proceedings of any Security Force Court on the ground that they are illegal or unjust. " In the instant case, we are concerned with the post confirmation petition presented under Section 117(2) to the Director General, BSF. As already mentioned the Director General rejected the same holding that it is devoid of merit without giving any personal hearing. The petition filed by the respondent under Section 117(2) is marked as Annexure `C ' in this appeal before us. We have gone through the same and we find that request for personal hearing as such has not been made. With this background we shall now examine whether it is ob 187 ligatory that a personal hearing should be given and whether there has been violation of principles of natural justice? The doctrine of principles of natural justice and audi alteram partem are part of Article 14 and there are any number of decisions rendred by this Court regarding the scope of this doctrine. We shall, however, refer to one or two important cases relied upon by the learned counsel for the appellants. In Maneka Gandhi vs Union of India, [1978] 2 SCR 621 all the earlier important cases are referred to. Suffice it to say that it is laid down that principles of natural justice apply to administrative orders affecting the rights of citizens. But it is also observed that: "The audi alteram partem rule may, therefore, by the experimental test, be excluded, if importing the right to be heard has the effect of paralysing the administrative process or the need for promptitute or the urgency of the situation so demands. But, at the same time, it must be remembered that this is a rule of vital importance in the field of administrative law and it must not be jettisoned save in very exceptional circumstances where compulsive necessity so demands. It is a wholesome rule designed to secure the rule of law and the Court should not be too ready to eschew it in its application to a given case. The Court must make every effort to salvage this cardinal rule to the maximum extend permissible in a given case. " In State of Haryana vs Ram Krishan and Others, ; the question was whether in a case of premature termination of mining leases by the Government, it was necessary to give an opportunity of hearing. The Court held that: "Since there is no suggestion in the section to deny the right of the affected persons to be heard, the provisions have to be interpreted as implying to preserve such a right. The Section must be interpreted to imply that the person who may be affected by such a decision should be afforded an opportunity to prove that the proposed step would not advance the interest of mines and mineral development. Not to do so will be violative of the principles of natural justice. Reference may be made to the observations of this Court in Baldev Singh vs State of Himachal Pradesh, , that where exercise of a power results in civil 188 consequences to citizens, unless the statute specifically rules out the application of natural justice, such rule would apply. The learned counsel appearing for the Union of India, however, submitted that the courts have not gone to the extent of holding that in every petition or revision by way of representation filed against an order of a Tribunal under special statute should also be given an opportunity of hearing before disposal of the same. Most of the other decisions cited deal with the question of giving an opportunity before disposal of a petition filed under Section 164(2) of the Army which is in pari materia to Section 117(2) of the . We may usefully extract Section 164 of the Army which reads thus: "164. Remedy against order, finding or sentence of court material Any person subject to this who considers himself aggrieved by any order passed by any court martial may present a petition to the officer or authority empowered to confirm any finding or sentence of such court martial and the confirming authority may take such steps as may be considered necessary to satisfy itself as to the correctness, legality or propriety of the order passed or as to the regularity of any proceedings to which the order relates. (2) Any person subject to this who considers himself aggrieved by a finding or sentence of any court martial which has been confirmed, may present a petition to the Central Government,the Chief of the Army Staff or any prescribed officer superior in command to the one who confirmed such finding or sentence and the Central Government the Chief of the Army Staff or other officer, as the case may be, may pass such orders thereon as it or he thinks fit. " In Som Datt Datta vs Union of India & Ors., ; a question came up whether it was necessary for the confirming authority or upon the Central Government to give reasons while disposing of a petition under Section 164. It was held that: "Apart from any requirement imposed by the statute or statutory rule either expressly or by necessary implication, 189 we are unable to accept the contention of Mr. Dutta that there is any general principle or any rule of natural justice that a statutory tribunal should always and in every case give reasons in support of its decision." (emphasis supplied) In Union of India vs Jyoti Prakash Mitter, ; a question came up whether an order passed by President acting under article 273 of the Constitution of India is justiciable. This Court held that the appreciation of the evidence by the President is entirely left to him but the Court will not sit in appeal over the judgement of the President. Now coming to the question of personal hearing it was further held that: "The President had given ample opportunities at diverse stages to the respondent to make his representations. All evidence placed before the President when he considered the question as to the age of the respondent was disclosed to him and he respondent was given an opportunity to make his representation thereon. There is nothing in clause (3) of Article 217 which requires that the Judge whose age is in dispute, should be given a personal hearing by the President. The President may in appropriate cases in the exercise of his discretion give to the Judge concerned an oral hearing, but he is not bound to do so. An order made by the President which is declared final by clause (3) of Article 217 is not invalid merely because no oral hearing was given by the President to the Judge concerned". (emphasis supplied) In Lt. Col. K.N.S. Sidhu vs The Union of India and Others, All India Service Law Journal, a Division Bench of the Punjab & Haryana High Court has considered this very question and held that the rejection of a representation made under Section 164(2) of the Army without giving a personal hearing does, not suffer from any illegality and after referring to A.K. Gopalan vs State of Madras, ; and Union of India vs Jyoti Prakash Mitter, ; , held that: "From the observations reproduced above, it is abundantly clear that there is no hard and fast rule for the applicability of principles of natural justice and that in each case it has to be definitely ascertained if the statute governing it leaves 190 any discretion for involving their assistance. " It was further observed that: "The applies to a class of people who are the backbone of the country. They are governed by the codified law. Discipline is maintained by resorting to the provisions of the codified law. There would hardly be any justification for importing the principles of natural justice in a completely codified statute". In Captain Harish Uppal vs Union of India and Others, ; also the question whether an opportunity to be heard is necessary before confirmation under Section 164 of the Army , was considered and it was held that: "The contention that Brig. Bhilla should either have given a hearing to the petitioner or the Chief of Army Staff should have given a hearing to the petitioner before confirming the subsequent sentence by the court martial is not a requirement under the . While it can be at least said that there is some semblance of reasonableness in the contention that before he ordered what in effect was an upward revision of the sentence passed on the petitioner, he should have been given a hearing, to insist that the confirming authority should give a hearing to the petitioner before it confirmed the sentence passed by the court martial, is a contention which cannot be accepted. To accept this contention would mean that all the procedure laid down by the Code of Criminal Procedure should be adopted in respect of the court martial, a contention which cannot be accepted in the face of the very clear indications in the Constitution that the provisions which are applicable to all the civil cases are not applicable to cases of Armed Personnel. It is not a requirement of the principles of natural justice. Indeed when he was informed that the subsequent sentence passed on him had been sent to the Chief of the Army Staff for confirmation it was open to the petitioner to have availed himself of the remedy provided under Section 164 of presenting a petition to the confirming officer, i.e. the Chief of the Army Staff in this case. He does not appear to have done so." (emphasis supplied) In this decision this Court has held in unambiguous terms that the confirming authority need not give a personal hearing and this ratio applies with equal force to a post confirmation petition under Section 164(2) and consequently to an application under Section 117(2) of the . In a recent decision in Shri S.N. Mukherjee vs Union of India, JT (1990) 3 630 a Constitution bench of this Court having noted the principle that requirement to record reasons can be regarded as one of the principles of natural justice which govern exercise of power by administrative authorities, however, proceeded to hold that "There is nothing in the language of sub section (2) of Section 164 which indicates that recording of reasons for an order passed on the post confirmation petition was necessary". In arriving at this finding, the Bench referred to the ratio laid down in Som Datt Datt 's case. At this stage we may refer to another decision of this Court in Union of India vs cor. J.N. Sinha and Anr., [1971] 1 SCR 791 wherein it is held: "Rules of natural justice are not embodied rules nor can they be elevated to the position of fundamental rights. As observed by this Court in Kraipak and Ors. vs Union of India, AIR 1970 SC 150, "the aim of rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. In other words they do not supplant the law but supplement it. xx xx xx Whether the exercise of a power conferred should be made in accordance with any of the principles of natural justice or not depends upon the express words of the provision conferring the power, the nature of the power conferred, the purpose for which it is conferred and the effect of the exercise of that power". From the above discussion it emerges that in cases of special enactments like Army , all the principles of natural justice cannot be imported. The same ration applies to a petition under Section 117(2) of the also. We may also point out her that Chapter XIII consisting of Rules 167 to 169 of the BSF Rules deals with petitions filed under Section 117 of the . Even in them there is nothing to indicate that a hearing has to be given before disposal of a petition. 192 As noted above, under Section 117(2) the respondent in only entitled to file a petition but the disposal of such a petition does not attract principles of natural justice. The respondent has been tried by observing the due process of law and the verdict of the Security Force Court was confirmed and it is only a post confirmation petition that was filed under Section 117(2) of the and authority which disposed of the same is not a court any every order passed administratively cannot be subjected to the rigours of principles of natural justice. For the aforesaid reasons, the order of the High Court is set aside and the matter is remitted back to the High Court for disposal on merits. The appeal is accordingly allowed. In the circumstances of the case, there will be no order as to costs. R.P. Appeal allowed.

The respondent in the appeal, a Mounted Constable in the Border Security Force, was charged for an offence under section 31(b) of the for extracting a sum of money from a person without proper authority. A charge sheet was issued, evidence in support of the same was recorded, and thereafter a Summary Security Force Court as provided under the Act was constituted and the respondent was put on trial. During the recording of evidence, the respondent was given an opportunity to cross examine prosecution witnesses, but he declined, pleaded guilty and prayed for a lenient view to be taken. The Summary Security Force Court passed an order sentencing him to rigorous imprisonment for one year civil prison and also to be dismissed from service. Aggrieved by the aforesaid order, the respondent preferred a petition under section 117(2) of the Act to the Director General, B.S.F., who after going through the petition and the records of the case, rejected the same as devoid of any merit. The respondent thereupon filed a petition under Articles 226 and 227 of the Constitution before the High Court urging that there was violation of the principles of natural justice since he had not been heard before disposing of his petition. The High Court allowed the writ petition, and directed fresh hearing of the petition of the respondent, after giving him an opportunity of being heard. The Union of India appealed to this Court against the decision of the High Court contending that section 117(2) of the Act does not provide for 183 a personal hearing. The appeal was contested by the respondent contending that as the ` does not expressly exclude a personal hearing and that an employee cannot be condemned without observing the principles of natural justice. On the question: whether a personal hearing is required before disposing of a petition under s.117(2) of the against an order of the Summary Security Force Court, Allowing the appeal, this Court, HELD: 1. The doctrine of principles of natural justice and audi alteram partem are part of Article 14 of the Construction. Although principles of natural justice apply to administrative orders affecting the rights of citizen yet it is also clear that in cases of special enactments, like Army Act, all the principles of natural justice cannot be imported. The same ratio applies to a petition under section 117(2) of the also. [187A B; 191G] 1.2 Chapter XIII consisting of Rules 167 to 169 of the Border Security Force Rules deals with petitions filed under s.117 of the . Even in them there is nothing to indicate that a hearing has to be given disposal of a petition. [191G H] Maneka Gandhi vs Union of India, [1978] 2 SCR 621; Som Datt Datta vs Union of India & Ors., [1969] 2SCR 177; Union of India vs Jyoti Prakash Mitter,[1971] 1 SCC 396; Captain Harish Uppal vs Union of Inida and Others, ; ; Shri S.N. Mukherjee vs Union of India, JT 1990 (3) 630 and Union of India vs Col. J.N. Sinha and Anr. ,[1971], 1 SCR 791, relied on. Lt. Col. K.N.S. Sidhu vs The Union of India and Others, All India Service Law Journal 1977 page 721, referred to. 2.1 Under section 117(2) of the , the person aggrieved is only entitled to file a petition but the disposal of such a petition does not attract principles of natural justice. [192A] 2.2 The authority disposing of the petition under section 117(2) is not a court, and every order passed administratively cannot be subjected to the rigours of principles of natural justice. [192B] 3. In the instant case, the respondent had been tried by observing 184 the due process of law, and the verdict of the Summary Security Force Court was confirmed and it was only a post confirmation petition that was filed under s.117(2) of the . The order was passed by an authority and not by a court and every order passed administratively could not be subjected to the rigours of principles of natural justice. [192A B]

Civil Appeal No.86 of 1958. Appeal by special leave from the Award dated November 15, 1956, of the Industrial Tribunal, Assam, at Dhubri. M. C. Setalvad, Attorney General for India, section N. Mukherjee and B. N. Ghose, for the appellants. Niharendu Dutt Mazumdar and Dipak Dutta Choudhri, for the respondents. October 14. The Judgment of the Court was delivered by SINHA C. J. This is an appeal by special leave from the Award dated November 15, 1956, made by the Industrial Tribunal, Assam. The dispute arose between the employers, the Indian General Navigation 3 & Railway Company Limited, carrying on business at No. 4, Fairlie Place, Calcutta, and the Rivers Steam Navigation Company Limited, carrying on business at No. 2, Fairlie Place, Calcutta, which will be referred to, in the course of this judgment, as the appellants ', and their workmen at Dhubri Ghat, represented by the Dhubri Transshipment Labour Union and Dhubri Local Ghat Transhipment Labour Union, Dhubri, which will be referred to hereinafter as the respondents '. The Award aforesaid was published in the Assam Gazette on December 19, 1956. It is necessary to state the following, facts in order to appreciate the points arising for decision in this case: The appellants carry on business of inland water transport in North East India and in Pakistan, in association with each other, and are commonly known as the Joint Steamer Companies. The appellants jointly maintain a large number of wharves, jetties, godowns, etc., at different river stations in India and in Pakistan, for the purposes of their business. One such station is at Dhubri in Assam. At that station, a large number of workmen are employed for the purpose of loading and unloading the appellant 's vessels and for transshipping goods from railway wagons to the appellants ' vessels and vice versa. Before May, 1954, such workmen were employed by a contractor called the Assam Labour Supply Syndicate which will hereinafter be referred to as 'the Syndicate '. Those workmen were organized under two labour unions, called (1) the Dhubri Transhipment Labour Union which was affiliated to the Indian National Trade Union Congress which is, a Federation of Trade Unions, and (2) the Dhubri Local Ghat Transhipment Labour Union. There were differences between the Syndicate and its employees who made certain demands, and has threatened to go on strike to enforce their demands. Conciliation proceedings under the industrial Disputes Act, 1947 (which will hereinafter be referred to as the Act), took place, in the course of which certain agreements to be referred to in greater detail hereinafter, were reached between the Syndicate and the respondents on 4 February 23, 1953, and March 30, 1953. On May 3, 1954, by virtue of a Memorandum of that date, an agreement was arrived 'at between the appellants and the respondents, whereby the appellants agreed that instead of employing a contractor to handle the work of loading and unloading and transhipment of goods, the appellants would employ supervisors and agents to handle the work " pending the proposed Tripartite Conference to decide the issue of permanent direct employment of employees for the future ". The appellants also agreed to maintain continuity of service of the workmen and the existing terms and conditions of their service. The Tripartite Conference contemplated by the Agreement, was to consist of the represent. natives of the appellants, the workmen and the Government of Assam. As a result of the Tripartite Con ference held on July 9 & 10, 1954, an agreement was reached between the appellants and the Indian National Trade Union Congress, which was incorporated in the form of a letter dated July 16, 1954, from the General Secretary of the Congress, Assam Branch, Dhubri Ghat, to the several Unions at different stations, including Dhubri. As a result of this agreement, the appellants agreed, inter alia, to introduce permanent direct employment at all the transhipment ghats of Assam, progressively, without prejudicing the agreement of May 3, 1954. It will be necessary hereinafter to consider some of the terms of this agreement in detail, when dealing with the several points in controversy between the parties. After the agreement aforesaid, there arose certain differences amongst the workmen represented by the two Unions aforesaid, in respect of the election of their office bearers. As a result of those internal dissensions amongst the employees, two rival groups, each claiming to represent a section of the workmen, came into existence. The appellants, thereupon, notified the Indian National Trade Unions ' Congress, that recognition to the Dhubri Transhipment Labour Union, was being withdrawn pending satisfactory settlement of the internal differences. Thus, came into existence, a new Trade Union known as the 5 Dhubri Transhipment Workers ' Union, in or about July, 1955. Meanwhile, between May 2, 1955, and July 31, 1955, the appellant 's, on five different occasions and on different charges, dismissed eight of their employees, after making such inquiries as they thought necessary against those workmen, and after giving them each an opportunity of explaining their conduct. On July 21, 1955, one B. Chakravarty, Secretary, Dhubri Transhipment Labour Union, served a notice on the appellants under sub section (i) of section 22 of the Act, that " I propose to call a strike on the 11th August, 1955, from zero hours, if the following demands be not fulfilled within fourteen days on receipt of this notice". Then followed an annexure containing ten demands which need not be set out here. A similar notice was also served by the Secretary Dhubri Local Ghat Transhipment Labour Union on the same date ' the annexure in this case containing eleven demands. On July 26, 1955, the Conciliation Officer of the Government of Assam, received the notice of the strike. He held conciliation proceedings on August 6, 1955, but those proceedings ended abruptly without arriving at any settlement. On August 8, 1955, the said Conciliation Officer, who was the Labour Officer of Gauhati, by his letter bearing the same date, informed the Labour Commissioner, Assam, about the failure of the conciliation proceedings, and forwarded copies of that letter to the appellants and the workmen 's Union at Dhubri. Without waiting for the statutory period of seven days from the date of failure of the conciliation proceedings, a large number of workmen concerned went on strike with effect from the mid night of August 10, 1953, in pursuance of the notices of strike aforesaid. They were alleged by the appellants not only to have gone on strike, but also to have forcibly entered the appellants ' jetties and other working places and prevented the loyal workmen, who were willing to carry on the transhipment work, from carrying on their normal work. The strike is, therefore, alleged to have been illegal. On August 11, 1955, the District Magistrate, Goal para, promulgated an 'order under 6 section 144 of the Code of Criminal Procedure, prohibiting the "holding of any meetings, demonstrations, pro cessions, or causing threat, obstructions, annoyance or injury directed against the persons lawfully employed in the following areas in the Dhabri Town and its suburbs". Then followed a specification of the ghats to which the prohibition applied This order was to remain in force till September 10, 1955, In consequence of the aforesaid strike which was treated by the appellants as illegal, they declared a lock out on August 11, 1955, in respect of 91 workmen named in the notice issued to them. Another lock out notice was issued on August 13, 1955, in respect of a much larger number of workmen in different groups described as belonging to a particular Sardar 's gang. The legality of these lock out notices, was seriously challenged by the respondents. The Workers ' Union called off the strike with effect from August 19, and the appellants lifted the lock out with effect from August 27. The appellants took proceedings against those employees who had taken part in the strike. They suspended those workmen who were alleged to have not only taken part in the strike, but also had obstructed those workmen who were willing to work. But those workmen who were alleged to have only participated in the strike, were not suspended during the inquiry. On September 8, 1955, 37 of the employees were convicted under section 188 of the Indian Penal Code, for violation of the aforesaid order under section 144 of the Criminal Procedure, Code, with the result that on September 9, they were Dismissed by the appellants. Another batch of 52 employees were convicted under a 143/188 of the Indian Penal Code, on February 17,1956. Meanwhile, on September 13, 1955, the Government of Assam bad constituted a Board of Conciliation, consisting of three persons, namely, (1) Labour Commissioner of Assam, as the Chairman, (2) D. N. Sarma of Gauhati, as representing the interest of the employees, and (3) P. J. Rayfield, as representing the interest of the employers, with a view to promoting settlement of the dispute between the appellants and their workmen 7 at Dhubri. The appellants alleged that they had dismissed their workmen as a result of the inquiry held by their nominee into the conduct of the persons who had participated in the alleged illegal strike and/ or had caused obstruction, before they became aware of the constitution of the Board of Conciliation, as aforesaid. On coming to know of the constitution of the said Board of Conciliation, the appellants subsequently passed orders, holding the order of dismissal of the two hundred and twenty three employees in abeyance, pending the disposal of their application to the Board for permission to dismiss the said two hundred and twenty three employees. The Board of Conciliation, by majority, P. J. Rayfield dissenting, came to the conclusion that as regard the dismissal of the thirty seven workmen, the Management had violated section 33 of the Act, because, in their opinion, the proceedings of the Board of Conciliation had commenced from August 26, and not from September 13. As regards the permission sought by the Management to dismiss the suspended two hundred and twenty three workmen, by a similar majority, it was held that although the strike prima facie was illegal, it was not unjustified. The dissenting member, P. J. Rayfield, recorded his note of dissent to the effect that the conciliation proceedings commenced on September 13, 1955, and not earlier, as decided by the majority, and consequently, the dismissal of the,thirty seven workmen ( 'discharge ' of 37 workmen, as stated in the note of dissent), was not in contravention of section 33 of the Act, and that the permission to dismiss the two hundred and twenty three workmen on the ground that they had been found guilty, by a departmental inquiry, of participating in an illegal strike and forcibly preventing others from attending work, should have been granted. This conclusion was sought to be based on the alleged legal position that the Board had no power to withhold the permission applied for, and had not the power to decide as to the kind of punishment to be imposed upon the workmen who had admittedly taken part in a strike which had unanimously been held to be illegal. The dissenting note also sought to 8 show that the finding of the majority of the Board that the strike was justified, was not based on a proper appreciation of the facts of the case. The report of the Board of Conciliation was published on Decem ber 5, 1955. As the parties had come to a stalemate, the Government of Assam, by its order dated December 7, 1955,as subsequently amended by its order dated January 23, 1956, referred the dispute to Shri Radhanath Hazarika as an Industrial Tribunal, for the adjudication of the dispute on the following issues: " 1 (a) Are the Management of R.S.N. & I.G.N. Railway Company Limited justified in dismissing the following eight workers: Manzoor Hussain, Sudam Singh, ldrish, Tazmal Hussain (S/o S.K. Gaffur) Jahangir Sardar, Keayamat Hossain, Panchu Shah and Ram Ekbal Singh? (b) If not, what relief, if any, are they entitled to ? (2) (a) Are the Management of R.S.N. & I.G.N. Railway Company Limited justified in dismissing and/or suspending as the case may be 260 workers at Dhubri Ghat on or about the 29th August, 1955? (b) If not, to what relief, if any, are the workers entitled ? " The parties to the dispute filed their written statement before the Tribunal and tendered both oral and documentary evidence before it. The Tribunal made its Award which was published in the Assam Gazette on December 19, 1956, as already stated. The Tribunal held that the strike, though illegal, was justified, but that in the absence of standing orders whereby participation in any illegal strike, could justify a punishment of dismissal, the appellants were not entitled to dismiss those workmen whose case was before the Tribunal. The Tribunal, by its Award, directed reinstatement of 208 out of 260 workmen whom the appellants had dismissed, or had sought permission to dismiss. The remaining 52 workmen were ordered to be refused reinstatement on the ground that they had been convicted under section 143 of the Indian Penal Code, which implied an offence involving 9 use of criminal force. It also directed the appellants to pay full wages and allowances from August 20, 1955, till the date of reinstatement of the workmen who had been directed to be reinstated. The Tribunal also held that the dismissal of the eight workmen who were the subject matter of the issue 1(a) aforesaid of the Reference, was bad, and therefore, those 8 workmen were also ordered to be reinstated with back wages. The present appeal by special leave is directed against the said Award of the Tribunal. Before we deal with the merits of the controversy between the parties, it is convenient at this stage to deal with certain arguments by way of preliminary objections to the maintainability and competence of the appeal, raised on behalf of the respondents. Those objections are of a three fold character, (1) no appeal lies, (2) the appellants did not exhaust their statutory remedies under section 17A of the Act, and (3) the appeal is not competent also for the reason that the Government of Assam has not been impleaded as party respondent to the appeal, In our opinion, there is no substance in any one of these objections. With reference to the first ground, the argument runs as follows: The Tribunal made its Award on November 15, 1956, and, submitted the same to the Assam Government under section 15 of the Act. On December 8 of that year, the Government of Assam directed the said Award to be published in the Assam Gazette, and it was so published on December 19, 1956. According to the order of the State Government, the Award became enforceable under section 17A, on the expiry of 30 days from the date of publication, namely, December 19, 1956. Accordingly, the Award became enforceable on January 18,1957, and acquired the force of law by the operation of the statute. By virtue of section 17(2) of the Act, the Award became " final and shall not be called in question by any court in any manner whatsoever ", subject to the provisions of section 17A. It was, therefore, further contended that in the events which had happened before January 18, 1957, the Award had become enforceable and had 2 10 acquired the force of law by operation of the statute, had, thus, passed beyond the pale of litigation and adjudication by any court of law. This argument has only to be stated to be rejected in view of the provisions of the Constitution. It is manifest that the provisions of the Act are subject to the paramount law as laid down in the Constitution. Article 136 of the Constitution, under which this Court grants special leave to appeal (in this case, from a determination of the Tribunal), cannot be read as subject to the provisions of the Act, as the ' argument on behalf of the respondents would postulate. The provisions of the Act must be read subject to the over riding provisions of the Constitution, in this case, article 136. Therefore, whatever finality may be claimed under the provisions of the Act, in respect of the Award, by virtue of sections 17 and 17A of the Act, it must necessarily be subject to the result of the determination of the appeal by special leave. It was further contended that the Award had merged in the orders of the Government, on publication in the Official Gazette, under section 17 of the Act, but this is the same argument stated in another form, and any argument based on the provisions of the, Act, making the Award final and enforceable, must always be read as being subject to the decision of this Court, in the event of special leave being granted against such determination by the Tribunal and as adopted by the Government. The same argument was advanced in still another form, namely, that the appellants should have moved this Court before the lease of the time contemplated by section 17 and section 17A of the Act, that is to say, before January 18, 1957. Apart from the consideration that this argument tends to curtail the period of limitation, prescribed by this Court by statutory rules, the operation of sections 17 and 17A of the Act, is not automatically stayed by making an application for special leave. It is only by virtue of specific orders made by this Court, staying the operation of the Award or some such order, that the appellant becomes, for the time being, immune from the operation of those provisions of the 11 Act, which impose penalties for the infringement of the terms of the Award. Adverting to the second branch of the preliminary objection, it appears that the provisions of section 17A, particularly, the provisos, have been sought to be pressed in aid of the respondents ' contention, without realizing that the Award in question in this case, does not come within the purview of either of those provisos. The State Government was not a party to the Industrial dispute, nor was it an Award given by a National Tribunal. Hence, there is no substance in the contention that the appellants did not exhaust their statutory remedies under section 17A of the Act. The third branch of the preliminary objection is based on the contention that the Government of Assam was a necessary and proper party, as it had acted under delegated powers of legislation under the Act, in making the Award enforceable and giving it the force of law. It is a little difficult to appreciate how the State Government became a necessary or proper party to this appeal. The State Government does not play any part in the proceedings, except referring the dispute to the Tribunal under section 10 of the Act. The publication of the Award under section 17, is automatic on receipt of the same by the Government. Its coining into operation is also not subject to any action on the part of the State Government, unless the case is brought within the purview of either of the provisos to section 17A. In view of these considerations, it must be held that there is no merit in the preliminary objection. The appeal must, therefore,, be determined on its merits. On the merits of the controversy between the parties, it has been argued by the learned counsel for the appellants that the Tribunal, having held the strike to be illegal, has erred in holding that it was justified; that an illegal strike could never be justified and that the Tribunal was wholly in error in losing sight of the fact that the appellants were carrying on what had been notified as a public utility service. In this connection, it was further argued that in view of 12 the proviso to section 10(1) of the Act, the State Government was bound to make a Reference of the dispute to an Industrial Tribunal when notice of strike under section 22 of the Act had already been given, and that, therefore, the failure of the employer to enter into direct negotiations with the employees, upon receipt of the strike 'notice, could not be used by the Tribunal for coming to the finding that the strike was justified. It was also urged that the Tribunal had clearly erred in holding that the lock out declared by the appellants, was illegal, and that, in coming that conclusion, it had over looked the provisions of section 24(3) of the Act. The Tribunal, it was further argued, had erred in holding that, in the absence of standing orders to the effect that participation in an illegal strike is a gross misconduct, an employer could not dismiss its workmen for mere participation in an illegal strike. Assuming that the last stated argument was not well founded it was argued that the standing orders governing the relations between the Syndicate and the workmen, would also govern the relations between the appellants and the workmen, as a result of the agreement aforesaid whereby the appellants undertook all the liabilities of the Syndicate in relation to the workmen, and guaranteed to them the same conditions of service. In this connection, it was also argued that the Tribunal bad made a serious mistake of record in treating the standing orders of the Syndicate as a mere draft and, therefore, of no binding force as between the employers and the employees; that the Tribunal erred, while considering the case of the eight workmen dismissed before the commencement of the strike, in proceeding upon an unfounded assumption that no charge sheets had been served upon those workmen during the inquiry against them, and that, therefore, the Award, in so far as it related to those 8 workmen, was entirely erroneous. As against the two hundred and eight workmen ordered by the Tribunal to be reinstated, it was argued that the departmental inquiry held by the appellants had resulted in the distinct finding that they bad not only participated in the illegal strike, but had also instigated loyal workmen 13 to join in the illegal strike, and had obstructed tranship ment work by loyal workmen. In this connection, it was also argued that in any view of the matter, the thirty seven persons, who had been convicted by the criminal court under section 188 of the Indian Penal Code, for having transgressed the prohibitions contained in the prohibitory order under section 144 of the Code of Criminal Procedure, were clearly liable to be dismissed on the findings of the criminal court itself, apart from any other considerations bearing on the regularity of the inquiry against them; that the Tribunal was in error in holdidg that the inquiry against the dismissed workmen was not in accordance with the prescribed procedure; and lastly, that this was not a case of reinstatement of the dismissed workmen, and that only compensation should have been awarded to them. On behalf of the respondents, their learned counsel, besides raising the preliminary objection already dealt with, urged that the Tribunal was fully justified in holding that the strike, though illegal, was " perfectly justified " and virtually provoked by the appellants. Though in the statement of the case, the argument had been raised that the strike could not be illegal, because the notification declaring the service at the ghats to be public utility service, was ultra vires, that argument was not persisted in before us, but it was vehemently argued that there were no standing orders either of the Syndicate or of the appellants, which could govern the service conditions of the workmen, and that in any event, mere participation in an illegal strike would not entitle the employers to dismiss those workmen who had joined the strike; that the dismissal orders in all cases, were sheer acts of victimization and unfair labour practice. It was also sought to be argued that the lock out was entirely illegal, and that in any view of the matter, its continuance after the strike had been called of, was wholly unjustified and against the principles of " social justice ". Further, it was urged that the appellants had dismissed and/or suspended 260 workmen without framing any specific charges against them; that the dismissal of the eight workmen 14 in view of the incidents before the commencement of the strike, was also illegal, and in any event, irregular, because, it was urged, no specific charges had been framed against them. It was also sought to be argued that the notice ' inviting the workmen to join their work, being unconditional without any reservations, amounted to a condonation of the strike, and therefore, the dismissal orders against the two hundred and sixty workmen were bad in law. Some other arguments also were advanced on behalf the respondents, but we do not propose to take notice of them, because they were ultimately found to be without any foundation in the record of the case. As a matter of fact, the arguments on behalf of the respondents, were not marked by that strict adherence to the record of the case, or the case made out before the Tribunal, as ought to be the case before courts of justice generally, and certainly, before the highest Court in the land. Now, turning to the merits, it is better to deal with the first issue first, that is to say, whether the dismissal of the eight workmen, named in the Issue as amended, was justified, and if not, to what relief they were entitled. The Tribunal dealt with the individual cases of those workmen, and came to the conclusion that the dismissal of none of them was justified, and that, therefore, all of them were entitled to reinstatement with all their back wages and other benefits accruing to them from the date of their suspension and subsequent dismissal until the date of their reinstatement, minus what had been paid to them. Thus, the first issue in both the parts, was decided entirely in favour of the workmen. We have, therefore, to examine how far the determination of Tribunal on the first issue, is open to question. The cases of Manzoor Hussain, Sudama Singh, Idrish and Tazmal Hussain, have been dealt with together by the Tribunal below. These four workmen had been dismissed by the appellants, upon a report made by Rayfield, the enquiring officer under the appellants, on the allegation that they had assaulted their Labour Supervisor section P. Tevari on May 2, 1955. This charge against those four workmen, was examined by 15 a Magistrate who tried them for the alleged assault on Tewari. The Magistrate found them not guilty and acquitted them by his judgment given in April, 1956. The departmental inquiry by Rayfield was held on May 17, 1955, when a member of witnesses were examined by him on behalf of the appellants. In their joint written statement, these four workmen stated that as the police case was pending against them in regard to these very charges, they were not in a position to make any further statement in their defence. The Tribunal came to the conclusion that, on the material before it had not been made out that Tewari had been actually assaulted, while on duty, and that the dismissal order was passed " possibly with a view to frighten the other workmen and to satisfy the whims of Tewari ". We have examined the record, and we do not find any justification for differing from the conclusions of the Tribunal. With reference to the case against Panchu Shah and Ram Ekbal Singh, it appears that the Tribunal definitely came to the conclusion that their dismissal order was vitiated because it was an act of victimization and was mala fide. In the face of this clear finding,we do not think that we can interfere with the determination of the Tribunal in respect of these two workmen. But the case against Jahangir Sardar and Keayamat Hussain, stands on a different footing. The charge against Jahangir was two fold, namely, (1) wilful insubordination and disobedience, and (2) conduct prejudicial to good order and discipline. To these charges, Jahangir demurred and objected, saying he could not " understand the reasons for the charge sheet ". On this demurrer, a letter dated May 7, 1955, was issued to him, giving him the details of the acts charged against him, with reference to the time, date and place. The charge against Keayamat was similarly, a two fold one, namely, (1) disorderly behaviour and inciting others to disturbance and violence, and (2) conduct prejudicial to good order and discipline. Keayamat also demurred to the charge in the same way that it was vague, and that 16 he was not aware of anything wrong having been done by him. On May 7, Keayamat was also given a similar letter, explaining to him the details of the charge aforesaid, with reference to the time, place and date of the acts which formed the gravamen of the charge against him. A number of witnesses were examined by Raymond who held the inquiry. In both these cases, the Tribunal refused to accept the result of the inquiry, chiefly on the ground that no specific charge had been laid against them, and that the allegations were much too vague. In recording this finding, the Tribunal has fallen into a grievous error of record. It has completely omitted to consider the letter issued to both these workmen on May 7, giving full particulars of the charges against them. If it had considered that letter issued to both these workmen, it would not have fallen into this serious error which has vitiated its award in respect of them. The Tribunal further proceeded to comment on the evidence led before the inquiring officer and remarked that the evidence was meager or insufficient. It also observed that the " degree of proof, even in the departmental enquiry, is the same as required in a Court of Law ". In our opinion, the Tribunal misdirected itself in looking into the sufficiency of proof led before the inquiring officer, as if it was sitting in appeal on the decision of the employers. In the case of these two employees, there is no finding by the Tribunal that the order of dismissal against them, was actuated by any mala fides, or was an act of victimization. In view of these considerations, the dismissal order made by the appellants on a proper inquiry, after giving the workmen concerned sufficient opportunity of explaining their conduct, must be upheld. The appeal in respect of these two workmen, must, therefore, be allowed, and the order of the Tribunal in respect of them, accordingly, set aside. The order of the Tribunal in respect of the other six workmen, is confirmed. Having dealt with the orders of dismissal in respect of the incidents before the strike of August 11, 1955, 17 we now turn to the strike itself The first question that arises in this connection, is whether the strike was illegal as alleged by the appellants and as found by the Tribunal. The learned counsel for the respondents sought to reopen the finding about the illegality of the strike, basing his submissions mainly on the contention that there were no conciliation proceedings pending either in fact or in law on the date of the strike, and that, therefore, the finding of the Tribunal was not correct. It was not disputed on behalf of the respondents that the notices of the strike given by the workmen on July 21, 1955, had been duly received by the Conciliation Officer on July 26, 1955, and that the conciliation proceedings were commenced on August 6, 1955. What was contended on their behalf, was that the proceedings had to be stopped, as it appears from the record of those proceedings, without any settlement of the dispute as the "workers ' representative expressed their inability to take further part in the proceedings, on a question of leave to their other representatives". We shall examine the question later as to which party was to blame for the break down of the conciliation proceedings at the very outset. It is enough to observe that under section 20 of the Act, the conciliation proceedings must be deemed to have commenced on July 26, 1955, when the notice of the strike was received by the Conciliation Officer, and those proceedings shall be deemed to have concluded when the report of the Conciliation Officer is received by the Government. In this case, the report to the Government was made by the Conciliation Officer on August 8, 1955. It is not absolutely clear as to when this report of the Conciliation Officer was actually received by the Government. It is clear, therefore, that the conciliation proceedings certainly lasted between July 26 and August 8, 1955. The strike, having commenced on August 11, was clearly illegal in view of the provisions of section 22 of the Act. We must, therefore, hold in agreement with the Tribunal, that the strike was clearly illegal. The Tribunal, having held that the strike was illegal, proceeded to discuss the question whether it 3 18 was justified, and came to the conclusion that it was "perfectly justified". In the first place, it is a little difficult to understand how a strike in respect of a public utility service, which is clearly, illegal, could at the same time be characterized as "perfectly justified". These two conclusions cannot in law co exist. The law has made a distinction between a strike which is illegal and one which is not, but it has not made any distinction between an illegal strike which may be said to be justifiable and one which is not justifiable. This distinction is not warranted by the Act, and is wholly misconceived, specially in the case of employees in a public utility service. Every one participating in an illegal strike, is liable to be dealt with departmentally, of course, subject to the action of the Department being questioned before an Industrial Tribunal, but it is not permissible to characterize an illegal strike as justifiable. The only question of practical importance which may arise in the case of an illegal strike, would be the kind or quantum of punishment, and that, of course, has to be modulated in accordance with the facts and circumstances of each case. Therefore, the tendency to condone what has been declared to be illegal by statute, must be deprecated, and it must be clearly understood by those who take part in an illegal strike that thereby they make themselves liable to be dealt with by their employers. There may be reasons for distinguishing the case of those who may have acted as mere dumb driven cattle from those who have taken an active part in fomenting the trouble and instigating workmen to join such a strike, or have taken recourse to violence. Apart from the basic error of treating the illegal strike to be perfectly justified, the Tribunal has indulged in language which is not characteristic of a judicial approach. The following observations by the Tribunal, in the course of its inordinately long Award, covering about 42 pages in print, are illustrative of the attitude of the Tribunal towards the appellants : " By this letter the Company 's Joint Agent at Dhubri instead of taking a friendly attitude approached the District Magistrate asking for police help. 19 If the Company 's Agent at Dhubri had the honest intention he could have immediately moved the appropriate authority to come immediately to the spot to stop the proposed strike. But instead of that he has provoked the Union by adopting this back door policy to suppress the demands of the workers. It was really unfair on the part of the Agent. It seems that he bad mala fide intention." For this outburst of the Tribunal, justification is sought in the letter which D. J. Milner, the Joint Agent of the appellants, wrote to the Secretary to the Government of Assam, Transport and Industries Department, Labour Commissioner, Government of Assam, Superintendent of Police, Goalpara District, Labour Officer, Lower Assam, and General Secretary, I.N.T.U.C., Assam Branch, on August 9, 1955, informing them of the threatened strike. The last paragraph of the letter explained the reasons for the long letter addressed by the Joint Agent: " In the interest of maintaining this vital link in Assam 's flood stricken communications and protecting our property,, and that of the Railway, as well as our own staff, Railway Staff and loyal laborers, we have to request that adequate police be available at each of our Ghats from shortly prior to midnight on the 10th instant in order that unlawful damage may not be caused by these illegal strikers who will be acting in defiance of Government regulations, and accepted industrial dispute procedure". We see nothing sinister in this letter, justifying the remarks by the Tribunal, quoted above. It was the usual ,request for the maintenance of public peace and for the prevention of acts of violence by misguided persons. It was also addressed to the I.N.T.U.C., the guardian of Labour. On the same date, that is, August 9,1955, B. Chakravarty, the Secretary of the Dhubri Transhipment Labour Union, addressed a letter to the Superintendent of Police, Goalpara, and Deputy Commissioner, Goalpara, alleging that the Joint Agent of the appellants had instructed the officers in charge of the jetties at the Ghats to raise a " hallah " after the zero hour of August 11, 1955, that the labourers of the 20 Transhipment Department were looting the goods of the ship, when they would go for picketing purposes to strengthen their strike. Those allegations of the Secretary, the Tribunal has taken as proof of those allegations, and has observed: ". it is clear that Mr. Milner hatched a plan to create a trouble and the Secretary of the Union got scent of all the secret arrangements made by the Company to create disturbance at the Ghats just immediately after the strike is declared. " This is the first reason assigned by the Tribunal for coming to the conclusion that the strike was "perfectly justified". The second reason for coming to this conclusion, according to the Tribunal, is to be found in the Conciliation Officer 's report that the appellants did not agree to grant leave to the labour representatives to sit in the conciliation proceedings which were held on August 6, 1955. The Tribunal has observed that it appeared also from the appellant 's attitude in refusing to grant leave to the five representatives of the Union, that the appellants were not inclined to give facilities for the conciliation proceedings. Is this observation justified on the record as it stands ? As already indicated, the Conciliation Officer received a copy of the strike notice on July 26, 1955. He fixed August 6, 1955, 10 a.m., at Dhubri, for the conciliation proceedings. The parties to the dispute were apprised of this meeting of August 6, 1955, on August 1, 1955 (ext. O, p. 119). From the proceedings of the Conciliation Officer, it appears that the Union applied to the appellants for leave to five workmen, officials of the Union, to enable them to represent the workmen in the conciliation proceedings. The attitude of the appellants was that they were agreeable to grant leave even on a verbal request, if the request came from those individual workmen, either direct or through the Union, but the appellants were not prepared to grant leave on a petition from the Union alone. On the other hand, the Union was not agreeable that the petition for leave should be made by the workmen themselves, and the Union insisted that it had the right to apply for leave on behalf of those workmen. Upon this, the Union 21 did not take any further part in the proceedings. It would be a travesty of facts to suggest that the appellants were not prepared to grant leave to those five workmen. In the first instance, leave should have been applied for before the date fixed for the commencement of the conciliation proceedings. Secondly, the application should have been made by the workmen concerned, either direct or through the Union. The Tribunal seems to have been under the impression that this attitude of the appellants amounted to a breach of one of the terms of the agreement as a result of the Tripartite Conference aforesaid. That, again, is an assumption which is not justified by the terms of the Agreement. Secondly, the five workmen selected for representing the workmen in the conciliation proceedings, should have applied in good time to their employers for leave for the purpose, but what we find is that an application (ext. M at p. 118) was made on August 6, 1955, not by those workmen themselves, but by the Secretary of the Union, and a copy of the application was forwarded to the Labour Officer and to the Deputy Commissioner, for information. Apparently, the Union was treating the matter as of sufficient importance, but they did not think it necessary to put in the application in time on behalf of the workmen themselves, even though the application might have been made through the Union. That the appellants were not to blame for the attitude they took in the matter of the procedure for application for leave to particular workmen, becomes clear on a reference to the terms of the Agreement dated February 23, 1953, between the Syndicate and their workmen represented by the Dhubri Transhipment Labour Union, at p. 75, Part 1 of the record. The Demand 5(f) was agreed to in these terms : " All leave applications be submitted by a representative of the Union on Tuesday or Friday in a week before the Management, and the decision be communicated to the Union the next day of submission of the application. " On the other band, in respect of leave, the terms of the Agreement reached between the Syndicate and the 22 Dhubri Local Ghat Transhipment Labour Union, on March 13, 1953, are as follows: " It is agreed that the workers will submit leave applications to the management who will communic ate their decision to the workers direct within three days of receipt of the applications and a copy thereof will he sent to the Union for information". It is clear, therefore,that the conciliation proceedings stopped abruptly not because the Management was to blame for not granting leave to the five chosen representatives of the workmen, but because B. Chakravarty insisted that the leave application would not be made by individual workmen but only by the Union. Even that application was made too late, and in the teeth of the terms of the Agreement, quoted above. If the Secretary had not taken this unreasonable attitude, and if he had been anxious that the conciliation proceedings should continue, the easiest thing for him to have done, was to get those five workmen to make their applications for leave, which the Management was prepared to grant even at that late hour. In our opinion, the conciliation proceedings failed because the Secretary took an unreasonable attitude. The Tribunal, therefore, was in error in throwing the blame for the failure of the conciliation proceedings on the Management. The third ground of attack on the bona fides of the appellants, was said to have been the attempt of the Management to interfere in the internal affairs of the Unions. The following remarks of the Tribunal are another instance of its intemperate language with which the Award bristles: " Curiously enough it appears that the Company 's Joint Agent at Dhubri dabbled in politics and meddled in internal administration of the Unions. He propped up another Union and backed it up to stand as a rival Union. " On an examination of the record of the case, it appears that the Indian National Trade Unions ' Congress, to which the Unions were affiliated, was not in favour of the strike. That would be an indication of the fact that the relation between the employers 23 and the employees had not come to the breaking point, and that the Congress, naturally, expected that conditions of service of the employees, could be improved more effectively by peaceful negotiations than by taking recourse to a strike in respect of a service which had been declared by the Government to be a public utility service . But the Secretary of one of the Unions, B. Chakravarty aforesaid, appears to have brought matters to a head without giving the Conciliation Officer a reasonable chance, as already indicated, of bringing about a reconciliation between the view points of the employers and the employees. The appellants had only recently taken over the workmen under their direct employment, and the Tripartite Conference between them, the representatives of the employees, and the Government, was yet to settle all the outstanding Questions between the parties. Hence, the fact that two rival Unions had come into existence, could not be laid at the door of the appellants as an act of unfair labour practice. The Tribunal was not, therefore, in our opinion, justified in holding that the Management had either meddled in the internal administration of the Unions, or dabbled in politics, and had, thus, been guilty of unfair labour practice. The Tribunal has been rather generous to the workmen without being just to the appellants. This is also shown by the fact that, after having held the strike to be illegal, the Tribunal considered the legality of the lock out declared by the appellants on August 11, 1955, in respect of one Ghat, and on August 13, 1955, in respect of the other Ghat. In this connection, the conclusion of the Tribunal may best be stated in its own words to demonstrate its attitude to the appellants: " In this case the Company used the weapon of lock out just to intimidate and put pressure on the employees to withdraw the demands. The lock out is also prohibited under Section 22(2)(d) of the Act. Therefore, both lock out and strike are illegal. The Company had no justification whatsoever to declare a lock out. " 24 Apparently, the Tribunal ignored the provisions of section 24(3) of the Act. The lock out was clearly not illegal. It is another question whether there was a justification for the appellants to continue the lockout even after the strike had been called off on August 19. The Joint Agent of the appellants, by his letter dated August 17, 1955, to the two Unions, had intimated to them that in view of the illegal strikes, lockout had been declared at the local Ghat on August 11, and at the Transhipment Ghat on August 13, and that the lock out " will remain in force until disciplinary action can be instituted against those of our employees chiefly responsible for leading and continuing the illegal strikes ". The continuance of the lock out after August 19, may be unjustified; but that does not make the lock out itself illegal. It was in pursuance of that order of the Joint, Agent, that proceedings were taken against the socalled leading strikers, leading upto their dismissal. Those orders of dismissal, to be presently discussed, are the main points in controversy between the parties in this Court. But before those orders of dismissal were passed, the Management issued a notice on August 26, 1955, lifting the lock out with effect from the next day. It required the employees to report for duty to the Joint Agent personally, at his office between the hours of 9 and 10 a.m. It also contained the threat that any employee who did not report for duty on August 30, " will in the absence of a letter of explanation and good reason, be treated as having voluntarily terminated his services." R. N. Biswas was then appointed the Inquiry Officer by the appellants, and he held the inquiry in batches, the first batch consisting of 26 workmen, the second, of 114, the third, of 68, the fourth, of 17 and the fifth, of 7. These inquiries related to different incidents in connection with the strikes. Biswas appears from the record as placed before us, to have recorded the statements of Milner, Rayfield, C. R. Das and section P. Tewari officers of the appellants in proof of the allegations against the strikers. We do not think any useful purpose will be served by 25 going into the details of the evidence given by those witnesses, because we have come to the conclusion that those several inquiries suffer from the fundamental defect that there is no satisfactory evidence on the record that charges, giving the details of the acts of violence or obstruction, against the strikers, were served upon the workmen against whom those inquiries had been instituted. As a result of each one of these inquiries, the Inquiry Officer, R. N. Biswas, reported that the charge against each one of the workmen, had been proved to his satisfaction. But before the inquiry was held, the Joint Agent on September 9, 1955, informed the thirty seven workmen who had been convicted as aforesaid, of the criminal charge under section 188 of the Indian Penal Code, that their services were terminated from that date, and that they were to call at his office by the 15th of the month to collect their dues and to vacate the quarters of the appellants. As regards the remaining two hundred and twenty three workmen, orders were passed on September 16, to the effect that as the departmental inquiry made against them, had resulted in the charges against them being proved, they were dismissed from the service of the appellants with effect from August 29, 1955. They were called upon to call at the Labour Office on September 18, to collect their dues, and to vacate the quarters of the appellants. Realising that as the Government had appointed a Board of Conciliation on the 13th instant, to resolve the dispute between the parties, the orders aforesaid of dismissal or termination of services of the thirty seven workmen and of the two hundred and twenty three workmen, as aforesaid, would be illegal, the Joint Agent informed the workmen on September 20, 1955, that those orders would be held in abeyance, pending permission from the Board to dismiss them, and they would be deemed to be under suspension. It may be recalled that the Government had constituted a Board of Conciliation, consisting of three persons, viz., H. P. Duara, the Labour Commissioner of Assam, as the Chairman, and D. N. Sarma and P. J. Rayfield as members, representing the interests of the employees and the employers 4 26 respectively. The Board of Conciliation considered the question of the dismissal or suspension of those thirty seven plus 223 workmen, along with the application, of the Management, asking permission to dismiss 223 workmen for their having taken part in the illegal strike, and forcibly preventing willing workmen from attending work. Two of the three persons constituting the Board, namely, the Chairman and D. N. Sarma, came to the conclusion that as regards the dismissal of the thirty seven workmen the order of dismissal was illegal, as in their opinion, the conciliation proceedings had commenced from August 26, and not from September 13. On the question of suspension of 223 workmen, the Board was of the opinion that suspension without pay, pending the permission of the Board to dismiss the workmen, was no punishment, and therefore, no action was called for. As regards the permission sought by the Management to dismiss the suspended two hundred and twenty three workmen, again by a majority, those two members were of the opinion that although the strike was prima facie illegal, it was not unjustified and therefore, the permission sought, could not be given. Rayfield, the other member of the Board, as already stated, submitted his Minute of dissent. He pointed out that the conciliation proceedings commenced on September 13, and therefore, the discharge of the thirty seven workmen, was not in contravention of section 33 of the Act. He further held that the Board had no power to withhold the permission asked for to dismiss 223 workmen on the ground that they had been found guilty, on a departmental inquiry, of having participated in an illegal strike, and of having forcibly prevented workmen from attending work. He added that the grant of the permission would not debar the Union from raising an industrial dispute in that matter. It may be added that the Board unanimously agreed that dismissal " is an appropriate punishment for participation in an illegal and unjustified strike. " The Tribunal also took the same view of the legal position, when it observed, " If the strike is not justified and at the same time it contravenes the provisions of 27 Section 22 of the Act, ordinarily the workmen participating in it are not entitled to any relief. " As a matter of fact, the Tribunal has closely followed the findings of the majority of the Board of Conciliation. But as we have already pointed out, there can be no question of an illegal strike being justified. We have further held, in agreement with the Tribunal, that the strike was illegal, and that it was not even justified in disagreement with the Tribunal assuming that such a situation could be envisaged, in accordance with the provisions of the Act. We have, therefore, to determine the question what punishment, if any, should be meted out to those workmen who took part in the illegal strike. To determine the question of punishment, a clear distinction has to be made between those workmen who not only joined in such a strike, but also took part in obstructing the loyal workmen from carrying on their work, or took part in violent demonstrations, or acted in defiance of law and order, on the one hand, and those workmen who were more or less silent participators in such a strike, on the other hand. It is not in the interest of the Industry that there should be a wholesale dismissal of all the workmen who merely participated in such a strike. It is certainly not in the interest of the workmen themselves. An Industrial Tribunal, therefore, has to consider the question of punishment, keeping in view the over riding consideration of the full and efficient working of the Industry as a whole. The punishment of dismissal or termination of services, has, therefore, to be imposed on such workmen as had not only participated in the illegal strike, but had fomented it, and had been guilty of violence or doing acts detrimental to the maintenance of law and order in the locality where work had to be carried on. While dealing with this part of the case, we are assuming, without deciding, that it is open to the Management to dismiss a workman who has taken part in an illegal strike. There was a great deal of argument at the Bar on the question whether the Management, in this case, was entitled to dismiss the workmen who had taken part, in the illegal strike. 28 A good deal of argument was devoted to the further question whether there were certified standing orders as between the Syndicate and the workmen, or later, as between the appellants and the workmen, and Whether, even apart from such standing orders, it was open to the employers to deal so drastically with their employees who had taken part in the illegal strike. In our opinion, it is not necessary to decide those general questions, in view of our conclusion, to be presently stated, on the question of the regularity of the inquiry held in different batches, as indicated above, by Biswas, the officer appointed by the appellants to hold the departmental inquiry. In order to find out which of the workmen, who had participated in the illegal strike, belong to one of the two categories of strikers who may, for the sake of convenience, be classified as (1) peaceful strikers, and (2) violent strikers, we have to enquire into the part played by them. That can only be done if a regular inquiry has been held, after furnishing a charge sheet to each one of the workmen sought to be dealt with, for his participation in the strike. Both the types of workmen may have been equally guilty of participation in the illegal strike, but it is manifest that both are not liable to the same kind of punishment. We have,therefore, to look into the nature of the inquiry alleged to have been held by or on behalf of the appellants. On the one hand, the workmen took the extreme position that no inquiry had at all been held, and on the other hand, the employers took up the position that the Inquiring Officer had held a regular inquiry, after furnishing a charge sheet to each one of the workmen against whom the inquiry was held. That there was an inquiry held by Biswas, admits of no doubt. The proceedings before him and the evidence recorded by him, have been placed on record. But the most serious question that we have to determine is whether a charge sheet, giving notice to each workman concerned, as to what the gravamen of the charge against him was, had or had not been furnished to him. On this part of the case, the record is admittedly incomplete. The appellants relied upon the following observations 29 of the Tribunal in support of their case that the inquiry had been entirely regular: " The charges are for fomenting and participating in an illegal strike from the 11th August, 1955 and forcibly preventing other labourers from working on the same day. " On the other hand, reliance was placed on behalf of the workmen on the following passage in the Award of the Tribunal: " In this case the Company has not framed any specific charge against those 260 workers alleging that they indulged in violence or acts subversive of discipline. " The finding of the Tribunal is that no such individual charge sheet was delivered to the workmen. This conclusion of the Tribunal was assailed on behalf of the appellants on the ground that as this point had not been specifically made in the written statement of the workmen, the appellants did not put in those charge sheets in evidence, and had contented themselves with only producing the record of proceedings before the Inquiring Officer. As we, naturally, attached a great deal of importance to this question, we were inclined to give another opportunity to the appellants to remove the lacunas in the evidence bearing upon that question, even at this late stage. More than once, during the course of the arguments by the learned Attorney General, we suggested that he might put in those charge sheets, if they were in existence, as additional evidence in this Court, so that we might be satisfied that there had been a regular inquiry according to the requirements of natural justice. After making the necessary investigation, the learned Attorney General informed us on the last day of the arguments, that no such documents were in existence. It was alleged that the entire bundle of documents, containing those individual charges, had been lost, and that, therefore, there were no means of satisfying this Court by documentary evidence, that there were in fact such individual charge sheets delivered to the workmen concerned. We find, therefore, no good reasons for displacing the finding of the 30 Tribunal that there were no such individual charges,in spite of apparently conflicting observations made by it, as quoted above. The position, therefore, is that the strikes were illegal, that there was no question of those strikes being justified, and that, assuming that the strikers were liable to be punished, the degree and kind of punishment had to be modulated according to the gravity of their guilt. Hence, it is necessary to distinguish between the two categories of strikers. The Tribunal attempted to make such a distinction by directing that the 52 workmen, who had been convicted under section 143, read with section 188 of the Indian Penal Code, were not entitled to reinstatement, and the remaining 208 workmen were so entitled. Dealing with the case of the thirty seven workmen, who had been convicted only under section 188 of the Indian Penal Code, for transgression of the prohibitory orders under section 144 of the Code of Criminal Procedure, the Tribunal put those workmen on the same footing as the rest of the workmen. But, in our opinion, those 37 workmen do not stand on the same footing as the others. Those 37 workmen, who were convicted under section 188 of the Indian Penal Code, had been found to have violated the prohibitory orders passed by the public authorities to keep the public peace. Those convictions were based upon evidence adduced before the Magistrate, showing that the workmen had proceeded to the steamer flat through the jetty, in defiance of the orders promulgated under section 144. We have examined the record and we find that there is sufficient indication that those 37 workmen were among the violent strikers, and could not be placed in the category of peaceful strikers. Hence, it is clear that those workmen not only joined the illegal strike by abstaining from their assigned duty, but also violated regularly promulgated orders for maintaining peace and order. Such persons,apparently,cannot be said to be peaceful strikers, and cannot,therefore, be dealt with as lightly as the Tribunal has done. The Tribunal, in our opinion, is wrong in taking the view that the appellants had nothing to do with the violation of the order under section 144 of the 31 Code of Criminal Procedure, promulgated by the District Magistrate, with a view to maintaining peace and order at the site of work. These 37 workmen, therefore, should not have been ordered to be reinstated. As regards the remaining workmen, the question is whether the Tribunal was entirely correct in ordering their reinstatement with full back wages and allowances on and from August 20, 1955, till reinstatement. This would amount to wholly condoning the illegal act of the strikers. On the findings arrived at before us, the workmen were guilty of having participated in an illegal strike, for which they were liable to 'be dealt with by their employers. It is also clear that the inquiry held by the appellants, was not wholly regular, as individual charge sheets had not been delivered to the workmen proceeded against. When the blame attaches to both the parties, we think that they should divide the loss half and half between them. We, therefore, direct that those workmen whose reinstatement by the Tribunal is upheld by us, should be entitled only to half of their wages during the period between the date of the cessation of the illegal strike (i.e. from August 20, 1955) and the date the Award became enforceable. After that date they will be entitled to their full wages, on reinstatement. In this connection, it has also got to be borne in mind that those workmen, as observed in the judgments of the criminal courts which inflicted nominal fines on them on their conviction, were " day labourers who earned their livelihoods by day to day labour ". It is only natural that during all these years that the workmen have not been employed by the appellants, the workmen should have been earning their living by doing day to day labour. It must, therefore be assumed that they were working for their living, and were not wholly unemployed. Therefore, the burden of the back wages for the long period that has elapsed between the date of the end of the strike and the date of the Award, ordering their reinstatement, should be divided half and half between the parties. The appeal is, therefore, allowed in part, as indicated above, that is to say, (1) the order of reinstatement 32 in respect of Jahangir Sardar and Keayamat Hussain,is set aside, (2) similarly, the order of reinstatement in respect of the thirty seven workmen, who had been convicted under section 188 of the Indian Penal Code, is also Set aside, and (3) the order for payment of full back wages, etc., is modified by reducing those amounts by half, for the period aforesaid. As success between the parties has been divided, they are directed to bear their own costs in this Court. Appeal allowed in part.

The appellant was the occupier of a factory where there was a pit in which dangerous fumes were likely to be present. The pit was securely covered and enclosed and no one was expected to go down into it for normal work as it was worked by gadgets fixed nearby above the ground. Something went wrong with the machinery inside the pit and five workers went down without wearing suitable breathing apparatus and without, wearing a belt securely attached to a rope the free end of which could be held by some person standing outside. All the workers were overcome by poisonous gases and died. It was found that suitable breathing apparatus, reviving apparatus, belts and ropes were not available anywhere in the factory and were not kept for ready use near the pit. The appellant was prosecuted as the occupier for breach of the provisions Of section 36(3) and (4) of the Indian . The trial Court held that no offence under section 36(3) had been made out and it was not proved that any permission, express or implied, had been given to the workmen to enter the pit, and I that no offence under section 36(4) had been made out because no permission having been given it was 'not necessary to keep the breathing apparatus etc., near the pit or anywhere else in the factory and consequently it acquitted the appellant. On appeal by the State, the High Court set aside the (1) [1952] S.C.R. $67. 655 acquittal and directed the trial Court to decide the case against the appellant in the light of the interpretation of the law made by the High Court. The High Court was of the view that as c, the appellant had failed to prevent the entry of the workers he must in law be held to have permitted the entry and committed breach Of section 36(3) ; and that it was not sufficient compliance with section 36(4) to provide breathing apparatus etc., only after coming to know that some person was about to enter the pit but that such apparatus must be immediately available at the pit at all times. Held, that section 36(3) did not cast an absolute duty on the occupier to prevent the entry into the pit and the mere fact that a person had entered the pit did not by itself prove that he had been "permitted to enter " within the meaning of that, subsection. The primary duty was on the worker prohibiting him from entering the pit. At the same time the occupier was also liable if his permission to the entry, whether express or implied, could be inferred from the facts and circumstances of the case. Held, further, that section 36(4) cast an absolute duty on the occupier to see that the breathing apparatus etc., was always available in the factory and was periodically examined and certified fit for use and a sufficient number of persons were trained in its use. But there was no duty to keep the apparatus at the pit at all times; such a duty arose when some person was about to enter the pit with the permission of the occupier.

Appeal No. 830 of 1963. Appeal by special leave from the judgment and decree dated March 3, 1960 of the Allahabad High Court in Special Appeal No. 3 of 1956. G. section Pathak and section P. Varma, for the appellants. 781 O.P. Rana, for the respondents. K. Srinivasan and R. Gopalakrishnan, for the intervener. The Judgment of the Court was delivered by Shah J. The appellants public limited Company having its registered office at Calcutta, was, with effect from October 5, 1946, appointed sole agent for sale of goods manufactured by the Swadeshi Cotton Mills Company Ltd. On March 20, 1952, the Sales Tax Officer, Kanpur issued a notice under section 21 of the U.P. Sales Tax Act, 1948 calling upon the appellant Company to file a return of its turnover for the assessment year 1948 49 on the ground that the turnover had escaped assessment. On March 31, 1952, the Sales Tax Office. made a "best judgment" assessment and determined the taxable turnover of the appellant Company, at Rs. 50 lakhs for the year 1948 49 and determined the appropriate tax liability. In the appeal to the Judge (Appeals) Sales Tax, the order passed by the Sales Tax Officer, was set aside, that authority holding that the appellant Company was not a dealer within the meaning of section 2(c) of the Act. But the order of the appellate authority was set aside by the Judge (Revisions) Sales Tax, by order dated March 28, 1955 and the case was remanded to the Sales Tax Officer for "fresh assessment". In the view of the Judge (Revisions) Sales Tax, it was necessary to determine "the ownership of the goods at the time of their sale". The Sales Tax Officer then issued a notice calling, upon the appellant Company to produce its books of account and other relevant documents on July 23, 1955 for the purpose of assessment for the year 1948 49. The appellant Company contended that as the original assessment under section 21 had been set aside by the Judge (Revisions) Sales Tax, no proceeding in connection with that assessment was pending and re assessment was barred because more than three year had elapsed since the end of the year of assessment. The Sales Tax Officer rejected the contention of the appellant Company and insisted that the books of account and other documents be produced as directed earlier. The appellant Company then petitioned on September 2, 1955 to the High Court of Allahabad under article 226 of the Constitution for a writ in the nature of prohibition restraining the Sales Tax Officer, Kanpur, from proceeding with the assessment of the appellant Company for the assessment year 1948 49 and for a writ of certiorari quashing the order dated September 2, 1955 of the Sales Tax Officer, Kanpur and the proceeding taken for re assess 782 ment in pursuance thereof. Chaturvedi J., held that assessment sought to be made by the Sales Tax Officer pursuant to the order of the Judge (Revisions) Sales Tax "was clearly barred by the law of limitation" prescribed in that behalf by section 21 of the U.P. Sales Tax Act. It was in the view of the learned Judge immaterial whether assessment was being made by the Sales Tax Officer suo motu or under the direction of a superior authority if at the time of making the re assessment the period prescribed by section 21 had expired. The order passed by Chaturvedi J., was reversed in appeal by a Division Bench of the High Court. The High Court held that the Sales Tax Officer was competent in view of the order of remand which directed "fresh assessment" to commence fresh assessment proceedings against the appellant Company and in commencing and continuing those proceedings he was acting in compliance with the directions given under sections 9 and 10 of the Act which he was bound to carry out and to such assessment proceedings the period of limitation prescribed by section 21 of the Act did not apply. Against the order passed by the High Court reversing the order passed by Chaturvedi J., this appeal has been preferred with special leave. The material provisions of the U.P. Sales Tax Act are briefly these : section 9 conferred a power upon the designated authority to entertain an appeal against the order passed by the Sales Tax authority, and by sub section (3) of section 9 it was provided: "The appellate authority may, after giving the appellant a reasonable opportunity of being heard, (a) confirm, reduce, enhance or, annul the assessment, or (b) set aside the assessment and direct the assessing authority to pass a fresh order after such further inquiry as may be directed, or (c) . By sub section (3) of section 10 as it stood at the relevant time, it was provided: " The Revising Authority may in his discretion at any time suo motu or on the application of the Commissioner of Sales Tax or the person aggrieved, call for and examine the record of any order made by any Appellate or Assessing Authority under this Act, for the purpose of satisfying himself as to the legality or propriety of such order and may pass such order as he thinks fit: 783 Provided that no such application shall be entertained in any case where an appeal lay against the order, but was not preferred. " Section 21 as it stood at the relevant time provided: "Where the whole or any part of the turnover of a dealer has, for any reason, escaped assessment to tax in any year, the Assessing Authority "may, at any time within three years from the expiry of such years, and after issuing notice to the dealer and making such enquiry as may be necessary, assess the tax payable on such turnover." In the view of the High Court section 21 which imposed upon the Assessing Authority duty to exercise his power to assess turnover which escaped assessment within three years from the end of the year of assessment applied only to the order which the Assessing Authority made suo motu : where, he was directed to, proceed by an order of the appellate or revisional authority under sections 9 and 10 of the Act to re assess, the period of limitation has no application. In our view the High Court was in error in so limiting the operation of section 21. That section imposes a restriction upon the power of the Sales Tax Officer: that officer is competent within three years next succeeding the date to which the tax relates to assess tax payable on the turnover which has escaped assessment. But the section does not provide expressly, nor is there any implication, that the period within which re assessment may be made applies only to those cases where the Sales Tax Officer acts on his own initiative and not pursuant to the directions of the appel late or the revisional authority. In our view the principle of the judgment of the Privy Council in Commissioner of Income tax, Bombay Presidency and Aden vs Khemchand Ramdas (a firm) (1) applies to this case. In Khemchand 's case(1) the tax payer was assessed as a registered firm to income tax by order dated January 17, 1927 for the year 1926 27 under section 23(4) of the Income tax Act. Under the Act as it then stood, a registered firm was not liable to pay super tax and was liable to income tax at the maximum rate. On January 9, 1928 the Commissioner of Income tax In exercise of powers of revision under section 33 of the Act issued a notice to the assessee requiring him to show cause why the order of the Income tax Officer granting registration of the firm and assessing it on that footing should not be set aside, and by order dated February 13, 1928 ordered cancellation of registration and (1) (1938) L.R. 65 T.A. 236. 784 .directed the Income tax Officer to take necessary action thereupon. On May 4, 1929, the Income tax Officer assessed to super :tax the assessee on the footing that its registration was cancelled. authority of the Income tax Officer to assess was challenged. It was held by the Judicial Committee that as the Income tax Officer had made the order imposing super tax on the assessee more than one year after the earlier demand in respect of income tax, the ,order was without jurisdiction. The Judicial Committee pointed out that once a final assessment has been made, it cannot be ,reopened by the Income tax Officer of his own motion, or at the direction of the Commissioner exercising his powers under section 33 of the Indian Income tax Act, 1922, except in the circumstances and within the time prescribed by sections 34 and 35 of the Act. They observed that sections 34 and 35 were exhaustive and prescribed the only circumstances in which, and the only time in which, such fresh assessments could be made and fresh notices of demand could be issued. As the Income tax Officer took no fresh step within one year under the statute, he was "hopelessly out of time whichever of the two sections was applicable". But the order of the High Court must still be confirmed, because during the pendency of the proceeding in the High Court section 21 was extensively amended. The section as amended by Act 19 of 1956 from May 28, 1956 reads as follows: "(1) If the assessing authority has reason to believe that the whole or any part of the turnover of a dealer has, for any reason, escaped assessment to tax for any year, the assessing authority may, after issuing notice to the dealer, and making such enquiry as may be necessary, assess or re assess him to tax: Provided that the tax shall be charged at the rate at which it would have been charged had the turnover not escaped assessment, or full assessment, as the case may be. Explanation. Nothing in this sub section shall be deemed to prevent the assessing authority from making an assessment to the best of its judgment. (2) No order of assessment under sub section (1) or under any other provision of this Act shall be made for ,any assessment year after the expiry of four years from the end of such year. Provided that where the notice under sub section (1) has been served within such four years the assessment or re assessment to be made in pursuance of such 785 notice may be made within one year of the date of the service of the notice even if the period of four years is thereby exceeded: Provided further that nothing contained in this section limiting the time within which any assessment or re assessment may be made, shall apply to an assessment or re assessment made in consequence of, or to give effect to, any finding or direction contained in an order under section 9, 10, or 11. Explanation. Under the terms of section 21 (1) as amended where the assessing authority has reason to believe that any part of the turnover has or any reason escaped assessment to tax for any year, he may make Assessment within four years from the end of the year in which the turnover has escaped assessment. The rule is, however, subject to two exceptions: (i) when notice under sub section (1) has been served within four years the assessment or re assessment to be made in pursuance of such notice may be made within one year of the date of the service of the notice even if the period of four years is thereby exceeded; and (ii) that, nothing contained in s 21 which limits the time within which any assessment or re assessment is to be made applies to assessment or re assessment made in consequence of, or to give effect to, any finding or direction contained in an order under sections 9, 10 or 11. Therefore where the Sales Tax Officer proceeds in pursuance of a direction given by the appellate or revising authority or under an order made by the High Court in a reference under section II, the period of limitation prescribed by sub section (2) of section 21 does not apply. This section was incorporated in the Act by section 15 of the amending Act, which enacted: "For section 21 of the Principal Act the following shall be and be always deemed to have been substituted: " The amended section was therefore to be deemed to be in operation at all material times since the enactment of the U.P. Sales Tax Act 15 of 1948. The Legislature has given a clear retrospective operation to the amended section as from the date on which the principal Act came into operation, and correctness of the order of the Sales Tax Officer holding that there was no bar of limitation to the making of a fresh assessment pursuant to the order of the appellate or revising authority had to be adjudged in the light of section 21 as amended by Act 19 of 1956. The words used by the Legislature are precise and admit of only one interpretation that 786 proceedings taken for assessment or re assessment in consequence of, or to give effect to an order of the appellate or revising authority or an order passed by the High Court under section 11 may be taken notwithstanding the expiry of the period prescribed by sub section (2) of section 21. Mr. Pathak on behalf of the appellant Company pleaded that even if that be the true interpretation of section 21 as amended, the section could only apply to proceedings which were pending at the date on which the Act was amended, but in law no proceeding was pending because the Judge (Revisions) Sales Tax had no power to direct after the expiry of the period prescribed under section 21 as it originally stood to make a fresh assessment in respect of the year 1948 49. There are two clear answers to this plea, either of which is sufficient to reject it. The revisional authority had under section 10(3) power to make such order as he thought fit after calling for and examining the record of any order made by an appellate or an assessing authority and after satisfying himself as to the legality or propriety of such order. Even assuming that the revisional authority came to a conclusion which was erroneous in law, it was still an order which he had jurisdiction to make and that order unless set aside in a proper proceeding could not be ignored on the ground of lack of jurisdiction. There was, therefore, a proceeding pending before the Sales Tax Officer in pursuance of the direction given by the Judge (Revisions) Sales Tax who had directed the Sales Tax Officer to make a fresh assessment. Whether in pursuance of this direction, a fresh assessment could be made under section 21 before it was amended, need not detain us. We are concerned with the jurisdiction of the revising authority to make the order that he did under the section as it stood amended, and not with the competence of the assessing authority to pass an order for assessment under the statute before it was amended. The other ground is also equally decisive. By section 15 of Act 19 of 1956, section 21 of the Act as amended, must be deemed to have been on the statute book on the date on which the revising authority passed his order, and under that amended provision the power of the assessing authority to assess or re assess pursuant to an order of the revising authority was not lost when the period prescribed by sub section 2 of section 21 for assessment or re assessment expired. Under section 21, before it was amended, there could be no order of assessment or re assessment either by the Sales Tax Officer suo motu, or pursuant to the direction of the appellate or revising authority after the expiry of the period of three years prescribed by the statute, but under section 21 as amended, the power may be exercised by the Sales Tax Officer suo motu within four years for assessment or 787 re assessment. That power could be exercised under the first proviso within a further period of one year if a notice under sub section (1) was served within four years of the end of the year of assessment and without limit of time when it was made in consequence of, or to give effect to, any finding or direction contained in an order of the appellate or revisional authority or under an order of the High Court under section 11. In initiating proceeding for assessment, pursuant to the direction of the revising authority, the Sales Tax Officer was, by virtue of section 21 as amended, subject to no restrictions as to the period within which the order of assessment could be made. The order passed by the High Court must therefore be confirmed. The appeal fails and is dismissed with costs. Appeal dismissed.

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

ivil Appeal No. 1995 of 1990. From the Judgment and Order dated 23.11.1988 of the Patna High Court in C.W.J.C. No. 8457 of 1988. A.K. Sen. Shankar Ghosh and M.P. Jha for the Appellant. G.S. Misra for the Respondents. The Judgment of the Court was delivered by J. This appeal on special leave is directed against the judgment and order dated November 23, 1988 passed in C.W.J.C. No. 8457 of 1988 by the High Court, Patna dismiss ing the writ petition moved by the appellant assailing the order of his compulsory retirement from service by notifica tion dated October 26, 1988 issued by the Government of Bihar compulsorily retiring him from service with effect from the date of issue of the notification. The salient facts giving rise to this appeal are that the appellant was initially appointed on December 9, 1957 to the post of Industrial Expansion Officer and he was con firmed to the said post on May 15, 682 1958. The appellant was promoted to the post of Planning cum Evaluation officer, a Gazetted post, on December 19, 1973 because of his excellent service career. The appellant was further promoted to the next higher post of Industrial Economist by notification dated September 24, 1983 with effect from December 19, 1978 in the scale of Rs.1350 2000. Because of excellent character role and merit of the appellant, he was promoted to the next higher post of Joint Director in his original scale of pay of Rs.1350 2000 with 20 per cent personal pay for holding such higher post which he held from September 24, 1983 to March 31, 1984. From April 1, 1984 the appellant was provided with the higher post of General Manager under the respondent State in its Industries Department. The respondent State issued a notification on September 16, 1988 promoting a large number of juniors to the higher scale of Rs.1575 2300 without considering the case of the appellant. Being aggrieved the appellant filed one representation against his supersession which was made without considering the case of the appellant. The representation was filed on October 7, 1988. In the said representation the appellant brought to the notice of the respondent State that the serv ice record of the appellant throughout remained excellent, integrity beyond doubt and the appellant was never communi cated with any punishment in his service career. While the appellant was awaiting for a decision, the respondent State issued the impugned notification dated October 26, 1988 compulsorily retiring the appellant from the post of General Manager, District Industries Centre, Deoghar under the provisions of Rule 74(b)(ii) of the Bihar Service Code. The appellant claimed that the aforesaid order of com pulsory retirement has been issued by the respondent State on the basis of a memorandum dated October 6, 1988 though in the garb of Rule 74(b)(ii) of the Bihar Service Code, but in fact this has been made as a measure of punishment. Being aggrieved and dissatisfied by the order of compul sory retirement passed against him by the respondents, the appellant preferred a writ petition being C.W.J.C. No. 8457 of 1988 before the High Court, Patna questioning the im pugned order on the grounds inter alia 683 that the appellant throughout his 30 years had an exemplary service career and his integrity remained unquestionable, that the appellant was never communicated with any adverse remarks nor any departmental proceeding was ever initiated against the appellant, nor any explanation was ever called for. The High Court without at all considering and appreci ating the contentions dismissed the writ application by a laconic order. Feeling aggrieved by the said order the instant appeal on special leave has been filed. The only crucial question that fails for consideration in this Court is whether the impugned order of compulsory retirement from service has been made by the Appointing Authority in public interest in accordance with Rule 74(b)(ii) of Bihar Service Code, 1979 or for any oblique motive as an extraneous consideration or by way of punish ment casting stigma on the service career of the appellant even though the impugned order was couched in innocuous language. The relevant Rule 74(b) reads as follows: "Rule 74(b)(i): Notwithstanding anything contained in the preceding subrule a Government Servant may, after giving at least three months ' previous notice, in writing, to the appointing authority concerned, retire from service on the date on which such a Government servant completes thirty years of qualifying service or attains fifty years of age or any date thereafter to be specified in the notice. Provided that no Government servant under suspension shall retire from service except with the specific approval of the State Government. Provided further that in case of officers and servants of the Patna High Court (including those of Circuit Bench at Ranchi), under the rule marking authority of the Chief Justice, no such officers and servants under suspension shall retire from service except with the specific approval of the Chief Justice. Rule 74(b)(ii): The appointing authority concerned may, after giving a Government servant at least three months ' previous 684 notice in writing, or an amount equal to three months ' pay and allowances in lieu of such notice, require him in public interest to retire from service on the date on which such a Government servant completes thirty years of qualifying service or attains fifty years of age or on any date there after to be specified in the notice. " On a plain reading of the said Rule it appears that the appointing authority has been conferred power to retire a government servant from service in public interest after giving three months ' prior notice in writing or an amount equal to three months ' pay and allowances in lieu of such notice on the date on which such government servant com pletes thirty years of qualifying service or attains fifty years of age or on any date thereafter to be specified in the notice. The impugned notification was made on October 26, 1988 by the Government of Bihar intimating the appellant that as he had completed the age of more than 50 years, and in the opinion of the Government of Bihar, in public inter est he is compulsorily retired from service with effect from the date of issue of this notification. He will be paid salary of three months with allowances in lieu of three months ' notice under Rule 74(b)(ii) of Bihar Service Code. It has been contended on behalf of the appellant that though the impugned order is couched in innocuous terms and it is made in compliance with the provisions of Rule 74(b)(ii) of Bihar Service Code on appellant 's reaching the age of more than 50 years and it does not prima facie appear to cast any stigma on the service career of the appellant yet it has been made by way of punishment casting stigma on the appellant 's service career and as such the impugned order is illegal, bad and the same has been made in viola tion of audi alterem partem rule as well as Article 311(2) of the Constitution. It has been further submitted in this connection that the power to retire the appellant compulso rily from service has not been made in public interest under Rule 74(b)(ii) of Bihar Service Code but on the basis of the fact finding report given by the Deputy Development Commis sioner, Dumka by his letter dated September 19, 1987 re garding grave financial irregularities committed by the appellant in consideration of which a memorandum was pre pared by the Additional Commissioner cum Special Secretary, Shri T. Nand Kumar on October 6, 1988 recommending to the respondent State to compulsorily retire the appellant from service under Rule 74(b)(ii) of Bihar Code. It has also been contended that the basis of the order was made with oblique purposes 685 in consideration of extraneous matter and the impugned order purports to removal from service on certain serious allega tions of misconduct and consequently it casts a stigma on the service career of the appellant. Such order of compulso ry retirement from service though appears to be innocuous, has been made by way of punishment and as such it is liable to be set aside and quashed. It has, on the other hand, been urged on behalf of the respondent State that the impugned order has been made under Rule 74(b)(ii) of Bihar Service Code in public interest and there is nothing to show from the order itself that it has been made by way of punishment and it casts a stigma on the service career of the appellant. The language of the order is innocuous. The appellant cannot delve into the secretari at files to find out the basis of the order. Some decisions have been cited at the bar in support of this submission. Rule 74(b)(ii) of the Bihar Service Code confers power on the Appointing Authority to compulsorily retire a govern ment servant on his attaining 50 years of age or after completing 30 years of qualifying service in public inter est. The object of this rule is to get rid of the government servant who has become dead wood. This order is made only to do away with service of only those employees who have lost their utility, become useless and whose further continuance in service is considered not to be in public interest. In the instant case the appellant has an unblemished career and undoubtedly by dint of his merit and flawless service career he had been promoted to the post of Joint Director in 1983 and subsequently on 1st April, 1984 he was promoted to the higher post of General Manager under the respondent State in its Industries Department. The appellant has specifically pleaded in paragraph K of this appeal that he came to know that the impugned order of compulsory retirement has been issued by the respondent State on the basis of a memorandum dated October 6, 1988. It has been further pleaded that the appellant came to know from the memorandum that the impugned order of compulsory retirement dated October 26, 1988 has been issued by the respondent State though in the garb of Rule 74(b)(ii) of the Bihar Service Code, but in fact the same has been issued as a measure of punishment. This fact will be evident from the memorandum dated 6th October, 1988 wherein the State has alleged that six items of charges have been proved against the petitioner (appellant). The State Government has also accepted that there is no question of going into the formality of departmental proceeding but has decided to retire the petitioner compulsorily under Rules 74(b)(ii) of the Bihar Service Code. Paragraphs 686 2 to 4 of the Memorandum dated 6th October, 1988 make it clear that the impugned order dated October 26, 1988 of compulsory retirement, has been issued as a measure ' of punishment. It is further submitted that the order passed on October 26, 1988 was without giving any notice or any show cause to the petitioner. It has been stated in para 4 to 7 of the counter affidavit as under: (4) That it is not at all necessary to draw departmental proceeding against the petitioner (appellant) before effect ing his compulsory retirement from government service. Since his retirement under Rule 74(b)(ii) of the Bihar Service Code does not amount to dismissal or removal from government service within the meaning of clause (2) of Article 311 of the Constitution, it is, therefore, not necessary to obtain the advice of the Bihar Public Service Commission (Limita tion of Functions) Regulation, 1956. (5) That it is relevant to state that while the petitioner (appellant) was General Manager, District Industries Centre, Dumka and Deoghar during the year 1985 onwards till his compulsory retirement, an enquiry into the serious charges of corruption, omission and commission of financial and administrative lapses and foul play against him had been conducted respectively by Deputy Development Commissioner, Dumka, Deputy Commissioner, Dumka and Additional Director of Industries, Bihar, Patna. The above charges were proved such as: (i) The charge of registration of bogus unit had clearly been established; (ii) Allegations of recommendations and sanction of capital subsidy on D.G. sets to bogus units have been proved; (iii) Where there were no D.G. sets and the unit was bogus, subsidy had been sanctioned against the departmental in structions; (iv) Seed money had been sanctioned to non existent units and payments made in violation of Government orders; 687 (v) Registration had been done for restricted items; (vi) Subsidy on D.G. sets had been sanctioned and payments made to units located outside his jurisdiction; and (vii) Appointment of persons had been made on ad hoc basis beyond his delegated powers in gross violation of Government rules. (6) That in the above mentioned cases registration; recom mendations and payments had been made by the petitioner (appellant) after making personal inspections of the units which facts are sufficient to prove that he had commited the said irregularities knowingly for his personal gains and thereby the State Government had suffered a heavy loss. This misconduct on his part had tarnished the image of the Gov ernment in the public. It is, therefore, his so called exemplary service record which has no co relation with his compulsory retirement as stated in the aforesaid paragraph. (7) That contention of the petitioner (appellant) as stated in para (viii) of the special leave petition that the memo randum which have formed the basis of causing the compulsory retirement of the petitioner (appellant), is absolutely wrong and without any substance. It is relevant to state that the memorandum being confidential papers of the re spondent State Government cannot be termed as the Order of compulsory retirement and which order does not contain any word from which a stigma may be inferred. " It has been further averred in para 8 of the said affi davit that on a perusal of the order of compulsory retire ment of the petitioner (appellant), it is sufficiently clear that no stigma has been attached to the petitioner nor there is any word in the said Order from which a stigma may be inferred. The Supreme Court has held in the case of I.N. Saxsena vs The State of Madhya Pradesh, [967] 2 SCR 496 that where an order requiting a Government servant to retire compulsorily contains express words from which a stigma can be inferred that order will amount to removal within the meaning of Article 311. But where there are no express words in the order itself which would throw any stigma on the Government order, we cannot delve into Secretariat files to discover whether some kind of stigma can be inferred on such research. 688 In para 9 it has been stated that it is, therefore, as per the decision of the Supreme Court in the said case, the Court cannot look into the background resulting in the passing of the order of compulsory retirement in order to discover whether some kind of stigma can be inferred and accordingly in the instant case the memorandum is totally irrelevant for the consideration by the Court and in view of the same the appeal of the appellant can be dismissed. A supplementary affidavit has been filed on behalf of the appellant sworn by Suhird Kumar, son of the appellant. In para 3 of the said affidavit it has been submitted that the memorandum is prepared on the basis of two enquiry reports done by the different officers without there being any notice or getting any other version and this sort of memorandum cannot be said to be a fair memorandum in the eyes of law and so any action taken by the State Government on the basis of the said Memorandum is bad and violative of Article 14 and 16 of the Constitution of India. It is thus, clear and evident from the counter affidavit filed on behalf of the State Government referred to herein before that the basis of the impugned order of compulsory retirement from service of the appellant is not in public interest as stated in the order of compulsory retirement dated October 26, 1988. The impugned order, in fact, has been passed on the basis of the memorandum dated October 6, 1988 which is also based on the Report given by the Deputy Development Commissioner, Dumka by his letter dated Septem ber 19, 1987 without asking any explanation from the appel lant and without giving him any opportunity to defend his case before the Deputy Development Commissioner. It is, therefore, wrong to say that the basis of the order is not the said memorandum as well as the report of the Deputy Development Commissioner which clearly evinces that the impugned order of compulsory retirement is a mere camouflage being couched in innocuous terms and in fact the same has been made by way of punishment. In support of the impugned order it has been vehemently urged on behalf of the respondent State that the order of compulsory retirement dated October 26, 1988 does not show prima facie that it has been made by way of punishment. The Order as it is, speaks of compulsory retirement of the appellant from service in accordance with the provisions of Rule 74(b)(ii) of the Bihar Service Code. It has been con tended further ' that this order being couched in innocuous terms cannot be questioned and the appellant cannot delve into the secre 689 tariat filed to find out the basis of the order and to challenge the same on that basis. Reference has been made in this connection to the case of 1. N. Saksena vs The State of Madhya Pradesh, (supra). In that case, the State of Madhya Pradesh issued a memorandum on February 28, 1963 raising the age of retirement of its employees from 55 to 58 years. Clause 5 of the memorandum, however, said that the appoint ing Authority may require a Government servant to retire after he attained the age of 55 years on three months ' notice without giving any reasons. The clause further said that this power was normally to be used to weed out unsuit able employees. The appellant who was a District and Ses sions Judge in the service of the State Government would normally have retired at the age of 55 years in August, 1963. In September, 1963, however, Government communicated to. him an order that he was to retire on December 31, 1963 under Rule 56 of the Fundamental Rules applicable to the State of Madhya Pradesh. This order was challenged by the appellant by writ petition before the High Court of Madhya Pradesh. It was rejected. Thereafter, the appellant came with a certificate, to this court. It has been held by this Court in that case that: "Where there are no express words in the order of compulsory retirement itself which would throw a stigma on the Govern ment servant, the Court would not delve into Secretariat files to discover whether some kind of stigma could be inferred on such research. Since in the present case there are no words of stigma in the order compulsorily retiring the appellant, there was no removal requiring action under article 311 of the Constitution. " This decision does not, in any way, apply to this case for the simple reason that in the affidavit in counter filed by the respondent State it has been categorically stated that while passing the impugned order of compulsory retirement the officers concerned were guided by the report dated September 19, 1987 submitted by the Deputy Development Commissioner, Dumka who stated in his report that the appel lant was responsible for the grave and serious financial irregularities resulting in financial loss to the State Government, without giving any opportunity of hearing and without intimating the allegations to the appellant before forming his opinion. The said report was taken into consid eration and memorandum in question was issued on October 26, 1988 by the Additional Secretary, Industries Department, Government of Bihar wherein it has been clearly stated that the impugned order of compulsory retirement was made as the said mis 690 conduct on the part of the appellant tarnished the image of the Government in the public. This categorical statement made in the affidavit in counter clearly proves that the basis of making the order of compulsory retirement of the appellant from the service is the aforesaid report of the Deputy Development Commissioner, Dumka referred to hereinbe fore. In such circumstances, it is futile to argue that the order of compulsory retirement being couched in an innocuous language without causing any stigma is unassailable. It is pertinent to mention in this connection the case of Shyam Lal vs The State of U.P. & Anr., ; wherein it has been held by the Constitution Bench that: "A compulsory retirement under the Civil Services (Classifi cation, Control and Appeal) Rules, does not amount to dis missal or removal within the meaning of Article 311 of the Constitution and therefore, does not fall within the provi sions of the said Article. " "There is no such element of charge or imputation in the case of compulsory retirement. The two requirements for compulsory retirement are that the officer has completed 25 years ' service and that it is in the public interest to dispense with his further services. It is true that this power of compulsory retirement may be used when the authori ty exercising this power cannot substantiate the misconduct which may be the real cause for taking the action but what is important to note is that the directions in the last sentence in Note 1 to Article 465 A make it abundantly clear that an imputation or charge is not in terms made a condi tion for the exercise of the power. In other words, a com pulsory retirement has no stigma or implication of misbeha viour or incapacity. " It has been further held that: "A compulsory retirement does not amount to dismissal or removal and, therefore, does not attract the provisions of Article 311 of the Constitution. In Baldev Raj Chadha vs Union of India and Ors., 1 it was held that: 691 "The whole purpose of Fundamental Rule 56(j) is to weed out the worthless without the punitive extremes covered by Article 311 of the Constitution. But under the guise of 'public interest ' if unlimited direction is regarded accept able 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. The exercise of power must be bona fide and promote public interest. " It has also been observed that: "An officer in 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 immedi ately before the compulsory retirement cannot be compulsori ly retired 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. " In the case of Union of India vs Col. J.N. Sinha and Anr., [1971] 1 SCR 791 it has been observed by this Court that: "Fundamental Rule 56(i) does not in terms require that any opportunity should be given to the concerned Government servant to show cause against his compulsory retirement. It says 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. If that authority bona fide forms that opinion the correctness of that opinion cannot be challenged before courts, though it is 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. " In Shamsher Singh & Anr. vs State of Punjab, ; the appellant Shamsher Singh was a Subordinate Judge on probation. His services were terminated by the Government of Punjab in the name of Governor of Punjab by an order which did not give any reasons for the termination. It has been held that: "No abstract proposition can be laid down that where the services of probationer are terminated without saying any 692 thing more in the order of termination that it can never amount to a punishment in the facts and circumstances of the case. If a probationer is discharged on the ground of mis conduct or inefficiency or for similar reason without a proper enquiry and without his getting a reasonable opportu nity of showing cause against his discharge it may in a given case amount to removal from service within the meaning of Article 311(2) of the Constitution. " In that case the appellant was asked to show cause why his services should not be terminated and there were four grounds. One was that the appellant 's behaviour towards the Bar and the litigant public was highly objectionable, de rogatory, non cooperative and unbecoming of a judicial officer. The second was that the appellant would leave his office early. The third was the complaint of Om Prakash, Agriculture Inspector that the appellant abused his position by proclaiming that he would get Om Prakash involved in a case if he did not cooperate with Mangal Singh, a friend of the appellant and Block Development officer, Sultanpur. The fourth was the complaint of Prem Sagar that the appellant did not give full opportunity to Prem Sagar to lead evi dence. Prem Sagar also complained that the decreeholder made an application for execution of the decree against Prem Sagar and the appellant without obtaining office report incorporated some additions in the original judgment and warrant of possession. The appellant showed cause stating that he was not provided with an opportunity to work under the same superior officer for at least six months so that independent opinion could k., formed about his knowledge, work and conduct. Thereafter, the appellant received a letter from the Deputy Secretary to the Government addressed to the Registrar, Punjab and Haryana High Court that the services of the appellant had been terminated. It has been held that in the facts and circumstances of the case it is clear that the order of the termination of the appellant, Shamsher Singh was one of punishment. The authorities were to find out the suitability of the appellant. The order of termination is in infraction of Rule 9 which makes it incum bent upon the authority that the services of a probationer can be terminated on specific fault or on account of unsat isfactory record implying unsuitability. The order of termi nation was, therefore, set aside. This judgment has been followed in the case of Anoop Jaiswal vs Government of India and Anr., ; It has been observed that: 693 "It is, therefore, now well settled that where the form of the order is merely a camouflage for an order of dismissal for misconduct it is always open to the Court before which the order is challenged to go behind the form and ascertain the true character of the order. If the Court holds that the order though in the form is merely a determination of em ployment is in reality a cloak for an order of punishment, the Court would not be debarred, merely because of the form of the order, in giving effect to the fights conferred by law upon the employee. " It has also been observed that: "Even though the order of discharge may be non committal, it cannot stand alone. Though the noting in the file of the Government may be irrelevant, the cause for the order cannot be ignored. The recommendation of the Director which is the basis or foundation for the order should be read along with the order for the purpose of determining its true character. If on reading the two together the Court reaches the conclu sion that the alleged act of misconduct was the cause of the order and that but for that incident it would not have been passed then it is inevitable that the order of discharge should fall to the ground as the appellant has not been afforded a reasonable opportunity to defend himself as provided in article 3 11(2) of the Constitution. " On a consideration of the above decisions the legal position that now emerges is that even though the order of compulsory retirement is couched in innocuous language without making any imputations against the government serv ant who is directed to be compulsorily retired from service, the Court, if challenged, in appropriate cases can lift the veil to find out whether the order is based on any miscon duct of the government servant concerned or the order has been made bona fide and not with any oblique or extraneous purposes. Mere form of the order in such cases cannot deter the Court from delving into the basis of the order if the order in question is challenged by the concerned government servant as has been held by this Court in Anoop Jaiswal 's case. This being the position the respondent State cannot defend the order of compulsory retirement of the appellant in the instant case on the mere plea that the order has been made in accordance with the provisions of Rule 74(b)(ii) of the Bihar Service Code 694 which prima facie does not make any imputation or does not cast any stigma on the service career of the appellant. But in view of the clear and specific averments made by the respondent State that the impugned order has been made to compulsorily retire the appellant from service under the aforesaid Rule as the appellant was found to have committed grave financial irregularities leading to financial loss to the State, the impugned order cannot but be said to have been made by way of punishment. As such, such an order is in contravention of Article 311 of the Constitution of India as well as it is arbitrary as it violates principles of natural justice and the same has not been made bona fide. In the premises aforesaid we hold that the impugned order has not been made bona fide but for collateral pur poses and on extraneous consideration by way of punishment. The impugned order is, therefore, illegal and unwanted and so it is liable to be quashed and set aside. We, therefore, allow the appeal and set aside the impugned order. We fur ther direct the respondents to reinstate the appellant in service forthwith with full back wages. The respondents will pay costs to the appellant. N.P.V. Appeal allowed.

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

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

Under section 517 of the Code of Criminal Procedure the court is empowered on the conclusion of an enquiry or trial to make an 977 order for the disposal of any property or document produced before it or in its custody or regarding which an offence appears to have been committed or which had been used for the commission of any offence. The power of the court extends to the confiscation of the property in the custody of the court but it is not in every case in which the court must necessarily pass an order of confiscation irrespective of the circumstances of the case. Held, that the confiscation of gold worth about 3 lakhs of rupees was singularly inappropriate in a case like the present where the prosecution story that the gold in question was smuggled into India from Africa was not accepted by the court and the accused was convicted for an offence under a. 61 E of the Bombay District Police Act, 1890, which provides a maximum sentence of three months and a fine of Rs. 100 and which does not contain any substantial provision such as the Sea Customs Act imposing the penalty of confiscation.

Civil Appeal No. 217 of 1976. Appeal by Special Leave from the Judgment ' and Order of the Gujarat High Court dt. 18th/l9th September, 1975 in Civil Revision Appln. No. 67 of 1973. P.H. Parekh, Ajit R. Oza, Kailash Vasdev and (Miss) Manju JarIey for the Appellant. M.V. Goswami for the Respondent. delivered by BEG C.J. This is a landlord 's appeal by special leave against the judgment and order of the High Court of, Gujarat allowing a revision application of the tenant under section 29(2) of the Bombay Rents, 571 Hotel and Lodging House Rates Control Act, 1947 (thereinaf ter referred to as 'the Act ') It appears from the statement of facts in the judgment of the High Court that there was no dispute that the monthly rent of the premises was Rs. 30/ and that the tenant had also to pay the charges for electricity consumed by him. It was, however, at first disputed whether the tenant had to pay house tax and the education cess also. The landlord had brought a suit for arrears of rent amounting to Rs. 990/ from 6 3 67 to 5 12 69 and also to recover a sum of Rs. 27.49 paid as house tax and another sum of Rs. 210.18 paid by the landlord for the electricity consumed by the tenant. On 5 1 1970, the landlord had served a notice upon the tenant terminating the tenancy on the ground that dues amounting to Rs. 1227.67 had not been paid. The tenant filed an application for fixation of the standard rent within a month of. the service of the above mentioned no tice. He also filed an application for fixation of interim rent on the ground that he, being a poor man, was unable to pay rent and the total amount due at once. On these appli cations, the interim rent was fixed at Rs. 25/ and the applicant was directed "to deposit arrears of rent and future rent at this rate on or before 10th of the next month". Although, the trial Court held the notice terminating the tenancy to be legally valid and the agreed rate of rent to be Rs. 30/ p.m., so that the plaintiff was entitled to the decree for arrears of rent from 6 3 67 to 5 12 1969 and also the amount of Rs. 27.49 as house tax and Rs. 210.18 towards electricity charges, making up the total of Rs. 1227.67, yet, it held that as the defendant tenant was "ready and willing" to pay the rent to the plaintiff. Hence, the suit for ejectment could not be decreed. The appellate Court, on the other hand, held that the unwilling ness of the defendant respondent to pay the rent, which was apparent from the patent facts and admissions and conduct of the defendant respondent, disentitled him for protection sought. It, therefore, decreed the suit for ejectment. Learned counsel for the appellant has contended that the High Court had proceeded upon the wrong assumption that the standard rent was fixed in the lower appellate Court for the first time when the appeal was decided. It is very diffi cult to find the basis for this opinion of the High Court. The application for fixing the standard rent, initiating a separate proceeding, was dismissed, as is admitted on behalf of the tenant respondent, for non prosecution. Hence, no standard rent could be fixed section 11. Section 5, sub section (10) defines standard rent as follows : 5. Definitions. In this Act unless there is anything repugnant to the subject or context (10) "Standard rent" in relation to any prem ises means (a) "Where the standard rent is fixed by the Court and the Controller respectively under the Bombay Rent Restriction Act, 1939 (Bom. XVI of 1939), or the 572 Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1944 (Bombay VII of 1944), such standard rent; or (b) where the standard rent is not so fixed subject to the provisions of section 11, (i) the rent at which the premises were let on the first day of September 1940, or (ii) where they were not let on the first day of September 1940, the rent at which they were first let before that day, or (iii) where they were first let after the first day of September 1940, the rent at which they were first let, or (iv) in any of the cases specified in section 11, the rent fixed by the Court". Both the sides before us are agreed that no question of a standard rent actually and finally fixed section 11 of the Act arose in the circumstances of this case. Section 11 of the Act reads as follows : "11. Court may fix standard rent and permit increases in certain cases. (1) In any of the following cases the Court may, upon an application made to it for that purpose, or in any suit or proceeding, fix the standard rent at such amount as, having regard to the provisions of this Act and the circumstances of the case, the Court deems just (a) where any premises are first let after the specified date and the rent at which they are so let is in the opinion of the Court exces sive; or (b) where the Court is satisfied that there is no sufficient evidence to ascertain the rent at which the premises were let in any one of the cases mentioned in sub clauses (i) to (iii) of clause (b) of sub section (10) of section 5; or (c) where by reason of the premises having been let at one time as a whole or in parts and at another time in parts or as a whole, or for any other reasons, any difficulty arises in giving effect to this Part; or (d) where any premises have been or are let rentfree or at a nominal rent or for some consideration in addition to rent; or (e) where there is any dispute be tween the landlord and the tenant regarding the amount of standard rent. 573 (2 ) If there is any dispute between the landlord and the tenant regarding the amount of permitted increases the court may determine such amount. (3) If an application for fixing the standard rent or for determining the permitted increases is made by a tenant who has received a notice from his landlord under subsection (2) of section 12, the Court shall make an order directing the tenant to deposit in Court forthwith and thereafter monthly or periodi cally, such amount of rent or permitted in creases as the Court considers to be reasona bly due to the landlord pending the final decision of the application, and a copy of such order shall be served upon the landlord. Out of the amount so deposited, the Court may make order for the payment of such reasonable sum to the landlord towards payment of rent or increases due to. him, as it thinks fit. If the tenant fails to deposit such amount, his application shall be. dismissed. (4) Where at any stage of a suit for recovery of rent whether with or without a claim for possession of the premises, the Court is satisfied that the tenant is withholding the rent on the ground that the rent is excessive and standard rent should be fixed the Court shall, and in any other case if it appears to the Court that it is just and proper to make such an order the Court may, make an order directing the tenant to deposit in Court forthwith such amount of rent as the Court considers to be reasonably due to the land lord. The Court may further make an order directing the tenant to deposit in Court, monthly or periodically, such amount as it considers proper as interim standard rent during the pendency of the suit. The Court may also direct that if the tenant fails to comply with any such order within such time as may be allowed by it he shall not be entitled to appear in or defend the suit except with leave of the Court which leave may be granted subject to such terms and conditions as the. court may specify. (5) No appeal shall lie from any order of the Court made under sub section (3) or (4). (6) An application under this section may be made jointly by all or any of the tenants interested in respect of the premises situated in the same building". A "fixation" of standard rent can only take place by means of the specified procedure provided for it. There is nothing in the case before us which could be "deemed" a fixation under the Act. Apparently, the High Court thought that the dismissal of an application for fixation of rent meant an automatic "fixation" of it at Rs. 30/ p.m. In the face of detailed findings 'given by the Appellate Court, which the High Court could not upset without a good enough legal ground for 10 502 SCI/77 574 doing so and did not actually set aside, it is difficult to see how the tenant could be said to be "ready and willing" to pay the rent so as to avoid passing of a decree for eviction against him. On behalf of the landlord appellant, it is submitted that, in an affidavit dated 18 9 75, which the respondent himself filed in the High Court, it is admit ted that the tenant had not been paying the rent regularly as contemplated by 'the order of 3 2 70. Under that order, the tenant had to deposit arrears of rent. In addition, he had to deposit future rent at the rate fixed for the "interim rent". The part of the order for future rent could not refer to arrears of rent. However, if the tenant was not quite clear about the meaning of the order, he could have applied to the Court to clarify the order and could have gone on depositing rent at Rs. 25/ p.m. after depositing "arrears of rent" so clarified. Learned counsel for the respondent could only contend that the deposit of future rent on or before the 10th of the next month indicat ed that the deposit could be made at any time before the rent was due and could cover subsequent accruals of rent so that it could cover several months if amount deposited was enough for that. Learned counsel for the appellant points out that the interpretation put forward on behalf of the respondent tenant is not only an unreason? able one but would not, even if accepted, justify defaults admitted by the respondent tenant even if an advance deposit could wipe off the effects of some defaults. The High Court had itself not only not set aside the finding relating to the defaults found by the appellate court. but, after assuming, quite erroneously. that the standard rent was fixed for the first time in the Appellate Court, it had condoned all defaults in payment of rent right up to the time of the making of the application before the High Court on 18 9 75 and the accept ance of a fresh deposit in the High Court itself to cover the arrears. The question is whether the statutory powers of the Court laid down in section 12 of the Act could be used in this manner. Section 12 of the Act reads as follows : "12. No ejectment ordinarily to he made if tenant pays or is ready and willing to pay standard rent and permitted increases ( 1 ) A landlord shall not be entitled to the recov ery of possession of any premises so long as the tenant pays, or is ready and willing to pay, the amount of the standard rent and permitted increases, if any, and observes and performs the other conditions of the tenancy, in so far as they are consistent with the provisions of this Act. (2) No suit for recovery of possession shall he instituted by a landlord against a tenant on the ground of non payment of the standard rent or permitted increases due, until the expiration of one month next after notice in writing of the demand of the standard rent or permitted increases has been served upon the tenant in the manner provided in section 106 of the Transfer of property Act, 1882. 575 (3) (a). Where the rent is payable by the month and there is no dispute regarding the amount of standard rent or permitted in creases, if such rent or increases are in arrears for a period of six months or more and the tenant neglects to make payment thereof until the expiration of the period of one month after notice referred to in sub section (2), the Court may pass a decree for evic tion in any such suit for recovery of posses sion. (b) In any other case, no decree for eviction shall be passed in any such suit if, on the first day of heating of the suit or on or before such other date as the court may fix, the tenant pays or tenders in Court the standard rent and permitted increases then due and thereafter continues to pay or tender in Court regularly such rent and permitted in creases till the suit is finally decided and also pays costs of the suit as directed by the Court. (4) Pending the disposal of any such suit, the Court may out of any amount paid or tendered by the tenant pay to the landlord such amount towards payment of rent or permit ted increases due to him as the Court thinks fit. Explanation In any case where there is a dispute as to the amount of standard rent or permitted increases recoverable under this Act the tenant shall be deemed to be ready and willing to pay such amount, if, before the expiry of the period of one month after notice referred to in sub section (2),, he makes an application to the Court under sub section (3) of section 11 and thereafter pays or tenders the amount of rent or permitted increases specified in the order made by the court In Vora Abbasbhai Alimahomed vs Haji Gulamnabi Haji Safibhai,(1) it was held that, according to section 12(3) (a) of the Act, the Court was bound to pass the decree for eviction if statutory terms are not complied with. The answer given on behalf of the respondenttenant was that the case before us is governed by the provisions of section 12(3)(b) of the Act. But, this section applies only to cases where either on the date of first heating of the suit or on such other dates as the Court may fix for the purpose, the tenant pays or tenders in Court the standard rent with permitted increases. It was laid down in Abbasbhai 's case (supra) that the ' explanation to section 12 introduces only a rule of evidence. It appears to us that where a tenant does not prosecute an application for fixation of standard rent and deliber ately permits it to be dismissed for non prosecution it could be reasonably inferred that it was not a bona fide application at all. In the case before us, it being admit ted that the agreed rent was Rs. 30/ p.m. that should be the "standard rent" as defined by section 5(10) of the Act. That was the rate at which rent was payable. Non prosecution of the application for (1) ; 576 standard rent indicated that there was no real dispute regarding the standard rent or permitted increases. In such cases, if the provisions of section 12(3)(a) are not shown to be complied with, the Court is bound to pass a decree for eviction. The statutory protection can only be given in accordance with the terms on which it is permissible. The Act certain ly does not confer a power upon the Court to excuse a viola tion of the provisions of the Act by making wrong assump tions or on compassionate grounds. The Court could not, therefore, exercise what would be, in effect, a power to condone infringement of the provisions of the Act. In Shah Dhansukhlal Chhaganlal vs Dalichand Virchand Shroff & Ors.,(1) this Court explained the provisions of section 12 of the Act and laid down that a failure to deposit the rent regularly as required by the Act will take the case out of the provisions of s.12(3)(,b). On facts found, there was such a failure to deposit in the case before us. The High Court appears to have condoned the defaults by accept ing the version of the defendant respondent that the default was due to his difficulty in finding money to pay up the rent. Hence, on the admission of the defendant respondent also, it seems a clear case of defaults which deprive the defendant respondent of the protection of section 12 of the Act. Learned counsel for the plaintiff appellant has, very rightly, pointed out that the High Court had not set aside the findings of the fact arrived at by the appellate Court which took the case of the defendant respondent clearly outside the protection conferred by the Act. The High Court seems to have accepted the erroneous. view that stand ard rent was actually fixed by the appellate Court for the first time whereas what had happened was that the applica tion for fixation of standard rent had been dismissed for non prosecution. This was not "fixation" of standard rent, as already pointed out. Hence, no question of giving time to pay up arrears after a "fixation" of standard rent arose here. We think that the case is clearly outside the protec tion conferred upon tenants under the Act. The readiness and the willingness of the tenant to pay could be ,found: only if he had complied with the provi sions of the Act. The Act does not cover the case of a person who is unable to pay owing to want of means but is otherwise "ready and willing". Such a case is no doubt a hard one, but, unfortunately, it does not enable Courts to make a special law for such hard cases which fall outside the statutory protection. We understand that the defendant respondent is a Carp.enter. If he is unable to find means to pay rent we cannot dismiss the suit for his eviction on the ground of non payment of rent. In view of his disability, on account of alleged illness, we propose to modify the decree of the appellate Court to the extent that he will have four months ' time from 5th April 1977 before the eviction order can be executed against him provided he deposits within a month from today all the arrears due (i) ; 577 and goes on depositing Rs. 30/ p.m. regularly, in advance, before the 5th of each month on which his tenancy begins. He must,, however, vacate the premises before 5th August, 1977, and may leave it earlier if he is unable to pay the required rent regularly in advance. The decree for eviction will become executable on breach of the conditions laid down, or, after 5th August, 1977. The result is that we set aside the judgment and order of the High Court and restore the decree of the appellate Court subject to the modification indicated above. The parties will bear their own costs. S.R. Appeal allowed.

The appellants were the sole selling agents of the Oriental Carpet Manufacturers India Pvt. Ltd. in respect of yarn, cloth and blankets manufactured by them and for the sales effected by the appellants, as such sole selling agent 's commission was paid to them by OCM. Since the appellants showed very satisfactory turnover from year to year, OCM started giving to them, in addition to the usual commission, over riding commission @ 21/2 per cent on the sales effected by the appellants. Since the turnover of the sales reached the figure of Rs. 54.28 lacs and over riding commission increased to Rs. l,13,449/ during the previous year corresponding to the assessment year 1963 64, the appellants paid out of the over riding commission received by them a sum of Rs. 22,690/ (i.e. at the rate of 1/2% of the sales) each to two of their employees viz., Saheb Dayal and Gurditta Mall since they were primarily responsible for the increased prosperity of the appellants. The commission so paid viz. Rs. 45,380/ was claimed by the appellants as a deductible expenditure in their assessment to income tax for the assessment year 1963 64. The Income Tax Officer disallowed the claim on the ground that there was no evi dence to show that the increase in sales during the relevant accounting year was due to the efforts of Saheb Dayal and Gurditta Mal. The Appellate Assistant Commissioner rejected the appeal preferred to him and held that since no evidence had been produced by the assessee to prove that the activi ties of Saheb Dayal and Gurditta Mal in the relevant account year were of a nature different from those: in the earlier years so that they put in any extra time or energy in the conduct of the business of the assessee so as to justify the payment of the commission, it could not be said that the commission was paid for services rendered by them. The Tribunal, in further appeal took the same view and held that since there was no proof to show that any extra services were rendered by Saheb Dayal and Gurditta Mal for which payment of commission in addition to salary and bonus could be justified, commission could not be said to have been paid for services rendered so as to attract the applicability of section 36(1)(ii) of the Act. The High Court was also of the same view and answered the reference made to it, in favour of the Revenue. Allowing the appeal by special leave, the Court, HELD: (1) The sum of Rs. 45,380/ paid by the assessee to Saheb Dayal and Gurditta Mal by way of commission during the 'relevant accounting year was reasonable, having regard to all the circumstances of the case and it ought to have been allowed as a deductible expenditure section 36(1)(ii) of the Income Tax Act. [537 B] (2) Section 36, sub section (1) clause (ii) does not postulate that there should be any extra services rendered by an employee before payment of commission to him can be justified as an allowable expenditure. What it requires, is only this, namely, that commission paid to an employee should be for some services rendered by him. It is not necessary that the commission should be paid under a con tractual obligation. It may be purely voluntary. (3) It is immaterial that the services rendered during the relevant accounting year were in no way greater or more onerous than the services rendered in the earlier years. There is no such requirement under the section and it is not justified by the language of section 36, sub section(l), clause (ii) and indeed if it were pushed to its logical extreme, even payment of bonus cannot be treated as permissible deduction under that provision. [534 G H] 530 (4) It is now well settled that the mere fact that commission is paid exgratia would not necessarily mean that it is unreasonable. Commercial expediency does not mean that an employer should not make any payment to an employee unless the employee is entitled to it under a contract. What is the requirement of commercial expediency must be judged not in the light of the 19th Century laissez faire doctrine which regarded man as an economic being concerned only to protect and advance his self interest but in the context of current socio economic thinking which places the general interest of the community above the personal interest of the individual and believes that a business or undertaking is the product of the combined efforts of the employer and the employees and where there is sufficiently large profit, after providing for the salary or remuneration of the employer and the employees and other prior charges such as interest on capital depreciation, reserves etc., as part of it should in all fairness go to the employees. [536 E G] (5) The question whether commercial expediency justified the payment of commission would have to be judged in the light of. all the circumstances existing at the material time. In the instant case, the assessee felt, on grounds of commercial expediency that a part of the over riding commis sion should be raid besides salary and bonus to its two employees who had worked so well and contributed to the prosperity of the assessee and did make the payment. [525 AB] Laxmandas Sejram vs C.I.T. Gujarat approved. (6) The question whether the amount of the commission is a reasonable amount or not has to be determined with refer ence to the three factors laid down in section 36(1)(ii). Though described loosely as conditions, they are not really conditions on the fulfilment of which alone the amount of commission paid to an employee can be regarded as reasona ble. The reasonableness of the amount of commission has to be considered from the point of view of a normal, prudent businessman, and not on any subjecting standard of the assessing authority. [525 C D] Observation: It is high time that the administration of our tax law recognised the demand of social justice today viz., profit sharing by the employees and encouraged it by adopting a progressive and liberal approach in the applicability of section 36, subsection (1), clause (ii). [536 H]

: Criminal Appeal No. 282 of 1971. (Appeal by Special Leave from the Judgment and Order dated 12 4 1971 of the Allahabad High Court in Criminal Appeal No. 1909/68). S.K. Mehta, for the appellants. D.P. Uniyal and O.P. Rana, for the respondent, 233 R.L. Kohli, for the Intervener. The Judgment of the Court was delivered by FAZAL ALI, J. It is a peculiar feature of our criminal law that where a trespasser has succeeded in taking recent wrongful possession of the property vested in the public for common enjoyment, the members of the village or the real owner are not entitled in law to throw out the trespasser but have to take recourse to the legal remedies available, and if any member of the public tries to secure public property from the possession of the trespasser he is normal ly visited with the onerous penalty of law. This is what appears to have happened in this appeal by special leave in which the appellants appear to have got themselves involved in an armed conflict with the prosecution party resulting in the death of the deceased, injuries to some of the prosecu tion witnesses and injuries to three of the accused them selves. The prosecution case in short is that on July 18, 1966, at about 7 30 to 8 00 in the morning when Ram Khelawan and his companions were removing weeds from the paddy crop sown by them in the field which included a portion of the Chak Road which had recently been encroached by the complainants ' party and amalgamated with their fields, Ram Ratan and Ram Samujh armed with lathis and Din Bandhu and Ram Sajiwan carrying a ballam and Biroo respectively entered the field of Ram Khelawan with their bullocks and insited on passing through the field along with their bullocks, which according to them was a public road. The complainants protested against the highhanded action of the party of the accused on which Ram Ratan exhorted his companions to assault the deceased Murli as a consequence of which Ram Sajiwan as saulted Murli in the abdomen with his Biroo as a result of which MurIi sustained serious injuries and fell down in the field and ultimately succumbed to the injuries. The other members of the complainants ' party, namely, Ram Khela wan Manohar Sarabjit, Mewa Lal and Satrohan were also assaulted by Ram Ratan and his party. Soon after the occurrence Rameshwar Pathak, a police officer, who happened to be present at the spot recorded the statement of P.W. 1 Ram Khelawan which was treated as the F.I.R. and after conducting the usual investigation submitted a chargesheet against all the accused persons who were put on trial before the Sessions Judge, Barabanki. The Learned Sessions Judge acquitted the accused Din Bandhu and convicted the appellant Ram Sajiwan under section 302 I.P.C. Ram Ratan and Ram Samujh were convicted under sections 326/34 I.P.C. and sentenced to eight years ' rigorous imprisonment. Three appellants Ram Ratan, Ram Sajiwan and Ram Samujh were further convicted under section 447 I.P.C. to three months ' rigorous imprisonment and under sections 324/34 I.P.C. to two years 'rigorous imprison ment under each of the two counts. and under sections 323/34 I.P.C. to six months ' rigorous imprisonment and ordered that all the sentences shall run concurrently. The accused persons filed an appeal before the High Court of Allahabad which was also dismissed and thereafter they obtained spe cial leave of this Court and hence this appeal before us. 234 The defence of the accused was that shortly before the occurrence proceedings for consolidation of holdings had taken place in the village as a result of which the Revenue authorities provided a Chak Road which passed through plot Nos. 853, 854, 864, 823 and 887. This Chak Road was meant to boa public road to enable the. residents of the village to pass through this road with their cattle. This road happened to be adjacent to the field of Ram Khelawan P.W. 1 and he took undue advantage of the proximity of the road and encroached upon the same and amalgamated it with his cultiv able field. The accused persons wanted t0 assert their lawful right over the Chak Road and it was the prosecution party which was the aggressor and started assaulting the accused as a result of which three persons on the side of the accused received serious injuries. The accused, there fore, assaulted the deceased in self defence. Even other wise, the accused pleaded innocence. Both the courts below have come to a concurrent finding of fact that the occurrence took place as alleged by the prosecution and that the accused persons were the aggressors and had opened the assault on the deceased. The Trial Court has also the High Court have concurrently found, on a full and complete appreciation of the evidence., that although the place of occurrence was a part of the Chak Road, yet the complainant Ram Khelawan had encroached on the same and some time before the occurrence had brought the land under culti vation over which he had grown paddy crop. The evidence of the Sub Inspector who visited the spot clearly shows that he found paddy crop grown at the height of 4 or 6 digits. The learned counsel for the appellants has not been able to show that the concurrent finding of fact arrived at by the Ses sions Judge and the High Court on this point is in any way not borne out by the evidence. The learned counsel for the appellants submitted two points before us. In the first place, he submitted that the finding of the High Court impliedly shows that the accused were trying to, assert their lawful right over the Chak Road which was wrongfully occupied by the complainant and was in possession of the villagers. The accused, therefore, had every right to throw out the complainants ' party who were trespassers by force. The accused were, therefore, acting in the exercise of their right of private defence of person and property and were. justified in causing the death of the deceased, particularly in view of the serious injuries received by three of the party of the accused. Reliance was placed, particularly on the Injury Reports of Ram Samujh, Harnam and Ram Ratan. It appears that Ram Samujh received two injuries one being a lacerated wound 3 cm X 3/4 cm X 1 cm deep on the posterior part of head and a contusion on the right side of the head, while Harnam had four contusions and Ram Ratan had two. lacerated wounds in the region of the ear, one punctured wound in the left forearm and one contusion. It was submitted that in view of the serious injuries, some of which were inflicted by sharp cutting weapons, it would not be said that the appellants had exceeded their right of private defence. The argument is no doubt attractive, but on closer scrutiny we find that it is not tenable. In view of the clear finding of the High Court and the Sessions Judge that the land in dispute was in the settled possession of the complainant Ram Khelawan 235 who rightly or wrongly encroached upon the road and convert ed it into his cultivable land the accused had no right to throw the complainant by force. In fact the Sessions Judge found thus: "There is also no doubt that from the evidence on record adduced by the prosecution and the defence, it appears that the Chak Road, if any was existing, was encroached upon by Ram Khelawan and his family members. So far as the question whether the Chak Road was encroached upon, there was hardly any discrepancy between the statements of the prosecution witnesses and the defence. It has been admitted by Ram Khelawan P.W. 1 that before the occurrence Ram Rattan and several other villagers whose Chaks are situated in the east of Ram Khelawan Chak used to say that he had encroached upon the Chak Road, and that in the absence of that Chak Road, from where they should take their bullocks to their Chaks. . . .From these admissions also it is amply proved that in fact there was a Chak Road but it was later encroached upon by the complainant Ram Khelawan. " The High Court also found: "It is thus clear that assuming that the consolidation authorities had formed a Chak Road adjoining the Chak of Ram KheIawan, it had been taken possession of by Ram Khelawan included in his Chak ploughed by him and paddy crop had been sown therein. It is thus obvi ous that Ram Khelawan had established his possession over the land where the incident took place and had been in peaceful possession thereof for 2 to 3 weeks at least before the occurrence took place. " It is well settled that a true owner has every right to dispossess or throw out a trespasser, while the trespasser is in the act or process of trespassing and has not accom plished his possession, but this right is not available to the true owner if the trespasser has been successful in accomplishing his possession to the knowledge of the true owner. In such circumstances the law requires that the true owner should dispossess the trespasser by taking recourse to the remedies available under the law. In view of the clear finding of the High Court that the complainant Ram Khelawan even after encroachment had established his possession over the land in dispute for two to three weeks before the occur rence, for the purpose of criminal law, the complainant must be treated to be in actual physical possession of the land so as to have a right of private defence to defend his possession even against the true owner. While it may not be possible to lay down a rule of universal application as to when the possession of a trespasser becomes complete and accomplished, yet, as this Court has indicated recently, one of the tests is to find out who had grown the crop on the land in dispute. In Puran Singh & Others vs State 236 of Punjab(1), this matter was comprehensively considered and on of us (Fazal Ali, J.) who spoke for the Court observed as follows: "We, however, think that this is not what this Court meant in defining the nature of the settled possession. It is indeed difficult to lay down any hard and fast rule as to. when the possession of a trespasser can mature into a settled possession. But what this Court really meant was that the posses sion of a trespasser must be effective, undis turbed and to the knowledge of the owner or without any attempt at concealment. For instance a stray or a casual act of possession would not amount to settled possession. There is no special charm or magic in the word 'settled possession ' nor is it a ritualistic formula which can be confined in a strait jacket but it has been used to mean such clear and effective possession of a person, even if he is a trespasser, who gets the right under the criminal law to defend his property against attack even by the true owner . . . Thus in our opinion the nature of possession in such cases which may entitle a trespasser to exercise the right of private defence of property and person should contain the following attributes: (i) that the trespasser must be in actual physical possession of property over a sufficiently long period; (ii) that the possession must be to the knowledge either express or implied of the owner or without any attempt at concealment and which contains an element of animus pros sendie. The nature of possession of the tres passer would however be a matter to be decided on facts and circumstances of each case; (iii) the process of dispossession of the true owner by the trespasser must be complete and final and must be acquiesced in by the true owner; and (iv) that one of the usual tests to determine the quality of settled possessions, in the case of culturable land, would be whether or not the trespasser, after having taken possession, had grown any crop. If the crop had been grown by the trespasser, then even the true Owner has no right to destroy the crop grown by the trespasser and take forcible possession, in which case the tres passer will have a right of private defence and the true owner will have no right of private defence. " In this case there is a clear finding of the High Court and the Sessions Judge that the complainant Ram Khelawan had encroached upon the land in dispute, had converted it into culturable field and had grown paddy crop which the com plainants ' party was trying to weed out on the day when the occurrence took place. In these circumstances, therefore, the complainant was undoubtedly in posses (1) [1975] Supp. S.C.R. 299. 237 sion of the land and the appellants had no right to commit trespass on the land and engage the complainants in a seri ous fight. As the complainant Ram Khelawan was in peaceful possession of the land to the knowledge of the appellants, he was in law entitled to defend his possession. The com plainant, therefore, was fully justified in protesting to the accused when they tried to pass through his field and caused damage to the paddy crop by forcibly taking the bullocks through the field. In these circumstances the appellants who were undoubtedly the aggressors and had opened the. assault could not claim any right of private defence either of person or property. For these reasons, therefore, we agree with the finding of the High Court that the accused are not entitled to claim the right of private defence, nor can it be said that in causing the murderous assault on the deceased they had merely exercised their right of private defence of property. It is true that the appellants were trying to exercise their lawful right over a portion of the land which had been left apart as a public road for the use of villagers by the Revenue authorities, but as a complaint had already been filed before the Pan chayat the appellant should have allowed the law to take its course instead of taking the law in their own hands by making an armed trespass into the property. However, there can be no doubt that there was no common intention on the part of all the accused to cause the death of the deceased Murli or to cause grievous injuries to him which was an individual act of the appellant Ram Sajiwan. The other appellants Ram Rattan and Ram Samujh, therefore, cannot be convicted under sections 325/34 I.P.C. Another point canvassed before us by counsel for the appellant was that although three persons on the side of the accused had sustained serious injuries, the prosecution has not given any explanation which shows that the origin of the prosecution is shrouded in mystery. This contention is also without any substance. The evidence of the eye witnesses examined by the prosecution clearly shows that some of them were also armed with lathis and sharp cutting weapons, and they have also stated that they wielded their weapons when the accused attached the complainants ' party and that this was done in selfdefence. In view of the injuries on the person of the deceased and the prosecution witnesses, name ly, Manohar, Sarabjit, Mewa Lal, Satrohan and Ram Khelawan, there can be No. doubt that there was a mutual fight. Thus in the instant case, the prosecution has given sufficient explanation for the injuries sustained by the accused per sons and the prosecution case cannot be thrown out on this ground. Lastly it was submitted that so far as Ram Sajiwan was concerned the evidence given by the eye witnesses regarding the manner of the assault is inconsistent with the medical evidence. In this connection reliance was placed by counsel for the: appellants on the evidence of the Doctor which is to the effect that the injury on the deceased Mufti was undoubtedly caused by a Biroo but it could have been caused only if the Biroo after being struck in the abdomen was rotated. Much capital has been made out of this admission made by the Doctor,but on a close scrutiny we find that this circumstance is not sufficient 238 to put the prosecution out of court. There is clear and consistent evidence of the eye witnesses that the deceased had been assaulted in the abdomen and this fact has been accepted by the two courts concurrently that the deceased Murli was assaulted by Ram Sajiwan with a Biroo. The medi cal evidence clearly shows that the deceased had an injury in the abdomen which could be caused by a Biroo. The exact manner in which the Biroo was pierced in the abdomen of the deceased could not have been observed by the witnesses, particularly in view of the mutual fight. Since the injury could be caused if the Biroo was rotated after being pierced, it must be presumed in the circumstances that the assailant must have rotated the Biroo after having pierced it in the abdomen of the deceased, otherwise the injuries could not have been caused to the deceased. In these cir cumstances, therefore, we are not able to agree with counsel for the appellants that the assault on the deceased by Ram Sajiwan is in any way inconsistent with the medical evi dence. For these reasons, therefore, we find ourselves in agreement with the High Court that the prosecution has proved its case against this accused beyond reasonable doubt. The injuries caused by the other appellants on the person of Manohar, Sarabjit, Mewa Lal, Satrohan and Ram Khelawan have been proved by the eye witness whose evidence has been accepted by the High Court as also the Sessions Judge. We see no reason to interfere with the assessment of the evidence by the two Courts. The only point that remains for consideration is as to the exact offence committed by the appellants. In the first place, once it is held that the appellants had no right of private defence of person of property, appellant Ram Sajiwan cannot escape conviction under section 302 I.P.C. simpliciter, because the injury caused by him to the deceased was suffi cient to cause the death of the deceased. The appellant Ram Sajiwan was rightly convicted under section 302 I.P.C. and as the minimum sentence is life imprisonment we cannot do anything about the sentence either. We would like to observe, howev er, that the facts, of the case do raise some amount of sympathy for the accused Ram Sajiwan who was really trying to assert his lawful right against the complainant who was a trespasser. The appellant was fighting for a just and righteous cause though not in a strictly lawful manner. If the appellant had succeeded he would have been able to secure the right over the Chak Road which was left by the Revenue authorities for the benefit of the villagers. These considerations, therefore, may weigh with the Government for considering the question of remitting a portion of the sentence imposed on the appellant Ram Sajiwan and the learned counsel appearing for the State has assured us that these considerations would be conveyed to the Government. So far as the other appellants are concerned, as the object of the appellants was merely to assert a supposed or bona fide claim of right, it cannot be said that they had any common intention to cause grievous hurt. In these circumstances, therefore, the charge under sections 326/34 I.P.C. must necessarily fall. The conviction under section 447 I.P.C. as also that under sections 324/34 and 323/34 I.P.C. cannot be interfered with in view of the evidence of assault made by the appellants on the 239 witnesses Ram Khelawan, Manohar, Sarabjit, Mewa Lal, Satro han with their respective weapons. Having regard to the fact that the appellants made a concerted attack either with a Biroo or lathis respectively on the aforesaid prosecution witnesses they had undoubtedly a common intention to cause simple hurt to these witnesses. For these reasons, therefore, we would affirm the con victions and sentences passed on the appellant Ram Sajiwan but allow the appeal of the other appellants viz. Ram Rattan and Ram Samujh to this extent that their convictions and sentences under sections 326/34 I.P.C. are set aside, but their convictions and sentences under sections 324/34, 323/34 and 447 I.P.C. will stand. If the appellants have already served out their sentences they may be released. M. R. Appeal dismissed.

The complainant Ram Khelawan had illegally encroached upon a portion of a public road and grown a paddy crop on it. A complaint against him was pending before the Panchay at. He was in peaceful possession of the land to the knowl edge of the appellants who nevertheless went armed and tried to exercise their right over the public road, by passing through the field with their cattle and thereby damaging the crop. The complainants protested and a fight ensued, as a result of which, one of the complainants ' party died and injuries were received by both sides. The appellants plead ed the right of private defence of property and person, which they had exceeded, but were concurrently found guilty by both, the Trial Court and the High Court. Dismissing the appeal the Court, HELD: (1) A true owner has every right to dispossess or throw out a trespasser while he is in the act or process of trespassing but this right is not available to the true owner if the trespasser has been successful in accomplishing his possession to the knowledge of the true owner. In such circumstances the law requires that the true owner should dispossess the trespasser by taking recourse to the remedies under, the law. [235 F G, 236 A] Puran Singh & Ors. vs State of Punjab [1975] Supp. S.C.R. 299, applied. The Court further observed: It is a peculiar feature of our criminal law that where a trespasser has succeeded in taking recent wrongful possession of the property vested in the public for common enjoyment, the members of the village or the real owner are not entitled in law to throw out the trespasser but have to take recourse to the legal remedies available, and if any member of the public tries to secure public property from the possession of the trespasser he is normally visited with the onerous penalty of law. [233 A B] (2) The complainant Ram Khelawan was in peaceful posses sion of the land to the knowledge of the appellants and he was in law entitled to defend his possession. The appel lants who were the aggressors and had opened the assault, could not claim any right of private defence either of person or property. [237 A B]

Civil Appeal No. 748 of 1968. 637 (Fazal Ali, J.) Appeal by Special Leave from the Judgment and Decree dated the 14th February, 1967 of he Bombay High Court in Civil First Appeal No. 888 of 1959. F. section Nariman and I. N. Shroff for the appellant. K. section Ramamurthi and K. Rajendra Choudhury, for the Respondent. The Judgment of the Court was delivered by FAZAL ALI, J. This appeal by special leave against the judgment dated February 14, 1967, of the High Court of Bombay turns upon the interpretation of clause 3 of the agreement Ext. 39 executed between the parties containing the terms and conditions for which the plaintiff appellant was to supply electricity to the defendant the Jalgaon Borough Municipality. What appears to us to have been a short and simple case has been rendered cumbersome and complicated by somewhat complex and involved process of reasoning adopted by the High Court in interpreting the various clauses of the agreement Ext. The plaintiff/appellant 's case was based mainly on clause 3 of the agreement but the High Court instead of concentrating its attention on the interpretation of the scope and ambit of this particular clause appears to have entered upon a covering inquiry and a detailed determination of the history of the case, the various clauses of the agreement executed, the licence taken by the appellant, and so on, which, in our opinion, were not at all germane for the decision of the simple issue which arose in this appeal. The facts of the case lie within a very narrow compass. The plaintiff/appellant entered into an agreement to supply electrical energy to the Jalgaon Borough Municipality as far back as 1944. The energy was to be supplied on the basis of the agreement executed between the parties in the year 1944. This agreement expired to wards the end of January 1951 and a fresh agreement which is dated May 29, 1951, Ext. 39, which was to commence from February 1, 1951, was executed between the parties. This agreement was to ensure for a period of five years. In the present appeal we are concerned with the terms and recitals of this agreement, particularly clause 3 thereof. The plaintiff averred inter alia that under the agreement the defendant was bound to consume electrical energy for 16 hours a day and pay the minimum charges even if no actual consumption was made. This claim was put forward by the plaintiff in December 1953 on the basis of clause 3 of the agreement. Consequent upon its claim the plaintiff sent a number of bills to the defendant which it refused to pay and hence the present suit was instituted on February 27, 1956. Before the Trial Court the defendant Municipality denied the allegations of the plaintiff and averred that under the terms of is the agreement the Municipality was not bound to pay to the plaintiff Company any minimum charges even if the electrical energy was not consumed. It was also alleged that even if there was any such clause 638 in the agreement it was void under section 23 of the 197. A number of other defences were also taken with which we are not concerned. The Trial Court of the Civil Judge, Senior Division, Jalgaon accepted the defendant 's plea and dismissed the suit of the plaintiff/appellant. The plaintiff thereupon preferred an appeal to the High Court of Bombay which upheld the decree of the Trial Court and dismissed the appeal negativing the plea put forward by the plaintiff. Counsel for both the parties agreed before us that the fate of the entire case depended upon the interpretation of clause 3 of the agreement Ext. 39 which appears on pp. 275 277 of the printed Paper Book. Mr. F. section Nariman for the appellant submitted that the interpretation put by the High Court was absolutely wrong, whereas Mr. K. section Ramamurthi strenuously supported the judgment of the High Court. The High Court on consideration of clauses 2 and 3 of the agreement appears to have lost sight of the essential stipulation contained in clause 3 and found that minimum charges were given only in clause 2 or the agreement and clause 3 could be of no assistance to the appellant. The High Court also considered lot of other circumstances which were not at all relevant for the purpose of construing clause 3 of the agreement. In order to interpret the document, it may be necessary to extract clauses 2 and 3 of the said agreement: "2. The Company shall supply to the Municipality and the Municipality shall take from the company for a period of five years, the period commencing from 1st February 1951, electrical energy for running the electric motors to work water pumps at the Girna Pumping Station at the following rates. 1.5 annas per unit for the first 50 units per month per B.H.P. installed and the lest at 0.5 anna per unit plus an additional charge at 0.01 anna per unit per rupee rise in the fuel oil rate over Rs. 68/ per ton viz. the rate ex Power house ruling prior to war, with a minimum of 50 units per month per B.H.P. installed, first 50 units per B.H.P. shall mean and include units given by both the electric Motors and Pumps at the Girna Pumping Station. The additional charge is to apply to all units. The hours of supply of electrical energy for running the said electric motors shall be according to the quota of diesel oil sanctioned by the Government. In normal times, i.e. when diesel oil becomes available in any required quantity and without any restriction, the Municipality shall take supply of electrical energy for a minimum period of 16 hours a day and the Company shall supply electricity for a maximum period of 20 hours a day i.e. excluding the four hours from 6 P.M. to 10 P.M. An analysis of clauses 2 and 3 of the agreement clearly shows that these two clauses are independent and separate provisions dealing with 639 (Fazal Ali, J.) different contingencies. If there is any link between the two it is only that the reason for making concession in clause a for charging rate of 0.5 annas per unit over first 50 units is the fact that the plain tiff company was guaranteed payment for electrical energy to be sup plied during fixed period whether or not it is consumed by the Municipality. Clause 3 first of all stipulated that in normal times the Municipality was bound to take supply of electrical energy for a" minimum period of 16 hours a day and in view of this minimum guarantee the Company would supply electricity for a maximum period of 20 hours a day. In doing this, however, four hours, namely from 6 P.M. to 10 P.M. , would be excluded, because these being the peak hours the Company would be at liberty to supply electricity to other consumers. The terms of clause 3 appear to us to be absolutely clear and unambiguous and it was not at all necessary for the High Court to have gone into a plethora of extraneous circumstances when the terms of that document do not admit of any ambiguity. The High Court seems to have completely overlooked the fact that clause 3 of the agreement embodied what is known in common parlance as the doctrine of minimum guarantee i.e. the Company was assured of a minimum consumption of electrical energy by the Municipality and or the payment of the same whether it was consumed or not. That was the reason why the Company was prepared to charge a minimum rate of 0.5 anna per unit over and above the first 50 units. The minimum charge of 0.5 anna per unit, therefore, was actually the consideration for the minimum guarantee allowed to the plaintiff under clause 3 of the agreement. Moreover clauses 2 and 3 of the agreement seem to us to be in consonance with the spirit and letter of the proviso to section 22 of the which runs thus: "Provided that no person shall be entitled to demand or to continue to receive from a licensee a supply of energy for any premises having a separate supply unless he has agreed with the licensee to pay to him such minimum annual sum as will give him a reasonable return on the capital expenditure, and will cover other standing charges incurred by him in order to meet the possible maximum demand for those premises, the sum payable to be determined in case of difference or dispute by arbitration. " A bale reading of clause 3 is sufficient to indicate that this particular term of the contract was in direct compliance with the provisions of the proviso to section 22 of the Act which ensures a provision for minimum guarantee for the supply of electricity. Moreover it is obvious that if the plaintiff company was to give bulk supply of electricity at a concessional rate of 0.5 anna per unit it had to lay down lines and to keep the power ready for being supplied as and when required. The consumers could put their switches on whenever they liked and therefore the plaintiff had to keep every thing ready so that power is supplied the moment the switch was put on. in these circumstances, it was absolutely essential that the plain 640 tiff should have been ensured the payment of the minimum charges for the supply of electrical energy whether consumed or not so that it may be able to meet the bare maintenance expenses. For these reasons, therefore, we are satisfied that the interpretation put by the Courts below on the agreement Ext. 39. was legally erroneous and cannot be accepted. The next question that falls to be considered is about the question of quantum of interest to be allowed to the appellant Company. Mr. F. section Nariman, learned counsel for the appellant, fairly conceded that he would not be in a position to press his claim for interest prior to the date of the suit and would be satisfied if he is awarded interest at the rate of 4 per cent. per annum from the date of the suit. The result is that the appeal is allowed, the judgments of the Trial Court and the High Court are set aside, the plaintiff 's suit is decreed with interest at the rate of 4% per annum from the date of the suit till payment. In the peculiar circumstances of the case, we leave the parties to bear their own costs throughout. V.M.K. Appeal allowed.

The plaintiff appellant entered into an agreement with the respondent to supply electrical energy to the respondent in 1944. This agreement expired towards the end of January 1951, and which was to commence from February 1951, was executed between the parties. This agreements was to ensure for a period of five years. Clause 3 of the agreement first of ' all stipulated that in normal times, the Municipality was bound to take supply. Of electrical energy for a minimum period of 16 hours a day and in view of this minimum guarantee Company would supply electricity for a maximum period of 20 hours a day. In doing, this, however four hours, namely, from 6 p.m. to 10 p.m would be excluded. The plaintiff averred that under the agreement the agreement was bound to consume electrical energy for 16 hours a day and pay the minimum charges even if no actual consumption was made. 'This claim was put forward by the plaintiff in December. 1953 on the basis of` clause 3 of the agreement Consequent upon its claim the plaintiff. sent a number of bills to the defendant which it refused to pay and hence the present in was instituted on February ' ',. Before the Trial Court the defendant Municipality denied the allegations of ' the plaintiff and averred that under. the terms of the agreement the. Municipality was not bound to pay to the plaintiff Company any minimum charges even if the electrical energy was not consumed. It was also alleged the even if there was any such clause in the agreement it was void under section 23 of the . The Trial Court accepted the defendant 's plea and dismissed the suit. The plaintiff thereupon preferred an appeal to the High Court of Bombay. 'the high Court dismissed the appeal holding that the minimum charges were given only in clause 2 of the agreement and that clause 3 could be of ' no assistance to the appellant. Allowing the appeal by special leave. ^ HELD: (i) An analysis of clauses 2 and 3 of the agreement clearly shows that these clauses are independent and separate provisions dealing with different contingencies. The terms of clause 3 are absolutely clear and unambiguous and it was not at all necessary for the High Court to halve gone into 1 a plethora of extraneous circumstances when the terms of that document do not admit of any ambiguity. The High Court seems to have completely overlooked the fact that clause 3 of the agreement embodied what is known in common parlance as the doctrine of minimum guarantee i.e. the Company was assured of a minimum consumption of electrical energy by the Municipality and for the payment of the same whether it was consumed or not. That was the reason why the Company was prepared to charge a minimum rate of 0.5 anna per unit over and above the first 50 units. The minimum charge of 0.5 anna per unit, therefore. was actually the consideration for the minimum guarantee allowed to the plaintiff under clause 3 of the agreement. [638 H. 639 C D] (ii) Clauses 2 and 3 of the agreement are in consonance with the spirit and letter of the proviso to s.22 of the . A bare reading of clause 3 is sufficient to which ensures a provision for minimum guarantee for the supply of electricity. [639 & G]

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

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

Civil Appeal No. 1472 of 1980. Appeal by Special leave from the judgment and order dated the 1st February, 1980 of the Delhi High Court in Civil Revision Petition No. 122 of 1980. Madan Bhatia, Rajiv Behl and Sushil Kumar for the Appellant. L.M. Singhvi, L.R. Gupta M.V. Goswami and L.K. Pandey for the Respondent. The Judgment of the Court was delivered by VARADARAJAN J. This appeal by special leave is directed against the one word order dated 1.2.1980 of the learned Single Judge of the 55 Delhi High Court dismissing Civil Revision Petition No. 122 of 1980 in limine. The tenants who were respondents in the Rent Control Eviction Petition, filed the Civil Revision Petition against the Rent Controller 's order dated 30.10.1979, declining to permit them to raise certain grounds of defence while granting leave to defend the eviction petition on certain other grounds. Special leave to appeal against the order of the learned Single Judge of the High Court has been granted by this Court only on the question whether section 14A of the Delhi Rent Control Act, 1958 is applicable or not to the facts and circumstances of the case "in view of the later Circular of 1977". The "later Circular of 1977" mentioned in the special leave granted by this Court on 5.8.1980 is the Office Memorandum dated 14.7.1977 of the Joint Secretary to the Government of India, Ministry of Works and Housing, Directorate of Estates, hereinafter referred to as the "second notification". The same Joint Secretary to the Government of India in the same Ministry had issued the earlier Memorandum dated 9.9.1975, hereinafter referred to as the "first notification". The respondent landlord filed the Petition for eviction of the appellants under section 14A read with section 25B of the Delhi Rent Control Act, 1958, hereinafter referred to as the "Act". In the Eviction Petition the respondent had alleged that by virtue of his being a Government servant he has been allotted residential accommodation at No. 83 Lodhi Estate, New Delhi since November 1971. Under the first notification he is required to vacate the Government accommodation and shift to his own house No. 11 B Maharani Bagh, New Delhi, which is now in the occupation of the appellants, and if he failed to do so he is to incur the obligation of paying rent/licence fee of Rs 1,448 per mensem on the ground that he owns a residential building in the Union Territory of Delhi and still continues to occupy Government accommodation. The appellants have not vacated the premises occupied by them in spite of several assurances given by them since February 1976. The respondent is paying a penal rent of Rs. 1,448 per mensem for the Government accommodation because he had not vacated that accommodation provided to him by the Government as a Government servant. After presentation of the Eviction Petition and service of notice under section 25B of the Act, the appellants filed a Petition for grant of leave to defend the main Petition. One of the objections disallowed, with which we are concerned in this appeal, is that in view of the second notification the respondent is not required to vacate the 56 Government accommodation now available to him and that he is, therefore, not entitled to evict the appellants under the provisions of section 14A of the Act. The Civil Revision Petition filed by the appellants against the order of the Additional Rent Controller has been dismissed by the learned Single Judge of the High Court as mentioned above. The appellants have, therefore, filed this appeal by special leave against that order. We are concerned in this appeal with section 14A (1) of the Act, which reads thus: "14A (1) Where landlord who, being a person in occupation of any residential premises allotted to him by the Central Government or any local authority is required, by, or in pursuance of, any general or special order made by that Government or authority, to vacate such residential accommodation, or in default, to incur certain obligations, on the ground that he owns, in the Union territory of Delhi, a residential accommodation either in his own name or in the name of his wife or dependent child, there shall accrue, on and from the date of such order to such landlord notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force in any contract (whether express or implied), custom or usage to the contrary, a right to recover immediately possession of any premises let out by him: Provided that nothing in this section shall be construed as conferring a right on a landlord owning, in the Union territory of Delhi, two or more dwelling houses, whether in his own name or in the name of his wife or dependent child, to recover the possession of more than one dwelling house and it shall be lawful for such landlord to indicate the dwelling house, possession of which he intends to recover. . There is no dispute that the respondent is the owner of the premises in question, namely, 11 B Maharani Bagh, New Delhi, now occupied by the appellants on a rent of Rs. 2,100 per mensem and that he is at present in occupation of Government accommodation at No. 83 Lodhi Estate, New Delhi and is obliged to pay 57 penal rent/licence fee of Rs. 1,448 per mensem. The relevant portion of the first notification reads thus: "That undersigned is directed to say that the question of allotment of Government residential accommodation to officers owing houses at or near the stations of their posting has been under consideration of Government for some time past. It has now been decided, in supersession of all previous orders on the subject, as follows: (i) Those Government servants, who build houses in future at the place of their posting, within the limits of any local or adjoining municipality, whether with or without Government assistance, or who become owners of houses in future either in their own names or in the names of any members of their families shall be required to vacate Government accommodation in their occupation from the date their own houses are fit for occupation. (ii) Those Government servants, who have already built houses at the place of their posting within the limits of any local or adjoining municipality, whether with or without Government assistance, or who own houses either in their own names or in the names of any members of their families shall be required to vacate the Government accommodation allotted to them, within three months from the 1st of October 1975. If they do not vacate Government accommodation after that period, they would be charged licence fee at market rates. (iii)Hence onward, no Government accommodation should be allotted to an officer owning a house at the place of his posting within the limits of any local or adjoining municipality. A certificate shall be obtained from a prospective allottee that he has no house at the station of his posing within the limits of any local or adjoining municipality either in his own name or in name of any member of his family. (iv) . . 58 (v) . . 2. . 3. The Ministry of Home Affairs, etc. are requested to bring the above decision of Government to the notice of all their attached and subordinate offices, and ensure that the decision is implemented in respect of different pools of Government residence under their control. In so far as general pool accommodation is concerned, the Ministry of Home Affairs, etc., are requested to bring this to the notice of all Government Servants who are eligible for general pool accommodation as well as those who have already been allotted accommodation from the general pool, asking them by 15th October, 1975 to indicate whether they have their own houses as covered by these orders. In case they have, a declaration may be obtained from them in the prescribed proforma and forwarded to the Directorate of Estate (Coordination I Section) by 15th November, 1975. Other officers who do not own houses should also furnish a declaration to that effect. All officials who have been allotted general pool accommodation may be advised that it is their responsibility to inform the Directorate of Estates, when they or any member of their families become owners of houses in future, within one month from the date of becoming such owners. All officers eligible for general pool accommodation may also be warned that severe action will be taken against them in case they furnish any incorrect information". In addition to this general first notification relating to Government accommodation in the occupation of Government employees there is a special order dated 22.1.1976 of the Assistant Director of Estates, New Delhi calling upon the respondent to vacate the Government accommodation No. 83 Lodhi Estate allotted to him since 31.12.1975, failing which he would be charged market rent with effect from 1.1.1976 at the rate fixed by Government from time to time and informing him that a bill at the market rate of licence fee for the said premises will follow. 59 In the affidavit filed in support of the Petition for grant of leave to defend the main Eviction Petition the appellants have stated that the respondent is occupying a huge, massive and palatial bungalow in the Lodhi Estate, New Delhi built on an area of about two acres and allotted to him by the Government and that whereas he is paying an alleged rent of Rs. 1,448 per mensem for that accommodation, he is getting a rent of Rs. 2,100 per mensem for his premises occupied by the appellants and he is thereby gaining a sum of Rs. 652 per mensem. The appellants have further stated in that affidavit that there is a clear shift in the policy of the Government whereby Government accommodation is made available to even those employees who happen to have their own houses at Delhi and that Government have modified the notification relied upon by the respondent whereby house owing officials have become eligible for allotment of Government accommodation at the places of their posting with effect from 1.6.1977. The notification said to modify the first notification is the second notification. The relevant portion of that notification reads thus: "The undersigned is directed to say that the orders contained in this Ministry 's office Memorandum No. 12031 (1)/74 Pol. II, dated 9.9.1975, as modified from time to time have been reconsidered. Government has decided that the restrictions on allotment of accommodation to houses owning officers should be modified with effect from 1.6.1977, making house owning officers eligible for Government accommodation as communicated in this Ministry 's Office Memorandum of even number dated the 29th June, 1977. It has also been decided that allotment of such accommodation to a house owning official will be on normal rent if the income from his own house does not exceed Rs. 1,000 p.m. or half the market rent if the income exceeds Rs. 1,000 p.m. but does not exceed Rs. 2,000 p.m. and on full market rent if the income is above Rs. 2,000 p.m. Rent will be recovered on the same basis w.e.f. 1.6.1977 also from those house owing officials who are retaining Government accommodation on payment of market rents. These decisions will apply equally whether the house is owned by the officer or his/her wife/husband or by his/her dependent children. 60 2. . 3. Allotment of accommodation to house owning officers who have already vacated Government accommodation. Such officers will be considered for allotment of accommodation in their turn on the basis of their priority date under the allotment rules. No preference should be shown to them in the matter of allotment in consideration of the fact that they were earlier in occupation of Government accommodation and had vacated it in compliance with the earlier orders to which the officers are normally entitled without restriction of any locality or without any reference to the types of accommodation which the officers were occupying previously. As usual, officers eligible for types V and above should also be considered for allotment in the types next below on the basis of their priority for such types. After accepting initial allotment, they will be eligible for change in the normal manner in accordance with the allotment rules. 4. . 5. . 6. In so for as the general pool is concerned officers who have already vacated Government accommodation may submit fresh applications for allotment of accommodation in the prescribed application form, indicating the details of the houses owned by them or their spouses or dependent children, alongwith documentary proof of the income they derive from the houses they own. House owing officers, who are continuing in Government accommodation, should also furnish suitable documentary proof of the income they get from their private houses, to enable the Director of Estates to fix the licence fee recoverable from them w.e.f. 1.6.1977". Mr. Madan Bhatia, learned counsel for the appellants, submitted that while under the first notification the respondent was required to vacate the Government accommodation within three 61 months from 1.10.1975 on pain of being liable to pay licence fee at the market rate if he failed to vacate within that time, Government employees like respondent have become eligible for Government accommodation under the second notification and are, therefore, not obliged to vacate the Government accommodation and that the respondent is, therefore, not entitled to seek eviction of the appellants from his premises under section 14A of the Act though he may file a Petition for eviction under section 14 (1) (e) of the Act which is a general provision applicable to all landlords who seek to evict their tenants on the ground that they require the premises for their own bonafide occupation. Section 14 (1) (e) reads thus: "14.(1) Notwithstanding anything to the contrary contained in any other law or contract, no order or decree for the recovery of possession of any premises shall be made by any Court or Controller in favour of the landlord against a tenant: Provided that the Controller may, on an application made to him in the prescribed manner, make an order for the recovery of possession of the premises on one or more of the following grounds only, namely : (a) . . (b) . . (c) . . (d) . . (e) that the premises let for residential purposes are required bona fide by the landlord for occupation as a residence for himself or for any member of his family dependent on him, if he is the owner thereof, or for any person for whose benefit the premises are held and that the landlord or such person has no other reasonably suitable residential accommodation: Explanation For the purposes of this clause, "premises let for residential purposes" include any premises which having been let for use as a residence are, without the con 62 sent of the landlord, used incidentally for commercial or other purposes; . . " In support of the contention that in view of the second notification the respondent is not entitled to have recourse to the provisions of section 14A of the Act, Mr. Madan Bhatia relied upon the decision of this Court in Busching Schmitz Private Ltd. vs P.T. Menghani and Anr. where the Court has observed at page 323 thus: "Supposing the landlord, after exploiting the easy process of section 14A, relets the premises for a higher rent; the social goal boomerangs because the tenant is ejected and the landlord does not occupy, as he would have been bound to do, if he had sought eviction for bona fide occupation under section 14 (1) (e). Section 19 obligates the landlord in this behalf. In literal terms, that section does not apply to eviction obtained under section 14A. But the scheme of that section definitely contemplates a specific representation by the petitioner landlord to the Controller that because he has been ordered to vacate the premises where he is residing therefore, he requires immediate possession for his occupation. . Once we grasp this cardinal point, the officer 's application for eviction under section 14A can be entertained only on his averment that he, having been asked to vacate, must get into possession of his own. . The cause of action is not only the government order to vacate, but his consequential urgency to recover his own building." Mr. Madan Bhatia relied also on the decision of learned single Judge of the Delhi High Court in K.D. Singh vs Shri Hari Babu Kanwal, where the learned Judge has observed thus: "At the time when this application was brought in February 1977, the Circular of 9.9.1975 held the field. Unfortunately, for the landlord this position under went change when the Central Government issued a revised Circular dated 14.7.1977 by which the orders contained in 63 the earlier circular dated 9.9.1975 were modified after reconsideration . . A vital change thus took place by the Circular of 14.7.1977, namely, that there is no direction to a person who owns a house and who is in occupation of a residential premises allotted to him by the Central Government to vacate such residential accommodation. . . Once therefore, the revised Circular of 14.7.1977 has come, the very basis on which the Eviction Application under s.14 A of Act was brought has ceased to exist and cannot avail him . . It must be realised that s.14A was brought in only for a limited purpose to enable the Government servants in getting immediate possession of their house when they had been directed to vacate the Government accommodation. The special legislation was made to serve special purpose in pursuance of the Circular of 9.9.1975. Once that purpose has been modified and the Government has revised its decision and there is no direction to vacate such residential accommodation, it is impermissible in law to allow a Government servant to invoke s.14A and frustrate the beneficial Act of the Rent Control legislation like the Delhi Rent Control Act". We do not agree with this view of the learned Judge. It is seen from paragraph 3 of the Order of the Additional Rent Controller, which was sought to be revised by the High Court, that the respondent is paying a rent of Rs. 1,448 per mensem for the Government accommodation No. 83 Lodhi Estate, New Delhi. In the reply affidavit filed in the Special Leave Petition the respondent has stated that he is liable to pay Rs. 1,543 per mensem for the Government accommodation as penal rent on account of his failure to vacate the same. The respondent has produced in this Court a communication addressed to him by the Assistant Director of Estates, New Delhi saying that without prejudice to any other action which may be taken in respect of the Government accommodation which has been allotted to him, his liability will continue to increase to Rs. 2,898 per mensem and three times that rate on the expiry of 15 days from the date of service of orders of eviction under the till he vacates and restores the premises to the Central Public Works Department. These facts and the liability of the 64 respondent to pay full market rent for the Government accommodation with effect from 1.6.1977 and the second notification in the light of his getting rental income exceeding Rs. 2,000 per mensem from his own premises show that the respondent has to incur certain obligations on his failure to vacate Government accommodation on the ground that he owns in the Union territory of Delhi a residential accommodation either in his own name or in the name of his wife or dependent child. We do not find anything in the second notification taking away the obligation which has been imposed on the respondent by the first notification to vacate the Government accommodation within three months from the 1st of October 1975. We are of the opinion that the second notification, without (taking away the obligation imposed by the first notification on Government employees owning houses in their own names or in the name of any other member of their families, within the limits of their place of posting, to vacate the Government accommodation within three months from the first of October 1975, has given an option to those employees to continue to occupy the Government accommodation subject to the obligation mentioned in the second notification, namely, that the house owning Government employee will have to pay normal rent for the Government accommodation if the income from his own house does not exceed Rs. 1,000 per mensem of half the market rent if the income from his own house exceeds Rs. 1,000 per mensem but does not exceed Rs. 2,000 per mensem and full market rent if the income from his house is above Rs. 2,000 per mensem with effect from 1.6.1977. In the present case the market rent/licence fee which the respondent had to pay for the Government accommodation occupied by him on the date of institution of Eviction Petition was Rs. 1,448 per mensem and it had been increased to Rs. 1,543 per mensem as stated in the counter affidavit filed by the respondent in the Special Leave Petition and it has been further enhanced to Rs. 2,898 per mensem by the letter dated 17/18 7 1981 of the Assistant Director of Estates addressed to the respondent and referred to above. The respondent has thus an option to continue to occupy the Government accommodation subject to the said obligation without vacating the Government accommodation within a period of three months from the Ist of October, 1975. We are of the opinion that it is not open to the appellants to compel the respondent to exercise his option and continue to occupy the Government accommodation in order that they may continue to occupy the premises in question as the tenants. Even apart from the first notification which is general in nature and has been modified by the 65 second notification as mentioned above, there is the special order dated 22.1.1976 which required the respondent to vacate the Government accommodation by 31.12.1975, failing which he is to pay market rent with effect from 1.1.1976 as mentioned above. In these circumstances it is not possible for us to accept the argument of Mr. Madan Bhatia that the respondent is not entitled to have recourse to section 14A of the Act for seeking eviction of the appellants from the premises in question, having regard to first and second notifications and the special order dated 22.1.1976. Dr. L.M. Singhvi, learned counsel for the respondent invited our attention to the decision of another learned Single Judge of the Delhi High Court in J.L. Paul vs Ranjit Singh (supra) where we find the following observations: "The last objection of the petitioner is that the notifications granting a right to the Government employee to seek eviction under Section 14A of the Act have been withdrawn, that this defence raises a triable issue and, therefore, the Controller ought to have granted leave to contest so that he may produce evidence on record in support of this part of his defence. The right to claim eviction accrues to a landlord under section 14A of the Act and not under any notification issued by the Government. The Government notification, general or special, only requires a landlord Government allottee to vacate the accommodation as he owns his house or pay penal rent. The respondent submits that the general notification dated September 9, 1975 and the special order dated December 26, 1975 have never been withdrawn. His contention is that there has been a notification about the rate of rent/licence fee to be paid by a Government employee, if he is also owner of his own house at the place of his posting and does not vacate allotted premises. In short his contention is that right of eviction is available to a landlord allottee of Government accommodation if he fulfils the conditions mentioned in section 14A of the Act. According to him there is modification that if the income of the landlord from his own house does not exceed Rs. 1,000 per month, he is liable to pay only the normal rent of the Government allotted accommodation, but if his income from his own house exceeds Rs. 1,000 and does not exceed Rs. 2,000 he is liable to pay half the market rent and in cases where his income from his own house is above 66 Rs. 2,000 per month, he is liable to pay full market rent. The respondent contends that section 14A of the Act conferring upon a landlord/Government allottee (a right) to get his own vacated has never been repealed. The learned counsel for the respondent further contends that mere assertion of the petitioner that the notifications have been withdrawn is vague and does not give him any right to leave to contest and lead any evidence. .If any notification has been withdrawn or cancelled, such an order must be in writing. The petitioner/tenant in his application does not disclose any notification under which the Government notification requiring a landlord/Government employee to vacate has been withdrawn. . . Thus the notification dated September 9, 1975 stands modified to the extent as to what rate of rent would be payable by the respondent Government allottee/landlord owning his own house if he retains the allotted premises, that is, if he fails to vacate the Government accommodation in pursuance of the general order dated September 9, 1975 and the special order dated December 26, 1975. The income of the respondent from his own house, that is, suit property No. 164 Greater Kailash 1, New Delhi is Rs. 1,950 per month. He is getting Rs. 850 per month from the petitioner occupying first floor and Rs. 1,100 per month from 'Escorts ' occupying the ground floor. In accordance with the notification dated July 14, 1977, the respondent/landlord is thus liable to pay half the market rent from June 1, 1977 if he does not vacate the Government allotted accommodation. In fact after the issue of notification dated July 14, 1977 the respondent has been directed to pay half the market rent by means of an order dated September 20, 1977 issued by the Directorate of Estates, Government of India with effect from June 1, 1977. In short, it is certain that there is the general notification dated September 9, 1975 and the special order dated December 26, 1975 requiring the respondent/landlord to vacate the Government allotted residential accommodation or in default to pay half the market rent. In other words he is to incur certain obligations, The liability is on account of the fact that he owns 67 the house in suit in the Union Territory of Delhi, his place of posting. . . On December 12, 1979 Directorate of Estates was required to state whether the notification dated September 9, 1975 stands withdrawn or it was simply modified. The Directorate of Estates in his letter dated December 14, 1979 informed that the Memorandum dated September 9, 1975 was not withdrawn but was only modified by the Memorandum dated July 14, 1977. . . So if the two notifications dated September 9, 1975 and July 14, 1977 are read together, it appears that there is no cancellation of the earlier notification and that it is only a notification of the rate of rent payable by an allottee owning his own house. Under this notification dated July 14, 1977 it is further provided that with effect from June 1, 1977 rent of allotted premises shall be recovered from the house owning officials retaining the premises at the rates mentioned therein. The respondent is, therefore, liable to pay the rent accordingly and thus liable to incur obligation in default of vacating the premises. . . The respondent satisfies the requirement of section 14A of the Act. There is no defence available to the petitioner against the eviction application under section 14A of the Act". . . In the present case also there is nothing on record to show that the obligation imposed upon respondent by the first notification to vacate the Government accommodation within three months from the Ist of October 1975 and by the special order dated 22.1.1976 by 31.12.1975, has been withdrawn. The respondent can continue to 68 occupy the Government accommodation only subject to certain obligations. We, therefore, hold that the respondent is entitled to have recourse to section 14A of the Act for evicting the appellants from the premises in question. Accordingly the appeal fails and is dismissed with costs. S.R. Appeal dismissed.

Seventy six workers of the appellant company resorted to a tools down strike in sympathy with a dismissed co worker. Repeated attempts to persuade them to resume work having failed the General Manager suspended them until further orders. After midday recess the Management sought to prevent the workers from entering the mills but they violently entered the mills and the Police had to be called in by the company to keep the peace. Charges of misconduct and insubordination were thereafter framed against the workers and they were called upon to show cause in an open enquiry to be held by the General Manager why disciplinary action should not be taken against them and the order of suspension was extended pending the enquiry. The workers took up an attitude of total non cooperation and the atmosphere was tense with the result that the enquiry could not be held within 4 days. The Management decided to dismiss the workers as a result of the enquiry but as an appeal was then pending before the Labour Appellate Tribunal, the company applied to it under section 22 of the Industrial Disputes (Appellate Tribunal) Act of 1950 for permission to do so and extended the period of suspension pending receipt of such permission. The workmen in their turn filed an application under a. 23 of the Act to the Appellate Tribunal for requisite action to be taken against the company for having contravened section 22(b) of the Act by resorting to an illegal lock out and thereby punishing them without its prior permission. The Appellate Tribunal held that the company had not held the enquiry within the time specified by el. L 12 of the Standing Orders and on that ground dismissed its application. It allowed the application of the workers holding that the wholesale suspension of the workers and preventing them from continuing work. after the mid day recess amounted to a lock out 917 and punishment by the company and contravened section 22(b) of the Act and directed their reinstatement. The company appealed. It was contended on behalf of the company that there had been neither a breach of el. L 12 of the Standing Orders nor a contravention of section 22(b) of the Act. Hold, that the contentions were correct and the appeals must succeed. The conduct of the company did not come within the definition of a lock out and even if there was any lock out it was in consequence of the illegal strike resorted to by the workmen and as such could not be deemed to be illegal by virtue of section 24(3) of the Industrial Disputes. Act, 1947. Moreover, even assuming that the company declared an illegal lock out it was not necessary for it to obtain the permission of the Appellate Tribunal under section 22 of the Act before it could do so. A lock out was neither an alteration of the conditions of service within the meaning of el. (a) nor a discharge or punishment by dismissal or otherwise within the meaning of el. (b) of section 33 of the Industrial Disputes Act, 1947 or under section 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950 and no permission was, therefore, required for its declaration. If the lock out was illegal the workmen had their remedy under section 26 of the Industrial Disputes Act and in any event they had the right to have the dispute referred for adjudication. Jute Workers Federation, Calcutta vs Clive Jute Mills ([1951] and Colliery Mazdoor Congress, Asansol vs New Beerbhoom Coal Co. Ltd. ([1952] L.A.C. 219), approved. The Company having been declared a public utility concern, the workers had no right to go on strike without giving a notice in terms of section 22(1) of the and the tools down strike resorted to by them was illegal and the company was within its rights in suspending them. Buckingham and Carnatic Co. Ltd. vs Workers of the Buckingham and Carnatic Co. Ltd., ([1953] S.C.R. 219), referred to. Mere failure to hold an enquiry within the period of four days prescribed by el. L 12 of the Standing Orders could not determine the matter before the Appellate Tribunal and where, as in the instant case, the delay was due to the conduct of the workers it was sufficiently explained. Where full and free opportunity was given to the workers to be present and defend themselves in a duly notified enquiry and they failed to do so, the Management was quite within its right to come to its own conclusion as to their guilt and the punishment to be meted out to them and it was not open to the workmen thereafter to urge that such enquiry was not fair or impartial or violated the principles of natural justice. 918 There could be no punishment so long as there was no offence and any action of the employer to the detriment of the workers ' interest would not amount to punishment. The law did not contemplate anything like a contingent punishment of a worker and, consequently, where there was an interim order of suspension pending an enquiry or the grant of permission by the Appellate Tribunal, the question of pay for the period of such suspension depending on whether or not the permission would be granted, such suspension would not amount to punishment even where it was of an indefinite duration so as to attract the operation of section 22 of the In dustrial Disputes (Appellate Tribunal) Act, 1950. Champdany Jute Mills and Certain Workmen, ([1952) 1 L.L.J. 554), Joint Steamer Companies and Their Workmen, ([1954] II L.L.J. 221), Assam Oil Co. Ltd. vs Appalswami, ([1954] , Standard Vacuum Oil Co. vs Gunaseelan, M. G. ([1954] II L.L.J. 656), relied on. Under that section the only thing that the Appellate Tribunal had to consider was whether a prima facie case had been made out by the employer for lifting the ban imposed by the section and if, on the materials before it, it was satisfied that there bad been a fair enquiry in the circumstances of the case and the Management had bona fide come to the conclusion that the worker was guilty of misconduct with which he had been charged and it would be detrimental to discipline and dangerous in the interests of the company to continue him in its employ, a prima facie case was made out and the Tribunal would be bound to permit the employer to punish the workman. It would be no part of its duty to judge whether the punishment was harsh or excessive, except so far it might bear on the bona fides of the Management, and could only grant the permission as sought for or refuse it and the question of the propriety of the punishment could be decided only by the appropriate Tribunal appointed by the Government for adjudicating the industrial dispute which would ensue upon the action of the management. Atherton West & Co. Ltd. vs Suti Mills Mazdoor Union and Others, ([1953] S.C.R. 780), The Automobile Products of India Ltd. vs Bukmaji Bala & Others, ([1955] 1 S.C.R. 1241) Champdany Jute Mills and Shri Alijan, ([1952] II L.L.J. 629), R.B.S. Lachmandas Mohan Lal & Sons Ltd. and Chini Hill Karmachari Union, ([1952] II L.L.J. 787) and Assam Oil Companies ' Case, ([1954] L.A.C. 78), referred to.

Civil Appeal No. 233 of 1991 etc. From the Judgment and Order dated 21.6.1988 of the Central Administrative Tribunal, Bombay Bench in O.A. No. 58 of 1988. V.C. Mahajan, S.N. Terdal, A.K. Srivastava, C.V, Subba Rao, S.K. Gambhir, Dr. B. L. Wadhera, Sudarshan Menon, P. Parameshwaran and G.D. Gupta for the appearing parties. The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J. To cater to the educational needs of children of persons employed in the ordnances factory at Ambazari the Central Government has sanctioned and is running a Primary School from classes I to V. In the same premises, the employees 687 of the ordance factory, by their own arrangement are also having a Secondary School with classes VI to X. They have appointed the respondents as teachers in the Secondary School. They are paid honorarium and not full salary. Their honorarium is paid out of fees from the children and other donations received by the school. the respondents, however, approached the Central Administrative Tribunal seeking regularisation of their services and demanding equal pay for equal work. The Tribunal has allowed their claim with certain directions to the appellants including the Union of India. The directions issued by the Tribunal are as follows: "(i) The respondents will immediately take up an assessment of the needs of the school to carry on its activities at their present level and the number of additional teachers required for this purpose; (ii) After assessing the number of teachers needed, the respondents will proceed to create a sufficient number of posts to be filled up on a regular basis; (iii) After completing the above exercise respondents will take steps to fill up the newly created posts in accordance with recruitment rules to be framed for the purpose. the applicants who have worked as teachers in past should be first considered for the posts and only if they are found unsuitable should candidates from sources like the Employment Exchange be considered; (iv) Once the procedure outlined above is completed all persons selected should be appointed on a regular basis and on remuneration admissible to the regular teachers of the primary school; (v) Similar procedure should also be followed in respect of posts of peon giving Shri Tadas an opportunity of competing for regular appontment; (vi) Till the exercise outlined above is completed which we hope will be done before the academic year 1989 90 commences the present procedure may continue and such of the applicants as are selected for appointment will be subject to the same conditions of service as before. " The Union of India and the officers of the ordnance factory have challenged the validity of these directions in Civil Appeal No. 233/1991. The respondents who have not been recruited as per the directions of the Tribunal have preferred Civil Appeal No. 480/1989. We have considered the submissions of counsel on both sides in the light of the material on record. At the outset we may point out that 688 there is no evidence that the respondents were appointed as teachers on honorarium by or on behalf of the Central Government. There is also no evidence that the respondents were initially appointed in the Primary School and latter they were shifted to the Secondary School. The fact, however, remains that when the respondents moved the Tribunal for relies they were only teaching in the Secondary School. It is undisputed that the Central Government has not sanctioned the Secondary School nor created any posts thereto. the Central Government has only sanctioned the Primary School and the posts connected therewith. Those posts are being occupied by regularly recruited teachers. The Tribunal, however, has directed the Central Government immediately to take up an assessment of the needs of the School to carry on its activities at the present level and to create a sufficient number of posts to be filled up on a regular basis. The Tribunal has further directed the Central Government to take steps to fill up the newly created posts in accordance with the recruitment rules to be framed for the purpose. These directions are indeed amazing. It has compelled the Government to sanction the Secondary School, create adequate number of posts and fill up the posts after framing the recruitment rules for the purpose. There is no law requiring the Central Government to sanction the Secondary School. the Central Government has taken a decision that it will not involve itself in sanctioning or running classes beyond the Primary School level. It is a policy matter involving financial burden. No Court or the Tribunal could compel the Government to change its policy involving expenditure. The Tribunal therefore, could not have, could not have, issued the directions as it did to compel the Central Government to assess the needs of the school and create the necessary posts without support of law. Secondly, the respondents are not paid by the Central Government. They are not holding any appointment under the Central Government. There is no relationship of master and servant between the Central Government and the respondents. The respondents are employed in the Secondary School by local arrangement made by the officers of the ordnance factory. It is not proved that how the Central Government is accountable to such arrangement made by the local officers. Thirdly, Section 14 of the confers no jurisdiction, power and authority on the Tribunal to deal with the service matters of the employees like the respondents. 689 In any view of the matter, the respondents cannot claim the pay scale admissible to the Government school teachers much less regularisation of their services by the Central Government. The directions issued by the Tribunal therefore, cannot be sustained. They are apparently injustified and without authority of law. In the result we allow the Civil Appeal No. 233/1991, and set aside the order of the Tribunal. the Civil Appeal No. 480/1989 is dismissed. In the circumstances of the case, however, we make no order as to costs. S.B. CA No. 233/91 allowed and CA No. 480/89 dismissed.

The appellant i.e. the Central Government sanctioned primary school from classes I V to cater to the educational needs of children of persons employed in the ordance factory at Ambazari. The employees on their own in the same premises opened a secondary school with classes VI to X. The respondents are teachers in the Secondary School and are being paid out of fees and other donations received by the school, They approached the Central Administrative Tribunal seeking regularisation of their service and demanded equal pay for equal work. The Tribunal allowed their claim with certain directions to the appellants including the Union of India i.e. directing the Central Government immediately to take up an assessment of the needs of the School to carry on its activities at the present level and to create a sufficient number of posts to be filled up on a regular basis. The Tribunal further directed the Central Government to take steps to fill up the newly created posts in accordance with recruitment rules to be framed for the purpose. Allowing Civil appeal No. 233 of 1991 of the Union of India, and setting aside the order of the Tribunal dismissing Civil Appeal No. 480 of 1989 of the respondents who have not been recruited as per direction of the Tribunal, the Court. HELD: 1. There is no evidence in record that respondents were appointed as teachers on honorarium by or on behalf of the Central Government. There is no evidence that they were initially appointed in primary School and later shifted to the Secondary School. It is undisputed 686 that the Central Government has not sanctioned the Secondary School nor created any posts thereto. It had only sanctioned the Primary School and the posts connected therewith which are being occupied by regularly recruited teachers. [688A B] 2. The directions of the Tribunal are indeed amazing compelling the Central Government to sanction the Secondary School. The Central Government has taken a decision that it will not involve itself in sanctioning or running classes beyond the Primary School level. It is a policy matter involving financial burden. No court or the Tribunal could compel the Government to change its policy involving expenditure. [688D E] 3. The respondents are not paid by the Central Government. There is no relationship of master and servant between the Central Government and the respondents. The respondents are employed by the local officers so how the Central Government is accountable. [688G] 4. Even section 14 of the Administrative Tribunal Act, 1985 confers no jurisdiction, power or authority on the Tribunal to deal with the service matters of the employees like the respondents. the respondents cannot claim the pay scale admissible to the Government school teachers and much less regularisation of their services by the Central Government. [688H 689A] 5. The directions of the Tribunal are apparently unjustified and without authority of law so cannot be sustained. [688F]

minal Appeal No. 101 of 1958. Appeal by special leave from the judgment and order dated the 12th September, 1956 of the Calcutta High Court in Criminal Appeal No. 19 of 1956, arising 127 out of the judgment and order dated the 8th December, 1955 of the Sessions Judge, Birbhum in Sessions Trial No. 1 of November 1955. H. J. Umrigar and D. N. Mukherjee, for the appellant. K. B. Bagchi, P. K. Ghosh for P. K. Bose, for the respondent. May 8. The Judgment of the Court was delivered by IMAM J. The appellant was sentenced to imprisonment for life under section 302 by the Sessions Judge of Birbhum who agreed with the majority verdict of the jury that he was guilty. He appealed against his conviction to the Calcutta High Court. That Court being of the opinion that there was no misdirection in the Sessions Judge 's charge to the jury dismissed the appeal. Two persons Jagdish Gorain and Sudhir Gorain were also tried along with the appellant but were acquitted by the jury whose verdict the Sessions Judge accepted. The appellant appealed to the High Court for a certificate to appeal to this Court which was refused. The present appeal is by special leave. According to the prosecution Sibapada Hati was married to a girl by the name of Lila. About a month previous to the date of occurrence the appellant had made a proposal to her that she should live with him which was rejected. The appellant thought that the removal of Sibapada Hati would clear the way and improve his chance of gaining Lila 's favour. Accordingly he murdered Sibapada Hati on the May 26, 1955. In that murder he was assisted by Jagdish Gorain, Sudhir Gorain and the approver Sastipada Ghose. The conviction of the appellant depended on the evidence of the approver and the circumstantial evidence which corroborated him in connecting or tending or connect the appellant with the murder of the deceased Sibapada Hati. Unless there was a misdirection or non direction amounting to a misdirection in the charge to the jury which, in fact, had occasioned a failure of justice the jury 's verdict must prevail and 128 it cannot be interfered with. The High Court was of the opinion that there was no misdirection in the Sessions Judge 's charge to the jury and we are in agreement with the High Court. We have examined the charge to the jury. The Sessions Judge in dealing with the evidence of the approver charged the jury as follows: " Before doing so, some established legal principles as regards the approver 's evidence and the confessions on which the prosecution has relied in the present case are required to be explained to you. The approver is a competent witness against an accused person and although his evidence is strictly admissible and a conviction is not illegal, merely because it is based on approver 's evidence, it is a settled rule of practice not to convict a person on such evidence except under very rare and exceptional circumstances, and usually substantial corroboration is required. I, therefore, warn you, gentlemen, that it is highly dangerous to convict on approver 's evidence alone. There can, no doubt be a legal conviction upon the uncorroborated evidence of an accomplice and, as already stated, the uncorroborated testimony of an accomplice is strictly admissible and a conviction based on it alone is not illegal, yet you should remember, gentlemen, that experience teaches us that an accomplice being always an infamous person, he having thrown to the wolves his associates and friends in order to save his own skin and, though criminal, has purchased his liberty by betrayal, his evidence must be received with very great caution and it is highly dangerous to act upon his evidence unless it is materially corroborated. I must also tell you that this rule as to corroboration has become a settled rule of practice of so universal an application that it has now almost the force and reverence of law. Corroboration must be as to the crime and the identity of each one of the accused and the corroboration required must be independent evidence, that is reliable evidence of another kind. 129 Evidence in corroboration must be independent testimony, which affects the accused by connecting or tending to connect the accused with the crime. In other words. it must be evidence which implicates him, that is, which conforms in some material particulars not only the evidence that the crime has been committed but also that the prisoner (accused) committed it. Corroborative evidence, you should bear in mind, is evidence which shows or tends to show that the story of the accomplice that the accused committed the crime is true. The corroboration need not be direct evidence that the accused committed the crime. It would be sufficient if it is merely circumstantial evidence of his connection with the crime. The corroboration in material particulars must be such as to connect or identify each of the accused with the offence. In the present case, a previous statement of an approver, viz., the confession has been made exhibit before you, but that previous statement, you are further to bear in mind, cannot corroborate his latter statement, viz., the statements that have been made by him before you in this Court. In dealing with the question what amount of corroboration is required you, gentlemen, must exercise careful discrimination and look at all the surrounding circumstances in order to arrive at a conclusion whether the facts deposed to by the approver Sastipada are borne out by those circum stances. " Mr. Umrigar on behalf of the appellant urged that the aforesaid direction given by Sessions Judge to the jury was not sufficient. The jury should have been told (1) in accordance with the decision of this Court in the case of Sarwan Singh vs The State of Punjab (1) that the approver 's evidence has to satisfy a double test. It must show that he is a reliable witness and that his evidence receives sufficient corroboration, (2) that the evidence of an approver must be confirmed not only as to the circumstances of the crime but also as to the identity of the prisoner. The corroboration (1) ; 17 130 ought to consist in circumstances that affects the identity of the party accused. Reliance was placed on the case of The King vs Baskerville (1), (3) that the circumstantial evidence corroborating the approver was not sufficient to connect the appellant with the murder of the deceased and (4) that on similar corroboration of the approver 's testimony the accused Jagdish Gorain had been acquitted. There was no real distinction between the case of Jagdish Gorain and the appellant. It is true that in Sarwan Singh 's case this Court had held, " The appreciation of an approver 's evidence has to satisfy a double test. It must show that he is a reliable witness and that his evidence receives sufficient corroboration and that is a test which is common to all witnesses. If this test is satisfied the second test which still remains to be applied is that the approver 's evidence must receive sufficient corroboration. This test is special to the cases of weak or tainted evidence like that of the approver. " These observations were made in the special circumstances of the case which this Court was deciding when dealing with the case of Sarwan Singh. This Court went on to observe, " The argument that the character of the approver 's evidence has not been considered by the High Court cannot be characterised as merely academic or theoretical in the present case because, as we shall presently point out, the evidence of the approver is so thoroughly discrepant that it would be difficult to resist the conclusion that the approver in the present case is a wholly unreliable witness. Indeed it may be legitimate to point out that the learned Judges of the High Court have themselves criticised the evidence of the approver in dealing with the prosecution case against Gurdial Singh and have ultimately found that the account given by the approver is unreliable and, though there was circumstantial evidence which raised an amount of suspicion against Gurdial Singh, that would not be enough to sustain his conviction. It seems to us that if it was found that the approver 's account against one of the accused persons was wholly discrepant, this (1) (1916) 2 K.B.D. 658, 131 finding itself should inevitably have led the court to scrutinise his evidence in respect of the other accused persons with greater caution. " It is clear therefore that in the special circumstances of the case of Sarwan Singh the approver had been found to be a wholly unreliable witness. It is important to observe that this Court stated that the approver 's evidence must show that he is a reliable witness and that is the test which is common to all witnesses. Nothing has been shown to us in this case, as was shown in Sarwan Singh 's case that apart from the approver 's testimony in the present case being regarded as tainted evidence his evidence as it stood was in any way unreliable. Indeed, the Sessions Judge went to the length of telling the jury that although an approver 's evidence is strictly admissible and a conviction is not illegal merely because it is based on an approver 's evidence, it was a settled rule of practice not to convict a person on such evidence except under very rare and exceptional circumstances and usually substantial cor roboration was required. The jury could not have been more clearly warned about the danger of acting on an approver 's evidence. In other words, the jury were told not to convict the appellant on the approver 's evidence unless his evidence had been substantially corroborated. Apart from the question of corroboration of the approver 's evidence nothing was suggested to us or to the High Court in what respect the approver 's evidence was unreliable after testing his evidence in the same way as one would test the evidence of any witness for the prosecution in a criminal case. In our opinion, the decision in Sarwan Singh 's case can be distinguished in the present case. Obviously, it was never suggested that the approver 's evidence in this case was entirely unreliable, if his evidence was tested in the same way as the evidence of any prosecution witness in a criminal trial. We cannot accept the submission made on behalf of the appellant that the charge to the jury is vitiated because of the decision of this Court in Sarwan Singh 's case. 132 As to the second submission made by Mr. Umrigar it is to be remembered that in Baskerville 's case the Court of Criminal Appeal in England after discussing various authorities on the subject came to the following conclusion : " We hold that evidence in corroboration must be independent testimony which affects the accused by connecting or tending to connect him with the crime. In other words, it must be evidence which implicates him, that is, which confirms in some material particular not only the evidence that the crime has been committed, but also that the prisoner committed it. The test applicable to determine the nature and extent of the corroboration is thus the same whether the case falls within the rule of practice at common law or within that class of offenses for which corroboration is required by statute. The language of the statute, implicates the accused, " compendiously incorporates the test applicable at common law in the rule of practice. The nature of the corroboration will necessarily vary according to the particular circumstances of the offence charged. It would be in high degree dangerous to attempt to formulate the kind of evidence which would be regarded as corroboration, except to say that corroborative evidence is evidence which shows or tends to show that the story of the accomplice that the accused committed the crime is true, not merely that the crime has been committed, but that it was committed by the accused. " The corroboration need not be direct evidence that the accused committed the crime; it is sufficient if it is merely circumstantial evidence of his connection with the crime. In the present case the jury had been clearly directed by the Sessions Judge that corroborative evidence must be evidence which implicates the accused, i.e., which confirms in some material particulars not only the evidence that the crime had been committed but also that the appellant had committed it. The Sessions Judge told the jury that " Corroborative 133 evidence, you should bear in mind, is evidence which shows or tends to show that the story of the accomplice that the accused committed the crime is true. The corroboration need not be direct evidence that the accused committed the crime. It is sufficient if it is merely circumstantial evidence of his connection with the crime. The corroboration in material particulars must be such as to connect or identify each of the accused with the offence. " It seems to us that the Sessions Judge directed the jury in accordance with the principle laid down in Baskerville 's case and no serious objection can be taken to the manner in which the Sessions Judge directed the jury in this respect. The moment there is corroborative evidence which connects or tends to connect an accused with the crime such corroborative evidence relates to the identity of the accused in connection with that crime. It is the approver 's evidence which is the direct evidence of the crime. There should be corroboration in material particulars not only concerning the crime but corroboration of the approver 's story by evidence which connects or tends to connect an accused with the crime. It is this corroborative evidence which determines the mind of the Court or a jury that the approver 's evidence that the accused committed the crime is true. As to the 3rd Submission made on behalf of the appellant the following circumstances were established by the evidence which were accepted by the jury: 1. There was a motive for the appellant to commit the, crime, that is to say, his immoral proposal to Lila, wife of the deceased. On the 25th of May, 1955, the appellant came to Lila 's house and had a talk with the deceased. On the 26th of May, 1955, in the morning the appellant also came to the house and talked with the deceased. Later on that very day a little after sunset the appellant came to the house and asked the deceased to go for a walk with him. The deceased did so. 4. Thereafter the appellant was seen going with Jagdish Gorain and the deceased by Brojeswari and 134 Lila towards the north of the village after 5 p.m. while they were bathing in Talbona tank. According to the approver at the time that the, deceased was stabbed by the appellant he had sustained an injury on the dorsum of his left palm. The medical evidence established that the appellant had an almost healed up ulcer I inch in length on the left side of the palm at its posterior surface one inch below the wrist joint and another healed up ulcer 1/3 inch in length on the left thumb at the posterior surface and that these injuries could be caused by a sharp cutting weapon like a knife. As it had become night and the deceased had not returned, Lila 's mother Brojeswari and. her uncle Radharaman Sadhu searched for him. They went to the club house where the appellant and his two co accused Jagdish Gorain and Sudhir Gorain and the approver used to associate with each other. When enquiries were made from the appellant by Brojeswari he first replied that the deceased had not gone with him and that he did not know anything about his whereabouts. When he was remainded that it was he who had taken the deceased for a walk which he was denying, the appellant replied that the deceased went with him upto the canal towards north of the village, but as he felt a headache he came away and it was not possible for the appellant to give any news about the deceased 's whereabouts. The above mentioned circumstances either individually or collectively may fall short of proving that the appellant committed the murder of the deceased. Indeed, the High Court was of the opinion that these circumstances independent of the direct evidence of the approver would not be sufficient to induce any reasonable person to come to the conclusion that the appellant had committed the crime. As already stated, however, the approver 's evidence is the direct evidence which establishes that the appellant had murdered the deceased. The jury had to decide for themselves whether the above mentioned circumstances were sufficient corroborative evidence to satisfy 135 them that the approver 's evidence that the appellant murdered the deceased was true. It is, however, urged by Mr. Umrigar that the circumstances mentioned were not circumstances corroborating the evidence of the approver in material particulars which would connect or tend to connect the appellant with the crime. In our opinion, at least in one circumstance the corroboration is in a very material particular connecting or tending to connect the appellant with the crime. The approver 's evidence that while the appellant was murdering the deceased he had received an injury on the dorsum of his left palm is corroborated by the medical evidence. It was, however, pointed out that the medical evidence does not show that the injury was on the dorsum of the left palm. In our opinion, there is no substance in this submission because the first injury is described as one on the left side of the palm at its posterior surface 1 inch below the wrist joint, that is to say, the dorsum of the left palm. The second injury is clearly on the left thumb at its posterior surface which is also consistent with the evidence of the approver that the dorsum of the left palm was injured. The jury were entitled to accept this evidence as sufficient corroboration in a material particular connecting the appellant or tending to connect him with the crime. In addition, the circumstance that it was the appellant who had called for the deceased a little after sunset and had taken him away and thereafter was seen going along towards the north of the village with the deceased and that thereafter the deceased was not seen alive was one upon which the jury could rely in coming to the conclusion that it connected or tended to connect the appellant with the crime. The appellant 's pretended ignorance of the whereabouts of the deceased that very night and his ultimate admission that he had taken the deceased towards the north of the village was also a circumstance upon which the jury could rely as inconsistent with his innocence. In our. opinion, all the circumstances referred to above were sufficient corroboration of the approver 's evidence connecting or tending to connect the appellant with 136 the crime and accordingly the, approver 's evidence that the appellant did commit the crime was true. As to the 4th submission that although there was similar corroboration of the approver 's evidence against Jagdish Gorain but he had been acquitted by the jury although no real distinction between his case and the case of the appellant arose is unsound as, in our opinion, the two cases are not comparable. In the first place, there was no motive for Jagdish Gorain to commit the murder. In the second place, the injury which Jagdish received was while he caught the knife in the hand of the appellant saying " what have you done?" The approver 's evidence therefore rather tended to show that he tried to prevent the appellant from further stabbing the deceased. These circumstances may have induced the jury to make a distinction between the case of Jagdish Gorain and the appellant. It was for the jury to say whether they regarded the circumstantial evidence as sufficient to connect or tending to connect Jagdish with the crime. It would seem that on the approver 's evidence the jury may well have regarded the circumstances as insufficient corroboration to connect or tending to connect Jagdish Gorain with the crime. In our opinion, it cannot be said with any good reason that there was any defect in the charge to the jury delivered by the Sessions Judge which would justify us in saying that the verdict of the jury was vitiated. The appeal is accordingly dismissed. Appeal dismissed.

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

Appeal No. 873 of 1966. Appeal by special leave from the judgment and order dated March 26, 1965 of the Calcutta High Court in I.T. Ref. No. 107 of 1960. Sukumr Mitra and D. N. Mukherjee, for the appellant. Niren De, Attorney General, section C. Manchanda and R. N. Sachthey, for the respondent. It was stipulated internal that the lessee could assign the lease with the consent of the lessor. He could after the structures on the premises so as, to convert them into a cinema if necessary. After expending Rs. 35,000/ on some alterations to the premises the assessee felt the necessity of having some more money in order to convert the building into a cinema. He entered into a lease on February 23, 1946 with three persons, namely, Nani. Gopal Dutt, Makhan Lal Dutt and Shiv Kumar Khanna. By this lease, the building which was called 'Khanna Cinema house ' at 157, Upper Circular Road, Calcutta was demised to the lessees for a period of 30 years. The lessees agreed to pay under the indenture of lease Rs. 55 200/ to the lessor towards the cost of erecting the said cinema. The rent which was agreed to be paid was Rs. 2,100/ per month. It was payable with effect from June 1, 1946. It is necessary to set out the relevant portion of the lease "And whereas the lessor obtained sanction from the Corporation of Calcutta and other necessary authorities and commenced the erection of a Cinema House the estimated total cost of which is about Rs. 1,00,000/(Rupees one lac). And whereas the lessees agreed to pay to the lessor a sum of Rs. 55,200/ (Rupees Fifty five thousand and two hundred) towards the cost of the erection of the said cinema house according to their suggestion and other charges and expenses 464 incurred therefore by the lessor. And whereas the construction of the said Cinema House is almost complete and is expected to be completed by the end of March, One Thousand Nine Hundred and Forty six and whereas the lessee have called upon the lessor to grant to them a lease of the said Cinema House which the lessor has agreed to do upon payment by the lessees of the said agreed sum of Rs. 55,2,00/ (Rupees fifty five thousand and two hundred), towards the costs of building the said Cinema House and whereas the lessees have paid to the lessor the said sum of Rs. 55,200 (Rupees Fifty five thousand and two hundred) for which separate receipt has been granted by the lessor." After the Cinema House had been completed the lessees entered into possession and started exhibiting shows there. For the assessment year 1947 48 the corresponding account ing year being the financial year ending March 31, 1947, the Income tax Officer sought to treat the sum of Rs. 55,200/ received by the assessee as his income. The contention of the assessee was that the aforesaid amount should be treated as capital receipt. Alternatively if it was to be treated as salami (premium) and was to be taxed as a revenue receipt it should be distributed evenly over the entire term of the lease i.e. 30 years. The Income tax Officer did not 'accept either of the contentions of the assessee. It was held by him that the lease was pot permanent but was temporary and that the salami had been fixed as an advance payment of rent and not as payment for transfer of the lease hold interest. According to him the system of accountancy for this source of income being on, cash basis the whole of the receipt of salami was liable to be taxed as one year 's income in the year of the receipt. The assessee appealed to the Appellate Assistant Commissioner who agreed with the Income tax Officer. In his view the lessees were under no legal obligation to contribute towards the cost of construction of the cinema house and the sum of Rs. 55,200/ constituted payment of advance rent. The assessee appealed to the Tribunal which held that the receipt of the aforesaid amount was in the nature of advance payment of rent since the assessee was short of funds at the time the lease was entered into and that the lease was for a short term and that the amount in question represented consolidated rent for thirty years paid in advance. The High Court answered the question which was refer red in the affirmative and against the assessee. According to the High Court the only object of the payment of the sum of Rs. 55,200 could be to advance the cost of construction or to meet the existing liabi lities of the assessee for completing the cinema house. It was observed: 465 "Further it should be noted that the period of lease is only for 30 years and the assessee 's investment on the Cinema is about Rs. 60,000/ , Rs. 35,000/ being the costs of construction and Rs. 25,000/ being costs of machinery with a liability to pay Rs. 750/ rent to the owner of the plot. As a result of this lease he has got a rent of Rs. 2,100/ for a term of 30 years. Thus there is no question of payment of any salami as no further inducement for grant of the lease was necessary. It is obvious that if the cost of construction of the Cinema House would have been met in its entirely by the assessee and thereafter if the assessee would have granted the lease to the lessee, the rent would certainly have been much higher. Thus, the said sum of Rs. 55,200/ in the absence of a different recital can only be deemed to have been paid as an advance rent in respect of the said Cinema House. " On behalf of the appellant assessee it has been urged that he sum of Rs. 55,200/ was paid to the lessor in lump for completing the cinema house without which the lessee could not have used the building for the purpose of exhibiting cinematograph films. According to the recitals in the deed which must be given due effect the lessees agreed to give this amount towards the cost ,if erection of the cinema house according to their suggestion and 'or defraying other charges and expenses. The payment of rent was expressly stipulated at the rate of Rs. 2,100/ per month and there was no indication whatsoever that any different or higher rate of rent was agreed to. It is further submitted that there was no material or evidence on which it could be found that the cinema would have fetched, any higher rent, the admitted cost of construction being about Rs. 1,00,000/ . Alternatively the sum of Rs. 55,200/ could be regarded only as payment of salami (premium) and could not be treated as revenue receipt, the payment being of a non recurring nature. It seems to us that the departmental authorities as well as the High Court were in error in treating the amount of Rs. 55,200/as advance payment of rent. The lease by which the cinema house was demised did not contain any condition or stipulation from which it could be inferred that the aforesaid amount had been paid by way of advance rent. The transaction embodied in the indenture of lease was clearly business like. The lessees wanted the building for running it as a cinema house and the lessor agreed to give it to them but apparently represented that he did not have enough money to complete it in accordance with the suggestions and requirement of the lessees. The lessees agreed to pay him the aforesaid amount by way of a lump sum without 466 making any provision for its adjustment towards the rent or repayment by the lessor. The essential question, however, is whether on the terms of the lease and in the absence of any other material or evidence could it be hold that the sum of Rs. 55,200/was paid by way of advance rental ? The view which has been expressed by the Tribunal as also the High Court that the lease was for a comparatively short period of thirty years and that the aforesaid amount had to be spread over that period by way of rent in 'addition to a rental of Rs. 2,100/ per month cannot be sustained as no foundation was laid for it by any cogent evidence The departmental authorities can well be said to have based their decision on mere conjectures as there was nothing whatsoever to substantiate the suggestion that the real rental value of the cinema house was in the region of Rs., 2,250/ per month and not Rs, 2,100/ which was the agreed rent. It can equally well be said that the payment of the amount in question to the appellant was in the nature of a premium (salami). In the words of Lord Greene M. R. in Henriksen V. Grafton Hotel Ltd.(") "A payment of this character appears to me to fall into the same class as the payment of a premium of a lease, which is admittedly not deductible. In the case of such, a premium it is nothing to the point to say that the parties if they had chosen, might have suppressed the premium and made a corresponding increase in the rent. No doubt they might have. done so, but they did not do so in fact. " Fazl Ali J.,(as he then was in Commissioner of Income tax, Bihar & Orissa vs Viswesh war. Singh(2) referred to the distinction between a single payment made at the time of the settlement of the demised property and recurring payments made during the period of its enjoyment by the lessee . This distinction, according to the learned Judge, is clearly recognised in section 105 of the Transfer of Property Act which defines both premium and rent. This is what was observed at page 545 "It is obvious that if the premium represents the whole or part of the price of the land it cannot be income. As pointed out by Sir George Lowndes in the Commissioner of Income tax, Bengal vs Messrs. Shaw Wallace & Company,: income in the Indian Income tax Act 'connotes a periodical monetary return, coming in 'with some sort of regularity or expected regularity from definite sources. The premium of salami which is paid once for. all 'and is not recurring payment, hardly satisfies this test. I concede that in some cases ' where the rent is ridiculously low and the premium abnormally high, it may be possible to argue that the premium includes advance rent. . (1) 24 T. 453. (2) 467 It has not beep even remotely suggested in the present case that the rent of Rs. 2100 per month was ridiculously low as compared with the, amount of Rs. 55,200 paid in lump sum. It is true that the question whether premium is a capital, or a revenue receipt cannot be decided as a pure question of law. Its decision necessarily depends upon the facts and circumstances of each case. It would not, however, be wrong to say that prima facie premium or salami is not income and it would be for the income tax authorities to show that facts exist which would make it a revenue receipt. There is another factor which is of substantial importance in the present case. According to the terms of the lease the payment of rent was to commence not from the date of the lease which was February 23, 1946, but with effect from June 1, 1946. It is also not disputed that the lessees entered into possession after the cinema house had been completed which was subsequent to the date of the lease. these facts coupled with the payment of a lump sum which was of a non recurring nature showed that the amount in question had all the characteristics of a capital payment and was not revenue. This would be. in accord with the principles laid down by this Court in Member for the Board of Agricultural Income tax vs Sindhurani Chaudhu. rani & Others(1) which was a case of settlement of agricultural land but in which the principles governing the payment of premium or salami have been fully discussed. For the reasons given above we hold that the question which was referred to the High Court ought to have been answered in the negative and in favour of the assessee. The appeal is accordingly allowed. with costs in this Court and the High Court and the answer returned by the High Court is hereby discharged. G.C. Appeal allowed.

On July 19, 1945 the assessee took an lease certain premises in Calcutta on a monthly rental. He made some alterations in the premises so as to convert it into a cinema house but found himself short of money. As permitted by the terms of his lease he leased the premises on February 23, 1946 to certain parties. According to the terms of the indenture the lessees agreed to pay him Rs. 55,2GO towards construction of the cinema house which would on completion be let to them at a monthly rental of Rs. 2,100 payable with effect from June 1, 1946. The Income tax authorities treated the sum of Rs. 55,200 thus received as taxable ;and the High Court on reference held the same. in appeal by the assessee this Court had to consider whether the receipt was taxable. HELD : (i) The departmental authorities as well as the High Court were in error in treating the amount of Rs. 55,200 as advance payment of rent. The lease by which the cinema house was demised did not contain any condition or stipulation from which it could be inferred that the aforesaid amount had been paid by way of advance rent. The transaction embodied in the indenture of lease was clearly business like. The lessees wanted the building for running it as a cinema house and the lessor agreed to give it to them but apparently represented that he did not have enough money to complete it in accordance with the suggestions and requirement of the lessees. The lessees agreed to pay him the aforesaid amount by way of a lump sum without making any provision for its adjustment towards the rent or repayment by the lessor. On the terms of the lease and in the absence of any other material or evidence it could not be held that the sum of Rs. 55,200 was paid by way of advance rental.[465 G 466 B] (ii) The question whether premium is a capital or a revenue receipt cannot be decided as a pure question of law. Its decision necessarily depends upon the facts and circumstances of each case. It would not however be wrong to say that prima facie premium or salami is not income and it would be for the income tax authorities to show that facts exist which would make it a revenue receipt. [467 B] According to the terms of the lease, in the present case ' the payment of rent was to commence not from the date of the lease which was February 23, 1946 but with effect from June 1, 1946. The lessees entered into possession after the cinema house had been completed which was subsequent to the date of the lease. These facts coupled with the payment of a lump sum which was of a non recurring nature showed that the amount in question had all the characteristics of a capital payment and was not revenue. [467 C D] Henriksen vs Grafton Hotel Ltd., , Commissioner of Income tax, Bihar & Orissa vs Visweshwar, [1939] 7 I.T.R. 536 and 463 Member for the Board of Agricultural Income tax vs Sindhurani Chaudhurani & Ors., , applied.

N: Criminal Appeal No. 773 of 1979. Appeal by Special Leave from the Judgment and Order dated 13 8 1979 of the Madhya Pradesh High Court in Misc. Criminal Case No. 279/79. Mrs. K. Hingorani for the Appellant. The Judgment of the Court was delivered by KRISHNA IYER, J. Sublime titles of cinematograph films may enchant or entice and only after entry into the theatre the intrinsic worth of the picture dawns on the viewer. The experience may transform because the picture is great or the audience may lose lucre and culture in the bargain. Mere titles may not, therefore, attest the noxious or noble content of the film. Sometimes the same film may produce contrary impacts and what one regards as lecherous, another may consider elevating. Be that as it may a well published film Satyam, Sivam, Sundaram became 514 the subject matter of a prosecution presumably a pro bono publico proceeding, by the respondent against the petitioner and others who are the producer, actor, photographer, exhibitor and distributor of that film. The complaint alleged that the fascinating title was misleadingly foul and beguiled the guileless into degeneracy. If the gravamen of this accusation were true, obscenity, indecency and vice are writ large on the picture, constituting an offence under section 292 I.P.C. The Magistrate, after examining some witnesses, took cognizance of the offence and issued notice to the accused. Thereupon, the producer, namely, the present petitioner, moved the High Court under section 482 Cr. P.C. on the score that the criminal proceeding was an abuse of the judicial process and engineered by ulterior considerations and that no prosecution could be legally sustained in the circumstances of the case, the film having been duly certified for public show by the Board of Censors. The High Court, however, dismissed the petition, ignoring the contention that the film had been given 'A ' certificate by the Central Board of Film Censors and finding in the prosecution nothing frivolous or vexatious nor any material to quash the proceedings. The aggrieved film producer has arrived in this Court hopefully, and pressed before us one principal objection founded on section 79 I.P.C. to neutralise section 292 I.P.C. We do not find this contention apparent in the High Court 's judgment, but since the facts are admitted and the question of law is of some moment, we have chosen to hear the petitioner on the invalidatory plea that once a certificate sanctioning public exhibition of a film has been granted by the competent authority under the (for short, the Act), there is a justification for its display thereafter, and by virtue of the antidotal provisions in section 79 of the Penal Code, the public exhibition, circulation or distribution or the production of the film, even if it be obscene, lascivious or tending to deprave or corrupt public morals, cannot be an offence, section 292 I.P.C. notwithstanding. The absolution is based upon the combined operation of section 5A of the Act and section 79 of the Penal Code. The issue is of some importance since the cinema is one of the major mass media with millions of viewers and many millions in investment. The respondent complainant, despite notice having been served on him, did not enter appearance. We requested the Additional Solicitor General, Shri Banerjee, to help the court unravel the legal tangle and he responded promptly and eruditely rendered industrious assistance. We record our appreciation of the services of Shri Banerjee. The sole point for decision is the legal effect of the combined operation of section 5A of the Act and section 79 I.P.C. But we will assume for purposes of argument that the facts stated in the complaint prima facie 515 attract the offence under section 292 I.P.C. Supposing such film has been certified by the Central Board of Film Censors, acting within their jurisdiction under the Act, thereby sanctioning the public exhibition of the film, does it furnish a justification in law in doing the act which, in the absence of such certification, may constitute an offence under section 292 I.P.C. ? Section 79 I.P.C. runs thus: 79. Nothing is an offence which is done by any person who is justified by law, or who by reason of a mistake of fact and not by reason of a mistake of law in good faith, believes himself to be justified by law, in doing it. The argument is irresistible that if the performance of the act which constitutes the offence is justified by law, i.e. by some other provision, then section 79 exonerates the doer because the act ceases to be an offence. Likewise, if the act were done by one "who by reason of a mistake of fact in good faith believes himself to be justified by law in doing it" then also, the exception operates and the bona fide belief, although mistaken, eliminates the culpability. The resolution of the problem raised in this case thus becomes simplified. If the offender can irrefutably establish that he is actually justified by law in doing the act or, alternatively, that he entertained a mistake of fact and in good faith believed that he was justified by law in committing the act, then, the weapon of section 79 demolishes the prosecution. Does a certificate issued under section 5A(1A) of the Act amount to justification in law for public exhibition of the film, be it obscene or not, or, at any rate, does it generate a belief induced by a mistake of fact, namely, the issuance of the certificate and its effect that the certificate holder is justified by law in exhibiting the film ? We are thrown back upon a study of the anatomy of the and the efficacy of a certificate under section 5A as a justification within the meaning of section 79 of I.P.C. "Justified" according to Black 's Legal Dictionary means: Done on adequate reasons sufficiently supported by credible evidence, when weighed by unprejudiced mind, guided by common sense and by correct rules of law. The Shorter Oxford English Dictionary assigns this meaning for "justification". The showing in court that one had sufficient reason for doing that which i.e. is called to answer; the ground for such a plea. 516 Lexically, the sense is clear. An act is justified by law if it is warranted, validated and made blameless by law. Is a legal sanction permitting a thing a legal justification for doing it ? Maybe, there is a fine semantic shade between mere legal sanction, which is passive, and clear legal justification which is active. For the work a day world of meanings, between 'permissive ' and 'justificative ' 'thin partition do their bounds divide '. It is an antinomy to say that under section 5A(1A) of the Act the Board certifies a film as suitable for public exhibition and for section 292 I.P.C. to punish such exhibition unless the ground covered by the two laws be different. Although it may be plausible to say that what is merely certified as suitable for show by a law may not go the length of holding that it is justified by law. Such niceties need not deter us once we grasp the sweep of the . Indeed, the Penal Code is general, the is special. The scheme of the latter is deliberately drawn up to meet the explosively expanding cinema menace if it were not strictly policed. No doubt, the cinema is a great instrument for public good if geared to social ends and can be a public curse if directed to anti social objectives. The freedom of expression, the right to be equally treated and the guarantee of fair hearing before heavy investments in films are destroyed belong to Indian citizens under the Constitution. But all freedom is a promise, not a menace and, therefore, is subject to socially necessary restraints permitted by the Constitution. Having regard to the instant appeal of the motion picture, its versatility, realism, and its coordination of the visual and aural senses. what with the art of the cameraman with trick photography, vistavision and three dimensional representation, the celluloid art has greater capabilities of stirring up emotions and making powerful mental impact so much so the treatment of this form of art on a different footing with pre censorship may well be regarded as a valid classification, as was held in K. A. Abbas. Maybe, art cannot be imprisoned by the bureaucrat and aesthetics can be robbed of the glory and grace and free expression of the human spirit if governmental palate is to prescribe the permit for exhibition of artistic production in any department, more so in cinema pictures. So it is that a special legislation viz. the Act of 1952, sets up a Board of Censors of high calibre and expertise, provides hearings, appeals and ultimate judicial review, pre censorship and conditional exhibitions and wealth of other policing strategies. In short, a special machinery and processual justice and a host of wholesome restrictions to protect State and society are woven into the fabric of the Act. After 517 having elaborately enacted such a legislation can it be that a certificate granted under it by expert authority can be stultified by a simple prosecution of a shower of prosecutions for an offence under section 292 I.P.C., driving the producer to satisfy a 'lay ' magistrate that the certificate of the Board of Censors notwithstanding, the film was offensive ? The Board under section 5B has to consider, before certification, all the points section 292 I.P.C. prescribes. Indeed, neither the Penal Code nor the can go beyonds the restrictions sanctioned by of the Constitution and once the special law polices the area it is pro tanto out of bounds for the general law. At least as a matter of interpretation, section 79 I.P.C. resolves the apparent conflict between section 292 I.P.C. and Part II of the Act relating to certification of films. If the Board blunders, the Act provides remedies. We are sure the public spirited citizen may draw the attention of the agencies under the Act to protect public interest. The general issues of art and the role of the State have already been referred to by us in an earlier appeal from the Delhi High Court relating to the same film. There section 79 I.P.C. was not considered by us because the contention was not urged before us. The present decision will bind the court that hears that case. The position that emerges is this. Jurisprudentially viewed, an act may be an offence, definitionally speaking but; a forbidden act may not spell inevitable guilt if the law itself declares that in certain special circumstances it is not to be regarded as an offence. The chapter on General Exceptions operates in this province. Section 79 makes an offence a non offence. When ? Only when the offending act is actually justified by law or is bona fide believed by mistake of fact to be so justified. If, as here, the Board of Censors, acting within their jurisdiction and on an application made and pursued in good faith, sanctions the public exhibition, the producer and connected agencies do enter the statutory harbour and are protected because section 79 exonerates them at least in view of their bona fide belief that the certificate is justificatory. Thus the trial court when it hears the case may be appropriately apprised of the certificate under the Act and, in the light of our observations, it fills the bill under section 79 it is right for the court to discharge the accused as the charge is groundless. In the present case, the prosecution is unsustainable because section 79 is exculpatory when read with section 5A of the Act and the certificate issued thereunder. We quash the prosecution. Two things deserve mention before we close. Prosecutions like this one may well be symptomatic of public dissatisfaction with the Board of Censors not screening vicious films. The ultimate censo 518 rious power over the censors belongs to the people and by indifference, laxity or abetment, pictures which pollute public morals are liberally certificated, the legislation, meant by Parliament to protect people 's good morals, may be sabotaged by statutory enemies within. Corruption at that level must be stamped out. And the Board, alive to its public duty, shall not play to the gallery; nor shall it restrain aesthetic expression and progressive art through obsolete norms and grandma inhibitions when the world is wheeling forward to glimpse the beauty of Creation in its myriad manifestations and liberal horizons. A happy balance is to ". consider, on the one hand, the number of readers they believe would tend to be depraved and corrupted by the book, the strength of the tendency to deprave and corrupt, and the nature of the depravity or corruption; on the other hand, they should assess the strength of the literary, sociological and ethical merit which they consider the book to possess. They should then weigh up all these factors and decide whether on balance the publication is proved to be justified as being for the public good. " Going to the basics, freedom of expression is fundamental. The censor is not the moral tailor setting his own fashions but a statutory gendarme policing films under article 19(2) from the angle of public order, decency or morality. These concepts are themselves dynamic and cannot be whittled down to stifle expression nor licentiously enlarged to promote a riot of sensual display. Anyway, the appeal must succeed and we extinguish the prosecution by the order. N.V.K. Appeal allowed.

Allowing the appeal by special leave, the Court, ^ HELD. Rule 2(a) of the C.C.S. (C.C.A.) Rules, 1965 states, after setting out alternative authorities, that the appointing authority is one out of four categories who is the highest, by using the expression "whichever authority is the highest". There is no doubt that of the four classes of authorities listed under Rule 2(a), the one falling under sub rule (iii) viz. Comptroller & Auditor General (in the present case) is the highest. Therefore the order of the retirement to be legal must be issued by the Comptroller & Auditor General. The impugned order of retirement issued by the Director of the Commercial Audit who is a lesser official is contrary to law. On account of the contravention of F.R. 56(j) read with rule 2(a) of the C.C.S. (C.C.A.) Rules, 1965, the retirement is illegal. [555 E G, 556 B] Observation: Administrative law is a course necessary for administrative officers at the highest levels so that such flaws may not vitiate orders they pass.

Appeal No. 366 of 1959. 38 Appeal from the judgment and order dated September 18, 1958, of the Calcutta High Court in Income Tax Reference No. 9 of 1955. section Mitra and section N. Mukherjee, for the appellant. K. N. Rajagopal Sastri and D. Gupta, for the respondent. December 8. section K. DAS, J. This is an appeal on a certificate of fitness granted by the High Court of Calcutta under section 66A(2) of the Indian Income tax Act, 1922. The assessee, Provat Kumar Mitter, is the appellant before us. He was a registered holder of 500 Ordinary shares. of the Calcutta Agency Ltd. By a written instrument, dated January 19, 1953, he assigned to his wife, Ena Mitter, the right, title and interest to all dividends and sums of money which might be declared or might become due on account or in respect of those shares for the term of her natural life. We may read here the material portion of the instrument: "This Deed Witnesseth that for effecting the said desire and in consideration of the natural love and affection of the Settlor for the Beneficiary the Settlor as the beneficial owner assigns unto the Beneficiary the right, title and interest to every dividend and sum of money which may be declared or become due and payable on account of or in respect of the said shares (not being the price or value thereof) and further hereby covenants with the Beneficiary to hand over and/or endorse over to the Beneficiary any dividend Warrant or any other document of title to such dividend or sum of money as aforesaid and to instruct the said Company to pay any such dividend or such sum of money to the Beneficiary To Hold the same unto the Beneficiary absolutely during the term of her natural life. And It Is Hereby Agreed And Declared that the Beneficiary shall remain entitled to and shall receive and stand possessed absolutely of every dividend and sum of money which she may receive on 39 account of the said shares during the term of her natural life and that the Settlor shall have no right, title or interest therein or derive any benefit therefrom during the said period. " It is to be noticed that under the terms quoted above the shares themselves remained the property of the assessee, and it was only the income arising therefrom which was sought to be settled or assigned to his wife. During the accounting year which ended on March 31, 1953, the dividend declared on the shares amounted to Rs. 12,000. In assessing the as sessee for the assessment year 1953 54 the Income tax Officer included the said sum of Rs. 12,000 in his income under the provisions of section 16(1)(c) and section 16(3) of the Act, as he said in his assessment order. The contention of the assessee was that since the settlement was for the lifetime of his wife, the third proviso to section 16(1)(c) applied and the dividend which his wife received could not be deemed to be his income under section 16(1)(c); as to section 16(3) of the Act the assessee contended that it did not apply, because there was no transfer of the shares to his wife. The assessee, accordingly, appealed to the Appellate Assistant Com missioner. Before that authority a somewhat unusual contention was put forward on behalf of the Department, viz., that the third proviso to section 16(1)(c) should be ignored inasmuch as it was repugnant to the main provisions contained in section 16(1)(c) and the general scheme of the Act. A further contention urged on behalf of the Department was that since the shares continued to stand in the name of the assessee and the dividends had been declared in his name, the transfer of the dividend to the beneficiary was only an application of the dividend income and, therefore,, the assessee could not claim exemption from being taxed on it as a part of his own income. The Appellate Assistant Commissioner accepted both the aforesaid contentions and dismissed the appeal. In a further appeal to the Income tax Appellate Tribunal, the assessee again relied on the third proviso to section 16(1)(c) of the Act and the Departmental Representative urged the same two contentions plus 40 a new one to the effect that the deed by which the dividend had been transferred was altogether invalid inasmuch as it was an unregistered instrument and, therefore, no valid transfer of the dividend income had been effected by it. The Tribunal rejected the Department 's contention that the third proviso was in conflict with the main provisions of section 16(1)(c) or the scheme of the Act. As to the second contention that the transfer of the dividend income was a mere application of it by the assessee after it had accrued to him, the Tribunal apparently expressed no opinion. It gave effect, however, to the third contention of the Department, namely, that the deed being an unregistered instrument did not operate as a valid transfer of the dividend income in favour of the assessee 's wife. Both the assessee and the Commissioner then moved the Tribunal to refer to the High Court the questions which had respectively been decided adversely to them. The Tribunal acceded to the request and referred three questions to the High Court, two at the instance of the Commissioner and one at the instance of the assessee. The questions referred were as follows : "(1) Whether the deed dated January 19, 1953, assigning the dividends to accrue, merely on account of natural love and affection, is void as it is not registered? (2) Whether the third proviso to section 16(1)(c) is repugnant to the main clause 16(1)(c) and the general scheme of the Act, and should not be given effect to? (3) Whether, on the facts and in the circum stances of the case, the payment of dividend income to the assessee 's wife, Ena Mitter, under the covenant in the deed of assignment dated January 19, 1953, was merely a case of application of the assessee 's income?" The High Court answered the first two questions in favour of the assessee. It answered the third question, however, against the assessee and in favour of the Department. The High Court expressed its conclusion on the third question in the following words: 41 ". . . the conclusion must be that there being only a voluntary covenant entere d into by the settlor to pay over the dividends received by him to the wife or to instruct the company to pay them to her and the income not having been made the wife 's income from the beginning, what the settlement provides for is only an application of the income and therefore the income is assessable in the hands of the settlor, irrespective of whether the wife is also assessable on her receipts. The case is outside the main clause of section 16(1)(c) and, therefore, the third proviso to the section is also not relevant. " The appeal before us is limited to the question of the correctness or otherwise of the answer given by the High Court to the third question. The first two questions having been answered in favour of the assessee and the Department not having filed any appeal with regard to them, we are not concerned with the correctness or otherwise of the answers given by the High Court to those questions and we express no opinion as respects those answers. On behalf of the appellant it has been argued that the High Court should not have answered the third question, because it did not arise out of the order of the Tribunal. The argument is that under section 66 of the Income tax Act, the Tribunal could refer to the High Court any question of law which arose out of its order, but it was not open to the Tribunal to refer a question which did not so arise. We are unable to accept the contention that the question did not arise out of the Tribunal 's order. Indeed, it is true as we have stated earlier, that the Tribunal did not state its specific finding on this question; but in the statement of the case drawn up by the Tribunal under section 66 it has stated that though no specific finding was given the question was raised by the Department and by implication was decided against the respondent. In its application to the Tribunal for a reference, the present respondent specifically mentioned the question as one decided adversely to it and though the appellant 42 submitted that the question did not arise, the Tribunal held that the question did arise out of its order. No objection appears to have been taken in the High Court to the reference made by the Tribunal on the three questions including the one now under consideration before us. In these circumstances it is not open to the appellant to contend now that the question did not arise out of the Tribunal 's order. We must, therefore, overrule this contention. Now, as to the correctness of the answer given by the High Court. Learned counsel for the appellant has contended that the High Court did not correctly construe the instrument of January 19, 1953, and on a proper construction, the High Court should have held that a right of property in present was assigned in favour of the wife. Learned counsel has submitted that the assessee as a registered holder of 500 Ordinary shares of the Calcutta Agency Ltd., had a bundle of rights in the Company: (1) a right to vote; (2) a right to participate in the distribution of assets on dissolution or liquidation of the Company; and (3) a right to participate in the profits, e.g., dividends which might be declared. It is contended that the aforesaid third right was assigned to the wife by the assessee, and that the High Court ignored the said assignment while it emphasised the other covenants for endorsing or handing over the dividend warrants, etc. In support of his contention learned counsel has relied on certain observations made by this Court in Bacha F. Guzdar vs Commissioner of Income tax, Bombay (1) at p. 883. , That was a case in which the question that arose for decision was whether dividend declared by a, company growing and manufacturing tea was agricultural income within the meaning of section 2(1) of the Income tax Act and hence exempt from income tax under section 4(3)(viii) of the said Act. It was held that the dividend of a shareholder was the outcome of his right to participate in the profits of the company arising out of the contractual relation between the company and the shareholder, and the observations on which learned counsel has relied were to the effect (1) ; 43 that "the right to participate in the profits exists independently of any declaration by the company with the only difference that the enjoyment of profits is postponed until dividends are declared. " We do not think that those observations are of any assistance to the appellant in the solution of the question before us, which is really one of construction of the instrument of January 19, 1953. A transfer of property may take place not only in the present, but also in future; but the property must be in existence. It is clear to us that the instrument of January 19, 1953, was not a transfer of any existing property of the assessee. It was in its true nature a contract to transfer or make over in future every dividend and sum of money which may be declared or become due and payable on account or in respect of the shares held by the assessee, to his wife during her lifetime; the other covenants are ancillary in nature and subserve this main object of the contract. The assessee did not assign the shares and, therefore, retained the right to participate in the profits of the company; he did not part with that right. What the contract provided for was merely this: the beneficiary was given the right to receive from the assessee every dividend and other sum of money which may be declared or become due and payable in respect of the shares. If this is the true construction of the document, then it is clear to us that the answer given by the High Court to the question referred to it is correct. The High Court rightly pointed out that the Company paying the dividend can pay. it only to the registered shareholder or under his orders (see Howrah Trading Co. Ltd. vs Commissioner of Income tax, Central, Calcutta) (1); therefore, section 16(1)(c) of the Income tax Act was not attracted nor the third proviso thereto, and the income continued to accrue to the assessee but was thereafter paid over to his wife under the terms of the contract. The income was, therefore, assessable in the hands of the assessee, because it was part of his income though applied subsequently towards payment to the wife under the terms of the contract. (1) [1959] Supp. 2 S.C.R. 448. 44 In this view of the matter, it is not necessary to decide the further question if a contract of this nature operates only as a contract to be performed in future which may be specifically enforced as soon as the property comes into existence or is a contract which fastens upon the property as soon as the settlor acquires it. In either view, the income from the shares will first accrue to the settlor before the beneficiary can get it. Such income will undoubtedly be assessable in the hands of the settlor despite the contract. We think that the true position is that if a person has alienated or assigned the source of his income so that it is no longer his, he may not be taxed upon the income arising after the assignment of the source, apart from special statutory provisions like section 16(1)(c) or section 16(3) which artificially deem it to be the assignor 's income. But if the assessee merely applies the income so that it passes through him and goes on to an ultimate purpose, even though he may have entered into a legal obligation to apply it in that way, it remains his income. This is exactly what has happened in the present case. We need only add that the principle laid down by the Privy Council in Bejoy Singh Dudhuria vs Commissioner of Income tax (3), does not apply to this case; because this is not a case of an allocation of a sum out of revenue before it becomes income in the hands of the assessee. In other words, this is not a case of diversion of income before it accrues but of application of income after it accrues. We have, therefore, come to the conclusion that the High Court correctly answered the question referred to it. The appeal fails and is dismissed with costs. Appeal dismissed.

By a deed dated March 5, 1951, the appellant made a declaration of trust in favour of hiswife as follows: "I hereby declare that I hold 244 sharesupon trust to pay the income thereof to my wifefor a period of seven years from the date hereof or her death (whichever event may be earlier) and I hereby declare that this trust shall not be revocable". In the year of account, 1951, a sum of Rs. 30,404 was received as dividend income on those shares and the appellant claimed before the income tax authorities that this sum was not liable to be included in his total income in view of the third proviso to section 16(1)(c) of the Indian Income tax Act, 1922, but this claim was rejected on the ground that the case was covered either by section 16(3)(a)(iii) or by section 16(3)(b) of the Act. The appellant 's contention was that under the deed of trust there was no transfer of assets either to the wife or to any person for the benefit of the wife but merely a creation of a trust in respect of the shares, the dividends from which were payable to the wife, that even if it be held that there was such a transfer, it was for adequate consideration being for love and affection which was a good consideration, and that thus section 16(3)(a)(iii) or section 16(3)(b) was not applicable. Held, that on a true construction of the deed dated March 15, 1951, there was a transfer of the shares by the husband to himself as a trustee for the benefit of the wife and that even though the husband was the same individual, in his capacity as a trustee he must be regarded as a person distinct from the transferor. Held, further, that the words "adequate consideration" in section 16(3) of the Indian Income tax Act, 1922, denoted considera tion other than mere love and affection, which, in the case of a wife, may be presumed. Accordingly, the present case fell within section 16(3)(b) of the Act and not within the third proviso to section 16(i)(c). Provat Kumar Mitter vs Commissioner of 'Income tax; , , distinguished.

iminal Appeal No. 2 of 1958. Appeal from the judgment and order dated July 27, 1957, of the Bombay High Court in Criminal Appeal No. 254 of 1957. WITH Criminal Appeal No. 81 of 1960. Appeal by special leave, from the judgment and order dated July 27, 1957, of the Bombay High Court, in Criminal Appeals Nos. 255 and 257 of 1957. M.H. Chhatrapati, Ravindra Narain, O. C. Mathur and J. B. Dadachanji, for the appellant (in Criminal Appeal No. 2 of 1958). B.K. Khanna and D. Gupta, for the respondent in Criminal Appeal 2 of 1958) and appellant (in Criminal Appeal No. 81 of 1960). 198 Ram Lal Anand and section N. Anand, for respondent No. 1 (in Criminal Appeal No. 81 of 1960). B.S. Gheba, for respondent No. 2 (in Criminal Appeal No. 81 of 1960). April 24. The Judgment of the Court was delivered by SUBBA RAO, J. These two appeals one filed by accused No. 1 by certificate and the other filed by the State of Maharashtra by special leave against the judgment of the High Court of Bombay confirming the conviction and sentence of accused No. 1 and setting aside the convictions and sentences of accused Nos. 2 and 3. The prosecution case may be briefly stated. There was a depot called the Dehu Vehicle Depot in which military stores were kept. In the year 1944 Col. Rao, the Chief Ordnance Officer, was in charge of the Depot; Col. Sindhi, the Station Commandant, and Brig. Wilson, the Brigadier, Ordnance, Southern Command, were his superior officers. Accused No. 1, Major Barsay, was second in command in the Depot and was in charge of stores section; he was subordi nate to Col. Rao. Major Nag, another subordinate to Col. Rao, was in charge of the administration of the Depot. One Capt. Pratap Singh was the Security Officer in the Depot; but, during the period in question, one Lawrence was acting as the Security Officer in place of Capt. Pratap Singh. Kochhar, accused No. 2, who was on leave from October 25, 1954, was recalled to duty by accused No. 1 and was put in charge of kit stores in the Depot. Avatar singh, accused No. 3, who was working in the Unfit Sub Park, was transferred to the Kit Stores by accused No. 1 during the absence on leave of Col. Rao. Accused No. 4, Saighal, was an Ex Col. and was at one time the Station Commandant of the Depot; after retirement he had been staying in a bungalow at a short distance from mile No. 92/7 on the Poona Bombay Road. Accused No. 5, Ramchand Gangwani, was a refugee from Sind and he was running a hotel at Lonnavala. Accused No. 6, Devichand, and one 199 Khemchand, who is absconding, are sons of accused No. 5. Accused Nos. 4 and 5 were friends and they were also partners along with one Bhagwan Parshuram of Bombay in "The Bombay Lonavala Disposal Syndicate". There were large consignments of Kits in Shed No. 48 of Kit Stores which were unitemized and unaccounted for in the books of the Depot. The accused entered into a conspiracy to smuggle out some of the said stores and to make an illegal gain by selling them at Bombay through accused No. 4. The brain behind the conspiracy was accused No. 1. The plan chalked out to implement the object of the conspiracy may be briefly stated. Col. Rao was to proceed on leave sometime in December 1954 and Maj. Barsay, being the next in command, was naturally to succeed him as Chief Ordnance Officer of the Depot during the absence on leave of Col. Rao. The smuggling of the goods out of the Depot was there fore arranged to take place during the period when Maj. Barsay was acting as the Chief Ordnance Officer of the Depot. Col. Rao went on leave from December 11, 1954. Kochhar, the second accused, who was in charge of the Fit Park, proceeded on two months ' leave of absence with effect from October 25, 1954, but he was recalled by accused No. 1 and posted as officer in charge of Kit Stores on November 25, 1954. Accused No. 3, Avatarsingh, was working in the Unfit Sub Park, and he too was shifted from there to the Kit Stores on or about November 22, 1954. These two, postings were made by accused No. 1 without the consent or knowledge of Col. Rao when he had gone to Delhi on some temporary duty for ten days from November 20, 1954 to November 30, 1954. On the night of December 1, 1954, there was a theft of various articles in the Unfit Park of the Depot. Accused No. 1 called in Lawrence, the acting Security Officer, ostensibly to discuss with him certain matters regarding the theft. During the course of the conversation accused No. 1 suggested to Lawrence that valuable stores in Shed No. 48 might be smuggled out and the large amounts expected to be realized from their sale might be shared between the conspirators, including 200 Lawrence. Presumably to put him in a suitable frame of mind to accept the suggestion to become a conspirator, he also hinted to Lawrence that Col. Rao suspected that he (Lawrence) had a hand in the theft. The scheme outlined by accused No. 1 was confirmed by accused No. 2 a few days later. According to the plan chalked out by Maj. Barsay, he was to appoint a board of officers for itemization of "Specialist Boxed Kits" in Shed No. 17 and once the board started functioning there would be shuttle of trucks moving from Shed No. 48 to Shed No. 17 and vice versa and during the movements of those trucks two or three trucks loaded with valuable stores were to be moved out through the main gate of the Depot on the pretext of being back loaded to the Return Stores Sub Depot. He was also to take Col. Rao to Shed No. 48 and explain to him that the boxes contained very few items so that he too, on his return from leave, would not be surprised at the final result of the itemization. It was also agreed that the scheme should be pushed through tentatively on December 16, 17 and 18, 1954. But, for one reason or other, it could not be pushed through during those days, as Capt. Kapoor was frequently visiting the scene of itemization. On December 18, 1954, a meeting took place at Maj. Barsay 's bungalow and accused Nos. 1 to 4 and Lawrence attended that meeting. At that meeting the details of working out the plan to be carried out on December 20, 1954, were finalized. Kochhar reported to the conspirators that he had briefed Jamadar Kundanlal, and Lawrence told them that, as per Kochhar 's suggestion, he had already detailed Jamadar Kundanlal on day duty at the main gate during the next week. Barsay agreed to get a driver of his confidence detailed on one of the trucks to be allotted to the Kit Stores and he offered to give orders to Kochhar on the morning of December 20, 1954, in the presence of all, to transfer the itemized kits to Shed No. 26 ostensibly for the purpose of conditioning and preservation. That would enable accused No. 3, Avatar Singh, to load the stores from Shed No. 17. The first trip was to be of ordinary stores in which the 201 conspirators were not interested and the second trip was to be of valuable stores which were to be smuggled out of the gate. Barsay also undertook to call Maj. Nag to his office on December 20, 1954 and issue orders in the presence of Maj. Nag to Lawrence to go to Dehu Ordnance Depot (D.O.D.) and get the fire hoses which were sent there for repairs. Kochhar agreed to prepare a bogus voucher on Monday (December 20, 1954) morning, and Lawrence undertook to provide a bogus gate pass. Accused No. 4, Saighal, agreed to keep a lorry and some laborers present near his bungalow for transshipping the stores. On the evening of December 19, 1954, Lawrence went to the house of Saighal and the latter showed him the spot where the stores were to be transshipped. Thereafter, after taking his dinner, Lawrence went to the Depot at 9 p.m. The Orderly Officer at the Depot, one Shrinivasan, informed Lawrence that Jamadar Kundanlal, who was to have been on duty at the main gate on December 20, 1954, was sick and had taken 3 days ' leave of absence on medical grounds and that Maj. Barsay had sent a chit to him asking him to send Lawrence to the bungalow of Maj. Barsay. Lawrence went to the bungalow of Maj. Barsay, but could not meet him; and then Lawrence went to the residence of Jamadar Kundanlal and tried to persuade him to attend to his duty at the main gate on December 20, 1954. On December 20, 1954, at about 9.15 a.m. Maj. Barsay called Havaldar Pillay to his office and asked him to allot a new vehicle to the Kit Stores and to detail driver Ramban on that vehicle. Havaldar Pillay did accordingly. At about 10 a.m., Maj. Barsay called Maj. Nag and Lawrence to his office and, in the presence of Maj. Nag, he issued orders to Lawrence to go to Dehu Ordnance Depot (D.O.D.) personally and get the fire hoses. After Maj. Nag left the place, Lawrence told Maj. Barsay that Jamadar Kundanlal had reported himself to be sick and had taken leave of absence and that one Godse was at the main gate. Barsay suggested to Lawrence that 26 202 Jamadar Jogendrasingh may be put at the main gate in place of Godse, and he informed him that he had fixed upon Ramban as the driver of the vehicle in which the stores were to be smuggled out. At about 11 a.m. Lawrence met Maj. Barsay and Kochhar near, Shed No. 48 and was told by Maj. Barsay that the scheme was to proceed according to schedule. Kochhar and Lawrence then went to Shed No. 17 where Avatarsingh, accused No. 3, was present. Kochhar told Avatarsingh that he had not prepared any voucher as it was not necessary. Lawrence had brought an old gate pass with him and he handed over the same to Avatarsingh. Truck No. D. D. 5963 was, in the first instance, loaded with ordinary stores and was sent to Shed No. 26. In the meanwhile, Lawrence went to the Depot and asked Godse to take over at the Unfit Sub Park gate and he ordered Jamadar Jogendrasingh to take over from Godse at the main gate. As Jamadar Jogendrasingh refused to accept the gate pass to be produced by the driver and pass out the vehicle without making an entry regarding the same in the "Vehicles In and Out Register", Lawrence gave him a written order to that effect with instructions not to show or hand over that written order to anybody except himself on his return or to Maj. At about 1 p.m. Maj. Barsay told Lawrence that he had become apprehensive of the scheme succeeding, as he had seen the Station Commandant 's car near the Barrack Office and, therefore, he told him not to take out the vehicle till that car had gone out. Lawrence agreed and went to Shed No. 17 where Avatarsingh was present, and Avatarsingh got the truck loaded and handed over the bogus gate pass and the duty slip of the vehicle to Ramban, and he also asked Lawrence to get into the truck there itself instead of near the main gate as per the plan. After Lawrence got into the truck, it proceeded towards the main gate at about 1.40 p.m. At the main gate, Ramban gave the duty slip of the vehicle and also the bogus gate pass to Jamadar Jogendrasingh and the latter told Lawrence that Maj. Barsay had left a message for him "not to do it on that day". Lawrence, 203 ignoring the said directions, took the vehicle out of the gate. At a spot near Talegaon there was a civilian lorry bearing No. BYL 3289 kept ready by accused Nos. 4, 5 and 6 for transhipping the stores, and to that place the truck was driven. The two lorries were parked back to back, and accused No. 6. and the absconding accused Khemchand and two others started transhipping the stores from the military lorry to the civilian lorry. At that stage, the police officers appeared at the scene and prevented further fulfilment of the plan of the accused. It is a further case of the prosecution that Lawrence ostensibly joined the conspiracy with a view to bring to book the culprits and was informing the superior officers and the police orally and in writing from time to time as and when the important events were taking place. As some argument was made on the basis of the charges, it would be convenient at this stage to read the charges framed by the Special Judge, Poona. The charges are: (1) That you accused No. 1 Major E. G. Barsay, when officiating as Chief Ordnance Officer, D. U. V. and you accused No. 2, H. section Kochhar, when posted as Civilian Group Officer, D. U. V., and you accused No. 3, Avatarsingh Seva Singh, then working as Civilian Stores Keeper, D. U. V., and you accused No. 4, W. section Saighal, released Lt. Col., and you, accused No. 5, Ramchand Pahlajrai Gangawani, and you accused No. 6, Deviprasad Ramchand Gangawani and the absconding accused Khemchand between about October 1954 and December 1954 were parties to a criminal conspiracy at Dehu Road area by agreeing to do certain illegal acts to wit: Firstly, dishonestly or fraudulently misappropriate or otherwise convert to your own use the Military Stores lying in the Vehicle Depot, Dehu Road and which was entrusted or was in charge of Major E. G. Barsay, H. section Kochhar, and Avatarsingh Seva Singh and which was also under their control, as public servants; Secondly, to obtain by corrupt or illegal means for yourselves or for any other persons 204 such stores which amounts to abusing their position as public servants i.e., the co conspirators; Thirdly, to commit illegal acts of committing theft or receiving of stolen property and the above said illegal acts were done in pursuance of the said agreement and that you have thereby committed an offence punishable under Section 120 B of the Indian Penal Code and within my cognizance. (2) That you accused Nos. 1, 2, 3,4, 5, 6 and another (Khemchand Ramchand Gangawani), between about October 1954 and December 1954 in pursuance of the abovesaid conspiracy jointly and in furtherance of the common intention of all of you, you accused No. 1, Major Barsay, Officiating Chief Ord. nance Officer, and you accused No. 2, H. section Kochbar, Civilian Group Officer, D. U. V., and you accused No. 3, Avatarsingh Seva Singh, Civilian Store Keeper, and you accused No. 4, W. section Saighal, released Lt. Col., and you accused No. 5, Ramchand Pahalajrai Gangawani, and you accused No. 6, Deviprasad Ramchand Gangawani, did on 20th of December 1954, dishonestly or fraudulently his. appropriate with a common intention or convert for your own use Government property in the form of Military Stores described in detail in Schedule 'A ' appended herewith, entrusted to or under the control of the first three accused, namely, Major E. G. Barsay, H. section Kochhar and Avatarsingh Seva Singh, who were public servants and thereby committed an offence under Section 5(1)(c), punishable under section 5(2), of the Prevention of Corruption Act, read with Section 34 of the Indian Penal Code and within my cognizance. (3) That you accused Nos. 1, 2,3, 4, 5, 6 and the absconding accused Khemchand Ramchand Gangawani, in pursuance of the abovesaid conspiracy, jointly and in furtherance of the common intention of all of you, did by corrupt or illegal means by abusing their position as public servants, obtained for yourselves or for any other persons, the valuable things in the form of Military Stores detailed out in Schedule 'A ' appended herewith, and this act 205 constitutes an offence under Section 5(1)(d) of the Prevention of Corruption Act, punishable under Section 5(2) of the said Act read with Section 34 of the Indian Penal Code and within my cognizance. (4) That you accused Nos. 1, 2, 3, 4,5, 6, along with the absconding accused, Khemchand Ramchand Gangawani, did on 20th of December 1954, in pursuance of the abovesaid conspiracy jointly and in furtherance of the common intention of all of you, dishonestly or fraudulently remove the Military stores described in detail in Schedule 'A ' appended herewith from the Dehu Road Depot and this act constitutes an offence punishable either under Section 381 or 411 of the Indian Penal Code, read with Section 34 of the Indian Penal Code and within my cognizance. " The main defence of the accused was that, in view of the thefts going on in the Depot, the reputation of Lawrence, the Security Officer, was at the lowest ebb, that in order to resurrect his reputation and to ingratiate himself into the good books of his superiors, he concocted the scheme of huge fraud and implicated therein the accused, including the Acting Chief Ordnance Officer of the Depot. Shortly stated, the defence was that all the accused were innocent and that it was Lawrence that "abducted" the truck with the stores, made false statements to the superior officers from time to time giving concocted versions to fit in with the theory of conspiracy. The Special Judge, on a consideration of the evidence, held that all the charges were made out against the accused. He rejected the technical objections raised in regard to the framing of the charges, the validity of the investigation made by the investigating officer and the sanction given by the Central Government for the prosecution of the accused, and came to the conclusion that prima facie there was no good ground to discard the evidence of Lawrence, but he placed the said evidence in the category of interested evidence and required independent corroboration before acceptance. In the words of the learned Special Judge, "Shri Lawrence 's evidence can, 206 therefore, be accepted and relied upon, only if it is corroborated by other independent evidence and circumstances in the case. " He found ample evidence and circumstances corroborating the evidence of Lawrence. After considering the entire evidence, he came to the following conclusion: "The above discussion of the evidence on record and the circumstances in the case makes it abundantly clear that the prosecution has been able to prove beyond a reasonable doubt that every one of these six accused did commit overt acts in furtherance of the criminal conspiracy alleged against them." He held that accused Nos. 1 to 6 were guilty of the principal offence charged against them and convicted all of them under section 120 B of the Indian Penal Code and section 5(2) of the Prevention of Corruption Act, 1947, read with B. 34 of the Indian Penal Code. He gave varying sentences of imprisonment and fine to the accused. The accused preferred five appeals to the High Court against their convictions and sentences. A division bench of the Bombay High Court which heard the appeals set aside the conviction of accused Nos. 2, 3, 5 and 6, but confirmed those of accused ' Nos. 1 and 4. The High Court also rejected all the technical objections raised at the instance of the appellant accused in regard to some parts of 2nd, 3rd and 4th charges. In regard to the 2nd and 3rd head sub charges, tile High Court accepted the plea that accused Nos. 4, 5 and 6 could not be charged with having committed an offence under section 5(1)(c) and section 5(1)(d) of the Prevention of Corruption Act, as they were not public servants; but they held that it would be proper to frame a charge against them under section 109 of the Indian Penal Code for having abetted the commission of the offence of criminal misconduct under section 5(1)(c) and (d) of the Prevention of Corruption Act, committed by accused Nos. 1 to 3. As the High Court held that they were not prejudiced by the irregularity of the charge, it altered the charge to one under section 109 of the Indian Penal Code, read with section 5(1)(c) and (d) of the Prevention of Corruption Act. As regards the 207 last head of the charge, it held that all the accused could not be charged with having committed an offence under section 381 of the Indian Penal Code and that the charge under section 411 of the Indian Penal Code would also appear to be improper so far as accused Nos. 1 to 3 were concerned; but it held that so far as accused Nos. 4, 5 and 6 were concerned, the charge under section 411, read with section 34, Indian Penal Code, would be quite proper. Before the High Court, learned counsel appearing on behalf of the accused and the special counsel, Mr. Amin, appearing on behalf of the State, asked the Court to proceed to examine the evidence of Lawrence on the basis that he was a decoy and a trap witness. The High Court agreed with the learned Special Judge that the evidence of Lawrence would, have to be treated on par with that of a trap witness and that it would be inadvisable to rely upon the said evidence without independent corroboration. It also pointed out that the corroboration required was not a corroboration of every particular in respect of which the accomplice or the approver gave his evidence, but the corroboration must be such as to make the court believe that the evidence of the accomplice was a truthful one and that it would be safe to act upon that evidence. Finally the High Court premised its discussion of the evidence in the following words: "In our opinion, all these decisions would clearly establish that it would not be safe to rely on the evidence of Lawrence who is admittedly a decoy or trap witness, without his testimony being corroborated from independent sources. " Then the learned Judges of the High Court considered the evidence of Lawrence minutely, discarded some parts of the evidence which were discrepant or inconsistent with other proved facts and accepted the broad story of conspiracy given by him as true to the extent it was corroborated by other unimpeachable pieces of evidence and circumstances. After elaborately considering the evidence of Lawrence, the learned Judges of the High Court came to the following con clusion: 208 "We, therefore, accept Lawrence 's evidence, find that his story is probable and true and we also find that the evidence on the record justified the finding of the trial Court that there was a conspiracy as alleged by the prosecution to smuggle goods out of the Dehu Vehicles Depot." Then the learned Judges considered the question as to which of the accused took part in the conspiracy. As regards accused No. 1, they came to the conclusion that there was cogent evidence to implicate him in the conspiracy, and in that view, they confirmed the finding of the trial court that he was a party to the conspiracy to smuggle military goods out of the Depot. As regards accused No. 2, they held that the evidence was not sufficient to establish that he was a member of the alleged conspiracy and that, as he could not be held to be a member of the conspiracy, he could not also be held to be guilty of committing criminal misconduct under section 5(1)(c) and (d) of the Prevention of Corruption Act, 1947. As regards accused No. 3, they were of the opinion that the case against him was not established beyond reasonable doubt and that he could not be held to be guilty of criminal conspiracy as well as criminal misconduct. As regards accused No. 4, they accepted the finding of the learned Special Judge, as independent acceptable evidence corroborated the evidence of Lawrence in respect of this accused. So far as accused Nos. 5 and 6 were concerned, they found the evidence to be very weak and therefore set aside the convictions and sentences passed against them. In the result, they confirmed the convictions and sentences of accused Nos. 1 and 4, and set aside those of accused Nos. 2, 3, 5 and 6. It appears that accused No. 4 died after the appeal was disposed of by the High Court. Accused No. 1 preferred Criminal Appeal No. 2 of 1958 against his conviction and sentence passed by the High Court and the State preferred Criminal Appeal No. 81 of 1960 challenging the correctness of the order of acquittal made in respect of accused Nos. 2 and 3. We shall first take the appeal filed by accused No. 1. 209 Learned counsel for the appellant raised before us all the technical points which he unsuccessfully raised before the Special Judge as well as before the High Court. At the outset we shall deal with the said contentions before considering the arguments advanced on the merits of the case. The first contention of learned counsel for the appellant is that the Special Judge, Poona, had no jurisdiction to take cognizance of the offences with which the accused were charged and that they should have been tried only by a court martial under the Army Act. The argument of learned counsel for the appellant may be briefly stated thus: The (46 of 1950) created new offences. Section 52 of the said Act created offences with which accused in the present case were charged, and provided a new machinery, namely, a court martial, to try persons committing the said offences. Therefore by necessary implication the trial of the said offences was excluded from the jurisdiction of ordinary criminal courts. This argument was sought to be reinforced by the provisions of section 69 of the whereunder, it was said, by a fiction, offences committed by army personnel which were triable by ordinary courts were to be deemed to be offences committed against the said Act. That difference between offences against the and the offences deemed to be committed against the , the argument proceeded, was an unfailing clue for the true construction of the pro visions of the in that the offences under the first category were exclusively triable by court martial and the offences; of the latter category were subject to concurrent jurisdiction of two courts. The logical conclusion from this premises, it was said, was that the provisions designed to resolve conflict of jurisdiction related only to the second category of offences. Assuming that the said contention was wrong, it was argued, section 126 of the is peremptory in its language, namely, that a criminal court shall not have jurisdiction to try an offence 27 210 defined under the , unless the conditions laid down therein were strictly complied with, that is, unless requisite notice is given to the officer referred to in section 125 of the Act. To appreciate the said argument it is necessary to scrutinize the provisions of the in some detail. Section 2 describes the different categories of army personnel who are subject to the . Section 3(ii) defines "civil offence" to mean "an offence which is triable by a criminal court"; a. 3(vii) defines "court martial" to mean "a court martial held under this Act"; section 3(viii) defines "criminal court" to mean "a court of ordinary criminal justice in any part of India, other than the State of Jammu and Kashmir"; section 3(xvii) defines "offence" to mean "any act or omission punishable under this Act and includes a civil offence"; and section 3(xxv) declares that "all words and expressions used but not defined in this Act and defined in the Indian Penal Code shall be deemed to have the meanings assigned to them in that Code." Chapter VI is comprised of sections 34 to 70. The heading of the Chapter is "Offences". As we have already noticed, the word "offence" is defined to mean not only any act or omission punishable under the , but also a civil offence. Sections 34 to 68 define the offences against the Act triable by court martial and also give the punishments for the said offences. Section 69 says that any person subject to the Act who at any Place in or beyond India commits any civil offence shall be deemed to be guilty of an offence against the Act and, if charged therewith under this section, shall be liable to be tried by a court martial and, on conviction, be punishable as provided for the offence under any law in force in India or such less punishment as is in the Act mentioned. Under section 70, " A person subject to this Act who commits an offence of murder against a person not subject to military, naval or air force law, or of culpable homicide not amounting to murder against such a person or of rape in relation to such a person, shall not be deemed to be guilty of an offence against this Act and shall not be tried by a Court martial. " 211 There are three exceptions to this section with which we are not concerned now. Shortly stated, under this Chapter there are three categories of offences, namely, (1) offences committed by a person subject to the Act triable by a court martial in respect whereof specific punishments have been assigned; (2) civil offences committed by the said person at any place in or beyond India, but deemed to be offences committed under the Act and, if charged under section 69 of the Act, triable by a court martial; and (3) offences of murder and culpable homicide not amounting to murder or rape committed by a person subject to the Act against a person not subject to the military law. Subject to a few exceptions, they are not triable by court martial, but are triable only by ordinary criminal courts. The said categorisation of offences and tribunals necessarily bring about a conflict of jurisdiction. Where an offence is for the first time created by the , such as those created by sections 34, 35, 36, 37 etc., it would be exclusively triable by a courtmartial; but where a civil offence is also an offence under the Act or deemed to be an offence under the Act, both an ordinary criminal court as well as a court martial would have jurisdiction to try the person committing the offence. Such a situation is visualized and provided for by as. 125 and 126 of the Act. Under section 125, "When a criminal court and a court martial have each jurisdiction in respect of an offence, it shall be in the discretion of the officer commanding the army, army corps, division or independent brigade in which the accused person is serving or such other officer as may be prescribed to decide before which court the proceedings shall be instituted, and, if that officer decides that they should be instituted before a court martial, to direct that the accused person shall be detained in military custody." Under a. 126(1) of the Act, "When a criminal court having jurisdiction is of opinion that proceedings shall be instituted before itself in respect of any alleged offence, it may, by written notice, require the officer referred to in 212 section 125 at his option, either to deliver over the offender to the nearest magistrate to be proceeded against according to law, or to postpone proceedings pending a reference to the Central Government. " Clause (2) of that section says that, "In every such case the said officer shall either deliver over the offender in compliance with the requisition, or shall forthwith refer the question as to the court before which the proceedings are to be instituted for the determination of the Central Government, whose order upon such reference shall be final. " Section 125 presupposes that in respect of an offence both a criminal court as well as a court martial have each concurrent jurisdiction. Such a situation can arise in a case of an act or omission punishable both under the . as well as under any law in force in India. It may also arise in the case of an offence deemed to be an offence under the Act. Under the scheme of the said two provisions, in the first instance,, it is left to the discretion of the officer mentioned in section 125 to decide before which court the proceedings shall be instituted, and, if the officer decides that they should be instituted before a court martial, the accused person is to be detained in military custody; but if a criminal court is of opinion that the said offence shall be tried before itself, he may issue the requisite notice under section 126 either to deliver over the offender to the nearest magistrate or to postpone the proceedings pending a reference to the Central Government. On receipt of the said requisition, the officer may either deliver over the offender to the said court or refer the question of proper court for the determination of the Central Government whose order shall be final. These two sections provide a satisfactory machinery to resolve the conflict of jurisdiction, having regard to the exigencies of the situation. What is more, section 127 of the provides for successive trials by court martial and by criminal court in respect of the same offence. Under sub section (1) of that section, "A person convicted or acquitted by a 213 court martial may, with the previous sanction of the Central Government, be tried again by a criminal court for the same offence, or on the same facts." But sub section (2) thereof imposes a limitation in the matters of punishment; for, under that sub section, the criminal court shall, in awarding punishment, have regard to the punishment the offender may already have undergone for the said offence. The scheme of the Act, therefore, is self evident. It applies to offences committed by army personnel described in section 2 of the Act; it creates new offences with specified punishments, imposes higher punishments to pre existing offences, and enables civil offences by a fiction to be treated as offences under the Act; it provides a satisfactory machinery for resolving the conflict of jurisdiction. Further it enables, subject to certain conditions, an accused to be tried successively both by court martial and by a criminal court. It does not expressly bar the jurisdiction of criminal courts in respect of acts or omissions punishable under the Act, if they are also punishable under any other law in force in India; nor is it possible to infer any prohibition by necessary implication. Sections 125, 126 and 127 exclude any such inference, for they in express terms provide not only for resolving conflict of jurisdiction between a criminal court and a court martial in respect of a same offence, but also provide for successive trials of an accused in respect of the same offence. Now let us apply this legal position to the facts of the case. Under section 52 of the Act, any person subject to the Act who commits theft of any property belonging to Government or to any military, naval or air force mess, band or institution, or to any person subject to military, naval or air force law, or dishonestly misappropriates or converts to his own use any such property, or commits criminal breach of trust in respect of any such property, or does any other thing with intent to defraud, or to cause wrongful gain to one person or wrongful loss to another person shall, on conviction by court martial, be liable to suffer im prisonment for a term which may extend to ten years 214 or such less punishment as is in the act mentioned. Section 2 (xxv) says that all words and expressions used but not defined in the and defined in the Indian Penal Code shall be deemed to have the meanings assigned to them in that Code. The section does not create new offences, but prescribes higher punishments if the said offences are tried by a court martial. The appellant and the other accused were charged in the present case, among others, for having been parties to a criminal conspiracy to dishonestly or fraudulently misappropriate or otherwise convert to their own use the military stores and also for dishonestly or fraudulently misappropriating the same. The said acts constitute offences under the Indian Penal Code and under the Prevention of Corruption Act. They are also offences under section 52 of the . Though the offence of conspiracy does not fall under section 52 of the Act, it, being a civil offence, shall be deemed to be an offence against the Act by the. force of section 69 of the Act. With the result that the offences are triable both by an ordinary criminal court having jurisdiction to try the said offences and a court martial. To such a situation sections 125 and 126 are clearly intended to apply. But the designated officer in section 125 has not chosen to exercise his discretion to decide before which court the proceedings shall be instituted. As he has not exercised the discretion, there is no occasion for the criminal court to invoke the provisions of section 126 of the Act, for the second part of section 126(1), which enables the criminal court to issue a notice to the officer designated in section 125 of the Act to deliver over the offender to the nearest magistrate or to postpone the proceedings pending a reference to the Central Government, indicates that the said subsection presuppose,% that the designated officer has decided that the proceedings shall be instituted before a court martial and directed that the accused person shall be detained in military custody. If no such decision was arrived at, the could not obviously be in the way of a criminal court exercising its ordinary jurisdiction in the manner provided by law. 215 The correct approach to the problem may be stated thus: The appellant and the other accused have committed offences under the Indian Penal Code and the Prevention of Corruption Act. By reason of section 7 of the Criminal Law (Amendment) Act, 1952, the said offences are triable by a special judge appointed under that Act. The special judge so appointed would have jurisdiction to try the said offences unless the expressly, or by necessary implication, excluded the offences alleged to have been committed by the appellant and others from the jurisdiction of that court. The aforesaid discussion of the provisions of the indicates that there is not only no such exclusion but also that there is clear and unambiguous indication to the contrary. An argument advanced by learned counsel for the appellant in this context may conveniently be noticed at this stage. The second branch of the argument of learned counsel for the appellant under this head is based upon section 549 of the Code of Criminal Procedure. Under that section, "The Central Government may make rules, consistent with this Code and the . . . as to the cases in which persons subject to military, naval or air force law shall be tried by a court to which this Code applies, or by Court martial . . . . The Central Government made rules in exercise of the power conferred on it under this section. No rule was made prescribing that the offences with which we are now concerned shall be tried only by a court martial. But reliance is made on r. 3 which reads: "Where a person subject to military, naval or air force law is brought before a Magistrate and charged with an offence for which he is liable to be tried by a Court martial, such Magistrate shall not proceed to try such person or to inquire with a view to his commitment for trial by the Court of Sessions or the High Court for any offence triable by such Court, unless, (a) he is of opinion, for reasons to be recorded, that he should so proceed without being moved thereto by competent military, naval or air force authority; or 216 (b) he is moved thereto by such authority. " This rule obviously cannot apply unless the Special Judge constituted under the Criminal Law (Amendment) Act, 1952, is a magistrate within the meaning of that rule. A special judge is appointed under section 6(1) of the Criminal Law (Amendment) Act to try the offences specified therein. Section 6(2), of that Act lays down that "A person shall not be qualified for appointment as a special judge under this Act unless he is, or has been, a sessions Judge or an additional sessions Judge or an assistant sessions Judge under the Code of Criminal Procedure, 1898 (V of 1898). " Section 8(1) of the said Act says, "A Special Judge may take cognizance of offences without the accused being committed to him for trial, and in trying the accused persons, shall follow the procedure prescribed by the Code of Criminal Procedure, 1898 (Act V of 1898), for the trial of warrant cases by magistrates. " Under sub section (3) thereof, "Save as provided in sub section (1) or sub section (2), the provisions of the Code of Criminal Procedure, 1898, shall, so far as they are not inconsistent with this Act, apply to the proceedings before a Special Judge; and for the purpose of the said provisions, the Court of the Special Judge shall be deemed to be a Court of session trying cases without a jury or without the aid of assessors and the person conducting a prosecution before a special judge shall be deemed to be a public prosecutor. " Under section 9 of the said Act, "The High Court may exercise, so far as they may be applicable, all the powers conferred by Chapters XXXI and XXXII of the Code of Crimi nal Procedure, 1898 (Act V of 1898), on a High Court as if the Court of a Special Judge were a Court of session trying cases without a jury within the local limits of the jurisdiction of the High Court." These provisions equate a special judge with a sessions judge, and the provisions of the Code of Criminal Procedure applicable to a sessions judge, in so far as they are not inconsistent with the Act, are made 217 applicable to a special judge. But it is said that section 8(1) of the Act puts him on par with a magistrate and therefore r. (3) of the rules framed under section 549 which applies to a magistrate equally applies to a special judge. This argument overlooks the limited purpose for which section 8(1) is enacted. Section 8 of the Criminal Law (Amendment) Act makes a distinction between the power of a special judge to take cognizance of an offence and the procedure to be followed by him in trying the case. In trying accused persons, he is enjoined to follow the procedure prescribed by the Code of Criminal Procedure for the trial of warrant cases by magistrates. The warrant procedure is incorporated in the Act by reference to the Code of Criminal Procedure. Chapter XXI of the Code of Criminal Procedure provides the procedure for the trial of warrant cases; and section 549 is not one of the sections in that Chapter. Nor does it empower the Central Government to make rules modifying the warrant procedure. That apart, can it be said that, by reason of the procedure to be followed by the special judge, he would be a magistrate empowered to try such a person within the meaning of r. (3)? Section 8(1) of the Criminal Law (Amendment) Act maintains a clear distinction between jurisdiction and the procedure. It is, therefore, not possible to hold that a special judge is a magistrate within the meaning of r. (3). If so, it follows that r. (3) has no application to the trial of an army personnel by a special judge. There is a more formidable obstacle in the way of learned counsel 's argument. Section 7 of the Criminal Law (Amendment) Act, 1952, reads: "Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (Act V of 1898) or in any other law the offences specified in subsection (1) of section 6 shall be triable by special Judges only. " Doubtless the is comprehended by the words "any other law". The offences with which we are now concerned are certainly offences specified in sub section (1) of section 6 of the Criminal Law (Amendment) Act. The non obstante clause in section 7 clearly confers 218 jurisdiction to try persons committing the said offences on a special judge. But it is contended that the is a special Act and therefore section 7 found in the general Act cannot take away the jurisdiction conferred on a court martial in respect of the said offences. That proposition of law may have some bearing when there is conflict of jurisdiction arising out of a general Act and a special Act, without any specific exclusion of the jurisdiction in the general Act of that conferred under the special Act. But that principle may not have any relevance to a case where the general Act in express terms confers jurisdiction on a particular tribunal in respect of specified offences to the exclusion of anything contained in any other law. In such a situation, the intention of the Legislature is clear and unambiguous, and no question of applying any rule of interpretation would arise, for the rules of interpretation are evolved only to ascertain the intention of the Legislature. It is contended that section 7 confers an exclusive jurisdiction on a special judge only in regard to offences specified in sub section (1) of section 6 and that the said subsection does not comprise offences under section 52 of the . There is a fallacy underlying this argument. Certain acts committed or omissions made by a person constitute offences under section 6(1) of the Criminal Law (Amendment) Act, 1952. Under section 7 of the said Act, the said offences are exclusively triable by a special judge. In the present case the accused were charged with having committed offences expressly falling under B. 6 of the said Act and, therefore, the special judge had clearly jurisdiction to try the accused in respect of the said offences. The mere fact that the said acts or omissions might also constitute an offence under section 52 of the would not be of any relevance, as jurisdiction was exclusively conferred on the special judge notwithstanding anything contained in any other law. If that be so, the special judge had exclusive jurisdiction to try offences covered by section 6 of the Criminal Law (Amendment) Act, 1952. At this stage, another argument of learned counsel may be adverted to. He says that some of the offences with which the accused are charged in the present 219 case are not those enumerated in section 6 of the Criminal Law (Amendment) Act, 1952. This objection is clearly answered by section 7(b) of the said Act which says, "When trying any case, a special judge may also try any offence other than an offence specified in section 6 with which the accused may, under the Code of Criminal Procedure, 1898, be charged at the same trial. " It is then argued that the prosecution has failed to establish that the Central Government accorded sanction to prosecute the appellant under section 6(1) of the Prevention of Corruption Act. Under section 6(1)(a) of the Prevention of Corruption Act, "No Court shall take cognizance of an offence punishable under section 161 or section 164 or section 165 of the Indian Penal Code, or under subsection (2) of section 5 of this Act, alleged to have been commuted by a public servant, except with the previous sanction (a) in the case of a person who is employed in connection with the affairs of the Union and is not removable from his office save by or with the sanction of the Central Government, of the Central Government. . It is common case that the appellant was a public servant within the meaning of the said sub section and, therefore, he cannot be prosecuted without the sanction of the Central. Government. The sanction given in this case for the prosecution of the appellant reads thus: " . . . . NOW, THEREFORE, THE CENTRAL GOVERNMENT doth hereby accord sanction under section 197 of the Criminal Procedure Code (Act V of 1898) and section 6(1)(a) of the Prevention of Corruption Act, 1947 (II of 1947) to the initiation of proceedings to prosecute in a Court of competent jurisdiction the said Major E. G. Barsay and Shri H. section Kochhar in respect of the aforesaid offences and other cognate offences punishable under other provisions of law. M. Gopala Menon, Deputy Secretary to the Govt. of India. " 220 Ex facie the said order giving the requisite sanction purports to have been issued in the name of the Central Government and is signed by the Deputy Secretary to the Government of India in the Ministry of Home Affairs. P.W. 36, Dharambir, an Assistant in the Minstry of Home Affairs, New Delhi, has given evidence in respect of this document. He says that the papers relating to the present case were submitted to the Home Ministry by the Inspector General of Police, Special Police Establishment, New Delhi, for obtaining the necessary sanction, that the papers were put up before the Deputy Secretary in that Ministry, that the Deputy Secretary was competent to accord sanction on behalf of the President, and that he gave the said sanction under his signature. In the cross examination, this witness says that he cannot say whether the Deputy Secretary 's signature was in his own right or by way of authentication of the President 's order. This uncontradicted evidence clearly established that the Deputy Secretary was competent to accord sanction on behalf of the President and that he gave the sanction in exercise of the power conferred on him, presumably, under the rules framed by the President in this behalf The statement made by this witness in the cross examination is not inconsistent with that made by him in the examination in chief. The Deputy Secretary may have power to make some orders in his own right and also may have power to authenticate other orders issued in the name of the President. But in this case, this witness has clearly deposed that the Deputy Secretary had power to accord sanction in his own right and when the order giving the sanction ex facie shows that he did not authenticate it by order of the President, we must hold that he gave the sanction in his own right. In this context, an argument based upon article 77 of the Constitution may be noticed. Under el. (1) of article 77, all executive actions of the Government of India shall be expressed to be taken in the name of the President; and under cl. (2) thereof, orders and other instruments made and executed in the name of the President shall be authenticated in 221 such manner as may be specified in rules to be made by the President, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the President. Under the General Clauses Act, the expression "President" means the Central Government. It is, therefore, argued that as the order issuing the sanction was not expressed to be made in the name of the President, the sanction was void. This Article and the corresponding Article viz., article 166, were subject to judicial scrutiny by this Court. The validity of an order of detention made by the Bombay Government under section 3 of the , was considered in The State of Bombay vs Puru shottam Jog Naik (1). There, in the body of the order the "satisfaction" was shown to be that of the Government of Bombay; at the bottom of the order the Secretary to the Government of Bombay, Home Department, signed it under the words "By order of the Governor of Bombay". It was contended that the order was defective as it was not expressed to be in the name of the Governor within the meaning of article 166(1) of the Constitution and accordingly was not protected by cl. (2) of the said Article. Adverting to this contention, Bose, J., speaking for the Court, said at p. 678: "In our opinion, the Constitution does not require a magic incantation which can only be expressed in a set formula of words. What we have to see is whether the substance of the requirements is there. " This judgment lays down that we must look at the substance of the order. On a construction of the order that was in question in that case, having regard to the definition of "State Government" in the General Clauses Act and the concluding words "By order of the Governor of Bombay", the Court came to the conclusion that the order was expressed to have been taken in the name of the Governor. In Dattatreya Moreshwar Pangarkar vs The State of Bombay (2), an (1) ; (2) ; 222 order made under the , was questioned on the ground that it did not comply with the provisions of article 166(1) of the Constitution. There the order was made in the name of the Government and was signed by one Kharkar for the Secretary to the Government of Bombay, Home Department. Das, J., as he then was, after referring to the decision of the Federal Court in J. K. Gas Plant Manufacturing Co., (Rampur) Ltd. vs The King Emperor (1) observed at p. 625 thus: "Strict compliance with the requirements of article 166 gives an immunity to the order in that it cannot be challenged on the ground that it is not an order made by the Governor. If, therefore, the requirements of that article are not complied with, the resulting immunity cannot be claimed by the State. This, however, does not vitiate the order it self. " The learned Judge came to the above conclusion on the ground that the provisions of the said article are only directory and not mandatory. This decision was followed by this Court in P. Joseph John vs The State of Travancore Cochin (2). There the "show cause notice" issued under article 311 of the Constitution was impugned on the ground that it was contrary to the provisions of article 166 thereof. The notice was issued on behalf of the Government and was signed by the Chief Secretary to the Government, who had under the rules of business framed by the Rajpramukh the charge of the portfolio of "service and appointments" at the Secretariat level in the State. This Court held that the said notice was issued in substantial compliance with the directory provisions of article 166 of the Constitution. The latest decision on the point is that in Ghaio Mall & Sons vs The State of Delhi(1). There the question was whether the com munication issued by the Under Secretary, Finance, Government of Delhi State, had complied with the provisions of article 166 of the Constitution. This Court held that it did not comply with the provisions of (1) (2) 223 article 166 of the Constitution and also found that the said order was not, as a matter of fact, made by the Chief Commissioner. When the decision in Dattatreya Moreshwar Pangarkar 's case (1) was cited this Court observed at p. 1439 thus: "In that case there was ample evidence on the record to prove that a decision had in fact been taken by the appropriate authority and the infirmity in the form of the authentication did not vitiate the order but only meant that the presumption could not be availed of by the State. " The foregoing decisions authoritatively settled the true interpretation of the provisions of article 166 of the Constitution. Shortly stated, the legal position is this: article 166(1) is only directory. Though an impugned order was not issued in strict compliance with the provisions of article 166(1), it can be established by evidence aliunde that the order was made by the appropriate authority. If an order is issued in the name of the Governor and is duly authenticated in the manner prescribed in r. (2) of the said Article, there is an irrebuttable presumption that the order or instrument is made or executed by the Governor. Any non compliance with the provisions of the said rule does not invalidate the order, but it precludes the drawing of any such irrebuttable presumption. This does not prevent any party from proving by other evidence that as a matter of fact the order has been made by the appropriate authority. Article 77 which relates to conduct of business of the Government of India is couched in terms similar to those in article 166 and the same principles must govern the interpretation of that provision. If that be the legal position, in the instant case the impugned order does not comply with the provisions of article 77(2) of the Constitution and, therefore, it is open to the appellant to question the validity of the order on the ground that it was not an order made by the President and to prove that it was not made by the Central Government. But this legal position does (1) ; 224 not help the appellant, for as we have pointed out, the uncontroverted evidence of P. W. 36, an Assistant in the Home Ministry, which was accepted by the High Court and the Special Judge, establishes that the order was made by the Deputy Secretary on behalf of the Central Government in exercise of the power conferred on him under the rules delegating such power to him. The next contention challenges the legal competence of Jog, an Inspector of Police in the Delhi Special Police Establishment, to make the investigation. In his evidence Jog stated that the Inspector General of Police, Special Police Establishment, New Delhi, empowered him under section 5A of the Prevention of Corruption Act to investigate the offences mentioned therein without the sanction of any magistrate. The question is whether he can make an investigation in regard to the offences alleged to have been committed by the accused in the present case. Section 5A of the Prevention of Corruption Act, 1950, on which reliance is placed reads: "Notwithstanding anything contained in the Code of Criminal Procedure., 1898, no police officer below the rank (a) in the presidency towns of Madras and Calcutta, of an assistant commissioner of police, (b)in the presidency town of Bombay, of a superintendent of police, and (c) elsewhere, of a deputy superintendent of police, shall investigate any offence punishable under section 161, section 165 or section 165A of the Indian Penal Code or under sub section (2) of section 5 of this Act, without the order of a presidency magistrate or a magistrate of the first class, as the case may be, or make any arrest therefor without a warrant: Provided that a police officer of the Delhi Special Police Establishment, not below the rank of an Inspector of police, who is specially authorized by the Inspector General of Police of that Establishment may, if he has reasons to believe that, on account of the delay involved in obtaining the order 225 of a magistrate of the first class, any valuable evidence relating to such offence is likely to be destroyed or concealed, investigate the offence without such order; but in every case where he makes such investigation, the police officer shall, as soon as may be, send a report of the same to a magistrate of the first class, together with the circumstances in which the investigation was made. " The proviso governs the present case. Jog, who was specially authorized by the Inspector General of Police under section 5A of the Prevention of Corruption Act to investigate the offences mentioned therein being an Inspector of Police, was certainly empowered to make an investigation within the meaning of that proviso. But what is contended is that the power to investigate under that proviso is hedged in by two conditions, namely, that the said officer should have reasons to believe that on account of delay involved in obtaining the order of a magistrate of the first class, any valuable evidence relating to such offence is likely to be destroyed or concealed, and subsequently he should have sent a report of the same to a magistrate of the first class together with the circumstances in which the investigation was made. The High Court on a consideration of the evidence found that the said two conditions have not been complied with by Jog. On that finding, the question arises whether the trial of the accused by the Special Judge was vitiated by the non compliance with the aforesaid two conditions. This Court in H. N. Rishbud & Inder Singh vs The State of Delhi (1) held that section 5(4) and proviso to section 3 of the Prevention of Corruption Act, 1947, and the corresponding section 5A of the Prevention of Corruption (Second Amendment) Act, 1952 (LIX of 1952) are mandatory and not directory and that an investigation conducted in violation thereof is illegal. In the same decision this Court also pointed out that the illegality committed in the course of investigation did not affect the competence and jurisdiction of the court for trial and where cognizance of the case had in fact (1) ; 29 226 been taken and the case had proceeded to termination the validity of the preceding investigation did not vitiate the result unless miscarriage of justice of been caused thereby. The question is whether in the present case the investigation made by the Inspector duly authorized by the Inspector General of Police to investigate under section 5A of the Prevention of Corruption Act, without complying with the two conditions laid down in the proviso to that section, had caused any prejudice to the accused. The High Court, after considering the entire evidence, found that the alleged irregularity would not justify the conclusion that the non observance of the conditions prescribed in the proviso to section 5A of the Prevention of Corruption Act had occasioned any failure of justice. Learned counsel has taken us through different steps in the investigation made by the said officer, and we have no reason to differ from the conclusion arrived at by the High Court. The validity of the investigation made by Jog was questioned yet on another ground. It was said that he had not obtained the requisite permission of the State Government under section 6 of the , before he started the investigation. Section 5 of that Act authorizes the Central Government to extend to any area the powers and jurisdiction of members of the Delhi Special Police Establishment for the investigation of any offences or classes of offences specified in a notification under section 3 thereof. But section 6 of that Act says that nothing contained in section 5 shall be deemed to enable any member of the Delhi Special Police Establishment to exercise powers and jurisdiction in any area in a State, not being a Union Territory or railways area, without the consent of the Government of that State. The Government of Bombay, Home Department, addressed a letter to the Government of India, dated August 13,1949 and it was stated therein, ". .I am directed to state that this Government re affirms, with reference to section 6 of the , the consent given for an indefinite period under its letter 227 No. 5042/4 D, dated the 6th November 1946, to the members of the Delhi Special Police Establishment exercising powers and jurisdiction in the area of the not province of Bombay. " It was contended before the High Court and it was repeated before us that the consent should have been given to every individual member of the Special Police Establishment and that a general consent would not be a good consent. We do not see any force in this argument. Under a. 6 of the , no member of the said Establishment can exercise powers and jurisdiction in any area in a State without the consent of the Government of that State. That section does not lay down that every member of the said Establishment should be specifically authorized to exercise jurisdiction in that area, though the State Government can do so. When a State Government can authorize a single officer to exercise the said jurisdiction, we do not see any legal objection why it could not authorize the entire force operating in that area belonging to that Establishment to make such investigation. The authorization filed in this case sufficiently complies with the provisions of section 6 of the , and there are no merits in this contention. The next contention centres round the framing of charges. The charges framed in this case have been fully extracted in the earlier part of the judgment. The first objection is that the Special Judge had no jurisdiction to try the accused on charges involving offences other than those mentioned in section 6(1) of the Criminal Law (Amendment) Act, 1952. This argument ignores section 7(2)(b) of the Act which says, "When trying any case, a special judge may also try any offence other than an offence specified in section 6 with which the accused may, under the Code of Criminal Procedure, 1898, be charged at the same trial. " The objection, therefore, has no force. The next criticism is that there can be no legal charge of a conspiracy between accused Nos. 1 to 3, who are public servants, and accused Nos. 4 to 6, who are not public servants, in respect of offences under 228 the Prevention of Corruption Act for the reason that they can only be committed by public servants. But this contention ignores the scope of the offence of criminal conspiracy. Section 120A of the Indian Penal Code defines "criminal conspiracy" and under that definition, "When two or more persons agree to do, or cause to be done, an illegal act, or an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy. " The gist of the offence is an agreement to break the law. The parties to such an agreement will be guilty of criminal con spiracy, though the illegal act agreed to be done has not been done. So too, it is not an ingredient of the offence that all the parties should agree to do a single illegal act. It may comprise the commission of a number of acts. Under section 43 of the Indian Penal Code, an act would be illegal if it is an offence or if it is prohibited by law. Under the first charge the accused are charged with having conspired to do three categories of illegal acts, and the mere fact that all of them could not be convicted separately in respect of each of the offences has no relevancy in considering the question whether the offence of conspiracy has been committed. They are all guilty of the offence of conspiracy to do illegal acts, though for individual offences all of them may not be liable. The second objection is in regard to the second charge. It is said that accused Nos. 4, 5 and 6 could not be charged with having committed an offence under section 5(1)(c) and 5(1)(d) of the Prevention of Corruption Act, as they are not public servants. The learned Judges of the High Court accepted the said legal position as correct, but held that they could be convicted under section 109 of the Indian Penal Code, read with cls. (c) and (d) of section 5(1) of the Prevention of Corruption Act. But on the merits they convicted accused No. 1 under section 5(2) of the Prevention of Corruption Act, instead of under the said section read with section 34 of the Indian Penal Code, and they convicted accused No. 4 under section 109 of the Indian Penal Code, read with section 5(1)(c) and (d) of the Prevention of Corruption Act, instead of under section 5(2) of the said 229 Act, read with section 34 of the Indian Penal Code. As accused No. 4 was dead before the appeal was filed in this Court, nothing need be said about the legality of his conviction. The only outstanding question, therefore, is whether the High Court was justified in convicting accused No. 1 under section 5(2) of the Prevention of Corruption Act instead of under the said section read with section 34 of the Indian Penal Code. To such a situation, section 537 of the Criminal Procedure Code applies and under that section, no sentence passed by a court of competent jurisdiction shall be reversed or altered on appeal or revision on account of an error, omission or irregularity in the charge, including any misjoinder of charges, unless such error, omission, irregularity or misdirection has in fact occasioned a failure of justice. This Court in W. Slaney vs State of M. P. (1) held that in adjudging a question of prejudice the concern of the court should be to see whether the accused had a fair trial, whether he knew what he was being tried for, whether the im pugned facts sought to be established against him were explained to him clearly and fairly and whether he was given a full and fair chance to defend himself. Judged by the said test it is manifest that accused No. I cannot be said to have been prejudiced by his conviction under section 5(2) of the Prevention of Corruption Act, for accused No. I had clear knowledge from the inception that the prosecution case against him was that he committed an offence under section 5(2) of the Prevention of Corruption Act and that he had every opportunity, and indeed he made a sustained effort throughout the trial to defend himself against the said accusation. It is not possible to hold in this case that there was any failure of justice by reason of the High Court convicting him for a substantive offence under section 5(2) of the said Act. So far as the third head of the charge is concerned, the High Court held that it was bad in regard to accused No. 1. Accused No. 1, therefore, cannot obviously have any grievance with that finding. For the foregoing reasons, we hold that there are no merits (1)[1955] 2 S.C.R. 1140. 230 in the contentions raised by learned counsel on the basis of the charges framed in this case. Now we come to the merits of the case. So far as the appellant is concerned, both the Special Judge and, on appeal the High Court accepted the evidence of Lawrence, as it was corroborated in material particulars by other acceptable evidence. They concurrently found that the appellant was a party to the conspiracy. The finding is one of fact, and the practice of this Court is not to interfere with such finding except under exceptional circumstances. Learned counsel for the appellant made a serious and sustained attempt to have the said finding reopened by advancing arguments under the following three heads: (1) The High Court has failed to draw correct inferences from the facts found by it and has also drawn wrong conclusion ignoring probabilities arising in a given situation; (2) the High Court has ignored the distinction between an untruthful witness and a truthful witness, whose evidence under the rule of prudence could be accepted only in so far as it is corroborated in material particulars, and the High Court, having disbelieved Lawrence 's evidence in regard to important incidents in his narration, should have rejected his evidence in toto; and if it had done so, the question of corroboration would not arise for consideration; and (3) the independent pieces of evidence accepted by the High Court did not corroborate the evidence of Lawrence in material particulars implicating him in the crime. The first argument is a direct attack on the correctness of the finding of fact arrived at by the High Court. As we have said, the practice of this Court in an appeal under article 136 of the Constitution is not to allow such an attack except in exceptional circumstances. Learned counsel addressed at some length on this aspect of the case, and after hearing him, we were satisfied that there were no such exceptional circumstances present in this case. Our reluctance to depart from the usual practice is hightened by the fact that in the present case, so far as the appellant is concerned, there are concurrent findings of fact by both the courts. 231 The second argument is a subtle attempt to reopen the findings of fact from a different perspective. This argument is based upon a decision of this Court in Sarwan Singh vs The State of Punjab (1). In that case, Gajendragadkar, J., speaking for the Court, observed at p. 959 thus: "But it must never be forgotten that before the Court reaches the stage of considering the question of corroboration and its adequacy or otherwise, the first initial and essential question to consider is whether even as an accomplice the approver is a reliable witness. If the answer to this question is against the approver then there is an end of the matter, and no question as to whether his evidence is corroborated or not falls to be considered. In other words, the appreciation of an approver 's evidence has to satisfy a double test." Then the learned Judge proceeded to state, "We have carefully read the judgment delivered by the High Court but we find no indication in the whole of the judgment that the learned Judges considered the character of the approver 's evidence and reached the conclusion that it was the evidence given by a reliable witness." Later on the learned Judge further stated, ". . the evidence of the approver is so thoroughly discrepant that it would be difficult to resist the conclusion that the approver in the present case is a wholly unreliable witness. " Relying upon these observations, learned counsel contends that in the present case the High Court did not accept the evidence of the approver in regard to important events and therefore the High Court should have rejected his evidence without further attempting to see whether there was any corroboration in material particulars in other evidence. Before we consider this argument in the context of the facts of the present case, we would like at the outset to make some general observations. This Court could not have intended to lay down that the evidence (1) ; 232 of an approver and the corroborating pieces of evidence should be treated in two different compartments, that is to say, the Court shall have first to consider the evidence of the approver dehors the corroborated pieces of evidence and reject it if it comes to the conclusion that his evidence is unreliable; but if it comes to the conclusion that it is reliable then it will have to consider whether that evidence is corroborated by any other evidence. This Court did not lay down any such proposition. In that case it happened that the evidence of the approver was so thoroughly discrepant that the Court thought that he was a wholly unreliable witness. But in most of the cases the said two aspects would be so interconnected that it would not be possible to give a separate treatment, for as often as not the reliability of an approver 's evidence, though not exclusively, would mostly depend upon the corroborative support it derives from other unimpeachable pieces of evidence. We must also make it clear that we are not equating the evidence of Lawrence with that of an approver; nor did the Special Judge or the High Court put him exactly on that footing. The learned Special Judge in his judgment observed thus: "He (Lawrence) is obviously decoy or spy and agent provocateur and his evidence will have, therefore, to be approached with great caution and much weight cannot be attached to it unless it is corroborated by other independent evidence and circumstances in the case. . . . Not being tainted evidence, it would not suffer from a disability of being unworthy of acceptance without independent corroboration. But being interested evidence, caution requires that there should be corroboration from an independent source before its acceptance. To convict an accused on the tainted evidence of an accomplice is not illegal but it is imprudent; to convict an accused upon the partisan evidence of a person at whose instance a trap is laid by the police is neither illegal nor imprudent but inadvisable therefore, be accepted and relied upon, only if it is corroborated by other independent evidence and circumstances in the case. " 233 The learned Judges of the High Court practically adopted the same attitude in the manner of their approach to the evidence of Lawrence. The learned Judges observed: "To convict an accused upon the partisan evidence of a person at whose instance a trap is laid by the police is neither illegal nor imprudent, because it is just possible that in some cases an accomplice may give evidence because he may have a feeling in his own mind that it is a condition of his pardon to give that evidence, but no such consideration obtains in the case of the evidence of a person who is not a guilty associate in crime but who invites the police to lay a trap. All the same, as the person who lodges information with the police for the purpose of laying a trap for another is a partisan witness interested in seeing that the trap succeeds, it would be necessary and advisable to look for corroboration to his evidence before accepting it. But the degree of corroboration in the case of a tainted evidence of an accomplice would be higher than that in the case of a partisan witness. In our opinion, all these decisions would clearly establish that it would not be safe to rely on the evidence of Lawrence who is admittedly a decoy or trap witness, without his testimony being corroborated from independent sources." Even Mr. Amin, learned special counsel on behalf of the State asked the courts to proced to examine the evidence of Lawrence on the basis that he was a decoy or trap witness. We are definitely of opinion that both the courts had approached the evidence of Lawrence from a correct standpoint. Though Lawrence was not an approver, he was certainly an interested witness in the sense that he was interested to see that the trap laid by him succeeded. He could at least be equated with a partisan witness and it would not be admissible to rely upon such evidence without corroboration. It would be equally clear that his evidence was not a tainted one, but it would only make a difference in the 30 234 degree of corroboration required rather than the necessity for it. Approaching the case from this perspective in our view that is a correct one the learned Special Judge came to the following conclusion: "There was no compelling necessity for Shri Lawrence to concoct a false story against Major Barsay and the other accused. It is, therefore, clear that prima facie there is no good ground to discard the evidence of Shri Lawrence." Then the learned Special Judge considered the corroborative pieces of evidence and finally held that Lawrence 's evidence had been corroborated in material particulars in respect of the appellant. Likewise, the learned Judges of the High Court considered the evidence of Lawrence along with that of other acceptable witnesses. Though the learned Judges of the High Court rejected the evidence of Lawrence in regard to some events either because that part of the evidence was not consistent with the other parts of his evidence or with the evidence of some disinterested witnesses, they did not see any reason to reject the story given by Lawrence as a myth or a concoction. After considering the evidence, the learned Judges concluded, "We, therefore, accept Lawrence 's evidence, find that his story is probable and true and we also find that the evidence on the record justifies the finding of the trial Court that there was a conspiracy as alleged by the prosecution to smuggle goods out of the Dehu Vehicles Depot." Having accepted broadly the version given by Lawrence, the High Court took the case of each of the accused and held that in the case of accused Nos. 1 to 4 Lawrence 's evidence had been amply corroborated by other evidence in all material particulars. In these circumstances, we cannot accept the contention of learned counsel for the appellant that the High Court had rejected the evidence of Lawrence. As we have said, the High Court did not accept some parts of the evidence of Lawrence, but it had broadly accepted the version given by Lawrence in regard to the conspiracy and the manner in which the articles were smuggled 235 out of the Depot. If some of the accused were acquitted it was because there were some discrepancies in the evidence of Lawrence in respect of them and particularly because that part of his evidence was not corroborated in material particulars by other evidence. But in the case of the appellant the High Court accepted the evidence given by Lawrence and convicted the appellant because that version was corroborated in all material particulars by the evidence of other disinterested witnesses. We, therefore, reject this contention. This leads us to the consideration of the only remaining question, namely, whether Lawrence 's evidence is corroborated in material particulars implicating the appellant by other acceptable evidence. The corroboration must be by independent testimony confirming in some material particulars not only that the crime was committed but also that the appellant committed it. It is not necessary to have corroboration of all the circumstances of the case or every detail of the crime. It would be sufficient if there was corroboration as to the material circumstances of the crime and of the identity of the accused in relation to the crime. These principles have been settled in R. vs Baskerville, (1) which has rightly been considered as the locus classicus of the law of approver 's evidence and has been followed by courts in India. Looking from that aspect, both the courts have found corroboration from disinterested witnesses in material particulars implicating the appellant in the crime. Lawrence gave a detailed account of the unfurling of the scheme of fraud from the date he met Major Barsay on December 2, 1954, upto December 20, 1954, when the offending truck was obstructed by the police from proceeding further on its onward journey. Lawrence stated in his evidence that on December 3, 1954, Major Barsay told him, inter alia, that he had chalked out a detailed scheme in consultation with Kochhar to transfer all the valuable parts lying in Shed No. 48 to Shed No. 17 for the purpose of itemization, that he had 'already recalled Kochhar from (1) 236 leave of absence prior to its expiry and posted him in the Kit Stores, and that he had also posted Avatarsingh from Unfit Sub Park to the Kit Stores. The prosecution has established by clear evidence that Major Barsay was instrumental in posting Kochhar, accused No. 2, to the Kit Stores after asking him to cut short his leave which was for, a period of two months. It was also established by evidence that Major Barsay brought Avatarsingh to the Kit Stores. Though these facts might not have implicated Kochhar and Avatarsingh, they certainly corroborate the evidence of Lawrence that Major Barsay told him that these transfers were made to facilitate the implementation of the scheme. Lawrence stated in his evidence that Major Barsay told him on December 3, 1954, that he had chalked out a detailed scheme in consultation with Kochhar to transfer all the valuable parts lying in Shed No. 48 to Shed No. 17 for the purpose of itemization, and that as soon as the Board of Officers was appointed there would be a shuttle of trucks moving from Shed No. 48 to Shed No. 17 and vice versa and nobody 's suspicion would be roused if one or two trucks were taken away out of the main gate during the course of these movements of the trucks between these two sheds. There is evidence to show that a Board of Officers was appointed to do the work of itemization and that one Captain Mehendiratta was appointed the President of that Board. Lawrence said that Major Barsay told him that he would show certain boxes from Shed No. 48 to Col. Rao and tell him that they did not contain many of the articles which they were said to contain, so that Col. Rao also would not be surprised at the final result of the itemization. It has been established by other evidence that on December 8, 1954, Major Barsay went to Col. Rao and took him to Shed No. 48 and showed him the military stores that were lying there awaiting itemization. At about midday on December 18, 1954, Lawrence stated, Major Barsay met him at the Depot and told him that he and other conspirators would meet at his 237 residence to discuss about the scheme. It is in evidence that on the 18th the meeting was held as deposed to by Lawrence. Evidence of Col. Sindhi and Capt. Sharma, which was accepted by both the courts, establishes this fact. The same evidence also establishes that at that meeting Major Barsay, Saighal, Lawrence and two Sikhs were present, and though the two Sikhs were not identified to be accused Nos. 2 and 3, the presence of accused Nos. 1 and 4 and two Sikhs corroborates the evidence of Lawrence. Lawrence stated that at that meeting Major Barsay undertook to do certain things. According to Lawrence Major Barsay told the conspirators that he would detail a driver of his confidence in a vehicle for executing the plan, that he would send Kochhar to Shed No. 17, order Kochhar to transfer the itemized goods from Shed No. 17 to Shed No. 26 ostensibly for the purpose of preservation, that he would call Major Nag on Monday (December 20) and in his presence he would order Lawrence to go to the D.O.D. to bring the fire hoses. The evidence of Havaldar Pillay, Godse, Suryawanshi and G. K. Pillay establishes the fact that Barsay secured one truck and a driver for shifting of the stores from Shed No. 17 to Shed No. 26. The evidence of Jamadar Lachmansing proves that Major Barsay went to Shed No. 17 and ordered the shifting of stores from there to Shed No. 26 for conditioning and preservation. The evidence of Major Nag establishes that in his presence Major Barsay sent for Lawrence and asked the latter to go to the D.O.D. and expedite the return of the fire hoses. These established facts certainly corroborate the evidence of Lawrence as to what took place on the 18th and also his evidence that Major Barsay gave the said instructions to him in the presence of Major Nag. The evidence of Lawrence that Major Barsay told him and the other conspirators that there should be two loadings of the trucks at Shed No. 17, the first loading to carry innocuous articles and the second the articles intended to be smuggled out of the Depot, was also corroborated by disinterested evidence. Both the courts accepted that evidence. 238 Then there is evidence of the movements of Major Barsay during the crucial time when the smuggling out of the goods was scheduled to take place. The evidence of Jogendrasingh, Rambhan and Wagh shows that at about 1 10 p.m. on December 20, 1954, Major Barsay was rather worried and was moving to and fro near the main gate because he was suspecting that somebody was watching their movements. Jamadar Jogendrasingh deposed that Major Barsay asked him to tell Lawrence, "not to do it as there was something suspicious about it." Major Nag also supported this version. These nervous movements of Major Barsay certainly corroborate the evidence of Lawrence that he was the moving spirit in the conspiracy. The evidence of Lawrence that the duty of going along with the truck was allotted to his part in the conspiracy is corroborated by the circumstances establisbed by the evidence that Lawrence got into the truck near Shed No. 17 and went in the truck to its destination. The evidence of Lawrence regarding how Major Barsay directed the smuggling of the goods out of the Depot was corroborated by other independent evidence. There is evidence of Jog and Diwate to show that on December 19, in the morning, Saighal showed the spot where the transshipment was to take place to Lawrence. There is the evidence of Darekar to show that a truck was arranged and that he was asked by Yakubsaheb to take his truck to Talegaon for the transport of iron goods. There is also the evidence of Darekar and Hatnolkar to establish that accused No. 4 was waiting near the cemetry on the Talegaon Dabhade Road and that Darekar was also instructed by Saighal to park the lorry in a particular way. Then there is the evidence of the police officers that the goods brought in the military lorry were being transported into the civilian truck when they came on the scene. All this evidence supports the version of Lawrence when he said that Major Barsay gave the necessary instructions as to the manner of transport of the military goods to the civilian truck. 239 The said facts found by both the courts below implicate accused No. 1 in the matter of the preparation, laying down of the details of implementation and the actual carrying out of the scheme of smuggling the goods out of the Depot through all the stages and thereby establish that the appellant was the main conspirator and the brain behind the conspiracy. We cannot, therefore, say that the version given by Lawrence implicating accused No. 1 is not corrobo rated by other independent evidence. It follows that the conviction of the appellant by the High Court is correct. This leads us to the appeal filed by the State against the judgment of the High Court acquitting accused Nos. 2 and 3 on the ground that the evidence of Lawrence implicating them in the offence was not corroborated in material particulars by independent evidence. In this appeal also we have not allowed learned counsel for the State to canvass the correctness of the finding arrived at by the High Court on the appreciation of the evidence in the case. Taking the findings arrived at by the High Court, we find it difficult to take a different view from that taken by the High Court. In regard to accused No. 2 the High Court arrived at the following findings: (1) There is no evidence or allegation on the record to show that there was any understanding between him and Major Barsay before he left on two months leave. (2) There is no evidence that Kochhar, accused No. 2, met Lawrence on December 6, 1954. (3) Accused No. 2 moved Major Barsay by his letter (exhibit 151) to convene the itemization board. (4) Prior to the appointment of the board and its constitution, accused No. 2 ordered the shifting of the "specialist boxed kits" from Shed No. 48 to Shed No. 17, but this was done under Major Barsay 's instructions. (5) Accused No. 2 was present when Fernandez was ordered by Major Barsay to complete the identification of the first set before December 13, even by working on Sunday the 12th December, and in that connection a written order was issued by him on December 11. (6) On December 12 Lawrence persuaded accused No. 2 to go in for two 240 insurance policies. (7) Though according to Lawrence, Kochhar undertook to prepare a bogus voucher and to be at the Depot at the opening hours on Monday the 20th to prepare that voucher in the office of Lawrence, it is admitted that Kochhar refused to issue the voucher. (8) Accused No. 2 was present at Shed No. 17 when Major Barsay issued orders to shift the stores to Shed No. 26. And (9) Accused No. 2 accompanied Major Barsay to Shed No. 19 in the morning and lie was present when the truck was being loaded for the second trip at Shed No. 17. The High Court found that the said circumstances, though some of them might raise a suspicion, did not implicate accused No. 2 in the offence and they are consistent also with his innocence. Though some of the facts give rise to a suspicion, we cannot say that the High Court was wrong in holding that the said facts did not corroborate the evidence of Lawrence in implicating the said accused in the offence. Now coming to accused No. 3, the High Court found the following facts based on the evidence other than that of Lawrence: (1) Avatarsing, accused No. 3, was transferred from Unfit Sub Park to Kit Stores. (2) Accused No. 3 was a party to the shifting of stores from Shed No. 48 to Shed No. 17 even before the appointment of the board of itemization. (3) Though Lawrence stated that Avatarsing expressed his inability to push the scheme on account of Capt. Kapoor 's constant vigilance and visits to Shed No. 17, Lawrence had admitted that his first contact with Avatarsing was in the noon of 18th December. (4) There is no evidence that Avatarsing attended the meeting at Major Barsay 's on the 18th. (5) Avatarsing loaded the truck for the first trip and also for the second trip, and in loading the second trip he used the usual laborers and two outside workers. (6) After the truck was loaded, he asked Rambhan to take the truck to D. 0. D. under instructions from the superior officers. (7) The words "D. O. D." in exhibit 42, the duty slip, were not entered by Avatarsing. The High Court held that the said facts found on independent evidence did not implicate the said accused in the offence and 241 they were all consistent with his innocence. Though some of the findings give rise to suspicion we cannot say that the High Court was wrong in holding that the said facts found did not corroborate the evidence of Lawrence in implicating the accused in the offence. We, therefore, accept the finding of the High Court in regard to accused Nos. 2 and 3. In the result both the appeals fail and are dismissed. Appeals dismissed.

The appellant and five other persons, three of Them not being public servants, were charged with criminal conspiracy to dishonestly or fraudulently misappropriate or convert to their own use military stores and with dishonestly and fraudulently misappropriating the same. Sanction for prosecution of the accused was given by a Deputy Secretary on behalf of the Central Government. The accused were tried by a Special judge. The main evidence led was that of one L, a security officer. , who had been asked to join the conspiracy and who had joined it with a view to have the offenders apprehended. The Special judge convicted all the accused persons. On appeal the High Court confirmed the conviction of the appellant and one other accused now dead and acquitted the other four accused persons holding that the evidence of L was corroborated in material particulars in respect of the appellant and one other accused only. The appellant contended: (i) that the appellant who was subject to the Army Act could only be tried by a Court Martial and the Special judge had no jurisdiction to try him, (ii) that the sanction to prosecute was void as it was not expressed to be 196 made in the name of the President, (iii) that the investigation by the Inspector of Police, was illegal, (iv) that there could be no legal charge of conspiracy between accused who were public servants and accused who were not, and (v) that L was a wholly unreliable witness whose testimony ought to have been rejected totally and no question of its corroboration arose. Held, that the Special judge had jurisdiction to try the appellant for the offences charged. The Army Act does not bar the jurisdiction of criminal courts in respect of acts or omissions which are punishable under the Army Act as well as under any other law in force. The offences charged were triable both by the Special judge and by a Court Martial. In such cases section 125 of the Army Act provides that if the designated officer decides that the proceedings should be before a Court Martial he may direct the accused to be detained in military custody. But in the present case the designated officer bad not exercised his discretion and the Army Act was not in the way of the Special judge exercising his jurisdiction. Rule 3 made under section 549, Code of Criminal Procedure for persons subject to military law was applicable only to magistrates and not to a Special judge who is not a magistrate within the meaning of r. 3. Besides, section 7 of the Criminal Law (Amendment) Act, 952, provides that notwithstanding anything contained in the Code of Criminal Procedure or in "any other law" the offences specified in section 6(1) shall be triable by Special judges only. The words "any other law" included the Army Act also. The offences for which the appellant was convicted were offences specified in section 6(1) and were exclusively triable by a Special judge. Held, further, that the sanction for the prosecution of the appellant was a good and valid sanction. Article 77 of the Constitution which provides that all orders of the Central Government shall be expressed to be in the name of the President is only directory and not mandatory. Where an order was not issued in strict compliance with the provisions of article 77 it could be established by extraneous evidence that the order was made by the appropriate authority. In the present case there was uncontroverted evidence which established that the order of sanction was made by the Deputy Secretary on behalf of the Central Government in exercise of the power conferred on him under the rules delegating such power to him. The State of Bombay vs Purushottam jog Naik, [1952] S.C.R. 674, Dattareya Moreshwar Pangarkar vs The State of Bombay, ; , J. K. Gas Plant Manufacturing Co., Ltd. vs The King Emperor, , P. Joseph John vs The State of Travancore Cochin; , and Ghaio Mall & Sons vs The State of Delhi, [1959] S.C.R. 1424, applied. Held, further, that though the conditions of investigation by the Inspector of Police as laid down in section 5A, Prevention of Corruption Act were not complied with the trial. was not vitiated 197 by the illegality as it did not result in any miscarriage of justice. The powers and jurisdiction of members of the Delhi Special Police Establishment for investigation of offences in the State of Bombay had been duly extended by a notification of the Government of Bombay dated August 13, 1949, giving a general consent in respect of all the members of the establishment. It was not necessary that the consent be given to every individual member of the Establishment. H.N. Rishbud & Inder Singh vs State of Delhi, ; , followed, Held, further, that there was no defect in the charges. It was not illegal to charge public servants and persons who were not public servants with the criminal conspiracy to do certain acts for which all of them could not be convicted separately. Though all the accused were not liable for the individual offences, they were all guilty of the offence of conspiracy to do illegal acts. Held, further, that the evidence of L was reliable and that it was corroborated in material particulars so far as the appellant was concerned. Though L was not an accomplice, he was an interested witness and required corroboration. The evidence of an approver and the corroborating pieces of evidence could not be treated in two different compartments; but had to be considered together. Though some parts of the evidence of L were not accepted, his version was broadly accepted in regard to the conspiracy and the manner in which articles were smuggled out. Sarwan Singh vs The State of Punjab, ; , explained.

Appeal No. 435 of 1970. Appeal by special leave from the judgment and order dated March 28, 1969 of the Assam and Nagaland High Court in Civil Rule No. 183 of 1965. 932 Naunit Lal, for the appellant. M. C. Chagla, P. K. Goswami and R. Gopalakrishnan,for the respondent. B. Datta, for the intervener. The Judgment of the Court was delivered by Shah J. The Assam Tea Company Ltd owns,teagardens in the village of Nazira in the State of Assam. By a notification dated June 16, 1909, the Government of Bengal (which then had territorial jurisdiction over the territory now within the State of Assam) constituted a Town Committee at Nazira adjacent to the tea garden of the, Company. In 1923 the Legislature enacted the Assam Municipal Act 1 of 1923. Section 328 of the Act provided for the constitution of notified areas. By sub section (1) of section 328 the Provincial Government was authorised by notification, to signify its intention to declare that with respect to some or all of the matters upon which a municipal fund may be expended, improved arrangements are required within a specified area. After issuing such a notification the Government was competent, after six weeks from the date of Publication, and after considering the objections, if any, to declare, by notification. , the specified area or any portion thereof to be a notified area. Section 4 of the Act authorised the Provincial Government by notification, inter alia, to signify its intention to include within a municipality any local area in the vicinity of the same or exclude from a municipality any local area comprised therein. Any inhabitant of any part of a local area defined in a notification published under section 4, was entitled by virtue of section 5 to raise objections to the proposed action. The Government would, after considering the objections, inter alia, include the local area or any part thereof within the municipality or exclude it therefrom. The provisions of sections 4 and, 5 were not of their own force applicable to a notified area constituted under section 328 but by virtue of cl. (d) of, sub section (1) of section 330 it was competent to the Provincial Government to extend to any notified area the provisions of any section of the Act. By sub section (3) of section 330 it was provided : "For the purposes of any section of this Act which may be extended to a notified area, the town committee constituted for such area, under section 329. shall be deemed to be a Municipal Board under this Act and the area to be a municipality. " Notifications were issued from time to time applying certain provisions of the Assam Municipal Act, 1923. In 1951 the Government of the State of Assam issued a notification applying sections 4(1) 933 (b)& (c) and 5(1) &_(2) (b) of the Assam Municipal Act, 1923 to the notified area committee including the Nazira Town Committee. But no notification under section 328 of the Assam Municipal Act, 1923 extending the boundaries of the Nazira Town Committee area was issued. In 1957 the Assam Municipal Act, 1923 was repealed and was replaced by the Assam Municipal Act 15 of 1957. On January 6, 1964 notification was issued under section 4 (1) (b) of Act 15 of 1957 to revise the boundaries of the notified area at Nazira, and thereby included a part of the tea estate belonging to the Assam Tea Co. Ltd. in the Nazira Town Committee area. Objections submitted by the Assam Tea Company Ltd. were, considered and overruled and the Government of Assam by notification dated September 30, 1964, incorporated within the Nazira Town Committee area a part of the area of the tea garden belonging to the Company. The Company then filed a petition in the High Court of Assam challenging the validity of the notification. The High Court was of the view that the Company had provided all amenities and facilities which a municipality may provide, and since it did not appear that any "improved arrangements" could be provided by the Town Committee the notification issued by the Government was "colourable legislation" and was liable to be struck down insofar as it related to the area of the tea estate belonging to the Company. We have considered in appeal No. 2052 of 1969 State of Assam vs The Amalgamated Tea Estates Co. Ltd. & Ors.the, correctness of this decision and we have rejected it. But Mr. Chagla appearing on behalf of the Company contended that the notification dated January 6, 1964 signifying the intention of the State Government to include the area belonging to the Company with in the Nazira Town Committee and the final notification dated September 30, 1964, were unauthorised, because the provisions of sections 4 and 5 of the Assam Municipal Act 15 of 1957 were not extended to the Nazira Town Committee by notification issued under sub section (3) of section 336 of the Assam Municipal Act. Counsel invited our attention to section 2 of the Assam Municipal Act, 15 of 1957 as originally enacted. By section 2 of that Act the Assam Municipal Act, 1923 was repealed; and by cl. (b) of the proviso to that section it was provided " all municipalities constituted, limits defined. regulations and divisions made, licenses an notices issued, taxes, tolls, rates and fees imposed or assessed, budgets passed, assessments made, plans approved, permissions or sanctions granted, under the Assam Municipal Act, 1923, shall so far as they are in force at the commencement of this Act, be deemed to have been respectively constituted, defined, issued, imposed, assessed, passed, made, approved or granted under this Act, and shall 934 remain in force for the period, if any, for which they were so constituted, defined, issued, imposed, assessed, passed, made, approved or granted. " Counsel said that under the proviso, notifications issued under the: Act of 1923 were not saved and it was for the first time by the Amending Act of 1958 that the notifications issued under the Act of 1923 were sought to be saved, notwithstanding the repeal of the Assam Municipal Act of 1923. But no retrospective operation was given to the Amending Act of 1958. Counsel submitted that this attempt on the part of the Legislature to save notifications issued under the Act of 1923 was ineffective. It is true that for the existing cl. (b) of the proviso to section 2 by the new clause substituted "all municipalities constituted, limits defined, regulations and divisions made, all rules and bye laws, notifications, orders, appointments and assessments made, licences and notices issued, taxes, tolls, rates and fees imposed or assessed, budgets passed, plans approved, permissions or sanctions granted, contracts entered into, suits instituted and proceedings taken under the Assam Municipal Act, 1923" are saved from the repeal. But the Amending Act of 1958 came into force on June 13, 1958, when it was published in the Assam Gazette. The attempt to save notifications issued under the Act of 1923 by the Assam Municipal (Amendment) Act 17 of 1958 is therefore ineffective. It is unnecessary to consider whether, as suggested by counsel for the State of Assam, by virtue of section 3 3 6 (3 ) once a notification under section 4 of the Act of 1923 was issued, for all purposes a Town Committee became a municipality and on that account the notification continued to remain in operation. In our judgment, under the provisions of the Assam General Clauses Act, 1915, section 26 saves the notification in question. Section 26 provides, inter alia : "Where any enactment is repealed and re enacted with or without modification, then, unless it is otherwise expressly provided, any appointment, notification, order, scheme, rule, form, or by law, made or issued under the repealed enactment, shall so far as it is not inconsistent with the provisions re enacted, continue in force and be deemed to have been made or issued under the provisions so reenacted. . There is no express provision in the Act 15 of 1957 which supersedes the notification issued in 1995 under the Act of 1923, nor is the continuance of the notification inconsistent with any provision in the new Act. The notification must, therefore, be deemed to have remained in force and the State Government was competent in exercise of the power conferred upon it by section 4 of Act 15 of 1957 935 to include within the area of Town Committee any local area contiguous to the same. We are here dealing only with the validity of the notification issued by the State Government, and not with the validity of the, demand for licence fee or other taxes levied by the notified Town Committee. Nothing in this judgment will affect the right of the Company to challenge the validity of the demand for such taxes in appropriate proceedings. The appeal is allowed and the order passed by the High Court is set aside. The petition is dismissed with costs throughout. In all these three appeals there will be one hearing fee.

Section 12 B of the Indian Income tax Act, 1922 (inserted by Act XXII of 1947) which imposed tax on 'Capital gains ' is not ultra vires the Government of India Act, 1935. The term 'Capital 106 830 gains ' comes well within the meaning of the word 'income ' used in item No. 54 of List I of the Seventh Schedule to the Government of India Act, 1935. It is incorrect to say that income cannot signify 'Capital gains ' and it is equally an incorrect approach to hold that there is a legislative practice which recognises a clear line of demarcation between income and capital. What is relied on here as a legislative practice is nothing but the judicial interpretation given to the word 'income ' as used in the income tax and fiscal statutes. Such interpretation does not necessarily cut down the ordinary natural meaning of the word 'income ' as used in item No. 54 of List I of the Seventh Schedule to the Government of India Act, 1935. Cardinal rule of interpretation is that the words should be read in their ordinary natural and grammatical meaning. But the words in a constitutional enactment conferring legislative powers should however be construed most liberally and in their widest amplitude, Commissioner of Income tax vs Shaw Wallace & Co. (L.R. 59 I.A. 206); Ryall vs Hoare and Ryall vs Honeywill ; Californian Copper Syndicate (Limited and Reduced) vs Harris ; Wallace Brothers & Co. Ltd. vs Commissioner of Income tax [L.R. 75 I.A. ; : ; Croft vs Dunphy ; Kamakshya Narain Singh vs Commissioner of Income tax [L.R. 70 I.A. 180: ; In re The Central Provinces and Berar Act No. XIV of ; United Provinces vs Atiqa Begum ; State of Bombay and Another vs F. N. Balsara ; ; Eisner vs Macomber ; : ; Merchant 's Loan & Trust Co. vs Smietanka ; ; United States vs Stewart ; and Resch vs Federal Commissioner of Taxation ; , referred to.

Civil Appeal No. 1258 of 1969. From the Judgment and Decree dated 17 2 1969 of the Kerala High Court in Writ Appeal No. 45 of 1968. V. A. Seyid Mohammed and K. M. K. Nair for the Appellant. Ex Parte for the Respondent. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. The perennial, nagging problem of delegated legislation and the so called Henry VIII clause have again come up for decision in this appeal by the State of Kerala. Section 60 of the Madras Cooperative Societies Act 1932 and a notification issued under that provision were struck down by the High Court of Kerala on the ground of unconstitutional delegation of legislative power. Certain consequential directions were issued by the High Court. Those directions have long since worked themselves out and so the party who invoked the jurisdiction of the High Court under Article 226 of the Constitution has no longer any surviving interest. The State of Kerala is, however, interested in sustaining the validity of Section 60 and has filed this appeal. Lawyers and judges have never ceased to be interested in the question of delegated legislation and since the case, we 262 have been blessed(?) by an abundance of authority, the blessing not necessarily unmixed. We do not wish, in this case, to search for the precise principles decided in the case, nor to consider whether N. K. Papiah & Sons vs Excise Commissioner(1) beats the final retreat from the earlier position. For the purposes of this case we are content to accept the "policy" and "guidelines" theory and seek such assistance as we may derive from cases where near identical provisions have been considered. It is trite to say that the function of the State has long since ceased to be confined to the preservation of the public peace, the exaction of taxes and the defence of its frontiers. It is now the function of the State to secure to its citizens 'Social, economic and political justice ', to preserve 'liberty of thought, expression, belief, faith and worship, ' and to ensure 'equity of status and of opportunity ' and 'the dignity of the individual ' and the 'unity of the nation. That is what the Preamble to our Constitution says and that is what is elaborated in the two vital chapters of the Constitution on Fundamental Rights and Directive Principles of State Policy. The desire to attain these objectives has necessarily resulted in intense legislative activity touching every aspect of the life of the citizen and the nation. Executive activity in the field of delegated or subordinate legislation has increased in direct, geometric progression. It has to be and it is as it should be. The Parliament and the State Legislatures are not bodies of experts or specialists. They are skilled in the art of discovering the aspirations, the expectations and the needs, the limits to the patience and the acquiescence and the articulation of the views of the people whom they represent. They function best when they concern themselves with general principles, broad objectives and fundamental issues instead of technical and situational intricacies which are better left to better equipped full time expert executive bodies and specialist public servants. Parliament and the State Legislatures have neither the time nor the expertise to be involved in detail and circumstance. Nor can Parliament and the State Legislatures visualise and provide for new, strange, unforeseen and unpredictable situations arising from the complexity of modern life and the ingenuity of modern man. That is the raison d 'etre for delegated legislation. That is what makes delegated legislation inevitable and indispensable. The Indian Parliament and the State Legislatures are endowed with plenary power to legislate upon any of the subjects entrusted to them by the Constitution, subject to the limitations imposed by the Constitution itself. The power to legislate carries with it the power to delegate. But excessive delegation may amount to abdication. Delegation unlimited may invite 263 despotism uninhibited. So the theory has been evolved that the legislature cannot delegate its essential legislative function. Legislate it must by laying down policy and principle and delegate it may to fill in detail and carry out policy. The legislature may guide the delegate by speaking through the express provision empowering delegation or the other provisions of the statute, the preamble, the scheme or even the very subject matter of the statute. If guidance there is, wherever it may be found, the delegation is valid. A good deal of latitude has been held to be permissible in the case of taxing statutes and on the same principle a generous degree of latitude must be permissible in the case of welfare legislation, particularly those statutes which are designed to further the Directive Principles of State Policy. In Harishankar Bagla and Anr. vs The State of Madhya Pradesh,(1) the question arose whether Section 3 of the Essential Supplies (Temporary Powers) Act, 1946, which empowered the Central Government to make orders providing for the regulation or prohibition of the production, supply and distribution of essential commodities and trade and commerce therein was void for excessive delegation. The Court said it was not and observed: ". the legislature cannot delegate its function of laying down legislative policy in respect of a measure and its formulation as a rule of conduct. The Legislature must declare the policy of the law and the legal principles which are to control any given cases and must provide a standard to guide the officials or the body in power to execute the law. The essential legislative function consists in the determination or choice of the legislative policy and of formally enacting that policy into a binding rule of conduct. In the present case the legislature has laid down such a principle and that principle is the maintenance or increase in supply of essential commodities and of securing equitable distribution and availability at fair prices. The principle is clear and offers sufficient guidance to the Central Government in exercising its powers under section 3". In The Edward Mills Co. Ltd., Beawar vs The State of Ajmer(2), this Court considered the question whether section 27 of the Minimum Wages Act under which power was given to the Government to add to either part of the schedule any employment in respect of which it was in its opinion that minimum wages should be fixed exceeded the 264 limits of permissible delegation and was, therefore, unconstitutional. The Court held that the legislative policy was apparent on the face of the enactment which aimed at the statutory fixation of minimum wages with a view to obviate the chance of exploitation of labour. The intention of the Legislature was not to apply the Act to all industries but only to those industries where by reason of unorganised labour or want of proper arrangements for effective regulation of wages or for other causes the wages of labourers in a particular industry were very low. In enacting section 27 there was, therefore, no delegation of essential legislative power. In Pandit Banarsi Das Bhanot vs The State of Madhya Pradesh(1), this Court held that it was not unconstitutional for the Legislature to leave it to the Executive to determine details relating to the working of taxation laws such as the selection of persons on whom the tax is to be laid, the rates at which it is to be charged in respect of different classes of goods and the selection of goods in respect of which exemption from taxation might be granted etc. In Sardar Inder Singh vs The State of Rajasthan(2), the validity of s.15 of the Rajasthan (Protection of Tenants) Ordinance which authorised the Government to exempt any person or class of persons from the operation of the Act was upheld and the argument that there was impermissible delegation of legislative power was repelled on the ground that the Preamble to the Ordinance set out with sufficient clarity the policy of the Legislature. In Vasantal Maganbhai Sanjanwala vs The State of Bombay(3), section 6 (2) of the Bombay Tenancy & Agricultural Lands Act was challenged as permitting excessive delegation of legislative power as it enabled the Government to fix a lower rate of the maximum rent payable by the tenants of lands situate in any particular area or to fix such rate on any suitable cases as it thought fit. This Court noticed that the Act was undoubtedly a beneficent measure, as shown by the Preamble which stated that the object of the Act was to improve the economic and social conditions of peasants and ensure the full and efficient use of land for agricultural. Bearing in mind the Preamble and the material provisions of the Act, it was held that the power delegated was within permissible limits. 265 In Jyoti Pershad vs The Administrator for the Union Territories of Delhi,(1) Rajagopala Ayyangar, J. made some useful observations which may be extracted here: "In regard to this matter we desire to make two observations. In the context of modern conditions and the variety and complexity of the situations which present themselves for solution, it is not possible for the Legislature to envisage in detail every possibility and make provisions for them. The Legislature therefore is forced to leave the authorities created by it an ample discretion limited, however, by the guidance afforded by the Act. This is the ratio of delegated legislation, and is a process which has come to stay, and which one may be permitted to observe is not without its advantages. So long therefore as the Legislature indicates, in the operative provisions of the statute with certainty, the policy and purpose of the enactment, the mere fact that the legislation is skeletal, or the fact that a discretion is left to those entrusted with administering the law, affords no basis either for the contention that there has been an excessive delegation of legislative power as to amount to an abdication of its functions, or that the discretion vested is uncanalised and unguided as to amount to a carte blanche to discriminate. The second is that if the power or discretion has been conferred in a manner which is legal and constitutional, the fact that Parliament could possibly have made more detailed provisions, could obviously not be a ground for invalidating the law. " In Mohammad Hussain Gulam Mohammad vs The State of Bombay,(2) the question was about the vires of section 29 of the Bombay Agricultural Produce Markets Act. It gave power to the State Government to add to, or amend, or cancel any of the items of agricultural produce specified in the schedule in accordance with prevailing local conditions. The attack was on the ground that legislative power had been delegated to an extent not permissible. The Court while noticing that section 29 itself did not provide for any criterion for determining which item of agricultural produce should be put into the schedule, nevertheless upheld its vires on the ground that guidance was writ large in the various provisions and the scheme of the Act. It was observed that in each case the State Government had to consider whether the 266 volume of trade in the produce was of such a nature as to give rise to wholesale trade so as to merit inclusion in the schedule. Let us now turn to section 60 of the Madras Cooperative Societies Act, 1932 whose vires is in question and which is as follows: "section 60: The State Government may, by general or special order, exempt any registered society from any of the provisions of this Act or may direct that such provisions shall apply to such society with such modifications as may be specified in the order. " The provision is a near Henry VIII clause. But to give it a name is not to hang it. We must examine the preamble, the scheme and other available material to see if there are any discernible guidelines. Sure the Cooperative Societies Act is a welfare legislation. Its preamble proclaims: "Whereas it is expedient further to facilitate the formation and working of co operative societies for the promotion of thrift, self help and mutual aid among agriculturists and other persons with common economic needs so as to bring about better living, better business and better methods of production and for that purpose to consolidate and amend the law relating to co operative societies in the State of Madras." The policy of the Act is there and so are the guidelines. Why the legislation ? "To facilitate the formation and working of Cooperative Societies". Cooperative Societies, for what purpose ? "For the promotion of thrift, self help and mutual aid". Amongst whom ? "Among agriculturists and other persons with common economic needs". To what end ? "To bring about better living, better business and better methods of production". The objectives are clear; the guidelines are there. There are numerous provisions of the Act dealing with registration of societies, rights and liabilities of members, duties of registered societies, privileges of registered societies, property and funds of registered societies, inquiry and inspection, supersession of committees of societies, dissolution of societies, surcharge and attachment, arbitration etc. We refrain from referring to the details of the provisions except to say that they are generally designed to further the objectives set out in the preamble. But, numerous as the provisions are, they are not capable of meeting the extensive demands of the complex situations which may arise in the course of the working of the Act and the formation and the functioning of the societies. In fact, the too rigorous application of some of the provisions of the Act may itself occasionally result 267 in frustrating the very objects of the Act instead of advancing them. It is to provide for such situations that the Government is invested by section 60 with a power to relax the occasional rigour of the provisions of the Act and to advance the objects of the Act. Section 60 empowers the State Government to exempt a registered society from any of the provisions of the Act or to direct that such provision shall apply to such society with specified modifications. The power given to the Government under section 60 of the Act is to be exercised so as to advance the policy and objects of the Act, according to the guidelines as may be gleaned from the preamble and other provisions which we have already pointed out, are clear. We are therefore of the view that section 60 is not void on the ground of excessive delegation of legislative power. We so declare and otherwise dismiss the appeal. N.V.K. Appeal dismissed.

The appellants who were the assignees of a decree for specific performance of an agreement to reconvey property, filed an application for execution of the decree under Order XXI, rule 16 of the Code of Civil Procedure. Notice of the application was issued to the respondent judgment debtor as well as the original decree holder. The judgment debtor filed objections contending that the execution application was not maintainable. The application was adjourned from time to time. In the meanwhile the original decree holder and the judgement debtor moved the executing court to record full satisfaction of the decree, stating that they had entered into a compromise and that the decree was proposed to be satisfied by payment of a fixed sum of money in cash. The money was paid in cash by the judgment debtor to the original decree holder in open court and satisfaction of the decree was recorded by the Executing Court which also observed that the compromise would not have any effect whatsoever on the rights, if any, of the transferee decree holder who had already filed the execution application pursuant to the deed of assignment. The execution application filed by the appellants was thereafter taken up and dismissed on the ground that the assignees had no right to execute the decree after the judgment debtor had satisfied the original decree holder by entering into a compromise with him. In the appeal, the District Court held that the appellants had the right to execute the decree and that their right could not be defeated by the collusive compromise entered into between the judgment debtor and the original decree holder subsequent to the date of assignment and with notice of assignment. In the further appeal to the High Court by the judgment debtor, it was held that the assignee of the decree had no right to execute the decree until the assignment was recognised by the Court and until that was done, it was open to the original decree holder to put the decree in execution and it was also open to the judgment debtor to satisfy the decree fully by payment to the decree holder or by other adjustment. In the appeal to this Court by the assignees of the decree on the question whether the adjustment of the decree between the judgment debtor and the transferor decree holder barred execution of the decree by the transferee: ^ HELD: 1. The High Court was wrong in holding that the adjustment between the judgment debtor and the transferor decree holder even after notice 470 of the application under Order XXI, rule 16 had been served on the transferor and the judgment debtor barred execution of the decree by the transferee. [475 D] 2. Property in a decree must pass to the transferee under a deed of assignment when the parties to the deed of assignment intend such property to pass. It does not depend on the Court 's recognition of the transfer. Order XXI rule 16 neither expressly nor by implication provides that assignment of a decree does not take effect until rcognized by the Court. [473 D] 3. While Order XXI rule 16 enables the transferee to apply for execution of the decree, the first proviso to Order XXI rule 16 enjoins that notice of such application shall be given to the transferor and the judgment debtor and that the decree shall not be executed until the court has heard their objections, if any, to its execution. [473 E] 4. The transfer as between the original decree holder and the transferee is effected by the deed of assignment. If the judgment debtor has notice of the transfer, he cannot be permitted to defeat the rights of the transferee by entering into an adjustment with the transferor. If the judgment debtor has no notice of the transfer and enters into an adjustment with the transferor before the transferee serves him with notice under Order XXI Rule 16 the judgment debtor is protected. [473 G] In the instant case, the original decree holder and the judgment debtor had colluded to deprive the appellants of their rights under the deed of assignment and the Executing Court tacitly gave its seal of approval by permitting satisfaction of the decree to be entered despite the fact that the decree had already been assigned to the knowledge of the judgment debtor. The process of the Court cannot be reduced to a mockery and the procedure prescribed by the Code of Civil Procedure does not permit this to be done. [472 C] Dwar Buksh Sirkar vs Fatik Jali I.L.R. 26 Calcutta 250 @ 253, 254; Avrapalli Ramrao vs Kanumarlapudi Ranganayakulu and others AIR 1964 A.P. 1; Sadagopa Chariar vs Raghunatha Chariar ILR , approved. Puthiandi Mammed vs Avalil Moidin ILR , disapproved.

Appeal No. 474 of 1964. Appeal by special leave from the judgment and order dated March 14, 1963 of the Andhra Pradesh High Court in C.R.P. No. 1725 of 1959. 210 M. C. Setalvad, and T. V. R. Tatachari for the appellant. Kirpa Narain and T. Satyanarayana, for respondent Nos. 1 and 9. The Judgment of the Court was delivered by Hidayatullah J. On the application of two creditors the appellant Yenumula Mallu Dora has been adjudged insolvent by the Subordinate Judge, Kakinada and a receiving order has been passed against him. The respondents before us are one of the petitioning creditors and the legal representatives of the other petitioning creditor who died during these proceedings. The first petitioning creditor held a decree for money which he had obtained in O.S. 67 of 1949. He also held another money decree in O.S. 473 of 1948. The second petitioning creditor held a decree which she had obtained in O.S. 17 of 1955. The application was based upon three acts of insolvency which the appellant was stated to have committed and on the general facts that he was indebted to the tune of Rs. two lakhs, and was unable to pay his debts. The three acts of insolvency alleged against him were (a) evasion of arrest in execution of the money decree in O.S. 67 of 1949; (b) sale of some of his properties on September 26, 1956 in execution arising from O.S. 73 of 1952; and (c) sale of some of his properties on September 19, 1956 in execution of money decree in O.S. 9 of 1950. It was also alleged that he was fraudulently transferring properties in the name of his wife and brother in law and had suffered a collusive charge decree for maintenance 'in favour of his wife, to delay and defeat his creditors. The Subordinate Judge, Kakinada did not accept the first two acts of insolvency. The evidence regarding evasion of arrest was not found convincing and the second act of insolvency was rejected because the sale of the property was in execution of a mortgage decree. In respect of the third art of insolvency the Subordinate Judge held that it satisfied section 6(e) of the and an adjudication and a receiving order were justified in the case. An appeal was taken to the District Court at Rajahmundry (C.A. 41 of 1958) which was dismissed on October 15, 1959. A Revision Application filed under section 75 of the was dismissed by the High Court of Andhra Pradesh on March 14, 1963. The appellant, however, obtained special leave of this Court and has filed the present appeal against the order of the High Court. The contention of the appellant was, and still is, that the third act of insolvency was not established as he had deposited, within 211 one month of the sale, the entire decretal amount together with poundage and commission and the sale was set aside on his petition under Or. 21 r. 89 of the Code of Civil Procedure. He contended, therefore, that as none of the acts of insolvency remained, the petition ought to have been dismissed as incompetent or he was. entitled to have the petition dismissed in any event, under section 25 of the which allows a creditor 's petition to be dismissed on sufficient cause. He submitted that as the sale was set aside before the order of adjudication was made the preexisted sufficient cause for the dismissal of the creditors ' petition. The Subordinate Judge relying upon Venkatakrishnayya vs Malakondayya(1) and on decisions of the Lahore and the Calcutta High Courts rejected the submission and made the order against the appellant. The District Judge, Rajahmundry agreed with the, conclusion of the Subordinate Judge and the High Court rejected ' the petition for revision. In this appeal the same points are urged ' again for our acceptance. In our judgment the view of the law taken in this case by the Subordinate Judge and approved by the, District Court is right and does not warrant any interference. The object of the law of insolvency is to seize the property of ' an insolvent before he can squander it and to distribute it amongst his creditors. It is, however, not every debtor, who has borrowed ' beyond his assets or even one whose property is attached in execution of his debts, who can be subjected to such control. The jurisdiction of the court commences when certain acts take place which are known as acts of insolvency and which give a right to, his creditors to apply to the Court for his adjudication as an insolvent. The lays down in section 6 what acts. are to be regarded as acts of insolvency. It is a long list. Some are voluntary acts of the insolvent and some others, are involuntary. The involuntary acts are of a kind by which a creditor is able to, compel a debtor to disclose his insolvent condition even if the insolvent is careful enough not to commit a voluntary act of insolvency. One such act is that the insolvent has been imprisoned in execution of a decree of any court for payment of money, and another is that any of his property has been sold in execution of a decree of any court for payment of money. In this case the property of the appellant was sold on September 19, 1956 in execution of a money decree against him and therefore there is no question that he was guilty of an act of insolvency described in section 6(e); of the . (1) A.I.R, 1942 Mad, 306, 212 Under section 7, a creditor is entitled to present a petition in the Insolvency Court against a debtor if he has committed an act of insolvency provided [as laid down in section 9(i) (c)] the petition is made within three months of the act of insolvency on which the petition is grounded. In this case both these conditions are fulfilled. There is thus no doubt that the petitioning creditors ' application under section 7 complied with section 6 (e) and section 9 ( 1 ) (c) of the . The petitioning creditors alleged that the appellant was indebted to the extent of Rs. two lakhs and this was not denied by the appellant. In the trial of one of the execution petitions filed against him by a decree holder the appellant admitted that he had "no means to pay the decree debt" because "all his properties" were "under attachment and were being brought to sale". He also stated that he was not "in a position to discharge the debts". It is, therefore, clear that the appellant who was in more than embarrassed pecuniary circumstances was unable to pay his debts. It was also clear from the evidence, which the District Court and the Subordinate Judge have concurrently accepted, that he had made some transfers to screen his properties from his creditors and had suffered a decree for maintenance in a suit by his wife. In view of these facts, which the appellant cannot now deny, he is driven to support his case by argument on law. The argument, as we have seen, is two fold. We, are not inclined to accept either leg of the argument. An act of insolvency once, committed cannot be explained or purged by subsequent events. The insolvent cannot claim to wipe it off by paying some of his creditors. This is because the same act of insolvency is available to all his creditors. By satisfying one of the creditors the act of insolvency is not erased unless all creditors are satisfied because till all creditors are paid the debtor must prove his ability to meet his liabilities. In this case the petitioning creditors had their own decrees. It was in the decree of another creditor that the payment was made but only after the act of insolvency was committed. Besides the petitioning creditors there were several other creditors to whom the appellant owed large sum of money and his total debts aggregated to Rs. two lakhs. It is plain that any of the remaining creditors, including the petitioning creditors, could rely upon the act of insolvency even though one or more creditors might have been paid in full. The act of insolvency which the appellant had committed thus remained and was not purged by payment of decretal amount after the sale in execution of the money decree. 21 3 The next question is whether the Subordinate Judge should have exercised his discretion under section 25, to dismiss the petition of the creditors treating the deposit of the money as sufficient cause. Section 25 of the is, in wide terms but it is impossible to give effect to those wide terms so as to confer a jurisdiction to ignore an act of insolvency at least in cases where the debtor continues to be heavily indebted and there is no proof that he is able to pay As debts. The section reads as follows "25. Dismissal of petition. (1) In the case of a petition presented by a creditor, where the Court is not satisfied with the proof of his right to present the petition or of the service on the debtor of notice of the order admitting the petition, or of the alleged act of insolvency, or is satisfied by the debtor that he is able to pay his debts, or that for any other sufficient cause no order ought to be made, the Court shall dismiss the petition, (2). . . . . . " The section expressly mentions three circumstances in which the petition made by a creditor must be dismissed, namely, (i) the absence of the right of the creditor to make the application (ii) failure to serve the debtor with the notice of the admission of the petition; and (iii) the ability of the debtor to pay his debts. In addition, the Court has been given a discretion to dismiss the petition if it is satisfied that there is other sufficient cause for not making the order against the debtor. The last clause of the section need not necessarily be read ejusdm generis with the previous ones but even so there can be no sufficient cause if, after an act of insolvency is established, the debtor is unable to pay his debts. The discretion to dismiss the petition can only be exercised under very different circumstances. What those cases would be, it is neither easy nor necessary to specify, but examples of sufficient cause are to be found when the petition is malicious and has been made for some collateral or inequitable purpose such as putting pressure upon the debtor or for extorting money from him, or where the petitioning creditor having refused tender of money, fraudulently and maliciously files the application. An order is sometimes not made when by the receiving order the only asset of the debtor would be destroyed such as a life interest which would cease on his bankruptcy. Cases have also occurred 214 where a receiving order was not made because there were no assets and it would have been a waste of time and money to make a receiving order against the debtor. These examples merely illustrate the grounds on which orders are generally made in the exercise of the discretion conferred by the last clause of section 25. This case is clearly one which cannot be treated under that clause. There are huge debts and no means to pay even though there are properties which, if realised, may satisfy at least in part the creditors of the appellant. The appellant was clearly guilty of an act of insolvency and an act of insolvency cannot be purged by anything he may have done subsequently. There is no proof of malicious or inequitable dealing on the part of the petitioning creditors. They have proved the necessary facts and have established both the act of insolvency and the inability of the appellant to pay his debts. The appellant has not been able to prove that he is able to pay. In fact, he has admitted that he is unable to pay his debts. The High Courts have taken a similar and uniform view of such cases. These rulings are quite numerous but the following may be seen: Pratapmall Rameshwar vs Chunnilal Jahuri,(1) Lal Chand Chaughuri vs Bogha Ram and others(2) and Venkatakrishnayya vs Malakondayya(3). We do not consider it necessary to examine the facts in those cases because they apply correctly the principles, which we have set out above to the facts in the cases then present. It is, therefore, quite clear that the adjudication of the appellant and the receiving order against him were properly made. In the result the appeal fails and is dismissed. There will be no order as to costs. Appeal dismissed. (1) A.I.R. (1933) Cal. (2) A.I.R. (1938) Lah. 819, (3) A.I.R.(1942) Mad.

On the application of two creditors (respondents in this appeal) the appellant was adjudged a bankrupt by the Subordinate Judge, Kakinada, and a receiving order was passed against him. This adjudication was based on the one act of insolvency out of three alleged in the application which was accepted by the sub judge, i.e., the sale of some of his properties in execution of a money decree. Appeals against the order to the District Judge, and later to the High Court, were dismissed. It was contended on behalf of the appellant that the alleged act of insolvency was not established as he had deposited, within one month of the sale, the entire decretal amount, and the sale was set aside on a petition by him under Order 21, rule 89 of the Code of Civil Procedure; that in any event he was entitled to have the application dismissed under section 25 of the , which allows a creditor 's application to be dismissed on sufficient cause. HELD: The adjudication of the appellant as an insolvent and the receiving order against him were properly made. [214 E] An act of insolvency once committed cannot be explained or purged by subsequent events. The insolvent cannot claim to wipe it off by paying some of his creditors; the same act of insolvency is available to all his creditors and is not erased unless all creditors are satisfied. The act of insolvency which the appellant had committed had remained and was not purged by payment of the decretal amount after the sale in execution of the money decree; the respondents could therefore rely on it even though one or more creditors might have been paid in full. 1212 F H] (ii) Although section 25 of the is in wide terms, it cannot be given effect to so as to ignore an act of insolvency in cases such as the present one, where the debtor continues to be heavily indebted and there is no proof that he is able to pay his debts. [213 A B] Venkatakrishnayya vs Malakondayya, A.I.R. 1942 Mad. 306; Pratapmall Rameshwar vs Chunnilal Jahuri, A.I.R. 1933 Cal. 417 and Lal Chand Changhuri vs Bogha Ram & Ors., A.I.R. 1938 Lah. 819, referred to.

Appeal No. 2456 of 1966. Appeal from the judgment and order dated January 27, 1964 of the Patna High Court in Misc. Judicial Case No. 299 of 1958. D. Narsaraju, section K. Aiyar, R. N. Sachthey and B. D. Sharma, for the appellant. C. K. Daphtary, Narain Rao, V. D. Narayan and D. Goburdhun, for the respondent. The Judgment of the Court was delivered by Shah, J. Indetermining the taxable income of the respondent firm for the assessment year 1948 49 the Income tax Officer added to the income returned a sum of Rs. 1,60,000 as 'undisclosed receipts '. The order was confirmed in ' appeal by the Appellate Assistant Commissioner, and by the Tribunal. The Income tax Officer had in the meantime commenced a proceeding for the levy of penalty and in exercise of the power under section 28 (1) (c) of the Indian Income tax Act, 1922 he directed the respondent firm to pay Rs. 60,000 as penalty. The Appellate Assistant Commissioner in appeal confirmed the order. The Income tax Appellate Tribunal rejected the contention of the respondent that the order imposing penalty upon the firm after the original firm was dissolved was without jurisdiction. The Tribunal referred at the instance of the respondent firm the following question to the High Court of Patna for opinion; "Whether on the facts and in the circumstances of the case the imposition of penalty under section 28 (1) (c) of the Indian Income tax Act, upon the petitioner firm (respondent) as constituted at the time of levy of penalty was legal and valid?" The High Court called for a supplementary statement of the case and pursuant thereto the Tribunal submitted a statement on the specified points raised by the order of the High Court that (1)The firm which carried on the business during the calendar year 1947 was dissolved on July 7, 1951 when Butto Kristo Roy, one of the partners, died. (2)During the previous year 1947 there was no instrument of partnership in existence, but the terms of the oral partnership were the same as set out in the partnership deed dated October 17, 1949. 985 (3) The business of the firm was continued with effect from July 8, 1951 by the new firm as successor to the business of the old firm. The terms of the partnership were the same as set out in the deed dated October 17, 1949 and the partners and their shares were also the same except that Baidyanath Roy took the place of Butto Kristo Roy. (4) With effect from April 28, 1952, the business was carried on by a partnership constituted by Baidyanath Roy and Bijali Kanti Roy under an instrument dated August 27, 1952. There was no dissolution of the firm, which was carrying on the business; there was only a change in the constitution of the old firm from April 28, 1952. The High Court held that penalty could be legally levied only upon the original firm constituted in the account year relevant to the assessment year 1948 49 and not upon the new firm constituted under the deed dated April 27, 1952. The Tribunal and the High Court approached the problem before them on the assumption that the source of the power of the Income tax Officer to impose a penalty was in section 44 of the Indian Income tax Act, 1922. In so assuming, in our judgment, they were in error. Section 44 of the Indian Income tax Act, 1922, as it stood at the relevant date, in so far as it is material provided : "Where any business, profession or vocation carried on by a firm has been discontinued every person who was at the time of such discontinuance a partner of such firm shall, in respect of the income, profits and gains of the firm be jointly and severally liable to assessment under Chapter IV and for the amount of tax payable and all the provisions of Chapter IV shall, so far as may be, apply to any such assessment". The section is fairly plain : it applies to cases of discontinuance of the business of a firm and not where there is dissolution of the firm but not discontinuance of its business. In section M. section Karuppiah Pillai vs Commissioner of Income tax, Madras(1), in dealing with the effect of section 44 of the Indian Income tax Act, 1922, before it was amended by Act 7 of 1939, a Full Bench of the Madras High Court observed "This section (s.44) only applies when there has been discontinuance of the, business, The section (1) 911.T.R. I. 986 says that if a business is discontinued the partners shall nevertheless be jointly and severally liable for the profits which had been earned". In Shivram Poddar vs Income tax Officer, Central Circle II, Calcutta and Anr.(1) this Court examined the scheme of section 44 (before it was amended by the Finance Act of 1958) and its inter relation with the provisions of sections 25(1), (2), 26(1), (2) and 28 (1) (c) in some detail. The Court observed : "Section 44 operates in two classes of cases; where there is discontinuance of business, profession or vocation carried on by a firm or association, and where there is dissolution of an association. It follows that mere dissolution of a firm without discontinuance of the business will not attract the application of s.44 of the Act. . The reason for this distinction appears from the scheme of the Income tax Act in its relation to assessment of the income of a firm. A firm whether registered or unregistered is recognised under the Act as a unit of assessment (sections 3 and 2(2)), and its income is computed under clauses (3) and (4) of section 23. as the income of any other unit. Section 25(1) relates to assessment in cases of a discontinued business whether the business is carried on by a firm or by any other person. . . Then there is the special provision relating to assessment when at the time of making an assessment it is found that a change has occurred in the constitution of a firm, or a firm has been newly constituted : section 26(1). The date on which the change has occurred is immaterial; it may be in the year of account, in the year of assessment or even after the close of the year of assessment, The Income fax Officer has under section 26(1) to assess the firm as constituted at the time of making the assessment, but the income, profits and gains of the previous year have, for the purpose of inclusion in the total income of the partners, to be apportioned between the partners who were entitled to receive the same. Subsection (2) of section 26 relates to assessment in the case of succession to a person (which expression includes a firm) carrying on a business by another person in such capacity. . . Discontinuance of business has the same connotation in section 44 as if has in section 25 of the Act; it does not (1) 987 cover mere change in ownership or in the constitution of the unit of assessment. Section 44 is, therefore, attracted only when the business of a firm is discontinued, i.e. when there is complete cessation of the busi ness and not when there is a change in the ownership of the firm, or in its constitution, because by reconstitution of the firm, no change is brought in the personality of the firm, and succession to the business and not discontinuance of the business results. . But the Income tax Act recognises a firm for purposes of assessment as a unit independent of the partners constituting it; it invests the firm with a personality which survives reconstitution. A firm discontinuing its business may be assessed in the manner provided by section 25(1) in the year of account in which it discontinues its business; it may also be assessed in the year of assessment. In either case it is the assessment of the income of the firm. Where the firm is dissolved, but the business is not discontinued, there being change in the constitution of the firm, assessment has to be made under section 26 (1), and if there be succession to the business assessment has to be made under section 26(2). The provisions relating to assessment on reconstituted or newly constituted firms, and on succession to the business are obligatory. Therefore, even when there is change in the ownership of the business carried on by a firm on reconstitution or because of a new constitution, assessment must still be made upon the firm. When there is succession, the successor and the person succeeded have to be assessed each in respect of his actual share. This scheme of assessment fumishes the reason for omitting reference to dissolution of a firm from section 44 when such dissolution is not accompanied by discontinuance of the business". Two other cases decided by this Court may be briefly noticed. In C. A. Abraham vs Income tax Officer, Kottayam and Another(1) there was discontinuance of the business of the firm consequent upon dissolution of the firm, section 44 was held applicable, and it was held that imposition or penalty being a process of assessment the. Income tax Officer was not incompetent to levy penalty after discontinuance of the business. In Commissioner of Income tax, Madras and Another vs section V. Angidi Chettiar (2) this Court held that the Income tax Officer could exercise under section 44 read with section 28 power to impose penalty upon the firm which discontinued its business on dissolution caused by the death of one of the partners (1) (2) 988 Section 44 therefore only applied to those cases in which there had been discontinuance of the business and not to case, in which the business continued after reconstitution of the firm or there was succession to the business. Cases of reconstitution of the firm or succession to the business of the firm are covered by sections 26(1) and (2). "Assessment" in Chapter IV of the Income tax Act, 1922, includes a proceeding for imposition of penalty. Section 28 of the Act authorises the Income tax Officer, if satisfied, in the course of any proceeding under the Act that any person has, inter alia, concealed the particulars of his income or deliberately furnished inaccurate particulars of such income, to direct that such person shall pay by way of penalty, a sum of money not exceeding the amount specified therein in addition to the incometax and super tax payable by such person. The expression " person" includes for the purpose of section 28, a firm registered or unregistered. If there is reconstitution of the firm, by virtue of section 26, the Income tax Officer will in imposing the penalty proceed against the firm. If there is discontinuance of the business penalty will be imposed against the partners of the firm. Before the Tribunal and the High Court the case was argued on the footing that section 44 alone was applicable. Whether under the terms of section 26 read with section 28, penalty may be imposed upon the new partners for the failure of the partners of the firm constituted in the year of account relating to the assessment 1948 49 was never investigated. The question raised by the Tribunal is in terms sufficiently comprehensive to embrace an enquiry whether partners of the firm in existence on July 30, 1954, were liable to be assessed to penalty as successors in interest of the partners of the original firm in existence in the year of account relating to the assessment year 1948 49. But in a reference under section 66 of the Indian Income tax Act, 1922, only the question which was either raised or argued before the Tribunal may be answered, even if the language of the question framed by the Tribunal may apparently include an enquiry into other matters which could have been, but were not, raised or argued. The appeal fails and is dismissed. In the circumstances of the case there will be no order as to costs in this Court. G.C. Appeal dismissed.

The Geneva Conventions Act 6 of 1960 was passed by the Indian Parliament to enable effect to be given to the International Conventions done at Geneva in 1949. India and Portugal have both signed and ratified the Conventions. The four Conventions were adopted in as many Schedules to the Act. 'Mc Fourth Convention was meant to apply to all cases of partial or total occupation of the territory of the contracting parties and gave protection to persons who, found themselves in case of a conflict or occupation in the hands of a Party to the conflict or Occupying Power of which they were not nationals. In the case of occupied territory the Convention applies under article 6 for a period of one year after the general close of Military operations, but during the period of occupation the Occupying Power is bound by certain Articles including, inter alia, articles 1 12, 47 and 49. By article 47 protected persons in occupied territory can not be deprived of the benefits of the Convention despite any change introduced as a result of the occupation or even annexation of whole or part of the territory by the Occupying Power. article 49 forbids the deportation of protected persons 'from the occupied territory. There is no definition of the term 'occupied ' in the Geneva Conventions but the Hague Regulations to which the Conventions are made supplementary defined a territory as occupied when it finds itself 'in fact placed under the authority of a hostile Army '. The territory of Goa was a Portuguese colony for about 450 years, having been seized by force of arms. On December 19, 1961 Goa was occupied by Indian Armed Forces following a short military action. It then came under Indian Administration from December 20, 1961 and was governed under the Goa, Daman and Diu (Administration) Ordinance 1962 promulgated by the President of India. The Ordinance was replaced on March 27, 1962 by Act 1 of 1962. The same day the Constitution (Twelth Amendment) Act 1962 was enacted and was deemed to have come into force on December 20,, 1961. By this amendment Goa was included in the Union Territories and a reference to Goa was inserted in article 240 of the Constitution. Indian laws including the Citizenship Act of 1955, the and the were extended to Goa. The Central Government also promulgated under section 7 of the , the Goa, Daman and Diu (Citizenship) Order 1962. The second paragraph of the order conferred Indian Citizenship on certain classes of persons in these terri tories, giving an option to those desirous of retaining their previous citizenship or nationality of another country to make a declaration to that effect within one month of the Order. 88 The appellant who was a resident of Goa made pursuant to the above order his declaration of Portuguese nationality. He was allowed to stay in India under a temporary residential permit till November 13. , 1964. After that date he did not ask for a renewal of the permit. The Lt. Governor of Goa empowered under article 239 of the Constitution ordered him to leave India. For disobeying the order he was prosecuted under section 14 read with section 3 (2) (c) of the . Being convicted he appealed unsuccessfully to the Court of Session. His revision petition being rejected by the Judicial Commissioner, he appealed by special leave to this Court. The contention on behalf of the appellant were based on the Geneva Conventions which it was said had become a part of the law of India under Act 6 of 1960. It was urged that after the United Nations Charter the acquisition of territory in International Law by 'force of arms could not confer title. The amendment of the Constitution only legalised the annexation so far as India was concerned but in International Law the territory remained occupied because it had neither been ceded, nor had the Occupying Power withdrawn. As a result, it was contended, the protection of articles 47 and 49 continued to be available to the appellant and by disobeying the deportation order he did not commit any offence. HELD : (i) The appellant 's argument overlooked the cardinal principle of international law that the reception and residence of an alien is a matter of discretion and every State has by reason of its own territorial supremacy not only the legal right but also the competence to exclude aliens from the whole or any part of its territory. Accordingly every country has adopted the passport system which document certifies nationality and entry into any State is only possible with the concurrence of the State. Again a State exercises territorial supremacy over persons in its territory, whether its own subjects or aliens, and can make laws for regulating the entry, residence and eviction of aliens. Therefore the application of the , the and Orders passed under them, to the appellant who had chosen Portuguese nationality was legally competent. There is authority for the proposition that an alien excluded from the territory of a State cannot maintain an action in a Municipal Court to enforce his right. [92 H 93 C] Oppen them International Law (Vol. 1) pp. 675/676, Brierly Law of Nations p. 217, and Musgrove vs Chun Teeong Toy, , referred to. (ii)The Geneva Conventions Act also gives no specific right to anyone to approach the Court. By itself it gives no special remedy. It does give indirect protection by providing for penalties for breach of Convention. The Conventions are not made enforceable by Government against itself, nor does the Act give a cause of action to any party, for the enforcement of the Conventions. Thus there is only an obligation undertaken by the Government of India to respect the Conventions regarding the treatment of civilian population but there is no right created in favour of protected which the court has been asked to enforce. If there is no provision of law which the courts can enforce the court may be powerless and has to leave the matter to the 'indignation of mankind '. [97 B C] (iii)The Geneva Conventions too did not support the appellant 's claim to the benefit of article 49 of the Fourth Convention on the basis that Goa continued, even after its annexation by India, to be occupied territory B within the meaning of article 47. (a)In the Hague Regulations to which the Geneva Conventions were supplementary the definition of 'occupation ' shows that a territory is con 89 sidered as occupied when it finds itself in fact placed under the authority of a hostile army. This means that occupation is by military authorities i.e. belligerent occupation. Under belligerent occupation, which is a de facto situation, the Occupied Power is not deprived of its sovereignty or its statehood. All that happens is that pro tempore the Occupied Power cannot exercise its rights, its Government cannot function and authority is exercised by the occupying force. In this connection the courts must take the Facts of State from the declaration of the State authorities. [99 C F] United States vs Attstoctter et tit, (1947) U.S. Military Tribunal, Nuremburg L.R. 3 T.W.C. vi, 34, referred to. (b) Annexation as distinguished from belligerent occupation occurs when the Occupying Power acquires and makes the occupied territory its own. Annexation gives a de jure right to administer the territory. Annexation means that there is not only possession but uncontested sovereignty over the territory. [99 F G] Greenspan, The Modern Law of Land Warfare, p. 215; referred to. There is however difference between true annexation on the one hand and premature annexation or 'anticipated annexation ' on the other. Annexation is premature so long as hostilities are continuing and there is an opposing army in the field even if the Occupied Power is wholly excluded from the territory. Anticipated annexation by unilateral action is not true annexation. True annexation is only so when the territory is conquered and subjugated. [99 C H; 100 A B] Oppenbeim : International Law (7th Edn.) pp. 846 847 (Vol. 1), 566 (Vol. 1), pp. 846 847 (Vol. 11), 430 439 (Vol. 11) and 599 et seq (Vol. 11); Greenspan pp. 215 et seq 600 603, Gould : Introduction to International Law pp. 652 656, 662 663; Brierly : Law of Nations, p. 155, referred to. (c) When Conventions lays down that annexation has no effect they speak of premature or anticipated annexation. It was so held by the Nuremburg Tribunal and the experts who drafted the Convention were inclined to add the word 'alleged ' before 'annexation ' in article 47 to distinguish between annexation following conquest and subjugation and annexation made while hostilities were going on subjugation puts an end to the State of war and destroys the source of authority of the existing Government. In subjugation which is recognised as one of the modes of acquiring title not only the de facto but also the de jure title passes to the conqueror. After subjugation the inhabitants must obey the laws such as they are and not resist them. [10C D] (d) Under article 6 the Convention continues to apply to occupied territory for one year after the general close of hostilities for the reason that if the Occupied Power turns victorious the land would be freed in one year, and if the Occupying Power remains victorious, as hostilities cease, strong measures against the civilian population are no longer necessary. Otherwise also, occupation, which means belligerent occupation comes to an end when hostilities cease and the territory becomes a part of the Occupying Power. [100 F G] (e) Title to new territory is not dependent on recognition. Despite the Stimson doctrine the conquest of Abyssinia by Italy was recognised because it was though that the State of affairs had come to stay. Even after the adoption of the United Nations Charter events since the Second 2Sup. CT/69 7 90 World War have shown that transfer of title to territory by conquest is still recognised. If cession after defeat can create title, occupation combined with absence of opposition must lead to the same result. [100 H 101 B] (f)In the present case the military engagement was only a few hours duration and there was no resistance at all. It was hardly necessary to try to establish title by history traced to the early days nor any room for Schwarzenburger 's thesis that title is relative and grows with recognition. True annexation followed here so close upon military occupation as to leave no real hiatus. True annexation by conquest and subjugation was complete on December 20, 1961 and the Geneva Convention ceased to apply 'from that date. It was not disputed that the annexation was lawful. Therefore since occupation in the sense used in article 47 had ceased the protection must cease also. [101 C F] Minquiers and Ecrenos, 1953 (I.C.J.) 47 and Schwarzenburger : A Manual of International Law, 5th Edn. p. 12, referred to. (iv)The national status of subject of the subjugated State is a matter for the State and courts of law can have no say in the matter. Having chosen Portuguese nationality the appellant could only stay in India on taking out a permit. He was therefore rightly convicted under the law applicable to him. [101 H 102 B] Oppenheim International Law, Vol. 1 p. 573, referred to. [On the view taken it was not considered necessary to. decide the question whether deportation was an Act of State and the Municipal Courts could therefore give no remedy.] [101 G]

Appeal No. 587 ,of 1963. Appeal by special leave from the judgment and order dated November 30, 1960 of the Madhya Pradesh High Court, in Miscellaneous Civil Case No. 73 of 1960. K.N. Rajagopal Sastri and R. N. sachthev, for the appellant. S.K. Kapoor, section Murty and K. K. fain, for the respondent, 811 April 17, 1964. The judgment of the Court was delivered by SIKRI, J. The respondent, Swadeshi Cotton & Flour Mills, hereinafter referred to as the assessee, is a limited company which owns and runs a textile mill at Indore. For, the assessment year 1950 51 (accounting year calendar year 1949), which was its first year of assessment under the Indian Income tax Act, 1922 (hereinafter referred to as the Act) it claimed that under section 10(2)(x) of the Act it was entitled to an allowance in respect of the sum of Rs. 1,08,325/ which it had paid as bonus for the year 1947 in the calendar year 1949, as a result of the award of the Industrial Tribunal, dated January 13, 1949. The claim of the assessee was not accepted by the Income Tax authorities. The Appellate Tribunal held that it was a liability relating to an earlier year and not the year 1949. However, on an application by the assessee it stated a case and referred two questions. We are concerned only with one which reads thus: "Whether on the facts and in the circumstances of the case the assessee is entitled to claim a deduction of bonus of Rs. 1,08,325/ relating to the calendar year 1947 in the assessment year 1950 51? The High Court of Madhya Pradesh answered the question in the affirmative. The appellant, having failed to get a certificate under section 66A(2) of the Act, obtained special leave from this Court, and that is how the appeal is before us. The facts and circumstances referred to in the question have been set out in the statement of the case. Unfortunately, the facts are meagre, but since the appellant is content to base his case on a few facts, which will be referred to shortly, it is not necessary to call for a further statement of the case. The facts, in brief, are as follows. The assessee paid as bonus to its employees the sum of Rs. 1,08,325/9/3 for the calendar year 1947 in terms of an award made on January 13, 1949 under the Industrial Disputes Act. This amount was debited by the assessee in its profit and loss account for the year 1948 and the corresponding credit was given to the bonus payable account. The books for 1948 had not been closed till the date of order of the Industrial Tribunal, January 13, 1949. This bonus was in fact paid to the employees in the calendar year 1949, the relevant assessment year being 1950 51. The Appellate Assistant Commissioner had further found that upto 1946 when the order for payment of bonus used to be received before the company 's accounts for the year were finalised, the amount of bonus used to be in fact 812 debited to the profit and loss account of the respective year. this finding is repeated by the Appellate Tribunal in its appellate order. On these facts the learned counsel for the appellant, ,Mr. Sastri, contends that according to the mercantile system of accounting, which is followed by the assessee, and on which its profits have been computed for the accounting calendar year 1949, the year to which the liability is properly attributable is the calendar year 1947 and not 1949. He says that it was a legal liability of the assessee which arose in 1947 and should have been estimated and put into the accounts for 1947. In the alternative he has invited us to reopen the accounts for the year 1947, following the practice which,according to him, obtains in England. Inour opinion, the answer to the question must depend on theproper interpretation of section 10(2)(x), read with section 10(5), of theAct. These provisions read as follows: "section 10(2)(x) Any sum paid to an employee as bonus or commission for services rendered, where such sum would not have been payable to him as profits or dividend if it had not been paid as bonus or commission; Provided that the amount of the bonus or commission is of a reasonable amount with reference to (a)the pay of the employee and the conditions of his service , (b)the profits of the business, profession or vocation for the year in question; and (c)the general practice in similar businesses, professions or vocations. " section 10(5) In sub section (2), "paid" means actually paid or incurred according to the method of accounting upon the basis of which the profits or gains are computed under this section;. " If we insert the definition of the word 'paid ' in sub cl. (x), it would read as follows: any sum actually paid or incurred according to the method 'of accounting upon the basis of which the profits or gains are computed under this section, to an employee as bonus. " As the assessee 's profits and gains have been computed according to the mercantile system, the question, using for .he time being the terms of the clauses, comes to this: "Has this sum of Rs. 1,08,325/ been incurred by the assessee according to the mercantile system in the calendar year 1947 or 1949?" 813 At first sight the sentence does not read well, but the meaning of the word 'incur ' includes 'to become liable to ' Therefore, the question boils down to: "In what year did the liability of this sum of Rs. 1,08,325/ arise, according to the mercantile system ? " The mercantile system of accounting was explained in a judgment of this Court in Keshav Mills Ltd. vs Commis sioner of Income Tax, Bombay(1) thus: "That system brings into credit what is duc, immediately it becomes legally due and before it is actually received, and it brings into debit expenditure the amount for which a legal liability has been incurred before it is actually disbursed. " These observations were quoted with approval in Calcutta ,Co. Ltd. vs Commissioner of Income Tax, West Bengal(2). On the facts of this case, when did the legal liability arise in respect of the bonus? This depends on the facts of the case and the nature of the bonus awarded in this case. This Court has examined the nature of profit bonus it is common round, that the bonus with which we are concerned with was a profit bonus in various cases. It is explained in Muir Mills vs Suti Mills Mazdoor Union(3) that "there .are two conditions which have to be satisfied before a demand for bonus can be justified and they are (1) when 'wages fall short of the living standard, and (2) the industry makes huge profits part of which are due to the contribution 'Which the workmen make in increasing production. The demand for bonus becomes an industrial claim when either or both these conditions are satisfied. " This matter was again considered in the case of Associated Cement Co. vs Their Workmen(4). This Court observed: "It is relevant to add that in dealing with the concept of bonus this Court ruled that bonus is neither a gratuitous payment made by the employer to his workmen nor can it be regarded as a deferred wage. According to this decision, 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 can be legitimately made." ; (2) ; ; (4) 814 In 1961, this Court was able to say that "the right to claim bonus which has been universally recognised by indus trial adjudication in cases of employment falling under the said Act has now attained the status of a legal right. Bonus can be claimed as a matter of right provided of course by 'the application of the Full Bench formula it is shown that for the relevant year the employer has sufficient available surplus in hand." (Vide Gajendragadkar, J., as lie then was, in Workmen vs Hercules Insurance Co.(1). The Indian Tea Association vs Workmen(2) this Court held that "the profit bonus can be awarded only by reference to a relevant year and a claim for such bonus has therefore to be made from year to year and has to be settled either amicably between the parties or if a reference is made, it has to be determined by Industrial adjudication. A general claim for the introduction of profit bonus cannot be made or entertained in the form in which it has been done in the present proceedings. " It follows from the above decisions of this Court that: (a) workmen are entitled to make a claim to profit bonus if certain conditions are satisfied; (b) the workmen have to make a claim from year to year; (c) this claim has either to be settled amicably or by industrial adjudication; and (d) if there is a loss or if no claim is made, no bonus will be permissible. In our opinion it is only when the claim to profit bonus, if made, is settled amicably or by industrial adjudication that a liability is incurred by the employer, who follows the mercantile system of accounting, within section 10(2)(x), read with section 10(5) of the Act. On the facts of this case, it is clear that it was only in 1940 that the claim to profit bonus was settled by an award of the Industrial Tribunal. Therefore, the only year the liabiiity can be properly attributed to is 1949, and hence we are of the opinion that the High Court was right in answering the question in favour of the assessee. The second contention of the learned counsel does not appeal to us. We are of the opinion that this system of reopening accounts does not fit in with the scheme of the Indian Income Tax Act. We have already held in Commissioner of Income Tax, Madras vs A. Gajapathy Naidu, Madras(,) that as far as receipts are concerned, there ,an be no reopening ; (2) [1962] Supp. (1) S.C.R. 557. (3)A.I.R. 815 of accounts. The same would be the position in respect of expenses. But even in En land accounts are not opened in every case. Halsbury gives various instances in footnote (m) at p. 148. Vol.20. Mr. Sastri has relied on various English cases but it is unnecessary to refer to them as Lord Radcliffe explains the position in England, in Southern Railway of Peru Ltd. vs Owen(1) thus: "The courts have not found it impossible hitherto to make considerable adjustments in the actual fall of receipts or payments in order to arrive at a truer statement of the profits of successive years. After all, that is why income and expenditure accounting is preferred to cash accounting for this purpose. As I understand the matter, the principle that justified the attribution of something that was in fact, received in one year to the profits of an earlier year, as in such cases as Isaac Holden and Sons vs Inland Revenue Comrs. and Newcastle Breweries Ltd. vs Inland Revenue Comrs. was just this, that the payment had been earned by services given in earlier year and, therefore, a true statement of profit required that the year which had borne the burden of the cost should have appropriated to it the benefit of the receipt. " The principle mentioned by Lord Radcliffe would not apply to a profit bonus. As stated above, a profit bonus is strictly not wages, at least not for the purpose of computing liability to income tax; it is not an expense, in the ordinary sense of the term, incurred for the purpose of earning profits. A fortiori profits have already been made. It is more like sharing of profits on the basis of a certain formula. One other point raised by Mr. Sastri remains. He urged that the word "for the year in question" in the proviso to sub section 10(2)(x) mean "for the year in which allowance is claimed. " We are unable to agree with him. The words 'for the year in question ' mean the year in respect which bonus is paid. In the result, the appeal fails and is dismissed with costs. Appeal dismissed.

The respondent company paid to its employees Rs. 1,08,325/ as bonus for the year 1947 in the calendar year 1949, as a result of the award of the Industrial Tribunal dated January 13, 1949. This amount was debited by the company in its profit and loss account for the year 1948 and the corresponding credit was given to the bonus payable account. The books for 1948 were not closed till the date of the award of the Industrial Tribunal. For the relevant assessment year, 1950 51, the company claimed that under section 10(2)(x) of the Indian Income tax Act, 1922, it was entitled to an allowance in respect of the amount paid as bonus, but the claim was rejected by the Income tax authorities on the ground that according to the mercantile system of accounting which was followed by the assessee the year to which the liability was properly attributable was the calendar year 1947 and not 1949. It was the case of the Income tax authorities that it was a legal liability of the assessee which arose in 1947 and should have been estimated and Put into the accounts for 1947, and that, if necessary, the amounts for the year 1947 should be reopened. It was admitted that the bonus in the instant case was a profit bonus. Held:(i) It was only when the claim to profit bonus, if made, was settled amicably or by industrial adjudication that a liability was incurred by the employer, who followed the mercantile system, within section 10(2)(x), read with section 10(5), of the Indian Income tax Act, 1922; and as it was only in 1949 that the claim to profit bonus was settled by an award of the Industrial Tribunal, the only year the liability could be properly attributed to was 1949. (ii) The system of reopening accounts was not applicable under thescheme of the Indian Income tax Act. (iii) The words "Year in question." in proviso (b) to s.10 (2)(x) of the Act meant "year in respect of which bonus was paid".

Appeal No. 131 of 1993. From the Judgment and Order dated 17.12.1991 of the Himachal Pradesh High Court in Civil Revision No. 210 of 1990. P.P. Rao and Ashok K. Mahajan for the Appellants. D.D. Thakur, N.N. Bhat, E.C. Agrawala, A.V. Palli and Ms. Purnima Bhat for the Respondent. The Judgment of the Court was delivered by YOGESHWAR DAYAL J. Special leave granted. With the consent of learned counsel for the parties, the appeal itself was heard. The respondent is a tenant at the rate of Rs. 183.33 per month in the premises in dispute i.e. Shop No. 50, The Mall Shimla. On 7th March, 1983, late Smt. Dhani Devi, Predecessor in interest of appellant No. 2 and Shri Madan Mohan, appellant No.1, filed an application for eviction of the respondent on various grounds. One of the grounds on which the eviction was claimed was non payment of rent. It was stated in eviction petition that the respondent was in arrears of rent with effect from 1.3.1980 to 28.2.1983. The Rent Controller on 29.7.1986 passed an order of eviction on the ground of non payment of arrears of rent. The operative part of the said order is as under: "In the tight of my finding on issue No.1 above, the application is allowed on the ground of non payment of arrears of rent and the petition fails on other grounds. However, the respondent shall not be evicted from the premises in question if he pays to the petitioner or deposit in this court a sum of Rs. 6,600, being arrears of rent from 1.3.1980 to 28.2.1983 @ 2,200 p.a. plus interest thereon @ 6% p.a. amounting to Rs. 609.39, upto 28.2.1983and further interest on Rs. 6,600/ @ 6% p.a. from 1.3.1983 till 28.8.1986 plus costs assessed at Rs. 100 within a period of 30 days from today. ' On 13.8.1986 the respondent deposited a sum of Rs. 8,500 in the court of the Rent Controller, Shimla. According to the appellants, decree holders, the amount due inclusive of interest and costs upto 29.7.1986 was Rs. 8,661.29 and till the date of deposit it worked out to Rs. 8,677.79 if the 113 interest was to be calculated at the ordered rate till 13.8.1986. According to the appellants the amount deposited was not in accordance with the order of the ejectment dated 29th July, 1986 and was short, and they filed the execution petition before the Rent Controller seeking possession of the suit premises. On the execution petition being opposed, the Rent Controller framed the following two issues: "(a) Whether the tender made by the respondent of the rent amount is short as alleged? (b) Relief" By an order dated 18.5.1990 the Rent Controller while deciding issue No. 1 held that the tender made by the respondent was short to the tune of Rs. 161.29. However, while deciding issue No.2, the Rent Controller allowed 15 days ' time from the date of the order for deposit of the said amount. The appellants being aggrieved by the order of the Rent Controller dated 18.5.1990 filed revision petition in the High Court. It was submitted on behalf of the appellants that the executing court had no jurisdiction to extend the time for making good the deficiency of. 161.29 inasmuch as since period of 30 days has been fixed by the Himachal Pradesh Urban Rent Control Act, 1987 (hereinafter referred to as 'the Act ') itself, the court could not either enlarge or abridge this period. By the impugned judgment dated 17.12.1991, the High Court dismissed the revision petition. The High Court while interpreting the words "amount due" occurring in the third proviso to Section 14(2) (i) of the Act held that these words referred to arrears of rent only and do not include interest and costs. It will be noticed that neither of the parties had challenged the order 29.7.1986 by which the order of eviction was passed on the ground of non payment of rent against the respondent but the respondent had been given the liberty of avoiding eviction provided he deposited the amounts as stated in the order within the period of 30days from the date of the said order. Before the High Court it was submitted on behalf of the appellants 114 that the executing court had no jurisdiction to extend the time to make good the deficiency in the amount as directed by the order dated 29.7.1986. It was submitted on behalf of the appellants that since the period of 30 days had been fixed in the Act itself the court could not enlarge or abridge this period. The High Court agreed with this submission but posed a question for itself, whether short fall of Rs. 161.29 which had been ordered to be deposited constitutes arrears of rent or interest and costs. While following an earlier decision of the same High Court reported as Om Parkash vs Sarla Kumari & Ors., 1991 (1) Sim. L.C. 45 interpreted the word "amount due" occurring in the third proviso to Section 14(2)(i) of the Act wherein it had been held that in order to save eviction the tenant is required to deposit only arrears of rent due at the time of filing application for eviction and not arrears of rent together with interest and costs within the statutory period of 30 days from the date of eviction order. After answering the question the High Court took the view that the deficiency of Rs. 161.29 pertains to interest and costs. So far as the arrears of rent which amountedto Rs. 6,600 for the period in question i.e. from 1.3.1980 to 28.3.1983 at the rate of Rs. 2,200 p.a. is concerned, it had been deposited within 30days. In view of this finding the High Court was of the view that the respondent was not liable to be evicted. High Court also held that the order of the executing court extending time to deposit Rs. 161.29 in pursuance of its order dated 29.7.1986 is of no consequence. The relevant part of Section 14 of the Act may be noticed: '14. Eviction of tenant (1) A tenant in possession of a building or rented land shall not be evicted therefrom in execution of a decre passed before or after the commencement of this Act or otherwise, whether before or after the termination of the tenancy, except in accordance with the provisions of this Act. (2) A landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf. If the Controller, after giving the tenant a reasonable opportunity of showing cause against the applicant, is satisfied (i) that the tenant has not paid or tendered the rent due from him in respect of the building or rented land within fifteen days 115 after the expiry of the time fixed in the agreement of tenancy with his landlord or in the absence of any such agreement by the last day of the month next following that for which the rent is payable: Provided that if the tenant on the first hearing of the application for ejectment after due service pays or tenders the arrears of rent and interest at the rate of 9 per cent per annum on such arrears together with the cost of application assessed by the Controller, the tenant shall be deemed to have duly paid or tendered the rent within time aforesaid: Provided further that if the arrears pertain to the period prior to the appointed day, the rate of interest shall be calculated at the rate of 6 per cent per annum: Provided further that the tenant against whom the Controller has made an order for eviction on the ground of non payment of rent due from him, shall not be evicted as a result of his order, if the tenant pays the amount due within a period of 30 days from the date of order; or (ii). ; or (iii) . ; or (iV). ; or (v). ; the Controller may make an order directing the tenant to put the landlord in possession of the building or rented land and if the Controller is not so satisfied he shall make an order rejecting the application:" A reading of the aforesaid relevant part of the Section shows that sub section (1) of Section 14 creates a ban against the eviction of a tenant except in accordance with the provisions of the Act. The ban is liable to be lifted. Sub section (2) of Section 14 provides the circumstances in which the ban is partially lifted. It contemplates that where an eviction petition is filed, inter alia, on the ground of non payment of rent by the landlord, 116 the Controller has to be satisfied that the tenant has neither paid nor tendered the rent in the circumstances mentioned in clause (i) of sub section (2) of Section 14. He has to arrive at this satisfaction after giving a reasonable opportunity of showing cause against it to the tenant. But there may be cases where the tenant, on being given notice of such an application for eviction, may like to contest or not to contest the application. The tenant is given the first chance to save himself from eviction as provided in the first proviso to clause (i) of sub section (2) of Section 14. This first proviso contemplates that the tenant may on the first hearing of the application for ejectment pay or tender in court the rent and interest at the rate mentioned in the proviso on such arrears together with the cost of application assessed by the Controller and in that case, the tenant is deemed to have duly paid or tendered the rent within the time as contemplated by clause (i) of sub section (2) of Section 14. Where the tenant does not avail of this opportunity of depositing as contemplated by the first proviso and waits for an ultimate decision of the application for eviction on the ground of non payment of rent, the Controller has to decide it and while deciding, the Controller has to find whether the ground contained in clause (i) of sub section (2) of Section 14 has been made out or not. If the Controller finds that the ground as contemplated by clause (i) of sub section (2) of Section 14 is made out, he is required to pass an order of eviction on the ground of non payment of rent due from him. A second opportunity to avoid eviction is provided by the third proviso to clause (i) of sub section (2) of Section 14. But the second opportunity is provided after the order of eviction. The benefit of avoiding eviction arises if the tenant pays the "amount due ' within the period of 30 days of the date of order. The question is what is the meaning of the words 'amount due" occurring in the third proviso to clause (i) of sub section (2) of Section 14 of the Act. It will be noticed that there is no provision in the Act for giving powers to the Controller to direct payment or deposit of 'Pendente lite" rent for each month during the pendency of the petition for eviction of the meant. First Proviso to sub section (2) of section 14 shows that in order to show payment or valid tender as contemplated by clause (i) of sub section (2) of Section 14 by a tenant in default, he has to pay on the first date of hearing the arrears of rent alongwith interest and costs of the application 117 which are to be assessed by the Controller. Surely where a tenant does not avail of the first opportunity and contests the eviction petition on the ground of non payment of arrears of rent and fails to show that he was not in default and court finds that the ground has been made out, an order of eviction has to follow. Therefore, it does not stand to reason that such a tenant who contests a claim and fails to avoid order of eviction can still avoid it by merely paying the rent due till the date of the filing of the application for ejectment. The third proviso to clause (i) of sub section (2) of Section 14 should also receive an interpretation which will safeguard the rights of both the landlord and tenant. The "amount due" occurring in the third proviso in the context will mean the amount due on and upto the date of the order of eviction. It will take into account not merely the arrears of rent which gave cause of action to file a petition for eviction but also include the rent which accumulated during the pendency of eviction peti tion as well. If the tenant has been paying the rent during the pendency of the eviction petition to the landlord, the "amount due" will be only arrears which have not been paid. The landlord, as per the scheme of the section, cannot be worse off vis a vis a tenant who was good enough to deposit in court the arrears of rent together with interest and costs on the first date of hearing. If the interpretation given by the High Court is accepted the result would be that the tenant will be better off by avoiding to pay the arrears of rent with interest and costs on the first date of hearing and prefer suffering order of ejectment after contest and then merely offer the amount due as mentioned in the application for ejectment to avoid eviction. This could not be the intention of the legislature. In such cases it will be advisable if the Controller while passing the order of eviction on the ground specified in clause (i) of sub section (2) of Section 14 of the Act specifies the "amount due" till the date of the order and not merely leave it to the parties to contest it after passing of the order of eviction as to what was the amount due. Surely the Rent Control Acts, no doubt, are measures to protect tenants from eviction except on certain specified grounds if found established. the grounds are made out and subject to any further condition which may be provided in the Act, the tenants would suffer ejectment. Again the protection given in the Acts is not to give licence for continuous litigation and bad blood. 118 Surely the legislature which made the Act could not have envisaged that after the parties finish off one round of litigation, the party should be relegated to another round of litigation for recovery of rent which accrued pendente lite. Whatever protection Rent Acts give they do not give blanket protection for "non payment of rent". This basic minimum has to be complied with by the tenants. Rent Acts do not contemplate that if one takes a house on rent, he can continue to enjoy the same without payment of rent. The order which the Controller passed was a composite order of eviction in the sense that if the tenant wanted to save himself from eviction, he had to comply with the order. The order which was passed by the Controller cannot be said to be an order without jurisdiction. It may be a right order; it may have been a wrong order. It was not a nullity that the executing court will ignore it. But at the stage when the execution application was filed, the rent Controller could not go behind its own order dated 29.7.1986. If the Controller could not go behind its own order in execution proceedings, surely the High Court could not also go behind the order in revision against the order of Controller refusing execution. It was not the appropriate stage for the High Court to examine what order ought to have been passed or to limit the efficacy of the order to its interpretation of the words "amount due" as mentioned in the third proviso to clause (i) of sub section (2) of Section 14. The question which the High Court posed never arose. Mr., Thakur, who appeared on behalf of the respondent submitted: (1)that sub section (2) of Section 14 gives discretion to the Controller to pass an order of eviction or not to pass an order of eviction even if the ground mentioned in clauses (i) to (v) of sub section (2) of Section 14 are made out; (2)that the order of eviction which was passed is not the final order in the sense that it is an interim order. The final order is passed only after the expiry of 30 days if the tenant fails to avail of the second opportunity provided by the third proviso to clause (i) of sub section (2) of Section 14. With due respect to learned counsel for the respondent we are not able to persuade ourselves to agree with either of his submissions. It is true that sub section (2) uses the expression "the Controller may make an order 119 directing the tenant to put the landlord in possession of the building or rented land and if the Controller is not so satisfied he shall make an order rejecting the application". It will be noticed that the Controller is required to dismiss the eviction application if he is not satisfied to the existence of any ground mentioned in clauses (i) to (v) of sub section (2) of Section 14 of the Act but where the Controller is satisfied with existence of any of the grounds mentioned in clauses (i) to (v) of sub section (2) of Section 14 the Controller has no discretion to decline to pass the order of eviction. In the context in which the expression "may" is used it means "shall '. Otherwise the section would read that "not only the Controller can reject an application when he is not satisfied with the ground but is also entitled to dismiss the application when he is so satisfied". Such an intention cannot be attributed to the legislature particularly when the consequences of non satisfaction is expressly mentioned. Even if the consequences of non satisfaction was not mentioned, we are of the view that the expression "may" occurring would still mean "shall" and all that would mean is that if the grounds are not made out, he will be bound to dismiss the application and if the grounds are made out, he is bound to pass the order of eviction. If any other interpretation is given to the word "may" the section may itself become subject matter of challenge under Article 14 of the Constitution of India. The Court shall avoid interpretation which make the provisions violative of the Constitution, if possible. Coming to the second submission, as we have noticed earlier, subclause (i) of sub section (2) of Section 14 gives two opportunities to the tenant to avoid eviction. The first opportunity to avoid eviction is if the tenant avails of the benefit of first proviso. This opportunity is before the passing of the order of eviction. The second opportunity is after the order of eviction. The order, which is passed for eviction, is final in the sense as it is not an interim order. If the tenant avails of the second opportunity as provided in the third proviso then the order of eviction becomes inexecutable and he saves himself from eviction. Having found that the question posed and answered by the High Court was not relevant at the stage it was posed, namely during the execution proceedings and, therefore, the order is bad. The validity of the order of the executing court dated 18th May, 1990 120 now needs to be considered. The executing court, on consideration of the evidence recorded during the execution proceedings held that the judgment debtor, respondent, himself calculated the interest for the period 1.3.1983 to 28.2.1986 with the result that Rs. 161.29 ps. was deposited less by the judgment debtor and thought that it had power to extend the time for making up the deficiency and accordingly extended the time. So far as the Himachal Pradesh High Court is concerned it has consistently taken the view that the executing court has no such power since the time is fixed by the statute. R.S. Pathak, CJ. (As His Lordship then was) in Shri Krishan Kumar vs Shri Gurbux Singh, while interpreting the third proviso to Section 14(2) (i) of the Act took the view thus: "It is apparent that the statute itself provides a period of 30 days from the date of the order for payment of rental arrears by the tenant. On such payment, the statute declares, effect will not be given to the order of eviction. The statute does not leave the determination of the period to the Rent Controller. It is not open to the Rent Controller, when disposing of the petition for eviction, to make an order either abridging or enlarging the period of 30 days. Indeed, the period having been determined by the statute itself, no order was necessary by the Rent Controller. There being no power in the Rent Controller to vary the period mentioned in the statute, it is apparent that the order made by him in the execution proceedings is a nullity. The Appellate Authority is right in the view taken by it." Mr. Thakur, learned counsel for the respondent, referred us to Shyamcharan Sharma vs Dharamdas, ; ; Miss Santosh Mehta vs Om Prakash and others; , ; Ram Murti vs Bhola Nath and another, and Ganesh Prasad Sah Kesari and another vs Lakshmi Narayan Guptta ; and submitted that this Court had, in spite of there being no express provisions to extend time taken the view that the Court has inherent powers to extended time for deposit of rent. We are of the view that the reliance placed on these cases is wholly misplaced. It may be noticed that the case of Shyamcharan Sharma (supra) related to the powers of the Court under Section 13(6) of the Madhya 121 Pradesh Accommodation Control Act, 1961. This Act contemplated an eviction petition being filed under Section 12 and one of the grounds for eviction was for failure of the tenant to pay or tender within two months from the date of service of notice of demand of rent and Section 12 (3) thereof provided that the order of eviction will not be passed on this ground if the tenant makes the payment of deposit as required by Section 13. Section 13(1) contemplated that when a suit has been instituted on any of the grounds against the tenant for his eviction, the tenant shall, within one month of the service of summons on him or within such further time as the court may, allow in this behalf, deposit in the court or pay to the landlord the arrears of rent and shall also continue to pay, month by month, the future rent as well. Sub section (5) of Section 13 contemplated that if the deposit was made as contemplated by sub section (1) of Section 13 no order for recovery of possession should be made on the ground of default in the payment of rent. Sub section (6) of Section 13 provide that if the tenant fails to pay any amount as required by Section 13 the court had the power to strike out the defence and proceed with the hearing of the suit. While dealing with the powers under Section 13(6) of the said Act this Court took the view that the court had discretion to strike off the defence or not even if there is delay in depositing rent falling due after institution of suit for eviction. The Court held : "In case of non deposit or non payment of rent by the tenant, Section 13(6) vests a discretion in the Court to order striking off the tenant 's defence against eviction; it neither clothes the landlord with an automatic right to an eviction decree nor visits the tenant with the penalty of such a decree being automatically passed. If the court has the discretion to strike off or not to strike off the defence, it has further discretion to condone the default and extend the time for making the payment or deposit. Such a discretion is a necessary implication of the discretion not to strike off the defence. A different construction might lead to perversion of an object of the Act, namely 'adequate protection of the tenant '. " An express provision for extending time for deposit or payment was not made in Section 13(1) because the consequences of non payment was proposed to be dealt with separately by Section 13(6) and the discretion to extend time is incidental to the discretion in the said section to strike 122 off or not to strike off the defence. This view in Shyamcharan Sharma 's case (supra) was followed by this Court in Miss Santosh Mehta 's case (supra) and Ram Murti 's case (supra), which were the cases under the Delhi Rent Control Act, 1958, which also had the provisions similar to the Madhya Pradesh Accommodation Control Act, 1961 contemplating direction by the court to direct the tenant to pay the pendente lite rents which have become due and consequences for not complying with such directions. Again the case of Genesh Prasad Sah Kesari (supra) related to the provisions for striking out the defence for failure of the tenant to deposit arrears of rent within 15 days of date of the courts 's order and this court again followed the decision in the case of Shyamcharan Sharma. These cases have no application where the final orders were passed after satisfaction of the Controller for entitling the landlord to seek eviction on the grounds specified in the Act. Mr. Thakur then submitted that this Court should not exercise its powers under Section 136 of the Constitution of India as the rent laws are meant for protection of the tenants. Rent Control Acts are necessary social measures for protection of tenants. The Rent Control Laws have tried to balance the equity. Landlord is duty bound to satisfy the ground of eviction mentioned in various Rent Acts and if he does not satisfy, he cannot get the order of eviction merely because the Act restricts his rights. There are certain Rent Acts which, even when a ground of eviction is satisfied, still confer powers on the Rent Controllers to consider the question of comparative hardship and it is only in those types of cases, if the Controller is satisfied, he can decline passing orders of eviction. But if there is no such limitations, the Rent Controllers. after the ground of eviction specified in the Act is made out, have no discretion to reject the application. Once the order of eviction is passed, in the circumstances like the present, the executing court is duty bound to execute its orders. No question of equity or hardship arises at that stage. We are in complete agreement with the view expressed by R.S. Pathak, CJ (as His Lordship then was ) in the aforesaid case of Shri Krishan Kumar. 123 In the present case the tenant spared no efforts to harass the landlords. After the order of eviction dated 29th July, 1986 the matter did not rest there. The tenant again failed to pay the rent and the landlord was forced to file another eviction petition on the ground of non payment of rent for the period from 1.3.1983 to 30.11.1986 and it was only after the filing of the said eviction petition and in order to avoid eviction he deposited the rent. The matter did not rest there even and it was only after the notice of the Special Leave Petition was issued in the present case that the tenant chose to pay the rent from 1.12.1986 after keeping it in arrears for practically six years. In view of the aforesaid facts and circumstances of the case we set aside the impugned order of the High Court dated 17th May, 1991 and the order of the Rent Controller dated 18th May, 1990 and direct the Rent Controller, Shimla, to issue the warrants of possession for ejectment of the respondent from the premises in dispute and place the landlords/appellants in possession. V.P.R. Appeal allowed.

The dispute between the appellant and the respondent in respect of their Interests In certain properties, was referred to arbitration by this Court and a retired Chief Justice of a High Court was appointed as the sole Arbitrator with direction to make a speaking award, and the Arbitrator submitted his Award. Against this award the appellant objector filed objections under Section 30 of the , contending that the Arbitrator had misconducted himself in that he did not take into consideration several documents which were placed on record before him to support the objector 's case and, hence, the award was invalid under clauses (a) and (c) of Section 30. Disposing of the Appeal, this Court HELD : 1.1. There is no infirmity on the face of the award which would entitle this Court to exercise jurisdiction under Section 30 of the . The Arbitrator has made a speaking award setting out his reasons for the conclusions reached by him and has thus complied with the direction of this Court given earlier. [56D, 55E] 12. The documents in question mainly relate to the rights and interests of the parties In the properties situate in that part which now belongs to the Dominion of Pakistan. Since they were refugees they had made certain claims under the law governing rehabilitation of displaced persons in respect of the properties left behind by them. The claim was sanctioned in the joint same of the objector 's predecessor in Interest and the respondent in respect of the properties left behind by the family. On the strength of that 52 claim, one of the houses was purchased in the said name. The Arbitrator, however, came to the conclusion, that the property in question was purchased from the funds contributed by the objector 's predecessor in interest and the respondent. The share of the objector was held to be 1/7th in the share of the predecessor in interest, since deceased. Since the contribution made for payment of the price was not equal, the Arbitrator allotted a larger share to objector 's predecessor in interest and consequently, the objector has got a share on the basis thereof, when inheritance opened on the death of the predecessor in interest. [55B D.H, 56A] 1.3. It is clear from the award that the Arbitrator did not go into the rights and interests of the parties including the HUF in the properties left behind in the Dominion of Pakistan. That was not necessary because the fact that the claim was sanctioned in the joint name of the Objector 's predecessor in interest and the respondent was never in dispute. The short question, which the Arbitrator was required to consider, was as regards the title of the properties, which were the subject matter of the reference, which included a house purchased on the strength of that claim. It is not necessary for the Court to go into the question of the rights and interests of the parties in the properties left behind in the Dominion of Pakistan since the Arbitrator was right that he was called upon to decide the interest of the parties in respect of two houses alone, which were the subject matter of the reference. Therefore, the Arbitrator had not misconducted himself by refusing to enumerate all those documents in question in his award because he was bound by the scope of the reference which was limited to the two houses and not the properties left behind in the Dominion of Pakistan by the parties. [55F, 56B C] 2. In order to interfere with an award, the Court must rind out whether the Arbitrator has misconducted himself or there was any infirmity in the procedure, such as, the Arbitrator having travelled beyond the terms of the reference or there being an error apparent on the face of the award. It is not misconduct on the part of an Arbitrator to come to an erroneous conclusion on a disputed issue. The Court does not sit in appeal and does not reassess the evidence. Even if the Court feels that had it been left to it, it would have assessed the evidence differently that would not be a valid ground for setting aside the award. [56E, G] 3. Therefore, in the facts and circumstances of the case, there is no reason to interfere with the award, which is made the rule of the 53 Court. [56H, 57A B] Food Corporation of India vs Joginder pal Mohinderpal & Anr., [1989]2 S.C.C. 347 and Hind Builders vs Union of India, [1990] 3 S.C.C. 338, relied on.

ivil Appeal No. 4146 of 1985. From the Judgment and Order dated 18.12.1984 of the Jammu & Kashmir High Court in C.S.A. No. S of 1981. Soli J. Sorabjee, Harjinder Singh and Ranjan Mahapatra for the Appellant. Anil Dev Singh, Dr. Meera Agarwal and R.C.Misra for the Respondent. The Judgment of the Court was delivered by RANGANATHAN, J. 1. This appeal involves the interpretation of section 11 of the Jammu & Kashmir Houses & Shops Rent Control Act, 1966 (hereinafter referred to as 'the Act '). The petitioner is a firm of which Sohan Singh Madan is the managing partner. The firm was the tenant of the respondent in respect of a portion of a building situated in Raghunath Bazar. Jammu, on a rent of Rs.200 p.m. According to the respondent, the petitioner had been irregular in paying the rent of the premises and had altogether stopped making payment of any rent from 1st April, 1976 onwards. On 26.11.1976, the respondent issued a notice to the petitioner calling upon it to pay the arrears of rent (Rs. 1,600). The notice also terminated the tenancy and called upon the petitioner to vacate the demised premises on or before 31.12. This notice was first sent by post. The postman called at the address on 7.12.1976 and 8.12.1976 but, having failed to find there either the addressee or any person authorised to receive the notice on its behalf, returned it with the endorsement "left without address, returned to sender". There upon, the respondent caused a copy of the notice to be affixed to one of the doors of the premises in question in the presence of two inhabitants of the locality PG NO 986 on 9.12.1976. No payment of rent was made subsequently by the petitioner. The respondent, therefore, filed a suit on 16.6.1977 seeking ejectment of the petitioner on the ground that he had committed three defaults, each in payment of two months ' rent within a period of 18 months. This plea was disputed, and eviction of the petitioner decreed, by the Sub Judge. This was affirmed by the B District Judge. A second appeal to the High Court was also unsuccessful. Hence this appeal by special leave. Ss. 11 and 12 of the Act, which are relevant in this context, may now be referred to. They read, in so far as is relevant for our present purposes, as follows: "Section 11: "Protection of a tenant against eviction ( I ) Notwithstanding anything to the contrary in any other Act or law, no order or decree for the recovery of possession of any house or shop shall be made by any court in favour of the landlord against a tenant xxx xxx xxx Provided that nothing in this sub section shall apply to any suit for decree for such recovery of possession xxx xxx xxx (i) subject to the provisions of section 12. where the amount of two months rent legally payable by the tenant and due from him is in arrears by not having been paid within the time fixed by contract or in the absence of such contract by the fifteenth day of the month next following that for which the rent is payable for by not having been validly deposited in accordance with section 14: Provided that no such amount shall be deemed to be in arrears unless the landlord on the rent becoming due serves a notice in writing through post office under a registered cover on the tenant to pay or deposit the arrears within a period of fifteen days from the date of the receipt of such a notice and the tenant fails to pay or deposit the said arrears within the specified period. PG NO 987 Section 12: When a tenant can get the benefit of protection against eviction (1) If in a suit for recovery of possession of any house or shop from the tenant the landlord would not get a decree for possession but for clause (i) of the proviso to subsection (1) of section 11, the Court shall determine the amount of rent legally payable by the tenant and which is in arrears taking into consideration any order made subsection (4) and effect thereof upto the date of the order mentioned hereafter, as also the amount of interest on such arrears of rent calculated at the rate of nine and three eights per centum per annum from the day when the rents became arrears upto such date, together with the amount of such costs of the suit as if fairly allowable to the plaintiff landlord, and shall make an order on the tenant for paying the aggregate of the amounts (specifying in the order such aggregate sum) on or before a date fixed in the order. (2) Such date fixed for payment shall be the fifteenth day from the date of the order excluding the day of the order. (3) If, within the time fixed in the order under sub section (1) the tenant deposits in the Court .he sum specified in the said order, the suit so far as it is a suit for recovery of possession of the house or shop, shall be dismissed by the court. In default of such payment the Court shall proceed with the hearing of the suit. Provided that the tenant shall not be entitled to the benefit of protection against eviction under this section, if, notwithstanding the receipt of notice under proviso to clause (i) of the proviso to sub section (1) of section 11, he makes a default in the payment of rent referred to in clause (i) of the proviso to sub section (1) of section 11 on three occasions within a period of eighteen months. xxx xxx xxx On the terms of the above sections, the controversy in this case turned on the question whether the notice sent by the respondent by registered post on 26.11.1976 can be said to have been served and the petitioner can be said to have PG NO 988 been in receipt of the said notice. If the answer to this question is in the affirmative, as held by all the courts concurrently, there is nothing further to be said. The contention of the appellant tenant however, is that the statute postulates a factual service of the notice on, and the actual receipt of it by, the tenant and that this admittedly not being the position in the present case, no eviction could have been decreed. Shri Soli Sorabjee, learned counsel appearing for the tenant submitted that the safeguards in Ss. 11 and 12 of the Act are intended for the benefit and protection of the tenant and that, therefore, where the Act provides for the service of the notice, by post, this requirement has to be strictly complied with. He referred to the decisions in Hare Krishna Das vs Hahnemann Publishing Co. Ltd ., [ and Surajmull Ghanshyamdas vs Samadarshan Sur, ILR 1969 1 Cal. 379 to contend that such postal service can neither be presumed nor considered to be good service where the letter is returned to the sender due to the non availability of the addressee. He urges that, in the absence of any enabling provision such as the one provided for in s.106 of the Transfer of Property Act, service by some other mode, such as affixture, cannot be treated as sufficient compliance with the statute. In this context, he referred to the frequently applied rule in Taylor vs Taylor, [ that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and that other methods of performance are necessarily forbidden. He urged that even if service by affixture can be considered to be permissible, there are stringent pre requisites for service by affixture, such as those outlined in Order V rules 17 to 19, of the Code of Civil Procedure (C.P.C.) and that these pre requisites were not fulfilled in the present case. He pointed out that even under the CPC. service by such affixture can be recognised as valid only if sincere and vigilant attempts to serve the notice on the addressee personally are unsuccessful. In the present case, it is submitted, the evidence shows that the postman made no serious efforts to ascertain the whereabouts of the addressee even though the evidence showed that a servant of the petitioner firm was known to the postman and was present in the neighbourhood. He, therefore, submitted that the High Court should have dismissed the suit for eviction filed by the landlord on the ground that the requirements of section 11 and 12 of the Act were not satisfied. We are of opinion that the conclusion arrived at by the courts below is correct and should be upheld. It is true that the proviso to (i) of section 11(1) and the proviso to PG NO 989 section 12(3) are intended for the protection of the tenant. Nevertheless it will be easy to see that too strict and literal a compliance of their language would be impractical and unworkable. The proviso insists that before any amount of rent can be said to be in arrears, a notice has to be served through posts. All that a landlord can do to comply with this provision is to post a prepaid registered letter (acknowledgement due or otherwise) containing the tenant 's correct address. Once he does this and the letter is delivered to the post office, he has no control over it. It is then presumed to have been delivered to the addressee under section 27 of the General Clauses Act. Under the rules of the post office, the letter is to be delivered to the addressee or a person authorised by him. Such a person may either accept the letter or decline to accept it. In either case, there is no difficulty, for the acceptance or refusal can be treated as a service on, and receipt by, the addressee. The difficulty is where the postman calls at the address mentioned and is unable to contact the addressee or a person authorised to receive the letter. All that he can then do is to return it to the sender. The Indian Post Office Rules do not prescribe any detailed procedure regarding the delivery of such registered letters. When the postman is unable to deliver it on his first visit, the general practice is for the postman to attempt to deliver it on the next one or two days also before returning it to the sender. However, he has neither the power nor the time to make enquiries regarding the whereabouts of the addressee; he is not expected to detain the letter until the addressee chooses to return and accept it; and he is not authorised to affix the letter on the premises because of the assessee 's absence. His responsibilities cannot, therefore, be equated to those of a process server entrusted with the responsibilities of serving the summons of a Court under Order V of the C.P.C. The statutory provision has to be interpreted in the context of this difficulty and in the light of the very limited role that the post office can play in such a task. If we interpret the provision as requiring that the letter must have been actually delivered to the addressee, we would be virtually rendering it a dead letter. The letter cannot be served where, as in this case, the tenant is away from the premises for some considerable time. Also, an addressee can easily avoid receiving the letter addressed to him without specifically refusing to receive it. He can so manipulate matters that it gets returned to the sender with vague endorsements such as "not found", "not in station", "addressee has left" and so on. It is suggested that a landlord, knowing that the tenant is away from station for some reasons, could go through the motions of posting a letter to him which he knows will not be served. Such a possibility cannot be excluded. But, as against this, if a registered letter addressed to a person at his residential address does not get served in the normal PG NO 990 course and is returned, it can only be attributed to the addressee 's own conduct. If he is staying in the premises, there is no reason why it should not be served on him. If he is compelled to be away for some time, all that he has to do is to leave necessary instructions with the postal authorities either to detain the letters addressed to him for some time until he returns or to forward them to the address where he has B gone or to deliver them to some other person authorised by him. In this situation, we have to chose the more reasonable, effective, equitable and practical interpretation and that would be to read the words "served" as "sent by post", correctly and properly addressed to the tenant, and the word "receipt" as the tender of the letter by the postal peon at the address mentioned in the letter. No other interpretation, we think, will fit the situation as it is simply not possible for a landlord to ensure that a registered letter sent by him gets served on, or is received by, the tenant. Much emphasis has been placed by the courts below and counsel for the landlord on the attempt made by the landlord to serve the notice on the premises in the presence of the witnesses. While the counsel for the landlord would have it that the steps show the landlord 's bona fides. counsel for the tenant submits that the haste with which the 'substituted service ' was effected and the lack of any real attempt to find out the whereabouts of the tenant (who had, according to him, been compelled to be away at Amritsar for medical treatment) throw consideration doubts on the claim of bona fides. We do not think that any statutory significance can at all be attached to the service by affixture claimed to have been effected by the landlord. The statute prescribes only one method of service for the notice and none other. If, as we have held, the despatch of the notice by registered post was sufficient compliance with this requirement, the landlord has fulfilled it. But, if that is not so, it is no compliance with the statute for the landlord to say that he has served the notice by some other method. To require any such service to be effected over and above the postal service would be to travel outside the statute. Where the statute does not specify any such additional or alternative mode of service, there can be no warrant for importing into the statute a method of service on the lines of the provisions of the C.P.C. We would therefore not like to hold that a "substituted" service, such as the one effected by the landlord in the present case, is a necessary or permissible requirement of the statute. It may be even an impracticable, if not impossible, requirement to expect some such service to be effected in cases where the landlord lives outside the town, or the State in which the premises are situated. If, in the present case, the landlord attempted such service because he was in the same town, that can only show His bona fides and PG NO 991 it is only in this view that we proceed to express our findings in this regard. Having gone through the facts stated in the various orders, we think that the landlord did his best in the circumstances. We are unable to accept the tenant 's contention that the mere circumstances that he had the notice affixed immediately on the day following the date of return of the postal notice is an indication of mala fides. What is material is that his evidence that he took the notice to the premises and had it affixed on the premises, as he could not find the tenant, stands uncontradicted. Indeed there is no doubt or dispute that the tenant was away from Jammu at the relevant time. The plaintiff 's father 's evidence is clear and categorical that neither the tenant nor his servant was available. There is no suggestion made to him that he made no real effort to ascertain the tenant 's address even though a servant was there who could have furnished the same. In the written submissions, now filed, it is admitted that the tenant and his servant were both away at Amritsar though it is said that this was due to his illness. It is however stated that the servant was coming to Jammu every week to collect the dak and that the postman had failed to make proper enquiry. If this was true, the servant must have at least made enquiries and learnt from the postman that a registered letter had come and been returned and informed the tenant who could have taken steps to pay the arrears of rent. On the other hand. the evidence of the plaintiff 's father and witnesses to the affixture, of the postman and of the tenant 's own witness shows that there was no servant on the premises. The evidence of the postman is categorical that there was no servant at the premises which was locked. He says he had learnt from enquiries in the neighbourhood that the tenant had not been living in the premises for the past few months. He admits that he knew there was a servant but says that the servant was also not there at the relevant time. His reference to the servant working as a pheriwala at the same place is in regard to the time when he was giving evidence (i.e. in Dec. 1978). It is not the case of the tenant that the other partner, son of Sohan Singh, was available for service either. Thus the sum and substance of the evidence on record is that the tenant had gone away from the premises without intimating the landlord or neighbours of his correct address and without leaving behind any servant or agent to accept letters addressed to him. In this situation the landlord did the only thing he could. We are quite conscious that the provision in regard to the notice contemplated by the statute is unsatisfactory and PG NO 992 hope that the legislature would soon set it right. But, on the provision as it stands, we cannot but hold that a landlord must be held to have complied with the statutory requirement by sending a notice correctly addressed to the tenant by registered post. Also, in the present case, we are satisfied as indeed the lower courts were that the landlord did his best to bring the notice to the knowledge of the tenant. He cannot be expected to do any more. His petition for eviction cannot be dismissed on this score. We only wish to add that, having regard to the fact that the tenant had deposited the arrears subsequently, we suggested to the parties that they should try to settle the matter amicably between themselves but the submissions filed by the parties after the hearing show that this has not been possible. We have, therefore, no alternative but to dismiss this appeal and we hereby do so without, however, making any order as to costs. R.S.S. Appeal dismissed.

At an election held on 23rd February, 1986, for the post of Panchayat President, the votes were counted on the 25th February, 1986, and the first respondent was declared elected having secured 649 votes. The petitioner and the second respondent who were the other contestants were declared to have secured only 556 votes and X votes respectively, and 55 votes were declared to be invalid votes. Two days after the results were declared i.e. on 27th February. 1986, the petitioner sent telegrams and registered notices alleging irregularities in the counting of the votes, and thereafter he filed an election petition under section 178 of the Tamil Nadu Panchayat Act, 1958. The reliefs claimed in the petition were that the Election Tribunal should set aside the election of the first respondent as the President of the Panchayat, order recounting of votes, and a declaration that the petitioner has been duly elected. The first respondent opposed the election petition and filed a counter statement denying all the allegations contained in the election petition. The Tribunal after recording the evidence of the candidates and the Assistant Returning Officer came to the conclusion that the petitioner was entitled to ask for re count of votes and ordered recounting and called for the ballot papers. In the recount of votes, it was found that there was no difference in the number of votes secured by the petitioner, namely, 556 votes but in so far as the first respondent was concerned he had secured only 528 votes as against the 649 votes, he was originally held to have secured. The excess of 121 votes were found to be invalid votes and consequently the total number of invalid votes came to 126 (sic) as against 55 votes originally held to be invalid. There was no difference in the number of 8 votes secured by the third contestant. Based on these figures of the recounting, the Tribunal declined to order re election and instead declared the petitioner to have been duly PG NO 950 PG NO 951 elected because the recount clearly proved that the petitioner has secured 28 votes more than the first respondent. Aggrieved by the aforesaid order of the Election Tribunal, the first respondent filed a Civil Revision Petition in the High Court. A Single Judge allowed the revision petition holding that the Tribunal had erred in ordering a recount of the votes when the petitioner had not made out a prima facie case for an order of recount, and observed that the secrecy of the ballot was sacrosanct and should not be violated unless a prima facie case of a complusive nature had been made out by the defeated candidates. The High Court set aside the order of the Tribunal and restored the election result in favour of the first respondent. Dismissing the Special Leave Petition, HELD: 1. The right of a defeated candidate to assail the validity of an election result and seek recounting of votes has to be subject to the basic principle that the secrecy of the ballot is sacrosanct in a democracy and hence unless the affected candidate is able to allege and substantiate in acceptable measure by means of evidence that a prima facie case of a high degree of probability existed for the recount of votes being ordered by the Election Tribunal in the interests of justice, a Tribunal or Court should not order the recount of votes. [957D E] 2. The salutary rule is that the preservation of the secrecy of the ballot is a sacrosanct principle which cannot he lightly or hastily broken unless there is prima facie genuine need for it. [957D] 3. The justification for an order for examination of ballot papers and recount of votes is not to be derived from high sight and by the result of the recount of votes. On the contrary, the justification for an order of recount of votes should be provided by the material placed by an election petitioner on the threshold before an order for recount of votes is actually made. [957C D] 4. An order or recount of votes must stand or fall on the nature of the averments made and the evidence adduced before the order of recount is made and not from the results emanating from the recount of votes. [958C] In the instant case, the petitioner has neither made such averments in the petition nor adduced evidence of such a compulsive nature as could have made the Tribunal reach a PG NO 952 prima facie satisfaction that there was adequate justification for the secrecy of ballot being breached. [957F] Ram Sewak Yadav vs Russain Kamil Kidwai & Ors. , ; Dr. Jagjit Singh vs Giani Kartar Singh, [1967]1 SCJ 762; R. Narayanan vs Sommalai, ; and N. Gopal Reddy vs Bonala Krishnamurthy & Ors., JT , referred to.

Civil Appeal No. 1572 of 1970. From the Judgment and Order dated 8 11 1968 of the Bombay High Court in S.C.A. No. 2087/68. M. C. Bhandare, C. K. Sucharita and M. N. Shroff for the Appellant. Nemo for the Respondent. The Judgment of the Court was delivered by KOSHAL J. , This is an appeal by special leave against the judgment dated November 8, 1968 of a Division Bench of the High Court of Bombay allowing a petition under articles 226 and 227 of the Constitution of India and declaring that sub section (5) of section 17 of the Maharashtra Medical Practitioners Act, 1961 (hereinafter referred to as the Act) is ultra vires of article 14 of the Constitution of India. The facts are not in dispute and may be shortly stated. The respondent hails from Uttar Pradesh. In 1940 he obtained the degree of "Ayurved Shastri" from the All India Adarsh Vidwat Parishad, Kanpur. On November 12, 1940 his name was listed by the Board of Indian Medicine, Uttar Pradesh, in the register of Vaids and Hakims. He practised as a Vaid in Agra thereafter upto 1955 when he migrated to Bhopal where he was registered as an Ayurvedic Doctor by the Medical Council of the Government of Bhopal under the Bhopal Medical Practitioners Registration Act, 1935. He migrated to Bombay in 1962 and started practising there as an Ayurvedic Doctor. However, in the meantime, i.e., on November 23, 1961, the Act came into force, except for Chapter VI thereof which came into operation on November 1, 1966. The respondent 's application for registration as a medical practitioner made to the Committee of the Medical Board of Unani System of Medicine under sub section (5) of section 17 of the Act (although none of the clauses of that sub section had anything to do with it) was rejected and his appeal filed to the Board was also dismissed on September 30, 1964. Clause (ii) of the said sub section (5) with which we are concerned provides that any person not being a person qualified for registration under sub sections (3) or (4) who proves to the satisfaction of the Committee appointed under sub section (6) "that he was on the 4th day of November 1941 regularly practising the Ayurvedic or the Unani System of Medicine in the Bombay area of the State, but his name was not entered in the register maintained under the Bombay Medical 400 Practitioners Act, 1938" shall be entitled to have his name entered in the register on making an application on the prescribed form, on payment of a fee of Rs. 10/ and production of such documents as may be prescribed by the rules. The expression "Bombay area of the State of Maharashtra" is defined in sub section (6) of section 3 of the Bombay General Clauses Act to mean "the area of the State of Maharashtra excluding the Vidarbha region and the Hyderabad area of that State." A contention was raised before the High Court on the strength of Rukmani Hoondraj Hingorani vs The Appellate Authority under the Maharashtra Medical Practitioners Act, 1961 that sub section (5) of section 17 of the Act fell foul of article 14 of the Constitution, and that contention was accepted. We may usefully refer to the following observations made in the decision just above cited: "Confining our attention, however, to medical practitioners practising in the Bombay area of the State, we find it difficult to appreciate why the right of enlistment should have been restricted to those who were regularly practising on 4th November 1951, `in the Bombay area of the State '. Since the object of the Legislature was to allow medical practice by those less qualified persons who were too old to choose alternative means of livelihood, it was clearly open to the Legislature to provide that a person must have been practising for a certain number of years, or from before a particular date, in order that his name may be included in the list. It was thus open to the Legislature to provide that, out of unregistered and unlisted medical practitioners who were practising in the Bombay area of the State, only those would be entitled to have their names included in the list who were practising regularly from before the 4th of November, 1951. It is, however, not possible to find any rational basis for the provision that medical practitioners in the Bombay area of the State, in order to be entitled to enlistment, must not only have been practising regularly from 4th November, 1951, but must have been practising on that day `in the Bombay area of the State '. The provision that medical practitioners must have been practising on 4th November, 1951 in the Bombay area of the State has no rational nexus with the object of the Legislature which was to ensure that medical practitioners, who were not fully qualified but who were too old to choose alternative means of livelihood, should not be deprived of their practice. 401 In order to illustrate the discriminatory nature of the provision contained in section 18(2)(b)(ii), we shall take imaginary instances of five persons who were all practising in the Bombay area of the State at the time of their applications under section 18 (i.e., on or before 31st March, 1965) and who were not already enlisted and were not entitled to registration under the Act. Let us suppose that one of them, A, was practising continuously in Bombay City from 1950 to 1963, when he applied under section 18 of the Act. Since on 4th November, 1951 he was practising regularly 'in the Bombay area of the State ', he is clearly entitled to have his name included in the list. Let us take another person B who practised in Poona from 1950 to 1954 and in Bombay City from 1954 to 1963 when he applied under section 18. He is also entitled to enlistment because Poona falls in the Bombay area of the State. We may then take the instance of C who practised in Nagpur from 1950 to 1954 and in Bombay City from 1954 to 1963. He would not be entitled to have his name included in the list, because on 4th November, 1951 he was regularly practising in Nagpur which, though situated in Maharashtra, is not included in the Bombay area of the State. We will next take the instance of D who practised in Baroda, then a part of the Bombay State, from 1950 to 1954 and thereafter in Bombay City from 1954 to 1963. He is also not entitled to enlistment, since Baroda in out side the State of Maharashtra. Similar would be the position of another person E who practised in Bhopal from 1950 to 1954 and then in Bombay City from 1954 to 1963. No rational explanation can be given of why A and B should receive the said concession from the Legislature and should be able to continue their practice and why C, D and E should not receive the concession and should be deprived of their practice. " We find ourselves in complete agreement with these observations which were made in relation to sub clause (ii) of clause (b) of sub section (2) of section 18 of the Act. The provisions of that sub clause being in pari materia with sub section (5) of section 17 of the Act, they apply fully to that sub section which must therefor be held to be violative of article 14 of the Constitution. Accordingly we have no hesitation in upholding the impugned judgment and dismiss this appeal, but with no order as to costs as the respondent has not appeared before us to contest it. N.V.K. Appeal dismissed.

By an order made on March 20, 1976 the Kerala State Government declared that raw cashewnut was an essential article under section 2(a) of the Kerala Essential Articles Control (Temporary Powers) Act, 1961 and thereafter promulgated the Kerala Raw Cashewnuts (Procurement and Distribution) Order 1977 under section 3 thereof, regulating the procurement and distribution of raw cashewnuts in the State of Kerala. The expression "essential article" is defined in section 2(a) of the Kerala Act as "an article (not being an essential commodity as defined in the ) which may be declared by the Government by a notified order to be an essential article". Under Section 2(a) (v) of the essential commodity means "foodstuffs, including edible oilseeds and oils. " In their petitions under article 32 of the Constitution the petitioners who were engaged in the processing of raw cashewnuts urged that raw cashewnut being a foodstuff, which was an essential commodity under the Central Act, the State Government could not make a declaration that it was an essential article under section 2(a) of the State Act and that for this reason the declaration and the impugned order were ultra vires the State Act. On behalf of the State Government it was contended that the expression "foodstuffs" meant only those articles which could be directly consumed without any kind of processing since the order regulated only the procurement and distribution of raw cashewnuts which were used as industrial raw material, they could not be called foodstuffs in the strict sense and were not an "essential commodity" within the meaning of that term under the Central Act. Allowing the petitions, ^ HELD: Raw cashewnut is a foodstuff under section 2(a)(v) of the Central Act and hence cannot be declared as an essential article under section 2(a) of the Kerala Act. No order could therefore be made by the State Government under section 3 thereof in respect of raw cashewnuts. Therefore the declaration made by the State Government to the effect that raw cashewnut is an essential article under the Kerala Act and the impugned order made thereunder are liable to be quashed. [694 B C] The words in parenthesis in section 2(a) of the State Act make it clear that the State Government can declare as an essential article under the State Act 677 only an article which is not an essential commodity under the Central Act. It is a well known rule of interpretation that associated words take their meaning from one another and that is the meaning of the rule of statutory construction noscitur a sociis. When the term 'foodstuffs ' is associated with edible oilseeds which have to be processed before the oil in them can be consumed, it is appropriate to interpret 'foodstuffs ' in the wider sense as including all articles of food which may be consumed by human beings after processing. [687 C] Having regard to the fact that the object of the Central Act is to regulate production, supply and distribution of essential commodities amongst the people, the expression 'foodstuffs ' should be given a wider meaning as including even raw materials which ultimately result in edible articles. [687 D E] The dictionary meaning of 'foodstuff ' is 'a substance with food value ' and 'the raw material of food before or after processing '. Therefore 'foodstuff ' need not necessarily mean only the final food product which is consumed. It also includes raw food articles which may, after processing, be used as food by human beings.[688 F] State of Bombay vs Virkumar Gulabchand Shah ; and Tika Ramji & Ors. etc. vs The State of Uttar Pradesh & Ors. ; at 418 referred to. Although as a result of large exports of cashewnut it is now in short supply and its price is beyond the reach of the common man, it is an article of food eaten in raw form and is used in various preparations. It is eaten in all parts of the country though it is grown in a few States. It is exported as foodstuff. It is, therefore, a foodstuff and must be classified as an essential commodity. [692 M G] There is no substance in the argument that cashewnuts can be treated as an essential article only for the purposes of export and not an essential commodity under the Central Act. The Central Government can make an Order under the Central Act even when an essential commodity is used for industrial purposes or for purposes of export. Essential commodities do not cease to be essential commodities under the Central Act merely because they are exported after they are processed in India. [693 B] The argument that so long as the Central Government had not made an order in respect of raw cashewnuts the State Government can pass an order is not available in the circumstances by reason of the definition of essential article in the Kerela Act. [693 E]

Civil Appeal No. 491 of 1985 From the Judgment and Order dated 26th July, 1984 of the Allahabad High Court in W.P. No. 4899 of 1983. 81 Pankaj Kalra for the Appellant. Rameshwar Dial and Sarv Mitter for the Respondents. 2.9.1983 reverting the appellant from the post of Commercial Officer to that of Superintendent. The appellant joined service in Kisan Sahkari Chini Mills Ltd., Bisalpur District Pilibhit, a sugar factory run and managed by the Uttar Pradesh Co operative Mills Federation. While the appellant was working as Office Surperintendent, he was selected for promotion to the post of Commercial Officer and by Order dt. August 29, 1980 appointed on probation for one year against a regular vacancy with a condition that his probationary period may be extended further and during the period of probation he could be reverted to the post of Office Superintendent without any notice. On 2.7.1981 the appellant was transferred from Bisalpur to Majohla Sugar Factory where he continued to work as Commercial Officer. By an Order dt. 2.10.1981 the appellant 's probationary period was extended for one year till 4.9.1982, the period so extended expired on 4.9.82 but no further order either extending the probationary period or confirming him on the post was issued, and the appellant continued to work as Commercial Officer. The Managing Director of the U.P. Co operative Sugar Mill Federation Ltd. a "Co operative society" registered under the U.P. Co operative Societies Act, 1965, which runs and manages a number of sugar factories in the State of Uttar Pradesh issued order on 2.9.83 reverting the appellant to the post of Office Superintendent. The appellant challenged the validity of the reversion order before the High Court on the sole ground that on the expiry of the probationary period he stood confirmed, and he could not be reverted treating him on probation. The High Court held that on the expiry of the probationary period the appellant could not be deemed to be confirmed as there was no rule prohibiting the extension of probationary period. The U.P. Co operative Institutional Service Board constituted by the State of Uttar Pradesh in accordance with sub sec. (2) of sec. 122 of the U.P. Co operative Societies Act, 1965 has framed the U.P. 82 Co operative Societies Employees Service Regulations 1975 which regulate the condition of service of employees of all the co operative societies placed under the purview of the Institutional Service Board by the Government Notification No. 366 C/XIIC 3 36 71 dt. March 4, 1972. These regulations contain provisions for recruitment, probation, confirmation, seniority and disciplinary control. Regulation 17 provides for probation, it lays down that all persons on appointment against regular vacancies shall be placed on probation for a period of one year. Proviso to the Regulation lays down that the appointing authority may, in individual cases, extend the period of probation in writing for further period not exceeding one year, as it may deem fit. Clause (ii) of the Regulation provides that if, at any time, during or at the end of the period of probation or the extended period of probation, it appears to the appointing authority that the employee placed on probation, has not made sufficient use of the opportunity offered to him or has otherwise failed to give satisfaction, he may be discharged from service, or reverted to the post held by him substantively, if any, immediately before such appointment. Regulation 18 provides for confirmation of an employee on the satisfactory completion of the probationary period. Regulation 17 and 18 read together, provide that appointment against a regular vacancy is to be made on probation for a period of one year, this probationary period can be extended for a period of one year more. The proviso to Regulation 17 restricts the power of the appointing authority in extending period of probation beyond the period of one year. An employee appointed against a regular vacancy cannot be placed on probation for a period more than two years and if during the period of probation the appointing authority is of the opinion that the employee has not made use of opportunity afforded to him he may discharage him from service or revert him to his substantive post but he has no power to extend the period of probation beyond the period of two years. Regulation 18 stipulates confirmation of an employee by an express order on the completion of the probationary period. The regulations do not expressly lay down as to what would be the status of an employee on the expiry of maximum period of probation where no order of confirmation is issued and the employee is allowed to continue in service. Since Regulation 17 does not permit continuation of an employee on probation for a period more than two years the necessary result would follow that after the expiry of two years probationary period, the employee stands confirmed by implication. This is implicit in the scheme of Regulation 17 and 18. In State of Punjab vs Dharam Singh ; , a Constitution Bench of this Court held, 83 "Where, as in the present case, the service rules fix a certain period of time beyond which the probationary period cannot be extended, and an employee appointed or promoted to a post on probation is allowed to continue in that post after completion of the maximum period of probation without an express order of confirmation, he cannot be deemed to continue in that post as a probationer by implication. The reason is that such an implication is negatived by the service rule forbidding extension of the probationary period beyond the maximum period fixed by it. In scuh a case, it is permissible to draw the inference that the employee allowed to continue in the post on completion of the maximum period of probation has been confirmed in the post by implication. " In the instant case the order of appointment promoting the appellant on the post of Commercial Officer merely indicated that his probationary period could be extended and he could be reverted to the post of Office Superintendent without any notice. Stipulation for extension of probationary period in the appointment order must be considered in accordance with the proviso to Regulation 17(1) which means that the probationary period could be extended for a period of one year more. Undisputably on the expiry of the appellant 's initial probationary period of one year, the appointing authority extended the same for another period of one year which also expired on 4.9.82. During the period of probation appellant 's services were neither terminated nor was he reverted to his substantive post instead he was allowed to continue on the post of Commercial Officer. On the expiry of the maximum probationary period of two years, the appellant could not be deemed to continue on probation, instead he stood confirmed in the post by implication. The appellant acquired the status of a confirmed employee on the post of Commercial Officer and the appointing authority could not legally revert him to the lower post of Superintendent. Learned Counsel appearing for the U.P. Co operative Sugar Factories Federation urged that the U.P. Co operative Societies Employees Service Regulations 1975 do not apply to the appellant as he was an employee of the U.P. Co operative Sugar Factories Federation, as the condition of service of the appellant and other employees of the U.P. Co operative Sugar Factories Federation are regulated by the U.P. Co operative Sugar Factories Federation Service Rules 1976 84 framed by Cane Commissioner in exercise of his powers under sub sec. (1) of sec. 121 of the Act published in the U.P. Gazette dt. September 4, 1976. Rule 3 of the U.P. Co operative Sugar Factories Federation Service Rules 1976 (herein after referred to as the Federation Service Rules) provides that these Rules shall apply to all the employees of the Federation. Rule 5 provides that every employee shall be appointed on probation for such period as the appointing authority may specify and the period of probation may be extended by the appointing authority from time to time, the rule does not prescribe any limit on the extension of the probationary period. Rule 6 provides that upon satisfactory completion of probationary period an employee shall be eligible for confirmation. Placing reliance on rule 5 learned counsel for the respondents urged that since there was no order of confirmation the appellant 's probationary period stood extended, therefore, he could be reverted at any time to his substantive post. It is true that rule 5 of the Federation Service Rules does not place any restriction on the appointing authority 's power to extend the probationary period, it may extend the probationary period for an unlimited period and in the absence of Confirmation Order the employee shall continue to be on probation for indefinite period. It is well settled that where appointment on promotion is made on probation for a specific period and the employee is allowed to continue in the post after expiry of the probationary period without any specific order of confirmation he would be deemed to continue on probation provided the Rules do not provide contrary to it. If Rule 5 applies to the appellant he could not acquire the status of a confirmed employee in the post of Commercial Officer and he could legally be reverted to his substantive post. There are two set of rules (i) The U.P. Co operative Societies Employees Service Regulations, 1975, (ii) the U.P. Co operative Sugar Factories Federation Employees Service Rules, 1976. The question is which of the rules apply to the employees of the Co operative Sugar Factories Federation. While considering this question it is necessary to advert to the relevant provisions of the Act and the Rules framed thereunder and the Notifications issued from time to time. Section 121 of the Act confers power on the Registrar, (an officer appointed as such by the State Government under sec. 3) to frame regulations to regulate the emoluments and conditions of service of employees in a Co operative Society or class of Co operative Societies. Section 3(2) confers power on the State Government to appoint officers to assist the Registrar and to confer on them all or any of the powers of the Registrar. An officer on whom powers of Re 85 gistrar are conferred by the State Government, has authority to frame rules regulating conditions of service under sec. 121(1) of the Act. Section 122(1) confers power on the State Goverment to constitute an authority for the recruitment, training and disciplinary control of the employees of the Co operative societies or class of co operative societies and it may further require such authority to frame regulations regarding recuritment, emoluments, terms and conditions of service including disciplinary control of such employees. Regulations so framed require approval of the State Government under sub sec. Once approval is granted, the regulations take effect from the date of publication. The State Government in exercise of its powers under sec. 122(1) issued a Notification No. 366 C/XIIC 3 36 71 dt. March 4, 1972 constituting the U.P. Co operative Institutional Service Board as an authority for the recruitment, training and disciplinary control of the employees of the Apex Level Societies Central or Primary Societies, and it further conferred power on the Institutional Service Board to frame regulations regarding recruitment, emoluments, terms and conditions of service of the employees of the co operative societies of the Apex Level Societies Central or Primary Societies. In pursuance thereof the Institutional Service Board framed the U.P. Co operative Societies Employees Service Regulations 1975 regulating the conditions of service of the employee of these Co operative Societies which were placed under the purview of the Institutional Board by the Government Notification No. 366 C/XII C 3 36 71 dt. March 4, 1972. This Notification states that the Board shall have authority to frame regulations for the recruitment, training and disciplinary control of the employees of the Apex Level Societies, Central, or Primary Societies. Section 2(a 4) which defines "Apex Level Societies", expressly specifies the U.P. Co operative Sugar Factories Federation Ltd. as an Apex Level Society. Since the Institutional Service Board was conferred power to frame regulations regulating the conditions of service of the employees of Apex Level Societies, the regulations framed by the Board apply to the employees of the U.P. Co operative Sugar Factories Federation Ltd. The respondents have failed to place any Notification before the Court to show that the power of the Institutional Service Board to frame regulations, regulating the conditions of service of the employees of Apex Level Societies including that of U.P. Co operative Sugar Factories Federation Ltd. was ever with drawn. The U.P. Co operative Sugar Factories Federation Service Rules 1976 have been framed by the Cane Commissioner under sub sec. (1) 86 of sec. 122 of the Act. These Rules provide that they shall apply to all the employees of the U.P. Co operative Sugar Factories Federation Ltd., but the question is whether rules so framed by the Cane Commissioner would override the Service Regulations 1975. As noted earlier, the Institutional Service Board was constituted an authority under sec. 122(1) of the Act and authorised to frame regulations regulating the conditions of service of employees of the Co operative Societies including those of Apex Level Societies. Sub section (2) of sec. 122 provides that on approval of the Regulations by the State Government any rule or regulations framed by the Registrar in exercise of its powers under sec. 121(1) would stand superseded. Sub section (1) of sec. 121 confers power on the Registrar which may include any other sub ordinate officer or authority to frame rules regulating the condition of service of employees of Co operative Societies, such rules do not require approval of the State Government. While a regulation framed by an authority constituted under sub sec. (1) of sec. 122 requires approval of the State Government and on such approval the regulation so framed supersedes any rules made under sec. The scheme of sec. 121 and sec. 122 postulates that primacy has to be given to regulations framed by the authority under sec. 122 of the Act. If there are two sets of rules regulating the conditions of service of employees of Cooperative societies the regulations framed under sec. 122 and approved by the State Government shall prevail. In this view the provisions of the U.P. Co operative Sugar Factories Federation Service Rules 1976 do not override Service Regulations of 1975. It appears that this position was realised by the State Government and for that reason it issued Notification No. U.O. 402(II)/C I 76 dt. August 6, 1977 constituting the Commissioner and Secretary Sugar Industry and Cane Development Department as authority under sub sec. (1) of sec. 122 for the recruitment, training and disciplinary control of employees of the U.P. Co operative Factories Federation Ltd. The learned counsel for the respondent urged that since the Government had constituted the Commissioner and Secretary of the Development Department as the competent authority for framing regulations for the recruitment, training and disciplinary control of the employees of the U.P. Co operative Sugar Factories Federation Ltd. 1975 Regulations framed by the Institutional Service Board do not apply. We find no merit in this submission. Firstly, the Notification dt. August 6, 1977 merely designates the Commissioner and Secretary Sugar Industry and Cane Development Department as the authority for the recruitment, training and disciplinary control of the employees of the 87 U.P. Co operative Sugar Factories Federation, it does not confer power on the authority to frame any rule or regulations regulating the conditions of service of the employees of Sugar Factories Federation Ltd. But even if any such power can be inferred, admittedly no rules or regulations regulating the conditions of service of the employees of the Co operative Sugar Factories Federation have as yet been framed. Learned counsel for the respondents conceded that draft service regulations have been prepared but those have not been approved by the Government as required by sub sec. (2) of the Act. In absence of approval of the State Government as required by sub sec. (2) of sec. 122, regulations, if any, framed by the Commissioner and Secretary Sugar Industry and Cane Development Department do not acquire any legal force. In this view 1975 Regulations framed by the Institutional Service Board continue to apply to the employees of the U.P. Co operative Sugar Factories Federation Ltd. In view of the above discussion it is manifestly clear that the appellant 's services were regulated by the U.P. Co operative Societies Employees Service Regulations, 1975. Since under those Regulations appellant 's probationary period could not be extended beyond the maximum period of two years, he stood confirmed on the expiry of maximum probationary period and thereafter he could not be reverted to a lower post treating him on probation. The Order of reversion is illegal. We accordingly allow the Appeal, set aside the order of the High Court and quash the order of reversion dt. 2.9.1983 and direct that the appellant shall be treated in service and paid his wages and other allowances. The appellant is entitled to his costs which is quantified as Rs. 1,000. S.R. Appeal allowed.

The appellant who was initially working as an Assistant Teacher started teaching Hindi in the Intermediate classes upon the institution being upgraded though he was not qualified to be appointed as a Lecturer in Hindi. As he did not possess the requisite qualification of B.A. in Sanakrit, he applied for an exemption under section 16E, though originially refused was however sanctioned by an order of the Board dated 23.7.1963. While fixing the inter se seniority, his appointment date was taken as 23.7.1963 and respondents 5 and 6 were treated as Seniors as they joined on 19.12.62 and 1.7.63 respectively. The appellant challanged it by moving a writ petition in the Allahabad High Court with a prayer that the exemption related back to his initial appointment. The High Court dismissed the Writ Petition and hence the appeal by special leave. Dismissing the appeal, the Court ^ HELD: 1. The Language of section 16E of the Uttar Pradesh Intermediate Education Act does not admit of the construction that the exemption granted by the Board must relate back to the date of making the application seeking exemption. Section 16E could be construed as enabling the Board to exercise the power to grant exemption prospectively after considering the report and taking into account the relevant circumstances which would by the very nature of things be with prospective effect and not with retropsective effect. Otherwise, it would be to hold that any unqualified person can be appointd even without the minimum qualifications subject to post facto expemption being granted. Till the exemption is granted the person is not qualified to be appointed. 107 In other words he would be lacking in the basic qualification for being appointed. This deficiency cannot be made good with retroactive exemption unless the provision itself expressly or by necessary implication contemplates such a course of action. Section 16E does not satisfy this test. Thus it would appear that retrospective exemption could not have been granted and in point of fact was not granted in the present case. Even otherwise, it is not sufficient to show that retrospective exemption could have been granted. [111 B F] Further though the appellant was working as a lecturer, it was not under any authority of law for there is no provision which empowers the college to allow any unqualified person to teach or to appoint him as such in anticipation of his disqualification being removed in future. Till the exemption was granted appellant was not even a teacher in the eye of law though he was allowed to teach by the indulgence of the college authorities. The disqualification was removed only on July 23, 1963 when the Board granted the exemption. [111H; 112A B] 2. An employee must belong to the same stream before he can claim seniority vis a vis others. One who belongs to the stream of lawfully and regularly appointed employees does not have to contend with those who never belonged to that stream, they having been appointed in an irregular manner. Those who have been irregularly appointed belong to a different stream, and cannot claim seniority vis a vis those who have been regularly and properly appointed, till their appointments became regular or are regularised by the appointing authority as a result of which their stream joins the regular stream. At that point of confluence with the regular stream, from the point of time they join the stream by virtue of the regularisation, they can claim seniority vis a vis those who join the same stream later. The late comers to the regular stream cannot steal a march over the early arrivals in the regular queue. [112C E] 3. In matters of seniority the Court does not exercise jurisdiction akin to appellate jurisdiction against the determination by the competent authority, so long as the competent authority has acted bonafide and acted on principles of fairness and fairplay. In a matter where there is no rule or regulation governing the situation or where there is one, but is not violated, the Court will not overturn the determination unless it would be unfair not to do so. [112E F] 108

Appeal No. 853 of 1968. Appeal under section 116 A of the Representation of the People Act, 1951 from the judgment and order dated January 15, 1968 of the Delhi High Court, Himachal Bench in C.O.P. No. 4 of 1967. C.B. Agarwala, S.K. Bagga and section Bagga, for the appellant. Sarjoo Prasad and Naunit Lal, for the respondent. The Judgment of the Court was delivered by Hidayatullah, C.J. This is an appeal against the judgment, dated January 15, 1968, of the High Court of Delhi (Himachal Bench) setting aside the election of the appellant to the Santokhgarh Assembly Constituency of Himachal Pradesh. The election has been set aside on the ground of corrupt practice under section 123(6) of the Representation of People Act read with section 98(b) of the Act. By a notification dated January 13, 1967 the electors of this constituency were invited to elect a member to the Assembly. The the last date of withdrawal was January 23, 1967. Three candidates contested the election. The appellant was an independent candidate opposed by the respondent who was a Congress nominee and one Shanti Swarup, Jansangh candidate. The poll took place throughout the constituency on February 18, 1967. Votes were counted four days later at Una and the result was declared at follows: Vidya Sagar Joshi (Appellant) 8437 votes Surinder Nath Gautam 7695 votes (Election Petitioner) Shanti Swarup 2067 votes 1267 ballots were rejected as invalid. Thus the present appellant was returned with a margin of 742 votes. The returned candidate filed his return of election expenses showing an expenditure of Rs. 1,862.05P. The limit of expenditure in this constituency was Rs. 2,000/ . One of the contentions of the election petitioner was that he had filed a false return of his election expenses, that he had spent .an amount exceeding Rs. 2,000/ in the aggregate and therefore contravened the provisions of section 77 (3) 86 of the Representation of People Act, 1951 and therefore committed corrupt practice under section l23(6) of the Act. The election petitioner therefore asked that his election be declared void. There were other grounds also on which the election was challenged, but we need not refer to them since no point has been made before us. The main item on which the expenses were said to be false was a deposit of Rs. 500/ as security and Rs. 200/ as application fee which the returned candidate had made with the Congress party on or before January 2, 1967. The fee was not returnable, but as this payment was, made before the notification calling upon the voters to elect a member to the Assembly nothing turns upon it. The returned candidate was denied the Congress ticket on or about January 10, 1967. This was also. before the said notification. According to the rules of the Congress party the security deposit was refundable to a candidate if he or she was not selected. It was however provided in the same rules that if the candidate contested the election against the official Congress candidate, the security deposit would be forfeited. The returned candidate chose to stand as an independent candidate against the official Congress nominee and incurred the penalty of forfeiture. This was after the date for the filing of the nomination paper (January 20, 1967). He had time till January 23, 1967 to withdraw from the contest. If he had done so the deposit would have presumably been returned to him. As he became a contesting candidate the forfeiture of the deposit became a fact. The case of the election petitioner was that if this deposit were added to the election expenses, the limit of Rs. 2,000/ was exceeded and therefore this amounted to a corrupt practice under section 123(6) read with section 77(3) of the Representation of People Act. The High Court held in favour of the election petitioner and hence the appeal. Section 77 of the Representation of People Act provides as follows. : Section 77. Account of election expenses 'and maximum thereof (1 ) Every candidate at an election shall either by himself or by his. election agent, keep a separate and correct account of all expenditure in connection with the election incurred or authorised by him or by his election agent between the date of publication of the notification calling the election and the date of declaration of the result thereof, both dates inclusive. The account shall contain such particulars, as may be prescribed. 87 (3) The total of the said expenditure shall not exceed such amount as may be prescribed. The third sub section creates a bar against expenditure in excess of the prescribed amount. In this case the prescribed amount was Rs. 2,000/ . Section 123(6) provides that "the incurring or authorising of expenditure in contravention of section 77 is a corrupt practice. " Therefore, if the amount of Rs. 500/was added to the election expenses as declared by the returned candidate he would be guilty of a corrupt practice, under the two sections quoted above. The question, therefore, is whether this amount can be regarded as an election expense. The first sub section of section 77 discloses what the candidate has. to declare as part of his election expenses. It speaks. of "all expenditure in connection with the election incurred or authorised by him or by his election agent between the date of publication of the notification calling the election and the date of declaration of the result thereof, both dates inclusive. " In the present case, therefore, the critical dates were January. 13, 1967 and February 22, 1967. The amount in question was paid before the first date. It was liable for confiscation not on the date on which the Congress ticket was refused to the returned candidate but on January 23, 1967 when he did not withdraw from the ' contest and offered himself as a contesting candidate against the official Congress candidate. In other words, the payment was made before the period marked out by section 77 ( 1 ) but the expenditure became a fact between the two. dates. The contention of the returned candidate was that this was not an expenditure within the meaning of section 77(1) of the Representation of People Act and this is the short question, which falls for consideration in the present case. Section 77 as flamed now departs in language from the earlier provision on the subject which was rule 117. It read: "117. Maximum election expenses No expense shall be incurred or authorised by a candidate or his election agent on account of or in respect of the conduct and management of an election in any one constituency in a State in excess of the maximum amount specified in respect of that constituency in Schedule V." The words "conduct and management of election" are not as wide as the words. "all expenditure in connection with election incurred or authorised by him, "which now find place in section 77". The question thus is what meaning must be given to the words used in section 77. The critical words of section 77 are 'expenditure ' 'in connection with election ' and 'incurred or authorized '. 'Expenditure ' means the amount expended and 'expended ' means to. pay away, lay. out or spend. It really represents money out of pocket, a going out. 88 Now the amount paid away or paid out need not be all money which a man spends on himself during this time. It is money in connection with ' his election. These words mean not so much as 'consequent upon ' as 'having to do with '. All money laid out and having to do. with the election is contemplated. But here again money which is liable to be refunded is not to be taken note of. The word 'incurred ' shows a finality. It has the sense of rendering oneself liable for the amount. Therefore the section regards everything for which the candidate has rendered himself liable and of which he is out of pocket in connection with his election that is to say having to do with his election. The candidate here put out this money for his election since he was trying to obtain a congress ticket. If he had got the ticket and the money was refunded to. him, this would not have counted as an expenditure since the expense would not have been incurred. When the candidate knowing that the money would be lost went on to stand as an independent candidate, he was willing to let the money go and take a chance independently. The case of the appellant is that this money was not used in furthering the prospect of his election. On the other hand, it was in fact used against him by the Congress Party as he was opposed to that party 's candidate. He contends that such an expense cannot be regarded as expense in connection with the election. According to him the connection must be a connection of utility and not something which is of no use but rather against the chances of victory. In this connection the learned counsel draws our attention to Halsbury 's Laws of England, Third Edition Volume 14, at page 177 paragraph 314. It is stated there as follows: "While no attempt has been made by judges to define exhaustively the meaning of expenses incurred in the conduct or management of an election, it has been said that if expenses are, primarily or principally, expenses incurred for the promotion of the interests of the candidate, they are election expenses. " It will be seen that the above passage refers to expenses incurred in the conduct or management of an election. The learned counsel for the appellant and respondent relied upon two decisions of this Court. Reliance was also placed upon two decisions of the Election Tribunals. The decisions of the Election Tribunal are of the same Bench and concern Rule 117. They need not be considered. The two cases of this Court may be noticed. In Haji Aziz and Abdul Shakoor Bros. vs Commissioner of Income Tax, Bombay City(1) the question arose under the Indian (1) ; 89 Income tax Act. A firm importing dates was found to have breached some law and a penalty was imposed on it under the Sea Customs Act. The firm sought to treat the penalty as expenses and they were disallowed by this Court. Learned Counsel for the appellant relied on this case and claimed that the same principle applies and this penalty cannot be said to be an expenditure in connection with the election. The analogy is not apt because not only the prescriptions of the two laws are different but the underlying principle is different also. In Income tax laws the expenditure must be laid out wholly or exclusively for the purpose of the business etc. Breaking laws and incurring penalty is not carrying on 'business and therefore the loss is not for the purposes of business. Here the expenditure is to be included if it is incurred in connection with the election and the payment to secure the seat is an expenditure in connection with the election. The ruling therefore, does not apply. In the second case a congress candidate had paid a sum of Rs. 500/ of which Rs. 100/ were subscription for membership and Rs. 400/ were a deposit. Later he paid Rs. 500/ as donation to the Congress. He failed to include the two sums of Rs. 500/ each in his return of expenses. The Tribunal found that both the sums were spent in connection with the election and by including them the limit was exceeded. This Court affirmed the decision of the Tribunal. The case was decided under r. 117. The two sums were considered separately. The contention was that under section 123 (7) and r. 117 the candidate was nominated only on November 16, 1951 and the first sum was paid on September 12, 1951. The question then arose when the candidate became a candidate for the application of the Rule and section 123(7). It was held that the candidate became a candidate when he unequivocally expressed his intention by making the payment. The question of commencement of the candidature is now obviated by prescribing the two terminii between which the expense is to be counted. In so far as the case goes it supports our view. It is risky to quote the decision because the terms of the law on which it was declared were entirely different. We can only say that there is nothing in it which militates against the view taken by us here. On the whole, therefore, the judgment under appeal is correct. The appeal fails and will be dismissed with costs. Appeal dismissed.

21 currency notes of Rs. 1,00.0 each were seized from the Appellant Bank by the police in the course of an investigation of a case against the third respondent of cheating the first and second respondents. The seized currency notes were said to be part of the property obtained by the third respondent from the other two respondents. The third respondent was acquitted by the trial court of the offence charged. In the course of the trial the appellant made an application under section 517(1) of the Code of Criminal Procedure asking for the delivery of the currency notes to it on the ground that the appellant was an innocent third party who had received the said notes without any knowledge or suspicion of their having been involved in the commission of an offence. By its order of 24th April 1962, the trial court allowed the application and directed that the currency notes 'should be returned to the appellant. Subseqently an appeal filed by the State was allowed by the High Court which set aside the trial court 's order of acquittal of the third respondent and convicted him of the offence charged. On an application made by the first respondent asking for delivery of the currency notes to him as they belonged to. him and the second respondent, the High Court, by an order of April 5, 1963 directed that the notes be handed over to the first and second respondents. In the appeal to this Court, it was contended, inter alia, on behalf of the appellant that the High Court had reversed the order of the trial court directing the return of the currency notes to the appellant without giving a notice to the appellant. and without giving an opportunity of being heard; and that the order of April 5, 1963 was therefore violative of the principles of natural justice and was illegal. The contention on behalf of the respondents was that there was no provision in section 520 of the Code of Criminal Procedure for giving notice to the affected parties and the order of the High Court could not be challenged on the ground that no hearing was given to the appellant. It was also contended that the High Court had a discretion under the statute as to whom. the property was to be returned and there was no reason why this Court should interfere with the exercise of discretion by the High Court. HELD: The appeal must be allowed and the order of the High Court dated April 5, 1963 set 'aside. The seized currency notes must be directed to be returned to, the appellant. (1) It is mainfest that the High Court was bound to. give notice to the 'appellant before reversing the order of the trial court directing the disposal of the property under section 517 of the Code of Criminal Procedure. As no such notice was given to the appellant, the order of the High Court dated 5th April 1963 is vitiated in law. Although the statute does not expressly require a notice to be issued, or a hearing to be given to the 217 parties adversely affected. there is in the eye of law a necessary implication that the parties adversely affected should be heard before the Court makes an order for return of the seized property. [220 C D, 221 E] Cooper vs Wandsworth Board of Works. ; , Ridge vs Baldwin, ; and Board of High School and Intermediate Education, U.P. Allahabad vs Ghanshyam Das Gupta and Ors, A.I.R. 1962 S.C. 1110, referred to. (2) The appellant asserted that it had obtained the currency notes in the normal course of its business and without any knowledge or suspecion of their having been involved in the commission of any offence and that the respondents had not alleged fraud or lack of good faith on the part of the appellant. In the circumstances the High Court should have directed the return of the currency notes to the appellant which had the "right to possess" the notes within the language of section 517 of the Code of Criminal Procedure. Property in coins and currency notes passes by mere delivery and it is the clearest exception to the rule Nemo dat quod non habet. [222 B. C] Whistler vs Forster, , referred to.

Civil Appeal No. 755 of 1978. Appeal by Special Leave from the Order dated 21 10 1976 of the Bombay High Court (Nagpur Bench) in S.C.A. No. 4260/76. R.K. Garg, Edward Faleire, V.J. Francis and D.K. Garg for the Appellant. R.P. Bhat and Girish Chandra for the Respondents. The Judgment of the Court was delivered by CHANDRACHUD, C.J. The appellant, Krishna Kumar, was appointed on May 30, 1966 as an Apprentice Mechanic (Electrical) after selection by the Railway Service Commission and on the completion of his training period, he was appointed as a Train Examiner (Electrical). On July 11, 1974 he was appointed as a Train Lighting Inspector, Nagpur under an order passed by the Chief Electrical Engineer. That the order of appointment was made by the C.E.E. is undisputed and indeed there can be no controversy over it. The list of officer declared to be heads of departments shows that Chief Electrical Engineers are heads of their departments. By an order dated August 31, 1976, the appellant was removed from service by respondent 1, the Divisional Assistant Engineer, Central Railway, Nagpur. The appellant thereupon filed a Writ Petition (No. 4260 of 1976) in the Bombay High Court to challenge the order of removal. A Division Bench of the Nagpur Bench of the High Court dismissed the Writ Petition summarily on October 21, 1976. Being aggrieved by that order the appellant has filed this appeal by special leave. The Special Leave Petition came up before this Court on February 22, 1978 when a Bench consisting of Justice V.R. Krishna Iyer and Justice Jaswant Singh adjourned the petition for four weeks in order to enable the respondents to file an affidavit stating as to (i) who appointed the petitioner, with special reference to the designation of the Officer who made the order of appointment and (ii) who removed the petitioner from service, with special reference to the designation of that Officer. Pursuant to that direction, two affidavits were filed by Shri S.P. Sarathy, Divisional Assistant Electrical Engineer, Central Railway, Nagpur. The petitioner filed his rejoinder affidavit on February 20, 1978. On a consideration of these affidavits the Court on April 3, 1978 granted special leave to the appellant to file this appeal. 52 Article 311 (1) of the Constitution provides that 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. The simple question for determination is whether, as alleged by the appellant, he was removed from service by an authority subordinate to that which had appointed him. The relevant facts are but these and these only: The appellant was appointed as a Train Lighting Inspector under an order issued by the Chief Electrical Engineer and was removed from service under an order passed by the Divisional Assistant Electrical Engineer, Central Railway, Nagpur. The narrow question, therefore, for consideration is whether the Divisional Assistant Electrical Engineer is subordinate in rank to the Chief Electrical Engineer. None of the affidavits filed by Shri Sarathy, who passed the order of removal says that the post of Divisional Assistant Electrical Engineer is equivalent to that of the Chief Electrical Engineer in the official hierarchy. That the former is not higher in rank than the latter is self evident. In the circumstances, it seems clear that the appellant was removed from service by an authority which is subordinate in rank to that by which he was appointed. In defence of the legality of the order of removal, counsel for the respondents relies on paragraph 2 of respondent 1 's affidavit, dated January 7, 1978, wherein he has stated that the power to make appointments to the post of the Train Lighting Inspector was delegated to certain other officers including the Divisional Assistant Electrical Engineer. It is urged that since the Div. Asstt. Elect. Engineer has been given the power to make appointments to the post of the Train Lighting Inspector, he would have the power to remove any person from that post. We cannot accept this contention. Whether or not an authority is subordinate in rank to another has to be determined with reference to the state of affairs existing on the date of appointment. It is at that point of time that the constitutional guarantee under article 311 (1) becomes available to the person holding, for example, a civil post under the Union Government that he shall not be removed or dismissed by an authority subordinate to that which appointed him. The subsequent authorization made in favour of respondent 1 in regard to making appointments to the post held by the appellant cannot confer upon respondent 1 the power to remove him. On the date of the appellant 's appointment as a Train Lighting Inspector, respondent 1 had no power to make that appointment. He cannot have, therefore, the power to remove him. 53 Besides, delegation of the power to make a particular appointment does not enhance or improve the hierarchical status of the delegate. An Officer subordinate to another will not become his equal in rank by reason of his coming to possess some of the powers of that another. The Divisional Engineer, in other words, does not cease to be subordinate in rank to the Chief Electrical Engineer merely because the latter 's power to make appointments to certain posts has been delegated to him. Since the appellant was appointed by the Chief Electrical Engineer and has been removed from service by an order passed by respondent 1 who, at any rate, was subordinate in rank to the Chief Electrical Engineer on the date of appellant 's appointment, it must be held the respondent 1 had no power to remove the appellant from service. The order of removal is in patent violation of the provisions of Article 311 (1) of the Constitution. For these reasons we allow the appeal, set aside the order passed by the High Court and hold that the order dated August 31, 1976 passed by respondent 1 removing the appellant from service is unconstitutional and, therefore, of no effect. The appellant must accordingly be deemed to continue in service until, if so advised, the government takes appropriate steps to bring his service to an end. Respondents will pay the costs of the appeal to the appellant. V.D.K. Appeal allowed.

The appellant filed a suit against his employer, the respondent, for a declaration that he had been removed from service illegally and without any reason and that he should be reinstated in his former job with due benefits and advantages. He also claimed compensation. The trial court held that the dispute raised by the appellant was in the nature of an industrial dispute and that the civil court had no jurisdiction to try the same. The First Appellate Court allowed the appeal and held that the dispute raised was of a civil nature and the case was cognizable by a civil court. In the respondent 's second appeal, the High Court agreed with the view of the trial court and held that the appellant had not claimed damages by pleading wrongful dismissal and breach of the contract of his service and that the facts pleaded in the plaint showed that the dispute was an industrial dispute cognizable only by an industrial court and not by a civil court. In the further appeal to this Court the point for consideration was whether on the facts pleaded by the appellant the dispute was an industrial dispute cognizable only by an industrial court and not by a civil court. Allowing the appeal, ^ HELD:(1) It is not quite correct to say that the suit as filed by the appellant is not maintainable at all in a civil court. The main reliefs asked for by the appellant which when granted will amount to specific performance of the contract of service and, therefore, they cannot be granted. But the appellant in the alternative has also claimed for awarding compensation to him. [127A C] (2) Reading the plaint as a whole, it can legitimately be culled out that the appellant had made out a case that he was wrongfully dismissed from service. This relief could be granted by the civil court if it found that the plaintiff 's case was true. The High Court was not right in saying that no such case had at all been made in the plaint. To this limited extent the matter could be examined by the civil court. [127D E] Dr. section B. Dutt vs University of Delhi, ; ; section R. Tewari vs Distt. Board Agra & Anr., ; ; Indian Airlines Corp. vs Sukhdeo Rai, , Premier Automobiles Ltd. vs Kamlekar Shantaram Wadke of Bombay & Ors., ; ; referred to.

Civil Appeal No. 322 of 1970. From the Judgment and Decree dated 25 3 1969 of the Madras High Court in Appeal No. 1195 of 1970. U.R. Lalit, P.H. Parekh and Miss Manik Tarkunde for the Appellant. The Judgment of the Court was delivered by KOSHAL J. A preliminary objection has been raised by Mr. Rangam to the effect that the certificate granted by the court under sub clauses (a) and (c) of clause (1) of Article 133 of the Constitution of India, as it then stood, does not conform to legal requirements in as much as (a) it does not specify the substantial question of law which the High Court states require determination; and (b) no reasons in support of the issuance of the certificate appear therein. 949 The preliminary objection is well founded in view of the decisions of this Court in Sohan Lal Naraindas vs Laxmidas Raghunath Gadit and in Sardar Bahadur section Indra Singh Trust vs Commissioner of Income Tax, Bengal. Faced with this situation Mr. Lalit wanted us to treat the appeal as one by special leave and prayed that such leave be granted now after condoning the delay. That would have been certainly a reasonable course to follow if it was made out that a substantial question of law really requires determination. We have gone through the impugned judgment and find that no such question is involved at all. We, therefore, refuse special leave, revoke the certificate granted by the High Court and dismiss the appeal but with no order as to costs. P.B.R. Appeal dismissed.

Accepting the State appeal, negativing the claim for interest and dismissing the original writ petition, the Court, ^ HELD: The expression "would not make any further claim in regard to compensation" in the agreement dated the 24th February, 1969 was clearly used by the petitioners respondents not in the sense in which it is used in sections 23 and 34 of the Land Acquisition Act but more comprehensively Meaning reimbursement in full satisfaction of their claim in respect of the acquisition. The condition attached by them to the relinquishment of their claim was that the agreed amount must be paid to them before 31st March 1969, which agreement would show that by the acceptance of the quantified sum of Rs. 4,41,202.45 they condoned the delay in payment and also relinquished all future claims to interest. If it were otherwise, the respondents would have expressly reserved their right to claim interest under section 34 of the Act. [853 A B, D F]